PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 15, 1993)
$115,000,000
ENTERGY LOUISIANA, INC.
FIRST MORTGAGE BONDS, 6 1/2% SERIES DUE MARCH 1, 2008
---------------------------
INTEREST PAYABLE MARCH 1 AND SEPTEMBER 1
---------------------------
Interest on the First Mortgage Bonds, 6 1/2% Series due March 1, 2008 (the
"New Bonds") of Entergy Louisiana, Inc. (formerly Louisiana Power & Light
Company) (the "Company") is payable on March 1 and September 1 of each year,
commencing September 1, 1998. The New Bonds will be redeemable at the option of
the Company, in whole or in part, at any time, prior to maturity upon not less
than 30 days' nor more than 60 days' notice, (i) under certain circumstances, at
the special redemption price of 100% of the principal amount thereof, (ii) prior
to March 1, 2003, at a redemption price equal to the greater of (A) 100% of the
principal amount thereof and (B) as determined by a Quotation Agent (as defined
herein), the sum of the present values as of the redemption date of (x) the
product of the principal amount of New Bonds called for redemption multiplied by
the general redemption price which would apply to a redemption of New Bonds on
March 1, 2003 and (y) the remaining scheduled interest payments on such
principal amount from the redemption date through March 1, 2003, such present
value to be determined on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) and using the Adjusted Treasury Rate (as
defined herein) as the discount rate or (iii) on or after March 1, 2003, at the
general redemption prices set forth herein, in each case, plus accrued interest
thereon to the redemption date. See "Description of the New Bonds -- Redemption
and Purchase of New Bonds."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
================================================================================
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(3)
- --------------------------------------------------------------------------------
Per New Bond... 99.706% 1.831% 97.875%
- --------------------------------------------------------------------------------
Total.......... $114,661,900 $2,105,650 $112,556,250
================================================================================
(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company, estimated at $135,000.
---------------------------
The New Bonds offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of the New Bonds
will be made only through the book-entry facilities of The Depository Trust
Company, New York, New York, on or about March 26, 1998, against payment
therefor in immediately available funds.
---------------------------
LEHMAN BROTHERS DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
March 19, 1998
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NEW BONDS, INCLUDING
STABILIZING TRANSACTIONS AND SYNDICATE COVERING TRANSACTIONS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Reference is made to "Incorporation of Certain Documents by Reference" in
the accompanying Prospectus. At the date of this Prospectus Supplement, the
Incorporated Documents (as defined in the accompanying Prospectus) include the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
The selected financial information of the Company set forth below should be
read in conjunction with the financial statements and other financial
information contained in the Incorporated Documents.
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------- -------------
Income Statement Data:
Operating Revenues.............. $ 1,803,272 $ 1,828,867 $ 1,674,875 $ 1,710,415 $ 1,731,541
Operating Income(1)............. 367,580 436,446 448,755 406,871 430,180
Interest Expense (net).......... 127,490 130,919 134,885 133,977 135,209
Net Income...................... 141,757 190,762 201,537 213,839 188,808
Ratio of Earnings to Fixed
Charges(2)................... 2.74 3.16 3.18 2.91 3.06
AS OF DECEMBER 31,
1997(3)
-------------------------
AMOUNT PERCENT
------------- -------
Balance Sheet Data:
First Mortgage Bonds(4)... $ 564,454 20.7
Other Long-Term Debt(4)... 774,010 28.4
Preferred Stock (with
sinking fund)........... 85,000 3.1
Company-obligated
mandatorily redeemable
preferred securities of
subsidiary trust holding
solely junior
subordinated deferrable
debentures.............. 70,000 2.6
Shareholders' Equity:
Preferred Stock (without
sinking fund)........ 100,500 3.7
Common Stock and Paid-in
Capital.............. 1,086,579 39.8
Retained Earnings....... 46,766 1.7
------------- -------
Total Shareholders'
Equity............ 1,233,845 45.2
------------- -------
Total
Capitalization. $ 2,727,309 100.0
============= =======
(1) Operating Income for the years ended December 31, 1993 through 1995 has been
restated to exclude income tax expense.
(2) "Earnings", as defined by Securities and Exchange Commission ("SEC")
Regulation S-K, represent the aggregate of (a) net income, (b) taxes based
on income, (c) investment tax credit adjustments -- net and (d) fixed
charges. "Fixed Charges" include interest (whether expensed or
capitalized), related amortization and interest applicable to rentals
charged to operating expenses.
(3) The proceeds from the sale of the New Bonds are expected to be used
primarily to refund outstanding First Mortgage Bonds and as a result the
Company's capitalization will not be materially affected. See "Use of
Proceeds."
(4) Excludes current maturities of First Mortgage Bonds and Other Long-Term Debt
of $35 million and $0.3 million, respectively.
S-2
USE OF PROCEEDS
The net proceeds to be received from the issuance and sale of the New Bonds
are expected to be used to satisfy a portion of the Company's annual replacement
fund requirement under the Mortgage (as defined herein). The Company expects to
use the cash deposited to satisfy the annual replacement fund requirement to
redeem all of the Company's First Mortgage Bonds, 8 1/2% Series due July 1, 2022
and 8% Series due June 1, 2003, at a price equal to 100% and 100.57%,
respectively, of the principal amount thereof plus accrued interest thereon to
the redemption date.
DESCRIPTION OF THE NEW BONDS
The following description of the particular terms of the New Bonds offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the New Bonds set forth in
the accompanying Prospectus under the heading "Description of New Bonds", to
which description reference is hereby made. As used in this Prospectus
Supplement, the terms "Bonds", "Corporate Trustee", "Mortgage",
"Participants" and "DTC" shall have the same meanings as the same terms used
under the headings "Description of New Bonds" and "Book Entry Securities" in
the accompanying Prospectus.
INTEREST, MATURITY AND PAYMENT. The New Bonds will mature on March 1,
2008. The New Bonds will bear interest from the date of issuance at the rate
shown in their title, payable on March 1 and September 1 of each year,
commencing September 1, 1998. Interest is payable to holders of record on the
interest payment date. Principal, premium, if any, and interest are payable at
the office or agency of the Company in New York City. For so long as the New
Bonds are registered in the name of DTC, or its nominee, the principal of and
premium, if any, and interest due on the New Bonds will be payable by the
Company or its agent to DTC for payment to its Participants for subsequent
disbursement to the beneficial owners. The Company has covenanted to pay
interest on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest on the Bonds of all series at the rate of 6% per annum.
REDEMPTION AND PURCHASE OF NEW BONDS. The New Bonds will be redeemable at
the option of the Company, in whole or in part, at any time, prior to maturity
upon not less than 30 days' nor more than 60 days' notice, (i) by the
application of cash deposited with the Corporate Trustee pursuant to the
provisions of the Mortgage relating to eminent domain, sales to governmental
entities or sales pursuant to governmental divestiture orders at the special
redemption price of 100% of the principal amount thereof, (ii) prior to March 1,
2003, at a redemption price equal to the greater of (A) 100% of the principal
amount thereof and (B) as determined by a Quotation Agent, the sum of the
present values as of the redemption date of (x) the product of the principal
amount of New Bonds called for redemption multiplied by the general redemption
price which would apply to a redemption of New Bonds on March 1, 2003 and (y)
the remaining scheduled interest payments on such principal amount from the
redemption date through March 1, 2003, such present value to be determined on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
and using the Adjusted Treasury Rate as the discount rate or (iii) on or after
March 1, 2003, at the following general redemption prices:
GENERAL GENERAL
REDEMPTION REDEMPTION
YEAR PRICE(%) YEAR PRICE(%)
- -------------------- ---------- ---------------- ----------
If redeemed during the 12-month period ending the last day of February,
2004................ 102.33 2007............ 100.00
2005................ 101.55 2008............ 100.00
2006................ 100.78
in the case of clauses (i), (ii), and (iii) above, plus accrued interest thereon
to the redemption date. With respect to clause (ii) above, if such redemption
date is not an interest payment date, the amount of the next succeeding
scheduled interest payment thereon will be reduced by the amount of interest
accrued thereon to such redemption date.
S-3
If, at the time notice of redemption is given, the redemption monies are
not held by the Corporate Trustee, the redemption may be made subject to receipt
of such monies before the date fixed for redemption, and such notice shall be of
no effect unless such monies are so received.
Cash deposited under any provision of the Mortgage (with certain
exceptions) may be applied to the redemption or purchase (including purchase
from the Company) of Bonds of any series.
CERTAIN DEFINITIONS. "Adjusted Treasury Rate" means, with respect to any
redemption date, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, plus 0.125%.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or a day on which the Corporate Trust
Office of the Corporate Trustee is closed for business.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the New Bonds that would be utilized at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the New Bonds.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer Quotations
or (B) if the Corporate Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.
"Quotation Agent" means one of the Reference Treasury Dealers appointed
by the Corporate Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Bear, Stearns & Co. Inc.,
Salomon Brothers Inc and Goldman, Sachs & Co. and their respective successors;
PROVIDED, HOWEVER, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
the Company shall substitute therefor another Primary Treasury Dealer, or any
other Primary Treasury Dealer selected by the Corporate Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Corporate Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Corporate Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third Business Day preceding such redemption date.
DIVIDEND COVENANT. The Company will covenant in substance that, so long as
any New Bonds remain outstanding, it will not pay any cash dividends on common
stock after February 28, 1998 (other than certain dividends declared by the
Company on or before February 28, 1998 for payment on or before April 15, 1998)
except from credits to retained earnings after February 28, 1998 plus
$345,000,000 and plus such additional amounts as shall be approved by the SEC.
SINKING OR IMPROVEMENT FUND. The New Bonds will not be entitled to any
sinking or improvement fund.
MODIFICATION OF THE MORTGAGE. Effective March 1, 1998, the Company
exercised its right to amend the Mortgage as set forth in "Description of New
Bonds -- Modification of the Mortgage" in the accompanying Prospectus.
S-4
RESERVATION OF RIGHTS TO AMEND THE MORTGAGE.
REPLACEMENT FUND. The Company has reserved the right without any
consent or other action by the holders of any series of Bonds created after
February 29, 1996, including the New Bonds, to amend the Mortgage to
eliminate the requirements of the replacement fund under the Mortgage.
ISSUANCE OF ADDITIONAL BONDS. The Company has reserved the right
without any consent or other action by the holders of any series of Bonds
created after February 29, 1996, including the New Bonds, to amend the
Mortgage (1) to provide that Bonds may be issued upon the basis of 80% of
the cost or fair value (whichever is less) of unfunded property additions
after adjustments to offset retirements (in addition to the other bases of
issuance) and (2) to modify the net earnings test (a) to provide that the
period over which net earnings is computed shall be 12 consecutive months
out of the immediately preceding 18 months (instead of the immediately
preceding 15 months), (b) to specifically permit the inclusion in net
earnings of revenues collected subject to possible refund and allowances
for funds used during construction and (c) to provide for no deduction for
non-recurring charges.
RELEASE AND SUBSTITUTION OF PROPERTY. The Company has reserved the
right without any consent or other action by the holders of any series of
Bonds created after February 29, 1996, including the New Bonds, to amend
the Mortgage (1) to permit the release of mortgaged property from the lien
of the Mortgage in an amount equal to the aggregate principal amount of
retired bonds that the Company elects to use as the basis for such release
times the reciprocal of the bonding ratio in effect at the time such
retired bonds were originally issued; (2) to permit the release of unfunded
property so long as the Company has at least $1 in unfunded property
additions remaining; (3) to remove the existing limitations on the amount
of obligations secured by purchase money mortgages upon any property being
released that can be used as the basis for such release; (4) to
specifically provide that if the Company transfers as an entirety all or
substantially all property subject to the Mortgage to a successor
corporation, the Company would be released of all obligations under the
Mortgage; and (5) to change the definition of "Funded Property" to mean
only property specified by the Company with a fair value, to be determined
by an independent expert, of not less than 10/8 of the sum of the amount of
outstanding Bonds and retired bond credits.
MODIFICATION. The Company has reserved the right without any consent
or other action by the holders of any series of Bonds created after
February 29, 1996, including the New Bonds, to amend the Mortgage (1) to
reduce the percentage vote required to modify certain bondholders' rights
from 66 2/3% to a majority of Bonds outstanding; (2) to provide that, if
less than all series of Bonds outstanding are to be affected by a proposed
change in the Mortgage, that only the consent of a majority of the Bonds of
each affected series is required to make such change; and (3) to permit the
Company to amend the Mortgage without the consent of the holders of Bonds
to make changes which do not adversely affect the interests of such
bondholders in any material respect.
S-5
UNDERWRITING
Under the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters has severally agreed to
purchase, the respective principal amount of the New Bonds set forth opposite
its name below:
UNDERWRITER PRINCIPAL AMOUNT
----------------
Lehman Brothers Inc.................. $ 57,500,000
Donaldson, Lufkin & Jenrette
Securities Corporation............. 57,500,000
----------------
Total........................ $115,000,000
================
The Underwriting Agreement provides that the several obligations of the
Underwriters to pay for and accept delivery of the New Bonds are subject to
approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters' obligations are such that they are committed to
take and pay for all of the New Bonds offered hereby if any are taken, provided,
that under certain circumstances involving a default of an Underwriter, less
than all of the New Bonds may be purchased. Default by one Underwriter would not
relieve the non-defaulting Underwriter from its several obligation, and in the
event of such a default, the non-defaulting Underwriter may be required by the
Company to purchase the principal amount of the New Bonds that it has severally
agreed to purchase and, in addition, to purchase the principal amount of the New
Bonds that the defaulting Underwriter shall have failed to purchase, severally
and not jointly, up to a principal amount equal to one-ninth of the principal
amount of the New Bonds that such non-defaulting Underwriter has otherwise
agreed to purchase.
The Underwriters have advised the Company that they propose to offer all or
part of the New Bonds directly to purchasers at the initial public offering
price set forth on the cover page of this Prospectus Supplement, and to certain
securities dealers at such price less a concession not in excess of .40% of the
principal amount of the New Bonds. The Underwriters may allow, and such dealers
may reallow to certain brokers and dealers, a concession not in excess of .25%
of the principal amount of the New Bonds. After the New Bonds are released for
sale to the public, the offering price and other selling terms may from time to
time be varied.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
There is presently no trading market for the New Bonds and there is no
assurance that a market will develop. Although they are under no obligation to
do so, the Underwriters presently intend to act as market makers for the New
Bonds in the secondary trading market, but may discontinue such market-making at
any time without notice.
The Underwriters may engage in stabilizing transactions and syndicate
covering transactions in accordance with Rule 104 under the Exchange Act.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the New Bonds in the open market after the
distribution has been completed in order to cover syndicate short positions.
Such stabilizing transactions and syndicate covering transactions may cause the
price of the New Bonds to be higher than it would otherwise be in the absence of
such transactions.
EXPERTS AND LEGALITY
The Company's balance sheets as of December 31, 1997 and 1996 and the
statements of income, retained earnings, and cash flows and the related
financial statement schedule for each of the three years in the period ended
December 31, 1997, incorporated by reference in this Prospectus Supplement from
the Company's Annual Report on Form 10-K for the year ended December 31, 1997,
have been
S-6
incorporated by reference herein in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.
The legality of the New Bonds will be passed upon for the Company by Denise
C. Redmann, Senior Attorney -- Corporate and Securities of Entergy Services,
Inc. and Reid & Priest LLP, New York, New York. Certain legal matters will be
passed upon for the Underwriters by Winthrop, Stimson, Putnam & Roberts, New
York, New York. Matters pertaining to New York law will be passed upon by Reid &
Priest LLP, New York counsel to the Company, and matters pertaining to Louisiana
law will be passed upon by Denise C. Redmann, Senior Attorney -- Corporate and
Securities of Entergy Services, Inc., Louisiana counsel to the Company.
The statements as to matters of law and legal conclusions made under
"Description of the New Bonds" in this Prospectus Supplement and "Description
of New Bonds" in the accompanying Prospectus have been reviewed by Denise C.
Redmann, Senior Attorney -- Corporate and Securities of Entergy Services, Inc.
and, except as to "Security" therein, by Reid & Priest LLP, New York, New
York, and are set forth herein in reliance upon the opinions of said counsel,
respectively, and upon their authority as experts.
S-7
PROSPECTUS
$369,000,000
LOUISIANA POWER & LIGHT COMPANY
FIRST MORTGAGE BONDS
PREFERRED STOCK, CUMULATIVE, $25 PAR VALUE
PREFERRED STOCK, CUMULATIVE, $100 PAR VALUE
Louisiana Power & Light Company (the "Company") may offer from time to
time its First Mortgage Bonds (the "New Bonds") and/or its Preferred Stock,
Cumulative, $25 Par Value and/or Preferred Stock, Cumulative, $100 Par Value
(collectively, the "New Preferred Stock"), provided, however, that the
aggregate principal amount and/or par value, as the case may be, shall not
exceed $369 million. The New Bonds and New Preferred Stock will each be offered
in one or more series at prices and on terms to be determined at the time of
sale. This Prospectus will be supplemented by a prospectus supplement or
supplements (the "Prospectus Supplement") which will set forth, as applicable,
(1) the aggregate principal amount, rate and time of payment of interest,
maturity, purchase price, initial public offering price, if any, any redemption
provisions and other specific terms of the series of the New Bonds in respect of
which this Prospectus is being delivered and/or (2) the number of shares, the
par value per share, purchase price, initial public offering price, if any,
dividend rate, any redemption or sinking fund terms and other specific terms of
the series of the New Preferred Stock in respect of which this Prospectus is
being delivered. The sale of one series of any security will not be contingent
upon the sale of any other series of any security.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Company may sell one or more series of the New Bonds and/or the New
Preferred Stock through underwriters, dealers or agents, or directly to one or
more purchasers. The Prospectus Supplement will set forth the names of
underwriters, dealers or agents, if any, any applicable commissions or discounts
and the net proceeds to the Company from any such sale. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers, agents and purchasers.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 15, 1993.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY OR ANY OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission
("SEC"). Such reports include information, as of particular dates, concerning
the Company's directors and officers, their remuneration, the principal holders
of the Company's securities and any material interest of such persons in
transactions with the Company. Such reports and other information can be
inspected and copied at the public reference facilities maintained by the SEC at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; 500 West Madison
Street, 14th floor, Chicago, Illinois 60661; and Seven World Trade Center, 13th
floor, New York, New York 10048. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the SEC at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Company's series
of 12.64% Preferred Stock and 9.68% Preferred Stock are listed on the New York
Stock Exchange. Reports and other information concerning the Company can be
inspected and copied at the office of such Exchange at 20 Broad Street, New
York, New York. Shareholders of the Company are furnished copies of financial
statements as of the end of the most recent fiscal year audited and reported
upon (with an opinion expressed) by independent certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC pursuant to the Exchange Act are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1992.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1993 and June 30, 1993.
In addition, all documents subsequently filed by the Company pursuant to
Section 13, 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents (such documents,
and the documents enumerated above, being herein referred to as "Incorporated
Documents").
Any statement contained herein or in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in any other subsequently filed Incorporated
Document or in an accompanying Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN
DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR
ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN. REQUESTS
SHOULD BE DIRECTED TO MR. GARY L. FLORREICH, ASSISTANT SECRETARY AND ASSISTANT
TREASURER, LOUISIANA POWER & LIGHT COMPANY, 639 LOYOLA AVENUE, NEW ORLEANS,
LOUISIANA
2
70113, TELEPHONE NUMBER: 504-569-4000. THE INFORMATION RELATING TO THE COMPANY
CONTAINED IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT DOES NOT
PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH THE INFORMATION
CONTAINED IN THE INCORPORATED DOCUMENTS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR, WITH RESPECT TO ANY SERIES
OF THE NEW BONDS OR THE NEW PREFERRED STOCK, THE PROSPECTUS SUPPLEMENT RELATING
THERETO, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND A PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THAT
PROSPECTUS SUPPLEMENT.
------------------------
THE COMPANY
The Company was incorporated under the laws of the State of Louisiana on
October 15, 1974 and is successor by merger to a predecessor Louisiana Power &
Light Company, which was incorporated under the laws of the State of Florida in
1927. The merger of such predecessor corporation into the Company became
effective on February 28, 1975. The Company's principal executive office is
located at 639 Loyola Avenue, New Orleans, Louisiana 70113. Its telephone
number, including area code, is (504) 569-4000.
The Company is an electric public utility company with all of its
operations in the State of Louisiana. Entergy Corporation, which is a registered
public utility holding company under the Public Utility Holding Company Act of
1935 ("Holding Company Act"), owns all of the outstanding common stock of the
Company. The Company, Arkansas Power & Light Company ("AP&L"), Mississippi
Power & Light Company ("MP&L") and New Orleans Public Service Inc. ("NOPSI")
are the principal operating electric utility subsidiaries of Entergy
Corporation. Entergy Corporation also owns all of the common stock of System
Energy Resources, Inc., a generating company, Entergy Services, Inc., a service
company, Entergy Enterprises, Inc., a non-utility company, Entergy Operations,
Inc., a nuclear management services company, and Entergy Power, Inc., a
subsidiary formed to market capacity and energy from certain generating units to
wholesale markets. Entergy Corporation also has several subsidiaries formed to
participate in utility projects located outside the Entergy System's areas of
retail service, both domestically and in foreign countries.
The Company, AP&L, MP&L and NOPSI own all of the capital stock of System
Fuels, Inc., a special purpose company which implements and/or maintains certain
programs for the procurement, delivery and storage of fuel supplies for certain
Entergy Corporation subsidiaries.
USE OF PROCEEDS
The net proceeds to be received from the issuance and sale of the New Bonds
and/or the New Preferred Stock will be used for general corporate purposes,
including, without limitation, the possible redemption or other acquisition, in
whole or in part, of certain of the Company's outstanding securities. Any
specific securities to be redeemed or acquired with the proceeds of a sale of a
series of New Bonds or New Preferred Stock will be set forth in the Prospectus
Supplement relating to that series. Reference is made to the Incorporated
Documents with respect to the Company's most significant contingencies, its
general capital requirements and its general financing plans and capabilities,
including its short-term borrowing capacity, and earnings coverage requirements
under the Company's Restated Articles of Incorporation, as amended ("Articles
of Incorporation"), which limit the amount of additional Preferred Stock the
Company may issue, and earnings coverage and other requirements
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under the Company's Mortgage (as herein defined) which limit the amount of
additional First Mortgage Bonds the Company may issue.
DESCRIPTION OF NEW BONDS
GENERAL. The New Bonds are to be issued under the Company's Mortgage and
Deed of Trust, dated as of April 1, 1944, with The Chase National Bank of the
City of New York (Bank of Montreal Trust Company, successor) ("Corporate
Trustee") and Carl E. Buckley (Mark F. McLaughlin, successor), ("Co-Trustee",
and together with the Corporate Trustee, the "Trustees"), as supplemented by
various supplemental indentures thereto and as to be further supplemented to
provide specifically for the New Bonds (collectively referred to as the
"Mortgage"). All First Mortgage Bonds issued or to be issued under the
Mortgage are referred to herein as "Bonds". The statements herein concerning
the Bonds, the New Bonds and the Mortgage are summary in nature and do not
purport to be complete. They are subject to the detailed provisions of the
Mortgage. The Mortgage and a form of supplemental indenture are filed as
exhibits to the Registration Statement of which this Prospectus is a part.
TERMS OF SPECIFIC SERIES OF THE NEW BONDS. A Prospectus Supplement will
describe the following terms of, or applicable to, each series of the New Bonds
to be issued: (1) the designation of such series of the New Bonds; (2) the
aggregate principal amount of such series; (3) the date on which such series
will mature; (4) the rate at which such series will bear interest and the date
from which such interest accrues; (5) the dates on which interest will be
payable; (6) the prices, including the "general redemption prices" and the
"special redemption prices" referred to below, and the other terms and
conditions upon which the particular series may be redeemed by the Company prior
to maturity; (7) whether the dividend covenant described below will be
applicable to any such series; (8) if an insurance policy will be provided for
the payment of the principal of and/or interest on the New Bonds of such series,
the terms thereof; and (9) any other terms of such series of the New Bonds, not
inconsistent with the provisions of the Mortgage.
FORM AND EXCHANGE. See "Book Entry Securities" below.
REPLACEMENT FUND. In addition to actual expenditures for maintenance and
repairs, the Company is required to expend or deposit for each year, for
replacements and improvements in respect of the mortgaged electric, gas, steam
and/or hot water utility property and certain automotive equipment, an amount
equal to $800,000 plus 2 1/4% of net additions to the mortgaged electric, gas,
steam and/or hot water utility property made after December 31, 1943 and prior
to the beginning of such year. Such requirement may be met by depositing cash or
certifying gross property additions or expenditures for certain automotive
equipment or by taking credit for Bonds and qualified lien bonds retired. Such
cash may be withdrawn against gross property additions or waiver of the right to
issue Bonds.
SINKING OR IMPROVEMENT FUND. The Company is required to make annual
sinking or improvement fund payments for each outstanding series of Bonds (other
than the forty-third, forty-fifth, forty-sixth, forty-ninth and fifty-first
series), stated as 1% per year of the greatest amount for each such series
outstanding prior to the beginning of the year, less certain Bonds retired, and
will have such requirements for each series of the New Bonds (beginning not
later than 23 months from the date of each series of the New Bonds). The Company
may also take as a credit against the sinking or improvement fund requirement in
respect of each series of the New Bonds an amount, not exceeding the sinking or
improvement fund requirement in any one year, based upon sinking fund credits
for certain Bonds retired prior to or at maturity. The resulting requirement
with respect to each series of the New Bonds may be satisfied in cash or
principal amount of such series of New Bonds or with property additions at 60%
of the cost or fair value thereof, whichever is less. The sinking or improvement
fund requirement in respect of each series of the New Bonds may be anticipated
at any time. If the date fixed for any resulting redemption shall be in the
calendar year in which such sinking fund payment is due, redemption shall be at
the special redemption price, but if the date fixed for any resulting redemption
shall be prior to the calendar year in which such sinking fund payment is due,
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redemption shall be at the general redemption price and subject to the
limitation on such redemptions as set forth under "Redemption and Purchase of
New Bonds" in the accompanying Prospectus Supplement. Similar but not identical
provisions are in effect with respect to the Bonds of other series now
outstanding.
SPECIAL PROVISIONS FOR RETIREMENT OF BONDS. If, during any 12 months'
period, mortgaged property is disposed of by order of or to any governmental
authority, resulting in the receipt of $5,000,000 or more as proceeds, the
Company (subject to certain conditions) must apply such proceeds, less certain
deductions, to the retirement of Bonds. The New Bonds are redeemable for this
purpose at the special redemption prices set forth under "Redemption and
Purchase of New Bonds" in the accompanying Prospectus Supplement.
SECURITY. The New Bonds, together with all other Bonds, will be secured by
the Mortgage, which constitutes, in the opinion of the General Counsel for the
Company, a first mortgage lien on all of the present properties of the Company
(except as stated below), subject to (a) leases of minor portions of the
Company's property to others for uses which, in the opinion of such counsel, do
not interfere with the Company's business, (b) leases of certain property of the
Company not used in its business, and (c) excepted encumbrances. There are
excepted from the lien of the Mortgage all cash and securities; certain
equipment, materials and supplies; automobiles and other vehicles and aircraft;
timber, mineral rights and royalties; and receivables, contracts, leases and
operating agreements.
The Mortgage contains provisions subjecting after-acquired property
(subject to pre-existing liens) to the lien thereof, subject to limitations in
the case of consolidation, merger or sale of substantially all of the Company's
assets.
The Mortgage provides that the Trustees shall have a lien on the mortgaged
property, prior to the Bonds, for the payment of their reasonable compensation
and expenses and for indemnity against certain liabilities.
The Mortgage contains restrictions, some of which apply only so long as
certain prior series are outstanding, on the acquisition of property subject to
liens and on the issuance of bonds under divisional or prior lien mortgages.
ISSUANCE OF ADDITIONAL BONDS. The maximum principal amount of Bonds that
may be issued under the Mortgage is limited to One Hundred Billion Dollars at
any time outstanding, subject to property additions, earnings and other
limitations of the Mortgage. Bonds of any series may be issued from time to time
upon the bases of (1) 60% of property additions after adjustments to offset
retirements, (2) retirement of Bonds or qualified lien bonds, and (3) deposit of
cash. Property additions generally include electric, gas, steam and/or hot water
property acquired after December 31, 1943, but may not include securities,
automobiles or other vehicles or aircraft or property used principally for the
production or gathering of natural gas. The Company estimates that, as of
September 30, 1993, there were approximately $89.6 million of unfunded property
additions available for the issuance of additional Bonds.
With certain exceptions in the case of (2) above, the issuance of
additional Bonds is subject to adjusted net earnings (before interest and income
taxes) for 12 consecutive months out of the 15 months immediately preceding the
issuance of such Bonds being at least twice the annual interest requirements on
all Bonds at the time outstanding, including the additional Bonds being issued,
and all indebtedness of prior rank. Such adjusted net earnings are computed
after provisions for retirement and depreciation of property at least equal to
the replacement fund requirements for such period.
The Company expects to issue the New Bonds on the basis of unfunded net
property additions and/or on the basis of the retirement of Bonds.
The Company has reserved the right (without any consent or other action by
holders of the 1999 Series Bonds or any subsequently created series, including
the New Bonds) to include nuclear fuel (and similar or analogous devices or
substances) as property additions. The Company has also reserved the right to
amend the Mortgage, without any consent or other action of the holders of the
2008 Series
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Bonds or any subsequently created series (including the New Bonds), to make
available as property additions any form of space satellites (including solar
power satellites), space stations and other analogous facilities.
No Bonds may be issued on the basis of property additions subject to
qualified liens if the qualified lien bonds secured thereby exceed 50% of such
property additions, or if the qualified lien bonds and Bonds then outstanding
which have been issued against property additions subject to continuing
qualified liens and certain other items would in the aggregate exceed 15% of the
Bonds and qualified lien bonds outstanding.
RELEASE AND SUBSTITUTION OF PROPERTY. Property may be released from the
lien of the Mortgage upon the bases of (1) deposit of cash or, to a limited
extent, purchase money mortgages, (2) property additions, after adjustments in
certain cases to offset retirements and after making adjustments for qualified
lien bonds outstanding against property additions, and (3) waiver of the right
to issue Bonds without applying any earnings test. Cash may be withdrawn upon
the bases stated in (2) and (3) above without meeting an earnings test. When
property released is not funded property, property additions used to effect the
release may again, in certain cases, become available as credits under the
Mortgage, and the waiver of the right to issue Bonds to effect the release may,
in certain cases, cease to be effective as such a waiver. Similar provisions are
in effect as to cash proceeds of such property. The Mortgage contains special
provisions with respect to qualified lien bonds pledged and disposition of
moneys received on pledged prior lien bonds.
DIVIDEND COVENANT. The Company may covenant in substance that, so long as
any New Bonds of a particular series remain outstanding, it will not pay any
cash dividends on common stock after a selected date close to the date of the
original issuance of such series of New Bonds (other than certain dividends that
may be declared by the Company prior to such selected date) except from credits
to earned surplus after such selected date plus an amount up to $345 million and
plus such additional amounts as shall be approved by the SEC. The Prospectus
Supplement relating to a particular series of New Bonds will state whether this
covenant will apply to such series.
MODIFICATION OF THE MORTGAGE. The rights of the Bondholders may be
modified with the consent of the holders of 70% of the Bonds, and, if less than
all series of Bonds are affected, the consent also of the holders of 70% of the
Bonds of each series affected. The Company has reserved the right (without any
consent or other action by holders of the 2000 Series Bonds or any subsequently
created series, including the New Bonds) to substitute for the foregoing
provision a provision to the effect that the rights of the Bondholders may be
modified with the consent of holders of 66 2/3% of the Bonds, and, if less than
all series of Bonds are affected, the consent also of holders of 66 2/3% of the
Bonds of each series affected. In general, no modification of the terms of
payment of principal or interest, no modification of the obligations of the
Company under Section 64 of the Mortgage (until the foregoing substitution is
made), and no modification affecting the lien of the Mortgage or reducing the
percentage required for modification, is effective against any Bondholder
without his consent.
DEFAULTS AND NOTICE THEREOF. Defaults are defined in the Mortgage as:
default in payment of principal; default for 60 days in payment of interest or
installments of funds for retirement of Bonds; certain events in bankruptcy,
insolvency or reorganization; defaults with respect to qualified lien bonds; and
default for 90 days after notice in other covenants. The Trustees may withhold
notice of default (except in payment of principal, interest or funds for
retirement of Bonds) if they determine it is in the interests of the
Bondholders.
The Corporate Trustee or the holders of 25% of the Bonds may declare the
principal and interest due on default, but a majority may annul such declaration
if such default has been cured. No holder of Bonds may enforce the lien of the
Mortgage without giving the Trustees written notice of a default and unless the
holders of 25% of the Bonds have requested the Trustees in writing to act and
offered them reasonable opportunity to act and indemnity satisfactory to the
Trustees against the costs, expenses and liabilities to be incurred thereby and
the Trustees shall have failed to act. Holders of a majority of the
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Bonds may direct the time, method and place of conducting any proceedings for
any remedy available to the Trustees, or exercising any trust or power conferred
upon the Trustees.
The Company must file an annual certificate with the Corporate Trustee as
to compliance with the provisions of the Mortgage and as to the absence of
default with respect to any of the covenants contained in the Mortgage.
DESCRIPTION OF NEW PREFERRED STOCK
GENERAL. The Articles of Incorporation provide for two classes of serial
preferred stock of the Company, the Preferred Stock, $100 Par Value ("$100
Preferred Stock"), and the Preferred Stock, $25 Par Value ("$25 Preferred
Stock") (the $100 Preferred Stock and the $25 Preferred Stock being herein
collectively referred to as the "Preferred Stock"). The $100 Preferred Stock
and the $25 Preferred Stock have the same rank and, except as to those
characteristics relating to par value, voting rights (including matters relating
to quorums and adjournments) and in certain other respects as to which there may
be variations among series, the shares of each series of Preferred Stock confer
equal rights upon the holders. The respects in which there may be variations as
among series consist of (a) the number of shares constituting each series and
the distinctive serial designation thereof, (b) the annual dividend rate, the
initial dividend payment date and the date from which dividends shall be
cumulative, (c) the amounts payable upon redemption, and (d) the terms and
amount of sinking fund requirements (if any) for the purchase or redemption of
shares of each series of Preferred Stock other than the first through tenth
series of the $100 Preferred Stock heretofore issued by the Company. When a new
series of Preferred Stock is created, the number of shares constituting such
series, its distinctive serial designation and its distinctive characteristics
(in those limited respects as to which there may be variations) are set by an
amendment to the Articles of Incorporation. The statements herein concerning the
Preferred Stock and the New Preferred Stock are summary in nature and do not
purport to be complete. Such statements do not attempt to relate or to give
effect to the applicable provisions of Louisiana statutory or decisional law and
are subject in all respects to the detailed provisions of the Articles of
Incorporation and to the articles of amendment to be adopted for each series of
New Preferred Stock. The Articles of Incorporation and the form of articles of
amendment are filed as exhibits to the Registration Statement of which this
Prospectus is a part.
FORM AND EXCHANGE. See "Book Entry Securities" below.
TERMS OF SPECIFIC SERIES OF THE NEW PREFERRED STOCK. A Prospectus
Supplement will describe the following terms of each series of New Preferred
Stock to be issued: (1) the designation of such series of New Preferred Stock;
(2) the par value of each share; (3) the number of shares of New Preferred Stock
in such series; (4) the purchase price and initial public offering price, if
any, of the shares of such series; (5) the dividend rate; (6) the initial
dividend payment date and the date from which dividends will be cumulative; (7)
the terms and conditions pursuant to which, and the prices at which, the Company
may redeem shares of such series; (8) the terms and amount of any sinking fund
requirements applicable to such series; and (9) any other terms of such series
of the New Preferred Stock, not inconsistent with the Articles of Incorporation.
DIVIDEND RIGHTS. Each series of the New Preferred Stock, PARI PASSU with
each other series of the Preferred Stock, shall be entitled, when and as
declared by the Board of Directors, in preference to the common stock, to
dividends at the rate stated in the title thereof, payable quarterly on February
1, May 1, August 1 and November 1 of each year.
VOTING RIGHTS. Except for that purpose only for which the right to vote is
expressly conferred upon the holders of the Preferred Stock by the Articles of
Incorporation, the holders of the Preferred Stock shall have no power to vote
and shall be entitled to no notice of any meeting of stockholders of the
Company.
If and when dividends payable on Preferred Stock of the Company shall be in
default in an amount equal to four full quarterly payments or more per share,
and thereafter until all dividends on
7
any such Preferred Stock in default shall have been paid, the holders of all
Preferred Stock, voting separately as a class in such manner that the holders of
the $100 Preferred Stock shall have one vote per share and the holders of the
$25 Preferred Stock shall have one-quarter vote per share, shall be entitled to
elect the smallest number of directors necessary to constitute a majority of the
full Board of Directors of the Company, and the holders of the common stock,
voting separately as a class, shall be entitled to elect the remaining directors
of the Company.
RESTRICTIONS ON ISSUANCE OF STOCK, RESTRICTIONS ON ALTERING TERMS OF
PREFERRED STOCK. So long as any shares of the Preferred Stock are outstanding,
the Company shall not, without the consent (given by vote at a meeting called
for that purpose) of at least two-thirds of the total number of shares of the
Preferred Stock then outstanding (for purposes of this computation each share of
the $100 Preferred Stock shall count as one share, and each share of the $25
Preferred Stock shall count as one-quarter share):
(1) Issue any new stock which would rank prior to the Preferred Stock
or issue any security convertible into shares of any such stock except for
the purpose of providing funds for the redemption of all of the Preferred
Stock then outstanding; or
(2) Amend or alter any of the express terms of the Preferred Stock
then outstanding in a manner prejudicial to the holders thereof; the
increase or decrease in the authorized amount of the Preferred Stock or the
creation, or increase or decrease in the authorized amount, of any new
class of stock ranking on a parity with the Preferred Stock shall not, for
the purposes of this paragraph, be deemed to be prejudicial to the holders
of the Preferred Stock.
RESTRICTIONS ON MERGER, SALE OF ASSETS, ISSUE OF UNSECURED DEBT, SALE OF
ADDITIONAL PREFERRED STOCK. So long as any shares of the Preferred Stock are
outstanding, the Company shall not, without the consent (given by vote in a
meeting called for that purpose) of the holders of a majority of the total
number of shares of the Preferred Stock then outstanding (for purposes of this
computation each share of the $100 Preferred Stock shall count as one share, and
each share of the $25 Preferred Stock shall count as one-quarter share):
(1) Merge or consolidate with or into any other corporation, or sell
or otherwise dispose of all or substantially all of the assets of the
Company, without obtaining the prior approval of regulatory authority of
the United States under the provisions of the Holding Company Act; or
(2) Issue or assume any unsecured indebtedness for purposes other
than (i) the refunding of outstanding unsecured indebtedness theretofore
issued or assumed by the Company, (ii) the reacquisition, redemption or
other retirement of any indebtedness which has been authorized by
regulatory authority of the United States under the provisions of the
Holding Company Act, or (iii) the reacquisition, redemption or other
retirement of all outstanding shares of the Preferred Stock, or preferred
stock ranking prior to, or PARI PASSU with, the Preferred Stock, if
immediately after such issue or assumption, the total principal amount of
all unsecured indebtedness issued or assumed by the Company, including
unsecured indebtedness then to be issued or assumed (but excluding the
principal amount then outstanding of any unsecured indebtedness having a
maturity in excess of ten years and in amount not exceeding 10% of the
aggregate of (a) and (b) below) would exceed 10% of the aggregate of (a)
the total principal amount of all bonds or other securities representing
secured indebtedness issued or assumed by the Company and then to be
outstanding, and (b) the capital and surplus of the Company as then to be
stated on the books of account of the Company. When unsecured debt of a
maturity in excess of ten years shall become of a maturity of ten years or
less, it shall then be regarded as unsecured debt of a maturity of less
than ten years and shall be computed with such debt for the purpose of
determining the percentage ratio to the sum of (a) and (b) above of
unsecured debt of a maturity of less than ten years, and when provision
shall have been made, whether through a sinking fund or otherwise, for the
retirement, prior to its maturity, of unsecured debt of a maturity in
excess of ten years, the amount of any such security so required to be
retired in less than ten years shall be regarded as unsecured debt of a
maturity of less than ten years (and not as unsecured debt of a maturity in
excess of ten
8
years) and shall be computed with such debt for the purpose of determining
the percentage ratio to the sum of (a) and (b) above of unsecured debt of a
maturity of less than ten years, provided, however, that the payment due
upon the maturity of unsecured debt having an original single maturity in
excess of ten years or the payment due upon the latest maturity of any
serial debt which had original maturities in excess of ten years shall not,
for purposes of this provision, be regarded as unsecured debt of a maturity
of less than ten years until such payment or payments shall be required to
be made within five years (provided that the words "five years" shall
read "three years" when none of the 4.96% Preferred Stock remains
outstanding); furthermore, when unsecured debt of a maturity of less than
ten years shall exceed 10% of the sum of (a) and (b) above, no additional
unsecured debt shall be issued or assumed (except for the purposes set
forth in (i), (ii) and (iii) above) until such ratio is reduced to 10% of
the sum of (a) and (b) above; or
(3) Issue, sell or otherwise dispose of any shares of the Preferred
Stock, or of any other class of stock ranking on a parity with the
Preferred Stock as to dividends or in liquidation, dissolution, winding up
or distribution, (a) so long as any of the 4.96% Preferred Stock remains
outstanding, unless the net income of the Company available for dividends
for a period of 12 consecutive calendar months within the 15 calendar
months immediately preceding the issuance, sale or disposition of such
stock, is at least equal to twice the annual dividend requirements on all
outstanding shares of the Preferred Stock and of all other classes of stock
ranking prior to or on a parity with the Preferred Stock, including the
shares proposed to be issued, and (b) so long as any Preferred Stock
remains outstanding, unless the gross income of the Company for such period
available for the payment of interest shall have been at least 1 1/2 times
the sum of the annual interest charges on all interest bearing indebtedness
of the Company and the annual dividend requirements on all outstanding
Preferred Stock and of all other classes of stock ranking prior to, or on a
parity with, the Preferred Stock including the shares proposed to be
issued, and (c) unless the aggregate of the capital of the Company
applicable to the common stock and the surplus of the Company shall be not
less than the aggregate amount payable on the involuntary dissolution,
liquidation or winding up of the Company in respect of all shares of the
Preferred Stock and all shares of stock, if any, ranking prior thereto, or
on a parity therewith, as to dividends or distributions, which will be
outstanding after the issue of the shares proposed to be issued.
LIQUIDATION RIGHTS. In the event of any voluntary liquidation, dissolution
or winding up of the Company, the Preferred Stock shall have a preference over
the common stock until an amount equal to the then current redemption price
shall have been paid. In the event of any involuntary liquidation, dissolution
or winding up of the Company, the Preferred Stock shall also have a preference
over the common stock until the par value thereof plus accumulated and unpaid
dividends thereon shall have been paid.
PRE-EMPTIVE OR OTHER SUBSCRIPTION RIGHTS. No holder of any stock of the
Company shall be entitled as of right to purchase or subscribe for any part of
any stock of the Company or of any additional stock of any class to be issued by
reason of any increase of the authorized capital stock of the Company.
LIABILITY TO FURTHER CALLS AND TO ASSESSMENT. All of the New Preferred
Stock will be validly issued and fully paid and non-assessable upon receipt by
the Company of the purchase price thereof.
LIMITATIONS ON PAYMENT OF COMMON STOCK DIVIDENDS. The Articles of
Incorporation in effect restrict the payment of dividends on common stock to 75%
of net income available for common stock dividends if the percentage of common
stock equity to total capitalization, as defined, is between 20% and 25%, and to
50% of such net income if such percentage is less than 20%. At any time when
common stock equity is 25% or more of total capitalization, the Company may not
declare dividends on the common stock which would reduce common stock equity
below 25% of total capitalization, except as hereinbefore provided. Certain
other limitations on payment of common stock dividends also exist in the
Articles of Incorporation.
9
CERTAIN TERMS APPLICABLE TO REDEMPTION. In general, at any time when
dividends payable on any Preferred Stock are in default, the Company may not (1)
make any payment, or set aside funds for payment, into any sinking fund for the
purchase or redemption of any shares of the Preferred Stock, or (2) redeem,
purchase or otherwise acquire less than all of the shares of the Preferred
Stock, in either case unless approval is obtained under the Holding Company Act.
Any shares of the Preferred Stock that are redeemed, purchased or acquired shall
be retired and cancelled.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the New
Preferred Stock is Mellon Securities Trust Company, New York, New York.
RATIOS OF EARNINGS TO FIXED CHARGES AND
RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
The Company has calculated ratios of earnings to fixed charges and ratios
of earnings to fixed charges and preferred dividends pursuant to Item 503 of SEC
Regulation S-K as follows:
TWELVE MONTHS ENDED
-----------------------------------------------------
DECEMBER 31,
---------------------------------------- JUNE 30,
1988 1989 1990 1991 1992 1993
------ ------ ------ ------ ------ --------
Ratios of Earnings to Fixed Charges(a)...................... 1.71 1.79 2.32 2.40 2.79 2.85
Ratios of Earnings to Fixed Charges and Preferred
Dividends(a)(b)........................................... 1.32 1.39 1.87 1.95 2.18 2.24
- ------------
(a) "Earnings", as defined by SEC Regulation S-K, represent the aggregate of
(1) net income, (2) taxes based on income, (3) investment tax credit
adjustments -- net and (4) fixed charges. "Fixed Charges" include interest
(whether expensed or capitalized), related amortization and interest
applicable to rentals charged to operating expenses.
(b) "Preferred Dividends", as defined by SEC Regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the effective income tax rate.
EXPERTS AND LEGALITY
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K have been audited by Deloitte & Touche, independent auditors, as
stated in their reports, which are incorporated by reference herein, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in auditing and accounting.
With respect to the unaudited interim financial information incorporated
herein by reference, Deloitte & Touche have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Company's Quarterly Reports
on Form 10-Q, and incorporated by reference herein, they did not audit and do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte & Touche
are not subject to the liability provisions of Section 11 of the Securities Act
of 1933 for their reports on the unaudited interim financial information because
those reports are not "reports" or "parts" of the Registration Statement
prepared or certified by an accountant within the meaning of Sections 7 and 11
thereof.
The statements at the date of this Prospectus as to matters of law and
legal conclusions made under "Description of New Bonds" and "Description of
New Preferred Stock" have been reviewed by Monroe & Lemann (A Professional
Corporation), General Counsel for the Company, and, except as to "Security"
under "Description of New Bonds", by Reid & Priest, and are set forth herein
in reliance upon the opinions of said firms, respectively, and upon their
authority as experts. The statements made in the Incorporated Documents at the
date of this Prospectus as to matters of law and legal conclusions, based on the
belief or opinion of the Company or otherwise, pertaining to titles to
10
properties, franchises and other operating rights of the Company, regulations to
which the Company is subject and any legal proceedings to which the Company is a
party, are made on the authority of Monroe & Lemann (A Professional
Corporation), and such statements are included in such documents and herein in
reliance upon their authority as experts.
The legality of the New Bonds and the New Preferred Stock will be passed
upon for the Company by Monroe & Lemann (A Professional Corporation), 201 St.
Charles Avenue, Suite 3300, New Orleans, Louisiana, and Reid & Priest, 40 West
57th Street, New York, New York, and for the underwriter(s), dealer(s), agent(s)
or purchaser(s) by Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza,
New York, New York. However, all legal matters pertaining to the organization of
the Company, titles to property, franchises and the lien of the Mortgage and all
matters of Louisiana law will be passed upon only by Monroe & Lemann (A
Professional Corporation).
PLAN OF DISTRIBUTION
The Company may sell the New Bonds and the New Preferred Stock in one or
more sales in any of three ways: (i) through one or more underwriters or
dealers; (ii) directly to a limited number of purchasers or to a single
purchaser; or (iii) through one or more agents. The Prospectus Supplement
relating to a series of the New Bonds ("Offered Bonds") or to a series of the
New Preferred Stock ("Offered Stock") will set forth the terms of the
offering, as applicable, of the Offered Bonds or the Offered Stock, including
the name or names of any underwriters, dealers or agents, the purchase price of
such Offered Bonds or Offered Stock and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in the sale, the Offered Bonds or Offered Stock
will be purchased by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of the sale. The underwriter or underwriters with respect to a
particular underwritten offering of Offered Bonds or Offered Stock will be named
in the Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Bonds or Offered Stock will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all such Offered Bonds or
Offered Stock if any are purchased; provided that the agreement between the
Company and the underwriter or underwriters providing for the sale of the
Offered Bonds or Offered Stock may provide that under certain circumstances
involving a default of underwriters, less than all of the Offered Bonds or
Offered Stock may be purchased.
Offered Bonds or Offered Stock may be sold directly by the Company or
through agents designated by the Company from time to time. The Prospectus
Supplement will set forth the name of any agent involved in the offer or sale of
the Offered Bonds or Offered Stock in respect of which the Prospectus Supplement
is delivered as well as any commissions payable by the Company to such agent.
Unless otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Bonds or Offered Stock from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
11
Each Prospectus Supplement relating to a particular offering of Offered
Bonds or Offered Stock will contain a statement (i) as to whether or not the
Company is able to predict the existence of a secondary market for such
securities and, if such existence is predicted, as to the extent of such
secondary market, and (ii) if such securities are to be purchased by an
underwriter or underwriters, as to whether or not such underwriter or
underwriters intend to make a market in such securities.
Subject to certain conditions, the Company may agree to indemnify any
underwriters, dealers, agents or purchasers, and any insurer providing an
insurance policy for the payment of principal of and/or interest on New Bonds,
and their controlling persons against certain civil liabilities, including
liabilities under the Securities Act of 1933.
BOOK ENTRY SECURITIES
Unless otherwise indicated in a Prospectus Supplement, the New Preferred
Stock and the New Bonds will be issued in the form of one or more fully
registered stock certificates or bonds, as the case may be, that will be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), or such other depository as may be subsequently designated, and
registered in the name of Cede & Co., as nominee for DTC.
So long as DTC, or its nominee, is the owner of the New Preferred Stock or
the New Bonds, DTC or such nominee, as the case may be, will be considered the
sole registered holder of the New Preferred Stock or the New Bonds for all
purposes under the Articles of Incorporation or Mortgage. Payments of redemption
price and dividends on the New Preferred Stock and payments of principal of and
premium, if any, and interest on the New Bonds will be made to DTC, or its
nominee, as the case may be, as the holder of the New Preferred Stock or the New
Bonds. Except as set forth below, owners of beneficial interests in the New
Preferred Stock or the New Bonds will not be entitled to have any of the
individual New Preferred Stock or New Bonds registered in their names, will not
receive or be entitled to receive physical delivery of any such New Preferred
Stock or New Bonds and will not be considered the holders thereof under the
Articles of Incorporation or Mortgage.
If DTC is at any time unwilling or unable to continue as depository and a
successor depository is not appointed, the Company will issue certificates for
New Preferred Stock or individual registered New Bonds in exchange for the New
Preferred Stock or New Bonds held by DTC. In addition, the Company may at any
time and in its sole discretion determine not to have the New Preferred Stock or
New Bonds held by DTC and, in such event, will issue New Preferred Stock
certificates or individual registered New Bonds in exchange for the New
Preferred Stock or New Bonds held by DTC. In any such instance, an owner of a
beneficial interest in the New Preferred Stock or the New Bonds will be entitled
to physical delivery of New Preferred Stock certificates or individual New Bonds
equal in par value or principal amount to its beneficial interest and to have
such New Preferred Stock or New Bonds registered in its name. Individual New
Bonds so issued will be issued as registered New Bonds in denominations of
$1,000 or any multiple thereof.
Upon the issuance of the New Preferred Stock or the New Bonds, DTC will
credit, on its book-entry registration and transfer system, the respective par
values or principal amounts of beneficial interests to the accounts of
institutions that have accounts with DTC ("Participants"). The accounts to be
credited will initially be designated by any Underwriter or the Company.
Ownership of beneficial interests in the New Preferred Stock or the New Bonds
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in the New Preferred Stock or
the New Bonds will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC (with respect to the
Participants' interests) or by Participants or persons that hold through
Participants (with respect to persons other than Participants). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities. Such limits and such laws may impair the ability to transfer
beneficial interests in the New Preferred Stock or the New Bonds.
12
Upon receipt of any payment of the redemption price or dividends in respect
to the New Preferred Stock or any payment of principal, premium or interest in
respect of the New Bonds, DTC's current practice is to credit immediately
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the par value of such New Preferred Stock or
the principal amount of such New Bonds as shown on the records of DTC. Payments
by Participants to owners of beneficial interests in the New Preferred Stock or
the New Bonds will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such
Participants, subject to any statutory or regulatory requirements that may be in
effect from time to time. Conveyance of notices and other communications by DTC
to Participants and by Participants to other beneficial owners will be governed
by arrangements among them, subject to any statutory and regulatory requirements
as may be in effect from time to time.
Each purchaser of New Preferred Stock or New Bonds must rely on (1) the
procedures of DTC, and, if such purchaser is not a Participant, the procedures
of the Participant through which such purchaser holds its beneficial interest,
to receive payments and notices, and (2) the records of DTC and, if such
purchaser is not a Participant, the records of the Participant through which
such purchaser holds its beneficial interest, to evidence its beneficial
ownership of New Preferred Stock or New Bonds.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commerical Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities of its Participants and facilitates the
clearance and settlement of securities transactions among its Participants in
such securities through electronic book-entry changes in accounts of the
Participants, thereby eliminating the need for physical movement of securities
certificates. DTC's Participants include securities brokers and dealers
(including any Underwriter of the New Preferred Stock or New Bonds), banks,
trust companies, clearing corporations, and certain other organizations, some of
whom (and/or their representatives) own DTC. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly. The rules applicable to DTC and its Participants
are on file with the Securities and Exchange Commission.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
Neither the Company, the Transfer Agent and Registrar, the Trustees, any
Underwriter nor any agent for payment on or registration of transfer or exchange
of such New Preferred Stock or New Bonds will have any responsibility or
liability for any of the records relating to or payments made on account of
beneficial interests in any of the New Preferred Stock or the New Bonds or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
13
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
-----
Incorporation of Certain Documents by
Reference.................................... S-2
Selected Financial Information................. S-2
Use of Proceeds................................ S-3
Description of the New Bonds................... S-3
Underwriting................................... S-6
Experts and Legality........................... S-6
PROSPECTUS
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
The Company.................................... 3
Use of Proceeds................................ 3
Description of New Bonds....................... 4
Description of New Preferred Stock............. 7
Ratios of Earnings to Fixed Charges and Ratios
of Earnings to Fixed Charges and Preferred
Dividends.................................... 10
Experts and Legality........................... 10
Plan of Distribution........................... 11
Book Entry Securities.......................... 12
$115,000,000
ENTERGY LOUISIANA, INC.
FIRST MORTGAGE BONDS, 6 1/2%
SERIES DUE MARCH 1, 2008
------------------------
PROSPECTUS SUPPLEMENT
MARCH 19, 1998
------------------------
LEHMAN BROTHERS
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION