SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date earliest event reported) February 7, 1997
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
1-11299 ENTERGY CORPORATION 72-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
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Item 2. Acquisition of Assets
On February 7, 1997, with approximately 73% of London
Electricity plc's outstanding common shares tendered, Entergy
Corporation's cash offer totaling US $2.1 billion for London
Electricity plc was declared unconditional and Entergy assumed
control. Entergy's offer was originally announced in London on
December 18, 1996 by Entergy Power UK plc ("Entergy UK"), a
subsidiary of Entergy Corporation. In order to make the
acquisition, Entergy UK will borrow approximately US $1.7
billion, nonrecourse to Entergy, pursuant to a Credit Facility
comprised of a consortium of banks, underwritten by ABN-Amro Bank
N.V., Bank of America International Limited and Union Bank of
Switzerland. Entergy will fund approximately $400 million of the
equity investment with internally generated funds and its $300
million line of credit. The closing is scheduled on or before
March 1, 1997. London Electricity plc is an electric
distribution company serving approximately two million customers
within the greater London area.
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Item 5. Other Information
Entergy Corporation issued the following press release in
connection with its release of earnings issued on February 13,
1996:
Entergy Reports Fourth-Quarter, Full-Year 1996 Earnings
NEW ORLEANS -- Entergy Corporation (NYSE: ETR) today
reported fourth-quarter 1996 consolidated net income of $38.9
million, or 17 cents per share, compared with $3.8 million, or 2
cents per share, for the fourth quarter of 1995. Fourth-quarter
1996 revenues totaled $1.57 billion, compared with $1.43 billion
for the same period a year ago.
Twelve months 1996 consolidated net income totaled $420.0
million, or $1.83 per share, compared with $520.0 million, or
$2.28 per share, for 1995. Revenues totaled $7.16 billion for the
full year of 1996, compared with $6.29 billion for all of 1995.
Both years' fourth-quarter and 12-month results contain
several unusual items that reduced consolidated net income for
the periods. These items are removed in the following comparison
of "ongoing" earnings.
- - Fourth-quarter 1996 ongoing net income was $42.1 million,
down 11 percent from the $47.3 million for the same period of
1995. Ongoing earnings per share were 18 cents, down 14.3 percent
from 21 cents in 1995.
- - Full-year 1996 ongoing net income was $568.0 million, up 6.1
percent from the $535.2 million for 1995. Ongoing earnings per
share were $2.48, up 5.5 percent from the $2.35 for 1995.
Unusual items in the fourth quarter of 1996 and 1995
resulted in net charges of $3.2 million and $43.5 million,
respectively. Charges taken in 1996 result from restructurings
and write-offs, primarily in the company's energy-management
subsidiary, Entergy Integrated Solutions. They were partially
offset by regulatory and reserve adjustments, and a gain from the
sale of some stock from Entergy's investment in a Pakistani power
project.
Net full-year 1996 charges totaled $147.9 million, compared
with $15.2 million in 1995 charges. Largest among 1996 charges
was a $174.4 million write-off in rate deferrals associated with
the River Bend nuclear plant. This was taken in the first quarter
in accordance with a new accounting rule (Financial Accounting
Standards Board Statement No. 121).
Fourth-Quarter 1996 Operations Reviewed
Weather in the fourth quarter of 1996 was milder than in
1995's fourth quarter and milder than normal for Entergy's
domestic retail energy service area (portions of Arkansas,
Louisiana, Mississippi, and Texas). This affected sales and
reduced fourth-quarter 1996 net income by about $10 million,
compared with fourth-quarter 1995 results, and about $2 million
compared with normal weather.
Total retail sales increased only 1.9 percent in the fourth
quarter of 1996. However, they were up 3.4 percent when the
unfavorable weather effect is removed.
Also, rate reductions in Entergy's domestic retail energy
business lowered fourth-quarter 1996 revenues about $9 million,
compared with the year-ago period.
Full-Year 1996 Operations Reviewed
Entergy's 1996 performance benefited from increased volume
sales of electricity, lower operating expenses in its domestic
retail energy business, and improved performance from the
company's diversified growth businesses. Entergy's good 1996
financial performance was achieved despite a reduction of about
$42 million in 1996 revenues, a result of rate actions.
Full-year 1996 retail sales increased 3.6 percent, compared
with 1995. When the effect of weather is removed from both years,
Entergy's 1996 increase was an even stronger 4.0 percent. Total
domestic retail customers increased 1.5 percent in 1996 to an
average of 2.42 million. This growth reflects a continued healthy
service-area economy.
Kilowatt-hour sales of electricity increased in all customer
classes in 1996. The percentage increases from 1995, on a weather-
adjusted basis, were: 3.0 residential, 3.4
commercial/governmental, and 4.9 industrial. Entergy experienced
significantly increased demand from the industrial chemicals and
petroleum processing sectors, primarily situated in south
Louisiana and eastern Texas. Also, demand was up in Arkansas in
the metals, chemicals, and gas exploration sectors.
Ongoing operation and maintenance expenses in the domestic
retail energy business declined $29.4 million, or 2.1 percent, in
1996, compared with a year ago. Driving the lower O&M expenses
were declining employee payroll expenses. In line with the
company's drive to become more cost effective in preparation for
competition, core-business employment declined 8.4 percent to
11,515 at year-end.
Entergy's diversified growth businesses (those not regulated
by domestic utility regulatory bodies) improved in 1996
performance. Although, as a group, they continued to operate in
the red, the ongoing net loss declined to $12.1 million, compared
with $44.1 million in 1995. On an ongoing basis, Entergy Power
group's global power investments turned profitable in 1996. With
CitiPower contributing, all international investments were
profitable, as was Entergy Power, Inc., Entergy's domestic
wholesale generation company.
Entergy Integrated Solutions, a domestic provider of energy-
efficient lighting, heating, ventilation, and air-conditioning
services, recorded a 1996 loss that was higher than last year's
but generally in line with expectations.
Outlook
"1996 was a year of solid progress," Gerald D. McInvale,
executive vice president and CFO, said. "We continued to improve
operations in our domestic retail energy business while at the
same time building a world-class international business. Entergy
Power group delivered strong earnings growth in 1996 and we
expect that to continue in 1997 and 1998. We also expect a
significant reduction in Entergy Integrated Solutions' losses in
1997.
"Our strategies are working and we continue to believe
Entergy can achieve the 5 to 6 percent ongoing earnings growth in
the 1996-99 time frame, as we have previously indicated,"
McInvale said. "While it is too early in the year to reliably
forecast 1997 earnings, we would point out that we have had
positive weather adjustments in each of the past four years. For
example, in 1996, our $2.48 ongoing earnings per share included
nine cents of positive weather. We, therefore, view the future
from a $2.39 weather-adjusted earnings per share base. We will
comment further on our earnings outlook as the year progresses."
Entergy Corporation's on-line address is http://www.entergy.com.
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Investors are cautioned that forward-looking statements
contained herein with respect to the revenues, earnings,
competitive performance, or other prospects for the business
of Entergy Corporation or its affiliated companies may be
influenced by factors that could cause actual outcomes and
results to be materially different than projected. Such
factors include, but are not limited to, the effects of
weather, the performance of generating units, fuel prices
and availability, regulatory decisions and the effects of
changes in law, capital spending requirements, the evolution
of competition, changes in accounting standards, and other
factors.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of the business acquired.
It is impractical for Entergy to provide at this
time pro forma financial information or financial
statements for London Electricity plc, and will file
such financial statements within sixty (60) days
pursuant to an amendment of this Form 8-K.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
ENTERGY CORPORATION
By: /s/Louis E. Buck
Louis E. Buck
Vice President and Chief Accounting Officer
Dated: February 18, 1997
