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, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address of Principal Executive Identification No.
Offices and Telephone Number
1-11299 ENTERGY CORPORATION 13-5550175
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
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 70113
Telephone (504) 529-5262
0-320 MISSISSIPPI POWER & LIGHT COMPANY 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 368-5000
0-5807 NEW ORLEANS PUBLIC SERVICE INC. 72-0273040
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
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, 1995
Entergy Corporation ($0.01 par value) 227,756,167
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1995
Page
Number
Definitions 1
Financial Statements:
Entergy Corporation and Subsidiaries:
Statements of Consolidated Income 3
Statements of Consolidated Cash Flows 4
Consolidated Balance Sheets 6
Arkansas Power & Light Company:
Statements of Income 8
Statements of Cash Flows 9
Balance Sheets 10
Gulf States Utilities Company:
Statements of Income (Loss) 12
Statements of Cash Flows 13
Balance Sheets 14
Louisiana Power & Light Company:
Statements of Income 16
Statements of Cash Flows 17
Balance Sheets 18
Mississippi Power & Light Company:
Statements of Income 20
Statements of Cash Flows 21
Balance Sheets 22
New Orleans Public Service Inc.:
Statements of Income 24
Statements of Cash Flows 25
Balance Sheets 26
System Energy Resources, Inc.:
Statements of Income 28
Statements of Cash Flows 29
Balance Sheets 30
Notes to Financial Statements 32
Management's Financial Discussion and Analysis 42
Part II:
Item 1. Legal Proceedings 64
Item 4. Submission of Matters to a Vote of
Security Holders 65
Item 5. Other Information 66
Item 6. Exhibits and Reports on Form 8-K 68
Experts 70
Signature 71
<PAGE>
This combined Quarterly Report on 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, and no company makes any
representation as to information relating to the other companies.
This combined Quarterly Report on Form 10-Q supplements and
updates the Annual Report on Form 10-K for the calendar year
ended December 31, 1994, and the Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1995 and June 30, 1995, 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
Cajun Cajun Electric Power Cooperative, Inc.
Capital Funds Agreement Agreement, dated as of June 21, 1974, as
amended, between System Energy and
Entergy Corporation, and the assignments
thereof
Council Council of the City of New Orleans,
Louisiana
D.C. Circuit United States Court of Appeals for the
District of Columbia Circuit
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.
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
Form 10-K The combined Annual Report on Form 10-K
for the year ended December 31, 1994, of
Entergy, AP&L, GSU, LP&L, MP&L, NOPSI
and System Energy
Grand Gulf 1 Unit No. 1 of the Grand Gulf Station
(nuclear)
GSU Gulf States Utilities Company (including
wholly owned subsidiaries - Varibus
Corporation, GSG&T, Inc., Prudential Oil
& Gas, Inc. and Southern Gulf Railway
Company)
KWH Kilowatt-Hour(s)
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
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
PCB Polychlorinated biphenyls
PUCT Public Utility Commission of Texas
River Bend River Bend Steam Electric Generating
Station (nuclear), owned 70% by GSU
RUS Rural Utility Services (formerly the
Rural Electrification Administration or
"REA")
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting
Standards as promulgated by the
Financial Accounting Standards Board
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
System operating AP&L, GSU, LP&L, MP&L and NOPSI,
companies collectively
System or Entergy Entergy Corporation and its various
direct and indirect subsidiaries
Waterford 3 Unit No. 3 of the Waterford Steam
Electric Generating Station (nuclear)
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands, Except Share Data)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $1,910,287 $1,776,982 $4,744,213 $4,668,907
Natural gas 15,073 17,107 75,861 93,952
Steam products 12,095 11,435 35,518 35,002
---------- ---------- ---------- ----------
Total 1,937,455 1,805,524 4,855,592 4,797,861
---------- ---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 464,751 430,718 1,066,258 1,103,157
Purchased power 107,262 72,169 285,254 306,798
Nuclear refueling outage expenses 19,591 15,730 70,554 46,949
Other operation and maintenance 335,701 468,911 1,032,596 1,172,916
Depreciation, amortization, and decommissioning 176,093 166,387 515,194 488,052
Taxes other than income taxes 76,209 71,446 226,677 214,365
Income taxes 180,208 130,795 327,312 254,101
Amortization of rate deferrals 131,665 112,757 316,039 295,107
---------- ---------- ---------- ----------
Total 1,491,480 1,468,913 3,839,884 3,881,445
---------- ---------- ---------- ----------
Operating Income 445,975 336,611 1,015,708 916,416
---------- ---------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 2,206 2,603 7,053 9,273
Miscellaneous - net (4,401) (2,900) 11,877 14,991
Income taxes 1,877 (2,859) 1,068 (14,239)
---------- ---------- ---------- ----------
Total (318) (3,156) 19,998 10,025
---------- ---------- ---------- ----------
Interest Charges:
Interest on long-term debt 157,760 167,754 479,433 501,273
Other interest - net 6,302 4,424 20,954 12,621
Allowance for borrowed funds used
during construction (1,978) (2,228) (6,182) (7,397)
Preferred and preference dividend requirements of
subsidiaries and other 20,455 20,306 59,355 61,674
---------- ---------- ---------- ----------
Total 182,539 190,256 553,560 568,171
---------- ---------- ---------- ----------
Net Income $263,118 $143,199 $482,146 $358,270
========== ========== ========== ==========
Earnings per average common share $1.16 $0.63 $2.12 $1.56
Dividends declared per common share $0.45 $0.45 $1.35 $1.35
Average number of common shares
outstanding 227,751,471 227,470,521 227,639,262 229,154,520
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, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $482,146 $358,270
Noncash items included in net income:
Change in rate deferrals/excess capacity-net 285,174 307,313
Depreciation, amortization, and decommissioning 515,194 488,052
Deferred income taxes and investment tax credits (2,053) 7,582
Allowance for equity funds used during construction (7,053) (9,273)
Amortization of deferred revenues - (14,632)
Changes in working capital:
Receivables (188,087) (99,413)
Fuel inventory (33,839) 23,910
Accounts payable (70,656) (40,482)
Taxes accrued 219,714 112,623
Interest accrued (7,768) (14,278)
Reserve for rate refund (51,685) -
Other working capital accounts (127,972) 43,981
Decommissioning trust contributions (21,189) (18,215)
Provision for estimated losses and reserves 13,425 (6,242)
Other 64,092 (18,596)
--------- ---------
Net cash flow provided by operating activities 1,069,443 1,120,600
--------- ---------
Investing Activities:
Construction/capital expenditures (401,031) (481,178)
Allowance for equity funds used during construction 7,053 9,273
Nuclear fuel purchases (207,211) (109,838)
Proceeds from sale/leaseback of nuclear fuel 224,265 85,178
Investment in nonregulated/nonutility properties (25,979) 199
-------- --------
Net cash flow used in investing activities (402,903) (496,366)
-------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds - 83,944
General and refunding mortgage bonds 109,285 -
Other long-term debt 43,538 63,590
Retirement of:
First mortgage bonds (45,800) (103,800)
General and refunding mortgage bonds (54,200) (45,000)
Other long-term debt (96,949) (45,410)
Premium and expense on refinancing sale/leaseback bonds - (47,663)
Repurchase of common stock - (119,486)
Redemption of preferred stock (39,605) (43,860)
Changes in short-term borrowings (171,219) 63,199
Common stock dividends paid (306,465) (309,469)
-------- --------
Net cash flow used in financing activities (561,415) (503,955)
-------- --------
Net increase in cash and cash equivalents 105,125 120,279
Cash and cash equivalents at beginning of period 613,907 563,749
-------- --------
Cash and cash equivalents at end of period $719,032 $684,028
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $476,637 $496,933
Income taxes $161,938 $131,607
Noncash investing and financing activities:
Capital lease obligations incurred - $69,520
Change in unrealized appreciation/depreciation of
decommissioning trust assets $13,221 $9,068
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $21,603,761 $21,184,013
Plant acquisition adjustment - GSU 475,756 487,955
Electric plant under leases 672,725 668,846
Property under capital leases - electric 151,640 161,950
Natural gas 165,483 164,013
Steam products 77,414 77,307
Construction work in progress 415,242 476,816
Nuclear fuel under capital leases 311,072 265,520
Nuclear fuel 60,633 70,147
---------- ----------
Total 23,933,726 23,556,567
Less - accumulated depreciation and 8,131,661 7,639,549
amortization ---------- ----------
Utility plant - net 15,802,065 15,917,018
---------- ----------
Other Property and Investments:
Decommissioning trust funds 256,180 207,395
Other 273,883 240,745
---------- ----------
Total 530,063 448,140
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 97,486 87,700
Temporary cash investments - at cost,
which approximates market 621,546 526,207
---------- ----------
Total cash and cash equivalents 719,032 613,907
Special deposits 5,772 8,074
Notes receivable 15,194 14,446
Accounts receivable:
Customer (less allowance for doubtful
accounts of $6.7 million in 1995 and 1994) 414,177 336,887
Other 83,314 66,651
Accrued unbilled revenues 334,744 240,610
Deferred fuel 6,495 -
Fuel inventory 127,050 93,211
Materials and supplies - at average cost 372,605 365,956
Rate deferrals 412,952 380,612
Prepayments and other 122,494 98,811
---------- ----------
Total 2,613,829 2,219,165
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 1,142,811 1,451,926
SFAS 109 regulatory asset - net 1,429,652 1,417,646
Unamortized loss on reacquired debt 223,717 232,420
Other regulatory assets 292,248 316,878
Long-term receivables 224,789 271,097
Other 337,442 339,201
---------- ----------
Total 3,650,659 4,029,168
---------- ----------
TOTAL $22,596,616 $22,613,491
========== ==========
See Notes to Financial Statements.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value, authorized
500,000,000 shares; issued 230,017,485 shares
in 1995 and 1994 $2,300 $2,300
Paid-in capital 4,201,435 4,202,134
Retained earnings 2,396,953 2,223,739
Less - treasury stock (2,261,318 shares in
1995 and 2,608,908 in 1994) 67,122 77,378
---------- ----------
Total common shareholders' equity 6,533,566 6,350,795
Subsidiary's preference stock 150,000 150,000
Subsidiaries' preferred stock:
Without sinking fund 550,955 550,955
With sinking fund 260,342 299,946
Long-term debt 6,749,860 7,093,473
---------- ----------
Total 14,244,723 14,445,169
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 308,068 273,947
Other 321,247 310,977
---------- ----------
Total 629,315 584,924
---------- ----------
Current Liabilities:
Currently maturing long-term debt 667,375 349,085
Notes payable 648 171,867
Accounts payable 400,464 471,120
Customer deposits 138,851 134,478
Taxes accrued 312,292 92,578
Accumulated deferred income taxes 60,844 40,313
Interest accrued 187,871 195,639
Dividends declared 12,942 13,599
Deferred fuel cost - 27,066
Obligations under capital leases 152,968 151,904
Reserve for rate refund 5,287 56,972
Other 257,324 327,330
---------- ----------
Total 2,196,866 2,031,951
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 3,892,970 3,915,138
Accumulated deferred investment tax credits 658,038 649,898
Other 974,704 986,411
---------- ----------
Total 5,525,712 5,551,447
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $22,596,616 $22,613,491
========== ==========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $530,448 $470,770 $1,282,208 $1,256,762
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 77,987 74,050 182,793 205,283
Purchased power 100,803 80,326 266,726 264,935
Nuclear refueling outage expenses 7,923 8,059 22,793 25,532
Other operation and maintenance 92,079 118,413 271,523 288,311
Depreciation, amortization, and decommissioning 42,603 38,671 121,557 110,929
Taxes other than income taxes 8,546 7,961 28,641 25,584
Income taxes 38,188 30,569 59,532 45,487
Amortization of rate deferrals 68,243 56,558 136,170 130,283
-------- -------- ---------- ----------
Total 436,372 414,607 1,089,735 1,096,344
-------- -------- ---------- ----------
Operating Income 94,076 56,163 192,473 160,418
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 770 894 2,376 2,944
Miscellaneous - net 10,036 10,785 36,388 35,346
Income taxes (3,941) (4,250) (14,279) (13,934)
-------- -------- ---------- ----------
Total 6,865 7,429 24,485 24,356
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 26,566 26,587 80,110 79,282
Other interest - net 906 1,287 4,646 3,290
Allowance for borrowed funds used
during construction (494) (912) (1,667) (2,579)
-------- -------- ---------- ----------
Total 26,978 26,962 83,089 79,993
-------- -------- ---------- ----------
Net Income 73,963 36,630 133,869 104,781
Preferred Stock Dividend Requirements
and Other 4,511 4,781 13,617 14,530
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $69,452 $31,849 $120,252 $90,251
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $133,869 $104,781
Noncash items included in net income:
Change in rate deferrals/excess capacity-net 93,740 77,607
Depreciation, amortization, and decommissioning 121,557 110,929
Deferred income taxes and investment tax credits (37,132) (42,973)
Allowance for equity funds used during construction (2,376) (2,944)
Changes in working capital:
Receivables (82,496) (38,663)
Fuel inventory (32,524) 26,905
Accounts payable 34,625 (2,690)
Taxes accrued 51,147 43,226
Interest accrued 253 460
Other working capital accounts 3,453 586
Decommissioning trust contributions (10,563) (8,525)
Provision for estimated losses and reserves 4,423 5,206
Other 4,132 (17,073)
-------- --------
Net cash flow provided by operating activities 282,108 256,832
-------- --------
Investing Activities:
Construction expenditures (117,203) (122,279)
Allowance for equity funds used during construction 2,376 2,944
Nuclear fuel purchases (41,843) (33,477)
Proceeds from sale/leaseback of nuclear fuel 41,832 33,477
-------- --------
Net cash flow used in investing activities (114,838) (119,335)
-------- --------
Financing Activities:
Proceeds from issuance of other long-term debt - 27,992
Retirement of:
First mortgage bonds (25,800) (800)
Other long-term debt - (28,761)
Redemption of preferred stock (7,000) (9,000)
Changes in short-term borrowings (34,000) 12,605
Dividends paid:
Common stock (83,600) (75,000)
Preferred stock (13,833) (14,798)
-------- --------
Net cash flow used in financing activities (164,233) (87,762)
-------- --------
Net increase in cash and cash equivalents 3,037 49,735
Cash and cash equivalents at beginning of period 80,756 1,825
-------- --------
Cash and cash equivalents at end of period $83,793 $51,560
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $74,689 $73,515
Income taxes $55,710 $54,117
Noncash investing and financing activities:
Capital lease obligations incurred - $41,122
Change in unrealized appreciation/depreciation of
decommissioning trust assets $6,811 $8,872
See Notes to Financial Statements.
</TABLE>
<PAGE>
ARKANSAS POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $4,421,730 $4,293,097
Property under capital leases 52,802 56,135
Construction work in progress 106,354 136,701
Nuclear fuel under capital lease 107,117 94,628
--------- ---------
Total 4,688,003 4,580,561
Less - accumulated depreciation and 1,823,395 1,710,216
amortization --------- ---------
Utility plant - net 2,864,608 2,870,345
--------- ---------
Other Property and Investments:
Investment in subsidiary companies - at 11,215 11,215
equity
Decommissioning trust fund 157,741 127,136
Other - at cost (less accumulated 7,578 4,628
depreciation) --------- ---------
Total 176,534 142,979
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 10,724 3,737
Temporary cash investments - at cost,
which approximates market:
Associated companies 11,051 4,713
Other 62,018 72,306
--------- ---------
Total cash and cash equivalents 83,793 80,756
Accounts receivable:
Customer (less allowance for doubtful
accounts of $2.0 million in 1995 and 1994) 106,652 53,781
Associated companies 36,785 28,506
Other 7,605 11,181
Accrued unbilled revenues 108,785 83,863
Fuel inventory - at average cost 67,085 34,561
Materials and supplies - at average cost 76,527 79,886
Rate deferrals 127,133 113,630
Deferred excess capacity 9,978 8,414
Prepayments and other 15,949 23,867
--------- ---------
Total 640,292 518,445
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 261,652 360,496
Deferred excess capacity 10,097 20,060
SFAS 109 regulatory asset - net 222,501 227,068
Unamortized loss on reacquired debt 54,846 57,344
Other regulatory assets 45,106 68,813
Other 33,963 26,665
--------- ---------
Total 628,165 760,446
--------- ---------
TOTAL $4,309,599 $4,292,215
========= =========
See Notes to Financial Statements.
<PAGE>
ARKANSAS POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares in 1995 and 1994 $470 $470
Paid-in capital 590,844 590,844
Retained earnings 528,450 491,799
--------- ---------
Total common shareholder's equity 1,119,764 1,083,113
Preferred stock:
Without sinking fund 176,350 176,350
With sinking fund 51,527 58,527
Long-term debt 1,281,030 1,293,879
--------- ---------
Total 2,628,671 2,611,869
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 102,937 94,534
Other 72,658 68,235
--------- ---------
Total 175,595 162,769
--------- ---------
Current Liabilities:
Currently maturing long-term debt 27,425 28,175
Notes payable 667 34,667
Accounts payable:
Associated companies 43,993 17,345
Other 97,306 89,329
Customer deposits 18,237 17,113
Taxes accrued 96,386 45,239
Accumulated deferred income taxes 34,249 25,043
Interest accrued 31,317 31,064
Dividends declared 4,512 4,727
Co-owner advances 37,944 20,639
Deferred fuel cost 14,732 20,254
Nuclear refueling reserve 34,416 37,954
Obligations under capital leases 56,971 56,154
Other 28,439 45,632
--------- ---------
Total 526,594 473,335
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 812,727 859,558
Accumulated deferred investment tax credits 114,253 118,548
Other 51,759 66,136
--------- ---------
Total 978,739 1,044,242
--------- ---------
Commitments and Contingencies (Note 1)
TOTAL $4,309,599 $4,292,215
========= =========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF INCOME (LOSS)
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $524,982 $530,209 $1,366,070 $1,371,328
Natural gas 3,210 3,887 17,654 25,714
Steam products 12,095 11,435 35,518 35,002
-------- -------- ---------- ----------
Total 540,287 545,531 1,419,242 1,432,044
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 149,535 154,881 391,364 393,240
Purchased power 47,901 44,330 132,625 159,389
Nuclear refueling outage expenses 2,580 2,707 8,354 7,747
Other operation and maintenance 91,939 171,054 295,566 376,616
Depreciation, amortization, and decommissioning 50,606 48,786 151,337 145,862
Taxes other than income taxes 26,951 24,623 77,082 58,633
Income taxes 40,737 17,458 63,715 34,210
Amortization of rate deferrals 16,507 16,839 49,519 49,576
-------- -------- ---------- ----------
Total 426,756 480,678 1,169,562 1,225,273
-------- -------- ---------- ----------
Operating Income 113,531 64,853 249,680 206,771
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 253 417 770 1,056
Miscellaneous - net 6,213 (78,886) 17,823 (70,653)
Income taxes (2,110) 31,590 (5,139) 27,407
-------- -------- ---------- ----------
Total 4,356 (46,879) 13,454 (42,190)
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 47,426 48,804 144,053 146,554
Other interest - net 2,588 1,172 4,681 6,409
Allowance for borrowed funds used
during construction (239) (340) (700) (847)
-------- -------- ---------- ----------
Total 49,775 49,636 148,034 152,116
-------- -------- ---------- ----------
Net Income (Loss) 68,112 (31,662) 115,100 12,465
Preferred and Preference Stock
Dividend Requirements and Other 7,341 7,506 22,357 22,442
-------- -------- ---------- ----------
Earnings (Loss) Applicable to Common Stock $60,771 ($39,168) $92,743 ($9,977)
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $115,100 $12,465
Noncash items included in net income:
Change in rate deferrals 49,519 80,138
Depreciation, amortization, and decommissioning 151,337 145,862
Deferred income taxes and investment tax credits 69,060 16,257
Allowance for equity funds used during construction (770) (1,056)
Changes in working capital:
Receivables 41,808 (50,881)
Fuel inventory (3,598) (3,750)
Accounts payable (21,476) 22,872
Taxes accrued 35,701 14,579
Interest accrued 4,254 3,792
Reserve for rate refund (51,268) -
Other working capital accounts (53,032) 15,330
Decommissioning trust contributions (2,959) (2,217)
Other 10,591 24,946
-------- --------
Net cash flow provided by operating activities 344,267 278,337
-------- --------
Investing Activities:
Construction expenditures (112,237) (101,952)
Allowance for equity funds used during construction 770 1,056
Nuclear fuel purchases - (25,205)
Proceeds from sale/leaseback of nuclear fuel - 25,205
-------- --------
Net cash flow used in investing activities (111,467) (100,896)
-------- --------
Financing Activities:
Proceeds from the issuance of other long-term debt 2,277 -
Retirement of other long-term debt (50,425) (425)
Redemption of preferred stock (4,850) (4,850)
Dividends paid:
Common stock - (289,100)
Preferred and preference stock (22,208) (22,343)
-------- --------
Net cash flow used in financing activities (75,206) (316,718)
-------- --------
Net increase (decrease) in cash and cash equivalents 157,594 (139,277)
Cash and cash equivalents at beginning of period 104,644 261,349
-------- --------
Cash and cash equivalents at end of period $262,238 $122,072
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $136,526 $136,957
Income taxes $288 $137
Noncash investing and financing activities:
Capital lease obligations incurred - $18,721
Change in unrealized appreciation/depreciation of
decommissioning trust assets $1,738 ($200)
See Notes to Financial Statements.
</TABLE>
<PAGE>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $6,928,954 $6,842,726
Natural gas 44,505 44,505
Steam products 77,414 77,307
Property under capital leases 79,323 82,914
Construction work in progress 118,319 96,176
Nuclear fuel under capital leases 53,102 80,042
--------- ---------
Total 7,301,617 7,223,670
Less - accumulated depreciation and 2,645,827 2,504,826
amortization --------- ---------
Utility plant - net 4,655,790 4,718,844
--------- ---------
Other Property and Investments:
Decommissioning trust fund 26,993 21,309
Other - at cost (less accumulated 28,567 29,315
depreciation) --------- ---------
Total 55,560 50,624
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 13,893 8,063
Temporary cash investments - at cost,
which approximates market:
Associated companies 35,496 5,085
Other 212,849 91,496
--------- ---------
Total cash and cash equivalents 262,238 104,644
Accounts receivable:
Customer (less allowance for doubtful
accounts of $0.7 million in 1995 and 1994) 97,846 167,745
Associated companies 6,908 12,732
Other 11,864 20,706
Accrued unbilled revenues 82,227 39,470
Deferred fuel costs 20,932 6,314
Accumulated deferred income taxes 26,448 49,457
Fuel inventory 29,382 25,784
Materials and supplies - at average cost 101,820 90,054
Rate deferrals 95,469 100,478
Prepayments and other 22,676 13,754
--------- ---------
Total 757,810 631,138
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 444,195 506,974
SFAS 109 regulatory asset - net 444,420 426,358
Unamortized loss on reacquired debt 62,973 63,994
Other regulatory assets 29,683 35,168
Long-term receivables 254,432 264,752
Other 153,360 145,609
--------- ---------
Total 1,389,063 1,442,855
--------- ---------
TOTAL $6,858,223 $6,843,461
========= =========
See Notes to Financial Statements.
<PAGE>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares in 1995 and 1994 $114,055 $114,055
Paid-in capital 1,152,469 1,152,336
Retained earnings 357,171 264,626
--------- ---------
Total common shareholder's equity 1,623,695 1,531,017
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 90,087 94,934
Long-term debt 2,250,420 2,318,417
--------- ---------
Total 4,250,646 4,230,812
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 95,051 125,691
Other 76,170 68,753
--------- ---------
Total 171,221 194,444
--------- ---------
Current Liabilities:
Currently maturing long-term debt 70,425 50,425
Accounts payable:
Associated companies 39,388 31,722
Other 111,833 140,975
Customer deposits 21,793 22,216
Taxes accrued 48,179 12,478
Interest accrued 59,581 55,327
Nuclear refueling reserve 21,522 10,117
Obligations under capital leases 37,366 37,265
Reserve for rate refund 5,704 56,972
Other 83,255 111,963
--------- ---------
Total 499,046 529,460
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 1,144,821 1,100,396
Accumulated deferred investment tax credits 220,583 199,428
Deferred River Bend finance charges 64,137 82,406
Other 507,769 506,515
--------- ---------
Total 1,937,310 1,888,745
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,858,223 $6,843,461
========= =========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $528,975 $502,458 $1,288,081 $1,327,927
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 116,015 113,688 227,616 257,314
Purchased power 92,944 83,942 261,417 289,279
Nuclear refueling outage expenses 4,517 4,195 13,550 13,671
Other operation and maintenance 70,865 100,800 216,203 260,575
Depreciation, amortization, and decommissioning 42,212 38,499 119,629 113,342
Taxes other than income taxes 13,133 14,377 43,181 42,733
Income taxes 56,003 39,015 104,366 80,171
Amortization of rate deferrals 8,118 8,118 21,664 21,664
-------- -------- ---------- ----------
Total 403,807 402,634 1,007,626 1,078,749
-------- -------- ---------- ----------
Operating Income 125,168 99,824 280,455 249,178
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 424 766 1,527 2,855
Miscellaneous - net 1,137 (154) 1,718 287
Income taxes (319) 150 (307) 190
-------- -------- ---------- ----------
Total 1,242 762 2,938 3,332
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 32,737 32,543 97,821 97,393
Other interest - net 1,355 1,560 5,100 4,635
Allowance for borrowed funds used
during construction (501) (546) (1,491) (1,996)
-------- -------- ---------- ----------
Total 33,591 33,557 101,430 100,032
-------- -------- ---------- ----------
Net Income 92,819 67,029 181,963 152,478
Preferred Stock Dividend Requirements
and Other 5,367 5,848 16,177 17,668
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $87,452 $61,181 $165,786 $134,810
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $181,963 $152,478
Noncash items included in net income:
Change in rate deferrals 21,664 21,664
Depreciation, amortization, and decommissioning 119,629 113,342
Deferred income taxes and investment tax credits (22,022) 31,788
Allowance for equity funds used during construction (1,527) (2,855)
Amortization of deferred revenues - (14,632)
Changes in working capital:
Receivables (51,126) (25,193)
Accounts payable (741) (24,406)
Taxes accrued 84,144 39,867
Interest accrued (5,232) (4,776)
Other working capital accounts (4,885) 17,969
Decommissioning trust contributions (3,611) (3,796)
Other (10,049) 3,051
-------- --------
Net cash flow provided by operating activities 308,207 304,501
-------- --------
Investing Activities:
Construction expenditures (77,319) (107,708)
Allowance for equity funds used during construction 1,527 2,855
Nuclear fuel purchases (45,493) -
Proceeds from sale/seaseback of nuclear fuel 45,493 -
-------- --------
Net cash flow used in investing activities (75,792) (104,853)
-------- --------
Financing Activities:
Proceeds from the issuance of other long-term debt - 19,946
Retirement of:
First mortgage bonds - (25,000)
Other long-term debt (239) (240)
Redemption of preferred stock (11,254) (13,510)
Changes in short-term borrowings (27,154) (32,841)
Dividends paid:
Common stock (134,000) (90,400)
Preferred stock (15,896) (17,285)
-------- --------
Net cash flow used in financing activities (188,543) (159,330)
-------- --------
Net increase in cash and cash equivalents 43,872 40,318
Cash and cash equivalents at beginning of period 28,718 33,489
-------- --------
Cash and cash equivalents at end of period $72,590 $73,807
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $102,574 $100,081
Income taxes $63,296 $32,400
Noncash investing and financing activities:
Capital lease obligations incurred - $9,677
Change in unrealized appreciation/depreciation of
decommissioning trust assets $2,043 $184
See Notes to Financial Statements.
</TABLE>
<PAGE>
LOUISIANA POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $4,864,083 $4,778,126
Electric plant under lease 229,468 229,468
Construction work in progress 74,130 94,791
Nuclear fuel under capital lease 69,267 44,238
Nuclear fuel 14,049 6,420
--------- ---------
Total 5,250,997 5,153,043
Less - accumulated depreciation and 1,706,469 1,600,510
amortization --------- ---------
Utility plant - net 3,544,528 3,552,533
--------- ---------
Other Property and Investments:
Nonutility property 20,060 20,060
Decommissioning trust fund 33,953 27,076
Investment in subsidiary company - at equity 14,230 14,230
Other 1,087 1,078
--------- ---------
Total 69,330 62,444
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 3,720 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 5,880 -
Other 62,990 28,718
--------- ---------
Total cash and cash equivalents 72,590 28,718
Accounts receivable:
Customer (less allowance for doubtful
accounts of $1.2 million in 1995 and 1994) 103,913 58,858
Associated companies 8,278 9,827
Other 9,206 11,609
Accrued unbilled revenues 73,132 63,109
Accumulated deferred income taxes 6,079 3,702
Materials and supplies - at average cost 90,342 89,692
Rate deferrals 28,422 28,422
Prepayments and other 14,931 28,528
--------- ---------
Total 406,893 322,465
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 3,945 25,609
SFAS 109 regulatory asset - net 373,257 379,263
Unamortized loss on reacquired debt 40,508 43,656
Other regulatory assets 23,981 25,736
Other 25,989 23,733
--------- ---------
Total 467,680 497,997
--------- ---------
TOTAL $4,488,431 $4,435,439
========= =========
See Notes to Financial Statements.
<PAGE>
LOUISIANA POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares in 1995 and 1994 $1,088,900 $1,088,900
Capital stock expense and other (4,835) (5,367)
Retained earnings 145,206 113,420
--------- ---------
Total common shareholder's equity 1,229,271 1,196,953
Preferred stock:
Without sinking fund 160,500 160,500
With sinking fund 100,009 111,265
Long-term debt 1,368,386 1,403,055
--------- ---------
Total 2,858,166 2,871,773
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 41,267 16,238
Other 53,679 54,216
--------- ---------
Total 94,946 70,454
--------- ---------
Current Liabilities:
Currently maturing long-term debt 110,260 75,320
Notes payable:
Associated companies - 7,954
Other - 19,200
Accounts payable:
Associated companies 45,239 20,793
Other 57,016 82,203
Customer deposits 56,363 54,934
Taxes accrued 82,284 (1,860)
Interest accrued 37,755 42,987
Dividends declared 5,239 5,489
Deferred fuel cost 1,161 13,983
Obligations under capital leases 28,000 28,000
Other 13,718 20,156
--------- ---------
Total 437,035 369,159
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 862,417 883,945
Accumulated deferred investment tax credits 146,977 151,259
Deferred interest - Waterford 3 lease 25,146 26,000
obligation
Other 63,744 62,849
--------- ---------
Total 1,098,284 1,124,053
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,488,431 $4,435,439
========= =========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $258,848 $234,274 $692,482 $651,481
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 62,557 53,097 130,431 117,710
Purchased power 55,696 59,155 183,706 182,035
Other operation and maintenance 31,815 41,327 103,970 118,543
Depreciation and amortization 9,614 9,513 28,349 27,270
Taxes other than income taxes 13,139 11,275 34,222 32,011
Income taxes 15,928 11,427 30,022 23,280
Amortization of rate deferrals 28,310 24,805 84,931 74,414
-------- -------- -------- --------
Total 217,059 210,599 595,631 575,263
-------- -------- -------- --------
Operating Income 41,789 23,675 96,851 76,218
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 235 365 763 1,386
Miscellaneous - net 413 (337) 1,270 (85)
Income taxes (158) 129 (486) 32
-------- -------- -------- --------
Total 490 157 1,547 1,333
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 12,451 11,882 35,399 35,999
Other interest - net 806 1,330 4,064 3,683
Allowance for borrowed funds used
during construction (206) (236) (645) (889)
-------- -------- -------- --------
Total 13,051 12,976 38,818 38,793
-------- -------- -------- --------
Net Income 29,228 10,856 59,580 38,758
Preferred Stock Dividend Requirements
and Other 2,917 1,797 6,168 5,827
-------- -------- -------- --------
Earnings Applicable to Common Stock $26,311 $9,059 $53,412 $32,931
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $59,580 $38,758
Noncash items included in net income:
Change in rate deferrals 78,772 92,135
Depreciation and amortization 28,349 27,270
Deferred income taxes and investment tax credits (24,436) (22,092)
Allowance for equity funds used during construction (763) (1,386)
Changes in working capital:
Receivables (29,362) (12,592)
Fuel inventory (3,327) 5,058
Accounts payable 24,505 17,513
Taxes accrued 24,979 9,361
Interest accrued (3,689) (11,213)
Other working capital accounts (16,475) 428
Other 1,273 11,129
-------- --------
Net cash flow provided by operating activities 139,406 154,369
-------- --------
Investing Activities:
Construction expenditures (55,616) (100,369)
Allowance for equity funds used during construction 763 1,386
-------- --------
Net cash flow used in investing activities (54,853) (98,983)
-------- --------
Financing Activities:
Proceeds from the issuance of:
General and refunding bonds 79,480 24,534
Other long-term debt - 15,652
Retirement of:
General and refunding bonds (30,000) (30,000)
First mortgage bonds (20,000) (18,000)
Other long-term debt (965) (16,045)
Redemption of preferred stock (15,000) (15,000)
Changes in short-term borrowings (30,000) 18,432
Dividends paid:
Common stock (35,400) (28,000)
Preferred stock (4,782) (5,851)
-------- --------
Net cash flow used in financing activities (56,667) (54,278)
-------- --------
Net increase in cash and cash equivalents 27,886 1,108
Cash and cash equivalents at beginning of period 9,598 7,999
-------- --------
Cash and cash equivalents at end of period $37,484 $9,107
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $41,304 $48,664
Income taxes $27,413 $19,007
See Notes to Financial Statements.
</TABLE>
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $1,543,888 $1,475,322
Construction work in progress 51,336 67,119
--------- ---------
Total 1,595,224 1,542,441
Less - accumulated depreciation and 607,407 582,514
amortization --------- ---------
Utility plant - net 987,817 959,927
--------- ---------
Other Property and Investments:
Investment in subsidiary company - at equity 5,531 5,531
Other 5,617 5,624
--------- ---------
Total 11,148 11,155
--------- ---------
Current Assets:
Cash and cash equivalents:
Cash 5,770 5,080
Temporary cash investments - at cost,
which approximates market
Associated companies 4,797 276
Other 26,917 4,242
Total cash and cash equivalents 37,484 9,598
Accounts receivable:
Customer (less allowance for doubtful
accounts of $2.1 million in 1995 and 1994) 61,911 43,846
Associated companies 4,566 4,680
Other 1,968 2,789
Accrued unbilled revenues 52,105 39,873
Fuel inventory - at average cost 8,107 4,780
Materials and supplies - at average cost 21,237 20,642
Rate deferrals 126,378 106,538
Prepayments and other 7,484 10,672
--------- ---------
Total 321,240 243,418
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 287,108 385,720
Unamortized loss on reacquired debt 9,557 10,488
Other regulatory assets 9,385 10,168
Other 8,000 8,569
--------- ---------
Total 314,050 414,945
--------- ---------
TOTAL $1,634,255 $1,629,445
========= =========
See Notes to Financial Statements.
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares in 1995 and 1994 $199,326 $199,326
Capital stock expense and other (218) (1,762)
Retained earnings 250,023 232,011
--------- ---------
Total common shareholder's equity 449,131 429,575
Preferred stock:
Without sinking fund 57,881 57,881
With sinking fund 16,770 31,770
Long-term debt 504,358 475,233
--------- ---------
Total 1,028,140 994,459
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 456 552
Other 8,345 8,984
--------- ---------
Total 8,801 9,536
--------- ---------
Current Liabilities:
Currently maturing long-term debt 66,015 65,965
Notes payable - 30,000
Accounts payable:
Associated companies 27,340 2,350
Other 29,720 30,205
Customer deposits 24,062 22,793
Taxes accrued 45,800 20,821
Accumulated deferred income taxes 52,426 47,515
Interest accrued 16,688 20,377
Dividends declared 1,468 1,626
Other 8,357 28,692
--------- ---------
Total 271,876 270,344
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 276,791 301,288
Accumulated deferred investment tax credits 28,366 29,528
SFAS 109 regulatory liability - net 9,410 13,099
Other 10,871 11,191
--------- ---------
Total 325,438 355,106
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,634,255 $1,629,445
========= =========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $134,855 $120,354 $310,065 $306,826
Natural gas 11,865 13,220 58,207 68,238
-------- -------- -------- --------
Total 146,720 133,574 368,272 375,064
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 29,649 23,814 75,088 83,773
Purchased power 40,850 42,999 114,777 115,940
Other operation and maintenance 22,409 23,444 56,324 63,404
Depreciation and amortization 4,898 4,903 14,512 14,356
Taxes other than income taxes 7,425 7,206 21,259 21,137
Income taxes 9,915 8,829 18,110 17,003
Amortization of rate deferrals 10,489 6,438 23,754 19,171
-------- -------- -------- --------
Total 125,635 117,633 323,824 334,784
-------- -------- -------- --------
Operating Income 21,085 15,941 44,448 40,280
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 43 60 104 297
Miscellaneous - net 504 499 993 1,483
Income taxes (194) (192) (382) (901)
-------- -------- -------- --------
Total 353 367 715 879
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 4,023 4,148 11,896 12,957
Other interest - net 588 272 1,555 865
Allowance for borrowed funds used
during construction (35) (45) (83) (221)
-------- -------- -------- --------
Total 4,576 4,375 13,368 13,601
-------- -------- -------- --------
Net Income 16,862 11,933 31,795 27,558
Preferred Stock Dividend Requirements
and Other 318 329 1,035 1,162
-------- -------- -------- --------
Earnings Applicable to Common Stock $16,544 $11,604 $30,760 $26,396
======== ======== ======== ========
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, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $31,795 $27,558
Noncash items included in net income:
Change in rate deferrals 23,211 17,499
Depreciation and amortization 14,512 14,356
Deferred income taxes and investment tax credits (5,853) (15,705)
Allowance for equity funds used during construction (104) (297)
Changes in working capital:
Receivables (20,681) 1,957
Accounts payable 14,100 (3,718)
Taxes accrued 11,525 1,677
Interest accrued (279) (960)
Income tax refund 20,172 -
Other working capital accounts (4,328) 13,534
Other (13,380) 5,050
-------- --------
Net cash flow provided by operating activities 70,690 60,951
-------- --------
Investing Activities:
Construction expenditures (14,637) (16,269)
Allowance for equity funds used during construction 104 297
-------- --------
Net cash flow used in investing activities (14,533) (15,972)
-------- --------
Financing Activities:
Proceeds from the issuance of general
and refunding bonds 29,805 -
Retirement of general and refunding bonds (24,200) (15,000)
Redemption of preferred stock (1,500) (1,500)
Dividends paid:
Common stock (14,100) (14,400)
Preferred stock (1,046) (1,220)
-------- --------
Net cash flow used in financing activities (11,041) (32,120)
-------- --------
Net increase in cash and cash equivalents 45,116 12,859
Cash and cash equivalents at beginning of period 8,031 43,317
-------- --------
Cash and cash equivalents at end of period $53,147 $56,176
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $13,173 $14,213
Income taxes (refund) - net ($6,469) $32,115
See Notes to Financial Statements.
</TABLE>
<PAGE>
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $479,206 $470,560
Natural gas 120,977 119,508
Construction work in progress 11,728 7,284
-------- --------
Total 611,911 597,352
Less - accumulated depreciation and 331,185 319,576
amortization -------- --------
Utility plant - net 280,726 277,776
-------- --------
Other Investments:
Investment in subsidiary company - at equity 3,259 3,259
-------- --------
Current Assets:
Cash and cash equivalents:
Cash 2,161 849
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,711 2,472
Other 43,275 4,710
-------- --------
Total cash and cash equivalents 53,147 8,031
Accounts receivable:
Customer (less allowance for doubtful
accounts of
$0.8 million in 1995 and 1994) 43,856 23,938
Associated companies 150 3,503
Other 516 600
Accrued unbilled revenues 18,495 14,295
Deferred electric fuel and resale gas costs 1,455 856
Materials and supplies - at average cost 9,400 9,676
Rate deferrals 35,549 31,544
Income tax receivable - 20,172
Prepayments and other 7,792 5,636
------- -------
Total 170,360 118,251
------- -------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 145,911 173,127
SFAS 109 regulatory asset - net 9,463 8,792
Unamortized loss on reacquired debt 2,039 2,361
Other regulatory assets 5,647 5,647
Other 3,890 3,681
------- -------
Total 166,950 193,608
------- -------
TOTAL $621,295 $592,894
======= =======
See Notes to Financial Statements.
<PAGE>
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $4 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares in 1995 and 1994 $33,744 $33,744
Paid-in capital 36,247 36,201
Retained earnings subsequent to the elimination of
the accumulated deficit on November 30, 1988 95,545 78,886
------- -------
Total common shareholder's equity 165,536 148,831
Preferred stock:
Without sinking fund 19,780 19,780
With sinking fund 1,950 3,450
Long-term debt 155,946 164,160
------- -------
Total 343,212 336,221
------- -------
Other Noncurrent Liabilities 17,336 19,063
------- -------
Current Liabilities:
Currently maturing long-term debt 38,250 24,200
Accounts payable:
Associated companies 18,915 6,456
Other 21,143 19,503
Customer deposits 18,396 17,422
Accumulated deferred income taxes 4,980 4,925
Taxes accrued 13,854 2,329
Interest accrued 4,963 5,242
Other 17,159 19,982
------- -------
Total 137,660 100,059
------- -------
Deferred Credits:
Accumulated deferred income taxes 84,485 89,246
Accumulated deferred investment tax credits 8,775 9,251
Other 29,827 39,054
------- -------
Total 123,087 137,551
------- -------
Commitments and Contingencies (Note 1)
TOTAL $621,295 $592,894
======= =======
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
1995 1994 1995 1994
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $144,758 $150,949 $455,054 $450,015
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 11,194 11,440 27,090 35,661
Nuclear refueling outage expenses 4,571 - 25,857 -
Other operation and maintenance 21,154 26,829 70,056 74,320
Depreciation, amortization, and decommissioning 24,530 23,026 74,463 68,993
Taxes other than income taxes 6,590 5,637 20,788 19,155
Income taxes 19,056 18,148 57,775 55,896
-------- -------- -------- --------
Total 87,095 85,080 276,029 254,025
-------- -------- -------- --------
Operating Income 57,663 65,869 179,025 195,990
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 479 101 1,511 735
Miscellaneous - net 783 2,025 2,525 4,641
Income taxes 448 569 1,500 (470)
-------- -------- -------- --------
Total 1,710 2,695 5,536 4,906
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 34,557 43,790 110,153 129,088
Other interest - net 1,952 18 6,269 1,051
Allowance for borrowed funds used
during construction (502) (178) (1,594) (938)
-------- -------- -------- --------
Total 36,007 43,630 114,828 129,201
-------- -------- -------- --------
Net Income $23,366 $24,934 $69,733 $71,695
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $69,733 $71,695
Noncash items included in net income:
Depreciation, amortization, and decommissioning 74,463 68,993
Deferred income taxes and investment tax credits (11,378) 16,535
Allowance for equity funds used during construction (1,511) (735)
Changes in working capital:
Receivables (56,341) (3,994)
Accounts payable (25,063) 8,469
Taxes accrued 672 4,770
Interest accrued (4,281) (1,457)
Other working capital accounts (23,343) (1,474)
Recoverable income taxes - 32,940
Decommissioning trust contributions (4,055) (3,764)
Other 32,303 14,893
-------- --------
Net cash flow provided by operating activities 51,199 206,871
-------- --------
Investing Activities:
Construction expenditures (19,524) (12,254)
Allowance for equity funds used during construction 1,511 735
Nuclear fuel purchases (52,188) (54)
Proceeds from sale/leaseback of nuclear fuel 52,188 -
-------- --------
Net cash flow used in investing activities (18,013) (11,573)
-------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds - 59,410
Other long-term debt 43,538 -
Retirement of:
First mortgage bonds - (60,000)
Other long-term debt (45,320) -
Premium and expenses paid on refinancing sale/leaseback bonds - (47,602)
Common stock dividends paid (69,500) (124,300)
-------- --------
Net cash flow used in financing activities (71,282) (172,492)
-------- --------
Net (decrease)increase in cash and cash equivalents (38,096) 22,806
Cash and cash equivalents at beginning of period 89,703 196,132
-------- --------
Cash and cash equivalents at end of period $51,607 $218,938
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $114,514 $125,519
Income taxes (refund) - net $65,637 ($3,477)
Noncash investing and financing activities:
Change in unrealized appreciation/depreciation of
decommissioning trust assets $2,629 $212
See Notes to Financial Statements.
</TABLE>
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
ASSETS
Utility Plant:
Electric $2,969,233 $2,939,384
Electric plant under lease 443,257 439,378
Construction work in progress 32,311 46,547
Nuclear fuel under capital lease 81,586 46,688
Nuclear fuel - 26,360
--------- ---------
Total 3,526,387 3,498,357
Less - accumulated depreciation and 828,374 751,717
amortization --------- ---------
Utility plant - net 2,698,013 2,746,640
--------- ---------
Other Investments:
Decommissioning trust fund 38,606 30,359
Current Assets:
Cash and cash equivalents:
Cash 212 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,773 5,489
Other 43,622 84,214
--------- ---------
Total cash and cash equivalents 51,607 89,703
Accounts receivable:
Associated companies 63,984 7,450
Other 3,219 3,412
Materials and supplies - at average cost 69,178 71,991
Prepayments and other 13,878 5,429
--------- ---------
Total 201,866 177,985
--------- ---------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 389,422 389,264
Unamortized loss on reacquired debt 53,793 54,577
Other regulatory assets 201,346 199,080
Other 14,931 15,454
--------- ---------
Total 659,492 658,375
--------- ---------
TOTAL $3,597,977 $3,613,359
========= =========
See Notes to Financial Statements.
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares in 1995 and 1994 $789,350 $789,350
Paid-in capital 7 7
Retained earnings 85,914 85,681
--------- ---------
Total common shareholder's equity 875,271 875,038
Long-term debt 1,189,720 1,438,305
--------- ---------
Total 2,064,991 2,313,343
--------- ---------
Other Noncurrent Liabilities:
Obligations under capital leases 53,585 18,688
Other 17,447 14,342
--------- ---------
Total 71,032 33,030
--------- ---------
Current Liabilities:
Currently maturing long-term debt 355,000 105,000
Accounts payable:
Associated companies 17,560 32,272
Other 12,853 23,204
Taxes accrued 36,054 35,382
Interest accrued 36,515 40,796
Obligations under capital leases 28,000 28,000
Other 2,087 19,794
--------- ---------
Total 488,069 284,448
--------- ---------
Deferred Credits:
Accumulated deferred income taxes 734,438 746,502
Accumulated deferred investment tax credits 107,977 110,584
FERC Settlement - refund obligation 57,775 60,388
Other 73,695 65,064
--------- ---------
Total 973,885 982,538
--------- ---------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,597,977 $3,613,359
========= =========
See Notes to Financial Statements.
<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,
including co-ownership of River Bend and Big Cajun 2, Unit 3.
GSU and Cajun, respectively, own 70% and 30% undivided interests
in River Bend and 42% and 58% undivided interests in Big Cajun 2,
Unit 3.
In June 1989, Cajun filed a civil action against GSU in the
United States District Court for the Eastern District of Louisiana
(District Court). Cajun's complaint seeks 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. The suit also seeks to recover
as damages Cajun's alleged $1.6 billion investment in the unit
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. If GSU is
ultimately unsuccessful in this litigation and is required to pay
substantial damages, GSU would probably be unable to make such
payments and could be forced to seek relief from its creditors
under the United States Bankruptcy Code.
A trial on the portion of the suit by Cajun to rescind the
Operating Agreement which began in April 1994 was completed in
March 1995. On October 24, 1995, the District Court issued a
memorandum opinion ruling in favor of GSU. The District Court
found that Cajun did not prove that GSU fraudulently induced it
to execute the Operating Agreement and that Cajun failed to timely
assert its claim. A final judgment will be entered when the
District Court issues its detailed written opinions. It is
uncertain when the District Court Judge's final opinion will be
entered, or whether Cajun will appeal the decision.
Cajun has not paid its full share of capital costs,
operating and maintenance expenses and other costs for repairs
and improvements to River Bend since 1992. Cajun's unpaid
portion of River Bend operating and maintenance expenses
(including nuclear fuel) and capital costs for the first nine
months of 1995 was approximately $42.8 million. The cumulative
cost to GSU resulting from Cajun's failure to pay its full share
of River Bend-related costs, reduced by the proceeds from the
sale by GSU of Cajun's share of River Bend power, was $59.1
million as of September 30, 1995, compared with $49 million as of
December 31, 1994. These amounts are reflected in long-term
receivables with an offsetting reserve in other deferred credits.
Cajun's bankruptcy may affect the ultimate collectibility of the
amounts owed to GSU, including any amounts that may be awarded in
litigation.
See Note 8 of Entergy Corporation's and GSU's Form 10-K for
additional information regarding the Cajun litigation, Cajun's
December 21, 1994 bankruptcy filing, related filings and the
ongoing potential effects of these matters upon GSU.
In the bankruptcy proceedings, Cajun filed a motion to
reject the Operating Agreement as a burdensome executory
contract. GSU responded on January 10, 1995, with a memorandum
opposing Cajun's motion. If the District Court were to grant
Cajun's motion to reject the Operating Agreement, Cajun would be
relieved of its financial obligations under the contract, while
GSU would likely have a substantial damage claim arising from any
such rejection. Although GSU believes that Cajun's motion to
reject the Operating Agreement is without merit, it is not
possible to predict the outcome or ultimate impact of these
proceedings.
Cajun - Transmission Service (Entergy Corporation and GSU)
In orders issued on August 3, 1995, and October 2, 1995, the
FERC affirmed the ALJ's April 1995 ruling in the remanded portion
of GSU's and Cajun's ongoing transmission service charge disputes
before the FERC. Both GSU and Cajun have petitioned for appeal
to the D.C Circuit.
Under GSU's interpretation of a 1992 FERC order, as modified
by its August 3, 1995, and October 2, 1995 orders, Cajun would
owe GSU approximately $63.3 million as of September 30, 1995.
GSU further estimates that if it were to prevail in its May 1992
motion for rehearing and on certain other issues decided
adversely to GSU in the February 1995, August 1995 and October
1995 FERC orders, which GSU has appealed, Cajun would owe GSU
approximately $140.3 million as of September 30, 1995. 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 Cajun were to prevail in appealing the FERC's
August and October 1995 orders, GSU estimates it would owe Cajun
approximately $92.1 million as of September 30, 1995. 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. Pending FERC's ruling on
the May 1992 motions for rehearing, GSU has continued to bill
Cajun utilizing the historical billing methodology and has
recorded underpaid transmission charges, including interest, in
the amount of $169.7 million as of September 30, 1995. This
amount is reflected in long-term receivables with an offsetting
reserve in other deferred credits. Cajun's bankruptcy may affect
GSU's collection of the above amounts. The FERC has determined
that the collection of the pre-petition debt of Cajun is an issue
properly decided in the bankruptcy proceeding. For additional
information regarding the GSU and Cajun transmission service
charge disputes, see Note 8 to Entergy Corporation's and GSU's
Form 10-K.
Nonregulated Investments (Entergy Corporation)
On March 31, 1995, Entergy Corporation, through its
subsidiary, Entergy Power Development Company (EPDC), entered
into an agreement with Enron Power Development Corporation
(Enron), a subsidiary of Enron Corporation, to acquire a 20%
interest in the Dabhol Power Project (Project), a 695 megawatt
combined cycle facility located in the State of Maharashtra,
India.
Subsequent to entering into the agreement with Enron, the
newly-elected Maharashtra state government investigated the
Project and its related cost of power. On August 3, 1995, the
Chief Minister of Maharashtra stated that the government of
Maharashtra had decided to suspend the first phase of the
Project, the 695 megawatt facility, and "scrap" the second phase
of the Project, a 1,320 megawatt facility, and indicated that
orders to stop work would be issued. In September 1995, the
Maharashtra state government announced its decision to resume
discussions with Enron regarding the Project.
On September 11, 1995, EPDC and Enron amended their original
agreement entered into on March 31, 1995. The amended agreement
provides EPDC with an option to participate in the Project under
the original terms of the agreement, with the option expiring on
May 1, 1996. Enron may sell the 20% interest to any third party
provided that EPDC has not notified Enron in writing of its
desire to exercise the option. In addition the amended agreement
resulted in the return of EPDC's $20.5 million investment
previously held in escrow.
Capital Requirements and Financing (Entergy Corporation, AP&L,
GSU, LP&L, MP&L, NOPSI and System Energy)
See Note 8 to Entergy Corporation's, AP&L's, GSU's, LP&L's,
MP&L's and NOPSI's Form 10-K and Note 7 to System Energy's Form
10-K for information on the System operating companies' and
System Energy's construction expenditures (excluding nuclear
fuel) for the years 1995, 1996 and 1997, and long-term debt and
preferred stock maturities and cash sinking fund requirements for
the period 1995-1999.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
(Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI and System
Energy)
See Note 8 to Entergy Corporation's, AP&L's, GSU's, LP&L's,
MP&L's and NOPSI's Form 10-K and Note 7 to System Energy's Form
10-K for information on nuclear liability, property and
replacement power insurance, related NRC regulations, the
disposal of spent nuclear fuel, other high-level radioactive
waste and decommissioning costs associated with ANO, River Bend,
Waterford 3 and Grand Gulf 1.
The staff of the SEC has questioned certain of the financial
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 FASB is reviewing the accounting for
decommissioning. In June 1995, the FASB reaffirmed its tentative
conclusions on measurement issues in accounting for the liability
for the decommissioning of nuclear power plants. The FASB
supports measurement of the liability based on discounted future
cash flows. Those future cash flows should be determined by
estimating current costs and adjusting for inflation,
efficiencies that may be gained from experience with similar
activities and consideration of reasonable future advances in
technology. The FASB also concluded that changes in the
decommissioning liability resulting from changes in assumptions
should be recognized with a corresponding adjustment to the plant
asset, and depreciation should be revised prospectively. In
addition, the FASB concluded that the asset recognized as a
result of recognizing the decommissioning liability should be
presented with other plant costs on the financial statements
because the cost of decommissioning the plant is recognized as
part of the total cost of the plant asset. Subsequent to the
FASB reaching the above tentative conclusions, the scope of the
FASB's review was expanded to consider not only the accounting
for decommissioning liabilities, but also liabilities related to
the closure and removal of all long-lived assets.
If current electric utility industry accounting practices
with respect to nuclear 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
decommissioning trusts could be reported as investment income
rather than as a reduction to decommissioning expense.
ANO Matters (Entergy Corporation and AP&L)
See Note 8 to Entergy Corporation's and AP&L's 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.
Further inspections and repairs were conducted at subsequent
refueling and mid-cycle outages including the most recent
refueling outage in October 1995. Beginning in January 1995, ANO
2's output was reduced 15 megawatts or 1.6% due to secondary side
fouling, tube plugging and reduction of primary temperature.
During the October 1995 inspection, additional cracks in the
tubes were discovered. The unit may be approaching the limit for
the number of steam generator tubes that can be plugged with the
unit in operation. If the currently established limit is
reached, Entergy Operations could be required during future
outages to insert sleeves in some of the steam generator tubes
which were previously plugged. Entergy Operations is in the
process of gathering information and assessing various options
for the repair or the replacement of ANO 2's steam generators.
Certain of these options could, in the future, require
significant capital expenditures and result in additional
outages. Entergy Operations periodically meets with the NRC to
discuss the results of inspections of the generator tubes, as
well as the timing of future inspections.
Environmental Issues
(AP&L)
In May 1995, AP&L was named as a defendant in a suit by
Reynolds Metals Company (Reynolds), seeking to recover a share of
the costs associated with the clean-up of hazardous substances at
a site south of Arkadelphia, Arkansas. Reynolds alleges that it
has spent $11.2 million to clean-up the site, and that the site
was contaminated in part with PCBs for which AP&L bears some
responsibility. AP&L, voluntarily, at its expense, has already
completed remediation at a nearby substation site and believes
that it has no liability for contamination at the site that is
subject to the Reynolds suit and is contesting the lawsuit.
Regardless of the outcome, AP&L does not believe this matter
would have a materially adverse effect on its financial condition
or results of operations. See "Environmental Regulation" in Item
1 of Part I of Entergy Corporation's and AP&L's Form 10-K for
information on PCB contamination at former Reynolds plant sites
in Arkansas to which AP&L had supplied power.
(GSU)
GSU has been designated as a potentially responsible party for
the clean-up of certain hazardous waste disposal sites. GSU is
currently negotiating with the EPA and state authorities
regarding the clean-up of certain of these sites.
Through September 30, 1995, $7.7 million has been expended on
the clean-up. As of September 30, 1995, a remaining recorded
liability of $22.1 million existed relating to the clean-up of
the sites at which GSU has been designated a potentially
responsible party. See Note 8 to GSU's Form 10-K for additional
discussion of the sites where GSU has been designated as a
potentially responsible party by the EPA, and related litigation.
(LP&L)
During 1993, the Louisiana Department of Environmental
Quality issued new rules for solid waste regulation, including
regulation of waste water impoundments. LP&L has determined that
certain of its power plant waste water impoundments were affected
by these regulations and has chosen to upgrade or close them. As
a result, a remaining recorded liability in the amount of $12.8
million existed at September 30, 1995, for waste water upgrades
and closures to be completed by 1996. Cumulative expenditures
relating to the upgrades and closures of waste water impoundments
were $4.1 million as of September 30, 1995. See Note 8 to LP&L's
Form 10-K for additional discussion of LP&L's waste water
impoundment upgrades and closures.
Waterford 3 Lease Obligations (LP&L)
LP&L entered into three transactions for the sale and
leaseback of undivided interests (aggregating approximately 9.3%)
in Waterford 3. 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. See Note 9 to LP&L's Form 10-
K for further information.
Reimbursement Agreement (System Energy)
Under the provisions of a bank letter of credit
reimbursement agreement, System Energy has agreed to a number of
covenants relating to the maintenance of certain capitalization
and fixed charge coverage ratios. System Energy agreed, during
the term of the reimbursement agreement, to maintain its equity
at not less than 33% of its adjusted capitalization (defined in
the reimbursement agreement to include certain amounts not
included in capitalization for financial statement purposes). In
addition, System Energy must maintain, with respect to each
fiscal quarter during the term of the reimbursement agreement, a
ratio of adjusted net income to interest expense (calculated, in
each case, as specified in the reimbursement agreement) of at
least 1.60 times earnings. As a result of charges recorded in
the fourth quarter of 1994 related to an agreement with FERC
which settled a long-standing dispute involving income tax
allocation procedures, System Energy has obtained the consent of
certain banks to waive temporarily the fixed charge coverage
covenant in the letters of credit reimbursement agreement until
November 30, 1995. As of September 30, 1995, System Energy's
equity approximated 33.66% of its adjusted capitalization, and
its fixed charge coverage ratio was 1.24. System Energy expects
that upon expiration of the waiver period, it will be in
compliance with the fixed charge coverage covenant. See Note 7
to System Energy's Form 10-K for further information on the
reimbursement agreement.
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 as to 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.
As discussed in Note 2 to Entergy Corporation's and GSU's
Form 10-K, various appeals of the PUCT's order have been filed.
GSU has filed an appeal with the Texas Supreme Court. The Texas
Supreme Court has not yet accepted the appeal, and no date for
oral argument has been set.
As of September 30, 1995, 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 $13
million, $277 million (both net of depreciation), and $169
million, respectively. Allowed Deferrals were approximately $84
million, net of taxes and amortization, as of September 30, 1995.
GSU estimates it has recorded approximately $177 million of
revenues as of September 30, 1995, 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 be lost, and no
assurance can be given as to whether or not refunds to customers
of revenue received based upon such deferred costs will be
required.
As discussed in Note 2 to Entergy Corporation's and GSU's
Form 10-K, 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 that the PUCT will be
allowed to rule on the prudence of the abeyed River Bend plant
costs. Management and legal counsel are unable to predict the
amount, if any, of abeyed and previously disallowed River Bend
plant costs that ultimately may be disallowed by the PUCT. As of
September 30, 1995, a net of tax write-off of up to $290 million
could be required based on an ultimate adverse ruling by the PUCT
on the abeyed and disallowed plant costs.
The following factors support management's position that a
loss contingency requiring accrual has not occurred, and 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. Analysis by Sandlin Associates, management consultants
with expertise in the cost of nuclear power plants,
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; and
4. The analysis of GSU's legal counsel, 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, and
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 $169 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.
The adoption of SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
(SFAS 121) will become effective January 1, 1996. SFAS 121
changes the standard for continued recognition of regulatory
assets, and as a result GSU will be required to write-off the
$169 million of rate deferrals discussed above, unless there are
favorable regulatory or court actions related to the recovery of
these costs prior to adoption. The standard also describes
circumstances which may result in assets being impaired and
provides criteria for recognition and measurement of asset
impairment. See Note 7 for further information regarding SFAS
121.
Filings with the PUCT and Texas Cities (Entergy Corporation and
GSU)
On March 20,1995, in connection with the PUCT's
investigation of the reasonableness of GSU's rates, the PUCT
ordered a $72.9 million annual base rate reduction for the period
March 31, 1994 through September 1, 1994, decreasing to an annual
base rate reduction of $52.9 million after September 1, 1994. In
accordance with the Merger agreement, the rate reduction was
applied retroactively to March 31, 1994.
`
On May 26, 1995, the PUCT amended its previously issued
March 20, 1995 rate order, reducing the $52.9 million annual base
rate reduction to an annual level of $36.5 million. The PUCT's
action was based, in part, upon a recent Texas Supreme Court
decision not to require a utility to use the prospective tax
benefits generated by disallowed expenses to reduce rates. The
PUCT's May 26, 1995 amended order no longer required GSU to pass
such prospective tax benefits on to its customers. The rate
refund, retroactive to March 31, 1994, was approximately $61.8
million (including interest) and was refunded to customers in
September, October and November 1995. The rate refund was
previously reserved, and therefore had no impact to income in the
current quarter. GSU and other parties have appealed the PUCT
order, but no assurance can be given as to the timing or outcome
of the appeal.
Filings with the LPSC
(Entergy Corporation and GSU)
In May 1994, GSU made a required earnings analysis filing
with the LPSC for the test year preceeding the Merger (1993). On
December 14, 1994, the LPSC ordered a $12.7 million annual rate
reduction for GSU effective January 1995. GSU received a
preliminary injunction from the District Court regarding $8.3
million of the reduction. On January 1, 1995, GSU reduced rates
by $4.4 million. GSU filed an appeal of the entire $12.7 million
rate reduction with the District Court, which denied the appeal
in July 1995. GSU has appealed the order to the Louisiana
Supreme Court. The preliminary injunction relating to $8.3
million of the reduction will remain in effect during the appeal.
On May 31, 1995, GSU filed its first required post-Merger
earnings analysis with the LPSC. Hearings on this review are
scheduled to begin in mid-December 1995 and a decision is
expected in early 1996.
(Entergy Corporation and LP&L)
See Note 2 to Entergy Corporation's and LP&L's Form 10-K for
a discussion of LP&L's performance-based formula rate plan filed
with the LPSC. On June 2, 1995, as a result of the LPSC's
earnings review of LP&L's performance-based formula rate plan, a
$49.4 million reduction in base rates was ordered. This included
$10.5 million of rate reductions previously made through the fuel
adjustment clause. The net effect of the LPSC order was to
reduce rates by $38.9 million. The LPSC approved LP&L's proposed
formula rate plan with the following modifications. An earnings
band is to be established with a range from 10.4% to 12% for
return on equity. If LP&L's earnings fall within the bandwidth,
no adjustment in rates occurs. If LP&L's earnings are above a
12% return on equity, a 60/40 sharing with customers occurs and
customers receive 60% of earnings in excess of the 12% through
prospective rate reductions. Alternatively, if LP&L's earnings
are below a 10.4% return on equity, customers pay 60% of the
difference between the realized return on equity and a 10.4%
return on equity through prospective rate increases. The LPSC
also reduced LP&L's authorized rate of return from 12.76% to
11.2%. The LPSC rate order is retroactive to April 27, 1995.
On June 9, 1995, LP&L appealed the $49.4 million rate
reduction. On the same date, LP&L also filed a petition for
injunctive relief from implementation of $14.7 million of the
$49.4 million rate reduction. The $14.7 million portion of the
rate reduction represents revenue made available to LP&L through
a previous LPSC order, which in turn allowed LP&L to provide
reduced rates to three industrial customers. Subsequently, a
request for a $14.7 million rate increase was filed by LP&L. On
July 13, 1995, LP&L was granted a preliminary injunction by the
District Court on $14.7 million of the rate reduction pending a
final LPSC order. No assurance can be given as to the timing or
outcome of the appeal or the requested rate increase. The rate
refund, retroactive to April 28, 1995, was approximately $8.2
million and was refunded to customers in the months of September
and October 1995. The rate refund was previously reserved, and
therefore represents no impact to income in the current quarter.
Proposed Rate Increase
(System Energy)
System Energy filed an application on May 12, 1995, with
FERC for a $65.5 million rate increase. The request seeks
changes to the System Energy rate schedule, including increases
in the revenue requirement associated with decommissioning costs,
the depreciation accrual rate and rate of return on common
equity. System Energy requested that the proposed rate increase
become effective subject to refund within 60 days after the
filing date, but the effective date was suspended until December
1995. Hearings on System Energy's request are scheduled to begin
in January 1996.
(MP&L)
MP&L's allocation of the proposed System Energy wholesale
rate increase is $21.6 million. In July 1995, MP&L filed a
schedule with the MPSC which will defer the ultimate amount of
the System Energy rate increase. The deferral plan, which was
approved by the MPSC in September 1995, will begin in December
1995, the effective date of the System Energy rate increase, and
will end after the issuance of a Final Order by the FERC.
February 1994 Ice Storm/Rate Rider (Entergy Corporation and
MP&L)
As discussed in Note 2 to Entergy Corporation's and MP&L's
Form 10-K the MPSC approved a stipulation in September 1994, with
respect to the recovery of ice storm costs recorded through April
30, 1994. Under the stipulation, MP&L implemented an ice storm
rate rider, which increased rates approximately $8 million for a
period of five years beginning on September 29, 1994. This
stipulation also stated that 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.
In September 1995, the MPSC approved a second joint
stipulation which allows for a -$2.5 million rate increase for a
period of four years beginning September 28, 1995, to recover
costs related to the ice storm that were recorded after April 30,
1994. The stipulation also allows for undepreciated ice storm
capital costs recorded after April 30, 1994 to be treated as
described above.
LPSC Fuel Cost Review (Entergy Corporation and GSU)
See Note 2 to Entergy Corporation's and GSU's Form 10-K, for
a discussion of the LPSC's review of GSU's fuel costs for the
period October 1988 through September 1991 and GSU's subsequent
appeal of $13.9 million of fuel costs disallowed by the LPSC.
The LPSC is currently conducting the second phase of its
review of GSU's fuel costs for the period October 1991 through
December 1994. On June 30, 1995, the LPSC consultants filed
testimony recommending a disallowance of $38.7 million of fuel
costs. Hearings are scheduled to begin in December 1995. No
assurance can be given as to the timing or the outcome of the
review.
NOTE 3. COMMON STOCK (Entergy Corporation)
Entergy Corporation from time to time may make purchases of
its outstanding common stock depending upon market conditions and
authorization by the Entergy Corporation Board of Directors.
During the first nine months of 1995, no shares of common stock
were repurchased.
During the first nine months of 1995, Entergy Corporation
issued 347,590 shares of its previously repurchased common stock,
reducing the amount held as treasury stock by $10.3 million.
Entergy Corporation issued these shares to meet the requirements
of its various stock plans.
NOTE 4. LONG-TERM DEBT
(MP&L)
On October 15, 1995, MP&L retired $15 million of its 5.95%
Series G&R Bonds upon maturity.
(System Energy)
On October 1, 1995 System Energy retired $105 million of its
6.12% Series First Mortgage Bonds upon maturity. On October 11,
1995, System Energy issued $30 million of its 7.38% Series
Debentures due 2000.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On October 27, 1995, Entergy Corporation's Board of
Directors declared a common stock dividend of 45 cents per share
payable on December 1, 1995.
NOTE 6. RESTRUCTURING COSTS (Entergy Corporation, AP&L, GSU,
LP&L, MP&L, NOPSI and Entergy Services)
The restructuring programs announced by Entergy in the third
quarter of 1994 included anticipated reductions in the number of
employees and the consolidation of offices and facilities.
Actual restructuring charges associated with these programs
recorded in 1994 and the first nine months of 1995 are shown
below by company along with the actual termination benefits paid
under the program.
Restructuring Restructuring
Liability Additional Liability
Company December 31, Accruals Payments September 30,
1994 1995
(In Millions)
AP&L $ 12.2 $ 9.0 $(16.1) $ 5.1
GSU 6.5 7.2 (11.7) 2.0
LP&L 6.8 5.0 (10.1) 1.7
MP&L 6.2 1.1 (5.9) 1.4
NOPSI 3.4 - (2.2) 1.2
Entergy Services - 6.0 (3.2) 2.8
------ ----- ------ --------
Total $ 35.1 $28.3 $(49.2) $ 14.2
====== ===== ====== ========
The restructuring charges shown above primarily included
employee severance costs related to the expected termination of
approximately 2,706 employees. As of September 30, 1995, 1,807
employees have either been terminated or accepted voluntary
separation packages under the restructuring plan.
Additionally, the System recorded $24.3 million in 1994 (of
which $23.8 million was recorded by GSU) for remaining severance
and augmented retirement benefits related to the Merger. Actual
termination benefits paid under the program during the first nine
months of 1995 amounted to $18.5 million. During that same
period, adjustments to the allocation of the total liability were
made among the System companies. At September 30, 1995, the
total remaining System liability for expected future Merger-
related outlays was $5.9 million, comprised principally of GSU's
and Entergy Services' liabilities of $4.3 million and $1.2
million, respectively.
NOTE 7. ACCOUNTING ISSUES
New Accounting Standard - In March 1995, the FASB issued SFAS
121, effective January 1, 1996. This standard describes
circumstances which may result in assets (including goodwill such
as the Merger acquisition adjustment, see Note 1 to Entergy
Corporation's Form 10-K) being impaired. The standard also
provides criteria for recognition and measurement of asset
impairment. Note 2 describes regulatory assets of $169 million
(net of tax) related to Texas retail deferred River Bend
operating and carrying costs. Management believes these deferred
costs will be required to be written off under the provisions of
SFAS 121 unless there are favorable regulatory or court actions
related to these costs prior to the adoption of the new standard
by Entergy.
Certain other assets and operations of Entergy totaling
approximately $1.7 billion (pre-tax) are most potentially
affected by the requirements of SFAS 121. Those assets include
AP&L's and LP&L's retained shares of Grand Gulf 1, Entergy
Power's investments in the Independence and Ritchie power plants,
GSU's Louisiana deregulated asset plan and Texas jurisdiction
abeyed portion of the River Bend plant, in addition to the FERC
jurisdiction and steam department operations of GSU. As
discussed in the Form 10-K, GSU has previously discontinued the
application of SFAS 71 for the Louisiana deregulated asset plan,
and operations under the FERC jurisdiction and the steam
department.
Entergy will periodically review these assets and operations
in order to determine if the carrying value of such assets will
be recovered. In most cases this determination will be based on
the net cash flows expected to result from such operations and
assets. Projected net cash flows will depend on the future
operating costs associated with the assets, the efficiency and
availability of the assets/generating units and the future
market/price for energy over the remaining life of the assets.
__________________________________________
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.
<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
Net cash flow from operations for Entergy Corporation, the
System operating companies and System Energy for the nine months
ended September 30, 1995 and 1994, was as follows (in millions):
Nine Months Nine Months
Company Ended 9/30/95 Ended 9/30/94
Entergy Corporation $1,069.4 $1,120.6
AP&L $ 282.1 $ 256.8
GSU $ 344.3 $ 278.3
LP&L $ 308.2 $ 304.5
MP&L $ 139.4 $ 154.4
NOPSI $ 70.7 $ 61.0
System Energy $ 51.2 $ 206.9
For the nine months ended September 30, 1995, AP&L's net
cash flow from operations increased because of reduced billings
from System Energy resulting from a FERC audit settlement in
1994. Partially offsetting this increase in AP&L's net cash flow
was a higher fuel inventory level in 1995 due to the depletion of
coal inventory in 1994 when spring flooding disrupted the normal
coal delivery schedule. GSU's net cash flow from operations
increased for the nine months ended September 30, 1995, due
primarily to lower operation and maintenance expenses and higher
deferred income taxes. This increase was partially offset by a
portion of the Texas retail rate refund made in September 1995,
representing $53 million, and a smaller reduction in rate
deferrals in 1995 as compared to 1994. MP&L's cash flow from
operations decreased for the nine months ended September 30,
1995, as the result of increased accounts receivable balances due
to increased sales from warmer weather. In addition, MP&L's
share of the System Energy FERC audit settlement was refunded to
customers in August 1995, decreasing cash provided by operating
activities. System Energy's net cash flow from operations
decreased for the nine months ended September 30, 1995, due
primarily to refunds to associated companies resulting from a
FERC audit settlement in 1994.
In the first nine months of 1995, 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. Entergy's ability to fund most of its capital
requirements with cash from operations results from continued
efforts to streamline operations and to reduce costs, as well as
from collections under rate phase-in plans that exceed current
cash requirements for the related costs. (In the income
statement, these revenue collections are offset by the
amortization of previously deferred costs so that 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.
Entergy Corporation will consider investing up to
approximately $150 million per year for the next several years in
nonregulated business opportunities. See Part II for additional
discussion of Entergy Corporation's current and future
investments in nonregulated businesses.
Certain agreements and restrictions 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, 1995, and
assumed annual interest or dividend rates of 8.25% for bonds and
8.50% for preferred stock, each of the System operating companies
and System Energy could have issued mortgage bonds or preferred
stock in the following amounts (in millions):
Company Mortgage Bonds Preferred Stock
AP&L $292 $ 763
GSU $318 $ -
LP&L $ 80 $1,100
MP&L $238 $ 253
NOPSI $ 55 $ 50
System Energy $ 52 (a)
(a) System Energy's charter does not provide for the issuance
of preferred stock.
In addition, the System operating companies and System
Energy have the ability, subject to certain conditions, to issue
bonds against retired bonds, in some cases without meeting an
earnings coverage test. In addition to issuable mortgage bonds
determined by the above restrictive tests, GSU has the ability to
issue up to approximately $578 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. See Notes 5 and 6 to
Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's
Form 10-K and Note 5 to System Energy's Form 10-K for long-term
debt and preferred stock issuances and retirements.
The System operating companies and System Energy have SEC
authorization to effect short-term borrowings. See Note 4 to
Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and
System Energy's Form 10-K for information on the System operating
companies', System Energy's and Entergy Services' short-term
borrowing authorizations and bank lines of credit. At September
30, 1995, Entergy Operations, Entergy Services and System Fuels
had outstanding short-term borrowings from the Money Pool as
follows (in millions):
Company Money Pool
Entergy Operations $ 9.3
Entergy Services $56.7
System Fuels $21.6
On July 27, 1995, Entergy Corporation received SEC
authorization for a $300 million bank credit facility. In
October 1995, a credit agreement was signed with a group of banks
to provide up to $300 million in loans to Entergy Corporation.
Proceeds from this bank credit facility are expected to be used
for common stock repurchases, investments in nonregulated and
nonutility businesses and other general corporate activities.
Entergy Corporation's current primary capital requirements
are to invest periodically in, or make loans to, its
subsidiaries. Entergy Corporation expects to meet these
requirements in 1995 - 1997 with internally generated funds and
cash on hand. Entergy Corporation paid dividends which
aggregated $306 million on its common stock in the first nine
months of 1995. Declarations of dividends on common stock are
made at the discretion of the Board. It is anticipated that
management will not recommend future dividend increases to the
Board unless such increases are justified by sustained earnings
growth of Entergy Corporation and its subsidiaries. Entergy
Corporation receives funds through dividend payments from its
subsidiaries. Such dividend payments totaled $337 million for
the first nine months of 1995. See Note 7 to Entergy
Corporation's Form 10-K for information on dividend restrictions.
GSU did not make common stock dividend payments to Entergy
Corporation in the first nine months of 1995.
Recent rate reductions, as discussed in Note 2, as well as
any future rate reductions, increase the need for Entergy to
continue to reduce costs in order to meet the increasing
competition in the utility industry as well as develop additional
sources of income.
Entergy Corporation and GSU
See Notes 1 and 2 regarding litigation with Cajun and River
Bend rate appeals. Adverse rulings in the River Bend rate appeal
could result in approximately $459 million of potential write-
offs (net of tax) and $177 million in refunds of previously
collected revenue. Such write-offs and charges as well as the
application of SFAS 121 (see Note 7) could result in substantial
net losses being reported by Entergy Corporation and GSU in 1995
and subsequent periods, with resulting adverse adjustments to
common equity of Entergy Corporation and GSU. Also, adverse
resolution of these matters could adversely affect GSU's ability
to obtain financing, which could in turn affect GSU's liquidity,
and GSU's ability to pay dividends.
Entergy Corporation and System Energy
Under the Capital Funds Agreement, Entergy Corporation has
agreed to supply to System Energy sufficient capital to maintain
System Energy's equity capital at an amount equal to a minimum of
35% of its total capitalization (excluding short-term debt), to
permit the continuation of commercial operation of Grand Gulf 1
and to pay in full all indebtedness for borrowed money of System
Energy when due under any circumstances. In addition, under
supplements to the Capital Funds Agreement assigning System
Energy's rights as security for specific debt of System Energy,
Entergy Corporation has agreed to make cash capital
contributions, if required, to enable System Energy to make
payments on such debt when due. The Capital Funds Agreement can
be terminated by the parties to the agreement, subject to the
receipt of consents of certain creditors.
RESULTS OF OPERATIONS
ENTERGY
Net Income
Consolidated net income increased for the three and nine
months ended September 30, 1995 due primarily to a decrease in
other operation and maintenance expense, increased weather
related sales, and decreased interest expense, partially offset
by the ongoing effect of 1994 and 1995 rate reductions.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenues and Sales
Detailed below are Entergy's electric revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 793.7 $ 726.3 $ 67.4 9
Commercial 451.4 435.8 15.6 4
Industrial 504.3 488.6 15.7 3
Governmental 42.7 42.7 0.0 0
--------- --------- -------
Total retail 1,792.1 1,693.4 98.7 6
Sales for resale 122.0 89.8 32.2 36
Other (3.8) (6.2) 2.4 (39)
--------- --------- -------
Total $ 1,910.3 $ 1,777.0 $ 133.3 8
========= ========= =======
Billed Electric Energy
Sales (Millions of KWH):
Residential 9,923 8,848 1,075 12
Commercial 6,310 5,916 394 7
Industrial 11,257 10,675 582 5
Governmental 644 609 35 6
--------- --------- -------
Total retail 28,134 26,048 2,086 8
Sales for resale 3,945 2,503 1,442 58
--------- --------- -------
Total 32,079 28,551 3,528 12
========= ========= =======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 1,715.2 $ 1,691.3 $ 23.9 1
Commercial 1,133.4 1,147.2 (13.8) (1)
Industrial 1,351.3 1,386.2 (34.9) (3)
Governmental 115.4 122.3 (6.9) (6)
--------- --------- ------
Total retail 4,315.3 4,347.0 (31.7) (1)
Sales for resale 279.2 235.5 43.7 19
Other 149.7 86.4 63.3 73
--------- --------- ------
Total $ 4,744.2 $ 4,668.9 $ 75.3 2
========= ========= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 21,830 20,716 1,114 5
Commercial 15,741 15,135 606 4
Industrial 31,617 30,481 1,136 4
Governmental 1,747 1,688 59 3
--------- --------- ------
Total retail 70,935 68,020 2,915 4
Sales for resale 8,228 6,274 1,954 31
--------- --------- ------
Total 79,163 74,294 4,869 7
========= ========= ======
Electric operating revenues increased in the three months
ended September 30, 1995 as a result of an increase in retail
sales and sales for resale, partially offset by rate reductions
at GSU, LP&L and NOPSI . Warmer weather and non-weather related
volume growth, contributed equally to the increase in retail
electric operating revenues. The increase in sales for resale
was primarily from increased energy sales outside of Entergy's
service area.
Electric operating revenues increased for the nine months
ended September 30, 1995 due primarily to increased retail sales,
increased wholesale revenues from outside Entergy's service area
and increased other revenue, partially offset by rate reductions
at GSU, LP&L and NOPSI and lower fuel adjustment revenues.
Approximately 72 percent of the sales volume/weather increase in
electric operating revenue resulted from increased customers and
associated usage, while the remainder resulted from warmer
weather. Other revenues increased for the nine months ended
September 30, 1995 due primarily to an increase in unbilled
revenues attributable to warmer weather in the current period and
an increase in MP&L's Grand Gulf over/under recovery. For the
nine months ended September 30, 1995, MP&L undercollected its
share of Grand Gulf 1 related costs due to decreased revenues
from its Grand Gulf 1 rate rider. For the same period last year
MP&L was in an overcollected position. The increased
undercollected position in the current year has resulted in MP&L
recording additional other revenue for these undercollected Grand
Gulf 1 costs. The Grand Gulf 1 over/under collection has no
effect on net income.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(34.9) $(55.6)
Rate riders 5.0 (0.6)
Fuel cost recovery 42.4 (57.0)
Sales volume/weather 91.9 118.0
Other revenue (including unbilled) (4.5) 25.5
Sales for resale 33.4 45.0
------ -----
Total $133.3 $75.3
====== =====
Gas operating revenues decreased for the three and nine
months ended September 30, 1995 because of milder than normal
winter weather, decreased fuel adjustment revenues and gas rate
reductions agreed to in the 1994 NOPSI Settlement.
Expenses
Operating expenses increased for the three months ended
September 30, 1995 due primarily to increased purchased power
expenses resulting from changes in generation availability and
requirements among the System operating companies, increased
income taxes due primarily to higher pre-tax book income, and
increased amortization of rate deferrals attributable to the
collection of more Grand Gulf 1 related costs from customers in
1995 as compared to 1994. Other operation and maintenance
expenses decreased due primarily to charges made in September
1994 for Merger-related costs, restructuring costs, increased
storm damage costs and increased environmental reserves.
Operating expenses decreased for the nine months ended
September 30, 1995 as the result of decreased operating and
maintenance expenses partially offset by increased nuclear
refueling outage expense due to a Grand Gulf 1 refueling outage
at System Energy. Income taxes also increased because of higher
pretax income, a decrease in tax depreciation at Waterford 3 and
River Bend and decreased amortization of investment tax credits
related to the 1994 FERC Settlement. Other operation and
maintenance expenses decreased due primarily to charges made in
September 1994 for Merger-related costs, restructuring costs,
increased storm damage costs and increased environmental
reserves.
Interest charges decreased for the three months and nine
months ended September 30, 1995 due primarily to the retirement
and refinancing of higher costing long-term debt.
AP&L
Net Income
Net income increased in the three months ended September 30,
1995 due primarily to an increase in revenues from retail energy
sales and a decrease in other operation and maintenance expenses
partially offset by an increase in income tax expense and the
amortization of rate deferrals.
Net income increased in the first nine months of 1995 due
primarily to higher revenues from retail energy sales partially
offset by an increase in depreciation, amortization, and
decommissioning expense and an increase in income tax expense.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenues and Sales
Detailed below are AP&L's operating revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 200.1 $ 170.5 $ 29.6 17
Commercial 103.3 95.2 8.1 9
Industrial 111.4 100.5 10.9 11
Governmental 5.1 4.7 0.4 9
------- ------- ------
Total retail 419.9 370.9 49.0 13
Sales for resale
Associated companies 52.1 50.8 1.3 3
Non-associated companies 60.8 49.2 11.6 24
Other (2.4) (0.1) (2.3) *
------- ------- ------
Total $ 530.4 $ 470.8 $ 59.6 13
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,092 1,802 290 16
Commercial 1,359 1,259 100 8
Industrial 1,752 1,561 191 12
Governmental 70 63 7 11
------- ------- ------
Total retail 5,273 4,685 588 13
Sales for resale
Associated companies 2,484 2,379 105 4
Non-associated companies 1,661 1,324 337 25
------- ------- ------
Total 9,418 8,388 1,030 12
======= ======= ======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 433.3 $ 402.1 $ 31.2 8
Commercial 245.5 236.3 9.2 4
Industrial 273.9 253.9 20.0 8
Governmental 13.1 12.9 0.2 2
--------- --------- ------
Total retail 965.8 905.2 60.6 7
Sales for resale
Associated companies 132.4 178.1 (45.7) (26)
Non-associated companies 139.9 135.6 4.3 3
Other 44.1 37.9 6.2 16
--------- --------- ------
Total $ 1,282.2 $ 1,256.8 $ 25.4 2
========= ========= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 4,668 4,381 287 7
Commercial 3,282 3,177 105 3
Industrial 4,706 4,392 314 7
Governmental 189 178 11 6
--------- --------- ------
Total retail 12,845 12,128 717 6
Sales for resale
Associated companies 6,239 8,617 (2,378) (28)
Non-associated companies 3,830 3,601 229 6
--------- --------- ------
Total 22,914 24,346 (1,432) (6)
========= ========= ======
* - Greater than 200%.
Electric operating revenues increased for the three months
ended September 30, 1995 as the result of an increase in retail
energy sales and fuel adjustment revenues. Approximately 58
percent of the sales volume/weather increase in electric
operating revenue resulted from warmer weather in the third
quarter of 1995.
Electric operating revenues increased for the nine months
ended September 30, 1995 due primarily to increased retail energy
sales and fuel adjustment revenues partially offset by a decrease
in sales for resale to associated companies. Approximately 70
percent of the sales volume/weather increase in electric
operating revenue resulted from increased customers and
associated usage, while the remainder resulted from warmer
weather. The decrease in sales for resale to associated
companies is caused by changes in generation availability and
requirements among the System operating companies.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(5.2) $(0.9)
Rate riders 9.6 13.0
Fuel cost recovery 15.3 26.2
Sales volume/weather 28.7 32.4
Other revenue (including unbilled) (4.3) (5.2)
Sales for resale 15.5 (40.1)
----- -----
Total $59.6 $25.4
===== =====
Expenses
Operating expenses increased in the three months ended
September 30, 1995 due primarily to an increase in fuel and
purchased power expenses, income tax expense, and the
amortization of rate deferrals partially offset by a decrease in
other operation and maintenance expense. The increase in fuel
and purchased power expenses is largely due to a 12% increase in
total sales volume. Fuel and purchased power expenses also
increased as the result of replacement power purchased during the
ANO 2 outage which began in mid September 1995 and is scheduled
to end in November 1995. Income tax expense increased because of
higher pretax income. The amortization of rate deferrals
increased primarily due to the over-recovery of Grand Gulf 1
charges from customers. The decrease in other operation and
maintenance expense is largely due to restructuring costs
recorded in 1994.
Operating expenses decreased for the first nine months of
1995 because of lower fuel and fuel-related expenses offset by
an increase in depreciation, decommissioning and amortization
expense and income tax expense. Fuel expenses decreased as the
result of a decrease in total sales volume of 6%. Depreciation,
amortization, and decommissioning expenses increased primarily
due to additions and upgrades at ANO and to additions to
transmission lines, substations and other equipment. Also,
decommissioning expense increased due to the implementation of
the decommissioning rate rider which resulted from the
decommissioning study performed in 1994. Income tax expense
increased primarily due to the write-off in 1994 of investment
tax credits in accordance with the FERC Settlement as well as an
increase in income taxes due to higher pretax income.
GSU
Net Income
Net income increased for the three months and nine months
ended September 30, 1995 primarily due to a decrease in other
operation and maintenance expenses and an increase in
miscellaneous income, partially offset by an increase in income
taxes and taxes other than income taxes.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenue and Sales
Detailed below are GSU's operating revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994:
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Department Operating
Revenues:
Residential $ 198.6 $ 192.2 $ 6.4 3
Commercial 120.3 115.6 4.7 4
Industrial 167.3 162.8 4.5 3
Governmental 5.9 6.4 (0.5) (8)
------- ------- -----
Total retail 492.1 477.0 15.1 3
Sales for resale
Associated companies 11.1 19.9 (8.8) (44)
Non-associated companies 21.7 16.4 5.3 32
Other 0.1 16.9 (16.8) (99)
------- ------- -----
Total Electric Department $ 525.0 $ 530.2 ($5.2) (1)
======= ======= =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,697 2,502 195 8
Commercial 1,831 1,743 88 5
Industrial 4,153 3,851 302 8
Governmental 80 77 3 4
------ ------ ----
Total retail 8,761 8,173 588 7
Sales for resale
Associated companies 534 1,109 (575) (52)
Non-associated companies 722 231 491 *
------ ------ ----
Total Electric Department 10,017 9,513 504 5
Steam Department 459 426 33 8
------ ------ ----
Total 10,476 9,939 537 5
====== ====== ====
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Department Operating
Revenues:
Residential $ 447.7 $ 448.7 $(1.0) -
Commercial 311.9 312.7 (0.8) -
Industrial 454.8 475.7 (20.9) (4)
Governmental 18.3 19.1 (0.8) (4)
-------- -------- -----
Total retail 1,232.7 1,256.2 (23.5) (2)
Sales for resale
Associated companies 43.9 33.9 10.0 29
Non-associated companies 52.3 41.2 11.1 27
Other 37.2 40.0 (2.8) (7)
-------- -------- -----
Total Electric Department $1,366.1 $1,371.3 ($5.2) -
======== ======== =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 6,012 5,775 237 4
Commercial 4,680 4,512 168 4
Industrial 11,500 11,237 263 2
Governmental 231 225 6 3
------ ------ -----
Total retail 22,423 21,749 674 3
Sales for resale
Associated companies 2,092 2,096 (4) -
Non-associated companies 1,744 494 1,250 *
------ ------ -----
Total Electric Department 26,259 24,339 1,920 8
Steam Department 1,308 1,257 51 4
------ ------ -----
Total 27,567 25,596 1,971 8
====== ====== =====
* - Greater than 200%.
Electric operating revenues remained relatively unchanged
for the three months ended September 30, 1995. An increase in
sales volume was partially offset by a decrease in base rates and
lower sales for resale. Approximately 66 percent and 34 percent
of the sales volume/weather increase in electric operating
revenue resulted from increased customers and associated usage
and warmer summer weather, respectively. Base rates decreased as
a result of rate reductions in effect for Texas and Louisiana.
Electric operating revenues remained relatively unchanged
for the first nine months of 1995 primarily due to lower fuel
revenues and a decrease in base rates which were offset by higher
sales for resale and an increase in sales volume. Base rates
decreased as a result of rate reductions in effect for Texas and
Louisiana. Sales for resale increased as a result of changes in
generation availability and requirements among the System
operating companies. Sales volume increased due to favorable
weather and an increase in usage by all customer classes.
Approximately 75 percent of the sales volume/weather increase in
electric operating revenue resulted from increased customers and
associated usage.
Gas operating revenues decreased for the three months and
nine months ended September 30, 1995 primarily due to a decrease
in residential sales. This decrease was the result of a milder
winter than in 1994.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(11.8) $(18.4)
Fuel cost recovery 5.7 (33.2)
Sales volume/weather 21.9 28.0
Other revenue (including unbilled) (17.5) (2.7)
Sales for resale (3.5) 21.1
----- -----
Total $(5.2) $(5.2)
===== =====
Expenses
Operating expenses decreased for the three months and nine
months ended September 30, 1995 as the result of lower operation
and maintenance expenses, partially offset by higher income taxes
and taxes other than income taxes. Other operation and
maintenance expenses decreased primarily due to charges made in
September 1994 for Merger-related costs, restructuring costs and
certain pre-acquisition contingencies including unfunded Cajun-
River Bend costs and environmental clean-up costs. Taxes other
than income taxes increased in 1995 because of a refund of
franchise taxes in 1994. Income taxes increased primarily due to
higher pre-tax income in 1995 and a decrease in tax depreciation
associated with River Bend. Additionally, purchased power
expenses decreased for the nine months ending September 30, 1995
due to the availability of less expensive gas fuel for use in
electric generation as well as changes in the generation
requirements among the System operating companies.
Other
Miscellaneous income - net increased in the three months and
nine months ended September 30, 1995 as the result of certain
adjustments made in September 1994 related to pre-acquisition
contingencies including Cajun-River Bend litigation and the write-
off of previously disallowed rate deferrals.
Income taxes on other income increased in the three months
and nine months ended September 30, 1995 due to the charges
discussed above.
LP&L
Net Income
Net income increased for the three months ended September
30, 1995 due primarily to increased revenue and decreased other
operation and maintenance expense, partially offset by an
increase in fuel, purchased power and income tax expenses.
Net income increased for the nine months ended September 30,
1995 due primarily to a decrease in fuel, purchased power and
other operation and maintenance expense, partially offset by a
decrease in revenue and increased income tax expense.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenues and Sales
Detailed below are LP&L's operating revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 214.7 $ 196.4 $ 18.3 9
Commercial 105.8 102.6 3.2 3
Industrial 172.7 170.9 1.8 1
Governmental 8.2 8.4 (0.2) (2)
------- ------- ------
Total retail 501.4 478.3 23.1 5
Sales for resale
Associated companies 0.6 0.2 0.4 *
Non-associated companies 18.5 16.4 2.1 13
Other 8.5 7.6 0.9 12
------- ------- ------
Total $ 529.0 $ 502.5 $ 26.5 5
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 2,812 2,493 319 13
Commercial 1,456 1,356 100 7
Industrial 4,416 4,305 111 3
Governmental 114 112 2 2
------ ------ -----
Total retail 8,798 8,266 532 6
Sales for resale
Associated companies 19 6 13 *
Non-associated companies 468 269 199 74
------ ------ -----
Total 9,285 8,541 744 9
====== ====== =====
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 459.5 $ 460.8 $(1.3) -
Commercial 267.2 275.4 (8.2) (3)
Industrial 475.1 499.9 (24.8) (5)
Governmental 23.7 24.2 (0.5) (2)
--------- --------- ------
Total retail 1,225.5 1,260.3 (34.8) (3)
Sales for resale
Associated companies 1.0 0.4 0.6 150
Non-associated companies 42.1 31.9 10.2 32
Other 19.5 35.3 (15.8) (45)
--------- --------- ------
Total $ 1,288.1 $ 1,327.9 $(39.8) (3)
========= ========= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 6,186 5,864 322 5
Commercial 3,634 3,502 132 4
Industrial 12,742 12,261 481 4
Governmental 332 318 14 4
--------- --------- ------
Total retail 22,894 21,945 949 4
Sales for resale
Associated companies 38 10 28 280
Non-associated companies 1,042 610 432 71
--------- --------- ------
Total 23,974 22,565 1,409 6
========= ========= ======
* - Greater than 200%.
Electric operating revenues increased in the three months
ended September 30, 1995 primarily due to weather-related sales.
Approximately 55 percent of the sales volume/weather increase in
electric operating revenue resulted from warmer weather, while
the remainder resulted from increased customers and associated
usage. Higher fuel adjustment revenues, which do not affect net
income, also contributed to the increase. The base rate
reduction ordered in the second quarter of 1995, discussed at
Note 2, partially reduced the effect of these increases.
Electric operating revenues were lower in the nine months
ended September 30, 1995 because of lower fuel adjustment
revenues, which do not affect net income. Additionally, the base
rate reduction ordered in the second quarter of 1995, as
discussed in Note 2, and the completion of the amortization of
proceeds from litigation with a gas supplier in the second
quarter of 1994, resulted in reduced revenues. These decreases
were partially offset by increased usage by residential and
industrial customers and higher sales to non-associated
utilities.
The changes in electric operating revenue for the three
months and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(9.0) $(18.7)
Fuel cost recovery 11.2 (55.0)
Sales volume/weather 25.6 36.0
Other revenue (including unbilled (3.8) (12.9)
Sales for resale 2.5 10.8
----- ------
Total $26.5 $(39.8)
===== ======
Expenses
Operating expenses remained relatively unchanged for the
three months ended September 30, 1995. Increases in fuel and
purchased power and income taxes were offset by a decrease in
other operation and maintenance expenses. The increase in fuel
and purchased power is primarily due to increased weather-related
energy sales. Income taxes increased as the result of a decrease
in tax depreciation associated with Waterford 3 and higher pre-
tax income. Other operation and maintenance expenses decreased
for the three months ending September 30, 1995 due to waste water
site closures in the third quarter of 1994, as discussed in Note
1, lower payroll expenses and reduced legal fees. Payroll
expenses decreased as a result of the restructuring program
announced during the third quarter of 1994, as discussed in Note
6. During 1994 additional legal fees were incurred relating to
litigation with a gas supplier.
Operating expenses decreased for the nine months ended
September 30, 1995 due to decreases in fuel expense, purchased
power and other operation and maintenance expenses partially
offset by an increase in income taxes. The decrease in fuel and
purchased power expense is due to lower fuel prices partially
offset by an increase in generation. Other operation and
maintenance expenses decreased for the nine months ending
September 30, 1995 due to waste water site closures in the third
quarter of 1994, as discussed in Note 1, lower payroll expenses,
decreased fossil and nuclear maintenance expenses and reduced
legal fees. Payroll expenses decreased as a result of the
restructuring program announced during the third quarter of 1994,
as discussed in Note 6. During 1994 additional legal fees were
incurred relating to litigation with a gas supplier. Income
taxes increased primarily due to a decrease in tax depreciation
associated with Waterford 3 and higher pre-tax income.
MP&L
Net Income
Net income increased for the three and nine months ended
September 30, 1995, primarily due to an increase in revenues and
a decrease in other operation and maintenance expense.
Cumulative sales for the three and nine months ended September
30, 1995, increased due to warmer weather and greater customer
usage. Other operation and maintenance expense decreased for the
three months and nine months ended September 30, 1995, due to
reduced scheduled maintenance at power plants and a reduction in
employees under the restructuring program. In addition, other
operation and maintenance expense decreased for the nine months
ended September 30, 1995, due to the absence of Merger-related
costs.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and
Sales" and "Expenses" below.
Revenues and Sales
Detailed below are MP&L's operating revenues by source and
KWH sales for the three months and nine months ended September
30, 1995 and 1994:
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 121.5 $ 115.7 $ 5.8 5
Commercial 78.8 78.1 0.7 1
Industrial 46.2 47.9 (1.7) (4)
Governmental 7.2 7.4 (0.2) (3)
------- ------- ------
Total retail 253.7 249.1 4.6 2
Sales for resale
Associated companies 15.0 9.1 5.9 65
Non-associated companies 8.3 5.0 3.3 66
Other (18.2) (28.9) 10.7 (37)
------- ------- ------
Total $ 258.8 $ 234.3 $ 24.5 10
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,524 1,363 161 12
Commercial 1,043 977 66 7
Industrial 792 795 (3) -
Governmental 94 90 4 4
------- ------- ------
Total retail 3,453 3,225 228 7
Sales for resale
Associated companies 512 238 274 115
Non-associated companies 278 159 119 75
------- ------- ------
Total 4,243 3,622 621 17
======= ======= ======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 263.1 $ 266.8 $(3.7) (1)
Commercial 197.7 198.4 (0.7) -
Industrial 130.1 137.0 (6.9) (5)
Governmental 20.5 21.3 (0.8) (4)
------- ------- ------
Total retail 611.4 623.5 (12.1) (2)
Sales for resale
Associated companies 27.6 25.2 2.4 10
Non-associated companies 17.9 12.5 5.4 43
Other 35.6 (9.7) 45.3 *
------- ------- ------
Total $ 692.5 $ 651.5 $ 41.0 6
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 3,341 3,208 133 4
Commercial 2,561 2,409 152 6
Industrial 2,256 2,200 56 3
Governmental 252 254 (2) (1)
------- ------- ------
Total retail 8,410 8,071 339 4
Sales for resale
Associated companies 771 594 177 30
Non-associated companies 594 376 218 58
------- ------- ------
Total 9,775 9,041 734 8
======= ======= ======
* - Greater than 200%.
Electric operating revenues increased in the three months ended
September 30, 1995, due to an increase in other revenues, sales
volume and sales for resale. Increased unbilled revenues due to
warmer weather in the summer months caused an increase in other
revenue. Approximately 69 percent of the sales volume/weather
increase in electric operating revenue resulted from warmer weather,
while the remainder resulted from increased customers and associated
usage. Sales for resale, specifically sales to associated companies,
increased primarily due to changes in the generation requirements
among the System operating companies.
Electric operating revenues increased for the nine months ended
September 30, 1995, due to an increase in other revenue, sales volume
and sales for resale, partially offset by a decrease in revenues from
the Grand Gulf 1 rate rider. For the nine months ended September 30,
1995, MP&L undercollected its share of Grand Gulf 1 related costs due
to decreased revenues from the Grand Gulf 1 rate rider. For the same
period last year MP&L was in an overcollected position. The
increased undercollected position in the current year has resulted in
MP&L recording additional other revenue for these undercollected
Grand Gulf 1 costs. The Grand Gulf 1 over/under collection has no
effect on net income. Increased unbilled revenues due to warmer
weather and increased sales volume in the summer months of 1995
caused an increase in other revenue. Approximately 57 percent and 43
percent of the sales volume/weather increase in electric operating
revenue resulted from increased customers and associated usage and
warmer summer weather, respectively. Sales for resale increased
primarily due to increases in MP&L's available generation.
The changes in electric operating revenue for the three months
and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $2.1 $(3.3)
Grand Gulf rate rider (4.5) (13.6)
Fuel cost recovery 3.5 5.4
Sales volume/weather 6.8 9.9
Other revenue (including unbilled) 7.4 34.8
Sales for resale 9.2 7.8
----- -----
Total $24.5 $41.0
===== =====
Expenses
Fuel and fuel-related expenses increased for the three and nine
months ended September 30, 1995 due to increased generation
requirements resulting from increased energy sales. The increase in
fuel and fuel-related expenses was partially offset by lower gas
costs. Purchased power expenses decreased for the three months ended
September 30, 1995 due to the availability of less expensive gas for
the use in electric generation as well as changes in the generation
requirements among the System operating companies.
Other operation and maintenance expenses decreased for the three
months ending September 30, 1995, due to 1994 Merger-related costs
allocated to MP&L and payroll expenses. No significant Merger-
related costs were allocated to MP&L during the current year.
Payroll expenses decreased as a result of the restructuring program
announced and accrued for during the third quarter of 1994. The
restructuring program included a reduction in the number of MP&L
employees during 1995. Other operation and maintenance expenses
decreased for the nine months ended September 30, 1995, due to lower
maintenance expenses at various power plants, 1994 Merger-related
costs and payroll expenses.
Income taxes increased for the three months and nine months
ended September 30, 1995 primarily due to a higher pretax income
resulting from increased revenue and reduced operating and
maintenance expense.
The amortization of rate deferrals increased for the three and
nine months ended September 30, 1995 in accordance with Grand Gulf 1
related deferral plan.
The increase in interest on long-term debt for the three months
ended September 30, 1995 is due to the increase in the amount of long-
term debt partially offset by the maturity of higher interest-bearing
debt in February and July 1995. In April 1995, MP&L issued $80
million of 8.8% Series G&R Bonds due in 2005.
NOPSI
Net Income
Net income increased for the three months ended September 30,
1995 due primarily to a September 1994 provision for litigation
related to the City of New Orleans street lighting dispute. Net
income increased for the nine months ended September 30, 1995 as the
result of a decrease in other operation and maintenance expense.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1995 and 1994 are discussed under "Revenues and Sales"
and "Expenses" below.
Revenues and Sales
Detailed below are NOPSI's operating revenues by source and KWH
sales for the three months and nine months ended September 30, 1995
and 1994.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 58.9 $ 51.4 $ 7.5 15
Commercial 43.2 44.3 (1.1) (2)
Industrial 6.7 6.6 0.1 2
Governmental 16.2 15.8 0.4 3
------- ------- ------
Total retail 125.0 118.1 6.9 6
Sales for resale
Associated companies 0.1 0.1 - -
Non-associated companies 3.5 2.1 1.4 67
Other 6.3 0.1 6.2 *
------- ------- ------
Total $ 134.9 $ 120.4 $ 14.5 12
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 798 688 110 16
Commercial 621 580 41 7
Industrial 144 138 6 4
Governmental 286 268 18 7
------- ------- ------
Total retail 1,849 1,674 175 10
Sales for resale
Associated companies 3 3 - -
Non-associated companies 107 58 49 84
------- ------- ------
Total 1,959 1,735 224 13
======= ======= ======
Nine Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 111.7 $ 113.0 $(1.3) (1)
Commercial 111.1 124.4 (13.3) (11)
Industrial 17.4 19.7 (2.3) (12)
Governmental 39.7 44.8 (5.1) (11)
------- ------- -----
Total retail 279.9 301.9 (22.0) (7)
Sales for resale
Associated companies 1.4 1.0 0.4 40
Non-associated companies 7.8 5.7 2.1 37
Other 21.0 (1.8) 22.8 *
------- ------- -----
Total $ 310.1 $ 306.8 $ 3.3 1
======= ======= =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,623 1,488 135 9
Commercial 1,583 1,535 48 3
Industrial 413 392 21 5
Governmental 744 713 31 4
------- ------- -----
Total retail 4,363 4,128 235 6
Sales for resale
Associated companies 71 39 32 82
Non-associated companies 243 152 91 60
------- ------- -----
Total 4,677 4,319 358 8
======= ======= =====
* - Greater than 200%.
Electric operating revenues increased for the three months and
nine months ended September 30, 1995 because of an increase in energy
sales partially offset by the impact of a permanent rate reduction
that took effect on January 1, 1995. The increase in energy sales is
due to increased sales volume and increased sales for resale to non-
associated utilities. For the three months and nine months ended
September 30, 1995, approximately 57 and 73 percent of the sales
volume/weather increase in electric operating revenue resulted from
increased customers and associated usage, respectively; the remainder
increase resulted from warmer weather.
The changes in electric operating revenue for the three months
and nine months ended September 30, 1995 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base rates $(11.0) $(14.3)
Fuel cost recovery 6.7 (0.4)
Sales volume/weather 9.0 11.7
Other revenue (including unbilled) 8.4 3.8
Sales for resale 1.4 2.5
----- -----
Total $14.5 $ 3.3
===== =====
For the three months and nine months ended September 30, 1995,
gas operating revenues decreased due primarily to decreased gas
sales, the rate reduction agreed to in the 1994 NOPSI Settlement
effective January 1, 1995, and a lower unit purchase price for gas
purchased for resale.
Expenses
Operating expenses increased for the three months ended
September 30, 1995 as the result of an increase in fuel expenses and
the amortization of rate deferrals. The increase in fuel and
fuel-related expenses is primarily due to the increase in weather-
related energy sales. The amortization of rate deferrals increased
primarily as a result of the collection of larger amounts of
previously deferred costs under the 1991 NOPSI Settlement.
Operating expenses decreased for the nine months ended September
30, 1995 due primarily to a decrease in fuel expenses and other
operation and maintenance expenses, partially offset by an increase
in the amortization of rate deferrals. The decrease in fuel and
fuel-related expenses is primarily due to a decrease in gas purchased
for resale as a result of lower gas sales and a lower unit purchase
price partially offset by an increase in energy sales. Other
operation and maintenance expenses decreased primarily due to a
decrease in maintenance activity and lower payroll expenses. The
decrease in payroll expenses is the result of the 1994 restructuring
and the related decrease in employees. The amortization of rate
deferrals increased as the result of the collection of larger amounts
of previously deferred costs under the 1991 NOPSI Settlement.
SYSTEM ENERGY
Net Income
Net income decreased for the three months and nine months ended
September 1995, as the result of revenues being adversely impacted by
a lower Grand Gulf 1 rate base.
Significant factors affecting the results of operations and
causing variances between the three months and nine months of 1995
and 1994 are discussed under "Revenues" and "Expenses" below.
Revenues
Operating revenues recover operating expenses, depreciation and
capital costs attributable to Grand Gulf 1. Capital costs are
computed by allowing a return on System Energy's common equity funds
allocable to its net investment in Grand Gulf 1 and adding to such
amount System Energy's effective interest cost for its debt allocable
to its investment in Grand Gulf 1.
Operating revenues decreased for the three months ended
September 30, 1995, due primarily to a lower return on System
Energy's decreasing investment in Grand Gulf 1 (caused by
depreciation of the unit and the reclassification of plant costs
discussed below), offset by the recovery of increased expenses in
connection with a Grand Gulf 1 refueling outage and higher
depreciation, amortization and decommissioning expense. Operating
revenues for the nine months ended September 30, 1995 increased as a
result of the recovery of higher current operating expenses related
to the Grand Gulf 1 refueling outage, partially offset by a lower
return on System Energy's decreasing investment in Grand Gulf 1.
Expenses
Nuclear refueling outage expenses increased for the three months
and nine months ended September 30, 1995 principally as a result of a
refueling outage which began April 15, 1995 and ended June 21, 1995.
There was no refueling outage for Grand Gulf 1 in 1994. Fuel expense
decreased for the first nine months of 1995 as a result of the
refueling outage. Other operation and maintenance expenses decreased
for the three months ended September 30, 1995 primarily as a result
of lower payroll and overhead expenses and lower payments associated
with the sale/leaseback of Grand Gulf 1.
Depreciation, amortization and decommissioning expense increased
for the three months and nine months ended September 30, 1995, due
primarily to increases of $2 million and $7 million, respectively, in
amortization expense as a result of the reclassification of $81
million of Grand Gulf 1 costs in accordance with the 1994 FERC
Settlement. The increase in amortization expense was partially
offset by a decrease in depreciation expense related to the
reclassified costs.
Interest expense decreased for the three months and nine months
ended September 30, 1995 due primarily to the retirement and
refinancing of higher costing long-term debt.
SIGNIFICANT FACTORS AND KNOWN TRENDS
Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI and System Energy
Competition and Industry Challenges
See "Significant Factors and Known Trends" in Entergy
Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and System
Energy's Form 10-K for a discussion of the increasing competitive
pressures facing the electric utility industry.
Entergy Retail and Wholesale Rate Issues
See Note 2 to Entergy Corporation's, AP&L's, GSU's, LP&L's,
MP&L's, NOPSI's and System Energy's Form 10-K, for a discussion of
the ongoing trend of regulatory ordered rate reductions as well as
incentive rate regulation.
Potential Changes in the Electric Utility Industry
Retail wheeling, the transmission by an electric utility of
energy produced by another entity over the utility's transmission and
distribution system to a retail customer in the electric utility's
area of service, continues to evolve. Approximately 40 states have
been or are studying or experimenting with the concept of retail
competition. In May 1995, the California Public Utilities Commission
adopted a preliminary proposal to create a wholesale power pool
(Poolco). Under the proposal the FERC would have exclusive
jurisdiction over the Poolco, while an independent operator would
manage the transmission network and generation dispatch. Customers
would gain access to the Poolco through bilateral contracts at least
two years after it begins operation. The Rhode Island Public
Utilities Commission has adopted a proposal calling for, among other
things, retail wheeling and the unbundling of generation from
transmission and distribution services. The Massachusetts Department
of Public Utilities has also adopted a similar proposal which is to
be in place by mid-1996. Such proposals are indicative of the
movement of the retail electric market toward deregulation and
increased competition. The retail market for electricity is expected
to become more competitive with such moves toward deregulation and
with greater focus on customer choice.
The movement of the retail electric market toward deregulation
and increased competition is also prevalent in areas of the country
in which Entergy presently operates. On April 21, 1995, a newly
incorporated entity, Crescent City Utilities, Inc., submitted to the
Council a draft resolution intended to permit the use of NOPSI's gas
and electric transmission and distribution facilities by any other
franchised utility to supply electricity and gas to retail customers
in New Orleans. The Council has not scheduled hearings relating to
this resolution. The Texas legislature has recently revised the
Public Utility Regulatory Act, the law regulating electric utilities
in Texas. The revised law permits utility and non-utility exempt
wholesale generators and power marketers to sell wholesale power in
the state. The revised law also allows for flexible pricing but does
not change the current law governing retail wheeling or the treatment
of federal income taxes. During the second quarter of 1995, the
Louisiana legislature considered a bill permitting local retail
wheeling. The bill was defeated.
The chairman of the PUCT recently introduced a proposal for
discussion by the Commission concerning the restructuring of the
electric utility industry in Texas. The proposal is designed to
implement greater wholesale electric competition in Texas and
addresses the issues of transmission service comparability, the
unbundling of electric utility operations, market-based pricing,
performance-based ratemaking and the recovery of stranded costs as
part of the transition to a more competitive electric industry
environment.
Another indication of the trend toward greater competition in
the electric utility industry is the recent surge of utility mergers.
This trend is expected to continue. Such mergers are motivated by
the drive to lower costs to increase economies of scale and
consolidation of administrative functions at the merged entities.
The lowered costs achieved will make the merged utilities more
formidable competitors in the future. Certain of the proposed merged
utilities will likely be in direct competition with Entergy in the
future if these mergers are consummated.
As discussed in "Significant Factors and Known Trends" in
Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's Form
10-K the FERC issued a notice of proposed rulemaking in mid-1994,
concerning a regulatory framework for dealing with recovery of
stranded costs. On March 29, 1995, the FERC issued a supplemental
notice of proposed rulemaking in this proceeding which would require
public utilities to provide non-discriminatory open access
transmission service to wholesale customers, and would also provide
guidance on the recovery of wholesale and retail stranded costs.
With regard to pending proceedings, including Entergy's tariff
proceeding, FERC directed the parties to proceed with their cases
while taking into account FERC's views expressed in the proposed
rule. Comments and reply comments on the proposed rulemaking have
now been filed with FERC by interested parties. Certain of the
parties filing comments have proposed that the FERC should order the
immediate unbundling of all retail services as part of the final
rulemaking in this proceeding.
In early October 1995, the FERC issued an order granting exempt
wholesale generator status to Entergy Power Marketing Corporation, a
wholly-owned subsidiary of Entergy Enterprises, Inc., which is a
wholly-owned subsidiary of Entergy Corporation.
Significant Industrial Cogeneration Effects
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 to 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 on investments. Substantially all of such
pricing agreements expire no later than 1997. In the third quarter
of 1995, KWH sales to GSU's industrial customers at non-full cost of
service rates made up approximately 28% of GSU's total industrial
class KWH sales.
The Council has recently approved a resolution requiring the
prior approval by the Council of regulatory treatment of any lost
contribution to fixed costs as a result of incentive rate agreements
with large industrial or commercial customers entered into for the
purposes of retaining those customers. The resolution also requires
prior approval by Council of regulatory treatment of stranded costs
which may result from the loss of large customers.
During 1995, LP&L received separate notices from two large
industrial customers that have decided to proceed with proposed
cogeneration projects for the purpose of fulfilling their future
electric energy needs. These customers will continue to purchase
their energy requirements from LP&L until their cogeneration
facilities are completed, which is expected to be between the years
1999 and 2000. During 1994, these two customers combined represented
approximately 18% of total LP&L industrial sales, and provided $36
million of base revenue.
Public Utility Holding Company Act of 1935
Entergy, along with other electric utility holding companies,
recently requested Congress to repeal the Public Utility Holding
Company Act of 1935 (HCA). The HCA requires detailed oversight by
the SEC of many business practices and activities of utility holding
companies and their subsidiaries including, among other things,
nonutility activities. In June 1995, the SEC adopted a report
proposing options for the repeal or the significant modification of
the HCA and proposed rule changes that would reduce the regulations
governing utility holding companies. Entergy believes that the HCA
inhibits its ability to compete in the evolving electric energy
marketplace and largely duplicates the oversight activities already
performed by the FERC and state and local regulators. On June 30,
1995, the SEC adopted a rule change under the HCA to eliminate the
requirement to receive prior authorization for all capital
contributions by a parent company to its subsidiary company.
Proposed legislation to reform the HCA in an effort to
streamline regulation of utilities recently was introduced in the
Senate. The proposed legislation would transfer oversight of public
utility holding companies from the SEC to the FERC.
Nonregulated Investments
As discussed in Note 1 and in "Corporate Development" in Item 1
of Part I of Entergy Corporation's Form 10-K, Entergy Corporation is
considering opportunities to expand its utility and utility-related
businesses that are not regulated by state and/or local regulatory
authorities (nonregulated businesses). As of September 30, 1995,
Entergy Corporation's net investment, reduced by accumulated losses,
in nonregulated subsidiaries totaled $493.0 million. For the first
nine months of 1995, Entergy Corporation's nonregulated investments
reduced consolidated net income by approximately $31.8 million. See
Part II for additional discussion of Entergy Corporation's investment
in nonregulated businesses.
ANO Matters
Entergy Operations has made inspections and repairs from time to
time on ANO 2's steam generators that are owned by AP&L. During the
October 1995 inspection, additional cracks in the tubes were
discovered. Currently, Entergy Operations is in the process of
gathering information and assessing various options for the repair or
the replacement of ANO 2's steam generator. See Note 1 for
additional information.
Deregulated Portion of River Bend
As of September 30, 1995, 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 Note 2
for further information. 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.
For the nine months ended September 30, 1995, GSU recorded
revenues resulting from the sale of electricity from the deregulated
asset plan of approximately $26.3 million ($24.5 million represent
non-fuel revenue)which, absent the deregulated asset plan, would not
have been realized. Operation and maintenance expenses, including
fuel, were approximately $23.8 million, and depreciation expense
associated with the deregulated asset plan investment was
approximately $13.8 million for the nine months ended September 30,
1995. 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. In addition, the deregulated asset plan will be
subject to the requirements of SFAS 121 as discussed in Note 7 in
determining the recognition of any asset impairment.
Property Tax Exemptions
LP&L and GSU are working with tax authorities to determine the
method for calculating the amount of property taxes to be paid when
Waterford 3's and River Bend's local property tax exemptions expire
in December 1995 and December 1996, respectively.
Environmental Issues
GSU has been notified by the U. S. Environmental Protection Agency
(EPA) that it has been designated as a potentially responsible party
for the clean-up of certain hazardous waste disposal sites. GSU is
currently negotiating with the EPA and state authorities regarding
the clean-up of certain of these sites. See Note 1 for additional
information.
During 1993, the Louisiana Department of Environmental Quality
issued new rules for solid waste regulation, including regulation of
waste water impoundments. LP&L has determined that certain of its
power plant waste water impoundments were affected by these
regulations and has chosen to upgrade or close them. See Note 1 for
additional information.
Accounting Issues
New Accounting Standard - In March 1995, the FASB issued SFAS
121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of" (SFAS 121) effective January 1, 1996.
This standard describes circumstances which may result in assets
being impaired and provides criteria for recognition and measurement
of asset impairment. See Notes 2 and 7 for information regarding the
potential impacts of the new accounting standard on Entergy.
Continued Application of SFAS 71 - As a result of the Energy
Policy Act of 1992 and actions of regulatory commissions, the
electric utility industry is moving toward a combination of
competition and a modified regulatory environment. The System's
financial statements currently reflect, for the most part, assets and
costs based on current cost-based ratemaking regulations, in
accordance with SFAS 71, "Accounting for the Effects of Certain Types
of Regulation." Continued applicability of SFAS 71 to the System's
financial statements requires that rates set by an independent
regulator on a cost-of-service basis can actually be charged to and
collected from customers.
In the event that all or a portion of a utility's operations
cease to meet those criteria for various reasons, including
deregulation, a change in the method of regulation or a change in the
competitive environment for the utility's regulated services, the
utility should discontinue application of SFAS 71 for the relevant
portion. That discontinuation should be reported by elimination from
the balance sheet of the effects of any actions of regulators
recorded as regulatory assets and liabilities.
As of September 30, 1995, and for the foreseeable future, the
System's financial statements continue to follow SFAS 71, except for
certain portions of GSU's business.
Accounting for Decommissioning Costs - The staff of the SEC has
questioned certain of the financial accounting practices of the
electric utility industry regarding the recognition, measurement and
classification of nuclear decommissioning costs for nuclear
generating stations in the financial statements of electric
utilities. See Note 1 for the FASB's tentative conclusions regarding
changes in the accounting for decommissioning costs and the potential
impact of these changes on Entergy.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Merger-Related Proceedings (Entergy Corporation and GSU)
See "State Regulation" in Item 1 of Part I of Entergy
Corporation's Form 10-K and Part II of Entergy Corporation's Form 10-
Q for the quarterly periods ending March 31, 1995 and June 30, 1995,
for information relating to the proceeding pending before the NRC
Atomic Safety and Licensing Board (ASLB), which was instigated by
Cajun and concerns the two Merger-related license amendments issued
by the NRC for River Bend. In June 1995, the NRC affirmed its
original findings that there had been no significant antitrust
changes in the positions of Cajun and GSU as a result of the Merger,
and therefore, reissued the license amendments approving the Merger.
Cajun filed a petition for review with the D.C. Circuit. See "Other
Regulation and Litigation" in Item 1 of Part I of Entergy
Corporation's Form 10-K for information regarding other Merger-
related suits.
Cajun - River Bend (Entergy Corporation and GSU)
See Note 8 of Entergy Corporation's and GSU's Form 10-K and Part
II of Entergy Corporation's Form 10-Q for the quarterly period ending
June 30, 1995, for a discussion of the Cajun litigation. In an order
issued by the District Court in August 1995, the U.S. Trustee was
directed to appoint a trustee in the Cajun bankruptcy case. A
former federal bankruptcy judge, Ralph Mabey, was appointed as
trustee to oversee Cajun in bankruptcy. The LPSC and Cajun have
appealed the appointment of a trustee to the United States Court of
Appeals for the Fifth Circuit.
In October 1995, the United States Court of Appeals for the
Fifth Circuit affirmed the District Court's preliminary injunction in
the Cajun litigation. The preliminary injunction stipulated that GSU
should make payments for its portion of expenses for Big Cajun 2,
Unit 3 into the registry of the District Court. As of September 30,
1995, $29.6 million had been paid by GSU into the registry of the
District Court.
A trial on the portion of the suit by Cajun to rescind the
Operating Agreement which began in April 1994 was completed in March
1995. On October 24, 1995, the District Court issued a memorandum
opinion ruling in favor of GSU. The District Court found that Cajun
did not prove that GSU fraudulently induced it to execute the
Operating Agreement and Cajun failed to timely assert its claim. A
final judgment will be entered when the District Court issues its
detailed written reasons. It is uncertain when the District Court
Judge's final opinion will be entered, or whether Cajun will appeal
the decision.
Cajun-Transmission Services (Entergy Corporation and GSU)
See Note 1 and also see Note 8 of Entergy Corporation's and
GSU's Form 10-K for a discussion of FERC proceedings relating to GSU
and Cajun transmission service charge disputes. In orders issued on
August 3, 1995, and October 2, 1995, the FERC affirmed the ALJ's
April 1995, ruling in the remanded portion of GSU's and Cajun's
ongoing transmission service charge disputes before the FERC. Both
GSU and Cajun have petitioned for appeal to the D.C Circuit.
Cajun-Service Dispute (Entergy Corporation and GSU)
See "Other Regulation and Litigation " in Item 1 of Part I of
Entergy Corporation's Form 10-K for a discussion of the transmission
service dispute in which Cajun requested that GSU provide the
transmission of power over GSU's transmission system to certain
industrial customers in Lake Charles, Louisiana. In October 1995,
the D.C. Circuit affirmed the FERC's previous opinion in its
entirety. The FERC held that GSU properly exercised its contractual
right to refuse to provide transmission service to Cajun.
Filings with the APSC (Entergy Corporation, AP&L and Entergy Power)
In September 1995, the APSC approved a waiver application filed
by Entergy Power which would enable Entergy Power to make sales to
wholesale entities in Arkansas which are not currently served by
AP&L. In response to a request by certain Arkansas cities, the APSC
agreed to decide whether Entergy Power can also sell to the wholesale
entities that currently are served by AP&L.
Mississippi Cities Complaint (Entergy Corporation and MP&L)
As discussed in "Significant Factors and Known Trends" of
MP&L's Form 10-K, in October 1994 certain Mississippi cities filed a
complaint in state court against MP&L and eight other power
associations requesting the repeal of certain amendments to the
Mississippi Public Utilities Act that prevent municipalities from
acquiring a utility's facilities that are located in municipalities
where the utility holds a certificate to serve. In October 1995, the
state court dismissed the complaint. Plaintiffs have until November
27, 1995, to appeal to the Mississippi Supreme Court.
City of New Orleans Complaint (Entergy Corporation, AP&L, LP&L,
MP&L, NOPSI and System Energy)
As discussed in "Wholesale Rate Matters" in Item 1 of Part I of
Entergy Corporation's Form 10-K, in August 1990, the City of New
Orleans filed a complaint against Entergy Corporation, AP&L, LP&L,
MP&L, NOPSI and System Energy requesting that the FERC investigate
AP&L's transfer of its interest in Independence 2 and Ritchie 2 to
Entergy Power and the effect of the transfer on AP&L, LP&L, MP&L and
NOPSI and their ratepayers. On October 20, 1995, the D.C. Circuit
affirmed the FERC's original orders. The FERC's original orders held
that the transfer and its effect on current rates were prudent.
However, the prudency of the transfer on future replacement costs was
deferred until a time when the need for such replacement capacity
occurs.
Crown Vista Energy Project (Entergy Corporation and Entergy Power
Development Corporation)
EPDC entered into a joint venture, known as Crown Vista Energy
Project (Crown Vista), with Mission Energy and Ahlstrom Development
to provide power to Jersey Central Power & Light (JCP&L). In August
1995 Mission Energy filed a complaint against Entergy Corporation and
EPDC alleging that EPDC improperly failed to pay at least $1.4
million in certain project development costs to Mission Energy.
Mission Energy seeks to recoup these payments. The complaint also
seeks declaratory relief regarding Mission Energy's obligation to
reimburse EPDC for previously incurred development expenses in the
event that Mission Energy sells, disposes of or transfers any of its
interest in Crown Vista to another party. It is believed that
Mission Energy has reached a settlement with General Public Utilities
Corporation, parent of JCP&L, which provides for a payment to Mission
Energy in consideration for the cessation of development of Crown
Vista. Crown Vista's purchased power agreements with JCP&L have been
sold and Mission Energy has paid a portion of the sales proceeds to
Ahlstrom Development. However, Mission Energy has made no settlement
with EPDC. EPDC anticipates filing claims against Mission Energy to
obtain reimbursement of the approximately $8.7 million in Crown Vista
development costs incurred to date by EPDC. Management believes it
has valid grounds to recover its investment in Crown Vista. No
assurances can be given as to the timing or outcome of this matter.
Item 4. Submission of Matters to a Vote of Security Holders
Redemption of Preferred Stock (Entergy Corporation and NOPSI)
A consent in lieu of a special meeting of NOPSI common
stockholders was executed on July 14, 1995. The consent was signed
on behalf of Entergy Corporation, the holder of all issued and
outstanding shares of NOPSI common stock. The common stockholder, by
such consent, approved the redemption of the remaining outstanding
shares (19,495 shares) of NOPSI's 15.44% Series Preferred Stock,
Cumulative, $100 Par Value.
Item 5. Other Information
Nonregulated Investments (Entergy Corporation and Entergy, S.A.)
As discussed in "Corporate Development" in Item 1 of Part I of
Entergy Corporation's Form 10-K, Entergy Corporation's subsidiary,
Entergy, S.A., acquired a 10% interest in a consortium with other
nonaffiliated companies that acquired a 60% interest in Central
Costanera, S.A. (Costanera), a steam electric generating facility
located in Argentina. During the three months ending September 30,
1995, Entergy, S.A. purchased 3.9% of the outstanding stock of the
Central Buenos Aires Project (the CBA Project) for $1.7 million.
Through Entergy, S.A.'s interest in Costanera, Entergy, S.A.
indirectly purchased an additional 3% of the outstanding stock of the
CBA Project. In October 1995, Entergy Power Holding Limited, a
wholly owned subsidiary of Entergy Corporation, purchased Entergy,
S.A.'s interest in the CBA Project and purchased an additional 3.9%
of the outstanding stock of the CBA Project for $1.9 million. The
CBA Project includes the addition of a 220 megawatt combustion
turbine and heat recovery boiler to a generating unit at the
Costanera steam electric generating facility. This addition will
provide electricity to the Argentina transmission grid and steam to
the Costanera generating unit. The open cycle portion of the CBA
Project, which will provide electricity to the Argentina transmission
grid, is expected to be in commercial operation by the end of October
1995. The steam recovery portion, which will provide steam to the
Costanera generating unit, is expected to be in operation in October
1996.
Labor Contract Negotiations (Entergy Corporation AP&L, GSU and MP&L)
As discussed in Part II of Entergy Corporation's Form 10-Q for
the quarterly periods ending March 31, 1995 and June 30, 1995, the
labor union contract between GSU and the International Brotherhood of
Electrical Workers (IBEW) expired on June 24, 1995. The labor
contract covers approximately 1,900 GSU employees in Southeast Texas
and Southwest Louisiana. Negotiators for GSU and the IBEW have been
unsuccessful in negotiating a new agreement for the non River Bend
portion of the IBEW. A federal mediator was called in on July 9,
1995, to assist the parties in resolving their differences, but the
mediation effort was unsuccessful. In subsequent meetings, the IBEW
voted to reject GSU's settlement offer as well as a contingent offer
and authorized the union leadership to call a strike if necessary.
In August 1995, GSU implemented its last, best and final offer, but
there has been no acceptance of this offer. The IBEW employees
continue to work without a contract. If a strike should occur, GSU
intends to continue its operations with the assistance of management
and supervisory personnel and outside contractors. The River Bend
bargaining unit of the IBEW signed a new two year contract on August
3, 1995.
On October 12 and 14, 1995, the IBEW voted to accept a new three-
year collective bargaining agreement with AP&L and MP&L,
respectively.
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:
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, September 30,
1990 1991 1992 1993 1994 1995
AP&L 2.16 2.25 2.28 3.11(b) 2.32 2.63
GSU .80(c) 1.56 1.72 1.54 .36(c) 1.09
LP&L 2.32 2.40 2.79 3.06 2.91 3.26
MP&L 2.42 2.36 2.37 3.79(b) 2.12 2.63
NOPSI 2.73 5.66 2.66 4.68(b) 1.91 2.19
System Energy 2.10 1.74 2.04 1.87 1.23 1.24
Ratios of Earnings to Combined Fixed
Charges and Preferred Dividends
Twelve Months Ended
December 31, September 30,
1990 1991 1992 1993 1994 1995
AP&L 1.81 1.87 1.86 2.54(b) 1.97 2.24
GSU (a) .59(c) 1.19 1.37 1.21 .29(c) .96(c)
LP&L 1.87 1.95 2.18 2.39 2.43 2.73
MP&L 1.93 1.94 1.97 3.08(b) 1.81 2.29
NOPSI 2.36 4.97 2.36 4.12(b) 1.73 2.01
(a) "Preferred Dividends" in the case of GSU also include
dividends on preference stock.
(b) 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.
(c) Earnings of GSU for the years ended December 31, 1994 and
1990, were not adequate to cover fixed charges by $144.8
million and $60.6 million, respectively. Earnings of GSU
for the years ended December 31, 1994 and 1990, were not
adequate to cover combined fixed charges and preferred
dividends by $197.1 million and $165.1 million,
respectively. Earnings of GSU for the twelve months ended
September 30, 1995 were not adequate to cover combined
fixed charges and preferred dividends by $10 million.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
**4(a) Credit Agreement, dated as of October 10, 1995, among
Entergy, the Banks (Bank of America National Trust &
Savings Association, The Bank of New York, Chemical
Bank, Citibank, N.A., Union Bank of Switzerland, ABN
AMRO Bank N.V., The Bank of Nova Scotia, Canadian
Imperial Bank of Commerce, Bank, N.A., First National
Bank of Commerce, and Whitney National Bank) and
Citibank, N.A.,as Agent (filed as Exhibit B to Rule 24
Certificate dated October 20, 1995 in File No. 70-
8149).
**4(b) Indenture, dated as of September 1, 1995, between
System Energy Resources, Inc. and Chemical Bank (filed
as Exhibit B-10(a) to Rule 24 Certificate dated
October 20, 1995).
23(a) - Consent of Clark, Thomas & Winters (A Professional
Corporation).
23(b) - Consent of Sandlin Associates.
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of September 30, 1995.
27(b) - Financial Data Schedule for AP&L as of September 30,
1995.
27(c) - Financial Data Schedule for GSU as of September 30,
1995.
27(d) - Financial Data Schedule for LP&L as of September 30,
1995.
27(e) - Financial Data Schedule for MP&L as of September 30,
1995.
27(f) - Financial Data Schedule for NOPSI as of September 30,
1995.
27(g) - Financial Data Schedule for System Energy as of
September 30, 1995.
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, 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(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, 1995, 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, 1995, 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) - 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(k) - 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(l) - 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, 1995, 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, 1995.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
Entergy
A current report on Form 8-K, dated October 25, 1995,
was filed with the SEC on October 25, 1995, reporting
information under Item 5. "Other Events."
GSU
A current report on Form 8-K, dated October 25, 1995,
was filed with the SEC on October 25, 1995, reporting
information under Item 5. "Other Events."
<PAGE>
EXPERTS
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/ Louis E. Buck, Jr.
Louis E. Buck, Jr.
Vice President, Chief Accounting
Officer and Assistant Secretary
(For each Registrant and for each as
Principal Accounting Officer)
Date: November 6, 1995
Exhibit 23(a)
[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 6, 1995
Exhibit 23(b)
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 6, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
Entergy's financial statements for the quarter ended September 30, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 017
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 15,802,065
<OTHER-PROPERTY-AND-INVEST> 530,063
<TOTAL-CURRENT-ASSETS> 2,613,829
<TOTAL-DEFERRED-CHARGES> 3,650,659
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 22,596,616
<COMMON> 2,300
<CAPITAL-SURPLUS-PAID-IN> 4,201,435
<RETAINED-EARNINGS> 2,396,953
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6,533,566
260,342
550,955
<LONG-TERM-DEBT-NET> 6,749,860
<SHORT-TERM-NOTES> 648
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 667,375
0
<CAPITAL-LEASE-OBLIGATIONS> 308,068
<LEASES-CURRENT> 152,968
<OTHER-ITEMS-CAPITAL-AND-LIAB> 7,305,712
<TOT-CAPITALIZATION-AND-LIAB> 22,596,616
<GROSS-OPERATING-REVENUE> 4,855,592
<INCOME-TAX-EXPENSE> 327,312
<OTHER-OPERATING-EXPENSES> 3,512,572
<TOTAL-OPERATING-EXPENSES> 3,839,884
<OPERATING-INCOME-LOSS> 1,015,708
<OTHER-INCOME-NET> 19,998
<INCOME-BEFORE-INTEREST-EXPEN> 1,035,706
<TOTAL-INTEREST-EXPENSE> 553,560
<NET-INCOME> 541,501
59,355
<EARNINGS-AVAILABLE-FOR-COMM> 482,146
<COMMON-STOCK-DIVIDENDS> 306,465
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 1,069,443
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 001
<NAME> ARKANSAS POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,864,608
<OTHER-PROPERTY-AND-INVEST> 176,534
<TOTAL-CURRENT-ASSETS> 640,292
<TOTAL-DEFERRED-CHARGES> 628,165
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,309,599
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,844
<RETAINED-EARNINGS> 528,450
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,119,764
51,527
176,350
<LONG-TERM-DEBT-NET> 1,281,030
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 27,425
0
<CAPITAL-LEASE-OBLIGATIONS> 102,937
<LEASES-CURRENT> 56,971
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,492,928
<TOT-CAPITALIZATION-AND-LIAB> 4,309,599
<GROSS-OPERATING-REVENUE> 1,282,208
<INCOME-TAX-EXPENSE> 59,532
<OTHER-OPERATING-EXPENSES> 1,030,203
<TOTAL-OPERATING-EXPENSES> 1,089,735
<OPERATING-INCOME-LOSS> 192,473
<OTHER-INCOME-NET> 24,485
<INCOME-BEFORE-INTEREST-EXPEN> 216,958
<TOTAL-INTEREST-EXPENSE> 83,089
<NET-INCOME> 133,869
13,617
<EARNINGS-AVAILABLE-FOR-COMM> 120,252
<COMMON-STOCK-DIVIDENDS> 83,600
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 282,108
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
GSU's financial statements for the quarter ended September 30, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 003
<NAME> GULF STATES UTILITIES COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,655,790
<OTHER-PROPERTY-AND-INVEST> 55,560
<TOTAL-CURRENT-ASSETS> 757,810
<TOTAL-DEFERRED-CHARGES> 1,389,063
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,858,223
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,469
<RETAINED-EARNINGS> 357,171
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,623,695
90,087
136,444
<LONG-TERM-DEBT-NET> 2,250,420
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 70,425
0
<CAPITAL-LEASE-OBLIGATIONS> 95,051
<LEASES-CURRENT> 37,366
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,554,735
<TOT-CAPITALIZATION-AND-LIAB> 6,858,223
<GROSS-OPERATING-REVENUE> 1,419,242
<INCOME-TAX-EXPENSE> 63,715
<OTHER-OPERATING-EXPENSES> 1,105,847
<TOTAL-OPERATING-EXPENSES> 1,169,562
<OPERATING-INCOME-LOSS> 249,680
<OTHER-INCOME-NET> 13,454
<INCOME-BEFORE-INTEREST-EXPEN> 263,134
<TOTAL-INTEREST-EXPENSE> 148,034
<NET-INCOME> 115,100
22,357
<EARNINGS-AVAILABLE-FOR-COMM> 92,743
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 344,267
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 009
<NAME> LOUISIANA POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,544,528
<OTHER-PROPERTY-AND-INVEST> 69,330
<TOTAL-CURRENT-ASSETS> 406,893
<TOTAL-DEFERRED-CHARGES> 467,680
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,488,431
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (4,835)
<RETAINED-EARNINGS> 145,206
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,229,271
100,009
160,500
<LONG-TERM-DEBT-NET> 1,368,386
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 110,260
0
<CAPITAL-LEASE-OBLIGATIONS> 41,267
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,450,738
<TOT-CAPITALIZATION-AND-LIAB> 4,488,431
<GROSS-OPERATING-REVENUE> 1,288,081
<INCOME-TAX-EXPENSE> 104,366
<OTHER-OPERATING-EXPENSES> 903,260
<TOTAL-OPERATING-EXPENSES> 1,007,626
<OPERATING-INCOME-LOSS> 280,455
<OTHER-INCOME-NET> 2,938
<INCOME-BEFORE-INTEREST-EXPEN> 283,393
<TOTAL-INTEREST-EXPENSE> 101,430
<NET-INCOME> 181,963
16,177
<EARNINGS-AVAILABLE-FOR-COMM> 165,786
<COMMON-STOCK-DIVIDENDS> 134,000
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 308,207
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 010
<NAME> MISSISSIPPI POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 987,817
<OTHER-PROPERTY-AND-INVEST> 11,148
<TOTAL-CURRENT-ASSETS> 321,240
<TOTAL-DEFERRED-CHARGES> 314,050
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,634,255
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> (218)
<RETAINED-EARNINGS> 250,023
<TOTAL-COMMON-STOCKHOLDERS-EQ> 449,131
16,770
57,881
<LONG-TERM-DEBT-NET> 504,358
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 66,015
0
<CAPITAL-LEASE-OBLIGATIONS> 456
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 539,644
<TOT-CAPITALIZATION-AND-LIAB> 1,634,255
<GROSS-OPERATING-REVENUE> 692,482
<INCOME-TAX-EXPENSE> 30,022
<OTHER-OPERATING-EXPENSES> 565,609
<TOTAL-OPERATING-EXPENSES> 595,631
<OPERATING-INCOME-LOSS> 96,851
<OTHER-INCOME-NET> 1,547
<INCOME-BEFORE-INTEREST-EXPEN> 98,398
<TOTAL-INTEREST-EXPENSE> 38,818
<NET-INCOME> 59,580
6,168
<EARNINGS-AVAILABLE-FOR-COMM> 53,412
<COMMON-STOCK-DIVIDENDS> 35,400
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 139,406
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
NOPSI's financial statements for the quarter ended September 30, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 011
<NAME> NEW ORLEANS PUBLIC SERVICE INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 280,726
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 170,360
<TOTAL-DEFERRED-CHARGES> 166,950
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 621,295
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,247
<RETAINED-EARNINGS> 95,545
<TOTAL-COMMON-STOCKHOLDERS-EQ> 165,536
1,950
19,780
<LONG-TERM-DEBT-NET> 155,946
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 38,250
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 239,833
<TOT-CAPITALIZATION-AND-LIAB> 621,295
<GROSS-OPERATING-REVENUE> 368,272
<INCOME-TAX-EXPENSE> 18,110
<OTHER-OPERATING-EXPENSES> 305,714
<TOTAL-OPERATING-EXPENSES> 323,824
<OPERATING-INCOME-LOSS> 44,448
<OTHER-INCOME-NET> 715
<INCOME-BEFORE-INTEREST-EXPEN> 45,163
<TOTAL-INTEREST-EXPENSE> 13,368
<NET-INCOME> 31,795
1,035
<EARNINGS-AVAILABLE-FOR-COMM> 30,760
<COMMON-STOCK-DIVIDENDS> 14,100
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 70,690
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from
SERI's financial statements for the quarter ended September 30, 1995
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 012
<NAME> SYSTEM ENERGY RESOURCES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,698,013
<OTHER-PROPERTY-AND-INVEST> 38,606
<TOTAL-CURRENT-ASSETS> 201,866
<TOTAL-DEFERRED-CHARGES> 659,492
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,597,977
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 7
<RETAINED-EARNINGS> 85,914
<TOTAL-COMMON-STOCKHOLDERS-EQ> 875,271
0
0
<LONG-TERM-DEBT-NET> 1,189,720
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 355,000
0
<CAPITAL-LEASE-OBLIGATIONS> 53,585
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,096,401
<TOT-CAPITALIZATION-AND-LIAB> 3,597,977
<GROSS-OPERATING-REVENUE> 455,054
<INCOME-TAX-EXPENSE> 57,775
<OTHER-OPERATING-EXPENSES> 218,254
<TOTAL-OPERATING-EXPENSES> 276,029
<OPERATING-INCOME-LOSS> 179,025
<OTHER-INCOME-NET> 5,536
<INCOME-BEFORE-INTEREST-EXPEN> 184,561
<TOTAL-INTEREST-EXPENSE> 114,828
<NET-INCOME> 69,733
0
<EARNINGS-AVAILABLE-FOR-COMM> 69,733
<COMMON-STOCK-DIVIDENDS> 69,500
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 51,199
<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
1990 1991 1992 1993 1994 1995
(In Thousands, Except for Ratios)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $132,607 $133,854 $120,317 $107,771 $101,439 $102,335
Interest on notes payable 1,027 -- 117 349 1,311 715
Amortization of expense and premium on debt-net(cr) 1,792 1,112 1,359 2,702 4,563 4,495
Other interest 1,567 1,303 2,308 8,769 3,501 5,452
Interest applicable to rentals 24,233 21,969 17,657 16,860 19,140 18,663
----------------------------------------------------------------
Total fixed charges, as defined 161,226 158,238 141,758 136,451 129,954 131,660
Preferred dividends, as defined (a) 30,851 31,458 32,195 30,334 23,234 23,035
----------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $192,077 $189,696 $173,953 $166,785 $153,188 $154,695
================================================================
Earnings as defined:
Net Income $129,765 $143,451 $130,529 $205,297 $142,263 $171,350
Add:
Provision for income taxes:
Federal & State 50,921 44,418 57,089 58,162 83,300 91,850
Deferred - net 17,943 11,048 3,490 34,748 (17,939) (16,546)
Investment tax credit adjustment - net (12,022) (1,600) (9,989) (10,573) (36,141) (31,693)
Fixed charges as above 161,226 158,238 141,758 136,451 129,954 131,660
----------------------------------------------------------------
Total earnings, as defined $347,833 $355,555 $322,877 $424,085 $301,437 $346,621
================================================================
Ratio of earnings to fixed charges, as defined 2.16 2.25 2.28 3.11 2.32 2.63
================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.81 1.87 1.86 2.54 1.97 2.24
================================================================
- ------------------------
(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,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $218,462 $201,335 $197,218 $172,494 $167,082 $183,987
Interest on notes payable 36,963 27,953 21,155 19,440 20,203 741
Other interest 18,380 29,169 26,564 10,561 7,957 6,251
Amortization of expense and premium on debt-net(cr) 2,192 1,999 3,479 8,104 8,892 8,926
Interest applicable to rentals 23,761 24,049 23,759 23,455 21,539 18,343
----------------------------------------------------------------
Total fixed charges, as defined 299,758 284,505 272,175 234,054 225,673 218,248
Preferred dividends, as defined (a) 104,484 90,146 69,617 65,299 52,210 30,015
----------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $404,242 $374,651 $341,792 $299,353 $277,883 $248,263
================================================================
Earnings as defined:
Income (loss) from continuing operations before extraordinary
items and the cumulative effect of accounting changes ($36,399) $112,391 $139,413 $69,462 ($82,755) $19,810
Add:
Income Taxes (24,216) 48,250 55,860 58,016 (62,086) 205
Fixed charges as above 299,758 284,505 272,175 234,054 225,673 218,248
----------------------------------------------------------------
Total earnings, as defined $239,143 $445,146 $467,448 $361,532 $80,832 $238,263
================================================================
Ratio of earnings to fixed charges, as defined 0.80 1.56 1.72 1.54 0.36 1.09
================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 0.59 1.19 1.37 1.21 0.29 0.96
================================================================
___________________
(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.
(b) Earnings for the year ended December 31, 1994 and 1990, for GSU
were not adequate to cover fixed charges by $144.8 million and
$60.6 million, respectively. Earnings for the years ended
December 31, 1994 and 1990, for GSU were not adequate to cover
fixed charges and preferred dividends by $197.1 million and
$165.1 million, respectively. Earnings for the twelve months
ended September 30, 1995 for GSU were not adequate to cover
fixed charges and preferred dividends by $10.0 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,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $154,357 $158,816 $128,672 $124,633 $124,820 $124,992
Interest on notes payable 87 -- 150 898 1,948 1,729
Other interest charges 6,378 5,924 5,591 5,706 4,546 5,230
Amortization of expense and premium on debt - net(cr) 3,397 3,282 7,100 5,720 5,130 5,387
Interest applicable to rentals 12,906 11,381 9,363 8,519 8,332 9,088
----------------------------------------------------------------
Total fixed charges, as defined 177,125 179,403 150,876 145,476 144,776 146,426
Preferred dividends, as defined (a) 42,365 41,212 42,026 40,779 29,171 28,777
----------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $219,490 $220,615 $192,902 $186,255 $173,947 $175,203
================================================================
Earnings as defined:
Net Income $155,049 $166,572 $182,989 $188,808 $213,839 $243,325
Add:
Provision for income taxes:
Federal and State 62,236 8,684 36,465 70,552 79,260 152,648
Deferred Federal and State - net (9,655) 67,792 51,889 43,017 21,580 (27,948)
Investment tax credit adjustment - net 26,646 8,244 (1,317) (2,756) (37,552) (36,721)
Fixed charges as above 177,125 179,403 150,876 145,476 144,776 146,426
----------------------------------------------------------------
Total earnings, as defined $411,401 $430,695 $420,902 $445,097 $421,903 $477,730
================================================================
Ratio of earnings to fixed charges, as defined 2.32 2.40 2.79 3.06 2.91 3.26
================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.87 1.95 2.18 2.39 2.43 2.73
================================================================
- ------------------------
(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,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $63,975 $63,628 $60,709 $52,099 $46,081 $45,619
Interest on notes payable 1,512 953 36 7 1,348 521
Other interest charges 1,494 1,444 1,636 1,795 3,581 4,789
Amortization of expense and premium on debt-net(cr) 1,737 1,617 1,685 1,458 1,754 1,616
Interest applicable to rentals 596 574 521 1,264 1,716 2,341
---------------------------------------------------------------
Total fixed charges, as defined 69,314 68,216 64,587 56,623 54,480 54,886
Preferred dividends, as defined (a) 17,584 14,962 12,823 12,990 9,447 8,168
---------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $86,898 $83,178 $77,410 $69,613 $63,927 $63,054
===============================================================
Earnings as defined:
Net Income $60,830 $63,088 $65,036 $101,743 $48,779 $69,601
Add:
Provision for income taxes:
Federal and State 4,027 (1,001) 4,463 54,418 46,884 56,488
Deferred Federal and State - net 35,721 32,491 20,430 539 (26,763) (29,301)
Investment tax credit adjustment - net (1,835) (1,634) (1,746) 1,036 (7,645) (7,452)
Fixed charges as above 69,314 68,216 64,587 56,623 54,480 54,886
----------------------------------------------------------------
Total earnings, as defined $168,057 $161,160 $152,770 $214,359 $115,735 $144,222
================================================================
Ratio of earnings to fixed charges, as defined 2.42 2.36 2.37 3.79 2.12 2.63
================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.93 1.94 1.97 3.08 1.81 2.29
================================================================
- ------------------------
(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(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,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $24,472 $23,865 $22,934 $19,478 $16,382 $15,381
Interest on notes payable -- -- -- -- 153 144
Other interest charges 831 793 1,714 1,016 1,027 1,725
Amortization of expense and premium on debt-net(cr) 579 565 576 598 710 649
Interest applicable to rentals 160 517 444 544 1,245 1,057
---------------------------------------------------------------
Total fixed charges, as defined 26,042 25,740 25,668 21,636 19,517 18,956
Preferred dividends, as defined (a) 4,020 3,582 3,214 2,952 2,071 1,770
---------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $30,062 $29,322 $28,882 $24,588 $21,588 $20,726
===============================================================
Earnings as defined:
Net Income $27,542 $74,699 $26,424 $47,709 $13,211 $17,448
Add:
Provision for income taxes:
Federal and State 134 8,885 16,575 27,479 22,606 13,343
Deferred Federal and State - net 17,370 36,947 (340) 5,203 (15,674) (5,896)
Investment tax credit adjustment - net (75) (591) (170) (744) (2,332) (2,259)
Fixed charges as above 26,042 25,740 25,668 21,636 19,517 18,956
---------------------------------------------------------------
Total earnings, as defined $71,013 $145,680 $68,157 $101,283 $37,328 $41,592
===============================================================
Ratio of earnings to fixed charges, as defined 2.73 5.66 2.66 4.68 1.91 2.19
===============================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.36 4.97 2.36 4.12 1.73 2.01
===============================================================
- ------------------------
(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,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $230,644 $218,538 $196,618 $184,818 $162,517 $144,125
Interest on notes payable 0 0 0 0 88 172
Amortization of expense and premium on debt-net 10,532 7,495 6,417 4,520 6,731 6,188
Interest applicable to rentals 13,830 10,007 6,265 6,790 7,546 5,982
Other interest charges 1,460 3,617 1,506 1,600 7,168 12,304
---------------------------------------------------------------
Total fixed charges, as defined $256,466 $239,657 $210,806 $197,728 $184,050 $168,771
===============================================================
Earnings as defined:
Net Income $168,677 $104,622 $130,141 $93,927 $5,407 $3,445
Add:
Provision for income taxes:
Federal and State 4,620 (26,848) 35,082 48,314 67,477 95,297
Deferred Federal and State - net 52,962 37,168 23,648 60,690 (27,374) (55,287)
Investment tax credit adjustment - net 56,320 63,256 30,123 (30,452) (3,265) (3,265)
Fixed charges as above 256,466 239,657 210,806 197,728 184,050 168,771
---------------------------------------------------------------
Total earnings, as defined $539,045 $417,855 $429,800 $370,207 $226,295 $208,961
===============================================================
Ratio of earnings to fixed charges, as defined 2.10 1.74 2.04 1.87 1.23 1.24
===============================================================
</TABLE>
Exhibit 99(l)
[LETTERHEAD OF CLARK, THOMAS & WINTERS]
November 6, 1995
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, 1995
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.
