File No. 70-9189
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form U-l/A
Amendment No. 2
___________________________________
APPLICATION-DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
___________________________________
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
(Name of company filing this statement and address
of principal executive offices)
___________________________________
Entergy Corporation
(Name of top registered holding company parent of each
applicant or declarant)
___________________________________
Naomi Nakagama
Senior Vice President-Finance and Treasurer
Entergy Services, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
(Names and addresses of agents for service)
___________________________________
The Commission is also requested to send copies of any
communications in connection with this matter to:
Laurence M. Hamric, Esq. William T. Baker, Jr. Esq.
Ann G. Roy, Esq. Reid & Priest LLP
Entergy Services, Inc. 40 West 57th Street
639 Loyola Avenue New York, NY 10019
New Orleans, LA 70113
<PAGE>
Item 1. Description of Proposed Transactions.
Item 1. D of the Application-Declaration on Form U-1 is
hereby amended and restated as follows and is further
amended to include an additional paragraphs E and F.
D. Compliance With Rules 53 and 54.
Entergy hereby represents that, pursuant to Rule 54
under the Act, (1) for the reasons discussed below, the
condition set forth in Rule 53(a)(1) that Entergy's
"aggregate investment" in "exempt wholesale generators"
("EWGs") and "foreign utility companies" ("FUCOs") not
exceed 50% of Entergy's "consolidated retained earnings" is
not currently satisfied, and (2) all of the other criteria
of Rule 53(a) and (b) are satisfied.<FN1>
Entergy's "aggregate investment" in EWGs and FUCOs is
equal to approximately 54% of Entergy's "consolidated
retained earnings" as of March 31, 1998. Entergy's
"aggregate investment" currently exceeds the 50% limitation
in Rule 53(a)(1) as a result of certain charges against
Entergy's consolidated retained earnings, including a net
decrease of approximately $140 million in Entergy's
consolidated retained earnings from the quarter ended June
30, 1997 to the quarter ended September 30, 1997. This $140
million net decrease was attributable primarily to the
recording in July 1997 of a one-time "windfall profits tax"
imposed by the British government on London Electricity plc
("London Electricity"), an indirect subsidiary of Entergy
and a FUCO, and other privatized companies in the United
Kingdom. This tax, which was approximately US$234 million
for London Electricity, was made payable in installments,
the first of which was paid on December 1, 1997, and the
second which will be due on December 1, 1998. The first
installment was paid by London Electricity, without need for
additional investment by Entergy, and it is not anticipated
that there will be a need for any additional investment by
Entergy to fund London Electricity's payment of the second
installment. Accordingly, operating earnings attributable
to Entergy's investments on EWGs and FUCOs have not had an
adverse impact on Entergy's financial integrity.
Following the July 2, 1997 announcement by the Labor
Government of the proposed windfall profits tax, a Standard
& Poor's Ratings Group report listed 13 British utilities,
including London Electricity, on "CreditWatch with negative
implications". However, as of March 31, 1997, London
Electricity's senior debt ratings have not changed due to
the enactment of the windfall profits tax. Moreover, as
noted below, after Entergy announced its intent to acquire
London Electricity, Standard & Poor's Ratings Group affirmed
its outstanding ratings on the Entergy's operating
companies' senior secured debt.
Entergy currently is not rated by Standard & Poor's
Ratings Group. However, all of Entergy's operating
companies have debt ratings of at least investment grade,
except that Entergy Gulf States, Inc.'s ("Gulf States") debt
rating for all debt other than senior secured debt is below
investment grade. Currently, Gulf States has $883.1 million
in long-term debt below investment grade consisting of
preferred stock, quarterly income preferred securities,
debentures, and tax-exempt bonds. However, as of July 1,
1998, $50 million in debentures will be retired and $21.6
million in tax-exempt bonds will be redeemed resulting in
$811.5 million of long-term debt remaining outstanding below
investment grade for Gulf States.
E. Capitalization Ratios.
Entergy states that as of March 31, 1998, Entergy's
consolidated capitalization consisted of 42.9% equity
(including mandatorily redeemable preferred securities) and
57.1% debt, (including long-term debt, currently maturing
long-term debt, preferred stock of subsidiaries with sinking
fund, and preference stock of subsidiaries). On a pro forma
basis, taking into consideration the transaction
contemplated in this filing, the ratios would be 42.2% to
57.8%, respectively, for equity and debt. Entergy states
that, its consolidated capitalization ratio, will not be
materially effected by this transaction.
F. Shareholder Approval at the Annual Meeting.
On May 15, 1998, at the Annual Meeting of the
Stockholders of Entergy Corporation, the shareholders
approved the equity ownership plan.
Item 2. Fees, Commissions and Expenses.
Item 2, Fees, Commissions and Expenses, is hereby amended
and restated in its entirety as follows:
Fees and expenses to be incurred in connection with the
proposed transactions are expected to be as follows:
Morrow & Co. Proxy Solicitation Fees
(including distribution $ 126,000
and broker invoices)
Bowne Proxy Printing Costs 44,000
Reid & Priest, LLP Counsel to Entergy Corporation 4,000
-----------
TOTAL $ 175,000
===========
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
*C Registration Statement with respect to the
Equity Plan.
_________________________
* To be filed by amendment.
(b) Financial Statements:
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<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CAPITALIZATION RATIOS
MARCH 31, 1998
(Unaudited)
Consolidated Pro Forma
per 10-Q Amounts (1) Equity Debt
(In Thousands)
<S> <C> <C> <C> <C>
Long-term debt 9,025,711 9,025,711
Currently maturing long-term debt 504,687 504,687
Subsidiaries' preferred stock with sinking fund 182,755 182,755
Subsidiary's 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
Company-obligated redeemable preferred
securities of subsidiary holding solely junior
subordinated deferrable debentures 300,000 300,000
Subsidiaries' preferred stock without sinking fund 338,455 338,455
Common stock 2,466 2,466
Paid-in capital 4,625,592 4,625,592
Retained earnings 1,984,903 (219,603) (2) 1,765,300
Cumulative foreign currency translation adjustment (53,124) (53,124)
Less - treasury stock 7,879 (7,879) (2) 0
---------- -------- ---------- ---------
Total 17,268,566 (211,725) 7,193,688 9,863,153
========== ======== ========== =========
Actual amounts in millions of dollars 17,269 7,406 9,863
Actual capitalization ratios 100.0% 42.9% 57.1%
Pro forma amounts in millions of dollars 17,057 7,194 9,863
Pro forma capitalization ratios 100.0% 42.2% 57.8%
NOTES
(1) The amounts and types of awards to be made will be dependent
upon a number of factors as provided by the Equity Plan.
The awards estimated to be made are based on the maximum
number of common shares requested to be made available in the subject
application for the purpose of illustrating the maximum effect upon
Entergy Corporation consolidated capitalization.
(2) To give effect to the proposed availability of 12,000,000 common
shares of Entergy Corporation for awards under the Equity Plan,
and the hypothetical award of those 12,000,000 common shares as
performance shares under the Equity Plan.
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Amendment No. 1 to the Application/Declaration to be signed on
its behalf by the undersigned thereunto duly authorized.
ENTERGY CORPORATION
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President, General Counsel
and Secretary
Dated: June 4, 1998
_______________________________
<FN1> The terms "aggregate investment" and "consolidated retained
earnings" are used herein as defined in Rule 53.
