FORM 10-Q
                                
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
(Mark One)
  X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

          For the Quarterly Period Ended March 31,June 30, 1995

          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ____________ to____________to ____________

Commission      Registrant, State of Incorporation,    I.R.S. Employer
File Number     Address of Principal Executive         Identification No.
                Offices and Telephone Number           
1-11299         ENTERGY CORPORATION                    13-5550175
                (a Delaware corporation)               
                639 Loyola Avenue                      
                New Orleans, Louisiana 70113           
                Telephone (504) 529-5262               
                                                                 
1-10764         ARKANSAS POWER & LIGHT COMPANY         71-0005900
                (an Arkansas corporation)              
                425 West Capitol Avenue, 40th Floor    
                Little Rock, Arkansas 72201            
                Telephone (501) 377-4000               
                                                                 
1-2703          GULF STATES UTILITIES COMPANY          74-0662730
                (a Texas corporation)                  
                350 Pine Street                        
                Beaumont, Texas  77701                 
                Telephone (409) 838-6631               
                                                                 
1-8474          LOUISIANA POWER & LIGHT COMPANY        72-0245590
                (a Louisiana corporation)              
                639 Loyola Avenue                      
                New Orleans, Louisiana 70113           
                Telephone (504) 529-5262               
                                                                 
0-320           MISSISSIPPI POWER & LIGHT COMPANY      64-0205830
                (a Mississippi corporation)            
                308 East Pearl Street                  
                Jackson, Mississippi 39201             
                Telephone (601) 969-2311               
                                                                 
0-5807          NEW ORLEANS PUBLIC SERVICE INC.        72-0273040
                (a Louisiana corporation)              
                639 Loyola Avenue                      
                New Orleans, Louisiana 70113           
                Telephone (504) 569-4000               
                                                                 
1-9067          SYSTEM ENERGY RESOURCES, INC.          72-0752777
                (an Arkansas corporation)              
                Echelon One                            
                1340 Echelon Parkway                   
                Jackson, Mississippi 39213             
                Telephone (601) 368-5000               


       Indicate  by check mark whether the registrants  (1)  have
filed all reports required to be filed by Section 13 or 15(d)  of
the  Securities  Exchange  Act of 1934 during  the  preceding  12
months  (or  for  such shorter period that the  registrants  were
required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.

Yes     X      No

Common Stock Outstanding           Outstanding at April 30,July 31, 1995
Entergy Corporation    ($0.01 par value)     227,746,450227,749,167


                                
              ENTERGY CORPORATION AND SUBSIDIARIES
             INDEX TO QUARTERLY REPORT ON FORM 10-Q
                          March 31,June 30, 1995

                                                         Page
                                                        Number

Definitions                                                1
Financial Statements:
  Entergy Corporation and Subsidiaries:
    Statements of Consolidated Income                      53
    Statements of Consolidated Cash Flows                  64
    Consolidated Balance Sheets                            86
  Arkansas Power & Light Company:
    Statements of Income                                   108
    Statements of Cash Flows                               119
    Balance Sheets                                        1210
  Gulf States Utilities Company:
    Statements of Income                                  (Loss)                                   1412
    Statements of Cash Flows                              1513
    Balance Sheets                                        1614
  Louisiana Power & Light Company:
    Statements of Income                                  1816
    Statements of Cash Flows                              1917
    Balance Sheets                                        2018
  Mississippi Power & Light Company:
    Statements of Income                                  2220
    Statements of Cash Flows                              2321
    Balance Sheets                                        2422
  New Orleans Public Service Inc.:
    Statements of Income                                  2624
    Statements of Cash Flows                              2725
    Balance Sheets                                        2826
  System Energy Resources, Inc.:
    Statements of Income                                  3028
    Statements of Cash Flows                              3129
    Balance Sheets                                        3230
Notes to Financial Statements                             3432
Management's Financial Discussion and Analysis            4745
Part II:
  Item 1.  Legal Proceedings                              7069
  Item 4.  Submission of Matters to a Vote of
     Security Holders                                     7170
  Item 5.  Other Information                              7271
  Item 6.  Exhibits and Reports on Form 8-K               7675
Experts                                                   7877
Signature                                                 7978


This   combined  Form  10-Q  is  separately  filed   by   Entergy
Corporation,  Arkansas  Power  &  Light  Company,   Gulf   States
Utilities  Company, Louisiana Power & Light Company,  Mississippi
Power  &  Light  Company, New Orleans Public  Service  Inc.,  and
System  Energy  Resources,  Inc.   Information  contained  herein
relating  to any individual company is filed by such  company  on
its  own  behalf, and no company makes any representation  as  to
information relating to the other companies.  This combined  Form
10-Q  supplements and updates the Form 10-K for the calendar year
ended  December 31, 1994, and the Form 10-Q for the quarter ended
March 31, 1995, filed by the individual registrants with the  SEC
and should be read in conjunction therewith.

                           DEFINITIONS

Certain abbreviations or acronyms used in the text are defined
below:

   Abbreviation or Acronym        Term

ALJ                      Administrative Law Judge
ANO                      Arkansas   Nuclear  One  Steam  Electric
                         Generating Station
ANO 1                    Unit No. 1 of ANO
ANO 2                    Unit No. 2 of ANO
AP&L                     Arkansas Power & Light Company
APSC                     Arkansas Public Service Commission
Availability Agreement   Agreement, dated as of June 21, 1974, as
                         amended,  among System Energy and  AP&L,
                         LP&L,   MP&L,   and   NOPSI,   and   the
                         assignments thereof
Capital Funds Agreement  Agreement, dated as of June 21, 1974, as
                         amended,   between  System  Energy   and
                         Entergy Corporation, and the assignments
                         thereof
CCLM                     Customer-Controlled Load Management (a
                         DSM activity utilizing residential time-of-use rates)
City of New Orleans or
 City                    New Orleans, Louisiana
City
Council                  Council  of  the  City of  New  Orleans,
                         Louisiana
D.C. Circuit             United  States Court of Appeals for  the
                         District of Columbia Circuit
DSM                      Demand-Side Management (Least Cost Plan
                         activities that influence electricity
                         usage by customers)
Entergy Corporation      Entergy    Corporation,    a    Delaware
                         corporation,   successor   to    Entergy
                         Corporation, a Florida Corporation
Entergy Operations       Entergy  Operations, Inc., a  subsidiary
                         of    Entergy   Corporation   that   has
                         operating responsibility for ANO,  Grand
                         Gulf 1, River Bend, and Waterford 3
Entergy or System        Entergy   Corporation  and  its  various
                         direct and indirect subsidiaries
Entergy Power            Entergy  Power,  Inc., a  subsidiary  of
                         Entergy    Corporation   that    markets
                         capacity   and   energy   from   certain
                         generating facilities to other  parties,
                         principally non-affiliates, for resale
Entergy Services         Entergy Services, Inc.
FERC                     Federal Energy Regulatory Commission
First Quarter Form 10-Q  The combined Quarterly Report on Form 10-
                         Q  for the quarter ended March 31, 1995,
                         of   Entergy,  AP&L,  GSU,  LP&L,  MP&L,
                         NOPSI, and System Energy
Form 10-K                The  combined Annual Report on Form 10-K
                         for the year ended December 31, 1994, of
                         Entergy,  AP&L, GSU, LP&L, MP&L,  NOPSI,
                         and System Energy
G&R Bonds                General  and  Refunding  Mortgage  Bonds
                         issued and issuable by MP&L and NOPSI
Grand Gulf Station       Grand  Gulf  Steam  Electric  Generating
                         Station (nuclear)
Grand Gulf 1             Unit  No.  1  of the Grand Gulf  Station
                         (nuclear)
GSU                      Gulf States Utilities Company (including
                         wholly   owned  subsidiaries  -  Varibus
                         Corporation, GSG&T, Inc., Prudential Oil
                         &  Gas,  Inc., and Southern Gulf Railway
                         Company)
KWH                      Kilowatt-Hour(s)
Least Cost Plan          Least  Cost  Integrated  Resource   Plan
                         (combination of demand- and  supply-side
                         resources  to  be  used  by  Entergy  to
                         satisfy electricity demand)
LP&L                     Louisiana Power & Light Company
LPSC                     Louisiana Public Service Commission
Merger                   The combination transaction, consummated
                         on  December  31,  1993,  by  which  GSU
                         became    a   subsidiary   of    Entergy
                         Corporation   and  Entergy   Corporation
                         became a Delaware Corporation
Money Pool               System  Money Pool, which allows certain
                         System companies to borrow from, or lend
                         to, certain other System companies
MP&L                     Mississippi Power & Light Company
MPSC                     Mississippi Public Service Commission
NOPSI                    New Orleans Public Service Inc.
NRC                      Nuclear Regulatory Commission
Owner Participant        A  corporation that, in connection  with
                         the   Waterford  3  sale  and  leaseback
                         transactions, has acquired a  beneficial
                         interest  in a trust, the Owner  Trustee
                         of  which  is  the owner and  lessor  of
                         undivided interests in Waterford 3
Owner Trustee            Each   institution   and/or   individual
                         acting  as Owner Trustee under  a  trust
                         agreement  with an Owner Participant  in
                         connection   with the Waterford  3  sale
                         and leaseback transactions
PCB                      Polychlorinated biphenyls
PUCT                     Public Utility Commission of Texas
Rate Cap                 The  level of GSU's retail electric base
                         rates in effect at December 31, 1993 for
                         the  Louisiana retail jurisdiction,  and
                         the  level in effect prior to the  Texas
                         Cities  Rate  Settlement for  the  Texas
                         retail  jurisdiction, which may  not  be
                         exceeded  for  the five years  following
                         December 31, 1993
Reallocation Agreement   1981 Agreement, superseded in part by a
                         June 13, 1985 decision of the FERC,
                         among AP&L, LP&L,Revised Plan             MP&L, NOPSI, and
                         System Energy, relating to the sale of
                         capacity and energy from the&L's   Grand   Gulf   Station1-related   rate
                         phase-in  plan, originally  approved  by
                         the   MPSC   in  the  Final   Order   on
                         Rehearing, as modified by the MPSC order
                         issued September 29, 1988, to bring such
                         plan    into   compliance    with    the
                         requirements of SFAS 92
River Bend               River  Bend  Steam  Electric  Generating
                         Station (nuclear), owned 70% by GSU
RUS                      Rural  Utility  Services  (formerly  the
                         Rural Electrification Administration  or
                         "REA")
SEC                      Securities and Exchange Commission
SFAS                     Statement    of   Financial   Accounting
                         Standards   as   promulgated   by    the
                         Financial Accounting Standards Board
SFAS 109                 SFAS No. 109, "Accounting for Income Taxes"
System Agreement         Agreement, effective January 1, 1983, as
                         modified,  among  the  System  operating
                         companies  relating to  the  sharing  of
                         generating  capacity  and  other   power
                         resources
System Energy            System Energy Resources, Inc.
System Fuels             System Fuels, Inc.
System operating
 companies               AP&L,   GSU,  LP&L,  MP&L,  and   NOPSI,
companies
                         collectively
System or Entergy        Entergy   Corporation  and  its  various
                         direct and indirect subsidiaries
Unit Power Sales         Agreement, dated as of June 10,
Agreement                1982, as amended, among AP&L, LP&L,
                         MP&L, NOPSI, and System Energy, relating
                         to the sale of capacity and energy from
                         System Energy's share of Grand Gulf 1
Waterford 3              Unit  No.  3   of  the  Waterford  Steam
                         Electric Generating Station (nuclear)


ENTERGY CORPORATION AND SUBSIDIARIES
                      STATEMENTS OF CONSOLIDATED INCOME
            For the Three Months Ended March 31, 1995 and 1994
                             (Unaudited)
                                                                       
                                                                       
                                                      1995           1994
                                                          (In Thousands,
                                                        Except Share Data)
                                                                            
Operating Revenues:                                                         
  Electric                                          $1,294,766    $1,340,252
  Natural gas                                           40,670        54,079
  Steam products                                        10,632        11,708
                                                    ----------    ----------
        Total                                        1,346,068     1,406,039
                                                    ----------    ----------
Operating Expenses:                                                         
  Operation and maintenance:                                                
     Fuel, fuel-related expenses, and                                       
       gas purchased for resale                        288,704       314,728
     Purchased power                                    81,489       124,796
     Nuclear refueling outage expenses                  16,796        15,745
     Other operation and maintenance                   347,105       336,012
  Depreciation, amortization, and decommissioning      169,544       160,809
  Taxes other than income taxes                         76,596        72,852
  Income taxes                                          35,137        33,553
  Amortization of rate deferrals                        94,789        93,674
                                                    ----------    ----------
        Total                                        1,110,160     1,152,169
                                                    ----------    ----------
Operating Income                                       235,908       253,870
                                                    ----------    ----------   
Other Income (Deductions):                                                  
  Allowance for equity funds used                                           
   during construction                                   2,494         3,535
  Miscellaneous - net                                    7,170        14,362
  Income taxes                                          (1,973)       (8,197)
                                                    ----------    ----------
        Total                                            7,691         9,700
                                                    ----------    ----------    
Interest Charges:                                                           
  Interest on long-term debt                           160,631       167,703
  Other interest - net                                   8,990         6,832
  Allowance for borrowed funds used                                         
   during construction                                  (2,197)       (2,642)
  Preferred dividend requirements of                                        
   subsidiaries and other                               19,850        20,942
                                                    ----------    ----------
        Total                                          187,274       192,835
                                                    ----------    ---------- 
Net Income                                             $56,325       $70,735
                                                    ==========    ========== 
Earnings per average common share                        $0.25         $0.31
Dividends declared per common share                      $0.90         $0.90
Average number of common shares                                             
 outstanding                                       227,415,009   230,584,786
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands, Except Share Data) Operating Revenues: Electric $1,539,160 $1,551,673 $2,833,926 $2,891,925 Natural gas 20,118 22,766 60,788 76,845 Steam products 12,791 11,859 23,423 23,567 ---------- ---------- ---------- ---------- Total 1,572,069 1,586,298 2,918,137 2,992,337 ---------- ---------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 312,803 357,711 601,507 672,439 Purchased power 92,433 109,833 177,992 234,629 Nuclear refueling outage expenses 34,167 15,474 50,963 31,219 Other operation and maintenance 353,860 367,993 696,895 704,005 Depreciation, amortization, and decommissioning 169,557 160,856 339,101 321,665 Taxes other than income taxes 73,872 70,067 150,468 142,919 Income taxes 111,967 89,753 147,104 123,306 Amortization of rate deferrals 89,585 88,676 184,374 182,350 ---------- ---------- ---------- ---------- Total 1,238,244 1,260,363 2,348,404 2,412,532 ---------- ---------- ---------- ---------- Operating Income 333,825 325,935 569,733 579,805 ---------- ---------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 2,353 3,135 4,847 6,670 Miscellaneous - net 9,108 6,659 16,278 17,892 Income taxes 1,164 (3,183) (809) (11,380) ---------- ---------- ---------- ---------- Total 12,625 6,611 20,316 13,182 ---------- ---------- ---------- ---------- Interest Charges: Interest on long-term debt 161,042 165,816 321,673 333,519 Other interest - net 5,662 4,494 14,652 8,197 Allowance for borrowed funds used during construction (2,007) (2,527) (4,204) (5,169) Preferred and preference dividend requirements of subsidiaries and other 19,050 20,426 38,900 41,368 ---------- ---------- ---------- ---------- Total 183,747 188,209 371,021 377,915 ---------- ---------- ---------- ---------- Net Income $162,703 $144,337 $219,028 $215,072 ========== ========== ========== ========== Earnings per average common share $0.71 $0.63 $0.96 $0.94 Dividends declared per common share - - $0.90 $0.90 Average number of common shares outstanding 227,747,609 229,440,707 227,582,228 230,010,476 See Notes to Consolidated Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $56,325 $70,735$219,028 $215,072 Noncash items included in net income: Change in rate deferrals/excess capacity-net 81,057 80,768162,963 164,750 Depreciation, amortization, and decommissioning 169,544 160,809339,101 321,665 Deferred income taxes and investment tax credits (19,160) 1,064(1,221) 13,690 Allowance for equity funds used during construction (2,494) (3,535)(4,847) (6,670) Amortization of deferred revenues - (10,283)(14,632) Changes in working capital: Receivables 104,230 89,848(91,462) (62,170) Fuel inventory (9,605) 23,622(37,175) 29,723 Accounts payable (70,433) (103,591)(74,712) (50,684) Taxes accrued 63,030 16,94077,924 27,880 Interest accrued (13,246) (9,389)(7,924) (15,542) Reserve for rate refund 10,5609,971 - Other working capital accounts (51,070) 36(150,287) (143,630) Decommissioning trust contributions (5,666) (5,516)(12,653) (11,742) Provision for estimated losses and reserves 754 (13,503)6,480 (4,523) Other (38,245) 24,42614,561 45,014 -------- -------- Net cash flow provided by operating activities 275,581 322,431449,747 508,201 -------- -------- Investing Activities: Construction/capital expenditures (108,367) (175,107)(243,061) (327,154) Allowance for equity funds used during construction 2,494 3,5354,847 6,670 Nuclear fuel purchases (9,672) (9,344)(177,776) (44,994) Proceeds from sale/leaseback of nuclear fuel 39,440 1,035210,265 16,144 Investment in nonregulated/nonutility properties (23,246) 240(46,243) (113) -------- -------- Net cash flow used in investing activities (99,351) (179,641)(251,968) (349,447) -------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 59,410 General and refunding mortgage bonds 109,285 - Other long-term debt 43,538 43,644 Retirement of: First mortgage bonds (20,825) (400)(96,025) (85,600) General and refunding mortgage bonds (29,200) -(44,200) (45,000) Other long-term debt (25) (44)(45,404) (16,108) Premium and expense on refinancing sale/leaseback bonds - (47,602) Repurchase of common stock - (35,590)(88,796) Redemption of preferred stock (24,250) (24,250)(26,250) (26,259) Changes in short-term borrowings (38,625)(103,534) 106,200 Common stock dividends paid (101,969) (103,728)(204,267) (207,149) -------- -------- Net cash flow used in financing activities (214,894) (211,614)(366,857) (307,260) -------- -------- Net decrease in cash and cash equivalents (38,664) (68,824)(169,078) (148,506) Cash and cash equivalents at beginning of period 613,907 563,749 -------- -------- Cash and cash equivalents at end of period $575,243 $494,925$444,829 $415,243 ======== ========
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $172,220 $169,748$323,218 $336,230 Income taxes $2,564 ($6,070)$86,327 $79,097 Noncash investing and financing activities: Capital lease obligations incurred $27,804 $20,547- $24,303 Change in unrealized appreciation/depreciation of decommissioning trust assets $9,972 $15,634$17,521 $7,477 See Notes to Consolidated Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $21,227,444$21,350,820 $21,184,013 Plant acquisition adjustment - GSU 483,889479,822 487,955 Electric plant under leases 668,843 668,846 Property under capital leases - electric 159,279155,067 161,950 Natural gas 164,043166,109 164,013 Steam products 77,307 77,307 Construction work in progress 532,525529,091 476,816 Nuclear fuel under capital leases 259,903330,238 265,520 Nuclear fuel 65,03237,463 70,147 ----------- ----------- Total 23,638,26523,794,760 23,556,567 Less - accumulated depreciation and amortization 7,799,9397,958,011 7,639,549 ----------- ----------- Utility plant - net 15,838,32615,836,749 15,917,018 ----------- ----------- Other Property and Investments: Decommissioning trust funds 225,446242,805 207,395 Other 291,031295,445 240,745 ----------- ----------- Total 516,477538,250 448,140 ----------- ----------- Current Assets: Cash and cash equivalents: Cash 101,914116,109 87,700 Temporary cash investments - at cost, which approximates market 473,329328,720 526,207 ----------- ----------- Total cash and cash equivalents 575,243444,829 613,907 Special deposits 6,08217,447 8,074 Notes receivable 13,958 19,19015,929 14,446 Accounts receivable: Customer (less allowance for doubtful accounts of $6.7 million in 1995 and 1994) 281,167 325,410336,931 336,887 Other 43,65347,970 66,651 Accrued unbilled revenues 216,703350,709 240,610 Deferred fuel 28,662 - Fuel inventory 102,816130,386 93,211 Materials and supplies - at average cost 371,393380,654 365,956 Rate deferrals 384,236398,281 380,612 Prepayments and other 93,237123,526 98,811 ----------- ----------- Total 2,088,488 2,212,4322,275,324 2,219,165 ----------- ----------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 1,369,4701,275,634 1,451,926 SFAS 109 regulatory asset - net 1,409,9301,417,996 1,417,646 Unamortized loss on reacquired debt 232,382228,878 232,420 Other regulatory assets 315,236320,630 316,878 Long-term receivables 284,511 277,830277,446 271,097 Other 334,095339,760 339,201 ----------- ----------- Total 3,945,624 4,035,9013,860,344 4,029,168 ----------- ----------- TOTAL $22,388,915$22,510,667 $22,613,491 =========== =========== See Notes to Consolidated Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $.01 par value, authorized 500,000,000 shares; issued 230,017,485 shares in 1995 and 1994 $2,300 $2,300 Paid-in capital 4,199,7804,199,643 4,202,134 Retained earnings 2,076,8242,236,785 2,223,739 Less - treasury stock (2,271,035(2,268,318 shares in 1995 and 2,608,908 in 1994) 67,37867,270 77,378 ----------- ----------- Total common shareholders' equity 6,211,5266,371,458 6,350,795 Subsidiary's preference stock 150,000 150,000 Subsidiaries' preferred stock: Without sinking fund 543,455550,955 550,955 With sinking fund 283,198273,698 299,946 Long-term debt 7,035,1287,023,655 7,093,473 ----------- ----------- Total 14,223,30714,369,766 14,445,169 ----------- ----------- Other Noncurrent Liabilities: Obligations under capital leases 265,889330,548 273,947 Other 321,285320,000 310,977 ----------- ----------- Total 587,174650,548 584,924 ----------- ----------- Current Liabilities: Currently maturing long-term debt 364,885403,060 349,085 Notes payable 133,24268,333 171,867 Accounts payable 400,687396,408 471,120 Customer deposits 137,019138,775 134,478 Taxes accrued 155,608170,502 92,578 Accumulated deferred income taxes 32,09941,342 40,313 Interest accrued 182,393187,715 195,639 Dividends declared 115,43812,883 13,599 Deferred fuel cost 20,158- 27,066 Obligations under capital leases 151,479152,730 151,904 Reserve for rate refund 67,53266,943 56,972 Other 293,229278,743 327,330 ----------- ----------- Total 2,053,7691,917,434 2,031,951 ----------- ----------- Deferred Credits: Accumulated deferred income taxes 3,893,0093,891,164 3,915,138 Accumulated deferred investment tax credits 644,466667,289 649,898 Other 987,1901,014,466 986,411 ----------- ----------- Total 5,524,6655,572,919 5,551,447 ----------- ----------- Commitments and Contingencies (Notes 1 and 2) TOTAL $22,388,915$22,510,667 $22,613,491 =========== =========== See Notes to Consolidated Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Revenues $339,596 $371,091 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 41,167 63,474 Purchased power 81,747 91,182 Nuclear refueling outage expenses 6,967 8,634 Other operation and maintenance 93,658 80,526 Depreciation, amortization, and decommissioning 39,352 35,718 Taxes other than income taxes 10,111 9,115 Income taxes (2,469) (2,405) Amortization of rate deferrals 38,033 40,173 -------- -------- Total 308,566 326,417 -------- -------- Operating Income 31,030 44,674 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 915 1,154 Miscellaneous - net 15,532 14,659 Income taxes (6,097) (5,771) -------- -------- Total 10,350 10,042 -------- -------- Interest Charges: Interest on long-term debt 26,933 26,344 Other interest - net 3,116 2,804 Allowance for borrowed funds used during construction (731) (820) -------- -------- Total 29,318 28,328 -------- -------- Net Income 12,062 26,388 Preferred Stock Dividend Requirements and Other 4,561 4,883 -------- -------- Earnings Applicable to Common Stock $7,501 $21,505
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $412,164 $414,901 $751,760 $785,992 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 63,639 67,759 104,806 131,233 Purchased power 84,176 93,427 165,923 184,609 Nuclear refueling outage expenses 7,903 8,839 14,870 17,473 Other operation and maintenance 85,786 89,372 179,444 169,898 Depreciation, amortization, and decommissioning 39,602 36,540 78,954 72,258 Taxes other than income taxes 9,984 8,508 20,095 17,623 Income taxes 23,813 17,323 21,344 14,918 Amortization of rate deferrals 29,894 33,552 67,927 73,725 -------- -------- -------- -------- Total 344,797 355,320 653,363 681,737 -------- -------- -------- -------- Operating Income 67,367 59,581 98,397 104,255 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 691 896 1,606 2,050 Miscellaneous - net 10,820 11,997 26,352 24,561 Income taxes (4,241) (3,913) (10,338) (9,684) -------- -------- -------- -------- Total 7,270 8,980 17,620 16,927 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 26,611 26,351 53,544 52,695 Other interest - net 624 1,294 3,740 2,003 Allowance for borrowed funds used during construction (442) (847) (1,173) (1,667) -------- -------- -------- -------- Total 26,793 26,798 56,111 53,031 -------- -------- -------- -------- Net Income 47,844 41,763 59,906 68,151 Preferred Stock Dividend Requirements and Other 4,545 4,866 9,106 9,749 -------- -------- -------- -------- Earnings Applicable to Common Stock $43,299 $36,897 $50,800 $58,402 ======== ======== ======== ======== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $12,062 $26,388$59,906 $68,151 Noncash items included in net income: Change in rate deferrals/excess capacity-net 30,665 26,25761,207 51,782 Depreciation, amortization, and decommissioning 39,352 35,71878,954 72,258 Deferred income taxes and investment tax credits (1,201) (11,751)(10,135) (20,012) Allowance for equity funds used during construction (915) (1,154)(1,606) (2,050) Changes in working capital: Receivables 37,541 21,934(41,124) (36,401) Fuel inventory (14,460) 12,695(34,626) 27,345 Accounts payable 32,917 (25,725)33,684 (31,606) Taxes accrued 8,488 20,16728,691 15,628 Interest accrued 636 (334)(759) (92) Other working capital accounts (9,952) 1,391(9,331) (38,907) Decommissioning trust contributions (2,386) (2,545)(6,071) (5,288) Provision for estimated losses and reserves (10,877) (7,938)3,522 (8,224) Other 2,972 (6,919)(21,032) (12,839) -------- --------------- Net cash flow provided by operating activities 124,842 88,184141,280 79,745 -------- --------------- Investing Activities: Construction expenditures (41,651) (40,188)(78,692) (74,778) Allowance for equity funds used during construction 915 1,1541,606 2,050 Nuclear fuel purchases (76)(32,874) - Proceeds from sale/leaseback of nuclear fuel 7632,831 - -------- --------------- Net cash flow used in investing activities (40,736) (39,034)(77,129) (72,728) -------- --------------- Financing Activities: Proceeds from issuance of other long-term debt - 27,992 Retirement of first mortgage bonds (400) (400)(25,600) (600) Redemption of preferred stock (5,000) (5,000)(7,000) (7,000) Changes in short-term borrowings - 10,597(34,000) 30,246 Dividends paid: Common stock (32,800) (17,900)(40,300) (39,400) Preferred stock (4,727) (5,049)(9,321) (9,915) -------- --------------- Net cash flow used inprovided by (used in) financing activities (42,927) (17,752)(116,221) 1,323 -------- --------------- Net increase (decrease) in cash and cash equivalents 41,179 31,398(52,070) 8,340 Cash and cash equivalents at beginning of period 80,756 1,825 -------- --------------- Cash and cash equivalents at end of period $121,935 $33,223$28,686 $10,165 ======== =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $25,916 $24,655$51,392 $49,205 Income taxes - ($242)$13,843 $28,677 Noncash investing and financing activities: Capital lease obligations incurred $76 $14,313- $14,626 Change in unrealized appreciation/depreciation of decommissioning trust assets $6,234 $13,463$11,347 $7,210 See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $4,310,936$4,352,381 $4,293,097 Property under capital leases 55,55453,412 56,135 Construction work in progress 153,728144,723 136,701 Nuclear fuel under capital lease 87,963108,967 94,628 ---------- ---------- Total 4,608,1814,659,483 4,580,561 Less - accumulated depreciation and amortization 1,744,8861,781,356 1,710,216 ---------- ---------- Utility plant - net 2,863,2952,878,127 2,870,345 ---------- ---------- Other Property and Investments: Investment in subsidiary companies - at equity 11,215 11,215 Decommissioning trust fund 138,846149,969 127,136 Other - at cost (less accumulated depreciation) 4,6787,487 4,628 ---------- ---------- Total 154,739168,671 142,979 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 15,11610,683 3,737 Temporary cash investments - at cost, which approximates market: Associated companies 16,0582,936 4,713 Other 90,76115,067 72,306 ---------- ---------- Total cash and cash equivalents 121,93528,686 80,756 Accounts receivable: Customer (less allowance for doubtful accounts of $2.0 million in 1995 and 1994) 36,89261,741 53,781 Associated companies 23,11631,119 28,506 Other 4,9118,130 11,181 Accrued unbilled revenues 74,871117,465 83,863 Fuel inventory - at average cost 49,02169,187 34,561 Materials and supplies - at average cost 74,83480,837 79,886 Rate deferrals 118,131122,632 113,630 Deferred excess capacity 8,4268,392 8,414 Prepayments and other 17,05816,223 23,867 ---------- ---------- Total 529,195544,412 518,445 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 327,555294,627 360,496 Deferred excess capacity 17,82315,742 20,060 SFAS 109 regulatory asset - net 221,691219,689 227,068 Unamortized loss on reacquired debt 56,51155,679 57,344 Other regulatory assets 69,62577,411 68,813 Other 25,36328,540 26,665 ---------- ---------- Total 718,568691,688 760,446 ---------- ---------- TOTAL $4,265,797$4,282,898 $4,292,215 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $0.01 par value, authorized 325,000,000 shares; issued and outstanding 46,980,196 shares in 1995 and 1994 $470 $470 Paid-in capital 590,844 590,844 Retained earnings 466,499502,299 491,799 ---------- ---------- Total common shareholder's equity 1,057,8131,093,613 1,083,113 Preferred stock: Without sinking fund 176,350 176,350 With sinking fund 53,52751,527 58,527 Long-term debt 1,273,2271,278,691 1,293,879 ---------- ---------- Total 2,560,9172,600,181 2,611,869 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 87,304105,426 94,534 Other 71,20371,757 68,235 ---------- ---------- Total 158,507177,183 162,769 ---------- ---------- Current Liabilities: Currently maturing long-term debt 53,17528,175 28,175 Notes payable: Other 34,667payable 667 34,667 Accounts payable: Associated companies 44,27241,587 17,345 Other 95,31998,771 89,329 Customer deposits 17,58218,074 17,113 Taxes accrued 53,72773,930 45,239 Accumulated deferred income taxes 36,93634,381 25,043 Interest accrued 31,70030,305 31,064 Dividends declared 4,5614,512 4,727 Co-owner advances 40,62742,144 20,639 Deferred fuel cost 10,29814,267 20,254 Nuclear refueling reserve 22,10729,118 37,954 Obligations under capital leases 56,21356,909 56,154 Other 29,16521,965 45,632 ---------- ---------- Total 530,349494,805 473,335 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 843,961836,175 859,558 Accumulated deferred investment tax credits 117,117115,685 118,548 Other 54,94658,869 66,136 ---------- ---------- Total 1,016,0241,010,729 1,044,242 ---------- ---------- Commitments and Contingencies (Notes 1 and 2)(Note 1) TOTAL $4,265,797$4,282,898 $4,292,215 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF INCOME (LOSS) For the Three Months Ended March 31, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Revenues: Electric $378,791 $402,104 Natural gas 9,923 15,846 Steam products 10,632 11,708 -------- -------- Total 399,346 429,658 -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses and gas purchased for resale 114,921 119,018 Purchased power 39,537 60,220 Nuclear refueling outage expenses 3,031 2,520 Other operation and maintenance 102,424 102,050 Depreciation, amortization, and decommissioning 50,339 47,867 Taxes other than income taxes 25,379 24,346 Income taxes (162) (821) Amortization of rate deferrals 16,506 15,897 -------- -------- Total 351,975 371,097 -------- -------- Operating Income 47,371 58,561 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 251 260 Miscellaneous - net 5,914 4,443 Income taxes (865) (1,972) -------- -------- Total 5,300 2,731 -------- -------- Interest Charges: Interest on long-term debt 48,270 48,980 Other interest - net 1,010 1,475 Allowance for borrowed funds used during construction (244) (206) -------- -------- Total 49,036 50,249 -------- -------- Net Income 3,635 11,043 Preferred and Preference Stock Dividend Requirements and Other 7,590 7,407 -------- -------- Earnings (Loss) Applicable to Common Stock ($3,955) $3,636
GULF STATES UTILITIES COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30,1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues: Electric $462,297 $439,015 $841,088 $841,119 Natural gas 4,521 5,981 14,444 21,827 Steam products 12,791 11,859 23,423 23,567 -------- -------- -------- -------- Total 479,609 456,855 878,955 886,513 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 126,908 119,341 241,829 238,359 Purchased power 41,117 54,839 84,724 115,059 Nuclear refueling outage expenses 2,743 2,520 5,774 5,040 Other operation and maintenance 105,273 103,512 203,627 205,562 Depreciation, amortization, and decommissioning 50,392 49,209 100,731 97,076 Taxes other than income taxes 24,752 9,664 50,131 34,010 Income taxes 23,140 17,573 22,978 16,752 Amortization of rate deferrals 16,506 16,840 33,012 32,737 -------- -------- -------- -------- Total 390,831 373,498 742,806 744,595 -------- -------- -------- -------- Operating Income 88,778 83,357 136,149 141,918 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 266 379 517 639 Miscellaneous - net 5,696 4,085 11,610 8,233 Income taxes (2,164) (2,211) (3,029) (4,183) -------- -------- -------- -------- Total 3,798 2,253 9,098 4,689 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 48,357 48,770 96,627 97,750 Other interest - net 1,083 4,057 2,093 5,237 Allowance for borrowed funds used during construction (217) (301) (461) (507) -------- -------- -------- -------- Total 49,223 52,526 98,259 102,480 -------- -------- -------- -------- Net Income 43,353 33,084 46,988 44,127 Preferred and Preference Stock Dividend Requirements and Other 7,426 7,529 15,016 14,936 -------- -------- -------- -------- Earnings Applicable to Common Stock $35,927 $25,555 $31,972 $29,191 ======== ======== ======== ======== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $3,635 $11,043$46,988 $44,127 Noncash items included in net income: Change in rate deferrals 16,506 15,89733,012 32,737 Depreciation, amortization, and decommissioning 50,339 47,867101,113 97,076 Deferred income taxes and investment tax credits 914 1,15025,403 19,454 Allowance for equity funds used during construction (251) (260)(517) (639) Changes in working capital: Receivables 58,324 (6,088)(7,940) (29,924) Fuel inventory 894 4,546(1,894) (4,484) Accounts payable (10,624) (30,618)(34,007) 10,436 Taxes accrued 11,043 6,80224,832 8,655 Interest accrued 4,466 6,375(9,334) (3,044) Reserve for rate refund 10,5602,381 - Other working capital accounts (4,667) (8,093)(87,395) (37,366) Decommissioning trust contributions (739) (493)(1,478) (1,478) Other (10,512) 5,6489,186 3,127 -------- -------- Net cash flow provided by operating activities 129,888 53,776100,350 138,677 -------- -------- Investing Activities: Construction expenditures (19,136) (20,824)(53,779) (68,109) Allowance for equity funds used during construction 251 260517 639 Nuclear fuel purchases - (3,538)(16,145) Proceeds from sale/leaseback of nuclear fuel - 1,03516,145 -------- -------- Net cash flow used in investing activities (18,885) (23,067)(53,262) (67,470) -------- -------- Financing Activities: Proceeds from the issuance of other long-term debt 2,277 - Redemption of preferred and preference stock (2,250) (2,250) Dividends paid: Common stock - (100,000)(183,600) Preferred and preference stock (7,514) (7,413)(14,917) (14,831) -------- -------- Net cash flow used in financing activities (7,487) (109,663)(14,890) (200,681) -------- -------- Net increase (decrease) in cash and cash equivalents 103,516 (78,954)32,198 (129,474) Cash and cash equivalents at beginning of period 104,644 261,349 -------- -------- Cash and cash equivalents at end of period $208,160 $182,395$136,842 $131,875 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interestfor: Interest - net of amount capitalized $41,860 $40,192$102,618 $96,470 Income taxes $77 $7,573 Noncash investing and financing activities: Capital lease obligations incurred - $16,145 Change in unrealized appreciation/depreciation of decommissioning trust assets $759 $390$1,651 ($244) See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $6,845,340$6,886,116 $6,842,726 Natural gas 44,505 44,505 Steam products 77,307 77,307 Property under capital leases 81,89480,977 82,914 Construction work in progress 114,584107,934 96,176 Nuclear fuel under capital leases 69,62561,225 80,042 ---------- ---------- Total 7,233,2557,258,064 7,223,670 Less - accumulated depreciation and amortization 2,552,4922,597,889 2,504,826 ---------- ---------- Utility plant - net 4,680,7634,660,175 4,718,844 ---------- ---------- Other Property and Investments: Decommissioning trust fund 23,00625,051 21,309 Other - at cost (less accumulated depreciation) 36,93036,625 29,315 ---------- ---------- Total 59,93661,676 50,624 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 27,7928,454 8,063 Temporary cash investments - at cost, which approximates market: Associated companies 25,05818,674 5,085 Other 155,310109,714 91,496 ---------- ---------- Total cash and cash equivalents 208,160136,842 104,644 Special deposits 50,784 332 Accounts receivable: Customer (less allowance for doubtful accounts of $0.7 million in 1995 and 1994) 143,826136,858 167,745 Associated companies 1,2398,196 12,732 Other 2,46717,399 20,706 Accrued unbilled revenues 34,79786,140 39,470 Deferred fuel costs 2,06520,659 6,314 Accumulated deferred income taxes 54,42750,448 49,457 Fuel inventory 24,89027,678 25,784 Materials and supplies - at average cost 99,246101,390 90,054 Rate deferrals 92,07993,774 100,478 Prepayments and other 10,238 13,75416,524 13,422 ---------- ---------- Total 673,434746,692 631,138 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 492,777468,486 506,974 SFAS 109 regulatory asset - net 426,734436,502 426,358 Unamortized loss on reacquired debt 67,32564,736 63,994 Other regulatory assets 33,29731,486 35,168 Long-term receivables 281,207277,446 264,752 Other 144,918147,750 145,609 ---------- ---------- Total 1,446,2581,426,406 1,442,855 ---------- ---------- TOTAL $6,860,391$6,894,949 $6,843,461 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 100 shares in 1995 and 1994 $114,055 $114,055 Paid-in capital 1,152,419 1,152,336 Retained earnings 260,671296,400 264,626 ---------- ---------- Total common shareholder's equity 1,527,1451,562,874 1,531,017 Preference stock 150,000 150,000 Preferred stock: Without sinking fund 136,444 136,444 With sinking fund 92,687 94,934 Long-term debt 2,300,7442,300,795 2,318,417 ---------- ---------- Total 4,207,0204,242,800 4,230,812 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 114,765104,959 125,691 Other 72,34072,985 68,753 ---------- ---------- Total 187,105177,944 194,444 ---------- ---------- Current Liabilities: Currently maturing long-term debt 70,425 50,425 Accounts payable: Associated companies 43,78633,189 31,722 Other 118,287105,501 140,975 Customer deposits 22,68522,901 22,216 Taxes accrued 23,52137,310 12,478 Interest accrued 59,79345,993 55,327 Nuclear refueling reserve 14,41018,132 10,117 Obligations under capital leases 36,73337,234 37,265 Reserve for rate refund 67,53259,353 56,972 Other 103,96195,103 111,963 ---------- ---------- Total 561,133525,141 529,460 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 1,107,6261,113,402 1,100,396 Accumulated deferred investment tax credits 198,340225,442 199,428 Deferred River Bend finance charges 76,31670,226 82,406 Other 522,851539,994 506,515 ---------- ---------- Total 1,905,1331,949,064 1,888,745 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $6,860,391$6,894,949 $6,843,461 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Revenues $352,996 $383,826 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 52,050 58,108 Purchased power 74,995 103,496 Nuclear refueling outage expenses 4,517 4,591 Other operation and maintenance 72,538 73,631 Depreciation, amortization, and decommissioning 38,507 37,392 Taxes other than income taxes 15,716 14,437 Income taxes 18,696 16,843 Amortization of rate deferrals 6,660 6,660 -------- -------- Total 283,679 315,158 -------- -------- Operating Income 69,317 68,668 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 564 1,111 Miscellaneous - net 372 607 Income taxes (25) (10) -------- -------- Total 911 1,708 -------- -------- Interest Charges: Interest on long-term debt 32,572 32,473 Other interest - net 2,085 1,608 Allowance for borrowed funds used during construction (491) (801) -------- -------- Total 34,166 33,280 -------- -------- Net Income 36,062 37,096 Preferred Stock Dividend Requirements and Other 5,591 6,119 -------- -------- Earnings Applicable to Common Stock $30,471 $30,977
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $406,110 $441,643 $759,106 $825,469 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 59,551 85,518 111,601 143,626 Purchased power 93,478 101,841 168,473 205,337 Nuclear refueling outage expenses 4,516 4,885 9,033 9,476 Other operation and maintenance 72,800 86,143 145,338 159,775 Depreciation, amortization, and decommissioning 38,910 37,451 77,417 74,843 Taxes other than income taxes 14,332 13,919 30,048 28,356 Income taxes 29,667 24,313 48,363 41,156 Amortization of rate deferrals 6,886 6,887 13,546 13,546 -------- -------- -------- -------- Total 320,140 360,957 603,819 676,115 -------- -------- -------- -------- Operating Income 85,970 80,686 155,287 149,354 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 539 978 1,103 2,089 Miscellaneous - net 209 130 581 441 Income taxes 37 50 12 40 -------- -------- -------- -------- Total 785 1,158 1,696 2,570 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 32,512 32,377 65,084 64,850 Other interest - net 1,660 1,763 3,745 3,075 Allowance for borrowed funds used during construction (499) (649) (990) (1,450) -------- -------- -------- -------- Total 33,673 33,491 67,839 66,475 -------- -------- -------- -------- Net Income 53,082 48,353 89,144 85,449 Preferred Stock Dividend Requirements and Other 5,219 5,701 10,810 11,820 -------- -------- -------- -------- Earnings Applicable to Common Stock $47,863 $42,652 $78,334 $73,629 ======== ======== ======== ======== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $36,062 $37,096$89,144 $85,449 Noncash items included in net income: Change in rate deferrals 6,660 6,66013,546 13,546 Depreciation, amortization, and decommissioning 38,507 37,39277,417 74,843 Deferred income taxes and investment tax credits (9,077) 11,147(10,535) 25,253 Allowance for equity funds used during construction (564) (1,111)(1,103) (2,089) Amortization of deferred revenues - (10,283)(14,632) Changes in working capital: Receivables 26,639 23,376(7,873) (10,807) Accounts payable (25,464) (10,968)5,084 (15,689) Taxes accrued 37,282 13,39527,686 8,960 Interest accrued (7,458) (6,023)(2,216) (1,061) Other working capital accounts 633 2,796(30,279) (15,707) Decommissioning trust contributions (1,204) (1,204)(2,408) (2,408) Other 1,708 (2,756)1,264 1,464 -------- -------- Net cash flow provided by operating activities 103,724 99,517159,727 147,122 -------- -------- Investing Activities: Construction expenditures (20,055) (41,381)(43,559) (78,552) Allowance for equity funds used during construction 564 1,1111,103 2,089 Nuclear fuel purchases (40,493) - Proceeds from sale/seaseback of nuclear fuel 40,493 - -------- -------- Net cash flow used in investing activities (19,491) (40,270)(42,456) (76,463) -------- -------- Financing Activities: Retirement of otherof: First mortgage bonds - (25,000) Other long-term debt (25) (44)(69) (63) Redemption of preferred stock (7,500) (7,500)(7,509) Changes in short-term borrowings (7,954) (27,148)(9,344) 22,113 Dividends paid: Common stock (55,700) (17,900)(86,200) (48,300) Preferred stock (5,491) (5,938)(10,743) (11,638) -------- -------- Net cash flow used in financing activities (76,670) (58,530)(113,856) (70,397) -------- -------- Net increase in cash and cash equivalents 7,563 7173,415 262 Cash and cash equivalents at beginning of period 28,718 33,489 -------- -------- Cash and cash equivalents at end of period $36,281 $34,206$32,133 $33,751 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interestfor: Interest - net of amount capitalized $40,325 $37,730$67,432 $64,396 Income taxes $43,623 $18,219 Noncash investing and financing activities: Capital lease obligations incurred $75- $9,677 Change in unrealized appreciation/depreciation of decommissioning trust assets $1,294 $843$1,934 $220 See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $4,786,450$4,809,009 $4,778,126 Electric plant under lease 229,468 229,468 Construction work in progress 102,45496,859 94,791 Nuclear fuel under capital lease 36,31670,650 44,238 Nuclear fuel 6,346 6,420 ---------- ---------- Total 5,161,0345,212,332 5,153,043 Less - accumulated depreciation and amortization 1,634,3371,666,260 1,600,510 ---------- ---------- Utility plant - net 3,526,6973,546,072 3,552,533 ---------- ---------- Other Property and Investments: Nonutility property 20,060 20,060 Decommissioning trust fund 29,95432,238 27,076 Investment in subsidiary company - at equity 14,230 14,230 Other 1,0931,080 1,078 ---------- ---------- Total 65,33767,608 62,444 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 2,6932,569 - Temporary cash investments - at cost, which approximates market: Associated companies 670 - Other 32,918market 29,564 28,718 ---------- ---------- Total cash and cash equivalents 36,28132,133 28,718 Special deposits 6,503 3,237 Accounts receivable: Customer (less allowance for doubtful accounts of $1.2 million in 1995 and 1994) 45,96463,093 58,858 Associated companies 1,248- 9,827 Other 11,83113,691 11,609 Accrued unbilled revenues 57,72174,492 63,109 Deferred fuel cost 15,278 - Accumulated deferred income taxes 5,309312 3,702 Materials and supplies - at average cost 89,40092,906 89,692 Rate deferrals 28,422 28,422 Prepayments and other 22,380 28,52819,584 25,291 ---------- ---------- Total 298,556346,414 322,465 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 18,94912,063 25,609 SFAS 109 regulatory asset - net 374,901374,743 379,263 Unamortized loss on reacquired debt 42,60641,557 43,656 Other regulatory assets 25,00624,385 25,736 Other 24,62225,206 23,733 ---------- ---------- Total 486,084477,954 497,997 ---------- ---------- TOTAL $4,376,674$4,438,048 $4,435,439 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 250,000,000 shares; issued and outstanding 165,173,180 shares in 1995 and 1994 $1,088,900 $1,088,900 Capital stock expense and other (5,029) (5,367) Retained earnings 88,190105,554 113,420 ---------- ---------- Total common shareholder's equity 1,172,0611,189,425 1,196,953 Preferred stock: Without sinking fund 160,500 160,500 With sinking fund 103,765 111,265 Long-term debt 1,368,1941,368,399 1,403,055 ---------- ---------- Total 2,804,5202,822,089 2,871,773 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 8,31642,650 16,238 Other 55,32754,038 54,216 ---------- ---------- Total 63,64396,688 70,454 ---------- ---------- Current Liabilities: Currently maturing long-term debt 110,320110,245 75,320 Notes payable: Associated companies -144 7,954 Other 19,20017,666 19,200 Accounts payable: Associated companies 22,86541,400 20,793 Other 54,66766,680 82,203 Customer deposits 55,60255,947 54,934 Taxes accrued 35,42225,826 (1,860) Interest accrued 35,52940,771 42,987 Dividends declared 5,2515,217 5,489 Deferred fuel cost 11,706- 13,983 Obligations under capital leases 28,000 28,000 Other 16,62818,898 20,156 ---------- ---------- Total 395,190410,794 369,159 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 873,843869,019 883,945 Accumulated deferred investment tax credits 149,832148,404 151,259 Deferred interest - Waterford 3 lease obligation 26,17226,345 26,000 Other 63,47464,709 62,849 ---------- ---------- Total 1,113,3211,108,477 1,124,053 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,376,674$4,438,048 $4,435,439 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Revenues $193,324 $187,417 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 30,133 22,795 Purchased power 57,044 64,322 Other operation and maintenance 32,218 36,573 Depreciation and amortization 9,397 8,706 Taxes other than income taxes 10,589 10,276 Income taxes 3,363 1,225 Amortization of rate deferrals 28,310 24,805 -------- -------- Total 171,054 168,702 -------- -------- Operating Income 22,270 18,715 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 259 576 Miscellaneous - net 61 94 Income taxes (23) (36) -------- -------- Total 297 634 -------- -------- Interest Charges: Interest on long-term debt 11,092 12,503 Other interest - net 1,906 964 Allowance for borrowed funds used during construction (205) (367) -------- -------- Total 12,793 13,100 -------- -------- Net Income 9,774 6,249 Preferred Stock Dividend Requirements and Other 1,707 2,075 -------- -------- Earnings Applicable to Common Stock $8,067 $4,174
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $240,310 $229,790 $433,634 $417,207 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 37,741 41,818 67,874 64,613 Purchased power 70,966 58,558 128,010 122,880 Other operation and maintenance 39,937 40,643 72,155 77,216 Depreciation and amortization 9,338 9,051 18,735 17,757 Taxes other than income taxes 10,494 10,460 21,083 20,736 Income taxes 10,731 10,628 14,094 11,853 Amortization of rate deferrals 28,311 24,804 56,621 49,609 -------- -------- -------- -------- Total 207,518 195,962 378,572 364,664 -------- -------- -------- -------- Operating Income 32,792 33,828 55,062 52,543 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 269 445 528 1,021 Miscellaneous - net 796 158 857 252 Income taxes (305) (61) (328) (97) -------- -------- -------- -------- Total 760 542 1,057 1,176 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 11,856 11,614 22,948 24,117 Other interest - net 1,352 1,389 3,258 2,353 Allowance for borrowed funds used during construction (234) (286) (439) (653) -------- -------- -------- -------- Total 12,974 12,717 25,767 25,817 -------- -------- -------- -------- Net Income 20,578 21,653 30,352 27,902 Preferred Stock Dividend Requirements and Other 1,544 1,955 3,251 4,030 -------- -------- -------- -------- Earnings Applicable to Common Stock $19,034 $19,698 $27,101 $23,872 ======== ======== ======== ======== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $9,774 $6,249$30,352 $27,902 Noncash items included in net income: Change in rate deferrals 14,755 20,86129,566 44,127 Depreciation and amortization 9,397 8,70618,735 17,757 Deferred income taxes and investment tax credits (3,740) 673(7,196) (7,288) Allowance for equity funds used during construction (259) (576)(528) (1,021) Changes in working capital: Receivables 14,012 18,219(19,922) (12,733) Fuel inventory (1,892) (335)(4,448) 4,110 Accounts payable 10,730 17,78923,540 13,367 Taxes accrued (9,035) (14,146)(4,239) (239) Interest accrued (7,887) (6,956)903 (4,217) Other working capital accounts 10,856 4,799(3,864) (4,002) Other 5,129 (8,419)11,856 (4,311) -------- -------- Net cash flow provided by operating activities 51,840 46,86474,755 73,452 -------- -------- Investing Activities: Construction expenditures (12,275) (58,989)(34,388) (80,224) Allowance for equity funds used during construction 259 576528 1,021 -------- -------- Net cash flow used in investing activities (12,016) (58,413)(33,860) (79,203) -------- -------- Financing Activities: Retirement of generalProceeds from the issuance of: General and refunding bonds (40,000)79,480 - Other long-term debt - 15,652 Retirement of: General and refunding bonds (20,000) (30,000) First mortgage bonds (20,000) - Other long-term debt (15) (16,045) Redemption of preferred stock (8,000) (8,000) Changes in short-term borrowings 12,319 60,021(30,000) 49,354 Dividends paid: Common stock (8,300) (4,600)(16,400) (8,800) Preferred stock (1,790) (1,995)(3,343) (4,054) -------- -------- Net cash flow provided by (used in)used in financing (45,771) 45,426 activities (18,278) (1,893) -------- -------- Net increase (decrease) in cash and cash equivalents (5,947) 33,87722,617 (7,644) Cash and cash equivalents at beginning of period 9,598 7,999 -------- -------- Cash and cash equivalents at end of period $3,651 $41,876$32,215 $355 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $20,278 $19,590$24,066 $29,113 Income taxes $1,600 ($1,532)$15,431 $8,577 See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $1,486,019$1,496,932 $1,475,322 Construction work in progress 68,43078,495 67,119 ---------- ---------- Total 1,554,4491,575,427 1,542,441 Less - accumulated depreciation and amortization 591,330599,463 582,514 ---------- ---------- Utility plant - net 963,119975,964 959,927 ---------- ---------- Other Property and Investments: Investment in subsidiary company - at equity 5,531 5,531 Other 5,6215,619 5,624 ---------- ---------- Total 11,15211,150 11,155 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 3,6513,434 5,080 Temporary cash investments - at cost, which approximates market Associated companies -4,694 276 Other -24,087 4,242 ---------- ---------- Total cash and cash equivalents 3,65132,215 9,598 Notes receivable 4,377 4,937 Accounts receivable: Customer (less allowance for doubtful accounts of $2.1 million in 1995 and 1994) 28,076 32,56446,335 37,501 Associated companies 5912,390 4,680 Other 1,9361,852 2,789 Accrued unbilled revenues 35,29154,187 39,873 Fuel inventory - at average cost 6,6729,228 4,780 Materials and supplies - at average cost 21,24522,814 20,642 Rate deferrals 113,070119,637 106,538 Prepayments and other 4,77715,657 10,672 ---------- ---------- Total 219,686304,315 237,073 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 364,433343,055 385,720 Unamortized loss on reacquired debt 10,1789,868 10,488 Other regulatory assets 9,6339,097 10,168 Long-term receivable 5,537- 6,345 Other 7,6917,075 8,569 ---------- ---------- Total 397,472369,095 421,290 ---------- ---------- TOTAL $1,591,429$1,660,524 $1,629,445 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 15,000,000 shares; issued and outstanding 8,666,357 shares in 1995 and 1994 $199,326 $199,326 Capital stock expense and other (1,661) (1,762) Retained earnings 231,778242,712 232,011 -------- ------------------ ---------- Total common shareholder's equity 429,443440,377 429,575 Preferred stock: Without sinking fund 57,881 57,881 With sinking fund 23,770 31,770 Long-term debt 475,279530,311 475,233 -------- ------------------ ---------- Total 986,3731,052,339 994,459 -------- ------------------ ---------- Other Noncurrent Liabilities: Obligations under capital leases 519485 552 Other 11,93111,522 8,984 -------- ------------------ ---------- Total 12,45012,007 9,536 -------- ------------------ ---------- Current Liabilities: Currently maturing long-term debt 25,96550,965 65,965 Notes payable: Associated companies 12,944payable - Other 29,375 30,000 Accounts payable: Associated companies 23,49125,207 2,350 Other 19,79430,888 30,205 Customer deposits 23,20923,812 22,793 Taxes accrued 11,78616,582 20,821 Accumulated deferred income taxes 50,26652,249 47,515 Interest accrued 12,49021,280 20,377 Dividends declared 1,433 1,626 Other 34,722 30,318 -------- --------30,965 28,692 ---------- ---------- Total 244,042253,381 270,344 -------- ------------------ ---------- Deferred Credits: Accumulated deferred income taxes 297,368292,018 301,288 Accumulated deferred investment tax credits 29,14128,753 29,528 SFAS 109 regulatory liability - net 10,91511,213 13,099 Other 11,14010,813 11,191 -------- ------------------ ---------- Total 348,564342,797 355,106 -------- ------------------ ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $1,591,429$1,660,524 $1,629,445 ========== ========== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF INCOME For the Three Months Ended March 31, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Revenues: Electric $78,140 $78,855 Natural gas 30,746 38,233 -------- -------- Total 108,886 117,088 -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses and gas purchased for resale 30,978 33,915 Purchased power 29,682 37,732 Other operation and maintenance 16,753 19,671 Depreciation and amortization 4,828 4,710 Taxes other than income taxes 7,227 7,054 Income taxes 3,275 619 Amortization of rate deferrals 5,280 6,928 -------- -------- Total 98,023 110,629 -------- -------- Operating Income 10,863 6,459 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 26 113 Miscellaneous - net 416 510 Income taxes (160) (525) -------- -------- Total 282 98 -------- -------- Interest Charges: Interest on long-term debt 4,329 4,541 Other interest - net 592 287 Allowance for borrowed funds used during construction (21) (84) -------- -------- Total 4,900 4,744 -------- -------- Net Income 6,245 1,813 Preferred Stock Dividend Requirements and Other 400 458 -------- -------- Earnings Applicable to Common Stock $5,845 $1,355
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues: Electric $97,070 $107,617 $175,210 $186,472 Natural gas 15,596 16,785 46,342 55,018 ------- -------- -------- -------- Total 112,666 124,402 221,552 241,490 ------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 14,461 26,044 45,439 59,959 Purchased power 44,245 35,209 73,927 72,941 Other operation and maintenance 17,162 20,289 33,915 39,960 Depreciation and amortization 4,786 4,743 9,614 9,453 Taxes other than income taxes 6,607 6,877 13,834 13,931 Income taxes 4,920 7,555 8,195 8,174 Amortization of rate deferrals 7,985 5,805 13,265 12,733 ------- -------- -------- -------- Total 100,166 106,522 198,189 217,151 ------- -------- -------- -------- Operating Income 12,500 17,880 23,363 24,339 ------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 35 124 61 237 Miscellaneous - net 73 474 489 984 Income taxes (28) (184) (188) (709) ------- -------- -------- -------- Total 80 414 362 512 ------- -------- -------- -------- Interest Charges: Interest on long-term debt 3,544 4,268 7,873 8,809 Other interest - net 375 306 967 593 Allowance for borrowed funds used during construction (27) (92) (48) (176) ------- -------- -------- -------- Total 3,892 4,482 8,792 9,226 ------- -------- -------- -------- Net Income 8,688 13,812 14,933 15,625 Preferred Stock Dividend Requirements and Other 317 375 717 833 ------- -------- -------- -------- Earnings Applicable to Common Stock $8,371 $13,437 $14,216 $14,792 ======= ======== ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $6,245 $1,813$14,933 $15,625 Noncash items included in net income: Change in rate deferrals 6,382 5,00313,452 10,379 Depreciation and amortization 4,828 4,7109,614 9,453 Deferred income taxes and investment tax credits (3,309) (4,254)(1,202) (10,899) Allowance for equity funds used during construction (26) (113)(61) (237) Changes in working capital: Receivables 3,091 9,063(7,972) 2,842 Accounts payable 3,676 (6,759)13,145 (3,801) Taxes accrued (30) 5,857(999) 7,173 Interest accrued (955) (718)(594) (679) Income tax refund 6,531704 - Other working capital accounts (4,680) 9,726(16,015) 8,180 Other (3,175) 2,180 -------- --------(10,465) 3,752 ------- ------- Net cash flow provided by operating activities 18,578 26,508 -------- --------14,540 41,788 ------- ------- Investing Activities: Construction expenditures (5,028) (5,634)(8,738) (10,855) Allowance for equity funds used during construction 26 113 -------- --------61 237 ------- ------- Net cash flow used in investing activities (5,002) (5,521) -------- --------(8,677) (10,618) ------- ------- Financing Activities: Proceeds from the issuance of general and refunding bonds 29,805 - Retirement of general and refunding bonds (9,200) -(24,200) (15,000) Redemption of preferred stock (1,500) (1,500) Dividends paid: Common stock - -(5,800) (1,400) Preferred stock (413) (471) -------- --------(775) (845) ------- ------- Net cash flow used in financing activities (11,113) (1,971) -------- --------(2,470) (18,745) ------- ------- Net increase in cash and cash equivalents 2,463 19,0163,393 12,425 Cash and cash equivalents at beginning of period 8,031 43,317 -------- --------------- ------- Cash and cash equivalents at end of period $10,494 $62,333 ======== ========$11,424 $55,742 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interestfor: Interest - net of amount capitalized $5,702 $5,244$9,056 $9,663 Income taxes $10,465 $12,671 See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $470,874$474,746 $470,560 Natural gas 119,538121,604 119,508 Construction work in progress 12,0219,761 7,284 -------- -------- Total 602,433606,111 597,352 Less - accumulated depreciation and amortization 324,210326,669 319,576 -------- -------- Utility plant - net 278,223279,442 277,776 -------- -------- Other Investments: Investment in subsidiary company - at equity 3,259 3,259 -------- -------- Current Assets: Cash and cash equivalents: Cash 1,2311,815 849 Temporary cash investments - at cost, which approximates market: Associated companies 1,3921,567 2,472 Other 7,8718,042 4,710 -------- -------- Total cash and cash equivalents 10,49411,424 8,031 Accounts receivable: Customer (less allowance for doubtful accounts of $0.8 million in 1995 and 1994) 24,80628,903 23,938 Associated companies 462,844 3,503 Other 370136 600 Accrued unbilled revenues 14,02318,425 14,295 Deferred electric fuel and resale gas costs -6,992 856 Materials and supplies - at average cost 9,1599,836 9,676 Rate deferrals 32,53333,815 31,544 Income tax receivable 13,64119,468 20,172 Prepayments and other 11,66511,013 5,636 -------- -------- Total 116,737142,856 118,251 -------- -------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 165,756157,404 173,127 SFAS 109 regulatory asset - net 9,0349,281 8,792 Unamortized loss on reacquired debt 2,2542,147 2,361 Other regulatory assets 5,647 5,647 Other 3,5993,833 3,681 -------- -------- Total 186,290178,312 193,608 -------- -------- TOTAL $584,509$603,869 $592,894 ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $4 par value, authorized 10,000,000 shares; issued and outstanding 8,435,900 shares in 1995 and 1994 $33,744 $33,744 Paid-in capital 36,247 36,201 Retained earnings subsequent to the elimination of the accumulated deficit on November 30, 1988 84,73187,302 78,886 -------- -------- Total common shareholder's equity 154,722157,293 148,831 Preferred stock: Without sinking fund 19,780 19,780 With sinking fund 1,9491,950 3,450 Long-term debt 179,172155,935 164,160 -------- -------- Total 355,623334,958 336,221 -------- -------- Other Noncurrent Liabilities: Accumulated provision for losses 17,33517,144 17,318 Other 1,082171 1,745 -------- -------- Total 18,41717,315 19,063 -------- -------- Current Liabilities: Currently maturing long-term debt -38,250 24,200 Accounts payable: Associated companies 13,88915,830 6,456 Other 15,74623,274 19,503 Customer deposits 17,94118,041 17,422 Accumulated deferred income taxes 4,6335,472 4,925 Taxes accrued 2,2991,330 2,329 Interest accrued 4,2874,648 5,242 Other 19,43915,021 19,982 -------- -------- Total 78,234121,866 100,059 -------- -------- Deferred Credits: Accumulated deferred income taxes 87,63988,304 89,246 Accumulated deferred investment tax credits 9,0928,933 9,251 Other 35,50432,493 39,054 -------- -------- Total 132,235129,730 137,551 -------- -------- Commitments and Contingencies (Notes 1 and 2)(Note 1) TOTAL $584,509$603,869 $592,894 ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF INCOME For the Three Months Ended March 31, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Revenues $151,664 $147,847 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 12,335 11,987 Nuclear refueling outage expenses 2,281 - Other operation and maintenance 25,099 21,540 Depreciation, amortization, and decommissioning 25,398 22,969 Taxes other than income taxes 7,174 6,873 Income taxes 19,305 20,136 -------- -------- Total 91,592 83,505 -------- -------- Operating Income 60,072 64,342 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 480 322 Miscellaneous - net 725 1,837 Income taxes 551 (1,720) -------- -------- Total 1,756 439 -------- -------- Interest Charges: Interest on long-term debt 37,434 42,862 Other interest - net 2,333 750 Allowance for borrowed funds used during construction (504) (380) -------- -------- Total 39,263 43,232 -------- -------- Net Income $22,565 $21,549
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $158,632 $151,219 $310,296 $299,066 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 3,561 12,234 15,896 24,221 Nuclear refueling outage expenses 19,005 - 21,286 - Other operation and maintenance 23,803 25,951 48,902 47,491 Depreciation, amortization, and decommissioning 24,535 22,998 49,933 45,967 Taxes other than income taxes 7,024 6,645 14,198 13,518 Income taxes 19,414 17,612 38,719 37,748 -------- -------- -------- -------- Total 97,342 85,440 188,934 168,945 -------- -------- -------- -------- Operating Income 61,290 65,779 121,362 130,121 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 552 312 1,032 634 Miscellaneous - net 1,017 1,517 1,742 2,616 Income taxes 501 681 1,052 (1,039) -------- -------- -------- -------- Total 2,070 2,510 3,826 2,211 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 38,162 40,045 75,596 82,907 Other interest - net 1,984 3,412 4,317 3,424 Allowance for borrowed funds used during construction (588) (380) (1,092) (760) -------- -------- -------- -------- Total 39,558 43,077 78,821 85,571 -------- -------- -------- -------- Net Income $23,802 $25,212 $46,367 $46,761 ======== ======== ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF CASH FLOWS For the ThreeSix Months Ended March 31,June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $22,565 $21,549$46,367 $46,761 Noncash items included in net income: Depreciation, amortization, and decommissioning 25,398 22,96949,933 45,967 Deferred income taxes and investment tax credits (5,501) 5,705(7,335) 8,689 Allowance for equity funds used during construction (480) (322)(1,032) (634) Changes in working capital: Receivables (95,228) (6,556)(60,206) (15,093) Accounts payable 39,786 1,887(181) 13,217 Taxes accrued 12,510 (13,678)14,062 (10,920) Interest accrued (2,660) (1,751)3,127 (6,577) Other working capital accounts (23,839) (3,866)(22,710) (5,279) Recoverable income taxes - 18,73326,948 Decommissioning trust contributions (1,304) (1,241)(2,696) (2,503) Other 2,574 9,970 --------32,074 12,291 ------- -------- Net cash flow provided by (used in) operating activities (26,179) 53,399 --------51,403 112,867 ------- -------- Investing Activities: Construction expenditures (7,734) (2,254)(17,178) (4,280) Allowance for equity funds used during construction 480 322 --------1,032 634 Nuclear fuel purchases (52,188) (54) Proceeds from sale/leaseback of nuclear fuel 52,188 - ------- -------- Net cash flow used in investing activities (7,254) (1,932) --------(16,146) (3,700) ------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 59,410 Other long-term debt 43,538 - Retirement of: First mortgage bonds - (60,000) Other long-term debt (45,320) - Premium and expenses paid on refinancing sale/leaseback bonds - (47,602) Common stock dividends paid - (57,800) --------(47,600) (79,300) ------- -------- Net cash flow used in financing activities - (105,402) --------(49,382) (127,492) ------- -------- Net decrease in cash and cash equivalents (33,433) (53,935)(14,125) (18,325) Cash and cash equivalents at beginning of period 89,703 196,132 --------------- -------- Cash and cash equivalents at end of period $56,270 $142,197 ========$75,578 $177,807 ======= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $40,903 $42,561$72,647 $88,723 Income taxes $1,125 ($3,278)$23,659 $4,730 Noncash investing and financing activities: Capital lease obligations incurred $27,653 - Change in unrealized appreciation/depreciation of decommissioning trust assets $1,685 $938$2,589 $291 See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $2,939,364 $2,939,384 Electric plant under lease 439,375 439,378 Construction work in progress 54,27863,717 46,547 Nuclear fuel under capital lease 66,00089,395 46,688 Nuclear fuel 24,535- 26,360 ---------- ---------- Total 3,523,5523,531,851 3,498,357 Less - accumulated depreciation 776,304and amortization 803,705 751,717 ---------- ---------- Utility plant - net 2,747,2482,728,146 2,746,640 ---------- ---------- Other Investments: Decommissioning trust fund 33,81036,621 30,359 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 422155 - Temporary cash investments - at cost, which approximates market: Associated companies 8,3958,252 5,489 Other 47,45367,171 84,214 ---------- ---------- Total cash and cash equivalents 56,27075,578 89,703 Accounts receivable: Associated companies 103,96468,766 7,450 Other 2,1262,302 3,412 Materials and supplies - at average cost 73,46968,959 71,991 Prepayments and other 9,81113,704 5,429 ---------- ---------- Total 245,640229,309 177,985 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: SFAS 109 regulatory asset - net 388,484388,995 389,264 Unamortized loss on reacquired debt 53,50754,891 54,577 Other regulatory assets 198,191197,157 199,080 Other 15,15314,501 15,454 ---------- ---------- Total 655,335655,544 658,375 ---------- ---------- TOTAL $3,682,033$3,649,620 $3,613,359 ========== ========== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS March 31,June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 1995 and 1994 $789,350 $789,350 Paid-in capital 7 7 Retained earnings 108,24684,448 85,681 ---------- ---------- Total common shareholder's equity 897,603873,805 875,038 Long-term debt 1,438,5111,439,526 1,438,305 ---------- ---------- Total 2,336,1142,313,331 2,313,343 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 38,00061,395 18,688 Other 14,342 14,342 ---------- ---------- Total 52,34275,737 33,030 ---------- ---------- Current Liabilities: Currently maturing long-term debt 105,000 105,000 Accounts payable: Associated companies 22,06642,420 32,272 Other 73,19612,875 23,204 Taxes accrued 47,89249,444 35,382 Interest accrued 38,13643,923 40,796 Obligations under capital leases 28,000 28,000 Other 1,8152,327 19,794 ---------- ---------- Total 316,105283,989 284,448 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 740,266739,080 746,502 Accumulated deferred investment tax credits 109,715108,846 110,584 FERC Settlement - refund obligation 59,54458,673 60,388 Other 67,94769,964 65,064 ---------- ---------- Total 977,472976,563 982,538 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $3,682,033$3,649,620 $3,613,359 ========== ========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1. COMMITMENTS AND CONTINGENCIES Cajun - River Bend Entergy Corporation and GSU GSU has significant business relationships with Cajun Electric Power Cooperative, Inc. (Cajun), including co-ownership of River Bend and Big Cajun 2, Unit 3. GSU and Cajun, respectively, own 70% and 30% undivided interests in River Bend respectively, and 42% and 58% undivided interests in Big Cajun 2, Unit 3, respectively.3. In June 1989, Cajun filed a civil action against GSU in the United States District Court for the Middle District of Louisiana (District Court). Cajun's complaint seeks to annul, rescind, terminate, and/or dissolve the Joint Ownership Participation and Operating Agreement entered into on August 28, 1979 (Operating Agreement) relating to River Bend. The suit also seeks to recover as damages Cajun's alleged $1.6 billion investment in the unit plus attorneys' fees, interest, and costs. Two member cooperatives of Cajun have brought an independent action to declare the Operating Agreement void, based upon failure to get prior LPSC approval alleged to be necessary. GSU believes the suits are without merit and is contesting them vigorously. A trial on the portion of the suit by Cajun to rescind the Operating Agreement which beganwas completed in April 1994 has been completed,March 1995, and a ruling from the District Court is pending. No assurance can be given as to the outcome of this litigation. If GSU is ultimately unsuccessful in this litigation and is required to pay substantial damages, GSU would probably be unable to make such payments and would probably have to seek relief from its creditors under the United States Bankruptcy Code (Bankruptcy Code). Since 1992 Cajun has not paid its full share of capital costs, and operating and maintenance expenses and other costs for repairs and improvements to River Bend. In addition, Cajun paid certain costs and expenses paid by Cajun were paid under protest. These actions were taken by Cajun based on its contentioncontentions that River Bend'sBend operating and maintenance expenses were excessive and becausethat the RUS allegedly would not permit Cajun to pay such costs. Cajun has continued to fund its share of the nuclear decommissioning trust payments for River Bend, as well as insurance and safety-related expenses. Cajun's unpaid portion of River Bend operating and maintenance expenses (including nuclear fuel) and maintenance expenses and capital costs for the first threesix months of 1995 was approximately $17.4$29.7 million. Cajun's total share of River Bend annual operating and maintenance expenses (including nuclear fuel) and maintenance expenses and capital costs was approximately $76.1 million in 1994. In view of Cajun's failure to fund its share of River Bend- related operating, maintenance and capital costs, GSU has (i) credited GSU's share of expenses for Big Cajun 2, Unit 3 against amounts due from Cajun to GSU and (ii) sought to market Cajun's share of the power from River Bend and apply the proceeds to the amounts due from Cajun to GSU. As a result, on November 2, 1994, Cajun discontinued supplying GSU with its share of energy from Big Cajun 2, Unit 3. GSU requested an order from the District Court requiring Cajun to supply GSU with this energy, and allowing GSU to credit amounts due to Cajun for Big Cajun 2, Unit 3 energy against amounts Cajun owed to GSU for River Bend. In December 1994, the District Court ordered Cajun to supply GSU with its share of energy from Big Cajun 2, Unit 3 and ordered GSU to make payments for its share of Big Cajun 2, Unit 3 expenses to the registry of the District Court. On December 14, 1994, the LPSC ordered Cajun to decrease the rates charged to its member distribution cooperatives by approximately $30 million per year. The rate decrease is associated with the LPSC's prior finding of imprudence in Cajun's participation in River Bend. On December 21, 1994, Cajun filed a petition in the United States Bankruptcy Court for the Middle District of Louisiana seeking bankruptcy relief under Chapter 11 of the Bankruptcy Code. Cajun's bankruptcy could have a material adverse effect on GSU, including the possibility of an NRC action with respect to the operation of River Bend.GSU. GSU is taking steps to protect its interests and its claims against Cajun arising from the co- ownership inco-ownership of River Bend and Big Cajun 2, Unit 3. On December 31, 1994, the District Court issued an order lifting an automatic stay as to certain proceedings, with the result that the December 1994 order of the District Court referred to above, remains in effect. Cajun filed a Notice of Appeal on January 18, 1995, to the United States Fifth Circuit Court of Appeals for the Fifth Circuit seeking a reversal of the District Court's order. No hearing date has been set on Cajun's appeal. In the bankruptcy proceedings, Cajun filed a motion to reject the Operating Agreement as a burdensome executory contract. GSU responded on January 10, 1995, with a memorandum opposing Cajun's motion filed with the District Court.motion. If the District Court were to grant Cajun's motion to reject the Operating Agreement, Cajun would be relieved of its financial obligations under the contract, while GSU would likely have a substantial damage claim arising from any such rejection. Although GSU believes that Cajun's motion to reject the Operating Agreement is without merit, it is not possible to predict the outcome or ultimate impact of these proceedings. During the period in which Cajun is not paying its share of River Bend-related costs, GSU intends to fund all costs necessary for the safe, continuing operation of the unit. The responsibilities of Entergy Operations, as the licensed operator of River Bend, for safely operating and maintaining the unit, are not affected by Cajun's actions. The net amount resulting from Cajun's failure to pay its full share of River Bend-related costs, reduced by the proceeds from the sale of Cajun's share of River Bend power, was $55.7$60.6 million as of March 31,June 30, 1995, compared with $50.8$49 million as of December 31, 1994. These amounts are reflected in long- termlong-term receivables with an offsetting reserve in other deferred credits. Cajun's bankruptcy may affect the ultimate collectibility of the amounts owed to GSU, including any amounts that may be awarded in litigation. Cajun - Transmission Service Entergy Corporation and GSU GSU and Cajun are parties to FERC proceedings relating to transmission service charge disputes. In April 1992, FERC issued an order. In May 1992, GSU and Cajun filed motions for rehearingsrehearing which are pending at FERC. In June 1992, GSU filed a petition for review in the United States Fifth Circuit Court of Appeals (Court of Appeals) regarding certain of the issues decided by FERC. In August 1993, the Court of Appeals rendered an opiniona decision reversing the FERC order regarding the portion of such disputes relating to the calculations of certain credits and equalization charges under GSU's service schedules with Cajun. The Court of Appeals opinion remanded these issues to FERC for further proceedingspro ceedings consistent with its opinion. In February 1995, FERC clarified its order, eliminating an issue that GSU believes the Court of Appeals directed FERC to reconsider. In April 1995, the ALJ issued a ruling in the remanded portion of the proceeding, andwhich the FERC is expected to issue aaffirmed in an order in Julyissued on August 3, 1995. GSU interpretsUnder GSU's interpretation of the 1992 FERC order, and the Court of Appeals' decision to mean thatas modified by its August 3, 1995 order, Cajun would owe GSU approximately $95.2$62.1 million as of March 31,June 30, 1995. However, due to the elimination of an issue by FERC in its February 1995 order, approximately $26.7 million of this amount may not be pursued by GSU in the remand proceedings, and the ALJ's April ruling, while awarding principle amounts to GSU, denied recovery of a portion of interest of approximately $8.5 million. GSU further estimates that if it were to prevail in its May 1992 motion for rehearing and it prevailson certain other issues decided adversely to GSU in its positions on remand,the February 1995 and the August 1995 FERC orders, which GSU may appeal, Cajun would owe GSU approximately $132.1$137.2 million as of March 31,June 30, 1995. If Cajun were to prevail in its May 1992 motion for rehearing to FERC, and if GSU were not to prevail in its May 1992 motion for rehearing to FERC, and if FERC does not implementCajun were to appeal the Court of Appeals' remand as GSU contends is required,FERC's August 1995 order and prevail, GSU estimates it would owe Cajun approximately $86.2$90.4 million as of March 31,June 30, 1995. The above amounts are exclusive of a $7.3 million payment by Cajun on December 31, 1990, which the parties agreed to apply to the disputed transmission service charges. GSU and Cajun further agreed that their positions at FERC would remain unaffected by the $7.3 million payment. Pending FERC's ruling on the May 1992 motions for rehearing, GSU has continued to bill Cajun utilizing the historical billing methodology and has bookedrecorded underpaid transmission charges, including interest, in the amount of $167.3 million as of March 31,June 30, 1995. This amount is reflected in long-term receivables with an offsetting reserve in other deferred credits. Financial Condition GSU Although GSU received partial rate relief relating to River Bend, GSU's financial position was severely strained from 1986 to 1990 by its inability to earn a return on and fully recover its investment and other costs associated with River Bend. Issues to be finally resolved in PUCT rate proceedings and appeals thereof, as discussed in Note 2, combined with the application of accounting standards, may result in substantial write-offs and charges that could result in substantial net losses being reported by Entergy Corporation and GSU in 1995, and subsequent periods, with resulting substantial adverse adjustments to common shareholder's equity. Future earnings will continue to be adversely affected by the lack of full recovery and return on the investment and other costs associated with River Bend. Nonregulated Investments Entergy Corporation As discussed on pages 3 and 4 of the Form 10-K, Entergy Corporation continues to consider opportunities to expand its business, including opportunities in overseas power development. On March 31, 1995, Entergy Corporation, through its subsidiary, Entergy Power Development Company (EPDC), entered into an agreement with Enron Power Development Corporation, a subsidiary of Enron Corporation, to acquire a 20% interest in the Dabhol Power Project (Project), a 695 megawatt combined cycle facility located in the State of Maharashtra, India. ThePursuant to an agreement, EPDC has placed approximately $20.5 million in an escrow account. If EPDC becomes a participant in the Project, is a 695 megawatt combined cycle facility which will burn distillate as its fuel. Entergy Corporation made an initialestimated investment in the first phase of the Project of approximately $20.5 million. The total Project is estimated to cost approximately $920 million. The Project is fully financed and under construction with commercial operation expected by the end of 1997. At the time of commercial operation EPDC will have investedwould be approximately $90 million in the Project. In addition to its investmentmillion. At that time, EPDC has committedwould also have an obligation to cover its pro rataa pro-rata share of the cost overruns up to approximately $30 million, if they are incurred.million. Subsequent to entering into the agreement with Enron Power Development Corporation, the newly-elected Maharashtra state government investigated the Project and its related cost of power. On August 3, 1995, the Chief Minister of Maharashtra stated that the government of Maharashtra has decided to suspend the first phase of the Project, the 695 megawatt facility and "scrap" the second phase of the Project, a 1,320 megawatt facility, and indicated that orders to stop work would be issued. In view of these developments, Entergy is uncertain as to the future of the project and is considering its options. Capital Requirements and Financing Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy See pages 109, 146-148, 189-191, 194, 228-230, 266-268, 299- 301, and 332 of the Form 10-K for information on the System operating companies' and System Energy's construction expenditures (excluding nuclear fuel) for the years 1995, 1996, and 1997, and long-term debt and preferred stock maturities and cash sinking fund requirements for the period 1995-1997.1995-1999. Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs Entergy Corporation, AP&L, GSU, LP&L, and System Energy See pages 110, 149-150, 194-195, 231-232, and 334-335 of the Form 10-K for information on nuclear liability, property and replacement power insurance, and related NRC regulations. See pages 110-112, 150-151, 195-196, 232-233, and 335-336 of the Form 10-K for information on the disposal of spent nuclear fuel, other high-level radioactive waste, and decommissioning costs associated with ANO, River Bend, Waterford 3, and Grand Gulf 1. The staff of the SEC has questioned certain of the financial accounting practices of the electric utility industry regarding the recognition, measurement, and classification of decommissioning costs for nuclear generating stations in the financial statements of electric utilities. In response to these questions, the Financial Accounting Standards Board (FASB) is currently reviewing the accounting for decommissioning. In June 1995, the FASB reaffirmed its tentative conclusions on measurement issues in accounting for the liability for the decommissioning of nuclear power plants. The FASB supports measurement of the liability based on discounted future cash flows. Those future cash flows should be determined by estimating current costs and adjusting for inflation, efficiencies that may be gained from experience with similar activities, and consideration of reasonable future advances in technology. The FASB also agreed that changes in the decommissioning liability that result from changes in assumptions should be recognized with a corresponding adjustment to the plant asset and depreciation should be revised prospectively. In addition, the FASB agreed that the asset recognized as a result of recognizing the decommissioning liability should be presented with other costs of the plant on the financial statements because the cost of decommissioning the plant is recognized as part of the total cost of the plant asset. If current electric utility industry accounting practices for suchwith respect to nuclear decommissioning are changed, among other things, annual provisions for decommissioning could increase, the estimated cost for decommissioning could be recorded as a liability rather than as accumulated depreciation, and trust fund income from the external decommissioning trusts could be reported as investment income rather than as a reduction to decommissioning expense. ANO Matters Entergy Corporation and AP&L See pages 31, 83, 112, and 138 of the Form 10-K for information on leaks in certain steam generator tubes at ANO 2 that were discovered and repaired during an outage in March 1992. Further inspections and repairs were conducted at subsequent refueling and mid-cycle outages in September 1992, May 1993, April 1994, and January 1995. AP&L's budgeted maintenance expenditures were adequate to cover the cost of such repairs. Beginning in January 1995, ANO 2's output was reduced 15 megawatts or 1.6% due to secondary side fouling, tube plugging, and reduction of primary temperature. Entergy Operations is taking steps at ANO 2 to reduce the number and severity of future tube cracks. However, the unit may be approaching the limit for the number of steam generator tubes that can be plugged with the unit in operation. If the currently established limit is reached, it could require Entergy Operations to insert sleeves in some of the steam generator tubes during future outages. Currently, Entergy Operations is in the process of gathering information and assessing various options for the repair or the replacement of ANO 2's steam generator. Certain of these options could, in the future, require significant capital expenditures and result in additional outages. In addition, Entergy Operations periodically meets with the NRC to discuss such steps and results of inspections of the generator tubes, as well as the timing of future inspections. Additional inspections are planned for the normal refueling outage scheduled for October 1995. Environmental Issues AP&L See pages 34-35 of the Form 10-K for information on PCB contamination at former Reynolds Metals Company (Reynolds) plant sites in Arkansas to which AP&L had supplied power. In May 1995, AP&L was named as a defendant in a suit by Reynolds, seeking to recover a share of the costs associated with the clean up of hazardous substances at a site south of Arkadelphia, Arkansas. Reynolds alleges that it has spent $11.2 million to cleanup the site, and that the site was contaminated in part with PCBs for which AP&L bears some responsibility. AP&L, voluntarily, at its expense, has already completed remediation at a nearby substation site, and believes that it has no liability for contamination at the site that is subject to the Reynolds suit and will contest the lawsuit. Regardless of the outcome, AP&L does not believe this matter would have a materially adverse effect on its financial condition or results of operations. GSU GSU has been notified by the U. S. Environmental Protection Agency (EPA) that it has been designated as a potentially responsible party for the cleanup of certain hazardous waste disposal sites. GSU is currently negotiating with the EPA and state authorities regarding the cleanup of some of these sites. Several class action and other suits have been filed in state and federal courts seeking relief from GSU and others for damages caused by the disposal of hazardous waste and for asbestos- related disease allegedly resulting from exposure on GSU premises. While the amounts at issue in the cleanup efforts and suits may be substantial, GSU believes that its results of operations and financial condition will not be materially adversely affected by the outcome of the suits. Through March 31,June 30, 1995, GSU$7.7 million has been expended $7.5 million cumulatively on the cleanup. As of March 31,June 30, 1995, GSU has a remaining recorded liability of $20.7 million relatedexisted relating to the cleanup of six sites at which GSU has been designated a potentially responsible party. See pages 35-36, 39-40, and 196-197 of the Form 10-K for additional discussion of the sites in whichwhere GSU has been designated as a potentially responsible party by the EPA. LP&L During 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including waste water impoundments. LP&L has determined that certain of its power plant waste water impoundments arewere affected by these regulations and has chosen to either upgrade or close them. As a result, LP&L had a remaining recorded liability in the amount of $14.2$13.8 million existed at March 31,June 30, 1995, for waste water upgrades and closures to be completed by 1996. Cumulative expenditures relating to the upgrades and closures of waste water impoundments are $1.3were $2.3 million as of March 31,June 30, 1995. See pages 37 and 233 of the Form 10-K for additional discussions of LP&L's waste water impoundment upgrades and closures. Waterford 3 Lease Obligations LP&L In September 1989, LP&L entered into three substantially identical but entirely separate transactions for the sale and leaseback of three undivided portionsinterests (aggregating approximately 9.3%) of its 100% ownership interest in Waterford 3. See pages 234-235 of the Form 10-K for further information. Upon the occurrence of certain events, LP&L may be obligated to pay amounts sufficient to permit the Owner Participants to withdraw from the lease transactions, and LP&L may be required to assume the outstanding bonds issued by the Owner Trustee to finance, in part, its acquisition of the undivided interests in Waterford 3. These events would include a failure, at specified dates, to maintain equity capital of at least 30% of adjusted capitalization and a fixed charge coverage ratio of at least 1.50 times earnings. As of March 31,June 30, 1995, LP&L's total equity capital was 48.67%48.23% of adjusted capitalization, and its fixed charge coverage ratio was 3.01.3.07. Reimbursement Agreement System Energy Under the provisions of the Reimbursement Agreement, as amended, System Energy has agreed to a number of covenants relating to the maintenance of certain capitalization and fixed charge coverage ratios. System Energy agreed, during the term of the Reimbursement Agreement, to maintain its equity at not less than 33% of its adjusted capitalization (as defined in the Reimbursement Agreement to include certain amounts not included in capitalization for financial statement purposes). In addition, System Energy must maintain, with respect to each fiscal quarter during the term of the Reimbursement Agreement, a ratio of adjusted net income to interest expense (calculated, in each case, as specified in the Reimbursement Agreement) of at least 1.60 times earnings. As of March 31,June 30, 1995, System Energy's equity approximated 36.38%33.57% of its adjusted capitalization, and its fixed charge coverage ratio was 1.23. As a result of charges recorded in the fourth quarter of 1994 related to an agreement with FERC settlingwhich settled a long-standinglong- standing dispute involving income tax allocation procedures, System Energy has obtained the consent of certain banks to waive temporarily the fixed charge coverage covenant in the letters of credit and Reimbursement Agreement until November 30, 1995. (See pages 92- 9392-93 and 327 of the Form 10-K for information on the FERC Settlement.) System Energy expects that upon expiration of the waiver period, it will be in compliance with the fixed charge coverage covenant. Absent a waiver, System Energy's failure to performsatisfy this covenant could cause a draw under and/or early termination of the letters of credit. If the letters of credit wereare not replaced in a timely manner, a default or early termination of System Energy's leases could result. Draws under the letters of credit must be repaid by System Energy within 5 days (or in some cases, 90 days) following the date of the drawing. See page 334 of the Form 10-K for further information on the Reimbursement Agreement. NOTE 2. RATE AND REGULATORY MATTERS River Bend Entergy Corporation and GSU In May 1988, the PUCT granted GSU a permanent increase in annual revenues of $59.9 million resulting from the inclusion in rate base of approximately $1.6 billion of company-wide River Bend plant investment and approximately $182 million of related Texas retail jurisdiction deferred River Bend costs (Allowed Deferrals). In addition, the PUCT disallowed as imprudent $63.5 million of company-wide River Bend plant costs and placed in abeyance, with no finding as to prudence, approximately $1.4 billion of company-wide River Bend plant investment and approximately $157 million of Texas retail jurisdiction deferred River Bend operating and carrying costs. The PUCT affirmed that the ultimate rate treatment of such amounts would be subject to a future demonstration of the prudence of such costs. GSU and intervening parties appealed this order (Rate Appeal) and GSU filed a separate rate case asking that the abeyed River Bend plant costs be found prudent (Separate Rate Case). Intervening parties filed suit in a Texas district court to prohibit the Separate Rate Case. The district court's decision was ultimately appealed to the Texas Supreme Court, which ruled in 1990 that the prudence of the purported abeyed costs could not be relitigated in a separate rate proceeding. The Texas Supreme Court's decision stated that all issues relating to the merits of the original PUCT order, including the prudence of all River Bend- related costs, should be addressed in the Rate Appeal. In October 1991, the Texas district court in the Rate Appeal issued an order holding that the PUCT had erred in assuming it could set aside $1.4 billion of the total costs of River Bend and consider them in a later proceeding, and that the PUCT had effectively found that GSU had not met its burden of proof related to the amounts placed in abeyance. The court ruled that the Allowed Deferrals should not be included in rate base, and further held that the PUCT had erred in reducing GSU's deferred costs by $1.50 for each $1.00 of revenue collected under the interim rate increases authorized in 1987 and 1988. The court remanded the case to the PUCT with instructions as to the proper handling of the Allowed Deferrals. GSU's motion for rehearing was denied and, in December 1991, GSU filed an appeal of the October 1991 district court order. The PUCT also appealed the October 1991 district court order, which served to supersede the district court's judgment, rendering it unenforceable under Texas law. In August 1994, the Texas Third District Court of Appeals (the Appellate Court) affirmed the district court's decision that there was substantial evidence to support the PUCT's 1988 decision not to include the abeyed construction costs in GSU's rate base. While acknowledging that the PUCT had exceeded its authority when it deferred a decision on the inclusion of those costs in rate base in order to allow GSU a further opportunity to demonstrate the prudence of those costs in a subsequent proceeding, the Appellate Court found that GSU had suffered no harm or lack of due process as a result of the PUCT's error. Accordingly, the Appellate Court held that the PUCT's action had the effect of disallowing the company-wide $1.4 billion of River Bend construction costs for ratemaking purposes. In its August 1994 opinion, the Appellate Court also held that GSU's deferred operating and maintenance costs associated with the allowed portion of River Bend should be included in rate base and that GSU's deferred River Bend carrying costs included in the Allowed Deferrals should also be included in rate base. The Appellate Court's August 1994 opinion affirmed the PUCT's original order in this case. The Appellate Court's August 1994 opinion was entered by two judges, with a third judge dissenting. The dissenting opinion stated that the result of the majority opinion was, among other things, to deprive GSU of due process at the PUCT because the PUCT had never made a finding on the $1.4 billion of construction costs. In October 1994, the Appellate Court denied GSU's motion for rehearing on the August 1994 opinion as to the $1.4 billion in River Bend construction costs and other matters. GSU appealed the Appellate Court's decision to the Texas Supreme Court. The Texas Supreme Court has not yet accepted the appeal, and no date for oral argument has been set. As of March 31,June 30, 1995, the River Bend plant costs disallowed for retail ratemaking purposes in Texas, the River Bend plant costs held in abeyance, and the related operating and carrying cost deferrals totaled (net of taxes) approximately $13 million, $284$280 million (both net of depreciation), and $170 million, respectively. Allowed Deferrals were approximately $87$86 million, net of taxes and amortization, as of March 31,June 30, 1995. GSU estimates it has recorded approximately $156$169 million of revenues as of March 31,June 30, 1995, as a result of the originally ordered rate treatment by the PUCT of these deferred costs. If recovery of the Allowed Deferrals is not upheld, future revenues based upon those allowed deferrals could also be lost, and no assurance can be given as to whether or not refunds to customers of revenue received based upon such deferred costs previously recorded will be required. No assurance can be given as to the timing or outcome of the remands or appeals described above. GSU has made no write-offs or reserves for the River Bend-related costs. Management believes, based on advice from Clark, Thomas & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the case will be remanded to the PUCT, and the PUCT will be allowed to rule on the prudence of the abeyed River Bend plant costs. Rate Caps imposed by the PUCT's regulatory approval of the Merger could result in GSU's inability to use the full amount of a favorable decision to immediately increase rates; however, a favorable decision could permit some increases and/or limit or prevent decreases during the period the Rate Caps are in effect. Management and legal counsel are unable to predict the amount, if any, of abeyed and previously disallowed River Bend plant costs that ultimately may be disallowed by the PUCT. As of March 31,June 30, 1995, a net of tax write- off of up to $297$293 million could be required based on an ultimate adverse ruling by the PUCT on the abeyed and disallowed costs. In prior proceedings, the PUCT has held that the original cost of nuclear power plants will be included in rates to the extent those costs were prudently incurred. Based upon these decisions, management believes that its River Bend construction costs were prudently incurred and that it is reasonably possible that it will recover in rate base, or otherwise through means such as a deregulated asset plan, all or substantially all of the abeyed River Bend plant costs. However, management also recognizes that it is reasonably possible that not all of the abeyed River Bend plant costs may ultimately be recovered. As part of its direct case in the Separate Rate Case, GSU filed a cost reconciliation study prepared by Sandlin Associates, management consultants with expertise in the cost analysis of nuclear power plants, which supports the reasonableness of the River Bend costs held in abeyance by the PUCT. This study determined that approximately 82% of the River Bend cost increase above the amount included by the PUCT in rate base was a result of changes in federal nuclear safety requirements and provided other support for the remainder of the abeyed amounts. There have been four other rate proceedings in Texas involving nuclear power plants. Disallowed investment in the plants ranged from 0% to 15%. Each case was unique, and the disallowances in each were made on a case-by-case basis for different reasons. Appeals of two of these PUCT decisions are currently pending. The following factors support management's position that a loss contingency requiring accrual has not occurred, and that all or substantially all of the abeyed plant costs will ultimately be recovered: 1. The $1.4 billion of abeyed River Bend plant costs have never been ruled imprudent and disallowed by the PUCT; 2. Sandlin Associates' analysis which supports the prudence of substantially all of the abeyed construction costs; 3. Historical inclusion by the PUCT of prudent construction costs in rate base; and 4. The analysis of GSU's internal legal staff, which has considerable experience in Texas rate case litigation. Additionally, management believes, based on advice from Clark, Thomas & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the Allowed Deferrals will continue to be recovered in rates. Management also believes, based on advice from Clark, Thomas & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal,rates, and that it is reasonably possible that the deferred costs related to the $1.4 billion of abeyed River Bend plant costs will be recovered in rates to the extent that the $1.4 billion of abeyed River Bend plant is recovered. However, a net of tax write-off of the $170 million of deferred costs related to the $1.4 billion of abeyed River Bend plant costs would be required if they are not allowed to be recovered in rates. The adoption of SFAS No.121,No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," (SFAS 121) which will become effective January 1, 1996, will require the write-off of the $170 million of rate deferrals discussed above, unless there are favorable regulatory or court actions related to these costs prior to adoption. The standard describes circumstances which may result in assets being impaired and provides criteria for recognition and measurement of asset impairment. See Note 7 for further information regarding SFAS 121. Filings with the PUCT and Texas Cities Entergy Corporation and GSU In March 1994,connection with the Texas Office of Public Utility Counsel and certain cities served by GSU instituted anPUCT's investigation of the reasonableness of GSU's rates. In June 1994, GSU provided the cities with information that supported the current rate level. In September 1994, various cities adopted ordinances directing GSU to reduce its Texas retail rates, by $45.9 million. GSU appealed the cities' ordinances to the PUCT for a determination of reasonableness of GSU's rates. Hearings were held in December 1994 and on March 20, 1995 the PUCT ordered a $72.9 million annual base rate reduction for the period March 31, 1994 through September 1, 1994, decreasing to an annual base rate reduction of $52.9 million after September 1, 1994. In accordance with the Merger agreement, the rate reduction was applied retroactively to March 31, 1994. As a result, in 1994 GSU recorded a $57 million reserve for rate refund and a $12.8 million reserve for franchise taxes to be refunded. In` On May 26, 1995, the first quarterPUCT amended its previously issued March 20, 1995 rate order, reducing the annual base rate reduction by $16.4 million to an annual level of $36.5 million. The PUCT's action was based upon a recent Texas Supreme Court decision not to require a utility to use the prospective tax benefits generated by disallowed expenses to reduce rates. The PUCT's May 26, 1995 amended order no longer requires GSU to pass such prospective tax benefits on to its customers. Therefore, in June 1995, GSU recorded an additionalreduced the reserve for rate refund of approximately $9.8by $18.1 million based on the annual $36.5 million rate reduction. At June 30, 1995, the reserve for rate refund balance was $59.4 million. The rate reduction is being appealedGSU intends to appeal the PUCT order and no assurance can be given as to the timing or outcome of the appeal. Filings with the LPSC Rate Review Entergy Corporation GSU, and LP&LGSU In May 1994, GSU made the first required post-Merger earnings analysis filing with the LPSC. On December 14, 1994, the LPSC ordered a $12.7 million annual rate reduction for GSU effective January 1995. The rate order included, among other things, a reduction in GSU's Louisiana jurisdictional authorized return on equity from 12.75% to 10.95% and the amortization for the benefit of the customers of $8.3 million of previously deferred unbilled revenue, representing one-half of the total resulting from a change in accounting for unbilled revenue. In December 1994, GSU received a preliminary injunction from the 19th Judicial District Court regarding $8.3 million of the reduction. On January 1, 1995, GSU reduced rates by $4.4 million. TheGSU filed an appeal of the entire $12.7 million rate reduction is beingwith the District Court. In July 1995, the District Court denied the appeal. GSU has appealed andthe order to the Louisiana Supreme Court; however, no assurance can be given as to the timing or outcome of the appeal. The preliminary injunction relating to $8.3 million of the reduction, will remain in effect during the appeal. On May 31, 1995, GSU filed the second required post-Merger earning analysis filing with the LPSC. Entergy Corporation and LP&L In August 1994, LP&L filed a performance-based formula rate plan with the LPSC. The proposed formula rate plan would continue existing LP&L rates at current levels, while providing financial incentive to reduce costs and maintain high levels of customer satisfaction and system reliability. The plan would allow LP&L the opportunity to earn a higher rate of return if it improves performance over time. Conversely, if performance declines, the rate of return LP&L could earn would be lowered. This provides a financial incentive for LP&L to maintain continuous improvement in all three performance categories (customer price,(price, customer satisfaction, and customerservice reliability). Under the proposed plan, if LP&L's earnings fall withinAs a bandwidth around a benchmark rate of return, there would be no adjustment in rates. If LP&L's earnings are above the bandwidth, the proposed plan would automatically reduce LP&L's base rates. Alternatively, if LP&L's earnings are below the bandwidth, the proposed plan would automatically increase LP&L's base rates. The reduction or increase in base rates would be an amount representing 50%result of the difference between the earnedLPSC's base rate of return and the nearest limit of the bandwidth. In no event would the annual adjustment in rates exceed 2% of LP&L's retail revenues. Hearings were heldreview, on the LP&L proposed performance-based formula rate plan in March 1995. On April 20,June 2, 1995, the LPSC Staff recommended a $49.4 million reduction in base rates.rates was ordered. This recommended rate reduction included $8.5$10.5 million of rates previously reduced through fuel clause reductions; therefore,reductions. Therefore, the net effect of recommended reduction is $40.9the LPSC order was to reduce rates by $38.9 million. The LPSC Staff recommended the approval ofapproved LP&L's proposed formula rate plan with the following modifications. An earnings band wouldwill be established with a range from a 10.4% to a 12% for return on equity. If LP&L's earnings fall within the bandwidth, no adjustment in rates occurs. If LP&L's earnings are above thea 12% return on equity, a 60/40 sharing with customers occurs and customers receive 60% of earnings in excess of the 12% through prospective rate reductions. Alternatively, if LP&L's earnings are below thea 10.4% return on equity, customers pay 60% of the difference between the realized return on equity and thea 10.4% return on equity through prospective rate increases. The LPSC Staff's recommendation also included a reduction inreduced LP&L's authorized rate of return from 12.76% to 11.2%. The LPSC rate order is expectedretroactive to issueApril 27, 1995. As of June 30, 1995, LP&L had recorded a $7.6 million reserve for rate refund. On June 9, 1995, LP&L appealed the $49.4 million rate reduction. On the same date LP&L also filed a petition for injunctive relief from implementation of $14.7 million of the $49.4 million rate reduction. The $14.7 million of the rate reduction represents revenue made available to LP&L through a previous LPSC order, which in turn allowed LP&L to provide reduced rates to three industrial customers. Subsequently, a request for a $14.7 million rate increase was filed by LP&L. On July 13, 1995, LP&L was granted a preliminary injunction on $14.7 million of the rate reduction by the District Court pending a final orderLPSC order. No assurance can be given as to the timing or outcome of the appeal or the requested rate increase. Proposed Rate Increase System Energy In May 1995, System Energy filed an application with FERC for a $65.5 million rate increase. The request seeks changes to the System Energy rate schedule, including increases in late May 1995. Formula Rate Plan Entergy Corporationthe revenue requirement associated with decommissioning costs, the depreciation accrual rate, and MP&L Under a formulary incentive rate plan (Formula Rate Plan) effective March 25, 1994, MP&L's earned rate of return on common equity. System Energy requested that the proposed rate increase become effective subject to refund within 60 days after the filing date, but the effective date was suspended until December 1995. MP&L MP&L's allocation of the proposed wholesale rate increase is calculated automatically every 12 months and compared to and adjusted against$21.6 million. In July 1995, MP&L filed a benchmark rate of return (calculated under a separate formula within the Formula Rate Plan). The Formula Rate Plan allows for periodic small adjustments in rates based on a comparison of earned to benchmark returns and upon certain performance factors. Pursuant to a stipulationschedule with the MPSC's Public Utilities Staff,MPSC which will defer and later recover the amount of the System Energy rate increase that is approved by the FERC. The deferral, which must be approved by the MPSC, will begin in September 1995 and will end after the new wholesale rates approved by the FERC go into affect. Beginning in 1998, MP&L did not request an adjustment inwill collect through its rates based on its earned rate of return for the 12-months ended December 31, 1994.deferral balance and carrying charges. February 1994 Ice Storm/Rate Rider Entergy Corporation and MP&L In early February 1994, an ice storm left more than 221,000 Entergy customers without electric power acrossAs discussed on pages 26, 95, and 262 of the System's four- state service area. Repair costs totaled approximately $116.2 million, $30.8 million, and $77.2 million forForm 10-K, the System, AP&L, and MP&L, respectively, with $85 million, $18.7 million, and $64.6 million of these amounts capitalized as plant-related costs. In September 1994, MPSC approved a stipulation in September 1994, with respect to the recovery of ice storm costs recorded through April 30, 1994. Under the stipulation, MP&L implemented an ice storm rate rider, which increased rates approximately $8 million for a period of five years beginning on September 29, 1995.1994. This stipulation also statesstated that at the end of the five-year period, the revenue requirement associated with the undepreciated ice storm capitalized costs will be included in MP&L's base rates to the extent that this revenue requirement does not result in MP&L's rate of return on rate base being above the benchmark rate of return under MP&L's formula rate plan. On April 28,In July 1995, MP&L filedand the MPSC Staff entered into a joint stipulation which allows for a $2.5 million rate increase of $2.9 million to be in effect for a four-year period of four years beginning September 28, 1995, to recover costs related to the ice storm that were recorded after April 30, 1994. At the end of the four- year period,The stipulation also allows for undepreciated ice storm capital costs recorded after April 30, 1994 willto be treated as described above. MP&L's filing requested recovery of capital costs and deferred operating and maintenance expenses of approximately $14.2 million and $1 million, respectively. No assurance can be given as to the outcome of the filing. LPSC Fuel Cost Review GSU In November 1993, the LPSC ordered a review of GSU's fuel costs for the period October 1988 through September 1991 (Phase 1) based on the number of outages at River Bend and the findings in the June 1993 PUCT fuel reconciliation case. In July 1994, the LPSC ruled in the Phase 1 case that GSU should refund approximately $27 million to its customers. Under the order, a refund of $13.1 million was made through a billing credit on August 1994 bills. In August 1994, GSU appealed the remaining portion of the LPSC-ordered refund to the district court. GSU has made no reserve for the remaining portion, pending the outcome of the district court appeal, and no assurance can be given as to the timing or outcome of the appeal. The LPSC is currently conducting Phase II of its review of GSU's fuel costs for the period October 1991 through December 1994. On January 18,June 30, 1995, GSU met with the special counsel of the LPSC to discuss the procedural schedule for the nextconsultants filed testimony recommending a disallowance of $38.7 million of Phase II fuel review (Phase II). The period under investigation was determined to be from October 1991 to March 1995.costs. Hearings are scheduled to begin in AugustSeptember 1995. No assurance can be given to the timing or the outcome of the review. PUCT Fuel Cost Review GSU For information on the PUCT Fuel Cost Review offor the period December 1, 1986 through September 30, 1991, see pages 183-184 of the Form 10-K. On January 9, 1995, GSU and various parties reached an agreement for the reconciliation of over- and under-recovery of fuel and purchased power expenses for the period October 1, 1991, through December 31, 1993. In the fourth quarter of 1994, GSU recorded a reserve of $7.6 million as a result of this settlement. On April 17, 1995, the PUCT issued a final order approving the settlement. NOTE 3. PREFERRED AND COMMON STOCK Entergy Corporation Entergy Corporation periodically repurchases shares of its outstanding common stock either on the open market or through negotiated purchases or tender offers. Stock repurchases are made from time to time dependingdepend upon market conditions and authorization ofby the Entergy Corporation Board of Directors. During the first quartersix months of 1995, no shares of common stock were repurchased. During the first threesix months of 1995, Entergy Corporation issued 337,873340,590 shares of its previously repurchased common stock, reducing the amount held as treasury stock by $10$10.1 million. Entergy Corporation issued these shares to meet the requirements of its various stock plans. For further information on Entergy Corporation's stock plans, see pages 103-104 of the Form 10-K. AP&L On January 1, 1995, AP&L redeemed, pursuant to sinking fund requirements, 200,000 shares of its 13.28% Series Preferred Stock, $25 par value.NOTE 4. LONG-TERM DEBT GSU On March 15,July 1, 1995, GSU redeemed, pursuant to sinking fund requirements, 22,500 shares of its Adjustable Rate Series B Preferred Stock, $100 par value. LP&L On February 1, 1995, LP&L redeemed, pursuant to sinking fund requirements, 300,000 shares of its 12.64% Series Preferred Stock, $25 par value. MP&L On January 1, 1995, MP&L redeemed 70,000 shares of its 9.76% Series Preferred Stock, $100 par value. On March 1, 1995, MP&L redeemed 10,000 shares of its 12.00% Series Preferred Stock, $100 par value. NOPSI On March 1, 1995, NOPSI redeemed 15,000 shares of its 15.44% Series Preferred Stock, $100 par value. NOTE 4. LONG-TERM DEBT AP&L On February 1, 1995, AP&L redeemed, pursuant to sinking fund requirements, $0.4$50 million of its 8.75%9.72% Series First Mortgage BondsDebentures due 1998. MP&L On February 1, 1995, MP&L retired $201998 and $0.425 million of its 14.95%7.00% Series Bonds upon maturity. On March 1, 1995, MP&L retired $20 million of its 4.625% Series First Mortgage Bonds upon maturity. On April 12, 1995, MP&L issued $80 million of 8.80% Series G&RPollution Control Revenue Bonds due 2005. NOPSI On February 1, 1995 NOPSI redeemed $9.2 million of its 13.90% Series G&R Bonds upon maturity. On April 27, 1995, NOPSI issued $30 million of 8.67% Series G&R Bonds due 2005. On May 1, 1995, NOPSI redeemed, pursuant to sinking fund requirements, $15 million of its 10.95% Series G&R Bonds due 1997.2006. NOTE 5. RETAINED EARNINGS On January 27,July 28, 1995, Entergy Corporation's Board of Directors (Board) declared a common stock dividend of 45 cents per share which was paid on March 1, 1995. In addition, on March 25, 1995, the Board declared a common stock dividend of 45 cents per share payable on JuneSeptember 1, 1995. NOTE 6. RESTRUCTURING COSTS Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and NOPSIEntergy Services The restructuring programprograms announced by Entergy in the third quarter of 1994 included anticipated reductions in the number of employees and the consolidation of offices and facilities. Restructuring charges associated with this programthese programs recorded in 1994 and the first quartersix months of 1995 are shown below by company together with actual termination benefits paid under the program. Restructuring Restructuring Liability Additional Liability Company December 31, Accruals Payments March 31,June 30, 1995 1994 1995 (In Millions) AP&L $12.2 $ 0.6 $(2.6) $10.212.2 $ 9.0 $(12.0) $ 9.2 GSU 6.5 1.2 (1.4) 6.37.2 (7.0) 6.7 LP&L 6.8 1.0 (1.7) 6.15.0 (7.9) 3.9 MP&L 6.2 0.3 (0.7) 5.81.1 (4.9) 2.4 NOPSI 3.4 0.5 (0.5) 3.4 ----- ----- ----- ------ (1.7) 1.7 Entergy Services - 6.0 (1.5) 4.5 ------- ------ ------ -------- Total $35.1 $ 3.6 $(6.9) $31.8 ===== ===== ===== =====35.1 $ 28.3 $(35.0) $ 28.4 ======= ====== ====== ======== The restructuring charges shown above primarily included employee severance costs related to the expected termination of approximately 2,150 employees. In June 1995, the System recorded $24.7 million of additional restructuring costs. As of March 31,June 30, 1995, 1,6491,683 employees have either been terminated or accepted voluntary separation under the restructuring plan. Additionally, GSUthe System recorded $24.3 million in 1994 (of which $23.8 million in 1994was recorded by GSU) for remaining severance and augmented retirement benefits related to the Merger. Actual termination benefits paid under the program during the first six months of 1995 amounted to $4.8$17.1 million. During that same period additional accruals of $5.0 million through March 31, 1995.were recorded and adjustments to the allocation of the total liability were made among the System companies. At June 30, 1995 the total remaining System liability of $12.2 million for expected future merger-related outlays was comprised principally of GSU and Entergy Services' liabilities of $8.0 million and $3.0 million, respectively. NOTE 7. ACCOUNTING ISSUES New Accounting Standard - In March 1995, the Financial Accounting Standards Board (FASB)FASB issued SFAS 121, effective January 1, 1996. This standard describes circumstances which may result in assets (including goodwill such as the Merger acquisition adjustment, see pages 87-88 of the Form 10-K) being impaired and provides criteria for recognition and measurement of asset impairment. Note 2 describes regulatory assets of $170 million (net of tax) related to Texas retail deferred River Bend operating and carrying costs. Management believes these deferred costs will be required to be written off under the provisions of SFAS 121 unless there are favorable regulatory or court actions related to these costs prior to the adoption of the new standard by Entergy. Certain other assets and operations of Entergy totaling approximately $1.8 billion (pre-tax) are most potentially affected by the requirements of SFAS 121. Those assets include AP&L's and LP&L's retained shareshares of Grand Gulf 1, Entergy Power's investmentinvestments in the Independence and Ritchie power plants, GSU's Louisiana deregulated asset plan, and Texas jurisdiction abeyed portion of the River Bend plant, in addition to the FERC jurisdiction and steam department operations of GSU. As discussed in the Form 10-K, GSU has previously discontinued the application of SFAS 71 for the Louisiana deregulated asset plan, and operations of the FERC jurisdiction and steam department. Entergy will continually review these assets and operations in order to determine if the carrying value of such assets will be recovered. In most cases this determination will be based on the net cash flows expected to result from such operations and assets. Projected net cash flows will depend on the future operating costs associated with the assets, the efficiency and availability of the assets/generating units, and the future market/price for energy over the remaining life of the assets. Based on current estimates, Entergy anticipates that the net cash flows will recover the carrying value of the potentially affected assets. __________________________________________ In the opinion of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy, the accompanying unaudited condensed financial statements contain all adjustments (consisting primarily of normal recurring accruals and reclassifying previously reported amounts to conform to current classifications) necessary for a fair statement of the results for the interim periods presented. However, the business of AP&L, GSU, LP&L, MP&L, and NOPSI is subject to seasonal fluctuations, with the peak period occurring during the summer months. The results for the interim periods presented should not be used as a basis for estimating results of operations for a full year. ENTERGY CORPORATION AND SUBSIDIARIES ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy Liquidity is important to Entergy due to the capital intensive nature of its business, which requires large investments in long-lived assets. While large capital expenditures for the construction of new generating capacity are not currently planned, the System does require significant capital resources for the periodic maturity of certain series of debt and preferred stock and ongoing construction expenditures. Net cash flow from operations for Entergy Corporation, the System operating companies, and System Energy for the threesix months ended March 31,June 30, 1995 and 1994, was as follows (in millions): ThreeSix Months ThreeSix Months Company Ended 3/31/6/30/95 Ended 3/31/6/30/94 Entergy Corporation $275.6 $322.4$449.7 $508.2 AP&L $124.8$141.3 $ 88.279.7 GSU $129.9 $ 53.8$100.4 $138.7 LP&L $103.7 $ 99.5$159.7 $147.1 MP&L $ 51.874.8 $ 46.973.5 NOPSI $ 18.614.5 $ 26.541.8 System Energy $(26.2) $ 53.451.4 $112.9 For the threesix months ended March 31,June 30, 1995, AP&L's net cash flow from operations increased due primarily to reduced billings from System Energy resulting from a FERC audit settlement in 1994.1994 and increased other working capital. Partially offsetting this increase in net cash flow at AP&L was a higher fuel inventory level due to the depletion of coal inventory in the first six months of 1994 when spring flooding disrupted the normal coal delivery schedule. GSU's net cash flow from operations increaseddecreased for the threesix months ended March 31,June 30, 1995, due primarily to reductions incash required for an upcoming debt retirement, and to reduced working capital. NOPSI's net cash flow from operations decreased for the threesix months ended March 31,June 30, 1995, due primarily to reduced working capital and to refunds associated with the 1994 NOPSI Settlement. Refund by NOPSI of a $25 million reserve established in December 1994 will be made over a 21-month period ending in September 1996. System Energy's net cash flow from operations decreased for the threesix months ended March 31,June 30, 1995, due primarily to refunds to associated companies resulting from a FERC audit settlement in 1994. In the first threesix months of 1995, as in recent years, cash from operations, supplemented by cash on hand, was sufficient to meet substantially all investing and financing requirements, including capital expenditures, dividends, and debt/preferred stock maturities. Entergy's ability to fund most of its capital requirements with cash from operations results from continued efforts to streamline operations and to reduce costs, as well as from collections under the rate phase-in plans, which exceed current cash requirements for the related costs. (In the income statement, these revenue collections are offset by the amortization of previously deferred costs so that there is no effect on net income.) The System operating companies and System Energy have the ability, subject to regulatory approval, to meet capital requirements through future debt or preferred stock issuances, as discussed below. Also, to the extent current market interest and dividend rates allow, the System operating companies and System Energy may continue to refinance high-cost debt and preferred stock prior to maturity. Productive investment of excess funds is necessary to enhance the long-term value of Entergy Corporation's common stock. Entergy Corporation will consider investing up to approximately $150 million per year for the next several years in nonregulated business opportunities. On March 31, 1995,See Part II for additional discussion of Entergy Corporation, through its subsidiary, Entergy Power Development Company (EPDC), entered into an agreement with Enron Power Development Corporation, a subsidiary of Enron Corporation, to acquire a 20% interestCorporation's current and future investments in the Dabhol Power Project (Project) locatednonregulated businesses. As discussed in the State of Maharashtra, India. The Project is a 695 megawatt combined cycle facility which will burn distillate as its fuel. Entergy Corporation made an initial investment in the Project of approximately $20.5 million. The total Project is estimated to cost approximately $920 million. The Project is fully financed and under construction with commercial operation expected by the end of 1997. At the time of commercial operation EPDC will have invested approximately $90 million in the Project. In addition to its investment EPDC has committed to cover its pro rata share of cost overruns up to approximately $30 million, if they are incurred. See Note 1 and "Significant Factors and Known Trends - Nonregulated Investments" for additional information., as of June 30, 1995, EPDC has made an initial investment in the Dabhol Power Project by depositing $20.5 million in an escrow account. Certain agreements and restrictions limit the amount of mortgage bonds and preferred stock that can be issued by each of the System operating companies and System Energy. Based on the most restrictive applicable tests as of March 31,June 30, 1995, and an assumed annual interest or dividend raterates of 9.25%,8% for bonds and 8.75% for preferred stock, each of the System operating companies and System Energy could have issued bonds or preferred stock in the following amounts (in millions): Company Bonds Preferred Stock AP&L $274 $388$462 GSU $ - $ - LP&L $117 $786$ 61 $867 MP&L $165$187 $ 8381 NOPSI $ 4620 $ 3913 System Energy $246$ 44 * * System Energy's charter does not provide for the issuance of preferred stock. In addition, the System operating companies and System Energy have the ability, subject to certain conditions, to issue bonds against retired bonds, in some cases without meeting an earnings coverage test. As a result of the charges recorded in 1994, GSU is currently precluded from issuing first mortgage bonds under its earnings coverage test. However, GSU has the ability to issue up to approximately $578 million of first mortgage bonds against previously retired bonds. AP&L may also issue preferred stock to refund outstanding preferred stock without meeting an earnings coverage test. GSU has no earnings coverage limitations on the issuance of preference stock. For information on the System operating companies' and System Energy's regulatory authorizations to issue and acquire securities, see Notes 3 and 4, and pages 102-105, 146-148, 189- 191, 228-230, 266-268, 299-301, and 332 of the Form 10-K. The System operating companies and System Energy have SEC authorization to effect short-term borrowings. As of March 31,June 30, 1995, GSU has unused lines of credit for short-term borrowings totaling $5.0 million. See pages 101, 145, 188, 227, 265, 299, and 331 of the Form 10-K for information on the System operating companies', System Energy's and Entergy Services' short-term borrowing authorizations and bank lines of credit. At March 31,June 30, 1995, the System operating companies, Entergy Services and System Fuels had outstanding short-term borrowings from the Money Pool and/or from banks as follows (in millions): Company Money Pool Banks AP&L $ - $34.0 GSU $ - $ - LP&L $ 0.1 $17.7 Entergy Operations $10.6 $ - $19.2 MP&L $12.9 $29.4 Entergy Services $39.8$36.4 $35.0 System Fuels $12.0$ - $15.0 On July 27, 1995, Entergy Corporation received SEC authorization for a $300 million bank line of credit and negotiations with a group of banks to provide up to $300 million in loans to Entergy Corporation are currently proceeding. Proceeds from this bank line of credit are expected to be used for common stock repurchases, investments in nonregulated and nonutility businesses, and other general corporate activities. Entergy Corporation's current primary capital requirements are to invest periodically in, or make loans to, its subsidiaries. Entergy Corporation expects to meet these requirements in 1995 - 1997 with internally generated funds and cash on hand. Entergy Corporation also pays dividends on its common stock, which aggregated $102$204 million in the first threesix months of 1995. Declarations of dividends on common stock are made at the discretion of the Board. It is anticipated that management will not recommend future dividend increases to the Board unless such increases are justified by sustained earnings growth of Entergy Corporation and its subsidiaries. Entergy Corporation receives funds through dividend payments from its subsidiaries. During the first threesix months of 1995, these common stock dividend payments totaled $96.8$196 million. Certain restrictions may limit the amount of these distributions. See page 106 of the Form 10-K for additional information. GSU did not make common stock dividend payments to Entergy Corporation in the first threesix months of 1995 in anticipation of a potential rate refund. NOPSI and System Energy did not make common stock dividend payments to Entergy Corporation in the first three months of 1995 due to refunds made to customers pursuant to the 1994 NOPSI Settlement and a FERC audit settlement, respectively.1995. Entergy Corporation has a program to repurchase shares of its outstanding common stock. The timing and amount of such repurchases depend upon market conditions and Board authorization. See Note 3 for additional information. Recent rate reductions, as discussed in Note 2, as well as any future rate reductions, have increased the need for Entergy Corporation has requested, but not yet received, SEC authorization for a $300 million bank line of credit,to stabilize and reduce costs in order to meet the proceeds of which are expected to be used for common stock repurchases, investments in nonregulated and nonutility businesses, and other activities. Certain parties have intervened in this proceeding, and the application is pending. Increasingincreasing competition in the utility industry brings an increased need to stabilize costs and reduce retail rates. See "Significant Factors and Known Trends - Competition" foras well as develop additional information on rate issues affecting the System. On March 20, 1995, the PUCT ordered GSU to implement a $72.9 million annual base rate reduction for the period March 31, 1994, through September 1, 1994, decreasing to an annual base rate reductionsources of $52.9 million after September 1, 1994. See Note 2 for additional information. In December 1994, NOPSI agreed to reduce electric and gas rates and issue credits and refunds to customers pursuant to the 1994 NOPSI Settlement. Under the terms of the settlement, NOPSI implemented rate reductions totaling $44.9 million effective January 1, 1995. NOPSI will implement an additional $4.4 million rate reduction on October 31, 1995. In addition, the 1994 NOPSI Settlement required NOPSI to credit its customers $25 million over a 21-month period beginning January 1, 1995, in order to resolve disputes with the Council regarding the interpretation of the 1991 NOPSI Settlement.income. Entergy Corporation and GSU See Notes 1 and 2 regarding litigation with Cajun and River Bend rate appeals. Write-offs or charges resulting from adverse rulings in these matters, or ultimately required by the application of SFAS 121 (see Note 7) could result in additional net losses being reported by Entergy Corporation and GSU in 1995 and subsequent periods, with resulting adverse adjustments to common equity of Entergy Corporation and GSU. Also, adverse resolution of these matters could adversely affect GSU's ability to continue to pay dividends and obtain financing, which could in turn affect GSU's liquidity. Entergy Corporation and System Energy Under athe Capital Funds Agreement, Entergy Corporation has agreed to supply to System Energy sufficient capital to maintain System Energy's equity capital at an amount equal to a minimum of 35% of its total capitalization (excluding short-term debt), and to permit the continuation of commercial operation of Grand Gulf 1 and to pay in full all indebtedness for borrowed money of System Energy when due under any circumstances. In addition, under supplements to the Capital Funds Agreement assigning System Energy's rights as security for specific debt of System Energy, Entergy Corporation has agreed to make cash capital contributions, if required, to enable System Energy to make payments on such debt when due. The Capital Funds Agreement can be terminated by the parties thereto, subject to the receipt of consents of certain creditors. RESULTS OF OPERATIONS ENTERGY Net Income Consolidated net income decreased inincreased for the first quarter ofthree months ended June 30, 1995 due primarily to decreasedincreased wholesale revenues relatedfrom customers outside of Entergy's service area, a reduction of the provision for a GSU rate refund associated with a 1995 PUCT rate order, and a decrease in interest charges. Consolidated net income increased slightly for the six months ended June 30, 1995 due primarily to rate reserves/reductions at GSU, MP&L,an increase in other income and NOPSI, certain restructing costs, and decreased miscellaneous income - net.a decrease in interest charges. Significant factors affecting the results of operations and causing variances between the first quarter ofthree months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales," "Expenses,"Sales" and "Other""Expenses" below. Revenues and Sales Detailed below are Entergy's operatingelectric revenues by source and KWH sales. Three Months Ended Increase/Increase Description 1995 1994 (Decrease) (In Millions) Electric Operating Revenues: Residential $ 480.0 $ 489.1 $(9.1) (2) Commercial 357.3 372.2 (14.9) (4) Industrial 433.0 461.5 (28.5) (6) Governmental 37.5 40.7 (3.2) (8) ------------------------ Total retail 1,307.8 1,363.5 (55.7) (4) Sales for resale 82.7 76.3 6.4 8 Other 148.7 111.9 36.8 33 ------------------------- Total $1,539.2 $1,551.7 $(12.5) (1) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 6,047 5,806 241 4 Commercial 4,958 4,813 145 3 Industrial 10,325 10,106 219 2 Governmental 564 553 11 2 ----------------------- Total retail 21,894 21,278 616 3 Sales for resale 2,406 2,035 371 18 ----------------------- Total 24,300 23,313 987 4 ======================= Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 441.5921.5 $ 476.0 $(34.5) (7)965.1 $(43.6) (5) Commercial 324.7 339.1 (14.4)682.0 711.3 (29.3) (4) Industrial 414.1 436.1 (22.0) (5)847.0 897.6 (50.6) (6) Governmental 35.1 38.9 (3.8) (10) -------- -------- ------72.7 79.6 (6.9) (9) -------------------------- Total retail 1,215.4 1,290.1 (74.7) (6)2,523.2 2,653.6 (130.4) (5) Sales for resale 74.5 69.4 5.1 7157.2 145.7 11.5 8 Other 4.9 (19.3) 24.2 125 -------- -------- ------153.5 92.6 60.9 66 -------------------------- Total $1,294.8 $1,340.2 $(45.4) (3) ======== ======== ======$2,833.9 $2,891.9 $(58.0) (2) ========================== Billed Electric Energy Sales (Millions of KWH): Residential 5,860 6,062 (202) (3)11,907 11,868 39 - Commercial 4,473 4,406 679,431 9,219 212 2 Industrial 10,035 9,728 30720,360 19,833 527 3 Governmental 539 525 14 3 ------ ------ ----1,103 1,079 24 2 ------------------------ Total retail 20,907 20,721 186 142,801 41,999 802 2 Sales for resale 2,400 1,736 664 38 ------ ------ ----4,283 3,771 512 14 ------------------------ Total 23,307 22,457 850 4 ====== ====== ====47,084 45,770 1,314 3 ======================== Electric operating revenues decreased $45.4 million infor the first quarter ofthree months and six months ended June 30, 1995 due primarily to milder than normal winter weather as compared to 1994, decreased fuel adjustment revenues, and rate reserves/reductions at GSU, MP&L, and NOPSI, partially offset by a reduction of the provision of a GSU rate refund associated with a 1995 PUCT rate order, increased weather-related sales, for resalean increase in wholesale revenues from outside Entergy's service area, and increased other revenues. The decrease in fuel adjustment revenues reflects a decrease in fuel prices. Other revenues increased primarily due to nonassociated utilities.the Grand Gulf over/under recovery, which does not affect net income. The changes in electric operating revenue for the three months and six months ended March 31,June 30, 1995 are as follows: Increase/Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(28.6)$(8.1) $(22.4) Rate riders (7.4)(5.1) (12.5) Fuel cost recovery (46.0)(62.7) (108.8) Sales volume/weather 0.725.5 26.2 Other revenue (including unbilled) 16.5 1994 Provision for revenue reduction (NOPSI) 14.331.5 48.0 Sales for resale 5.16.4 11.5 ------ ------ Total $(47.8)$(12.5) $(58.0) ====== ====== Gas operating revenues decreased $13.4 million in the first quartersix months of 1995 due primarily to milder than normal winter weather, decreased fuel adjustment revenues as compared to 1994 and gas rate reductions agreed to in the 1994 NOPSI Settlement. Expenses Operating expenses decreased for three months and six months ended June 30, 1995 due primarily to decreased fuel and purchased power expenses, partially offset by increased nuclear outage expenses and income taxes. Fuel for electric generation and fuel-relatedfuel- related expenses decreased $26.0 million in the first quarter of 1995 due primarily to lower fuel costs. Purchased power decreased $43.3 million in the first quarter of 1995 due primarily to decreased power purchases from nonassociatednon-associated utilities due to changes in generation requirements for the System operating companies. Nuclear refueling outage expense increased due primarily to a Grand Gulf 1 refueling outage at System Energy. Income taxes increased due primarily to higher pretax income, a decrease in tax depreciation at LP&L's Waterford 3 and GSU's River Bend plants, and decreased $4.6 millionamortization of investment tax credits related to the 1994 FERC Settlement. Interest charges decreased for the three months and six months ended June 30, 1995 due primarily to retirement and refinancing of high-cost long-term debt, partially offset by carrying charges related to the System Energy 1994 FERC Settlement. AP&L Net Income Net income increased in the firstsecond quarter of 1995 due primarily to higher retail non-fuel revenues and lower pretax income. Other Miscellaneousother operation and maintenance expenses partially offset by lower sales for resale and higher income - net decreased $7.2 million in the first quarter of 1995 due primarily to increased losses by Entergy Corporation's nonregulated business investments. The increased loss stems from expansion of domestic energy services operations and international power development activities. AP&L Net Incometax expense. Net income decreased in the first quartersix months of 1995 due primarily to decreased sales for resale revenues and increasedhigher other operationsoperation and maintenance, depreciation, and income tax expenses. Significant factors affecting the results of operations and causing variances between the first quarter ofthree months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are AP&L's operating revenues by source and KWH sales.sales for the three months and six months ended June 30, 1995 and 1994: Three Months Ended Increase/Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 109.0 $ 108.3 $ 0.7 1 Commercial 73.9 74.8 (0.9) (1) Industrial 84.9 80.6 4.3 5 Governmental 4.0 4.1 (0.1) (2) ------------------------ Total retail 271.8 267.8 4.0 1 Sales for resale Associated companies 51.2 60.4 (9.2) (15) Non-associated companies 40.5 42.5 (2.0) (5) Other 48.7 44.2 4.5 10 ------------------------ Total $ 412.2 $ 414.9 $(2.7) (1) ======================== Billed Electric Energy Sales (Millions of KWH): Residential 1,149 1,141 8 1 Commercial 976 986 (10) (1) Industrial 1,515 1,441 74 5 Governmental 66 57 9 16 ---------------------- Total retail 3,706 3,625 81 2 Sales for resale Associated companies 2,396 2,988 (592) (20) Non-associated companies 1,156 1,065 91 9 ---------------------- Total 7,258 7,678 (420) (5) ====================== Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 124.2233.2 $ 123.3231.6 $ 0.91.6 1 Commercial 68.3 66.3 2.0 3142.2 141.1 1.1 1 Industrial 77.6 72.8 4.8 7162.5 153.4 9.1 6 Governmental 4.0 4.1 (0.1)8.0 8.2 (0.2) (2) ------- ------- ------------------------------- Total retail 274.1 266.5 7.6 3545.9 534.3 11.6 2 Sales for resale:resale Associated companies 29.1 66.6 (37.5) (56)80.3 127.0 (46.7) (37) Non-associated companies 38.6 44.3 (5.7) (13)79.1 86.8 (7.7) (9) Other (2.2) (6.3) 4.1 65 ------- ------- ------46.5 37.9 8.6 23 ------------------------- Total $ 339.6751.8 $ 371.1 $(31.5) (8) ======= ======= ======786.0 $(34.2) (4) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 1,427 1,438 (11) (1)2,576 2,579 (3) - Commercial 947 931 16 21,923 1,917 6 - Industrial 1,439 1,364 752,954 2,805 149 5 Governmental 53 58 (5) (8) ----- ----- ------119 115 4 3 ------------------------- Total retail 3,866 3,791 757,572 7,416 156 2 Sales for resale:resale Associated companies 1,359 3,250 (1,891) (58)3,755 6,238 (2,483) (40) Non-associated companies 873 1,204 (331) (27) ----- ----- ------2,029 2,269 (240) (11) ------------------------- Total 6,098 8,245 (2,147) (26) ===== ===== ======13,356 15,923 (2,567) (16) ========================= Electric operating revenues decreased in the second quarter and first quartersix months of 1995 due primarily due to lower sales for resale to associated companies caused by changes in generation availability and requirements among the System operating companies. This decrease was partially offset by higher retail sales due primarily to an increase in customers and power usage. The changes in electric operating revenue for the three months and six months ended March 31,June 30, 1995 are as follows: Increase/Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $1.6 $ 1.02.6 Rate riders 0.31.4 1.7 Fuel cost recovery 4.2(0.6) 3.6 Sales volume/weather 2.11.7 3.8 Other revenue (including unbilled) 4.14.4 8.5 Sales for resale (43.2)(11.2) (54.4) ----- ------ Total $(31.5)$(2.7) $(34.2) ===== ====== Expenses Operating expenses decreased in the firstsecond quarter of 1995 due primarily due to lower fuel and fuel-related expenses and purchased power expenses partially offset by an increase in other operationhigher income tax expense. Fuel and maintenance expenses. Fuelfuel-related expenses and purchased power expenses decreased due to the lower sales for resale to associated companies as noted in "Revenues and Sales" above. The increase in income tax expense is primarily due to higher pretax income. Operating expenses decreased for the six months of 1995 due primarily to lower fuel and fuel-related expenses and purchased power expenses partially offset by higher other operation and maintenance expenses and income tax expenses. Fuel and purchased power expenses decreased for the reasons discussed above. The increase in other operation and maintenance expenses is primarily the result of additional work being performed and the use of materials during ANO 1's scheduled refueling outage which began in mid- Februarymid-February 1995 and lasted through the end of the quarter.was completed in early April 1995. In addition, ANO 2 experienced a 30 day mid-cycle outage during the first quarter of 1995 which also required additional work and materials. See Note 1 for an additional discussionIncome tax expense increased primarily due to the write-off in 1994 of ANO 2's mid-cycle outage.the investment tax credit in accordance with the FERC Settlement. GSU Net Income Net income decreased inincreased for the first quarterthree months and six months ended June 30, 1995 primarily due to a reduction of the provision for rate refund associated with a 1995 due primarily to reduced base revenues resulting fromPUCT rate reductions ordered by the PUCT in September 1994 and March 1995,order (see Note 2 for further information). This increase was partially offset by increased energy sales.an increase in taxes other than income taxes. Significant factors affecting the results of operations and causing variances between the first quarter ofthree months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenue and Sales See tableDetailed below for information onare GSU's operating revenues by source and KWH sales.sales for the three months and six months ended June 30, 1995 and 1994: Three Months Ended Increase/Increase Description 1995 1994 (Decrease) % (In millions) Electric Department Operating Revenues: Residential $ 132.6 $ 132.7 $(0.1) - Commercial 99.3 102.4 (3.1) (3) Industrial 145.2 159.9 (14.7) (9) Governmental 6.2 6.4 (0.2) (3) -------------------------- Total retail 383.3 401.4 (18.1) (5) Sales for resale Associated companies 22.6 4.7 17.9 381 Non-associated companies 15.8 15.7 0.1 1 Other 40.6 17.2 23.4 136 -------------------------- Total Electric Department $ 462.3 $439.0 $ 23.3 5 ========================== Billed Electric Energy Sales (Millions of KWH): Residential 1,754 1,672 82 5 Commercial 1,507 1,462 45 3 Industrial 3,677 3,811 (134) (4) Governmental 63 74 (11) (15) ------------------------ Total retail 7,001 7,019 (18) - Sales for resale Associated companies 1,057 589 468 79 Non-associated companies 548 120 428 357 ------------------------ Total Electric Department 8,606 7,728 878 11 Steam Department 452 421 31 7 ------------------------ Total 9,058 8,149 909 11 ======================== Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Department Operating revenues:Revenues: Residential $ 116.5249.1 $ 123.8 $ (7.3) (6)256.5 $(7.4) (3) Commercial 92.3 94.7 (2.4)191.6 197.1 (5.5) (3) Industrial 142.3 153.0 (10.7) (7)287.5 312.9 (25.4) (8) Governmental 6.2 6.3 (0.1)12.4 12.7 (0.3) (2) ------- ------- ------------------------------- Total retail 357.3 377.8 (20.5)740.6 779.2 (38.6) (5) Sales for resale:resale Associated companies 10.2 9.3 0.9 1032.8 14.0 18.8 134 Non-associated companies 14.8 9.1 5.7 6330.6 24.8 5.8 23 Other (3.5) 5.9 (9.4) (159) ------- ------- ------37.1 23.1 14.0 61 ------------------------- Total Electric Department $ 378.8 $ 402.1 $(23.3) (6) ======= ======= ======841.1 $841.1 - - ========================= Billed Electric Energy Sales (Millions of KWH): Residential 1,561 1,601 (40) (2)3,315 3,273 42 1 Commercial 1,342 1,307 352,849 2,769 80 3 Industrial 3,670 3,575 957,347 7,386 (39) (1) Governmental 151 148 3 Governmental 88 74 14 19 ----- ----- ---2 ---------------------- Total retail 6,661 6,557 104 213,662 13,576 86 1 Sales for resale:resale Associated companies 501 398 103 261,558 987 571 58 Non-associated companies 473 143 330 231 ----- ----- ---1,021 263 758 288 ---------------------- Total Electric Department 7,635 7,098 537 816,241 14,826 1,415 10 Steam Department 397 410 (13) (3) ----- ----- ---849 831 18 2 ---------------------- Total 8,032 7,508 524 7 ===== ===== === Operating17,090 15,657 1,433 9 ====================== Electric operating revenues decreasedincreased in the first quarterthree months ended June 30, 1995 primarily due to a reduction of the provision for rate refund associated with a 1995 due primarily to reduced base revenues resulting fromPUCT rate reductions ordered by the PUCTorder and an increase in September 1994 and March 1995 (see Note 2sales for further discussion) in addition to reduced fuel revenue. These decreases wereresale. This increase was partially offset by increased energy sales. Energy sales increaseda decrease in fuel revenues. Electric operating revenues were basically unchanged for the first six months of 1995 primarily due to increasedlower fuel revenues which were offset by higher sales for resale. Sales for resale increased as a result of GSU's participationan increase in the System power pool and non-weather related growth in the non-residential markets. The changes in electric operating revenue for the three months ended March 31, 1995 are as follows: Increase/ Description (Decrease) (In Millions) Change in base rates $(18.7) Fuel cost recovery (14.1) Sales volume/weather 2.6 Other revenue (including unbilled) 0.3 Sales for resale 6.6 ------ Total $(23.3) ====== Expenses Operating expenses decreased primarily duesales to lower purchased power expenses. Purchased power decreased in the first quarter of 1995 due primarily toassociated companies caused by changes in generation availability and requirements among the System operating companies. Gas operating revenues decreased for the first six months of 1995 primarily due to a decrease in residential sales. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $12.2 $(6.6) Fuel cost recovery (24.8) (38.9) Sales volume/weather 3.5 6.1 Other revenue (including unbilled) 14.4 14.8 Sales for resale 18.0 24.6 ----- ----- Total $23.3 $ - ===== ===== Expenses Operating expenses increased for the three months ended June 30, 1995 primarily due to increased taxes other than income taxes and income taxes, partially offset by lower purchased power expense. Taxes other than income taxes increased primarily due to a refund of franchise taxes in 1994. Income taxes increased primarily due to a decrease in tax depreciation associated with River Bend and higher pre-tax income for this period. Purchased power expense decreased primarily due to the changes in generation availability and requirements among the System operating companies. This increase in generation was offset by a decrease in the price of fuel. Operating expenses remained relatively unchanged for the first six months of 1995 primarily due to the same reasons as the three months ended June 30, 1995 (discussed above). In addition, other operation and maintenance expenses increased slightly primarily due to additional restructuring charges which were partially offset by the prior year severance charges related to the merger. Other interest - net decreased for the three months and six months ended June 30, 1995 primarily due to the one time interest charge associated with the March 1994 Louisiana Supreme Court ruling requiring GSU to refund to ratepayers the portion of GSU's cost to purchase power from Nelson Industrial Steam Company (NISCO) representing the excess of NISCO's purchase price of the units over GSU's depreciated cost of the units. LP&L Net Income Net income remained relatively unchanged inincreased for the first quarter ofthree months and six months ended June 30, 1995. This is due primarily to the completion in the second quarter of 1994 of the amortization of the proceeds resulting from litigation with a gas supplier,lower other operating and maintenance expenses partially offset by increased sales for resale to non-associated utilities.higher income tax expense. Significant factors affecting the results of operations and causing variances between the first quarter ofthree months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are LP&L's operating revenues by source and KWH sales.sales for the three months and six months ended June 30, 1995 and 1994. Three Months Ended Increase/Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 132.9 $ 139.4 $(6.5) (5) Commercial 85.4 92.0 (6.6) (7) Industrial 153.5 169.1 (15.6) (9) Governmental 7.8 7.9 (0.1) (1) ------------------------ Total retail 379.6 408.4 (28.8) (7) Sales for resale Associated companies 0.2 0.1 0.1 100 Non-associated companies 13.6 8.7 4.9 56 Other 12.7 24.4 (11.7) (48) ------------------------ Total $ 406.1 $ 441.6 $(35.5) (8) ======================== Billed Electric Energy Sales (Millions of KWH): Residential 1,787 1,691 96 6 Commercial 1,159 1,118 41 4 Industrial 4,247 3,979 268 7 Governmental 108 99 9 9 ---------------------- Total retail 7,301 6,887 414 6 Sales for resale Associated companies 9 1 8 80 Non-associated companies 360 216 144 67 ---------------------- Total 7,670 7,104 566 8 ====================== Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 111.9 $124.9 $(13.0) (10)244.8 $ 264.4 $(19.6) (7) Commercial 76.0 80.8 (4.8) (6)161.4 172.8 (11.4) (7) Industrial 148.9 159.9 (11.0) (7)302.4 329.0 (26.6) (8) Governmental 7.7 7.9 (0.2) (3) ------- ------ ------15.5 15.8 (0.3) (2) ------------------------- Total retail 344.5 373.5 (29.0) (8)724.1 782.0 (57.9) (7) Sales for resale:resale Associated companies 0.4 0.2 0.1 0.10.2 100 Non-associated companies 10.0 6.8 3.2 4723.6 15.5 8.1 52 Other (1.7) 3.4 (5.1) (150) ------- ------ ------11.0 27.8 (16.8) (60) ------------------------- Total $ 353.0 $383.8 $(30.8)759.1 $ 825.5 $(66.4) (8) ======= ====== =============================== Billed Electric Energy Sales (Millions of KWH): Residential 1,587 1,680 (93) (6)3,374 3,371 3 - Commercial 1,019 1,028 (9) (1)2,178 2,146 32 1 Industrial 4,079 3,977 102 38,326 7,956 370 5 Governmental 110 107 3 3 ----- ----- ---218 206 12 6 ----------------------- Total retail 6,795 6,79214,096 13,679 417 3 - Sales for resale:resale Associated companies 10 3 7 23319 4 15 37 Non-associated companies 214 125 89 71 ----- ----- ---574 341 233 68 ----------------------- Total 7,019 6,920 99 1 ===== ===== ===14,689 14,024 665 5 ======================= Electric operating revenues were lower in the first quarter ofthree months and six months ended June 30, 1995 primarily due to lower fuel adjustment revenues, which do not affect net income. In addition, a reserve for rate refund was established (see Note 2 for further information) and completion of the amortization of the proceeds resulting from litigation with a gas supplier in the second quarter of 1994 resulted in decreased other operating revenues for the first quarter of 1995, partially offset by higher sales to non-associated utilities. The changes in electric operating revenue for the three months and six months ended March 31,June 30, 1995 are as follows: Increase/Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $ 0.8$(10.4) $(9.7) Fuel cost recovery (26.3)(39.9) (66.2) Sales volume/weather (3.4)13.8 10.5 Other revenue (including unbilled) (5.2)(4.0) (9.3) Sales for resale 3.35.0 8.3 ------ ------ Total $(30.8)$(35.5) $(66.4) ====== ====== Expenses Operating expenses decreased for the first quarter ofthree months and six months ended June 30, 1995 primarily due to lower fuel, and purchased power, expenses.and other operation and maintenance expenses partially offset by higher income tax expense. Fuel for electric generation and fuel-related expenses decreased primarily due to a lower per unit cost for gasdeferred fuel partially offset by an increase in gas fired generation.cost. The decrease in purchased power expensesexpense is primarily due to changes in generation availability and requirements among the System operating companies. Other operation and maintenance expenses decreased primarily due to lower fossil and nuclear maintenance activities and a court settlement reducing legal expense. Income taxes increased primarily due to a decrease in tax depreciation associated with Waterford 3 and higher pre-tax income. MP&L Net Income Net income decreased slightly in the three months ended June 30, 1995 due primarily to decreased sales for resale. Net income increased in the first quarter ofsix months ended June 30, 1995 due primarily to a decrease in other operation and maintenance expenses and an increase in sales. The increase in sales for resale. These increases werewas partially offset by lower retail revenues due to the effects of thea March 1994 rate reduction. Significant factors affecting the results of operations and causing variances between the first quarter ofthree months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are MP&L's operating revenues by source and KWH sales.sales for the three months and six months ended June 30, 1995 and 1994: Three Months Ended Increase/Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 74.5 $ 75.0 $(0.5) (1) Commercial 63.2 61.9 1.3 2 Industrial 43.7 45.0 (1.3) (3) Governmental 6.8 7.3 (0.5) (7) -------------------------- Total retail 188.2 189.2 (1.0) (1) Sales for resale Associated companies 6.0 11.0 (5.0) (45) Non-associated companies 5.4 4.5 0.9 20 Other 40.7 25.1 15.6 62 -------------------------- Total $ 240.3 $ 229.8 $ 10.5 5 ========================== Billed Electric Energy Sales (Millions of KWH): Residential 884 869 15 2 Commercial 794 749 45 6 Industrial 741 713 28 4 Governmental 80 87 (7) (8) ----------------------- Total retail 2,499 2,418 81 3 Sales for resale Associated companies 100 300 (200) (67) Non-associated companies 176 141 35 25 ----------------------- Total 2,775 2,859 (84) (3) ======================= Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 67.1141.6 $ 76.1151.1 $ (9.0) (12)(9.5) (6) Commercial 55.6 58.4 (2.8) (5)118.8 120.3 (1.5) (1) Industrial 40.2 44.1 (3.9) (9)83.9 89.1 (5.2) (6) Governmental 6.5 6.6 (0.1) (2) ------ ------ -----13.3 13.9 (0.6) (4) ------------------------- Total retail 169.4 185.2 (15.8) (9)357.6 374.4 (16.8) (4) Sales for resale:resale Associated companies 6.6 5.1 1.5 2912.6 16.1 (3.5) (22) Non-associated companies 4.2 3.0 1.2 409.6 7.5 2.1 28 Other 13.1 (5.9) 19.0 322 ------ ------ -----53.8 19.2 34.6 180 ------------------------- Total $193.3 $187.4 $ 5.9 3 ====== ====== =====433.6 $ 417.2 $ 16.4 4 ========================= Billed Electric Energy Sales (Millions of KWH): Residential 933 976 (43) (4)1,817 1,845 (28) (2) Commercial 724 683 411,518 1,432 86 6 Industrial 723 692 311,464 1,405 59 4 Governmental 78 77 1 1 ----- ----- ---158 164 (6) (4) ---------------------- Total retail 2,458 2,428 30 14,957 4,846 111 2 Sales for resale:resale Associated companies 159 56 103 184259 356 (97) (27) Non-associated companies 140 76 64 84 ----- ----- ---316 217 99 46 ---------------------- Total 2,757 2,560 197 8 ===== ===== ===5,532 5,419 113 2 ====================== Electric operating revenues increased in the first quarter ofthree months ended June 30, 1995 due to increased sales for resale andan increase in other revenues, partially offset by lower retail revenues.sales for resale. Other revenues increased primarily due to Grand Gulf over/under recovery, which does not affect net income. Sales for resale increaseddecreased primarily due to changes in generation availability and requirements among the System operating companies. Electric operating revenues increased in the six months ended June 30, 1995 due to an increase in other revenues, partially offset by lower retail revenues. Other revenues increased primarily due to Grand Gulf over/under recovery, which does not affect net income. Retail revenues decreased primarily due to the effects of thea March 1994 rate reduction. The changes in electric operating revenue for the three months and six months ended March 31,June 30, 1995 are as follows: Increase/Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $ (4.9)$(0.5) $(5.4) Grand Gulf rate rider (7.7)(6.4) (14.3) Fuel cost recovery (4.1)3.9 (0.2) Sales volume/weather 0.92.1 3.1 Other revenue (including unbilled) 19.015.6 34.6 Sales for resale 2.7 ------(4.2) (1.4) ----- ----- Total $ 5.9 ======$10.5 $16.4 ===== ===== Expenses Operating expenses increased for the three months and six months ended June 30, 1995 primarily due to increased amortization of rate deferrals and increased income taxes,fuel and purchase power costs. In addition, the increase in operating expenses for the six months ended June 30, 1995 was partially offset by lowera decrease in other operation and maintenance expenses. Other operation and maintenance expenses decreased primarily due to increased maintenance incurred at various plant sites during the first quarter of 1994. Income taxes increased in the first quarter of 1995 due to a higher pre-tax income.expense. The amortization of rate deferrals increased in the first quarter ofthree months and six months ended June 30, 1995 reflecting the fact that MP&L, based on the Revised Plan, collected more Grand Gulf 1-related costs from its customers in the first quarter ofthree months and six months ended June 30, 1995 than it recovered in the same period in 1994. Purchased power increased for the three months ended June 30, 1995 primarily due to increased purchase power prices. Fuel and fuel- related expenses and purchased power increased for the six months ended June 30, 1995 due to increased generation requirements resulting from increased energy sales. Other operation and maintenance expenses decreased for the six months ended June 30, 1995 primarily due to increased maintenance incurred at various plant sites during the three months ended March 31, 1994. NOPSI Net Income Net income increaseddecreased in the first quarter ofthree months and six months ended June 30, 1995 due primarily to a provision for rate reduction that was recorded in the first quarter of 1994, partially offset by a permanent rate reduction that took effect on January 1, 1995.1995 partially offset by a decrease in other operation and maintenance expenses. Significant factors affecting the results of operations and causing variances between the first quarter ofthree months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are NOPSI's operating revenues by source and KWH sales.sales for the three months and six months ended June 30, 1995 and 1994. Three Months Ended Increase/Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 31.0 $ 33.6 $ (2.6) (8) Commercial 35.4 41.1 (5.7) (14) Industrial 5.6 6.8 (1.2) (18) Governmental 12.8 15.1 (2.3) (15) ------------------------ Total retail 84.8 96.6 (11.8) (12) Sales for resale Associated companies 0.0 0.9 (0.9) (100) Non-associated companies 2.4 2.2 0.2 9 Other 9.9 7.9 2.0 25 ------------------------ Total $ 97.1 $ 107.6 $(10.5) (10) ======================== Billed Electric Energy Sales (Millions of KWH): Residential 473 433 40 9 Commercial 522 498 24 5 Industrial 146 135 11 8 Governmental 248 234 14 6 ----------------------- Total retail 1,389 1,300 89 7 Sales for resale Associated companies 2 34 (32) (94) Non-associated companies 76 67 9 13 ----------------------- Total 1,467 1,401 66 5 ======================= Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 21.852.8 $ 28.061.6 $ (6.2) (22)(8.8) (14) Commercial 32.5 39.0 (6.5) (17)67.9 80.1 (12.2) (15) Industrial 5.1 6.3 (1.2)10.7 13.1 (2.4) (18) Governmental 23.5 29.0 (5.5) (19) Governmental 10.7 13.9 (3.2) (23) ------ ------ ------------------------------ Total retail 70.1 87.2 (17.1) (20)154.9 183.8 (28.9) (16) Sales for resale:resale Associated ompaniescompanies 1.3 0.1 1.2 *0.9 0.4 44 Non-associated companies 1.9 1.3 0.6 464.3 3.6 0.7 19 Other 4.8 (9.7) 14.5 149 ------ ------ ------14.7 (1.8) 16.5 (917) ------------------------- Total $ 78.1175.2 $ 78.9 $ (0.8) (1) ====== ====== ======186.5 $(11.3) (6) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 352 367 (15) (4)825 800 25 3 Commercial 440 457 (17) (4)962 955 7 1 Industrial 123 119 4269 254 15 6 Governmental 458 445 13 3 Governmental 210 210 - - ----- ----- -------------------------- Total retail 1,125 1,153 (28) (2)2,514 2,454 60 2 Sales for resale:resale Associated companies 66 2 64 *68 36 32 8 Non-associated companies 60 27 33 122 ----- ----- ---136 94 42 4 ----------------------- Total 1,251 1,182 69 6 ===== ===== === * Increase greater than 200 percent.2,718 2,584 134 5 ======================= Electric operating revenues decreased in the first quarterthree months and six months ended June 30, 1995 due primarily to a decrease in retail base revenues and lower fuel adjustment revenues. Retail base revenues decreased as a result of the rate reduction in accordance with the 1994 NOPSI Settlement as well as lower sales of energy due to warmer than normal winter weather. These decreases wereThis decrease was partially offset by a reserve for revenue reduction recorded in the first quarter of 1994 and increased sales for resale to associated companies.companies for the six months ended June 30, 1995. The changes in electric operating revenue for the three months and six months ended March 31,June 30, 1995 are as follows: Increase/Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $ (6.8)$(10.8) $(3.3) Fuel cost recovery (5.7)(1.4) (7.1) Sales volume/weather (1.5)4.3 2.7 Other revenue (including unbilled) (2.9) 1994 Provision for revenue reduction 14.3(1.9) (4.7) Sales for resale 1.8(0.7) 1.1 ------ ------ Total $ (0.8)$(10.5) $(11.3) ====== ====== For the first quarter ofthree months and six months ended June 30, 1995, gas operating revenues decreased due primarily to decreased gas sales, in the first quarter as a result of a warmer winter than the prior year, the rate reduction agreed to in the 1994 NOPSI Settlement effective January 1, 1995, and a lower unit puchasepurchase price for gas purchased for resale. Expenses Fuel for electric generation and fuel-relatedOperating expenses decreased infor the first quarter ofthree months and six months ended June 30, 1995 due primarily to alower fuel and other operation and maintenance expenses. The decrease in gasfuel and fuel-related expenses is partially offset by an increase in purchased power expenses for resale.the three months ended June 30, 1995. Gas purchased for resale decreased for the first quarter ofsix months ended June 30, 1995 due primarily to decreased gas sales and a lower unit purchase price. Purchased power expenses decreasedincreased in the first quarter ofthree months and six months ended June 30, 1995 due primarily to changes in generation requirements among the System operating companies and higher costs. Other operation and maintenance expenses decreased primarily due to a decrease in maintenance activity and lower costs.payroll expenses. The decrease in payroll expenses is the result of restructuring and a decrease in the number of employees. Income taxes increaseddecreased in the first quarter ofthree months ended June 30, 1995 due primarily to higherlower pre-tax income. The decrease in the amortization of rate deferrals in the first quarter of 1995 is primarily a result of reduced over- recovery of Grand Gulf-1 related costs in 1995 compared to 1994. SYSTEM ENERGY Net Income Net income increased indecreased for the first quarter ofthree months ended June 30, 1995, due primarily to increased revenues and a reduction in interest expense,nuclear refueling outage expenses, partially offset by an increase in operation and maintenance expenses, depreciation, amortization and decommissioning expense.revenues. Net income for the six months ended June 30, 1995 was virtually unchanged from the same period in 1994. Significant factors affecting the results of operations and causing variances between the second quarters and first quartersix months of 1995 and 1994 are discussed under "Revenues" and "Expenses" below. Revenues Operating revenues recover operating expenses, depreciation and capital costs attributable to Grand Gulf 1. The capital costs are computed by allowing a return on System Energy's common equity funds allocable to its net investment in Grand Gulf 1 and adding to such amount System Energy's effective interest cost for its debt allocable to its investment in Grand Gulf 1. Operating revenues increased infor the first quarter ofthree months and six months ended June 30, 1995, due primarily to increased expenses in connection with a Grand Gulf 1 refueling outage and higher depreciation, amortization, and decommissioning expense offset by a lower return on System Energy's decreasing investment in Grand Gulf 1 (caused by depreciation of the unit). Expenses Operation and maintenance expenses increased infor the first quarter ofthree months and six months ended June 30, 1995, principally as a result of a refueling outage which began April 15, 1995 and ended June 9, 1995. Fuel expense decreased for the second quarter and first six months of 1995 as a result of the refueling outage. Depreciation, amortization, and decommissioning expense increased infor the first quarter of 1995three months and six months ended June 30, due primarily to an increaseincreases of $2 million and $5 million, respectively, in amortization expense as a result of the reclassification of $81 million of Grand Gulf 1 costs in accordance with the November 1994 FERC Settlement. The increase in amortization expense was partially offset by a decrease in depreciation expense related to the reclassified costs. Interest expense decreased in the second quarter and first quartersix months of 1995 due primarily to the retirement and refinancing of high-cost long- termlong-term debt. SIGNIFICANT FACTORS AND KNOWN TRENDS Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and NOPSISystem Energy Competition and Industry Challenges The electric utility industry, including Entergy, is experiencing increased competitive pressures. Entergy is seeking to becomecontinue as a leading competitor in the changing electric energy business. Competition presents Entergy with many challenges. The following have been identified by Entergy as its major competitive challenges. Entergy Retail and Wholesale Rate Issues Increasing competition anticipated in the utility industry brings an increasedas well as recent rate reductions increase the need for Entergy to stabilize or reduce retail rates.its costs. The retail regulatory philosophy is shifting in some jurisdictions from traditional cost-of-service regulation to incentive-rate regulation. Incentive and performance-based rate plans encourage efficiencies and productivity while permitting utilities and their customers to share in the results. MP&L implemented an incentive-rate plan in March 1994, and LP&L filedin June 1995, the LPSC approved a performance-basedperformance based formula rate plan with the LPSC in August 1994 which is pending final approval from the LPSC.for LP&L. GSU agreed to shared-savings plans as part of the Merger. Recognizing that many industrial customers have energy alternatives, Entergy continues to work with these customers to address their needs. In certain cases, competitive prices are negotiated, using variable-rate designs. In a settlement with the Council that was approvedAs discussed on December 29, 1994, NOPSI agreed to reduce electric and gas rates and issue credits and refunds to customers. Effective January 1, 1995, NOPSI implemented a $31.8 million permanent reduction in electric base rates and a $3.1 million permanent reduction in gas base rates. On January 1, 1995, NOPSI also implemented a $10 million permanent reduction in electric base rates to reflect the reduced costs related to Grand Gulf 1, to be followed by an additional $4.4 million rate reduction on October 31, 1995. These Grand Gulf 1 rate reductions, which are expected to be largely offset by lower operating costs, may reduce NOPSI's after- tax net income by approximately $1.4 million per year beginning November 1, 1995. For additional information, see pages 73, 79,23, 26, 27-28, 92, 94-95, 97, 285, 290,183, 261 and 295 of the Form 10-K. LP&L's five-year rate freeze expired10-K during the fiscal year 1994, GSU's Louisiana jurisdiction, MP&L and NOPSI reduced rates in March 1994. In August 1994,accordance with regulatory orders. During the first six months of 1995, GSU's Texas jurisdiction and LP&L filed a performance-based formula rate plan with the LPSC. The proposed formula rate plan would continue existing LP&L rates at current levels, while providing financial incentivewere also required by regulators to reduce costs and maintain high levelsrates. See Note 2 for additional discussion of customer satisfaction and system reliability. Hearings were held on the LP&L proposed performance-based formulaEntergy's rate plan in March 1995. On April 20, 1995 the LPSC Staff recommended a $49.4 million reduction in base rates. This recommended rate reduction included $8.5 million of rates previously reduced through fuel clause reductions; therefore, the net effect of the recommended reduction is $40.9 million. The LPSC Staff recommended the approval of LP&L's proposed formula rate plan with the following modifications. An earnings band would be established from a 10.4% to a 12% return on equity. If LP&L's earnings fall within the bandwidth, no adjustment in rates occurs. If LP&L's earnings are above the 12% return on equity, a 60/40 sharing with customers occurs and customers receive 60% of earnings in excess of the 12% through prospective rate reductions. Alternatively, if LP&L's earnings are below the 10.4% return on equity, customers pay 60% of the difference between the realized return on equity and the 10.4% through prospective rate increases. The LPSC Staff's recommendation also included a reduction in LP&L's authorized rate of return from 12.76% to 11.2%. The LPSC is expected to issue a final order in late May 1995.activities. In connection with the Merger, AP&L and MP&L agreed with their respective retail regulators not to request any general retail rate increases that would take effect before November 1998, with certain exceptions. MP&L also agreed that during this period retail base rates under its formula rate plan would not be increased above the level of rates in effect on November 1, 1993. GSU agreed with the LPSC and PUCT to a five-year Rate Cap (beginning January 1, 1994) on retail electric rates, and to pass through to retail customers the fuel savings and a certain percentage of the nonfuel savings created by the Merger. UnderIn the wholesale rate area, FERC approved in 1992, with certain modifications, the proposal of AP&L, LP&L, MP&L, NOPSI, and Entergy Power to sell wholesale power at market-based rates and to provide to electric utilities "open access" to the System's transmission system (subject to certain requirements). GSU was later added to this filing. On October 31, 1994, as amended on January 25, 1995, Entergy Services filed with FERC revised transmission tariffs intended to provide access to transmission service on the same or comparable bases, terms, and conditions as the System operating companies, and the tariffs were subsequently approved. Open access and market pricing, once they take effect, will increase marketing opportunities for the System, but will also expose the System to the risk of loss of load or reduced revenues due to competition with alternative suppliers. In light of the rate issues discussed above, Entergy's utility subsidiaries are aggressively reducing costs to avoid potential earnings erosions that might result, as well as to compete successfully by becoming a low-cost producer. In 1995, Entergy implemented a restructuring program related to certain of its operating units, designed to reduce costs and to improve operating efficiencies. See pages 117, 155, 201, 238, and 306 of the Form 10-K and Note 6 for further information. Also, in response to an increasingly competitive environment, AP&L, LP&L, MP&L, and NOPSI have announced intentions to revise their respective Merger agreements,initial least-cost planning activities, and GSU is continuing to work with the LPSC and PUCT have reviewed GSU's base rates duringregarding integrated resource planning. Potential Changes in the first post-Merger earnings analysis. The LPSC ordered a $12.7 million annual rate reduction effective January 1, 1995. GSU received an injunction delaying implementation of $8.3 million of the reduction and on January 1, 1995, reduced rates by $4.4 million. The entire $12.7 million is being appealed. On March 20, 1995, the PUCT ordered a $72.9 million annual base rate reduction for the period March 31, 1994 through September 1, 1994, decreasing to an annual base rate reduction of $52.9 million after September 1, 1994. In accordance with the Merger agreement, the rate reduction is applied retroactively to March 31, 1994. The rate reduction is being appealed, and no assurance can be given as to the timing or outcome of the appeal. See Note 2 for further information.Electric Utility Industry Retail wheeling, the transmission by an electric utility of energy produced by another entity over the utility's transmission and distribution system to a retail customer in the electric utility's area of service, is also evolving. Over a dozen states have been or are studying or experimenting with the concept of retail competition. In April 1994, the state of Michigan initiated a five-year experiment that would allow limited competition among public utilities. The experimentutilities; however, it is currently being challenged in the courts. In April 1994,May 1995, the California Public Utilities Commission (CPUC) proposedadopted a preliminary proposal to deregulate that state's electriccreate a wholesale power industry, starting on January 1, 1996, to allow the largest industrial customers to select the lowest cost supplier for electricity service.pool (Poolco). Under the proposal by the year 2002, smaller companiesFERC would have exclusive jurisdiction over the pool, while an independent operator would manage the transmission network and residential customers in Californiageneration dispatch. Customers would access Poolco through bilateral contracts at least two years after the pool begins operation. The Rhode Island Public Utilities Commission has adopted a proposal calling for, among other things, retail wheeling and the unbundling of generation from transmission and distribution services. The Massachusetts Department of Public Utilities has also be able to buy power from any suppliers. The CPUC is currently reviewing itsconsidered a similar proposal. These types of proposals are indicative of the movement of the retail electric market toward deregulation and increased competition. The retail market for electricity is expected to become more competitive with such moves toward deregulation and with greater focus on customer choice. The movement of the retail electric market toward deregulation and increased competition is also prevalent in areas of the country in which Entergy presently operates. On April 21, 1995, a newly incorporated entity, Crescent City Utilities, Inc., submitted to the Council a draft resolution intended to permit the use of NOPSI's gas and electric transmission and distribution facilities by any other franchised utility to supply electricity and gas to retail customers in New Orleans. On April 27, 1995, the Council issued a statement noting that the Council had played no role in the development of the resolution, that it had not received the document formally and that no hearings arehad been scheduled to address its merits. However, the Council later stated its intention to schedule public hearings to consider competition in the electric utility service industries and retail electric industry. No schedule for such hearings has been announced. The Texas legislature has recently revised the Public Utility Regulatory Act, the law regulating electric utilities in Texas. The revised law permits utility and non-utility exempt wholesale generators and power marketers to sell wholesale power in the state. The revised law also allows for flexible pricing but does not change the current law governing retail wheeling or treatment of federal income taxes. During the second quarter of 1995, the Louisiana legislature considered a bill permitting local retail wheeling; however, the bill was defeated. In some areas of the country, municipalities (or comparable entities) whose residents are served at the retail level by an investor- ownedinvestor-owned utility pursuant to a franchise, are exploring the possibility of establishing new distribution systems in order to serve retail customers, especially large industrial customers, that currently receive service from an investor-owned utility. These options depend on the terms of a utility's franchise as well as on state law and regulation. In addition, FERC's authority to order utilities to transmit for a new or expanding municipal system is limited in certain respects. Where successful, however, the establishment of a municipal system or the acquisition by a municipal system of a utility's customers could result in the inability of a utility to recover costs that the utilityit has incurred in serving those customers. In mid-1994, FERC issued a notice of proposed rulemaking concerning a regulatory framework for dealing with recovery of stranded costs, such as those associated with high-cost nuclear generating units, which may be incurred by electric utilities as a result of increased competition. In addition to addressing recovery of stranded costs related to wholesale service, the proposal requested comment as to recovery of retail stranded costs in transmission rates where state regulatory authorities failed to address the issue or were in conflict. On March 29, 1995, FERC issued a supplemental notice of proposed rulemaking in this proceeding which would require public utilities to provide non- discriminatorynon-discriminatory open access transmission service to wholesale customers, and which would also provide guidance on the recovery of wholesale and retail stranded costs. Under the proposal, public utilities would be required to file transmission tariffs for both point-to-point and network services. Model transmission tariffs were included in the proposal. With regard to pending proceedings, including Entergy's tariff proceeding, FERC directed the parties to proceed with their cases while taking into account FERC's views expressed in the proposed rule. Comments will be filed in August 1995, with reply comments in October 1995. The risk of exposure to stranded costs which may result from competition in the industry will depend on the extent and timing of retail competition, the resolution of jurisdictional issues concerning stranded cost recovery, and the extent to which such costs are recovered from departing or remaining customers, among other matters. Significant Industrial Cogeneration Effects Cogeneration projects developed or considered by certain of GSU's industrial customers over the last several years have resulted in GSU developing and securing approval of rates lower than the rates previously approved by the PUCT and LPSC for such industrial customers. Such rates are designed to retain such customers, and to compete for and to develop new loads, and do not presently recover GSU's full cost of service. The pricing agreements at non-full cost of service based rates fully recover all related costs but provide only a minimal return.return on investments. Substantially all of such pricing agreements expire no later than 1997. In the firstsecond quarter of 1995, KWH sales to GSU's industrial customers at non-full cost of service rates which makemade up approximately 25% of GSU's total industrial class, decreased 2%. Sales to the remaining GSU industrial customers increased 4%.class. In March 1995, LP&L received notice from a large industrial customer that the customer has decided to proceed with its proposed cogeneration project for the purpose of fulfilling its future electric energy needs. The customer will continue to purchase its energy requirements until its cogeneration facilities are completed, which is expected to be sometime after 1999. During 1994, this customer represented approximately 8% of total LP&L industrial sales, and provided $19 million of base revenue. In the wholesale rate area, FERC approved in 1992, with certain modifications, the proposal of AP&L, LP&L, MP&L, NOPSI, and Entergy Power to sell wholesale power at market-based rates and to provide to electric utilities "open access" to the System's transmission system (subject to certain requirements). GSU was later added to this filing. On October 31, 1994, as amended on January 25, 1995, Entergy Services filed with FERC revised transmission tariffs intended to provide access to transmission service on the same or comparable bases, terms, and conditions as the System operating companies, and the matter is pending. Open access and market pricing, once they take effect, will increase marketing opportunities for the System, but will also expose the System to the risk of loss of load or reduced revenues due to competition with alternative suppliers. In light of the rate issues discussed above, Entergy is aggressively reducing costs to avoid potential earnings erosions that might result as well as to compete successfully by becoming a low-cost producer. In 1994, Entergy announced a restructuring program related to certain of its operating units. This program is designed to reduce costs and improve operating efficiencies. See pages 117, 155, 201, 238, and 306 of the Form 10-K and Note 7 for further information. Also, in response to an increasingly competitive environment, AP&L, LP&L, MP&L, and NOPSI have announced intentions to revise their initial least-cost planning activities, and GSU is continuing to work with the Council and PUCT regarding integrated resource planning. The Energy Policy Act of 1992 The Energy Policy Act of 1992 (EP Act)(EPAct) addresses a wide range of energy issues and is altering the way Entergy and the rest of the electric utility industry operate. The EP ActEPAct encourages competition and affords utilities the opportunities and the risks associated with an open and more competitive market environment. The EP ActEPAct creates exemptions from regulation under the Public Utility Holding Company Act of 1935 (Holding Company Act) and creates a class of exempt wholesale generators consisting of utility affiliates and nonutilities that are owners and operators of facilities for the generation and transmission of power for sales at wholesale. The EP ActEPAct also gives FERC the authority to order investor-owned utilities, including the System operating companies, to transmit power and energy to or for wholesale purchasers and sellers. The law creates the potential for electric utilities and other power producers to gain increased access to the transmission systems of other entities to facilitate wholesale sales. Both the System operating companies and Entergy Power expect to compete in this market. In addition, the EP ActEPAct allows utilities to own and operate foreign generation, transmission, and distribution facilities. See "Nonregulated Investments" below for further information. Public Utility Holding Company Act of 1935 Entergy, Corporation, along with 10 other electric utility holding companies, recently asked Congress to repeal the Holding Company Act. ThePublic Utility Holding Company Act of 1935 (HCA). The HCA requires detailed oversight by the SEC of many business practices and activities of utility holding companies and their subsidiaries including, among other things, nonutility activities. In June 1995, the SEC adopted a report proposing options for the repeal or the significant modification of the HCA and proposed rule changes that would reduce the regulations governing utility holding companies. Entergy Corporation believes that the Holding Company ActHCA inhibits its ability to compete in the evolving electric energy marketplace, and largely duplicates the oversight activities already performed by FERC and state and local public service commissions. On June 30, 1995, the SEC amended certain rules under the HCA to exempt the requirement to receive prior authorization for all capital contributions by a parent company to its subsidiary company. Litigation and Regulatory Proceedings See Note 1 for information on the bankruptcy proceedings of Cajun and litigation with Cajun concerning Cajun's ownership interest in River Bend and the related possible material adverse effects on GSU's financial condition. See Note 2 for information on the possible material adverse effects on GSU's financial condition and results of operations due to $467$463 million of potential net of tax write-offs, and $156$169 million in refunds of previously collected revenue. These possible write-offs and refunds are in connection with outstanding appeals and remands regarding the River Bend plant and rate deferrals. Entergy Corporation and GSU The acquisition of GSU by Entergy Corporation was the largest electric utility merger in United States history. Entergy expects to achieve $850 million in fuel cost savings and $670 million in operation and maintenance expense savings over 10 years as a result of the Merger. Although common shareholders experienced some dilution in earnings as a result of the Merger, Entergy believes that the Merger will ultimately be beneficial to common shareholders in terms of strategic benefits as well as economies and efficiencies produced. For further information, see pages 117-118 and 201 of the Form 10-K. Nonregulated Investments As discussed in Note 1 and on pages 3 and 4 of the Form 10-K,10- K, Entergy Corporation continues to consider opportunities to expand its utility and utility-related businesses that are not regulated by state and local regulatory authorities (nonregulated businesses). Entergy Corporation's investment strategy is to invest in nonregulated business opportunities that have the potential to earn a greater rate of return than its regulated utility operations, and Entergy Corporation may invest up to approximately $150 million per year for the next several years in nonregulated businesses. See Part II for additional discussion of Entergy Corporation's current and future investments in nonregulated businesses. As of June 30, 1995, Entergy Corporation's investment in nonregulated subsidiaries totaled $506.1 million. In the near term, these investments are unlikely to have a positive effect on earnings; however, management believes that these investments will contribute to future earnings growth. For the first six months of 1995, Entergy Corporation's nonregulated investments reduced consolidated net income by approximately $21.6 million. On March 31, 1995, Entergy Corporation, through its subsidiary, Entergy Power Development Company (EPDC), entered into an agreement with Enron Power Development Corporation, a subsidiary of Enron Corporation, to acquire a 20% interest in the Dabhol Power Project (Project), a 695 megawatt combined cycle facility located in the State of Maharashtra, India. ThePursuant to an agreement, EPDC has placed approximately $20.5 million in an escrow account. If EPDC becomes a participant in the Project, is a 695 megawatt combined cycle facility which will burn distillate as its fuel. Entergy made an initialestimated investment in the first phase of the Project of approximately $20.5 million. The total Project is estimated to cost approximately $920 million. The Project is fully financed and under construction with commercial operation expected by the end of 1997. At the time of commercial operations EPDC will have investedwould be approximately $90 million in the Project. In addition to its investmentmillion. At that time, EPDC has committedwould also have an obligation to cover its pro rataa pro-rata share of the cost overruns up to approximately $30 million, if they are incurred.million. Subsequent to entering into the agreement with Enron Power Development Corporation, the newly- elected Maharashtra state government investigated the Project and its related cost of power. On August 3, 1995, the Chief Minister of Maharashtra stated that the government of Maharashtra has decided to suspend the first phase of the Project, the 695 megawatt facility, and "scrap" the second phase of the Project, a 1320 megawatt facility, and indicated that orders to stop work would be issued. In view of these developments, Entergy is uncertain as to the future of the project and is considering its options. As discussed on page 3 of the Form 10-K, Entergy Corporation requested authorization from the SEC to convert the debt obligation of Entergy Power into equity. On April 18, 1995, Entergy Corporation received authorization from the SEC to consummate this transaction.transaction and converted this debt obligation into equity. As discussed in Part II and on page 4 of the Form 10-K, Entergy Corporation provided to Entergy SASI $72.3 million in loans to fund Entergy SASI's installment sale agreements with its customers. In the first three months ofJune 1995, Entergy Corporation's nonregulated investments reduced consolidated net income by approximately $11.4 million. As of March 31,Corporation contributed $125 million in capital to Entergy SASI through Entergy Enterprises, Inc. thus allowing Entergy SASI to convert its debt obligation to Entergy Corporation into equity. In June 1995, Entergy Corporation's investmentrequested approval from the SEC to form a new non-regulated subsidiary named Entergy Technologies Company (ETC). ETC will offer bulk interstate telecommunications service to telecommunications providers who will in nonregulated businesses totaled $446.6 million. Inturn market that contracted capacity to third parties. ETC will allow Entergy to take advantage of the near term, these investments are unlikely to haverapidly expanding telecommunications industry by marketing a positive effect on earnings; but management believes that these investments will contribute to future earnings growth.portion of Entergy's existing telecommunications system. ANO Matters ANO 2 experienced a forced outage for repair of certain steam generator tubes in March 1992. FurtherEntergy Operations has made inspections and repairs were conducted at subsequent refueling and mid-cycle outages in September 1992, May 1993, April 1994, and January 1995. AP&L's budgeted maintenance expenditures were adequatefrom time to cover the cost of such repairs. Beginning in January 1995,time on ANO 2's output has been reduced 15 megawatts or 1.6% due to secondary side fouling, tube plugging, and reduction of primary temperature.steam generator. Currently, Entergy Operations continues to take steps at ANO 2 to reduceis in the numberprocess of gathering information and severity of future tube cracks. In addition, Entergy Operations continues to meet with the NRC to discuss such steps and results of inspections of the generator tubes, as well as the timing of future inspections. Additional inspections are plannedassessing various options for the normal refueling outage scheduledrepair or the replacement of ANO 2's steam generator. See Note 1 for October 1995.additional information. Deregulated Portion of River Bend As of March 31,June 30, 1995, GSU had not recovered a significant amount of its investment in, or received any return associated with, the portion of River Bend included in the deregulated asset plan in Louisiana and the portion of River Bend placed in abeyance as part of the Texas rate order which went into effect in July 1988. See Note 2 for further information. Future earnings will continue to be adversely affected by the lack of full recovery and return on the investment and other costs associated with River Bend. For the threesix months ended March 31,June 30, 1995, GSU recorded revenues resulting from the sale of electricity from the deregulated asset plan of approximately $7.9$16.5 million which, absent the deregulated asset plan, would not have been realized. Operation and maintenance expenses, including fuel, were approximately $8.3$16.5 million, and depreciation expense associated with the deregulated asset plan investment was approximately $4.6$9.2 million for the threesix months ended March 31,June 30, 1995. For the six months ended June 30, 1995, GSU recorded nonfuel revenue of $0.2 million (included in the $16.5 million of total deregulated asset plan revenue discussed above) which, absent the deregulated asset plan, would not have been realized. The operation and maintenance expenses and depreciation expense allocated to the deregulated asset plan as detailed above would have been incurred at River Bend with or without the deregulated asset plan. The future impact of the deregulated asset plan on GSU's results of operations and financial position will depend on River Bend's future operating costs, the unit's efficiency and availability and the future market for energy over the remaining life of the unit. Based on current estimates of the factors discussed above, GSU anticipates that future revenues fromIn addition, the deregulated asset plan will fully recover all related costs.be subject to the requirements of SFAS 121 as discussed in Note 7 in determining the recognition of any asset impairment. Property Tax Exemptions Exemptions from the payment of Louisiana local property taxes on Waterford 3 and River Bend, which have been in effect for 10 years for each of the plants, will expire in December 1995 and December 1996, respectively. LP&L and GSU are working with taxingtax authorities to determine the method for calculating the amount of the property taxes to be paid when the exemptions expire. LP&L believes that assessed property taxes will be recovered from its customers through rates. GSU believes that assessed property taxes allocated to its retail jurisdictions will be recovered from those customers through rates. Environmental Issues GSU has been notified by the U. S. Environmental Protection Agency (EPA) that it has been designated as a potentially responsible party for the cleanup of certain hazardous waste disposal sites. GSU is currently negotiating with the EPA and state authorities regarding the cleanup of some of these sites. Several class action and other suits have been filed in state and federal courts seeking relief from GSU and others for damages caused by the disposal of hazardous waste and for asbestos- related disease allegedly resulting from exposure on GSU premises. While the amounts at issue in the cleanup efforts and suits may be substantial, GSU believes that its results of operations and financial condition will not be materially adversely affected by the outcome of the suits. Through March 31,June 30, 1995, GSU$7.7 million has been expended $7.5 million cumulatively on the cleanup. As of March 31,June 30, 1995, GSU has a remaining recorded liability of $20.7 million relatedexisted relating to the cleanup of six sites at whichwhere GSU has been designated a potentially responsible party. See pages 35-36, 39- 40, and 196-197 of the Form 10-K and Note 1 for additional discussion of the sites in which GSU has been designated as a potentially responsible party by the EPA. During 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including waste water impoundments. LP&L has determined that certain of its power plant waste water impoundments arewere affected by these regulations and has chosen to either upgrade or close them. As a result, LP&L had a remaining recorded liability in the amount of $14.2$13.8 million existed at March 31,June 30, 1995, for waste water upgrades and closures to be completed by 1996. Cumulative expenditures relating to the upgrades and closures of waste water impoundments are $1.3were $2.3 million as of March 31,June 30, 1995. See pages 37 and 233 of the Form 10-K and Note 1 for additional discussions of LP&L's waste water impoundment upgrades and closures. Accounting Issues New Accounting Standard - In March 1995, the Financial Accounting Standards Board (FASB)FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long- LivedLong-Lived Assets to Be Disposed Of" (SFAS 121) effective January 1, 1996. This standard describes circumstances which may result in assets being impaired and provides criteria for recognition and measurement of asset impairment. See Notes 2 and 7 for information regarding the potential impacts of the new accounting standard on Entergy. Continued Application of SFAS 71 - As a result of the EP ActEPAct and actions of regulatory commissions, the electric utility industry is moving toward a combination of competition and a modified regulatory environment. The System's financial statements currently reflect, for the most part, assets and costs based on current cost-based ratemaking regulations, in accordance with SFAS 71, "Accounting for the Effects of Certain Types of Regulation." Continued applicability of SFAS 71 to the System's financial statements requires that rates set by an independent regulator on a cost-of-service basis can actually be charged to and collected from customers. In the event that either all or a portion of a utility's operations cease to meet those criteria for various reasons, including deregulation, a change in the method of regulation or a change in the competitive environment for the utility's regulated services, the utility should discontinue application of SFAS 71 for the relevant portion. That discontinuation should be reported by elimination from the balance sheet of the effects of any actions of regulators recorded as regulatory assets and liabilities. As of March 31,June 30, 1995, and for the foreseeable future, the System's financial statements continue to follow SFAS 71, except for certain portions of GSU's business (see page 88 of the Form 10-K for additional information). Accounting for Decommissioning Costs - The staff of the SEC has questioned certain of the financial accounting practices of the electric utility industry regarding the recognition, measurement, and classification of nuclear decommissioning costs for nuclear generating stations in the financial statements of electric utilities. In response to these questions,See Note 1 for the FASB is currently reviewingFASB's tentative conclusions regarding changes in the accounting for decommissioning. If current electric utility industry accounting practices for such decommissioning are changed, annual provisions for decommissioning could increase,costs and the estimated cost for decommissioning could be recorded as a liability rather than as accumulated depreciation, and trust fund income from the external decommissioning trusts could be reported as investment income rather than as a reduction to decommissioning expense.potential impact of these changes on Entergy. ENTERGY CORPORATION AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. Legal Proceedings System Agreement Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI See page 16In June 1995, the APSC filed a complaint with FERC alleging that because of the Form 10-K for a discussion related tochanged circumstances FERC's proceeding to consider whetherallocation of nuclear decommissioning costs in the System Agreement permits certain out-of-service generating units to be included in reserve equalization calculations under Service Schedule MSS-1 of that agreement. On March 3, 1995, a FERC ALJ issued an opinion holding that the practice whereby the System operating companies included the out-of-service units in the reserve equalization calculations during the period 1987 through 1993 was not permitted by Service Schedule MSS-1is no longer just and therefore, constituted a violation of the System Agreement. However, the ALJ found that the violation was in good faith and had benefited the customers of the System as a whole. Accordingly, the ALJ determined that no retroactive refunds by any of the System operating companies should be ordered.reasonable. The ALJ also heldAPSC proposes that the System Agreement should be amended to allow out-of-service unitsprovide a new schedule that would equalize nuclear decommissioning costs according to be included in reserve equalization, as proposed byload responsibility among the Offer of Settlement filed on February 16, 1994. The ALJ's order is subject to review by the FERC. If the FERC concurs with the finding that the System Agreement was violated, it would have the discretion, notwithstanding the ALJ's recommendation, to order that refunds be made. If that were to occur, certain Systempre-merger operating companies might be required to refund some or all of the amount by which they were underbilled pursuant to the System Agreement as a result of the inclusion of the out-of-service units in the reserve equalization formula. The System operating companies cannot determine at this time whether they would be authorized to recover through retail rates any amounts associated with refunds that might be ordered by the FERC in this proceeding. Briefs on exceptions to the ALJ's initial decision were filed on April 3, 1995 by Entergy Services, the LPSC, the MPSC, the Mississippi Attorney General, FERC staff and other parties. Briefs opposing exceptions were filed on April 24, 1995.companies. See pagepages 16-17 of the Form 10-K for a discussion of the LPSC's complaint filed with FERC alleging that the System Agreement results in unjust and unreasonable rates. On April 24, 1995, Entergy filed a response to the LPSC's complaint. Open Access TransmissionIn April 1995, the LPSC filed an amended complaint with FERC. Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI See page 17 offiled a response to the Form 10-K for a discussion of various petitions filed with D.C. Circuit related to FERC's 1992 orders regarding open access transmission and the sale of wholesale power at market-based rates. On March 29, 1995, FERC issued a supplemental notice of proposed rulemaking which would require public utilities to provide non-discriminatory open access transmission service to wholesale customers, and which would also provide guidance on the recovery of wholesale and retail stranded costs. Under the proposal, public utilities would be required to file transmission tariffs for both point-to-point and network services. Model transmission tariffs were includedLPSC's amended complaint in the proposal. With regard to pending proceedings, including Entergy's tariff proceeding, FERC directed the parties to proceed with their cases while taking into account FERC's views expressed in the proposed rule. Comments will be filed in August 1995, with reply comments in OctoberJune 1995. Merger-Related Proceedings Entergy Corporation and GSU See page 31 of the Form 10-K and page 71 of the First Quarter Form 10-Q for information relating to the proceeding pending before the NRC Atomic Safety and Licensing Board (ASLB), which was instigated by Cajun and concerns the two Merger-related NRC issued license amendments for River Bend. A hearingIn June 1995, the NRC affirmed its original findings that there had been no significant antitrust changes in the proceeding beforepositions of Cajun and GSU as a result of the ASLB was scheduledMerger; and therefore, reissued the license amendments approving the Merger. The NRC has decided not to begin May 9, 1995. On April 11, 1995, on motion of allpetition the parties toD.C. Circuit for a rehearing; however, it is expected that Cajun will file a petition for review with the proceeding, the ASLB issued an Order revising the hearing schedule. Pursuant to this new Order, the hearing will begin no earlier than 81 days after the ASLB's ruling on GSU's Motion for Summary Disposition, which is still pending.D.C. Circuit. See pages 38-39 of the Form 10-K for information regarding other merger-related suits. Cajun-Transmission ServiceCajun - River Bend Entergy Corporation and GSU See Note 1, and also see pages 40 - 41, 106 - 108, and 193-194191 - 193 of the Form 10-K; and pages 34 - 35 of the First Quarter Form 10-Q for a discussion of the Cajun litigation. A hearing was held on the pending Motions to Appoint a Trustee in the Cajun bankruptcy case. An order was issued on August 1, 1995, directing that the U.S. Trustee appoint a trustee in the Cajun bankruptcy case within five dates from the date of the order. A decision was also issued regarding the preemption dispute among Cajun, the RUS, and the LPSC, the LPSC's ratemaking authority is not preempted by the Federal law establishing the RUS. Environmental Issues AP&L See Note 1 and pages 34 and 35 of the Form 10-K for information on PCB contamination at former Reynolds Metals Company (Reynolds) plant sites in Arkansas to which AP&L had supplied power. In May 1995, AP&L was named as a discussion of FERC proceedings relatingdefendant in a suit by Reynolds, seeking to GSU and Cajun transmission service charge disputes. In April 1995, the ALJ issuedrecover a ruling in the remanded portionshare of the proceeding,costs associated with the cleanup of hazardous substances at a site south of Arkadelphia, Arkansas. Reynolds alleges that it has spent $11.2 million to clean up the site, and that the FERC is expected to issue an ordersite was contaminated in July 1995. Flowage Easements Suitspart with PCBs for which AP&L bears some responsibility. AP&L, voluntarily, at its expense, has already completed remediation at a nearby substation site, and Entergy Services See page 39believes that it has no liability for contamination at the site that is subject to the Reynolds suit and will contest the lawsuit. Regardless of the Form 10-K foroutcome, AP&L does not believe this matter would have a discussionmaterially adverse effect on its financial condition or results of lawsuits filed against AP&L and Entergy Services by numerous plaintiffs in connection with the operation of two dams during a period of heavy rainfall and flooding in May 1990. On March 9, 1995, the Arkansas District Court granted a petition to reopen proceedings relating to plaintiff claims for which the flowage easements did not apply. Such claims had been stayed previously by the Arkansas District Court. This matter is pending. Panda Energy Corporation Complaint Entergy has received notification of the filing of an amended complaint by Panda Energy Corporation (Panda) against Entergy Enterprises, Inc., Entergy Power, Inc., Entergy Power Asia, Ltd., and Entergy Power Development Corporation in the Dallas District Court. The amended complaint alleges tortious interference with contractual relations, conspiracy, misappropriation of corporate opportunity, unfair competition and fraud, and constructive trust issues. Panda seeks damages of approximately $4.8 billion, of which $3.6 billion is claimed in punitive damages. Entergy believes that this lawsuit is without merit; however, no assurance can be given as to the timing or outcome of this matter.operations. Item 4. Submission of Matters to a Vote of Security Holders AmendmentElection of Company Bylaws MPBoard of Directors Entergy Corporation The annual meeting of stockholders of Entergy Corporation was held on May 26, 1995. The following matters were voted on and received the specified number of votes for, abstentions, votes withheld (against), and broker non-votes: 1. Election of Directors: Votes Broker Name of Nominee Votes For Abstentions Withheld Non-Votes W. Frank Blount 195,996,179 N/A 1,910,038 N/A John A. Cooper, Jr. 196,085,800 N/A 1,820,417 N/A Lucie J. Fjeldstad 195,943,352 N/A 1,962,865 N/A Norman C. Francis 195,727,190 N/A 2,179,027 N/A Kaneaster Hodges, Jr. 196,007,250 N/A 1,898,967 N/A Robert v. d. Luft 195,861,980 N/A 2,044,237 N/A Edwin Lupberger 194,768,932 N/A 3,137,285 N/A Kinnaird R. McKee 196,015,061 N/A 1,891,156 N/A Paul W. Murrill 195,952,044 N/A 1,954,173 N/A James R. Nichols 196,073,895 N/A 1,832,322 N/A Eugene H. Owen 196,006,852 N/A 1,899,365 N/A John N. Palmer, Sr. 196,147,203 N/A 1,759,014 N/A Robert D. Pugh 196,031,905 N/A 1,874,312 N/A H. Duke Shackelford 196,016,109 N/A 1,890,098 N/A Wm. Clifford Smith 196,113,786 N/A 1,792,431 N/A Bismark A. Steinhagen 196,109,636 N/A 1,796,581 N/A 2. Appointment of independent public accountants, Coopers & Lybrand L.L.P., for the year 1995: 194,866,985 votes for; 2,145,346 votes against; 893,886 abstentions; and broker non- votes are not applicable. AP&L On April 5, 1995,A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the ownerholder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the common stockfollowing individuals to serve as directors constituting the Board of MP&L, adopted a resolution to amend the second sentenceDirectors of Section 11 of the bylaws of MP&L as follows: "The Vice Chairman and Chief Operating Officer of the Company shall also be a member of the Executive Committee." In addition the adopted resolution resolved thatAP&L: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, R. Drake Keith, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. GSU A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of GSU: Michael B. Bemis, Frank F. Gallaher, Donald C. Hintz, Jerry D. Jackson, shall continue as the membersEdwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. LP&L A consent in lieu of the Executive Committeeannual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of LP&L: Michael B. Bemis, John J. Cordaro, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. MP&L untilA consent in lieu of the next Annual Meetingannual meeting of Shareholderscommon stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of MP&L.&L: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, Gerald D. McInvale, and Donald E. Meiners. NOPSI A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of NOPSI: John J. Cordaro, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. System Energy A consent in lieu of the annual meeting of common stockholders was executed on April 14, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of System Energy: Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, and Jerry L. Maulden. Item 5. Other Information PUCT Fuel Cost Review GSU See Note 2 and also pages 22, 96 and 184 of the Form 10-K for a discussion of the PUCT's approval of GSU's settlement agreement of over- and under-recovery of fuel and purchased power expenses for the period October 1, 1991 through December 31, 1993. On April 17, 1995, the PUCT issued a final order approving the settlement. Performance-Based Formula Rate Plan Entergy Corporation and LP&L See Note 2 and pages 24-25, 95 and 224 of the Form 10-K, for a discussion of LP&L's performance-based formula rate plan filing with the LPSC. Hearings were held on the LP&L proposed performance-based formula rate plan in March 1995. On April 20, 1995 the LPSC Staff recommended a $49.4 million reduction in base rates. This recommended rate reduction included $8.5 million of rates previously reduced through fuel clause reductions; therefore, the net effect of the recommended reduction is $40.9 million. The LPSC Staff recommended the approval of LP&L's proposed formula rate plan with the following modifications. An earnings band would be established from a 10.4% to a 12% return on equity. If LP&L's earnings fall within the bandwidth, no adjustment in rates occurs. If LP&L's earnings are above the 12% return on equity, a 60/40 sharing with customers occurs and customers receive 60% of earnings in excess of the 12% through prospective rate reductions. Alternatively, if LP&L's earnings are below the 10.4% return on equity, customers pay 60% of the difference between the realized return on equity and the 10.4% through prospective rate increases. The LPSC Staff's recommendation also included a reduction in LP&L's authorized rate of return from 12.76% to 11.2%. The LPSC is expected to issue a final order in late May 1995. February 1994 Ice Storm/Rate Rider Entergy Corporation and MP&L See Note 2 and also pages 26, 95, 262 of the Form 10-K for a discussion of MP&L's rate recovery of the February 1994 ice storm damages. On April 28, 1995, MP&L filed for a rate increase of $2.9 million to be in effect for a four-year period beginning September 28, 1995, to recover costs related to the ice storm that were recorded after April 30, 1994. At the end of the four- year period, undepreciated ice storm capital costs recorded after April 30, 1994, will be treated consistently with undepreciated ice storm costs included under the September 1994 stipulation. MP&L's filing requested recovery of capital costs and deferred operating and maintenance expenses of approximately $14.2 million and $1 million, respectively. No assurance can be given as to the outcome of the filing. Nonregulated Investments Entergy Corporation and Entergy Power Development Company As discussed on pagepages 3 and 4 of the Form 10-K, Entergy Corporation continues to consider opportunities to expand its business, including opportunities in overseas power development. On March 31, 1995, Entergy Corporation, through its subsidiary, Entergy Power Development Company (EPDC), entered into an agreement with Enron Power Development Corp. (Enron), a subsidiary of Enron Corporation, to acquire a 20% interest in the Dabhol Power Project (Project) located in the State of Maharashtra, India. The Project is a 695 megawatt combined cycle facility which will burn distillate as its fuel. Entergy Corporation made an initial investment in the Project of approximately $20.5 million. The total Project is estimated to cost approximately $920 million. The Project is fully financed and under construction with commercial operation expected by the end of 1997. At the time of commercial operations EPDC will have invested approximately $90 million in the Project. In addition to its investment EPDC has committed to cover its pro rata share of cost overruns up to approximately $30 million, if they are incurred. See Note 1 and pages 36, 48, 66, and 73 of the First Quarter Form 10-Q for a discussion of EPDC's agreement with Enron Power Development Corporation to acquire a 20% interestinvestment in the Project.Project in the State of Maharashtra, India. Subsequent to entering into the agreement with Enron Power Development Corporation, the newly-elected Maharashtra state government investigated the Project and its related cost of power. On August 3, 1995, the Chief Minister of Maharashtra stated that the government of Maharashtra has decided to suspend the first phase of the Project, the 695 megawatt facility, and "scrap" the second phase of the Project, a 1320 megawatt facility, and indicated that orders to stop work would be issued. In view of these developments, Entergy is uncertain as to the future of the project and is considering its options. Entergy Corporation and Entergy Technologies Company In June 1995, Entergy requested approval from the SEC to form a new non-regulated subsidiary named ETC. ETC will offer bulk interstate telecommunications service to telecommunications providers who will in turn market that contracted capacity to third parties. ETC will allow Entergy to take advantage of the rapidly expanding telecommunications industry by marketing a portion of Entergy's existing telecommunications system. Entergy Corporation, Entergy Enterprises, Inc., and Entergy Systems and Service, Inc. As discussed on page 34 of the Form 10-K, Entergy Enterprises Inc.'s (Enterprises) subsidiary, Entergy Systems and Service, Inc. (Entergy SASI), held an equity interest in Systems and Service International, Inc. (SASI), a manufacturer of efficient lighting products. In April 1995, Entergy SASI and SASI amended their Distribution Agreement. As a result, Entergy SASI liquidated its equity interest in SASI. The amended distribution agreement provided for a reduction in SASI's profit margin on its sale of products to Entergy SASI and transferred the rights to certain of SASI's energy efficient technologies to Entergy SASI. In exchange, among other things, Entergy SASI transferred to SASI all of its equity ownership in SASI. As discussed on page 4 of the Form 10-K, Entergy Corporation requested authorization from the SECprovided to convert the debt obligation of Entergy Power into equity. On April 18,SASI $72.3 million in loans to fund Entergy SASI's installment sale agreements with its customers. In June 1995, Entergy Corporation received authorization fromcontributed $125 million in capital to Entergy SASI through Entergy Enterprises, thus allowing Entergy SASI to convert its debt obligation to Entergy Corporation into equity. Entergy Corporation and Entergy Enterprises, Inc. In June 1995, the SEC authorized Entergy Corporation to consummate this transaction.invest up to $350 million through December 31, 1997 in its subsidiary, Enterprises. Such investments may take the form of purchases of common stock, capital contributions, loans, and/or guarantees of the indebtedness or other obligations of Enterprises or certain of its associate companies. Subsequently, the SEC amended Rule 45(b)(4) under the Holding Company Act to exempt the requirement to receive prior authorization for all capital contributions by a parent company to its subsidiary company. Labor Contract Negotiations AP&L,Entergy Corporation and GSU and MP&L On June 24, 1995, GSU'sAs discussed on page 73 of the First Quarter Form 10-Q, the labor union contract expires. Negotiations for a newbetween GSU labor union contract beganand the International Brotherhood of Electrical Workers (IBEW) expired on AprilJune 24, 1995. The labor contract covers approximately 1,900 GSU employees in Southeast Texas and Southwest Louisiana. Negotiators for GSU and the IBEW have been unsuccessful in negotiating a new agreement for the non River Bend laborportion of the IBEW. A federal mediator was called in on July 9, 1995, to assist the parties in resolving their differences, but the mediation effort was unsuccessful. In subsequent meetings, the IBEW voted to reject GSU's final settlement offer as well as a contingent offer and authorized the union employees'leadership to call a strike if necessary. The IBEW employees continue to work without a contract. If a strike should occur, GSU intends to continue its operations with the assistance of management and supervisory personnel and outside contractors. The River Bend bargaining unit of the IBEW signed a new two year contract will be renegotiated separately in the near future. AP&L and MP&L's labor union contracts expire on October 1, 1995, and October 15, 1995, respectively. Although no contract negotiations are in process at present for AP&L and MP&L, renegotiations are expected in the near future.August 3, 1995. Common Stock Price Range and Dividends Entergy Corporation The shares of Entergy Corporation's common stock are listed on the New York, Chicago, and Pacific Stock Exchanges. The high and low sales prices of Entergy Corporation's common stock for the firstsecond quarter of 1995, as reported by The Wall Street Journal as composite transactions, were $24.75$25.375 and $20.00,$21.00, respectively, per share. For the twelve months ended March 31,June 30, 1995, Entergy Corporation paid common stock dividends in an aggregate amount of $1.80 per share. As of March 31,June 30, 1995, the consolidated book value of a share of Entergy Corporation's common stock was $27.27$27.98, and the last reported sale price of Entergy Corporation's common stock on March 31,June 30, 1995, was $20 7/$24 1/8 per share. Earnings Ratios AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy The System operating companies and System Energy have calculated ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends pursuant to Item 503 of Regulation S-K of the SEC as follows: Twelve Months Ended December 31, March 31,June 30, 1990 1991 1992 1993 1994 1995 Ratios of Earnings to Fixed Charges (a) AP&L 2.16 2.25 2.28 3.11(f) 2.32 2.182.29 GSU .80(g) 1.56 1.72 1.54 .36(g) .32(g).38(g) LP&L 2.32 2.40 2.79 3.06 2.91 2.892.95 MP&L 2.42 2.36 2.37 3.79(f) 2.12 2.222.21 NOPSI 2.73 5.66(e) 2.66 4.68(f) 1.91 2.231.86 System Energy 2.10 1.74 2.04 1.87 1.23 1.471.23 Twelve Months Ended December 31, March 31,June 30, 1990 1991 1992 1993 1994 1995 Ratios of Earnings to Combined Fixed Charges and Preferred Dividends (a)(b)(c) AP&L 1.81 1.87 1.86 2.54(f) 1.97 1.861.94 GSU (d) .59(g) 1.19 1.37 1.21 .29(g) .26(g).30(g) ) LP&L 1.87 1.95 2.18 2.39 2.43 2.422.47 MP&L 1.93 1.94 1.97 3.08(f) 1.81 1.91 NOPSI 2.36 4.97(e) 2.36 4.12(f) 1.73 2.021.70 (a) "Earnings," as defined by SEC Regulation S-K, represent the aggregate of (1) net income, (2) taxes based on income, (3) investment tax credit adjustments - net, and (4) fixed charges. "Fixed Charges" include interest (whether expensed or capitalized), related amortization, and interest applicable to rentals charged to operating expenses. (b) "Preferred Dividends," as defined by SEC Regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the effective income tax rate. (c) System Energy's Amended and Restated Articles of Incorporation do not currently provide for the issuance of preferred stock. (d) "Preferred Dividends" in the case of GSU also include dividends on preference stock. (e) Earnings for the year ended December 31, 1991 include the $90 million effect of the 1991 NOPSI Settlement. (f) Earnings for the year ended December 31, 1993 include $81 million, $52 million, and $18 million for AP&L, MP&L, and NOPSI, respectively, related to the change in accounting principle to provide for the accrual of estimated unbilled revenues. (g) Earnings for the years ended December 31, 1994 and 1990, for GSU were not adequate to cover fixed charges by $144.8 million and $60.6 million, respectively. Earnings for the years ended December 31, 1994 and 1990, for GSU were not adequate to cover combined fixed charges and preferred dividends by $197.1 million and $165.1 million, respectively. Earnings for the twelve months ended March 31,June 30, 1995 for GSU were not adequate to cover fixed charges by $151.5$136.6 million. Earnings for the twelve months ended March 31,June 30, 1995 for GSU were not adequate to cover combined fixed charges and preferred dividends by $201.8$187.8 million. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits* ** 4(a) - Tenth Supplemental Indenture,3(a) Articles of Amendment, dated July 20, 1995 and Restated Articles of Incorporation, as of April 1, 1995, toDecember 21, 1983 of MP&L's Mortgage and Deed of Trust (filed as Exhibit A-2(l) to Rule 24 Certificate dated April 21, 1995 in File No. 70-7914). ** 4(b) - Fifth Supplemental Indenture, dated as of April 1, 1995, to NOPSI's Mortgage and Deed of Trust (filed as Exhibit 4(a) to Form 8-K dated April 26, 1995 in File No. 0-5807).&L. 23(a) - Consent of Friday, Eldredge & Clark. - 23(b) - Consent of Monroe & Lemann (A Professional - Corporation). 23(c) - Consent of Wise Carter Child & Caraway, Professional - Association. 23(d) - Consent of Clark, Thomas & Winters (A Professional - Corporation). 23(e) - Consent of Sandlin Associates. - 27(a) - Financial Data Schedule for Entergy Corporation and - Subsidiaries as of March 31,June 30, 1995. 27(b) - Financial Data Schedule for AP&L as of March 31,June 30, 1995. - 27(c) - Financial Data Schedule for GSU as of March 31,June 30, 1995. - 27(d) - Financial Data Schedule for LP&L as of March 31,June 30, 1995. - 27(e) - Financial Data Schedule for MP&L as of March 31,June 30, 1995. - 27(f) - Financial Data Schedule for NOPSI as of March 31,June 30, 1995. - 27(g) - Financial Data Schedule for System Energy as of March 31,June - 30, 1995. 99(a) - AP&L's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(b) - GSU's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(c) - LP&L's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(d) - MP&L's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(e) - NOPSI's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(f) - System Energy's Computation of Ratios of Earnings to - Fixed Charges, as defined. ** 99(g) - Annual Reports on Form 10-K of Entergy Corporation, - AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the fiscal year ended December 31, 1994, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-320,0- 320, 0-5807, and 1-9067, respectively). ** 99(h) Quarterly Report on Form 10-Q of Entergy Corporation, - AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the quarter ended March 31, 1995, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-320, 0-5807, and 1-9067, respectively). 99(i) Earnings statement of MP&L for the twelve month period - ended June 30, 1995, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. 99(j) Earnings statement of System Energy for the twelve - month period ended June 30, 1995, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. ** 99(k) Opinion of Clark, Thomas & Winters, a professional - corporation, dated September 30, 1992 regarding the effect of the October 1, 1991 judgment in GSU v. PUCT in the District Court of Travis County, Texas (99-1 in Registration No. 33-48889). ** 99(i) -99(l) Opinion of Clark, Thomas & Winters, a professional - corporation, dated August 8, 1994 regarding recovery of costs deferred pursuant to PUCT order in Docket 6525 (filed as Exhibit 99(j) to Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 in File No. 1-2703). 99(j) -99(m) Opinion of Clark, Thomas & Winters, a professional - corporation, confirming its opinions dated September 30, 1992 and August 8, 1994. ___________________________ * Reference is made to a duplicate list of exhibits being filed as a part of Form 10-Q for the quarter ended March 31,June 30, 1995, which list, prepared in accordance with Item 102 of Regulation S-T of the SEC,Securities and Exchange Commission, immediately precedes the exhibits being filed with Form 10-Q for the quarter ended March 31,June 30, 1995. ** Incorporated herein by reference as indicated. (b) Reports on Form 8-K NOPSIEntergy A current report on Form 8-K, dated April 20,July 26, 1995, was filed with the SEC on AprilJuly 26, 1995, reporting information under Item 5. "Other Events." GSU A current report on Form 8-K, dated July 26, 1995, was filed with the SEC on July 26, 1995, reporting information under Item 5. "Other Events." EXPERTS All statements in Part II of this Quarterly Report on Form 10-Q as to matters of law and legal conclusions, based on the belief or opinion of AP&L, LP&L, MP&L, NOPSI, and System Energy or otherwise, pertaining to the titles to properties, franchises and other operating rights of certain of the registrants filing this Quarterly Report on Form 10-Q, and their subsidiaries, the regulations to which they are subject and any legal proceedings to which they are parties are made on the authority of Friday, Eldredge & Clark, 2000 First Commercial Building, 400 West Capitol, Little Rock, Arkansas, as to AP&L; Monroe & Lemann (A Professional Corporation), 201 St. Charles Avenue, Suite 3300, New Orleans, Louisiana, as to LP&L and NOPSI; and Wise Carter Child & Caraway, Professional Association, Heritage Building, Jackson, Mississippi, as to MP&L and System Energy. The statements attributed to Clark, Thomas & Winters, a professional corporation, as to legal conclusions with respect to GSU's rate regulation in Texas in Note 2 to Entergy Corporation and Subsidiaries Consolidated Financial Statements, "Rate and Regulatory Matters," have been reviewed by such firm and are included herein upon the authority of such firm as experts. The statements attributed to Sandlin Associates regarding the analysis of River Bend construction costs of GSU in Note 2 to Entergy Corporation and Subsidiaries Consolidated Financial Statements, "Rate and Regulatory Matters," have been reviewed by such firm and are included herein upon the authority of such firm as experts. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries. ENTERGY CORPORATION ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. /s/ Lee W. Randall Lee W. RandallGerald D. McInvale Gerald D. McInvale Executive Vice President and Chief AccountingFinancial Officer (For each Registrant and for each as Principal AccountingFinancial Officer) Date: May 11,August 7, 1995