___________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
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
Offices and Telephone Number No.
1-11299 ENTERGY CORPORATION 72-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 576-4000
1-10764 ENTERGY ARKANSAS, INC. 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-2703 ENTERGY GULF STATES, INC. 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-8474 ENTERGY LOUISIANA, INC. 72-0245590
(a Louisiana corporation)
4809 Jefferson Highway
Jefferson, Louisiana 70121
Telephone (504) 840-2734
0-320 ENTERGY MISSISSIPPI, INC. 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 368-5000
0-5807 ENTERGY NEW ORLEANS, INC. 72-0273040
(a Louisiana corporation)
1600 Perdido Building
New Orleans, Louisiana 70112
Telephone (504) 670-3674
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
___________________________________________________________________________
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrants were required to file such reports), and (2)
have been subject to such filing requirements for the past 90 days.
Yes X No
Common Stock Outstanding Outstanding at April 30, 2000
Entergy Corporation ($0.01 par value) 229,974,723
This combined Quarterly Report on Form 10-Q is separately filed by
Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans,
Inc., and System Energy Resources, Inc. Information contained herein
relating to any individual company is filed by such company on its own
behalf. Each company reports herein only as to itself and makes no other
representations whatsoever as to any other company. 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, 1999, filed by the
individual registrants with the SEC, and should be read in conjunction
therewith.
Forward Looking Information
The following constitutes a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995: Investors are cautioned that
forward-looking statements contained herein with respect to the revenues,
earnings, performance, strategies, prospects and other aspects of the
business of Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf
States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy
New Orleans, Inc., System Energy Resources, Inc., and their affiliated
companies may involve risks and uncertainties. A number of factors could
cause actual results or outcomes to differ materially from those indicated
by such forward-looking statements. These factors include, but are not
limited to, risks and uncertainties relating to: the effects of weather,
the performance of generating units and transmission systems, the
possession of nuclear materials, fuel prices and availability, the effects
of regulatory decisions and changes in law, litigation, capital spending
requirements, the onset of competition, advances in technology, changes in
accounting standards, corporate restructuring and changes in capital
structure, movements in the markets for electricity and other energy-
related commodities, changes in interest rates and in financial and foreign
currency markets generally, changes in corporate strategies, and other
factors.
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 2000
Page Number
Definitions 1
Management's Financial Discussion and Analysis -
Liquidity and Capital Resources 3
Management's Financial Discussion and Analysis -
Significant Factors and Known Trends 7
Results of Operations and Financial Statements:
Entergy Corporation and Subsidiaries:
Results of Operations 9
Consolidated Statements of Income 13
Consolidated Statements of Cash Flows 14
Consolidated Balance Sheets 16
Consolidated Statements of Retained Earnings,
Comprehensive Income, and Paid-in Capital 18
Selected Operating Results 19
Entergy Arkansas, Inc.:
Results of Operations 20
Income Statements 22
Statements of Cash Flows 23
Balance Sheets 24
Selected Operating Results 26
Entergy Gulf States, Inc.:
Results of Operations 27
Income Statements 29
Statements of Cash Flows 31
Balance Sheets 32
Selected Operating Results 34
Entergy Louisiana, Inc.:
Results of Operations 35
Income Statements 37
Statements of Cash Flows 39
Balance Sheets 40
Selected Operating Results 42
Entergy Mississippi, Inc.:
Results of Operations 43
Income Statements 45
Statements of Cash Flows 47
Balance Sheets 48
Selected Operating Results 50
Entergy New Orleans, Inc.:
Results of Operations 51
Income Statements 53
Statements of Cash Flows 55
Balance Sheets 56
Selected Operating Results 58
System Energy Resources, Inc.:
Results of Operations 59
Income Statements 60
Statements of Cash Flows 61
Balance Sheets 62
Notes to Financial Statements for Entergy Corporation
and Subsidiaries 64
Part II:
Item 1. Legal Proceedings 70
Item 5. Other Information 71
Item 6. Exhibits and Reports on Form 8-K 71
Signature 73
DEFINITIONS
Certain abbreviations or acronyms used in the text are defined below:
Abbreviation or Acronym Term
AFUDC Allowance for Funds Used During Construction
ALJ Administrative Law Judge
ANO 1 and 2 Units 1 and 2 of Arkansas Nuclear One Steam
Electric Generating Station (nuclear), owned
by Entergy Arkansas
APSC Arkansas Public Service Commission
Board Board of Directors of Entergy Corporation
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 Pty., an electric distribution
company serving Melbourne, Australia and
surrounding suburbs, which was acquired by
Entergy effective January 5, 1996, and was
sold by Entergy effective December 31, 1998
Council Council of the City of New Orleans,
Louisiana
domestic utility
companies Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, collectively
EWG Exempt wholesale generator under PUHCA
Entergy Entergy Corporation and its various direct
and indirect subsidiaries
Entergy Arkansas Entergy Arkansas, Inc., an Arkansas
corporation
Entergy Corporation Entergy Corporation, a Delaware corporation
Entergy Gulf States Entergy Gulf States, Inc., a Texas
corporation (including wholly owned
subsidiaries - Varibus Corporation, GSG&T,
Inc., Prudential Oil & Gas, Inc., and
Southern Gulf Railway Company)
Entergy Louisiana Entergy Louisiana, Inc., a Louisiana
corporation
Entergy Mississippi Entergy Mississippi, Inc., a Mississippi
corporation
Entergy New Orleans Entergy New Orleans, Inc., a Louisiana
corporation
FERC Federal Energy Regulatory Commission
FUCO an exempt foreign utility company under
PUHCA
Form 10-K The combined Annual Report on Form 10-K for
the year ended December 31, 1999 of Entergy,
Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy
Grand Gulf 1 Unit No. 1 of the Grand Gulf Nuclear
Generation Plant
London Electricity London Electricity plc - a regional electric
company serving London, England, which was
acquired by Entergy London Investments plc,
effective February 1, 1997, and was sold by
Entergy effective December 4, 1998
LPSC Louisiana Public Service Commission
MPSC Mississippi Public Service Commission
MW Megawatt(s)
NRC Nuclear Regulatory Commission
Pilgrim Pilgrim Nuclear Station, 670 MW facility
located in Plymouth, Massachusetts purchased
in July 1999 from Boston Edison by
Entergy's non-utility nuclear power business
PUCT Public Utility Commission of Texas
PUHCA Public Utility Holding Company Act of 1935,
as amended
River Bend River Bend Nuclear Generation Plant
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting Standards
as promulgated by the Financial Accounting
Standards Board
Abbreviation or Acronym Term
System Agreement Agreement, effective January 1, 1983, as
modified, among the domestic utility
companies relating to the sharing of
generating capacity and other power
resources
System Energy System Energy Resources, Inc., an Arkansas
corporation
UK The United Kingdom of Great Britain and
Northern Ireland
Waterford 3 Unit No. 3 (nuclear) of the Waterford Plant
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Operations
Net cash flow provided by (used in) operations for Entergy, the
domestic utility companies, and System Energy for the first quarter
of 2000 and 1999 was as follows:
First Quarter First Quarter
Company 2000 1999
(In Millions)
Entergy $310.6 $210.1
Entergy Arkansas $ 17.8 $ 42.2
Entergy Gulf States $ 81.5 $ 74.3
Entergy Louisiana $ 33.9 $ 56.4
Entergy Mississippi $(72.2) $ 16.0
Entergy New Orleans $ 4.5 $ 3.7
System Energy $188.5 $ 40.7
For the first quarter of 2000, competitive businesses provided
$14.6 million to consolidated operating cash flow compared with using
$50.8 million in the first quarter of 1999. The increase is
primarily due to revenues from Pilgrim and less cash used by the
power marketing and trading business. Pilgrim was purchased in July
1999 and provided positive operating cash flow in the first quarter
of 2000 compared to no cash flow in the first quarter of 1999.
The operating cash flows of the domestic utility companies and
System Energy were primarily affected by the following money pool
activity for the first quarter of 2000:
o System Energy's operating cash flow increased primarily due to a
decrease in receivables from affiliated companies; and
o Entergy Arkansas and Entergy Mississippi issued debt during the
first quarter of 2000, the proceeds of which were used in part by
each of these companies to pay off borrowings from the money pool
and create receivables to them from the money pool, resulting in
an overall decrease in their respective operating cash flows.
The money pool is an inter-company funding arrangement designed to
reduce the domestic utility companies' and System Energy's
dependence on external short-term borrowings. The money pool
provides a means by which, on a daily basis, the excess funds of
Entergy Corporation, the domestic utility companies and System Energy
may be used by the domestic utilities or System Energy when they have
short-term cash requirements. See "Capital Resources" below for a
discussion of the limitations on these borrowings.
Investing Activities
Net cash used in investing activities increased compared with
the first quarter of 1999 due to higher construction expenditures in
2000. The increased expenditures were primarily due to construction
of the Saltend and Damhead Creek power plants by Entergy's global
power development business and spending on customer service and
reliability improvements by the domestic utility companies. Also
contributing to the increase in cash used in 2000 were the proceeds
from the sale of Entergy Security, Inc. received in January 1999,
which decreased the cash used in investing activities in 1999.
Offsetting the overall increase in cash used was the maturity of
other temporary investments in the first quarter of 2000.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Financing Activities
Net cash provided by financing activities increased compared to
the first quarter of 1999 primarily due to:
o the issuance of debt at Entergy Arkansas and Entergy
Mississippi;
o additional borrowings under Entergy Corporation credit
facilities, the proceeds of which were used for general corporate
purposes and to make an open-account advance to Entergy Louisiana
to repay maturing debt;
o increased borrowings under the credit facilities for the
construction of the Saltend and Damhead Creek power projects by
Entergy's global power development business; and
o a reduction in the redemption of preferred stock in the first
quarter of 2000 compared to the first quarter of 1999.
Partially offsetting the overall increase is the increased
repurchase of Entergy Corporation common stock in the first quarter
of 2000 compared with the first quarter of 1999.
Capital Resources
Entergy requires capital resources for:
o construction and other capital expenditures;
o debt and preferred stock maturities;
o capital investments;
o funding of subsidiaries; and
o dividend and interest payments.
Management provides more information on construction expenditures,
capital investments, and long-term debt and preferred stock
maturities in Notes 5, 6, 7, and 9 to the financial statements in the
Form 10-K.
Entergy's sources of funds to meet its capital requirements
include:
o internally generated funds;
o cash on hand;
o debt or preferred stock issuances;
o bank financing under new or existing facilities;
o short-term borrowings; and
o sales of assets.
Certain of the domestic utility companies have issued or expect
to issue debt in 2000, the proceeds of which have been or will be
used for general corporate purposes, including capital expenditures,
the retirement of short-term indebtedness, and, in the case of
Entergy Gulf States, the mandatory redemption of preference stock.
See Note 4 to the financial statements for details regarding
issuances of debt by Entergy Mississippi and Entergy Arkansas in the
first quarter of 2000.
All debt and common and preferred stock issuances require prior
regulatory approval. Preferred stock and debt issuances are subject
to issuance tests set forth in corporate charters, bond indentures,
and other agreements. The domestic utility companies have sufficient
capacity under these issuance tests to consummate the financings
planned for the remainder of 2000. The domestic utility companies
may also establish special purpose trusts or limited partnerships as
financing subsidiaries for the purpose of issuing preferred
securities.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
The domestic utility companies and System Energy expect to
continue refinancing or redeeming higher cost debt and preferred
stock prior to maturity, to the extent market conditions and interest
and dividend rates are favorable.
Short-term borrowings by the domestic utility companies and
System Energy are limited to amounts authorized by the SEC. The
current SEC-authorized limit of $1.078 billion for these companies is
effective through November 30, 2001. Borrowings from the money pool
and external borrowings combined may not exceed the SEC-authorized
limit. As of March 31, 2000, only Entergy Gulf States, Entergy
Louisiana, and Entergy New Orleans had borrowings outstanding from
the money pool, in the amounts of $40.9 million, $40.7 million, and
$6.4 million, respectively.
Other Entergy subsidiaries have SEC authorization to borrow from
Entergy Corporation, through the money pool, or from external sources
in an aggregate principal amount up to $265 million. These companies
had $113.6 million of outstanding borrowings from the money pool as
of March 31, 2000. Some of these borrowings are restricted as to use
and are collaterized by certain assets.
As of March 31, 2000, Entergy Corporation had the following
short-term credit facilities:
o a $250 million bank credit facility under which $230 million of
borrowings were outstanding; and
o a 364-day term loan in the amount of $120 million, all of which
was outstanding.
The 364-day term loan was obtained on February 25, 2000 and
currently bears interest at an annual rate of 6.96%. The proceeds
were used by Entergy Corporation to make an open-account advance in
the amount of $100 million to Entergy Louisiana to enable it to repay
maturing debt. Entergy Corporation used the remaining proceeds for
general corporate purposes and working capital needs.
Entergy Corporation is expanding its $250 million bank credit
facility to permit borrowings up to $500 million. It is anticipated
that this expansion will become effective during May 2000, and an
additional $120 million will be drawn to repay the 364-day term loan.
Entergy's ability to invest in domestic and foreign generation
businesses is subject to the SEC's regulations under PUHCA. These
regulations limit to 50% of consolidated retained earnings the total
amount that Entergy may invest in domestic and foreign generation
businesses at the time an investment is made. Using the proceeds
from the sales of London Electricity and CitiPower in 1998, Entergy's
FUCO and EWG subsidiaries have the ability to make significant
additional investments in domestic and foreign generation businesses
without the need of further investment by Entergy Corporation.
However, Entergy has pending at the SEC an application to increase
its permissible EWG and FUCO investments to 100% of consolidated
retained earnings.
Entergy's global power development business is currently
constructing two combined-cycle gas turbine merchant power plants in
the UK, Saltend and Damhead Creek. These projects are discussed in
"MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND
CAPITAL RESOURCES" in the Form 10-K. The financing of the
construction of these two power plants is discussed in Note 7 to the
financial statements in the Form 10-K.
In October 1999, Entergy's global power development business
obtained an option to acquire twenty-four GE7FA advanced technology
gas turbines, four steam turbines, and eight GE7EA advanced
technology gas turbines. The financing of these turbines is
discussed in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
LIQUIDITY AND CAPITAL RESOURCES" in the Form 10-K.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
In March 2000, Entergy's non-utility nuclear business, signed an
agreement, subject to regulatory approvals, for the acquisition of
the New York Power Authority's (NYPA) 825 MW James A. FitzPatrick
nuclear power plant located near Oswego, New York and NYPA's 980 MW
Indian Point 3 nuclear power plant located in Westchester County, New
York. Management expects to close the acquisition by the end of the
fourth quarter of 2000. Entergy will pay $50 million in cash at the
closing of the purchase, plus seven annual installments of
approximately $108 million commencing one year from the date of the
closing, and eight annual installments of $20 million commencing
eight years from the date of the closing. Entergy currently projects
that these installments will be paid primarily from the proceeds of
the sale of power from the plants and that Entergy will provide an
additional $100 million of funding. Subject to certain conditions,
Entergy's non-utility nuclear business has agreed to pay NYPA up to
$10 million annually for up to 10 years, beginning on the second
anniversary date of such acquisition, if Entergy acquires ownership
of the Indian Point 2 nuclear power plant located in Westchester
County, New York. If Entergy acquires the Nine Mile Point nuclear
power plants (referred to in the following paragraph), it will pay
NYPA up to $2 million annually for up to 10 years, commencing on the
second anniversary date of such acquisition. NYPA also will be paid
$2.5 million annually by each of the two Entergy subsidiaries that
acquire the NYPA plants for up to twenty years if the NRC grants an
extension of the current nuclear operating licenses for the plants.
These payments would commence on the first anniversary of the
expiration of the respective current licenses and would continue
during the extension period.
In December 1999, an Entergy subsidiary signed an agreement with
Rochester Gas and Electric Corporation (RG&E) to lease and operate
the Nine Mile Point 1 and 2 nuclear power plants, totaling 1,754 MW,
located in Scriba, New York. Nine Mile Point 1 is owned by Niagara
Mohawk Power Corporation (NiMo), and Nine Mile Point 2 is co-owned by
RG&E, NiMo, New York State Electric & Gas Corporation (NYSEG), Long
Island Lighting Company doing business as LIPA, and Central Hudson
Gas & Electric Corporation. The lease and operating agreement is
subject to RG&E's acquisition of NiMo and NYSEG's ownership interests
in the plants under RG&E's right of first refusal and is subject to
approval by the New York Public Service Commission (NYPSC). NiMo and
NYSEG initiated a proceeding before the NYPSC seeking authorization
for the sale of their ownership interests in Nine Mile Point 1 and 2
to a third party. Entergy intervened in the proceedings, but on
April 25, 2000, NiMo and NYSEG moved to withdraw the request for
authority to transfer their interests in the Nine Mile plants on the
grounds that there are multiple parties who wish to acquire them.
The NYPSC encouraged the owners of the Nine Mile plants to determine
the market value of the plants through an open bid process, which
will likely take place during the summer of 2000. Entergy expects to
participate in the bidding to acquire the Nine Mile plants, or will
seek a contract to lease and operate them.
In April 2000, Entergy and Koch Industries, Inc. announced plans
for the formation of a new joint venture company to be called Entergy-
Koch L.P. Entergy will contribute to the venture its power marketing
and trading business in the United States and the United Kingdom as
well as $350 million in cash. Of the $350 million, approximately
$200 million will be funded with debt that is non-recourse to Entergy
Corporation, and $150 million will be provided from Entergy's cash on
hand. Koch Industries, Inc. will contribute to the venture its
10,000-mile Koch Gateway Pipeline, gas storage facilities including
the Bisteneau storage facility near Shreveport, Louisiana, and Koch
Energy Trading which markets and trades electricity, gas, weather
derivatives and other energy-related commodities and services. The
parties will have equal ownership interests in Entergy-Koch L.P.,
which will be governed by an eight-member board of directors.
Entergy will have the right to appoint four members of the board.
The venture, which will require prior approval from FERC and from the
SEC under PUHCA, is expected to become operational by the end of
2000.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy has made investments in energy-related businesses,
including power marketing and trading. Under PUHCA, the SEC imposes a
limit equal to 15% of consolidated capitalization on the amount that
may be invested in such "energy-related" businesses without specific
SEC approval. Entergy's available capacity to make additional
investments at March 31, 2000 was approximately $2.2 billion. The
available capacity will be partially reduced by Entergy's investment
in its recently announced joint venture with Koch Industries
discussed above.
In the first quarter of 2000, Entergy Corporation paid $71
million in cash dividends on its common stock and received dividend
payments totaling $63 million from subsidiaries. Declarations of
dividends on Entergy's common stock are made at the discretion of the
Board. The Board evaluates the level of dividends based upon
Entergy's earnings and financial strength. Dividend restrictions are
discussed in Note 8 to the financial statements in the Form 10-K.
In October 1998, the Board approved a plan for the repurchase of
Entergy common stock through December 31, 2001 to fulfill the
requirements of various compensation and benefit plans. This stock
repurchase plan provides for purchases in the open market of up to 5
million shares, for an aggregate consideration of up to $250 million.
In July 1999, the Board approved the commitment of up to an
additional $750 million for the repurchase of Entergy common stock
through December 31, 2001. Shares are purchased on a discretionary
basis. Entergy also issues shares under its Dividend Reinvestment
and Stock Purchase Plan and other compensation and benefit plans.
See Note 3 to the financial statements for stock repurchases and
issuances made during the first quarter of 2000.
See Notes 4, 5, 6, 7, 9, and 10 to the financial statements in
the Form 10-K for further discussion of Entergy's capital and
refinancing requirements and available lines of credit.
Entergy Corporation and System Energy
Pursuant to the Capital Funds Agreement, Entergy Corporation has
agreed to supply System Energy with sufficient capital to:
o maintain System Energy's equity capital at a minimum of 35% of
its total capitalization (excluding short-term debt);
o permit the continued commercial operation of Grand Gulf 1;
o pay in full all System Energy indebtedness for borrowed money
when due; and
o enable System Energy to make payments on specific System Energy
debt, under supplements to the agreement assigning System Energy's
rights in the agreement as security for the specific debt.
The Capital Funds Agreement and other Grand Gulf 1-related
agreements are more thoroughly discussed in Note 9 to the financial
statements in the Form 10-K.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in the Form 10-K for a
discussion of the increasing competitive pressures facing Entergy and
the electric utility industry, as well as market risks and other
significant issues affecting Entergy. Set forth below are recent
updates to the information contained therein.
Domestic Transition to Competition
State Regulatory and Legislative Activity
Texas
In June 1999, the Texas legislature enacted a law providing for
competition in the electric utility industry through retail open
access. The law provides for retail open access by most electric
utilities, including Entergy Gulf States, on January 1, 2002. When
retail open access is achieved, the generation business and a new
retail electricity provider function will become competitive
businesses, but transmission and distribution operations will
continue to be regulated. The new retail electricity provider
function will be the primary point of contact with customers for most
services beyond initiation of electric service and restoration of
service following outages.
In January 2000, Entergy Gulf States filed a business separation
plan with the PUCT as required by the Texas restructuring
legislation. The plan provides that Entergy Gulf States will
ultimately be divided into a Texas distribution company, a Texas
transmission company, a Texas generation company, a Texas retail
service provider, and a Louisiana company that will encompass
distribution, generation, and transmission operations. Intervenors
in the Texas proceeding have, for the most part, expressed opposition
to the plan for various reasons. It is not certain whether the plan
will be approved as filed, or whether a different plan will be
approved by the PUCT. Entergy Gulf States and other parties to the
proceeding are in discussions aimed at determining whether there are
modifications to the proposed plan that would be acceptable to all
concerned parties. The procedural schedule requires Entergy Gulf
States to file an amended business separation plan by June 8, 2000.
The timing and outcome of this proceeding are uncertain, and
additional regulatory approvals from FERC, the SEC, and the LPSC will
be required before any business separation plan dividing Entergy Gulf
States into a series of new legal entities can be implemented.
Pursuant to the Texas restructuring legislation, Entergy Gulf
States filed its separated business cost data and proposed
transmission, distribution, and competition tariffs with the PUCT on
March 31, 2000. This filing also included a proposal for a
performance-based enhancement to the authorized rate of return on
equity. Management does not agree with the arbitrary level of return
on equity set by PUCT rules (200 basis points over the cost of a
distribution utility's debt) and has sought a higher return in its
separated cost filing. See Note 2 to the financial statements for
further information on this filing.
Mississippi
In May 2000, after two years of studies and hearings, the MPSC
announced that it opposed opening the state's retail electricity
markets to competition at this time. The MPSC concluded that
competition could raise the electric rates paid by residential users.
The final decision ultimately lies with the Mississippi Legislature,
which has adjourned its 2000 session.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Federal Regulatory Activity
See "Part I, Item 1, Competition" in the Form 10-K for a
discussion of changes that may result from retail competition and
unbundling.
In April 2000, the LPSC and the Council filed a complaint with
FERC seeking revisions to the System Agreement that they allege are
necessary to accommodate the introduction of retail competition in
certain jurisdictions served by Entergy and, at the same time, to
protect Entergy's Louisiana customers from any adverse impact that
may occur due to the introduction of retail competition in some
jurisdictions but not others. The LPSC and the Council request that
FERC immediately institute a proceeding to permit changes to be
adopted prior to January 1, 2002, and request, among other things,
that FERC cap certain of the System Agreement obligations of Entergy
Gulf States, Entergy Louisiana, and Entergy New Orleans and fix these
companies' access to the pool energy at the average level existing
for the three years prior to the date that retail access is initiated
in Texas and Arkansas. Alternatively, the LPSC and the Council
request that FERC require Entergy to provide wholesale power
contracts to these companies to satisfy their energy requirements at
costs no higher than would have been incurred if retail competition
were not implemented. The LPSC and the Council request that the
relief be made available for at least eight years after
implementation of retail competition or the withdrawal of Entergy
Arkansas and Entergy Gulf States from the System Agreement, or until
retail access is implemented in Louisiana and New Orleans. In
addition, among other things, the LPSC and the Council assert in
their complaint that:
o unless the requested relief is granted, the restructuring
legislation adopted in Texas and Arkansas, to the extent such
legislation requires, or has the effect of, altering the rights of
parties under the System Agreement, will result in violations of the
interstate commerce clause, the due process clause, and the
impairment of contracts clause in the U.S. Constitution; and
o the failure of the domestic utility companies to honor a right
of first refusal with respect to any sale of generating capacity and
associated energy under the System Agreement, and any attempt to
eliminate such right of first refusal from the System Agreement,
would violate the Federal Power Act and constitute a breach of the
System Agreement.
State and Local Rate Regulation
In March 2000, the LPSC ordered Entergy Gulf States to refund
approximately $17.7 million based on its fourth post-Merger earnings
analysis filed with the LPSC in May 1997. Entergy Gulf States will
appeal the order. Entergy Gulf States has provided adequate reserves
for its annual earnings reviews based on management's estimates of
the outcome of these proceedings.
In March 2000, Entergy Mississippi submitted its annual
performance-based formula rate plan filing for the 1999 test year.
The filing indicated that no change in rate levels was necessary.
Continued Application of SFAS 71 and Stranded Cost Exposure
See "Continued Application of SFAS 71 and Stranded Cost
Exposure" in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in the Form 10-K for a
discussion of the potential effects of discontinuation of SFAS 71 for
the generation portion of Entergy's business as well as Entergy's
exposure to stranded costs.
Because management believes that definitive outcomes have not
yet been determined regarding the transition to competition in each
of Entergy's jurisdictions, the regulated operations of the domestic
utility companies and System Energy continue to apply SFAS 71.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
The restructuring laws enacted in Arkansas and Texas provide an
opportunity for the recovery of stranded costs following review and
approval by the APSC or the PUCT. Nearly all of Entergy's exposure
to stranded costs involves commitments that were approved by
regulators. The actual amount of costs and obligations that will be
identified as stranded will be determined in regulatory proceedings.
These proceedings will commence in 2000 in Arkansas and Texas.
Entergy Gulf States included an estimate of its Texas stranded
costs in its March 31, 2000 filing with the PUCT. Using the model
established by the PUCT staff, Entergy Gulf States' estimate of Texas
stranded costs is $117.2 million. Entergy Gulf States disagrees with
certain of the assumptions and estimates included in the PUCT model
and believes that the model understates actual stranded costs. The
model offsets potential strandable costs against mitigating factors,
including the estimated fair value of existing generation plants, to
determine an estimated stranded cost figure. The model, however,
does not include estimated River Bend decommissioning costs. The
Texas stranded cost filing is discussed more thoroughly in Note 2 to
the financial statements. The outcome of the Texas and Arkansas
stranded cost proceedings cannot be predicted and will depend upon a
number of variables, including the timing of stranded cost
determination, the values attributable to certain strandable assets,
assumptions concerning future market prices for electricity, and
other factors.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Entergy's results of operations are discussed in two business
categories, "Domestic Utility Companies and System Energy" and
"Competitive Businesses." Domestic Utility Companies and System
Energy is Entergy's predominant business segment, contributing 77% of
Entergy's operating revenue and 81% of its net income for the first
quarter of 2000. Competitive Businesses include the following
segments discussed in Note 6 to the financial statements: "power
marketing and trading" and "all other." "All other" principally
includes global power development, non-utility nuclear power, and the
parent holding company, Entergy Corporation. The elimination of
power marketing and trading mark-to-market profits on intercompany
power transactions is also included in "all other."
Net Income
Entergy Corporation's consolidated net income increased for the
first quarter of 2000 primarily due to:
o a $25.2 million increase in net income from the power marketing
and trading business primarily resulting from improved trading
results and higher expected summer 2000 forward electricity prices
affecting the mark-to-market valuations;
o an overall $4.8 million increase in net income from the domestic
utility companies and System Energy, primarily due to increases in
electric operating revenues, a decrease in other operation and
maintenance expenses, and a true-up to reflect fuel under-recoveries
at Entergy Arkansas. The increase was partially offset by a true-up
to reflect fuel over-recoveries at Entergy Gulf States as a result of
the PUCT fuel reconciliation settlement and an increase in the
effective tax rate; and
o an increase in net income from other competitive businesses,
primarily resulting from the operation of Pilgrim in 2000, which was
acquired in July 1999. The increase was partially offset by a
decrease in other income and an increase in the effective tax rate.
Net income for the first quarter of 1999 reflected the results
of operations for Entergy Security, Inc., Entergy Power Edesur
Holdings, and several telecommunications businesses. These
businesses were sold between January 1999 and mid-1999, and are
therefore not included in 2000's results of operations.
Domestic Utility Companies and System Energy
Revenues and Sales
The changes in electric operating revenues associated with the
domestic utility companies for the first quarter of 2000 are as
follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Base revenues ($23.8)
Rate riders (5.8)
Fuel cost recovery 101.3
Sales volume/weather 18.1
Other revenue (including unbilled) 18.4
Sales for resale 6.1
------
Total $114.3
======
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Base revenues
Base revenues decreased $23.8 million for the first quarter of
2000 primarily due to provisions for potential rate refunds at
Entergy Louisiana. This decrease is partially offset by increased
base revenues at Entergy Gulf States due to base rate refunds in 1999
in the Texas jurisdiction.
Rate riders
Rate rider revenues do not affect net income because they are
offset by specific incurred expenses.
Rate rider revenues decreased $5.8 million for the first quarter
of 2000 as a result of decreased Grand Gulf 1 riders and decreased
ANO decommissioning riders at Entergy Arkansas that became effective
in January 2000.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that is offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased $101.3 million for the
first quarter of 2000 due to:
o increased fuel factors implemented in March and September 1999
in Texas for Entergy Gulf States;
o a fuel surcharge implemented in January 2000 in Texas for
Entergy Gulf States;
o an increase in the energy cost recovery rate that became
effective in April 1999 at Entergy Arkansas;
o higher fuel prices at Entergy Louisiana due to the increased
market price of gas; and
o an increase in the energy cost recovery rate at Entergy
Mississippi that became effective in January 2000.
Sales volume/weather
Sales volume increased $18.1 million for the first quarter of
2000 primarily due to:
o more favorable weather in Entergy Gulf States' Louisiana service
territory as well as increased usage by industrial customers of
Entergy Gulf States; and
o increased volume of electricity sales to residential and
industrial customers at Entergy Louisiana.
Other revenue (including unbilled)
Other revenue increased $18.4 million for the first quarter of
2000 primarily due to increased unbilled revenue for retail and
wholesale customers, and a change in estimated unbilled revenues in
June 1999 at the domestic utility companies. The changed estimate
more closely aligns the fuel component of unbilled revenues with
their regulatory treatment. The change in estimate will not affect
comparisons with prior periods after the first quarter of 2000.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses increased $129.5 million for
the first quarter of 2000 primarily due to:
o a true-up to reflect fuel over-recoveries at Entergy Gulf
States, partially offset by an adjustment to increase the deferred
fuel balance at Entergy Arkansas;
o an increase in the market prices of purchased power and gas in
the first quarter of 2000; and
o a shift to increased use of higher-priced gas and purchased
power at Entergy Gulf States due to scheduled outages at coal and
nuclear facilities in the first quarter of 2000.
Other operation and maintenance
Other operation and maintenance decreased $17.6 million for the
first quarter of 2000 primarily due to:
o a larger refund of nuclear insurance premiums in 2000 compared
to 1999 at Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
and System Energy; and
o lower incentive compensation accruals in 2000 compared to 1999.
Depreciation and amortization
Depreciation and amortization decreased $4.2 million for the
first quarter of 2000 primarily due to reduced River Bend
depreciation expense at Entergy Gulf States as a result of the write-
down of the River Bend abeyed plant required by the Texas rate
settlement in June 1999.
Other
Interest charges
Interest on long-term debt decreased $7.0 million for the first
quarter of 2000 primarily due to the retirement and refinancing of
certain long-term debt at Entergy Gulf States, Entergy Louisiana, and
System Energy in 1999.
Other interest increased $7.0 million for the first quarter of
2000 primarily due to interest recorded at System Energy for a
portion of the potential refund to customers of its proposed rate
increase pending at FERC.
Competitive Businesses
Revenues and Sales
Competitive business revenues increased approximately $57
million for the first quarter of 2000 compared with the first quarter
of 1999. The increase was primarily due to an increase in sales
revenues of $59.7 million for the non-utility nuclear business
resulting primarily from the operation of Pilgrim, partially offset
by the decrease in revenues in other competitive businesses. The
decrease in revenues in other competitive businesses was due to the
sales of Entergy Security, Inc. in January 1999 and Entergy Power
Edesur Holdings and several telecommunications businesses in June
1999. These businesses contributed to operating revenues in the
first quarter of 1999 but not in the first quarter of 2000.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The power marketing and trading business did not have a material
change in revenues. However, the power marketing and trading
business had an increase in net income of $25 million for the first
quarter of 2000 due to:
o decreased purchased power expenses as discussed below;
o improved trading performance; and
o higher expected summer 2000 forward electricity prices affecting
the mark-to-market valuations.
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses decreased $31 million for the
first quarter of 2000 compared with the first quarter of 1999. The
decrease is attributable to decreased electricity and gas trading
volumes in the power marketing and trading business. The overall
decrease was partially offset by an increase in fuel and purchased
power expenses related to the operation of Pilgrim.
Other operation and maintenance
Other operation and maintenance expenses increased $27.4 million
for the first quarter of 2000 compared with the first quarter of
1999. The increase is primarily due to expenses incurred by the non-
utility nuclear business from the operation of Pilgrim and an
increase in the elimination of mark-to-market profits on intercompany
power transactions. Partially offsetting the overall increase is a
decrease in expenses due to the sales of businesses previously
discussed.
Other
Other income
Other income decreased $18 million for the first quarter of 2000
compared with the first quarter of 1999 primarily due to the
following:
o a $12.5 million ($.6 million net of tax) gain on the sale of
Entergy Security, Inc. in January 1999; and
o a $7.6 million ($4.9 million net of tax) favorable adjustment to
the final sale price of CitiPower in January 1999.
Partially offsetting the overall decrease is an increase in other
miscellaneous income in the first quarter of 2000.
Interest charges
Other interest charges increased $5 million for the first
quarter of 2000 compared with the first quarter of 1999. The
increase was primarily due to the accretion of the decommissioning
liability associated with Pilgrim.
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Income Taxes
The effective income tax rates for the first quarters of 2000
and 1999 were 43.4% and 38.3%, respectively. The increase was
primarily due to the following affecting the first quarter 1999 tax
rate:
o decreased state income taxes at the power marketing and trading
business as a result of net losses; and
o recognition of certain foreign tax credits resulting in lower
income taxes.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands, Except Share Data)
OPERATING REVENUES
Domestic electric $1,352,896 $1,238,583
Natural gas 45,881 37,731
Steam products - 8,296
Competitive businesses 412,715 355,312
---------- ----------
TOTAL 1,811,492 1,639,922
---------- ----------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 497,754 402,973
Purchased power 369,544 373,799
Nuclear refueling outage expenses 18,557 19,685
Other operation and maintenance 377,410 367,632
Decommissioning 10,938 12,674
Taxes other than income taxes 79,618 83,068
Depreciation and amortization 178,276 184,368
Other regulatory credits (14,605) (16,125)
Amortization of rate deferrals 7,396 8,413
---------- ----------
TOTAL 1,524,888 1,436,487
---------- ----------
OPERATING INCOME 286,604 203,435
---------- ----------
OTHER INCOME
Allowance for equity funds used during construction 7,695 5,411
Gain on sale of assets - net 517 20,583
Miscellaneous - net 28,982 19,952
---------- ----------
TOTAL 37,194 45,946
---------- ----------
INTEREST AND OTHER CHARGES
Interest on long-term debt 113,659 122,531
Other interest - net 20,283 8,541
Distributions on preferred securities of subsidiaries 4,709 4,709
Allowance for borrowed funds used during construction (6,088) (4,479)
---------- ----------
TOTAL 132,563 131,302
---------- ----------
INCOME BEFORE INCOME TAXES 191,235 118,079
Income taxes 82,825 45,173
---------- ----------
CONSOLIDATED NET INCOME 108,410 72,906
Preferred dividend requirements and other 9,550 10,725
---------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK $98,860 $62,181
========== ==========
Earnings per average common share:
Basic and diluted $0.42 $0.25
Dividends declared per common share $0.30 $0.30
Average number of common shares outstanding:
Basic 236,608,445 246,579,198
Diluted 236,671,604 246,716,928
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Consolidated net income $108,410 $72,906
Noncash items included in net income:
Amortization of rate deferrals 7,396 8,413
Reserve for regulatory adjustments 19,888 (2,265)
Other regulatory credits - net (14,605) (16,125)
Depreciation, amortization, and decommissioning 189,214 197,042
Deferred income taxes and investment tax credits (30,652) (8,945)
Allowance for equity funds used during construction (7,695) (5,411)
Gain on sale of assets - net (517) (12,513)
Changes in working capital:
Receivables 37,462 6,867
Fuel inventory (25,783) (11,212)
Accounts payable (27,239) (20,461)
Taxes accrued 44,026 32,165
Interest accrued (25,053) (43,865)
Deferred fuel 32,626 32,950
Other working capital accounts (4,917) (53,931)
Provision for estimated losses and reserves (19,521) 17,490
Changes in other regulatory assets (3,741) (8,487)
Other 31,298 25,495
---------- ----------
Net cash flow provided by operating activities 310,597 210,113
---------- ----------
INVESTING ACTIVITIES
Construction/capital expenditures (388,443) (249,733)
Allowance for equity funds used during construction 7,695 5,411
Nuclear fuel purchases (41,215) (33,352)
Proceeds from sale/leaseback of nuclear fuel 13,952 23,300
Proceeds from sale of businesses - 215,416
Investment in other nonregulated/nonutility properties - (14,133)
Proceeds from other temporary investments 321,351 -
Decommissioning trust contributions and realized change in trust assets (12,624) (16,871)
Other (226) 3,061
---------- ----------
Net cash flow used in investing activities (99,510) (66,901)
---------- ----------
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt 370,465 198,196
Common stock 1,972 1,915
Retirement of long-term debt (103,212) (145,105)
Repurchase of common stock (155,981) (12,132)
Redemption of preferred stock (2,493) (74,731)
Changes in short-term borrowings - net 230,000 (125,500)
Dividends paid:
Common stock (71,040) (70,362)
Preferred stock (7,330) (11,641)
---------- ----------
Net cash flow provided by (used in) financing activities 262,381 (239,360)
---------- ----------
Effect of exchange rates on cash and cash equivalents (1,091) (1,993)
---------- ----------
Net increase (decrease) in cash and cash equivalents 472,377 (98,141)
Cash and cash equivalents at beginning of period 1,213,719 1,184,495
---------- ----------
Cash and cash equivalents at end of period $1,686,096 $1,086,354
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $156,560 $171,185
Income taxes $35,995 $10,617
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets ($9,906) $13,626
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $113,365 $108,198
Temporary cash investments - at cost,
which approximates market 1,566,629 1,105,521
Special deposits 6,102 -
----------- -----------
Total cash and cash equivalents 1,686,096 1,213,719
----------- -----------
Other temporary investments - at cost,
which approximates market - 321,351
Notes receivable 3,635 2,161
Accounts receivable:
Customer 257,729 290,331
Allowance for doubtful accounts (9,507) (9,507)
Other 234,947 207,898
Accrued unbilled revenues 274,202 298,616
----------- -----------
Total receivables 757,371 787,338
----------- -----------
Deferred fuel costs 208,035 240,661
Fuel inventory - at average cost 117,633 94,419
Materials and supplies - at average cost 393,726 392,403
Rate deferrals 27,450 30,394
Deferred nuclear refueling outage costs 47,180 58,119
Prepayments and other 91,248 78,567
----------- -----------
TOTAL 3,332,374 3,219,132
----------- -----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 214 214
Decommissioning trust funds 1,247,408 1,246,023
Non-utility property - at cost (less accumulated depreciation) 321,984 317,165
Non-regulated investments 246,240 198,003
Other - at cost (less accumulated depreciation) 17,480 16,714
----------- -----------
TOTAL 1,833,326 1,778,119
----------- -----------
UTILITY PLANT
Electric 23,237,556 23,163,161
Plant acquisition adjustment 402,863 406,929
Property under capital lease 774,184 768,500
Natural gas 187,632 186,041
Construction work in progress 1,769,202 1,500,617
Nuclear fuel under capital lease 268,220 286,476
Nuclear fuel 110,910 87,693
----------- -----------
TOTAL UTILITY PLANT 26,750,567 26,399,417
Less - accumulated depreciation and amortization 11,080,253 10,898,661
----------- -----------
UTILITY PLANT - NET 15,670,314 15,500,756
----------- -----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 12,130 16,581
SFAS 109 regulatory asset - net 1,044,438 1,068,006
Unamortized loss on reacquired debt 197,092 198,631
Other regulatory assets 665,179 637,870
Long-term receivables 31,625 32,260
Other 575,749 533,732
----------- -----------
TOTAL 2,526,213 2,487,080
----------- -----------
TOTAL ASSETS $23,362,227 $22,985,087
=========== ===========
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $175,408 $194,555
Notes payable 350,716 120,715
Accounts payable 591,132 707,678
Customer deposits 166,931 161,909
Taxes accrued 495,418 445,677
Accumulated deferred income taxes 59,853 72,640
Nuclear refueling outage costs 9,246 11,216
Interest accrued 102,687 129,028
Co-owner advances 3,420 7,018
Obligations under capital leases 176,530 178,247
Other 155,292 125,749
----------- -----------
TOTAL 2,286,633 2,154,432
----------- -----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 3,276,922 3,310,340
Accumulated deferred investment tax credits 513,009 519,910
Obligations under capital leases 184,751 205,464
FERC settlement - refund obligation 35,765 37,337
Other regulatory liabilities 200,607 199,139
Decommissioning 714,529 703,453
Transition to competition 164,486 157,034
Regulatory reserves 398,195 378,307
Accumulated provisions 279,192 279,425
Other 655,277 535,156
----------- -----------
TOTAL 6,422,733 6,325,565
----------- -----------
Long-term debt 6,885,702 6,612,583
Preferred stock with sinking fund 69,650 69,650
Preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts holding
solely junior subordinated deferrable debentures 215,000 215,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 335,961 338,455
Common stock, $.01 par value, authorized 500,000,000
shares; issued 247,172,239 shares in 2000 and
247,082,345 shares in 1999 2,472 2,471
Paid-in capital 4,636,474 4,636,163
Retained earnings 2,814,499 2,786,467
Accumulated other comprehensive loss:
Cumulative foreign currency translation adjustment (69,489) (68,782)
Net unrealized investment losses (9,958) (5,023)
Less - treasury stock, at cost (14,962,294 shares in 2000 and
8,045,434 shares in 1999) 377,450 231,894
----------- -----------
TOTAL 7,332,509 7,457,857
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $23,362,227 $22,985,087
=========== ===========
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS, COMPREHENSIVE INCOME,
AND PAID-IN CAPITAL
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
RETAINED EARNINGS
Retained Earnings - Beginning of period $2,786,467 $2,526,888
Add - Earnings applicable to common stock 98,860 $98,860 62,181 $62,181
Deduct:
Dividends declared on common stock 71,658 73,989
Capital stock and other expenses (830) 345
---------- ----------
Total 70,828 74,334
---------- ----------
Retained Earnings - End of period $2,814,499 $2,514,735
========== ==========
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Balance at beginning of period ($73,805) ($46,739)
Foreign currency translation adjustments (707) (707) 379 379
Net unrealized investment losses (4,935) (4,935) - -
---------- ----------
Balance at end of period ($79,447) ($46,360)
========== ------- ========== -------
Comprehensive Income $93,218 $62,560
======= =======
PAID-IN CAPITAL
Paid-in Capital - Beginning of period $4,636,163 $4,630,609
Add - Common stock issuances related to stock 311 431
plans
---------- ----------
Paid-in Capital - End of period $4,636,474 $4,631,040
========== ==========
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
Increase/
Description 2000 1999 (Decrease) %
(In Millions)
Domestic Utility Electric
Operating Revenues:
Residential $ 468.2 $ 432.0 $ 36.2 8
Commercial 346.9 316.2 30.7 10
Industrial 453.4 406.7 46.7 11
Governmental 38.8 36.0 2.8 8
--------------------------------
Total retail 1,307.3 1,190.9 116.4 10
Sales for resale 83.2 77.1 6.1 8
Other (37.6) (29.4) (8.2) (28)
--------------------------------
Total $ 1,352.9 $ 1,238.6 $ 114.3 9
================================
Billed Electric Energy
Sales (GWH):
Residential 6,512 6,417 95 1
Commercial 5,280 5,169 111 2
Industrial 10,617 10,216 401 4
Governmental 586 589 (3) (1)
--------------------------------
Total retail 22,995 22,391 604 3
Sales for resale 2,272 2,209 63 3
--------------------------------
Total 25,267 24,600 667 3
================================
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the first quarter of 2000 primarily due
to increased electric operating revenues, decreased other operation
and maintenance expenses, and a decrease in fuel expense reflecting a
true-up of the deferred fuel balance in the first quarter of 2000,
partially offset by an increase in income tax expense.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 2000 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Base revenues $0.7
Rate riders (6.4)
Fuel cost recovery 10.8
Sales volume/weather 1.3
Other revenue (including unbilled) 7.4
Sales for resale 21.1
-----
Total $34.9
=====
Rate riders
Rate rider revenues do not affect net income because they are
offset by specific incurred expenses.
Rate rider revenues decreased for the first quarter of 2000 as
a result of decreased Grand Gulf 1 riders and ANO decommissioning
riders, both of which became effective in January 2000.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that is offset by specific incurred
fuel costs.
Fuel cost recovery revenue increased for the first quarter of
2000 primarily due to an increase in the energy cost recovery rate,
which became effective in April 1999. The increase in the energy
cost recovery rate allows Entergy Arkansas to recover previously
under-recovered fuel expenses.
Other revenue (including unbilled)
Other revenue increased for the first quarter of 2000 primarily
due to increased unbilled revenue for retail and wholesale customers,
and a change in estimated unbilled revenues in June 1999. The
changed estimate more closely aligns the fuel component of unbilled
revenues with their regulatory treatment. The change in estimate
will not affect comparisons with prior periods after the first
quarter of 2000. Comparative impacts are also affected by seasonal
variations in demand.
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Sales for resale
Sales for resale increased for the first quarter of 2000
primarily due to increased nuclear generation making more energy
available for sale, coupled with an increase in the market price of
energy.
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses increased slightly for the
first quarter of 2000 primarily due to an increase in generation
compared to the first quarter of 1999. Nuclear generation increased
in the first quarter of 2000 due to a refueling outage at ANO 2 in
the first quarter of 1999. Gas generation increased in the first
quarter of 2000 as an offset to decreased coal generation resulting
from maintenance outages at the White Bluff plant. Purchased power
increased due to an increase in the market price of purchased power
as well as an increase in purchased power volume. The increased
expenses were largely offset by a true-up to adjust the deferred fuel
balance to reflect fuel under-recoveries that Entergy Arkansas
expects to recover in the future.
Other operation and maintenance
Other operation and maintenance expenses decreased for the first
quarter of 2000 primarily due to:
o lower incentive compensation accruals in 2000 compared to 1999;
o decreased return-to-service expenditures for certain generating
plants; and
o a larger nuclear insurance refund in 2000 compared to 1999.
Other regulatory credits
Other regulatory credits increased for the first quarter of 2000
primarily due to an increased under-recovery of Grand Gulf 1 costs as
a result of the decreased rate rider as ordered by the APSC that
became effective in January 2000.
Other
Allowance for equity funds used during construction increased
for the first quarter of 2000 due to increased capital spending.
Income taxes
The effective income tax rates for the first quarter of 2000 and
1999 were 40.9% and 19.6%, respectively. The increase in the
effective tax rate was due to increased pre-tax income for 2000
combined with decreased flow-through tax benefits which included a
tax liability on nuclear fuel purchases in the first quarter of 2000
compared with a tax credit on nuclear fuel purchases in the first
quarter of 1999.
ENTERGY ARKANSAS, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING REVENUES
Domestic electric $346,877 $311,969
-------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 47,677 48,792
Purchased power 98,797 94,943
Nuclear refueling outage expenses 6,439 8,066
Other operation and maintenance 75,925 82,209
Decommissioning 2,028 2,461
Taxes other than income taxes 8,716 9,256
Depreciation and amortization 41,301 41,668
Other regulatory credits - net (10,765) (7,586)
-------- --------
TOTAL 270,118 279,809
-------- --------
OPERATING INCOME 76,759 32,160
-------- --------
OTHER INCOME
Allowance for equity funds used during construction 3,578 2,410
Miscellaneous - net 1,545 937
-------- --------
TOTAL 5,123 3,347
-------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 20,906 20,674
Other interest - net 2,297 1,526
Distributions on preferred securities of subsidiary 1,275 1,275
Allowance for borrowed funds used during construction (2,304) (1,658)
-------- --------
TOTAL 22,174 21,817
-------- --------
INCOME BEFORE INCOME TAXES 59,708 13,690
Income taxes 24,394 2,679
-------- --------
NET INCOME 35,314 11,011
Preferred dividend requirements and other 1,944 2,420
-------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $33,370 $8,591
======== ========
See Notes to Financial Statements.
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Net income $35,314 $11,011
Noncash items included in net income:
Other regulatory credits - net (10,765) (7,586)
Depreciation, amortization, and decommissioning 43,329 44,129
Deferred income taxes and investment tax credits 3,376 2,094
Allowance for equity funds used during construction (3,578) (2,410)
Changes in working capital:
Receivables (13,534) (11,036)
Fuel inventory (18,759) (16,921)
Accounts payable (58,822) 33,193
Taxes accrued 41,318 2,639
Interest accrued 1,547 (893)
Deferred fuel costs (10,808) 10,400
Other working capital accounts 1,003 (19,459)
Provision for estimated losses and reserves (1,377) (10,307)
Changes in other regulatory assets (2,596) (10,271)
Other 12,116 17,595
-------- --------
Net cash flow provided by operating activities 17,764 42,178
-------- --------
INVESTING ACTIVITIES
Construction expenditures (69,411) (61,382)
Allowance for equity funds used during construction 3,578 2,410
Nuclear fuel purchases (148) (962)
Proceeds from sale/leaseback of nuclear fuel 148 962
Decommissioning trust contributions and realized
change in trust assets (3,450) (5,854)
-------- --------
Net cash flow used in investing activities (69,283) (64,826)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long Term Debt 99,630 -
Dividends paid:
Preferred stock - (2,420)
-------- --------
Net cash flow provided by (used in) financing activities 99,630 (2,420)
-------- --------
Net increase (decrease) in cash and cash equivalents 48,111 (25,068)
Cash and cash equivalents at beginning of period 6,862 93,105
-------- --------
Cash and cash equivalents at end of period $54,973 $68,037
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized $21,694 $23,104
Income taxes ($15,400) $4,380
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets ($4,378) $7,220
See Notes to Financial Statements.
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $6,642 $6,862
Temporary cash investments - at cost,
which approximates market 48,331 -
---------- ----------
Total cash and cash equivalents 54,973 6,862
---------- ----------
Accounts receivable:
Customer 59,709 73,357
Allowance for doubtful accounts (1,768) (1,768)
Associated companies 57,654 27,073
Other 6,582 5,583
Accrued unbilled revenues 49,202 53,600
---------- ----------
Total receivables 171,379 157,845
---------- ----------
Deferred fuel costs 52,427 41,620
Fuel inventory - at average cost 43,244 24,485
Materials and supplies - at average cost 89,506 85,612
Deferred nuclear refueling outage costs 21,718 28,119
Prepayments and other 9,115 6,480
---------- ----------
TOTAL 442,362 351,023
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 11,215 11,215
Decommissioning trust funds 343,082 344,011
Non-utility property - at cost (less accumulated depreciation) 1,462 1,463
Other - at cost (less accumulated depreciation) 3,033 3,033
---------- ----------
TOTAL 358,792 359,722
---------- ----------
UTILITY PLANT
Electric 4,873,306 4,854,433
Property under capital lease 43,983 44,471
Construction work in progress 316,859 267,091
Nuclear fuel under capital lease 77,021 85,725
Nuclear fuel 8,767 9,449
---------- ----------
TOTAL UTILITY PLANT 5,319,936 5,261,169
Less - accumulated depreciation and amortization 2,443,639 2,401,021
---------- ----------
UTILITY PLANT - NET 2,876,297 2,860,148
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 185,841 192,344
Unamortized loss on reacquired debt 47,247 48,193
Other regulatory assets 116,059 106,959
Other 11,871 14,125
---------- ----------
TOTAL 361,018 361,621
---------- ----------
TOTAL ASSETS $4,038,469 $3,932,514
========== ==========
See Notes to Financial Statements.
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $220 $220
Notes payable 667 667
Accounts payable
Associated companies 38,608 81,958
Other 87,487 102,959
Customer deposits 27,120 26,320
Taxes accrued 79,849 38,532
Accumulated deferred income taxes 44,674 38,649
Interest accrued 23,925 22,378
Co-owner advances 12,077 15,338
Obligations under capital leases 55,207 55,150
Other 17,219 11,598
---------- ----------
TOTAL 387,053 393,769
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 706,039 713,622
Accumulated deferred investment tax credits 93,573 94,852
Obligations under capital leases 65,798 75,045
Other regulatory liabilities 84,184 88,563
Transition to competition 111,066 109,933
Accumulated provisions 41,911 43,288
Other 51,038 51,080
---------- ----------
TOTAL 1,153,609 1,176,383
---------- ----------
Long-term debt 1,232,876 1,130,801
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 60,000 60,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 116,350 116,350
Common stock, $0.01 par value, authorized 325,000,000
shares; issued and outstanding 46,980,196 shares in
2000 and 1999 470 470
Paid-in capital 591,127 591,127
Retained earnings 496,984 463,614
---------- ----------
TOTAL 1,204,931 1,171,561
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,038,469 $3,932,514
========== ==========
See Notes to Financial Statements.
ENTERGY ARKANSAS, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
Increase/
Description 2000 1999 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 117.7 $ 116.7 $ 1.0 1
Commercial 62.1 59.6 2.5 4
Industrial 73.7 70.7 3.0 4
Governmental 3.2 3.3 (0.1) (3)
--------------------------------
Total retail 256.7 250.3 6.4 3
Sales for resale
Associated companies 45.2 29.5 15.7 53
Non-associated companies 41.9 36.5 5.4 15
Other 3.1 (4.3) 7.4 172
--------------------------------
Total $ 346.9 $ 312.0 $ 34.9 11
================================
Billed Electric Energy
Sales (GWH):
Residential 1,550 1,556 (6) -
Commercial 1,075 1,060 15 1
Industrial 1,652 1,607 45 3
Governmental 54 55 (1) (2)
--------------------------------
Total retail 4,331 4,278 53 1
Sales for resale
Associated companies 1,681 1,536 145 9
Non-associated companies 1,149 821 328 40
--------------------------------
Total 7,161 6,635 526 8
================================
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased slightly for the first quarter of 2000
primarily due to an adjustment of the deferred fuel balance to
reflect regulatory actions in the first quarter of 2000. This
decrease was largely offset by increased base revenues and decreased
other operation and maintenance expenses, depreciation and
amortization expenses, and interest expense.
Revenues and Sales
Electric operating revenues
The changes in electric operating revenues for the first quarter
of 2000 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Base revenues $8.4
Fuel cost recovery 51.1
Sales volume/weather 6.9
Other revenue (including unbilled) (1.8)
Sales for resale 2.4
-----
Total $67.0
=====
Base revenues
Base revenues increased for the first quarter of 2000 primarily
due to the elimination and expiration of 1999 Texas base rate
refunds.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that is offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased for the first quarter of
2000 due to higher fuel factors that became effective in March and
September 1999 and a fuel surcharge implemented in January 2000 in
the Texas jurisdiction. Fuel cost recovery revenues also increased
due to higher fuel and purchased power costs in the Louisiana
jurisdiction due to increased market prices.
Sales volume/weather
Sales volume increased for the first quarter of 2000 due to more
favorable weather, primarily in the Louisiana jurisdiction, as well
as increased usage primarily by industrial customers in both
Louisiana and Texas.
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Steam operating revenues
Steam operating revenues decreased for the first quarter of 2000
due to a new lease arrangement for Louisiana Station 1 that began in
June 1999. Under the terms of this new lease, revenues and expenses
are now classified as other income rather than steam operating
revenues and other operation and maintenance expenses, respectively,
which were the previous classifications.
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses increased for the first
quarter of 2000 due to:
o an adjustment of the Texas jurisdiction deferred fuel balance as
a result of the fuel reconciliation settlement with the PUCT;
o a shift from lower-priced coal and nuclear fuel to higher-priced
gas and purchased power due to scheduled outages at Nelson 6 and
River Bend in the first quarter of 2000; and
o higher market prices for gas and purchased power.
Other operation and maintenance
Other operation and maintenance expenses decreased for the first
quarter of 2000 primarily due to:
o a larger nuclear insurance refund in 2000 compared to 1999;
o decreased environmental reserves in the distribution business;
and
o lower incentive compensation accruals in 2000 compared to 1999.
These decreases were partially offset by higher customer service
expenses, such as tree-trimming.
Depreciation and amortization
Depreciation and amortization decreased for the first quarter of
2000 primarily due to reduced River Bend depreciation expense as a
result of the write-down of the River Bend abeyed plant required by
the Texas rate settlement in June 1999.
Other
Interest charges
Interest charges decreased for the first quarter of 2000
primarily due to the retirement and refinancing of certain long-term
debt in 1999.
Income taxes
The effective income tax rates for the first quarter of 2000 and
1999 were 47.0% and 49.5%, respectively.
ENTERGY GULF STATES, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING REVENUES
Domestic electric $470,817 $403,806
Natural gas 12,414 11,717
Steam products - 8,296
-------- --------
TOTAL 483,231 423,819
-------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 191,550 138,574
Purchased power 72,135 45,593
Nuclear refueling outage expenses 5,493 2,678
Other operation and maintenance 95,121 99,555
Decommissioning 1,568 3,280
Taxes other than income taxes 26,854 29,725
Depreciation and amortization 46,818 50,507
Other regulatory credits - net (8,145) (9,395)
Amortization of rate deferrals 1,402 2,270
-------- --------
TOTAL 432,796 362,787
-------- --------
OPERATING INCOME 50,435 61,032
-------- --------
OTHER INCOME
Allowance for equity funds used during construction 1,741 1,226
Gain on sale of assets 515 447
Miscellaneous - net 1,635 597
-------- --------
TOTAL 3,891 2,270
-------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 32,375 35,240
Other interest - net 1,404 685
Distributions on preferred securities of subsidiary 1,859 1,859
Allowance for borrowed funds used during construction (1,609) (1,109)
-------- --------
TOTAL 34,029 36,675
-------- --------
INCOME BEFORE INCOME TAXES 20,297 26,627
Income taxes 9,540 13,190
-------- --------
NET INCOME 10,757 13,437
Preferred dividend requirements and other 4,144 4,552
-------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $6,613 $8,885
======== ========
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Net income $10,757 $13,437
Noncash items included in net income:
Amortization of rate deferrals 1,402 2,270
Reserve for regulatory adjustments 333 (2,265)
Other regulatory credits - net (8,145) (9,395)
Depreciation, amortization, and decommissioning 48,386 53,787
Deferred income taxes and investment tax credits (19,306) 2,120
Allowance for equity funds used during construction (1,741) (1,226)
Gain on sale of assets (515) (447)
Changes in working capital:
Receivables 6 (30,932)
Fuel inventory (8,561) (10,679)
Accounts payable 21,661 12,849
Taxes accrued (9,828) 11,695
Interest accrued (7,242) 6,845
Deferred fuel costs 37,296 20,845
Other working capital accounts 10,624 4,905
Provision for estimated losses and reserves (1,110) 1,833
Changes in other regulatory assets (6,470) (5,395)
Other 13,908 4,093
-------- --------
Net cash flow provided by operating activities 81,455 74,340
-------- --------
INVESTING ACTIVITIES
Construction expenditures (50,130) (36,070)
Allowance for equity funds used during construction 1,741 1,226
Nuclear fuel purchases (33,304) (11,030)
Proceeds from sale/leaseback of nuclear fuel 13,797 11,030
Decommissioning trust contributions and realized
change in trust assets (2,608) (2,605)
-------- --------
Net cash flow used in investing activities (70,504) (37,449)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long Term Debt - 21,775
Retirement of:
Long Term Debt - (47,095)
Redemption of preferred stock (2,493) (24,731)
Dividends paid:
Common stock (3,400) -
Preferred stock (4,109) (4,643)
-------- --------
Net cash flow used in financing activities (10,002) (54,694)
-------- --------
Net increase (decrease) in cash and cash equivalents 949 (17,803)
Cash and cash equivalents at beginning of period 32,312 115,736
-------- --------
Cash and cash equivalents at end of period $33,261 $97,933
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized $41,483 $29,039
Income taxes $33,835 ($2,674)
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets ($2,826) $5,846
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $8,987 $8,607
Temporary cash investments - at cost,
which approximates market 24,274 23,705
---------- ----------
Total cash and cash equivalents 33,261 32,312
---------- ----------
Accounts receivable:
Customer 72,348 73,215
Allowance for doubtful accounts (1,828) (1,828)
Associated companies 3,892 1,706
Other 18,252 15,030
Accrued unbilled revenues 85,849 90,396
---------- ----------
Total receivables 178,513 178,519
---------- ----------
Deferred fuel costs 97,162 134,458
Fuel inventory - at average cost 46,832 38,271
Materials and supplies - at average cost 109,396 112,585
Rate deferrals 5,606 5,606
Prepayments and other 16,899 21,750
---------- ----------
TOTAL 487,669 523,501
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 234,459 234,677
Non-utility property - at cost (less accumulated depreciation) 190,501 187,759
Other - at cost (less accumulated depreciation) 14,447 13,681
---------- ----------
TOTAL 439,407 436,117
---------- ----------
UTILITY PLANT
Electric 7,398,592 7,365,407
Property under capital lease 44,165 46,210
Natural gas 53,141 52,473
Construction work in progress 154,163 145,492
Nuclear fuel under capital lease 75,706 70,801
Nuclear fuel 19,512 -
---------- ----------
TOTAL UTILITY PLANT 7,745,279 7,680,383
Less - accumulated depreciation and amortization 3,579,636 3,534,473
---------- ----------
UTILITY PLANT - NET 4,165,643 4,145,910
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 4,205 5,606
SFAS 109 regulatory asset - net 386,954 385,405
Unamortized loss on reacquired debt 40,589 40,576
Other regulatory assets 145,078 140,157
Long-term receivables 31,625 32,260
Other 17,800 23,490
---------- ----------
TOTAL 626,251 627,494
---------- ----------
TOTAL ASSETS $5,718,970 $5,733,022
========== ==========
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Accounts payable:
Associated companies $88,837 $79,962
Other 127,230 114,444
Customer deposits 35,385 33,360
Taxes accrued 91,971 101,798
Accumulated deferred income taxes 13,665 27,960
Nuclear refueling outage costs 9,246 11,216
Interest accrued 21,329 28,570
Obligations under capital leases 51,816 51,973
Other 17,057 14,557
---------- ----------
TOTAL 456,536 463,840
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 1,098,625 1,098,882
Accumulated deferred investment tax credits 175,639 178,500
Obligations under capital leases 68,056 65,038
Other regulatory liabilities 17,980 20,089
Decommissioning 139,760 139,194
Transition to competition 53,421 47,101
Regulatory reserves 110,869 110,536
Accumulated provisions 68,285 69,395
Other 106,314 117,804
---------- ----------
TOTAL 1,838,949 1,846,539
---------- ----------
Long-term debt 1,631,639 1,631,581
Preferred stock with sinking fund 34,650 34,650
Preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 85,000 85,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 48,951 51,444
Common stock, no par value, authorized 200,000,000
shares; issued and outstanding 100 shares in 2000 and
and 1999 114,055 114,055
Paid-in capital 1,153,195 1,153,131
Retained earnings 205,995 202,782
---------- ----------
TOTAL 1,522,196 1,521,412
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,718,970 $5,733,022
========== ==========
See Notes to Financial Statements.
ENTERGY GULF STATES, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
Increase/
Description 2000 1999 (Decrease) %
(In Millions)
Electric Department Operating
Revenues:
Residential $ 137.9 $ 116.2 $ 21.7 19
Commercial 108.3 91.5 16.8 18
Industrial 184.5 156.2 28.3 18
Governmental 7.7 6.5 1.2 18
------------------------------
Total retail 438.4 370.4 68.0 18
Sales for resale
Associated companies 6.5 3.8 2.7 71
Non-associated companies 20.4 20.7 (0.3) (1)
Other 5.5 8.9 (3.4) (38)
------------------------------
Total Electric Department $ 470.8 $ 403.8 $ 67.0 17
==============================
Billed Electric Energy
Sales (GWH):
Residential 1,833 1,803 30 2
Commercial 1,642 1,600 42 3
Industrial 4,370 4,114 256 6
Governmental 105 100 5 5
------------------------------
Total retail 7,950 7,617 333 4
Sales for resale
Associated companies 188 153 35 23
Non-associated companies 799 985 (186) (19)
------------------------------
Total Electric Department 8,937 8,755 182 2
==============================
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 2000 primarily due
to an increase in provisions for rate refunds, partially offset by
decreases in nuclear refueling outage expenses, other operation and
maintenance expenses, and interest charges.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 2000 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Base revenues ($29.5)
Fuel cost recovery 21.4
Sales volume/weather 8.6
Other revenue (including unbilled) (4.2)
Sales for resale (1.6)
-----
Total ($5.3)
=====
Base revenues
Base revenues decreased primarily due to accruals for potential
rate refunds.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that is offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased for the first quarter of
2000 as a result of higher fuel and purchased power expenses
primarily due to the increased market price of natural gas.
Sales volume/weather
Sales volume increased for the first quarter of 2000 primarily
due to increased usage by industrial and residential customers.
Other revenue (including unbilled)
Other revenue decreased for the first quarter of 2000 primarily
due to electric property rent received in 1999 as a result of
increased pole usage fees.
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Fuel and purchased power expenses
Net fuel and purchased power expenses increased for the first
quarter of 2000 primarily due to increased market prices of natural
gas and increased nuclear generation. This was partially offset by
a decrease in purchased power expenses as a result of the nuclear
refueling outage in February 1999.
Nuclear refueling outage expenses
Nuclear refueling outage expenses decreased for the first
quarter of 2000 as a result of the amortization of larger outage
expenses in 1999 due to the extended nuclear refueling outage in
1997. The costs incurred by the nuclear refueling outages are
amortized over the period between scheduled outages, typically
eighteen months.
Other operation and maintenance
Other operation and maintenance expenses decreased for the
first quarter in 2000 primarily due to:
o a larger nuclear insurance refund in 2000 compared to 1999; and
o lower incentive compensation accruals in 2000 compared to 1999.
Other
Interest charges
Interest on long-term debt decreased for the first quarter of
2000 primarily due to the redemption, retirement, and refinancing of
certain long-term debt during 1999.
Income taxes
The effective income tax rates for the first quarter of 2000 and
1999 were 45.3% and 42.8%, respectively.
ENTERGY LOUISIANA, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING REVENUES
Domestic electric $346,820 $352,135
-------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 83,191 58,225
Purchased power 88,875 92,463
Nuclear refueling outage expenses 3,410 5,436
Other operation and maintenance 63,075 67,803
Decommissioning 2,606 2,196
Taxes other than income taxes 16,763 18,244
Depreciation and amortization 42,147 41,779
Other regulatory charges - net 240 -
-------- --------
TOTAL 300,307 286,146
-------- --------
OPERATING INCOME 46,513 65,989
-------- --------
OTHER INCOME
Allowance for equity funds used during construction 683 761
Miscellaneous - net 108 (42)
-------- --------
TOTAL 791 719
-------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 24,163 27,054
Other interest - net 2,050 1,171
Distributions on preferred securities of subsidiary 1,575 1,575
Allowance for borrowed funds used during construction (957) (651)
-------- --------
TOTAL 26,831 29,149
-------- --------
INCOME BEFORE INCOME TAXES 20,473 37,559
Income taxes 9,282 16,072
-------- --------
NET INCOME 11,191 21,487
Preferred dividend requirements and other 2,378 2,670
-------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $8,813 $18,817
======== ========
See Notes to Financial Statements.
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Net income $11,191 $21,487
Noncash items included in net income:
Other regulatory charges - net 240 -
Depreciation, amortization, and decommissioning 44,753 43,976
Deferred income taxes and investment tax credits (12,187) 4,899
Allowance for equity funds used during construction (683) (761)
Changes in working capital:
Receivables 15,211 41,368
Fuel inventory - (489)
Accounts payable (65,581) (18,292)
Taxes accrued 23,218 21,369
Interest accrued 57 (32,185)
Deferred fuel costs (94) (7,464)
Other working capital accounts 17,637 (10,502)
Provision for estimated losses and reserves 381 (945)
Changes in other regulatory assets 5,249 11,040
Other (5,513) (17,150)
-------- --------
Net cash flow provided by operating activities 33,879 56,351
-------- --------
INVESTING ACTIVITIES
Construction expenditures (30,345) (20,124)
Allowance for equity funds used during construction 683 761
Nuclear fuel purchases - (11,308)
Proceeds from sale/leaseback of nuclear fuel - 11,308
Decommissioning trust contributions and realized
change in trust assets (776) (2,811)
-------- --------
Net cash flow used in investing activities (30,438) (22,174)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long Term Debt - 74,691
Retirement of:
Long Term Debt (100,000) (6,547)
Redemption of preferred stock - (50,000)
Advances from Parent 100,000 -
Dividends paid:
Preferred stock (2,378) (3,253)
-------- --------
Net cash flow provided by (used in) financing activities (2,378) 14,891
-------- --------
Net increase in cash and cash equivalents 1,063 49,068
Cash and cash equivalents at beginning of period 7,734 83,030
-------- --------
Cash and cash equivalents at end of period $8,797 $132,098
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $25,456 $60,646
Income taxes $9,900 $4,301
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets ($1,499) $1,182
See Notes to Financial Statements.
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents $8,797 $7,734
Notes Receivable 1,503 3
Accounts receivable:
Customer 74,562 79,335
Allowance for doubtful accounts (1,615) (1,615)
Associated companies 13,740 14,601
Other 12,085 10,762
Accrued unbilled revenues 95,300 106,200
---------- ----------
Total receivables 194,072 209,283
---------- ----------
Deferred fuel costs 2,256 2,161
Accumulated deferred income taxes 13,770 12,520
Materials and supplies - at average cost 84,765 84,027
Deferred nuclear refueling outage costs 7,934 11,336
Prepayments and other 13,592 6,011
---------- ----------
TOTAL 326,689 333,075
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 14,230 14,230
Decommissioning trust funds 100,220 100,943
Non-utility property - at cost (less accumulated depreciation) 22,156 21,433
---------- ----------
TOTAL 136,606 136,606
---------- ----------
UTILITY PLANT
Electric 5,192,795 5,178,808
Property under capital lease 236,272 236,271
Construction work in progress 122,808 108,106
Nuclear fuel under capital lease 44,771 51,930
---------- ----------
TOTAL UTILITY PLANT 5,596,646 5,575,115
Less - accumulated depreciation and amortization 2,336,112 2,294,394
---------- ----------
UTILITY PLANT - NET 3,260,534 3,280,721
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 225,408 230,899
Unamortized loss on reacquired debt 36,963 35,856
Other regulatory assets 50,433 50,191
Other 14,160 17,302
---------- ----------
TOTAL 326,964 334,248
---------- ----------
TOTAL ASSETS $4,050,793 $4,084,650
========== ==========
See Notes to Financial Statements.
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $16,388 $116,388
Accounts payable:
Associated companies 83,155 137,869
Other 79,901 90,768
Customer deposits 62,127 61,096
Taxes accrued 49,080 25,863
Interest accrued 20,293 20,236
Obligations under capital leases 28,387 28,387
Other 82,761 59,737
---------- ----------
TOTAL 422,092 540,344
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 777,548 792,290
Accumulated deferred investment tax credits 121,775 123,155
Obligations under capital leases 16,384 23,543
Other regulatory liabilities 13,922 15,421
Accumulated provisions 58,468 58,087
Other 34,461 34,564
---------- ----------
TOTAL 1,022,558 1,047,060
---------- ----------
Long-term debt 1,245,547 1,145,463
Preferred stock with sinking fund 35,000 35,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 70,000 70,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 100,500 100,500
Common stock, no par value, authorized 250,000,000
shares; issued and outstanding 165,173,180 shares in 2000
and 1999 1,088,900 1,088,900
Capital stock expense and other (2,171) (2,171)
Retained earnings 68,367 59,554
---------- ----------
TOTAL 1,255,596 1,246,783
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,050,793 $4,084,650
========== ==========
See Notes to Financial Statements.
ENTERGY LOUISIANA, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
Increase/
Description 2000 1999 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 119.1 $ 112.2 $ 6.9 6
Commercial 83.3 79.2 4.1 5
Industrial 152.7 138.3 14.4 10
Governmental 7.9 7.7 0.2 3
-----------------------------
Total retail 363.0 337.4 25.6 8
Sales for resale
Associated companies 0.5 2.5 (2.0) (80)
Non-associated companies 11.6 11.2 0.4 4
Other (28.3) 1.0 (29.3) (2,930)
-----------------------------
Total $ 346.8 $ 352.1 ($5.3) (2)
=============================
Billed Electric Energy
Sales (GWH):
Residential 1,733 1,690 43 3
Commercial 1,148 1,131 17 2
Industrial 3,762 3,626 136 4
Governmental 113 116 (3) (3)
-----------------------------
Total retail 6,756 6,563 193 3
Sales for resale
Associated companies 13 98 (85) (87)
Non-associated companies 203 244 (41) (17)
-----------------------------
Total 6,972 6,905 67 1
=============================
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the first quarter of 2000 primarily due
to an increase in unbilled revenues and other income, partially
offset by increased base rate reductions and higher other operation
and maintenance expenses.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 2000 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Base revenues ($3.3)
Grand Gulf rate rider 0.6
Fuel cost recovery 11.1
Sales volume/weather 1.1
Other revenue (including unbilled) 6.8
Sales for resale (16.0)
-----
Total $0.3
=====
Base revenues
Base revenues decreased for the first quarter of 2000 primarily
due to a base rate reduction that became effective in May 1999.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that is offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased for the first quarter of
2000 primarily due to an increase in the energy cost recovery rate
effective January 2000.
Other revenue (including unbilled)
Other revenue increased for the first quarter of 2000 primarily
due to the effect of favorable weather on the unbilled revenue
calculation in 2000.
Sales for resale
Sales for resale decreased for the first quarter of 2000
primarily due to a decrease in sales to associated companies as a
result of decreased oil generation due to plant outages at Entergy
Mississippi in early 2000.
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses decreased for the first
quarter of 2000 primarily due to the displacement of oil generation
by less expensive gas generation in the first quarter of 2000. The
decrease was partially offset by a shift to higher-priced purchased
power as a result of plant outages.
Other operation and maintenance
Other operation and maintenance expenses increased for the first
quarter of 2000 primarily due to:
o an increase in employee pension and benefits expense;
o an increase in property insurance expense; and
o an increase in plant maintenance.
The overall increase is partially offset by a decrease in
general and administrative salaries.
Other regulatory credits
Other regulatory credits decreased for the first quarter of 2000
primarily due to a decrease in the deferral of Grand Gulf 1 expenses.
Other
Other Income
The increase in other income is primarily due to an increase in
AFUDC and an increase in the interest income received from the
deferral of Grand Gulf 1 expenses.
Income taxes
The effective income tax rates for the first quarter of 2000 and
1999 were 27.3% and 29.4%, respectively.
ENTERGY MISSISSIPPI, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING REVENUES
Domestic electric $182,775 $182,443
-------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 44,287 59,434
Purchased power 76,828 68,466
Other operation and maintenance 35,623 31,119
Taxes other than income taxes 10,176 10,701
Depreciation and amortization 11,725 11,516
Other regulatory credits - net (9,078) (11,013)
-------- --------
TOTAL 169,561 170,223
-------- --------
OPERATING INCOME 13,214 12,220
-------- --------
OTHER INCOME
Allowance for equity funds used during construction 637 143
Miscellaneous - net 2,030 1,619
-------- --------
TOTAL 2,667 1,762
-------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 9,454 9,222
Other interest - net 1,020 844
Allowance for borrowed funds used during (504) (355)
construction
-------- --------
TOTAL 9,970 9,711
-------- --------
INCOME BEFORE INCOME TAXES 5,911 4,271
Income taxes 1,616 1,256
-------- --------
NET INCOME 4,295 3,015
Preferred dividend requirements and other 842 842
-------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $3,453 $2,173
======== ========
See Notes to Financial Statements.
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Net income $4,295 $3,015
Noncash items included in net income:
Other regulatory credits - net (9,078) (11,013)
Depreciation and amortization 11,725 11,516
Deferred income taxes and investment tax credits 3,731 7,686
Allowance for equity funds used during construction (637) (143)
Changes in working capital:
Receivables (5,521) 21,172
Fuel inventory 786 (308)
Accounts payable (54,785) (13,471)
Taxes accrued (27,128) (2,002)
Interest accrued 2,528 (934)
Deferred fuel costs 1,675 10,735
Other working capital accounts 572 (904)
Provision for estimated losses and reserves (473) (132)
Changes in other regulatory assets (9,661) (18,580)
Other 9,741 9,327
-------- --------
Net cash flow provided by (used in) operating activities (72,230) 15,964
-------- --------
INVESTING ACTIVITIES
Construction expenditures (26,337) (15,366)
Allowance for equity funds used during construction 637 143
-------- --------
Net cash flow used in investing activities (25,700) (15,223)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long Term Debt 119,241 -
Dividends paid:
Common stock (1,000) -
Preferred stock (842) (842)
-------- --------
Net cash flow provided by (used in) financing activities 117,399 (842)
-------- --------
Net increase (decrease) in cash and cash equivalents 19,469 (101)
Cash and cash equivalents at beginning of period 4,787 2,640
-------- --------
Cash and cash equivalents at end of period $24,256 $2,539
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized $7,317 $10,586
Income taxes $4,664 ($23,711)
See Notes to Financial Statements.
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $3,313 $4,787
Temporary cash investments - at cost,
which approximates market 20,943 -
---------- ----------
Total cash and cash equivalents 24,256 4,787
---------- ----------
Accounts receivable:
Customer 28,451 35,675
Allowance for doubtful accounts (886) (886)
Associated companies 16,579 1,370
Other 2,327 2,391
Accrued unbilled revenues 26,200 28,600
---------- ----------
Total receivables 72,671 67,150
---------- ----------
Deferred fuel costs 46,264 47,939
Fuel inventory - at average cost 2,988 3,774
Materials and supplies - at average cost 15,589 17,068
Prepayments and other 8,826 7,114
---------- ----------
TOTAL 170,594 147,832
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 5,531 5,531
Non-utility property - at cost (less accumulated depreciation) 6,933 6,965
---------- ----------
TOTAL 12,464 12,496
---------- ----------
UTILITY PLANT
Electric 1,776,184 1,763,636
Property under capital lease 361 384
Construction work in progress 81,733 66,789
---------- ----------
TOTAL UTILITY PLANT 1,858,278 1,830,809
Less - accumulated depreciation and amortization 721,099 709,543
---------- ----------
UTILITY PLANT - NET 1,137,179 1,121,266
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 24,260 24,051
Unamortized loss on reacquired debt 16,038 16,345
Other regulatory assets 141,695 132,243
Other 5,743 5,784
---------- ----------
TOTAL 187,736 178,423
---------- ----------
TOTAL ASSETS $1,507,973 $1,460,017
========== ==========
See Notes to Financial Statements.
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Accounts payable:
Associated companies $35,218 $84,382
Other 26,848 32,470
Customer deposits 24,207 23,303
Taxes accrued 8,840 35,968
Accumulated deferred income taxes 562 526
Interest accrued 12,566 10,038
Obligations under capital leases 97 95
Other 2,040 2,137
---------- ----------
TOTAL 110,378 188,919
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 302,894 298,477
Accumulated deferred investment tax credits 20,533 20,908
Obligations under capital leases 265 290
Accumulated provisions 6,901 7,374
Other 4,110 3,368
---------- ----------
TOTAL 334,703 330,417
---------- ----------
Long-term debt 584,223 464,466
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 50,381 50,381
Common stock, no par value, authorized 15,000,000
shares; issued and outstanding 8,666,357 shares in
2000 and 1999 199,326 199,326
Capital stock expense and other (59) (59)
Retained earnings 229,021 226,567
---------- ----------
TOTAL 478,669 476,215
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,507,973 $1,460,017
========== ==========
See Notes to Financial Statements.
ENTERGY MISSISSIPPI, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
Increase/
Description 2000 1999 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 66.1 $ 62.3 $ 3.8 6
Commercial 59.5 55.2 4.3 8
Industrial 37.4 36.1 1.3 4
Governmental 5.8 5.7 0.1 2
-----------------------------
Total retail 168.8 159.3 9.5 6
Sales for resale
Associated companies 5.9 21.9 (16.0) (73)
Non-associated companies 6.8 6.8 - -
Other 1.3 (5.5) 6.8 124
-----------------------------
Total $ 182.8 $ 182.5 $ 0.3 -
=============================
Billed Electric Energy
Sales (GWH):
Residential 1,023 1,004 19 2
Commercial 918 889 29 3
Industrial 743 755 (12) (2)
Governmental 80 83 (3) (4)
-----------------------------
Total retail 2,764 2,731 33 1
Sales for resale
Associated companies 125 977 (852) (87)
Non-associated companies 77 112 (35) (31)
-----------------------------
Total 2,966 3,820 (854) (22)
=============================
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the first quarter of 2000 primarily due
to increased net gas revenue and decreased other operation and
maintenance expenses.
Revenues and Sales
Electric operating revenues
The changes in electric operating revenues for the first quarter
of 2000 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Base revenues ($0.1)
Fuel cost recovery 6.9
Sales volume/weather 0.1
Other revenue (including unbilled) 1.6
Sales for resale (2.3)
----
Total $6.2
====
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an addition to revenues that is offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased for the first quarter of
2000 primarily due to higher market prices for gas.
Sales for resale
Sales for resale decreased for the first quarter of 2000
primarily due to decreased oil-fired generation as a result of
increased market prices for oil.
Gas Operating Revenues
Gas operating revenues increased for the first quarter of 2000
due to higher prices and increased usage primarily in the residential
and commercial sectors.
Expenses
Fuel and purchased power expenses
Net fuel and purchased power expenses increased for the first
quarter of 2000 primarily due to increased gas market prices and
increased gas purchased for resale due to more favorable weather in
2000.
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other operation and maintenance
Other operation and maintenance decreased for the first quarter
of 2000 primarily due to lower incentive compensation accruals and
lower environmental reserves in 2000 compared to 1999.
Other regulatory credits
Other regulatory credits decreased for the first quarter of 2000
primarily due to an over-recovery of Grand Gulf 1-related costs in
2000 as opposed to an under-recovery in 1999.
Other
Income taxes
The effective income tax rates for the first quarter of 2000 and
1999 were 52.2% and 27.5%, respectively. The increase in tax rate
for the first quarter of 2000 was primarily due to the increase in
pre-tax income affecting the impact of permanent differences and flow-
through items. For the first quarter of 1999, Entergy New Orleans
reported a pre-tax loss.
ENTERGY NEW ORLEANS, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING REVENUES
Domestic electric $86,259 $80,042
Natural gas 33,483 26,014
-------- --------
TOTAL 119,742 106,056
-------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 41,801 30,935
Purchased power 35,111 36,452
Other operation and maintenance 16,851 22,980
Taxes other than income taxes 9,512 7,618
Depreciation and amortization 5,701 5,628
Other regulatory credits - net (1,602) (4,449)
Amortization of rate deferrals 5,996 6,143
-------- --------
TOTAL 113,370 105,307
-------- --------
OPERATING INCOME 6,372 749
-------- --------
OTHER INCOME
Allowance for equity funds used during construction 325 206
Miscellaneous - net 598 413
-------- --------
TOTAL 923 619
-------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 3,319 3,319
Other interest - net 416 322
Allowance for borrowed funds used during (238) (155)
construction
-------- --------
TOTAL 3,497 3,486
-------- --------
INCOME (LOSS) BEFORE INCOME TAXES 3,798 (2,118)
Income taxes 1,981 (583)
-------- --------
NET INCOME (LOSS) 1,817 (1,535)
Preferred dividend requirements and other 241 241
-------- --------
EARNINGS (LOSS) APPLICABLE TO
COMMON STOCK $1,576 ($1,776)
======== ========
See Notes to Financial Statements.
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Net income (loss) $1,817 ($1,535)
Noncash items included in net income:
Amortization of rate deferrals 5,996 6,143
Other regulatory credits - net (1,602) (4,449)
Depreciation and amortization 5,701 5,628
Deferred income taxes and investment tax credits (3,501) 150
Allowance for equity funds used during construction (325) (206)
Changes in working capital:
Receivables 8,720 5,375
Fuel inventory 828 1,411
Accounts payable (9,369) (644)
Taxes accrued 5,095 568
Interest accrued (3,369) (3,361)
Deferred fuel costs 4,557 (1,567)
Other working capital accounts (8,934) (3,403)
Provision for estimated losses and reserves (579) (431)
Changes in other regulatory assets (2,318) (3,867)
Other 1,775 3,925
-------- --------
Net cash flow provided by operating activities 4,492 3,737
-------- --------
INVESTING ACTIVITIES
Construction expenditures (8,051) (8,997)
Allowance for equity funds used during construction 325 206
-------- --------
Net cash flow used in investing activities (7,726) (8,791)
-------- --------
FINANCING ACTIVITIES
Dividends paid:
Preferred stock - (482)
-------- --------
Net cash flow used in financing activities - (482)
-------- --------
Net decrease in cash and cash equivalents (3,234) (5,536)
Cash and cash equivalents at beginning of period 4,454 17,153
-------- --------
Cash and cash equivalents at end of period $1,220 $11,617
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized $7,014 $6,912
Income taxes ($45) ($5,944)
See Notes to Financial Statements.
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents $1,220 $4,454
Accounts receivable:
Customer 22,568 28,658
Allowance for doubtful accounts (846) (846)
Associated companies 257 404
Other 5,911 6,225
Accrued unbilled revenues 17,651 19,820
-------- --------
Total receivables 45,541 54,261
-------- --------
Deferred fuel costs 9,926 14,483
Fuel inventory - at average cost 2,465 3,293
Materials and supplies - at average cost 10,391 10,127
Rate deferrals 21,843 24,788
Prepayments and other 11,281 2,528
-------- --------
TOTAL 102,667 113,934
-------- --------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
UTILITY PLANT
Electric 543,248 541,525
Natural gas 134,491 133,568
Construction work in progress 34,786 29,780
-------- --------
TOTAL UTILITY PLANT 712,525 704,873
Less - accumulated depreciation and amortization 387,680 382,797
-------- --------
UTILITY PLANT - NET 324,845 322,076
-------- --------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 7,925 10,974
Unamortized loss on reacquired debt 1,134 1,187
Other regulatory assets 35,357 33,039
Other 833 1,277
-------- --------
TOTAL 45,249 46,477
-------- --------
TOTAL ASSETS $476,020 $485,746
======== ========
See Notes to Financial Statements.
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Accounts payable:
Associated companies $22,731 $24,350
Other 20,511 28,261
Customer deposits 18,092 17,830
Taxes accrued 5,525 429
Accumulated deferred income taxes 8,017 10,863
Interest accrued 1,587 4,956
Other 5,588 5,524
-------- --------
TOTAL 82,051 92,213
-------- --------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 42,434 43,878
Accumulated deferred investment tax credits 6,249 6,378
SFAS 109 regulatory liability - net 8,545 7,528
Other regulatory liabilities 1,459 1,753
Accumulated provisions 8,257 8,836
Other 8,005 7,733
-------- --------
TOTAL 74,949 76,106
-------- --------
Long-term debt 169,100 169,083
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 19,780 19,780
Common stock, $4 par value, authorized 10,000,000
shares; issued and outstanding 8,435,900 shares in 2000
and 1999 33,744 33,744
Paid-in capital 36,294 36,294
Retained earnings 60,102 58,526
-------- --------
TOTAL 149,920 148,344
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $476,020 $485,746
======== ========
See Notes to Financial Statements.
ENTERGY NEW ORLEANS, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
Increase/
Description 2000 1999 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 27.5 $ 24.5 $ 3.0 12
Commercial 33.7 30.8 2.9 9
Industrial 5.1 5.3 (0.2) (4)
Governmental 14.1 12.9 1.2 9
----------------------------
Total retail 80.4 73.5 6.9 9
Sales for resale
Associated companies 2.6 5.1 (2.5) (49)
Non-associated companies 2.2 2.0 0.2 10
Other 1.1 (0.5) 1.6 320
----------------------------
Total $ 86.3 $ 80.1 $ 6.2 8
============================
Billed Electric Energy
Sales (GWH):
Residential 373 364 9 2
Commercial 497 490 7 1
Industrial 91 115 (24) (21)
Governmental 233 235 (2) (1)
----------------------------
Total retail 1,194 1,204 (10) (1)
Sales for resale
Associated companies 83 233 (150) (64)
Non-associated companies 44 47 (3) (6)
----------------------------
Total 1,321 1,484 (163) (11)
============================
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the first quarter of 2000 primarily due
to increased operating revenues and decreased interest expense.
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.
Operating revenues increased for the first quarter of 2000 as
compared to the same period in 1999 due to additional reserves
recorded in the first quarter of 1999 for the potential refund of
tariffs collected subject to refund in System Energy's rate case
pending before FERC. System Energy's proposed rate increase, which
is subject to refund, is discussed in Note 2 to the financial
statements in the Form 10-K. Operating revenues also increased as a
result of Grand Gulf 1 being operational for 20 days more in the
first quarter of 2000 than in the first quarter of 1999.
Expenses
Fuel expenses
Fuel expenses increased for the first quarter of 2000 because
Grand Gulf 1 was operational for 20 days more in the first quarter of
2000 than in 1999, when maintenance outages occurred.
Other operation and maintenance
Other operation and maintenance expense decreased primarily due
to a larger nuclear insurance refund in 2000 compared to 1999.
Other
Interest charges
Interest on long-term debt decreased for the first quarter of
2000 as a result of the refinancing and redemption of pollution
control revenue bonds and the redemption of first mortgage bonds in
1999.
Other interest decreased for the first quarter of 2000 due to an
adjustment to interest on the potential refund of System Energy's
proposed rate increase in the first quarter of 1999.
Income taxes
The effective income tax rates for the first quarter of 2000 and
1999 were 47.1% and 89.3%, respectively. The decrease in the
effective income tax rate is primarily due to an adjustment to the
provision for rate refund and its associated accrued interest expense
in the first quarter of 1999.
SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING REVENUES
Domestic electric $157,089 $140,617
-------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 10,683 8,636
Nuclear refueling outage expenses 3,214 3,505
Other operation and maintenance 15,272 18,446
Decommissioning 4,736 4,736
Taxes other than income taxes 5,943 6,752
Depreciation and amortization 28,056 28,860
Other regulatory charges - net 14,745 15,845
-------- --------
TOTAL 82,649 86,780
-------- --------
OPERATING INCOME 74,440 53,837
-------- --------
OTHER INCOME
Allowance for equity funds used during construction 732 666
Miscellaneous - net 4,096 4,059
-------- --------
TOTAL 4,828 4,725
-------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 24,126 25,829
Other interest - net 6,843 26,751
Allowance for borrowed funds used during construction (476) (551)
-------- --------
TOTAL 30,493 52,029
-------- --------
INCOME BEFORE INCOME TAXES 48,775 6,533
Income taxes 22,989 5,833
-------- --------
NET INCOME $25,786 $700
======== ========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
2000 1999
(In Thousands)
OPERATING ACTIVITIES
Net income $25,786 $700
Noncash items included in net income:
Reserve for regulatory adjustments 19,555 23,443
Other regulatory charges - net 14,745 15,845
Depreciation, amortization, and decommissioning 32,792 33,596
Deferred income taxes and investment tax credits (19,377) (35,973)
Allowance for equity funds used during construction (732) (666)
Changes in working capital:
Receivables 103,319 (43,485)
Accounts payable 263 (6,034)
Taxes accrued 30,056 16,523
Interest accrued (18,587) (14,211)
Other working capital accounts (3,424) (1,420)
Provision for estimated losses and reserves 15 36,855
Changes in other regulatory assets 11,795 5,293
Other (7,705) 10,276
-------- --------
Net cash flow provided by operating activities 188,501 40,742
-------- --------
INVESTING ACTIVITIES
Construction expenditures (9,250) (5,593)
Allowance for equity funds used during construction 732 666
Nuclear fuel purchases (7) -
Proceeds from sale/leaseback of nuclear fuel 7 -
Decommissioning trust contributions and realized
change in trust assets (5,790) (5,602)
-------- --------
Net cash flow used in investing activities (14,308) (10,529)
-------- --------
FINANCING ACTIVITIES
Retirement of:
Long Term Debt (2,947) (15,820)
Dividends paid:
Common stock (23,600) -
-------- --------
Net cash flow used in financing activities (26,547) (15,820)
-------- --------
Net increase in cash and cash equivalents 147,646 14,393
Cash and cash equivalents at beginning of period 35,152 236,841
-------- --------
Cash and cash equivalents at end of period $182,798 $251,234
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized $42,653 $39,413
Income taxes ($4,035) $10,544
Noncash investing and financing activities:
Change in unrealized depreciation of
decommissioning trust assets ($1,204) ($622)
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $98 $136
Temporary cash investments - at cost,
which approximates market 182,700 35,016
---------- ----------
Total cash and cash equivalents 182,798 35,152
---------- ----------
Accounts receivable:
Associated companies 197,314 301,287
Other 1,323 670
---------- ----------
Total receivables 198,637 301,957
---------- ----------
Materials and supplies - at average cost 62,214 61,264
Deferred nuclear refueling outage costs 17,528 18,665
Prepayments and other 5,941 2,251
---------- ----------
TOTAL 467,118 419,289
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 139,970 135,384
---------- ----------
UTILITY PLANT
Electric 3,050,466 3,060,324
Property under capital lease 444,850 434,993
Construction work in progress 67,760 58,510
Nuclear fuel under capital lease 70,721 78,020
---------- ----------
TOTAL UTILITY PLANT 3,633,797 3,631,847
Less - accumulated depreciation and amortization 1,342,039 1,312,559
---------- ----------
UTILITY PLANT - NET 2,291,758 2,319,288
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 230,519 242,834
Unamortized loss on reacquired debt 55,121 56,474
Other regulatory assets 186,430 185,910
Other 10,054 9,869
---------- ----------
TOTAL 482,124 495,087
---------- ----------
TOTAL ASSETS $3,380,970 $3,369,048
========== ==========
See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 2000 and December 31, 1999
(Unaudited)
2000 1999
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $91,800 $77,947
Accounts payable
Associated companies 14,344 15,237
Other 19,626 18,470
Taxes accrued 85,439 55,383
Accumulated deferred income taxes 6,684 7,162
Interest accrued 21,412 40,000
Obligations under capital leases 38,421 38,421
Other 1,728 1,651
---------- ----------
TOTAL 279,454 254,271
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 457,706 481,945
Accumulated deferred investment tax credits 92,350 93,219
Obligations under capital leases 32,300 39,599
FERC settlement - refund obligation 35,765 37,337
Other regulatory liabilities 83,061 73,313
Decommissioning 135,293 129,503
Regulatory reserves 287,325 267,771
Accumulated provisions 2,032 2,016
Other 16,219 16,014
---------- ----------
TOTAL 1,142,051 1,140,717
---------- ----------
Long-term debt 1,065,798 1,082,579
SHAREHOLDERS' EQUITY
Common stock, no par value, authorized 1,000,000
shares; issued and outstanding 789,350 shares in 2000
in 1999 789,350 789,350
Retained earnings 104,317 102,131
---------- ----------
TOTAL 893,667 891,481
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,380,970 $3,369,048
========== ==========
See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Capital Requirements and Financing (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
See Note 9 to the financial statements in the Form 10-K for
information on Entergy's estimated construction expenditures
(excluding nuclear fuel), long-term debt and preferred stock
maturities, and cash sinking fund requirements for the period 2000-
2002.
Sales Warranties and Indemnities (Entergy Corporation)
See Note 9 to the financial statements in the Form 10-K for
information on certain warranties made by Entergy or its subsidiaries
in the Entergy London and CitiPower sales transactions.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
See Note 9 to the financial statements in the 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 1, ANO 2, River Bend, Waterford 3, Grand Gulf 1,
and Pilgrim.
ANO Matters (Entergy Corporation and Entergy Arkansas)
See Note 9 to the financial statements in the Form 10-K for
information on cracks in a number of steam generator tubes at ANO 2
that were discovered and repaired during an outage in March 1992, and
the replacement of the steam generators scheduled for September 2000.
Environmental Issues
(Entergy Gulf States)
Entergy Gulf States has been designated as a potentially
responsible party (PRP) for the cleanup of certain hazardous waste
disposal sites. Entergy Gulf States is in periodic negotiations with
the U.S. Environmental Protection Agency and state authorities
regarding the cleanup of certain of these sites. As of March 31,
2000, a remaining recorded liability of approximately $17.8 million
existed relating to the cleanup of the remaining sites at which
Entergy Gulf States has been designated a PRP. See "Environmental
Regulation" in Item 1 of Part I of the Form 10-K for additional
discussion of Entergy Gulf States' environmental clean-up activity
and related litigation.
(Entergy Louisiana and Entergy New Orleans)
During 1993, the Louisiana Department of Environmental Quality
(LDEQ) issued new rules for solid waste regulation, including
regulation of wastewater impoundments. Entergy Louisiana and Entergy
New Orleans have determined that certain of their power plant
wastewater impoundments were affected by these regulations and chose
to upgrade or close them. As a result, remaining recorded
liabilities in the amounts of $5.9 million and $0.5 million existed
at March 31, 2000 for wastewater upgrades and closures for Entergy
Louisiana and Entergy New Orleans, respectively. Completion of this
work is awaiting LDEQ approval.
City Franchise Ordinances (Entergy New Orleans)
Entergy New Orleans provides electric and gas service in the
City of New Orleans pursuant to franchise ordinances. These
ordinances contain a continuing option for the City to purchase
Entergy New Orleans' electric and gas utility properties.
Waterford 3 Lease Obligations (Entergy Louisiana)
On September 28, 1989, Entergy Louisiana entered into three
separate but substantially identical transactions for the sale and
leaseback of undivided interests (aggregating approximately 9.3%) in
Waterford 3, which were refinanced in 1997. Entergy Louisiana is
obligated under certain circumstances to pay amounts sufficient to
permit the Owner Participants to withdraw from these lease
transactions. Additionally, Entergy Louisiana may be required to
assume the outstanding bonds issued by the Owner Trustee under these
leases to finance, in part, its acquisition of the undivided
interests in Waterford 3. See Note 10 to the financial statements in
the Form 10-K for further information.
Employment Litigation (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans)
Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and Entergy New Orleans are defendants in numerous
lawsuits filed by former employees asserting that they were
wrongfully terminated and/or discriminated against on the basis of
age, race, and/or sex. The defendant companies are vigorously
defending these suits and deny any liability to the plaintiffs.
However, no assurance can be given as to the outcome of these cases.
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
See "Cajun - Coal Contracts" in Note 9 to the financial
statements in the Form 10-K for information relating to the
declaratory judgment actions filed by Entergy Gulf States in the U.S.
Bankruptcy Court in which the Cajun bankruptcy case was pending. The
settlement agreement and plan of reorganization have been consummated
and effectively release Entergy Gulf States from any claims asserted
by the coal suppliers and transporters for Big Cajun 2.
Reimbursement Agreement (System Energy)
Under 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 agreement, to
maintain its equity at not less than 33% of its adjusted
capitalization (defined in the 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 agreement, a ratio of adjusted net
income to interest expense (calculated, in each case, as specified in
the agreement) of at least 1.60 times earnings. System Energy was in
compliance with the above covenants at March 31, 2000. See Note 9 to
the financial statements in the Form 10-K for further information.
Litigation (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans)
In addition to those proceedings discussed elsewhere herein and
in the Form 10-K, Entergy and the domestic utility companies are
involved in a number of other legal proceedings and claims in the
ordinary course of their businesses. While management is unable to
predict the outcome of these other legal proceedings and claims, it
is not expected that their ultimate resolutions individually or
collectively will have a material adverse effect on results of
operations, cash flows, or financial condition of these entities.
NOTE 2. RATE AND REGULATORY MATTERS
Electric Industry Restructuring
Previous developments and information related to electric
industry restructuring are presented in Note 2 to the financial
statements in the Form 10-K.
Texas
(Entergy Corporation and Entergy Gulf States)
As discussed in Note 2 to the financial statements in the Form
10-K, in June 1999, the Texas legislature enacted a law providing for
competition in the electric utility industry through retail open
access. The law provides for retail open access by most electric
utilities, including Entergy Gulf States, on January 1, 2002. When
retail open access is achieved, the generation business and a new
retail electricity provider function will become competitive
businesses, but transmission and distribution operations will
continue to be regulated. The new retail provider function will be
the primary point of contact with the customers for most services
beyond initiation of electric service and restoration of service
following outages.
In January 2000, Entergy Gulf States filed a business separation
plan with the PUCT as required by the Texas restructuring
legislation. The plan provides that Entergy Gulf States will
ultimately be divided into a Texas distribution company, a Texas
transmission company, a Texas generation company, a Texas retail
electricity provider, and a Louisiana company that will encompass
distribution, generation and transmission operations. Intervenors in
the Texas proceeding have, for the most part, expressed opposition to
the plan for various reasons. It is not certain whether the plan
will be approved as filed, or whether a different plan will be
approved by the PUCT. Entergy Gulf States and other parties to the
proceeding are in discussions aimed at determining whether there are
modifications to the proposed plan that would be acceptable to all
concerned parties. The procedural schedule requires Entergy Gulf
States to file an amended business separation plan by June 8, 2000.
The timing and outcome of this proceeding is uncertain, and
additional regulatory approvals from FERC, the SEC, and the LPSC will
be required before any legal separation plan can be implemented.
On March 31, 2000, pursuant to the Texas restructuring
legislation, Entergy Gulf States filed cost data with the PUCT for
its unbundled business functions and proposed tariffs for its
unbundled distribution utility. In the filing, Entergy Gulf States
is seeking approval for recovery of the following, among other
things:
o the unbundled distribution utility's cost of service;
o a 12% return on equity for the unbundled distribution utility;
and
o a ten-year non-bypassable charge to recover estimated stranded
costs and a non-bypassable charge to recover nuclear
decommissioning costs.
At a prehearing conference held in April 2000, a procedural
schedule for the case was established, calling for a hearing in
January 2001. Management cannot predict the outcome of this
proceeding.
Retail Rate Proceedings
Previous developments and information related to retail rate
proceedings are presented in Note 2 to the financial statements in
the Form 10-K.
Filings with the APSC (Entergy Corporation and Entergy Arkansas)
In March 2000, Entergy Arkansas filed its annually redetermined
energy cost rate with the APSC in accordance with the energy cost
recovery rider formula. The filing reflected that an increase was
warranted to collect an under-recovery of energy costs for 1999. The
increased energy cost recovery rate is effective April 2000 through
March 2001.
Filings with the PUCT and Texas Cities
PUCT Fuel Cost Review (Entergy Corporation and Entergy Gulf States)
Based on the settlement agreement discussed in Note 2 to the
financial statements in the Form 10-K, Entergy Gulf States adopted a
methodology for calculating its fixed fuel factor based on the market
price of natural gas. This calculation and any necessary adjustments
will occur semi-annually and continue until December 2001.
The amounts collected under Entergy Gulf States' fixed fuel
factor through December 2001 are subject to fuel reconciliation
proceedings before the PUCT, including a fuel reconciliation case
filed by Entergy Gulf States in July 1999. In February 2000, Entergy
Gulf States reached a settlement with all but one of the parties to
that proceeding. Entergy Gulf States reconciled approximately $731
million (after excluding approximately $14 million related to Cajun
issues to be handled in a subsequent proceeding) of fuel and
purchased power costs. The settlement reduces Entergy Gulf States'
requested surcharge in the reconciliation filing from $14.7 million
to $2.2 million. This settlement was approved by the PUCT in an
order dated April 12, 2000, confirming an interim order that allowed
Entergy Gulf States to begin the recovery of the $2.2 million
surcharge between April 2000 and January 2001. In addition, Entergy
Gulf States agreed to file a fuel reconciliation case by January 12,
2001 covering the period from March 1, 1999 through August 31, 2000.
The decrease in the requested surcharge was recorded in March 2000
and is reflected in Entergy Gulf States' operating income.
Filings with the LPSC
Annual Earnings Reviews (Entergy Corporation and Entergy Gulf
States)
In May 1997, Entergy Gulf States filed its fourth post-Merger
earnings analysis with the LPSC. In March 2000, the LPSC ordered
Entergy Gulf States to refund approximately $17.7 million to
customers. Entergy Gulf States will appeal the order. Entergy Gulf
States has provided adequate reserves for its annual earnings reviews
based on management's estimates of the outcome of these proceedings.
Fuel Adjustment Clause Litigation
(Entergy Corporation and Entergy Louisiana)
In May 1998, a group of ratepayers filed a complaint against
Entergy Corporation, Entergy Power, and Entergy Louisiana in state
court in Orleans Parish purportedly on behalf of all Entergy
Louisiana ratepayers. The plaintiffs seek treble damages for alleged
injuries arising from alleged violations by the defendants of
Louisiana's antitrust laws in connection with the costs included in
fuel filings with the LPSC and passed through to ratepayers. Among
other things, the plaintiffs allege that Entergy Louisiana improperly
introduced certain costs into the calculation of the fuel charges,
including high-cost electricity imprudently purchased from its
affiliates and high-cost gas imprudently purchased from independent
third party suppliers. In addition, plaintiffs seek to recover
interest and attorney's fees. Exceptions were filed by Entergy,
asserting that this dispute should be litigated before the LPSC and
FERC. At the appropriate time, if necessary, Entergy will raise its
defenses to the antitrust claims. At present, the suit in state
court is stayed by stipulation of the parties.
Plaintiffs also requested that the LPSC initiate a review of
Entergy Louisiana's monthly fuel adjustment charge filings and force
restitution to ratepayers of all costs that the plaintiffs allege
were improperly included in those fuel adjustment filings. Marathon
Oil Company and Louisiana Energy Users Group have also intervened in
the LPSC proceeding. Discovery at the LPSC has been conducted and is
expected to continue. Direct testimony was filed with the LPSC by
plaintiffs and the intervenors in July 1999. In their testimony for
the period 1989 through 1998, plaintiffs purport to quantify many of
their claims in an amount totaling $544 million, plus interest. The
plaintiffs will likely assert additional damages for the period 1974
through 1988. The Entergy companies filed responsive and rebuttal
testimony in September 1999. Rebuttal testimony by the plaintiffs
and intervenors was filed in November 1999.
Entergy Louisiana and the staff of the LPSC have reached an
agreement in principle for the settlement of the matter before the
LPSC. The terms of the proposed settlement have not as yet been
agreed to by other parties to the LPSC proceeding, and must be
approved by the LPSC after any parties contesting the settlement are
afforded the opportunity for a hearing. Entergy Louisiana would
agree under the proposed terms to refund to customers approximately
$72 million in settlement of all claims arising out of or relating to
Entergy Louisiana's fuel adjustment clause filings from January 1,
1975 through December 31, 1999, except with respect to purchased
power and associated costs included in the fuel adjustment clause
filings for the period May 1 through September 30, 1999. Reserves
were previously provided by Entergy Louisiana for the refund. If the
proposed settlement is approved, Entergy Louisiana would also consent
to future fuel cost recovery under a long-term gas contract based on
a formula that would likely result in an under-recovery of actual
costs under that contract for the remainder of its term, which runs
through 2013. The future under-recovery cannot be precisely
estimated at this time because it will depend upon factors that are
not certain, such as the price of gas and the amount of gas purchased
under the long-term contract. In recent years, Entergy Louisiana has
made purchases under that contract totaling from $91 million to $121
million annually. Had the proposed settlement terms been applicable
to such purchases, the under-recoveries would have ranged from $4
million to $9 million per year.
In its intervention, Marathon Oil Company and Louisiana Energy
Users Group requested that the LPSC review the prudence of a contract
entered into by Entergy Louisiana to purchase energy generated by a
hydroelectric facility known as the Vidalia project through the year
2031. Note 9 to the financial statements in the Form 10-K contains
further discussions of the obligations related to the Vidalia
project. By orders entered by the LPSC in 1985 and 1990, the LPSC
approved Entergy Louisiana's entry into the Vidalia contract and
Entergy Louisiana's right to recover, through the fuel adjustment
clause, the costs of power purchased thereunder. Additionally, the
wholesale electric rates under the Vidalia power purchase contract
were filed at FERC. In December 1999, the LPSC instituted a review
of the following issues relating to the Vidalia project: (i) the
LPSC's jurisdiction over the Vidalia project; (ii) Entergy
Louisiana's management of the Vidalia contract, including
opportunities to restructure or otherwise reform the contract; (iii)
the appropriateness of Entergy Louisiana's recovery of 100% of the
Vidalia contract costs from ratepayers; (iv) the appropriateness of
the fuel adjustment clause as the method for recovering all or part
of the Vidalia contract costs; (v) the appropriate regulatory
treatment of the Vidalia contract in the event the LPSC approves
implementation of retail competition; and (vi) Entergy Louisiana's
communication of pertinent information to the LPSC regarding the
Vidalia project and contract. Based on its review, the LPSC will
determine whether it should disallow any of the costs of the Vidalia
project included in the fuel adjustment clause.
In March 2000, Entergy Louisiana filed testimony in this
sub-docket in which it takes the position that the prudence of the
Vidalia contract already has been approved by final orders of the
LPSC and that recovery of all amounts paid by Entergy Louisiana
related to the Vidalia project pursuant to the FERC-filed rate is
appropriate. The LPSC is required to file testimony on May 26, 2000.
It is anticipated that hearings in this sub-docket concerning the
Vidalia contract will be completed by the end of 2000.
(Entergy Corporation and Entergy New Orleans)
In April 1999, a group of ratepayers filed a complaint against
Entergy New Orleans, Entergy Corporation, Entergy Services, and
Entergy Power in state court in Orleans Parish purportedly on behalf
of all Entergy New Orleans ratepayers. The plaintiffs seek treble
damages for alleged injuries arising from the defendants' alleged
violations of Louisiana's antitrust laws in connection with certain
costs passed on to ratepayers in Entergy New Orleans' fuel adjustment
filings with the Council. In particular, plaintiffs allege that
Entergy New Orleans improperly included certain costs in the
calculation of fuel charges and that Entergy New Orleans imprudently
purchased high-cost fuel from other Entergy affiliates. Plaintiffs
allege that Entergy New Orleans and the other defendant Entergy
companies conspired to make these purchases to the detriment of
Entergy New Orleans' ratepayers and to the benefit of Entergy's
shareholders, in violation of Louisiana's antitrust laws. Plaintiffs
also seek to recover interest and attorney's fees. Exceptions to the
plaintiffs' allegations were filed by Entergy, asserting, among other
things, that jurisdiction over these issues rests with the Council
and FERC. If necessary, at the appropriate time, Entergy will also
raise its defenses to the antitrust claims. At present, the suit in
state court is stayed by stipulation of the parties.
Plaintiffs also filed this complaint with the Council in order
to initiate a review by the Council of their allegations and to force
restitution to ratepayers of all costs they allege were improperly
and imprudently included in the fuel adjustment filings. Discovery
has begun in the proceedings before the Council. In April 2000,
testimony was filed on behalf of the plaintiffs in this proceeding.
The testimony asserts, among other things, that Entergy New Orleans
and other defendants have engaged in fuel procurement and power
purchasing practices that could have resulted in New Orleans
customers being overcharged by more than $45 million over a period of
years. However, it is not clear precisely what periods and damages
are being alleged. Entergy intends to defend this matter vigorously,
both in court and before the Council. The ultimate outcome of the
lawsuit and the Council proceeding cannot be predicted at this time.
Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
In March 2000, Entergy Mississippi submitted its annual
performance-based formula rate plan filing for the 1999 test year.
The filing indicated that no change in rate levels was warranted and
the current rate levels remain in effect.
NOTE 3. COMMON STOCK (Entergy Corporation)
During the first quarter of 2000, Entergy Corporation
repurchased 7,350,800 shares of common stock in the open market for
an aggregate purchase price of approximately $156 million. These
shares were purchased pursuant to Entergy's stock repurchase plan and
also to fulfill the requirements of various stock-based compensation
and benefit plans. During the first quarter of 2000, Entergy
Corporation issued 433,940 shares of its previously repurchased
common stock to satisfy stock options exercised and employee stock
purchases. In addition, Entergy Corporation received proceeds of
approximately $2.0 million from the issuance of 89,894 shares of
common stock under its dividend reinvestment and stock purchase plan.
NOTE 4. LONG-TERM DEBT
(Entergy Mississippi)
On February 15, 2000, Entergy Mississippi issued $120 million of
7.75% Series First Mortgage Bonds due February 15, 2003. The
proceeds are being used for general corporate purposes, including the
retirement of short-term indebtedness that was incurred for working
capital needs and capital expenditures.
(Entergy Arkansas)
On March 9, 2000, Entergy Arkansas issued $100 million of 7.72%
Series First Mortgage Bonds due March 1, 2003. The proceeds are
being used for general corporate purposes, including the retirement
of short-term indebtedness that was incurred for working capital
needs and capital expenditures.
(Entergy Louisiana)
On March 1, 2000, Entergy Louisiana redeemed, at maturity, $100
million of 6.00% Series First Mortgage Bonds using funds received
from an open-account advance from Entergy Corporation. See
"MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND
CAPITAL RESOURCES" for a further discussion of this advance.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On April 5, 2000, Entergy Corporation's Board of Directors
declared a common stock dividend of $0.30 per share, payable on June
1, 2000, to holders of record on May 16, 2000.
NOTE 6. BUSINESS SEGMENT INFORMATION (Entergy Corporation)
See Note 14 to the financial statements in the Form 10-K for
information regarding Entergy's adoption of SFAS 131 and its
operating segments. Entergy's segment financial information for the
first quarter of 2000 and 1999 is as follows (in thousands):
Domestic Power All Other* Eliminations Consolidated
Utility and Marketing
System and
Energy Trading*
2000
Operating Revenues $1,401,444 $346,157 $ 75,850 $ (11,959) $ 1,811,492
Income Taxes 71,191 5,736 5,898 - 82,825
Net Income 87,338 11,297 9,775 - 108,410
Total Assets 19,556,488 616,853 3,804,322 (615,436) 23,362,227
1999
Operating Revenues $1,286,703 $344,438 $ 12,096 $ (3,315) $ 1,639,922
Income Taxes 59,594 (8,223) (6,198) - 45,173
Net Income 82,576 (14,013) 4,343 - 72,906
Total Assets 20,193,864 572,940 2,630,391 (547,811) 22,849,384
Businesses marked with * are referred to as the "competitive
businesses," with the exception of the parent company, Entergy
Corporation, which is also included in the "All Other" column. The
"All Other" category includes the parent, Entergy Corporation,
segments below the quantitative threshold for separate disclosure,
and other business activities. Other segments principally include
global power development and non-utility nuclear power operations and
management. Other business activities principally include the gains
on the sales of businesses. The elimination of power marketing and
trading mark-to-market profits on intercompany power transactions is
also included in "All Other." Eliminations are primarily
intersegment activity.
__________________________________
In the opinion of the management of Entergy Corporation, Entergy
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
reclassification of 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 the domestic
utility companies and System Energy is subject to seasonal
fluctuations with the peak periods occurring during the third
quarter. 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
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See "PART I, Item 1, Other Regulation and Litigation" in the
Form 10-K for a discussion of legal proceedings affecting Entergy.
Set forth below are updates to the information contained in the
Form 10-K.
Union Pacific Railroad (Entergy Corporation and Entergy Arkansas)
See "Union Pacific Railroad" in Item 1 of Part 1 of the Form 10-
K for information relating to the civil suit filed by Entergy
Arkansas and Entergy Services against Union Pacific Railroad Company
(Union Pacific) seeking damages and the termination of coal shipping
contracts with Union Pacific because of its failure to meet its
contractual obligations to ship coal to Entergy Arkansas' two coal-
fired plants. In addition to rescission of the contracts and
monetary damages, Entergy is seeking restitution for amounts paid to
Union Pacific since the date of material breach that are above
reasonable market rates. The case is scheduled for trial beginning
in October 2000.
Aquila Power Corporation (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans)
See "Aquila Power Corporation" in Item 1 of Part 1 of the Form
10-K for information relating to the complaint filed by Aquila Power
Corporation (Aquila) against Entergy Services, as agent for the
domestic utility companies, alleging that the domestic utility
companies improperly reserved transmission capacity on Entergy's
transmission system, resulting in the denial of Aquila's request for
transmission service. FERC issued an order in March 2000 responding
to Aquila's complaints. While FERC found that Entergy improperly
reserved transmission capacity in the past, FERC determined it did
not have authority to order monetary damages, and that refunds were
not appropriate under the circumstances. Entergy has requested
rehearing of certain parts of FERC's ruling.
Ratepayer Lawsuits (Entergy Corporation, Entergy Gulf States,
Entergy Louisiana, and Entergy New Orleans)
See "Ratepayer Lawsuits" in Item 1 of Part I of the Form 10-K
for a discussion of the lawsuits filed by ratepayers with the LPSC,
the Council, and in Louisiana state courts in Orleans and East Baton
Rouge Parishes. See "Fuel Adjustment Clause Litigation" in Note 2 to
the financial statements herein for developments that have occurred
since the filing of the Form 10-K.
Franchise Service Area Litigation (Entergy Gulf States)
See "Franchise Service Area Litigation" in Item 1 of Part 1 of
the Form 10-K for information relating to the request filed by
Beaumont Power and Light Company (BP&L) with the PUCT to obtain a
certificate of convenience and necessity for those portions of
Jefferson County, Texas, outside the boundaries of any municipality,
except for the city of Beaumont, for which Entergy Gulf States
provides retail electric service. In April 2000, the ALJ recommended
denial of BP&L's application. In May 2000, the PUCT voted to remand
the proceeding back to the ALJ to allow BP&L to provide further
evidence. No procedural schedule has been set.
Ice Storm Litigation (Entergy Corporation and Entergy Gulf States)
See "Ice Storm Litigation" in Part I of the Form 10-K for
information relating to the lawsuit filed by a group of Entergy Gulf
States customers in Texas against Entergy Corporation, Entergy Gulf
States, and other Entergy subsidiaries in state court in Jefferson
County, Texas purportedly on behalf of all Entergy Gulf States
customers in Texas who sustained outages in a January 1997 ice storm.
On March 14, 2000, an appellate court affirmed the district court's
decision to certify the class. Entergy has filed a motion for
rehearing.
Litigation Environment (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy)
The four states in which Entergy and the domestic utility
companies operate have proven to be unusually litigious environments.
Judges and juries in these states, and in particular Louisiana and
Texas, have demonstrated a willingness to grant large verdicts,
including punitive damages, to plaintiffs in personal injury,
property damage, and business tort cases. Entergy uses all
appropriate legal means to contest litigation threatened or filed
against it, but the litigation environment in these states poses a
significant business risk.
Item 5. Other Information
Earnings Ratios (Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
The domestic utility companies and System Energy have calculated
ratios of earnings to fixed charges and ratios of earnings to
combined fixed charges and preferred dividends pursuant to Item 503
of Regulation S-K of the SEC as follows:
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, March 31,
1995 1996 1997 1998 1999 2000
Entergy Arkansas 2.56 2.93 2.54 2.63 2.08 2.48
Entergy Gulf States 1.86 1.47 1.42 1.40 2.18 2.16
Entergy Louisiana 3.18 3.16 2.74 3.18 3.48 3.39
Entergy Mississippi 2.92 3.40 2.98 3.04 2.44 2.48
Entergy New Orleans 3.93 3.51 2.70 2.59 3.00 3.38
System Energy 2.07 2.21 2.31 2.52 1.90 2.37
Ratios of Earnings to Combined Fixed Charges
and Preferred Dividends
Twelve Months Ended
December 31, March 31,
1995 1996 1997 1998 1999 2000
Entergy Arkansas 2.12 2.44 2.24 2.28 1.80 2.14
Entergy Gulf States (a) 1.54 1.19 1.23 1.20 1.86 1.85
Entergy Louisiana 2.60 2.64 2.36 2.75 3.09 3.01
Entergy Mississippi 2.51 2.95 2.69 2.73 2.18 2.22
Entergy New Orleans 3.56 3.22 2.44 2.36 2.74 3.05
(a) "Preferred Dividends" in the case of Entergy Gulf States also
include dividends on preference stock.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
4(a) - Fifty-fifth Supplemental Indenture, dated as of March 1,
2000, to Entergy Arkansas' Mortgage and Deed of Trust,
dated as of October 1, 1944.
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of March 31, 2000.
27(b) - Financial Data Schedule for Entergy Arkansas as of March
31, 2000.
27(c) - Financial Data Schedule for Entergy Gulf States as of
March 31, 2000.
27(d) - Financial Data Schedule for Entergy Louisiana as of March
31, 2000.
27(e) - Financial Data Schedule for Entergy Mississippi as of
March 31, 2000.
27(f) - Financial Data Schedule for Entergy New Orleans as of
March 31, 2000.
27(g) - Financial Data Schedule for System Energy as of March 31,
2000.
99(a) - Entergy Arkansas' Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed Charges
and Preferred Dividends, as defined.
99(b) - Entergy Gulf States' Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed Charges
and Preferred Dividends, as defined.
99(c) - Entergy Louisiana's Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed Charges
and Preferred Dividends, as defined.
99(d) - Entergy Mississippi's Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(e) - Entergy 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,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System
Energy for the fiscal year ended December 31, 1999,
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).
___________________________
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy
Corporation agrees to furnish to the Commission upon request any
instrument with respect to long-term debt that is not registered or
listed herein as an Exhibit because the total amount of securities
authorized under such agreement does not exceed ten percent of
Entergy Corporation and its subsidiaries on a consolidated basis.
* Reference is made to a duplicate list of exhibits being
filed as a part of this report on Form 10-Q for the quarter
ended March 31, 2000, which list, prepared in accordance
with Item 102 of Regulation S-T of the SEC, immediately
precedes the exhibits being filed with this report on Form
10-Q for the quarter ended March 31, 2000.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
Entergy Arkansas
A Current Report on Form 8-K, dated March 2, 2000,
was filed with the SEC on March 3, 2000, reporting
information under Item 5. "Other Events".
Entergy Corporation
A Current Report on Form 8-K, dated March 28, 2000,
was filed with the SEC on March 31, 2000, reporting
information under Item 5. "Other Events".
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, INC.
ENTERGY GULF STATES, INC.
ENTERGY LOUISIANA, INC.
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC.
SYSTEM ENERGY RESOURCES, INC.
/s/ Nathan E. Langston
Nathan E. Langston
Vice President and Chief Accounting Officer
(For each Registrant and for each as
Principal Accounting Officer)
Date: May 12, 2000