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 September 30, 1995March 31, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ 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 13-555017572-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
1-10764 ENTERGY ARKANSAS, POWER & LIGHT COMPANYINC. 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-2703 ENTERGY GULF STATES, UTILITIES COMPANYINC. 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-8474 ENTERGY LOUISIANA, POWER & LIGHT COMPANYINC. 72-0245590
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
0-320 ENTERGY MISSISSIPPI, POWER & LIGHT COMPANYINC. 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 368-5000
0-5807 ENTERGY NEW ORLEANS, PUBLIC SERVICE INC. 72-0273040
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
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 October 31, 1995April 30, 1996
Entergy Corporation ($0.01 par value) 227,756,167228,043,846
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1995March 31, 1996
Page
Number
Definitions 1
Management's Financial Statements:Discussion and Analysis -
Liquidity and Capital Resources 3
Management's Financial Discussion and Analysis -
Significant Factors and Known Trends 6
Management's Financial Discussion and Analysis for
Entergy Corporation and Subsidiaries:Subsidiaries 9
Statements of Consolidated Income 3(Loss) for Entergy
Corporation and Subsidiaries 13
Statements of Consolidated Cash Flows 4for Entergy
Corporation and Subsidiaries 14
Consolidated Balance Sheets 6for Entergy Corporation
and Subsidiaries 16
Management's Financial Discussion and Analysis for
Entergy Arkansas, Power & Light Company:Inc. 18
Statements of Income 8
Statements of Cash Flows 9
Balance Sheets 10
Gulf States Utilities Company:
Statements of Income (Loss) 12
Statements of Cash Flows 13
Balance Sheets 14
Louisiana Power & Light Company:
Statements of Income 16
Statements of Cash Flows 17
Balance Sheets 18
Mississippi Power & Light Company:
Statements of Incomefor Entergy Arkansas, Inc. 20
Statements of Cash Flows for Entergy Arkansas, Inc. 21
Balance Sheets for Entergy Arkansas, Inc. 22
New Orleans Public Service Inc.:
Statements of Income 24
Statements of Cash Flows 25
Balance Sheets 26
System Energy Resources, Inc.:
Statements of Income 28
Statements of Cash Flows 29
Balance Sheets 30
Notes to Financial Statements 32
Management's Financial Discussion and Analysis for
Entergy Gulf States, Inc. 24
Statements of Income (Loss) for Entergy Gulf States, Inc. 26
Statements of Cash Flows for Entergy Gulf States, Inc. 27
Balance Sheets for Entergy Gulf States, Inc. 28
Management's Financial Discussion and Analysis for
Entergy Louisiana, Inc. 30
Statements of Income for Entergy Louisiana, Inc. 32
Statements of Cash Flows for Entergy Louisiana, Inc. 33
Balance Sheets for Entergy Louisiana, Inc. 34
Management's Financial Discussion and Analysis for
Entergy Mississippi, Inc. 36
Statements of Income for Entergy Mississippi, Inc. 38
Statements of Cash Flows for Entergy Mississippi, Inc. 39
Balance Sheets for Entergy Mississippi, Inc. 40
Management's Financial Discussion and Analysis for
Entergy New Orleans, Inc. 42
Statements of Income for Entergy New Orleans, Inc. 44
Statements of Cash Flows for Entergy New Orleans, Inc. 45
Balance Sheets for Entergy New Orleans, Inc. 46
Management's Financial Discussion and Analysis for
System Energy Resources, Inc. 49
Statements of Income for System Energy Resources, Inc. 50
Statements of Cash Flows for System Energy Resources, Inc. 51
Balance Sheets for System Energy Resources, Inc. 52
Notes to Financial Statements for Entergy Corporation
and Subsidiaries 54
Part II:
Item 1. Legal Proceedings 64
Item 4. Submission of Matters to a Vote of
Security Holders 6563
Item 5. Other Information 6664
Item 6. Exhibits and Reports on Form 8-K 65
Experts 68
Experts 70
Signature 7169
This combined Quarterly Report on Form 10-Q is separately filed by
Entergy Corporation, Entergy Arkansas, Power & Light Company,Inc., Entergy Gulf States,
Utilities Company,Inc., Entergy Louisiana, Power & Light Company,Inc., Entergy Mississippi, Power & Light Company,Inc., Entergy 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 makesbehalf. None of these companies make any
representationrepresentations as to information relating to the other companies.
This combined Quarterly Report on Form 10-Q supplements and updates
the Annual Report on Form 10-K for the calendar year ended December
31, 1994, and the Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1995 and June 30, 1995, filed by the individual registrants with the SEC and should
be read in conjunction therewith. On April 22, 1996, Entergy
Corporation filed amendments to its articles of incorporation to
change the names of its operating companies.
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 StationPlant
ANO 2 Unit No. 2 of ANO
AP&L Arkansas Power & Light Company
APSC Arkansas Public Service Commission
Cajun Cajun Electric Power Cooperative, Inc.
Capital Funds Agreement Agreement, dated as of June 21, 1974, as
amended, between System Energy and Entergy
Corporation, and the assignments thereof
CitiPower CitiPower Ltd. - an electric distribution
company serving Melbourne, Australia, and
surrounding suburbs, which was acquired by
Entergy on January 5, 1996
Council Council of the City of New Orleans,
Louisiana
D.C. Circuit United States Court of Appeals for the
District of Columbia CircuitEntergy Arkansas Entergy Arkansas, Inc., formerly Arkansas
Power & Light
Entergy Corporation Entergy Corporation, a Delaware corporation,
successor to Entergy Corporation, a Florida
Corporation
Entergy Gulf States Entergy Gulf States, Inc., formerly Gulf
States Utilities (including wholly owned
subsidiaries - Varibus Corporation, GSG&T,
Inc., Prudential Oil & Gas, Inc., and
Southern Gulf Railway Company)
Entergy Louisiana Entergy Louisiana, Inc., formerly Louisiana
Power & Light
Entergy Mississippi Entergy Mississippi, Inc., formerly
Mississippi Power & Light
Entergy New Orleans Entergy New Orleans, Inc., formerly New
Orleans Public Service, Inc.
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.
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
Form 10-K The combined Annual Report on Form 10-K for
the year ended December 31, 1994,1995, of
Entergy, AP&L, GSU, LP&L, MP&L, NOPSIEntergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System
Energy
Grand Gulf 1 Unit No. 1 (nuclear) 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)
LP&L Louisiana Power & Light CompanyPlant
KWh Kilowatt-hour(s)
LPSC Louisiana Public Service Commission
Merger The combination transaction, consummated on
December 31, 1993, by which GSUEntergy Gulf
States 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.MWh Megawatt-hour(s)
NRC Nuclear Regulatory Commission
operating companies Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, collectively
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
PURPA Public Utility Regulatory Policies Act
River Bend River Bend Steam Electric Generating
Station (nuclear),Nuclear Plant, owned 70% by
GSU
RUS Rural Utility Services (formerly the
Rural Electrification Administration or
"REA")Entergy Gulf States
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting Standards
as promulgated by the Financial Accounting
Standards Board
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
System operating AP&L, GSU, LP&L, MP&L and NOPSI,
companies collectively
System or Entergy Entergy Corporation and its various direct
and indirect subsidiaries
Waterford 3 Unit No. 3 (nuclear) of the Waterford SteamPlant
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy
Cash Flows
Net cash flow from operations for Entergy Corporation, the
operating companies, and System Energy for the three months ended
March 31, 1996 and 1995, was as follows:
Three Months Three Months
Company Ended 3/31/96 Ended 3/31/95
(In Millions)
Entergy Corporation $268.3 $275.6
Entergy Arkansas $111.8 $124.8
Entergy Gulf States $ 34.8 $129.9
Entergy Louisiana $ 88.7 $103.7
Entergy Mississippi $ 29.7 $ 51.8
Entergy New Orleans $ (2.9) $ 18.6
System Energy $ 67.7 $(26.2)
For the first quarter of 1996, Entergy Gulf States' and Entergy
Louisiana's net cash flow from operations decreased due primarily to
higher accounts receivable balances in the three months ended March
31, 1996 than in the same period in 1995, as a result of increased
sales in 1996. In addition, Entergy Gulf States had a greater amount
of under-recovered fuel costs in the first quarter of 1996 compared
to the same period in 1995. An increase in Entergy Mississippi's
under-recovered Grand Gulf 1 costs slightly offset by higher sales
resulted in an overall decrease in Entergy Mississippi's cash flow
from operations for the first quarter of 1996. Entergy Mississippi's
accounts receivable balances were higher for the first quarter of
1996 compared to the same period in 1995, also contributing to the
decrease. For the first quarter of 1996, Entergy New Orleans'
prepayment of certain ad valorem taxes, in addition to an increase in
under-recovered fuel cost, resulted in a decrease in its cash flow
from operations. System Energy's net cash flow from operations
increased for the first quarter of 1996, due primarily to refunds
made to associated companies in 1995 resulting from a FERC audit
settlement in 1994.
Financing Sources
As discussed in Note 8, on January 5, 1996, Entergy acquired
CitiPower for approximately $1.2 billion. The acquisition was funded
by a $294 million equity investment, while the remainder was funded
by the issuance of non-recourse debt. Entergy funded the majority of
the equity portion of the investment with funds borrowed from a $300
million line of credit. Excluding the CitiPower investment, 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
for the first three months of 1996. 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 rate phase-in plans that 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 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. In
addition, to the extent market interest and dividend rates allow, the
operating companies and System Energy will refinance high-cost debt
and preferred stock prior to maturity.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
In April 1996, Entergy Corporation filed for authorization from
the SEC to issue and sell up to 10 million additional shares of
common stock through March 2001, under a new dividend reinvestment
plan. SEC authorization is not expected until mid-1996.
Entergy Corporation periodically reviews its capital structure
to determine its future needs for debt and equity financing. Certain
agreements and restrictions limit the amount of mortgage bonds and
preferred stock that can be issued by the operating companies and
System Energy. Based on the most restrictive applicable tests as of
March 31, 1996, and assumed annual interest or dividend rates of
8.75% for bonds and 8.25% for preferred stock, each of the operating
companies and System Energy could have issued mortgage bonds or
preferred stock up to the following amounts:
Mortgage Preferred
Company Bonds Stock
------------------- ------------ -------------
(In Millions)
Entergy Arkansas $ 354 $ 576
Entergy Gulf States (a) (a)
Entergy Louisiana $ 49 $ 821
Entergy Mississippi $ 261 $ 334
Entergy New Orleans $ 52 $ 190
System Energy $ 121 (b)
(a) Entergy Gulf States was precluded from issuing mortgage bonds and
preferred stock under its earnings coverage tests at March 31,
1996.
(b) System Energy's charter does not provide for the issuance
of preferred stock.
In addition to these amounts, the operating companies and System
Energy have the ability, subject to certain conditions, to issue
bonds against retired bonds. Such amounts may be significant and, in
some cases, no earnings coverage test is required. As a result of
the River Bend rate deferrals being written off in the first quarter
of 1996 (see Note 7), Entergy Gulf States is currently precluded from
issuing first mortgage bonds under its earnings coverage test and
issuing preferred stock under its charter. However, Entergy Gulf
States has the ability to issue up to approximately $598 million of
first mortgage bonds against previously retired bonds. Entergy Gulf
States has no earnings coverage limitations on the issuance of
preference stock. Entergy Arkansas may also issue preferred stock to
refund outstanding preferred stock without meeting an earnings
coverage test.
The operating companies and System Energy have SEC authorization
to effect short-term borrowings. See Note 4 to Entergy's Form 10-K
for information on the operating companies' and System Energy's short-
term borrowing authorizations and bank lines of credit. At March 31,
1996, outstanding short-term borrowings from the Money Pool were as
follows (in millions):
Company Money Pool
Entergy Louisiana $48.0
Entergy Mississippi $17.4
Entergy Operations $ 7.6
Entergy Services $27.8
System Fuels $25.0
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
In addition, Entergy Services and System Fuels had $22 million
and $30 million, respectively, outstanding on their respective
available bank lines of credit of $34 million and $45 million at
March 31, 1996. Entergy Corporation had $270 million outstanding on
its $300 million bank credit facility at March 31, 1996, of which
$230 million was used for the acquisition of CitiPower in January
1996.
Financing Uses
As discussed in Part I of Entergy's Form 10-K, Entergy
Corporation has been expanding its investments in nonregulated
business opportunities overseas and in the United States. As of
March 31, 1996, Entergy Corporation had invested $865.4 million in
equity capital (reduced by $172 million of accumulated losses) in
nonregulated businesses, which includes the acquisition of CitiPower.
In addition to investing in nonregulated businesses, Entergy
Corporation's capital requirements result from periodically investing
in, or making loans to, its subsidiaries, and sustaining its
dividends. To meet such capital requirements, Entergy Corporation
will utilize internally generated funds, cash on hand, funds
remaining on its $300 million credit facility, and other bank
financings as may be required. Entergy Corporation receives funds
through dividend payments from its domestic utility subsidiaries.
During the first quarter of 1996, such common stock dividend payments
from subsidiaries totaled $48.7 million. Due to its weakened
financial position, Entergy Gulf States has not paid common stock
dividends since the third quarter of 1994. Entergy Gulf States is
not currently expected to pay common stock dividends during 1996.
Entergy Corporation paid $99.7 million of dividends on its common
stock during the first quarter of 1996. Declarations of dividends on
common stock are made at the discretion of Entergy Corporation's
Board of Directors. 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. See Note 7 to Entergy's Form 10-K
for information on dividend restrictions.
Entergy Corporation and Entergy Gulf States
See Notes 1 and 2 regarding River Bend rate appeals and
litigation with Cajun. Adverse rulings in the River Bend rate appeal
could result in approximately $286 million of potential write-offs
(net of tax) and $188 million in refunds of previously collected
revenue. Such write-offs and charges could result in additional
substantial net losses being reported in the future by Entergy
Corporation and Entergy Gulf States, with resulting adverse
adjustments to common equity of Entergy Corporation and Entergy Gulf
States. Adverse resolution of these matters could adversely affect
Entergy Gulf States' ability to obtain financing, which in turn could
affect Entergy Gulf States' liquidity and ability to pay dividends.
Although Entergy Corporation's common shareholders have 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.
Entergy Corporation and System Energy
Under the Capital Funds Agreement, Entergy Corporation has
agreed to supply to System Energy sufficient capital to maintain
System Energy's equity capital at a minimum of 35% of its total
capitalization (excluding short-term debt), to permit the continued
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 consent of certain
creditors.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Competition and Industry Challenges
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in Entergy's Form 10-K for a
discussion of the increasing competitive pressures facing Entergy
and the electric utility industry.
On April 24, 1996, FERC issued new rules requiring electric
utilities to open their transmission lines to other power producers.
The rules will take effect sixty days after they are published in the
Federal Register.
Retail and Wholesale Rate Issues
See Note 2 to Entergy's Form 10-K and herein for a discussion of
the ongoing trend of regulatory ordered rate reductions as well as
incentive and performance-based regulation.
Potential Changes in the Electric Generating Station (nuclear)Utility Industry
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in Entergy's Form 10-K for a
discussion of legislative and regulatory developments relating to the
potential for retail competition in the areas served by the operating
companies.
Significant Industrial Cogeneration Effects
Cogeneration projects developed or considered by certain of
Entergy Gulf States' and Entergy Louisiana's industrial customers
over the last several years have caused Entergy Gulf States and
Entergy Louisiana to develop and secure approval for rate tariffs
lower than those previously approved by the PUCT and LPSC for such
industrial customers. In certain cases, contracts or special tariffs
that use flexible pricing have been negotiated with industrial
customers to keep these customers on the System. The contracts and
tariffs are not at full cost-of-service rates. Although the rates
may fully recover expenses, they provide only a minimal return, if
any, on investment. In the first quarter of 1996, KWh sales to
Entergy Gulf States' and Entergy Louisiana's industrial customers at
less than full cost-of-service rates made up approximately 28% and
40% of Entergy Gulf States' and Entergy Louisiana's total industrial
sales, respectively.
During 1995, Entergy Louisiana received separate notices from
two large industrial customers that they will proceed with proposed
cogeneration projects for the purpose of fulfilling their future
electric energy needs. These customers will continue to purchase
their energy requirements from Entergy Louisiana until their
cogeneration facilities are completed and operational, which is
expected to occur in 1997-1998. After that time, these customers
will still purchase energy from Entergy Louisiana, but at a reduced
level. During the first quarter of 1996, these two customers
represented an aggregate of approximately 18% of Entergy Louisiana's
industrial sales and provided 12% of its total industrial base
revenues.
Domestic and Foreign Energy-Related Investments
Entergy Corporation seeks opportunities to expand its domestic
energy-related businesses that are not regulated by state and local
utility regulatory authorities, as well as foreign energy-related
investments. Such investments are expected to provide returns in
excess of domestic regulated utility investments. These investments
include power development and new technology related to the utility
business. Entergy Corporation's strategy is to identify and pursue
business opportunities that have the potential to earn a greater
return than its regulated utility operations. Refer to "MANAGEMENT'S
FINANCIAL DISCUSSION ANDANALYSIS - LIQUIDITY AND CAPITAL RESOURCES"
for a discussion of Entergy Corporation's investments in domestic and
foreign energy-related businesses. These investments may involve a
greater risk than domestically regulated utility enterprises. In the
first quarter of 1996, Entergy Corporation's investments in domestic
and foreign energy-related investments reduced consolidated net
income by approximately $2.1 million. The power development
investments were profitable during the first quarter of 1996 and
management believes that they will generally continue to provide
profits in the current year. However, the income provided by power
development investments was offset by losses experienced by new
technology investments.
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in Entergy's Form 10-K, and
Note 8, herein, for a discussion of Entergy's major nonregulated
business opportunities and foreign energy-related investments.
ANO Matters
Entergy Operations has made inspections and repairs from time to
time on the boiler tubes in ANO 2's steam generators, which have
experienced cracking. Entergy Operations is gathering information
and assessing various options for the repair or replacement of ANO
2's steam generators. See Note 1 for additional information.
Deregulated Utility Operations
Entergy Gulf States discontinued regulatory accounting
principles in 1989 for its wholesale jurisdiction and steam
department and in 1991 for the Louisiana deregulated portion of River
Bend. The recent improving trend in net income from these operations
continued during the first quarter of 1996 when the related operating
income was $6.2 million compared to $1.2 million for the fiscal year
ended 1995.
The improvement in net income from deregulated operations in the
first quarter of 1996 was due to increased revenues and reduced
operation and maintenance expenses, partially offset by increased
income taxes. Refer to Entergy Gulf States' Results of Operations
for discussion of these trends. The future impact of the deregulated
utility operations on Entergy's and Entergy Gulf States' results of
operations and financial position will depend on future operating
costs, the future efficiency and availability of generating units,
and the future market prices for energy over the remaining life of
the assets. Entergy expects the performance of its deregulated
utility operations to continue to improve due to on-going reductions
in operation and maintenance expenses. The deregulated operations
will be subject to the requirements of SFAS 121, as discussed in Note
7, in determining the recognition of any asset impairment.
Property Tax Exemptions
As discussed in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
- - SIGNIFICANT FACTORS AND KNOWN TRENDS" in Entergy's Form 10-K,
Waterford 3's local property tax exemption expired in December 1995
and River Bend's local property tax exemption will expire in December
1996. In a March 1996 LPSC order, Entergy Louisiana was permitted to
defer the estimated Waterford 3 property tax from January 1996
through June 1996. The order allows for the recovery of the property
tax and also for the recovery, from July 1996 through June 1997, of
the related deferral. In April 1996, Louisiana authorities set
Waterford 3's 1996 property tax at $20.8 million.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Environmental Issues
Entergy Gulf States has been notified by the U. S. Environmental
Protection Agency (EPA) that it has been designated as a potentially
responsible party for the clean-up of certain hazardous waste
disposal sites. See Note 1 for additional information.
As a consequence of rules for solid waste regulation issued by
the Louisiana Department of Environmental Quality in 1993, Entergy
Louisiana is upgrading or closing certain of its power plant
wastewater impoundments. See Note 1 for additional information.
Accounting Issues
Continued Application of SFAS 71 - As a result of the Energy
Policy Act, the actions of regulatory commissions, and other factors,
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 existing cost-based ratemaking regulations in
accordance with SFAS 71, "Accounting for the Effects of Certain Types
of Regulation" (SFAS 71). 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 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 of its obligations. The 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, 1996, and for the foreseeable future, the
System's financial statements continue to follow SFAS 71, except for
certain portions of Entergy Gulf States' business.
Accounting for Decommissioning Costs -. In February 1996, the
FASB issued an exposure draft of a proposed SFAS addressing the
accounting for decommissioning costs of nuclear generating units as
well as liabilities related to the closure and removal of all long-
lived assets. See Note 1 for a discussion of proposed changes in the
accounting for decommissioning/closure costs and the potential impact
of these changes on Entergy.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
ENTERGY
Net Income
Consolidated net income decreased for the three months ended
March 31, 1996 due to the $174 million net of tax write-off of River
Bend rate deferrals pursuant to SFAS 121 and the cumulative effect of
the prior year change in accounting method for incremental nuclear
refueling outage maintenance costs at Entergy Arkansas. Excluding the
above mentioned items, net income would have increased $32.4 million
in the first quarter of 1996 due primarily to increased energy sales
to retail customers.
Significant factors affecting the results of operations and
causing variances between the three months ended March 31, 1996, and
1995 are discussed under "Revenues and Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy's electric revenues associated with
its domestic regulated operations by source and KWh sales for the
three months ended March 31, 1996, and 1995:
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months EndedIncrease/
Description 1996 1995 1994(Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 507.1 $ 441.5 $ 65.6 15
Commercial 354.5 324.7 29.8 9
Industrial 460.3 414.1 46.2 11
Governmental 38.7 35.1 3.6 10
-------- -------- -------
Total retail 1,360.6 1,215.4 145.2 12
Sales for resale 90.1 70.0 20.1 29
Other (37.6) (7.9) (29.7) 376
-------- -------- -------
Total $1,413.1 $1,277.5 $ 135.6 11
======== ======== =======
Billed Electric Energy
Sales (Millions of KWh):
Residential 6,667 5,860 807 14
Commercial 4,792 4,473 319 7
Industrial 10,445 10,035 410 4
Governmental 556 539 17 3
-------- -------- --------
Total retail 22,460 20,907 1,553 7
Sales for resale 2,575 1,844 731 40
-------- -------- --------
Total 25,035 22,751 2,284 10
======== ======== ========
Electric operating revenues increased for the three months ended
March 31, 1996, as a result of higher fuel adjustment revenues, which
do not affect net income, and increases in retail sales and sales for
resale, partially offset by rate reductions at Entergy Louisiana and
Entergy New Orleans. Cold weather in 1996 and non-weather related
volume growth contributed to the increase in retail electric
operating revenues. The increase in sales for resale was primarily
the result of increased energy sales outside of Entergy's service
area.
ENTERGY CORPORATION AND S.UBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The changes in electric operating revenues associated with
Entergy's domestic regulated operations for the three months ended
March 31, 1996, are as follows:
Three Months Ended
Description Increase/(Decrease)
(In Millions)
Change in base revenues $(26.0)
Rate riders 2.6
Fuel cost recovery 101.5
Sales volume/weather 67.1
Other revenue (including unbilled) (29.7)
Sales for resale 20.1
--------
Total $135.6
========
Gas operating revenues increased for the three months ended
March 31, 1996, because of increased sales related to colder than
normal winter weather and increased fuel adjustment revenues.
Nonregulated and foreign-energy related business revenues
increased for the three months ended March 31, 1996, as a result of
the January 1996 acquisition of CitiPower. See Note 8 for additional
information regarding CitiPower.
Expenses
Operating expenses for the three months ended March 31, 1996,
include the operating expenses of CitiPower, which are not included
in the prior year financial statements. See Note 8 for additional
information regarding CitiPower.
Excluding the operating expenses of CitiPower, Entergy's
operating expenses increased for the three months ended March 31,
1996, due primarily to increased fuel and purchased power expenses,
depreciation and decommissioning expenses, and higher income tax
expense. These increases were offset in part by lower operating and
maintenance expenses and the effect of certain rate deferrals. Fuel
and purchased power expenses increased as a result of the increase in
energy sales as discussed above. Depreciation and decommissioning
expenses increased as a result of increased depreciation rates and
decommissioning costs as reflected in the 1995 System Energy/FERC
rate increase filing. Income tax expenses increased primarily due to
higher pretax income excluding the River Bend rate deferral write-off
and the prior year change in accounting method. In addition, taxes
other than income taxes increased primarily due to the expiration of
Waterford 3's local property tax exemption in December 1995.
Other operation and maintenance expenses decreased for the three
months ended March 31, 1996, due to lower payroll related expenses,
resulting from restructuring programs, as discussed in Note 6, in
addition to ongoing operating efficiency improvement programs
throughout Entergy. The deferral of Waterford 3 local property
taxes, the deferral of a portion of the proposed System Energy rate
increase at Entergy Mississippi and Entergy New Orleans, and the
deferral of least cost planning expenses at Entergy New Orleans
resulted in a reduction to Entergy's operating expenses in 1996.
Other Income decreased for the three months ended March 31,
1996, as a result of the write-off of River Bend rate deferrals
pursuant to SFAS 121, as discussed in Note 7.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Interest charges increased for the three months ended March 31,
1996, due primarily to interest on long-term debt related to the
investment in CitiPower and borrowings by Entergy Corporation from
the $300 million line of credit, which were used to fund the
acquisition of CitiPower. Excluding these increases, interest expense
decreased $4.5 million due to ongoing retirement and refinancing of
high cost debt at the operating companies.
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
1994------- -------
(In Thousands, Except
Share Data)
Operating Revenues:
Electric $1,910,287 $1,776,982 $4,744,213 $4,668,907$1,413,068 $1,277,490
Natural gas 15,073 17,107 75,861 93,95257,473 40,670
Steam products 12,095 11,435 35,518 35,002
---------- ----------15,578 10,632
Nonregulated and foreign energy-related 112,873 8,608
businesses
---------- ----------
Total 1,937,455 1,805,524 4,855,592 4,797,861
---------- ----------1,598,992 1,337,400
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 464,751 430,718 1,066,258 1,103,157375,764 288,960
Purchased power 107,262 72,169 285,254 306,798158,157 82,509
Nuclear refueling outage expenses 19,591 15,730 70,554 46,94914,209 19,014
Other operation and maintenance 335,701 468,911 1,032,596 1,172,916353,212 359,593
Depreciation, amortization, and 194,567 170,480
decommissioning 176,093 166,387 515,194 488,052
Taxes other than income taxes 76,209 71,446 226,677 214,36588,971 76,635
Income taxes 180,208 130,795 327,312 254,10162,586 29,621
Rate deferrals (19,802) -
Amortization of rate deferrals 131,665 112,757 316,039 295,107
---------- ----------91,511 81,768
---------- ----------
Total 1,491,480 1,468,913 3,839,884 3,881,445
---------- ----------1,319,175 1,108,580
---------- ----------
Operating Income 445,975 336,611 1,015,708 916,416
---------- ----------279,817 228,820
---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 2,206 2,603 7,053 9,2732,558 2,494
Write-off of River Bend rate deferrals (194,498) -
Miscellaneous - net (4,401) (2,900) 11,877 14,99110,778 17,556
Income taxes 1,877 (2,859) 1,068 (14,239)
---------- ----------14,906 (6,619)
---------- ----------
Total (318) (3,156) 19,998 10,025
---------- ----------(166,256) 13,431
---------- ----------
Interest Charges:
Interest on long-term debt 157,760 167,754 479,433 501,273172,843 160,631
Other interest - net 6,302 4,424 20,954 12,62111,847 8,990
Allowance for borrowed funds used
during construction (1,978) (2,228) (6,182) (7,397)(2,138) (2,197)
Preferred and preference dividend
requirements of
subsidiaries and other 20,455 20,306 59,355 61,674
---------- ----------18,081 19,850
---------- ----------
Total 182,539 190,256 553,560 568,171200,633 187,274
---------- ----------
Income (Loss) before the Cumulative Effect
of Accounting Change (87,072) 54,977
Cumulative Effect of Accounting
Change (net of income taxes) - 35,415
---------- ------------------
Net Income $263,118 $143,199 $482,146 $358,270(Loss) ($87,072) $90,392
========== ========== ========== ==================
Earnings (Loss) per average common share
$1.16 $0.63 $2.12 $1.56before cumulative effect of
accounting change ($0.38) $0.24
Earnings (Loss) per average common share ($0.38) $0.40
Dividends declared per common share $0.45 $0.45 $1.35 $1.35$0.90 $0.90
Average number of common shares
outstanding 227,751,471 227,470,521 227,639,262 229,154,520227,780,604 227,415,009
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
Operating Activities:
Net income $482,146 $358,270(loss) ($87,072) $90,392
Noncash items included in net income:income (loss):
Write-off of River Bend rate deferrals 194,498 -
Cumulative effect of a change in accounting principle - (35,415)
Change in rate deferrals/excess capacity-net 285,174 307,313105,388 81,057
Depreciation, amortization, and decommissioning 515,194 488,052194,567 170,480
Deferred income taxes and investment tax credits (2,053) 7,582(45,013) (20,030)
Allowance for equity funds used during (2,558) (2,494)
construction
Changes in working capital:
Receivables 37,148 104,230
Fuel inventory 23,212 (9,605)
Accounts payable (32,984) (70,433)
Taxes accrued 65,289 63,030
Interest accrued (65,276) (13,246)
Other working capital accounts (81,209) (33,005)
Decommissioning trust contributions (12,146) (5,666)
Provision for estimated losses and reserves 5,667 11,314
Other (31,202) (55,028)
----------- --------
Net cash flow provided by operating activities 268,309 275,581
----------- --------
Investing Activities:
Construction/capital expenditures (131,435) (108,367)
Allowance for equity funds used during construction (7,053) (9,273)
Amortization of deferred revenues - (14,632)
Changes in working capital:
Receivables (188,087) (99,413)
Fuel inventory (33,839) 23,910
Accounts payable (70,656) (40,482)
Taxes accrued 219,714 112,623
Interest accrued (7,768) (14,278)
Reserve for rate refund (51,685) -
Other working capital accounts (127,972) 43,981
Decommissioning trust contributions (21,189) (18,215)
Provision for estimated losses and reserves 13,425 (6,242)
Other 64,092 (18,596)
--------- ---------
Net cash flow provided by operating activities 1,069,443 1,120,600
--------- ---------
Investing Activities:
Construction/capital expenditures (401,031) (481,178)
Allowance for equity funds used during construction 7,053 9,2732,558 2,494
Nuclear fuel purchases (207,211) (109,838)(65,430) (9,672)
Proceeds from sale/leaseback of nuclear fuel 224,265 85,17846,872 39,440
Acquisition of CitiPower (1,156,112) -
Investment in nonregulated/nonutility properties (25,979) 199
--------(5,171) (23,246)
----------- --------
Net cash flow used in investing activities (402,903) (496,366)
--------(1,308,718) (99,351)
----------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds 198,250 - 83,944
General and refunding mortgage bonds 109,28539,608 -
OtherBank notes and other long-term debt 43,538 63,590946,167 -
Retirement of:
First mortgage bonds (45,800) (103,800)(133,687) (20,825)
General and refunding mortgage bonds (54,200) (45,000)- (29,200)
Other long-term debt (96,949) (45,410)
Premium and expense on refinancing sale/leaseback bonds - (47,663)
Repurchase of common stock - (119,486)(92,744) (25)
Redemption of preferred stock (39,605) (43,860)(19,704) (24,250)
Changes in short-term borrowings (171,219) 63,199- net 277,000 (38,625)
Common stock dividends paid (306,465) (309,469)
--------(99,714) (101,969)
----------- --------
Net cash flow used inprovided by (used in) financing 1,115,176 (214,894)
activities
(561,415) (503,955)----------- --------
--------Effect of exchange rates on cash and cash equivalents 40 -
Net increase (decrease) in cash and cash equivalents 105,125 120,27974,807 (38,664)
Cash and cash equivalents at beginning of period 533,590 613,907
563,749
------------------- --------
Cash and cash equivalents at end of period $719,032 $684,028
========$608,397 $575,243
=========== ========
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $476,637 $496,933$239,354 $172,220
Income taxes $161,938 $131,607$12,032 $2,564
Noncash investing and financing activities:
Capital lease obligations incurred - $69,520$27,804
Change in unrealized appreciation/depreciation of
decommissioning trust assets $13,221 $9,068($4,265) $9,972
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $21,603,761 $21,184,013
Plant acquisition adjustment - GSU 475,756 487,955
Electric plant under leases 672,725 668,846
Property under capital leases - electric 151,640 161,950
Natural gas 165,483 164,013
Steam products 77,414 77,307
Construction work in progress 415,242 476,816
Nuclear fuel under capital leases 311,072 265,520
Nuclear fuel 60,633 70,147
---------- ----------
Total 23,933,726 23,556,567
Less - accumulated depreciation and 8,131,661 7,639,549
amortization ---------- ----------
Utility plant - net 15,802,065 15,917,018
---------- ----------
Other Property and Investments:
Decommissioning trust funds 256,180 207,395
Other 273,883 240,745
---------- ----------
Total 530,063 448,140
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 97,486 87,700
Temporary cash investments - at cost,
which approximates market 621,546 526,207
---------- ----------
Total cash and cash equivalents 719,032 613,907
Special deposits 5,772 8,074
Notes receivable 15,194 14,446
Accounts receivable:
Customer (less allowance for doubtful
accounts of $6.7 million in 1995 and 1994) 414,177 336,887
Other 83,314 66,651
Accrued unbilled revenues 334,744 240,610
Deferred fuel 6,495 -
Fuel inventory 127,050 93,211
Materials and supplies - at average cost 372,605 365,956
Rate deferrals 412,952 380,612
Prepayments and other 122,494 98,811
---------- ----------
Total 2,613,829 2,219,165
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 1,142,811 1,451,926
SFAS 109 regulatory asset - net 1,429,652 1,417,646
Unamortized loss on reacquired debt 223,717 232,420
Other regulatory assets 292,248 316,878
Long-term receivables 224,789 271,097
Other 337,442 339,201
---------- ----------
Total 3,650,659 4,029,168
---------- ----------
TOTAL $22,596,616 $22,613,491
========== ==========
1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $22,332,245 $21,698,593
Plant acquisition adjustment - GSU 467,623 471,690
Electric plant under leases 676,275 675,425
Property under capital leases - electric 140,400 145,146
Natural gas 167,919 166,872
Steam products 77,558 77,551
Construction work in progress 539,412 482,950
Nuclear fuel under capital leases 296,514 312,782
Nuclear fuel 67,500 49,100
----------- -----------
Total 24,765,446 24,080,109
Less - accumulated depreciation and 8,413,266 8,259,318
amortization
----------- -----------
Utility plant - net 16,352,180 15,820,791
----------- -----------
Other Property and Investments:
Decommissioning trust funds 295,618 277,716
Other 454,572 434,619
----------- -----------
Total 750,190 712,335
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 38,979 42,822
Temporary cash investments - at cost,
which approximates market 392,248 490,768
Special deposits 177,170 -
----------- -----------
Total cash and cash equivalents 608,397 533,590
Notes receivable 6,087 6,907
Accounts receivable:
Customer (less allowance for doubtful accounts of
$8.2 million in 1996 and $7.1 million in 1995) 353,939 333,343
Other 67,118 59,176
Accrued unbilled revenues 283,916 293,461
Deferred fuel 70,099 25,924
Fuel inventory - at average cost 98,955 122,167
Materials and supplies - at average cost 355,712 345,330
Rate deferrals 422,760 420,221
Prepayments and other 160,297 175,121
----------- -----------
Total 2,427,280 2,315,240
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 733,902 1,033,282
SFAS 109 regulatory asset - net 1,199,525 1,279,495
Unamortized loss on reacquired debt 223,187 224,131
Other regulatory assets 376,162 329,397
Long-term receivables 225,130 224,726
Citipower license (net of $3.3 million of 616,947 -
amortization)
Other 344,750 326,533
----------- -----------
Total 3,719,603 3,417,564
----------- -----------
TOTAL $23,249,253 $22,265,930
=========== ===========
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(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 4,201,435 4,202,134
Retained earnings 2,396,953 2,223,739
Less - treasury stock (2,261,318 shares in
1995 and 2,608,908 in 1994) 67,122 77,378
---------- ----------
Total common shareholders' equity 6,533,566 6,350,795
Subsidiary's preference stock 150,000 150,000
Subsidiaries' preferred stock:
Without sinking fund 550,955 550,955
With sinking fund 260,342 299,946
Long-term debt 6,749,860 7,093,473
---------- ----------
Total 14,244,723 14,445,169
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 308,068 273,947
Other 321,247 310,977
---------- ----------
Total 629,315 584,924
---------- ----------
Current Liabilities:
Currently maturing long-term debt 667,375 349,085
Notes payable 648 171,867
Accounts payable 400,464 471,120
Customer deposits 138,851 134,478
Taxes accrued 312,292 92,578
Accumulated deferred income taxes 60,844 40,313
Interest accrued 187,871 195,639
Dividends declared 12,942 13,599
Deferred fuel cost - 27,066
Obligations under capital leases 152,968 151,904
Reserve for rate refund 5,287 56,972
Other 257,324 327,330
---------- ----------
Total 2,196,866 2,031,951
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 3,892,970 3,915,138
Accumulated deferred investment tax credits 658,038 649,898
Other 974,704 986,411
---------- ----------
Total 5,525,712 5,551,447
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $22,596,616 $22,613,491
========== ==========
1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value, authorized 500,000,000
shares; issued 230,017,485 shares $ 2,300 $ 2,300
Paid-in capital 4,201,117 4,201,483
Retained earnings 2,042,902 2,335,579
Cumulative foreign currency translation adjustment 17,255 -
Less - treasury stock (1,983,639 shares in 1996 and
2,251,318 in 1995) 59,961 67,642
----------- -----------
Total common shareholders' equity 6,203,613 6,471,720
Subsidiary's preference stock 150,000 150,000
Subsidiaries' preferred stock:
Without sinking fund 550,955 550,955
With sinking fund 233,755 253,460
Long-term debt 7,637,897 6,777,124
----------- -----------
Total 14,776,220 14,203,259
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 285,717 303,664
Other 348,071 326,804
----------- -----------
Total 633,788 630,468
----------- -----------
Current Liabilities:
Currently maturing long-term debt 715,568 558,650
Notes payable 322,667 45,667
Accounts payable 468,047 460,379
Customer deposits 146,481 140,054
Taxes accrued 273,117 207,828
Accumulated deferred income taxes 97,427 72,847
Interest accrued 130,321 195,445
Dividends declared 109,970 12,194
Obligations under capital leases 150,799 151,140
Other 210,889 247,039
----------- -----------
Total 2,625,286 2,091,243
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 3,631,832 3,777,644
Accumulated deferred investment tax credits 605,796 612,701
Other 976,331 950,615
----------- -----------
Total 5,213,959 5,340,960
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $23,249,253 $22,265,930
============ ============
See Notes to Financial Statements.
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the three months ended March 31, 1996,
due primarily to the one-time recording in 1995 of the cumulative
effect of the change in accounting method for incremental nuclear
refueling outage maintenance costs. Excluding the above mentioned
item, net income would have increased $8.6 million for the three
months ended March 31, 1996, due primarily to an increase in sales
for resale and retail energy sales.
Significant factors affecting the results of operations and
causing variances between the three months ended March 31, 1996, and
1995 are discussed under "Revenues and Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy Arkansas' operating revenues by
source and KWh sales for the three months ended March 31, 1996, and
1995:
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
Three Monthe Ended Increase/
Description 1996 1995 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 132.2 $ 124.2 $ 8.0 6
Commercial 70.6 68.3 2.3 3
Industrial 77.7 77.6 0.1 -
Governmental 4.1 4.0 0.1 2
------- ------- -------
Total retail 284.6 274.1 10.5 4
Sales for resale
Associated companies 59.8 29.1 30.7 105
Non-associated companies 48.8 38.6 10.2 26
Other (10.1) (2.2) (7.9) *
------- ------- -------
Total $ 383.1 $ 339.6 $ 43.5 13
======= ======= =======
Billed Electric Energy
Sales (Millions of KWh):
Residential 1,571 1,426 145 10
Commercial 996 947 49 5
Industrial 1,525 1,439 86 6
Governmental 56 53 3 6
------- ------- -------
Total retail 4,148 3,865 283 7
Sales for resale
Associated companies 2,654 1,359 1,295 95
Non-associated companies 1,674 956 718 75
------- ------- -------
Total 8,476 6,180 2,296 37
======= ======= =======
* Greater than 200%.
Electric operating revenues increased for the three months ended
March 31, 1996, primarily due to increased sales for resale to
associated companies, caused by changes in generation availability
and requirements among the operating companies. The increase in
retail energy sales resulted from increased customers and associated
usage, while the remainder resulted from colder than normal weather.
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The changes in electric operating revenues for the three months
ended March 31, 1996, are as follows:
Three Months Ended
Description Increase/(Decrease)
(In Millions)
Change in base revenues $(3.2)
Rate riders (1.8)
Fuel cost recovery (1.8)
Sales volume/weather 12.3
Other revenue (including unbilled) (2.9)
Sales for resale 40.9
-----
Total $43.5
=====
Expenses
Operating expenses increased for the three months ended March
31, 1996, due to an increase in fuel, purchased power, and income tax
expenses partially offset by a decrease in other operation and
maintenance expenses. The increase in fuel and purchased power
expenses is largely due to an increase in generation and purchases
related to the increase in sales for resale in the first three months
of 1996. Income tax expense increased because of higher pretax
income. The decrease in other operation and maintenance expenses is
primarily the result of work and materials associated with non-outage
related maintenance during ANO 1's refueling outage, which began in
mid-February 1995 and lasted through the first quarter of 1995. In
addition, ANO 2 underwent a 30 day mid-cycle outage during the first
three months of 1995, which also required additional work and
materials.
ENTERGY ARKANSAS, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------- -------
Operating Revenues $530,448 $470,770 $1,282,208 $1,256,762$383,081 $339,596
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 77,987 74,050 182,793 205,28365,200 41,167
Purchased power 100,803 80,326 266,726 264,93598,625 81,747
Nuclear refueling outage expenses 7,923 8,059 22,793 25,5327,542 9,185
Other operation and maintenance 92,079 118,413 271,523 288,31183,265 93,658
Depreciation, amortization, and 41,030 39,352
decommissioning 42,603 38,671 121,557 110,929
Taxes other than income taxes 8,546 7,961 28,641 25,5849,018 10,111
Income taxes 38,188 30,569 59,532 45,4873,591 (3,339)
Amortization of rate deferrals 68,243 56,558 136,170 130,28336,446 38,033
-------- --------
---------- ----------
Total 436,372 414,607 1,089,735 1,096,344344,717 309,914
-------- --------
---------- ----------
Operating Income 94,076 56,163 192,473 160,418
-------- -------- ---------- ----------38,364 29,682
------- -------
Other Income (Deductions):
Allowance for equity funds used
during construction 770 894 2,376 2,9441,090 915
Miscellaneous - net 10,036 10,785 36,388 35,3468,239 15,532
Income taxes (3,941) (4,250) (14,279) (13,934)(3,228) (6,097)
-------- --------
---------- ----------
Total 6,865 7,429 24,485 24,3566,101 10,350
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 26,566 26,587 80,110 79,28224,835 26,933
Other interest - net 906 1,287 4,646 3,2901,027 3,116
Allowance for borrowed funds used
during construction (494) (912) (1,667) (2,579)(665) (731)
-------- --------
---------- ----------
Total 26,978 26,962 83,089 79,99325,197 29,318
-------- --------
---------- ----------Income before the Cumulative Effect of
Accounting Change 19,268 10,714
Cumulative Effect of Accounting
Change (net of income taxes) - 35,415
-------- --------
Net Income 73,963 36,630 133,869 104,78119,268 46,129
Preferred Stock Dividend Requirements
and Other 4,511 4,781 13,617 14,5304,458 4,561
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $69,452 $31,849 $120,252 $90,251$ 14,810 $ 41,568
======== ======== ========== ==========
See Notes to Financial Statements.
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
Operating Activities:
Net income $133,869 $104,781$19,268 $46,129
Noncash items included in net income:
Cumulative effect of a change in accounting principle - (35,415)
Change in rate deferrals/excess capacity-net 93,740 77,60735,953 30,665
Depreciation, amortization, and decommissioning 121,557 110,92941,030 39,352
Deferred income taxes and investment tax credits (37,132) (42,973)(18,102) (2,071)
Allowance for equity funds used during construction (2,376) (2,944)(1,090) (915)
Changes in working capital:
Receivables (82,496) (38,663)24,582 37,541
Fuel inventory (32,524) 26,9053,174 (14,460)
Accounts payable 34,625 (2,690)(3,762) 32,917
Taxes accrued 51,147 43,22626,025 8,488
Interest accrued 253 460(14,743) 636
Other working capital accounts 3,453 5862,326 (35,323)
Decommissioning trust contributions (10,563) (8,525)(4,140) (2,386)
Provision for estimated losses and reserves 4,423 5,206529 2,968
Other 4,132 (17,073)733 16,716
-------- --------
Net cash flow provided by operating activities 282,108 256,832111,783 124,842
-------- --------
Investing Activities:
Construction expenditures (117,203) (122,279)(32,250) (41,651)
Allowance for equity funds used during construction 2,376 2,9441,090 915
Nuclear fuel purchases (41,843) (33,477)(19,081) (76)
Proceeds from sale/leaseback of nuclear fuel 41,832 33,47718,470 76
-------- --------
Net cash flow used in investing activities (114,838) (119,335)(31,771) (40,736)
-------- --------
Financing Activities:
Proceeds from issuance of other long-term debt - 27,992
Retirement of:
Firstfirst mortgage bonds (25,800) (800)
Other long-term debt84,256 -
(28,761)Retirement of first mortgage bonds (30,437) (400)
Redemption of preferred stock (7,000) (9,000)
Changes in short-term borrowings (34,000) 12,605- (5,000)
Dividends paid:
Common stock (83,600) (75,000)- (32,800)
Preferred stock (13,833) (14,798)(8,917) (4,727)
-------- --------
Net cash flow used inprovided by (used in) 44,902 (42,927)
financing activities (164,233) (87,762)
-------- --------
Net increase in cash and cash equivalents 3,037 49,735124,914 41,179
Cash and cash equivalents at beginning of period 11,798 80,756 1,825
-------- --------
Cash and cash equivalents at end of period $83,793 $51,560$136,712 $121,935
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $74,689 $73,515$37,479 $25,916
Income taxes $55,710 $54,117$6,460 -
Noncash investing and financing activities:
Capital lease obligations incurred - $41,122$76
Change in unrealized appreciation/depreciation of
decommissioning trust assets $6,811 $8,872($4,363) $6,234
See Notes to Financial Statements.
ENTERGY ARKANSAS, POWER & LIGHT COMPANYINC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $4,421,730 $4,293,097
Property under capital leases 52,802 56,135
Construction work in progress 106,354 136,701
Nuclear fuel under capital lease 107,117 94,628
--------- ---------
Total 4,688,003 4,580,561
Less - accumulated depreciation and 1,823,395 1,710,216
amortization --------- ---------
Utility plant - net 2,864,608 2,870,345
--------- ---------
Other Property and Investments:
Investment in subsidiary companies - at 11,215 11,215
equity
Decommissioning trust fund 157,741 127,136
Other - at cost (less accumulated 7,578 4,628
depreciation) --------- ---------
Total 176,534 142,979
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 10,724 3,737
Temporary cash investments - at cost,
which approximates market:
Associated companies 11,051 4,713
Other 62,018 72,306
--------- ---------
Total cash and cash equivalents 83,793 80,756
Accounts receivable:
Customer (less allowance for doubtful
accounts of $2.0 million in 1995 and 1994) 106,652 53,781
Associated companies 36,785 28,506
Other 7,605 11,181
Accrued unbilled revenues 108,785 83,863
Fuel inventory - at average cost 67,085 34,561
Materials and supplies - at average cost 76,527 79,886
Rate deferrals 127,133 113,630
Deferred excess capacity 9,978 8,414
Prepayments and other 15,949 23,867
--------- ---------
Total 640,292 518,445
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 261,652 360,496
Deferred excess capacity 10,097 20,060
SFAS 109 regulatory asset - net 222,501 227,068
Unamortized loss on reacquired debt 54,846 57,344
Other regulatory assets 45,106 68,813
Other 33,963 26,665
--------- ---------
Total 628,165 760,446
--------- ---------
TOTAL $4,309,599 $4,292,215
========= =========
1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $ 4,445,035 $ 4,438,519
Property under capital leases 46,795 48,968
Construction work in progress 129,400 119,874
Nuclear fuel under capital lease 104,526 98,691
----------- -----------
Total 4,725,756 4,706,052
Less - accumulated depreciation and 1,876,766 1,846,112
amortization
----------- -----------
Utility plant - net 2,848,990 2,859,940
----------- -----------
Other Property and Investments:
Investment in subsidiary companies - 11,122 11,122
at equity
Decommissioning trust fund 173,493 166,832
Other - at cost (less accumulated 5,148 5,085
depreciation)
----------- -----------
Total 189,763 183,039
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 5,221 7,780
Temporary cash investments - at cost,
which approximates market:
Associated companies 16,524 908
Other 32,797 3,110
Special deposits 82,170 -
----------- -----------
Total cash and cash 136,712 11,798
equivalents
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.1 million in 1996 and 1995) 67,329 75,445
Associated companies 39,589 40,577
Other 7,418 6,962
Accrued unbilled revenues 77,622 93,556
Fuel inventory - at average cost 54,282 57,456
Materials and supplies - at average cost 76,865 75,030
Rate deferrals 137,011 131,634
Deferred excess capacity 12,295 11,088
Deferred nuclear refueling outage costs 24,213 32,824
Prepayments and other 13,904 15,215
----------- -----------
Total 647,240 551,585
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 190,105 228,390
Deferred excess capacity 1,732 5,984
SFAS 109 regulatory asset - net 225,281 219,906
Unamortized loss on reacquired debt 57,805 58,684
Other regulatory assets 72,344 68,160
Other 29,741 28,727
----------- -----------
Total 577,008 609,851
----------- -----------
TOTAL $ 4,263,001 $ 4,204,415
============ ============
See Notes to Financial Statements.
ENTERGY ARKANSAS, POWER & LIGHT COMPANYINC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(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 528,450 491,799
--------- ---------
Total common shareholder's equity 1,119,764 1,083,113
Preferred stock:
Without sinking fund 176,350 176,350
With sinking fund 51,527 58,527
Long-term debt 1,281,030 1,293,879
--------- ---------
Total 2,628,671 2,611,869
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 102,937 94,534
Other 72,658 68,235
--------- ---------
Total 175,595 162,769
--------- ---------
Current Liabilities:
Currently maturing long-term debt 27,425 28,175
Notes payable 667 34,667
Accounts payable:
Associated companies 43,993 17,345
Other 97,306 89,329
Customer deposits 18,237 17,113
Taxes accrued 96,386 45,239
Accumulated deferred income taxes 34,249 25,043
Interest accrued 31,317 31,064
Dividends declared 4,512 4,727
Co-owner advances 37,944 20,639
Deferred fuel cost 14,732 20,254
Nuclear refueling reserve 34,416 37,954
Obligations under capital leases 56,971 56,154
Other 28,439 45,632
--------- ---------
Total 526,594 473,335
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 812,727 859,558
Accumulated deferred investment tax credits 114,253 118,548
Other 51,759 66,136
--------- ---------
Total 978,739 1,044,242
--------- ---------
Commitments and Contingencies (Note 1)
TOTAL $4,309,599 $4,292,215
========= =========
1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares $ 470 $ 470
Paid-in capital 590,794 590,844
Retained earnings 491,896 492,386
----------- -----------
Total common shareholder's equity 1,083,160 1,083,700
Preferred stock:
Without sinking fund 176,350 176,350
With sinking fund 49,027 49,027
Long-term debt 1,250,122 1,281,203
----------- -----------
Total 2,558,659 2,590,280
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 96,641 93,574
Other 71,503 67,444
----------- -----------
Total 168,144 161,018
----------- -----------
Current Liabilities:
Currently maturing long-term debt 115,870 28,700
Notes payable 667 667
Accounts payable:
Associated companies 40,880 42,156
Other 117,764 120,250
Customer deposits 19,347 18,594
Taxes accrued 66,184 40,159
Accumulated deferred income taxes 59,814 48,992
Interest accrued 15,497 30,240
Dividends declared 15,300 4,458
Co-owner advances 29,858 34,450
Deferred fuel cost 21,050 17,837
Obligations under capital leases 54,678 54,697
Other 21,103 26,238
----------- -----------
Total 578,012 467,438
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 801,114 823,471
Accumulated deferred investment tax credits 111,737 112,890
Other 45,335 49,318
----------- -----------
Total 958,186 985,679
----------- -----------
Commitments and Contingencies (Note 1)
TOTAL $ 4,263,001 $ 4,204,415
============ ============
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the three months ended March 31, 1996,
due to the $174 million net of tax write-off of River Bend rate
deferrals required by the adoption of SFAS 121. Excluding the write-
off, net income for the three months ended March 31, 1996, would have
increased $19 million primarily due to increased electric retail
energy sales, partially offset by increased income tax expenses.
Significant factors affecting the results of operations and
causing variances between the three months ended March 31, 1996, and
1995 are discussed under "Revenues and Sales," "Expenses," and
"Other" below.
Revenues and Sales
Detailed below are Entergy Gulf States' electric operating
revenues by source and KWh sales for the three months ended March 31,
1996, and 1995:
GULF STATES UTILITIES COMPANY
STATEMENTS OF INCOME (LOSS)
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
Three Months Ended Increase/
Description 1996 1995 (Decrease) %
(In Millions)
Electric Department Operating Revenues:
Residential $ 134.7 $ 116.5 $ 18.2 16
Commercial 102.5 92.3 10.2 11
Industrial 160.6 142.3 18.3 13
Governmental 7.0 6.2 0.8 13
--------- -------- --------
Total retail 404.8 357.3 47.5 13
Sales for resale
Associated companies 2.8 10.2 (7.4) (73)
Non-associated companies 19.0 14.8 4.2 28
Other (0.4) (3.5) 3.1 (89)
--------- -------- --------
Total Electric Department $ 426.2 $ 378.8 $ 47.4 13
======== ======== ========
Billed Electric Energy
Sales (Millions of KWh):
Residential 1,825 1,561 264 17
Commercial 1,462 1,342 120 9
Industrial 3,901 3,670 231 6
Governmental 92 88 4 5
------- ------- -----
Total retail 7,280 6,661 619 9
Sales for resale
Associated companies 56 501 (445) (89)
Non-associated companies 500 473 27 6
------- ------- -----
Total Electric Department 7,836 7,635 201 3
Steam Department 416 397 19 5
------- ------- -----
Total 8,252 8,032 220 3
======= ======= =====
Electric operating revenues increased for the three months ended
March 31, 1996, as a result of higher fuel adjustment revenues, which
do not affect net income, and increased customer usage, partially
attributable to colder winter weather than in the same period of
1995. Other electric revenues decreased due to a settlement with the
United States Department of Energy regarding service and pricing
arrangements.
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The changes in electric operating revenues for the three months
ended March 31, 1996, are as follows:
Three Months Ended
Description Increase/(Decrease)
(In Millions)
Change in base revenues $(2.7)
Fuel cost recovery 33.9
Sales volume/weather 26.8
Other revenue (including unbilled (7.4)
Sales for resale (3.2)
------
Total $ 47.4
======
Gas operating revenues increased for the three months ended
March 31, 1996, primarily due to an increase in residential sales as
a result of colder weather than in the same period of 1995.
Expenses
Operating expenses increased for the three months ended March
31, 1996, as a result of higher fuel expenses, including purchased
power, and higher income taxes. Fuel expenses increased because of
higher gas prices and increased energy requirements resulting from
higher energy sales. Income taxes increased primarily due to higher
pre-tax income for the three months ended March 31, 1996, excluding
the net effect of the write-off of River Bend rate deferrals
discussed below.
Other
Other income decreased due to the write-off of River Bend rate
deferrals pursuant to the adoption of SFAS 121, which became
effective January 1, 1996. See Note 7 for a further discussion.
Income taxes on other income decreased as a result of this write-off.
ENTERGY GULF STATES, INC.
STATEMENTS OF INCOME (LOSS)
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------- -------
(In Thousands)
Operating Revenues:
Electric $524,982 $530,209 $1,366,070 $1,371,328$426,177 $378,791
Natural gas 3,210 3,887 17,654 25,71414,876 9,923
Steam products 12,095 11,435 35,518 35,00215,578 10,632
-------- --------
---------- ----------
Total 540,287 545,531 1,419,242 1,432,044456,631 399,346
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 149,535 154,881 391,364 393,240117,409 114,921
Purchased power 47,901 44,330 132,625 159,38967,834 40,557
Nuclear refueling outage expenses 2,580 2,707 8,354 7,7472,360 3,031
Other operation and maintenance 91,939 171,054 295,566 376,61696,741 101,404
Depreciation, amortization, and 51,251 50,339
decommissioning 50,606 48,786 151,337 145,862
Taxes other than income taxes 26,951 24,623 77,082 58,63326,334 25,379
Income taxes 40,737 17,458 63,715 34,21011,983 (162)
Amortization of rate deferrals 16,507 16,839 49,519 49,57617,644 16,506
-------- --------
---------- ----------
Total 426,756 480,678 1,169,562 1,225,273391,556 351,975
-------- --------
---------- ----------
Operating Income 113,531 64,853 249,680 206,77165,075 47,371
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 253 417 770 1,056493 251
Write-off of River Bend rate deferrals (194,498) -
Miscellaneous - net 6,213 (78,886) 17,823 (70,653)4,940 5,914
Income taxes (2,110) 31,590 (5,139) 27,40718,743 (865)
---------- --------
--------Total (170,322) 5,300
---------- ----------
Total 4,356 (46,879) 13,454 (42,190)
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 47,426 48,804 144,053 146,55446,488 48,270
Other interest - net 2,588 1,172 4,681 6,409950 1,010
Allowance for borrowed funds used
during construction (239) (340) (700) (847)(428) (244)
---------- --------
--------Total 47,010 49,036
---------- ----------
Total 49,775 49,636 148,034 152,116
-------- -------- ---------- ----------
Net Income (Loss) 68,112 (31,662) 115,100 12,465(152,257) 3,635
Preferred and Preference Stock
Dividend Requirements and Other 7,341 7,506 22,357 22,4427,219 7,590
---------- --------
-------- ---------- ----------
Earnings (Loss)Loss Applicable to Common Stock $60,771 ($39,168) $92,743159,476) ($9,977)
======== ========3,955)
========== ==================
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
GULF STATES UTILITIES COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
Net income (loss) ($152,257) $3,635
Noncash items included in net income:
Write-off of River Bend rate deferrals 194,498 -
Change in rate deferrals 17,644 16,506
Depreciation, amortization, and 51,251 50,339
decommissioning
Deferred income taxes and investment tax (6,812) 914
credits
Allowance for equity funds used during (493) (251)
construction
Changes in working capital:
Receivables 8,020 58,324
Fuel inventory 6,822 894
Accounts payable (902) (10,624)
Taxes accrued (6,976) 11,043
Interest accrued (21,462) 4,466
Reserve for rate refund - 10,560
Other working capital accounts (56,512) (4,667)
Decommissioning trust contributions (1,481) (739)
Provision for estimated losses and reserves 2,648 (3,587)
Other 777 (6,925)
-------- --------
Net cash flow provided by operating activities 34,765 129,888
-------- --------
Investing Activities:
Construction expenditures (36,419) (19,136)
Allowance for equity funds used during construction 493 251
Nuclear fuel purchases (22,188) -
Proceeds from sale/leaseback of nuclear fuel 23,375 -
-------- --------
Net cash flow used in investing activities (34,739) (18,885)
-------- --------
Financing Activities:
Proceeds from the issuance of long-term debt 780 2,277
Retirement of first mortgage bonds (20,000) -
Redemption of preferred and preference stock (4,204) (2,250)
Dividends paid on preferred and preference (7,132) (7,514)
stock
-------- --------
Net cash flow used in financing activities (30,556) (7,487)
-------- --------
Net increase (decrease) in cash and cash (30,530) 103,516
equivalents
Cash and cash equivalents at beginning of period 234,604 104,644
-------- --------
Cash and cash equivalents at end of period $204,074 $208,160
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
interest - net of amount capitalized $66,212 $41,860
Change in unrealized appreciation/depreciation of
decommissioning trust assets - $759
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Unaudited)
1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $ 6,962,426 $ 6,942,983
Natural gas 45,782 45,789
Steam products 77,558 77,551
Property under capital leases 76,617 77,918
Construction work in progress 164,427 148,043
Nuclear fuel under capital lease 66,439 69,853
----------- -----------
Total 7,393,249 7,362,137
Less - accumulated depreciation and 2,713,779 2,664,943
amortization
----------- -----------
Utility plant - net 4,679,470 4,697,194
----------- -----------
Other Property and Investments:
Decommissioning trust fund 34,859 32,943
Other - at cost (less accumulated depreciation) 29,230 28,626
----------- -----------
Total 64,089 61,569
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 7,882 13,751
Temporary cash investments - at cost,
which approximates market:
Associated companies 61,097 46,336
Other 135,095 174,517
----------- -----------
Total cash and cash equivalents 204,074 234,604
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.6 million in 1996 and 1995) 107,171 110,187
Associated companies 1,391 1,395
Other 16,854 15,497
Accrued unbilled revenues 67,024 73,381
Deferred fuel costs 61,887 31,154
Accumulated deferred income taxes 37,721 43,465
Fuel inventory - at average cost 25,319 32,141
Materials and supplies - at average cost 93,097 91,288
Rate deferrals 95,614 97,164
Prepayments and other 9,676 15,566
----------- -----------
Total 719,828 745,842
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 203,222 419,904
SFAS 109 regulatory asset-net 370,522 453,628
Unamortized loss on reacquired debt 59,475 61,233
Other regulatory assets 26,718 27,836
Long-term receivables 225,130 224,727
Other 168,119 169,125
----------- -----------
Total 1,053,186 1,356,453
----------- -----------
TOTAL $ 6,516,573 $ 6,861,058
=========== ===========
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Unaudited)
1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares $ 114,055 $ 114,055
Paid-in capital 1,152,592 1,152,505
Retained earnings 198,228 357,704
----------- -----------
Total common shareholder's equity 1,464,875 1,624,264
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 83,450 87,654
Long-term debt 2,141,303 2,175,471
----------- -----------
Total 3,976,072 4,173,833
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 105,638 108,078
Other 81,636 78,245
----------- -----------
Total 187,274 186,323
----------- -----------
Current Liabilities:
Currently maturing long-term debt 160,425 145,425
Accounts payable:
Associated companies 42,574 31,349
Other 124,401 136,528
Customer deposits 22,179 21,983
Taxes accrued 30,437 37,413
Interest accrued 35,375 56,837
Nuclear refueling reserve 6,193 22,627
Obligations under capital lease 37,418 37,773
Other 73,031 86,653
----------- -----------
Total 532,033 576,588
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 1,084,204 1,177,144
Accumulated deferred investment tax credits 206,805 208,618
Deferred River Bend finance charges 51,957 58,047
Other 478,228 480,505
----------- -----------
Total 1,821,194 1,924,314
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $ 6,516,573 $ 6,861,058
=========== ===========
See Notes to Financial Statements.
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three months ended March 31, 1996,
due primarily to increased revenues and decreased other operation and
maintenance expenses, partially offset by increased income taxes.
Significant factors affecting the results of operations and
causing variances between the three months ended March 31, 1996, and
1995 are discussed under "Revenues and Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy Louisiana's operating revenues by
source and KWh sales for the three months ended March 31, 1996, and
1995.
Three Months Ended Increase/
Description 1996 1995 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 135.3 $ 111.9 $ 23.4 21
Commercial 86.0 76.0 10.0 13
Industrial 175.6 148.9 26.7 18
Governmental 8.5 7.7 0.8 10
------- ------- ------
Total retail 405.4 344.5 60.9 18
Sales for resale
Associated companies 0.2 0.2 - -
Non-associated companies 14.5 10.5 4.0 38
Other (2.3) (1.7) (0.6) 35
------- ------- ------
Total $ 417.8 $ 353.5 $ 64.3 18
======= ======= ======
Billed Electric Energy
Sales (Millions of KWh):
Residential 1,826 1,587 239 15
Commercial 1,092 1,019 73 7
Industrial 4,213 4,079 134 3
Governmental 115 110 5 5
------- ------- ------
Total retail 7,246 6,795 451 7
Sales for resale
Associated companies 3 10 (7) (70)
Non-associated companies 233 214 19 9
------- ------- ------
Total 7,482 7,019 463 7
======= ======= ======
Electric operating revenues increased for the three months ended
March 31, 1996, primarily due to higher fuel adjustment revenues,
which do not affect net income, and higher retail sales, partially
offset by a decrease in rates. Colder weather and increased customer
usage in the first three months of 1996 contributed to the increase
in retail sales. A base rate reduction ordered in the second quarter
of 1995, and a subsequent settlement of related issues during the
fourth quarter of 1995, partially offset the effect of these
increases.
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The changes in electric operating revenues for the three months
ended March 31, 1996, are as follows:
Three Months Ended
Description Increase/(Decrease)
(In Millions)
Change in base revenues $(13.8)
Fuel cost recovery 54.3
Sales volume/weather 20.4
Other revenue (including unbilled) (0.6)
Sales for resale 4.0
------
Total $64.3
======
Expenses
Operating expenses increased for the three months ended March
31, 1996, due primarily to an increase in fuel and purchased power
expenses, income taxes, and taxes other than income taxes offset by a
decrease in other operation and maintenance expenses and the
recording of rate deferrals in 1996. The increase in fuel and
purchased power is primarily due to increased energy sales as noted
in "Revenues and Sales" above. Income taxes increased for the three
months ended March 31, 1996, because of higher pre-tax income. Taxes
other than income taxes increased as the result of the expiration of
Waterford 3's local property tax exemption in December 1995, and was
offset by the recording of the LPSC-approved rate deferral for these
taxes discussed in Note 2. Other operation and maintenance expenses
decreased for the three months of 1996 due to lower payroll expenses.
Payroll expenses decreased as a result of the restructuring program
announced and accrued for during 1994 and 1995, which included a
reduction in the number of Entergy Louisiana employees throughout
1995 and into 1996.
ENTERGY LOUISIANA, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------- -------
(In Thousands)
Operating Revenues $417,767 $353,462
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 90,680 52,050
Purchased power 100,875 74,995
Nuclear refueling outage expenses 4,000 4,517
Other operation and maintenance 65,770 73,004
Depreciation, amortization, and 41,741 38,507
decommissioning
Taxes other than income taxes 19,734 15,716
Income taxes 22,528 18,696
Rate deferrals (6,859) -
Amortization of rate deferrals 6,660 6,660
-------- --------
Total 345,129 284,145
-------- --------
Operating Income 72,638 69,317
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 277 564
Miscellaneous - net 286 372
Income taxes (26) (25)
-------- --------
Total 537 911
-------- --------
Interest Charges:
Interest on long-term debt 30,717 32,572
Other interest - net 2,336 2,085
Allowance for borrowed funds used
during construction (408) (491)
-------- --------
Total 32,645 34,166
-------- --------
Net Income 40,530 36,062
Preferred Stock Dividend Requirements
and Other 4,915 5,591
-------- --------
Earnings Applicable to Common Stock $35,615 $ 30,471
======== ========
See Notes to Financial Statements.
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
-------- --------
(In Thousands)
Operating Activities:
Net income $115,100 $12,465$40,530 $36,062
Noncash items included in net income:
Change in rate deferrals 49,519 80,1386,660 6,660
Depreciation, amortization, and decommissioning 151,337 145,86241,741 38,507
Deferred income taxes and investment tax credits 69,060 16,257(4,169) (9,077)
Allowance for equity funds used during construction (770) (1,056)(277) (564)
Changes in working capital:
Receivables 41,808 (50,881)
Fuel inventory (3,598) (3,750)6,447 26,639
Accounts payable (21,476) 22,872(2,740) (25,464)
Taxes accrued 35,701 14,57940,406 37,282
Interest accrued 4,254 3,792
Reserve for rate refund (51,268) -(17,143) (7,458)
Other working capital accounts (53,032) 15,330(11,327) 633
Decommissioning trust contributions (2,959) (2,217)(4,393) (1,204)
Other 10,591 24,946(6,997) 1,708
-------- --------
Net cash flow provided by operating activities 344,267 278,33788,738 103,724
-------- --------
Investing Activities:
Construction expenditures (112,237) (101,952)(26,235) (20,055)
Allowance for equity funds used during 277 564
construction 770 1,056
Nuclear fuel purchases - (25,205)
Proceeds from sale/leaseback of nuclear fuel - 25,205
-------- --------
Net cash flow used in investing activities (111,467) (100,896)(25,958) (19,491)
-------- --------
Financing Activities:
Proceeds from the issuance of otherfirst mortgage bonds 113,994 -
Retirement of:
First mortgage bonds (35,000) -
Other long-term debt 2,277 -
Retirement of other long-term debt (50,425) (425)(44) (25)
Redemption of preferred stock (4,850) (4,850)(7,500) (7,500)
Changes in short-term borrowings - net (28,468) (7,954)
Dividends paid:
Common stock - (289,100)(14,400) (55,700)
Preferred and preference stock (22,208) (22,343)(5,151) (5,491)
-------- --------
Net cash flow used inprovided by (used in) financing 23,431 (76,670)
activities (75,206) (316,718)
-------- --------
Net increase (decrease) in cash and cash equivalents 157,594 (139,277)86,211 7,563
Cash and cash equivalents at beginning of period 104,644 261,34934,370 28,718
-------- --------
Cash and cash equivalents at end of period $262,238 $122,072$120,581 $36,281
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $136,526 $136,957
Income taxes $288 $137$48,555 $40,325
Noncash investing and financing activities:
Capital lease obligations incurred - $18,721$75
Change in unrealized appreciation/depreciation of
decommissioning trust assets $1,738 ($200)94) $1,294
See Notes to Financial Statements.
GULF STATES UTILITIES COMPANYENTERGY LOUISIANA, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $6,928,954 $6,842,726
Natural gas 44,505 44,505
Steam products 77,414 77,307
Property under capital leases 79,323 82,914
Construction work in progress 118,319 96,176
Nuclear fuel under capital leases 53,102 80,042
--------- ---------
Total 7,301,617 7,223,670
Less - accumulated depreciation and 2,645,827 2,504,826
amortization --------- ---------
Utility plant - net 4,655,790 4,718,844
--------- ---------
Other Property and Investments:
Decommissioning trust fund 26,993 21,309
Other - at cost (less accumulated 28,567 29,315
depreciation) --------- ---------
Total 55,560 50,624
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 13,893 8,063
Temporary cash investments - at cost,
which approximates market:
Associated companies 35,496 5,085
Other 212,849 91,496
--------- ---------
Total cash and cash equivalents 262,238 104,644
Accounts receivable:
Customer (less allowance for doubtful
accounts of $0.7 million in 1995 and 1994) 97,846 167,745
Associated companies 6,908 12,732
Other 11,864 20,706
Accrued unbilled revenues 82,227 39,470
Deferred fuel costs 20,932 6,314
Accumulated deferred income taxes 26,448 49,457
Fuel inventory 29,382 25,784
Materials and supplies - at average cost 101,820 90,054
Rate deferrals 95,469 100,478
Prepayments and other 22,676 13,754
--------- ---------
Total 757,810 631,138
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 444,195 506,974
SFAS 109 regulatory asset - net 444,420 426,358
Unamortized loss on reacquired debt 62,973 63,994
Other regulatory assets 29,683 35,168
Long-term receivables 254,432 264,752
Other 153,360 145,609
--------- ---------
Total 1,389,063 1,442,855
--------- ---------
TOTAL $6,858,223 $6,843,461
========= =========
1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $ 4,897,057 $ 4,886,898
Property under capital leases 231,121 231,121
Construction work in progress 95,320 87,567
Nuclear fuel under capital lease 63,516 72,864
Nuclear fuel 1,506 1,506
----------- -----------
Total 5,288,520 5,279,956
Less - accumulated depreciation and 1,774,850 1,742,306
amortization
----------- -----------
Utility plant - net 3,513,670 3,537,650
----------- -----------
Other Property and Investments:
Nonutility property 20,060 20,060
Decommissioning trust fund 43,496 38,560
Investment in subsidiary companies - at equity 14,230 14,230
Other 869 1,113
----------- -----------
Total 78,655 73,963
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 4,481 3,952
Temporary cash investments - at cost,
which approximates market 21,100 30,418
Special deposits 95,000 -
----------- -----------
Total cash and cash equivalents 120,581 34,370
Accounts receivable:
Customer (less allowance for doubtful accounts of
$1.4 million in 1996 and 1995) 79,780 72,328
Associated companies 1,361 8,033
Other 8,506 8,979
Accrued unbilled revenues 55,378 62,132
Deferred fuel costs 13,984 10,200
Materials and supplies - at average cost 81,375 79,799
Rate deferrals 18,949 25,609
Deferred nuclear refueling outage costs 17,320 21,344
Prepayments and other 9,801 9,118
----------- -----------
Total 407,035 331,912
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 303,419 301,520
Unamortized loss on reacquired debt 38,474 39,474
Other regulatory assets 31,998 23,935
Other 24,486 23,069
----------- -----------
Total 398,377 387,998
----------- -----------
TOTAL $ 4,397,737 $ 4,331,523
=========== ===========
See Notes to Financial Statements.
GULF STATES UTILITIES COMPANYENTERGY LOUISIANA, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(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 1,152,469 1,152,336
Retained earnings 357,171 264,626
--------- ---------
Total common shareholder's equity 1,623,695 1,531,017
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 90,087 94,934
Long-term debt 2,250,420 2,318,417
--------- ---------
Total 4,250,646 4,230,812
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 95,051 125,691
Other 76,170 68,753
--------- ---------
Total 171,221 194,444
--------- ---------
Current Liabilities:
Currently maturing long-term debt 70,425 50,425
Accounts payable:
Associated companies 39,388 31,722
Other 111,833 140,975
Customer deposits 21,793 22,216
Taxes accrued 48,179 12,478
Interest accrued 59,581 55,327
Nuclear refueling reserve 21,522 10,117
Obligations under capital leases 37,366 37,265
Reserve for rate refund 5,704 56,972
Other 83,255 111,963
--------- ---------
Total 499,046 529,460
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 1,144,821 1,100,396
Accumulated deferred investment tax credits 220,583 199,428
Deferred River Bend finance charges 64,137 82,406
Other 507,769 506,515
--------- ---------
Total 1,937,310 1,888,745
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,858,223 $6,843,461
========= =========
1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $0.01 par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares $ 1,088,900 $ 1,088,900
Capital stock expense and other (4,880) (4,836)
Retained earnings 57,564 72,150
----------- -----------
Total common shareholder's equity 1,141,584 1,156,214
Preferred stock
Without sinking fund 160,500 160,500
With sinking fund 92,509 100,009
Long-term debt 1,389,283 1,385,171
----------- -----------
Total 2,783,876 2,801,894
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 35,516 43,362
Other 51,840 50,835
----------- -----------
Total 87,356 94,197
----------- -----------
Current Liabilities:
Currently maturing long-term debt 111,258 35,260
Notes payable
Associated companies 47,991 61,459
Other - 15,000
Accounts payable:
Associated companies 40,695 37,494
Other 63,981 69,922
Customer deposits 57,275 56,924
Taxes accrued 59,018 18,612
Accumulated deferred income taxes 3,403 3,366
Interest accrued 27,059 44,202
Dividends declared 40,713 5,149
Obligations under capital leases 28,000 28,000
Other 7,738 17,397
----------- -----------
Total 487,131 392,785
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 806,422 807,278
Accumulated deferred investment tax credits 144,145 145,561
Deferred interest - Waterford 3 lease obligation 24,145 23,947
Other 64,662 65,861
----------- -----------
Total 1,039,374 1,042,647
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $ 4,397,737 $ 4,331,523
============ ============
See Notes to Financial Statements.
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three months ended March 31, 1996,
primarily due to an increase in electric operating revenues and a
decrease in other operation and maintenance expenses, partially
offset by an increase in income tax expense.
Significant factors affecting the results of operations and
causing variances between the three months ended March 31, 1996, and
1995 are discussed under "Revenues and Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy Mississippi's operating revenues by
source and KWh sales for the three months ended March 31, 1996, and
1995:
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
Three Months Ended Increase/
Description 1996 1995 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 77.5 $ 67.1 $ 10.4 15
Commercial 62.3 55.6 6.7 12
Industrial 40.8 40.2 0.6 1
Governmental 6.9 6.5 0.4 6
------- -------- --------
Total retail 187.5 169.4 18.1 11
Sales for resale
Associated companies 13.6 6.6 7.0 106
Non-associated companies 5.3 4.2 1.1 26
Other (2.5) 0.4 (2.9) *
------- -------- --------
Total $ 203.9 $ 180.6 $ 23.3 13
======== ======== ========
Billed Electric Energy
Sales (Millions of KWh):
Residential 1,055 933 122 13
Commercial 777 724 53 7
Industrial 694 723 (29) (4)
Governmental 81 78 3 4
------- -------- --------
Total retail 2,607 2,458 149 6
Sales for resale
Associated companies 269 159 110 69
Non-associated companies 116 141 (25) (18)
------- -------- --------
Total 2,992 2,758 234 8
======== ======== ========
* - Greater than 200%.
Electric operating revenues increased for the three months ended
March 31, 1996, due to an increase in revenues from the Grand Gulf 1
rate rider, the fuel adjustment clause, and electric sales. In
connection with an annual MPSC review, in October 1995, Entergy
Mississippi's Grand Gulf 1 rate rider was adjusted upward as a result
of its undercollection of Grand Gulf 1 costs. Therefore, Grand Gulf
1 rate rider revenues for the three months ended March 31, 1996, were
greater than revenues for the same period last year. Fuel adjustment
clause revenues increased due to higher fuel costs, as discussed
below. The increase in retail sales volume is primarily attributed
to colder than normal
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
weather during the first three months of 1996 compared to the same
period in 1995. Sales for resale, specifically sales to associated
companies, increased primarily due to changes in the generation
requirements and availability among the operating companies.
The changes in electric operating revenues for the three months
ended March 31, 1996, are as follows:
Three Months Ended
Description Increase/(Decrease)
(In Millions)
Change in base revenues $(0.8)
Grand Gulf rate rider 4.2
Fuel cost recovery 8.4
Sales volume/weather 4.6
Other revenue (including unbilled) (1.2)
Sales for resale 8.1
-----
Total $23.3
=====
Expenses
Fuel and purchased power expenses increased for the three months
ended March 31, 1996, due to an increase in the demand for gas caused
by the colder than normal weather and the resulting shortage of this
fuel. The gas shortage in combination with Entergy Mississippi's
need to burn excess oil inventory resulted in increased oil-fired
generation during the first three months of 1996. Oil tends to be a
more expensive fuel than gas or coal.
Other operation and maintenance expenses decreased for the three
months ended March 31, 1996, due to lower payroll expenses. Payroll
expenses decreased as a result of the restructuring programs
announced and accrued for during 1994 and 1995, which included a
reduction in the number of Entergy Mississippi employees throughout
1995 and into 1996.
Income taxes increased for the three months ended March 31,
1996, primarily due to a higher pretax income resulting from
increased revenue and reduced other operation and maintenance
expenses.
Rate deferrals charged against operating expenses in 1996
represent the deferral of Entergy Mississippi's portion of the
proposed System Energy rate increase. In December 1995, Entergy
Mississippi received an order from the MPSC to defer such costs. The
deferral will end once a final order is issued by the FERC in the
System Energy request for a rate increase. Entergy Mississippi will
amortize the deferral of the actual FERC authorized rate increase
over 48 months beginning October 1998.
The amortization of rate deferrals increased for the three
months ended March 31, 1996, in accordance with the Grand Gulf 1
related deferral plan. The plan allows for the recovery of more
Grand Gulf 1-related costs in 1996 than in 1995.
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------- -------
(In Thousands)
Operating Revenues $528,975 $502,458 $1,288,081 $1,327,927$203,902 $180,559
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 116,015 113,688 227,616 257,31439,746 30,389
Purchased power 92,944 83,942 261,417 289,279
Nuclear refueling outage expenses 4,517 4,195 13,550 13,67167,312 57,044
Other operation and maintenance 70,865 100,800 216,203 260,57527,649 32,218
Depreciation and amortization and decommissioning 42,212 38,499 119,629 113,34210,027 9,397
Taxes other than income taxes 13,133 14,377 43,181 42,7339,585 10,589
Income taxes 56,003 39,015 104,366 80,1716,016 3,363
Rate deferrals (7,151) -
Amortization of rate deferrals 8,118 8,118 21,664 21,66426,264 15,289
-------- --------
---------- ----------
Total 403,807 402,634 1,007,626 1,078,749179,448 158,289
-------- --------
---------- ----------
Operating Income 125,168 99,824 280,455 249,17824,454 22,270
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 424 766 1,527 2,855273 259
Miscellaneous - net 1,137 (154) 1,718 287(78) 61
Income taxes (319) 150 (307) 19030 (23)
-------- --------
---------- ----------
Total 1,242 762 2,938 3,332225 297
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 32,737 32,543 97,821 97,39311,039 11,092
Other interest - net 1,355 1,560 5,100 4,635940 1,906
Allowance for borrowed funds used
during construction (501) (546) (1,491) (1,996)(224) (205)
-------- --------
---------- ----------
Total 33,591 33,557 101,430 100,03211,755 12,793
-------- --------
---------- ----------
Net Income 92,819 67,029 181,963 152,47812,924 9,774
Preferred Stock Dividend Requirements
and Other 5,367 5,848 16,177 17,6681,248 1,707
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $87,452 $61,181 $165,786 $134,810$ 11,676 $ 8,067
======== ======== ========== ==========
See Notes to Financial Statements.
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
Operating Activities:
Net income $181,963 $152,478$12,924 $9,774
Noncash items included in net income:
Change in rate deferrals 21,664 21,66431,475 14,755
Depreciation and amortization and decommissioning 119,629 113,34210,027 9,397
Deferred income taxes and investment tax credits (22,022) 31,788(7,907) (3,740)
Allowance for equity funds used during construction (1,527) (2,855)
Amortization of deferred revenues - (14,632)(273) (259)
Changes in working capital:
Receivables (51,126) (25,193)4,269 14,012
Fuel inventory 1,055 (1,892)
Accounts payable (741) (24,406)4,350 10,730
Taxes accrued 84,144 39,867(10,253) (9,035)
Interest accrued (5,232) (4,776)(9,419) (7,887)
Other working capital accounts (4,885) 17,969
Decommissioning trust contributions (3,611) (3,796)4,977 10,856
Other (10,049) 3,051(11,501) 5,129
-------- --------
Net cash flow provided by operating activities 308,207 304,50129,724 51,840
-------- --------
Investing Activities:
Construction expenditures (77,319) (107,708)(19,297) (12,275)
Allowance for equity funds used during construction 1,527 2,855
Nuclear fuel purchases (45,493) -
Proceeds from sale/seaseback of nuclear fuel 45,493 -273 259
-------- --------
Net cash flow used in investing activities (75,792) (104,853)(19,024) (12,016)
-------- --------
Financing Activities:
Proceeds from the issuance of other long-term debtRetirement of:
General and refunding mortgage bonds - 19,946
Retirement of:(40,000)
First mortgage bonds - (25,000) Other long-term debt (239) (240)-
Redemption of preferred stock (11,254) (13,510)(8,000) (8,000)
Changes in short-term borrowings (27,154) (32,841)- net 17,436 12,319
Dividends paid:
Common stock (134,000) (90,400)(7,700) (8,300)
Preferred stock (15,896) (17,285)(1,392) (1,790)
-------- --------
Net cash flow used in financing activities (188,543) (159,330)(24,656) (45,771)
-------- --------
Net increasedecrease in cash and cash equivalents 43,872 40,318(13,956) (5,947)
Cash and cash equivalents at beginning of period 28,718 33,48916,945 9,598
-------- --------
Cash and cash equivalents at end of period $72,590 $73,807$2,989 $3,651
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $102,574 $100,081$20,860 $20,278
Income taxes $63,296 $32,400
Noncash investing and financing activities:
Capital lease obligations incurred - $9,677
Change in unrealized appreciation/depreciation of
decommissioning trust assets $2,043 $184$4,932 $1,600
See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANYENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $4,864,083 $4,778,126
Electric plant under lease 229,468 229,468
Construction work in progress 74,130 94,791
Nuclear fuel under capital lease 69,267 44,238
Nuclear fuel 14,049 6,420
--------- ---------
Total 5,250,997 5,153,043
Less - accumulated depreciation and 1,706,469 1,600,510
amortization --------- ---------
Utility plant - net 3,544,528 3,552,533
--------- ---------
Other Property and Investments:
Nonutility property 20,060 20,060
Decommissioning trust fund 33,953 27,076
Investment in subsidiary company - at equity 14,230 14,230
Other 1,087 1,078
--------- ---------
Total 69,330 62,444
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 3,720 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 5,880 -
Other 62,990 28,718
--------- ---------
Total cash and cash equivalents 72,590 28,718
Accounts receivable:
Customer (less allowance for doubtful
accounts of $1.2 million in 1995 and 1994) 103,913 58,858
Associated companies 8,278 9,827
Other 9,206 11,609
Accrued unbilled revenues 73,132 63,109
Accumulated deferred income taxes 6,079 3,702
Materials and supplies - at average cost 90,342 89,692
Rate deferrals 28,422 28,422
Prepayments and other 14,931 28,528
--------- ---------
Total 406,893 322,465
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 3,945 25,609
SFAS 109 regulatory asset - net 373,257 379,263
Unamortized loss on reacquired debt 40,508 43,656
Other regulatory assets 23,981 25,736
Other 25,989 23,733
--------- ---------
Total 467,680 497,997
--------- ---------
TOTAL $4,488,431 $4,435,439
========= =========
1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $ 1,563,264 $ 1,559,955
Construction work in progress 63,943 55,443
----------- -----------
Total 1,627,207 1,615,398
----------- -----------
Less - accumulated depreciation and 616,324 613,712
amortization
----------- -----------
Utility plant - net 1,010,883 1,001,686
----------- -----------
Other Property and Investments:
Investment in subsidiary companies - at equity 5,531 5,531
Other 5,613 5,615
----------- -----------
Total 11,144 11,146
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 2,989 2,574
Temporary cash investments - at cost,
which approximates market:
Associated companies - 3,248
Other - 11,123
----------- -----------
Total cash and cash equivalents 2,989 16,945
Accounts receivable:
Customer (less allowance for doubtful accounts of
$1.6 million in 1996 and 1995) 48,090 46,214
Associated companies 4,639 1,134
Other 458 1,967
Accrued unbilled revenues 39,009 47,150
Fuel inventory - at average cost 5,626 6,681
Materials and supplies - at average cost 19,431 19,233
Rate deferrals 134,866 130,622
Prepayments and other 5,682 11,536
----------- -----------
Total 260,790 281,482
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 211,353 247,072
SFAS 109 regulatory asset - net 8,504 6,445
Unamortized loss on reacquired debt 9,892 10,105
Other regulatory assets 30,164 17,736
Other 6,472 6,311
----------- -----------
Total 266,385 287,669
----------- -----------
TOTAL $ 1,549,202 $ 1,581,983
============ ============
See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANYENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(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 (4,835) (5,367)
Retained earnings 145,206 113,420
--------- ---------
Total common shareholder's equity 1,229,271 1,196,953
Preferred stock:
Without sinking fund 160,500 160,500
With sinking fund 100,009 111,265
Long-term debt 1,368,386 1,403,055
--------- ---------
Total 2,858,166 2,871,773
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 41,267 16,238
Other 53,679 54,216
--------- ---------
Total 94,946 70,454
--------- ---------
Current Liabilities:
Currently maturing long-term debt 110,260 75,320
Notes payable:
Associated companies - 7,954
Other - 19,200
Accounts payable:
Associated companies 45,239 20,793
Other 57,016 82,203
Customer deposits 56,363 54,934
Taxes accrued 82,284 (1,860)
Interest accrued 37,755 42,987
Dividends declared 5,239 5,489
Deferred fuel cost 1,161 13,983
Obligations under capital leases 28,000 28,000
Other 13,718 20,156
--------- ---------
Total 437,035 369,159
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 862,417 883,945
Accumulated deferred investment tax credits 146,977 151,259
Deferred interest - Waterford 3 lease 25,146 26,000
obligation
Other 63,744 62,849
--------- ---------
Total 1,098,284 1,124,053
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,488,431 $4,435,439
========= =========
1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares $ 199,326 $ 199,326
Capital stock expense and other (243) (218)
Retained earnings 226,139 231,463
----------- -----------
Total common shareholder's equity 425,222 430,571
Preferred stock
Without sinking fund 57,881 57,881
With sinking fund 8,770 16,770
Long-term debt 494,932 494,404
----------- -----------
Total 986,805 999,626
----------- -----------
Other Noncurrent Liabilities 10,027 11,625
----------- -----------
Current Liabilities:
Currently maturing long-term debt 36,015 61,015
Notes payable - associated companies 17,436 -
Accounts payable:
Associated companies 34,581 24,391
Other 26,260 32,100
Customer deposits 24,958 24,339
Taxes accrued 18,386 28,639
Accumulated deferred income taxes 55,713 54,090
Interest accrued 12,415 21,834
Other 14,733 6,875
----------- -----------
Total 240,497 253,283
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 273,378 278,581
Accumulated deferred investment tax credits 26,553 27,978
Other 11,942 10,890
----------- -----------
Total 311,873 317,449
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $ 1,549,202 $ 1,581,983
=========== ===========
See Notes to Financial Statements.
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three months ended March 31, 1996,
due primarily to higher electric and gas revenues. Significant
factors affecting the results of operations and causing variances
between the three months ended March 31, 1996, and 1995 are discussed
under "Revenues and Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy New Orleans' electric operating
revenues by source and KWh sales for the three months ended March 31,
1996, and 1995.
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
Three Months Ended Increase/
Description 1996 1995 (Decrease) %
(In Millions)
Electric Operating Revenues $258,848 $234,274 $692,482 $651,481
-------- -------- -------- --------Revenues:
Residential $ 27.3 $ 21.8 $ 5.5 25
Commercial 33.2 32.5 0.7 2
Industrial 5.6 5.1 0.5 10
Governmental 12.2 10.7 1.5 14
------- ------- -------
Total retail 78.3 70.1 8.2 12
Sales for resale
Associated companies 1.9 1.3 0.6 46
Non-associated companies 2.5 1.9 0.6 32
Other (2.4) 4.8 (7.2) (150)
------- ------- -------
Total $ 80.3 $ 78.1 $ 2.2 3
======= ======= =======
Billed Electric Energy
Sales (Millions of KWh):
Residential 391 352 39 11
Commercial 465 440 25 6
Industrial 111 123 (12) (10)
Governmental 212 210 2 1
------- ------- -------
Total retail 1,179 1,125 54 5
Sales for resale
Associated companies 45 66 (21) (32)
Non-associated companies 52 60 (8) (13)
------- ------- -------
Total 1,276 1,251 25 2
======= ======= =======
Electric operating revenues increased for the three months ended
March 31, 1996, principally because of an increase in fuel adjustment
revenues and retail energy sales. Fuel adjustment revenues increased
due to the higher energy sales and higher fuel prices. The majority
of the retail sales increase resulted from colder weather in the
first three months of 1996 than in the same period in 1995.
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The changes in electric operating revenues for the three months ended
March 31, 1996, are as follows:
Three Months Ended
Description Increase/(Decrease)
(In Millions)
Change in base revenues $(5.5)
Fuel cost recovery 6.7
Sales volume/weather 3.0
Other revenue (including unbilled) (3.2)
Sales for resale 1.2
-----
Total $ 2.2
=====
For the three months ended March 31, 1996, gas operating
revenues increased due primarily to increased gas sales as a result
of the colder winter and a higher unit purchase price for gas
purchased for resale.
Expenses
Operating expenses increased for the three months ended March
31, 1996, due primarily to increases in fuel expense, gas purchased
for resale, and purchased power expense, partially offset by the
recording of rate deferrals in 1996. Fuel expense increased due to
significantly higher prices for gas used in generation as a result of
widespread cold weather in 1996. Gas purchased for resale increased
as a result of higher gas sales and a higher unit purchase price,
which was caused by the increased demand for gas due to the weather.
Purchased power expense increased in the first three months of 1996,
as a result of additional power being purchased due primarily to
changes in generation availability among the operating companies,
partially offset by a decrease in the cost of the power purchased.
The rate deferrals recorded were associated with the deferral of
costs related to least cost planning, which are expected to be
recovered in future rates and the deferral of a portion of the System
Energy rate increase being billed to Entergy New Orleans. See Note 2
for a discussion of Entergy New Orleans' deferral of the System
Energy rate increase.
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------- -------
(In Thousands)
Operating Revenues:
Electric $80,291 $78,140
Natural gas 42,597 30,746
------- -------
Total 122,888 108,886
------- -------
Operating Expenses:
Operation and maintenance:
Fuel, and fuel-related expenses,
62,557 53,097 130,431 117,710and gas purchased for resale 41,436 30,978
Purchased power 55,696 59,155 183,706 182,03538,739 29,682
Other operation and maintenance 31,815 41,327 103,970 118,54316,424 16,753
Depreciation and amortization 9,614 9,513 28,349 27,2704,971 4,828
Taxes other than income taxes 13,139 11,275 34,222 32,0116,863 7,227
Income taxes 15,928 11,427 30,022 23,2803,985 3,275
Rate deferrals (5,793) -
Amortization of rate deferrals 28,310 24,805 84,931 74,414
-------- -------- -------- --------4,496 5,280
------- -------
Total 217,059 210,599 595,631 575,263
-------- -------- -------- --------111,121 98,023
------- -------
Operating Income 41,789 23,675 96,851 76,218
-------- -------- -------- --------11,767 10,863
------- -------
Other Income (Deductions):
Allowance for equity funds used
during construction 235 365 763 1,38674 26
Miscellaneous - net 413 (337) 1,270 (85)774 416
Income taxes (158) 129 (486) 32
-------- -------- -------- --------(298) (160)
------- -------
Total 490 157 1,547 1,333
-------- -------- -------- --------550 282
------- -------
Interest Charges:
Interest on long-term debt 12,451 11,882 35,399 35,9994,059 4,329
Other interest - net 806 1,330 4,064 3,683282 592
Allowance for borrowed funds used
during construction (206) (236) (645) (889)
-------- -------- -------- --------(59) (21)
------- -------
Total 13,051 12,976 38,818 38,793
-------- -------- -------- --------4,282 4,900
------- -------
Net Income 29,228 10,856 59,580 38,7588,035 6,245
Preferred Stock Dividend Requirements
and Other 2,917 1,797 6,168 5,827
-------- -------- -------- --------241 400
------- -------
Earnings Applicable to Common Stock $26,311 $9,059 $53,412 $32,931
======== ======== ======== ========$ 7,794 $ 5,845
======= =======
See Notes to Financial Statements.
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
Operating Activities:
Net income $59,580 $38,758$8,035 $6,245
Noncash items included in net income:
Change in rate deferrals 78,772 92,1357,565 6,382
Depreciation and amortization 28,349 27,2704,971 4,828
Deferred income taxes and investment tax credits (24,436) (22,092)2,270 (3,309)
Allowance for equity funds used during (74) (26)
Changes in working capital:
Receivables 5,675 3,091
Accounts payable (5,397) 3,676
Taxes accrued 2,584 (30)
Interest accrued (2,917) (955)
Income tax refund - 6,531
Other working capital accounts (18,263) (4,680)
Other (7,339) (3,175)
-------- --------
Net cash flow provided by (used in) operating (2,890) 18,578
activities
-------- --------
Investing Activities:
Construction expenditures (7,919) (5,028)
Allowance for equity funds used during construction (763) (1,386)
Changes in working capital:
Receivables (29,362) (12,592)
Fuel inventory (3,327) 5,058
Accounts payable 24,505 17,513
Taxes accrued 24,979 9,361
Interest accrued (3,689) (11,213)
Other working capital accounts (16,475) 428
Other 1,273 11,129
-------- --------
Net cash flow provided by operating activities 139,406 154,369
-------- --------
Investing Activities:
Construction expenditures (55,616) (100,369)
Allowance for equity funds used during construction 763 1,38674 26
-------- --------
Net cash flow used in investing activities (54,853) (98,983)(7,845) (5,002)
-------- --------
Financing Activities:
Proceeds from the issuance of
general and refunding mortgage bonds 39,608 -
Retirement of:
First mortgage bonds (23,250) -
General and refunding bonds 79,480 24,534
Other long-term debt - 15,652
Retirement of:
General and refunding bonds (30,000) (30,000)
First mortgage bonds (20,000) (18,000)
Other long-term debt (965) (16,045)- (9,200)
Redemption of preferred stock (15,000) (15,000)
Changes in short-term borrowings (30,000) 18,432- (1,500)
Dividends paid:
Common stock (35,400) (28,000)(3,300) -
Preferred stock (4,782) (5,851)(482) (413)
-------- --------
Net cash flow used inprovided by (used in) financing 12,576 (11,113)
activities (56,667) (54,278)
-------- --------
Net increase in cash and cash equivalents 27,886 1,1081,841 2,463
Cash and cash equivalents at beginning of period 9,598 7,99949,746 8,031
-------- --------
Cash and cash equivalents at end of period $37,484 $9,107$51,587 $10,494
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $41,304 $48,664
Income taxes $27,413 $19,007$7,054 $5,702
See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANYENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $1,543,888 $1,475,322
Construction work in progress 51,336 67,119
--------- ---------
Total 1,595,224 1,542,441
Less - accumulated depreciation and 607,407 582,514
amortization --------- ---------
Utility plant - net 987,817 959,927
--------- ---------
Other Property and Investments:
Investment in subsidiary company - at equity 5,531 5,531
Other 5,617 5,624
--------- ---------
Total 11,148 11,155
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 5,770 5,080
Temporary cash investments - at cost,
which approximates market
Associated companies 4,797 276
Other 26,917 4,242
Total cash and cash equivalents 37,484 9,598
Accounts receivable:
Customer (less allowance for doubtful
accounts of $2.1 million in 1995 and 1994) 61,911 43,846
Associated companies 4,566 4,680
Other 1,968 2,789
Accrued unbilled revenues 52,105 39,873
Fuel inventory - at average cost 8,107 4,780
Materials and supplies - at average cost 21,237 20,642
Rate deferrals 126,378 106,538
Prepayments and other 7,484 10,672
--------- ---------
Total 321,240 243,418
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 287,108 385,720
Unamortized loss on reacquired debt 9,557 10,488
Other regulatory assets 9,385 10,168
Other 8,000 8,569
--------- ---------
Total 314,050 414,945
--------- ---------
TOTAL $1,634,255 $1,629,445
========= =========
1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $ 483,427 $ 483,581
Natural gas 122,137 121,083
Construction work in progress 21,850 17,525
----------- -----------
Total 627,414 622,189
Less - accumulated depreciation and 337,044 335,021
amortization
----------- -----------
Utility plant - net 290,370 287,168
----------- -----------
Other Property and Investments:
Investment in subsidiary companies - at equity 3,259 3,259
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 1,105 1,693
Temporary cash investments - at cost,
which approximates market:
Associated companies 17,120 10,860
Other 33,362 37,193
----------- -----------
Total cash and cash equivalents 51,587 49,746
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.5 million in 1996 and $0.8 million in 27,761 29,168
1995)
Associated companies 149 551
Other 498 843
Accrued unbilled revenues 13,721 17,242
Deferred electric fuel and resale gas costs 14,651 2,647
Materials and supplies - at average cost 9,213 8,950
Rate deferrals 36,320 35,191
Prepayments and other 11,021 4,529
----------- -----------
Total 164,921 148,867
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 129,222 137,916
SFAS 109 regulatory asset-net 7,291 6,813
Unamortized loss on reacquired debt 1,825 1,932
Other regulatory assets 10,153 9,204
Other 1,338 1,047
----------- -----------
Total 149,829 156,912
----------- -----------
TOTAL $ 608,379 $ 596,206
=========== ===========
See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANYENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(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 (218) (1,762)
Retained earnings 250,023 232,011
--------- ---------
Total common shareholder's equity 449,131 429,575
Preferred stock:
Without sinking fund 57,881 57,881
With sinking fund 16,770 31,770
Long-term debt 504,358 475,233
--------- ---------
Total 1,028,140 994,459
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 456 552
Other 8,345 8,984
--------- ---------
Total 8,801 9,536
--------- ---------
Current Liabilities:
Currently maturing long-term debt 66,015 65,965
Notes payable - 30,000
Accounts payable:
Associated companies 27,340 2,350
Other 29,720 30,205
Customer deposits 24,062 22,793
Taxes accrued 45,800 20,821
Accumulated deferred income taxes 52,426 47,515
Interest accrued 16,688 20,377
Dividends declared 1,468 1,626
Other 8,357 28,692
--------- ---------
Total 271,876 270,344
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 276,791 301,288
Accumulated deferred investment tax credits 28,366 29,528
SFAS 109 regulatory liability - net 9,410 13,099
Other 10,871 11,191
--------- ---------
Total 325,438 355,106
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,634,255 $1,629,445
========= =========
1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $4 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares $ 33,744 $ 33,744
Paid-in capital 36,294 36,306
Retained earnings subsequent to the elimination of
the accumulated deficit on November 30, 1988 80,155 81,261
----------- -----------
Total common shareholder's equity 150,193 151,311
Preferred stock - without sinking fund 19,780 19,780
Long-term debt 168,839 155,958
----------- -----------
Total 338,812 327,049
----------- -----------
Other Noncurrent Liabilities 18,267 17,745
----------- -----------
Current Liabilities:
Currently maturing long-term debt 42,000 38,250
Accounts payable:
Associated companies 7,366 13,851
Other 25,762 24,674
Customer deposits 18,291 18,214
Accumulated deferred income taxes 16,218 9,174
Taxes accrued 8,138 5,554
Interest accrued 2,194 5,111
Dividends declared 5,600 482
Other 14,282 13,863
----------- -----------
Total 139,851 129,173
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 77,517 81,654
Accumulated deferred investment tax credits 8,459 8,618
Other 25,473 31,967
----------- -----------
Total 111,449 122,239
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $ 608,379 $ 596,206
=========== ===========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income for the three months ended March 31, 1996, remained
relatively unchanged as compared to the same period for 1995.
Significant factors affecting the results of operations and
causing variances between the three months ended March 31, 1996, and
1995 are discussed under "Revenues" and "Expenses" below.
Revenues
Operating revenues recover operating expenses, depreciation, and
capital costs attributable to Grand Gulf 1. 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 were higher for the three months ended March
31, 1996, due primarily to increased depreciation, amortization, and
decommissioning expenses. The increase was the result of an increase
in decommissioning costs and increased depreciation rates as
reflected in the 1995 System Energy FERC rate increase filing,
subject to refund. See Note 2 for a discussion of the proposed rate
increase.
Expenses
Operating expenses increased for the three months ended March
31, 1996, due to an increase in depreciation, amortization, and
decommissioning expenses and income tax expenses, partially offset by
a decrease in nuclear refueling outage expenses and other operation
and maintenance expenses. Depreciation, amortization, and
decommissioning expenses increased for the three months ended March
31, 1996, due to an increase in depreciation of electric plant in
service and decommissioning charges as discussed in "Revenues" above.
Total income taxes increased for the three months ended March 31,
1996 as a result of higher pre-tax income. The decrease in nuclear
refueling outage expense was attributed to the effect of refueling
outage expenses incurred in the first quarter of 1995. The decrease
in other operation and maintenance expenses is due to timing
differences in construction expenditures.
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
1996 1995
------- -------
(In Thousands)
Operating Revenues:
Electric $134,855 $120,354 $310,065 $306,826
Natural gas 11,865 13,220 58,207 68,238
-------- -------- -------- --------
Total 146,720 133,574 368,272 375,064
-------- --------Revenues $156,424 $151,664
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses and gas purchased for resale 29,649 23,814 75,088 83,773
Purchased power 40,850 42,999 114,777 115,94012,840 12,335
Nuclear refueling outage expenses 308 2,281
Other operation and maintenance 22,409 23,444 56,324 63,40421,433 25,099
Depreciation, amortization, and amortization 4,898 4,903 14,512 14,356decommissioning 31,999 25,398
Taxes other than income taxes 7,425 7,206 21,259 21,1376,906 7,174
Income taxes 9,915 8,829 18,110 17,003
Amortization of rate deferrals 10,489 6,438 23,754 19,171
-------- --------20,692 19,305
-------- --------
Total 125,635 117,633 323,824 334,784
-------- --------94,178 91,592
-------- --------
Operating Income 21,085 15,941 44,448 40,280
-------- --------62,246 60,072
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 43 60 104 297350 480
Miscellaneous - net 504 499 993 1,483839 725
Income taxes (194) (192) (382) (901)
-------- --------(315) 551
-------- --------
Total 353 367 715 879
-------- --------874 1,756
-------- --------
Interest Charges:
Interest on long-term debt 4,023 4,148 11,896 12,95737,953 37,434
Other interest - net 588 272 1,555 8651,991 2,333
Allowance for borrowed funds used
during construction (35) (45) (83) (221)
-------- --------(354) (504)
-------- --------
Total 4,576 4,375 13,368 13,601
-------- --------39,590 39,263
-------- --------
Net Income 16,862 11,933 31,795 27,558
Preferred Stock Dividend Requirements
and Other 318 329 1,035 1,162
-------- -------- -------- --------
Earnings Applicable to Common Stock $16,544 $11,604 $30,760 $26,396
======== ========$ 23,530 $ 22,565
======== ========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
1996 1995
-------- --------
(In Thousands)
Operating Activities:
Net income $31,795 $27,558$23,530 $22,565
Noncash items included in net income:
Change in rate deferrals 23,211 17,499
Depreciation, amortization, and amortization 14,512 14,356decommissioning 31,999 25,398
Deferred income taxes and investment tax credits (5,853) (15,705)(8,897) (5,501)
Allowance for equity funds used during construction (104) (297)(350) (480)
Changes in working capital:
Receivables (20,681) 1,957(2,870) (95,228)
Accounts payable 14,100 (3,718)17,326 39,786
Taxes accrued 11,525 1,67713,735 12,510
Interest accrued (279) (960)
Income tax refund 20,172 -(10,825) (2,660)
Other working capital accounts (4,328) 13,534(4,711) (23,839)
Decommissioning trust contributions (2,131) (1,304)
FERC Settlement - refund obligation (956) -
Provision for estimated losses and reserves 13,954 -
Other (13,380) 5,050(2,137) 2,574
-------- --------
Net cash flow provided by (used in) operating 67,667 (26,179)
activities 70,690 60,951
-------- --------
Investing Activities:
Construction expenditures (14,637) (16,269)(1,384) (7,734)
Allowance for equity funds used during construction 104 297350 480
Nuclear fuel purchases (733) -
-------- --------
Net cash flow used in investing activities (14,533) (15,972)(1,767) (7,254)
-------- --------
Financing Activities:
Proceeds from the issuance of general
and refunding bonds 29,805long-term debt 89,192 -
Retirement of general and refunding bonds (24,200) (15,000)
Redemption of preferred stock (1,500) (1,500)
Dividends paid:long-term debt (92,700) -
Changes in short-term borrowings - net (2,990) -
Common stock (14,100) (14,400)
Preferred stock (1,046) (1,220)dividends paid (23,300) -
-------- --------
Net cash flow used in financing activities (11,041) (32,120)(29,798) -
-------- --------
Net increase (decrease) in cash and cash equivalents 45,116 12,85936,102 (33,433)
Cash and cash equivalents at beginning of period 8,031 43,317240 89,703
-------- --------
Cash and cash equivalents at end of period $53,147 $56,176$36,342 $56,270
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $13,173 $14,213
Income taxes (refund)$48,911 $40,903
Noncash investing and financing activities:
Capital lease obligation incurred - net ($6,469) $32,115$27,653
Change in unrealized appreciation/depreciation of
decommissioning trust assets $192 $1,685
See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICESYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1995March 31, 1996 and December 31, 19941995
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $479,206 $470,560
Natural gas 120,977 119,508
Construction work in progress 11,728 7,284
-------- --------
Total 611,911 597,352
Less - accumulated depreciation and 331,185 319,576
amortization -------- --------
Utility plant - net 280,726 277,776
-------- --------
Other Investments:
Investment in subsidiary company - at equity 3,259 3,259
-------- --------
Current Assets:
Cash and cash equivalents:
Cash 2,161 849
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,711 2,472
Other 43,275 4,710
-------- --------
Total cash and cash equivalents 53,147 8,031
Accounts receivable:
Customer (less allowance for doubtful
accounts of
$0.8 million in 1995 and 1994) 43,856 23,938
Associated companies 150 3,503
Other 516 600
Accrued unbilled revenues 18,495 14,295
Deferred electric fuel and resale gas costs 1,455 856
Materials and supplies - at average cost 9,400 9,676
Rate deferrals 35,549 31,544
Income tax receivable - 20,172
Prepayments and other 7,792 5,636
------- -------
Total 170,360 118,251
------- -------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 145,911 173,127
SFAS 109 regulatory asset - net 9,463 8,792
Unamortized loss on reacquired debt 2,039 2,361
Other regulatory assets 5,647 5,647
Other 3,890 3,681
------- -------
Total 166,950 193,608
------- -------
TOTAL $621,295 $592,894
======= =======
See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
September 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 95,545 78,886
------- -------
Total common shareholder's equity 165,536 148,831
Preferred stock:
Without sinking fund 19,780 19,780
With sinking fund 1,950 3,450
Long-term debt 155,946 164,160
------- -------
Total 343,212 336,221
------- -------
Other Noncurrent Liabilities 17,336 19,063
------- -------
Current Liabilities:
Currently maturing long-term debt 38,250 24,200
Accounts payable:
Associated companies 18,915 6,456
Other 21,143 19,503
Customer deposits 18,396 17,422
Accumulated deferred income taxes 4,980 4,925
Taxes accrued 13,854 2,329
Interest accrued 4,963 5,242
Other 17,159 19,982
------- -------
Total 137,660 100,059
------- -------
Deferred Credits:
Accumulated deferred income taxes 84,485 89,246
Accumulated deferred investment tax credits 8,775 9,251
Other 29,827 39,054
------- -------
Total 123,087 137,551
------- -------
Commitments and Contingencies (Note 1)
TOTAL $621,295 $592,894
======= =======
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
Operating Revenues $144,758 $150,949 $455,054 $450,015
-------- -------- -------- --------
Operating Expenses:
Operation1996 1995
----------- -----------
(In Thousands)
ASSETS
Utility Plant:
Electric $ 2,983,843 $ 2,977,303
Electric plant under lease 445,155 444,305
Construction work in progress 29,931 35,946
Nuclear fuel under capital lease 62,033 71,374
----------- -----------
Total 3,520,962 3,528,928
Less - accumulated depreciation and maintenance:
Fuel890,222 861,752
amortization
----------- -----------
Utility plant - net 2,630,740 2,667,176
----------- -----------
Other Property and fuel-related expenses 11,194 11,440 27,090 35,661
Nuclear refueling outage expenses 4,571Investments:
Decommissioning trust fund 43,770 40,927
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 192 240
Temporary cash investments - 25,857at cost,
which approximates market:
Associated companies 12,259 -
Other operation23,891 -
----------- -----------
Total cash and maintenance 21,154 26,829 70,056 74,320
Depreciation, amortization,cash equivalents 36,342 240
Accounts receivable:
Associated companies 75,532 72,458
Other 4,633 4,837
Materials and decommissioning 24,530 23,026 74,463 68,993
Taxessupplies - at average cost 68,398 67,661
Prepayments and other than income taxes 6,590 5,637 20,788 19,155
Income taxes 19,056 18,148 57,775 55,896
-------- -------- -------- --------19,217 16,050
----------- -----------
Total 87,095 85,080 276,029 254,025
-------- -------- -------- --------
Operating Income 57,663 65,869 179,025 195,990
-------- -------- -------- --------204,122 161,246
----------- -----------
Deferred Debits and Other Income (Deductions):
Allowance for equity funds used
during construction 479 101 1,511 735
Miscellaneous - net 783 2,025 2,525 4,641
Income taxes 448 569 1,500 (470)
-------- -------- -------- --------Assets:
Regulatory assets:
SFAS 109 regulatory asset-net 284,507 291,181
Unamortized loss on reacquired debt 55,716 52,702
Other regulatory assets 203,053 203,731
Other 14,388 14,049
----------- -----------
Total 1,710 2,695 5,536 4,906
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 34,557 43,790 110,153 129,088
Other interest - net 1,952 18 6,269 1,051
Allowance for borrowed funds used
during construction (502) (178) (1,594) (938)
-------- -------- -------- --------
Total 36,007 43,630 114,828 129,201
-------- -------- -------- --------
Net Income $23,366 $24,934 $69,733 $71,695
======== ======== ======== ========557,664 561,663
----------- -----------
TOTAL $ 3,436,296 $ 3,431,012
=========== ===========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,BALANCE SHEETS
March 31, 1996 and December 31, 1995
and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Activities:
Net income $69,733 $71,695
Noncash items included in net income:
Depreciation, amortization,1996 1995
----------- -----------
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
1,000,000 shares; issued and decommissioning 74,463 68,993outstanding
789,350 shares $ 789,350 $ 789,350
Paid-in capital - 7
Retained earnings 75,151 85,920
----------- -----------
Total common shareholder's equity 864,501 875,277
Long-term debt 1,221,152 1,219,917
----------- -----------
Total 2,085,653 2,095,194
Other Noncurrent Liabilities:
Obligations under capital leases 34,033 44,107
Other 31,767 16,068
----------- -----------
Total 65,800 60,175
----------- -----------
Current Liabilities:
Currently maturing long-term debt 250,000 250,000
Notes payable-associated companies - 2,990
Accounts payable:
Associated companies 16,033 17,458
Other 37,814 19,063
Taxes accrued 86,383 72,648
Interest accrued 25,918 36,743
Dividends declared 11,000 -
Obligations under capital lease 28,000 28,000
Other 3,404 4,211
----------- -----------
Total 458,552 431,113
----------- -----------
Deferred Credits:
Accumulated deferred income taxes and586,471 602,182
Accumulated deferred investment tax credits (11,378) 16,535
Allowance for equity funds used during construction (1,511) (735)
Changes in working capital:
Receivables (56,341) (3,994)
Accounts payable (25,063) 8,469
Taxes accrued 672 4,770
Interest accrued (4,281) (1,457)106,250 107,119
FERC Settlement - refund obligation 55,892 56,848
Other working capital accounts (23,343) (1,474)
Recoverable income taxes - 32,940
Decommissioning trust contributions (4,055) (3,764)
Other 32,303 14,893
-------- --------
Net cash flow provided by operating activities 51,199 206,871
-------- --------
Investing Activities:
Construction expenditures (19,524) (12,254)
Allowance for equity funds used during construction 1,511 735
Nuclear fuel purchases (52,188) (54)
Proceeds from sale/leaseback of nuclear fuel 52,188 -
-------- --------
Net cash flow used in investing activities (18,013) (11,573)
-------- --------
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) -
Premium77,678 78,381
----------- -----------
Total 826,291 844,530
----------- -----------
Commitments and expenses paid on refinancing sale/leaseback bonds - (47,602)
Common stock dividends paid (69,500) (124,300)
-------- --------
Net cash flow used in financing activities (71,282) (172,492)
-------- --------
Net (decrease)increase in cashContingencies (Notes 1 and cash equivalents (38,096) 22,806
Cash and cash equivalents at beginning of period 89,703 196,132
-------- --------
Cash and cash equivalents at end of period $51,607 $218,938
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $114,514 $125,519
Income taxes (refund) - net $65,637 ($3,477)
Noncash investing and financing activities:
Change in unrealized appreciation/depreciation of
decommissioning trust assets $2,629 $2122)
TOTAL $ 3,436,296 $ 3,431,012
=========== ===========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $2,969,233 $2,939,384
Electric plant under lease 443,257 439,378
Construction work in progress 32,311 46,547
Nuclear fuel under capital lease 81,586 46,688
Nuclear fuel - 26,360
--------- ---------
Total 3,526,387 3,498,357
Less - accumulated depreciation and 828,374 751,717
amortization --------- ---------
Utility plant - net 2,698,013 2,746,640
--------- ---------
Other Investments:
Decommissioning trust fund 38,606 30,359
Current Assets:
Cash and cash equivalents:
Cash 212 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,773 5,489
Other 43,622 84,214
--------- ---------
Total cash and cash equivalents 51,607 89,703
Accounts receivable:
Associated companies 63,984 7,450
Other 3,219 3,412
Materials and supplies - at average cost 69,178 71,991
Prepayments and other 13,878 5,429
--------- ---------
Total 201,866 177,985
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 389,422 389,264
Unamortized loss on reacquired debt 53,793 54,577
Other regulatory assets 201,346 199,080
Other 14,931 15,454
--------- ---------
Total 659,492 658,375
--------- ---------
TOTAL $3,597,977 $3,613,359
========= =========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 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 85,914 85,681
--------- ---------
Total common shareholder's equity 875,271 875,038
Long-term debt 1,189,720 1,438,305
--------- ---------
Total 2,064,991 2,313,343
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 53,585 18,688
Other 17,447 14,342
--------- ---------
Total 71,032 33,030
--------- ---------
Current Liabilities:
Currently maturing long-term debt 355,000 105,000
Accounts payable:
Associated companies 17,560 32,272
Other 12,853 23,204
Taxes accrued 36,054 35,382
Interest accrued 36,515 40,796
Obligations under capital leases 28,000 28,000
Other 2,087 19,794
--------- ---------
Total 488,069 284,448
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 734,438 746,502
Accumulated deferred investment tax credits 107,977 110,584
FERC Settlement - refund obligation 57,775 60,388
Other 73,695 65,064
--------- ---------
Total 973,885 982,538
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,597,977 $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)
GSUEntergy Gulf States)
Entergy Gulf States has significant business relationships with
Cajun, including co-ownership of River Bend (operated by Entergy Gulf
States) and Big Cajun 2, Unit 3.
GSU3 (operated by Cajun). Entergy Gulf
States and Cajun, respectively, own 70% and 30% undivided interests
in River Bend and 42% and 58% undivided interests in Big Cajun 2,
Unit 3. These relationships have spawned a number of significant and
long-standing disputes and claims between the parties. In a recent
development, as more fully described below, a preliminary agreement
setting forth terms for the resolution of such disputes has been
reached by Entergy Gulf States, the Bankruptcy Trustee for Cajun, and
the Rural Utilities Service (RUS).
In June 1989, Cajun filed a civil action against GSUEntergy Gulf
States in the United States District Court for the EasternMiddle District of
Louisiana (District Court). Cajun's complaint seeks to annul,
rescind, terminate, and/or dissolve the Joint Ownership Participation
and Operating Agreement (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 their failure to get prior LPSC approval alleged to
be necessary. GSUEntergy Gulf States 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 began in April 1994 and was completed in March
1995. On October 24, 1995, the District Court issued a memorandum
opinion ruling in favor of Entergy Gulf States. The District Court
found that Cajun had not proved that Entergy Gulf States fraudulently
induced it to execute the Operating Agreement and that Cajun failed
to timely assert its claim. A final judgment on this portion of the
suit will not be entered until all claims asserted by Cajun have been
heard. The trial of the second portion of the suit was previously
scheduled to begin on July 2, 1996. If GSU is
ultimately unsuccessful inthe ultimate outcome of this
litigation and is requiredrequires Entergy Gulf States to pay substantial damages,
GSUit would probably be unable to make such payments and could be forced
to seek relief from its creditors under the United States Bankruptcy
Code.
A trial on the portion of the suit by Cajun to rescind the
Operating Agreement which began in April 1994 was completed in
March 1995. On October 24, 1995, the District Court issued a
memorandum opinion ruling in favor of GSU. The District Court
found that Cajun did not prove that GSU fraudulently induced it
to execute the Operating Agreement and that Cajun failed to timely
assert its claim. A final judgment will be entered when the
District Court issues its detailed written opinions. It is
uncertain when the District Court Judge's final opinion will be
entered, or whether Cajun will appeal the decision.
Cajun has not paid its full share of capital costs, operating
and maintenance expenses, and other costs for repairs and
improvements to River Bend since 1992. Cajun's unpaid portion of
River Bend operating and maintenance expenses (including nuclear
fuel) and capital costs for the first ninethree months of 19951996 was
approximately $42.8$22.1 million. The cumulative cost to GSUEntergy Gulf
States resulting from Cajun's failure to pay its full share of River
Bend-related costs, reduced by the proceeds from the sale by GSUEntergy
Gulf States of Cajun's share of River Bend power, and payments into
the registry of the District Court for Entergy Gulf States' portion
of expenses for Big Cajun 2, Unit 3, was $59.1$29.1 million as of September 30, 1995,March
31, 1996, compared with $49$31.1 million as of December 31, 1994. These amounts are1995.
Cajun's unpaid portion of the River Bend related costs is reflected
in long-term receivables with an offsetting reserve in other deferred
credits. Cajun's bankruptcy may affect the ultimate collectibility
of the amounts owed to GSU,Entergy Gulf States, including any amounts
that may be awarded in litigation. Cajun continues to pay its share
of decommissioning costs for River Bend.
See Note 8 of Entergy Corporation's and GSU'sEntergy's Form 10-K for additional information
regarding the Cajun litigation, Cajun's December 21, 1994 bankruptcy
filing, related filings, and the ongoing potential effects of these
matters upon GSU.Entergy Gulf States.
In the bankruptcy proceedings, Cajun filed a motion on January
10, 1995, to reject the Operating Agreement as a burdensome executory
contract. GSUEntergy Gulf States responded on January 10, 1995, with a
memorandum opposing Cajun's motion. IfShould the District Court were tocourt grant Cajun's
motion to reject the Operating Agreement, Cajun would be relieved of
its financial obligations under the contract, while GSUEntergy Gulf
States would likely have a substantial damage claim arising from any
such rejection. Although GSUEntergy Gulf States 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.
On March 8, 1996, Southwestern Electric Power Company (SWEPCO),
Entergy Gulf States, and certain member cooperatives of Cajun filed a
joint proposal to bring an end to the Cajun bankruptcy proceeding.
The proposal was submitted in response to a bid procedure established
by the Cajun bankruptcy trustee. On April 22, 1996, the Cajun
bankruptcy trustee filed a plan of reorganization with the bankruptcy
court based on the proposal of two non-affiliated companies to take
over the non-nuclear operations of Cajun. The timing and completion
of the reorganization plan depends on bankruptcy court approval and
any required regulatory approvals.
On April 26, 1996, Entergy Gulf States, the Cajun bankruptcy
trustee, and the RUS, Cajun's largest creditor, agreed to terms for
the settlement of all disputes between Cajun and Entergy Gulf States.
The terms include, but are not limited to, the following: (i) Cajuns'
interest in River Bend will be turned over to the RUS, which will
have the option to retain the interest, sell it to a third party, or
transfer it to Entergy Gulf States at no cost; (ii) Cajun will set
aside a total of $125 million for the decommissioning of its interest
in River Bend; (iii) Cajun will transfer certain transmission assets
to Entergy Gulf States; (iv) Cajun will settle transmission disputes
and be released from claims for payment under transmission
arrangements with Entergy Gulf States as discussed under "Cajun -
Transmission Service" below; and (v) all funds paid by Entergy Gulf
States into the registry of the District Court will be returned to
Entergy Gulf States. The settlement is subject to approvals by the
RUS, the Board of Directors of Entergy Corporation and Entergy Gulf
States, the U.S. Bankruptcy Court, and appropriate regulatory
agencies.
Cajun - Transmission Service (Entergy Corporation and GSU)
In orders issued on August 3, 1995,Entergy Gulf
States)
Entergy Gulf States and October 2, 1995, theCajun are parties to FERC affirmed the ALJ's April 1995 ruling in the remanded portion
of GSU's and Cajun's ongoingproceedings
relating to transmission service charge disputes
beforedisputes. See Note 8 in
Entergy's Form 10-K for additional information regarding these FERC
proceedings, FERC orders issued as a result of such proceedings, and
the FERC. Both GSU and Cajun have petitioned for appeal
to the D.C Circuit.potential effects of these proceedings upon Entergy Gulf States.
Under GSU'sEntergy Gulf States' interpretation of a 1992 FERC order,
as modified by itsFERC's August 3, 1995, and October 2, 1995 orders,
Cajun would owe GSUEntergy Gulf States approximately $63.3$66.3 million as of
September 30, 1995.
GSUMarch 31, 1996. Entergy Gulf States further estimates that if it were
to prevail in its May 1992 motion for rehearing and on certain other
issues decided adversely to GSUEntergy Gulf States in the February 1995,
August 1995, and October 1995 FERC orders, which GSUEntergy Gulf States
has appealed, Cajun would owe GSUEntergy Gulf States approximately
$140.3$146.6 million as of September 30, 1995.March 31, 1996. If Cajun were to prevail in its
May 1992 motion for rehearing to FERC, and if GSUEntergy Gulf States
were not to prevail in its May 1992 motion for rehearing to FERC, and
if Cajun were to prevail in appealing the FERC's August and October 1995
orders, GSUEntergy Gulf States estimates it would owe Cajun
approximately $92.1$99.5 million as of September 30, 1995.March 31, 1996. 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. Pending FERC's ruling on the May 1992 motions for
rehearing, GSUEntergy Gulf States has continued to bill Cajun utilizing
the historical billing methodology and has recorded underpaid
transmission charges, including interest, in the amount of $169.7$138.9
million as of September 30, 1995.March 31, 1996. This amount is reflected in long-term
receivables with an offsetting reserve in other deferred credits.
Cajun's bankruptcy may affect GSU'sEntergy Gulf States' collection of the
above amounts. The FERC has determined that the collection of the pre-petitionpre-
petition debt of Cajun is an issue properly decided in the bankruptcy
proceeding. For additional
information regarding the GSU and Cajun transmission service
charge disputes, see Note 8Refer to Entergy Corporation's and GSU's
Form 10-K.
Nonregulated Investments (Entergy Corporation)
On March 31, 1995, Entergy Corporation, through its
subsidiary, Entergy Power Development Company (EPDC), entered
into an agreement with Enron Power Development Corporation
(Enron),"Cajun - River Bend Litigation" above for 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.
Subsequent to entering into the agreement with Enron, 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 had decided to suspend the first phasediscussion of the Project, the 695 megawatt facility, and "scrap" the second phasepotential settlement of the Project, a 1,320 megawatt facility,Cajun and indicated that
orders to stop work would be issued. In September 1995, the
Maharashtra state government announced its decision to resume
discussions with Enron regarding the Project.
On September 11, 1995, EPDC and Enron amended their original
agreement entered into on March 31, 1995. The amended agreement
provides EPDC with an option to participate in the Project under
the original terms of the agreement, with the option expiring on
May 1, 1996. Enron may sell the 20% interest to any third party
provided that EPDC has not notified Enron in writing of its
desire to exercise the option. In addition the amended agreement
resulted in the return of EPDC's $20.5 million investment
previously held in escrow.Entergy Gulf
States disputes.
Capital Requirements and Financing (Entergy Corporation, AP&L,
GSU, LP&L, MP&L, NOPSIEntergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
See Note 8 to Entergy Corporation's, AP&L's, GSU's, LP&L's,
MP&L's and NOPSI's Form 10-K and Note 7 to System Energy'sEntergy's 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-term1998, and long-
term debt and preferred stock maturities and cash sinking fund
requirements for the period 1995-1999.1996-1998.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
(Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSIEntergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
See Note 8 to Entergy Corporation's, AP&L's, GSU's, LP&L's,
MP&L's and NOPSI's Form 10-K and Note 7 to System Energy'sEntergy's Form 10-K for information on nuclear
liability, property and replacement power insurance, related NRC
regulations, 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 stationsplants in the financial statements of electric utilities. In
response to these questions, the FASB ishas been reviewing the
accounting for decommissioning. In June 1995,decommissioning and has expanded the FASB reaffirmedscope of its
tentative
conclusions onreview to include liabilities related to the closure and removal of
all long-lived assets. An exposure draft of the proposed SFAS (which
is proposed to be effective in 1997) was issued in February 1996.
The proposed SFAS would require measurement issues in accounting forof the liability for
the decommissioningclosure and removal of nuclear power plants. The FASB
supports measurement of the liabilitylong-lived assets (including decommissioning)
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 FASBIt also concludedwould require that changes in the
decommissioningdecommissioning/closure cost liability resulting 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 concludedThe proposed SFAS states that the initial recognition of the
decommissioning/closure cost liability would result in an asset recognized as a
result of recognizing the decommissioning liabilitythat
should be presented with other plant costs on the financial
statements because the cost of decommissioningdecommissioning/closing the plant
iswould be recognized as part of the total cost of the plant asset. SubsequentIn
addition there would be a regulatory asset recognized on the
financial statements to the FASB reachingextent the above tentative conclusions, the scope of the
FASB's review was expanded to consider not only the accounting
for decommissioning liabilities, but also liabilities relatedinitial
decommissioning/closure liability has increased due to the closurepassage of
time, and removalsuch costs are probable of all long-lived assets.future recovery.
If current electric utility industry accounting practices with
respect to nuclear decommissioning and other closure costs are
changed, annual provisions for decommissioningsuch costs could increase, the
estimated cost for decommissioningdecommissioning/closure could be recorded as a
liability rather than as accumulated depreciation, and trust fund
income from decommissioning trusts could be reported as investment
income rather than as a reduction to decommissioning expense.
ANO Matters (Entergy Corporation and AP&L)Entergy Arkansas)
See Note 8 to Entergy Corporation's and AP&L'sEntergy's Form 10-K for information on leakscracks 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,
including the most recent refueling outage in October 1995. 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.
During
the October 1995 inspection, additional cracks in the tubes were
discovered. ANO 2's output has been reduced 23 megawatts due to
steam generator fouling and tube plugging. The unit may be
approaching the current limit for the number of steam generator tubes
that can be plugged with the unit in operation. If the currently established
limit is reached, Entergy Operations could be required during future
outages to insert sleeves in some of the steam generator tubes whichthat
were previously plugged. Entergy Operations is in the process of
gathering information and assessing various options for the repair or
the replacement of ANO 2's steam generators. Certain of these
options could, in the future, require significant capital
expenditures and result in additional outages. However, a decision
as to the repair or replacement of ANO 2's steam generators is not
expected prior to 1997. Entergy Operations periodically meets with
the NRC to discuss the results of inspections of the generator tubes,
as well as the timing of future inspections.
Environmental Issues
(AP&L)(Entergy Arkansas)
In May 1995, AP&LEntergy Arkansas was named as a defendant in a suit
by Reynolds Metals Company (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 clean-up the site, and that the site was
contaminated in part with PCBspolychlorinated biphenyls for which AP&LEntergy
Arkansas bears some responsibility. AP&L,Entergy Arkansas, 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 is contesting the lawsuit.
Regardless of the outcome, AP&L doesEntergy Arkansas not believe this matter
would have a materially adverse effect on its financial condition or
results of operations. See "Environmental Regulation" in Item 1 of
Part I of Entergy Corporation's and AP&L'sEntergy's Form 10-K for information on PCBpolychlorinated
biphenyls contamination at former Reynolds plant sites in Arkansas to
which AP&LEntergy Arkansas had supplied power.
(GSU)
GSU(Entergy Gulf States)
Entergy Gulf States has been designated as a potentially
responsible party for the clean-up of certain hazardous waste
disposal sites. GSUEntergy Gulf States is currently negotiating with the
EPA and state authorities regarding the clean-up of certain of these
sites.
Through September 30, 1995, $7.7March 31, 1996, $7.9 million has been expended on the
clean-up. As of September 30, 1995,March 31, 1996, a remaining recorded liability of
$22.1$21.7 million existed relating to the clean-up of the sites at which
GSUEntergy Gulf States has been designated a potentially responsible
party. See Note 8 to GSU'sEntergy's Form 10-K for additional discussion
of the sites where GSUEntergy Gulf States has been designated as a
potentially responsible party by the EPA and related litigation.
(LP&L)(Entergy Louisiana)
During 1993, the Louisiana Department of Environmental Quality
issued new rules for solid waste regulation, including regulation of
waste water impoundments. LP&LEntergy Louisiana has determined that
certain of its power plant waste water impoundments were affected by
these regulations and has chosenchose to upgrade or close them. As
a result, aA remaining
recorded liability in the amount of $12.8$10.2 million existed at September 30, 1995,March
31, 1996, for waste water upgrades and closures to be completed by
the end of 1996. Cumulative expenditures relating to the upgrades
and closures of waste water impoundments were $4.1$6.3 million as of
September 30, 1995.March 31, 1996. See Note 8 to LP&L'sEntergy's Form 10-K for additional
discussion of LP&L'sEntergy Louisiana's waste water impoundment upgrades
and closures.
Waterford 3 Lease Obligations (LP&L)
LP&L(Entergy Louisiana)
On September 28, 1989, Entergy Louisiana entered into three
transactions for the sale and leaseback of undivided interests
(aggregating approximately 9.3%) in Waterford 3. Upon the occurrence
of certain events, LP&LEntergy Louisiana may be obligated to pay amounts
sufficient to permit the Owner Participants to withdraw from the
lease transactions, and LP&LEntergy Louisiana 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. See
Note 9 to LP&L'sEntergy's Form 10-
K10-K for further information.
Reimbursement Agreement (System Energy)
Under the provisions of a bank letter of credit and reimbursement agreement,
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 (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 a result of charges recorded in
the fourth quarter of 1994 related to an agreement with FERC
which settled a long-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 reimbursement agreement until
November 30, 1995. As of September 30, 1995, System Energy's
equity approximated 33.66% of its adjusted capitalization, and
its fixed charge coverage ratio was 1.24. System Energy expects
that upon expiration of the waiver period, it will be in
compliance with the fixed charge coverage covenant. See Note 78 to
System Energy'sEntergy's Form 10-K for further information on the
reimbursement agreement.information.
NOTE 2. RATE AND REGULATORY MATTERS
River Bend (Entergy Corporation and GSU)Entergy Gulf States)
In May 1988, the PUCT granted GSUEntergy Gulf States 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.costs (Abeyed Deferrals).
As discussed in Note 2 to Entergy Corporation's and GSU'sEntergy's Form 10-K, various appeals
of the PUCT's order have been filed.
GSU hasfiled (Rate Appeal). Entergy Gulf
States filed an appeal with the Texas Supreme Court. TheCourt and, on February
9, 1996, the Texas Supreme Court hasagreed to hear the appeal. Oral
arguments were held on March 19, 1996. The timing of a decision by
the Texas Supreme Court is not yet accepted the appeal, and no date for
oral argument has been set.certain.
As of September 30, 1995,March 31, 1996, the River Bend plant costs disallowed for
retail ratemaking purposes in Texas and the River Bend plant costs
held in abeyance and the related operating and
carrying cost deferrals totaled (net of taxes)taxes and depreciation)
approximately $13$12 million $277 million (both net of depreciation), and $169$274 million, respectively. Allowed
Deferrals were approximately $84$81 million, net of taxes and
amortization, as of September 30, 1995.
GSUMarch 31, 1996. Entergy Gulf States estimates it
has recordedcollected approximately $177$188 million of revenues as of September 30, 1995,March 31,
1996, 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 deferralsthereon could be lost, and no
assurance can be given as to whether or not refunds to customers of
revenue received based upon such deferred costs willwould be required.
As discussedDuring the first quarter of 1996, Entergy Gulf States wrote off
Abeyed Deferrals of $169 million in Note 2 to Entergy Corporation's and GSU's
Form 10-K, GSUaccordance with SFAS 121, which
became effective January 1, 1996, but it has made no write-offs or
reserves for the River Bend-relatedBend plant-related costs. Management believes, basedA general remand by
the Texas Supreme Court in the Rate Appeal would enable Entergy Gulf
States to seek recovery of the Abeyed Deferrals. Based on advice
from Clark, Thomas & Winters, A Professional Corporation, legal
counsel of record in the Rate Appeal, management believes that it is
reasonably possible that the case will be remanded to the PUCT, and
that the PUCT will be allowed to rule on the prudence of the abeyed
River Bend plant costs. Management and legal counsel are unable to
predict the amount, if any, of abeyed and previously disallowed River
Bend plant costs that ultimately maymight be disallowed by the PUCT. As
of September 30, 1995,March 31, 1996, a net of tax write-off of up to $290$286 million could
be required based onif the PUCT ultimately issues an ultimate adverse ruling by the PUCT on the
abeyed and disallowed plant costs.
The following factors support management's position that a loss
contingency requiring accrual has not occurred, and its belief 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. Analysis by Sandlin Associates, management consultants
with expertise in the cost of nuclear power plants,
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'sEntergy Gulf States' internal legal counsel,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,
management believes that it is reasonably possible that the Allowed
Deferrals will continue to be recovered in rates, and that it is
reasonably possible that the deferred costs related to
the $1.4 billion of abeyed River Bend plant costsAbeyed Deferrals 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 $169 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 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
(SFAS 121) will become effective January 1, 1996. SFAS 121
changes the standard for continued recognition of regulatory
assets, and as a result GSU will be required to write-off the
$169 million of rate deferrals discussed above, unless there are
favorable regulatory or court actions related to the recovery of
these costs prior to adoption. The standard also 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)
On March 20,1995, in connection with the PUCT's
investigation of the reasonableness of GSU's rates, 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.
`
On May 26, 1995, the PUCT amended its previously issued
March 20, 1995 rate order, reducing the $52.9 million annual base
rate reduction to an annual level of $36.5 million. The PUCT's
action was based, in part, 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 required GSU to pass
such prospective tax benefits on to its customers. The rate
refund, retroactive to March 31, 1994, was approximately $61.8
million (including interest) and was refunded to customers in
September, October and November 1995. The rate refund was
previously reserved, and therefore had no impact to income in the
current quarter. GSU and other parties have appealed the PUCT
order, but no assurance can be given as to the timing or outcome
of the appeal.
Filings with the LPSC
(Entergy Corporation and GSU)
In May 1994, GSU madeEntergy Gulf States)
See Note 2 in Entergy's Form 10-K for a discussion of Entergy
Gulf States' required earnings analysis filing with the LPSC for the
test year preceedingpreceding the Merger (1993). On
December 14,Entergy Gulf States has
appealed to the Louisiana Supreme Court the 1994 the LPSC ordered a $12.7 millionorder for an
annual rate reduction for GSU effective January 1995. GSU received aof $12.7 million. During the appeal, the
preliminary injunction Entergy Gulf States received from the District
Court, regardingrelating to the $8.3 million earnings effect of the reduction. On January 1, 1995, GSU reduced rates
by $4.4 million. GSU filed an appeal of the entire $12.7 million
rate reduction with the District Court, which denied the appeala 1994 change
in July 1995. GSU has appealed the order to the Louisiana
Supreme Court. The preliminary injunction relating to $8.3
million of the reductionaccounting for unbilled revenues, will remain in effect during the appeal.effect.
On May 31, 1995, GSUEntergy Gulf States filed its first required
post-Merger earnings analysis with the LPSC. Hearings on this review
are
scheduled to beginwere held in mid-DecemberDecember 1995 and a decision is expected in early 1996.mid-1996.
(Entergy Corporation and LP&L)Entergy Louisiana)
See Note 2 to Entergy Corporation's and LP&L'sin Entergy's Form 10-K for a discussion of LP&L'sEntergy
Louisiana's performance-based formula rate plan filed
withapproved in a June
1995 LPSC rate order, Entergy Louisiana's subsequent appeal of the
LPSC.LPSC's order, and the final settlement of this appeal. On June 2,April 15,
1996, as required by the performance-based formula rate plan, Entergy
Louisiana made its annual earnings filing for the 1995 test year.
The filing indicates a required rate reduction due to overearnings in
1995. In addition, rates will be reduced as a result of the
LPSC'sexpiration of the Waterford 3 phase-in-plan discussed below. These
rate reductions will be largely offset by the recovery of the
Waterford 3 property tax. Hearings on these issues are expected to
begin in June 1996.
The property tax exemption for Waterford 3 ended in December
1995 and Entergy Louisiana will be required to pay $20.8 million in
property taxes to St. Charles Parish for the 1996 tax year. In a
March 1996 LPSC order, Entergy Louisiana was permitted to defer the
rate recovery of these taxes for the period January 1996 through June
1996. The order allows for the recovery of the property tax and also
for the recovery, from July 1996 through June 1997, of the related
deferral. In addition, Entergy Louisiana's phase-in-plan for
Waterford 3 will expire in November 1996. Entergy Louisiana was
recovering deferred costs annually of approximately $28.4 million.
Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
On March 15, 1996, Entergy Mississippi filed its annual earnings
review of LP&L's performance-basedwith the MPSC under its formula rate plan,plan. On April 18, 1996,
the MPSC issued an order approving and adopting a $49.4joint stipulation
and placing the prospective rate reduction of $5.9 million reduction in base rates was ordered. This included
$10.5 million of rate reductions previously made through the fuel
adjustment clause. The netinto
effect of the LPSC order was to
reduce rates by $38.9 million. The LPSC approved LP&L's proposed
formula rate planon May 1, 1996.
Filings with the following modifications. An earnings
band is to be established with a range from 10.4% to 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 a
12% return on equity, a 60/40 sharing with customers occursCouncil (Entergy Corporation and customers receive 60% of earnings in excess of the 12% through
prospective rate reductions. Alternatively, if LP&L's earnings
are below a 10.4% return on equity, customers pay 60% of the
difference between the realized return on equity and a 10.4%
return on equity through prospective rate increases. The LPSC
also reduced LP&L's authorized rate of return from 12.76% to
11.2%. The LPSC rate order is retroactive to April 27, 1995.
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 portion 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 by the
District Court on $14.7 million of the rate reduction pending a
final LPSC order. No assurance can be given asEntergy New
Orleans)
Pursuant to the timing or
outcome1994 NOPSI Settlement, Entergy New Orleans is
required to make earnings filings with the Council for the 1995 and
1996 rate years. A review of Entergy New Orleans' earnings for the
appeal ortest year ending September 30, 1995, required Entergy New Orleans to
credit customers $6.2 million over a 12-month period which began in
March 1996. Hearings before the requested rate increase. The rate
refund, retroactive toCouncil on the reasonableness and
prudence of Entergy New Orleans' deferred Least Cost Integrated
Resource Planning expenses for cost recovery purposes were previously
scheduled for April 28, 1995, was approximately $8.2
million and was refunded to customers in the months of September
and October 1995. The rate refund was previously reserved, and
therefore represents no impact to income in the current quarter.1996, but have been delayed.
Proposed Rate Increase
(System Energy)
System Energy filed an application with FERC on May 12, 1995, with
FERC
for a $65.5 million rate increase. The request seeks changes to
the System EnergyEnergy's rate schedule, including increases in the revenue
requirement associated with decommissioning costs, the depreciation
accrual rate, and the rate of return on common equity. On December 12, 1995,
System Energy requested that the proposedimplemented a $65.5 million rate increase, become effective subject to
refund within 60 days after the
filing date, but the effective date was suspended until December
1995.refund. Hearings on System Energy's request are scheduled to beginbegan in January 1996
and were completed in February 1996. (MP&L)
MP&L'sThe ALJ's initial decision is
expected in the latter part of 1996.
(Entergy Mississippi)
Entergy Mississippi's allocation of the proposed System Energy
wholesale rate increase is $21.6 million. In July 1995, MP&LEntergy
Mississippi filed a schedule with the MPSC which will deferthat defers the ultimate amountretail
recovery of the System Energy rate increase. The deferral plan,
which was approved by the MPSC, in September 1995, will beginbegan in December 1995, the effective
date of the System Energy rate increase, and will end after the
issuance of a Final Orderfinal order by the FERC. February 1994 Ice Storm/Rate RiderThe deferred rate increase is to
be amortized over 48 months beginning October 1998.
(Entergy Corporation and
MP&L)
As discussed in Note 2 toNew Orleans)
Entergy Corporation's and MP&L's
Form 10-K the 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, 1994. This
stipulation also stated that at the endNew Orleans' allocation of the five-year period,
the revenue requirement associatedproposed System Energy
wholesale rate increase is $11.1 million. In February 1996, Entergy
New Orleans filed a plan with the undepreciated ice
storm capitalized costsCity to defer 50% of the amount of
the System Energy rate increase. The deferral began in February 1996
and will be included in MP&L's base rates toend after the extent that this revenue requirement does not result in
MP&L's rateissuance of return on rate base being above the benchmark rate
of return under MP&L's formula rate plan.
In September 1995, the MPSC approved a second joint
stipulation which allows for a -$2.5 million rate increase for a
period of four years beginning September 28, 1995, to recover
costs related to the ice storm that were recorded after April 30,
1994. The stipulation also allows for undepreciated ice storm
capital costs recorded after April 30, 1994 to be treated as
described above.final order by FERC.
LPSC Fuel Cost Review (Entergy Corporation and GSU)Entergy Gulf States)
See Note 2 to Entergy Corporation's and GSU'sEntergy's Form 10-K, for a discussion of the
LPSC's review of GSU'sEntergy Gulf States' fuel costs for the period
October 1988 through September 1991 and GSU'sEntergy Gulf States'
subsequent appeal of $13.9 million of fuel costs disallowed by the
LPSC.
The LPSC is currently conducting the second phase of its review
of GSU'sEntergy Gulf States' fuel costs for the period October 1991
through December 1994. On June 30, 1995, the LPSC consultants filed
testimony recommending a disallowance of $38.7 million of fuel costs.
Hearings are scheduled to beginbegan in December 1995. No
assurance can be given as to1995 and were completed in March 1996. A
decision is expected in the timing or the outcomesecond quarter of the
review.1996.
NOTE 3. COMMON STOCK (Entergy Corporation)
Entergy Corporation from time to time may make purchases of
its outstanding common stock depending upon market conditions and
authorization by the Entergy Corporation Board of Directors.
During the first nine monthsquarter of 1995, no shares of common stock
were repurchased.
During the first nine months of 1995,1996, Entergy Corporation issued
347,590267,679 shares of its previously repurchased common stock, reducing
the amount held as treasury stock by $10.3$7.7 million. Entergy
Corporation issued these shares to meet the requirements of its
various stock plans.
NOTE 4. LONG-TERM DEBT
(MP&L)(Entergy Corporation)
An Entergy subsidiary signed an agreement with several banks on
January 5, 1996, to obtain a revolving credit facility in the
aggregate amount of $1.2 billion Australian dollars ($870 million US
dollars) for the acquisition of CitiPower. The facility was drawn
down on that same date, bears interest at an average rate of 8.18%,
is non-recourse to Entergy, and matures on June 30, 2000. As part of
the CitiPower acquisition, a bank letter of credit and other
agreements were secured by Entergy Corporation totaling $79 million
as of March 31, 1996.
(Entergy Arkansas)
On October 15, 1995, MP&L retired $15April 26, 1996, Entergy Arkansas redeemed, prior to their
maturities, $23.8 million of its 5.95%
Series G&R Bonds upon maturity.
(System Energy)
On October 1, 1995 System Energy retired $105 million of its
6.12%10.375% Series First Mortgage Bonds
upon maturity.due October 1, 2020 (all of the outstanding bonds of such series) and
$58.4 million of its 10.00% Series First Mortgage Bonds due February
1, 2020, in each case at a price of 100% of their principal amounts,
using funds deposited with the mortgage trustee pursuant to the
annual maintenance and replacement fund requirement as provided under
Entergy Arkansas' mortgage.
(Entergy Louisiana)
On October 11,
1995, System Energy issuedApril 26, 1996, Entergy Louisiana redeemed, in full, prior to
its maturity, $95 million of its 10.125% Series First Mortgage Bonds
due April 1, 2020 at a price of 100% of its principal amount, using
funds deposited with the mortgage trustee pursuant to the annual
replacement fund requirement as provided under Entergy Louisiana's
mortgage.
(Entergy New Orleans)
On May 1, 1996, Entergy New Orleans retired, at 100% of the
principal amount thereof, $30 million of its 7.38%10.95% Series DebenturesGeneral &
Refunding Mortgage Bonds due 2000.May 1, 1997, $15 million of which was a
scheduled sinking fund requirement.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On October 27, 1995,March 24, 1996, Entergy Corporation's Board of Directors
declared a common stock dividend of 45 cents per share payable on
DecemberJune 1, 1995.1996, to holders of record on May 10, 1996.
NOTE 6. RESTRUCTURING COSTS (Entergy Corporation, AP&L, GSU,
LP&L, MP&L, NOPSIEntergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy Services)
TheNew Orleans)
In 1994 and 1995 Entergy implemented various restructuring
programs announced by Entergy in the third
quarter of 1994 included anticipated reductions into reduce the number of employees and the consolidation ofconsolidate offices
and facilities. ActualThe programs were designed to reduce costs and
improve operating efficiencies in order to enable Entergy to become a
low-cost producer. The balances as of December 31, 1995, and March
31, 1996, for restructuring chargesliabilities associated with these
programs
recorded in 1994 and the first nine months of 1995 are shown below by company along with the actual termination
benefits paid under the program.
Restructuring Restructuring
Liability Additional Liability
Company December 31, Accruals Payments September 30,
1994 1995
(In Millions)
AP&L $ 12.2 $ 9.0 $(16.1) $ 5.1
GSU 6.5 7.2 (11.7) 2.0
LP&L 6.8 5.0 (10.1) 1.7
MP&L 6.2 1.1 (5.9) 1.4
NOPSI 3.4 - (2.2) 1.2
Entergy Services - 6.0 (3.2) 2.8
------ ----- ------ --------
Total $ 35.1 $28.3 $(49.2) $ 14.2programs.
Restructuring Restructuring
Liability as of Adjustments Payments Liability as of
December 31, Made in Made in March 31,
Company 1995 1996 1996 1996
(In Millions)
AP&L $8.3 - ($3.4) $4.9
GSU 5.4 - (2.4) 3.0
LP&L 2.2 - (1.2) 1.0
MP&L 2.5 (0.4) (0.5) 1.6
NOPSI 0.6 - (0.3) 0.3
Other 5.2 0.4 (1.2) 4.4
------ ---- ----- -----
Total $ 24.2 - ($9.0) $15.2
====== ==== ===== =====
====== ========
The restructuring charges shown above primarily includedinclude employee
severance costs related to the expected termination of approximately
2,706 employees.2,750 employees in various groups. As of September 30, 1995, 1,807March 31, 1996, 2,350
employees havehad either been terminated or accepted voluntary separation
packages under the restructuring plan.
Additionally, the System recorded $24.3 million in 1994 (of
which $23.8 million was recorded by GSU) for remaining severance
and augmented retirement benefits related to the Merger. Actual
termination benefits paid under the program during the first nine
months of 1995 amounted to $18.5 million. During that same
period, adjustments to the allocation of the total liability were
made among the System companies. At September 30, 1995, the
total remaining System liability for expected future Merger-
related outlays was $5.9 million, comprised principally of GSU's
and Entergy Services' liabilities of $4.3 million and $1.2
million, respectively.
NOTE 7. ACCOUNTING ISSUES
New Accounting Standard - In March 1995, the FASB issued SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of", which became effective January 1,
1996. This standardstatement describes circumstances which may result in
assets (including goodwill such
as the Merger acquisition adjustment, see Note 1being impaired, in addition to Entergy
Corporation's Form 10-K) being impaired. The standard also
providesproviding criteria for
recognition and measurement of asset impairment. Note 2 describesIn the first
quarter of 1996, Entergy Gulf States' regulatory assets of $169
million (net of tax) related to Texas retail deferred River Bend
operating and carrying costs. Management believes thesecosts and $5 million (net of tax) related to
Louisiana retail deferred River Bend operating costs will be required to bewere written off
under the provisions of SFAS 121 unless there are favorable regulatory or court actions
related121. See Note 1 to these costs prior to the adoption of the new standard
by Entergy.
CertainEntergy's Form 10-K
for additional details regarding other assets and operations
of Entergy totaling
approximately $1.7 billion (pre-tax) are most potentially affectedimpacted in the future by the requirements of SFAS 121. Those121
and the process for periodically reviewing those assets include
AP&L's and
LP&L's retained sharesoperations for impairment.
NOTE 8. ENTERGY CORPORATION-CITIPOWER ACQUISITION (Entergy
Corporation)
On January 5, 1996, Entergy Corporation finalized its
acquisition of Grand Gulf 1,CitiPower, an electric distribution company serving
Melbourne, Australia, and surrounding suburbs. The purchase price of
CitiPower was approximately $1.2 billion, of which $294 million
represented an equity investment by Entergy Power's investments inCorporation, and the
Independence and Ritchie power plants,
GSU's Louisiana deregulated asset plan and Texas jurisdiction
abeyedremainder represented debt. Entergy Corporation funded the majority
of the equity portion of the River Bend plant, in addition to the FERC
jurisdiction and steam department operationsinvestment by using $230 million of GSU. As
discussedits
$300 million bank revolving credit facility.
CitiPower is one of five electric distribution businesses in the
Form 10-K, GSU has previously discontinuedstate of Victoria. CitiPower's distribution area accounts for
approximately ten percent of Victoria's population. For the applicationfiscal
year ended June 30, 1995, CitiPower supplied approximately 4.4
million MWh of SFAS 71electricity to over 230,000 customer sites.
Approximately 36,000, or 16%, of these sites were commercial
customers.
In accordance with the purchase method of accounting, the three
month results of operations for Entergy Corporation reported in its
Statements of Consolidated Income and Cash Flows do not reflect
CitiPower's results of operations for any period prior to January 5,
1996. If the acquisition had occurred on January 1, 1995, Entergy
Corporation's operating revenues would have increased by
approximately $100 million for the Louisiana deregulated asset plan,
and operations underfirst quarter, but the FERC jurisdiction and the steam
department.
Entergy will periodically 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 basedeffects on
the net cash flows expected to result from suchoverall results of operations and
assets. Projected net cash flows will depend on the future
operating costs associated with the assets, the efficiency and
availabilitywould have been immaterial. This
pro forma information is not necessarily indicative of the assets/generating unitsresults of
operations that would have occurred had the acquisition been
consummated for the period for which it is being given effect.
CitiPower's results of operations for the period from January 5,
1996, through March 31, 1996, are included in Entergy Corporation's
Consolidated Financial Statements and the future
market/price for energy over the remaining life of the assets.
__________________________________________is stated separately below:
Period from January 5, 1996
to March 31, 1996
(In Thousands)
Operating revenues $ 91,636
Operating expenses $ 73,630
Interest charges $ 17,753
Net income $ 253
_________________________________________
In the opinion of Entergy Corporation, AP&L, GSU, LP&L,
MP&L, NOPSIEntergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, 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&LEntergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and NOPSIEntergy New Orleans 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
Net cash flow from operations for Entergy Corporation, the
System operating companies and System Energy for the nine months
ended September 30, 1995 and 1994, was as follows (in millions):
Nine Months Nine Months
Company Ended 9/30/95 Ended 9/30/94
Entergy Corporation $1,069.4 $1,120.6
AP&L $ 282.1 $ 256.8
GSU $ 344.3 $ 278.3
LP&L $ 308.2 $ 304.5
MP&L $ 139.4 $ 154.4
NOPSI $ 70.7 $ 61.0
System Energy $ 51.2 $ 206.9
For the nine months ended September 30, 1995, AP&L's net
cash flow from operations increased because of reduced billings
from System Energy resulting from a FERC audit settlement in
1994. Partially offsetting this increase in AP&L's net cash flow
was a higher fuel inventory level in 1995 due to the depletion of
coal inventory in 1994 when spring flooding disrupted the normal
coal delivery schedule. GSU's net cash flow from operations
increased for the nine months ended September 30, 1995, due
primarily to lower operation and maintenance expenses and higher
deferred income taxes. This increase was partially offset by a
portion of the Texas retail rate refund made in September 1995,
representing $53 million, and a smaller reduction in rate
deferrals in 1995 as compared to 1994. MP&L's cash flow from
operations decreased for the nine months ended September 30,
1995, as the result of increased accounts receivable balances due
to increased sales from warmer weather. In addition, MP&L's
share of the System Energy FERC audit settlement was refunded to
customers in August 1995, decreasing cash provided by operating
activities. System Energy's net cash flow from operations
decreased for the nine months ended September 30, 1995, due
primarily to refunds to associated companies resulting from a
FERC audit settlement in 1994.
In the first nine 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 rate phase-in plans that 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.
Entergy Corporation will consider investing up to
approximately $150 million per year for the next several years in
nonregulated business opportunities. See Part II for additional
discussion of Entergy Corporation's current and future
investments in nonregulated businesses.
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 September 30, 1995, and
assumed annual interest or dividend rates of 8.25% for bonds and
8.50% for preferred stock, each of the System operating companies
and System Energy could have issued mortgage bonds or preferred
stock in the following amounts (in millions):
Company Mortgage Bonds Preferred Stock
AP&L $292 $ 763
GSU $318 $ -
LP&L $ 80 $1,100
MP&L $238 $ 253
NOPSI $ 55 $ 50
System Energy $ 52 (a)
(a) 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. In addition to issuable mortgage bonds
determined by the above restrictive tests, 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. See Notes 5 and 6 to
Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's
Form 10-K and Note 5 to System Energy's Form 10-K for long-term
debt and preferred stock issuances and retirements.
The System operating companies and System Energy have SEC
authorization to effect short-term borrowings. See Note 4 to
Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and
System Energy's 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 September
30, 1995, Entergy Operations, Entergy Services and System Fuels
had outstanding short-term borrowings from the Money Pool as
follows (in millions):
Company Money Pool
Entergy Operations $ 9.3
Entergy Services $56.7
System Fuels $21.6
On July 27, 1995, Entergy Corporation received SEC
authorization for a $300 million bank credit facility. In
October 1995, a credit agreement was signed with a group of banks
to provide up to $300 million in loans to Entergy Corporation.
Proceeds from this bank credit facility 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 paid dividends which
aggregated $306 million on its common stock in the first nine
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. Such dividend payments totaled $337 million for
the first nine months of 1995. See Note 7 to Entergy
Corporation's Form 10-K for information on dividend restrictions.
GSU did not make common stock dividend payments to Entergy
Corporation in the first nine months of 1995.
Recent rate reductions, as discussed in Note 2, as well as
any future rate reductions, increase the need for Entergy to
continue to reduce costs in order to meet the increasing
competition in the utility industry as well as develop additional
sources of income.
Entergy Corporation and GSU
See Notes 1 and 2 regarding litigation with Cajun and River
Bend rate appeals. Adverse rulings in the River Bend rate appeal
could result in approximately $459 million of potential write-
offs (net of tax) and $177 million in refunds of previously
collected revenue. Such write-offs and charges as well as the
application of SFAS 121 (see Note 7) could result in substantial
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 obtain financing, which could in turn affect GSU's liquidity,
and GSU's ability to pay dividends.
Entergy Corporation and System Energy
Under the 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), 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 to the agreement, subject to the
receipt of consents of certain creditors.
RESULTS OF OPERATIONS
ENTERGY
Net Income
Consolidated net income increased for the three and nine
months ended September 30, 1995 due primarily to a decrease in
other operation and maintenance expense, increased weather
related sales, and decreased interest expense, partially offset
by the ongoing effect of 1994 and 1995 rate reductions.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy's electric revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 793.7 $ 726.3 $ 67.4 9
Commercial 451.4 435.8 15.6 4
Industrial 504.3 488.6 15.7 3
Governmental 42.7 42.7 0.0 0
--------- --------- -------
Total retail 1,792.1 1,693.4 98.7 6
Sales for resale 122.0 89.8 32.2 36
Other (3.8) (6.2) 2.4 (39)
--------- --------- -------
Total $ 1,910.3 $ 1,777.0 $ 133.3 8
========= ========= =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 9,923 8,848 1,075 12
Commercial 6,310 5,916 394 7
Industrial 11,257 10,675 582 5
Governmental 644 609 35 6
--------- --------- -------
Total retail 28,134 26,048 2,086 8
Sales for resale 3,945 2,503 1,442 58
--------- --------- -------
Total 32,079 28,551 3,528 12
========= ========= =======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 1,715.2 $ 1,691.3 $ 23.9 1
Commercial 1,133.4 1,147.2 (13.8) (1)
Industrial 1,351.3 1,386.2 (34.9) (3)
Governmental 115.4 122.3 (6.9) (6)
--------- --------- ------
Total retail 4,315.3 4,347.0 (31.7) (1)
Sales for resale 279.2 235.5 43.7 19
Other 149.7 86.4 63.3 73
--------- --------- ------
Total $ 4,744.2 $ 4,668.9 $ 75.3 2
========= ========= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 21,830 20,716 1,114 5
Commercial 15,741 15,135 606 4
Industrial 31,617 30,481 1,136 4
Governmental 1,747 1,688 59 3
--------- --------- ------
Total retail 70,935 68,020 2,915 4
Sales for resale 8,228 6,274 1,954 31
--------- --------- ------
Total 79,163 74,294 4,869 7
========= ========= ======
Electric operating revenues increased in the three months
ended September 30, 1995 as a result of an increase in retail
sales and sales for resale, partially offset by rate reductions
at GSU, LP&L and NOPSI . Warmer weather and non-weather related
volume growth, contributed equally to the increase in retail
electric operating revenues. The increase in sales for resale
was primarily from increased energy sales outside of Entergy's
service area.
Electric operating revenues increased for the nine months
ended September 30, 1995 due primarily to increased retail sales,
increased wholesale revenues from outside Entergy's service area
and increased other revenue, partially offset by rate reductions
at GSU, LP&L and NOPSI and lower fuel adjustment revenues.
Approximately 72 percent of the sales volume/weather increase in
electric operating revenue resulted from increased customers and
associated usage, while the remainder resulted from warmer
weather. Other revenues increased for the nine months ended
September 30, 1995 due primarily to an increase in unbilled
revenues attributable to warmer weather in the current period and
an increase in MP&L's Grand Gulf over/under recovery. For the
nine months ended September 30, 1995, MP&L undercollected its
share of Grand Gulf 1 related costs due to decreased revenues
from its Grand Gulf 1 rate rider. For the same period last year
MP&L was in an overcollected position. The increased
undercollected position in the current year has resulted in MP&L
recording additional other revenue for these undercollected Grand
Gulf 1 costs. The Grand Gulf 1 over/under collection has no
effect on net income.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(34.9) $(55.6)
Rate riders 5.0 (0.6)
Fuel cost recovery 42.4 (57.0)
Sales volume/weather 91.9 118.0
Other revenue (including unbilled) (4.5) 25.5
Sales for resale 33.4 45.0
------ -----
Total $133.3 $75.3
====== =====
Gas operating revenues decreased for the three and nine
months ended September 30, 1995 because of milder than normal
winter weather, decreased fuel adjustment revenues and gas rate
reductions agreed to in the 1994 NOPSI Settlement.
Expenses
Operating expenses increased for the three months ended
September 30, 1995 due primarily to increased purchased power
expenses resulting from changes in generation availability and
requirements among the System operating companies, increased
income taxes due primarily to higher pre-tax book income, and
increased amortization of rate deferrals attributable to the
collection of more Grand Gulf 1 related costs from customers in
1995 as compared to 1994. Other operation and maintenance
expenses decreased due primarily to charges made in September
1994 for Merger-related costs, restructuring costs, increased
storm damage costs and increased environmental reserves.
Operating expenses decreased for the nine months ended
September 30, 1995 as the result of decreased operating and
maintenance expenses partially offset by increased nuclear
refueling outage expense due to a Grand Gulf 1 refueling outage
at System Energy. Income taxes also increased because of higher
pretax income, a decrease in tax depreciation at Waterford 3 and
River Bend and decreased amortization of investment tax credits
related to the 1994 FERC Settlement. Other operation and
maintenance expenses decreased due primarily to charges made in
September 1994 for Merger-related costs, restructuring costs,
increased storm damage costs and increased environmental
reserves.
Interest charges decreased for the three months and nine
months ended September 30, 1995 due primarily to the retirement
and refinancing of higher costing long-term debt.
AP&L
Net Income
Net income increased in the three months ended September 30,
1995 due primarily to an increase in revenues from retail energy
sales and a decrease in other operation and maintenance expenses
partially offset by an increase in income tax expense and the
amortization of rate deferrals.
Net income increased in the first nine months of 1995 due
primarily to higher revenues from retail energy sales partially
offset by an increase in depreciation, amortization, and
decommissioning expense and an increase in income tax expense.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 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 for the three months and nine months ended September
30, 1995 and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 200.1 $ 170.5 $ 29.6 17
Commercial 103.3 95.2 8.1 9
Industrial 111.4 100.5 10.9 11
Governmental 5.1 4.7 0.4 9
------- ------- ------
Total retail 419.9 370.9 49.0 13
Sales for resale
Associated companies 52.1 50.8 1.3 3
Non-associated companies 60.8 49.2 11.6 24
Other (2.4) (0.1) (2.3) *
------- ------- ------
Total $ 530.4 $ 470.8 $ 59.6 13
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,092 1,802 290 16
Commercial 1,359 1,259 100 8
Industrial 1,752 1,561 191 12
Governmental 70 63 7 11
------- ------- ------
Total retail 5,273 4,685 588 13
Sales for resale
Associated companies 2,484 2,379 105 4
Non-associated companies 1,661 1,324 337 25
------- ------- ------
Total 9,418 8,388 1,030 12
======= ======= ======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 433.3 $ 402.1 $ 31.2 8
Commercial 245.5 236.3 9.2 4
Industrial 273.9 253.9 20.0 8
Governmental 13.1 12.9 0.2 2
--------- --------- ------
Total retail 965.8 905.2 60.6 7
Sales for resale
Associated companies 132.4 178.1 (45.7) (26)
Non-associated companies 139.9 135.6 4.3 3
Other 44.1 37.9 6.2 16
--------- --------- ------
Total $ 1,282.2 $ 1,256.8 $ 25.4 2
========= ========= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 4,668 4,381 287 7
Commercial 3,282 3,177 105 3
Industrial 4,706 4,392 314 7
Governmental 189 178 11 6
--------- --------- ------
Total retail 12,845 12,128 717 6
Sales for resale
Associated companies 6,239 8,617 (2,378) (28)
Non-associated companies 3,830 3,601 229 6
--------- --------- ------
Total 22,914 24,346 (1,432) (6)
========= ========= ======
* - Greater than 200%.
Electric operating revenues increased for the three months
ended September 30, 1995 as the result of an increase in retail
energy sales and fuel adjustment revenues. Approximately 58
percent of the sales volume/weather increase in electric
operating revenue resulted from warmer weather in the third
quarter of 1995.
Electric operating revenues increased for the nine months
ended September 30, 1995 due primarily to increased retail energy
sales and fuel adjustment revenues partially offset by a decrease
in sales for resale to associated companies. Approximately 70
percent of the sales volume/weather increase in electric
operating revenue resulted from increased customers and
associated usage, while the remainder resulted from warmer
weather. The decrease in sales for resale to associated
companies is caused by changes in generation availability and
requirements among the System operating companies.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(5.2) $(0.9)
Rate riders 9.6 13.0
Fuel cost recovery 15.3 26.2
Sales volume/weather 28.7 32.4
Other revenue (including unbilled) (4.3) (5.2)
Sales for resale 15.5 (40.1)
----- -----
Total $59.6 $25.4
===== =====
Expenses
Operating expenses increased in the three months ended
September 30, 1995 due primarily to an increase in fuel and
purchased power expenses, income tax expense, and the
amortization of rate deferrals partially offset by a decrease in
other operation and maintenance expense. The increase in fuel
and purchased power expenses is largely due to a 12% increase in
total sales volume. Fuel and purchased power expenses also
increased as the result of replacement power purchased during the
ANO 2 outage which began in mid September 1995 and is scheduled
to end in November 1995. Income tax expense increased because of
higher pretax income. The amortization of rate deferrals
increased primarily due to the over-recovery of Grand Gulf 1
charges from customers. The decrease in other operation and
maintenance expense is largely due to restructuring costs
recorded in 1994.
Operating expenses decreased for the first nine months of
1995 because of lower fuel and fuel-related expenses offset by
an increase in depreciation, decommissioning and amortization
expense and income tax expense. Fuel expenses decreased as the
result of a decrease in total sales volume of 6%. Depreciation,
amortization, and decommissioning expenses increased primarily
due to additions and upgrades at ANO and to additions to
transmission lines, substations and other equipment. Also,
decommissioning expense increased due to the implementation of
the decommissioning rate rider which resulted from the
decommissioning study performed in 1994. Income tax expense
increased primarily due to the write-off in 1994 of investment
tax credits in accordance with the FERC Settlement as well as an
increase in income taxes due to higher pretax income.
GSU
Net Income
Net income increased for the three months and nine months
ended September 30, 1995 primarily due to a decrease in other
operation and maintenance expenses and an increase in
miscellaneous income, partially offset by an increase in income
taxes and taxes other than income taxes.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenue and Sales
Detailed below are GSU's operating revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994:
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Department Operating
Revenues:
Residential $ 198.6 $ 192.2 $ 6.4 3
Commercial 120.3 115.6 4.7 4
Industrial 167.3 162.8 4.5 3
Governmental 5.9 6.4 (0.5) (8)
------- ------- -----
Total retail 492.1 477.0 15.1 3
Sales for resale
Associated companies 11.1 19.9 (8.8) (44)
Non-associated companies 21.7 16.4 5.3 32
Other 0.1 16.9 (16.8) (99)
------- ------- -----
Total Electric Department $ 525.0 $ 530.2 ($5.2) (1)
======= ======= =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,697 2,502 195 8
Commercial 1,831 1,743 88 5
Industrial 4,153 3,851 302 8
Governmental 80 77 3 4
------ ------ ----
Total retail 8,761 8,173 588 7
Sales for resale
Associated companies 534 1,109 (575) (52)
Non-associated companies 722 231 491 *
------ ------ ----
Total Electric Department 10,017 9,513 504 5
Steam Department 459 426 33 8
------ ------ ----
Total 10,476 9,939 537 5
====== ====== ====
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Department Operating
Revenues:
Residential $ 447.7 $ 448.7 $(1.0) -
Commercial 311.9 312.7 (0.8) -
Industrial 454.8 475.7 (20.9) (4)
Governmental 18.3 19.1 (0.8) (4)
-------- -------- -----
Total retail 1,232.7 1,256.2 (23.5) (2)
Sales for resale
Associated companies 43.9 33.9 10.0 29
Non-associated companies 52.3 41.2 11.1 27
Other 37.2 40.0 (2.8) (7)
-------- -------- -----
Total Electric Department $1,366.1 $1,371.3 ($5.2) -
======== ======== =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 6,012 5,775 237 4
Commercial 4,680 4,512 168 4
Industrial 11,500 11,237 263 2
Governmental 231 225 6 3
------ ------ -----
Total retail 22,423 21,749 674 3
Sales for resale
Associated companies 2,092 2,096 (4) -
Non-associated companies 1,744 494 1,250 *
------ ------ -----
Total Electric Department 26,259 24,339 1,920 8
Steam Department 1,308 1,257 51 4
------ ------ -----
Total 27,567 25,596 1,971 8
====== ====== =====
* - Greater than 200%.
Electric operating revenues remained relatively unchanged
for the three months ended September 30, 1995. An increase in
sales volume was partially offset by a decrease in base rates and
lower sales for resale. Approximately 66 percent and 34 percent
of the sales volume/weather increase in electric operating
revenue resulted from increased customers and associated usage
and warmer summer weather, respectively. Base rates decreased as
a result of rate reductions in effect for Texas and Louisiana.
Electric operating revenues remained relatively unchanged
for the first nine months of 1995 primarily due to lower fuel
revenues and a decrease in base rates which were offset by higher
sales for resale and an increase in sales volume. Base rates
decreased as a result of rate reductions in effect for Texas and
Louisiana. Sales for resale increased as a result of changes in
generation availability and requirements among the System
operating companies. Sales volume increased due to favorable
weather and an increase in usage by all customer classes.
Approximately 75 percent of the sales volume/weather increase in
electric operating revenue resulted from increased customers and
associated usage.
Gas operating revenues decreased for the three months and
nine months ended September 30, 1995 primarily due to a decrease
in residential sales. This decrease was the result of a milder
winter than in 1994.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(11.8) $(18.4)
Fuel cost recovery 5.7 (33.2)
Sales volume/weather 21.9 28.0
Other revenue (including unbilled) (17.5) (2.7)
Sales for resale (3.5) 21.1
----- -----
Total $(5.2) $(5.2)
===== =====
Expenses
Operating expenses decreased for the three months and nine
months ended September 30, 1995 as the result of lower operation
and maintenance expenses, partially offset by higher income taxes
and taxes other than income taxes. Other operation and
maintenance expenses decreased primarily due to charges made in
September 1994 for Merger-related costs, restructuring costs and
certain pre-acquisition contingencies including unfunded Cajun-
River Bend costs and environmental clean-up costs. Taxes other
than income taxes increased in 1995 because of a refund of
franchise taxes in 1994. Income taxes increased primarily due to
higher pre-tax income in 1995 and a decrease in tax depreciation
associated with River Bend. Additionally, purchased power
expenses decreased for the nine months ending September 30, 1995
due to the availability of less expensive gas fuel for use in
electric generation as well as changes in the generation
requirements among the System operating companies.
Other
Miscellaneous income - net increased in the three months and
nine months ended September 30, 1995 as the result of certain
adjustments made in September 1994 related to pre-acquisition
contingencies including Cajun-River Bend litigation and the write-
off of previously disallowed rate deferrals.
Income taxes on other income increased in the three months
and nine months ended September 30, 1995 due to the charges
discussed above.
LP&L
Net Income
Net income increased for the three months ended September
30, 1995 due primarily to increased revenue and decreased other
operation and maintenance expense, partially offset by an
increase in fuel, purchased power and income tax expenses.
Net income increased for the nine months ended September 30,
1995 due primarily to a decrease in fuel, purchased power and
other operation and maintenance expense, partially offset by a
decrease in revenue and increased income tax expense.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 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 for the three months and nine months ended September
30, 1995 and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 214.7 $ 196.4 $ 18.3 9
Commercial 105.8 102.6 3.2 3
Industrial 172.7 170.9 1.8 1
Governmental 8.2 8.4 (0.2) (2)
------- ------- ------
Total retail 501.4 478.3 23.1 5
Sales for resale
Associated companies 0.6 0.2 0.4 *
Non-associated companies 18.5 16.4 2.1 13
Other 8.5 7.6 0.9 12
------- ------- ------
Total $ 529.0 $ 502.5 $ 26.5 5
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,812 2,493 319 13
Commercial 1,456 1,356 100 7
Industrial 4,416 4,305 111 3
Governmental 114 112 2 2
------ ------ -----
Total retail 8,798 8,266 532 6
Sales for resale
Associated companies 19 6 13 *
Non-associated companies 468 269 199 74
------ ------ -----
Total 9,285 8,541 744 9
====== ====== =====
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 459.5 $ 460.8 $(1.3) -
Commercial 267.2 275.4 (8.2) (3)
Industrial 475.1 499.9 (24.8) (5)
Governmental 23.7 24.2 (0.5) (2)
--------- --------- ------
Total retail 1,225.5 1,260.3 (34.8) (3)
Sales for resale
Associated companies 1.0 0.4 0.6 150
Non-associated companies 42.1 31.9 10.2 32
Other 19.5 35.3 (15.8) (45)
--------- --------- ------
Total $ 1,288.1 $ 1,327.9 $(39.8) (3)
========= ========= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 6,186 5,864 322 5
Commercial 3,634 3,502 132 4
Industrial 12,742 12,261 481 4
Governmental 332 318 14 4
--------- --------- ------
Total retail 22,894 21,945 949 4
Sales for resale
Associated companies 38 10 28 280
Non-associated companies 1,042 610 432 71
--------- --------- ------
Total 23,974 22,565 1,409 6
========= ========= ======
* - Greater than 200%.
Electric operating revenues increased in the three months
ended September 30, 1995 primarily due to weather-related sales.
Approximately 55 percent of the sales volume/weather increase in
electric operating revenue resulted from warmer weather, while
the remainder resulted from increased customers and associated
usage. Higher fuel adjustment revenues, which do not affect net
income, also contributed to the increase. The base rate
reduction ordered in the second quarter of 1995, discussed at
Note 2, partially reduced the effect of these increases.
Electric operating revenues were lower in the nine months
ended September 30, 1995 because of lower fuel adjustment
revenues, which do not affect net income. Additionally, the base
rate reduction ordered in the second quarter of 1995, as
discussed in Note 2, and the completion of the amortization of
proceeds from litigation with a gas supplier in the second
quarter of 1994, resulted in reduced revenues. These decreases
were partially offset by increased usage by residential and
industrial customers and higher sales to non-associated
utilities.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(9.0) $(18.7)
Fuel cost recovery 11.2 (55.0)
Sales volume/weather 25.6 36.0
Other revenue (including unbilled (3.8) (12.9)
Sales for resale 2.5 10.8
----- ------
Total $26.5 $(39.8)
===== ======
Expenses
Operating expenses remained relatively unchanged for the
three months ended September 30, 1995. Increases in fuel and
purchased power and income taxes were offset by a decrease in
other operation and maintenance expenses. The increase in fuel
and purchased power is primarily due to increased weather-related
energy sales. Income taxes increased as the result of a decrease
in tax depreciation associated with Waterford 3 and higher pre-
tax income. Other operation and maintenance expenses decreased
for the three months ending September 30, 1995 due to waste water
site closures in the third quarter of 1994, as discussed in Note
1, lower payroll expenses and reduced legal fees. Payroll
expenses decreased as a result of the restructuring program
announced during the third quarter of 1994, as discussed in Note
6. During 1994 additional legal fees were incurred relating to
litigation with a gas supplier.
Operating expenses decreased for the nine months ended
September 30, 1995 due to decreases in fuel expense, purchased
power and other operation and maintenance expenses partially
offset by an increase in income taxes. The decrease in fuel and
purchased power expense is due to lower fuel prices partially
offset by an increase in generation. Other operation and
maintenance expenses decreased for the nine months ending
September 30, 1995 due to waste water site closures in the third
quarter of 1994, as discussed in Note 1, lower payroll expenses,
decreased fossil and nuclear maintenance expenses and reduced
legal fees. Payroll expenses decreased as a result of the
restructuring program announced during the third quarter of 1994,
as discussed in Note 6. During 1994 additional legal fees were
incurred relating to litigation with a gas supplier. 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 increased for the three and nine months ended
September 30, 1995, primarily due to an increase in revenues and
a decrease in other operation and maintenance expense.
Cumulative sales for the three and nine months ended September
30, 1995, increased due to warmer weather and greater customer
usage. Other operation and maintenance expense decreased for the
three months and nine months ended September 30, 1995, due to
reduced scheduled maintenance at power plants and a reduction in
employees under the restructuring program. In addition, other
operation and maintenance expense decreased for the nine months
ended September 30, 1995, due to the absence of Merger-related
costs.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 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 for the three months and nine months ended September
30, 1995 and 1994:
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 121.5 $ 115.7 $ 5.8 5
Commercial 78.8 78.1 0.7 1
Industrial 46.2 47.9 (1.7) (4)
Governmental 7.2 7.4 (0.2) (3)
------- ------- ------
Total retail 253.7 249.1 4.6 2
Sales for resale
Associated companies 15.0 9.1 5.9 65
Non-associated companies 8.3 5.0 3.3 66
Other (18.2) (28.9) 10.7 (37)
------- ------- ------
Total $ 258.8 $ 234.3 $ 24.5 10
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,524 1,363 161 12
Commercial 1,043 977 66 7
Industrial 792 795 (3) -
Governmental 94 90 4 4
------- ------- ------
Total retail 3,453 3,225 228 7
Sales for resale
Associated companies 512 238 274 115
Non-associated companies 278 159 119 75
------- ------- ------
Total 4,243 3,622 621 17
======= ======= ======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 263.1 $ 266.8 $(3.7) (1)
Commercial 197.7 198.4 (0.7) -
Industrial 130.1 137.0 (6.9) (5)
Governmental 20.5 21.3 (0.8) (4)
------- ------- ------
Total retail 611.4 623.5 (12.1) (2)
Sales for resale
Associated companies 27.6 25.2 2.4 10
Non-associated companies 17.9 12.5 5.4 43
Other 35.6 (9.7) 45.3 *
------- ------- ------
Total $ 692.5 $ 651.5 $ 41.0 6
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 3,341 3,208 133 4
Commercial 2,561 2,409 152 6
Industrial 2,256 2,200 56 3
Governmental 252 254 (2) (1)
------- ------- ------
Total retail 8,410 8,071 339 4
Sales for resale
Associated companies 771 594 177 30
Non-associated companies 594 376 218 58
------- ------- ------
Total 9,775 9,041 734 8
======= ======= ======
* - Greater than 200%.
Electric operating revenues increased in the three months ended
September 30, 1995, due to an increase in other revenues, sales
volume and sales for resale. Increased unbilled revenues due to
warmer weather in the summer months caused an increase in other
revenue. Approximately 69 percent of the sales volume/weather
increase in electric operating revenue resulted from warmer weather,
while the remainder resulted from increased customers and associated
usage. Sales for resale, specifically sales to associated companies,
increased primarily due to changes in the generation requirements
among the System operating companies.
Electric operating revenues increased for the nine months ended
September 30, 1995, due to an increase in other revenue, sales volume
and sales for resale, partially offset by a decrease in revenues from
the Grand Gulf 1 rate rider. For the nine months ended September 30,
1995, MP&L undercollected its share of Grand Gulf 1 related costs due
to decreased revenues from the Grand Gulf 1 rate rider. For the same
period last year MP&L was in an overcollected position. The
increased undercollected position in the current year has resulted in
MP&L recording additional other revenue for these undercollected
Grand Gulf 1 costs. The Grand Gulf 1 over/under collection has no
effect on net income. Increased unbilled revenues due to warmer
weather and increased sales volume in the summer months of 1995
caused an increase in other revenue. Approximately 57 percent and 43
percent of the sales volume/weather increase in electric operating
revenue resulted from increased customers and associated usage and
warmer summer weather, respectively. Sales for resale increased
primarily due to increases in MP&L's available generation.
The changes in electric operating revenue for the three months
and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $2.1 $(3.3)
Grand Gulf rate rider (4.5) (13.6)
Fuel cost recovery 3.5 5.4
Sales volume/weather 6.8 9.9
Other revenue (including unbilled) 7.4 34.8
Sales for resale 9.2 7.8
----- -----
Total $24.5 $41.0
===== =====
Expenses
Fuel and fuel-related expenses increased for the three and nine
months ended September 30, 1995 due to increased generation
requirements resulting from increased energy sales. The increase in
fuel and fuel-related expenses was partially offset by lower gas
costs. Purchased power expenses decreased for the three months ended
September 30, 1995 due to the availability of less expensive gas for
the use in electric generation as well as changes in the generation
requirements among the System operating companies.
Other operation and maintenance expenses decreased for the three
months ending September 30, 1995, due to 1994 Merger-related costs
allocated to MP&L and payroll expenses. No significant Merger-
related costs were allocated to MP&L during the current year.
Payroll expenses decreased as a result of the restructuring program
announced and accrued for during the third quarter of 1994. The
restructuring program included a reduction in the number of MP&L
employees during 1995. Other operation and maintenance expenses
decreased for the nine months ended September 30, 1995, due to lower
maintenance expenses at various power plants, 1994 Merger-related
costs and payroll expenses.
Income taxes increased for the three months and nine months
ended September 30, 1995 primarily due to a higher pretax income
resulting from increased revenue and reduced operating and
maintenance expense.
The amortization of rate deferrals increased for the three and
nine months ended September 30, 1995 in accordance with Grand Gulf 1
related deferral plan.
The increase in interest on long-term debt for the three months
ended September 30, 1995 is due to the increase in the amount of long-
term debt partially offset by the maturity of higher interest-bearing
debt in February and July 1995. In April 1995, MP&L issued $80
million of 8.8% Series G&R Bonds due in 2005.
NOPSI
Net Income
Net income increased for the three months ended September 30,
1995 due primarily to a September 1994 provision for litigation
related to the City of New Orleans street lighting dispute. Net
income increased for the nine months ended September 30, 1995 as the
result of a decrease in other operation and maintenance expense.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 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 for the three months and nine months ended September 30, 1995
and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 58.9 $ 51.4 $ 7.5 15
Commercial 43.2 44.3 (1.1) (2)
Industrial 6.7 6.6 0.1 2
Governmental 16.2 15.8 0.4 3
------- ------- ------
Total retail 125.0 118.1 6.9 6
Sales for resale
Associated companies 0.1 0.1 - -
Non-associated companies 3.5 2.1 1.4 67
Other 6.3 0.1 6.2 *
------- ------- ------
Total $ 134.9 $ 120.4 $ 14.5 12
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 798 688 110 16
Commercial 621 580 41 7
Industrial 144 138 6 4
Governmental 286 268 18 7
------- ------- ------
Total retail 1,849 1,674 175 10
Sales for resale
Associated companies 3 3 - -
Non-associated companies 107 58 49 84
------- ------- ------
Total 1,959 1,735 224 13
======= ======= ======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 111.7 $ 113.0 $(1.3) (1)
Commercial 111.1 124.4 (13.3) (11)
Industrial 17.4 19.7 (2.3) (12)
Governmental 39.7 44.8 (5.1) (11)
------- ------- -----
Total retail 279.9 301.9 (22.0) (7)
Sales for resale
Associated companies 1.4 1.0 0.4 40
Non-associated companies 7.8 5.7 2.1 37
Other 21.0 (1.8) 22.8 *
------- ------- -----
Total $ 310.1 $ 306.8 $ 3.3 1
======= ======= =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,623 1,488 135 9
Commercial 1,583 1,535 48 3
Industrial 413 392 21 5
Governmental 744 713 31 4
------- ------- -----
Total retail 4,363 4,128 235 6
Sales for resale
Associated companies 71 39 32 82
Non-associated companies 243 152 91 60
------- ------- -----
Total 4,677 4,319 358 8
======= ======= =====
* - Greater than 200%.
Electric operating revenues increased for the three months and
nine months ended September 30, 1995 because of an increase in energy
sales partially offset by the impact of a permanent rate reduction
that took effect on January 1, 1995. The increase in energy sales is
due to increased sales volume and increased sales for resale to non-
associated utilities. For the three months and nine months ended
September 30, 1995, approximately 57 and 73 percent of the sales
volume/weather increase in electric operating revenue resulted from
increased customers and associated usage, respectively; the remainder
increase resulted from warmer weather.
The changes in electric operating revenue for the three months
and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(11.0) $(14.3)
Fuel cost recovery 6.7 (0.4)
Sales volume/weather 9.0 11.7
Other revenue (including unbilled) 8.4 3.8
Sales for resale 1.4 2.5
----- -----
Total $14.5 $ 3.3
===== =====
For the three months and nine months ended September 30, 1995,
gas operating revenues decreased due primarily to decreased gas
sales, the rate reduction agreed to in the 1994 NOPSI Settlement
effective January 1, 1995, and a lower unit purchase price for gas
purchased for resale.
Expenses
Operating expenses increased for the three months ended
September 30, 1995 as the result of an increase in fuel expenses and
the amortization of rate deferrals. The increase in fuel and
fuel-related expenses is primarily due to the increase in weather-
related energy sales. The amortization of rate deferrals increased
primarily as a result of the collection of larger amounts of
previously deferred costs under the 1991 NOPSI Settlement.
Operating expenses decreased for the nine months ended September
30, 1995 due primarily to a decrease in fuel expenses and other
operation and maintenance expenses, partially offset by an increase
in the amortization of rate deferrals. The decrease in fuel and
fuel-related expenses is primarily due to a decrease in gas purchased
for resale as a result of lower gas sales and a lower unit purchase
price partially offset by an increase in energy sales. Other
operation and maintenance expenses decreased primarily due to a
decrease in maintenance activity and lower payroll expenses. The
decrease in payroll expenses is the result of the 1994 restructuring
and the related decrease in employees. The amortization of rate
deferrals increased as the result of the collection of larger amounts
of previously deferred costs under the 1991 NOPSI Settlement.
SYSTEM ENERGY
Net Income
Net income decreased for the three months and nine months ended
September 1995, as the result of revenues being adversely impacted by
a lower Grand Gulf 1 rate base.
Significant factors affecting the results of operations and
causing variances between the three months and nine 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. 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 decreased for the three months ended
September 30, 1995, due primarily to a lower return on System
Energy's decreasing investment in Grand Gulf 1 (caused by
depreciation of the unit and the reclassification of plant costs
discussed below), offset by the recovery of increased expenses in
connection with a Grand Gulf 1 refueling outage and higher
depreciation, amortization and decommissioning expense. Operating
revenues for the nine months ended September 30, 1995 increased as a
result of the recovery of higher current operating expenses related
to the Grand Gulf 1 refueling outage, partially offset by a lower
return on System Energy's decreasing investment in Grand Gulf 1.
Expenses
Nuclear refueling outage expenses increased for the three months
and nine months ended September 30, 1995 principally as a result of a
refueling outage which began April 15, 1995 and ended June 21, 1995.
There was no refueling outage for Grand Gulf 1 in 1994. Fuel expense
decreased for the first nine months of 1995 as a result of the
refueling outage. Other operation and maintenance expenses decreased
for the three months ended September 30, 1995 primarily as a result
of lower payroll and overhead expenses and lower payments associated
with the sale/leaseback of Grand Gulf 1.
Depreciation, amortization and decommissioning expense increased
for the three months and nine months ended September 30, 1995, due
primarily to increases of $2 million and $7 million, respectively, in
amortization expense as a result of the reclassification of $81
million of Grand Gulf 1 costs in accordance with the 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 for the three months and nine months
ended September 30, 1995 due primarily to the retirement and
refinancing of higher costing long-term debt.
SIGNIFICANT FACTORS AND KNOWN TRENDS
Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI and System Energy
Competition and Industry Challenges
See "Significant Factors and Known Trends" in Entergy
Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and System
Energy's Form 10-K for a discussion of the increasing competitive
pressures facing the electric utility industry.
Entergy Retail and Wholesale Rate Issues
See Note 2 to Entergy Corporation's, AP&L's, GSU's, LP&L's,
MP&L's, NOPSI's and System Energy's Form 10-K, for a discussion of
the ongoing trend of regulatory ordered rate reductions as well as
incentive rate regulation.
Potential Changes in the 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, continues to evolve. Approximately 40 states have
been or are studying or experimenting with the concept of retail
competition. In May 1995, the California Public Utilities Commission
adopted a preliminary proposal to create a wholesale power pool
(Poolco). Under the proposal the FERC would have exclusive
jurisdiction over the Poolco, while an independent operator would
manage the transmission network and generation dispatch. Customers
would gain access to the Poolco through bilateral contracts at least
two years after it 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 adopted a similar proposal which is to
be in place by mid-1996. Such 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. The Council has not scheduled hearings relating to
this resolution. 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 the treatment
of federal income taxes. During the second quarter of 1995, the
Louisiana legislature considered a bill permitting local retail
wheeling. The bill was defeated.
The chairman of the PUCT recently introduced a proposal for
discussion by the Commission concerning the restructuring of the
electric utility industry in Texas. The proposal is designed to
implement greater wholesale electric competition in Texas and
addresses the issues of transmission service comparability, the
unbundling of electric utility operations, market-based pricing,
performance-based ratemaking and the recovery of stranded costs as
part of the transition to a more competitive electric industry
environment.
Another indication of the trend toward greater competition in
the electric utility industry is the recent surge of utility mergers.
This trend is expected to continue. Such mergers are motivated by
the drive to lower costs to increase economies of scale and
consolidation of administrative functions at the merged entities.
The lowered costs achieved will make the merged utilities more
formidable competitors in the future. Certain of the proposed merged
utilities will likely be in direct competition with Entergy in the
future if these mergers are consummated.
As discussed in "Significant Factors and Known Trends" in
Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's Form
10-K the FERC issued a notice of proposed rulemaking in mid-1994,
concerning a regulatory framework for dealing with recovery of
stranded costs. On March 29, 1995, the FERC issued a supplemental
notice of proposed rulemaking in this proceeding which would require
public utilities to provide non-discriminatory open access
transmission service to wholesale customers, and would also provide
guidance on the recovery of wholesale and retail stranded costs.
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 and reply comments on the proposed rulemaking have
now been filed with FERC by interested parties. Certain of the
parties filing comments have proposed that the FERC should order the
immediate unbundling of all retail services as part of the final
rulemaking in this proceeding.
In early October 1995, the FERC issued an order granting exempt
wholesale generator status to Entergy Power Marketing Corporation, a
wholly-owned subsidiary of Entergy Enterprises, Inc., which is a
wholly-owned subsidiary of Entergy Corporation.
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 on investments. Substantially all of such
pricing agreements expire no later than 1997. In the third quarter
of 1995, KWH sales to GSU's industrial customers at non-full cost of
service rates made up approximately 28% of GSU's total industrial
class KWH sales.
The Council has recently approved a resolution requiring the
prior approval by the Council of regulatory treatment of any lost
contribution to fixed costs as a result of incentive rate agreements
with large industrial or commercial customers entered into for the
purposes of retaining those customers. The resolution also requires
prior approval by Council of regulatory treatment of stranded costs
which may result from the loss of large customers.
During 1995, LP&L received separate notices from two large
industrial customers that have decided to proceed with proposed
cogeneration projects for the purpose of fulfilling their future
electric energy needs. These customers will continue to purchase
their energy requirements from LP&L until their cogeneration
facilities are completed, which is expected to be between the years
1999 and 2000. During 1994, these two customers combined represented
approximately 18% of total LP&L industrial sales, and provided $36
million of base revenue.
Public Utility Holding Company Act of 1935
Entergy, along with other electric utility holding companies,
recently requested Congress to repeal the Public 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 believes that the HCA
inhibits its ability to compete in the evolving electric energy
marketplace and largely duplicates the oversight activities already
performed by the FERC and state and local regulators. On June 30,
1995, the SEC adopted a rule change under the HCA to eliminate the
requirement to receive prior authorization for all capital
contributions by a parent company to its subsidiary company.
Proposed legislation to reform the HCA in an effort to
streamline regulation of utilities recently was introduced in the
Senate. The proposed legislation would transfer oversight of public
utility holding companies from the SEC to the FERC.
Nonregulated Investments
As discussed in Note 1 and in "Corporate Development" in Item 1
of Part I of Entergy Corporation's Form 10-K, Entergy Corporation is
considering opportunities to expand its utility and utility-related
businesses that are not regulated by state and/or local regulatory
authorities (nonregulated businesses). As of September 30, 1995,
Entergy Corporation's net investment, reduced by accumulated losses,
in nonregulated subsidiaries totaled $493.0 million. For the first
nine months of 1995, Entergy Corporation's nonregulated investments
reduced consolidated net income by approximately $31.8 million. See
Part II for additional discussion of Entergy Corporation's investment
in nonregulated businesses.
ANO Matters
Entergy Operations has made inspections and repairs from time to
time on ANO 2's steam generators that are owned by AP&L. During the
October 1995 inspection, additional cracks in the tubes were
discovered. 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. See Note 1 for
additional information.
Deregulated Portion of River Bend
As of September 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 nine months ended September 30, 1995, GSU recorded
revenues resulting from the sale of electricity from the deregulated
asset plan of approximately $26.3 million ($24.5 million represent
non-fuel revenue)which, absent the deregulated asset plan, would not
have been realized. Operation and maintenance expenses, including
fuel, were approximately $23.8 million, and depreciation expense
associated with the deregulated asset plan investment was
approximately $13.8 million for the nine months ended September 30,
1995. 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. In addition, the deregulated asset plan will be
subject to the requirements of SFAS 121 as discussed in Note 7 in
determining the recognition of any asset impairment.
Property Tax Exemptions
LP&L and GSU are working with tax authorities to determine the
method for calculating the amount of property taxes to be paid when
Waterford 3's and River Bend's local property tax exemptions expire
in December 1995 and December 1996, respectively.
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 clean-up of certain hazardous waste disposal sites. GSU is
currently negotiating with the EPA and state authorities regarding
the clean-up of certain of these sites. See Note 1 for additional
information.
During 1993, the Louisiana Department of Environmental Quality
issued new rules for solid waste regulation, including regulation of
waste water impoundments. LP&L has determined that certain of its
power plant waste water impoundments were affected by these
regulations and has chosen to upgrade or close them. See Note 1 for
additional information.
Accounting Issues
New Accounting Standard - In March 1995, the FASB issued SFAS
121, "Accounting for the Impairment of Long-Lived Assets and for Long-
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 Energy
Policy Act of 1992 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 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 September 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.
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. See Note 1 for the FASB's tentative conclusions regarding
changes in the accounting for decommissioning costs and the potential
impact of these changes on Entergy.
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Merger-Related Proceedings (Entergy Corporation and GSU)Entergy Gulf
States)
See "State Regulation""Nuclear Operations" in Item 1 of Part I of Entergy
Corporation'sEntergy's Form
10-K and Part II of Entergy Corporation's Form 10-
Q for the quarterly periods ending March 31, 1995 and June 30, 1995, 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 license amendments issued
by the NRC for River Bend. In June 1995,March 1996, the NRC affirmed its
original findings that there had been no significant antitrust
changes inASLB, responding to
Cajun's request, dismissed the positionspending proceedings without prejudice.
Cajun - River Bend (Entergy Corporation and Entergy Gulf States)
See Note 8 of Entergy's Form 10-K and Note 1 for a discussion of
the Cajun litigation and bankruptcy proceedings.
On March 8, 1996, SWEPCO, Entergy Gulf States, and certain
member cooperatives of Cajun submitted a joint proposal to bring an
end to the Cajun bankruptcy proceeding. The proposal was made in
response to a bid procedure established by the Cajun bankruptcy
trustee. On April 22, 1996, the Cajun bankruptcy trustee filed a plan
of reorganization with the bankruptcy court based on a proposal by
two non-affiliated companies to take over the non-nuclear operations
of Cajun. On April 19, 1996, SWEPCO, Entergy Gulf States and GSU ascertain
Cajun member cooperatives filed a resultseparate plan of reorganization
with the court based upon their earlier proposal. The timing and
completion of the Merger,reorganization plan depends on bankruptcy court
approval and therefore, reissuedany required regulatory approvals.
On April 26, 1996, Entergy Gulf States, the license amendments approvingCajun bankruptcy
trustee, and the Merger.Rural Utilities Service (RUS), Cajun's largest
creditor, agreed to terms for the settlement of all disputes between
Cajun filedand Entergy Gulf States. The terms include, but are not
limited to, the following: (i) Cajuns' interest in River Bend will be
turned over to the RUS, which will have the option to retain the
interest, sell it to a petitionthird party, or transfer it to Entergy Gulf
States; (ii) Cajun will set aside a total of $125 million for reviewthe
decommissioning of its interest in River Bend; (iii) Cajun will
transfer certain transmission assets to Entergy Gulf States; (iv)
Cajun will settle transmission disputes and be released from claims
for payment under transmission arrangements with Entergy Gulf States;
and (v) all funds paid by Entergy Gulf States into the D.C. Circuit.registry of
the District Court will be returned to Entergy Gulf States. The
settlement is subject to further approvals by the RUS, the Board of
Directors of Entergy Corporation, the U.S. Bankruptcy Court, and
appropriate regulatory agencies.
Panda Energy Corporation Complaint (Entergy Corporation)
See "Other Regulation and Litigation" in Item 1 of Part I of
Entergy
Corporation'sEntergy's Form 10-K for information regarding other Merger-
related suits.
Cajun - River Bend (Entergy Corporation and GSU)
See Note 8 of Entergy Corporation's and GSU's Form 10-K and Part
II of Entergy Corporation's Form 10-Q for the quarterly period ending
June 30, 1995, for a discussion of the Cajun litigation. In an order
issued by the District Court in August 1995, the U.S. Trustee was
directed to appoint a trustee in the Cajun bankruptcy case. A
former federal bankruptcy judge, Ralph Mabey, was appointed as
trustee to oversee Cajun in bankruptcy. The LPSC and Cajun have
appealed the appointment of a trusteerelating to the United States Court of
Appeals for the Fifth Circuit.
In October 1995, the United States Court of Appeals for the
Fifth Circuit affirmed the District Court's preliminary injunction in
the Cajun litigation. The preliminary injunction stipulated that GSU
should make payments for its portion of expenses for Big Cajun 2,
Unit 3 into the registry of the District Court. As of September 30,
1995, $29.6 million had been paidlitigation
brought by GSU into the registry of the
District Court.
A trial on the portion of the suit by Cajun to rescind the
Operating Agreement which began in April 1994 was completed in March
1995. On October 24, 1995, the District Court issued a memorandum
opinion ruling in favor of GSU. The District Court found that Cajun
did not prove that GSU fraudulently induced it to execute the
Operating Agreement and Cajun failed to timely assert its claim. A
final judgment will be entered when the District Court issues its
detailed written reasons. It is uncertain when the District Court
Judge's final opinion will be entered, or whether Cajun will appeal
the decision.
Cajun-Transmission Services (EntergyPanda Energy Corporation and GSU)
See Note 1 and also see Note 8 of(Panda) naming Entergy
Corporation's and
GSU's Form 10-K for a discussion of FERC proceedings relating to GSU
and Cajun transmission service charge disputes. In orders issued on
August 3, 1995, and October 2, 1995, the FERC affirmed the ALJ's
April 1995, ruling in the remanded portion of GSU's and Cajun's
ongoing transmission service charge disputes before the FERC. Both
GSU and Cajun have petitioned for appeal to the D.C Circuit.
Cajun-Service Dispute (Entergy Corporation, and GSU)
See "Other Regulation and Litigation " in Item 1 of Part I of
Entergy Corporation's Form 10-K for a discussion of the transmission
service dispute in which Cajun requested that GSU provide the
transmission of power over GSU's transmission system to certain
industrial customers in Lake Charles, Louisiana. In October 1995,
the D.C. Circuit affirmed the FERC's previous opinion in its
entirety. The FERC held that GSU properly exercised its contractual
right to refuse to provide transmission service to Cajun.
Filings with the APSC (Entergy Corporation, AP&L and Entergy Power)
In September 1995, the APSC approved a waiver application filed
byEnterprises, Entergy Power, which would enable Entergy Power to make sales to
wholesale entities in Arkansas which are not currently served by
AP&L. In response to a request by certain Arkansas cities, the APSC
agreed to decide whether Entergy Power can also sell to the wholesale
entities that currently are served by AP&L.
Mississippi Cities Complaint (Entergy Corporation and MP&L)
As discussed in "Significant Factors and Known Trends" of
MP&L's Form 10-K, in October 1994 certain Mississippi cities filed a
complaint in state court against MP&L and eight other power
associations requesting the repeal of certain amendments to the
Mississippi Public Utilities Act that prevent municipalities from
acquiring a utility's facilities that are located in municipalities
where the utility holds a certificate to serve. In October 1995, the
state court dismissed the complaint. Plaintiffs have until November
27, 1995, to appeal to the Mississippi Supreme Court.
City of New Orleans Complaint (Entergy Corporation, AP&L, LP&L,
MP&L, NOPSI and System Energy)
As discussed in "Wholesale Rate Matters" in Item 1 of Part I of
Entergy Corporation's Form 10-K, in August 1990, the City of New
Orleans filed a complaint against Entergy Corporation, AP&L, LP&L,
MP&L, NOPSI and System Energy requesting that the FERC investigate
AP&L's transfer of its interest in Independence 2 and Ritchie 2 to
Entergy Power and the effect of the transfer on AP&L, LP&L, MP&L and
NOPSI and their ratepayers. On October 20, 1995, the D.C. Circuit
affirmed the FERC's original orders. The FERC's original orders held
that the transfer and its effect on current rates were prudent.
However, the prudency of the transfer on future replacement costs was
deferred until a time when the need for such replacement capacity
occurs.
Crown Vista Energy Project (Entergy CorporationAsia,
Ltd., and Entergy Power Development Corporation)
EPDCCorporation as defendants. Panda
was seeking damages of $4.8 billion. Entergy believes that this
litigation is unfounded, but entered into a joint venture, known as Crown Vista Energy
Project (Crown Vista), with Mission Energy and Ahlstrom Developmentarrangements on April 30,
1996, to provide power to Jersey Central Power & Light (JCP&L). In August
1995 Mission Energy filed a complaint againstsettle the matter for $350,000. Yet, the settlement
provided that it may be revoked by Entergy Corporation and
EPDC alleging that EPDC improperly failed to pay at least $1.4
million in certain project development costs to Mission Energy.
Mission Energy seeks to recoup these payments. The complaint also
seeks declaratory relief regarding Mission Energy's obligation to
reimburse EPDC for previously incurred development expensesif the court rules in the
eventcase. On the same day, the judge advised that Mission Energy sells, disposes of or transfers any of its
interest in Crown Vista to another party. It is believed that
Mission Energy has reached a settlement with General Public Utilities
Corporation, parent of JCP&L, which provides for a payment to Mission
Energy in considerationhe would grant summary
judgment for the cessation of development of Crown
Vista. Crown Vista's purchased power agreements with JCP&L have been
sold and Mission Energydefendants, because he does not believe that the
plaintiff has paid a portionsustained any provable damages. Entergy will consider
whether to revoke the settlement in this case in light of the sales proceeds to
Ahlstrom Development. However, Mission Energy has made no settlement
with EPDC. EPDC anticipates filing claims against Mission Energy to
obtain reimbursement of the approximately $8.7 million in Crown Vista
development costs incurred to date by EPDC. Management believes it
has valid grounds to recover its investment in Crown Vista. No
assurances can be given as to the timing or outcome of this matter.judge's
determination.
Item 4. Submission of Matters to a Vote of Security Holders
RedemptionAmended and Restated Articles of Preferred StockIncorporation (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and NOPSI)Entergy New Orleans)
A consent in lieu of a special meeting of NOPSI common stockholders
was executed on July 14, 1995.April 22, 1996. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of NOPSIEntergy Arkansas', Entergy Gulf States', Entergy Louisiana's,
Entergy Mississippi's, and Entergy New Orleans' common stock. The
common stockholder by such consent, approved the redemptionamendment of its
Amended and Restated Articles of Incorporation to change the remaining outstanding
shares (19,495 shares)name of
NOPSI's 15.44% Series Preferred Stock,
Cumulative, $100 Par Value.Arkansas Power & Light to Entergy Arkansas, Inc., the name of Gulf
States Utilities Company to Entergy Gulf States, Inc., the name of
Louisiana Power & Light to Entergy Louisiana, Inc., the name of
Mississippi Power & Light to Entergy Mississippi, Inc., and the name
of New Orleans Public Service, Inc. to Entergy New Orleans, Inc.
Item 5. Other Information
Nonregulated Investments (Entergy Corporation and Entergy, S.A.)
As discussed in "Corporate Development" in Item 1 of Part I of
Entergy Corporation's Form 10-K, Entergy Corporation's subsidiary,
Entergy, S.A., acquired a 10% interest in a consortium with other
nonaffiliated companies that acquired a 60% interest in Central
Costanera, S.A. (Costanera), a steam electric generating facility
located in Argentina. During the three months ending September 30,
1995, Entergy, S.A. purchased 3.9% of the outstanding stock of the
Central Buenos Aires Project (the CBA Project) for $1.7 million.
Through Entergy, S.A.'s interest in Costanera, Entergy, S.A.
indirectly purchased an additional 3% of the outstanding stock of the
CBA Project. In October 1995, Entergy Power Holding Limited, a
wholly owned subsidiary of Entergy Corporation, purchased Entergy,
S.A.'s interest in the CBA Project and purchased an additional 3.9%
of the outstanding stock of the CBA Project for $1.9 million. The
CBA Project includes the addition of a 220 megawatt combustion
turbine and heat recovery boiler to a generating unit at the
Costanera steam electric generating facility. This addition will
provide electricity to the Argentina transmission grid and steam to
the Costanera generating unit. The open cycle portion of the CBA
Project, which will provide electricity to the Argentina transmission
grid, is expected to be in commercial operation by the end of October
1995. The steam recovery portion, which will provide steam to the
Costanera generating unit, is expected to be in operation in October
1996.
Labor Contract Negotiations (Entergy Corporation AP&L, GSU and MP&L)
As discussed in Part II of Entergy Corporation's Form 10-Q for
the quarterly periods ending March 31, 1995 and June 30, 1995, the
labor union contract between GSU and the International Brotherhood of
Electrical Workers (IBEW) expired on June 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
portion 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 settlement offer as well as a contingent offer
and authorized the union leadership to call a strike if necessary.
In August 1995, GSU implemented its last, best and final offer, but
there has been no acceptance of this offer. 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 on August
3, 1995.
On October 12 and 14, 1995, the IBEW voted to accept a new three-
year collective bargaining agreement with AP&L and MP&L,
respectively.
Earnings Ratios (AP&L, GSU, LP&L, MP&L, NOPSI(Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, 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-KS-
K of the SEC as follows:
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, September 30,
1990 1991 1992 1993 1994 1995
AP&L 2.16 2.25 2.28 3.11(b) 2.32 2.63
GSU .80(c) 1.56 1.72 1.54 .36(c) 1.09
LP&L 2.32 2.40 2.79 3.06 2.91 3.26
MP&L 2.42 2.36 2.37 3.79(b) 2.12 2.63
NOPSI 2.73 5.66 2.66 4.68(b) 1.91 2.19
System Energy 2.10 1.74 2.04 1.87 1.23 1.24
Ratios of Earnings to Combined Fixed
Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1990 1991 1992 1993 1994 1995
AP&L 1.81 1.87 1.86 2.54(b) 1.97 2.24
GSU (a) .59(c) 1.19 1.37 1.21 .29(c) .96(c)
LP&L 1.87 1.95 2.18 2.39 2.43 2.73
MP&L 1.93 1.94 1.97 3.08(b) 1.81 2.29
NOPSI 2.36 4.97 2.36 4.12(b) 1.73 2.01
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, March 31,
------------------------------------------------ ---------
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
Entergy Arkansas 2.25 2.28 3.11(c) 2.32 2.56 2.70
Entergy Gulf States 1.56 1.72 1.54 .36(d) 1.86 1.11
Entergy Louisiana 2.40 2.79 3.06 2.91 3.18 3.26
Entergy Mississippi 2.36 2.37 3.79(c) 2.12 2.92 3.07
Entergy New Orleans 5.66(b) 2.66 4.68(c) 1.91 3.93 4.18
System Energy 1.74 2.04 1.87 1.23 2.07 2.08
Ratios of Earnings to Combined Fixed Charges and
Preferred Dividends
Twelve Months Ended
December 31, March 31,
---------------------------------------------------- ---------
1991 1992 1993 1994 1995 1996
------- ------ ------ ------- ------ ------
Entergy Arkansas 1.87 1.86 2.54(c) 1.97 2.12 2.23
Entergy Gulf States 1.19 1.37 1.21 .29(d) 1.54 0.92(d)
(a)
Entergy Louisiana 1.95 2.18 2.39 2.43 2.60 2.66
Entergy Mississippi 1.94 1.97 3.08(c) 1.81 2.51 2.64
Entergy New Orleans 4.97(b) 2.36 4.12(c) 1.73 3.56 3.80
(a) "Preferred Dividends" in the case of GSUEntergy Gulf
States also include dividends on preference stock.
(b) Earnings for the year ended December 31, 1991,
include the $90 million effect of the 1991 NOPSI
Settlement.
(c) Earnings for the year ended December 31, 1993,
include $81 million, $52 million, and $18 million
for AP&L, MP&L,Entergy Arkansas, Entergy Mississippi, and
NOPSI,Entergy New Orleans, respectively, related to the
change in accounting principle to provide for the
accrual of estimated unbilled revenues.
(c)(d) Earnings of GSU for the yearsyear ended December 31, 1994, and
1990,for
Entergy Gulf States were not adequate to cover fixed
charges by $144.8 million and $60.6 million, respectively.million. Earnings of GSU for the years
ended December 31, 1994, and 1990,March 31, 1996, for
Entergy Gulf States were not adequate to cover
combined fixed charges and preferred dividends by
$197.1 million and $165.1$22.0 million, respectively.
Earnings of GSU for the twelve months ended
September 30, 1995 were not adequate to cover combined
fixed charges and preferred dividends by $10 million.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
3(a) - Amended and Restated Articles of Incorporation of
Entergy Arkansas and amendments thereto through April
22, 1996,
3(b) - Restated Articles of Incorporation of Entergy Gulf
States and amendments thereto through April 22, 1996.
3(c) - Restated Articles of Incorporation of Entergy
Louisiana and amendments thereto through April 22,
1996.
3(d) - Restated Articles of Incorporation of Entergy
Mississippi and amendments thereto through April 22,
1996.
3(e) - Restatement of Articles of Incorporation of Entergy
New Orleans and amendments thereto through April 22,
1996.
**4(a) Credit- Amended and Restated Installment Sale Agreement, dated
as of October 10, 1995, among
Entergy, the Banks (Bank of America National Trust &
Savings Association, The Bank of New York, Chemical
Bank, Citibank, N.A., Union Bank of Switzerland, ABN
AMRO Bank N.V., The Bank of Nova Scotia, Canadian
Imperial Bank of Commerce, Bank, N.A., First National
Bank of Commerce,February 15, 1996, between System Energy and
Whitney National Bank) and
Citibank, N.A.,as AgentClaiborne County, Mississippi (filed as Exhibit BB-6(a)
to Rule 24 Certificate dated October 20, 1995March 4, 1996 in File No.
70-
8149)70-8511).
**4(b) - Sixth Supplemental Indenture, dated as of SeptemberMarch 1,
1995, between
System Energy Resources, Inc.1996, to Entergy New Orleans' Mortgage and Chemical BankDeed of
Trust, dated as of May 1, 1987 (filed as Exhibit B-10(a)4(a)
to Form 8-K dated March 22, 1996 in File No. 0-5807).
** 4(c) - Fifty-third Supplemental Indenture, dated as of March
1, 1996, to Entergy Arkansas' Mortgage and Deed of
Trust, dated as of October 1, 1944 (filed as Exhibit C-
2 to Form U5S for the year ended December 31, 1995).
** 4(d) - Fifty-first Supplemental Indenture, dated as of March
1, 1996, to Entergy Louisiana's Mortgage and Deed of
Trust, dated as of April 1, 1944 (filed as Exhibit A-
2(a) to Rule 24 Certificate dated October 20,April 4, 1996 in
File No. 70-8487).
** 4(e) - Share Sale Agreement (Revised) of December 12, 1995,
relating to acquisition of CitiPower Limited, among
State Electricity Commission of Victoria, the State of
Victoria, Entergy Victoria LDC, Entergy Victoria
Holding LDC and Entergy Corporation (filed as Exhibit
C-1(o) to Form U5S for the year ended December 31,
1995 pursuant to Rule 104).
** 4(f) - Multi-Option Syndicated Facility Agreement, dated as
of January 5, 1996, among CitiPower Limited as
Borrower, Commonwealth Bank of Australia as Facility
Agent, Bank of America N.T. & S.A. as Arranger, and
Commonwealth Bank of Australia as Security Trustee
(filed as Exhibit C-1(p) to Form U5S for the year
ended December 31, 1995).
** 4(g) - Undertaking Agreement, dated as of March 7, 1996, of
Entergy Corporation to Commonwealth Bank of Australia
as Facility-Agent, of CitiPower Limited's obligations
up to maximum of $7,367,000 under the Multi-Option
Syndicated Facility Agreement (filed as Exhibit C-1(q)
to Form U5S for the year ended December 31, 1995).
23(a) - Consent of Clark, Thomas & Winters (A Professional
Corporation).
23(b) - Consent of Sandlin Associates.
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of September 30, 1995.March 31, 1996.
27(b) - Financial Data Schedule for AP&LEntergy Arkansas as of
September 30,
1995.March 31, 1996.
27(c) - Financial Data Schedule for GSUEntergy Gulf States as of
September 30,
1995.March 31, 1996.
27(d) - Financial Data Schedule for LP&LEntergy Louisiana as of
September 30,
1995.March 31, 1996.
27(e) - Financial Data Schedule for MP&LEntergy Mississippi as of
September 30,
1995.March 31, 1996.
27(f) - Financial Data Schedule for NOPSIEntergy New Orleans as of
September 30,
1995.March 31, 1996.
27(g) - Financial Data Schedule for System Energy as of September 30, 1995.March
31, 1996.
99(a) - AP&L'sEntergy Arkansas' Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(b) - GSU'sEntergy Gulf States' Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(c) - LP&L'sEntergy Louisiana'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'sEntergy Mississippi's Computation of Ratios of
Earnings to Fixed Charges and of Earnings to Combined
Fixed Charges and Preferred Dividends, as defined.
99(e) - NOPSI'sEntergy New Orleans' 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,Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans,
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, 0-5807, 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-
2703, 1-8474, 0-320, 0-5807, and 1-9067,
respectively).
** 99(i) - Quarterly Report on Form 10-Q of Entergy Corporation,
AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for
the quarter ended June 30, 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(j)99(h) - Opinion of Clark, Thomas & Winters, a professional
corporation, dated September 30, 1992 regarding the
effect of the October 1, 1991 judgment in GSUEntergy Gulf
States v. PUCT in the District Court of Travis County,
Texas (99-1 in Registration No. 33-48889).
** 99(k)99(i) - 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(l)99(j) - 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 September 30, 1995,March
31, 1996, which list, prepared in accordance with Item 102
of Regulation S-T of the Securities and Exchange
Commission, immediately precedes the exhibits being filed
with Form 10-Q for the quarter ended September 30, 1995.March 31, 1996.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
Entergy New Orleans
A current report on Form 8-K, dated October 25, 1995,March 20, 1996,
was filed with the SEC on October 25, 1995,March 22, 1996, reporting
information under Item 5. "Other Events."
GSUEntergy and Entergy Gulf States
A current report on Form 8-K, dated October 25, 1995,March 22, 1996,
was filed with the SEC on October 25, 1995,March 22, 1996, reporting
information under Item 5. "Other Events."
Entergy and Entergy Gulf States
A current report on Form 8-K, dated April 19, 1996,
was filed with the SEC on April 22, 1996, reporting
information under Item 5. "Other Events." and Item 7.
"Financial Statements and Exhibits."
Entergy and Entergy Gulf States
A current report on Form 8-K, dated April 29, 1996,
was filed with the SEC on April 30, 1996, reporting
information under Item 5. "Other Events."
EXPERTS
The statements attributed to Clark, Thomas & Winters, A
Professional Corporation, as to legal conclusions with respect to
GSU'sEntergy Gulf States' 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 GSUEntergy Gulf States 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
ENTERGY ARKANSAS, POWER & LIGHT COMPANYINC.
ENTERGY GULF STATES, UTILITIES COMPANYINC.
ENTERGY LOUISIANA, POWER & LIGHT COMPANYINC.
ENTERGY MISSISSIPPI, POWER & LIGHT COMPANYINC.
ENTERGY NEW ORLEANS, PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC.
/s/ Louis E. Buck, Jr.
Louis E. Buck, Jr.
Vice President, Chief Accounting
Officer and Assistant Secretary
(For each Registrant and for each as
Principal Accounting Officer)
Date: NovemberMay 6, 19951996