FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1994
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 and Telephone Number Identification No.
1-11299 ENTERGY CORPORATION 13-5550175
(a Delaware corporation)
225 Baronne Street
New Orleans, Louisiana 70112
Telephone (504) 529-5262
1-10764 ARKANSAS POWER & LIGHT COMPANY 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-2703 GULF STATES UTILITIES COMPANY 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-8474 LOUISIANA POWER & LIGHT COMPANY 72-0245590
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70112
Telephone (504) 569-4000
0-320 MISSISSIPPI POWER & LIGHT COMPANY 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 969-2311
0-5807 NEW ORLEANS PUBLIC SERVICE INC. 72-0273040
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70112
Telephone (504) 569-4000
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
<PAGE>
Indicate by check mark whether the registrants (1) have
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrants were
required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.
Yes X No
Common Stock Outstanding Outstanding at October 31, 1994
Entergy Corporation ($0.01 par value) 227,378,729
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1994
Page
Number
Definitions 1
Financial Statements:
Entergy Corporation and Subsidiaries:
Consolidated Balance Sheets 4
Statements of Consolidated Income 6
Statements of Consolidated Cash Flows 7
Selected Operating Results 9
Arkansas Power & Light Company:
Balance Sheets 10
Statements of Income 12
Statements of Cash Flows 13
Selected Operating Results 14
Gulf States Utilities Company:
Balance Sheets 15
Statements of Income 17
Statements of Cash Flows 18
Selected Operating Results 19
Louisiana Power & Light Company:
Balance Sheets 20
Statements of Income 22
Statements of Cash Flows 23
Selected Operating Results 24
Mississippi Power & Light Company:
Balance Sheets 25
Statements of Income 27
Statements of Cash Flows 28
Selected Operating Results 29
New Orleans Public Service Inc.:
Balance Sheets 30
Statements of Income 32
Statements of Cash Flows 33
Selected Operating Results 34
System Energy Resources, Inc.:
Balance Sheets 35
Statements of Income 37
Statements of Cash Flows 38
Notes to Financial Statements 39
Management's Financial Discussion and Analysis 58
Part II:
Item 1. Legal Proceedings 74
Item 5. Other Information 78
Item 6. Exhibits and Reports on Form 8-K 81
Experts 83
Signature 84
<PAGE>
This combined Form 10-Q is separately filed by Entergy
Corporation, Arkansas Power & Light Company, Gulf States
Utilities Company, Louisiana Power & Light Company, Mississippi
Power & Light Company, New Orleans Public Service Inc., and
System Energy Resources, Inc. Information contained herein
relating to any individual company is filed by such company on
its own behalf. Each company makes no representation as to
information relating to the other companies. This combined Form
10-Q supplements and updates the Form 10-K for the calendar year
ended December 31, 1993, and the Forms 10-Q for the quarters
ended March 31, 1994 and June 30, 1994, filed by the individual
registrants with the SEC, and should be read in conjunction
therewith.
DEFINITIONS
Certain abbreviations or acronyms used in the text are defined
below:
Abbreviation or Acronym Term
ALJ Administrative Law Judge
ANO Arkansas Nuclear One Steam Electric
Generating Station
ANO 2 Unit No. 2 of ANO
AP&L Arkansas Power & Light Company
APSC Arkansas Public Service Commission
Availability Agreement Agreement, dated as of June 21, 1974,
as amended, among System Energy and
AP&L, LP&L, MP&L, and NOPSI, and the
assignments thereof
Capital Funds Agreement Agreement, dated as of June 21, 1974,
as amended, between System Energy and
Entergy Corporation, and the assignments
thereof
CCLM Customer-Controlled Load Management (a
DSM activity utilizing residential time-
of-use rates)
City of New Orleans
or City New Orleans, Louisiana
Council Council of the City of New Orleans,
Louisiana
D.C. Circuit United States Court of Appeals for the
District of Columbia Circuit
DSM Demand-Side Management (Least Cost Plan
activities that influence electricity
usage by customers)
Entergy Corporation Entergy Corporation, a Delaware
corporation, successor to Entergy
Corporation, a Florida Corporation
Entergy Operations Entergy Operations, Inc., a subsidiary
of Entergy Corporation that has
operating responsibility for ANO, Grand
Gulf 1, River Bend, and Waterford 3
Entergy or System Entergy Corporation and its various
direct and indirect subsidiaries
Entergy Power Entergy Power, Inc., a subsidiary of
Entergy Corporation that markets
capacity and energy from certain
generating facilities to other parties,
principally non-affiliates, for resale
Entergy Services Entergy Services, Inc.
FERC Federal Energy Regulatory Commission
First Quarter Form 10-Q The combined Quarterly Report on Form
10-Q for the quarter ended March 31,
1994, of Entergy, AP&L, GSU, LP&L, MP&L,
NOPSI, and System Energy
Form 10-K The combined Annual Report on Form 10-K
for the year ended December 31, 1993, of
Entergy, AP&L, GSU, LP&L, MP&L, NOPSI,
and System Energy
G&R Bonds General and Refunding Mortgage Bonds
issued and issuable by MP&L and NOPSI
Grand Gulf Station Grand Gulf Steam Electric Generating
Station
Grand Gulf 1 Unit No. 1 of the Grand Gulf Station
GSU Gulf States Utilities Company
KWH Kilowatt-Hour(s)
Least Cost Plan Least Cost Integrated Resource Plan
(combination of demand- and supply-side
resources to be used by Entergy to
satisfy electricity demand)
LP&L Louisiana Power & Light Company
LPSC Louisiana Public Service Commission
Merger The combination transaction,
consummated on December 31, 1993, by
which GSU became a subsidiary of Entergy
Corporation and Entergy Corporation
became a Delaware Corporation
Money Pool System Money Pool, which allows certain
System companies to borrow from, or lend
to, certain other System companies
MP&L Mississippi Power & Light Company
MPSC Mississippi Public Service Commission
1991 NOPSI Settlement Agreement, retroactive to October 4,
1991, among NOPSI, the Council and the
Alliance for Affordable Energy, Inc.
that settled certain Grand Gulf 1
prudence issues and pending litigation
related to a resolution adopted by the
Council disallowing the recovery by
NOPSI of $135 million of previously
deferred Grand Gulf 1-related costs
NOPSI New Orleans Public Service Inc.
NRC Nuclear Regulatory Commission
Owner Participant A corporation that, in connection with
the Waterford 3 sale and leaseback
transactions, has acquired a beneficial
interest in a trust, the Owner Trustee
of which is the owner and lessor of
undivided interests in Waterford 3
Owner Trustee Each institution and/or individual
acting as Owner Trustee under a trust
agreement with an Owner Participant in
connection with the Waterford 3 sale
and leaseback transactions
PUCT Public Utility Commission of Texas
Rate Cap The level of GSU's retail electric base
rates in effect at December 31, 1993 for
the Louisiana retail jurisdiction, and
the level in effect prior to the Texas
Cities Rate Settlement for the Texas
retail jurisdiction, which may not be
exceeded for the five years following
December 31, 1993
Reallocation Agreement 1981 Agreement, superseded in part by a
June 13, 1985 decision of the FERC,
among AP&L, LP&L, MP&L, NOPSI, and
System Energy, relating to the sale of
capacity and energy from the Grand Gulf
Station
River Bend River Bend Steam Electric Generating
Station, owned 70% by GSU
Revised Plan MP&L's Grand Gulf 1-related rate phase-
in plan, originally approved by the MPSC
in an order issued on September 16,
1985, as modified by the MPSC order
issued September 29, 1988, to bring such
plan into compliance with the
requirements of SFAS No. 92
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting
Standards as promulgated by the
Financial Accounting Standards Board
SFAS 109 SFAS No. 109, "Accounting for Income
Taxes"
Second Quarter Form 10-Q The combined Quarterly Report on Form
10-Q for the quarter ended June 30,
1994, of Entergy, AP&L, GSU, LP&L, MP&L,
NOPSI, and System Energy
System Agreement Agreement, effective January 1, 1983,
as subsequently modified by decisions of
the FERC, among the System operating
companies relating to the sharing of
generating capacity and other power
resources
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
System operating
companies AP&L, GSU, LP&L, MP&L, and NOPSI,
collectively
System or Entergy Entergy Corporation and its various
direct and indirect subsidiaries
Unit Power Sales
Agreement Agreement, dated as of June 10,
1982, as amended, among AP&L, LP&L,
MP&L, NOPSI, and System Energy, relating
to the sale of capacity and energy from
System Energy's share of Grand Gulf 1
Waterford 3 Unit No. 3 of the Waterford Steam
Electric Generating Station
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $21,323,257 $20,848,844
Plant acquisition adjustment - GSU 424,540 380,117
Electric plant under leases 665,579 663,024
Property under capital leases - electric 167,304 175,276
Natural gas 161,811 156,452
Steam products 75,922 75,689
Construction work in progress 442,780 533,112
Nuclear fuel under capital leases 289,775 329,433
Nuclear fuel 44,101 17,760
----------- -----------
Total 23,595,069 23,179,707
Less - accumulated depreciation and amortization 7,563,520 7,157,981
----------- -----------
Utility plant - net 16,031,549 16,021,726
----------- -----------
Other Property and Investments:
Decommissioning trust funds 208,362 172,960
Other 192,915 183,597
----------- -----------
Total 401,277 356,557
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 118,682 27,345
Temporary cash investments - at cost,
which approximates market 565,346 536,404
----------- -----------
Total cash and cash equivalents 684,028 563,749
Special deposits 9,854 36,612
Notes receivable 15,795 17,710
Accounts receivable:
Customer (less allowance for doubtful accounts of
$6.7 million in 1994 and $8.8 million in 1993) 400,106 315,796
Other 68,513 81,931
Accrued unbilled revenues 285,842 257,321
Fuel inventory 86,294 110,204
Materials and supplies - at average cost 360,663 360,353
Rate deferrals 363,747 333,311
Prepayments and other 96,655 98,144
----------- -----------
Total 2,371,497 2,175,131
----------- -----------
Deferred Debits and Other Assets:
Rate deferrals 1,545,303 1,876,051
SFAS 109 regulatory asset - net 1,390,075 1,385,824
Long-term receivables 244,790 228,030
Unamortized loss on reacquired debt 237,598 210,698
Other 592,310 622,680
----------- -----------
Total 4,010,076 4,323,283
----------- -----------
TOTAL $22,814,399 $22,876,697
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, $.01 par value, authorized 500,000,000
shares; issued 229,989,737 shares in 1994 and
231,219,737 shares in 1993 $2,300 $2,312
Paid-in capital 4,201,981 4,223,682
Retained earnings 2,345,156 2,310,082
Less - treasury stock (2,611,158 shares in 1994) 77,440 -
----------- -----------
Total common shareholders' equity 6,471,997 6,536,076
Preference stock 150,000 150,000
Subsidiaries' preferred stock:
Without sinking fund 550,955 550,955
With sinking fund 305,183 349,053
Long-term debt 7,288,021 7,355,962
----------- -----------
Total 14,766,156 14,942,046
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 266,457 322,867
Other 296,551 296,876
----------- -----------
Total 563,008 619,743
----------- -----------
Current Liabilities:
Currently maturing long-term debt 353,930 322,010
Notes payable 106,866 43,667
Accounts payable 373,245 413,727
Customer deposits 133,864 127,524
Taxes accrued 230,890 118,267
Accumulated deferred income taxes 52,666 44,637
Interest accrued 196,616 210,894
Dividends declared 13,858 13,404
Deferred revenue - gas supplier judgment proceeds - 14,632
Deferred fuel cost 9,915 4,528
Obligations under capital leases 190,301 194,015
Other 235,411 233,009
----------- -----------
Total 1,897,562 1,740,314
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 3,812,618 3,849,439
Accumulated deferred investment tax credits 762,513 802,273
Other 1,012,542 922,882
----------- -----------
Total 5,587,673 5,574,594
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $22,814,399 $22,876,697
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands, Except Share Data)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $1,776,982 $1,397,007 $4,668,907 $3,345,757
Natural gas 17,107 13,944 93,952 61,708
Steam products 11,435 - 35,002 -
---------- ---------- ---------- ----------
Total 1,805,524 1,410,951 4,797,861 3,407,465
---------- ---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 430,718 305,928 1,103,157 664,824
Purchased power 72,169 72,679 306,798 208,212
Nuclear refueling outage expenses 14,960 12,079 46,949 42,764
Operation and maintenance 469,681 257,438 1,172,916 735,938
Depreciation and decommissioning 166,387 110,676 488,052 329,898
Taxes other than income taxes 71,446 48,599 214,365 145,643
Income taxes 130,795 150,033 254,101 252,744
Rate deferrals
Rate deferrals - (25) - (1,651)
Amortization of rate deferrals 112,757 93,606 295,107 215,838
---------- ---------- ---------- ----------
Total 1,468,913 1,051,013 3,881,445 2,594,210
---------- ---------- ---------- ----------
Operating Income 336,611 359,938 916,416 813,255
---------- ---------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 2,603 1,451 9,273 5,777
Miscellaneous - net (2,900) 13,894 14,991 43,928
Income taxes (2,859) (1,194) (14,239) (16,411)
---------- ---------- ---------- ----------
Total (3,156) 14,151 10,025 33,294
---------- ---------- ---------- ----------
Interest Charges:
Interest on long-term debt 160,928 121,503 480,189 368,332
Other interest - net 11,250 6,125 33,705 17,624
Allowance for borrowed funds used
during construction (2,228) (953) (7,397) (3,974)
Preferred dividend requirements of
subsidiaries and other 20,306 13,984 61,674 42,964
---------- ---------- ---------- ----------
Total 190,256 140,659 568,171 424,946
---------- ---------- ---------- ----------
Income before Cumulative Effect of
a Change in Accounting Principle 143,199 233,430 358,270 421,603
Cumulative effect to January 1, 1993
of Accruing Unbilled Revenues (net
of income taxes of $57,188) - - - 93,841
---------- ---------- ---------- ----------
Net Income $143,199 $233,430 $358,270 $515,444
========== ========== ========== ==========
Earnings per average common share
before cumulative effect of a
change in accounting principle $0.63 $1.34 $1.56 $2.41
Earnings per average common share $0.63 $1.34 $1.56 $2.95
Dividends declared per common share $0.45 $0.40 $1.35 $1.20
Average number of common shares
outstanding 227,470,521 174,534,253 229,154,520 174,794,391
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $358,270 $515,444
Noncash items included in net income:
Cumulative effect of a change in accounting principle - (93,841)
Change in rate deferrals/excess capacity-net 307,313 158,287
Depreciation and decommissioning 488,052 329,898
Deferred income taxes and investment tax credits 7,582 16,022
Allowance for equity funds used during construction (9,273) (5,777)
Amortization of deferred revenues (14,632) (32,196)
Changes in working capital:
Receivables (99,413) (148,980)
Fuel inventory 23,910 20,909
Accounts payable (40,482) (55,775)
Taxes accrued 112,623 90,085
Interest accrued (14,278) (13,001)
Other working capital accounts 43,981 (35,784)
Refunds to customers - gas contract settlement - (56,027)
Decommissioning trust contributions (18,215) (14,903)
Provision for estimated losses and reserves (6,242) 39,741
Other (18,596) 62,330
--------- --------
Net cash flow provided by operating activities 1,120,600 776,432
--------- --------
Investing Activities:
Construction / capital expenditures (481,178) (279,561)
Allowance for equity funds used during construction 9,273 5,777
Nuclear fuel purchases (109,838) (62,170)
Proceeds from sale/leaseback of nuclear fuel 85,178 61,302
Investment in nonregulated/nonutility properties 199 (58,407)
Decrease in other temporary investments - 17,012
--------- --------
Net cash flow used in investing activities (496,366) (316,047)
--------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds 83,944 275,000
General and refunding mortgage bonds - 285,000
Other long-term debt 63,590 80,299
Premium and expense on refinancing sale/leaseback bonds (47,663) -
Retirement of:
First mortgage bonds (103,800) (475,615)
General and refunding mortgage bonds (45,000) (99,400)
Other long-term debt (45,410) (68,563)
Repurchase of common stock (119,486) (20,558)
Redemption of preferred stock (43,860) (44,000)
Common stock dividends paid (309,469) (208,908)
Changes in short-term borrowings 63,199 -
--------- --------
Net cash flow used in financing activities (503,955) (276,745)
--------- --------
Net increase in cash and cash equivalents 120,279 183,640
Cash and cash equivalents at beginning of period 563,749 379,792
--------- --------
Cash and cash equivalents at end of period $684,028 $563,432
========= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<S> <C> <C>
Cash paid during the period for:
Interest - net of amount capitalized $496,933 $388,051
Income taxes $131,607 $101,782
Noncash investing and financing activities:
Capital lease obligations incurred $69,520 $61,302
Excess of fair value of decommissioning trust
assets over amount invested $9,068 -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 726.3 $ 598.5 $ 127.8 21
Commercial 435.8 334.4 101.4 30
Industrial 488.6 333.4 155.2 47
Governmental 42.7 39.4 3.3 8
--------- -------- -------
Total retail 1,693.4 1,305.7 387.7 30
Sales for resale 112.2 91.1 21.1 23
Other (28.6) 0.2 (28.8) *
--------- -------- -------
Total $ 1,777.0 $1,397.0 $ 380.0 27
========= ======== =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 8,848 6,916 1,932 28
Commercial 5,916 4,220 1,696 40
Industrial 10,675 6,592 4,083 62
Governmental 609 540 69 13
--------- -------- --------
Total retail 26,048 18,268 7,780 43
Sales for resale 2,503 2,296 207 9
--------- -------- --------
Total 28,551 20,564 7,987 39
========= ======== ========
Nine Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 1,691.3 $1,241.9 $ 449.4 36
Commercial 1,147.2 805.1 342.1 42
Industrial 1,386.2 878.4 507.8 58
Governmental 122.3 101.9 20.4 20
--------- -------- --------
Total retail 4,347.0 3,027.3 1,319.7 44
Sales for resale 272.3 225.3 47.0 21
Other 49.6 93.2 (43.6) (47)
--------- -------- --------
Total $ 4,668.9 $3,345.8 $1,323.1 40
========= ======== ========
Billed Electric Energy
Sales (Millions of KWH):
Residential 20,716 14,788 5,928 40
Commercial 15,135 10,173 4,962 49
Industrial 30,481 18,479 12,002 65
Governmental 1,688 1,414 274 19
--------- -------- --------
Total retail 68,020 44,854 23,166 52
Sales for resale 6,274 6,416 (142) (2)
--------- -------- --------
Total 74,294 51,270 23,024 45
========= ======== ========
Note: On December 31, 1993, GSU became a wholly-owned subsidiary of Entergy
Corporation. In accordance with the purchase method of accounting, the 1993
third quarter and year to date operating results do not include GSU operating
results.
* Decrease greater than 200 percent.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $4,286,317 $4,098,355
Property under capital leases 59,190 62,139
Construction work in progress 111,961 197,005
Nuclear fuel under capital lease 100,060 93,606
---------- ----------
Total 4,557,528 4,451,105
Less - accumulated depreciation and amortization 1,696,801 1,604,318
---------- ----------
Utility plant - net 2,860,727 2,846,787
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,232 11,232
Decommissioning trust fund 130,514 108,192
Other - at cost (less accumulated depreciation) 4,545 4,257
---------- ----------
Total 146,291 123,681
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 18,663 1,825
Temporary cash investments - at cost,
which approximates market:
Associated companies 4,904 -
Other 27,993 -
---------- ----------
Total cash and cash equivalents 51,560 1,825
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.0 million in 1994 and $2.1 million in 1993) 81,652 65,641
Associated companies 30,441 18,312
Other 12,478 20,817
Accrued unbilled revenues 102,240 83,378
Fuel inventory - at average cost 25,015 51,920
Materials and supplies - at average cost 79,650 81,398
Rate deferrals 108,113 92,592
Deferred excess capacity 9,062 9,115
Prepayments and other 20,222 28,303
---------- ----------
Total 520,433 453,301
---------- ----------
Deferred Debits and Other Assets:
Rate deferrals 389,260 475,387
Deferred excess capacity 21,517 28,465
SFAS 109 regulatory asset - net 211,835 234,015
Unamortized loss on reacquired debt 58,176 60,169
Other 116,448 112,300
---------- ----------
Total 797,236 910,336
---------- ----------
TOTAL $4,324,687 $4,334,105
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares in 1994 and 1993 $470 $470
Paid-in capital 590,844 590,844
Retained earnings 464,062 448,811
---------- ----------
Total common shareholder's equity 1,055,376 1,040,125
Preferred stock:
Without sinking fund 176,350 176,350
With sinking fund 61,027 70,027
Long-term debt 1,293,886 1,313,315
---------- ----------
Total 2,586,639 2,599,817
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 97,976 94,861
Other 70,664 66,879
---------- ----------
Total 168,640 161,740
---------- ----------
Current Liabilities:
Currently maturing long-term debt 28,020 3,020
Notes payable:
Associated companies - 21,395
Other 34,667 667
Accounts payable:
Associated companies 38,010 45,177
Other 98,088 93,611
Customer deposits 16,839 15,241
Taxes accrued 86,239 43,013
Accumulated deferred income taxes 36,537 32,367
Interest accrued 31,870 31,410
Dividends declared 4,780 5,049
Co-owner advances 22,402 39,435
Deferred fuel cost 19,840 16,130
Nuclear refueling reserve 30,347 30,677
Obligations under capital leases 61,274 60,883
Other 25,446 25,730
---------- ----------
Total 534,359 463,805
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 816,232 876,618
Accumulated deferred investment tax credits 145,946 154,723
Other 72,871 77,402
---------- ----------
Total 1,035,049 1,108,743
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,324,687 $4,334,105
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $470,770 $519,822 $1,256,762 $1,250,213
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 74,050 80,284 205,283 197,559
Purchased power 80,326 90,653 264,935 265,084
Nuclear refueling outage expenses 8,059 5,279 25,532 26,011
Other operation and maintenance 118,413 95,052 288,311 272,550
Depreciation and decommissioning 38,671 34,601 110,929 101,156
Taxes other than income taxes 7,961 6,750 25,584 20,491
Income taxes 30,569 40,680 45,487 45,226
Amortization of rate deferrals 56,558 65,039 130,283 130,359
-------- -------- ---------- ----------
Total 414,607 418,338 1,096,344 1,058,436
-------- -------- ---------- ----------
Operating Income 56,163 101,484 160,418 191,777
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 894 383 2,944 2,695
Miscellaneous - net 10,785 14,662 35,346 44,739
Income taxes (4,250) (6,838) (13,934) (24,233)
-------- -------- ---------- ----------
Total 7,429 8,207 24,356 23,201
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 25,464 27,171 75,842 81,607
Other interest - net 2,410 1,080 6,730 3,097
Allowance for borrowed funds used
during construction (912) (237) (2,579) (1,869)
-------- -------- ---------- ----------
Total 26,962 28,014 79,993 82,835
-------- -------- ---------- ----------
Income before Cumulative Effect of
a Change in Accounting Principle 36,630 81,677 104,781 132,143
Cumulative Effect to January 1, 1993
of Accruing Unbilled Revenues (net
of income taxes of $31,140) - - - 50,187
-------- -------- ---------- ----------
Net Income 36,630 81,677 104,781 182,330
Preferred Stock Dividend Requirements
and Other 4,781 5,267 14,530 15,828
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $31,849 $76,410 $90,251 $166,502
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $104,781 $182,330
Noncash items included in net income:
Cumulative effect of a change in accounting principle - (50,187)
Change in rate deferrals/excess capacity-net 77,607 65,517
Depreciation and decommissioning 110,929 101,156
Deferred income taxes and investment tax credits (42,973) (25,214)
Allowance for equity funds used during construction (2,944) (2,695)
Changes in working capital:
Receivables (38,663) (22,383)
Fuel inventory 26,905 24,812
Accounts payable (2,690) 2,100
Taxes accrued 43,226 24,449
Interest accrued 460 (395)
Other working capital accounts 586 (15,615)
Decommissioning trust contributions (8,525) (8,224)
Provision for estimated losses and reserves 5,206 8,862
Other (17,073) (15,022)
--------- --------
Net cash flow provided by operating activities 256,832 269,491
--------- --------
Investing Activities:
Construction expenditures (122,279) (108,063)
Allowance for equity funds used during construction 2,944 2,695
Nuclear fuel purchases (33,477) (29,072)
Proceeds from sale/leaseback of nuclear fuel 33,477 29,072
--------- --------
Net cash flow used in investing activities (119,335) (105,368)
--------- --------
Financing Activities:
Proceeds from issuance of:
First mortgage bonds - 115,000
Other long-term debt 27,992 47,299
Retirement of:
First mortgage bonds (800) (135,889)
Other long-term debt (28,761) (46,350)
Redemption of preferred stock (9,000) (9,000)
Changes in short-term borrowings 12,605 (4,000)
Dividends paid:
Common stock (75,000) (37,700)
Preferred stock (14,798) (16,095)
--------- --------
Net cash flow provided by financing activities (87,762) (86,735)
--------- --------
Net increase in cash and cash equivalents 49,735 77,388
Cash and cash equivalents at beginning of period 1,825 -
--------- --------
Cash and cash equivalents at end of period $51,560 $77,388
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $73,515 $79,265
Income taxes $54,117 $54,293
Noncash investing and financing activities:
Capital lease obligations incurred $41,122 $29,072
Excess of fair value of decommissioning trust
assets over amount invested $8,872 -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 170.5 $ 197.9 ($27.4) (14)
Commercial 95.2 103.0 (7.8) (8)
Industrial 100.5 107.1 (6.6) (6)
Governmental 4.7 5.0 (0.3) (6)
------- ------- ------
Total retail 370.9 413.0 (42.1) (10)
Sales for resale 99.9 96.9 3.0 3
Other 0.0 9.9 (9.9) (100)
------- ------- ------
Total $ 470.8 $ 519.8 ($49.0) (9)
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,802 2,041 (239) (12)
Commercial 1,260 1,329 (69) (5)
Industrial 1,587 1,605 (18) (1)
Governmental 63 68 (5) (7)
------- ------- ------
Total retail 4,712 5,043 (331) (7)
Sales for resale 3,711 2,980 731 25
------- ------- ------
Total 8,423 8,023 400 5
======= ======= ======
Nine Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 402.1 $ 420.5 ($ 18.4) (4)
Commercial 236.3 236.1 0.2 -
Industrial 253.9 253.1 0.8 -
Governmental 12.9 12.8 0.1 1
-------- -------- ------
Total retail 905.2 922.5 (17.3) (2)
Sales for resale 313.7 291.8 21.9 8
Other 37.9 35.9 2.0 6
-------- -------- ------
Total $1,256.8 $1,250.2 $ 6.6 1
======== ======== ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 4,381 4,517 (136) (3)
Commercial 3,177 3,136 41 1
Industrial 4,392 4,247 145 3
Governmental 178 177 1 1
------- ------- ------
Total retail 12,128 12,077 51 -
Sales for resale 12,218 10,895 1,323 12
------- ------- ------
Total 24,346 22,972 1,374 6
======= ======= ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $6,879,066 $6,825,989
Natural gas 43,556 42,786
Steam products 75,922 75,689
Property under capital leases 84,142 86,039
Construction work in progress 94,476 50,080
Nuclear fuel under capital leases 81,464 94,828
---------- ----------
Total 7,258,626 7,175,411
Less - accumulated depreciation and amortization 2,458,358 2,323,804
---------- ----------
Utility plant - net 4,800,268 4,851,607
---------- ----------
Other Property and Investments:
Decommissioning trust fund 20,712 17,873
Other - at cost (less accumulated depreciation) 29,738 29,360
---------- ----------
Total 50,450 47,233
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 18,748 3,012
Temporary cash investments - at cost,
which approximates market:
Associated companies 13,515 -
Other 89,809 258,337
---------- ----------
Total cash and cash equivalents 122,072 261,349
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million in 1994 and $2.4 million in 1993) 145,636 117,369
Associated companies 11,651 -
Other 19,855 18,371
Accrued unbilled revenues 42,051 32,572
Deferred fuel costs 18,930 5,883
Accumulated deferred income taxes 29,064 28,425
Fuel inventory 27,198 23,448
Materials and supplies - at average cost 89,234 86,831
Rate deferrals 97,850 90,775
Prepayments and other 21,404 20,523
---------- ----------
Total 624,945 685,546
---------- ----------
Deferred Debits and Other Assets:
Rate deferrals 532,532 638,015
SFAS 109 regulatory asset - net 427,634 432,411
Long-term receivables 239,327 218,079
Unamortized loss on reacquired debt 65,802 70,970
Other 189,723 193,490
---------- ----------
Total 1,455,018 1,552,965
---------- ----------
TOTAL $6,930,681 $7,137,351
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares in 1994 and 1993 $114,055 $114,055
Paid-in capital 1,152,344 1,152,304
Retained earnings 367,323 666,401
---------- ----------
Total common shareholder's equity 1,633,722 1,932,760
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 96,143 101,004
Long-term debt 2,318,375 2,368,639
---------- ----------
Total 4,334,684 4,688,847
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 129,021 152,359
Other 66,214 65,259
---------- ----------
Total 195,235 217,618
---------- ----------
Current Liabilities:
Currently maturing long-term debt 50,425 425
Accounts payable:
Associated companies 37,221 2,745
Other 98,236 109,840
Customer deposits 22,916 21,958
Taxes accrued 37,435 22,856
Interest accrued 63,308 59,516
Nuclear refueling reserve 8,425 22,356
Obligations under capital leases 37,720 41,713
Other 114,283 97,741
---------- ----------
Total 469,969 379,150
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 1,259,262 1,222,999
Accumulated deferred investment tax credits 91,090 94,455
Deferred River Bend finance charges 88,495 106,765
Other 491,946 427,517
---------- ----------
Total 1,930,793 1,851,736
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,930,681 $7,137,351
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $530,209 $559,296 $1,371,328 $1,364,027
Natural gas 3,887 4,818 25,714 23,349
Steam products 11,435 10,493 35,002 33,632
-------- -------- ---------- ----------
Total 545,531 574,607 1,432,044 1,421,008
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses and
gas purchased for resale 154,881 185,138 393,240 430,452
Purchased power 44,330 27,294 159,389 101,600
Nuclear refueling outage expenses 2,707 3,360 7,747 10,080
Other operation and maintenance 171,054 103,401 376,616 293,403
Depreciation and decommissioning 48,786 47,276 145,862 141,830
Taxes other than income taxes 24,623 24,322 58,633 72,869
Income taxes 17,458 50,359 34,210 55,656
Amortization of rate deferrals 16,839 15,425 49,576 45,689
-------- -------- ---------- ----------
Total 480,678 456,575 1,225,273 1,151,579
-------- -------- ---------- ----------
Operating Income 64,853 118,032 206,771 269,429
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 417 126 1,056 383
Miscellaneous - net (78,886) 5,786 (70,653) 14,978
Income taxes 31,590 (1,678) 27,407 (9,572)
-------- -------- ---------- ----------
Total (46,879) 4,234 (42,190) 5,789
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 48,804 50,925 146,554 153,538
Other interest - net 1,172 1,335 6,409 5,924
Allowance for borrowed funds used
during construction (340) (149) (847) (472)
-------- -------- ---------- ----------
Total 49,636 52,111 152,116 158,990
-------- -------- ---------- ----------
Income (Loss) before Extraordinary Items and
the Cumulative Effect of Accounting Changes (31,662) 70,155 12,465 116,228
Extraordinary Items (net of income taxes) - (974) - (1,259)
Cumulative Effect to January 1, 1993,
of Accruing Unbilled Revenues (net
of income taxes of $ 6,940) - - - 10,660
-------- -------- ---------- ----------
Net Income (Loss) (31,662) 69,181 12,465 125,629
Preferred and Preference Stock
Dividend Requirements and Other 7,506 7,921 22,442 28,118
-------- -------- ---------- ----------
Earnings (Loss) Applicable to Common Stock ($39,168) $61,260 ($9,977) $97,511
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $12,465 $125,629
Noncash items included in net income:
Extraordinary items - 1,259
Cumulative effect of a change in accounting principle - (10,660)
Change in rate deferrals 80,138 45,689
Depreciation and decommissioning 145,862 141,830
Deferred income taxes and investment tax credits 16,257 53,452
Allowance for equity funds used during construction (1,056) (383)
Changes in working capital:
Receivables (50,881) (35,524)
Fuel inventory (3,750) 4,468
Accounts payable 22,872 (2,336)
Taxes accrued 14,579 38,151
Interest accrued 3,792 3,878
Other working capital accounts 15,330 (15,214)
Decommissioning trust contributions (2,217) (2,217)
Purchased power settlement - (169,300)
Other 24,946 (5,491)
--------- --------
Net cash flow provided by operating activities 278,337 173,231
--------- --------
Investing Activities:
Construction expenditures (101,952) (82,454)
Allowance for equity funds used during construction 1,056 383
Nuclear fuel purchases (25,205) (2,118)
Proceeds from sale/leaseback of nuclear fuel 25,205 2,118
Refund of escrow account and other property - 6,710
--------- --------
Net cash flow used in investing activities (100,896) (75,361)
--------- --------
Financing Activities:
Proceeds from the issuance of:
Preference stock - 146,625
First mortgage bonds - 338,379
Other long-term debt - 21,440
Retirement of:
First mortgage bonds - (360,200)
Other long-term debt (425) (18,398)
Redemption of preferred and preference stock (4,850) (172,408)
Dividends paid:
Common stock (289,100) -
Preferred and preference stock (22,343) (28,525)
--------- --------
Net cash flow used in financing activities (316,718) (73,087)
--------- --------
Net increase (decrease) in cash and cash equivalents (139,277) 24,783
Cash and cash equivalents at beginning of period 261,349 197,741
--------- --------
Cash and cash equivalents at end of period $122,072 $222,524
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $136,957 $143,875
Income taxes $137 -
Noncash investing and financing activities:
Capital lease obligations incurred $18,721 $2,302
Deficiency of fair value of decommissioning
trust assets over amount invested ($200) -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Department Operating Revenues:
Residential $ 192.2 $ 218.4 ($ 26.2) (12)
Commercial 115.6 126.4 (10.8) (9)
Industrial 162.8 174.4 (11.6) (7)
Governmental 6.4 6.9 (0.5) (7)
------- ------- -------
Total retail 477.0 526.1 (49.1) (9)
Sales for resale 36.3 10.9 25.4 233
Other 16.9 22.3 (5.4) (24)
------- ------- -------
Total Electric Department $ 530.2 $ 559.3 ($ 29.1) (5)
======= ======= =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,502 2,639 (137) (5)
Commercial 1,743 1,756 (13) (1)
Industrial 3,851 3,736 115 3
Governmental 77 78 (1) (1)
------- ------- -------
Total retail 8,173 8,209 (36) -
Sales for resale 1,340 249 1,091 438
------- ------- -------
Total Electric Department 9,513 8,458 1,055 12
Steam Department 426 418 8 2
------- ------- -------
Total 9,939 8,876 1,063 12
======= ======= =======
Nine Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
Electric Department Operating Revenues:
Residential $ 448.7 $ 464.5 ($ 15.8) (3)
Commercial 312.7 318.6 (5.9) (2)
Industrial 475.7 494.6 (18.9) (4)
Governmental 19.1 20.1 (1.0) (5)
-------- -------- -------
Total retail 1,256.2 1,297.8 (41.6) (3)
Sales for resale 75.1 24.3 50.8 209
Other 40.0 41.9 (1.9) (5)
-------- -------- -------
Total Electric Department $1,371.3 $1,364.0 $ 7.3 1
======== ======== =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 5,775 5,589 186 3
Commercial 4,512 4,332 180 4
Industrial 11,237 10,758 479 4
Governmental 225 224 1 -
-------- -------- -------
Total retail 21,749 20,903 846 4
Sales for resale 2,590 510 2,080 408
-------- -------- -------
Total Electric Department 24,339 21,413 2,926 14
Steam Department 1,257 1,210 47 4
-------- -------- -------
Total 25,596 22,623 2,973 13
======== ======== =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $4,754,371 $4,646,020
Electric plant under lease 226,395 225,083
Construction work in progress 100,690 133,536
Nuclear fuel under capital lease 52,413 61,375
Nuclear fuel 5,065 3,823
---------- ----------
Total 5,138,934 5,069,837
Less - accumulated depreciation and amortization 1,575,308 1,496,107
---------- ----------
Utility plant - net 3,563,626 3,573,730
---------- ----------
Other Property and Investments:
Nonutility property 20,060 20,060
Decommissioning trust fund 26,802 22,109
Investment in subsidiary company - at equity 14,230 14,230
Other 1,032 984
---------- ----------
Total 62,124 57,383
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 13,157 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 4,815 -
Other 55,835 33,489
---------- ----------
Total cash and cash equivalents 73,807 33,489
Special deposits 4,683 19,077
Accounts receivable:
Customer (less allowance for doubtful accounts of
$1.2 million in 1994 and of $1.1 million in 1993) 82,159 66,575
Associated companies 4,319 2,952
Other 11,444 10,656
Accrued unbilled revenues 71,768 64,314
Accumulated deferred income taxes 2,510 6,031
Materials and supplies - at average cost 87,108 87,204
Rate deferrals 28,422 28,422
Prepayments and other 29,080 16,510
---------- ----------
Total 395,300 335,230
---------- ----------
Deferred Debits and Other Assets:
Rate deferrals 32,368 54,031
SFAS 109 regulatory asset - net 357,214 349,703
Unamortized loss on reacquired debt 44,705 47,853
Other 48,140 46,068
---------- ----------
Total 482,427 497,655
---------- ----------
TOTAL $4,503,477 $4,463,998
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares in 1994 and 1993 $1,088,900 $1,088,900
Capital stock expense and other (5,529) (6,109)
Retained earnings 134,409 89,849
---------- ----------
Total common shareholder's equity 1,217,780 1,172,640
Preferred stock:
Without sinking fund 160,500 160,500
With sinking fund 112,793 126,302
Long-term debt 1,477,964 1,457,626
---------- ----------
Total 2,969,037 2,917,068
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 18,546 27,508
Other 48,480 28,909
---------- ----------
Total 67,026 56,417
---------- ----------
Current Liabilities:
Currently maturing long-term debt 320 25,315
Notes payable:
Associated companies - 52,041
Other 19,200 -
Accounts payable:
Associated companies 29,141 33,523
Other 56,260 76,284
Customer deposits 54,457 52,234
Taxes accrued 54,977 15,110
Interest accrued 37,365 42,141
Dividends declared 5,523 5,938
Deferred revenue - gas supplier judgment proceeds - 14,632
Deferred fuel cost 11,644 605
Obligations under capital leases 33,867 33,867
Other 12,528 9,741
---------- ----------
Total 315,282 361,431
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 870,810 834,899
Accumulated deferred investment tax credits 183,698 188,843
Deferred interest - Waterford 3 lease obligation 25,844 25,372
Other 71,780 79,968
---------- ----------
Total 1,152,132 1,129,082
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,503,477 $4,463,998
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $502,458 $545,487 $1,327,927 $1,302,913
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 113,688 120,692 257,314 233,279
Purchased power 83,942 99,256 289,279 289,488
Nuclear refueling outage expenses 4,195 4,591 13,671 13,789
Other operation and maintenance 100,800 86,306 260,575 244,857
Depreciation and decommissioning 38,499 35,537 113,342 106,446
Taxes other than income taxes 14,377 11,823 42,733 35,707
Income taxes 39,015 54,375 80,171 96,547
Amortization of rate deferrals 8,118 8,118 21,664 21,664
-------- -------- ---------- ----------
Total 402,634 420,698 1,078,749 1,041,777
-------- -------- ---------- ----------
Operating Income 99,824 124,789 249,178 261,136
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 766 545 2,855 1,869
Miscellaneous - net (154) 198 287 848
Income taxes 150 361 190 2,601
-------- -------- ---------- ----------
Total 762 1,104 3,332 5,318
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 31,264 30,818 93,561 93,691
Other interest - net 2,839 3,169 8,467 9,077
Allowance for borrowed funds used
during construction (546) (381) (1,996) (1,266)
-------- -------- ---------- ----------
Total 33,557 33,606 100,032 101,502
-------- -------- ---------- ----------
Net Income 67,029 92,287 152,478 164,952
Preferred Stock Dividend Requirements
and Other 5,848 6,069 17,668 18,816
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $61,181 $86,218 $134,810 $146,136
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $152,478 $164,952
Noncash items included in net income:
Change in rate deferrals 21,664 21,663
Depreciation and decommissioning 113,342 106,446
Deferred income taxes and investment tax credits 31,788 44,430
Allowance for equity funds used during construction (2,855) (1,869)
Amortization of deferred revenues (14,632) (32,196)
Changes in working capital:
Receivables (25,193) (39,410)
Accounts payable (24,406) (30,916)
Taxes accrued 39,867 42,703
Interest accrued (4,776) (4,406)
Other working capital accounts 17,969 (3,862)
Refunds to customers - gas contract settlement - (56,027)
Decommissioning trust contributions (3,796) (3,000)
Other 3,051 16,922
--------- --------
Net cash flow provided by operating activities 304,501 225,430
--------- --------
Investing Activities:
Construction expenditures (107,708) (98,021)
Allowance for equity funds used during construction 2,855 1,869
--------- --------
Net cash flow used in investing activities (104,853) (96,152)
--------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds - 100,000
Other long-term debt 19,946 33,000
Changes in short-term borrowings (32,841) -
Retirement of:
First mortgage bonds (25,000) (100,919)
Other long-term debt (240) (21,983)
Redemption of preferred stock (13,510) (18,500)
Dividends paid:
Common stock (90,400) (81,400)
Preferred stock (17,285) (19,265)
--------- --------
Net cash flow used in financing activities (159,330) (109,067)
--------- --------
Net increase in cash and cash equivalents 40,318 20,211
Cash and cash equivalents at beginning of period 33,489 22,782
--------- --------
Cash and cash equivalents at end of period $73,807 $42,993
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $100,081 $101,463
Income taxes $32,400 $20,967
Noncash investing and financing activities:
Capital lease obligations incurred $9,677 -
Excess of fair value of decommissioning trust
assets over amount invested $184 -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 196.4 $ 213.9 ($ 17.5) (8)
Commercial 102.6 105.2 (2.6) (2)
Industrial 170.9 171.8 (0.9) (1)
Governmental 8.4 7.8 0.6 8
------- ------- -------
Total retail 478.3 498.7 (20.4) (4)
Sales for resale 10.4 19.8 (9.4) (47)
Other 13.8 27.0 (13.2) (49)
------- ------- -------
Total $ 502.5 $ 545.5 ($43.0) (8)
======= ======= =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,493 2,674 (181) (7)
Commercial 1,356 1,370 (14) (1)
Industrial 4,305 4,122 183 4
Governmental 112 103 9 9
------- ------- -------
Total retail 8,266 8,269 (3) -
Sales for resale 275 519 (244) (47)
------- ------- -------
Total 8,541 8,788 (247) (3)
======= ======= =======
Nine Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 460.8 $ 440.5 $ 20.3 5
Commercial 275.4 257.1 18.3 7
Industrial 499.9 476.5 23.4 5
Governmental 24.2 21.9 2.3 11
-------- -------- -------
Total retail 1,260.3 1,196.0 64.3 5
Sales for resale 26.1 38.7 (12.6) (33)
Other 41.5 68.2 (26.7) (39)
-------- -------- -------
Total $1,327.9 $1,302.9 $ 25.0 2
======== ======== =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 5,864 5,693 171 3
Commercial 3,502 3,330 172 5
Industrial 12,261 11,856 405 3
Governmental 318 297 21 7
------- ------- -------
Total retail 21,945 21,176 769 4
Sales for resale 620 1,038 (418) (40)
------- ------- -------
Total 22,565 22,214 351 2
======= ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $1,460,766 $1,389,229
Construction work in progress 63,444 62,699
---------- ----------
Total 1,524,210 1,451,928
Less - accumulated depreciation and amortization 575,410 577,728
---------- ----------
Utility plant - net 948,800 874,200
---------- ----------
Other Property and Investments:
Investment in subsidiary company - at equity 5,531 5,531
Other 4,754 4,760
---------- ----------
Total 10,285 10,291
---------- ----------
Current Assets:
Cash 9,107 7,999
Notes receivable 6,216 7,118
Accounts receivable:
Customer (less allowance for doubtful accounts of
$2.1 million in 1994 and $2.5 million in 1993) 52,803 33,155
Associated companies 7,348 7,342
Other 3,975 3,672
Accrued unbilled revenues 50,049 57,414
Fuel inventory - at average cost 3,594 8,652
Materials and supplies - at average cost 20,236 20,886
Rate deferrals 99,538 96,935
Prepayments and other 7,268 13,763
---------- ----------
Total 260,134 256,936
---------- ----------
Deferred Debits and Other Assets:
Rate deferrals 409,690 504,428
Notes receivable 5,463 9,951
Other 29,196 20,931
---------- ----------
Total 444,349 535,310
---------- ----------
TOTAL $1,663,568 $1,676,737
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares in 1994 and 1993 $199,326 $199,326
Capital stock expense and other (1,762) (1,864)
Retained earnings 241,330 236,337
---------- ----------
Total common shareholder's equity 438,894 433,799
Preferred stock:
Without sinking fund 57,881 57,881
With sinking fund 31,770 46,770
Long-term debt 490,187 516,156
---------- ----------
Total 1,018,732 1,054,606
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 589 686
Other 11,377 6,231
---------- ----------
Total 11,966 6,917
---------- ----------
Current Liabilities:
Currently maturing long-term debt 50,965 48,250
Notes payable:
Associated companies - 11,568
Other 30,000 -
Accounts payable:
Associated companies 25,555 29,181
Other 33,296 12,157
Customer deposits 22,290 21,474
Taxes accrued 33,613 24,252
Accumulated deferred income taxes 44,975 41,758
Interest accrued 11,958 23,171
Dividends declared 1,797 1,985
Other 8,843 17,303
---------- ----------
Total 263,292 231,099
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 304,884 311,616
Accumulated deferred investment tax credits 35,818 37,193
SFAS 109 regulatory liability - net 18,851 23,626
Other 10,025 11,680
---------- ----------
Total 369,578 384,115
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,663,568 $1,676,737
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $234,274 $264,419 $651,481 $673,392
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 53,097 62,435 117,710 103,784
Purchased power 59,155 66,810 182,035 213,493
Other operation and maintenance 41,327 39,018 118,543 111,018
Depreciation and amortization 9,513 8,011 27,270 24,009
Taxes other than income taxes 11,275 10,157 32,011 29,991
Income taxes 11,427 20,504 23,280 35,831
Amortization of rate deferrals 24,805 17,588 74,414 52,765
-------- -------- -------- --------
Total 210,599 224,523 575,263 570,891
-------- -------- -------- --------
Operating Income 23,675 39,896 76,218 102,501
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 365 237 1,386 632
Miscellaneous - net (337) 703 (85) 1,258
Income taxes 129 (274) 32 (481)
-------- -------- -------- --------
Total 157 666 1,333 1,409
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 11,461 13,028 34,657 39,749
Other interest - net 1,751 782 5,025 2,276
Allowance for borrowed funds used
during construction (236) (169) (889) (451)
-------- -------- -------- --------
Total 12,976 13,641 38,793 41,574
-------- -------- -------- --------
Income before Cumulative Effect of
a Change in Accounting Principle 10,856 26,921 38,758 62,336
Cumulative Effect to January 1, 1993
of Accruing Unbilled Revenues (net
of income taxes of $19,456) - - - 32,706
-------- -------- -------- --------
Net Income 10,856 26,921 38,758 95,042
Preferred Stock Dividend Requirements
and Other 1,797 2,216 5,827 6,985
-------- -------- -------- --------
Earnings Applicable to Common Stock $9,059 $24,705 $32,931 $88,057
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $38,758 $95,042
Noncash items included in net income:
Cumulative effect of a change in accounting principle - (32,706)
Change in rate deferrals 92,135 60,650
Depreciation and amortization 27,270 24,009
Deferred income taxes and investment tax credits (22,092) (16,423)
Allowance for equity funds used during construction (1,386) (632)
Changes in working capital:
Receivables (12,592) (30,788)
Fuel inventory 5,058 2,964
Accounts payable 17,513 (3,320)
Taxes accrued 9,361 17,789
Interest accrued (11,213) (7,664)
Other working capital accounts 428 (5,935)
Other 11,129 6,818
--------- --------
Net cash flow provided by operating activities 154,369 109,804
--------- --------
Investing Activities:
Construction expenditures (100,369) (39,148)
Allowance for equity funds used during construction 1,386 632
--------- --------
Net cash flow used in investing activities (98,983) (38,516)
--------- --------
Financing Activities:
Proceeds from issuance of:
General and refunding bonds 24,534 185,000
Other long-term debt 15,652 -
Retirement of:
First mortgage bonds (18,000) (137,672)
General and refunding bonds (30,000) (55,000)
Other long-term debt (16,045) (230)
Redemption of preferred stock (15,000) (15,000)
Dividends paid:
Common stock (28,000) (34,100)
Preferred stock (5,851) (7,122)
Changes in short-term borrowings 18,432 -
--------- --------
Net cash flow used in financing activities (54,278) (64,124)
--------- --------
Net increase in cash and cash equivalents 1,108 7,164
Cash and cash equivalents at beginning of period 7,999 34,008
--------- --------
Cash and cash equivalents at end of period $9,107 $41,172
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $48,664 $48,211
Income taxes $19,007 $31,169
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 115.7 $ 126.4 ($ 10.7) (8)
Commercial 78.1 78.1 0.0 -
Industrial 47.9 47.7 0.2 -
Governmental 7.4 8.2 (0.8) (10)
------- ------- -------
Total retail 249.1 260.4 (11.3) (4)
Sales for resale 14.1 25.0 (10.9) (44)
Other (28.9) (21.0) (7.9) (38)
------- ------- -------
Total $ 234.3 $ 264.4 ($ 30.1) (11)
======= ======= =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,363 1,442 (79) (5)
Commercial 977 928 49 5
Industrial 795 735 60 8
Governmental 90 99 (9) (9)
------- ------- -------
Total retail 3,225 3,204 21 1
Sales for resale 397 724 (327) (45)
------- ------- -------
Total 3,622 3,928 (306) (8)
======= ======= =======
Nine Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 266.8 $ 266.6 $ 0.2 -
Commercial 198.4 189.0 9.4 5
Industrial 137.0 130.0 7.0 5
Governmental 21.3 21.4 (0.1) -
------- ------- -------
Total retail 623.5 607.0 16.5 3
Sales for resale 37.7 43.5 (5.8) (13)
Other (9.7) 22.9 (32.6) (142)
------- ------- -------
Total $ 651.5 $ 673.4 ($ 21.9) (3)
======= ======= =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 3,208 3,105 103 3
Commercial 2,409 2,208 201 9
Industrial 2,200 2,009 191 10
Governmental 254 250 4 2
------- ------- -------
Total retail 8,071 7,572 499 7
Sales for resale 970 1,090 (120) (11)
------- ------- -------
Total 9,041 8,662 379 4
======= ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $488,098 $476,976
Natural gas 118,256 113,666
Construction work in progress 8,065 15,205
---------- ----------
Total 614,419 605,847
Less - accumulated depreciation and amortization 338,597 330,268
---------- ----------
Utility plant - net 275,822 275,579
---------- ----------
Other Investments:
Investment in subsidiary company - at equity 3,259 3,259
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 2,841 1,176
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,950 10,034
Other 45,385 32,107
---------- ----------
Total cash and cash equivalents 56,176 43,317
Accounts receivable:
Customer (less allowance for doubtful
accounts of $0.8 million in 1994 and 1993) 33,964 35,801
Associated companies 1,346 1,378
Other 697 876
Accrued unbilled revenues 19,734 19,643
Deferred electric fuel and resale gas costs 2,639 6,323
Materials and supplies - at average cost 10,969 11,885
Rate deferrals 29,824 24,587
Prepayments and other 6,140 2,994
---------- ----------
Total 161,489 146,804
---------- ----------
Deferred Debits and Other Assets:
Rate deferrals 181,454 204,190
SFAS 109 regulatory asset - net 9,725 9,004
Other 9,666 8,769
---------- ----------
Total 200,845 221,963
---------- ----------
TOTAL $641,415 $647,605
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABLITIES
<S> <C> <C>
Capitalization:
Common stock, $4 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares in 1994 and 1993 $33,744 $33,744
Paid-in capital 36,201 36,156
Retained earnings subsequent to the elimination
of the accumulated deficit of $13.9 million on
November 30, 1988 112,507 100,556
---------- ----------
Total common shareholder's equity 182,452 170,456
Preferred stock:
Without sinking fund 19,780 19,780
With sinking fund 3,450 4,950
Long-term debt 164,148 188,312
---------- ----------
Total 369,830 383,498
---------- ----------
Other Noncurrent Liabilities:
Accumulated provision for losses 17,491 18,062
Other 7,864 3,351
---------- ----------
Total 25,355 21,413
---------- ----------
Current Liabilities:
Currently maturing long-term debt 24,200 15,000
Accounts payable:
Associated companies 20,228 23,080
Other 21,145 22,011
Customer deposits 17,362 16,617
Accumulated deferred income taxes 2,728 4,968
Taxes accrued 6,838 5,161
Interest accrued 4,512 5,472
Other 18,644 7,367
---------- ----------
Total 115,657 99,676
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 92,895 105,096
Accumulated deferred investment tax credits 11,034 11,592
Other 26,644 26,330
---------- ----------
Total 130,573 143,018
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $641,415 $647,605
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $120,354 $140,666 $306,826 $321,650
Natural gas 13,220 13,944 68,238 61,708
-------- -------- -------- --------
Total 133,574 154,610 375,064 383,358
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses
and gas purchased for resale 23,814 27,158 83,773 73,967
Purchased power 42,999 47,016 115,940 123,479
Other operation and maintenance 23,444 21,242 63,404 63,809
Depreciation and amortization 4,903 4,290 14,356 12,884
Taxes other than income taxes 7,206 7,344 21,137 20,352
Income taxes 8,829 15,076 17,003 23,203
Rate deferrals:
Rate deferrals - (25) - (1,651)
Amortization of rate deferrals 6,438 2,861 19,171 11,050
-------- -------- -------- --------
Total 117,633 124,962 334,784 327,093
-------- -------- -------- --------
Operating Income 15,941 29,648 40,280 56,265
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 60 40 297 74
Miscellaneous - net 499 385 1,483 1,523
Income taxes (192) (156) (901) (140)
-------- -------- -------- --------
Total 367 269 879 1,457
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 3,959 4,707 12,423 15,109
Other interest - net 461 403 1,399 1,143
Allowance for borrowed funds used
during construction (45) (36) (221) (69)
-------- -------- -------- --------
Total 4,375 5,074 13,601 16,183
-------- -------- -------- --------
Income before Cumulative Effect of
a Change in Accounting Principle 11,933 24,843 27,558 41,539
Cumulative Effect to January 1, 1993
of Accruing Unbilled Revenues (net
of income taxes of $6,592) - - - 10,948
-------- -------- -------- --------
Net Income 11,933 24,843 27,558 52,487
Preferred Stock Dividend Requirements
and Other 329 432 1,162 1,335
-------- -------- -------- --------
Earnings Applicable to Common Stock $11,604 $24,411 $26,396 $51,152
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $27,558 $52,487
Noncash items included in net income:
Cumulative effect of a change in accounting principle - (10,948)
Change in rate deferrals 17,499 10,456
Depreciation and amortization 14,356 12,884
Deferred income taxes and investment tax credits (15,705) 78
Allowance for equity funds used during construction (297) (74)
Net pension expense - 3,260
Changes in working capital:
Receivables 1,957 (15,645)
Accounts payable (3,718) (5,719)
Taxes accrued 1,677 3,594
Interest accrued (960) (898)
Other working capital accounts 13,534 (29,502)
Other 5,050 1,585
--------- --------
Net cash flow provided by operating activities 60,951 21,558
--------- --------
Investing Activities:
Construction expenditures (16,269) (13,320)
Allowance for equity funds used during construction 297 74
--------- --------
Net cash flow used in investing activities (15,972) (13,246)
--------- --------
Financing Activities:
Proceeds from the issuance of general
and refunding bonds - 100,000
Retirement of:
First mortgage bonds - (41,135)
General and refunding bonds (15,000) (44,400)
Redemption of preferred stock (1,500) (1,500)
Dividends paid:
Common stock (14,400) (11,700)
Preferred stock (1,220) (1,393)
--------- --------
Net cash flow used in financing activities (32,120) (128)
--------- --------
Net increase in cash and cash equivalents 12,859 8,184
Cash and cash equivalents at beginning of period 43,317 46,070
--------- --------
Cash and cash equivalents at end of period $56,176 $54,254
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $14,213 $17,372
Income taxes $32,115 $17,954
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 51.4 $ 60.2 ($ 8.8) (15)
Commercial 44.3 48.1 (3.8) (8)
Industrial 6.6 6.8 (0.2) (3)
Governmental 15.8 18.5 (2.7) (15)
------ ------ ------
Total retail 118.1 133.6 (15.5) (12)
Sales for resale 2.2 3.5 (1.3) (37)
Other 0.1 3.6 (3.5) (97)
------ ------ ------
Total $120.4 $140.7 ($20.3) (14)
====== ====== ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 688 759 (71) (9)
Commercial 580 593 (13) (2)
Industrial 138 130 8 6
Governmental 268 270 (2) (1)
------ ------ ------
Total retail 1,674 1,752 (78) (4)
Sales for resale 61 96 (35) (36)
------ ------ ------
Total 1,735 1,848 (113) (6)
====== ====== ======
Nine Months Ended Increase/
Description 1994 1993 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 113.0 $ 114.2 ($ 1.2) (1)
Commercial 124.4 122.9 1.5 1
Industrial 19.7 18.8 0.9 5
Governmental 44.8 45.9 (1.1) (2)
------ ------ ------
Total retail 301.9 301.8 0.1 -
Sales for resale 6.7 9.3 (2.6) (28)
Other (1.8) 10.6 (12.4) (117)
------ ------ ------
Total $306.8 $321.7 ($14.9) (5)
====== ====== ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,488 1,473 15 1
Commercial 1,535 1,499 36 2
Industrial 392 367 25 7
Governmental 713 690 23 3
------ ------ ------
Total retail 4,128 4,029 99 2
Sales for resale 191 281 (90) (32)
------ ------ ------
Total 4,319 4,310 9 -
====== ====== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $3,036,792 $3,027,537
Electric plant under lease 439,184 437,941
Construction work in progress 39,472 41,442
Nuclear fuel under capital lease 55,838 79,625
---------- ----------
Total 3,571,286 3,586,545
Less - accumulated depreciation 741,534 669,666
---------- ----------
Utility plant - net 2,829,752 2,916,879
---------- ----------
Other Investments:
Decommissioning trust fund 30,333 24,787
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash - 2,424
Temporary cash investments - at cost,
which approximates market:
Associated companies 32,635 46,601
Other 186,303 147,107
---------- ----------
Total cash and cash equivalents 218,938 196,132
Accounts receivable:
Associated companies 59,750 57,216
Other 3,517 2,057
Materials and supplies - at average cost 70,802 69,765
Recoverable income taxes 53,000 63,400
Prepayments and other 4,297 4,835
---------- ----------
Total 410,304 393,405
---------- ----------
Deferred Debits and Other Assets:
Recoverable income taxes 6,749 29,289
SFAS 109 regulatory asset - net 386,553 384,317
Unamortized loss on reacquired debt 55,647 17,258
Other 133,652 125,131
---------- ----------
Total 582,601 555,995
---------- ----------
TOTAL $3,852,990 $3,891,066
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
1994 1993
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares in 1994 and 1993 $789,350 $789,350
Paid-in capital 7 7
Retained earnings 175,969 228,574
---------- ----------
Total common shareholder's equity 965,326 1,017,931
Long-term debt 1,543,037 1,511,914
---------- ----------
Total 2,508,363 2,529,845
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 838 24,679
Other 18,050 18,229
---------- ----------
Total 18,888 42,908
---------- ----------
Current Liabilities:
Currently maturing long-term debt 200,000 230,000
Accounts payable:
Associated companies 6,071 1,928
Other 22,603 18,223
Taxes accrued 25,722 20,952
Interest accrued 47,472 48,929
Obligations under capital leases 55,000 55,000
Other 1,830 2,805
---------- ----------
Total 358,698 377,837
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 791,276 775,630
Accumulated deferred investment tax credits 111,242 113,849
Other 64,523 50,997
---------- ----------
Total 967,041 940,476
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,852,990 $3,891,066
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1994 and 1993
(Unaudited)
Three Months Ended Nine Months Ended
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $150,949 $155,071 $450,015 $473,228
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 11,440 10,081 35,661 40,423
Other operation and maintenance 26,829 33,525 74,320 80,880
Depreciation and decommissioning 23,026 22,749 68,993 68,167
Taxes other than income taxes 5,637 6,768 19,155 19,648
Income taxes 18,148 17,956 55,896 58,248
-------- -------- -------- --------
Total 85,080 91,079 254,025 267,366
-------- -------- -------- --------
Operating Income 65,869 63,992 195,990 205,862
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 101 245 735 506
Miscellaneous - net 2,025 1,519 4,641 4,565
Income taxes 569 4,069 (470) 6,359
-------- -------- -------- --------
Total 2,695 5,833 4,906 11,430
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 42,076 45,780 123,950 138,176
Other interest - net 1,732 1,131 6,189 3,337
Allowance for borrowed funds used
during construction (178) (128) (938) (313)
-------- -------- -------- --------
Total 43,630 46,783 129,201 141,200
-------- -------- -------- --------
Net Income $24,934 $23,042 $71,695 $76,092
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
(Unaudited)
1994 1993
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $71,695 $76,092
Noncash items included in net income:
Depreciation and decommissioning 68,993 68,167
Deferred income taxes and investment tax credits 16,535 16,375
Allowance for equity funds used during construction (735) (506)
Amortization of debt discount 3,388 3,358
Amortization of loss on reacquired debt 1,750 -
Changes in working capital:
Receivables (3,994) 5,069
Accounts payable 8,469 (8,195)
Taxes accrued 4,770 8,083
Interest accrued (1,457) 324
Other working capital accounts (1,474) (1,410)
Recoverable income taxes 32,940 61,771
Decommissioning trust contributions (3,764) (3,679)
Provision for estimated losses and reserves - 29,403
Other 9,755 (1,438)
--------- --------
Net cash flow provided by operating activities 206,871 253,414
--------- --------
Investing Activities:
Construction expenditures (12,254) (10,646)
Allowance for equity funds used during construction 735 506
Nuclear fuel purchases (54) (32,230)
Proceeds from sale/leaseback of nuclear fuel - 32,230
--------- --------
Net cash flow used in investing activities (11,573) (10,140)
--------- --------
Financing Activities:
Proceeds from the issuance of first mortgage bonds 59,410 60,000
Retirement of first mortgage bonds (60,000) (60,000)
Premium and expenses paid on refinancing sale/leaseback bonds (47,602) -
Common stock dividends paid (124,300) (210,100)
--------- --------
Net cash flow used in financing activities (172,492) (210,100)
--------- --------
Net increase in cash and cash equivalents 22,806 33,174
Cash and cash equivalents at beginning of period 196,132 181,795
--------- --------
Cash and cash equivalents at end of period $218,938 $214,969
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $125,519 $137,517
Income taxes (refund) ($3,477) ($36,534)
Noncash investing and financing activities:
Capital lease obligations incurred - $32,230
Excess of fair value of decommissioning trust
assets over amount invested $212 -
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
ARKANSAS POWER & LIGHT COMPANY
GULF STATES UTILITIES COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Cajun - River Bend
Entergy Corporation and GSU
GSU has significant business relationships with Cajun Electric
Power Cooperative, Inc. (Cajun), including co-ownership of River
Bend and Big Cajun 2 Unit 3. GSU and Cajun own 70% and 30%
undivided interests in River Bend, respectively, and 42% and 58%
undivided interests in Big Cajun 2 Unit 3, respectively.
In June 1989, Cajun filed a civil action against GSU in the
United States District Court for the Middle District of Louisiana
(District Court). Cajun stated in its complaint that the object
of the suit is to annul, rescind, terminate, and/or dissolve the
Joint Ownership Participation and Operating Agreement entered
into on August 28, 1979 (Operating Agreement) relating to River
Bend. Cajun alleges fraud and error by GSU, breach of its
fiduciary duties owed to Cajun, and/or GSU's repudiation,
renunciation, abandonment, or dissolution of its core obligations
under the Operating Agreement, as well as the lack or failure of
cause and/or consideration for Cajun's performance under the
Operating Agreement. The suit seeks to recover Cajun's alleged
$1.6 billion investment in the unit as damages, plus attorneys'
fees, interest, and costs. Two member cooperatives of Cajun
have brought an independent action to declare the Operating
Agreement void, based upon failure to get prior LPSC approval
alleged to be necessary. GSU believes the suits are without
merit and is contesting them vigorously.
A trial without jury on the portion of the suit by Cajun to
rescind the Operating Agreement began on April 12, 1994, and is
continuing. No assurance can be given as to the outcome of this
litigation. If GSU were ultimately unsuccessful in this
litigation and were required to make substantial payments, GSU
would probably be unable to make such payments and would probably
have to seek relief from its creditors under the Bankruptcy Code.
If GSU prevails in this litigation, no assurance can be provided
that Cajun's weak financial condition will allow funding of all
required costs of Cajun's ownership in River Bend.
During 1992, Cajun notified GSU that it would not fund its
full share of costs related to the fourth refueling outage at
River Bend, completed in September 1992. Cajun has also not
funded its full share of the costs associated with certain
additional repairs and improvements at River Bend completed
during that refueling outage. GSU has paid the costs associated
with such repairs and improvements without waiving any rights
against Cajun. GSU believes that Cajun is obligated to pay its
share of such costs under the terms of the applicable contract.
Cajun has filed a suit seeking a declaration that it does not owe
such funds and seeking injunctive relief against GSU. GSU is
contesting such suit.
In September 1992, GSU received a letter from Cajun alleging
that the operating and maintenance costs for River Bend are "far
in excess of industry averages" and that "it would be imprudent
for Cajun to fund these excessive costs." Cajun further stated
that until it is satisfied it would fund a maximum of $700,000
per week under protest during the remainder of 1992. In a
December 1992 letter, Cajun stated that it would also withhold
costs associated with certain additional repairs, the majority of
which were incurred during the fifth refueling outage completed
in July 1994.
In a letter dated October 21, 1994, and at a subsequent
meeting, Cajun representatives advised Entergy Corporation and
GSU that on October 25, 1994, Cajun would exhaust its 1994 budget
for operating and maintenance expenses for River Bend, and that
it would not make any further payments to GSU in 1994 for River
Bend operating, maintenance or capital costs. Cajun also advised
that it does not expect the Rural Electrification Administration
(which provided funding to Cajun for its investment in River
Bend) to permit it to budget funds in 1995 to pay its share of
operating and maintenance expenses or capital costs for River
Bend. However, Cajun stated that it will continue to fund its
share of the nuclear decommissioning trust payments for River
Bend, as well as insurance and safety-related expenses. GSU
estimates that the unpaid portion of Cajun's River Bend
operating, maintenance, and capital costs for the remainder of
1994 will aggregate approximately $10 million. Cajun's share of
River Bend annual operating (including nuclear fuel) and
maintenance expenses and capital costs was approximately $69
million in 1993.
In view of Cajun's stated expectation that it will fund only a
limited portion of its share of River Bend related operating,
maintenance, and capital costs in 1994 and for the foreseeable
future, GSU has notified Cajun that it will (i) credit GSU's
share of expenses for Big Cajun 2, Unit 3 against amounts due
from Cajun to GSU and (ii) seek to market Cajun's share of the
power from River Bend and apply the proceeds to the amounts due
from Cajun to GSU. On November 2, 1994, Cajun discontinued GSU's
entitlement of energy from Big Cajun 2, Unit 3. In response, on
November 3, 1994, GSU filed pleadings in District Court seeking
an order requiring Cajun to provide GSU with the energy from Big
Cajun 2, Unit 3 to which GSU is entitled, and holding that GSU is
entitled to credit amounts due from GSU to Cajun for Big Cajun 2,
Unit 3 against amounts due from Cajun to GSU with respect to
River Bend. The District Court held a hearing on this motion on
November 7, 1994. The matter is pending.
During the period in which Cajun is not paying its share of
River Bend costs, GSU intends to fund all costs necessary for the
safe, continuing operation of the unit. The responsibilities of
Entergy Operations as the licensed operator of River Bend, for
safely operating and maintaining the unit are not affected by
Cajun's actions.
The total resulting from Cajun's failure to fund repair
projects, Cajun's funding limitation on refueling outages, and
the weekly funding limitation by Cajun was $36.6 million as of
September 30, 1994, compared with $33.3 million as of December
31, 1993. These amounts are reflected in long-term receivables
with an offsetting reserve in other deferred credits. Cajun's
weak financial condition may affect the ultimate collectibility
of the amounts owed to GSU, including any amounts that may be
awarded in litigation.
GSU has been informed that Cajun has serious financial
problems including a finding during 1994 of imprudence by the
LPSC on Cajun's participation in the River Bend nuclear project.
Cajun's weak financial condition could have a material adverse
effect on GSU, including the possibility of an NRC action with
respect to the operation of River Bend and a need to bear
additional costs associated with the co-owned facilities.
In September 1994, in connection with Entergy Corporation's
analysis of certain preacquisition contingencies, Entergy
Corporation increased its acquisition adjustment and GSU recorded
a loss provision associated with the River Bend litigation
between GSU and Cajun and certain underpayments by Cajun of River
Bend costs, in accordance with SFAS No. 5, "Accounting for
Contingencies." See Note 8 for additional information on
provisions for preacquisition contingencies recorded during the
third quarter of 1994.
Cajun - Transmission Service
Entergy Corporation and GSU
GSU and Cajun are parties to FERC proceedings related to
transmission service charge disputes. In April 1992, FERC issued
a final order. In May 1992, GSU and Cajun filed motions for
rehearings which are pending consideration by FERC. In June
1992, GSU filed a petition for review in the United States Court
of Appeals regarding certain of the issues decided by FERC. In
August 1993, the United States Court of Appeals rendered an
opinion reversing the FERC order regarding the portion of such
disputes relating to the calculations of certain credits and
equalization charges under GSU's service schedules with Cajun.
The opinion remanded the issues to FERC for further proceedings
consistent with its opinion. In January 1994, FERC denied GSU's
request to collect a surcharge while FERC considers the court's
remand, which GSU has appealed.
GSU interprets the FERC order and the United States Court of
Appeals' decision to mean that Cajun would owe GSU approximately
$91 million as of September 30, 1994. GSU further estimates that
if it prevails in its May 1992 motion for rehearing, Cajun would
owe GSU approximately $127 million as of September 30, 1994. If
Cajun were to prevail in its May 1992 motion for rehearing to
FERC, and if GSU were not to prevail in its May 1992 motion for
rehearing to FERC, and if FERC does not implement the court's
remand as GSU contends is required, GSU estimates it would owe
Cajun approximately $83 million as of September 30, 1994. The
above amounts are exclusive of a $7.3 million payment by Cajun on
December 31, 1990, which the parties agreed to apply to the
disputed transmission service charges. GSU and Cajun further
agreed that their positions at FERC would remain unaffected by
the $7.3 million payment. Pending FERC's ruling on the May 1992
motions for rehearing, GSU has continued to bill Cajun utilizing
the historical billing methodology and has booked underpaid
transmission charges, including interest, in the amount of $156
million as of September 30, 1994. This amount is reflected in
long-term receivables with an offsetting reserve in other
deferred credits.
Financial Condition
GSU
Although GSU received partial rate relief relating to River
Bend, GSU's financial position was strained from 1986 to 1990 by
its inability to earn a return on and fully recover its
investment and other costs associated with River Bend. Issues to
be finally resolved in PUCT rate proceedings and appeals thereof,
as discussed in Note 2, combined with the application of
accounting standards, may result in substantial write-offs and
charges that could result in substantial net losses being
reported in 1994, and subsequent periods, with resulting
substantial adverse adjustments to common shareholder's equity.
Future earnings will continue to be adversely affected by the
lack of full recovery and return on the investment and other
costs associated with River Bend.
Capital Requirements and Financing
Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy
Construction expenditures (excluding nuclear fuel) for the
years 1994, 1995, and 1996, and long-term debt and preferred
stock maturities and cash sinking fund requirements for the
period 1994-1996, are estimated to total (in millions):
Long-term Debt and
Construction Expenditures Preferred Stock
Maturities and Cash
Sinking Fund
Requirements
1994 1995 1996 1994-1996
Entergy $614 $560 $550 $1,414
AP&L $177 $172 $175 $ 112
GSU $135 $128 $119 $ 214
LP&L $142 $143 $142 $ 165
MP&L $116 $ 63 $ 63 $ 228
NOPSI $ 24 $ 26 $ 26 $ 81
System $ 18 $ 22 $ 23 $ 615
Energy
The System plans to meet the above requirements with
internally generated funds, including collections under the
System operating companies' rate phase-in plans, and cash on
hand, supplemented by the issuance of long-term debt and
preferred stock. See pages 130-131, 205-206, 240-241, 271-272,
and 301 of the Form 10-K and Notes 4 and 5 for information on the
possible issuance of preferred stock, common stock, and long-term
debt, and the possible retirement, redemption, purchase, or other
acquisition of outstanding securities by the System operating
companies and System Energy.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
Entergy Corporation, AP&L, GSU, LP&L, and System Energy
See pages 96-97, 133-134, 174-175, 208, and 304 of the
Form 10-K for information on nuclear liability, property and
replacement power insurance, and related NRC regulations.
See pages 97-98, 134, 175, 208-209, and 304-305 of the Form
10-K for information on the disposal of spent nuclear fuel, other
high-level radioactive waste, and decommissioning costs
associated with ANO, River Bend, Waterford 3, and Grand Gulf 1.
Decommissioning costs for ANO, Waterford 3, and Grand Gulf 1 have
been recently revised to be approximately $806.3 million, $320.1
million, and $365.9 million, respectively. In March 1994, AP&L
filed with the APSC an interim update of the ANO cost study,
which reflected significant increases in costs of low-level
radioactive waste disposal. On October 5, 1994, the APSC issued
an order approving AP&L's updated decommissioning costs to be
included in rates through a rate rider. As of January 1994, LP&L
began funding $4.8 million annually to fund the increased
estimated costs for decommissioning Waterford 3. In August 1994,
LP&L filed its recently revised cost study in connection with the
LPSC's investigation of LP&L's rates (see Note 2). In October
1994, GSU presented the 1991 update to the 1985 original
decommissioning cost study in the current Texas Cities rate
proceeding.
The staff of the SEC has questioned certain of the current
accounting practices of the electric utility industry, regarding
the recognition, measurement, and classification of
decommissioning costs for nuclear generating stations in the
financial statements of electric utilities. In response to these
questions, the Financial Accounting Standards Board has agreed to
review the accounting for removal costs, including
decommissioning. If current electric utility industry accounting
practices for such decommissioning are changed, annual provisions
for decommissioning could increase, the estimated cost for
decommissioning could be recorded as a liability rather than as
accumulated depreciation, and trust fund income from the external
decommissioning trusts could be reported as investment income
rather than as a reduction to decommissioning expense.
ANO Matters
Entergy Corporation and AP&L
See pages 30, 77, and 123 of the Form 10-K for information
on leaks in certain steam generator tubes at ANO 2 that were
discovered and repaired during an outage in March 1992. During a
refueling outage in September 1992, a comprehensive inspection of
all steam generator tubing was conducted and necessary repairs
were made. During a mid-cycle outage in May 1993, a scheduled
special inspection of certain steam generator tubing was
conducted by Entergy Operations, and additional repairs were
made. Entergy Operations operated ANO 2 with no further steam
generator inspections until the refueling outage that was
completed on April 23, 1994. Inspections during the outage
revealed additional cracks; however, most were smaller than those
seen in earlier inspections, except for one relatively large
crack. Based upon results of these inspections and an
inconclusive pressure test, Entergy Operations plans to inspect
the steam generator tubes during a mid-cycle outage tentatively
scheduled for January 1995. The operations and power output of
the unit have not been materially adversely affected.
Environmental Issues
GSU
GSU has been notified by the U. S. Environmental Protection
Agency (EPA) that it has been designated as a potentially
responsible party for the cleanup of sites on which GSU and
others have or have been alleged to have disposed of material
designated as hazardous waste. GSU is currently negotiating with
the EPA and state authorities regarding the cleanup of some of
these sites. Several class action and other suits have been
filed in state and federal courts seeking relief from GSU and
others for damages caused by the disposal of hazardous waste and
for asbestos-related disease allegedly resulting from exposure on
GSU premises. While the amounts at issue in the cleanup efforts
and suits may be substantial, GSU believes that its results of
operations and financial condition will not be materially
affected by the outcome of the suits.
As of September 30, 1994, GSU has accrued cumulative amounts
related to the cleanup of six sites at which GSU has been
designated a potentially responsible party, totaling $27.7
million since 1990. Through September 30, 1994, GSU has expended
$7.3 million cumulatively on the cleanup, resulting in a
remaining recorded liability of $20.4 million as of September 30,
1994.
LP&L
In 1993, the Louisiana Department of Environmental Quality
issued new rules for solid waste regulation, including waste
water impoundments. LP&L has determined that certain of its
power plant waste water sites are affected by these regulations
and has chosen to close them rather than retrofit and permit
them. In September 1994, LP&L recorded a liability of $9.7
million for costs related to the closure of these waste water
sites.
Waterford 3 Lease Obligations
LP&L
In September 1989, LP&L entered into three substantially
identical, but entirely separate, transactions for the sale and
leaseback of three undivided portions (aggregating approximately
9.3%) of its 100% ownership interest in Waterford 3. See pages
210-211 of the Form 10-K and Note 5 below for further
information.
Upon the occurrence of certain events, LP&L may be obligated
to pay amounts sufficient to permit the Owner Participants to
withdraw from the lease transactions, and LP&L may be required to
assume the outstanding bonds issued by the Owner Trustee to
finance, in part, its acquisition of the undivided interests in
Waterford 3. These events include failure, at specified dates,
to maintain equity capital of at least 30% of adjusted
capitalization and a fixed charge coverage ratio of at least
1.50. As of September 30, 1994, LP&L's total equity capital was
49.34% of adjusted capitalization, and its fixed charge coverage
ratio was 3.01.
LP&L did not exercise its option to repurchase the undivided
interests in Waterford 3 on the fifth anniversary (September
1994) of the closing date of the sale and leaseback transactions.
As a result, LP&L was required to provide collateral to the Owner
Participants for the equity portion of certain amounts payable by
LP&L under the lease. Such collateral was in the form of a new
series of first mortgage bonds in the aggregate principal amount
of $208.2 million issued by LP&L in September 1994, under its
first mortgage bond indenture.
Reimbursement Agreement
System Energy
Under the provisions of the Reimbursement Agreement, as
amended, and letters of credit related to the Grand Gulf 1 sale
and leaseback transactions, System Energy has agreed to a number
of covenants relating to the maintenance of equity at not less
than 33%, and common equity at not less than 29%, of adjusted
capitalization, and a fixed charge coverage ratio of at least
1.60. As of September 30, 1994, System Energy's equity and
common equity, in each case, approximated 34% of its adjusted
capitalization, and its fixed charge coverage ratio was 1.96.
Failure by System Energy to perform its covenants under the
Reimbursement Agreement could give rise to a draw under the
letters of credit and/or an early termination of the letters of
credit. If such letters of credit were not replaced in a timely
manner, a default under System Energy's related leases could
result.
See Note 2, "FERC Audit - Proposed Settlement," for
information on a proposed settlement, which, if ultimately
sustained and implemented, would cause System Energy to fall
below the required equity and fixed charge coverage covenant
levels. System Energy has obtained the consent of the banks
(parties to the Reimbursement Agreement) to waive these covenants
for the 12-month period beginning with the earlier of a write-off
or the first refund, if such write-off or refund occurs prior to
December 31, 1994. System Energy believes the conditions
included in the proposed settlement are covered by the waiver.
The waiver is conditioned upon System Energy not paying any
common stock dividends to Entergy Corporation until the equity
ratio covenant is once again met. If the proposed settlement had
been in effect as of September 30, 1994, System Energy's common
equity would have been approximately 32% of its adjusted
capitalization, and its fixed charge coverage ratio would have
been approximately 1.27. System Energy expects that after the 12-
month waiver period, it will be in compliance with the equity and
fixed charge covenants. Also, see pages 296-297 of the Form 10-K
for further information.
System Fuels
AP&L, LP&L, MP&L, NOPSI, and System Energy
See pages 133, 207, 242-243, 274, and 305 of the Form 10-K
for information on certain commitments and contingencies of
System Fuels, and related commitments and contingencies of AP&L,
LP&L, MP&L, NOPSI, and System Energy, respectively, in connection
with System Fuels' fuel procurement programs.
Internal Revenue Service Tax Audit
Entergy
In August 1994, Entergy received an IRS report covering the
federal income tax audit of Entergy Corporation and subsidiaries
for the years 1988 - 1990. The report asserts an $80 million tax
deficiency for the 1990 consolidated federal income tax returns
related primarily to the application of accelerated investment
tax credits associated with Waterford 3 and Grand Gulf nuclear
plants. Entergy believes there is no tax deficiency and is
vigorously contesting the proposed assessment.
Other
Entergy Corporation and System Energy
See pages 96 and 302 of the Form 10-K for information on
Entergy Corporation's commitments to System Energy under the
Capital Funds Agreement.
AP&L, LP&L, MP&L, NOPSI, and System Energy
See pages 302-303 of the Form 10-K for information on System
Energy relating to the Unit Power Sales, Availability, and
Reallocation Agreements. See also pages 132-133, 206-207, 242,
and 273-274 of the Form 10-K for information on commitments and
potential liabilities of AP&L, LP&L, MP&L, and NOPSI,
respectively, relating to these agreements.
NOTE 2. RATE AND REGULATORY MATTERS
River Bend
Entergy Corporation and GSU
In May 1988, the PUCT granted GSU a permanent increase in
annual revenues of $59.9 million resulting from the inclusion in
rate base of approximately $1.6 billion of company-wide River
Bend plant investment and approximately $182 million of related
Texas retail jurisdiction deferred River Bend costs (Allowed
Deferrals). In addition, the PUCT disallowed as imprudent $63.5
million of company-wide River Bend plant costs and placed in
abeyance, with no finding of prudence, approximately $1.4 billion
of company-wide River Bend plant investment and approximately
$157 million of Texas retail jurisdiction deferred River Bend
operating and carrying costs. The PUCT affirmed that the
ultimate rate treatment of such amounts would be subject to
future demonstration of the prudence of such costs. GSU and
intervening parties appealed this order (Rate Appeal) and GSU
filed a separate rate case asking that the abeyed River Bend
plant costs be found prudent (Separate Rate Case). Intervening
parties filed suit in a Texas district court to prohibit the
Separate Rate Case. The district court's decision was ultimately
appealed to the Texas Supreme Court, which ruled in 1990 that the
prudence of the purported abeyed costs could not be relitigated
in a separate rate proceeding. The Texas Supreme Court's
decision stated that all issues relating to the merits of the
original PUCT order, including the prudence of all River Bend-
related costs, should be addressed in the Rate Appeal.
In October 1991, the Texas district court in the Rate Appeal
issued an order holding that, while it was clear the PUCT made an
error in assuming it could set aside $1.4 billion of the total
costs of River Bend and consider them in a later proceeding, the
PUCT, nevertheless, found that GSU had not met its burden of
proof related to the amounts placed in abeyance. The court also
ruled that the Allowed Deferrals should not be included in rate
base under a 1991 decision regarding El Paso Electric Company's
similar deferred costs. The court further stated that the PUCT
had erred in reducing GSU's deferred costs by $1.50 for each
$1.00 of revenue collected under the interim rate increases
authorized in 1987 and 1988. The court remanded the case to the
PUCT with instructions as to the proper handling of the Allowed
Deferrals. GSU's motion for rehearing was denied and, in
December 1991, GSU filed an appeal of the October 1991 district
court order. The PUCT also appealed the October 1991 district
court order, which served to supersede the district court's
judgment, rendering it unenforceable under Texas law.
In September 1993, the Texas Third District Court of Appeals
(the Appellate Court) remanded the October 1991 district court
decision to the PUCT "to reexamine the record evidence to
whatever extent necessary to render a final order supported by
substantial evidence and not inconsistent with our opinion." The
Appellate Court held that the PUCT's failure to include the
company-wide $1.4 billion of River Bend construction costs in
rate base was not based on substantial evidence. The Appellate
Court also held that GSU's deferred operating and maintenance
costs associated with the allowed portion of River Bend should be
included in rate base, but that its deferred River Bend carrying
costs should not be included in rate base.
In May 1994, the Appellate Court withdrew its September 1993
opinion and entered a substitute opinion. In August 1994, the
Appellate Court issued a third opinion in the Rate Appeal,
further revising its September 1993 opinion. In the August 1994
opinion, the Appellate Court affirmed the district court's
decision that there was substantial evidence to support the
PUCT's 1988 decision not to include the abeyed construction costs
in GSU's rate base. While acknowledging that the PUCT had
exceeded its authority when it attempted to defer a decision on
the inclusion of those costs in rate base in order to allow GSU a
further opportunity to demonstrate the prudence of those costs in
a subsequent proceeding, the Appellate Court found that GSU had
suffered no harm or lack of due process as a result of the PUCT's
error. Accordingly, the Appellate Court held that the PUCT's
action had the effect of disallowing the company-wide $1.4
billion of River Bend construction costs for ratemaking purposes.
In its August 1994 opinion, the Appellate Court repeated its
earlier decision that GSU's deferred operating and maintenance
costs associated with the allowed portion of River Bend should be
included in rate base and changed that order to provide that
GSU's deferred River Bend carrying costs included in the Allowed
Deferrals should also be included in rate base. The Appellate
Court's August 1994 opinion affirmed the PUCT's original order in
this case.
The Appellate Court's August 1994 opinion was entered by two
judges, with a third judge dissenting. The dissenting opinion
states that the result of the majority opinion is, among other
things, to deprive GSU of due process at the PUCT because the
PUCT never reached a finding on the $1.4 billion of construction
costs.
In October 1994, the Appellate Court denied GSU's motion for
rehearing on the August 1994 opinion as to the $1.4 billion in
River Bend construction costs and other matters. GSU plans to
appeal the Appellate Court's decision to the Texas Supreme Court.
As of September 30, 1994, the River Bend plant costs
disallowed for retail ratemaking purposes in Texas, the River
Bend plant costs held in abeyance, and the related operating and
carrying cost deferrals totaled (net of taxes) approximately $14
million, $297 million (both net of depreciation), and $170
million, respectively. Allowed Deferrals were approximately $90
million, net of taxes and amortization, as of September 30, 1994.
GSU estimates it has collected approximately $153 million of
revenues as of September 30, 1994, as a result of the originally
ordered rate treatment by the PUCT of these deferred costs. If
recovery of the Allowed Deferrals is not upheld, future revenues
based upon those allowed deferrals could also be lost, and no
assurance can be given as to whether or not refunds of revenue
received based upon such deferred costs previously recorded will
be required.
No assurance can be given as to the timing or outcome of the
remands or appeals described above. Pending further developments
in these cases, GSU has made no write-offs or reserves for the
River Bend-related costs. Management believes, based on advice
from Clark, Thomas & Winters, a Professional Corporation, legal
counsel of record in the Rate Appeal, that it is reasonably
possible that the case will be remanded to the PUCT, and the PUCT
will be allowed to rule on the prudence of the abeyed River Bend
plant costs. Rate Caps imposed by the PUCT's regulatory approval
of the Merger could result in GSU being unable to use the full
amount of a favorable decision to immediately increase rates;
however, a favorable decision could permit some increases and/or
limit or prevent decreases during the period the Rate Caps are in
effect. At this time, management and legal counsel are unable to
predict the amount, if any, of the abeyed and previously
disallowed River Bend plant costs that ultimately may be
disallowed by the PUCT. A net of tax write-off as of September
30, 1994, of up to $311 million could be required based on an
ultimate adverse ruling by the PUCT on the abeyed and disallowed
costs.
In prior proceedings, the PUCT has held that the original
cost of nuclear power plants will be included in rates to the
extent those costs were prudently incurred. Based upon the
PUCT's prior decisions, management believes that its River Bend
construction costs were prudently incurred and that it is
reasonably possible that it will recover in rate base, or
otherwise through means such as a deregulated asset plan, all or
substantially all of the abeyed River Bend plant costs. However,
management also recognizes that it is reasonably possible that
not all of the abeyed River Bend plant costs may ultimately be
recovered.
As part of its direct case in the Separate Rate Case, GSU
filed a cost reconciliation study prepared by Sandlin Associates,
management consultants with expertise in the cost analysis of
nuclear power plants, which supports the reasonableness of the
River Bend costs held in abeyance by the PUCT. This
reconciliation study determined that approximately 82% of the
River Bend cost increase above the amount included by the PUCT in
rate base was a result of changes in federal nuclear safety
requirements and provided other support for the remainder of the
abeyed amounts.
There have been four other rate proceedings in Texas
involving nuclear power plants. Investment in the plants
ultimately disallowed ranged from 0% to 15%. Each case was
unique, and the disallowances in each were made on a case-by-case
basis for different reasons. Appeals of most, if not all, of
these PUCT decisions are currently pending.
The following factors support management's position that a
loss contingency requiring accrual has not occurred, and its
belief that all, or substantially all, of the abeyed plant costs
will ultimately be recovered:
1. The $1.4 billion of abeyed River Bend plant costs have
never been ruled imprudent and disallowed by the PUCT.
2. Sandlin Associates' analysis which supports the prudence
of substantially all of the abeyed construction costs.
3. Historical inclusion by the PUCT of prudent construction
costs in rate base.
4. The analysis of GSU's internal legal staff, which has
considerable experience in Texas rate case litigation.
Additionally, management believes, based on advice from
Clark, Thomas, & Winters, a Professional Corporation, legal
counsel of record in the Rate Appeal, that it is reasonably
possible that the Allowed Deferrals will continue to be recovered
in rates. Management also believes, based on advice from Clark,
Thomas, & Winters, a Professional Corporation, legal counsel of
record in the Rate Appeal, that it is reasonably possible that
the deferred costs related to the $1.4 billion of abeyed River
Bend plant costs will be recovered in rates to the extent that
the $1.4 billion of abeyed River Bend plant is recovered.
However, a net of tax write-off of the $170 million of deferred
costs related to the $1.4 billion of abeyed River Bend plant
costs would be required if they are not allowed to be recovered
in rates.
See pages 103 and 180 of the Form 10-K for the accounting
treatment of preacquisition contingencies, including any River
Bend write-down.
FERC Audit - Proposed Settlement
Entergy Corporation and System Energy
In December 1990, FERC Division of Audits issued an audit
report for System Energy for the years 1986 through 1988. The
report recommended that System Energy (1) write off, and not
recover in rates, approximately $95 million of Grand Gulf 1 costs
included in utility plant related to certain System income tax
allocation procedures alleged to be inconsistent with FERC's
accounting requirements, and (2) compute refunds for the years
1987 to date to correct for resulting overcollections from AP&L,
LP&L, MP&L, and NOPSI.
In August 1992, FERC issued an opinion and order (August 4
Order) which found that System Energy overstated its Grand Gulf 1
utility plant account by approximately $95 million as indicated
in FERC's report. The order required System Energy to make
adjusting accounting entries and refunds, with interest, to AP&L,
LP&L, MP&L, and NOPSI within 90 days from the date of the order.
System Energy filed a request for rehearing, and in October 1992,
FERC issued an order allowing additional time for its
consideration of the request. In addition, it deferred System
Energy's refund obligation until 30 days after FERC issues an
order on rehearing.
In June 1994, System Energy, AP&L, LP&L, MP&L, and NOPSI
reached a tentative settlement with the FERC staff and other
parties. The proposed settlement was filed with FERC on October
7, 1994. FERC has not approved the proposed settlement, and
therefore, the effects of the settlement have not been recorded.
The proposed settlement would require System Energy to refund or
credit approximately $61.7 million to AP&L, LP&L, MP&L, and
NOPSI, which would in turn make refunds or credits to their
customers (except for those portions attributable to AP&L's and
LP&L's retained share of Grand Gulf 1 costs). Additionally,
System Energy would refund or credit a total of approximately $62
million, plus interest, to AP&L, LP&L, MP&L, and NOPSI over the
period through June 2004. The proposed settlement would also
require the write-off of certain related unamortized balances of
deferred investment tax credits by AP&L, LP&L, MP&L, and NOPSI.
Had the proposed settlement been effective in the third quarter
of 1994, it would have reduced Entergy Corporation's consolidated
net income for the quarter and nine months ended September 30,
1994, by approximately $68.2 million, offset by the write-off of
the unamortized balances of related deferred investment tax
credits of approximately $69.4 million ($2.9 million for Entergy
Corporation; $27.3 million for AP&L; $31.5 million for LP&L; $6
million for MP&L; and $1.7 million for NOPSI). Pursuant to the
proposed settlement, System Energy would also reclassify from
utility plant to other deferred debits approximately $81 million
of other Grand Gulf 1 costs. Although excluded from rate base,
System Energy would be permitted to recover such costs over a 10
year period. Interest on the $62 million refund and the loss of
the return on the $81 million of other Grand Gulf 1 costs will
reduce Entergy's and System Energy's net income by approximately
$10 million annually over the next 10 years. There can be no
assurance that FERC will ultimately approve the settlement in its
current form.
As a result of the charges associated with the refunds,
System Energy requires the consent of certain banks (parties to
the Reimbursement Agreements) to waive temporarily the fixed
charge coverage and equity ratio covenants in the letters of
credit and Reimbursement Agreement related to the Grand Gulf 1
sale and leaseback transaction. System Energy has obtained the
consent of the banks to waive these covenants, for the 12-month
period beginning with the earlier of a write-off or the first
refund, if such refund occurs prior to December 31, 1994. System
Energy believes the conditions included in the proposed
settlement are covered by the waiver. The waiver is conditioned
upon System Energy not paying any common stock dividends to
Entergy Corporation until the equity ratio covenant is once again
met. Absent a waiver, System Energy's failure to perform these
covenants could cause a draw under the letters of credit and/or
early termination of the letters of credit. If the letters of
credit were not replaced in a timely manner, a default or early
termination of System Energy's leases could result.
Texas Cities Rate Settlement
Entergy Corporation and GSU
In June 1993, 13 cities within GSU's Texas service area
instituted an investigation to determine whether GSU's current
rates were justified. In October 1993, the general counsel of
the PUCT instituted an inquiry into the reasonableness of GSU's
rates. In November 1993, a settlement agreement was filed with
the PUCT which provided for an initial reduction in GSU's annual
retail base revenues in Texas of approximately $22.5 million
effective for electric usage on or after November 1, 1993, and a
second reduction of $20 million effective September 1994.
Pursuant to the settlement, GSU reduced rates with a $20 million
one-time bill credit in December 1993, and refunded approximately
$3 million to Texas retail customers on bills rendered in
December 1993. The PUCT approved the settlement agreement on
July 21, 1994. The cities' rate inquiries were settled earlier
on the same terms.
Filings with the PUCT and Texas Cities
Entergy Corporation and GSU
In March 1994, the Texas Office of Public Utility Counsel
and certain cities served by GSU instituted a second
investigation of the reasonableness of GSU's rates. In June
1994, GSU provided the cities with information that GSU believes
supports the current rate level. GSU filed the same information
with the PUCT in June 1994, pursuant to provisions of the Merger.
In August 1994, the cities' consultants issued a report that
indicated GSU's current rates were approximately $40 to $50
million in excess of current requirements. GSU can provide no
assurance as to the ultimate outcome in this matter, and any
resulting rate reduction could be applied retroactively to March
31, 1994, in accordance with the Merger agreement.
In September 1994, various cities adopted ordinances
directing GSU to reduce its Texas retail rates by $45.9 million.
GSU has appealed the cities' ordinances to the PUCT where the
reasonableness of GSU's rates will be reviewed. Hearings are
scheduled to begin in November 1994.
LPSC Investigation
Entergy Corporation, GSU, and LP&L
In May 1994, GSU made the required first post-Merger
earnings analysis filing with the LPSC, which indicated a revenue
deficiency of $46.4 million. On September 22, 1994, LPSC
consultants recommended that GSU base rates be reduced by $30
million. On November 7, 1994, LPSC consultants filed additional
testimony which recommended lowering GSU's rate reduction to
$10.8 million from the previously recommended $30 million rate
reduction. Hearings are scheduled to begin on November 14, 1994.
Recognizing that LP&L was subject to a rate freeze until
March 1994, the LPSC requested LP&L to explain its "relatively
high cost of debt" compared to other electric utilities subject
to LPSC jurisdiction. LP&L responded to this request, and in an
August 1993 report to the LPSC, the LPSC's legal consultants
acknowledged LP&L's rationale for its cost of debt in comparison
to two other utilities subject to the LPSC's jurisdiction. In
October 1993, the LPSC approved a schedule to conduct a review of
LP&L's rates and rate structure upon the expiration of LP&L's
rate freeze. Discovery is currently underway and hearings are
scheduled to begin in December 1994. In August 1994, LP&L filed
a performance-based formula rate plan with the LPSC. The
proposed formula rate plan would continue existing LP&L rates at
current levels, while providing financial incentive to reduce
costs and maintain high levels of customer satisfaction and
system reliability. A performance rating adjustment feature of
the plan would allow LP&L the opportunity to earn a higher rate
of return if it improves performance over time. Conversely, if
performance declines, the rate of return LP&L could earn would be
lowered. This provides financial incentive for LP&L to maintain
continuous improvement in all three performance categories
(customer price, customer satisfaction, and customer
reliability). Under the proposed plan, if LP&L's earnings fall
within a bandwidth around a benchmark rate of return, there would
be no adjustment in rates. If LP&L's earnings are above the
bandwidth, the proposed plan would automatically reduce LP&L's
base rates. Alternatively, if LP&L's earnings are below the
bandwidth, the proposed plan would automatically increase LP&L's
base rates. The reduction or increase in base rates would be an
amount representing 50% of the difference between the earned rate
of return and the nearest limit of the bandwidth. In no event
would the annual adjustment in rates exceed 2% of LP&L's retail
revenues. Hearings are scheduled to begin in February 1995.
February 1994 Ice Storm
Entergy Corporation, AP&L, and MP&L
In early February 1994, an ice storm left more than 221,000
Entergy customers without electric power across the System's four-
state service area. The storm was the most severe natural
disaster ever to affect the System, causing damage to
transmission and distribution lines, equipment, poles, and
facilities in certain areas, primarily in Mississippi. Repair
costs totaled approximately $110.3 million, $28.6 million, and
$73.8 million for the System, AP&L, and MP&L, respectively, with
$79.8 million, $17.0 million, and $61.0 million of these amounts
capitalized as plant-related costs. The remaining balances have
been charged against the respective companies' regulatory storm
damage reserves, except for MP&L which recorded a deferred debit.
Estimated construction expenditures (see Note 1) reflect the
above amounts. On April 15, 1994, MP&L filed for rate recovery
of costs related to the ice storm. MP&L's filing, as
subsequently amended, requested recovery of the revenue
requirement associated with MP&L's ice storm costs recorded
through April 30, 1994, representing approximately 86% of the
total estimated ice storm costs. MP&L intends to make another
ice storm rate filing with the MPSC by early 1995 to recover ice
storm costs recorded by MP&L after April 30, 1994. In August
1994, MP&L and the MPSC's Public Utilities Staff (MPUS) entered
into a stipulation with respect to the recovery of ice storm
costs recorded through April 30, 1994, and in September 1994, the
MPSC approved the stipulation. Under the stipulation, MP&L will
implement for five years, an ice storm rider schedule, which
went into effect on September 29, 1994, that will increase rates
approximately $8 million annually. At the end of the five year
period, the revenue requirement associated with the undepreciated
ice storm capitalized costs will be included in MP&L's base rates
to the extent that this revenue requirement does not result in
MP&L's rate of return on rate base being above the benchmark rate
of return under MP&L's formula rate plan.
NOPSI Rate Reduction/Credit
Entergy Corporation and NOPSI
See pages 27 and 266-268 of the Form 10-K for information
regarding the 1991 NOPSI Settlement and a 1992 gas rate
settlement. Under the terms of the 1991 NOPSI Settlement and a
1992 gas rate settlement, NOPSI agreed that during the period
October 1, 1992 through October 31, 1996, the Council will have
the right to investigate the appropriateness of NOPSI's rates if
NOPSI's return on equity on its operations (calculated in
accordance with the applicable provisions of the 1991 NOPSI
Settlement and a 1992 gas rate settlement) for twelve month
periods subsequent to September 30, 1992, were to exceed 13.76%,
and after rate hearing(s), to impose a credit on NOPSI's
customers' bills over the ensuing twelve month period in an
amount that would have allowed NOPSI, during the relevant test
year, to earn a return on equity incident to its operations of no
less than 12.76%.
On July 7, 1994, NOPSI and the Council agreed that, based on
the test year ended September 30, 1993, NOPSI's earnings exceeded
its revenue requirement by $24.95 million and in accordance with
the terms of the 1991 NOPSI Settlement and a 1992 gas rate
settlement, there would be a prospective base rate reduction for
twelve months commencing July 14, 1994. The reduction, because
of a rate freeze, will be accomplished by means of a credit (to
be expressed on a per KWH basis) to customers' bills. The per
kilowatt hour credit will be calculated by dividing test year
overearnings by test year KWH consumption and applied to kilowatt
hour usage during the period ending July 13, 1995. In the first
quarter of 1994, NOPSI recorded a $14.3 million reserve for the
anticipated revenue reduction, which reduced net income by $8.8
million (net of tax). The reserve has been and will continue to
be reduced by the actual credits prospectively applied to
customers bills in accordance with the terms of the July 7, 1994
agreement.
Management believes that any rate investigation by the
Council in accordance with the 1991 settlement agreement and a
1992 gas rate settlement which may propose a base rate reduction
to be in effect after the expiration of the rate freeze should
reflect, as an offset, any rate reduction credit then in effect
as a result of overearnings during the rate freeze period. NOPSI
can provide no assurance as to the level of return on common
equity that will be achieved from operations, nor the amount of
rate reduction/credit, if any, prior to or after the end of the
rate freeze. On November 1, 1994, NOPSI filed with the Council
an analysis of its earnings for the test year ended September 30,
1994, which indicated a rate reduction/credit of approximately
$24 million is required. The Council is expected to order a
hearing in the fourth quarter of 1994 to render a final decision
on the actual amount, method, and timing of the credit.
LPSC Fuel Cost Review
GSU
In November 1993, the LPSC ordered a review of GSU's fuel
costs. The LPSC stated that fuel costs for the period October
1988 through September 1991 (Phase 1) would be reviewed based on
the number of outages at River Bend and the findings in the June
1993 PUCT fuel reconciliation case. In July 1994, the LPSC made
a decision in the Phase 1 fuel review case and ordered GSU to
refund approximately $27 million to its customers. Under the
order, a refund of $13.1 million, which was not contested under a
recent Louisiana Supreme Court decision as discussed below, was
made through a billing credit on August bills. In August 1994,
GSU appealed the remaining portion of the LPSC ordered refund to
the district court. GSU has made no reserve for the remaining
portion, pending outcome of the district court appeal.
In February 1990, the LPSC disallowed the pass-through to
ratepayers for the portion of GSU's cost to purchase power from
Nelson Industrial Steam Company (NISCO) representing the excess
of NISCO's purchase price of the units over GSU's depreciated
cost of the units. GSU appealed the 1990 order. In March 1994,
the Louisiana Supreme Court ruled in favor of the LPSC. GSU
recorded an estimated refund provision of $13.1 million, before
related income taxes of $5.3 million.
PUCT Fuel Cost Review
GSU
For information on the June 1993 PUCT fuel reconciliation
case, see page 164 of the Form 10-K. In June 1994, GSU filed a
petition with the PUCT for the reconciliation of over- and under-
recovery of fuel and purchased power expenses for the period
October 1, 1991, through December 31, 1993, in accordance with
the Texas Merger settlement agreement. GSU is required to
reconcile its fuel costs from the end of the period of its last
fuel reconciliation through the Merger closing date to reflect
the fuel and purchased power costs GSU incurred as a stand-alone
company. GSU believes there was a net under-recovery of
approximately $4.6 million for the period but has indicated that
it does not propose to surcharge the under-recovery at this time.
A prehearing conference was held on July 18, 1994, at which time
a procedural schedule was adopted which provides for hearings to
begin on January 9, 1995.
NOTE 3. LINES OF CREDIT AND RELATED BORROWINGS
See pages 89, 129, 169, 203, 239, 270, and 300 of the Form
10-K for information on Entergy Corporation's, the System
operating companies', and System Energy's short-term borrowing
authorizations, including the Money Pool, and certain limitations
thereon, and lines of credit with banks. On March 25, 1994,
GSU received SEC authorization to participate in the Money Pool.
GSU is authorized to effect short-term borrowings of up to $125
million, subject to increase to as much as $455 million after
further SEC approval. On April 21, 1994, AP&L, LP&L, and MP&L
received SEC approval to increase their short-term borrowing
limits to $200 million (from $125 million), $200 million (from
$125 million), and $113 million (from $100 million),
respectively. As of September 30, 1994, the System operating
companies and System Energy had no outstanding borrowings from
the Money Pool. As of September 30, 1994, Entergy Corporation,
the System operating companies, and System Energy had outstanding
short-term borrowings from banks as follows (in millions):
Company Banks
Entergy Corporation -
AP&L $34.0
GSU -
LP&L $19.2
MP&L $30.0
NOPSI -
System Energy -
As of September 30, 1994, GSU had unused lines of credit for
short-term borrowings of $5.0 million.
NOTE 4. PREFERRED AND COMMON STOCK
Entergy Corporation
Entergy Corporation periodically repurchases shares of its
outstanding common stock either on the open market or through
negotiated purchases or tender offers. Stock repurchases are
made from time to time depending upon market conditions and
authorization of the Entergy Corporation Board of Directors.
During the first nine months of 1994, 4,035,000 shares of common
stock were repurchased and were accounted for as treasury stock
using the average cost method at a cost of $119.5 million. In
August 1994, 1,230,000 shares of the common stock repurchased
were retired.
AP&L
During the first nine months of 1994, AP&L redeemed the
following series of preferred stock pursuant to sinking fund
requirements:
Redemption Date Series Par Value Shares
1/1/94 13.28% Series $25 200,000
6/1/94 9.92% Series $25 80,000
7/1/94 10.60% Series $100 20,000
On November 1, 1994, AP&L redeemed, pursuant to sinking fund
requirements, 25,000 shares of its 8.52% Series Preferred Stock,
$100 par value.
GSU
GSU has requested, but not yet received, SEC authorization
to issue and sell, through December 31, 1995, up to $700 million
aggregate principal amount of preferred stock and/or first
mortgage bonds and medium term notes. The proceeds will be used
for general corporate purposes and the repayment and/or
redemption of certain outstanding securities. On March 15, 1994,
GSU redeemed, pursuant to sinking fund requirements, 22,500
shares of its Adjustable Rate Series B Preferred Stock, $100 par
value.
LP&L
During the first nine months of 1994, LP&L redeemed the
following series of preferred stock pursuant to sinking fund
requirements:
Redemption Date Series Par Value Shares
2/1/94 12.64% Series $25 300,000
5/2/94 14.72% Series $25 416
7/1/94 10.72% Series $25 240,000
On October 1, 1994, LP&L redeemed, pursuant to sinking fund
requirements, 61,121 shares of its 13.12% Series Preferred Stock,
$25 par value, which represented the remaining outstanding shares
of this series.
MP&L
During the first nine months of 1994, MP&L redeemed the
following series of preferred stock pursuant to sinking fund
requirements:
Redemption Date Series Par Value Shares
Date
1/1/94 9.76% Series $100 70,000
3/1/94 12.00% Series $100 10,000
7/1/94 9.00% Series $100 70,000
NOPSI
On March 1, 1994, NOPSI redeemed 15,000 shares of its 15.44%
Series Preferred Stock, $100 par value.
NOTE 5. LONG-TERM DEBT
AP&L
AP&L has SEC authorization to enter into arrangements for
the issuance and sale, through December 31, 1996, of up to $200
million aggregate principal amount of tax-exempt bonds. The
proceeds have been or will be used to acquire and construct
certain pollution control or sewage and solid waste disposal
facilities at AP&L's generating plants or to refinance
outstanding tax-exempt bonds issued for that purpose. On June
22, 1994, AP&L entered into arrangements with Pope County,
Arkansas, and Jefferson County, Arkansas, for the issuance and
sale of $19.5 million of 6.30% Pollution Control Revenue
Refunding Bonds (Pope Bonds) due 2016 and $9.2 million of 6.30%
Pollution Control Revenue Refunding Bonds (Jefferson Bonds) due
2018, respectively. Funds provided by the issuance of the Pope
Bonds and Jefferson Bonds were used on July 15, 1994, to redeem
$16.6 million of Pope County, Arkansas Pollution Control Revenue
Bonds 7.375% due 2006, $2.9 million of Pope County, Arkansas
Pollution Control Revenue Bonds 7.25% due 2008, and $9.2 million
of Jefferson County, Arkansas Pollution Control Revenue Bonds
7.25% due 2008. During the first nine months of 1994, AP&L
redeemed the following first mortgage bonds pursuant to sinking
fund requirements:
Redemption Date Series Principal
(in thousands)
2/1/94 8.75% Series Due 1998 $400
5/1/94 6.25% Series Due 1996 $200
8/1/94 9.75% Series Due 2000 $200
GSU
GSU has requested, but not yet received, SEC authorization
to issue and sell, through December 31, 1995, up to $700 million
aggregate principal amount of its first mortgage bonds, medium
term notes and/or preferred stock. The proceeds will be used for
general corporate purposes and the repayment or redemption of
certain outstanding securities. GSU has also requested, but not
yet received, SEC authorization to enter into arrangements for
the issuance and sale, through December 31, 1995, of up to $250
million aggregate principal amount of tax-exempt bonds for the
financing or refinancing of certain sewage and/or solid waste
disposal facilities. The proceeds from the sale of tax-exempt
bonds will be used to finance certain sewage and/or solid waste
disposal or pollution control facilities or to refinance
outstanding tax-exempt bonds issued for that purpose. In
addition, GSU has requested, but has not yet received, SEC
authorization to purchase or otherwise acquire its outstanding
pollution control revenue bonds and/or industrial development
revenue bonds through December 31, 1995. On July 1, 1994, GSU
redeemed, pursuant to sinking fund requirements, $0.425 million
of Iberville Parish 7.0% Series Pollution Control Revenue Bonds.
LP&L
LP&L has requested, but not yet received, SEC authorization
to undertake the refunding of approximately $310 million of
intermediate-term and long-term bonds issued by the Owner Trustee
to acquire interests in Waterford 3 in 1989. Such bonds became
optionally redeemable in July 1994. On July 20, 1994, LP&L
entered into arrangements with the Parish of St. Charles,
Louisiana, for the issuance of $20.4 million of its 6-7/8%
Environmental Revenue Bonds due 2024. During the first nine
months of 1994, LP&L redeemed, pursuant to sinking fund
requirements, $0.2 million of various series of its pollution
control and industrial revenue bond obligations. On June 1,
1994, LP&L retired $25 million of its 4.625% Series First
Mortgage Bonds upon maturity.
MP&L
On April 1, 1994, MP&L retired $30 million of its 9.9%
Series G&R Bonds upon maturity. On April 20, 1994, MP&L entered
into arrangements with Warren County, Mississippi and Washington
County, Mississippi for the issuance of $16.0 million principal
amount of 7% Pollution Control Revenue Refunding Bonds due 2022,
the proceeds of which were used to redeem $8.1 million principal
amount of 8.5% Warren County Pollution Control Revenue Bonds and
$7.9 million principal amount of 7.5% Washington County Pollution
Control Revenue Bonds on May 13, 1994. On July 14, 1994, MP&L
issued $25 million of its 8.25% Series G&R Bonds due 2004. A
portion of the net proceeds from the issuance and sale of these
G&R Bonds was used on July 15, 1994, to retire $18 million of
MP&L's 11.11% Series G&R Bonds upon maturity.
NOPSI
On May 2, 1994, NOPSI redeemed, pursuant to sinking fund
requirements, $15 million of its 10.95% Series G&R Bonds.
System Energy
On January 11, 1994, System Energy refinanced $435 million
aggregate principal amount of secured lease obligation bonds
originally issued as part of the financing for the sale and
leaseback of undivided portions of Grand Gulf 1. The secured
lease obligation bonds of $356 million, 7.43% series due 2011 and
$79 million, 8.2% series due 2014 are indirectly secured by liens
on, and a security interest in, certain ownership interests and
the respective leases relating to Grand Gulf 1. On April 28,
1994, System Energy issued $60 million of its 7-5/8% Series First
Mortgage Bonds due 1999. On May 2, 1994, System Energy redeemed,
pursuant to mandatory and optional sinking fund requirements, $60
million of its 11% Series First Mortgage Bonds due 2000.
NOTE 6. RETAINED EARNINGS
On October 28, 1994, Entergy Corporation's Board of
Directors declared a common stock dividend of 45 cents per share
payable on December 1, 1994.
NOTE 7. NEW ACCOUNTING STANDARDS
SFAS 115
The System adopted the provisions of SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities," effective January 1, 1994. As a result, as of
September 30, 1994, the System has recorded on the balance sheet
an additional $9.1 million in decommissioning trust funds,
representing the amount by which the fair value of the securities
held in such funds exceeds the amounts recovered in rates and
deposited in the funds and the related earnings on the amounts
deposited. Due to the regulatory treatment for decommissioning
trust funds, the System recorded an offsetting amount in
unrealized gains on investment securities as a regulatory
liability in other deferred credits.
SFAS 116
In the third quarter of 1994, the System adopted the
provisions of SFAS No. 116, "Accounting for Contributions
Received and Contributions Made." As a result, the System
recorded a liability of approximately $10.8 million for
contribution commitments.
NOTE 8. PREACQUISITION CONTINGENCIES
Entergy Corporation and GSU
See pages 103 and 180 of the Form 10-K for a discussion of
accounting for preacquisition contingencies in connection with
the Merger. Entergy Corporation has completed its analyses with
respect to certain GSU preacquisition contingencies and has
revised the allocation of the purchase price for a number of
preacquisition contingencies. In September 1994, GSU wrote-off
assets or recorded liabilities totaling approximately $67.8
million net of tax for the Cajun-River Bend litigation, unfunded
Cajun-River Bend costs, environmental cleanup costs, obsolete
spare parts, and Louisiana River Bend rate deferrals previously
disallowed by the LPSC (see pages 86 and 165 of the Form 10-K).
Entergy Corporation is continuing its analyses of certain other
preacquisition contingencies and additional adjustments to the
allocation of the purchase price may occur in the fourth quarter
of 1994.
NOTE 9. RESTRUCTURING COSTS
Entergy, AP&L, GSU, LP&L, MP&L, and NOPSI
During the third quarter of 1994, Entergy announced a
restructuring program related to certain of its operating units.
The program is designed to reduce costs, improve operating
efficiencies, and increase shareholder value in order to enable
Entergy to become a low-cost producer. The program includes
reductions in the number of employees and the consolidation of
offices and facilities. In the third quarter of 1994, AP&L, GSU,
LP&L, MP&L, and NOPSI recorded restructuring charges of $7.9
million, $6.1 million, $3.3 million, $2.2 million, and $2.8
million respectively. These charges primarily include employee
severance costs related to the expected termination of
approximately 1,084 employees. As of September 30, 1994, no
employees have been terminated and no termination benefits have
been paid under this restructuring program.
Additionally, GSU recorded $23.8 million in the third quarter
of 1994 for remaining severance and augmented retirement benefits
related to the Merger.
__________________________________________
In the opinion of Entergy Corporation, AP&L, GSU, LP&L,
MP&L, NOPSI, and System Energy, the accompanying unaudited
condensed financial statements contain all adjustments
(consisting primarily of normal recurring accruals and
reclassifying previously reported amounts to conform to current
classifications) necessary for a fair statement of the results
for the interim periods presented. However, the business of
AP&L, GSU, LP&L, MP&L, and NOPSI is subject to seasonal
fluctuations with the peak period occurring during the summer
months. The results for the interim periods presented should not
be used as a basis for estimating results of operations for a
full year.
In accordance with the purchase method of accounting, the
1993 third quarter and first nine months results of operations
for Entergy Corporation reported in its Statements of
Consolidated Income and Cash Flows do not include GSU's results
of operations. However, the Results of Operations discussion in
"Management's Financial Discussion & Analysis" is presented with
GSU's 1993 results of operations included for comparative
purposes. This information is not necessarily indicative of the
results of operations that would have occurred had the Merger
been consummated for the period for which it is being given
effect, nor is it necessarily indicative of future operating
results.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
ARKANSAS POWER & LIGHT COMPANY
GULF STATES UTILITIES COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy
Liquidity is important to Entergy due to the capital
intensive nature of its business, which requires large
investments in long-lived assets. While large capital
expenditures for the construction of new generating capacity are
not currently planned, the System does require significant
capital resources for the periodic maturity of certain series of
debt and preferred stock and ongoing construction expenditures.
See Note 1 for additional information on the System's capital and
refinancing requirements in 1994 - 1996. Net cash flow from
operations for Entergy, the System operating companies, and
System Energy for the nine months ended September 30, 1994 and
1993, was as follows (in millions):
Nine Months Nine Months
Company Ended 9/30/94 Ended 9/30/93
Entergy * $1,120.6 $776.4
AP&L $ 256.8 $269.5
GSU $ 278.3 $173.2
LP&L $ 304.5 $225.4
MP&L $ 154.4 $109.8
NOPSI $ 61.0 $ 21.6
System Energy $ 206.9 $253.4
* Entergy's net cash flow from operations for the nine months
ended September 30, 1993, excludes GSU because the Merger
was not yet consummated.
In the first nine months of 1994, as in recent years, cash
from operations, supplemented by cash on hand, was sufficient to
meet substantially all investing and financing requirements,
including capital expenditures, dividends, and debt/preferred
stock maturities. (However, MP&L substantially increased its
short-term borrowings because of unexpected costs incurred as a
result of an ice storm.) Entergy's ability to fund most of its
capital requirements with cash from operations results, in part,
from continued efforts to streamline operations and reduce costs
as well as collections under the Grand Gulf 1 rate phase-in
plans, which exceed current cash requirements for Grand Gulf 1-
related costs. (In the income statement, these revenue
collections are offset by the amortization of previously deferred
costs; therefore, there is no effect on net income.) The System
operating companies and System Energy have the ability, subject
to regulatory approval, to meet capital requirements through
future debt or preferred stock issuances, as discussed below.
Also, to the extent current market interest and dividend rates
allow, the System operating companies and System Energy may
continue to refinance high-cost debt and preferred stock prior to
maturity.
Productive investment of excess funds is necessary to
enhance the long-term value of Entergy Corporation's common
stock. Entergy Corporation expects to invest approximately $150
million per year in nonregulated and nonutility businesses. See
"Significant Factors and Known Trends - Nonregulated Investments"
for additional information. In October 1994, Entergy Corporation
invested $50 million in the Hub River Company which is
constructing a generating station near Karachi, Pakistan.
Entergy Corporation's current primary capital requirements
are to periodically invest in, or make loans to, its
subsidiaries. Entergy Corporation expects to meet these
requirements in 1994 - 1996 with internally generated funds and
cash on hand. Entergy Corporation also pays dividends on its
common stock, which aggregated $309.5 million in the first nine
months of 1994. Declarations of dividends on common stock are
made at the discretion of Entergy Corporation's Board of
Directors (Board). Management will recommend future dividend
increases to the Board only if such increases are justified by
sustained earnings growth of Entergy Corporation and its
subsidiaries. Entergy Corporation receives funds through
dividend payments from its subsidiaries. During the first nine
months of 1994, these common stock dividend payments totaled
$621.2 million. Certain restrictions may limit the amount of
these distributions (see page 94 of the Form 10-K and Note 2).
Entergy Corporation has a program to repurchase shares of
its outstanding common stock. The timing and amount of such
repurchases depend upon market conditions and authorization from
the Board. See Note 4 for additional information. Entergy
Corporation has requested, but not yet received, SEC
authorization for a $300 million bank line of credit, the
proceeds of which are expected to be used for common stock
repurchases, investments in nonregulated and nonutility
businesses, and other activities. Certain parties have
intervened in this proceeding, and the application is pending.
Earnings coverage tests, bondable property additions, and
equity ratio requirements (in the case of System Energy) limit
the amount of mortgage bonds and preferred stock that can be
issued by each of the System operating companies and System
Energy. Based on the most restrictive applicable tests as of
September 30, 1994, and an assumed annual interest or dividend
rate of 9.25%, each of the System operating companies and System
Energy could have issued bonds or preferred stock in the
following amounts (in millions):
Company Bonds Preferred
Stock
AP&L $239 $348
GSU $ - $ -
LP&L $ 87 $513
MP&L $246 $ 81
NOPSI $ 88 $ 88
System $295 *
Energy
* System Energy's charter does not provide for the issuance of
preferred stock.
In addition, the System operating companies and System
Energy have the conditional ability to issue bonds against the
retirement of bonds, in some cases without meeting an earnings
coverage test. As a result of the charges recorded in the third
quarter of 1994 as discussed in Notes 8 and 9, GSU is currently
precluded from issuing first mortgage bonds under its earnings
coverage test. However, GSU has the ability to issue up to
approximately $526 million of first mortgage bonds against
previously retired bonds. AP&L may also issue preferred stock to
refund outstanding preferred stock without meeting an earnings
coverage test. GSU has no earnings coverage limitations on the
issuance of preference stock. For information on the System
operating companies' and System Energy's regulatory
authorizations to issue and acquire securities, see Notes 4 and
5, and pages 90-94, 129-131, 170-172, 204-206, 239-241, 271-272,
and 301 of the Form 10-K. See Note 3 for information on the
System's short-term borrowings.
Entergy Corporation and GSU
In September 1994, Entergy Corporation completed its
analyses with respect to certain preacquisition contingencies and
revised the allocation of the purchase price for a number of
preacquisition contingencies. In accordance with the purchase
method of accounting, Entergy Corporation increased its
acquisition adjustment and GSU reduced net income by
approximately $67.8 million net of tax. See Notes 2 and 8 for
additional information on provisions for preacquisition
contingencies recorded in September 1994.
See Notes 1 and 2, and Part II, Item 1. "Legal
Proceedings," regarding litigation with Cajun and River Bend rate
appeals. Substantial write-offs or charges resulting from
adverse rulings in these matters could result in substantial
additional net losses being reported by GSU in 1994, and
subsequent periods, with resulting substantial adverse
adjustments to common shareholder's equity. Also, adverse
resolution of these matters could adversely affect GSU's ability
to continue to pay dividends and obtain financing, which could in
turn affect GSU's liquidity.
Entergy Corporation and System Energy
In connection with the financing of Grand Gulf 1, Entergy
Corporation has undertaken to provide System Energy with
sufficient capital to (1) maintain System Energy's equity capital
at an amount equal to at least 35% of System Energy's total
capitalization (excluding short-term debt), (2) permit the
continuation of commercial operation of Grand Gulf 1, and (3)
enable System Energy to pay in full all borrowings of System
Energy, whether at maturity, on prepayment, on acceleration or
otherwise. In addition, Entergy Corporation has agreed to make
certain cash capital contributions, if required, to enable System
Energy to make payments when due on its long-term debt.
System Energy
The financial condition of System Energy significantly
depends on the continued commercial operation of Grand Gulf 1 and
on the receipt of payments from AP&L, LP&L, MP&L, and NOPSI.
Such payments are System Energy's only source of operating
revenues.
In addition, System Energy's financial condition could be
affected by the outcome of a pending FERC audit matter. As
discussed in Note 2, FERC Division of Audits issued a report in
December 1990 that recommended that System Energy write off and
not recover in rates approximately $95 million of Grand Gulf 1
costs included in utility plant, and compute refunds for
overcollections from AP&L, LP&L, MP&L, and NOPSI.
In June 1994, System Energy, AP&L, LP&L, MP&L, and NOPSI
reached a tentative settlement with the FERC staff and certain
other parties. The proposed settlement was filed with FERC on
October 7, 1994. FERC has not approved the proposed settlement,
and therefore, the effects of the settlement have not been
recorded. The proposed settlement, which is subject to approval
by FERC, would require System Energy to refund or credit
approximately $61.7 million to AP&L, LP&L, MP&L, and NOPSI, which
would in turn make refunds or credits to their customers (except
for those portions attributable to AP&L's and LP&L's retained
share of Grand Gulf 1 costs). Additionally, System Energy would
refund or credit a total of approximately $62 million, plus
interest, to AP&L, LP&L, MP&L, and NOPSI over the period through
June 2004. Interest on the $62 million refund and loss of the
return on certain Grand Gulf 1 costs will reduce Entergy's and
System Energy's net income by approximately $10 million annually
over the next 10 years. However, there can be no assurance that
FERC will ultimately approve the settlement in its current form.
See Note 2 for additional information. Also, see Note 1 for
certain restrictions on the payment of common dividends by System
Energy in connection with the proposed settlement.
NOPSI
As discussed in Note 2, under the terms of the 1991 NOPSI
Settlement and a 1992 gas rate settlement, the Council has the
right to review NOPSI's return on equity annually through October
31, 1996. Also, NOPSI is currently operating under electric and
gas base rate freezes through October 31, 1996.
On July 7, 1994, NOPSI and the Council agreed that, based on
the test year ended September 30, 1993, NOPSI's earnings exceeded
its revenue requirement by $24.95 million and in accordance with
the terms of the 1991 NOPSI Settlement and a 1992 gas rate
settlement, there would be a prospective base rate reduction for
twelve months commencing July 14, 1994. The reduction, because of
a rate freeze, will be accomplished by means of a credit (to be
expressed on a per KWH basis) to customers' bills.
On November 1, 1994, NOPSI filed with the Council an
analysis of its earnings for the test year ended September 30,
1994, which indicated a rate reduction/credit of approximately
$24 million is required.
RESULTS OF OPERATIONS
ENTERGY
On December 31, 1993, GSU became a subsidiary of Entergy
Corporation. In accordance with the purchase method of
accounting, the nine months ended September 1993 results of
operations for Entergy Corporation and subsidiaries reported in
its Statements of Consolidated Income and Cash Flows do not
include GSU's results of operations. However, the following
discussion is presented with GSU's 1993 results of operations
included for comparative purposes.
In the third quarter of 1994, Entergy recorded certain one-
time, non-recurring charges which significantly affected results
of operations as discussed below. These one-time charges
included, among other things, Merger related costs and
restructuring costs (see Note 9).
Net Income
Consolidated net income decreased $151.5 million in the
third quarter of 1994 due primarily to decreased revenues,
increased merger-related costs, certain restructuring costs, and
decreased miscellaneous income - net, partially offset by a
decrease in interest expense as explained below.
Consolidated net income decreased in the first nine months
of 1994 due primarily to the one-time recording in 1993 of the
cumulative effect of the change in accounting principle for
unbilled revenues for AP&L, MP&L, GSU, and NOPSI. Excluding the
effect of the change in accounting principle, net income
decreased in the first nine months of 1994 by approximately
$150.2 million. This resulted from a decrease in retail
revenues, increased merger related costs, certain restructuring
costs, and decreased miscellaneous income - net, partially offset
by a decrease in interest on long-term debt and preferred
dividend requirements as a result of continued debt refinancing
and stock redemption activities.
Significant factors affecting the results of operations and
causing variances between the third quarter and first nine months
of 1994 and 1993 are discussed under "Revenues and Sales,"
"Expenses," and "Other" below.
Revenues and Sales
See Entergy's "Selected Operating Results" for information
on operating revenues by source and KWH sales.
Electric operating revenues decreased $178.5 million in the
third quarter due primarily to lower retail energy sales and
decreased unbilled revenues resulting from cooler than normal
summer weather as compared to 1993. Additionally, revenues were
lower due to decreased fuel adjustment revenues and rate
reductions at GSU and MP&L, and decreased fuel adjustment
revenues at NOPSI. Electric operating revenues decreased $31.0
million in the first nine months of 1994 due primarily to rate
reductions at GSU, MP&L, and NOPSI, and decreased unbilled
revenues, partially offset by increased retail energy sales.
Gas operating revenues increased $8.9 million in the first
nine months of 1994 due primarily to increased retail sales
resulting from colder than normal winter weather, partially
offset by lower gas sales in the third quarter of 1994 due to a
warmer than normal spring.
Expenses
Fuel for electric generation and fuel-related expenses
decreased $60.3 million in the third quarter of 1994 due
primarily to decreased energy sales as discussed in "Revenues and
Sales" above.
Purchased power decreased $27.0 million in the third quarter
of 1994 due primarily to decreased power purchases from
nonassociated utilities due to changes in generation requirements
for the System operating companies resulting primarily from
decreased energy sales and fuel-related costs.
Other operation and maintenance expenses increased in the
third quarter of 1994 due primarily to increased GSU merger
related costs, as discussed in Note 9, increased storm damage
costs and environmental reserves, and recognition of certain
restructuring costs.
Nuclear refueling outage expenses decreased $5.9 million in
the first nine months of 1994 due primarily due to Grand Gulf
outage expenses incurred in the third quarter of 1993 and lower
outage expense accruals at River Bend.
Income taxes decreased in the third quarter and first nine
months of 1994 due primarily to lower pre-tax book income.
The amortization of rate deferrals increased $33.6 million
in the first nine months of 1994 due primarily to collection of
more Grand Gulf 1-related costs from customers in 1994 as
compared to 1993.
Interest expense decreased $7.7 million in the third quarter
and $31.5 million for in the first nine months of 1994 due
primarily to the refinancing of high cost debt.
Preferred dividend requirements decreased $1.6 million in
the third quarter and $9.4 million for the first nine months of
1994 due primarily to stock redemption activities.
Other
Miscellaneous income - net decreased $22.6 million in the
third quarter and $43.9 million in the first nine months of 1994
due primarily to amortization of plant acquisition adjustments
related to the Merger, the early adoption of SFAS No. 116, as
discussed in Note 7, and reduced Grand Gulf 1 carrying charges at
AP&L.
AP&L
Net Income
Net income decreased in the third quarter of 1994 due
primarily to decreased operating revenues and increased operating
and maintenance expenses.
Net income decreased in the first nine months of 1994 due
primarily to the one-time recording in the first quarter of 1993
of the cumulative effect of the change in accounting principle
for unbilled revenues. Excluding the effect of the change in
accounting principle, net income decreased $27.4 million. This
decrease is due primarily to increased operation and maintenance
expense as a result of restructuring costs and storm damage
activity in the second and third quarters of 1994.
Significant factors affecting the results of operations and
causing variances between the third quarters and first nine
months of 1994 and 1993 are discussed under "Revenues and Sales"
and "Expenses" below.
Revenues and Sales
See AP&L's "Selected Operating Results" for information on
operating revenues by source and KWH sales.
Electric operating revenues decreased in the third quarter
of 1994 due to lower retail energy sales. Electric operating
revenues also decreased due to decreased collections of Grand
Gulf 1-related costs and lower fuel adjustment revenues, which do
not impact net income. Total sales increased in the third
quarter due primarily to increased sales for resale to associated
companies, caused by changes in generation availability and
requirements among the System operating companies, partially
offset by lower retail sales due to a cooler summer than prior
year.
Electric operating revenues and sales increased in the first
nine months of 1994 due primarily to an increase in sales for
resale to associated companies caused by changes in generation
availability and requirements among the System operating
companies, and increased commercial and industrial sales,
partially offset by decreased collections of Grand Gulf 1-related
costs and decreased recovery of fuel-related costs, which do not
impact net income.
Expenses
Purchased power decreased in the third quarter of 1994 as a
result of lower prices, partially offset by an increase in the
amount of power purchased. Other operation and maintenance
expense increased in the third quarter and first nine months of
1994 due primarily to storm damage costs and restructuring costs
as discussed in Note 9. Depreciation and decommissioning expense
increased in the third quarter and first nine months of 1994 due
primarily to additions and upgrades to the ANO isometric drawing
and financial management systems, and to additions and
replacements to the ANO steam generator and plant monitoring
systems. The amortization of rate deferrals decreased in the
third quarter of 1994 due primarily to reduced Grand Gulf 1
carrying charges.
Total income taxes decreased in the third quarter and first
nine months of 1994 due to lower pretax income.
Other
Miscellaneous income - net decreased in the third quarter of
1994 due primarily to reduced Grand Gulf 1 carrying charges.
GSU
Net Income
Net income decreased in the third quarter and first nine
months of 1994 primarily due to write-offs associated with
certain preacquisition contingencies as discussed in Note 8, and
additional merger related costs, and restructuring costs as
discussed in Note 9.
Significant factors affecting the results of operations and
causing variances between the third quarter and first nine months
of 1994 and 1993 are discussed under "Revenues and Sales" and
"Expenses" below.
Revenue and Sales
See GSU's "Selected Operating Results" for information on
operating revenues by source and KWH sales.
Operating revenues decreased in the third quarter of 1994
due primarily to lower retail revenues partially offset by
increased sales for resale. The decrease in electric operating
revenues was primarily due to a decrease in fuel recovery
revenue, current and prior year rate reductions in Texas and a
cooler summer than the prior year, which offset the increase in
wholesale revenues. Energy sales increased due to higher sales
for resale as a result of GSU's participation in the System power
pool.
Operating revenues increased slightly in the first nine
months of 1994 due primarily to increased wholesale revenues
associated with higher sales for resale partially offset by lower
retail revenues. The decrease in retail revenues is primarily due
to a decrease in fuel recovery revenue and a November 1993 rate
reduction in Texas, partially offset by favorable weather in the
first and second quarters as compared to the prior year. Sales
for resale increased as a result of GSU's participation in the
System power pool.
Expenses
Purchased power increased in the third quarter and first
nine months of 1994 due to GSU's participation in joint
dispatching through the System power pool resulting from
increased energy sales as discussed above. In addition, the
increase in purchased power expense for the first nine months of
1994 was also due to the recording of a provision for refund of
disallowed purchased power costs resulting from a Louisiana
Supreme Court ruling in the second quarter as discussed in Note
2. Fuel, fuel-related expenses and gas purchased for resale
decreased in the third quarter of 1994 primarily due to lower gas
prices. Operation and maintenance expenses increased in the third
quarter and first nine months of 1994 due primarily to charges
associated with certain preacquisition contingencies as discussed
in Note 8, additional merger related costs, and restructuring
costs as discussed in Note 9.
Income taxes decreased in the third quarter and first nine
months of 1994 due primarily to lower pretax income.
Taxes other than income taxes decreased in the first nine
months of 1994 due to a $15.1 million franchise tax refund.
Other
Miscellaneous income - net decreased in the third quarter
and first nine months of 1994 due primarily to certain
preacquisition contingencies as discussed in Note 8, including
Cajun River Bend litigation, the write-off of previously
disallowed rate deferrals, and obsolete spare parts.
Income taxes decreased in the third quarter and first nine
months of 1994 due primarily to the charges discussed above.
LP&L
Net Income
Net income decreased in the third quarter of 1994 due
primarily to decreased operating revenues and increased other
operation and maintenance expenses. For the first nine months of
1994 net income decreased primarily due to higher operation and
maintenance expenses.
Significant factors affecting the results of operations and
causing variances between the third quarters and first nine
months of 1994 and 1993 are discussed under "Revenues and Sales"
and "Expenses" below.
Revenues and Sales
See LP&L's "Selected Operating Results" for information on
operating revenues by source and KWH sales.
Electric operating revenues were lower in the third quarter
of 1994 primarily due to decreased retail and wholesale revenues.
The decrease in retail energy sales is primarily due to a cooler
summer than the prior year which reduced sales to residential and
commercial customers partially offset by higher industrial sales.
Lower sales for resale to associated and nonassociated companies
also contributed to the decrease in electric operating revenues
for the third quarter of 1994. In addition, completion of the
amortization of the proceeds resulting from litigation with a gas
supplier resulted in decreased other operating revenues for the
third quarter and first nine months of 1994.
Electric operating revenues were slightly higher during the
first nine months of 1994 primarily due to higher fuel adjustment
revenues, which do not affect net income, and increased retail
energy sales, partially offset by lower wholesale and other
operating revenues.
Expenses
Operating expenses decreased for the third quarter of 1994
primarily due to lower purchased power and income tax expense
partially offset by higher other operation and maintenance
expenses. Other operation and maintenance expense increased
primarily due to the impact of expenses related to restructuring
costs as discussed in Note 9 and power plant waste water site
closures as discussed in Note 1. Purchased power decreased
primarily due to lower cost. The decrease in income tax expense
reflects lower pretax book income for the third quarter of 1994.
Operating expenses increased slightly for the first nine
months of 1994 primarily due to higher fuel and other operation
and maintenance expense partially offset by lower income tax
expense. The increase in fuel expense for the first nine months
of 1994 is primarily due to an increase in deferred fuel expense
related to the over-recovery of fuel cost in the current period.
Other operation and maintenance expense increased for the first
nine months of 1994 primarily due to third quarter expenses
related to restructuring costs as discussed in Note 9, and power
plant waste water site closures as discussed in Note 1. The
decrease in income tax expense reflects lower pretax book income
for the first nine months of 1994.
MP&L
Net Income
Net income decreased in the third quarter of 1994 due
primarily to decreased electric operating revenues.
Net income decreased in the first nine months of 1994 due
primarily to the one-time recording in the first quarter of 1993
of the cumulative effect of the change in accounting principle
for unbilled revenues. Excluding the effect of the change in
accounting principle, net income decreased by $23.6 million. This
decrease for the first nine months of 1994 is primarily due to
decreased electric operating revenues.
Significant factors affecting the results of operations and
causing variances between the third quarters and first nine
months of 1994 and 1993 are discussed under "Revenues and Sales"
and "Expenses" below.
Revenues and Sales
See MP&L's "Selected Operating Results" for information on
operating revenues by source and KWH sales.
Electric operating revenues decreased in the third quarter
primarily due to the impact of the incentive rate plan that went
into effect in March 1994, a cooler summer than the prior year
period, and lower wholesale revenues. During the first nine
months of 1994, electric operating revenues decreased primarily
due to the second quarter incentive rate plan, partially offset
by higher energy sales and higher fuel adjustment revenues that
do not effect net income. In addition to the factors cited above
for revenues, accrued unbilled revenues decreased due to a change
in the cycle billing dates offset by an increase in billed
revenues. This decrease was partially offset by increased retail
energy sales resulting from increased commercial and industrial
sales.
Expenses
Fuel for electric generation and fuel-related expenses
decreased in the third quarter of 1994 due primarily to improved
generating efficiency at certain MP&L plants. Fuel for electric
generation and fuel-related expenses increased in the first nine
months of 1994 due primarily to an increase in generation
requirements resulting primarily from increased energy sales as
discussed in "Revenues and Sales" above.
Purchased power expense decreased in the third quarter and
first nine months of 1994 due primarily to changes in generation
availability and requirements among the System operating
companies. A lower per unit price for power purchased also
contributed to the decrease in purchased power in the third
quarter of 1994.
The amortization of rate deferrals increase in the third
quarter and first nine months of 1994 reflected the fact that
MP&L, based on the Revised Plan, collected more Grand
Gulf 1-related costs from its customers in the third quarter and
first nine months of 1994 than it recovered in the same period in
1993.
Income taxes decreased in the first nine months due
primarily to lower pretax income.
NOPSI
Net Income
Net income decreased in the third quarter of 1994 due
primarily to lower operating revenues partially offset by lower
operating expenses.
Net income decreased for the first nine months of 1994 due
primarily to the one-time recording of the cumulative effect of
the change in accounting principle for unbilled revenues in 1993.
Excluding the effect of the change in accounting principle, net
income decreased for the first nine months of 1994 by $14
million. This decrease is due primarily to the recording of a
reserve for revenue reduction as a result of a review of NOPSI's
return on equity in accordance with the 1991 NOPSI Settlement and
a 1992 gas rate settlement.
Significant factors affecting the results of operations and
causing variances between the third quarters and first nine
months of 1994 and 1993 are discussed under "Revenues and Sales"
and "Expenses" below.
Revenues and Sales
See NOPSI's "Selected Operating Results" for information on
operating revenues by source and KWH sales.
Electric operating revenues decreased in the third quarter
due primarily to a decrease in energy sales and lower fuel
adjustment revenues. The decrease in electric operating revenues
in the first nine months of 1994 was due primarily to the
recording of a reserve as discussed in "Net Income" above.
Electric energy sales decreased in the third quarter due
primarily to a decrease in residential sales resulting from a
cooler summer than the prior year. Electric energy sales were
flat for the first nine months of 1994 due primarily to a slight
increase in retail sales resulting from a colder winter and
warmer spring weather than in the previous year, offset by a
decrease in sales for resale.
For the first nine months of 1994, gas operating revenues
increased due primarily to increased gas sales in the first
quarter as a result of a colder winter than the prior year,
partially offset by lower second and third quarter gas sales.
Expenses
Fuel for electric generation and fuel-related expenses
decreased in the third quarter of 1994 due primarily to a
decrease in energy sales as discussed in "Revenue and Sales"
above, and lower gas fuel costs. The decrease in fuel price for
the third quarter of 1994 was partially offset by an increase in
deferred fuel expense due to the over-recovery of fuel costs in
the current period. For the first nine months of 1994 fuel for
electric generation and fuel-related expenses increased due to
higher deferred fuel expense partially offset by lower fuel costs
relating to a change in the fuel mix from oil in the prior year
to gas in the current period.
Purchased power expense decreased in the third quarter and
first nine months of 1994 due primarily to changes in generation
requirements among the System operating companies and lower
costs.
Gas purchased for resale decreased for the third quarter of
1994 due to decreased gas sales.
Income taxes decreased in the third quarter and first nine
months due primarily to lower pretax income.
The increase in the amortization of rate deferrals in the
third quarter and the first nine months of 1994 is primarily a
result of the collection of larger amounts of previously deferred
costs under the 1991 NOPSI Settlement.
SYSTEM ENERGY
Net Income
Net income increased in the third quarter of 1994 due
primarily to an adjustment in the third quarter of 1993 related
to the recording of a reserve for revenues in the third quarter
of 1993 as a result of a FERC investigation of the return on
equity of System Energy's formula wholesale rates and a reduction
in interest expense due to the refinancing of high-cost debt.
Net income decreased in the first nine months of 1994 due
primarily to a lower rate of return on System Energy's decreasing
investment in Grand Gulf 1, partially offset by a decrease in
interest expense due to refinancing of high-cost long-term debt.
Significant factors affecting the results of operations and
causing variances between the third quarters and first nine
months of 1994 and 1993 are discussed under "Revenues and Sales"
and "Expenses" below.
Revenues
Operating revenues recover operating expenses, depreciation
and capital costs attributable to Grand Gulf 1. The capital
costs are computed by allowing a return on System Energy's common
equity funds allocable to its net investment in Grand Gulf 1 and
adding to such amount System Energy's effective interest cost for
its debt allocable to its investment in Grand Gulf 1.
Operating revenues decreased in the third quarter of 1994
due primarily to a lower return on System Energy's decreasing
investment in Grand Gulf 1 (caused by depreciation of the unit)
and increased expenses in connection with Grand Gulf 1 refueling
outage in the third quarter of 1993.
Operating revenues decreased in the first nine months due
primarily to a lower return on System Energy's decreasing
investment in Grand Gulf 1 and a decrease in fuel expenses.
Expenses
Fuel for electric generation and fuel-related expenses
increased in the third quarter primarily due to per unit price.
Fuel for electric generation and fuel-related expenses
decreased in the first nine months primarily due to a lower per
unit cost for nuclear fuel as a result of a favorable market for
uranium.
Income taxes decreased in the first nine months due
primarily to lower pretax income and adjustments to the SFAS 109
deferred tax balances.
Interest expense decreased in the first nine months of 1994
due primarily to the refinancing of high-cost long-term debt.
SIGNIFICANT FACTORS AND KNOWN TRENDS
Entergy Corporation and GSU
Entergy Corporation-GSU Merger
On December 31, 1993, Entergy completed the Merger and
became one of the nation's largest electric utilities. With GSU
as its fifth retail operating company, Entergy gained size,
expanded market area, economies of scale, an additional nuclear
unit (River Bend), and a more price-competitive fuel mix. As a
result of the Merger, Entergy estimates $850 million in fuel cost
savings and $670 million in operation and maintenance expense
savings over the next decade. It is possible that common
shareholders may experience some dilution in earnings in the
short term as a result of the Merger. However, Entergy
Corporation believes that the Merger will be beneficial to common
shareholders over the longer term, both in terms of the strategic
benefits and the economies and efficiencies expected to be
produced. For further information, see pages 103-104 and 180 of
the Form 10-K and "Litigation and Regulatory Proceedings" below.
Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI
Competition
Entergy welcomes competition in the electric energy business
and believes that a more competitive environment should benefit
our shareholders, customers, and employees. However, competition
presents Entergy with many challenges. The following have been
identified by Entergy as its major competitive challenges.
Retail and Wholesale Rate Issues
Increasing competition in the utility industry brings an
increased need to stabilize or reduce retail rates. The retail
regulatory environment is shifting from traditional rate-base
regulation to incentive rate regulation. Incentive and
performance-based rate plans encourage efficiencies and
productivity while permitting utilities and their customers to
share in the results. Retail wheeling, which requires utilities
to "wheel" or move power from third parties to their own retail
customers, is evolving. As a result, the retail market is
expected to become more competitive. In the wholesale rate area,
FERC approved in 1992, with certain modifications, the proposal
of AP&L, LP&L, MP&L, NOPSI, and Entergy Power to sell wholesale
power at market-based rates and to provide to electric utilities
"open access" to the System's transmission system (subject to
certain requirements). GSU was later added to this filing.
Various intervenors in the proceeding filed petitions for review
with the D.C. Circuit. See Part II, Item 1. "Legal
Proceedings," for information on a ruling by the D.C. Circuit
regarding Entergy's open access transmission rates. Open access
and market pricing, once it takes effect, will increase marketing
opportunities for the System, but will also expose the System to
the risk of loss of load or reduced revenues due to competition
with alternative suppliers.
In connection with the Merger, AP&L agreed with the APSC not
to request any general retail rate increases that would take
effect before November 1998, with certain exceptions. For
further information, see pages 82-83 and 125-126 of the Form 10-
K.
On March 31, 1994, North Little Rock, Arkansas, awarded AP&L
a wholesale electric contract that will provide estimated
revenues of $347 million over 11 years. Under the contract, the
price per KWH was reduced 18%, retroactive to March 1, 1994, with
increases in price through the year 2004. AP&L, which has been
serving North Little Rock for over 40 years, was awarded the
contract after intense bidding with several competitors. FERC
accepted the contract, but one of AP&L's competitors has
requested a rehearing and has filed complaints against AP&L and
North Little Rock challenging the contract.
In connection with the Merger, GSU agreed with the LPSC and
PUCT to a five-year Rate Cap on retail electric rates, and to
pass through to retail customers the fuel savings and a certain
percentage of the nonfuel savings created by the Merger. Under
the terms of their respective Merger agreements, the LPSC and
PUCT will review GSU's base rates during the first post-Merger
earnings analysis for reasonableness of its return on equity. In
May 1994 and June 1994, GSU made its first post-Merger earnings
analysis filings with the LPSC and PUCT, respectively, which GSU
believes support the current levels of rates. For further
information, see pages 82-83 and 163-164 of the Form 10-K. See
Note 2 for information on recent filings by certain Texas cities
seeking a reduction in GSU's rates.
Cogeneration projects developed or considered by certain of
GSU's industrial customers over the last several years have
resulted in GSU developing and securing approval of rates lower
than the rates previously approved by the PUCT and LPSC for such
industrial customers. Such rates are designed to retain such
customers, and to compete for and develop new loads, and do not
presently recover GSU's full cost of service. The pricing
agreements at non-full cost of service based rates fully recover
all related costs but provide only a minimal return.
Substantially all of such pricing agreements expire no later than
1997. During the first nine months of 1994, KWH sales to GSU's
industrial customers at less than full cost of service, which
make up approximately 28% of the total industrial class,
increased 15%. Sales to the remaining industrial customers
increased 1%.
LP&L's five year rate freeze expired in March 1994. At the
same time, approximately $46 million of annual rate relief that
was included in LP&L's retail rates also expired. In October
1993, the LPSC approved a schedule to conduct a review of LP&L's
rates and rate structure upon the expiration of LP&L's rate
freeze. Discovery is currently underway and hearings are
scheduled to begin in December 1994. In August 1994, LP&L
filed a performance-based formula rate plan with the LPSC. The
proposed formula rate plan would continue existing LP&L rates at
current levels, while providing financial incentive to reduce
costs and maintain high levels of customer satisfaction and
system reliability. Hearings are scheduled to begin in February
1995. See Note 2 for additional information.
In February 1994, the MPSC conducted a general review of
MP&L's current rates and in March 1994, the MPSC issued a final
order adopting a formula rate plan for MP&L that will allow for
periodic small adjustments in rates based on a comparison of
earned to benchmark returns and upon certain performance factors.
The order also adopted previously agreed-upon stipulations of a
required return on equity of 11% and certain accounting
adjustments that result in a 4.3% ($28.1 million) reduction in
MP&L's June 30, 1993, test-year operating revenues. Pursuant to
the MPSC's order, on March 18, 1994, MP&L filed rates designed to
provide for this reduction in operating revenues for the test
year. These rates are effective for service rendered on or after
March 25, 1994. See pages 83-84 and 235-236 of the Form 10-K for
further information.
In connection with the Merger, MP&L agreed with its retail
regulator not to request any general retail rate increases that
would take effect before November 1998, with certain exceptions.
For further information, see pages 82-83 and 236 of the Form 10-
K, and Part II, Item 1. "Legal Proceedings."
In light of the rate issues discussed above, Entergy is
aggressively reducing costs to avoid potential earnings erosions
that might result as well as to successfully compete by becoming
a low-cost producer.
In December 1992, AP&L, LP&L, MP&L, and NOPSI each filed a
Least Cost Plan with their respective retail regulators, and GSU
is currently working with the PUCT regarding integrated resource
planning. However, in response to an increasingly competitive
electric utility environment, AP&L, LP&L, MP&L, and NOPSI have
announced their intentions to revise their Least Cost Plan
activities. In this regard, AP&L, GSU, LP&L, MP&L, and NOPSI
intend to adopt the ratepayer impact measure test as their
primary economic criterion for DSM programs rather than the total
resource cost test that had been used in developing the initial
Least Cost Plans. Therefore, absent overriding customer,
strategic, or public interests, AP&L, GSU, LP&L, MP&L, and NOPSI
will propose those DSM programs that have the potential for lower
rates to all customers, rather than DSM programs that, while
providing direct benefits to participants, may result in higher
rates for everyone, including non-participants. In addition,
AP&L, GSU, LP&L (outside the city of New Orleans), and MP&L will
no longer seek a pre-approved cost recovery rider as a mechanism
for recovering program costs, lost contributions and incentives.
See Part II, Item 1. "Legal Proceedings," for information on
filings made by AP&L, LP&L, and MP&L with their respective
regulators in connection with proposed changes to their Least
Cost Plans. Notwithstanding the changes noted above, LP&L and
NOPSI intend to implement the DSM programs already approved by
the Council. However, LP&L and NOPSI intend to pursue
appropriate changes in the Council ordinance establishing the
Least Cost Plans framework and planning criteria.
The Energy Policy Act of 1992
The Energy Policy Act of 1992 (Energy Act) is changing the
business of transmitting and distributing electricity. The
Energy Act encourages competition and affords utilities the
opportunities, and the risks, associated with an open and more
competitive market environment. The Energy Act increases
competition in the wholesale energy market through the creation
of exempt wholesale generators (EWGs). Entergy is competing in
this market through its independent power subsidiary, Entergy
Power Development Corporation. The Energy Act also gives FERC
the authority to order investor-owned utilities to provide
transmission access to or for other utilities, including EWGs.
In addition, the Energy Act allows utilities to own and operate
foreign generation, transmission, and distribution facilities.
See "Nonregulated Investments" below for further information.
Entergy Corporation and GSU
Litigation and Regulatory Proceedings
See Note 1 and Part II, Item 1. "Legal Proceedings," for
information on litigation with Cajun concerning Cajun's ownership
interest in River Bend and the possible material adverse effects
on GSU's financial condition in the event that GSU is ultimately
unsuccessful in this litigation, including a possible filing
under the bankruptcy laws.
See Note 2 for information on the possibility of material
adverse effects on GSU's financial condition and results of
operations as a result of substantial write-offs and/or refunds
in connection with outstanding appeals and remands regarding
approximately $1.4 billion of abeyed company-wide River Bend
plant costs and approximately $187 million ($170 million net of
tax) of Texas retail jurisdiction deferred River Bend operating
and carrying costs.
System Energy
FERC Audit - Proposed Settlement
See Note 2 for information with respect to a proposed
settlement between System Energy and FERC in connection with a
decision issued by FERC in August 1992.
Entergy Corporation
Nonregulated Investments
Entergy Corporation continues to seek new opportunities to
expand its electric energy business, including expansion into
related nonutility businesses. These opportunities include new
domestic ventures such as Entergy Systems and Service, Inc.
(Entergy SASI), the region's only full-service provider of energy-
efficient lighting and related services, previously established
ventures in Argentina, and planned investments in Asia, Central
America and South America. Entergy Corporation expects to invest
approximately $150 million per year in nonregulated business
opportunities. Additional shareholder and/or regulatory
approvals may be required for such acquisitions to take place.
In the first nine months of 1994, Entergy Corporation's
nonregulated investments reduced consolidated net income by
approximately $19.3 million. In the near term, these investments
are not likely to have a positive effect on earnings; but
management believes that these investments could contribute to
future earnings growth.
Entergy Corporation and AP&L
ANO Matters
See pages 30, 77, and 123 of the Form 10-K for information
on leaks in certain steam generator tubes at ANO 2 that were
discovered and repaired during an outage in March 1992. During a
refueling outage in September 1992, a comprehensive inspection of
all steam generator tubing was conducted and necessary repairs
were made. During a mid-cycle outage in May 1993, a scheduled
special inspection of certain steam generator tubing was
conducted by Entergy Operations and additional repairs were made.
Entergy Operations operated ANO 2 with no further steam generator
inspections until the refueling outage which was completed on
April 23, 1994. Inspections during the outage revealed
additional cracks; however, most were smaller than those seen in
earlier inspections, except for one relatively large crack.
Based upon results of these inspections and an inconclusive
pressure test, Entergy Operations plans to inspect the steam
generator tubes during a mid-cycle outage tentatively scheduled
for January 1995. The operations and power output of the unit
have not been materially adversely affected.
GSU
Deregulated Portion of River Bend
As of September 30, 1994, GSU had not recovered a
significant amount of its investment in, or received any return
associated with, the portion of River Bend included in the
deregulated asset plan in Louisiana and the portion of River Bend
placed in abeyance as part of the Texas rate order which went
into effect in July 1988. See pages 157 and 165 of the Form 10-K
for further information. Future earnings will continue to be
limited as long as the limited recovery of the investment and
lack of return continues.
For the nine months ended September 30, 1994, GSU recorded
revenues resulting from the sale of electricity from the
deregulated asset plan of approximately $26.2 million. Operation
and maintenance expenses, including fuel, were approximately
$31.3 million, and depreciation expense associated with the
deregulated asset plan investment was approximately $12.3 million
for the nine months ended September 30, 1994. For the first nine
months of 1994, GSU recorded nonfuel revenue of $24.3 million
(included in the $26.2 million of total deregulated asset plan
revenue discussed above) which, absent the deregulated asset
plan, would not have been realized. The operation and
maintenance expenses and depreciation expense allocated to the
deregulated asset plan as detailed above would have been incurred
at River Bend with or without the deregulated asset plan. The
future impact of the deregulated asset plan on GSU's results of
operations and financial position will depend on River Bend's
future operating costs, the unit's efficiency and availability,
and the future market for energy over the remaining life of the
unit. Based on current estimates of the factors discussed above,
GSU anticipates that future revenues from the deregulated asset
plan will fully recover all related costs.
LPSC Fuel Cost Review
In November 1993, the LPSC ordered a review of GSU's fuel
costs. The LPSC stated that fuel costs for the period October
1988 through September 1991 (Phase 1) would be reviewed based on
the number of outages at River Bend and the findings in the June
1993 PUCT fuel reconciliation case. In July 1994, the LPSC made
a decision in the GSU/Louisiana Phase 1 fuel review case and
ordered GSU to refund approximately $27 million to its
customers. Under the order, a refund of $13.1 million, which was
not contested under a recent Louisiana Supreme Court decision as
discussed in Note 2, was made through a billing credit on August
bills. In August 1994, GSU appealed the remaining portion of the
LPSC ordered refund to the district court. GSU has made no
reserve for the remaining portion, pending outcome of the
district court appeal.
Accounting for Decommissioning Costs
The Financial Accounting Standards Board has agreed to
review the accounting for removal costs, which includes the
accounting for decommissioning of nuclear plants. This project
could possibly change the System's, as well as the entire utility
industry's, accounting for such costs.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
River Bend
Entergy Corporation and GSU
See Note 2 and also see pages 20-22, 80-82, and 160-163 of
the Form 10-K, pages 44-46 of the First Quarter Form 10-Q, and
pages 44-47 and 70-71 of the Second Quarter Form 10-Q, for a
discussion of outstanding appeals and remands regarding
approximately $1.4 billion of abeyed company-wide River Bend
plant costs and approximately $157 million of Texas retail
jurisdiction deferred River Bend operating and carrying costs.
See Note 1 and also see pages 40-42, 94-95, and 172-173 of
the Form 10-K, pages 39-40 and 70 of the First Quarter Form 10-Q,
and pages 39-40 of the Second Quarter Form 10-Q, for a discussion
of proceedings between GSU and Cajun.
LPSC Fuel Cost Review
GSU
See pages 23 and 165 of the Form 10-K, page 49 of the First
Quarter Form 10-Q, and pages 50 and 71 of the Second Quarter Form
10-Q, for a discussion of an LPSC ordered refund to GSU
customers. In August 1994, GSU appealed the contested portion of
the LPSC ordered refund to the district court.
Cajun/Jefferson Davis
GSU
See page 40 of the Form 10-K for a discussion of a suit
brought against GSU by Cajun and Jefferson Davis for failing to
provide transmission services. On March 21, 1994, FERC issued an
order affirming the ALJ and dismissing Cajun's complaint, finding
that GSU properly exercised its contractual right to refuse to
provide the service. On August 3, 1994, FERC denied rehearing.
On August 12, 1994, Cajun filed a petition for review of FERC's
orders in the United States Court of Appeals for the District of
Columbia Circuit. The matter is pending.
Least Cost Planning
AP&L, GSU, LP&L, MP&L, and NOPSI
See pages 8-9, 19, 23, 25-27, 76, 122, 197, 232, and 264 of
the Form 10-K, page 67 of the First Quarter Form 10-Q, and page
72 of the Second Quarter Form 10-Q, for a discussion of Least
Cost Planning. On July 1, 1994, AP&L filed a motion requesting
that the APSC approve the withdrawal of AP&L's Least Cost Plan
filed December 1, 1992, and July 1, 1993, and to rescind its
directive that AP&L file another Least Cost Plan in March 1995.
On October 5, 1994, the APSC issued an order that suspended the
individual dockets and established a new one. Hearings are
scheduled to begin in April 1995.
On September 28, 1994, LP&L and NOPSI filed a report with
the Council that discussed Entergy's Least Cost Plan activities
in other jurisdictions and described the motivations for these
activities. LP&L and NOPSI also filed a motion requesting that
the Council defer the filing of a new Least Cost Plan, which the
existing Least Cost Plan Ordinance required on December 1, 1994.
On October 6, 1994, the Council approved an amendment to the City
Code that rescinded the December 1, 1994 filing requirement and
allowed the Council to set a future date for a new filing. The
Council's actions also established that there would be a set of
hearings to consider a wide range of Least Cost Plan issues, and
that a new filing date would be established following these
hearings. These rulings do not affect the ongoing DSM programs
that LP&L and NOPSI are currently implementing in the City.
System Agreement
Entergy Corporation, AP&L, LP&L, MP&L, and NOPSI
See pages 67-68 of the First Quarter Form 10-Q, and page 73
of the Second Quarter Form 10-Q for a discussion related to
FERC's proceeding to consider whether the System Agreement
permits certain out-of-service generating units to be included in
reserve equalization calculations under Service Schedule MSS-1 of
that agreement. Entergy submitted testimony on September 23,
1994, describing the impacts (not including interest) on Service
Schedule MSS-1 calculations during the period 1987 through 1993.
LP&L and MP&L would have been overbilled by $10.6 and $8.8
million , respectively, and AP&L and NOPSI would have been
underbilled by $6.3 and $13.1 million, respectively.
Merger-Related Proceedings
Entergy Corporation and GSU
a) See pages 19, 83, and 163 of the Form 10-K, page 69 of
the First Quarter Form 10-Q, and page 74 of the Second Quarter
Form 10-Q, for information on a GSU cost-of-service study filed
with the PUCT and Texas Cities. In August 1994, the cities'
consultants issued a report that indicated GSU's current rates
were approximately $40 to $50 million in excess of current
requirements. In September 1994, various cities adopted
ordinances directing GSU to reduce its rates on a Texas retail
basis by $45.9 million. GSU has appealed the cities' ordinances
to the PUCT where the reasonableness of GSU's rates will be
reviewed. The PUCT has scheduled a hearing on the merits for
November 21, 1994. Final action by the PUCT is expected in March
1995. GSU can provide no assurance as to the ultimate outcome in
this matter; however, any rate reduction could be retroactive to
March 31, 1994.
b) See page 38 of the Form 10-K, page 69 of the First
Quarter Form 10-Q, and page 74 of the Second Quarter Form 10-Q,
for information on parties contesting FERC's order approving the
Merger.
On August 9, 1994, Cajun filed a motion for remand and
partial summary grant of its petition for review. Cajun argued
that FERC's orders approving the Merger relied on the Entergy
transmission service tariff and because of the D.C. Circuit's
opinion finding the transmission tariff to be flawed (see "Open
Access Transmission" below), the Court should summarily grant
Cajun's petition for review, in part, and remand these matters to
FERC for further proceedings. Entergy responded that judicial
economy would best be served by holding the case in abeyance
until FERC addresses the transmission tariff.
On September 6, 1994, Occidental Chemical Corporation (OCC)
and Arkansas Electric Energy Consumers (AEEC) filed a motion for
remand and partial summary disposition, to FERC for a full
evidentiary hearing on Merger competition issues. OCC and AEEC
opposed any delay of a remand by holding the proceedings in
abeyance because it would allegedly serve to prolong the present
potential for anticompetitive harm. Entergy opposed the OCC and
AEEC motion in a response filed on September 16, 1994, arguing
that OCC and AEEC provided no basis for FERC to hold an
evidentiary hearing on the competitive impacts of the Merger.
FERC also opposed the OCC and AEEC motion, requesting again that
the Court hold the proceedings in abeyance. The motions filed by
Cajun, OCC and AEEC are pending.
c) As discussed on page 38 of the Form 10-K, petitions for
review of the SEC order approving various aspects of the Merger
were filed with the D.C. Circuit in February 1994 by Houston
Industries Incorporated, Houston Lighting and Power Company, and
Cajun. These petitions have been consolidated. In September
1994, the SEC filed a motion with the D.C. Circuit seeking a
remand of the Merger proceedings to the SEC to permit the agency
to supplement or amend its findings and order regarding the
Merger's anti-competitive effects in light of the July 12, 1994,
opinion of the D.C. Circuit which overturned certain findings of
FERC regarding the Entergy System's "open access" transmission
tariff (see page 75 of the Second Quarter Form 10-Q). The matter
is pending before the D.C. Circuit.
d) See page 31 of the Form 10-K for information on Cajun's
suit claiming that the NRC erred by issuing two license
amendments for River Bend. On August 23, 1994, the NRC issued an
order disallowing GSU's appeal in the ASLB proceeding and
upholding the ASLB's January 27, 1994 order. A hearing on the
proceeding before the ASLB on Cajun's contention has been set for
May 9, 1995.
FERC Audit - Proposed Settlement
Entergy Corporation and System Energy
See Note 2 and also see pages 16, 84-85, and 296-297 of the
Form 10-K, pages 46-47 of the First Quarter Form 10-Q, and pages
47-48, and 75 of the Second Quarter Form 10-Q, for information on
a proposed settlement of a FERC audit of System Energy. On
October 7, 1994, System Energy filed with FERC for approval of
the proposed settlement.
Open Access Transmission
Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI
See page 17 of the Form 10-K and page 75 of the Second
Quarter Form 10-Q for a discussion of various petitions filed
with the United States Court of Appeals for the District of
Columbia Circuit related to FERC's 1992 orders regarding open
access transmission and the sale of wholesale power at market-
based rates. On August 23, 1994, Entergy submitted a letter to
FERC in connection with the D.C. Circuit's remand. Entergy
committed to revise its transmission service tariff to facilitate
the expeditious resolution of the case and to provide
"comparability of service" over the Entergy transmission network.
Entergy further committed that the revised transmission service
tariff would withdraw the specific provisions regarding recovery
of stranded investment found problematic by the D.C. Circuit. To
date, Entergy has not sought recovery of stranded investment
costs in rates under the transmission tariffs and the remand to
FERC is not expected to result in refunds of any amounts that
have been collected pursuant to transmission tariffs.
LPSC Investigation/Formula Rate Plan
Entergy Corporation and LP&L
See Note 2 and pages 75, 84, and 199 of the Form 10-K, pages
48 and 71 of the First Quarter Form 10-Q, and pages 49 and 76 of
the Second Quarter Form 10-Q, for a discussion of an LPSC
investigation and a subsequent LP&L formula rate plan filing with
the LPSC.
Incentive Rate Plan
Entergy and MP&L
See pages 25-26, 83-84, and 235-236 of the Form 10-K and
page 76 of the Second Quarter Form 10-Q for a discussion of
MP&L's incentive rate plan approved by the MPSC. On October 6,
1994, Mississippi Valley Gas filed a motion with the Mississippi
Supreme Court to voluntarily dismiss its appeal.
February 1994 Ice Storm
Entergy Corporation, AP&L, and MP&L
See Note 2 for a discussion of MP&L's rate recovery of the
February 1994 ice storm damages.
NRC Fine
Entergy Corporation and LP&L
On August 19, 1994, the NRC notified Entergy Operations that
it will be fined $112,500 for violations at Waterford 3. Entergy
Operations discovered and reported the problems which would have
affected several engineered safety features related to the
ventilation and filtration systems following a loss of their
normal power supply. The problems were traced to a system design
change installed in various systems between October 1992 and
April 1993. Entergy Operations did not contest the fine.
Spent Nuclear Fuel
Entergy Corporation, AP&L, GSU, LP&L, and System Energy
See pages 29, 97-98, 134, 175, 208-209, and 304 of the Form
10-K for information regarding spent nuclear fuel. Entergy
Operations and System Fuels joined in lawsuits against the
Department of Energy (DOE), seeking clarification of the DOE's
responsibility to receive spent nuclear fuel beginning in 1998.
The original suits, filed June 20, 1994, asked for a ruling
that the Nuclear Waste Policy Act requires the DOE to begin
taking title to the spent fuel and start removing it from nuclear
power plants in 1998, a mandate for and court monitoring of DOE's
nuclear waste management program to enable fuel acceptance
beginning in 1998, and the potential for escrow of customer
payments to the Nuclear Waste Fund.
Municipalities
Entergy Corporation, LP&L and MP&L
On August 24, 1994, the Terrebonne Parish Council adopted an
ordinance authorizing the Terrebonne Parish Consolidated
Government (Government) to enter into negotiations with LP&L to
settle a pending lawsuit filed by LP&L on March 27, 1992, against
the Government and its Department of Utilities, pertaining to
alleged unlawful actions in usurping certain service locations of
LP&L. This ordinance also authorizes the Government to seek
court action to expropriate LP&L's facilities in the city of
Houma, but only in the event a settlement is not reached with
respect to the pending lawsuit. The matter is pending.
On October 11, 1994, twelve Mississippi cities filed a
complaint in state court against MP&L and eight electric power
associations seeking a judgment from the court declaring
unconstitutional certain Mississippi statutes that establish the
procedure that must be followed before a municipality can acquire
the facilities and certificate rights of a utility serving in the
municipality. Specifically, the suit requests that the court
declare unconstitutional certain 1987 amendments to the
Mississippi Public Utilities Act that require that the MPSC
cancel a utility's certificate to serve in the municipality
before a municipality may acquire a utility's facilities located
in the municipality. The suit also requests that the court find
that Mississippi municipalities can serve any consumer in the
boundaries of the municipality (and within one mile thereof).
Such a finding would be contrary to a number of Mississippi
Supreme Court decisions that have held that a municipality cannot
serve in another utility's service area even where the municipal
boundaries extend into such service area. The matter is pending.
Sales/Use Tax Issues
Entergy Corporation, GSU, LP&L, and NOPSI
The Louisiana Supreme Court (Court) recently issued an
opinion (in a case in which none of the System companies is a
party), holding, in part, that the Louisiana state legislature's
suspension of state sales and use tax exemptions also has the
effect of suspending exemptions from local sales and use taxes.
The Court has granted an application for rehearing on this issue
and, therefore, its decision is not yet final. However, if the
Court's decision is not changed, previously exempt sales of
electricity and gas, fuels and other items used to generate
electricity in Louisiana by GSU, LP&L, and NOPSI, as well as
other items exempt from sales and use taxes, could be subject to
local sales and use taxes. If the Court's decision were to have
retroactive application, GSU, LP&L, and NOPSI could be liable for
back sales and use taxes. The final outcome of this matter
cannot yet be determined, but a unfavorable result could have a
material adverse effect upon Entergy, GSU, LP&L, and NOPSI. The
matter is pending.
See page 43 of the Form 10-K and page 77 of the Second
Quarter Form 10-Q for a discussion of disputes and litigation
between LP&L and tax authorities in St. Charles Parish, Louisiana
(Parish), with respect to sales, use and lease taxes allegedly
applicable to nuclear fuel.
On October 13, 1994, Parish tax authorities sued LP&L and
Entergy in the Civil District Court of Orleans Parish, Louisiana,
claiming that $1.4 million of sales and use and lease taxes paid
under protest by LP&L with respect to newly acquired nuclear fuel
were not, in fact, paid under protest and should be disposed of
by Parish, and that unspecified additional taxes, interest, and
penalties are due. LP&L presently has a suit pending in Parish
seeking to recover the $1.4 million in taxes paid under protest,
and will contest the suit in Orleans Parish, which LP&L and
Entergy believes is without merit.
Item 5. Other Information
River Bend Unplanned Outage
Entergy Corporation and GSU
On September 8, 1994, River Bend automatically shut down due
to false high water signals. As River Bend was ready to begin
operations on October 10, 1994, seepage was detected from some
high pressure water lines. The lines were repaired and the unit
was placed back in service on October 21, 1994. On October 28,
1994, the unit was shut down because of water leakage from a
recirculating pump seal. The seal was repaired and the unit was
placed back in service on November 3, 1994.
Nonregulated Investments
Entergy Corporation
As discussed on page 3 of the Form 10-K and Page 75 of the
First Quarter Form 10-Q, Entergy continues to consider
opportunities to expand its business, including opportunities in
overseas power development. In October 1994, Entergy Corporation
invested $50 million in the Hub River Company which is
constructing a generating station near Karachi, Pakistan.
Common Stock Price Range and Dividends
Entergy Corporation
The shares of Entergy Corporation's common stock are listed
on the New York, Chicago, and Pacific Stock Exchanges. The high
and low sales prices of Entergy Corporation's common stock for
the third quarter of 1994, as reported by The Wall Street Journal
as composite transactions, were $26 1/4 and $22 5/8,
respectively, per share.
For the twelve months ended September 30, 1994, Entergy
Corporation paid common stock dividends in an aggregate amount of
$1.80 per share. As of September 30, 1994, the consolidated book
value of a share of Entergy Corporation's common stock was $28.46
and the last reported sale price of Entergy Corporation's common
stock on September 30, 1994, was $23 1/4 per share.
Earnings Ratios
AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy
The System operating companies and System Energy have
calculated ratios of earnings to fixed charges and ratios of
earnings to combined fixed charges and preferred dividends
pursuant to Item 503 of Regulation S-K of the SEC as follows:
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
Ratios of
Earnings to
Fixed Charges
(a)
AP&L 2.31 2.16 2.25 2.28 3.11(h) 2.37
GSU 1.16 .80(i) 1.56 1.72 1.54 .84(i)
LP&L 1.79 2.32 2.40 2.79 3.06 2.88
MP&L 1.04(e) 2.42 2.36 2.37 3.79(h) 2.26
NOPSI 1.89 2.73 5.66(g) 2.66 4.68(h) 3.18
System Energy -(f) 2.10 1.74 2.04 1.87 1.93
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
Ratios of
Earnings to
Combined Fixed
Charges and
Preferred
Dividends
(a)(b)(c)
AP&L 1.88 1.81 1.87 1.86 2.54(h) 1.96
GSU (d) .66(i) .59(i) 1.19 1.37 1.21 .75(i)
LP&L 1.39 1.87 1.95 2.18 2.39 2.32
MP&L 1.00(e) 1.93 1.94 1.97 3.08(h) 1.86
NOPSI 1.62 2.36 4.97(g) 2.36 4.12(h) 2.76
(a) "Earnings," as defined by SEC Regulation S-K, represent the
aggregate of (1) net income, (2) taxes based on income, (3)
investment tax credit adjustments - net, and (4) fixed
charges. "Fixed Charges" include interest (whether expensed
or capitalized), related amortization, and interest
applicable to rentals charged to operating expenses.
(b) "Preferred Dividends," as defined by SEC Regulation S-K, are
computed by dividing the preferred dividend requirement by
one hundred percent (100%) minus the effective income tax
rate.
(c) System Energy's Amended and Restated Articles of
Incorporation do not currently provide for the issuance of
preferred stock.
(d) "Preferred Dividends" in the case of GSU also include
dividends on preference stock.
(e) Earnings for the twelve months ended December 31, 1989
include the impact of the write-off of $60 million of
deferred Grand Gulf 1-related costs pursuant to an agreement
between MP&L and the MPSC.
(f) Earnings for the year ended December 31, 1989 were
inadequate to cover fixed charges due to System Energy's
cancellation and write-off of its investment in Grand Gulf 2
in September 1989. The amount of the coverage deficiency
for fixed charges was $745.2 million.
(g) Earnings for the year ended December 31, 1991 include the
$90 million effect of the 1991 NOPSI Settlement.
(h) Earnings for the year ended December 31, 1993 include $81
million, $52 million, and $18 million for AP&L, MP&L, and
NOPSI, respectively, related to the change in accounting
principle to provide for the accrual of estimated unbilled
revenues.
(i) Earnings for the year ended December 31, 1990 for GSU were
not adequate to cover fixed charges by $60.6 million.
Earnings for the years ended December 31, 1990 and 1989,
were not adequate to cover fixed charges and preferred
dividends by $165.1 million and $190.8 million,
respectively. Earnings in 1990 include a $205 million
charge for the settlement of a purchase power dispute.
Earnings for the twelve months ended September 30, 1994 were
not adequate to cover fixed charges by $34.7 million.
Earnings for the twelve months ended September 30, 1994 were
not adequate to cover fixed charges and preferred dividends
by $64.5 million.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
3(a) - Articles of Amendment dated August 1, 1994 and
Restated Articles of Incorporation, as of December
21, 1983 of MP&L.
** 4(a) - Fiftieth Supplemental Indenture, dated as
of September 1, 1994, supplementing and amending
LP&L's Mortgage and Deed of Trust, dated as of April
1, 1994, as herefore supplemented and amended (filed
as Exhibit A-4(c) to Rule 24 Certificate dated
September 28, 1994 in File No. 70-7653).
23(a) - Consent of Friday, Eldredge & Clark.
23(b) - Consent of Monroe & Lemann (A Professional
Corporation).
23(c) - Consent of Wise Carter Child & Caraway, Professional
Association.
23(d) - Consent of Clark, Thomas & Winters.
23(e) - Consent of Sandlin Associates.
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of September 30, 1994.
27(b) - Financial Data Schedule for AP&L as of September 30,
1994.
27(c) - Financial Data Schedule for GSU as of September 30,
1994.
27(d) - Financial Data Schedule for LP&L as of September 30,
1994.
27(e) - Financial Data Schedule for MP&L as of September 30,
1994.
27(f) - Financial Data Schedule for NOPSI as of September 30,
1994.
27(g) - Financial Data Schedule for System Energy as of
September 30, 1994.
99(a) - AP&L's Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Combined Fixed Charges and
Preferred Dividends, as defined.
99(b) - GSU's Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Combined Fixed Charges and
Preferred Dividends, as defined.
99(c) - LP&L's Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Combined Fixed Charges and
Preferred Dividends, as defined.
99(d) - MP&L's Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Combined Fixed Charges and
Preferred Dividends, as defined.
99(e) - NOPSI's Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Combined Fixed Charges and
Preferred Dividends, as defined.
99(f) - System Energy's Computation of Ratios of Earnings to
Fixed Charges, as defined.
**99(g) - Annual Reports on Form 10-K of Entergy
Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System
Energy for the fiscal year ended December 31, 1993,
portions of which are incorporated herein by
reference as described elsewhere in this document
(filed with the SEC in File Nos. 1-11299, 1-10764, 1-
2703, 1-8474, 0-320, 0-5807, and 1-9067,
respectively).
**99(h) - Quarterly Report on Form 10-Q of Entergy
Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System
Energy for the quarter ended March 31, 1994, portions
of which are incorporated herein by reference as
described elsewhere in this document (filed with the
SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-
320, 0-5807, and 1-9067, respectively).
**99(i) - Quarterly Report on Form 10-Q of Entergy
Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System
Energy for the quarter ended June 30, 1994, portions
of which are incorporated herein by reference as
described elsewhere in this document (filed with the
SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-
320, 0-5807, and 1-9067, respectively).
99(j) - Earnings statement of AP&L for the twelve month
period ended September 30, 1994, made generally
available to security holders pursuant to Section
11(a) of the Securities Act of 1933, as amended.
99(k) - Earnings statement of MP&L for the twelve month
period ended September 30, 1994, made generally
available to security holders pursuant to Section
11(a) of the Securities Act of 1933, as amended.
**99(l) - Opinion of Clark, Thomas & Winters, a
professional corporation, dated September 30, 1992
regarding the effect of the October 1, 1991 judgment
in GSU v. PUCT in the District Court of Travis
County, Texas (99-1 in Registration No. 33-48889).
**99(m) - Opinion of Clark, Thomas & Winters, a
professional corporation, dated August 8, 1994
regarding recovery of costs deferred pursuant to PUCT
order in Docket 6525 (filed as Exhibit 99(j) to
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994 in File No. 1-2703).
99(n) - Opinion of Clark, Thomas & Winters, a professional
corporation, confirming its opinions dated September
30, 1992 and August 8, 1994.
___________________________
* Reference is made to a duplicate list of exhibits being
filed as a part of Form 10-Q for the quarter ended September
30, 1994, which list, prepared in accordance with Item 102
of Regulation S-T of the Securities and Exchange Commission,
immediately precedes the exhibits being filed with Form 10-Q
for the quarter ended September 30, 1994.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
Entergy
A current report on Form 8-K, dated October 21, 1994, was
filed with the SEC on October 28, 1994, reporting
information under Item 5. "Other Materially Important
Events."
GSU
A current report on Form 8-K, dated October 21, 1994, was
filed with the SEC on October 28, 1994, reporting
information under Item 5. "Other Materially Important
Events."
<PAGE>
EXPERTS
All statements in Part II of this Quarterly Report on Form
10-Q as to matters of law and legal conclusions, based on the
belief or opinion of AP&L, LP&L, MP&L, NOPSI, and System Energy
or otherwise, pertaining to the titles to properties, franchises
and other operating rights of certain of the registrants filing
this Quarterly Report on Form 10-Q, and their subsidiaries, the
regulations to which they are subject and any legal proceedings
to which they are parties are made on the authority of Friday,
Eldredge & Clark, 2000 First Commercial Building, 400 West
Capitol, Little Rock, Arkansas, as to AP&L; Monroe & Lemann (A
Professional Corporation), 201 St. Charles Avenue, Suite 3300,
New Orleans, Louisiana, as to LP&L and NOPSI; and Wise Carter
Child & Caraway, Professional Association, Heritage Building,
Jackson, Mississippi, as to MP&L and System Energy.
The statements attributed to Clark, Thomas & Winters, a
professional corporation, as to legal conclusions with respect to
GSU's rate regulation in Texas in Note 2 to Entergy Corporation
and Subsidiaries Consolidated Financial Statements, "Rate and
Regulatory Matters," have been reviewed by such firm and are
included herein upon the authority of such firm as experts.
The statements attributed to Sandlin Associates regarding
the analysis of River Bend construction costs of GSU in Note 2 to
Entergy Corporation and Subsidiaries Consolidated Financial
Statements, "Rate and Regulatory Matters," have been reviewed by
such firm and are included herein upon the authority of such firm
as experts.
<PAGE>
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
ARKANSAS POWER & LIGHT COMPANY
GULF STATES UTILITIES COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC.
/s/ Lee W. Randall
Lee W. Randall
Vice President and
Chief Accounting Officer
(For each Registrant and for each as
Principal Accounting Officer)
Date: November 10, 1994
Exhibit 3(a)
RESTATED ARTICLES OF INCORPORATION
OF
MISSISSIPPI POWER & LIGHT COMPANY
Pursuant to the provisions of Section 64 of the Misissippi
Business Corporation Law (Section 79-3-127, Mississippi Code of
1972, as amended), the undersigned Corporation adopts the
following Restated Articles of Incorporation:
FIRST: The name of the Corporation is MISSISSIPPI POWER &
LIGHT COMPANY.
SECOND: The period of its duration is ninety-nine (99)
years.
THIRD: The purpose or purposes which the Corporation is
authorized to pursue are:
To acquire, buy, hold, own, sell, lease, exchange, dispose
of, finance, deal in, construct, build, equip, improve, use,
operate, maintain and work upon:
(a) Any and all kinds of plants and systems for the
manufacture, production, storage, utilization, purchase,
sale, supply, transmission, distribution or disposition of
electricity, natural or artificial gas, water or steam, or
power produccd tbereby, or of ice and refrigeration of any
and every kind;
(b) Any and all kinds of telephone, telegraph, radio,
wireless and other systems, facilities and devices for the
receipt and transmission of sounds and signals, any and all
kinds of interurban, city and street railways and railroads
and bus lines for the transportation of passengers and/or
freight, transmission lines, systems, appliances, equipment
and devices and tracks, stations, buildings and other
structures and facilities;
(c) Any and all kinds of works, power plants,
manufactories, structures, substations, systems, tracks,
machinery, generators, motors, lamps, poles, pipes, wires,
cables, conduits, apparatus, devices, equipment, supplies,
articles and merchandise of every kind pertaining to or in
anywise connected with the construction, operation or
maintenance of telephone, telegraph, radio, wireless and
other systems, facilities and devices for the receipt and
transmission of sounds and signals, or of interurban, city
and street railways and railroads and bus lines, or in
anywise connected with or pertaining to the manufacture,
production, purchase, use, sale, supply, transmission,
distribution, regulation, control or application of
electricity, natural or artificial gas, water, steam, ice,
refrigeration and power or any other purposes;
To acquire, buy, hold, own, sell, lease, exchange, dispose
of, transmit, distribute, deal in, use, manufacture, produce,
furnish and supply street and interurban railway and bus service,
electricity, natural or artificial gas, light, heat, ice,
refrigeration, water and steam in any form and for any purposes
whatsoever, and any power or force or energy in any form and for
any purposes whatsoever;
To buy, sell, manufacture, produce and generally deal in
milk, cream and any articles or substances used or usable in or
in connection with the manufacture and production of ice cream,
ices, beverages and soda fountain supplies; to buy, sell,
manufacture, produce and generally deal in ice cream and ices;
To acquire, organize, assemble, develop, build up and
operate constructing and operating and other organizations and
systems, and to hire, sell, lease, exchange, turn over, deliver
and dispose of such organizations and systems in whole or in part
and as going organizations and systems and otherwise, and to
enter into and perform contracts, agreements and undertakings of
any kind in connection with any or all the foregoing powers;
To do a general contracting business;
To purchase, acquire, develop, mine, explore, drill, hold,
own and dispose of lands, interests in and rights with respect to
lands and waters and fixed and movable property;
To borrow money and contract debts when necessary for the
transaction of the business of the Corporation or for the
exercise of its corporate rights, privileges or franchises or for
any other lawful purpose of its incorporation; to issue bonds,
promissory notes, bills of exchange, debentures and other
obligations and evidences of indebtedness payable at a specified
time or times or payable upon the happening of a specified event
or events, whether secured by mortgage, pledge or otherwise or
unsecured, for money borrowed or in payment for property
purchased or acquired or any other lawful objects;
To guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of
indebtedness created by, any other corporation or corporations of
the State of Mississippi or any other state or government and,
while the owner of such stock, to exercise all the rights, powers
and privileges of individual ownership with respect thereto
including the right to vote thereon, and to consent and otherwise
act with respect thereto;
To aid in any manner any corporation or association,
domestic or foreign, or any firm or individual, any shares of
stock in which or any bonds, debentures, notes, securities,
evidences of indebtedness, contracts or obligations of which are
held by or for the Corporation or in which or in the welfare of
which the Corporation shall have any interest, and to do any acts
designed to protect, preserve, improve or enhance the value of
any property at any time held or controlled by the Corporation,
or in which it may be at any time interested; and to organize or
promote or facilitate the organization of subsidiary companies;
To purchase, hold, sell and transfer shares of its own
capital stock, provided that the Corporation shall not purchase
its own shares of capital stock except frorn surplus of its
assets over its liabilities including capital; and provided,
further, that the shares of its own capital stock owned by the
Corporation shall not be voted upon directly or indirectly nor
counted as outstanding for the purposes of any stockholders'
quorum or vote;
In any manner to acquire, enjoy, utilize and to dispose of
patents, copyrights and trade-marks and any licenses or other
rights or interests therein and thereunder:
To purchase, acquire, hold, own or dispose of franchises,
concessions, consents, privileges and licenses necessary for and
in its opinion useful or desirable for or in connection with the
foregoing powers;
To do all and everything necessary and proper for the
accomplishment of the objects enumerated in these Restated
Articles of Incorporation or any amendment thereof or necessary
or incidental to the protection and benefits of the Corporation,
and in general to carry on any lawful business necessary or not
incidental to the attainment of the objects of the Corporation
whether or not such business is similar in nature to the objects
set forth in these Restated Articles of Incorporation or any
amendment thereof.
To do any or all things herein set forth, to the same extent
and as fully as natural persons might or could do, and in any
part of the world, and as principal, agent, contractor or
otherwise, and either alone or in conjunction with any other
persons, firms, associations or corporations;
To conduct its business in all its branches in the State of
Mississippi, other states, the District of Columbia, the
territories and colonies of the United States, and any foreign
countries, and to have one or more offices out of the State of
Mississippi and to hold, purchase, mortgage and convey real and
personal property both within and without the State of
Mississippi; provided, however, that the Corporation shall not
exercise any of the powers set forth herein for the purpose of
engaging in business as a street railway, telegraph or telephone
company unless prior tbereto this Article Third shall have been
amended to set forth a description of the line and the points it
will traverse.
FOURTH: The aggregate number of shares which the Corporation
shall have authority to issue is 17,004,478 shares, divided into
2,004,476 shares of Preferred Stock of the par value of $100 per
share and 15,000,000 shares of Common Stock without par value.
The preferences, limitations and relative rights in respect
of the shares of each class and the variations in the relative
rights and preferences as between series of any preferred or
special class in series are as follows:
The Preferred Stock shall be issuable in one or more series
from tirne to time and the shares of each series shall have the
same rank and be identical with each other and shall have the
same relative rights except with respect to the following:
(a) The number of shares to constitute each such series
and the distinctive designation thereof;
(b) The annual rate or rates of dividends payable on
shares of such series, the dates on which dividends shall be
paid in each year and the date from which such dividends
shall commence to accumulate;
(c) The amount or amounts payable upon redemption
thereof; and
(d) The sinking fund provisions, if any, for the
redemption or purchase of shares;
which different characterics of clauses (a), (b), (c) and (d)
above may be stated and expressed with respect to each series in
the resolution or resolutions providing for the issue of such
series adopted by the Board of Directors or in these Restated
Articles of Incorporation of any amendment thereof.
A series of 60,000 shares of Preferred Stock shall:
(a) be designated "4.36% Preferred Stock Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.36 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
February 1, 1963, and such dividends to be cumulative from
the last date to which dividends upon the 4.36% Preferred
Stock Cumulative, $100 Par Value, of Mississippi Power &
Light Company, a Florida corporation, are paid;
(c) be subject to redemption in the manner provided
herein with respect to the Preferred Stock at the price of
$105.36 per share if redeemed on or before February 1, 1964,
and of $103.88 per share if redeemed after February 1, 1964,
in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption.
A series of 44,476 shares of the Preferred Stock shall:
(a) be designated "4.56% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.56 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
February 1, 1963, and such dividends to be cumulative from
the last date to which dividends upon the 4.56% Preferred
Stock, Cumulative, $100 Par Value, of Mississippi Power &
Light Company, a Florida corporation, are paid; and
(c) be subject to redemption in the manner provided
herein with respect to the Preferred Stock at the price of
$108.50 per share if redeemed on or before November 1, l964,
and of $107.00 per share if redeemed after November 1, 1964,
in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "4.92% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.92 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
February 1, 1966, and such dividends to be cumulative from
the date of issue of said series; and
(c) be subject to redemption at the price of $106.30 per
share if redeemed on or before January 1, 1971, of $104.38
per share if redeemed after January 1, 1971 and on or before
January 1, 1976, and of $102.88 per share if redeemed after
January 1, 1976, in each case plus an amount equivalent to
the accumulated and unpaid dividends thereon, if any, to the
date fixed for redemption.
A series of 75,000 shares of the Preferred Stock shall:
(a) be designated "9.16% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $9.16 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
November 1, 1970, and such dividends to be cumulative from
the date of issue of said series; and
(c) be subject to redemption at the price of $110.93 per
share if redeemed on or before August 1, 1975, of $108.64
per share if redeemed after August 1, 1975 and on or before
August 1, 1980, of $106.35 per share if redeemed after
August 1, 1980 and on or before August 1, 1985, and of
$104.06 per share if redeemed after August 1, 1985, in each
case plus an amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date fixed for redemption;
provided, however, that no share of the 9.16% Preferred
Stock, Cumulative, $100 Par Value, shall be redeemed prior
to August 1, 1975 if such redemption is for the purpose or
in anticipation of refunding such share through the use,
directly or indirectly, of funds borrowed by the
Corporation, or through the use, directly or indirectly, of
funds derived through the issuance by the Corporation of
stock ranking prior to or on a parity with the 9.16%
Preferred Stock, Cumulative, $100 Par Value, as to dividends
or assets, if such borrowed funds have an effective interest
cost to the Corporation (computed in accordance with
generally aocepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of
less than the effective dividend cost to the Corporation of
the 9.16% Preferred Stock, Cumulative, $100 Per Value.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "7.44% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $7.44 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be May
1, 1973, and such dividends to be cumulative from February
14, 1973; and
(c) be subject to redemption at the price of $108.39 per
share if redeemed on or before February 1, 1978, of $106.53
per share if redeemed after February 1, 1978 and on or
before February 1, 1983, of $104.67 per share if redeemed
after February 1, 1983 and on or before February 1, 1988,
and of $102.81 per share if redeemed after February 1, 1988,
in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption; provided, however, that no share of the 7.44%
Preferred Stock, Cumulative, $100 Par Value, shall be
redeemed prior to February 1, 1978 if such redemption is for
the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed
by the Corporation, or through the use, directly or
indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with
the 7.44% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an
effective interest cost to the Corporation (computed in
accordance with generally accepted financial practice) or
such stock has an effective dividend cost to the Corporation
(so computed) of less than the effective dividend cost to
the Corporation of the 7.44% Preferred Stock, Cumulative,
S100 Par Value.
A series of 200,000 shares of the Preferred Stock shall:
(a) be designated "17% Preferred Stock, Cumulative, $100
Par Value"
(b) have a dividend rate of $17.00 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
November 1, 1981, and such dividends to be cumulative from
the date of issuance;
(c) be subject to redemption at the price of $117.00 per
share if redeemed on or before September 1, 1986, of $112.75
per share if redeemed after September 1, 1986 and on or
before September 1, 1991, of $108.50 per share if redeemed
after September 1, 1991 and on or before September 1, 1996,
and of $104.25 per share if redeemed after September 1,
1996, in each case plus an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the
date fixed for redemption; provided, however, that no share
of the 17% Preferred Stock Cumulative, $100 Par Value, shall
be redeemed prior to September 1, 1986 if such redemption is
for the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed
by the Corporation or through the use, directly or
indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with
the 17% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance
with generally accepted financial practice) or such stock;
has an effective dividend cost to the Corporation (so
computed) of less than the effective dividend cost to the
Corporation of the 17% Preferred Stock, Cumulative, $100 Par
Value; and
(d) be subject to redemption as and for a sinking fund
as follows: On September 1, 1986 and on each September 1
thereafter (each such date being hereinafter referred to as
a "17% Sinking Fund Redemption Date"), for so long as any
shares of the 17% Preferred Stock, Cumulative, $100 Par
Value, shall remain outstanding, the Corporation shall
redeem, out of funds legally available therefor, 10,000
shares of the 17% Preferred Stock, Cumulative, $100 Par
VaIue (or the number of shares then outstanding if less than
10,000) at the sinking fund redemption price of $100 per
share plus, as to each share so redeemed, an amount
equivalent to the accumulated and unpaid dividends thereon,
if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 17% Preferred
Stock, Cumulative, $100 Par Value, being hereinafter
referred to as the "17% Sinking Fund Obligation"); the 17%
Sinking Fund Obligation shall be cumulative; if on any 17%
Sinking Fund Redemption Date, the Corporation shall not have
funds legally available therefor sufficient to redeem the
full number of shares required to be redeemed on that date,
the 17% Sinking Fund Obligation with respect to the shares
not redeemed shall carry forward to each successive 17%
Sinking Fund Redemption Date until such shares shall have
been redeemed; whenever on any 17% Sinking Fund Redemption
Date, the funds of the Corporation legally available for the
satisfaction of the 17% Sinking Fund Obligation and all
other sinking fund and similar obligations then existing
with respect to any other class or series of its stock
ranking on a parity as to dividends or assets with the 17%
Preferred Stock, Cumulative, $100 Par Value (such Obligation
and obligations collectively being hereinafter referred to
as the "Total Sinking Fund Obligation") are insufficient to
permit the Corporation to satisfy fully its Total Sinking
Fund Obligation on that date, the Corporation shall apply to
the satisfaction of its 17% Sinking Fund Obligation on that
date that proportion of such legally available funds which
is equal to the ratio of such 17% Sinking Fund Obligation to
such Total Sinking Fund Obligation; in addition to the 17%
Sinking Fund Obligation, the Corporation shall have the
option, which shall be noncumulative, to redeem, upon
authorization of the Board of Directors, on each 17% Sinking
Fund Redemption Date, at the aforesaid sinking fund
redemption price, up to 10,000 additional shares of the 17%
Preferred Stock, Cumulative, $100 Par Value; the Corporation
shall be entitled, at its election, to credit against its
17% Sinking Fund Obligation on any 17% Sinking Fund
Redemption Date any shares of the 17% Preferred Stock,
Cumulative, Stock Par Value (including shares of the 17%
Preferred Stock, Cumulative, $100 Par Value optionally
redeemed at the aforesaid sinking fund price) theretofore
redeemed (other than shares of the 17% Preferred Stock,
Cumulative, $100 Par Value redeemed pursuant to the 17%
Sinking Fund Obligation) purchased or otherwise acquired and
not previously credited against the 17% Sinking Fund
Obligation.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "14-3/4% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a divedend rate of $14.75 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be May 1
1982, and such dividends to be cumulative from the date of
issuance;
(c) be subject to redemption at the price of $114.75 per
share if redeemed after the issuanoe and sale and on or
before March 1, 1983, $113.11 per share if redeemed after
March 1, 1983 and on or before March 1, 1984, $111.47 per
share if redeemed after March 1, 1984 and on or before March
1, 1985, $109.83 per share if redeemed after March 1, 1985
and on or before March 1, 1986, $108.19 per share if
redeemed after March 1, 1986 and on or before March 1, 1987,
$106.56 per share if redeemed after March 1, 1987 and on or
before March 1, 1988, $104.92 per share if redeemed after
March 1, 1988 and on or before March 1, 1989, $103.28 per
share if redeemed after March 1, 1989 and on or before March
1, l990, $101.64 per share if redeemed after March 1, 1990
and on or before March 1, 1991, and $100.00 per share if
redeemed after March 1, 1991, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon,
if any, to the date fixed for redemption; provided, however,
that no share of the 14-3/4% Preferred Stock, Cumulative,
$100 Par Value, shall be redeemed prior to March 1, 1987 if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or
indirectly, of funds borrowed by the Corporation, or through
the use, directly or indirectly, of funds derived through
the issuance by the Corporation of stock ranking prior to or
on a parity with the 14-3/4% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed
funds have an effective interest cost to the Corporation
(computed in accordance with generally accepted financial
practice) or such stock has an effective dividend cost to
the Corporation (so oomputed) of less than the effective
dividend cost to the Corporation of the 14-3/4% Preferred
Stock, Cumulative, $100 Par Value; and
(d) be subject to redemption as and for a sinking fund
as follows. On March 1, 1990, 1991 and 1992 (each such date
being hereinafteir referred to as a "14-3/4% Sinking Fund
Redemption Date"), the Corporation shall redeem, out of
funds legally available therefor, 33,333, 33,333 and 33,334
shares, respectively, of the 14-3/4% Preferred Stock,
Cumulative, $100 Par Value, at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed,
an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation
of the Corporation so to redeem the shares of the 14-3/4%
Preferred Stock, Cumulative, $100 Par Value, being
hereinafter referred to as the "14-3/4% Sinking Fund
Obligation"); the 14-3/4% Sinking Fund Obligation shall be
cumulative; if on any 14-3/4% Sinking Fund Redemption Date,
the Corporation shall not have funds legally available
therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 14-3/4% Sinking
Fund Obligation with respect to the shares not redeemed
shall carry forward to each successive 14-3/4% Sinking Fund
Redemption Date (or, in the event the 14-3/4% Sinking Fund
Obligation is not satisfied on March 1, 1992, to such date
as soon thereafter as funds are legally available to satisfy
the 14-3/4% Sinking Fund Obligation) until such shares shall
have been redeemed; whenever on any 14-3/4% Sinking Fund
Redemption Date, the funds of the Corporation legally
available for the satisfaction of the 14-3/4% Sinking Fund
Obligation and all other sinking fund and similar
obligations then existing with respect to any other class or
series of its stock ranking on a parity as to dividends or
assets with the 14-3/4% Preferred Stock, Cumulative, $100
Par Value (such Obligation and obligations collectively
being hereinafter referred to as the "Total Sinking Fund
Obligation") are insufficient to permit the Corporation to
satisfy fully its Total Sinking Fund Obligation on that
date, the Corporation shall apply to the satisfaction of its
14-3/4% Sinking Fund Obligation on that date that proportion
of such legally available funds which is equal to the ratio
of such 14-3/4% Sinking Fund Obligation to such Total
Sinking Fund Obligation.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "12.00% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $12.00 per share per annum
payable quarterly on February 1, May 1, August 1 and
November l of each year, the first dividend date to be May
1, 1983, and such dividends to be cumulative from the date
of issuance;
(c) be subject to redemption at the price of $112.00 per
share if redeemed on or before March 1, 1988, of $109.00 per
share if redeemed after March 1, 1988 and on or before March
1, 1993, of $106.00 per share if redeemed after March 1,
1993 and on or before March 1, 1998, and of $103.00 per
share if redeemed after March 1, 1998, in each case plus an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; provided,
however, that no share of the 12.00% Preferred Stock,
Cumulative, $100 Par Value, shall be redeemed prior to March
1, 1988 if such redemption is for the purpose or in anticipa
tion of refunding such share through the use, directly or
indirectly, of funds borrowed by the Corporation, or through
the use, directly or indirectly, of funds derived through
the issuance by the Corporation of stock ranking prior to or
on a parity with the 12.00% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed
funds have an effective interest cost to the Corporation
(computed in accordance with generally accepted financial
practice) or such stock has an effective dividend cost to
the Corporation (so computed) of less than 12.7497% to per
annum; and
(d) be subject to redemption as and for a sinking fund
as follows: on March 1, 1888 and on each March 1 thereafter
(each such date being hereinafter referred to as a "12.00%
Sinking Fund Redemption Date"), for so long as any shares of
the 12.00% Preferred Stock, Cumulative, $100 Par Value,
shall remain outstanding, the Corporation shall redeem, out
of funds legally available therefor, 5,000 shares of the
12.00% Preferred Stock, Cumulative, $100 Par Value (or the
number of shares then outstanding if less than 5,000) at the
sinking fund redemption price of $100 per share plus, as to
each share so redeemed, an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the
date of redemption (the obligation of the Corporation so to
redeem the shares of the 12.00% Preferred Stock, Cumulative,
$100 Par Value, being hereinafter referred to as the "12.00%
Sinking Fund Obligation"); the 12.00% Sinking Fund
Obligation shall be cumulative; if on any 12.00% Sinking
Fund Redemption Date, the Corporation shall not have funds
legally available therefor sufficient to redeem the full
number of shares required to be redeemed on that date, the
12.00% Sinking Fund Obligation with respect to the shares
not redeemed shall carry forward to each successive 12.00%
Sinking Fund Redemption Date until such shares shall have
been redeemed; whenever on any 12.00% Sinking Fund
Redemption Date, the funds of the Corporation legally
available for the satisfaction of the 12.00% Sinking Fund
Obligation and all other sinking fund and similar
obligations then existing with respect to any other class or
series of its stock ranking on a parity as to dividends or
assets with the 12.00% Preferred Stock Cumulative, $100 Par
Value (such Obligation and obligations collectively being
hereinafter referred to as the "Total Sinking Fund
Obligation") are insufficient to permit the Corporation to
satisfy fully its Total Sinking Fund Obligation on that
date, the Corporation shall apply to the satisfaction of its
12.00% Sinking Fund Obligation on that date that proportion
of such legally available funds which is equal to the ratio
of such 12.00% Sinking Fund Obligation to such Total Sinking
Fund Obligation; in addition to the 12.00% Sinking Fund
Obligation, the Corporation shall have the option, which
shall be noncumulative, to redeem, upon authorization of the
Board of Directors, on each 12.00% Sinking Fund Redemption
Date, at the aforesaid sinking fund redemption price, up to
5,000 additional shares of the 12.00% Preferred Stock
Cumulative, $100 Par Value; the Corporation shall be
entitled, at its election, to credit against its 12.00%
Sinking Fund Obligation on any 12.00% Sinking Fund
Redemption Date any shares of the 12.00% Preferred Stock,
Cumulative, $100 Par Value (including shares of the 12.00%
Preferred Stock Cumulative, $100 Par Value optionally
redeemed at the aforesaid sinking fund price) theretofore
redeemed (other than shares of the 12.00% Preferred Stock,
Cumulative, $100 Par Value redeemed pursuant to the 12.00%
Sinking Fund Obligation) purchased or otherwise acquired and
not previously credited against the 12.00% Sinking Fund
Obligation.
Subject to the foregoing, the distinguishing characteristics
of the Preferred Stock shall be:
(A) Each series of the Preferred Stock, pari passu with all
shares of preferred stock of any class or series then
outstanding, shall be entitled but only when and as declared by
the Board of Directors, out of funds legally available for the
payment of dividends in preference to the Common Stock, to
dividends at tbe rate stated and expressed with respect to such
series herein or by the resolution or resolutions providing for
the issue of such series adopted by tbe Board of Directors; such
dividends to be cumulative from such date and payable on such
dates in each year as may be stated and expressed in said
resolution, to stockholders of record as of a date not to exceed
40 days and not less than 10 days preceding the dividend payment
dates so fixed.
(B) If and when dividends payable on any of the Preferred
Stock of the Corporation at any time outstanding shall be in
defauIt in an amount equal to four full quarterly payments or
more per share, and thereafter until all dividends on any such
preferred stock in default shall have been paid, the holders of
the Preferred Stock pari passu with the holders of other
preferred stock then outstanding, voting separately as a class,
shall be entitled to elect the smallest number of directors
necessary to constitute a majority of the full Board of
Directors, and, except as provided in the following paragraph,
the holders of the Comrnon Stock, voting separately as a class,
shall be entitled to elect the remaining directors of the
Corporation. The termns of office, as directors, of all persons
who may be directors of the Corporation at the time shall
terminate upon the election of a majority of the Board of
Directors by the holders of the Preferred Stock except that if
the holders of the Common Stock shall not have elected the
remaining directors of the Corporation, then, and only in that
event, the directors of the Corporation in office just prior to
the election of a majority of the Board of Directors by the
holders of the Preferred Stock shall elect the remaining
directors of the Corporation. Thereafter, while such default
continues and the majority of the Board of Directors is being
elected by the holders of the Preferred Stock, the remaining
directors, whether elected by directors, as aforesaid, or whether
originally or later elected by holders of the Common Stock shall
continue in office until their successors are elected by holders
of the Common Stock and shall qualify.
If and when all dividends then in default on the Preferred
Stock; then outstanding shall be paid (such dividends to be
declared and paid out of any funds legally available therefor as
soon as reasonably practicable), the holders of the Preferred
Stock shall be divested of any special right with respect to the
election of directors, and the voting power of the holders of the
Preferred Stock and the holders of the Common Stock shall revert
to the status existing before the first dividend payment date on
which dividends on the Preferred Stock were not paid in full,
but always subject to the same provisions for vesting such
special rights in the bolders of the Preferred Stock in case of
further like defaults in the payment of dividends thereon as
described in the immediately foregoing paragraph. Upon
termination of any such special voting right upon payment of all
accumulated and unpaid dividends on the Preferred Stock, the
terms of office of all persons who may have been elected
directors of the Corporation by vote of the holders of the
Preferred Stock as a class, pursuant to such special voting right
shall forthwith terminate, and the resulting vacancies shall be
filled by the vote of a majority of the remaining directors.
In case of any vacancy in the office of a director occurring
among the directors elected by the holders of the Preferred
Stock, voting separately as a class, the remaining directors
elected by the holders of the Preferred Stock, by affirmative
vote of a majority thereof, or the remaining director so elected
if there be but one, may elect a successor or successors to hold
office for the unexpired term or terms of the director or
directors whose place or places shall be vacant. Likewise, in
case of any vacancy in the office of a director occurring among
the directors not elected by the holders of the Preferred Stock,
the remaining directors not elected by the holders of the
Preferred Stock, by affirmative vote of a majority thereof, or
the remaining director so elected if there be but one, may elect
a successor or successors to hold office for the unexpired term
or terms of the director or directors whose place or places shall
be vacant.
Whenever the right shall have accrued to the holders of the
Preferred Stock to elect directors, voting separately as a class,
it shall be the duty of the President, a Vice-President or the
Secretary of the Corporation forthwith to call and cause notice
to be given to the shareholders entitled to vote of a meeting to
be held at such time as the Corporation's officers may fix, not
less than forty-five nor more than sixty days after the accrual
of such right, for the purpose of electing directors. The notice
so given shall be mailed to each holder of record of preferred
stock at his last known address appearing on the books of the
Corporation and shall set forth, among other things, (i) that by
reason of the fact that dividends payable on preferred stock are
in default in an amount equal to four full quarterly payments or
more per share, the holders of the Preferred Stock, voting
separately as a class, have the right to elect the smallest
number of directors necessary to constitute a majority of the
full Board of Directors of the Corporation, (ii) that any holder
of the Preferred Stock has the right, at any reasonable time, to
inspect, and make copies of, the list or lists of holders of the
Preferred Stock maintained at the principal office of the
Corporation or at the office of any Transfer Agent of the
Preferred Stock, and (iii) either the entirety of this paragraph
or the substance thereof with respect to the number of shares of
the Preferred Stock required to be represented at any meeting, or
adjournment thereof, called for the election of directors of the
Corporation. At the first meeting of stockholders held for the
purpose of electing directors during such time as the holders of
the Preferred Stock shall have the special right, voting
separately as a class, to elect directors, the presence in person
or by proxy of the holders of a majority of the outstanding
Common Stock shall be required to constitute a quorum of such
class for the election of directors, and the presence in person
or by proxy of the holders of a majority of the outstanding
Preferred Stock shall be required to constitute a quorum of such
class for the election of directors; provided, however, that in
the absence of a quorum of the holders of the Preferred Stock, no
election of directors shall be held, but a majority of the
holders of the Preferred Stock who are present in person or by
proxy shall have power to adjourn the election of the directors
to a date not less than fifteen nor more than fifty days from the
giving of the notice of such adjourned meeting hereinafter
provided for; and provided, further, that at such adjourned
meeting, the presence in person or by proxy of the holders of 35%
of the outstanding Preferred Stock shall be required to
constitute a quorum of such class for the election of directors.
In the event such first meeting of stockholders shall be so
adjourned, it shall be the duty of the President, a Vice-
President or the Secretary of the Corporation, within ten days
from the date on which such first meeting shall have been
adjourned, to cause notice of such adjourned meeting to be given
to the shareholders entitled to vote thereat, such adjourned
meeting to be held not less than fifteen days nor more than fifty
days from the giving of such second notice. Such second notice.
shall be given in the form and manner hereinabove provided for
with respect to the notice required to be given of such first
meeting of stockholders, and shall further set forth that a
quorum was not present at such first meeting and that the holders
of 35% of the outstanding Preferred Stock shall be required to
constitute a quorum of such class for the election of directors
at such adjourned meeting. If the requisite quorum of holders of
the Preferred Stock shall not be present at said adjourned
meeting, then the directors of the Corporation then in office
shall remain in office until the next Annual Meeting of the
Corporation, or special meeting in lieu thereof and until their
successors shall have been elected and shall qualify. Neither
such first meeting nor such adjourned meeting shall be held on a
date within sixty days of the date of the next Annual Meeting of
the Corporation, or special meeting in lieu thereof. At each
Annual Meeting of the Corporation, or special meeting in lieu
thereof, held during such time as the holders of the Preferred
Stock, voting separately as a class. shall have the right to
elect a majority of the Board of Directors, the foregoing
provisions of this paragraph shall govern each Annual Meeting, or
special meeting in lieu thereof, as if said Annual Meeting or
special meeting were the first meeting of stockholders held for
the purpose of electing directors after the right of the holders
of the Preferred Stock, voting separately as a class, to elect a
majority of the Board of Directors, should have accrued the
exception, that if, at any adjourned annual meeting, or special
meeting in lieu thereof, the holders of 35% of the outstanding
Preferred Stock are not present in person or by proxy, all the
directors shall be elected by a vote of the holders of a majority
of the Common Stock of the Corporation present or represented at
the meeting.
(C) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of at least
two-thirds of the total number of shares of the Preferred Stock
then outstanding:
(1) create, authorize or issue any new stock which,
after issuance would rank prior to the Preferred Stock as to
dividends, in liquidation, dissolution, winding up or
distribution, or create, authorize or issue any security
convertible into shares of any such stock except for the
purpose of providing funds for the redemption of all of the
Preferred Stock then outstanding, such new stock or security
not to be issued until such redemption shall have been
authorized and notice of such redemption given and the
aggregate redemption price deposited as provided in
paragraph (G) below; provided, however, that any such new
stock or security shall be issued within twelve months after
the vote of the Preferred Stock herein provided for
authorizing the issuance of such new stock or security; or
(2) amend, alter, or repeal any of the rights,
preferences or powers of the holders of the Preferred Stock
so as to affect adversely any such rights, preferences or
powers; provided, however, that if such amendment,
alteration or repeal affects adversely the rights,
preferences or powers of one or more, but not all, series of
Preferred Stock at the time outstanding, only the consent of
the holders of at least two-thirds of the total number of
outstanding shares of all series so affected shall be
required; and provided, further, that an amendment to
increase or decrease the authorized amount of Preferred
Stock or to create or authorize, or increase or decrease the
amount of, any class of stock; ranking on a parity with the
outstanding shares of the Preferred Stock as to dividends or
assets shall not be deemed to affect adversely the rights,
preferences or powers of the holders of the Preferred Stock
or any series thereof.
(D) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of the
holders of a majority of the total number of shares of the
Preferred Stock then outstanding:
(1) merge or consolidate with or into any other
corporation or corporations or sell or otherwise dispose of
all or substantially all of the assets of the Corporation,
unless such merger or consolidation or sale or other
disposition, or the exchange, issuance or assumption of all
securities to be issued or assumed in connection with any
such merger or consolidation or sale or other disposition,
shall have been ordered, approved or permitted under the
Public Utility Holding Company Act of 1935; or
(2) issue or assume any unsecured notes, debentures or
other securities representing unsecured indebtedness for
purposes other than (i) the refunding of outstanding
unsecured indebtedness theretofore issued or assumed by the
Corporation resulting in equal or longer maturities, or (ii)
the reacquisition, redemption or other retirement of all
outstanding shares of the Preferred Stock, if immediately
after such issue or assumption, the total principal amount
of all unsecured notes, debentures or other securities
representing unsecured indebtedness issued or assumed by the
Corporation, including unsecured indebtedness then to be
issued or assumed (but excluding the principal amount then
outstanding of any unsecured notes, debentures, or other
securities representing unsecured indebtedness having a
maturity in excess of ten (10) years and in amount not
exceeding 10% of the aggregate of (a) and (b) of this
section below) would exceed ten per centum (10%) of the
aggregate of (a) the total principal amount of all bonds or
other securities representing secured indebtedness issued or
assumed by the Corporation and then to be outstanding, and
(b) the capital and surplus of the Corporation as then to be
stated on the books of account of the Corporation. When
unsecured notes, debentures or other securities representing
unsecured debt of a maturity in excess of ten (10) years
shall become of a maturity of ten (10) years or less, it
shall then be regarded as unsecured debt of a maturity of
less than ten (10) years and shall be computed with such
debt for the purpose of determining the percentage ratio to
the sum of (a) and (b) above of unsecured debt of a maturity
of less than ten (10) years, and when provision shall have
been made, whether through a sinking fund or otherwise, for
the retirement, prior to their maturity, of unsecured notes,
debentures, or other securities representing unsecured debt
of a maturity in excess of ten (10) years, the amount of any
such security so required to be retired in less than ten
(10) years shall be regarded as unsecured debt of a maturity
of less than ten (10) years (and not as unsecured debt of a
maturity in excess of ten (10) years) and shall be computed
with such debt for the purpose of determining the percentage
ratio to the sum of (a) and (b) above of unsecured debt of a
maturity of less than ten (10) years, provided, however,
that the payment due upon the maturity of unsecured debt
having an original single maturity in excess of ten (10)
years or the payment due upon the latest maturity of any
serial debt which had original maturities in excess of ten
(10) years shall not, for purposes of this provision, be
regarded as unsecured debt of a maturity of less than ten
(10) years until such payment or payments shall be required
to be made within three (3) years; furthermore, when
unsecured notes, debentures or other securities representing
unsecured debt of a maturity of less than ten (10) years
shall exceed 10% of the sum of (a) and (b) above, no
additional unsecured notes, debentures or other securities
representing unsecured debt shall be issued or assumed
(except for the purpose set forth in (i) or (ii) above)
until such ratio is reduced to 10% of the sum of (a) and (b)
above; or
(3) issue, sell or otherwise dispose of any shares of
the Preferred Stock in addition to the 104,476 shares of the
Preferred Stock originally authorized, or of any other class
of stock ranking on a parity with the Preferred Stock as to
dividends or in liquidation, dissolution, winding up or
distribution, unless the gross income of the Corporation and
Mississippi Power & Light Company, a Florida corporation,
for a period of twelve (12) consecutive calendar months
within the fifteen (15) calendar months immediately
preceding the issuance, sale or disposition of such stock,
determined in accordance with generally acccepted accounting
practices (but in any event after deducting all taxes and
the greater of (a) the amount for said period charged by the
Corporation and Mississippi Power & Light Company, a Florida
corporation, on their books to depreciation expense or (b)
the largest amount required to be provided therefor by any
mortgage indenture of the Corporation) to be available for
the payment of interest, shall have been at least one and
one-half times the sum of (i) the annual interest charges on
all interest bearing indebtedness of the Corporation and
(ii) the annual dividend requirements on all outstanding
shares of the Preferred Stock and of all other classes of
stock ranking prior to, or on a parity with, the Preferred
Stock as to dividends or distributions, including the shares
proposed to be issued; provided, that there shall be
excluded from the foregoing computation interest charges on
all indebtedness and dividends on all shares of stock which
are to be retired in connection with the issue of such
additional shares of the Preferred Stock or other class of
stocks ranking prior to, or on a parity with, the Preferred
Stock as to dividends or distributions; and provided,
further, that in any case where such additional shares of
the Preferred Stock, or other class of stock ranking on a
parity with the Preferred Stock as to dividends or
distributions, are to be issued in connection with the
acquisition of additional property, the gross income of the
property to be so acquired, computed on the same basis as
the gross income of the Corporation, may be included on a
pro forma basis in making the foregoing computation; or
(4) issue, sell, or otherwise dispose of any shares of
the Preferred Stock, in addition to the 104,476 shares of
the Preferred Stock originally authorized, or of any other
class of stock ranking on a parity with the Preferred Stock
as to dividends or distributions, unless the aggregate of
the capital of the Corporation applicable to the Common
Stock and the surplus of the Corporation shall be not less
than the aggregate amount payable on the involuntary
liquidation, dissolution, or winding up of the Corporation,
in respect of all shares of the Preferred Stock and all
shares of stock, if any, ranking prior thereto, or on a
parity therewith, as to dividends or distributions, which
will be outstanding after the issue of the shares proposed
to be issued; provided, that if, for the purposes of meeting
the requirements of this subparagraph (4), it becomes
necessary to take into consideration any earned surplus of
the Corporation, the Corporation shall not thereafter pay
any dividends on shares of the Common Stock which would
result in reducing the Corporation's Common Stock equity (as
in paragraph (H) hereinafter defined) to an amount less than
the aggregate amount payable, on involuntary liquidation,
dissolution or winding up the Corporation, on all shares of
the Preferred Stock and of any stock ranking prior to, or on
a parity with, the Preferred Stock, as to dividends or other
distributions, at the time outstanding.
(E) Each holder of Conunon Stock of the Corporation shall be
entitled to one vote, in person or by proxy, for each share of
such stock standing in his name on the books of the Corporation.
Except as hereinbefore expressly provided in this Section Fourth,
the holders of the Preferred Stock shall have no power to vote
and shall be entitled to no notice of any meeting of the
stockholders of the Corporation. As to matters upon which holders
of the Preferred Stock are entitled to vote as hereinbefore
expressly provided, each holder of such Preferred Stock shall be
entitled to one vote, in person or by proxy, for each share of
such Preferred Stock standing in his name on the books of the
Corporation.
(F) In the event of any voluntary liquidation, dissolution or
winding up of the Corporation, the Preferred Stock, pari passu
with all shares of preferred stock of any class or series then
outstanding, shall have a preference over the Common Stock until
an amount equal to the then current redemption price shall have
been paid. In the event of any involuntary liquidation,
dissolution or winding up of the Corporation, which shall include
any such liquidation, dissolution or winding up which may arise
out of or result from the condemnation or purchase of all or a
major portion of the properties of the Corporation, by (i) the
United States Government or any authority, agency or
instrumentality thereof, (ii) a state of the United States or any
polltical subdivision, authority, agency, or instrumentality
thereof, or (iii) a disrict, cooperative or other association or
entity not organized for profit, the Preferred Stock, pari passu
with all shares of preferred stock of any class or series then
outstanding, shall also have a preference over the Common Stock
until the full par value thereof and an amount equal to all
accumulated and unpaid dividends thereon shall have been paid by
dividends or distribution.
(G) Upon the affirmative vote of a majority of the shares of
the issued and outstanding Common Stock at any annual meeting, or
any special meeting called for that purpose, the Corporation may
at any time redeem all of any series of said Preferred Stock or
may from time to time redeem any part thereof, by paying in cash
the redemption price then applicable thereto as stated and
expressed with respect to such series in the resolution providing
for the issue of such shares adopted by the Board of Directors of
the Corporation, or in these Restated Articles of Incorporation
or any amendment thereof, plus, in each case, an amount
equivalent to the accumulated and unpaid dividends, if any, to
the date of redemption. Notice of the intention of the
Corporation to redeem all or any part of the Preferred Stock
shall be mailed not less than thirty (30) days nor more than
sixty (60) days before the date of redemption to each holder of
record of Preferred Stock to be redeemed, at his post office
address as shown by the Corporation's records, and not less than
thirty (30) days' nor more than sixty (60) days' notioe of such
redemption may be published in such manner as may be prescribed
by resolution of the Board of Directors of the Corporation; and,
in the event of such publication, no defect in the mailing of
such notice shall affect the validity of the proceedings for the
redemption of any shares of Preferred Stock so to be redeemed.
Contemporaneously with the mailing or the publication of such
notice as aforesaid or at any time thereafter prior to the date
of redemption, the Corporation may deposit the aggregate
redemption price (or the portion thereof not already paid in the
redemption of such Preferred Stock so to be redeemed) with any
bank or trust company in the City of New York, New York, or in
the City of Jackson, Mississippi, named in such notice, payable
to the order of the record holders of the Preferred Stock so to
be redeemed, as the case may be, on the endorsement and surrender
of their certificates, and thereupon said holders shall cease to
be stockholders wlth respect to such shares; and from and after
the making of such deposit such holders shall have no interest in
or claim against the Corporation with respect to said shares, but
shall be enlitled only to receive such moneys from said bank or
trust company, with interest, if any, allowed by such bank or
trust company on such moneys deposited as in this paragraph
provided, on endorsement and surrender of their certificates, as
aforesaid. Any moneys so deposited, plus interest thereon, if
any, remaining unclaimed at the end of six years from the date
fixed for redemption, if thereafter requested by resolution of
the Board of Directors, shall be repaid to the Corporation, and
in the event of such repayment to the Corporation, such holders
of record of the shares so redeemed as shall not have made claim
against such moneys prior to such repayment to the Corporation,
shall be deemed to be unsecured creditors of the Corporation for
an amount, without interest, equivalent to the amount deposited,
plus interest thereon, if any, allowed by such bank or trust
company, as above stated, for the redemption of such shares and
so paid to the Corporation. Shares of the Preferred Stock which
have been redeemed shall not be reissued. If less than all of
the shares of the Preferred Stock are to be redeemed, the shares
thereof to be redeemed shall be selected by lot, in such manner
as the Board of Directors of the Corporation shall determine, by
an independent bank or trust company selected for that purpose by
the Board of Directors of the Corporation. Nothing herein
contained shall limit any legal right of the Corporation to
purchase or otherwise acquire any shares of the Preferred Stock;
provided, however, that, so long as any shares of the Preferred
Stock are outstanding, the Corporation shall not redeem, purchase
or otherwise acquire less than all of the shares of the Preferred
Stock, if, at the time of such redemption, purchase or other
acquisition, dividends payable on the Preferred Stock shall be in
default in whole or in part, unless, prior to or concurrently
with such redemption, purchase or other acquisition, all such
defaults shall be cured or unless such redemption, purchase or
other acquisition shall have been ordered, approved or permitted
under the Public Utility Holding Company Act of 1935; and
provided further that, so long as any shares of the Preferred
Stock are outstanding, the Corporation shall not make any payment
or set aside any funds for payment into any sinking fund for the
purchase or redemption of any shares of the Preferred Stock, if,
at the time of such payment, or the setting apart of funds for
such payment, dividends payable on the Preferred Stock shall be
in default in whole or in part, unless, prior to or concurrently
with such payment or the setting apart of funds for such payment,
all such defaults shall be cured or unless such payment, or the
setting apart of funds for such payment, shall bave been ordered,
approved or permitted under the Public Utility Holding Company
Act of 1935. Any shares of the Preferred Stock so redeemed,
purchased or acquired shall retired and cancelled.
(H) For the purposes of this paragraph (H) and subparagraph
(4) of paragraph (D) the term "Common Stock Equity" shall mean
the aggregate of the par value of, or stated capital represented
by, the outstanding shares (other than shares owned by the
Corporation) of stock ranking junior to the Preferred Stock as to
dividends and assets, of the premium on such junior stock and of
the surplus (including earned surplus, capital surplus and
surplus invested in plant) of the Corporation less (1) any
amounts recorded on the books of the Corporation for utility
plant and other plant in excess of the original cost thereof, (2)
unamortized debt discount and expense, capital stock discount and
expense and any other intangible items set forth on the asset
side of the balance sheet as a result of accounting convention,
(3) the excess, if any, of the aggregate amount payable on
involuntary liquidation, dissolution or winding up of the affairs
of the Corporation upon all outstanding preferred stock of the
Corporation over the aggregate par or stated value thereof and
any premiums thereon and (4) the excess, if any, for the period
beginning with January 1, 1954, to the end of the month within
ninety (90) days preceding the date as of which Common Stock
Equity is determined, of the cumulative amount computed under re
quirements contained in the Corporation's mortgage indentures
relating to minimum depreciation provisions (this cumulative
amount being the aggregate of the largest amounts separately
computed for entire periods of differing coexisting mortgage
indenture requirements), over the amount charged by the
Corporation and Mississippi Power & Light Company, a Florida
corporation, on their books for depreciation during such period,
including the final fraction of a year; provided, however, that
no deductions shall be required to be made in respect of items
referred to in subdivisions (1) and (2) of this paragraph (H) in
cases in which such items are being amortized or are provided
for, or are being provided for, by reserves. For the purpose of
this paragraph (H): (i) the term "total capitalization" shall
mean the sum of the Common Stock Equity plus item three (3) in
this paragraph (H) and the stated capital applicable to, and any
premium on, outstanding stock of the Corporation not included in
Common Stock Equity, and the principal amount of all outstanding
debt of the Corporation maturing more than twelve months after
the date of issue thereof; and (ii) the term "dividends on Common
Stock" shall embrace dividends on Common Stock (other than
dividends payable only in shares of Common Stock), distributions
on, and purchases or other acquisitions for value of, any Common
Stock of the Corporation or other stock if any, subordinate to
its Preferred Stock. So long as any shares of the Preferred
Stock are outstanding, the Corporation shall not declare or pay
any dividends on the Common Stock, except as follows:
(a) If and so long as the Common Stock Equity at the
end of the calendar month immediately preceding the date on
which a dividend on Common Stock is declared is, or as a
result of such dividend would become, less than 20% of total
capitalization, the Corporation shall not declare such
dividends in an amount which, together with all other
dividends on Common Stock paid within the year ending with
and including the date on which such dividend is payable,
exceeds 50% of the net income of the Corporation available
for dividends on the Common Stock for the twelve full
calendar months immediately preceding the month in which
such dividends are declared, except in an amount not
exceeding the aggregate of dividends on Common Stock which
under the restrictions set forth above in this subparagraph
(a) could have been, and have not been, declared; and
(b) If and so long as the Common Stock Equity at the
end of the calendar month immediately preceding the date on
which a dividend on Common Stock is declared is, or as a
result of such dividend would become, less than 25% but not
less than 20% of total capitalization, the Corporation shall
not declare dividends on the Common Stock in an amount
which, together with all other dividends on Comrnon Stock
paid within the year ending with and including the date on
which such dividend is payable, exceeds 75% of the net
income of the Corporation and Mississippi Power & Light
Company, a Florida corporation, available for dividends on
the Common Stock for the twelve full calendar months
immediately preceding the month in which such dividends are
declared, except in an amount not exceeding the aggregate of
dividends on Common Stock which under the restrictions set
forth above in subparagraph (a) and in this subparagraph (b)
could have been and have not been declared; and
(c) If any time when the Common Stock Equity is 25% or
more of total capitalization, the Corporation may not
declare dividends on shares of the Common Stock which would
reduce the Common Stock Equity below 25% of total
capitalization, except to the extent provided in
subparagraphs (a) and (b) above.
At anytime when the aggregate of all amounts credited
subsequent to January 1, 1954, to the depreciation reserve
account of the Corporation and Mississippi Power & Light Company,
a Florida corporation, through charges to operating revenue
deductions or otherwise on the books of the Corporation and
Mississippi Power & Light Company, a Florida corporation, shall
be less than the amount computed as provided in clause (aa)
below, under requirements contained in the Corporation's mortgage
indentures, then for the purposes of subparagraphs (a) and (b)
above, in determining the earnings available for common stock
dividends during any twelve-month period, the amount to be
provided for depreciation in that period shall be (aa) the
greater of the cumulative amount charged to depreciation expense
on the books of the Corporation and Mississippi Power & Light
Company, a Florida corporation, or the cumulative amount computer
under requirements contained in the Corporation's mortgage
indentures relating to minimum depreciation provisions (the
latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing co-
existing mortgage indenture requirements) for the period from
January 1, 1954, to and including said twelve-month period, less
(bb) the greater of the cumulative amount charged to depreciation
expense on the books of the Corporation and Mississippi Power &
Light Company, a Florida corporation, or the cumulative amount
computed under requirements contained in the Corporation's
mortgage indentures relating to minimum depreciation provisions
(the latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing
coexisting mortgage indenture requirements) from January 1, 1954,
up to but excluding said twelve-month period; provided that in
the event any company other than Mississippi Power & Light
Company, a Florida corporation, is merged into the Corporation
the "cumulative amount computed under requirements contained in
the Corporation's mortgage indentures relating to minimum
depreciation provisions" referred to above shall be computed
without regard, for the period perior to the merger, of property
acquired in the merger, and the "cumulative amount charged to
depreciation expense on the books of the Corporation" shall be
exclusive of amounts provided for such property prior to the
merger.
(I) The Board of Directors are hereby expressly authorized
by resolution or resolutions to state and express the series and
distinctive serial designation of any authorized and unissued
shares of Preferred Stock proposed to be issued, the number of
shares to constitute each such series, the annnal rate or rates
of dividends payable on shares of each series together with the
dates on which such dividends shall be paid in each year, the
date from which such dividends shall commence to accumulate, the
amount or amounts payable upon redemption and the sinking fund
provisions, if any, for the redemption or purchase of shares.
(J) Dividends may be paid upon the Common Stock only when (i)
dividends have been paid or declared and funds set apart for the
payment of dividends as aforesaid on the Preferred Stock from thc
date(s) after which dividends thereon became cumulative, to the
beginning of the period then current, with respect to which such
dividends on the Preferred Stock are usually declared, and (ii)
all payments have been made or funds have been set aside for
payments then or theretofore due under sinking fund provisions,
if any, for the redemption or purchase of shares of any series of
the Preferred Stock, but whenever (x) there shall have been paid
or declared and funds shall have been set apart for the payment
of all such dividends upon the Preferred Stock as aforesaid, and
(y) all payments shall have been made or funds shall have been
set aside for payments then or theretofore due under sinking fund
provisions, if any, for the redemption or purchase of shares of
any series of the Preferred Stock, then, subject to the
limitations above set forth, dividends upon the Common Stock may
be declared payable then or thereafter, out of any net earnings
or surplus of assets over liabilities, including capital, then
remaining. After the payment of the limited dividends and/or
shares in distribution of assets to which the Preferred Stock is
expressly entitled in preference to the Common Stock, in
accordancc with the provisions hereinabove set forth, the Common
Stock alone (subject to the rights of any class of stock
hereafter authorized) shall receive all further dividends and
shares in distribution.
(K) Subject to the limitations hereinabove set forth the
Corporation from time to time may resell any of its own stock,
purchased or otherwise acquired by it as hereinafter provided
for, at such price as may be fixed by its Board of Directors or
Executive Committee.
(L) Subject to the limitations hereinabove set forth the
Corporation in order to acquire funds with which to redeem any
outstanding Preferred Stock of any class, may issue and sell
stock of any class then authorized but unissued, bonds, notes,
evidences of indebtedness, or other securities.
(M) Subject to the limitations hereinabove set forth the
Board of Directors of the Corporation may at any time authorize
the conversion or exchange of the whole or any particular share
of the outstanding preferred stock of any class with the consent
of the holder thereof, into or for stock of any other class at
the time of such consent authorized but unissued and may fix the
terms and conditions upon which such conversion or exchange may
be made; provided that without the consent of the holders of
record of two-thirds of the shares of Common Stock outstanding
given at a meeting of the holders of the Common Stock called and
held as provided by the By-Laws or given in writing without a
meeting, the Board of Directors shall not authorize the
conversion or exchange of any preferred stock of any class into
or for Common Stock or authorize the conversion or exchange of
any preferred stock; of any class into or for preferred stock of
any other class, if by such conversion or exchange the amount
which the holders of the shares of stock so converted or
exchanged would be entitled to receive either as dividends or
shares in distribution of assets in preference to the Common
Stock would be increased.
(N) A consolidation, merger or amalgamation of the
Corporation with or into any other corporation or corporations
shall not be deemed a distribution of assets of the Corporation
within the meaning of any provisions of these Restated Articles
of Incorporation.
(O) The consideration received by the Corporation from the
sale of any additional stock without nominal or par value shall
be entered in the Corporation's capital stock account.
(P) Subject to the limitations hereinabove set forth upon
the vote of a majority of all the Directors of the Corporation
and of a majority of the total number of shares of stock then
issued and outstanding and entitled to vote, irrespective of
class (or if the vote of a larger number or different proportion
of shares is required by the laws of the State of Mississippi not
withstanding the above agreement of the stockholders of the
Corporation to the contrary, then upon the vote of the larger
number or different proportion of shares so required), the
Corporation may from time to time create or authorize one or more
other classes of stock with such preferences, designations,
rights, privileges, powers, restrictions, limitations and qualifi
cations as may be determined by said vote, which may be the same
as or different from the preferences, designations, rights,
privileges, powers, restrictions, limitations and qualifications
of the classes of stock of the Corporation then authorized. Any
such vote authorizing the creation of a new class of stock may
provide that all moneys payable by the Corporation with respect
to any class of stock thereby authorized shall be paid in the
money of any foreign country named therein or designated by the
Board of Directors, pursuant to authority therein granted, at a
fixed rate of exchange with the money of the United States of
America therein stated or provided for and all such payments
shall be made accordingly. Any such vote may authorize any shares
of any class then authorized but unissued to be issued as shares
of such new class or classes
(Q) Subject to the limitations hereinabove set forth, either
the Preferred Stock or the Common Stock or both of said classes
of stock, may be increased at any time upon vote of the holders
of a majority of the total number of shares of the Corporation
then issued and outstanding and entitled to vote thereon,
irrespective of class.
(R) If any provisions in this Section Fourth shall be in
conflict or inconsistent with any other provisions of these
Restated Articles of Incorporation of the Corporation the
provisions of this Section Fourth shall prevail and govern.
FIFTH: The Corporation will not commence business until at
least $1,000 has been received by it as consideration for the
issuance of shares.
SIXTH: Existing provisions limiting or denying to
shareholders the preemptive right to acquire additional or
treasury shares of the Corporation are:
No holder of any stock of the Corporation shall be entitled
as of right to purchase or subscribe for any part of any unissued
stock of the Corporation, or any additional stock of any class to
be issued by reason of any increase of the authorized capital
stock of the Corporation or of bonds, certificates of
indebtedness, debentures, or other securities convertible into
stock of the Corporation, but any such unissued stock or any such
additional authorized issue of new stock, or of securities
convertible into stock, may be issued and disposed of by the
Board of Directors without offering to the stockholders then of
record, or to any class of stockholders, any thereof on any
terms.
SEVENTH: Existing provisions of the Restated Articles of
Incorporation for the regulation of the internal affairs of the
Corporation are:
(a) General authority is hereby conferred upon the
Board of Directors to fix the consideration for which shares
of stock of the Corporation without nominal or par value may
be issued and disposed of, and the shares of stock of the
Corporation without nominal or par value, whether authorized
by these Restated Articles of Incorporation or by subsequent
increase of the authorized number of shares of stock or by
amendment of these Restated Articles of Incorporation by
consolidation or merger or otherwise, and/or any securities
convertible into stock of the Corporation without nominal or
par value may be issued and disposed of for such
consideration and on such terms and in such manner as may be
fixed from time to time by the Board of Directors.
(b) The issue of the whole, or any part determined by
the Board of Directors, of the shares of stock of the
Corporation as partly paid, and subject to calls thereon
until the whole thereof shall have been paid, is hereby
authorized.
(c) The Board of Directors shall have power to
authorize the payment of compensation to the directors for
services to the Corporation, including fees for attendance
at meetings of the Board of Directors or the Executive
Committee and all other committees and to determine the
amount of such compensation and fees.
(d) The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by
it, alleged to have been lost or destroyed and the Board of
Directors may, in their discretion, require the owner of the
lost or destroyed certificate, or his legal representative,
to give bond in such sum as they may direct as indemnity
against any claim that may be made against the Corporation,
its officers, employees or agents by reason thereof; a new
certificate may be issued without requiring any bond when,
in the judgment of the directors, it is proper so to do.
If the Corporation shall neglect or refuse to issue
such a new certificate and it shall appear that the owner
thereof has applied to the Corporation for a new certificate
in place thereof and has made due proof of the loss or
destruction thereof and has given such notice of his
application for such new certificate on such newspaper of
general circulation, published in the State of Mississippi
as reasonably should be approved by the Board of Directors,
and in such other newspaper as may be required by the Board
of Directors, and has tendered to the Corporation adequate
security to indemnify the Corporation, its officers
employees, or agents, and any person other than such
applicant who shall thereafter appear to be the lawful owner
of such alleged lost or destroyed certificate against
damage, loss or expense because of the issuance of such new
certificate, and the effect thereof as herein provided,
then, unless there is adequate cause why such new
certificate shall not be issued, the Corporation, upon the
receipt of said indemnity, shall issue a new certificate of
stock in place of such lost or destroyed certificate. In the
event that the Corporation shall nevertheless refuse to
issue a new certificate as aforesaid, the applicant may then
petition any court of competent jurisdiction for relief
against the failure of the Corporation to perform its
obligations hereunder. In the event that the Corporation
shall issue such new certificate, any person who shall
thereafter claim any rights under the certificate in place
of which such new certificate is issued, whether such new
certificate is issued pursuant to the judgment or decree of
such court or voluntarily by the Corporation after the
publication of notice and the receipt of proof and indemnity
as aforesaid, shall have recourse to such indemnity and the
Corporation shall be discharged from all liability to such
person by reason of such certificate and the shares
represented thereby.
(e) No stockholder shall have any right to inspect any
account, book or document of the Corporation, except as
conferred by statute or authorized by the directors.
(f) A director of the Corporation shall not be
disqualified by his office from dealing or contracting with
the Corporation either as a vendor, purchaser or otherwise,
nor shall any transaction or contract of the Corporation be
void or voidable by reason of the fact that any director or
any firm of which any director is a member or any
corporation of which any director is a shareholder, officer
or director, is in any way interested in such transaction or
contract, provided that such transaction or contract is or
shall be authorized, ratified or approved either (1) by a
vote of a majority of a quorum of the Board of Directors or
the Executive Committee, without counting in such majority
or quorum any directors so interested or members of a firm
so interested or a shareholder, officer or director of a
corporation so interested, or (2) by the written consent, or
by vote at a stockholders' meeting of the holders of record
of a majority in number of all the outstanding shares of
stock of the Corporation entitled to vote; nor shall any
director be liable to account to the Corporation for any
profits realized by or from or through any such transaction
or contract of the Corporation, authorized, ratified or
approved as aforesaid by reason of the fact that he or any
firm of which he is a member or any corporation of which he
is a shareholder, officer or director was interested in such
transaction or contract. Nothing herein contained shall
create any liability in the events above described or
prevent the authorization, ratification or approval of such
contract in any other manner provided by law.
(g) Any director may be removed, whether cause shall be
assigned for his removal or not, and his place filled at any
meeting of the stockholders by the vote of a majority of the
outstanding stock of the Corporation entitled to vote.
Vacancies in the Board of Directors, except vacancies
arising from the removal of directors, shall be filed by the
directors remaining in office.
(h) Any property of the Corporation not essential to
the conduct of its corporate business and purposes may be
sold, leased, exchanged or otherwise disposed of by
authority of its Board of Directors and the Corporation may
sell, lease or exchange all of its property and franchises
or any of its property, franchises, corporate rights or
privileges essential to the conduct of its corporate
business and purposes upon the consent of and for such
considerations and upon such terms as may be authorized by a
majority of the Board of Directors and the holders of a
majority of the outstanding shares of stock entitled to
vote, expressed in writing or by vote at a meeting called
for that purpose in the manner provided by the By-Laws of
the Corporation for special meetings of stockholders; and at
no time shall any of the plants, properties, easements,
franchises (other than corporate franchises) or securities
then owned by the Corporation be deemed to be property,
franchises, corporate rights or privileges essential to the
conduct of the corporate business and purposes of the
Corporation.
Upon the vote or consent of the stockholders required
to dissolve the Corporation, the Corporation shall have
power, as the attorney and agent of the holders of all of
its outstanding stock, to sell, assign and transfer all such
stock to a new corporation organized under the laws of the
United States, the State of Mississippi or any other state,
and to receive as the consideration therefor shares of stock
of such new corporation of the several classes into which
the stock of the Corporation is then divided, equal in
number to the number of shares of stock of the Corporation
of said several classes then outstanding, such shares of
said new corporation to have the same preferences, voting
powers, restrictions and qualifications thereof as may then
attach to the classes of stock of the Corporation then
outstanding so far as the same shall be consistent with such
laws of the United States or of the State of Mississippi or
of such other state, except that the whole or any part of
such stock or any class thereof may be stock with or without
nominal or par value. In order to make effective such a
sale, assignment and transfer, the Corporation shall have
the right to transfer all its outstanding stock on its books
and to issue and deliver new certificates therefor in such
names and amounts as such new corporation may direct without
receiving for cancellation the certificates for such stock
previously issued and then outstanding. Upon completion of
such sale, assignment and transfer, the holders of the stock
of the Corporation shall have no rights or interests in or
against the Corporation except the right, upon surrender of
certificates for stock of the Corporation properly endorsed,
if required, to receive from the Corporation certificates
for shares of stock of such new corporation of the class
corresponding to the class of the shares surrendered, equal
in number to the number of shares of the stock of the
Corporation so surrendered.
(i) Upon the written assent or pursuant to the
affirmative vote in person or by proxy of the holders of a
majority in number of the shares then outstanding and
entitled to vote, irrespective of class, (1) any or every
statute of the State of Mississippi hereafter enacted,
whereby the rights, powers or privileges of the Corporation
are or may be increased, diminished or in any way affected
or whereby the rights, powers or privileges of the
stockholders of corporations organized under the law under
which the Corporation is organized, are increased,
diminished or in any way affected or whereby effect is given
to the action taken by any part, less than all, of the
stockholders of any such corporation, shall, notwithstanding
any provisions which may at the time be contained in these
Restated Articles of Incorporation or any law, apply to the
Corporation, and shall be binding not only upon the
Corporation, but upon every stockholder thereof, to the same
extent as if such statute had been in force at the date of
the making and filing of these Restated Articles of
Incorporation and/or (2) amendments of these Restated
Articles of Incorporation authorized at the time of the
making of such amendments by the laws of the State of
Mississippi may be made.
EIGHTH: The Restated Articles of Incorporation correctly set
forth without change the corresponding provisions of the Articles
of Incorporation as heretofore amended and restated, and
supersede the original Articles of Incorporation, and all
amendments thereto, and prior Restated Articles of Incorporation
and all amendments thereto.
DATED: December 21, 1983.
MISSISSIPPI POWER & LIGHT COMPANY
By: D. C. LUTKEN
Its President
[CORPORATE SEAL]
By: F. S. YORK, JR.
Its Secretary
STATE OF MISSISSIPPI
COUNTY OF HINDS
I, Bethel Ferguson, a Notary Public, do hereby certify that
on this 21st day of December, 1983, personally appeared before me
D. C. Lutken. who, being by me first duly sworn, declared that he
is the President of Mississippi Power & Light Company, that he
signed the foregoing document as President of the Corporation,
and that the statements therein contained are true.
BETHEL FERGUSON
Notary Public
My commission expires July 23, 1987.
[NOTARY'S SEAL]
<PAGE>
RESTATED ARTICLES OF INCORPORATION
of
MISSISSIPPI POWER & LIGHT COMPANY
Filing and Recording Data
Restated Articles of Incorporation filed with Secretary of State-
- -December 21, 1983
Certificate of Restated Articles of Incorporation issued by
Secretary of State--December 21, 1983
Certificate of Restated Articles of Incorporation and Restated
Articles of Incorporation filed for record in the office of the
Chancery Clerk of the First Judicial District of Hinds County,
Mississippi, Book 189, Page 624--December 22, 1983.
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Resolution Establishing Series of Shares
October 25, 1984
Pursuant to the provisions of Section 79-3-29 of the
Mississippi Business Corporation Law, the undersigned Corporation
submits the following statement for the purpose of establishing
and designating a series of shares and fixing and determining the
relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on October 24,
1984.
Dated this the 25th day of October, 1984.
MISSISSIPPI POWER & LIGHT COMPANY
By/s/ William Cavanaugh, III
William Cavanaugh, III
President
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this October 25, 1984, personally appeared before me William
Cavanaugh, III, who, being by me first duly sworn, declared that
he is President of Mississippi Power & Light Company, that he
executed the foregoing document as President of the Corporation,
and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
March 30, 1986
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this October 25, 1984, personally appeared before me Frank S.
York, Jr., who, being by me first duly sworn, declared that he is
Senior Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, that he executed the foregoing
document as Senior Vice President, Chief Financial Officer and
Secretary of the Corporation, and that the statements therein
contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
March 30, 1986
<PAGE>
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 150,000 shares of the Preferred Stock shall:
(a) be designated "16.16% Preferred Stock, Cumulative, $100
Par Value;"
(b) have a dividend rate of $16.16 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be February 1, 1986, and
such dividends to be cumulative from the date of issuance;
(c) be subject to redemption at the price of $116.16 per
share if redeemed on or before November 1, 1989, of $112.12 per
share if redeemed after November 1, 1989, and on or before
November 1, 1994, of $108.08 per share if redeemed after November
1, 1994, and on or before November 1, 1999, and of $104.04 per
share if redeemed after November 1, 1999, in each case plus an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; provided,
however, that no share of the 16.16% Preferred Stock, Cumulative,
$100 Par Value, shall be redeemed prior to November 1, 1989, if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Corporation, or through the use, directly
or indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with the
16.16% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of less
than 16.2772% per annum; and
(d) be subject to redemption as and for a sinking fund as
follows: on November 1, 1989 and on each November 1 thereafter
(each such date being hereinafter referred to as a "16.16%
Sinking Fund Redemption Date"), for so long as any shares of the
16.16% Preferred Stock, Cumulative, $100 Par Value, shall remain
outstanding, the Corporation shall redeem, out of funds legally
available therefor, 7,500 shares of the 16.16% Preferred Stock,
Cumulative, $100 Par Value, (or the number of shares than
outstanding if less than 7,500) at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 16.16% Preferred
Stock, Cumulative, $100 Par Value, being hereinafter referred to
as the "16.16% Sinking Fund Obligation"); the 16.16% Sinking Fund
Obligation shall be cumulative; if on any 16.16% Sinking Fund
Redemption Date, the Corporation shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 16.16% Sinking Fund
Obligation with respect to the shares not redeemed shall carry
forward to each successive 16.16% Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any
16.16% Sinking Fund Redemption Date, the funds of the Corporation
legally available for the satisfaction of the 16.16% Sinking Fund
Obligation and all other sinking fund and similar obligations
than existing with respect to any other class or series of its
stock ranking on a parity as to dividends or assets with the
16.16% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"), are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 16.16% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 16.16% Sinking Fund Obligation to such
Total Sinking Fund Obligation; in addition to the 16.16% Sinking
Fund Obligation, the Corporation shall have the option, which
shall be noncumulative, to redeem, upon authorization of the
Board of Directors, on each 16.16% Sinking Fund Redemption Date,
at the aforesaid sinking fund redemption price, up to 7,500
additional shares of the 16.16% Preferred Stock, Cumulative $100
Par Value; the Corporation shall be entitled, at its election, to
credit against its 16.16% Sinking Fund Obligation on any 16.16%
Sinking Fund Redemption Date any shares of the Preferred Stock,
Cumulative, $100 Par Value (including shares of the 16.16%
Preferred Stock, Cumulative, $100 Par Value, optionally redeemed
at the aforesaid sinking fund price) theretofore redeemed (other
than shares of the 16.16% Preferred Stock, Cumulative, $100 Par
Value, redeemed pursuant to the 16.16% Sinking Fund Obligation)
purchased or otherwise acquired and not previously credited
against the 16.16% Sinking Fund Obligation.
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Resolution Establishing Series of Shares
July 24, 1986
Pursuant to the provisions of Section 79-3-29 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement for the purpose of establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on July 24, 1986.
Dated this the 24th day of July, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By/s/ William Cavanaugh, III
William Cavanaugh, III
President
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joseph L. Blount, a Notary Public, do hereby certify that
on this July 24, 1986, personally appeared before me William
Cavanaugh, III, who, being by me first duly sworn, declared that
he is President of Mississippi Power & Light Company, a
Mississippi corporation, that he executed the foregoing document
as President of the Corporation, and that the statements therein
contained are true.
/s/ Joseph L. Blount
Joseph L. Blount, Notary Public
My Commission Expires:
January 20, 1990
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joseph L. Blount, a Notary Public, do hereby certify that
on this July 24, 1986, personally appeared before me Frank S.
York, Jr., who, being by me first duly sworn, declared that he is
Senior Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as Senior Vice President,
Chief Financial Officer and Secretary of the Corporation, and
that the statements therein contained are true.
/s/ Joseph L. Blount
Joseph L. Blount, Notary Public
My Commission Expires:
January 20, 1990
<PAGE>
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 350,000 shares of the Preferred Stock shall:
(a) be designated "9% Preferred Stock, Cumulative, $100 Par
Value;"
(b) have a dividend rate of $9.00 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be November 1, 1986, and
such dividends to be cumulative from the date of issuance;
(c) be subject to redemption at the price of $109.00 per
share if redeemed on or before July 1, 1991, of $106.75 per share
if redeemed after July 1, 1991, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon, if
any, to the date fixed for redemption; provided, however, that no
share of the 9% Preferred Stock, Cumulative, $100 Par Value,
shall be redeemed prior to July 1, 1991, if such redemption is
for the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed by the
Corporation, or through the use, directly or indirectly, of funds
derived through the issuance by the Corporation of stock ranking
prior to or on a parity with the 9% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed funds
have an effective interest cost to the Corporation (computed in
accordance with generally accepted financial practice) or such
stock has an effective dividend cost to the Corporation (so
computed) of less than 9.9901% per annum; and
(d) be subject to redemption as and for a sinking fund as
follows: on July 1, 1991, and on each July 1 thereafter (each
such date being hereinafter referred to as a "9% Sinking Fund
Redemption Date"), for so long as any shares of the 9% Preferred
Stock, Cumulative, $100 Par Value, shall remain outstanding, the
Corporation shall redeem, out of funds legally available
therefor, 70,000 shares of the 9% Preferred Stock, Cumulative,
$100 Par Value, (or the number of shares than outstanding if less
than 70,000) at the sinking fund redemption price of $100 per
share plus, as to each share so redeemed, an amount equivalent to
the accumulated and unpaid dividends thereon, if any, to the date
of redemption (the obligation of the Corporation so to redeem the
shares of the 9% Preferred Stock, Cumulative, $100 Par Value,
being hereinafter referred to as the "9% Sinking Fund
Obligation"); the 9% Sinking Fund Obligation shall be cumulative;
if on any 9.% Sinking Fund Redemption Date, the Corporation shall
not have funds legally available therefor sufficient to redeem
the full number of shares required to be redeemed on that date,
the 9% Sinking Fund Obligation with respect to the shares not
redeemed shall carry forward to each successive 9% Sinking Fund
Redemption Date until such shares shall have been redeemed;
whenever on any 9% Sinking Fund Redemption Date, the funds of the
Corporation legally available for the satisfaction of the 9%
Sinking Fund Obligation and all other sinking fund and similar
obligations than existing with respect to any other class or
series of its stock ranking on a parity as to dividends or assets
with the 9% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"), are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 9% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 9% Sinking Fund Obligation to such
Total Sinking Fund Obligation; the Corporation shall be entitled,
at its election, to credit against its 9% Sinking Fund Obligation
on any 9% Sinking Fund Redemption Date any shares of the
Preferred Stock, Cumulative, $100 Par Value, theretofore
redeemed (other than shares of the 9% Preferred Stock,
Cumulative, $100 Par Value, redeemed pursuant to the 9% Sinking
Fund Obligation) purchased or otherwise acquired and not
previously credited against the 9% Sinking Fund Obligation.
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Cancellation of Shares
September 1, 1986
Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The number of redeemable shares cancelled through
redemption is 20,000 shares of 17% preferred stock,
cumulative, $100 par value.
3. The aggregate number of issued shares, itemized by class
and series, after giving effect to such cancellation is
as follows:
(a) 6,275,000 shares of common stock, without par value;
(b) 59,920 shares of 4.36% preferred stock, cumulative,
$100 par value;
(c) 43,888 shares of 4.56% preferred stock, cumulative,
$100 par value;
(d) 100,000 shares of 4.92% preferred stock, cumulative,
$100 par value;
(e) 75,000 shares of 9.16% preferred stock, cumulative,
$100 par value;
(f) 100,000 shares of 7.44% preferred stock, cumulative,
$100 par value;
(g) 180,000 shares of 17% preferred stock, cumulative,
$100 par value;
(h) 100,000 shares of 14.75% preferred stock,
cumulative, $100 par value;
(i) 100,000 shares of 12% preferred stock, cumulative,
$100 par value;
(j) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(k) 350,000 shares of 9% preferred stock, cumulative,
$100 par value;
4. The amount, expressed in dollars, of the stated
capital of the Corporation, after giving effect to such
cancellation is $270,205,800.00.
5. The Restated Articles of Incorporation of the
Corporation provide that the cancelled shares shall not
be reissued, and the number of shares which the
Corporation has authority to issue, itemized by class,
after giving effect to such cancellation, is as follows:
(a) 15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b) 1,984,476 shares of preferred stock, 1,258,808
shares of which are issued and outstanding as
outlined above.
Dated this the 10th day of December, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ A. H. Mapp
A. H. Mapp
Assistant Secretary and
Assistant Treasurer
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Cancellation of Shares
November 1, 1986
Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The number of redeemable shares cancelled through
redemption is 180,000 shares of 17% preferred stock,
cumulative, $100 par value.
3. The aggregate number of issued shares, itemized by class
and series, after giving effect to such cancellation is
as follows:
(a) 6,275,000 shares of common stock, without par value;
(b) 59,920 shares of 4.36% preferred stock, cumulative,
$100 par value;
(c) 43,888 shares of 4.56% preferred stock, cumulative,
$100 par value;
(d) 100,000 shares of 4.92% preferred stock, cumulative,
$100 par value;
(e) 75,000 shares of 9.16% preferred stock, cumulative,
$100 par value;
(f) 100,000 shares of 7.44% preferred stock, cumulative,
$100 par value;
(g) 100,000 shares of 14.75% preferred stock,
cumulative, $100 par value;
(h) 100,000 shares of 12% preferred stock, cumulative,
$100 par value;
(i) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(j) 350,000 shares of 9% preferred stock, cumulative,
$100 par value;
4. The amount, expressed in dollars, of the stated
capital of the Corporation, after giving effect to such
cancellation is $252,205,800.00.
5. The Restated Articles of Incorporation of the
Corporation provide that the cancelled shares shall not
be reissued, and the number of shares which the
Corporation has authority to issue, itemized by class,
after giving effect to such cancellation, is as follows:
(a) 15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b) 1,804,476 shares of preferred stock, 1,078,808
shares of which are issued and outstanding as
outlined above.
Dated this the 10th day of December, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ A. H. Mapp
A. H. Mapp
Assistant Secretary and
Assistant Treasurer
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Cancellation of Shares
November 1, 1986
Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The number of redeemable shares cancelled through
redemption is 100,000 shares of 14.75% preferred stock,
cumulative, $100 par value.
3. The aggregate number of issued shares, itemized by class
and series, after giving effect to such cancellation is
as follows:
(a) 6,275,000 shares of common stock, without par value;
(b) 59,920 shares of 4.36% preferred stock, cumulative,
$100 par value;
(c) 43,888 shares of 4.56% preferred stock, cumulative,
$100 par value;
(d) 100,000 shares of 4.92% preferred stock, cumulative,
$100 par value;
(e) 75,000 shares of 9.16% preferred stock, cumulative,
$100 par value;
(f) 100,000 shares of 7.44% preferred stock, cumulative,
$100 par value;
(g) 100,000 shares of 12% preferred stock, cumulative,
$100 par value;
(h) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(i) 350,000 shares of 9% preferred stock, cumulative,
$100 par value;
4. The amount, expressed in dollars, of the stated
capital of the Corporation, after giving effect to such
cancellation is $242,205,800.00.
5. The Restated Articles of Incorporation of the
Corporation provide that the cancelled shares shall not
be reissued, and the number of shares which the
Corporation has authority to issue, itemized by class,
after giving effect to such cancellation, is as follows:
(a) 15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b) 1,704,476 shares of preferred stock, 978,808 shares
of which are issued and outstanding as outlined
above.
Dated this the 10th day of December, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ A. H. Mapp
A. H. Mapp
Assistant Secretary and
Assistant Treasurer
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Resolution Establishing Series of Shares
January 13, 1987
Pursuant to the provisions of Section 79-3-29 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement for the purpose of establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on January 13,
1987.
Dated this the 13th day of January, 1987.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ D. C. Lutken
D. C. Lutken
President, Chairman of
the Board and Chief
Executive Officer
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this January 13, 1987, personally appeared before me D. C.
Lutken, who, being by me first duly sworn, declared that he is
President, Chairman of the Board and Chief Executive Officer of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as President, Chairman of
the Board and Chief Executive Officer of the Corporation, and
that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this January 13, 1987, personally appeared before me G. A. Goff,
who, being by me first duly sworn, declared that he is Senior
Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as Senior Vice President,
Chief Financial Officer and Secretary of the Corporation, and
that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
<PAGE>
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 350,000 shares of the Preferred Stock shall:
(a) be designated "9.76% Preferred Stock, Cumulative, $100
Par Value;"
(b) have a dividend rate of $9.76 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be May 1, 1987, and such
dividends to be cumulative from the date of issuance;
(c) be subject to redemption at the price of $109.76 per
share if redeemed on or before January 1, 1988, of $108.68 per
share if redeemed after January 1, 1988, and on or before January
1, 1989, of $107.60 per share if redeemed after January 1, 1989,,
and on or before January 1, 1990, of $106.51 per share if
redeemed after January 1, 1990, and on or before January 1, 1991,
of $105.43 per share if redeemed after January 1, 1991, and on or
before January 1, 1992, of $104.34 per share if redeemed after
January 1, 1992, and on or before January 1, 1993, of $103.26 per
share if redeemed after January 1, 1993, and on or before January
1, 1994, of $102.17 per share if redeemed after January 1, 1994,
and on or before January 1, 1995, of $101.09 per share if
redeemed after January 1, 1995, and on or before January 1, 1996,
and of $100.00 per share if redeemed after January 1, 1996, in
each case plus an amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date fixed for redemption;
provided, however, that no share of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, shall be redeemed prior to January 1,
1992, if such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Corporation, or through the use, directly
or indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with the
9.76% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of less
than 9.9165% per annum; and
(d) be subject to redemption as and for a sinking fund as
follows: on January 1, 1993, and on each January 1 thereafter
(each such date being hereinafter referred to as a "9.76% Sinking
Fund Redemption Date"), for so long as any shares of the 9.76%
Preferred Stock, Cumulative, $100 Par Value, shall remain
outstanding, the Corporation shall redeem, out of funds legally
available therefor, 70,000 shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, (or the number of shares than
outstanding if less than 70,000) at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, being hereinafter referred to as the
"9.76% Sinking Fund Obligation"); the 9.76% Sinking Fund
Obligation shall be cumulative; if on any 9.76% Sinking Fund
Redemption Date, the Corporation shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 9.76% Sinking Fund
Obligation with respect to the shares not redeemed shall carry
forward to each successive 9.76% Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any 9.76%
Sinking Fund Redemption Date, the funds of the Corporation
legally available for the satisfaction of the 9.76% Sinking Fund
Obligation and all other sinking fund and similar obligations
than existing with respect to any other class or series of its
stock ranking on a parity as to dividends or assets with the
9.76% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"), are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 9.76% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 9.76% Sinking Fund Obligation to such
Total Sinking Fund Obligation; the Corporation shall be entitled,
at its election, to credit against its 9.76% Sinking Fund
Obligation on any 9.76% Sinking Fund Redemption Date any shares
of the Preferred Stock, Cumulative, $100 Par Value, theretofore
redeemed (other than shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, redeemed pursuant to the 9.76%
Sinking Fund Obligation) purchased or otherwise acquired and not
previously credited against the 9.76% Sinking Fund Obligation.
FURTHER RESOLVED That the officers of the Company are hereby
authorized and directed to execute, file, publish and record all
such statements and other documents, and to do and perform all
such other and further acts and things, as in the judgment of the
officer or officers taking such action may be necessary or
desirable for the purpose of causing the immediately preceding
resolution to become fully effective and of causing said
resolution to become and constitute an amendment of the Restated
Articles of Incorporation of the Company, all in the manner and
to the extent required by the Mississippi Business Corporation
Law.
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1987)
March 8, 1988
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 5,000 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b)1,699,476 shares of preferred stock, 1,323,808 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 95,000 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 8th day of March, 1988.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ J. R. Martin
J. R. Martin
Treasurer and Assistant
Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
January 19, 1989
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 1,500 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,699,476 shares of preferred stock, 1,323,808 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 93,500 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 19th day of January, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
REGISTERED AGENT/OFFICE STATEMENT OF CHANGE
(Mark appropriate box)
X DOMESTIC X PROFIT
FOREIGN NONPROFIT
1. Name of Corporation:
Mississippi Power & Light Company
Federal Tax ID: 64-0205830
2. Current street address of registered office:
308 East Pearl Street
Jackson, Mississippi 39201
3. New street address of registered office: (No change)
4. Name of current registered agent:
Donald C. Lutken or Robert C. Grenfell
5. Name of new registered agent:
Michael B. Bemis or Robert C. Grenfell
6. (Mark appropriate box)
(X) The undersigned hereby accepts designation as
registered agent for service of process.
/s/ Michael B. Bemis
/s/ Robert C. Grenfell
( ) Statement of written consent if attached.
7. ( ) Nonprofit. The street address of the registered
office and the street address of the
principal office of its registered
agent will be identical.
(X) Profit. The street address of the registered
office and the street address of the
business office of its registered agent
will be identical.
8. The corporation has been notified of the change of
registered office.
Mississippi Power & Light Company
Corporate Name
By: Michael B. Bemis, President and COO /s/ Michael B. Bemis
PRINTED NAME/CORPORATE TITLE SIGNATURE
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
March 30, 1989
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 8,500 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,699,476 shares of preferred stock, 1,323,808 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 85,000 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 30th day of March, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
March 30, 1989
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 5,800 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,692,176 shares of preferred stock, 1,316,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 87,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 30th day of March, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
ARTICLES OF CORRECTION
(Mark appropriate box)
X PROFIT NONPROFIT
The undersigned corporation, pursuant to Section 79-4-1.24 (if a
profit corporation) or Section 79-11-113 (if a nonprofit
corporation) of the Mississippi Code of 1972, as amended, hereby
executes the following document and sets forth:
1. The name of the corporation is:
Mississippi Power & Light Company
2. (Mark appropriate box.)
(X) The document to be corrected is Articles of
Amendment which became effective on March 31,
1989 (date).
( ) A copy of the document to be corrected is attached.
3. The aforesaid articles contain the following incorrect
statement:
See Attachment "A"
4. a. The reason such statement is incorrect is: The
reduction in the number of shares of the class and
series referred to in attachment A was incorrectly
states as 8,500, and should have been 5,800, which
incorrect statement is a component of certain other
statements made in the Articles of Amendment, all as
reflected in attachment "A".
or
b. The manner in which the execution of such document
was defective was:
5. The correction is as follows: Attachment "B", a new
executed form of Articles of Amendment, is substituted
in its entirety for the Articles of Amendment referred
to above.
6. The certificate of correction shall become effective on
March 31, 1989.
By: Mississippi Power & Light Company /s/ G. A. Goff
printed name/corporation title G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
ATTACHMENT "A"
The following incorrect statements were included in the
Articles of Amendment under Miss. Code Ann. Section 74-4-6.31
(Supp. 1988) dated March 30, 1989:
1. Paragraph 2 thereof provided as follows: "The
reduction in the number of authorized shares, itemized
by class and series, is 8,500 shares of 12% Preferred
Stock, Cumulative, $100 par value."
2. Paragraph 3(b) provided in part as follows: "1,699,476
shares of preferred stock, 1,323,808 shares of which
are issued and outstanding in the following series:
(vi) 85,000 shares of 12% preferred stock,
cumulative, $100 par value;
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
November 2, 1989
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988), submits the following document
and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 90,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,602,176 shares of preferred stock, 1,226,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $200 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 87,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)60,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 2nd day of November, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1972)
March 28, 1990
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1972), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of
12.009% Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,592,176 shares of preferred stock, 1,216,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $200 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 77,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)60,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 30th day of March, 1990.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1972)
November 2, 1990
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1972), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,577,176 shares of preferred stock, 1,201,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 77,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)45,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 2nd day of November, 1990.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
[Letterhead of Wise Carter Child & Caraway]
March 26, 1991
Ms. Sylvia Jacobs
Branch Supervisor-Corporations Business Services
Secretary of State of State of Mississippi
202 North Congress Street, Suite 601
Jackson, MS 39205
Re: Mississippi Power & Light Company
Articles of Amendment
Dear Ms. Jacobs:
I received your Notice of Return regarding the Articles of
Amendment we recently filed for Mississippi Power & Light Company
under Section 79-4-6.31 of the Mississippi Code. Your Notice of
Return states that we must use Form C-3 provided in the Guide for
Domestic Corporations published by the Mississippi Secretary of
State.
I draw your attention to the fact that the Articles of
Amendment we are filing are being filed under Section 79-4-6.31
(1989) of the Mississippi Code, and not Section 79-4-10.06. I
agree that if we were filing Articles of Amendment under Section
79-4-10.06, the proper form to use would be Form C-3 provided by
the Mississippi Secretary of State. However, the Articles of
Amendment we are filing are being filed only because stock was
redeemed by the corporation and is now being cancelled.
We have used the form enclosed with this letter numerous
times in the past to file Articles of Amendment pursuant to
Section 79-4-6.31, after consultation with Ray Bailey. It is my
opinion that the form for the standard Articles of Amendment
would not be appropriate for the type of amendment we are filing,
and there is no place on the form to provide the information
required under Section 79-4-6.31. Accordingly, I am returning
our duplicate originals of the Articles of Amendment and request
that you file one among the records in your office, and return
the conformed copy, marked "Filed," to my attention at the above
address.
If you have any questions, please feel free to call at the
above direct dial number.
Very truly yours,
/s/ J. Michael Cockrell
J. Michael Cockrell
DMC/st
Enclosure
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 18, 1991
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is (a) 80 shares of 4.36%
preferred stock, cumulative, $100 par value; (b) 588
shares of 4.56% preferred stock, cumulative, $100 par
value; and (c) 10,000 shares of 12% preferred stock,
cumulative, $100 par value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,566,508 shares of preferred stock, 1,191,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 67,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)45,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 18th day of March, 1991.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 12, 1991
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,496,508 shares of preferred stock, 1,121,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 67,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)45,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 12th day of July, 1991.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
A. H. Mapp
Assistant Treasurer and
Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
November 19, 1991
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,481,508 shares of preferred stock, 1,106,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 67,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)30,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 19th day of November, 1991.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
A. H. Mapp
Assistant Treasurer and
Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 13, 1992
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,471,508 shares of preferred stock, 1,096,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)30,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 13th day of March, 1992.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 15, 1992
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,401,508 shares of preferred stock, 1,026,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)30,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 15th day of July, 1992.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment - Statement of Resolution
Establishing Series of Shares
October 22, 1992
Pursuant to the provisions of Section 79-4-6.02(d) of the
Mississippi Code of 1972 (Supp. 1989), Mississippi Power & Light
Company submits the following statement for the purpose of
establishing and designating a series of shares and fixing and
determining the relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on October 22,
1992.
Dated this the 22nd day of October, 1992.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Allan H. Mapp
Assistant Secretary and
Assistant Treasurer
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Excerpts from the minutes of the Meeting
of the Board of Directors held on October 22, 1992
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 200,000 shares of the Preferred Stock shall:
(a) be designated as the "8.36% Preferred Stock,
Cumulative, $100 Par Value";
(b) have a dividend rate of $8.36 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be February 1, 1993, and
such dividends to be cumulative from the date of issuance; and
(c) be subject to redemption at the price of $100 par share
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption (except that no
share of the 8.36% Preferred Stock shall be redeemed on or before
October 1, 1997).
FURTHER RESOLVED That the officers of the Company are hereby
authorized and directed to execute, file and publish and record
all such statements and other documents, and to do and perform
all such other and further acts and things, as in the judgment of
the officer and officers taking such action may be necessary or
desirable for the purpose of causing the immediately preceding
resolution to become fully effective and of causing said
resolution to become and constitute an amendment of the Restated
Articles of Incorporation of the Company, all in the manner and
to the extent required by the Mississippi Business Corporation
Law.
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
November 6, 1992
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,386,508 shares of preferred stock, 1,211,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 6th day of November, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
January 12, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.76%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,316,508 shares of preferred stock, 1,141,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 12th day of January, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 10, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,306,508 shares of preferred stock, 1,131,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 47,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 10th day of March, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 12, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,236,508 shares of preferred stock, 1,061,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 47,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)140,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 12th day of July, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ James W. Snider
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
November 15, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,221,508 shares of preferred stock, 1,046,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 47,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)140,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 15th day of November, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ James W. Snider
Title: Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-10.06 (1989)
February 4, 1994
The undersigned corporation, pursuant to Section 79-4-10.06
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. As evidenced by the attached Stockholder's Written
Approval of Amendment authorizing 1,500,000 additional
shares of Preferred Stock of the par value of $100 per
share, the following amendment of the Restated Articles
of Incorporation, as amended (the "Charter"), was
proposed by the Board of Directors of Mississippi Power
& Light Company on October 29, 1993, was adopted by the
stockholders of the Corporation entitled to vote on the
amendment on February 4, 1994, in accordance with and in
the manner prescribed by the laws of the State of
Mississippi and the Charter of Mississippi Power & Light
Company:
The first paragraph in Article FOURTH of the Charter is
amended to read as follows:
FOURTH: The aggregate number of shares which the
Corporation shall have authority to issue is
17,721,508 shares, divided into 2,721,508 shares of
Preferred Stock of the par value of $100 per share
and 15,000,000 shares of Common Stock without par
value.
3. Pursuant to the Laws of the State of Mississippi and the
Charter of Mississippi Power & Light Company, the
holders of Preferred Stock of the par value of $100 per
share were not entitled to vote on the amendment as a
separate voting group. The holders of the outstanding
shares of common stock were the only stockholders
entitled to vote on the amendment.
4. The number of shares of common stock of the corporation
outstanding at the time of such adoption was 8,666,357;
and the number of shares entitled to vote thereon was
8,666,357.
Dated this the 4th day of February, 1994.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ Edwin Lupberger
Edwin Lupberger
Chairman of the Board and
Chief Executive Officer
By: /s/ Donald E. Meiners
Donald E. Meiners
President
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 17, 1994
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,641,508 shares of preferred stock, 966,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 37,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)140,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 17th day of March, 1994.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
August 1, 1994
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par value,
8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,571,508 shares of preferred stock, 896,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii)100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 37,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii)70,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 1st day of August, 1994.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
Exhibit 23(a)
[Letterhead of Friday, Eldredge & Clark]
November 7, 1994
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112
Gentlemen:
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company ("AP&L"), Gulf States Utilities Company, Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc. We
further consent to the incorporation by reference of such
reference to our firm into AP&L's Registration Statements (Form S-
3, File Nos. 33-36149, 33-48356 and 33-50289), and related
Prospectuses pertaining to AP&L's First Mortgage Bonds and/or
Preferred Stock and First Mortgage Bonds, respectively.
Very truly yours,
/s/ Friday, Eldredge & Clark
FRIDAY, ELDREDGE & CLARK
Exhibit 23(b)
[Letterhead of Monroe & Lemann]
November 7, 1994
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112
Gentlemen:
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company, Louisiana Power &
Light Company ("LP&L"), Mississippi Power & Light Company, New
Orleans Public Service Inc. ("NOPSI") and System Energy
Resources, Inc. We further consent to the incorporation by
reference of such reference to our firm into LP&L's Registration
Statements on Form S-3, and the related prospectuses (File Nos.
33-50937, 33-46085 and 33-39221) pertaining to LP&L's First
Mortgage Bonds and Preferred Stock, and into NOPSI's Registration
Statement on Form S-3, and the related prospectus (File No. 33-
57926) pertaining to NOPSI's General and Refunding Mortgage
Bonds.
Very truly yours,
/s/ Monroe & Lemann
MONROE & LEMANN
Exhibit 23(c)
[Letterhead of Wise Carter Child & Caraway]
November 7, 1994
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112
Gentlemen:
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company, Louisiana Power &
Light Company, Mississippi Power & Light Company ("MP&L"), New
Orleans Public Service Inc., and System Energy Resources, Inc.
("System Energy"). We further consent to the incorporation by
reference of such reference to our firm into System Energy's
Registration Statement on Form S-3, and the related prospectus
(File No. 33-47662) pertaining to System Energy's First Mortgage
Bonds, and into MP&L's Registration Statements on Form S-3, and
the related prospectuses (File Nos. 33-53004, 33-55826 and 33-
50507) pertaining to MP&L's Preferred Stock.
Very truly yours,
WISE CARTER CHILD & CARAWAY,
Professional Association
By: /s/ Robert B. McGehee
Robert B. McGehee
Exhibit 23(d)
[Letterhead of Clark, Thomas & Winters]
CONSENT
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company ("GSU"), Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc. We
further consent to the incorporation by reference in the
registration statements of GSU on Form S-3 and Form S-8 (File
Numbers 2-76551, 2-98011, 33-49739, and 33-51181) of such
reference and Statements of Legal Conclusions.
/s/ Clark, Thomas & Winters
A Professional Corporation
CLARK, THOMAS & WINTERS,
A Professional Corporation
Austin, Texas
November 7, 1994
Exhibit 23(e)
CONSENT
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company ("GSU"), Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc. We
further consent to the incorporation by reference of such
reference to our firm into GSU's Registration Statements on Form
S-3 and Form S-8 (File Numbers 2-76551, 2-98011, 33-49739 and 33-
51181) of such reference and Statements.
/s/ Sandlin Associates
SANDLIN ASSOCIATES
Management Consultants
Pasco, Washington
November 7, 1994
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
This schedule contains summary financial information extracted from
Entergy Corporation and Subsidiaries financial statements for the
quarter ended September 30, 1994 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000065984
<NAME> ENTERGY CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<TOTAL-ASSETS> 22,814,399
<COMMON> 2,300
305,183
550,955
<OTHER-SE> 6,469,697
<TOTAL-LIABILITY-AND-EQUITY> 22,814,399
<TOTAL-REVENUES> 4,797,861
<INCOME-TAX> 254,101
<INCOME-CONTINUING> 358,270
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 358,270
<EPS-PRIMARY> 1.56
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
AP&L's financial statements for the quarter ended September 30, 1994
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000007323
<NAME> ARKANSAS POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,860,727
<OTHER-PROPERTY-AND-INVEST> 146,291
<TOTAL-CURRENT-ASSETS> 520,433
<TOTAL-DEFERRED-CHARGES> 797,236
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,324,687
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,844
<RETAINED-EARNINGS> 464,062
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,055,376
61,027
176,350
<LONG-TERM-DEBT-NET> 1,293,886
<SHORT-TERM-NOTES> 34,667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 28,020
0
<CAPITAL-LEASE-OBLIGATIONS> 97,976
<LEASES-CURRENT> 61,274
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,516,111
<TOT-CAPITALIZATION-AND-LIAB> 4,324,687
<GROSS-OPERATING-REVENUE> 1,256,762
<INCOME-TAX-EXPENSE> 45,487
<OTHER-OPERATING-EXPENSES> 1,050,857
<TOTAL-OPERATING-EXPENSES> 1,096,344
<OPERATING-INCOME-LOSS> 160,418
<OTHER-INCOME-NET> 24,356
<INCOME-BEFORE-INTEREST-EXPEN> 184,774
<TOTAL-INTEREST-EXPENSE> 79,993
<NET-INCOME> 104,781
14,530
<EARNINGS-AVAILABLE-FOR-COMM> 90,251
<COMMON-STOCK-DIVIDENDS> 75,000
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 256,832
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
GSU's financial statements for the quarter ended September 30, 1994
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000044570
<NAME> GULF STATES UTILITIES COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,800,268
<OTHER-PROPERTY-AND-INVEST> 50,450
<TOTAL-CURRENT-ASSETS> 624,945
<TOTAL-DEFERRED-CHARGES> 1,455,018
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,930,681
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,344
<RETAINED-EARNINGS> 367,323
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,633,722
96,143
136,444
<LONG-TERM-DEBT-NET> 2,318,375
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 50,425
0
<CAPITAL-LEASE-OBLIGATIONS> 129,021
<LEASES-CURRENT> 37,720
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,528,831
<TOT-CAPITALIZATION-AND-LIAB> 6,930,681
<GROSS-OPERATING-REVENUE> 1,432,044
<INCOME-TAX-EXPENSE> 34,210
<OTHER-OPERATING-EXPENSES> 1,191,063
<TOTAL-OPERATING-EXPENSES> 1,225,273
<OPERATING-INCOME-LOSS> 206,771
<OTHER-INCOME-NET> (42,190)
<INCOME-BEFORE-INTEREST-EXPEN> 164,581
<TOTAL-INTEREST-EXPENSE> 152,116
<NET-INCOME> 12,465
22,442
<EARNINGS-AVAILABLE-FOR-COMM> (9,977)
<COMMON-STOCK-DIVIDENDS> 289,100
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 278,337
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
LP&L's financial statements for the quarter ended September 30, 1994
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000060527
<NAME> LOUISIANA POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,563,626
<OTHER-PROPERTY-AND-INVEST> 62,124
<TOTAL-CURRENT-ASSETS> 395,300
<TOTAL-DEFERRED-CHARGES> 482,427
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,503,477
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (5,529)
<RETAINED-EARNINGS> 134,409
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,217,780
112,793
160,500
<LONG-TERM-DEBT-NET> 1,477,964
<SHORT-TERM-NOTES> 19,200
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 320
0
<CAPITAL-LEASE-OBLIGATIONS> 18,546
<LEASES-CURRENT> 33,867
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,462,507
<TOT-CAPITALIZATION-AND-LIAB> 4,503,477
<GROSS-OPERATING-REVENUE> 1,327,927
<INCOME-TAX-EXPENSE> 80,171
<OTHER-OPERATING-EXPENSES> 998,578
<TOTAL-OPERATING-EXPENSES> 1,078,749
<OPERATING-INCOME-LOSS> 249,178
<OTHER-INCOME-NET> 3,332
<INCOME-BEFORE-INTEREST-EXPEN> 252,510
<TOTAL-INTEREST-EXPENSE> 100,032
<NET-INCOME> 152,478
17,668
<EARNINGS-AVAILABLE-FOR-COMM> 134,810
<COMMON-STOCK-DIVIDENDS> 90,400
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 304,501
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
MP&L's financial statements for the quarter ended September 30, 1994
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000066901
<NAME> MISSISSIPPI POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 948,800
<OTHER-PROPERTY-AND-INVEST> 10,285
<TOTAL-CURRENT-ASSETS> 260,134
<TOTAL-DEFERRED-CHARGES> 444,349
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,663,568
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> (1,762)
<RETAINED-EARNINGS> 241,330
<TOTAL-COMMON-STOCKHOLDERS-EQ> 438,894
31,770
57,881
<LONG-TERM-DEBT-NET> 490,187
<SHORT-TERM-NOTES> 30,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 50,965
0
<CAPITAL-LEASE-OBLIGATIONS> 589
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 563,282
<TOT-CAPITALIZATION-AND-LIAB> 1,663,568
<GROSS-OPERATING-REVENUE> 651,481
<INCOME-TAX-EXPENSE> 23,280
<OTHER-OPERATING-EXPENSES> 551,983
<TOTAL-OPERATING-EXPENSES> 575,263
<OPERATING-INCOME-LOSS> 76,218
<OTHER-INCOME-NET> 1,333
<INCOME-BEFORE-INTEREST-EXPEN> 77,551
<TOTAL-INTEREST-EXPENSE> 38,793
<NET-INCOME> 38,758
5,827
<EARNINGS-AVAILABLE-FOR-COMM> 32,931
<COMMON-STOCK-DIVIDENDS> 28,000
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 154,369
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
NOPSI's financial statements for the quarter ended September 30, 1994
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000071508
<NAME> NEW ORLEANS PUBLIC SERVICE INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 275,822
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 161,489
<TOTAL-DEFERRED-CHARGES> 200,845
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 641,415
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,201
<RETAINED-EARNINGS> 112,507
<TOTAL-COMMON-STOCKHOLDERS-EQ> 182,452
3,450
19,780
<LONG-TERM-DEBT-NET> 164,148
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 24,200
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 247,385
<TOT-CAPITALIZATION-AND-LIAB> 641,415
<GROSS-OPERATING-REVENUE> 375,064
<INCOME-TAX-EXPENSE> 17,003
<OTHER-OPERATING-EXPENSES> 317,781
<TOTAL-OPERATING-EXPENSES> 334,784
<OPERATING-INCOME-LOSS> 40,280
<OTHER-INCOME-NET> 879
<INCOME-BEFORE-INTEREST-EXPEN> 41,159
<TOTAL-INTEREST-EXPENSE> 13,601
<NET-INCOME> 27,558
1,162
<EARNINGS-AVAILABLE-FOR-COMM> 26,396
<COMMON-STOCK-DIVIDENDS> 14,400
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 60,951
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
System Energy's financial statements for the quarter ended
September 30, 1994 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000202584
<NAME> SYSTEM ENERGY RESOURCES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,829,752
<OTHER-PROPERTY-AND-INVEST> 30,333
<TOTAL-CURRENT-ASSETS> 410,304
<TOTAL-DEFERRED-CHARGES> 582,601
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,852,990
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 7
<RETAINED-EARNINGS> 175,969
<TOTAL-COMMON-STOCKHOLDERS-EQ> 965,326
0
0
<LONG-TERM-DEBT-NET> 1,543,037
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 200,000
0
<CAPITAL-LEASE-OBLIGATIONS> 838
<LEASES-CURRENT> 55,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,088,789
<TOT-CAPITALIZATION-AND-LIAB> 3,852,990
<GROSS-OPERATING-REVENUE> 450,015
<INCOME-TAX-EXPENSE> 55,896
<OTHER-OPERATING-EXPENSES> 198,129
<TOTAL-OPERATING-EXPENSES> 254,025
<OPERATING-INCOME-LOSS> 195,990
<OTHER-INCOME-NET> 4,906
<INCOME-BEFORE-INTEREST-EXPEN> 200,896
<TOTAL-INTEREST-EXPENSE> 129,201
<NET-INCOME> 71,695
0
<EARNINGS-AVAILABLE-FOR-COMM> 71,695
<COMMON-STOCK-DIVIDENDS> 124,300
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 206,871
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(a)
Arkansas Power and Light Company
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $89,027 $101,412 $100,533 $89,317 $77,980 $72,780
Interest on long-term debt - other 31,138 31,195 33,321 31,000 29,791 29,226
Interest on notes payable 828 1,027 -- 117 349 1,161
Amortization of expense and premium on debt-net(cr) 1,557 1,792 1,112 1,359 2,702 4,475
Other interest (6,295) 1,567 1,303 2,308 8,769 877
Interest applicable to rentals 22,349 24,233 21,969 17,657 16,860 14,697
---------------------------------------------------------------------
Total fixed charges, as defined 138,604 161,226 158,238 141,758 136,451 123,216
Preferred dividends, as defined (a) 31,298 30,851 31,458 32,195 30,334 25,889
---------------------------------------------------------------------
Combined fixed charges and preferred dividends, as $169,902 $192,077 $189,696 $173,953 $166,785 $149,105
defined =====================================================================
Earnings as defined:
Net Income $131,979 $129,765 $143,451 $130,529 $205,297 $127,749
Add:
Provision for income taxes:
Federal & State 8,440 50,921 44,418 57,089 58,162 65,883
Deferred - net 37,268 17,943 11,048 3,490 34,748 (14,084)
Investment tax credit adjustment - net 3,543 (12,022) (1,600) (9,989) (10,573) (10,639)
Fixed charges as above 138,604 161,226 158,238 141,758 136,451 123,216
---------------------------------------------------------------------
Total earnings, as defined $319,834 $347,833 $355,555 $322,877 $424,085 $292,125
=====================================================================
Ratio of earnings to fixed charges, as defined 2.31 2.16 2.25 2.28 3.11 2.37
=====================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.88 1.81 1.87 1.86 2.54 1.96
=====================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend
requirement by one hundred percent (100%) minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(b)
Gulf States Utilities Company
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on mortgage bonds $231,170 $218,462 $201,335 $197,218 $172,494 $166,498
Interest on notes payable 33,185 24,295 8,446 - - -
Interest on long-term debt - other 19,495 12,668 19,507 21,155 19,440 19,440
Other interest 13,331 18,380 29,169 26,564 10,561 7,743
Amortization of expense and premium on debt-net(cr) 2,280 2,192 1,999 3,479 8,104 8,842
Interest applicable to rentals 23,244 23,761 24,049 23,759 23,455 21,390
---------------------------------------------------------------------
Total fixed charges, as defined 322,705 299,758 284,505 272,175 234,054 223,913
Preferred dividends, as defined (a) 241,829 104,484 90,146 69,617 65,299 29,817
---------------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $564,534 $404,242 $374,651 $341,792 $299,353 $253,730
=====================================================================
Earnings as defined:
Income (loss) from continuing operations before extraordinary
items and the cumulative effect of accounting changes $13,251 ($36,399) $112,391 $139,413 $69,462 ($34,301)
Add:
Income taxes 37,744 (24,216) 48,250 55,860 58,016 (409)
Fixed charges as above 322,705 299,758 284,505 272,175 234,054 223,913
---------------------------------------------------------------------
Total earnings, as defined (b) $373,700 $239,143 $445,146 $467,448 $361,532 $189,203
=====================================================================
Ratio of earnings to fixed charges, as defined 1.16 0.80 1.56 1.72 1.54 0.84
=====================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 0.66 0.59 1.19 1.37 1.21 0.75
=====================================================================
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend
requirement by one hundred percent (100%) minus the income tax rate.
(b) Earnings for the year ended December 31, 1990, for GSU were not adequate to cover fixed charges
by $60.6 million. Earnings for the years ended December 31, 1990 and 1989, were not adequate
adequate to cover fixed charges and preferred and preference dividends by $165.1 million
and $190.8 million, respectively. Earnings in 1990 include a $205 million charge for the
settlement of a purchased power dispute. Earnings for the twelve months ended September 30, 1994
were not adequate to cover fixed charges by $34.7 million. Earnings for the twelve months
ended September 30, 1994 were not adequate to cover fixed charges and preferred dividends by
$64.5 million.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(c)
Louisiana Power and Light Company
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on mortgage bonds $155,640 $101,996 $97,324 $68,247 $60,939 $58,627
Interest on long-term debt - other 25,400 52,361 61,492 60,425 63,694 65,875
Interest on notes payable -- 87 -- 150 898 1,782
Interest on lease (nuclear) 9,475 8,756 7,086 5,092 4,574 5,038
Other interest charges 11,300 6,378 5,924 5,591 5,706 3,544
Amortization of expense and premium on debt-net (cr) 2,260 3,397 3,282 7,100 5,720 5,106
Interest applicable to rentals 4,415 4,150 4,295 4,271 3,945 4,991
---------------------------------------------------------------------
Total fixed charges, as defined 208,490 177,125 179,403 150,876 145,476 144,963
Preferred dividends, as defined (a) 59,009 42,365 41,212 42,026 40,779 35,566
---------------------------------------------------------------------
Combined fixed charges and preferred dividends, as $267,499 $219,490 $220,615 $192,902 $186,255 $180,529
defined =====================================================================
Earnings as defined:
Net Income $106,613 $155,049 $166,572 $182,989 $188,808 $176,333
Add:
Provision for income taxes:
Federal and State 29,069 62,236 8,684 36,465 70,552 74,342
Deferred Federal and State - net 7,840 (9,655) 67,792 51,889 43,017 25,302
Investment tax credit adjustment - net 20,822 26,646 8,244 (1,317) (2,756) (2,796)
Fixed charges as above 208,490 177,125 179,403 150,876 145,476 144,963
---------------------------------------------------------------------
Total earnings, as defined $372,834 $411,401 $430,695 $420,902 $445,097 $418,144
=====================================================================
Ratio of earnings to fixed charges, as defined 1.79 2.32 2.40 2.79 3.06 2.88
=====================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.39 1.87 1.95 2.18 2.39 2.32
=====================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend
requirement by one hundred percent (100%) minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(d)
Mississippi Power and Light Company
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $60,995 $59,675 $59,440 $56,646 $48,029 $43,311
Interest on long-term debt - other 4,325 4,300 4,188 4,063 4,070 3,697
Interest on notes payable 1,031 1,512 953 36 7 1,242
Other interest charges 1,591 1,494 1,444 1,636 1,795 2,992
Amortization of expense and premium on debt-net(cr) 1,548 1,737 1,617 1,685 1,458 1,775
Interest applicable to rentals 533 596 574 521 1,264 1,496
------------------------------------------------------------------
Total fixed charges, as defined 70,023 69,314 68,216 64,587 56,623 54,513
Preferred dividends, as defined (a) 2,584 17,584 14,962 12,823 12,990 11,982
------------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $72,607 $86,898 $83,178 $77,410 $69,613 $66,495
==================================================================
Earnings as defined:
Net Income $12,419 $60,830 $63,088 $65,036 $101,743 $45,458
Add:
Provision for income taxes:
Federal and State 370 4,027 (1,001) 4,463 54,418 47,021
Deferred Federal and State - net (8,636) 35,721 32,491 20,430 539 (24,565)
Investment tax credit adjustment - net (1,523) (1,835) (1,634) (1,746) 1,036 1,014
Fixed charges as above 70,023 69,314 68,216 64,587 56,623 54,513
------------------------------------------------------------------
Total earnings, as defined $72,653 $168,057 $161,160 $152,770 $214,359 $123,441
==================================================================
Ratio of earnings to fixed charges, as defined 1.04 2.42 2.36 2.37 3.79 2.26
==================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.00 1.93 1.94 1.97 3.08 1.86
==================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend
requirement by one hundred percent (100%) minus the income tax rate.
(b) Earnings for the twelve months ended December 31, 1989 include the impact of the write-off of $60 million
of deferred Grand Gulf 1 - related costs pursuant to an agreement between MP&L and the MPSC.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(e)
New Orleans Public Service Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on mortgage bonds $24,472 $24,472 $23,865 $22,934 $19,478 $16,792
Interest on notes payable -- -- -- -- -- 102
Other interest charges 2,422 831 793 1,714 1,016 1,046
Amortization of expense and premium on debt-net(cr) 579 579 565 576 598 723
Interest applicable to rentals 603 160 517 444 544 903
------------------------------------------------------------------
Total fixed charges, as defined 28,076 26,042 25,740 25,668 21,636 19,566
Preferred dividends, as defined (a) 4,633 4,020 3,582 3,214 2,952 2,987
------------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $32,709 $30,062 $29,322 $28,882 $24,588 $22,553
==================================================================
Earnings as defined:
Net Income $14,464 $27,542 $74,699 $26,424 $47,709 $22,780
Add:
Provision for income taxes:
Federal and State 848 134 8,885 16,575 27,479 37,823
Deferred Federal and State - net 9,296 17,370 36,947 (340) 5,203 (17,191)
Investment tax credit adjustment - net 444 (75) (591) (170) (744) (725)
Fixed charges as above 28,076 26,042 25,740 25,668 21,636 19,566
------------------------------------------------------------------
Total earnings, as defined $53,128 $71,013 $145,680 $68,157 $101,283 $62,253
==================================================================
Ratio of earnings to fixed charges, as defined 1.89 2.73 5.66 2.66 4.68 3.18
==================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.62 2.36 4.97 2.36 4.12 2.76
==================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend
requirement by one hundred percent (100%) minus the income tax rate.
(b) Earnings for the twelve months ended December 31, 1991 include the $90 million effect of the
1991 NOPSI Settlement.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99 (f)
System Energy Resources, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, September 30,
1989 1990 1991 1992 1993 1994
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on mortgage bonds $148,402 $138,689 $126,351 $104,429 $91,472 $84,857
Interest on other long-term debt 91,295 91,955 92,187 92,189 93,346 85,735
Interest on lease nuclear 18,298 13,830 10,007 6,265 6,790 7,321
Interest on notes payable 0 0 0 0 0 46
Amortization of expense and premium on debt-net 7,326 10,532 7,495 6,417 4,520 6,300
Other interest charges 2,790 1,460 3,617 1,506 1,600 1,934
-------------------------------------------------------------------
Total fixed charges, as defined $268,111 $256,466 $239,657 $210,806 $197,728 $186,193
===================================================================
Earnings as defined:
Net Income ($655,524) $168,677 $104,622 $130,141 $93,927 $89,529
Add:
Provision for income taxes:
Federal and State (168,440) 4,620 (26,848) 35,082 48,314 67,039
Deferred Federal and State - net 93,048 52,962 37,168 23,648 60,690 46,231
Investment tax credit adjustment - net (14,321) 56,320 63,256 30,123 (30,452) (30,240)
Fixed charges as above 268,111 256,466 239,657 210,806 197,728 186,193
--------------------------------------------------------------------
Total earnings, as defined ($477,126) $539,045 $417,855 $429,800 $370,207 $358,752
====================================================================
Ratio of earnings to fixed charges, as defined (a) 2.10 1.74 2.04 1.87 1.93
====================================================================
- ------------------------
(a) Earnings for the twelve months ended December 31, 1989 were inadequate to cover fixed charges due to
System Energy's cancellation and write-off of its investment in Grand Gulf 2 in September 1989.
The amount of the coverage deficiency for fixed charges was $745.2 million.
</TABLE>
Exhibit 99(j)
ARKANSAS POWER & LIGHT COMPANY
STATEMENT OF INCOME
Twelve Months Ended September 30, 1994
(In Thousands)
(Unaudited)
Operating Revenues: $1,598,117
----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 265,707
Purchased power 349,569
Nuclear refueling outage expenses 38,800
Other operation and maintenance 380,309
Depreciation and decommissioning 145,303
Taxes other than income taxes 33,719
Income taxes 19,007
Amortization of rate deferrals 160,840
----------
Total 1,393,254
----------
Operating Income 204,863
----------
Other Income (Deductions):
Allowance for equity funds used
during construction 3,876
Miscellaneous - net 55,491
Income taxes (22,152)
----------
Total 37,215
----------
Interest Charges:
Interest on long-term debt 102,006
Other interest - net 15,452
Allowance for borrowed funds used
during construction (3,128)
----------
Total 114,330
----------
Net Income 127,748
Preferred Stock Dividend Requirements and Other 19,579
----------
Earnings Applicable to Common Stock $108,169
==========
Exhibit 99(k)
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENT OF INCOME
Twelve Months Ended September 30, 1994
(In Thousands)
(Unaudited)
Operating Revenues: $873,895
--------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 154,317
Purchased power 257,558
Other operation and maintenance 163,930
Depreciation and amortization 35,413
Taxes other than income taxes 43,898
Income taxes 20,523
Amortization of rate deferrals 99,219
--------
Total 774,858
--------
Operating Income 99,037
--------
Other Income (Deductions):
Allowance for equity funds used
during construction 1,682
Miscellaneous - net (395)
Income taxes (2,949)
--------
Total (1,662)
--------
Interest Charges:
Interest on long-term debt 47,008
Other interest - net 6,009
Allowance for borrowed funds used
during construction (1,101)
--------
Total 51,916
--------
Net Income 45,459
Preferred Stock Dividend Requirements and Other 8,002
--------
Earnings Applicable to Common Stock $37,457
========
Exhibit 99(n)
[LETTERHEAD OF CLARK, THOMAS & WINTERS]
November 7, 1994
Gulf States Utilities Company
639 Loyola Avenue
New Orleans, LA 70112
Attn: Scott Forbes
Re: SEC Form 10-Q of Gulf States Utilities Company (the
"Company") for the quarter ending September 30,
1994
Dear Mr. Forbes:
Our firm has rendered to the Company two opinion letters
dated September 30, 1992 and August 8, 1994, concerning
certain issues presented in the appeal of PUCT Docket No.
7195 now pending in the Texas Third District Court of
Appeals. In connection with the above-referenced Form 10-Q,
we confirm to you as of the date hereof that we continue to
hold the opinions set forth in the letter dated August 8,
1994 and in the September 30, 1992 letter which addressed the
recovery of $1.45 billion of abeyed construction costs.<FN1>
CLARK, THOMAS & WINTERS
A Professional Corporation
/s/ Clark, Thomas & Winters,
A Professional Corporation
<FN1> The opinion letters dated September 30, 1992 indicate
that the amount of River Bend plant costs held in abeyance
was $1.45 billion. The more correct amount, as indicated by
the Company in its securities filings to which those
opinions related, is $1.4 billion.
