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 March 31, 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) 969-2311
0-5807 NEW ORLEANS PUBLIC SERVICE INC. 72-0273040
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 569-4000
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
<PAGE>
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrants were required to file such
reports), and (2) have been subject to such filing requirements for the
past 90 days.
Yes X No
Common Stock Outstanding Outstanding at April 30, 1995
Entergy Corporation ($0.01 par value) 227,746,450
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1995
Page
Number
Definitions 1
Financial Statements:
Entergy Corporation and Subsidiaries:
Statements of Consolidated Income 5
Statements of Consolidated Cash Flows 6
Consolidated Balance Sheets 8
Arkansas Power & Light Company:
Statements of Income 10
Statements of Cash Flows 11
Balance Sheets 12
Gulf States Utilities Company:
Statements of Income (Loss) 14
Statements of Cash Flows 15
Balance Sheets 16
Louisiana Power & Light Company:
Statements of Income 18
Statements of Cash Flows 19
Balance Sheets 20
Mississippi Power & Light Company:
Statements of Income 22
Statements of Cash Flows 23
Balance Sheets 24
New Orleans Public Service Inc.:
Statements of Income 26
Statements of Cash Flows 27
Balance Sheets 28
System Energy Resources, Inc.:
Statements of Income 30
Statements of Cash Flows 31
Balance Sheets 32
Notes to Financial Statements 34
Management's Financial Discussion and Analysis 47
Part II:
Item 1. Legal Proceedings 70
Item 4. Submission of Matters to a Vote of Security Holders 71
Item 5. Other Information 72
Item 6. Exhibits and Reports on Form 8-K 76
Experts 78
Signature 79
<PAGE>
This combined Form 10-Q is separately filed by Entergy
Corporation, Arkansas Power & Light Company, Gulf States
Utilities Company, Louisiana Power & Light Company, Mississippi
Power & Light Company, New Orleans Public Service Inc., and
System Energy Resources, Inc. Information contained herein
relating to any individual company is filed by such company on
its own behalf, and no company makes any representation as to
information relating to the other companies. This combined Form
10-Q supplements and updates the Form 10-K for the calendar year
ended December 31, 1994, filed by the individual registrants with
the SEC and should be read in conjunction therewith.
DEFINITIONS
Certain abbreviations or acronyms used in the text are defined
below:
Abbreviation or Acronym Term
ALJ Administrative Law Judge
ANO Arkansas Nuclear One Steam Electric
Generating Station
ANO 2 Unit No. 2 of ANO
AP&L Arkansas Power & Light Company
APSC Arkansas Public Service Commission
Availability Agreement Agreement, dated as of June 21, 1974, as
amended, among System Energy and AP&L,
LP&L, MP&L, and NOPSI, and the
assignments thereof
Capital Funds Agreement Agreement, dated as of June 21, 1974, as
amended, between System Energy and
Entergy Corporation, and the assignments
thereof
CCLM Customer-Controlled Load Management (a
DSM activity utilizing residential time-of-use rates)
City of New Orleans or New Orleans, Louisiana
City Council Council of the City of New Orleans, Louisiana
D.C. Circuit United States Court of Appeals for the
District of Columbia Circuit
DSM Demand-Side Management (Least Cost Plan
activities that influence electricity
usage by customers)
Entergy Corporation Entergy Corporation, a Delaware
corporation, successor to Entergy
Corporation, a Florida Corporation
Entergy Operations Entergy Operations, Inc., a subsidiary
of Entergy Corporation that has
operating responsibility for ANO, Grand
Gulf 1, River Bend, and Waterford 3
Entergy or System Entergy Corporation and its various
direct and indirect subsidiaries
Entergy Power Entergy Power, Inc., a subsidiary of
Entergy Corporation that markets
capacity and energy from certain
generating facilities to other parties,
principally non-affiliates, for resale
Entergy Services Entergy Services, Inc.
FERC Federal Energy Regulatory Commission
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
G&R Bonds General and Refunding Mortgage Bonds
issued and issuable by MP&L and NOPSI
Grand Gulf Station Grand Gulf Steam Electric Generating
Station (nuclear)
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)
Least Cost Plan Least Cost Integrated Resource Plan
(combination of demand- and supply-side
resources to be used by Entergy to
satisfy electricity demand)
LP&L Louisiana Power & Light Company
LPSC Louisiana Public Service Commission
Merger The combination transaction, consummated
on December 31, 1993, by which GSU
became a subsidiary of Entergy
Corporation and Entergy Corporation
became a Delaware Corporation
Money Pool System Money Pool, which allows certain
System companies to borrow from, or lend
to, certain other System companies
MP&L Mississippi Power & Light Company
MPSC Mississippi Public Service Commission
NOPSI New Orleans Public Service Inc.
NRC Nuclear Regulatory Commission
Owner Participant A corporation that, in connection with
the Waterford 3 sale and leaseback
transactions, has acquired a beneficial
interest in a trust, the Owner Trustee
of which is the owner and lessor of
undivided interests in Waterford 3
Owner Trustee Each institution and/or individual
acting as Owner Trustee under a trust
agreement with an Owner Participant in
connection with the Waterford 3 sale
and leaseback transactions
PUCT Public Utility Commission of Texas
Rate Cap The level of GSU's retail electric base
rates in effect at December 31, 1993 for
the Louisiana retail jurisdiction, and
the level in effect prior to the Texas
Cities Rate Settlement for the Texas
retail jurisdiction, which may not be
exceeded for the five years following
December 31, 1993
Reallocation Agreement 1981 Agreement, superseded in part by a
June 13, 1985 decision of the FERC,
among AP&L, LP&L, MP&L, NOPSI, and
System Energy, relating to the sale of
capacity and energy from the Grand Gulf
Station
River Bend River Bend Steam Electric Generating
Station (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
SFAS 109 SFAS No. 109, "Accounting for Income Taxes"
System Agreement Agreement, effective January 1, 1983, as
modified, among the System operating
companies relating to the sharing of
generating capacity and other power
resources
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
System operating AP&L, GSU, LP&L, MP&L, and NOPSI,
companies collectively
System or Entergy Entergy Corporation and its various
direct and indirect subsidiaries
Unit Power Sales Agreement, dated as of June 10,
Agreement 1982, as amended, among AP&L, LP&L,
MP&L, NOPSI, and System Energy, relating
to the sale of capacity and energy from
System Energy's share of Grand Gulf 1
Waterford 3 Unit No. 3 of the Waterford Steam
Electric Generating Station (nuclear)
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands,
Except Share Data)
Operating Revenues:
Electric $1,294,766 $1,340,252
Natural gas 40,670 54,079
Steam products 10,632 11,708
---------- ----------
Total 1,346,068 1,406,039
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 288,704 314,728
Purchased power 81,489 124,796
Nuclear refueling outage expenses 16,796 15,745
Other operation and maintenance 347,105 336,012
Depreciation, amortization, and decommissioning 169,544 160,809
Taxes other than income taxes 76,596 72,852
Income taxes 35,137 33,553
Amortization of rate deferrals 94,789 93,674
---------- ----------
Total 1,110,160 1,152,169
---------- ----------
Operating Income 235,908 253,870
---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 2,494 3,535
Miscellaneous - net 7,170 14,362
Income taxes (1,973) (8,197)
---------- ----------
Total 7,691 9,700
---------- ----------
Interest Charges:
Interest on long-term debt 160,631 167,703
Other interest - net 8,990 6,832
Allowance for borrowed funds used
during construction (2,197) (2,642)
Preferred dividend requirements of
subsidiaries and other 19,850 20,942
---------- ----------
Total 187,274 192,835
---------- ----------
Net Income $56,325 $70,735
========== ==========
Earnings per average common share $0.25 $0.31
Dividends declared per common share $0.90 $0.90
Average number of common shares
outstanding 227,415,009 230,584,786
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $56,325 $70,735
Noncash items included in net income:
Change in rate deferrals/excess capacity-net 81,057 80,768
Depreciation, amortization, and decommissioning 169,544 160,809
Deferred income taxes and investment tax credits (19,160) 1,064
Allowance for equity funds used during construction (2,494) (3,535)
Amortization of deferred revenues - (10,283)
Changes in working capital:
Receivables 104,230 89,848
Fuel inventory (9,605) 23,622
Accounts payable (70,433) (103,591)
Taxes accrued 63,030 16,940
Interest accrued (13,246) (9,389)
Reserve for rate refund 10,560 -
Other working capital accounts (51,070) 36
Decommissioning trust contributions (5,666) (5,516)
Provision for estimated losses and reserves 754 (13,503)
Other (38,245) 24,426
-------- --------
Net cash flow provided by operating activities 275,581 322,431
-------- --------
Investing Activities:
Construction/capital expenditures (108,367) (175,107)
Allowance for equity funds used during construction 2,494 3,535
Nuclear fuel purchases (9,672) (9,344)
Proceeds from sale/leaseback of nuclear fuel 39,440 1,035
Investment in nonregulated/nonutility properties (23,246) 240
-------- --------
Net cash flow used in investing activities (99,351) (179,641)
-------- --------
Financing Activities:
Retirement of:
First mortgage bonds (20,825) (400)
General and refunding mortgage bonds (29,200) -
Other long-term debt (25) (44)
Premium and expense on refinancing sale/leaseback bonds - (47,602)
Repurchase of common stock - (35,590)
Redemption of preferred stock (24,250) (24,250)
Changes in short-term borrowings (38,625)
Common stock dividends paid (101,969) (103,728)
-------- --------
Net cash flow used in financing activities (214,894) (211,614)
-------- --------
Net decrease in cash and cash equivalents (38,664) (68,824)
Cash and cash equivalents at beginning of period 613,907 563,749
-------- --------
Cash and cash equivalents at end of period $575,243 $494,925
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $172,220 $169,748
Income taxes $2,564 ($6,070)
Noncash investing and financing activities:
Capital lease obligations incurred $27,804 $20,547
Change in unrealized appreciation/depreciation of
decommissioning trust assets $9,972 $15,634
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $21,227,444 $21,184,013
Plant acquisition adjustment - GSU 483,889 487,955
Electric plant under leases 668,843 668,846
Property under capital leases - electric 159,279 161,950
Natural gas 164,043 164,013
Steam products 77,307 77,307
Construction work in progress 532,525 476,816
Nuclear fuel under capital leases 259,903 265,520
Nuclear fuel 65,032 70,147
----------- -----------
Total 23,638,265 23,556,567
Less - accumulated depreciation and amortization 7,799,939 7,639,549
----------- -----------
Utility plant - net 15,838,326 15,917,018
----------- -----------
Other Property and Investments:
Decommissioning trust funds 225,446 207,395
Other 291,031 240,745
----------- -----------
Total 516,477 448,140
----------- -----------
Current Assets:
Cash and cash equivalents:
Cash 101,914 87,700
Temporary cash investments - at cost,
which approximates market 473,329 526,207
----------- -----------
Total cash and cash equivalents 575,243 613,907
Special deposits 6,082 8,074
Notes receivable 13,958 19,190
Accounts receivable:
Customer (less allowance for doubtful accounts of
$6.7 million in 1995 and 1994) 281,167 325,410
Other 43,653 66,651
Accrued unbilled revenues 216,703 240,610
Fuel inventory 102,816 93,211
Materials and supplies - at average cost 371,393 365,956
Rate deferrals 384,236 380,612
Prepayments and other 93,237 98,811
----------- -----------
Total 2,088,488 2,212,432
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 1,369,470 1,451,926
SFAS 109 regulatory asset - net 1,409,930 1,417,646
Unamortized loss on reacquired debt 232,382 232,420
Other regulatory assets 315,236 316,878
Long-term receivables 284,511 277,830
Other 334,095 339,201
----------- -----------
Total 3,945,624 4,035,901
----------- -----------
TOTAL $22,388,915 $22,613,491
=========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
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 4,199,780 4,202,134
Retained earnings 2,076,824 2,223,739
Less - treasury stock (2,271,035 shares in 1995 and
2,608,908 in 1994) 67,378 77,378
----------- -----------
Total common shareholders' equity 6,211,526 6,350,795
Subsidiary's preference stock 150,000 150,000
Subsidiaries' preferred stock:
Without sinking fund 543,455 550,955
With sinking fund 283,198 299,946
Long-term debt 7,035,128 7,093,473
----------- -----------
Total 14,223,307 14,445,169
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 265,889 273,947
Other 321,285 310,977
----------- -----------
Total 587,174 584,924
----------- -----------
Current Liabilities:
Currently maturing long-term debt 364,885 349,085
Notes payable 133,242 171,867
Accounts payable 400,687 471,120
Customer deposits 137,019 134,478
Taxes accrued 155,608 92,578
Accumulated deferred income taxes 32,099 40,313
Interest accrued 182,393 195,639
Dividends declared 115,438 13,599
Deferred fuel cost 20,158 27,066
Obligations under capital leases 151,479 151,904
Reserve for rate refund 67,532 56,972
Other 293,229 327,330
----------- -----------
Total 2,053,769 2,031,951
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 3,893,009 3,915,138
Accumulated deferred investment tax credits 644,466 649,898
Other 987,190 986,411
----------- -----------
Total 5,524,665 5,551,447
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $22,388,915 $22,613,491
=========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Revenues $339,596 $371,091
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 41,167 63,474
Purchased power 81,747 91,182
Nuclear refueling outage expenses 6,967 8,634
Other operation and maintenance 93,658 80,526
Depreciation, amortization, and decommissioning 39,352 35,718
Taxes other than income taxes 10,111 9,115
Income taxes (2,469) (2,405)
Amortization of rate deferrals 38,033 40,173
-------- --------
Total 308,566 326,417
-------- --------
Operating Income 31,030 44,674
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 915 1,154
Miscellaneous - net 15,532 14,659
Income taxes (6,097) (5,771)
-------- --------
Total 10,350 10,042
-------- --------
Interest Charges:
Interest on long-term debt 26,933 26,344
Other interest - net 3,116 2,804
Allowance for borrowed funds used
during construction (731) (820)
-------- --------
Total 29,318 28,328
-------- --------
Net Income 12,062 26,388
Preferred Stock Dividend Requirements
and Other 4,561 4,883
-------- --------
Earnings Applicable to Common Stock $7,501 $21,505
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
ARKANSAS POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $12,062 $26,388
Noncash items included in net income:
Change in rate deferrals/excess capacity-net 30,665 26,257
Depreciation, amortization, and decommissioning 39,352 35,718
Deferred income taxes and investment tax credits (1,201) (11,751)
Allowance for equity funds used during construction (915) (1,154)
Changes in working capital:
Receivables 37,541 21,934
Fuel inventory (14,460) 12,695
Accounts payable 32,917 (25,725)
Taxes accrued 8,488 20,167
Interest accrued 636 (334)
Other working capital accounts (9,952) 1,391
Decommissioning trust contributions (2,386) (2,545)
Provision for estimated losses and reserves (10,877) (7,938)
Other 2,972 (6,919)
-------- --------
Net cash flow provided by operating activities 124,842 88,184
-------- --------
Investing Activities:
Construction expenditures (41,651) (40,188)
Allowance for equity funds used during construction 915 1,154
Nuclear fuel purchases (76) -
Proceeds from sale/leaseback of nuclear fuel 76 -
-------- --------
Net cash flow used in investing activities (40,736) (39,034)
-------- --------
Financing Activities:
Retirement of first mortgage bonds (400) (400)
Redemption of preferred stock (5,000) (5,000)
Changes in short-term borrowings - 10,597
Dividends paid:
Common stock (32,800) (17,900)
Preferred stock (4,727) (5,049)
-------- --------
Net cash flow used in financing activities (42,927) (17,752)
-------- --------
Net increase in cash and cash equivalents 41,179 31,398
Cash and cash equivalents at beginning of period 80,756 1,825
-------- --------
Cash and cash equivalents at end of period $121,935 $33,223
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $25,916 $24,655
Income taxes - ($242)
Noncash investing and financing activities:
Capital lease obligations incurred $76 $14,313
Change in unrealized appreciation/depreciation of
decommissioning trust assets $6,234 $13,463
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
ARKANSAS POWER & LIGHT COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $4,310,936 $4,293,097
Property under capital leases 55,554 56,135
Construction work in progress 153,728 136,701
Nuclear fuel under capital lease 87,963 94,628
---------- ----------
Total 4,608,181 4,580,561
Less - accumulated depreciation and amortization 1,744,886 1,710,216
---------- ----------
Utility plant - net 2,863,295 2,870,345
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,215 11,215
Decommissioning trust fund 138,846 127,136
Other - at cost (less accumulated depreciation) 4,678 4,628
---------- ----------
Total 154,739 142,979
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 15,116 3,737
Temporary cash investments - at cost,
which approximates market:
Associated companies 16,058 4,713
Other 90,761 72,306
Total cash and cash equivalents 121,935 80,756
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.0 million in 1995 and 1994) 36,892 53,781
Associated companies 23,116 28,506
Other 4,911 11,181
Accrued unbilled revenues 74,871 83,863
Fuel inventory - at average cost 49,021 34,561
Materials and supplies - at average cost 74,834 79,886
Rate deferrals 118,131 113,630
Deferred excess capacity 8,426 8,414
Prepayments and other 17,058 23,867
---------- ----------
Total 529,195 518,445
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 327,555 360,496
Deferred excess capacity 17,823 20,060
SFAS 109 regulatory asset - net 221,691 227,068
Unamortized loss on reacquired debt 56,511 57,344
Other regulatory assets 69,625 68,813
Other 25,363 26,665
---------- ----------
Total 718,568 760,446
---------- ----------
TOTAL $4,265,797 $4,292,215
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
ARKANSAS POWER & LIGHT COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares in 1995 and 1994 $470 $470
Paid-in capital 590,844 590,844
Retained earnings 466,499 491,799
---------- ----------
Total common shareholder's equity 1,057,813 1,083,113
Preferred stock:
Without sinking fund 176,350 176,350
With sinking fund 53,527 58,527
Long-term debt 1,273,227 1,293,879
---------- ----------
Total 2,560,917 2,611,869
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 87,304 94,534
Other 71,203 68,235
---------- ----------
Total 158,507 162,769
---------- ----------
Current Liabilities:
Currently maturing long-term debt 53,175 28,175
Notes payable:
Other 34,667 34,667
Accounts payable:
Associated companies 44,272 17,345
Other 95,319 89,329
Customer deposits 17,582 17,113
Taxes accrued 53,727 45,239
Accumulated deferred income taxes 36,936 25,043
Interest accrued 31,700 31,064
Dividends declared 4,561 4,727
Co-owner advances 40,627 20,639
Deferred fuel cost 10,298 20,254
Nuclear refueling reserve 22,107 37,954
Obligations under capital leases 56,213 56,154
Other 29,165 45,632
---------- ----------
Total 530,349 473,335
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 843,961 859,558
Accumulated deferred investment tax credits 117,117 118,548
Other 54,946 66,136
---------- ----------
Total 1,016,024 1,044,242
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,265,797 $4,292,215
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
GULF STATES UTILITIES COMPANY
STATEMENTS OF INCOME (LOSS)
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Revenues:
Electric $378,791 $402,104
Natural gas 9,923 15,846
Steam products 10,632 11,708
-------- --------
Total 399,346 429,658
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses and
gas purchased for resale 114,921 119,018
Purchased power 39,537 60,220
Nuclear refueling outage expenses 3,031 2,520
Other operation and maintenance 102,424 102,050
Depreciation, amortization, and decommissioning 50,339 47,867
Taxes other than income taxes 25,379 24,346
Income taxes (162) (821)
Amortization of rate deferrals 16,506 15,897
-------- --------
Total 351,975 371,097
-------- --------
Operating Income 47,371 58,561
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 251 260
Miscellaneous - net 5,914 4,443
Income taxes (865) (1,972)
-------- --------
Total 5,300 2,731
-------- --------
Interest Charges:
Interest on long-term debt 48,270 48,980
Other interest - net 1,010 1,475
Allowance for borrowed funds used
during construction (244) (206)
-------- --------
Total 49,036 50,249
-------- --------
Net Income 3,635 11,043
Preferred and Preference Stock
Dividend Requirements and Other 7,590 7,407
-------- --------
Earnings (Loss) Applicable to Common Stock ($3,955) $3,636
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $3,635 $11,043
Noncash items included in net income:
Change in rate deferrals 16,506 15,897
Depreciation, amortization, and decommissioning 50,339 47,867
Deferred income taxes and investment tax credits 914 1,150
Allowance for equity funds used during construction (251) (260)
Changes in working capital:
Receivables 58,324 (6,088)
Fuel inventory 894 4,546
Accounts payable (10,624) (30,618)
Taxes accrued 11,043 6,802
Interest accrued 4,466 6,375
Reserve for rate refund 10,560 -
Other working capital accounts (4,667) (8,093)
Decommissioning trust contributions (739) (493)
Other (10,512) 5,648
-------- --------
Net cash flow provided by operating activities 129,888 53,776
-------- --------
Investing Activities:
Construction expenditures (19,136) (20,824)
Allowance for equity funds used during construction 251 260
Nuclear fuel purchases - (3,538)
Proceeds from sale/leaseback of nuclear fuel - 1,035
-------- --------
Net cash flow used in investing activities (18,885) (23,067)
-------- --------
Financing Activities:
Proceeds from the issuance of other long-term debt 2,277 -
Redemption of preferred and preference stock (2,250) (2,250)
Dividends paid:
Common stock - (100,000)
Preferred and preference stock (7,514) (7,413)
-------- --------
Net cash flow used in financing activities (7,487) (109,663)
-------- --------
Net increase (decrease) in cash and cash equivalents 103,516 (78,954)
Cash and cash equivalents at beginning of period 104,644 261,349
-------- --------
Cash and cash equivalents at end of period $208,160 $182,395
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
interest - net of amount capitalized $41,860 $40,192
Change in unrealized appreciation/depreciation of
decommissioning trust assets $759 $390
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $6,845,340 $6,842,726
Natural gas 44,505 44,505
Steam products 77,307 77,307
Property under capital leases 81,894 82,914
Construction work in progress 114,584 96,176
Nuclear fuel under capital leases 69,625 80,042
---------- ----------
Total 7,233,255 7,223,670
Less - accumulated depreciation and amortization 2,552,492 2,504,826
---------- ----------
Utility plant - net 4,680,763 4,718,844
---------- ----------
Other Property and Investments:
Decommissioning trust fund 23,006 21,309
Other - at cost (less accumulated depreciation) 36,930 29,315
---------- ----------
Total 59,936 50,624
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 27,792 8,063
Temporary cash investments - at cost,
which approximates market:
Associated companies 25,058 5,085
Other 155,310 91,496
---------- ----------
Total cash and cash equivalents 208,160 104,644
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million in 1995 and 1994) 143,826 167,745
Associated companies 1,239 12,732
Other 2,467 20,706
Accrued unbilled revenues 34,797 39,470
Deferred fuel costs 2,065 6,314
Accumulated deferred income taxes 54,427 49,457
Fuel inventory 24,890 25,784
Materials and supplies - at average cost 99,246 90,054
Rate deferrals 92,079 100,478
Prepayments and other 10,238 13,754
---------- ----------
Total 673,434 631,138
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 492,777 506,974
SFAS 109 regulatory asset - net 426,734 426,358
Unamortized loss on reacquired debt 67,325 63,994
Other regulatory assets 33,297 35,168
Long-term receivables 281,207 264,752
Other 144,918 145,609
---------- ----------
Total 1,446,258 1,442,855
---------- ----------
TOTAL $6,860,391 $6,843,461
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares in 1995 and 1994 $114,055 $114,055
Paid-in capital 1,152,419 1,152,336
Retained earnings 260,671 264,626
---------- ----------
Total common shareholder's equity 1,527,145 1,531,017
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 92,687 94,934
Long-term debt 2,300,744 2,318,417
---------- ----------
Total 4,207,020 4,230,812
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 114,765 125,691
Other 72,340 68,753
---------- ----------
Total 187,105 194,444
---------- ----------
Current Liabilities:
Currently maturing long-term debt 70,425 50,425
Accounts payable:
Associated companies 43,786 31,722
Other 118,287 140,975
Customer deposits 22,685 22,216
Taxes accrued 23,521 12,478
Interest accrued 59,793 55,327
Nuclear refueling reserve 14,410 10,117
Obligations under capital leases 36,733 37,265
Reserve for rate refund 67,532 56,972
Other 103,961 111,963
---------- ----------
Total 561,133 529,460
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 1,107,626 1,100,396
Accumulated deferred investment tax credits 198,340 199,428
Deferred River Bend finance charges 76,316 82,406
Other 522,851 506,515
---------- ----------
Total 1,905,133 1,888,745
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,860,391 $6,843,461
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Revenues $352,996 $383,826
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 52,050 58,108
Purchased power 74,995 103,496
Nuclear refueling outage expenses 4,517 4,591
Other operation and maintenance 72,538 73,631
Depreciation, amortization, and decommissioning 38,507 37,392
Taxes other than income taxes 15,716 14,437
Income taxes 18,696 16,843
Amortization of rate deferrals 6,660 6,660
-------- --------
Total 283,679 315,158
-------- --------
Operating Income 69,317 68,668
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 564 1,111
Miscellaneous - net 372 607
Income taxes (25) (10)
-------- --------
Total 911 1,708
-------- --------
Interest Charges:
Interest on long-term debt 32,572 32,473
Other interest - net 2,085 1,608
Allowance for borrowed funds used
during construction (491) (801)
-------- --------
Total 34,166 33,280
-------- --------
Net Income 36,062 37,096
Preferred Stock Dividend Requirements
and Other 5,591 6,119
-------- --------
Earnings Applicable to Common Stock $30,471 $30,977
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $36,062 $37,096
Noncash items included in net income:
Change in rate deferrals 6,660 6,660
Depreciation, amortization, and decommissioning 38,507 37,392
Deferred income taxes and investment tax credits (9,077) 11,147
Allowance for equity funds used during construction (564) (1,111)
Amortization of deferred revenues - (10,283)
Changes in working capital:
Receivables 26,639 23,376
Accounts payable (25,464) (10,968)
Taxes accrued 37,282 13,395
Interest accrued (7,458) (6,023)
Other working capital accounts 633 2,796
Decommissioning trust contributions (1,204) (1,204)
Other 1,708 (2,756)
-------- --------
Net cash flow provided by operating activities 103,724 99,517
-------- --------
Investing Activities:
Construction expenditures (20,055) (41,381)
Allowance for equity funds used during construction 564 1,111
-------- --------
Net cash flow used in investing activities (19,491) (40,270)
-------- --------
Financing Activities:
Retirement of other long-term debt (25) (44)
Redemption of preferred stock (7,500) (7,500)
Changes in short-term borrowings (7,954) (27,148)
Dividends paid:
Common stock (55,700) (17,900)
Preferred stock (5,491) (5,938)
-------- --------
Net cash flow used in financing activities (76,670) (58,530)
-------- --------
Net increase in cash and cash equivalents 7,563 717
Cash and cash equivalents at beginning of period 28,718 33,489
-------- --------
Cash and cash equivalents at end of period $36,281 $34,206
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
interest - net of amount capitalized $40,325 $37,730
Noncash investing and financing activities:
Capital lease obligations incurred $75 $9,677
Change in unrealized appreciation/depreciation of
decommissioning trust assets $1,294 $843
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
LOUISIANA POWER & LIGHT COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $4,786,450 $4,778,126
Electric plant under lease 229,468 229,468
Construction work in progress 102,454 94,791
Nuclear fuel under capital lease 36,316 44,238
Nuclear fuel 6,346 6,420
---------- ----------
Total 5,161,034 5,153,043
Less - accumulated depreciation and amortization 1,634,337 1,600,510
---------- ----------
Utility plant - net 3,526,697 3,552,533
---------- ----------
Other Property and Investments:
Nonutility property 20,060 20,060
Decommissioning trust fund 29,954 27,076
Investment in subsidiary company - at equity 14,230 14,230
Other 1,093 1,078
---------- ----------
Total 65,337 62,444
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 2,693 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 670 -
Other 32,918 28,718
---------- ----------
Total cash and cash equivalents 36,281 28,718
Accounts receivable:
Customer (less allowance for doubtful accounts of
$1.2 million in 1995 and 1994) 45,964 58,858
Associated companies 1,248 9,827
Other 11,831 11,609
Accrued unbilled revenues 57,721 63,109
Accumulated deferred income taxes 5,309 3,702
Materials and supplies - at average cost 89,400 89,692
Rate deferrals 28,422 28,422
Prepayments and other 22,380 28,528
---------- ----------
Total 298,556 322,465
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 18,949 25,609
SFAS 109 regulatory asset - net 374,901 379,263
Unamortized loss on reacquired debt 42,606 43,656
Other regulatory assets 25,006 25,736
Other 24,622 23,733
---------- ----------
Total 486,084 497,997
---------- ----------
TOTAL $4,376,674 $4,435,439
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
LOUISIANA POWER & LIGHT COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares in 1995 and 1994 $1,088,900 $1,088,900
Capital stock expense and other (5,029) (5,367)
Retained earnings 88,190 113,420
---------- ----------
Total common shareholder's equity 1,172,061 1,196,953
Preferred stock:
Without sinking fund 160,500 160,500
With sinking fund 103,765 111,265
Long-term debt 1,368,194 1,403,055
---------- ----------
Total 2,804,520 2,871,773
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 8,316 16,238
Other 55,327 54,216
---------- ----------
Total 63,643 70,454
---------- ----------
Current Liabilities:
Currently maturing long-term debt 110,320 75,320
Notes payable:
Associated companies - 7,954
Other 19,200 19,200
Accounts payable:
Associated companies 22,865 20,793
Other 54,667 82,203
Customer deposits 55,602 54,934
Taxes accrued 35,422 (1,860)
Interest accrued 35,529 42,987
Dividends declared 5,251 5,489
Deferred fuel cost 11,706 13,983
Obligations under capital leases 28,000 28,000
Other 16,628 20,156
---------- ----------
Total 395,190 369,159
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 873,843 883,945
Accumulated deferred investment tax credits 149,832 151,259
Deferred interest - Waterford 3 lease obligation 26,172 26,000
Other 63,474 62,849
---------- ----------
Total 1,113,321 1,124,053
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,376,674 $4,435,439
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Revenues $193,324 $187,417
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 30,133 22,795
Purchased power 57,044 64,322
Other operation and maintenance 32,218 36,573
Depreciation and amortization 9,397 8,706
Taxes other than income taxes 10,589 10,276
Income taxes 3,363 1,225
Amortization of rate deferrals 28,310 24,805
-------- --------
Total 171,054 168,702
-------- --------
Operating Income 22,270 18,715
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 259 576
Miscellaneous - net 61 94
Income taxes (23) (36)
-------- --------
Total 297 634
-------- --------
Interest Charges:
Interest on long-term debt 11,092 12,503
Other interest - net 1,906 964
Allowance for borrowed funds used
during construction (205) (367)
-------- --------
Total 12,793 13,100
-------- --------
Net Income 9,774 6,249
Preferred Stock Dividend Requirements
and Other 1,707 2,075
-------- --------
Earnings Applicable to Common Stock $8,067 $4,174
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MISSISSIPPI POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $9,774 $6,249
Noncash items included in net income:
Change in rate deferrals 14,755 20,861
Depreciation and amortization 9,397 8,706
Deferred income taxes and investment tax credits (3,740) 673
Allowance for equity funds used during construction (259) (576)
Changes in working capital:
Receivables 14,012 18,219
Fuel inventory (1,892) (335)
Accounts payable 10,730 17,789
Taxes accrued (9,035) (14,146)
Interest accrued (7,887) (6,956)
Other working capital accounts 10,856 4,799
Other 5,129 (8,419)
-------- --------
Net cash flow provided by operating activities 51,840 46,864
-------- --------
Investing Activities:
Construction expenditures (12,275) (58,989)
Allowance for equity funds used during construction 259 576
-------- --------
Net cash flow used in investing activities (12,016) (58,413)
-------- --------
Financing Activities:
Retirement of general and refunding bonds (40,000) -
Redemption of preferred stock (8,000) (8,000)
Changes in short-term borrowings 12,319 60,021
Dividends paid:
Common stock (8,300) (4,600)
Preferred stock (1,790) (1,995)
-------- --------
Net cash flow provided by (used in) financing (45,771) 45,426
activities -------- --------
Net increase (decrease) in cash and cash equivalents (5,947) 33,877
Cash and cash equivalents at beginning of period 9,598 7,999
-------- --------
Cash and cash equivalents at end of period $3,651 $41,876
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $20,278 $19,590
Income taxes $1,600 ($1,532)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
MISSISSIPPI POWER & LIGHT COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $1,486,019 $1,475,322
Construction work in progress 68,430 67,119
---------- ----------
Total 1,554,449 1,542,441
Less - accumulated depreciation and amortization 591,330 582,514
---------- ----------
Utility plant - net 963,119 959,927
---------- ----------
Other Property and Investments:
Investment in subsidiary company - at equity 5,531 5,531
Other 5,621 5,624
---------- ----------
Total 11,152 11,155
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 3,651 5,080
Temporary cash investments - at cost,
which approximates market
Associated companies - 276
Other - 4,242
---------- ----------
Total cash and cash equivalents 3,651 9,598
Notes receivable 4,377 4,937
Accounts receivable:
Customer (less allowance for doubtful accounts of
$2.1 million in 1995 and 1994) 28,076 32,564
Associated companies 591 4,680
Other 1,936 2,789
Accrued unbilled revenues 35,291 39,873
Fuel inventory - at average cost 6,672 4,780
Materials and supplies - at average cost 21,245 20,642
Rate deferrals 113,070 106,538
Prepayments and other 4,777 10,672
---------- ----------
Total 219,686 237,073
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 364,433 385,720
Unamortized loss on reacquired debt 10,178 10,488
Other regulatory assets 9,633 10,168
Long-term receivable 5,537 6,345
Other 7,691 8,569
---------- ----------
Total 397,472 421,290
---------- ----------
TOTAL $1,591,429 $1,629,445
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
MISSISSIPPI POWER & LIGHT COMPANY
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares in 1995 and 1994 $199,326 $199,326
Capital stock expense and other (1,661) (1,762)
Retained earnings 231,778 232,011
-------- --------
Total common shareholder's equity 429,443 429,575
Preferred stock:
Without sinking fund 57,881 57,881
With sinking fund 23,770 31,770
Long-term debt 475,279 475,233
-------- --------
Total 986,373 994,459
-------- --------
Other Noncurrent Liabilities:
Obligations under capital leases 519 552
Other 11,931 8,984
-------- --------
Total 12,450 9,536
-------- --------
Current Liabilities:
Currently maturing long-term debt 25,965 65,965
Notes payable:
Associated companies 12,944 -
Other 29,375 30,000
Accounts payable:
Associated companies 23,491 2,350
Other 19,794 30,205
Customer deposits 23,209 22,793
Taxes accrued 11,786 20,821
Accumulated deferred income taxes 50,266 47,515
Interest accrued 12,490 20,377
Other 34,722 30,318
-------- --------
Total 244,042 270,344
-------- --------
Deferred Credits:
Accumulated deferred income taxes 297,368 301,288
Accumulated deferred investment tax credits 29,141 29,528
SFAS 109 regulatory liability - net 10,915 13,099
Other 11,140 11,191
-------- --------
Total 348,564 355,106
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,591,429 $1,629,445
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Revenues:
Electric $78,140 $78,855
Natural gas 30,746 38,233
-------- --------
Total 108,886 117,088
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses
and gas purchased for resale 30,978 33,915
Purchased power 29,682 37,732
Other operation and maintenance 16,753 19,671
Depreciation and amortization 4,828 4,710
Taxes other than income taxes 7,227 7,054
Income taxes 3,275 619
Amortization of rate deferrals 5,280 6,928
-------- --------
Total 98,023 110,629
-------- --------
Operating Income 10,863 6,459
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 26 113
Miscellaneous - net 416 510
Income taxes (160) (525)
-------- --------
Total 282 98
-------- --------
Interest Charges:
Interest on long-term debt 4,329 4,541
Other interest - net 592 287
Allowance for borrowed funds used
during construction (21) (84)
-------- --------
Total 4,900 4,744
-------- --------
Net Income 6,245 1,813
Preferred Stock Dividend Requirements
and Other 400 458
-------- --------
Earnings Applicable to Common Stock $5,845 $1,355
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
NEW ORLEANS PUBLIC SERVICE INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $6,245 $1,813
Noncash items included in net income:
Change in rate deferrals 6,382 5,003
Depreciation and amortization 4,828 4,710
Deferred income taxes and investment tax credits (3,309) (4,254)
Allowance for equity funds used during construction (26) (113)
Changes in working capital:
Receivables 3,091 9,063
Accounts payable 3,676 (6,759)
Taxes accrued (30) 5,857
Interest accrued (955) (718)
Income tax refund 6,531 -
Other working capital accounts (4,680) 9,726
Other (3,175) 2,180
-------- --------
Net cash flow provided by operating activities 18,578 26,508
-------- --------
Investing Activities:
Construction expenditures (5,028) (5,634)
Allowance for equity funds used during construction 26 113
-------- --------
Net cash flow used in investing activities (5,002) (5,521)
-------- --------
Financing Activities:
Retirement of general and refunding bonds (9,200) -
Redemption of preferred stock (1,500) (1,500)
Dividends paid:
Common stock - -
Preferred stock (413) (471)
-------- --------
Net cash flow used in financing activities (11,113) (1,971)
-------- --------
Net increase in cash and cash equivalents 2,463 19,016
Cash and cash equivalents at beginning of period 8,031 43,317
-------- --------
Cash and cash equivalents at end of period $10,494 $62,333
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
interest - net of amount capitalized $5,702 $5,244
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $470,874 $470,560
Natural gas 119,538 119,508
Construction work in progress 12,021 7,284
-------- --------
Total 602,433 597,352
Less - accumulated depreciation and amortization 324,210 319,576
-------- --------
Utility plant - net 278,223 277,776
-------- --------
Other Investments:
Investment in subsidiary company - at equity 3,259 3,259
-------- --------
Current Assets:
Cash and cash equivalents:
Cash 1,231 849
Temporary cash investments - at cost,
which approximates market:
Associated companies 1,392 2,472
Other 7,871 4,710
-------- --------
Total cash and cash equivalents 10,494 8,031
Accounts receivable:
Customer (less allowance for doubtful accounts of
$0.8 million in 1995 and 1994) 24,806 23,938
Associated companies 46 3,503
Other 370 600
Accrued unbilled revenues 14,023 14,295
Deferred electric fuel and resale gas costs - 856
Materials and supplies - at average cost 9,159 9,676
Rate deferrals 32,533 31,544
Income tax receivable 13,641 20,172
Prepayments and other 11,665 5,636
-------- --------
Total 116,737 118,251
-------- --------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 165,756 173,127
SFAS 109 regulatory asset - net 9,034 8,792
Unamortized loss on reacquired debt 2,254 2,361
Other regulatory assets 5,647 5,647
Other 3,599 3,681
-------- --------
Total 186,290 193,608
-------- --------
TOTAL $584,509 $592,894
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
NEW ORLEANS PUBLIC SERVICE INC.
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
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 84,731 78,886
-------- --------
Total common shareholder's equity 154,722 148,831
Preferred stock:
Without sinking fund 19,780 19,780
With sinking fund 1,949 3,450
Long-term debt 179,172 164,160
-------- --------
Total 355,623 336,221
-------- --------
Other Noncurrent Liabilities:
Accumulated provision for losses 17,335 17,318
Other 1,082 1,745
-------- --------
Total 18,417 19,063
-------- --------
Current Liabilities:
Currently maturing long-term debt - 24,200
Accounts payable:
Associated companies 13,889 6,456
Other 15,746 19,503
Customer deposits 17,941 17,422
Accumulated deferred income taxes 4,633 4,925
Taxes accrued 2,299 2,329
Interest accrued 4,287 5,242
Other 19,439 19,982
-------- --------
Total 78,234 100,059
-------- --------
Deferred Credits:
Accumulated deferred income taxes 87,639 89,246
Accumulated deferred investment tax credits 9,092 9,251
Other 35,504 39,054
-------- --------
Total 132,235 137,551
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $584,509 $592,894
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
Operating Revenues $151,664 $147,847
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 12,335 11,987
Nuclear refueling outage expenses 2,281 -
Other operation and maintenance 25,099 21,540
Depreciation, amortization, and decommissioning 25,398 22,969
Taxes other than income taxes 7,174 6,873
Income taxes 19,305 20,136
-------- --------
Total 91,592 83,505
-------- --------
Operating Income 60,072 64,342
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 480 322
Miscellaneous - net 725 1,837
Income taxes 551 (1,720)
-------- --------
Total 1,756 439
-------- --------
Interest Charges:
Interest on long-term debt 37,434 42,862
Other interest - net 2,333 750
Allowance for borrowed funds used
during construction (504) (380)
-------- --------
Total 39,263 43,232
-------- --------
Net Income $22,565 $21,549
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $22,565 $21,549
Noncash items included in net income:
Depreciation, amortization, and decommissioning 25,398 22,969
Deferred income taxes and investment tax credits (5,501) 5,705
Allowance for equity funds used during construction (480) (322)
Changes in working capital:
Receivables (95,228) (6,556)
Accounts payable 39,786 1,887
Taxes accrued 12,510 (13,678)
Interest accrued (2,660) (1,751)
Other working capital accounts (23,839) (3,866)
Recoverable income taxes - 18,733
Decommissioning trust contributions (1,304) (1,241)
Other 2,574 9,970
-------- --------
Net cash flow provided by (used in) operating activities (26,179) 53,399
-------- --------
Investing Activities:
Construction expenditures (7,734) (2,254)
Allowance for equity funds used during construction 480 322
-------- --------
Net cash flow used in investing activities (7,254) (1,932)
-------- --------
Financing Activities:
Premium and expenses paid on refinancing sale/leaseback bonds - (47,602)
Common stock dividends paid - (57,800)
-------- --------
Net cash flow used in financing activities - (105,402)
-------- --------
Net decrease in cash and cash equivalents (33,433) (53,935)
Cash and cash equivalents at beginning of period 89,703 196,132
-------- --------
Cash and cash equivalents at end of period $56,270 $142,197
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $40,903 $42,561
Income taxes $1,125 ($3,278)
Noncash investing and financing activities:
Capital lease obligations incurred $27,653 -
Change in unrealized appreciation/depreciation of
decommissioning trust assets $1,685 $938
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $2,939,364 $2,939,384
Electric plant under lease 439,375 439,378
Construction work in progress 54,278 46,547
Nuclear fuel under capital lease 66,000 46,688
Nuclear fuel 24,535 26,360
---------- ----------
Total 3,523,552 3,498,357
Less - accumulated depreciation 776,304 751,717
---------- ----------
Utility plant - net 2,747,248 2,746,640
---------- ----------
Other Investments:
Decommissioning trust fund 33,810 30,359
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 422 -
Temporary cash investments - at cost,
which approximates market:
Associated companies 8,395 5,489
Other 47,453 84,214
---------- ----------
Total cash and cash equivalents 56,270 89,703
Accounts receivable:
Associated companies 103,964 7,450
Other 2,126 3,412
Materials and supplies - at average cost 73,469 71,991
Prepayments and other 9,811 5,429
---------- ----------
Total 245,640 177,985
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 388,484 389,264
Unamortized loss on reacquired debt 53,507 54,577
Other regulatory assets 198,191 199,080
Other 15,153 15,454
---------- ----------
Total 655,335 658,375
---------- ----------
TOTAL $3,682,033 $3,613,359
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
<CAPTION>
1995 1994
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares in 1995 and 1994 $789,350 $789,350
Paid-in capital 7 7
Retained earnings 108,246 85,681
---------- ----------
Total common shareholder's equity 897,603 875,038
Long-term debt 1,438,511 1,438,305
---------- ----------
Total 2,336,114 2,313,343
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 38,000 18,688
Other 14,342 14,342
---------- ----------
Total 52,342 33,030
---------- ----------
Current Liabilities:
Currently maturing long-term debt 105,000 105,000
Accounts payable:
Associated companies 22,066 32,272
Other 73,196 23,204
Taxes accrued 47,892 35,382
Interest accrued 38,136 40,796
Obligations under capital leases 28,000 28,000
Other 1,815 19,794
---------- ----------
Total 316,105 284,448
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 740,266 746,502
Accumulated deferred investment tax credits 109,715 110,584
FERC Settlement - refund obligation 59,544 60,388
Other 67,947 65,064
---------- ----------
Total 977,472 982,538
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,682,033 $3,613,359
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
ARKANSAS POWER & LIGHT COMPANY
GULF STATES UTILITIES COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Cajun - River Bend
Entergy Corporation and GSU
GSU has significant business relationships with Cajun
Electric Power Cooperative, Inc. (Cajun), including co-ownership
of River Bend and Big Cajun 2, Unit 3. GSU and Cajun own 70% and
30% undivided interests in River Bend, respectively, and 42% and
58% undivided interests in Big Cajun 2, Unit 3, respectively.
In June 1989, Cajun filed a civil action against GSU in the
United States District Court for the Middle District of Louisiana
(District Court). Cajun'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.
A trial on the portion of the suit by Cajun to rescind the
Operating Agreement which began in April 1994 has been completed,
and a ruling from the District Court is pending. No assurance
can be given as to the outcome of this litigation. 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 would probably have to seek relief from its
creditors under the United States Bankruptcy Code (Bankruptcy
Code).
Since 1992 Cajun has not paid its full share of capital
costs and operating and maintenance expenses and other costs for
repairs and improvements to River Bend. In addition, certain
costs and expenses paid by Cajun were paid under protest. These
actions were taken by Cajun based on its contention that River
Bend's operating and maintenance expenses were excessive and
because the RUS allegedly would not permit Cajun to pay such
costs. Cajun has continued to fund its share of the nuclear
decommissioning trust payments for River Bend, as well as
insurance and safety-related expenses. Cajun's unpaid portion of
River Bend operating (including nuclear fuel) and maintenance
expenses and capital costs for the first three months of 1995 was
approximately $17.4 million. Cajun's total share of River Bend
annual operating (including nuclear fuel) and maintenance
expenses and capital costs was approximately $76.1 million in
1994.
In view of Cajun's failure to fund its share of River Bend-
related operating, maintenance and capital costs, GSU has (i)
credited GSU's share of expenses for Big Cajun 2, Unit 3 against
amounts due from Cajun to GSU and (ii) sought to market Cajun's
share of the power from River Bend and apply the proceeds to the
amounts due from Cajun to GSU. As a result, on November 2, 1994,
Cajun discontinued supplying GSU with its share of energy from
Big Cajun 2, Unit 3. GSU requested an order from the District
Court requiring Cajun to supply GSU with this energy, and
allowing GSU to credit amounts due to Cajun for Big Cajun 2, Unit
3 energy against amounts Cajun owed to GSU for River Bend. In
December 1994, the District Court ordered Cajun to supply GSU
with its share of energy from Big Cajun 2, Unit 3 and ordered GSU
to make payments for its share of Big Cajun 2, Unit 3 expenses to
the registry of the District Court.
On December 14, 1994, the LPSC ordered Cajun to decrease the
rates charged to its member distribution cooperatives by
approximately $30 million per year. The rate decrease is
associated with the LPSC's prior finding of imprudence in Cajun's
participation in River Bend.
On December 21, 1994, Cajun filed a petition in the United
States Bankruptcy Court for the Middle District of Louisiana
seeking bankruptcy relief under Chapter 11 of the Bankruptcy
Code. Cajun's bankruptcy could have a material adverse effect on
GSU, including the possibility of an NRC action with respect to
the operation of River Bend. GSU is taking steps to protect its
interests and its claims against Cajun arising from the co-
ownership in River Bend and Big Cajun 2, Unit 3. On December 31,
1994, the District Court issued an order lifting an automatic
stay as to certain proceedings, with the result that the December
1994 order of the District Court referred to above, remains in
effect. Cajun filed a Notice of Appeal on January 18, 1995, to
the United States Court of Appeals for the Fifth Circuit seeking
a reversal of the District Court's order. No hearing date has
been set on Cajun's appeal.
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 filed with the District Court. 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.
During the period in which Cajun is not paying its share of
River Bend-related costs, GSU intends to fund all costs necessary
for the safe, continuing operation of the unit. The
responsibilities of Entergy Operations, as the licensed operator
of River Bend, for safely operating and maintaining the unit, are
not affected by Cajun's actions.
The net amount resulting from Cajun's failure to pay
its full share of River Bend-related costs reduced by the
proceeds from the sale of Cajun's share of River Bend power was
$55.7 million as of March 31, 1995, compared with $50.8 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.
Cajun - Transmission Service
Entergy Corporation and GSU
GSU and Cajun are parties to FERC proceedings relating to
transmission service charge disputes. In April 1992, FERC issued
an order. In May 1992, GSU and Cajun filed motions for
rehearings which are pending at FERC. In June 1992, GSU filed a
petition for review in the United States Fifth Circuit Court of
Appeals (Court of Appeals) regarding certain of the issues
decided by FERC. In August 1993, the Court of Appeals rendered
an opinion reversing the FERC order regarding the portion of such
disputes relating to the calculations of certain credits and
equalization charges under GSU's service schedules with Cajun.
The opinion remanded these issues to FERC for further proceedings
consistent with its opinion. In February 1995, FERC clarified its
order, eliminating an issue that GSU believes the Court of
Appeals directed FERC to reconsider. In April 1995, the ALJ
issued a ruling in the remanded portion of the proceeding, and
the FERC is expected to issue a order in July 1995.
GSU interprets the 1992 FERC order and the Court of Appeals'
decision to mean that Cajun would owe GSU approximately $95.2
million as of March 31, 1995. However, due to the elimination of
an issue by FERC in its February 1995 order, approximately $26.7
million of this amount may not be pursued by GSU in the remand
proceedings, and the ALJ's April ruling, while awarding principle
amounts to GSU, denied recovery of a portion of interest of
approximately $8.5 million. GSU further estimates that if it were
to prevail in its May 1992 motion for rehearing, and it prevails
in its positions on remand, Cajun would owe GSU approximately
$132.1 million as of March 31, 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 FERC
does not implement the Court of Appeals' remand as GSU contends
is required, GSU estimates it would owe Cajun approximately $86.2
million as of March 31, 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. GSU and Cajun further agreed that their positions at
FERC would remain unaffected by the $7.3 million payment.
Pending FERC's ruling on the May 1992 motions for rehearing, GSU
has continued to bill Cajun utilizing the historical billing
methodology and has booked underpaid transmission charges,
including interest, in the amount of $167.3 million as of March
31, 1995. This amount is reflected in long-term receivables with
an offsetting reserve in other deferred credits.
Financial Condition
GSU
Although GSU received partial rate relief relating to River
Bend, GSU's financial position was severely strained from 1986 to
1990 by its inability to earn a return on and fully recover its
investment and other costs associated with River Bend. Issues to
be finally resolved in PUCT rate proceedings and appeals thereof,
as discussed in Note 2, combined with the application of
accounting standards, may result in substantial write-offs and
charges that could result in substantial net losses being
reported in 1995, and subsequent periods, with resulting
substantial adverse adjustments to common shareholder's equity.
Future earnings will continue to be adversely affected by the
lack of full recovery and return on the investment and other
costs associated with River Bend.
Nonregulated Investments
Entergy Corporation
As discussed on pages 3 and 4 of the Form 10-K, Entergy
Corporation continues to consider opportunities to expand its
business, including opportunities in overseas power development.
On March 31, 1995, Entergy Corporation, through its subsidiary,
Entergy Power Development Company (EPDC), entered into an
agreement with Enron Power Development Corporation, a subsidiary
of Enron Corporation, to acquire a 20% interest in the Dabhol
Power Project (Project) located in the State of Maharashtra,
India. The Project is a 695 megawatt combined cycle facility
which will burn distillate as its fuel. Entergy Corporation made
an initial investment in the Project of approximately $20.5
million. The total Project is estimated to cost approximately
$920 million. The Project is fully financed and under
construction with commercial operation expected by the end of
1997. At the time of commercial operation EPDC will have
invested approximately $90 million in the Project. In addition
to its investment EPDC has committed to cover its pro rata share
of cost overruns up to approximately $30 million, if they are
incurred.
Capital Requirements and Financing
Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy
See pages 109, 146-148, 189-191, 194, 228-230, 266-268, 299-
301, and 332 of the 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 1995-1997.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
Entergy Corporation, AP&L, GSU, LP&L, and System Energy
See pages 110, 149-150, 194-195, 231-232, and 334-335 of the
Form 10-K for information on nuclear liability, property and
replacement power insurance, and related NRC regulations.
See pages 110-112, 150-151, 195-196, 232-233, and 335-336 of
the Form 10-K for information on the disposal of spent nuclear
fuel, other high-level radioactive waste, and decommissioning
costs associated with ANO, River Bend, Waterford 3, and Grand
Gulf 1.
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 Financial Accounting Standards Board is currently
reviewing the accounting for decommissioning. If current electric
utility industry accounting practices for such decommissioning
are changed, among other things, annual provisions for
decommissioning could increase, the estimated cost for
decommissioning could be recorded as a liability rather than as
accumulated depreciation, and trust fund income from the external
decommissioning trusts could be reported as investment income
rather than as a reduction to decommissioning expense.
ANO Matters
Entergy Corporation and AP&L
See pages 31, 83, 112, and 138 of the Form 10-K for
information on leaks in certain steam generator tubes at ANO 2
that were discovered and repaired during an outage in March 1992.
Further inspections and repairs were conducted at subsequent
refueling and mid-cycle outages in September 1992, May 1993,
April 1994, and January 1995. AP&L's budgeted maintenance
expenditures were adequate to cover the cost of such repairs.
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. Entergy Operations is
taking steps at ANO 2 to reduce the number and severity of future
tube cracks. In addition, Entergy Operations periodically meets
with the NRC to discuss such steps and results of inspections of
the generator tubes, as well as the timing of future inspections.
Additional inspections are planned for the normal refueling
outage scheduled for October 1995.
Environmental Issues
GSU
GSU has been notified by the U. S. Environmental Protection
Agency (EPA) that it has been designated as a potentially
responsible party for the cleanup of certain hazardous waste
disposal sites. GSU is currently negotiating with the EPA and
state authorities regarding the cleanup of some of these sites.
Several class action and other suits have been filed in state and
federal courts seeking relief from GSU and others for damages
caused by the disposal of hazardous waste and for asbestos-
related disease allegedly resulting from exposure on GSU
premises. While the amounts at issue in the cleanup efforts and
suits may be substantial, GSU believes that its results of
operations and financial condition will not be materially
affected by the outcome of the suits.
Through March 31, 1995, GSU has expended $7.5 million
cumulatively on the cleanup. As of March 31, 1995, GSU has a
remaining recorded liability of $20.7 million related to the
cleanup of six sites at which GSU has been designated a
potentially responsible party. See pages 35-36, 39-40, and 196-197
of the Form 10-K for additional discussion of the sites in which
GSU has been designated as a potentially responsible party by the EPA.
LP&L
During 1993, the Louisiana Department of Environmental
Quality issued new rules for solid waste regulation, including
waste water impoundments. LP&L has determined that certain of
its power plant waste water impoundments are affected by these
regulations and has chosen to either upgrade or close them. As
a result, LP&L had a remaining recorded liability in the amount
of $14.2 million at March 31, 1995, for waste water upgrades and
closures to be completed by 1996. Cumulative expenditures
relating to the upgrades and closures of waste water impoundments
are $1.3 million as of March 31, 1995. See pages 37 and 233 of
the Form 10-K for additional discussions of LP&L's waste water
impoundment upgrades and closures.
Waterford 3 Lease Obligations
LP&L
In September 1989, LP&L entered into three substantially
identical but entirely separate transactions for the sale and
leaseback of three undivided portions (aggregating approximately
9.3%) of its 100% ownership interest in Waterford 3. See pages
234-235 of the Form 10-K for further information.
Upon the occurrence of certain events, LP&L may be obligated
to pay amounts sufficient to permit the Owner Participants to
withdraw from the lease transactions, and LP&L may be required to
assume the outstanding bonds issued by the Owner Trustee to
finance, in part, its acquisition of the undivided interests in
Waterford 3. These events would include a failure, at specified
dates, to maintain equity capital of at least 30% of adjusted
capitalization and a fixed charge coverage ratio of at least 1.50
times earnings. As of March 31, 1995, LP&L's total equity
capital was 48.67% of adjusted capitalization, and its fixed
charge coverage ratio was 3.01.
Reimbursement Agreement
System Energy
Under the provisions of the Reimbursement Agreement, as
amended, 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 (as 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 of March 31, 1995, System Energy's
equity approximated 36.38% of its adjusted capitalization, and
its fixed charge coverage ratio was 1.23.
As a result of charges recorded in the fourth quarter of
1994 related to an agreement with FERC settling 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 and
Reimbursement Agreement, until November 30, 1995. (See pages 92-
93 and 327 of the Form 10-K for information on the FERC
Settlement.) System Energy expects that upon expiration of the
waiver period, it will be in compliance with the fixed charge
coverage covenant. Absent a waiver, System Energy's failure to
perform this covenant could cause a draw under and/or early
termination of the letters of credit. If the letters of credit
were not replaced in a timely manner, a default or early
termination of System Energy's leases could result. Draws under
the letters of credit must be repaid by System Energy within 5
days (or in some cases, 90 days) following the date of the
drawing. See page 334 of the 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. The PUCT affirmed that
the ultimate rate treatment of such amounts would be subject to a
future demonstration of the prudence of such costs. GSU and
intervening parties appealed this order (Rate Appeal) and GSU
filed a separate rate case asking that the abeyed River Bend
plant costs be found prudent (Separate Rate Case). Intervening
parties filed suit in a Texas district court to prohibit the
Separate Rate Case. The district court's decision was ultimately
appealed to the Texas Supreme Court, which ruled in 1990 that the
prudence of the purported abeyed costs could not be relitigated
in a separate rate proceeding. The Texas Supreme Court's
decision stated that all issues relating to the merits of the
original PUCT order, including the prudence of all River Bend-
related costs, should be addressed in the Rate Appeal.
In October 1991, the Texas district court in the Rate Appeal
issued an order holding that the PUCT had erred in assuming it
could set aside $1.4 billion of the total costs of River Bend and
consider them in a later proceeding, and that the PUCT had
effectively found that GSU had not met its burden of proof
related to the amounts placed in abeyance. The court ruled that
the Allowed Deferrals should not be included in rate base, and
further held that the PUCT had erred in reducing GSU's deferred
costs by $1.50 for each $1.00 of revenue collected under the
interim rate increases authorized in 1987 and 1988. The court
remanded the case to the PUCT with instructions as to the proper
handling of the Allowed Deferrals. GSU's motion for rehearing
was denied and, in December 1991, GSU filed an appeal of the
October 1991 district court order. The PUCT also appealed the
October 1991 district court order, which served to supersede the
district court's judgment, rendering it unenforceable under Texas
law.
In August 1994, the Texas Third District Court of Appeals
(the Appellate Court) affirmed the district court's decision that
there was substantial evidence to support the PUCT's 1988
decision not to include the abeyed construction costs in GSU's
rate base. While acknowledging that the PUCT had exceeded its
authority when it deferred a decision on the inclusion of those
costs in rate base in order to allow GSU a further opportunity to
demonstrate the prudence of those costs in a subsequent
proceeding, the Appellate Court found that GSU had suffered no
harm or lack of due process as a result of the PUCT's error.
Accordingly, the Appellate Court held that the PUCT's action had
the effect of disallowing the company-wide $1.4 billion of River
Bend construction costs for ratemaking purposes. In its August
1994 opinion, the Appellate Court also held that GSU's deferred
operating and maintenance costs associated with the allowed
portion of River Bend should be included in rate base and that
GSU's deferred River Bend carrying costs included in the Allowed
Deferrals should also be included in rate base. The Appellate
Court's August 1994 opinion affirmed the PUCT's original order in
this case.
The Appellate Court's August 1994 opinion was entered by two
judges, with a third judge dissenting. The dissenting opinion
stated that the result of the majority opinion was, among other
things, to deprive GSU of due process at the PUCT because the
PUCT had never made a finding on the $1.4 billion of construction
costs.
In October 1994, the Appellate Court denied GSU's motion for
rehearing on the August 1994 opinion as to the $1.4 billion in
River Bend construction costs and other matters. GSU appealed
the Appellate Court's decision to 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 March 31, 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,
$284 million (both net of depreciation), and $170 million,
respectively. Allowed Deferrals were approximately $87 million,
net of taxes and amortization, as of March 31, 1995. GSU
estimates it has recorded approximately $156 million of revenues
as of March 31, 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 also be lost, and no assurance can
be given as to whether or not refunds of revenue received based
upon such deferred costs previously recorded will be required.
No assurance can be given as to the timing or outcome of the
remands or appeals described above. GSU has made no write-offs or
reserves for the River Bend-related costs. Management believes,
based on advice from Clark, Thomas & Winters, a Professional
Corporation, legal counsel of record in the Rate Appeal, that it
is reasonably possible that the case will be remanded to the
PUCT, and the PUCT will be allowed to rule on the prudence of the
abeyed River Bend plant costs. Rate Caps imposed by the PUCT's
regulatory approval of the Merger could result in GSU's inability
to use the full amount of a favorable decision to immediately
increase rates; however, a favorable decision could permit some
increases and/or limit or prevent decreases during the period the
Rate Caps are in effect. 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 March 31, 1995, a net of tax write-
off of up to $297 million could be required based on an ultimate
adverse ruling by the PUCT on the abeyed and disallowed costs.
In prior proceedings, the PUCT has held that the original
cost of nuclear power plants will be included in rates to the
extent those costs were prudently incurred. Based upon these
decisions, management believes that its River Bend construction
costs were prudently incurred and that it is reasonably possible
that it will recover in rate base, or otherwise through means
such as a deregulated asset plan, all or substantially all of the
abeyed River Bend plant costs. However, management also
recognizes that it is reasonably possible that not all of the
abeyed River Bend plant costs may ultimately be recovered.
As part of its direct case in the Separate Rate Case, GSU
filed a cost reconciliation study prepared by Sandlin Associates,
management consultants with expertise in the cost analysis of
nuclear power plants, which supports the reasonableness of the
River Bend costs held in abeyance by the PUCT. This study
determined that approximately 82% of the River Bend cost increase
above the amount included by the PUCT in rate base was a result
of changes in federal nuclear safety requirements and provided
other support for the remainder of the abeyed amounts.
There have been four other rate proceedings in Texas
involving nuclear power plants. Disallowed investment in the
plants ranged from 0% to 15%. Each case was unique, and the
disallowances in each were made on a case-by-case basis for
different reasons. Appeals of two of these PUCT decisions are
currently pending.
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. Sandlin Associates' analysis which supports the prudence
of substantially all of the abeyed construction costs;
3. Historical inclusion by the PUCT of prudent construction
costs in rate base; and
4. The analysis of GSU's internal legal staff, which has
considerable experience in Texas rate case litigation.
Additionally, management believes, based on advice from
Clark, Thomas & Winters, a Professional Corporation, legal
counsel of record in the Rate Appeal, that it is reasonably
possible that the Allowed Deferrals will continue to be recovered
in rates. Management also believes, based on advice from Clark,
Thomas & Winters, a Professional Corporation, legal counsel of
record in the Rate Appeal, that it is reasonably possible that
the deferred costs related to the $1.4 billion of abeyed River
Bend plant costs will be recovered in rates to the extent that
the $1.4 billion of abeyed River Bend plant is recovered.
However, a net of tax write-off of the $170 million of deferred
costs related to the $1.4 billion of abeyed River Bend plant
costs would be required if they are not allowed to be recovered
in rates.
The adoption of SFAS No.121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," (SFAS 121) which will become effective January 1, 1996, will
require the write-off of the $170 million of rate deferrals
discussed above, unless there are favorable regulatory or court
actions related to these costs prior to adoption. The standard
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
In March 1994, the Texas Office of Public Utility Counsel
and certain cities served by GSU instituted an investigation of
the reasonableness of GSU's rates. In June 1994, GSU provided
the cities with information that supported the current rate
level. In September 1994, various cities adopted ordinances
directing GSU to reduce its Texas retail rates by $45.9 million.
GSU appealed the cities' ordinances to the PUCT for a
determination of reasonableness of GSU's rates.
Hearings were held in December 1994 and on March 20, 1995
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. As a
result, in 1994 GSU recorded a $57 million reserve for rate
refund and a $12.8 million reserve for franchise taxes to be
refunded. In the first quarter of 1995, GSU recorded an
additional reserve for rate refund of approximately $9.8 million.
The rate reduction is being appealed and no assurance can be
given as to the timing or outcome of the appeal.
LPSC Rate Review
Entergy Corporation, GSU, and LP&L
In May 1994, GSU made the first required post-Merger
earnings analysis filing with the LPSC. On December 14, 1994,
the LPSC ordered a $12.7 million annual rate reduction for GSU
effective January 1995. The rate order included, among other
things, a reduction in GSU's Louisiana jurisdictional authorized
return on equity from 12.75% to 10.95% and the amortization for
the benefit of the customers of $8.3 million of previously
deferred unbilled revenue, representing one-half of the total
resulting from a change in accounting for unbilled revenue. In
December 1994, GSU received a preliminary injunction from the
19th Judicial District Court regarding $8.3 million of the
reduction. On January 1, 1995, GSU reduced rates by $4.4
million. The entire $12.7 million reduction is being appealed
and no assurance can be given as to the timing or outcome of the
appeal.
In August 1994, LP&L filed a performance-based formula rate
plan with the LPSC. The proposed formula rate plan would
continue existing LP&L rates at current levels, while providing
financial incentive to reduce costs and maintain high levels of
customer satisfaction and system reliability. The plan would
allow LP&L the opportunity to earn a higher rate of return if it
improves performance over time. Conversely, if performance
declines, the rate of return LP&L could earn would be lowered.
This provides a financial incentive for LP&L to maintain
continuous improvement in all three performance categories
(customer price, customer satisfaction, and customer
reliability). Under the proposed plan, if LP&L's earnings fall
within a bandwidth around a benchmark rate of return, there would
be no adjustment in rates. If LP&L's earnings are above the
bandwidth, the proposed plan would automatically reduce LP&L's
base rates. Alternatively, if LP&L's earnings are below the
bandwidth, the proposed plan would automatically increase LP&L's
base rates. The reduction or increase in base rates would be an
amount representing 50% of the difference between the earned rate
of return and the nearest limit of the bandwidth. In no event
would the annual adjustment in rates exceed 2% of LP&L's retail
revenues.
Hearings were held on the LP&L proposed performance-based
formula rate plan in March 1995. On April 20, 1995 the LPSC
Staff recommended a $49.4 million reduction in base rates. This
recommended rate reduction included $8.5 million of rates
previously reduced through fuel clause reductions; therefore, the
net effect of recommended reduction is $40.9 million. The LPSC
Staff recommended the approval of LP&L's proposed formula rate
plan with the following modifications. An earnings band would be
established from a 10.4% to a 12% return on equity. If LP&L's
earnings fall within the bandwidth, no adjustment in rates
occurs. If LP&L's earnings are above the 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 the
10.4% return on equity, customers pay 60% of the difference
between the realized return on equity and the 10.4% through
prospective rate increases. The LPSC Staff's recommendation also
included a reduction in LP&L's authorized rate of return from
12.76% to 11.2%. The LPSC is expected to issue a final order in
late May 1995.
Formula Rate Plan
Entergy Corporation and MP&L
Under a formulary incentive rate plan (Formula Rate Plan)
effective March 25, 1994, MP&L's earned rate of return is
calculated automatically every 12 months and compared to and
adjusted against a benchmark rate of return (calculated under a
separate formula within the Formula Rate Plan). The Formula Rate
Plan allows for periodic small adjustments in rates based on a
comparison of earned to benchmark returns and upon certain
performance factors. Pursuant to a stipulation with the MPSC's
Public Utilities Staff, MP&L did not request an adjustment in
rates based on its earned rate of return for the 12-months ended
December 31, 1994.
February 1994 Ice Storm/Rate Rider
Entergy Corporation and MP&L
In early February 1994, an ice storm left more than 221,000
Entergy customers without electric power across the System's four-
state service area. Repair costs totaled approximately $116.2
million, $30.8 million, and $77.2 million for the System, AP&L,
and MP&L, respectively, with $85 million, $18.7 million, and
$64.6 million of these amounts capitalized as plant-related
costs. In September 1994, MPSC approved a stipulation 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, 1995. This
stipulation also states 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.
On April 28, 1995, MP&L filed for a rate increase of $2.9
million to be in effect for a four-year period beginning
September 28, 1995, to recover costs related to the ice storm
that were recorded after April 30, 1994. At the end of the four-
year period, undepreciated ice storm capital costs recorded after
April 30, 1994, will be treated as described above. MP&L's
filing requested recovery of capital costs and deferred operating
and maintenance expenses of approximately $14.2 million and $1
million, respectively. No assurance can be given as to the
outcome of the filing.
LPSC Fuel Cost Review
GSU
In November 1993, the LPSC ordered a review of GSU's fuel
costs for the period October 1988 through September 1991 (Phase
1) based on the number of outages at River Bend and the findings
in the June 1993 PUCT fuel reconciliation case. In July 1994,
the LPSC ruled in the Phase 1 case that GSU should refund
approximately $27 million to its customers. Under the order, a
refund of $13.1 million was made through a billing credit on
August 1994 bills. In August 1994, GSU appealed the remaining
portion of the LPSC-ordered refund to the district court. GSU
has made no reserve for the remaining portion, pending the
outcome of the district court appeal, and no assurance can be
given as to the timing or outcome of the appeal.
On January 18, 1995, GSU met with the special counsel of the
LPSC to discuss the procedural schedule for the next fuel review
(Phase II). The period under investigation was determined to be
from October 1991 to March 1995. Hearings are scheduled to begin
in August 1995.
PUCT Fuel Cost Review
GSU
For information on the PUCT Fuel Cost Review of the period
December 1, 1986 through September 30, 1991, see pages 183-184 of
the Form 10-K.
On January 9, 1995, GSU and various parties reached an
agreement for the reconciliation of over- and under-recovery of
fuel and purchased power expenses for the period October 1, 1991,
through December 31, 1993. In the fourth quarter of 1994, GSU
recorded a reserve of $7.6 million as a result of this
settlement. On April 17, 1995, the PUCT issued a final order
approving the settlement.
NOTE 3. PREFERRED AND COMMON STOCK
Entergy Corporation
Entergy Corporation periodically repurchases shares of its
outstanding common stock either on the open market or through
negotiated purchases or tender offers. Stock repurchases are
made from time to time depending upon market conditions and
authorization of the Entergy Corporation Board of Directors.
During the first quarter of 1995, no shares of common stock were
repurchased.
During the first three months of 1995, Entergy Corporation
issued 337,873 shares of its previously repurchased common stock,
reducing the amount held as treasury stock by $10 million. Entergy
Corporation issued these shares to meet the requirements of its
various stock plans. For further information on Entergy
Corporation's stock plans see pages 103-104 of the Form 10-K.
AP&L
On January 1, 1995, AP&L redeemed, pursuant to sinking fund
requirements, 200,000 shares of its 13.28% Series Preferred
Stock, $25 par value.
GSU
On March 15, 1995, GSU redeemed, pursuant to sinking fund
requirements, 22,500 shares of its Adjustable Rate Series B
Preferred Stock, $100 par value.
LP&L
On February 1, 1995, LP&L redeemed, pursuant to sinking fund
requirements, 300,000 shares of its 12.64% Series Preferred
Stock, $25 par value.
MP&L
On January 1, 1995, MP&L redeemed 70,000 shares of its 9.76%
Series Preferred Stock, $100 par value. On March 1, 1995, MP&L
redeemed 10,000 shares of its 12.00% Series Preferred Stock, $100
par value.
NOPSI
On March 1, 1995, NOPSI redeemed 15,000 shares of its 15.44%
Series Preferred Stock, $100 par value.
NOTE 4. LONG-TERM DEBT
AP&L
On February 1, 1995, AP&L redeemed, pursuant to sinking
fund requirements, $0.4 million of its 8.75% Series First
Mortgage Bonds due 1998.
MP&L
On February 1, 1995, MP&L retired $20 million of its 14.95%
Series Bonds upon maturity. On March 1, 1995, MP&L retired $20
million of its 4.625% Series First Mortgage Bonds upon maturity.
On April 12, 1995, MP&L issued $80 million of 8.80% Series G&R
Bonds due 2005.
NOPSI
On February 1, 1995 NOPSI redeemed $9.2 million of its
13.90% Series G&R Bonds upon maturity. On April 27, 1995, NOPSI
issued $30 million of 8.67% Series G&R Bonds due 2005. On May 1,
1995, NOPSI redeemed, pursuant to sinking fund requirements, $15
million of its 10.95% Series G&R Bonds due 1997.
NOTE 5. RETAINED EARNINGS
On January 27, 1995, Entergy Corporation's Board of
Directors (Board) declared a common stock dividend of 45 cents
per share which was paid on March 1, 1995. In addition, on March
25, 1995, the Board declared a common stock dividend of 45 cents
per share payable on June 1, 1995.
NOTE 6. RESTRUCTURING COSTS
Entergy, AP&L, GSU, LP&L, MP&L, and NOPSI
The restructuring program announced by Entergy in the third
quarter of 1994 included anticipated reductions in the number of
employees and the consolidation of offices and facilities.
Restructuring charges associated with this program recorded in
1994 and the first quarter of 1995 are shown below by company
together with actual termination benefits paid under the program.
Restructuring Restructuring
Liability Additional Liability
Company December 31, Accruals Payments March 31,
1994 1995
(In Millions)
AP&L $12.2 $ 0.6 $(2.6) $10.2
GSU 6.5 1.2 (1.4) 6.3
LP&L 6.8 1.0 (1.7) 6.1
MP&L 6.2 0.3 (0.7) 5.8
NOPSI 3.4 0.5 (0.5) 3.4
----- ----- ----- -----
Total $35.1 $ 3.6 $(6.9) $31.8
===== ===== ===== =====
The restructuring charges shown above primarily included
employee severance costs related to the expected termination of
approximately 2,150 employees. As of March 31, 1995, 1,649
employees have either been terminated or accepted voluntary
separation under the restructuring plan.
Additionally, GSU recorded $23.8 million in 1994 for remaining
severance and augmented retirement benefits related to the
Merger. Actual termination benefits paid under the program
amounted to $4.8 million through March 31, 1995.
NOTE 7. ACCOUNTING ISSUES
New Accounting Standard - In March 1995, the Financial
Accounting Standards Board (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 pages 87-88 of the Form 10-K) being
impaired and provides criteria for recognition and measurement
of asset impairment. Note 2 describes regulatory assets of $170
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 $1.8 billion (pre-tax) are most potentially
affected by the requirements of SFAS 121. Those assets include
AP&L's and LP&L's retained share of Grand Gulf 1, Entergy Power's
investment 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 of the FERC jurisdiction and steam department.
Entergy will continually 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.
Based on current estimates, Entergy anticipates that the net cash
flows will recover the carrying value of the potentially affected
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
Liquidity is important to Entergy due to the capital
intensive nature of its business, which requires large
investments in long-lived assets. While large capital
expenditures for the construction of new generating capacity are
not currently planned, the System does require significant
capital resources for the periodic maturity of certain series of
debt and preferred stock and ongoing construction expenditures.
Net cash flow from operations for Entergy Corporation, the System
operating companies, and System Energy for the three months ended
March 31, 1995 and 1994, was as follows (in millions):
Three Months Three Months
Company Ended 3/31/95 Ended 3/31/94
Entergy Corporation $275.6 $322.4
AP&L $124.8 $ 88.2
GSU $129.9 $ 53.8
LP&L $103.7 $ 99.5
MP&L $ 51.8 $ 46.9
NOPSI $ 18.6 $ 26.5
System Energy $(26.2) $ 53.4
For the three months ended March 31, 1995, AP&L's net cash
flow from operations increased due primarily to reduced billings
from System Energy resulting from a FERC audit settlement in
1994. GSU's net cash flow from operations increased for the
three months ended March 31, 1995, due primarily to reductions in
working capital. NOPSI's net cash flow from operations decreased
for the three months ended March 31, 1995, due primarily to
refunds associated with the 1994 NOPSI Settlement. Refund by
NOPSI of a $25 million reserve established in December 1994 will
be made over a 21-month period ending in September 1996. System
Energy's net cash flow from operations decreased for the three
months ended March 31, 1995, due primarily to refunds to
associated companies resulting from a FERC audit settlement in
1994.
In the first three 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 reduce costs, as well as
collections under the rate phase-in plans, which 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.
Productive investment of excess funds is necessary to
enhance the long-term value of Entergy Corporation's common
stock. Entergy Corporation will consider investing up to
approximately $150 million per year for the next several years in
nonregulated business opportunities. On March 31, 1995, Entergy
Corporation, through its subsidiary, Entergy Power Development
Company (EPDC), entered into an agreement with Enron Power
Development Corporation, a subsidiary of Enron Corporation, to
acquire a 20% interest in the Dabhol Power Project (Project)
located in the State of Maharashtra, India. The Project is a
695 megawatt combined cycle facility which will burn distillate
as its fuel. Entergy Corporation made an initial investment in
the Project of approximately $20.5 million. The total Project is
estimated to cost approximately $920 million. The Project is
fully financed and under construction with commercial operation
expected by the end of 1997. At the time of commercial operation
EPDC will have invested approximately $90 million in the Project.
In addition to its investment EPDC has committed to cover its
pro rata share of cost overruns up to approximately $30 million,
if they are incurred. See Note 1 and "Significant Factors and
Known Trends - Nonregulated Investments" for additional
information.
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 March 31, 1995, and an
assumed annual interest or dividend rate of 9.25%, each of the
System operating companies and System Energy could have issued
bonds or preferred stock in the following amounts (in millions):
Company Bonds Preferred Stock
AP&L $274 $388
GSU $ - $ -
LP&L $117 $786
MP&L $165 $ 83
NOPSI $ 46 $ 39
System Energy $246 *
* 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. As a result of the charges recorded in
1994, GSU is currently precluded from issuing first mortgage
bonds under its earnings coverage test. However, 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. For
information on the System operating companies' and System
Energy's regulatory authorizations to issue and acquire
securities, see Notes 3 and 4, and pages 102-105, 146-148, 189-
191, 228-230, 266-268, 299-301, and 332 of the Form 10-K.
The System operating companies and System Energy have SEC
authorization to effect short-term borrowings. As of March 31,
1995, GSU has unused lines of credit for short-term borrowings
totaling $5.0 million. See pages 101, 145, 188, 227, 265, 299,
and 331 of the 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 March 31,
1995, the System operating companies, Entergy Services, and
System Fuels had outstanding short-term borrowings from the Money
Pool and/or from banks as follows (in millions):
Company Money Pool Banks
AP&L $ - $34.0
GSU $ - $ -
LP&L $ - $19.2
MP&L $12.9 $29.4
Entergy Services $39.8 $35.0
System Fuels $12.0 $15.0
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 also pays dividends on its
common stock, which aggregated $102 million in the first three
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. During the first three months of 1995, these
common stock dividend payments totaled $96.8 million. Certain
restrictions may limit the amount of these distributions. See
page 106 of the Form 10-K for additional information. GSU did
not make common stock dividend payments to Entergy Corporation in
the first three months of 1995 in anticipation of a potential
rate refund. NOPSI and System Energy did not make common stock
dividend payments to Entergy Corporation in the first three
months of 1995 due to refunds made to customers pursuant to the
1994 NOPSI Settlement and a FERC audit settlement, respectively.
Entergy Corporation has a program to repurchase shares of
its outstanding common stock. The timing and amount of such
repurchases depend upon market conditions and Board
authorization. See Note 3 for additional information.
Entergy Corporation has requested, but not yet received, SEC
authorization for a $300 million bank line of credit, the
proceeds of which are expected to be used for common stock
repurchases, investments in nonregulated and nonutility
businesses, and other activities. Certain parties have
intervened in this proceeding, and the application is pending.
Increasing competition in the utility industry brings an
increased need to stabilize costs and reduce retail rates. See
"Significant Factors and Known Trends - Competition" for
additional information on rate issues affecting the System.
On March 20, 1995, the PUCT ordered GSU to implement 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. See Note 2
for additional information.
In December 1994, NOPSI agreed to reduce electric and gas
rates and issue credits and refunds to customers pursuant to the
1994 NOPSI Settlement. Under the terms of the settlement, NOPSI
implemented rate reductions totaling $44.9 million effective
January 1, 1995. NOPSI will implement an additional $4.4 million
rate reduction on October 31, 1995. In addition, the 1994 NOPSI
Settlement required NOPSI to credit its customers $25 million
over a 21-month period beginning January 1, 1995, in order to
resolve disputes with the Council regarding the interpretation of
the 1991 NOPSI Settlement.
Entergy Corporation and GSU
See Notes 1 and 2 regarding litigation with Cajun and River
Bend rate appeals. Write-offs or charges resulting from adverse
rulings in these matters could result in additional 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 continue
to pay dividends and obtain financing, which could in turn affect
GSU's liquidity.
Entergy Corporation and System Energy
Under a 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), and
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 thereto, subject to the receipt of
consents of certain creditors.
<PAGE>
RESULTS OF OPERATIONS
ENTERGY
Net Income
Consolidated net income decreased in the first quarter of
1995 due primarily to decreased revenues related to rate
reserves/reductions at GSU, MP&L, and NOPSI, certain restructing
costs, and decreased miscellaneous income - net.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1995 and 1994 are
discussed under "Revenues and Sales," "Expenses," and "Other"
below.
Revenues and Sales
Detailed below are Entergy's operating revenues by source
and KWH sales.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 441.5 $ 476.0 $(34.5) (7)
Commercial 324.7 339.1 (14.4) (4)
Industrial 414.1 436.1 (22.0) (5)
Governmental 35.1 38.9 (3.8) (10)
-------- -------- ------
Total retail 1,215.4 1,290.1 (74.7) (6)
Sales for resale 74.5 69.4 5.1 7
Other 4.9 (19.3) 24.2 125
-------- -------- ------
Total $1,294.8 $1,340.2 $(45.4) (3)
======== ======== ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 5,860 6,062 (202) (3)
Commercial 4,473 4,406 67 2
Industrial 10,035 9,728 307 3
Governmental 539 525 14 3
------ ------ ----
Total retail 20,907 20,721 186 1
Sales for resale 2,400 1,736 664 38
------ ------ ----
Total 23,307 22,457 850 4
====== ====== ====
Electric operating revenues decreased $45.4 million in the
first quarter of 1995 due primarily to milder than normal winter
weather as compared to 1994, decreased fuel adjustment revenues,
and rate reserves/reductions at GSU, MP&L, and NOPSI, partially
offset by increased sales for resale to nonassociated utilities.
The changes in electric operating revenue for the three
months ended March 31, 1995 are as follows:
Increase/
Description (Decrease)
(In Millions)
Change in base rates $(28.6)
Rate riders (7.4)
Fuel cost recovery (46.0)
Sales volume/weather 0.7
Other revenue (including unbilled) 16.5
1994 Provision for revenue reduction (NOPSI) 14.3
Sales for resale 5.1
------
Total $(47.8)
======
Gas operating revenues decreased $13.4 million in the first
quarter of 1995 due primarily to milder than normal winter
weather, decreased fuel adjustment revenues as compared to 1994
and gas rate reductions agreed to in the 1994 NOPSI Settlement.
Expenses
Fuel for electric generation and fuel-related expenses
decreased $26.0 million in the first quarter of 1995 due
primarily to lower fuel costs.
Purchased power decreased $43.3 million in the first quarter
of 1995 due primarily to decreased power purchases from
nonassociated utilities due to changes in generation requirements
for the System operating companies.
Income taxes decreased $4.6 million in the first quarter of
1995 due primarily to lower pretax income.
Other
Miscellaneous income - net decreased $7.2 million in the
first quarter of 1995 due primarily to increased losses by
Entergy Corporation's nonregulated business investments. The
increased loss stems from expansion of domestic energy services
operations and international power development activities.
AP&L
Net Income
Net income decreased in the first quarter of 1995 due
primarily to decreased sales for resale revenues and increased
other operations and maintenance expenses.
Significant factors affecting the results of operations and
causing variances between the first quarter of 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.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 124.2 $ 123.3 $ 0.9 1
Commercial 68.3 66.3 2.0 3
Industrial 77.6 72.8 4.8 7
Governmental 4.0 4.1 (0.1) (2)
------- ------- ------
Total retail 274.1 266.5 7.6 3
Sales for resale:
Associated companies 29.1 66.6 (37.5) (56)
Non-associated companies 38.6 44.3 (5.7) (13)
Other (2.2) (6.3) 4.1 65
------- ------- ------
Total $ 339.6 $ 371.1 $(31.5) (8)
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,427 1,438 (11) (1)
Commercial 947 931 16 2
Industrial 1,439 1,364 75 5
Governmental 53 58 (5) (8)
----- ----- ------
Total retail 3,866 3,791 75 2
Sales for resale:
Associated companies 1,359 3,250 (1,891) (58)
Non-associated companies 873 1,204 (331) (27)
----- ----- ------
Total 6,098 8,245 (2,147) (26)
===== ===== ======
Electric operating revenues decreased in the first quarter
of 1995 primarily due to lower sales for resale to associated
companies caused by changes in generation availability and
requirements among the System operating companies.
The changes in electric operating revenue for the three
months ended March 31, 1995 are as follows:
Increase/
Description (Decrease)
(In Millions)
Change in base rates $ 1.0
Rate riders 0.3
Fuel cost recovery 4.2
Sales volume/weather 2.1
Other revenue (including unbilled) 4.1
Sales for resale (43.2)
------
Total $(31.5)
======
Expenses
Operating expenses decreased in the first quarter of 1995
primarily due to lower fuel and fuel-related expenses and
purchased power expenses partially offset by an increase in other
operation and maintenance expenses. Fuel and purchased power
expenses decreased due to the lower sales for resale to
associated companies as noted in "Revenues and Sales" above. The
increase in other operation and maintenance expenses is primarily
the result of additional work being performed and use of
materials during ANO 1's refueling outage which began in mid-
February 1995 and lasted through the end of the quarter. In
addition ANO 2 experienced a 30 day mid-cycle outage during the
first quarter of 1995 which also required additional work and
materials. See Note 1 for an additional discussion of ANO 2's
mid-cycle outage.
GSU
Net Income
Net income decreased in the first quarter of 1995 due
primarily to reduced base revenues resulting from rate reductions
ordered by the PUCT in September 1994 and March 1995, partially
offset by increased energy sales.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1995 and 1994 are
discussed under "Revenues and Sales" and "Expenses" below.
Revenue and Sales
See table below for information on GSU's operating revenues
by source and KWH sales.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Department
Operating revenues:
Residential $ 116.5 $ 123.8 $ (7.3) (6)
Commercial 92.3 94.7 (2.4) (3)
Industrial 142.3 153.0 (10.7) (7)
Governmental 6.2 6.3 (0.1) (2)
------- ------- ------
Total retail 357.3 377.8 (20.5) (5)
Sales for resale:
Associated companies 10.2 9.3 0.9 10
Non-associated companies 14.8 9.1 5.7 63
Other (3.5) 5.9 (9.4) (159)
------- ------- ------
Total Electric Department $ 378.8 $ 402.1 $(23.3) (6)
======= ======= ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,561 1,601 (40) (2)
Commercial 1,342 1,307 35 3
Industrial 3,670 3,575 95 3
Governmental 88 74 14 19
----- ----- ---
Total retail 6,661 6,557 104 2
Sales for resale:
Associated companies 501 398 103 26
Non-associated companies 473 143 330 231
----- ----- ---
Total Electric Department 7,635 7,098 537 8
Steam Department 397 410 (13) (3)
----- ----- ---
Total 8,032 7,508 524 7
===== ===== ===
Operating revenues decreased in the first quarter of 1995
due primarily to reduced base revenues resulting from rate
reductions ordered by the PUCT in September 1994 and March 1995
(see Note 2 for further discussion) in addition to reduced fuel
revenue. These decreases were partially offset by increased
energy sales. Energy sales increased primarily due to increased
sales for resale as a result of GSU's participation in the System
power pool and non-weather related growth in the non-residential
markets.
The changes in electric operating revenue for the three months
ended March 31, 1995 are as follows:
Increase/
Description (Decrease)
(In Millions)
Change in base rates $(18.7)
Fuel cost recovery (14.1)
Sales volume/weather 2.6
Other revenue (including unbilled) 0.3
Sales for resale 6.6
------
Total $(23.3)
======
Expenses
Operating expenses decreased primarily due to lower
purchased power expenses. Purchased power decreased in the first
quarter of 1995 due primarily to changes in generation
availability and requirements among the System operating
companies.
LP&L
Net Income
Net income remained relatively unchanged in the first
quarter of 1995. This is due primarily to the completion in the
second quarter of 1994 of the amortization of the proceeds
resulting from litigation with a gas supplier, partially offset
by increased sales for resale to non-associated utilities.
Significant factors affecting the results of operations and
causing variances between the first quarter of 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.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 111.9 $124.9 $(13.0) (10)
Commercial 76.0 80.8 (4.8) (6)
Industrial 148.9 159.9 (11.0) (7)
Governmental 7.7 7.9 (0.2) (3)
------- ------ ------
Total retail 344.5 373.5 (29.0) (8)
Sales for resale:
Associated companies 0.2 0.1 0.1 100
Non-associated companies 10.0 6.8 3.2 47
Other (1.7) 3.4 (5.1) (150)
------- ------ ------
Total $ 353.0 $383.8 $(30.8) (8)
======= ====== ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 1,587 1,680 (93) (6)
Commercial 1,019 1,028 (9) (1)
Industrial 4,079 3,977 102 3
Governmental 110 107 3 3
----- ----- ---
Total retail 6,795 6,792 3 -
Sales for resale:
Associated companies 10 3 7 233
Non-associated companies 214 125 89 71
----- ----- ---
Total 7,019 6,920 99 1
===== ===== ===
Electric operating revenues were lower in the first
quarter of 1995 primarily due to lower fuel adjustment revenues,
which do not affect net income. In addition, completion of the
amortization of the proceeds resulting from litigation with a gas
supplier in the second quarter of 1994 resulted in decreased
other operating revenues for the first quarter of 1995, partially
offset by higher sales to non-associated utilities.
The changes in electric operating revenue for the three
months ended March 31, 1995 are as follows:
Increase/
Description (Decrease)
(In Millions)
Change in base rates $ 0.8
Fuel cost recovery (26.3)
Sales volume/weather (3.4)
Other revenue (including unbilled) (5.2)
Sales for resale 3.3
------
Total $(30.8)
======
Expenses
Operating expenses decreased for the first quarter of 1995
primarily due to lower fuel and purchased power expenses. Fuel
for electric generation and fuel-related expenses decreased
primarily due to a lower per unit cost for gas fuel partially
offset by an increase in gas fired generation. The decrease in
purchased power expenses is primarily due to changes in
generation availability and requirements among the System
operating companies.
MP&L
Net Income
Net income increased in the first quarter of 1995 due
primarily to a decrease in other operation and maintenance
expenses and an increase in sales for resale. These increases
were partially offset by lower retail revenues due to the effects
of the March 1994 rate reduction.
Significant factors affecting the results of operations and
causing variances between the first quarter of 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.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 67.1 $ 76.1 $ (9.0) (12)
Commercial 55.6 58.4 (2.8) (5)
Industrial 40.2 44.1 (3.9) (9)
Governmental 6.5 6.6 (0.1) (2)
------ ------ -----
Total retail 169.4 185.2 (15.8) (9)
Sales for resale:
Associated companies 6.6 5.1 1.5 29
Non-associated companies 4.2 3.0 1.2 40
Other 13.1 (5.9) 19.0 322
------ ------ -----
Total $193.3 $187.4 $ 5.9 3
====== ====== =====
Billed Electric Energy
Sales (Millions of KWH):
Residential 933 976 (43) (4)
Commercial 724 683 41 6
Industrial 723 692 31 4
Governmental 78 77 1 1
----- ----- ---
Total retail 2,458 2,428 30 1
Sales for resale:
Associated companies 159 56 103 184
Non-associated companies 140 76 64 84
----- ----- ---
Total 2,757 2,560 197 8
===== ===== ===
Electric operating revenues increased in the first quarter
of 1995 due to increased sales for resale and other revenues,
partially offset by lower retail revenues. Sales for resale
increased primarily due to changes in generation availability and
requirements among the System operating companies. Other
revenues increased primarily due to Grand Gulf over/under
recovery, which does not affect net income. Retail revenues
decreased primarily due to the effects of the March 1994 rate
reduction.
The changes in electric operating revenue for the three
months ended March 31, 1995 are as follows:
Increase/
Description (Decrease)
(In Millions)
Change in base rates $ (4.9)
Grand Gulf rate rider (7.7)
Fuel cost recovery (4.1)
Sales volume/weather 0.9
Other revenue (including unbilled) 19.0
Sales for resale 2.7
------
Total $ 5.9
======
Expenses
Operating expenses increased primarily due to increased
amortization of rate deferrals and increased income taxes,
partially offset by lower other operation and maintenance
expenses.
Other operation and maintenance expenses decreased primarily
due to increased maintenance incurred at various plant sites
during the first quarter of 1994.
Income taxes increased in the first quarter of 1995 due to a
higher pre-tax income.
The amortization of rate deferrals increased in the first
quarter of 1995 reflecting the fact that MP&L, based on the
Revised Plan, collected more Grand Gulf 1-related costs from its
customers in the first quarter of 1995 than it recovered in the
same period in 1994.
NOPSI
Net Income
Net income increased in the first quarter of 1995 due
primarily to a provision for rate reduction that was recorded in
the first quarter of 1994, partially offset by a permanent rate
reduction that took effect on January 1, 1995.
Significant factors affecting the results of operations and
causing variances between the first quarter of 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.
Three Months Ended Increase/
Description 1995 1994 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 21.8 $ 28.0 $ (6.2) (22)
Commercial 32.5 39.0 (6.5) (17)
Industrial 5.1 6.3 (1.2) (19)
Governmental 10.7 13.9 (3.2) (23)
------ ------ ------
Total retail 70.1 87.2 (17.1) (20)
Sales for resale:
Associated ompanies 1.3 0.1 1.2 *
Non-associated companies 1.9 1.3 0.6 46
Other 4.8 (9.7) 14.5 149
------ ------ ------
Total $ 78.1 $ 78.9 $ (0.8) (1)
====== ====== ======
Billed Electric Energy
Sales (Millions of KWH):
Residential 352 367 (15) (4)
Commercial 440 457 (17) (4)
Industrial 123 119 4 3
Governmental 210 210 - -
----- ----- ---
Total retail 1,125 1,153 (28) (2)
Sales for resale:
Associated companies 66 2 64 *
Non-associated companies 60 27 33 122
----- ----- ---
Total 1,251 1,182 69 6
===== ===== ===
* Increase greater than 200 percent.
Electric operating revenues decreased in the first quarter
due primarily to a decrease in retail base revenues and lower
fuel adjustment revenues. Retail base revenues decreased as a
result of the rate reduction in accordance with the 1994 NOPSI
Settlement as well as lower sales of energy due to warmer than
normal winter weather. These decreases were partially offset by a
reserve for revenue reduction recorded in the first quarter of
1994 and increased sales for resale to associated companies.
The changes in electric operating revenue for the three
months ended March 31, 1995 are as follows:
Increase/
Description (Decrease)
(In Millions)
Change in base rates $ (6.8)
Fuel cost recovery (5.7)
Sales volume/weather (1.5)
Other revenue (including unbilled) (2.9)
1994 Provision for revenue reduction 14.3
Sales for resale 1.8
------
Total $ (0.8)
======
For the first quarter of 1995, gas operating revenues decreased
due primarily to decreased gas sales in the first quarter as a
result of a warmer winter than the prior year, the rate reduction
agreed to in the 1994 NOPSI Settlement, and a lower unit puchase
price for gas purchased for resale.
Expenses
Fuel for electric generation and fuel-related expenses
decreased in the first quarter of 1995 due primarily to a
decrease in gas purchased for resale. Gas purchased for resale
decreased for the first quarter of 1995 due primarily to
decreased gas sales and a lower unit purchase price.
Purchased power expenses decreased in the first quarter of
1995 due primarily to changes in generation requirements among
the System operating companies and lower costs.
Income taxes increased in the first quarter of 1995 due
primarily to higher pre-tax income.
The decrease in the amortization of rate deferrals in the
first quarter of 1995 is primarily a result of reduced over-
recovery of Grand Gulf-1 related costs in 1995 compared to 1994.
SYSTEM ENERGY
Net Income
Net income increased in the first quarter of 1995 due
primarily to increased revenues and a reduction in interest
expense, partially offset by an increase in operation and
maintenance expenses, depreciation, amortization and decommissioning
expense.
Significant factors affecting the results of operations and
causing variances between the first quarter 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. The capital
costs are computed by allowing a return on System Energy's common
equity funds allocable to its net investment in Grand Gulf 1 and
adding to such amount System Energy's effective interest cost for
its debt allocable to its investment in Grand Gulf 1.
Operating revenues increased in the first quarter of 1995
due primarily to increased expenses in connection with a Grand
Gulf 1 refueling outage and higher depreciation, amortization,
and decommissioning expense offset by a lower return on System
Energy's decreasing investment in Grand Gulf 1 (caused by
depreciation of the unit).
Expenses
Operation and maintenance expenses increased in the first
quarter of 1995 principally as a result of a refueling outage
which began April 15, 1995.
Depreciation, amortization, and decommissioning expense
increased in the first quarter of 1995 due primarily to an
increase of $2 million in amortization expense as a result of the
reclassification of $81 million of Grand Gulf costs in the
November 1994 FERC Settlement.
Interest expense decreased in the first quarter of 1995 due
primarily to the retirement and refinancing of high-cost long-
term debt.
<PAGE>
SIGNIFICANT FACTORS AND KNOWN TRENDS
Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI
Competition
The electric utility industry, including Entergy, is
experiencing increased competitive pressures. Entergy is seeking
to become a leading competitor in the changing electric energy
business. Competition presents Entergy with many challenges.
The following have been identified by Entergy as its major
competitive challenges.
Retail and Wholesale Rate Issues
Increasing competition in the utility industry brings an
increased need to stabilize or reduce retail rates. The retail
regulatory philosophy is shifting in some jurisdictions from
traditional cost-of-service regulation to incentive-rate
regulation. Incentive and performance-based rate plans encourage
efficiencies and productivity while permitting utilities and
their customers to share in the results. MP&L implemented an
incentive-rate plan in 1994 and LP&L filed a performance-based
formula rate plan with the LPSC in August 1994 which is pending
final approval from the LPSC. GSU agreed to shared-savings plans
as part of the Merger. Recognizing that many industrial
customers have energy alternatives, Entergy continues to work
with these customers to address their needs. In certain cases,
competitive prices are negotiated, using variable-rate designs.
In a settlement with the Council that was approved on
December 29, 1994, NOPSI agreed to reduce electric and gas rates
and issue credits and refunds to customers. Effective January 1,
1995, NOPSI implemented a $31.8 million permanent reduction in
electric base rates and a $3.1 million permanent reduction in gas
base rates. On January 1, 1995, NOPSI also implemented a $10
million permanent reduction in electric base rates to reflect the
reduced costs related to Grand Gulf 1, to be followed by an
additional $4.4 million rate reduction on October 31, 1995.
These Grand Gulf 1 rate reductions, which are expected to be
largely offset by lower operating costs, may reduce NOPSI's after-
tax net income by approximately $1.4 million per year beginning
November 1, 1995. For additional information, see pages 73, 79,
97, 285, 290, and 295 of the Form 10-K.
LP&L's five-year rate freeze expired in March 1994. In
August 1994, LP&L filed a performance-based formula rate plan
with the LPSC. The proposed formula rate plan would continue
existing LP&L rates at current levels, while providing financial
incentive to reduce costs and maintain high levels of customer
satisfaction and system reliability. Hearings were held on the
LP&L proposed performance-based formula rate plan in March 1995.
On April 20, 1995 the LPSC Staff recommended a $49.4 million
reduction in base rates. This recommended rate reduction
included $8.5 million of rates previously reduced through fuel
clause reductions; therefore, the net effect of the recommended
reduction is $40.9 million. The LPSC Staff recommended the
approval of LP&L's proposed formula rate plan with the following
modifications. An earnings band would be established from a 10.4%
to a 12% return on equity. If LP&L's earnings fall within the
bandwidth, no adjustment in rates occurs. If LP&L's earnings
are above the 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 the 10.4% return on
equity, customers pay 60% of the difference between the realized
return on equity and the 10.4% through prospective rate
increases. The LPSC Staff's recommendation also included a
reduction in LP&L's authorized rate of return from 12.76% to
11.2%. The LPSC is expected to issue a final order in late May
1995.
In connection with the Merger, AP&L and MP&L agreed with
their respective retail regulators not to request any general
retail rate increases that would take effect before November
1998, with certain exceptions. MP&L also agreed that during this
period retail base rates under its formula rate plan would not be
increased above the level of rates in effect on November 1, 1993.
GSU agreed with the LPSC and PUCT to a five-year Rate Cap
(beginning January 1, 1994) on retail electric rates, and to pass
through to retail customers the fuel savings and a certain
percentage of the nonfuel savings created by the Merger. Under
the terms of their respective Merger agreements, the LPSC and
PUCT have reviewed GSU's base rates during the first post-Merger
earnings analysis. The LPSC ordered a $12.7 million annual rate
reduction effective January 1, 1995. GSU received an injunction
delaying implementation of $8.3 million of the reduction and on
January 1, 1995, reduced rates by $4.4 million. The entire $12.7
million is being appealed. On March 20, 1995, 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 is
applied retroactively to March 31, 1994. The rate reduction is
being appealed, and no assurance can be given as to the timing or
outcome of the appeal. See Note 2 for further information.
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, is also evolving. Over a dozen states
have been or are studying the concept of retail competition.
In April 1994, the state of Michigan initiated a five-year
experiment that would allow limited competition among public
utilities. The experiment is currently being challenged in the
courts. In April 1994, the California Public Utilities
Commission (CPUC) proposed to deregulate that state's electric
power industry, starting on January 1, 1996, to allow the largest
industrial customers to select the lowest cost supplier for
electricity service. Under the proposal, by the year 2002,
smaller companies and residential customers in California would
also be able to buy power from any suppliers. The CPUC is
currently reviewing its proposal. The retail market for
electricity is expected to become more competitive with such
moves toward deregulation and with greater focus on customer
choice.
On April 21, 1995, a newly incorporated entity, Crescent City
Utilities, Inc., submitted 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. On April
27, 1995, the Council issued a statement noting that the Council
had played no role in the development of the resolution, that it
had not received the document formally and that no hearings are
scheduled to address its merits. However, the Council later
stated its intention to schedule public hearings to consider
competition in the electric utility service industries and retail
electric industry.
In some areas of the country, municipalities (or comparable
entities) whose residents are served at retail by an investor-
owned utility pursuant to a franchise are exploring the
possibility of establishing new distribution systems in order to
serve retail customers, especially large industrial customers,
that currently receive service from an investor-owned utility.
These options depend on the terms of a utility's franchise as
well as on state law and regulation. In addition, FERC's
authority to order utilities to transmit for a new or expanding
municipal system is limited in certain respects. Where
successful, however, the establishment of a municipal system or
the acquisition by a municipal system of a utility's customers
could result in the inability to recover costs that the utility
has incurred in serving those customers.
In mid-1994, FERC issued a notice of proposed rulemaking
concerning a regulatory framework for dealing with recovery of
stranded costs, such as high-cost nuclear generating units, which
may be incurred by electric utilities as a result of increased
competition. In addition to addressing recovery of stranded
costs related to wholesale service, the proposal requested
comment as to recovery of retail stranded costs in transmission
rates where state regulatory authorities failed to address the
issue or were in conflict. On March 29, 1995, 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 which would also provide guidance on the recovery
of wholesale and retail stranded costs. Under the proposal,
public utilities would be required to file transmission tariffs
for both point-to-point and network services. Model transmission
tariffs were included in the proposal. 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 will be
filed in August 1995, with reply comments in October 1995. The
risk of exposure to stranded costs which may result from
competition in the industry will depend on the extent and timing
of retail competition, the resolution of jurisdictional issues
concerning stranded cost recovery, and the extent to which such
costs are recovered from departing or remaining customers, among
other matters.
Cogeneration projects developed or considered by certain of
GSU's industrial customers over the last several years have
resulted in GSU developing and securing approval of rates lower
than the rates previously approved by the PUCT and LPSC for such
industrial customers. Such rates are designed to retain such
customers, and to compete for and develop new loads, and do not
presently recover GSU's full cost of service. The pricing
agreements at non-full cost of service based rates fully recover
all related costs but provide only a minimal return.
Substantially all of such pricing agreements expire no later than
1997. In the first quarter of 1995, KWH sales to GSU's
industrial customers at non-full cost of service rates, which
make up approximately 25% of GSU's total industrial class,
decreased 2%. Sales to the remaining GSU industrial customers
increased 4%.
In March 1995, LP&L received notice from a large industrial
customer that the customer has decided to proceed with its
proposed cogeneration project for the purpose of fulfilling its
future electric energy needs. The customer will continue to
purchase its energy requirements until its cogeneration
facilities are completed, which is expected to be sometime after
1999. During 1994, this customer represented approximately 8% of
total LP&L industrial sales, and provided $19 million of base
revenue.
In the wholesale rate area, FERC approved in 1992, with
certain modifications, the proposal of AP&L, LP&L, MP&L, NOPSI,
and Entergy Power to sell wholesale power at market-based rates
and to provide to electric utilities "open access" to the
System's transmission system (subject to certain requirements).
GSU was later added to this filing. On October 31, 1994, as
amended on January 25, 1995, Entergy Services filed with FERC
revised transmission tariffs intended to provide access to
transmission service on the same or comparable bases, terms, and
conditions as the System operating companies, and the matter is
pending. Open access and market pricing, once they take effect,
will increase marketing opportunities for the System, but will
also expose the System to the risk of loss of load or reduced
revenues due to competition with alternative suppliers.
In light of the rate issues discussed above, Entergy is
aggressively reducing costs to avoid potential earnings erosions
that might result as well as to compete successfully by becoming
a low-cost producer. In 1994, Entergy announced a restructuring
program related to certain of its operating units. This program
is designed to reduce costs and improve operating efficiencies.
See pages 117, 155, 201, 238, and 306 of the Form 10-K and Note 7
for further information. Also, in response to an increasingly
competitive environment, AP&L, LP&L, MP&L, and NOPSI have
announced intentions to revise their initial least-cost planning
activities, and GSU is continuing to work with the Council and
PUCT regarding integrated resource planning.
The Energy Policy Act of 1992
The Energy Policy Act of 1992 (EP Act) addresses a wide
range of energy issues and is altering the way Entergy and the
rest of the electric utility industry operate. The EP Act
encourages competition and affords utilities the opportunities
and the risks associated with an open and more competitive market
environment. The EP Act creates exemptions from regulation under
the Public Utility Holding Company Act of 1935 (Holding Company
Act) and creates a class of exempt wholesale generators
consisting of utility affiliates and nonutilities that are owners
and operators of facilities for the generation and transmission
of power for sales at wholesale. The EP Act also gives FERC the
authority to order investor-owned utilities, including the System
operating companies, to transmit power and energy to or for
wholesale purchasers and sellers. The law creates the potential
for electric utilities and other power producers to gain
increased access to the transmission systems of other entities to
facilitate wholesale sales. Both the System operating companies
and Entergy Power expect to compete in this market. In addition,
the EP Act allows utilities to own and operate foreign
generation, transmission, and distribution facilities. See
"Nonregulated Investments" below for further information.
Public Utility Holding Company Act of 1935
Entergy Corporation, along with 10 other electric utility
holding companies, recently asked Congress to repeal the Holding
Company Act. The Holding Company Act requires oversight by the
SEC of many business practices and activities of utility holding
companies and their subsidiaries including, among other things,
nonutility activities. Entergy Corporation believes that the
Holding Company Act inhibits its ability to compete in the
evolving electric energy marketplace, and largely duplicates the
oversight activities already performed by FERC and state and
local public service commissions.
Litigation and Regulatory Proceedings
See Note 1 for information on the bankruptcy proceedings of
Cajun and litigation with Cajun concerning Cajun's ownership
interest in River Bend and the related possible material adverse
effects on GSU's financial condition.
See Note 2 for information on the possible material adverse
effects on GSU's financial condition and results of operations
due to $467 million of potential net of tax write-offs, and $156
million in refunds of previously collected revenue. These
possible write-offs and refunds are in connection with
outstanding appeals and remands regarding the River Bend plant
and rate deferrals.
Entergy Corporation and GSU
The acquisition of GSU by Entergy Corporation was the
largest electric utility merger in United States history. Entergy
expects to achieve $850 million in fuel cost savings and $670
million in operation and maintenance expense savings over 10
years as a result of the Merger. Although common shareholders
experienced some dilution in earnings as a result of the Merger,
Entergy believes that the Merger will ultimately be beneficial to
common shareholders in terms of strategic benefits as well as
economies and efficiencies produced. For further information,
see pages 117-118 and 201 of the Form 10-K.
Nonregulated Investments
As discussed on pages 3 and 4 of the Form 10-K, Entergy
Corporation continues to consider opportunities to expand its
utility and utility-related businesses that are not regulated
by state and local regulatory authorities (nonregulated
businesses). Entergy Corporation's investment strategy is to
invest in nonregulated business opportunities that have the
potential to earn a greater rate of return than its regulated
utility operations, and Entergy Corporation may invest up to
approximately $150 million per year for the next several years in
nonregulated businesses. On March 31, 1995, Entergy Corporation,
through its subsidiary, Entergy Power Development Company (EPDC),
entered into an agreement with Enron Power Development
Corporation, a subsidiary of Enron Corporation, to acquire a 20%
interest in the Dabhol Power Project (Project) located in the
State of Maharashtra, India. The Project is a 695 megawatt
combined cycle facility which will burn distillate as its fuel.
Entergy made an initial investment in the Project of
approximately $20.5 million. The total Project is estimated to
cost approximately $920 million. The Project is fully financed
and under construction with commercial operation expected by the
end of 1997. At the time of commercial operations EPDC will have
invested approximately $90 million in the Project. In addition
to its investment EPDC has committed to cover its pro rata share
of cost overruns up to approximately $30 million, if they are
incurred.
As discussed on page 3 of the Form 10-K, Entergy Corporation
requested authorization from the SEC to convert the debt
obligation of Entergy Power into equity. On April 18, 1995,
Entergy Corporation received authorization from the SEC to
consummate this transaction.
In the first three months of 1995, Entergy Corporation's
nonregulated investments reduced consolidated net income by
approximately $11.4 million. As of March 31, 1995, Entergy
Corporation's investment in nonregulated businesses totaled
$446.6 million. In the near term, these investments are unlikely
to have a positive effect on earnings; but management believes
that these investments will contribute to future earnings growth.
ANO Matters
ANO 2 experienced a forced outage for repair of certain
steam generator tubes in March 1992. Further inspections and
repairs were conducted at subsequent refueling and mid-cycle
outages in September 1992, May 1993, April 1994, and January
1995. AP&L's budgeted maintenance expenditures were adequate to
cover the cost of such repairs. Beginning in January 1995, ANO
2's output has been reduced 15 megawatts or 1.6% due to secondary
side fouling, tube plugging, and reduction of primary
temperature. Entergy Operations continues to take steps at ANO 2
to reduce the number and severity of future tube cracks. In
addition, Entergy Operations continues to meet with the NRC to
discuss such steps and results of inspections of the generator
tubes, as well as the timing of future inspections. Additional
inspections are planned for the normal refueling outage scheduled
for October 1995.
Deregulated Portion of River Bend
As of March 31, 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 three months ended March 31, 1995, GSU recorded
revenues resulting from the sale of electricity from the
deregulated asset plan of approximately $7.9 million which,
absent the deregulated asset plan, would not have been realized.
Operation and maintenance expenses, including fuel, were
approximately $8.3 million, and depreciation expense associated
with the deregulated asset plan investment was approximately $4.6
million for the three months ended March 31, 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. Based on current estimates of the factors
discussed above, GSU anticipates that future revenues from the
deregulated asset plan will fully recover all related costs.
Property Tax Exemptions
Exemptions from the payment of Louisiana local property
taxes on Waterford 3 and River Bend, which have been in effect
for 10 years for each of the plants, will expire in December 1995
and December 1996, respectively. LP&L and GSU are working with
taxing authorities to determine the method for calculating the
amount of the property taxes to be paid when the exemptions
expire. LP&L believes that assessed property taxes will be
recovered from its customers through rates. GSU believes that
assessed property taxes allocated to its retail jurisdictions
will be recovered from those customers through rates.
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 cleanup of certain hazardous waste
disposal sites. GSU is currently negotiating with the EPA and
state authorities regarding the cleanup of some of these sites.
Several class action and other suits have been filed in state and
federal courts seeking relief from GSU and others for damages
caused by the disposal of hazardous waste and for asbestos-
related disease allegedly resulting from exposure on GSU
premises. While the amounts at issue in the cleanup efforts and
suits may be substantial, GSU believes that its results of
operations and financial condition will not be materially
affected by the outcome of the suits. Through March 31, 1995, GSU
has expended $7.5 million cumulatively on the cleanup. As of
March 31, 1995, GSU has a remaining recorded liability of $20.7
million related to the cleanup of six sites at which GSU has been
designated a potentially responsible party. See pages 35-36, 39-
40, and 196-197 of the Form 10-K for additional discussion of the
sites in which GSU has been designated as a potentially
responsible party by the EPA.
During 1993, the Louisiana Department of Environmental
Quality issued new rules for solid waste regulation, including
waste water impoundments. LP&L has determined that certain of
its power plant waste water impoundments are affected by these
regulations and has chosen to either upgrade or close them. As a
result, LP&L had a remaining recorded liability in the amount of
$14.2 million at March 31, 1995, for waste water upgrades and
closures to be completed by 1996. Cumulative expenditures
relating to the upgrades and closures of waste water impoundments
are $1.3 million as of March 31, 1995. See pages 37 and 233 of
the Form 10-K for additional discussions of LP&L's waste water
impoundment upgrades and closures.
Accounting Issues
New Accounting Standard - In March 1995, the Financial
Accounting Standards Board (FASB) issued SFAS No. 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
EP Act 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 either 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 March 31, 1995, and for the foreseeable future, the
System's financial statements continue to follow SFAS 71, except
for certain portions of GSU's business (see page 88 of the Form
10-K for additional information).
Accounting for Decommissioning Costs - The staff of the SEC
has questioned certain of the 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
currently reviewing the accounting for decommissioning. If
current electric utility industry accounting practices for such
decommissioning are changed, annual provisions for
decommissioning could increase, the estimated cost for
decommissioning could be recorded as a liability rather than as
accumulated depreciation, and trust fund income from the external
decommissioning trusts could be reported as investment income
rather than as a reduction to decommissioning expense.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
System Agreement
Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI
See page 16 of the Form 10-K for a discussion related to
FERC's proceeding to consider whether the System Agreement
permits certain out-of-service generating units to be included in
reserve equalization calculations under Service Schedule MSS-1 of
that agreement. On March 3, 1995, a FERC ALJ issued an opinion
holding that the practice whereby the System operating companies
included the out-of-service units in the reserve equalization
calculations during the period 1987 through 1993 was not
permitted by Service Schedule MSS-1 and, therefore, constituted a
violation of the System Agreement. However, the ALJ found that
the violation was in good faith and had benefited the customers
of the System as a whole. Accordingly, the ALJ determined
that no retroactive refunds by any of the System operating
companies should be ordered. The ALJ also held that the System
Agreement should be amended to allow out-of-service units to be
included in reserve equalization, as proposed by the Offer of
Settlement filed on February 16, 1994.
The ALJ's order is subject to review by the FERC. If the
FERC concurs with the finding that the System Agreement was
violated, it would have the discretion, notwithstanding the ALJ's
recommendation, to order that refunds be made. If that were to
occur, certain System operating companies might be required to
refund some or all of the amount by which they were underbilled
pursuant to the System Agreement as a result of the inclusion of
the out-of-service units in the reserve equalization formula.
The System operating companies cannot determine at this time
whether they would be authorized to recover through retail rates
any amounts associated with refunds that might be ordered by the
FERC in this proceeding. Briefs on exceptions to the ALJ's
initial decision were filed on April 3, 1995 by Entergy Services,
the LPSC, the MPSC, the Mississippi Attorney General, FERC staff
and other parties. Briefs opposing exceptions were filed on
April 24, 1995.
See page 16-17 of the Form 10-K for a discussion of the
LPSC's complaint filed with FERC alleging that the System
Agreement results in unjust and unreasonable rates. On April 24,
1995, Entergy filed a response to the LPSC's complaint.
Open Access Transmission
Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI
See page 17 of the Form 10-K for a discussion of various
petitions filed with D.C. Circuit related to FERC's 1992 orders
regarding open access transmission and the sale of wholesale
power at market-based rates. On March 29, 1995, FERC issued a
supplemental notice of proposed rulemaking which would require
public utilities to provide non-discriminatory open access
transmission service to wholesale customers, and which would also
provide guidance on the recovery of wholesale and retail stranded
costs. Under the proposal, public utilities would be
required to file transmission tariffs for both point-to-point and
network services. Model transmission tariffs were included in
the proposal. 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 will be filed in August 1995,
with reply comments in October 1995.
Merger-Related Proceedings
Entergy Corporation and GSU
See page 31 of the Form 10-K 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 NRC issued license amendments for River Bend. A
hearing in the proceeding before the ASLB was scheduled to begin
May 9, 1995. On April 11, 1995, on motion of all the parties to
the proceeding, the ASLB issued an Order revising the hearing
schedule. Pursuant to this new Order, the hearing will begin no
earlier than 81 days after the ASLB's ruling on GSU's Motion for
Summary Disposition, which is still pending. See pages 38-39 of
the Form 10-K for information regarding other merger-related
suits.
Cajun-Transmission Service
Entergy Corporation and GSU
See Note 1 and also pages 108 and 193-194 of the Form 10-K
for a discussion of FERC proceedings relating to GSU and Cajun
transmission service charge disputes. In April 1995, the ALJ
issued a ruling in the remanded portion of the proceeding, and
the FERC is expected to issue an order in July 1995.
Flowage Easements Suits
AP&L and Entergy Services
See page 39 of the Form 10-K for a discussion of lawsuits
filed against AP&L and Entergy Services by numerous plaintiffs in
connection with the operation of two dams during a period of
heavy rainfall and flooding in May 1990. On March 9, 1995, the
Arkansas District Court granted a petition to reopen proceedings
relating to plaintiff claims for which the flowage easements did
not apply. Such claims had been stayed previously by the
Arkansas District Court. This matter is pending.
Panda Energy Corporation Complaint
Entergy has received notification of the filing of an amended
complaint by Panda Energy Corporation (Panda) against Entergy
Enterprises, Inc., Entergy Power, Inc., Entergy Power Asia, Ltd.,
and Entergy Power Development Corporation in the Dallas District
Court. The amended complaint alleges tortious interference with
contractual relations, conspiracy, misappropriation of corporate
opportunity, unfair competition and fraud, and constructive trust
issues. Panda seeks damages of approximately $4.8 billion, of
which $3.6 billion is claimed in punitive damages. Entergy
believes that this lawsuit is without merit; however, no
assurance can be given as to the timing or outcome of this matter.
Item 4. Submission of Matters to a Vote of Security Holders
Amendment of Company Bylaws
MP&L
On April 5, 1995, Entergy Corporation, the owner of all
issued and outstanding shares of the common stock of MP&L,
adopted a resolution to amend the second sentence of Section 11
of the bylaws of MP&L as follows: "The Vice Chairman and Chief
Operating Officer of the Company shall also be a member of the
Executive Committee." In addition the adopted resolution
resolved that Edwin Lupberger, Jerry L. Maulden and Jerry D.
Jackson shall continue as the members of the Executive Committee
of MP&L until the next Annual Meeting of Shareholders of MP&L.
Item 5. Other Information
PUCT Fuel Cost Review
GSU
See Note 2 and also pages 22, 96 and 184 of the Form 10-K
for a discussion of the PUCT's approval of GSU's settlement
agreement of over- and under-recovery of fuel and purchased power
expenses for the period October 1, 1991 through December 31,
1993. On April 17, 1995, the PUCT issued a final order approving
the settlement.
Performance-Based Formula Rate Plan
Entergy Corporation and LP&L
See Note 2 and pages 24-25, 95 and 224 of the Form 10-K, for
a discussion of LP&L's performance-based formula rate plan filing
with the LPSC. Hearings were held on the LP&L proposed
performance-based formula rate plan in March 1995. On April 20,
1995 the LPSC Staff recommended a $49.4 million reduction in base
rates. This recommended rate reduction included $8.5 million of
rates previously reduced through fuel clause reductions;
therefore, the net effect of the recommended reduction is $40.9
million. The LPSC Staff recommended the approval of LP&L's
proposed formula rate plan with the following modifications. An
earnings band would be established from a 10.4% to a 12% return
on equity. If LP&L's earnings fall within the bandwidth, no
adjustment in rates occurs. If LP&L's earnings are above the
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 the 10.4% return on equity, customers pay 60% of the
difference between the realized return on equity and the 10.4%
through prospective rate increases. The LPSC Staff's
recommendation also included a reduction in LP&L's authorized
rate of return from 12.76% to 11.2%. The LPSC is expected to
issue a final order in late May 1995.
February 1994 Ice Storm/Rate Rider
Entergy Corporation and MP&L
See Note 2 and also pages 26, 95, 262 of the Form 10-K for a
discussion of MP&L's rate recovery of the February 1994 ice storm
damages. On April 28, 1995, MP&L filed for a rate increase of
$2.9 million to be in effect for a four-year period beginning
September 28, 1995, to recover costs related to the ice storm
that were recorded after April 30, 1994. At the end of the four-
year period, undepreciated ice storm capital costs recorded after
April 30, 1994, will be treated consistently with undepreciated
ice storm costs included under the September 1994 stipulation.
MP&L's filing requested recovery of capital costs and deferred
operating and maintenance expenses of approximately $14.2
million and $1 million, respectively. No assurance can be given
as to the outcome of the filing.
Nonregulated Investments
Entergy Corporation
As discussed on page 3 and 4 of the Form 10-K, Entergy
Corporation continues to consider opportunities to expand its
business, including opportunities in overseas power development.
On March 31, 1995, Entergy Corporation, through its subsidiary,
Entergy Power Development Company (EPDC), entered into an
agreement with Enron Power Development Corp. (Enron), a
subsidiary of Enron Corporation, to acquire a 20% interest in the
Dabhol Power Project (Project) located in the State of
Maharashtra, India. The Project is a 695 megawatt combined cycle
facility which will burn distillate as its fuel. Entergy
Corporation made an initial investment in the Project of
approximately $20.5 million. The total Project is estimated to
cost approximately $920 million. The Project is fully financed
and under construction with commercial operation expected by the
end of 1997. At the time of commercial operations EPDC will have
invested approximately $90 million in the Project. In addition
to its investment EPDC has committed to cover its pro rata share
of cost overruns up to approximately $30 million, if they are
incurred. See Note 1 for a discussion of EPDC's agreement with
Enron to acquire a 20% interest in the Project.
As discussed on page 3 of the Form 10-K, Entergy Corporation
requested authorization from the SEC to convert the debt
obligation of Entergy Power into equity. On April 18, 1995,
Entergy Corporation received authorization from the SEC to
consummate this transaction.
Labor Contract Negotiations
AP&L, GSU, and MP&L
On June 24, 1995, GSU's labor union contract expires.
Negotiations for a new GSU labor union contract began on April
24, 1995. The River Bend labor union employees' contract will
be renegotiated separately in the near future. AP&L and MP&L's
labor union contracts expire on October 1, 1995, and October 15,
1995, respectively. Although no contract negotiations are in
process at present for AP&L and MP&L, renegotiations are expected
in the near future.
Common Stock Price Range and Dividends
Entergy Corporation
The shares of Entergy Corporation's common stock are listed
on the New York, Chicago, and Pacific Stock Exchanges. The high
and low sales prices of Entergy Corporation's common stock for
the first quarter of 1995, as reported by The Wall Street Journal
as composite transactions, were $24.75 and $20.00, respectively,
per share.
For the twelve months ended March 31, 1995, Entergy
Corporation paid common stock dividends in an aggregate amount of
$1.80 per share. As of March 31, 1995, the consolidated book
value of a share of Entergy Corporation's common stock was $27.27
and the last reported sale price of Entergy Corporation's common
stock on March 31, 1995, was $20 7/8 per share.
Earnings Ratios
AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy
The System operating companies and System Energy have
calculated ratios of earnings to fixed charges and ratios of
earnings to combined fixed charges and preferred dividends
pursuant to Item 503 of Regulation S-K of the SEC as follows:
Twelve Months Ended
December 31, March 31,
1990 1991 1992 1993 1994 1995
Ratios of
Earnings to Fixed
Charges (a)
AP&L 2.16 2.25 2.28 3.11(f) 2.32 2.18
GSU .80(g) 1.56 1.72 1.54 .36(g) .32(g)
LP&L 2.32 2.40 2.79 3.06 2.91 2.89
MP&L 2.42 2.36 2.37 3.79(f) 2.12 2.22
NOPSI 2.73 5.66(e) 2.66 4.68(f) 1.91 2.23
System Energy 2.10 1.74 2.04 1.87 1.23 1.47
Twelve Months Ended
December 31, March 31,
1990 1991 1992 1993 1994 1995
Ratios of Earnings
to Combined Fixed
Charges and
Preferred Dividends
(a)(b)(c)
AP&L 1.81 1.87 1.86 2.54(f) 1.97 1.86
GSU (d) .59(g) 1.19 1.37 1.21 .29(g) .26(g)
LP&L 1.87 1.95 2.18 2.39 2.43 2.42
MP&L 1.93 1.94 1.97 3.08(f) 1.81 1.91
NOPSI 2.36 4.97(e) 2.36 4.12(f) 1.73 2.02
(a) "Earnings," as defined by SEC Regulation S-K, represent the
aggregate of (1) net income, (2) taxes based on income, (3)
investment tax credit adjustments - net, and (4) fixed
charges. "Fixed Charges" include interest (whether
expensed or capitalized), related amortization, and
interest applicable to rentals charged to operating
expenses.
(b) "Preferred Dividends," as defined by SEC Regulation S-K,
are computed by dividing the preferred dividend requirement
by one hundred percent (100%) minus the effective income
tax rate.
(c) System Energy's Amended and Restated Articles of
Incorporation do not currently provide for the issuance of
preferred stock.
(d) "Preferred Dividends" in the case of GSU also include
dividends on preference stock.
(e) Earnings for the year ended December 31, 1991 include the
$90 million effect of the 1991 NOPSI Settlement.
(f) 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.
(g) Earnings for the years 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 combined fixed charges and preferred
dividends by $197.1 million and $165.1 million,
respectively. Earnings for the twelve months ended March
31, 1995 for GSU were not adequate to cover fixed charges
by $151.5 million. Earnings for the twelve months ended
March 31, 1995 for GSU were not adequate to cover combined
fixed charges and preferred dividends by $201.8 million.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
** 4(a) - Tenth Supplemental Indenture, dated as of April 1,
1995, to MP&L's Mortgage and Deed of Trust (filed
as Exhibit A-2(l) to Rule 24 Certificate dated
April 21, 1995 in File No. 70-7914).
** 4(b) - Fifth Supplemental Indenture, dated as of April 1,
1995, to NOPSI's Mortgage and Deed of Trust (filed
as Exhibit 4(a) to Form 8-K dated April 26, 1995
in File No. 0-5807).
23(a) - Consent of Friday, Eldredge & Clark.
23(b) - Consent of Monroe & Lemann (A Professional
Corporation).
23(c) - Consent of Wise Carter Child & Caraway,
Professional Association.
23(d) - Consent of Clark, Thomas & Winters (A Professional
Corporation).
23(e) - Consent of Sandlin Associates.
27(a) - Financial Data Schedule for Entergy Corporation
and Subsidiaries as of March 31, 1995.
27(b) - Financial Data Schedule for AP&L as of March 31,
1995.
27(c) - Financial Data Schedule for GSU as of March 31,
1995.
27(d) - Financial Data Schedule for LP&L as of March 31,
1995.
27(e) - Financial Data Schedule for MP&L as of March 31,
1995.
27(f) - Financial Data Schedule for NOPSI as of March 31,
1995.
27(g) - Financial Data Schedule for System Energy as of
March 31, 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) - 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(i) - 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(j) - 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 March
31, 1995, which list, prepared in accordance with Item 102
of Regulation S-T of the SEC, immediately precedes the
exhibits being filed with Form 10-Q for the quarter ended
March 31, 1995.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
NOPSI
A current report on Form 8-K, dated April 20, 1995,
was filed with the SEC on April 26, 1995, reporting
information under Item 5. "Other Events."
<PAGE>
EXPERTS
All statements in Part II of this Quarterly Report on Form
10-Q as to matters of law and legal conclusions, based on the
belief or opinion of AP&L, LP&L, MP&L, NOPSI, and System Energy
or otherwise, pertaining to the titles to properties, franchises
and other operating rights of certain of the registrants filing
this Quarterly Report on Form 10-Q, and their subsidiaries, the
regulations to which they are subject and any legal proceedings
to which they are parties are made on the authority of Friday,
Eldredge & Clark, 2000 First Commercial Building, 400 West
Capitol, Little Rock, Arkansas, as to AP&L; Monroe & Lemann (A
Professional Corporation), 201 St. Charles Avenue, Suite 3300,
New Orleans, Louisiana, as to LP&L and NOPSI; and Wise Carter
Child & Caraway, Professional Association, Heritage Building,
Jackson, Mississippi, as to MP&L and System Energy.
The statements attributed to Clark, Thomas & Winters, a
professional corporation, as to legal conclusions with respect to
GSU's rate regulation in Texas in Note 2 to Entergy Corporation
and Subsidiaries Consolidated Financial Statements, "Rate and
Regulatory Matters," have been reviewed by such firm and are
included herein upon the authority of such firm as experts.
The statements attributed to Sandlin Associates regarding
the analysis of River Bend construction costs of GSU in Note 2 to
Entergy Corporation and Subsidiaries Consolidated Financial
Statements, "Rate and Regulatory Matters," have been reviewed by
such firm and are included herein upon the authority of such firm
as experts.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, each registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized. The
signature for each undersigned company shall be deemed to relate
only to matters having reference to such company or its
subsidiaries.
ENTERGY CORPORATION
ARKANSAS POWER & LIGHT COMPANY
GULF STATES UTILITIES COMPANY
LOUISIANA POWER & LIGHT COMPANY
MISSISSIPPI POWER & LIGHT COMPANY
NEW ORLEANS PUBLIC SERVICE INC.
SYSTEM ENERGY RESOURCES, INC.
/s/ Lee W. Randall
Lee W. Randall
Vice President and
Chief Accounting Officer
(For each Registrant and for each as
Principal Accounting Officer)
Date: May 11, 1995
Exhibit 23(a)
[Letterhead of Friday, Eldredge & Clark]
May 9, 1995
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112
Gentlemen:
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company ("AP&L"), Gulf States Utilities Company, Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc. We
further consent to the incorporation by reference of such
reference to our firm into AP&L's Registration Statements (Form S-
3, File Nos. 33-36149, 33-48356 and 33-50289), and related
Prospectuses pertaining to AP&L's First Mortgage Bonds and/or
Preferred Stock and First Mortgage Bonds, respectively.
Very truly yours,
/s/ Friday, Eldredge & Clark
FRIDAY, ELDREDGE & CLARK
Exhibit 23(b)
[Letterhead of Monroe & Lemann]
May 9, 1995
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112
Gentlemen:
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company, Louisiana Power &
Light Company ("LP&L"), Mississippi Power & Light Company, New
Orleans Public Service Inc. ("NOPSI") and System Energy
Resources, Inc. We further consent to the incorporation by
reference of such reference to our firm into LP&L's Registration
Statements on Form S-3, and the related prospectuses (File Nos.
33-50937, 33-46085 and 33-39221) pertaining to LP&L's First
Mortgage Bonds and Preferred Stock, and into NOPSI's Registration
Statement on Form S-3, and the related prospectus (File No. 33-
57926) pertaining to NOPSI's General and Refunding Mortgage
Bonds.
Very truly yours,
/s/ Monroe & Lemann
MONROE & LEMANN
Exhibit 23(c)
[Letterhead of Wise Carter Child & Caraway]
May 9, 1995
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112
Gentlemen:
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company, Louisiana Power &
Light Company, Mississippi Power & Light Company ("MP&L"), New
Orleans Public Service Inc., and System Energy Resources, Inc.
("System Energy"). We further consent to the incorporation by
reference of such reference to our firm into System Energy's
Registration Statement on Form S-3, and the related prospectus
(File No. 33-47662) pertaining to System Energy's First Mortgage
Bonds, and into MP&L's Registration Statements on Form S-3, and
the related prospectuses (File Nos. 33-53004, 33-55826 and 33-
50507) pertaining to MP&L's General and Refunding Mortgage Bonds
and MP&L's Preferred Stock.
Very truly yours,
WISE CARTER CHILD & CARAWAY,
Professional Association
By: /s/ Robert B. McGehee
Robert B. McGehee
Exhibit 23(d)
[Letterhead of Clark, Thomas & Winters]
CONSENT
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company ("GSU"), Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc. We
further consent to the incorporation by reference in the
registration statements of GSU on Form S-3 and Form S-8 (File
Numbers 2-76551, 2-98011, 33-49739, and 33-51181) of such
reference and Statements of Legal Conclusions.
/s/ Clark, Thomas & Winters
A Professional Corporation
CLARK, THOMAS & WINTERS,
A Professional Corporation
Austin, Texas
May 9, 1995
Exhibit 23(e)
CONSENT
We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company ("GSU"), Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc. We
further consent to the incorporation by reference of such
reference to our firm into GSU's Registration Statements on Form
S-3 and Form S-8 (File Numbers 2-76551, 2-98011, 33-49739 and 33-
51181) of such reference and Statements.
/s/ Sandlin Associates
SANDLIN ASSOCIATES
Management Consultants
Pasco, Washington
May 8, 1995
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation and Subsidiaries financial statements for the quarter ended
March 31, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000065984
<NAME> ENTERGY CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 15,838,326
<OTHER-PROPERTY-AND-INVEST> 516,477
<TOTAL-CURRENT-ASSETS> 2,088,488
<TOTAL-DEFERRED-CHARGES> 3,945,624
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 22,388,915
<COMMON> 2,300
<CAPITAL-SURPLUS-PAID-IN> 4,199,780
<RETAINED-EARNINGS> 2,076,824
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6,211,526
283,198
543,455
<LONG-TERM-DEBT-NET> 7,035,128
<SHORT-TERM-NOTES> 133,242
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 364,885
0
<CAPITAL-LEASE-OBLIGATIONS> 265,889
<LEASES-CURRENT> 151,479
<OTHER-ITEMS-CAPITAL-AND-LIAB> 7,332,735
<TOT-CAPITALIZATION-AND-LIAB> 22,388,915
<GROSS-OPERATING-REVENUE> 1,346,068
<INCOME-TAX-EXPENSE> 35,137
<OTHER-OPERATING-EXPENSES> 1,075,023
<TOTAL-OPERATING-EXPENSES> 1,110,160
<OPERATING-INCOME-LOSS> 235,908
<OTHER-INCOME-NET> 7,691
<INCOME-BEFORE-INTEREST-EXPEN> 243,599
<TOTAL-INTEREST-EXPENSE> 187,274
<NET-INCOME> 76,175
19,850
<EARNINGS-AVAILABLE-FOR-COMM> 56,325
<COMMON-STOCK-DIVIDENDS> 101,969
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 275,581
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from AP&L's
financial statements for the quarter ended March 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000007323
<NAME> ARKANSAS POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,863,295
<OTHER-PROPERTY-AND-INVEST> 154,739
<TOTAL-CURRENT-ASSETS> 529,195
<TOTAL-DEFERRED-CHARGES> 718,568
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,265,797
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,844
<RETAINED-EARNINGS> 466,499
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,057,813
53,527
176,350
<LONG-TERM-DEBT-NET> 1,273,227
<SHORT-TERM-NOTES> 34,667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 53,175
0
<CAPITAL-LEASE-OBLIGATIONS> 87,304
<LEASES-CURRENT> 56,213
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,473,521
<TOT-CAPITALIZATION-AND-LIAB> 4,265,797
<GROSS-OPERATING-REVENUE> 339,596
<INCOME-TAX-EXPENSE> (2,469)
<OTHER-OPERATING-EXPENSES> 311,035
<TOTAL-OPERATING-EXPENSES> 308,566
<OPERATING-INCOME-LOSS> 31,030
<OTHER-INCOME-NET> 10,350
<INCOME-BEFORE-INTEREST-EXPEN> 41,380
<TOTAL-INTEREST-EXPENSE> 29,318
<NET-INCOME> 12,062
4,561
<EARNINGS-AVAILABLE-FOR-COMM> 7,501
<COMMON-STOCK-DIVIDENDS> 32,800
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 124,842
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from GSU's
financial statements for the quarter ended March 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000044570
<NAME> GULF STATES UTILITIES COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,680,763
<OTHER-PROPERTY-AND-INVEST> 59,936
<TOTAL-CURRENT-ASSETS> 673,434
<TOTAL-DEFERRED-CHARGES> 1,446,258
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,860,391
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,419
<RETAINED-EARNINGS> 260,671
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,527,145
92,687
136,444
<LONG-TERM-DEBT-NET> 2,300,744
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 70,425
0
<CAPITAL-LEASE-OBLIGATIONS> 114,765
<LEASES-CURRENT> 36,733
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,581,448
<TOT-CAPITALIZATION-AND-LIAB> 6,860,391
<GROSS-OPERATING-REVENUE> 399,346
<INCOME-TAX-EXPENSE> (162)
<OTHER-OPERATING-EXPENSES> 352,137
<TOTAL-OPERATING-EXPENSES> 351,975
<OPERATING-INCOME-LOSS> 47,371
<OTHER-INCOME-NET> 5,300
<INCOME-BEFORE-INTEREST-EXPEN> 52,671
<TOTAL-INTEREST-EXPENSE> 49,036
<NET-INCOME> 3,635
7,590
<EARNINGS-AVAILABLE-FOR-COMM> (3,955)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 129,888
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from LP&L's
financial statements for the quarter ended March 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000060527
<NAME> LOUISIANA POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,526,697
<OTHER-PROPERTY-AND-INVEST> 65,337
<TOTAL-CURRENT-ASSETS> 298,556
<TOTAL-DEFERRED-CHARGES> 486,084
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,376,674
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (5,029)
<RETAINED-EARNINGS> 88,190
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,172,061
103,765
160,500
<LONG-TERM-DEBT-NET> 1,368,194
<SHORT-TERM-NOTES> 19,200
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 110,320
0
<CAPITAL-LEASE-OBLIGATIONS> 8,316
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,406,318
<TOT-CAPITALIZATION-AND-LIAB> 4,376,674
<GROSS-OPERATING-REVENUE> 352,996
<INCOME-TAX-EXPENSE> 18,696
<OTHER-OPERATING-EXPENSES> 264,983
<TOTAL-OPERATING-EXPENSES> 283,679
<OPERATING-INCOME-LOSS> 69,317
<OTHER-INCOME-NET> 911
<INCOME-BEFORE-INTEREST-EXPEN> 70,228
<TOTAL-INTEREST-EXPENSE> 34,166
<NET-INCOME> 36,062
5,591
<EARNINGS-AVAILABLE-FOR-COMM> 30,471
<COMMON-STOCK-DIVIDENDS> 55,700
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 103,724
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from MP&L's
financial statements for the quarter ended March 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000066901
<NAME> MISSISSIPPI POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 963,119
<OTHER-PROPERTY-AND-INVEST> 11,152
<TOTAL-CURRENT-ASSETS> 219,686
<TOTAL-DEFERRED-CHARGES> 397,472
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,591,429
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> (1,661)
<RETAINED-EARNINGS> 231,778
<TOTAL-COMMON-STOCKHOLDERS-EQ> 429,443
23,770
57,881
<LONG-TERM-DEBT-NET> 475,279
<SHORT-TERM-NOTES> 42,319
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 25,965
0
<CAPITAL-LEASE-OBLIGATIONS> 519
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 536,253
<TOT-CAPITALIZATION-AND-LIAB> 1,591,429
<GROSS-OPERATING-REVENUE> 193,324
<INCOME-TAX-EXPENSE> 3,363
<OTHER-OPERATING-EXPENSES> 167,691
<TOTAL-OPERATING-EXPENSES> 171,054
<OPERATING-INCOME-LOSS> 22,270
<OTHER-INCOME-NET> 297
<INCOME-BEFORE-INTEREST-EXPEN> 22,567
<TOTAL-INTEREST-EXPENSE> 12,793
<NET-INCOME> 9,774
1,707
<EARNINGS-AVAILABLE-FOR-COMM> 8,067
<COMMON-STOCK-DIVIDENDS> 8,300
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 51,840
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from NOPSI'S
financial statements for the quarter ended March 31, 1995 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000071508
<NAME> NEW ORLEANS PUBLIC SERVICE INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 278,223
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 116,737
<TOTAL-DEFERRED-CHARGES> 186,290
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 584,509
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,247
<RETAINED-EARNINGS> 84,731
<TOTAL-COMMON-STOCKHOLDERS-EQ> 154,722
1,949
19,780
<LONG-TERM-DEBT-NET> 179,172
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 228,886
<TOT-CAPITALIZATION-AND-LIAB> 584,509
<GROSS-OPERATING-REVENUE> 108,886
<INCOME-TAX-EXPENSE> 3,275
<OTHER-OPERATING-EXPENSES> 94,748
<TOTAL-OPERATING-EXPENSES> 98,023
<OPERATING-INCOME-LOSS> 10,863
<OTHER-INCOME-NET> 282
<INCOME-BEFORE-INTEREST-EXPEN> 11,145
<TOTAL-INTEREST-EXPENSE> 4,900
<NET-INCOME> 6,245
400
<EARNINGS-AVAILABLE-FOR-COMM> 5,845
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 18,578
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from System
Energy's financial statements for the quarter ended March 31, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000202584
<NAME> SYSTEM ENERGY RESOURCES, INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,747,248
<OTHER-PROPERTY-AND-INVEST> 33,810
<TOTAL-CURRENT-ASSETS> 245,640
<TOTAL-DEFERRED-CHARGES> 655,335
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,682,033
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 7
<RETAINED-EARNINGS> 108,246
<TOTAL-COMMON-STOCKHOLDERS-EQ> 897,603
0
0
<LONG-TERM-DEBT-NET> 1,438,511
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 105,000
0
<CAPITAL-LEASE-OBLIGATIONS> 38,000
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,174,919
<TOT-CAPITALIZATION-AND-LIAB> 3,682,033
<GROSS-OPERATING-REVENUE> 151,664
<INCOME-TAX-EXPENSE> 19,305
<OTHER-OPERATING-EXPENSES> 72,287
<TOTAL-OPERATING-EXPENSES> 91,592
<OPERATING-INCOME-LOSS> 60,072
<OTHER-INCOME-NET> 1,756
<INCOME-BEFORE-INTEREST-EXPEN> 61,828
<TOTAL-INTEREST-EXPENSE> 39,263
<NET-INCOME> 22,565
0
<EARNINGS-AVAILABLE-FOR-COMM> 22,565
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> (26,179)
<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, March 31,
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 $102,017
Interest on notes payable 1,027 -- 117 349 1,311 1,086
Amortization of expense and premium on debt-net(cr) 1,792 1,112 1,359 2,702 4,563 4,574
Other interest 1,567 1,303 2,308 8,769 3,501 6,133
Interest applicable to rentals 24,233 21,969 17,657 16,860 19,140 19,282
----------------------------------------------------------
Total fixed charges, as defined 161,226 158,238 141,758 136,451 129,954 133,092
Preferred dividends, as defined (a) 30,851 31,458 32,195 30,334 23,234 23,321
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $192,077 $189,696 $173,953 $166,785 $153,188 $156,413
==========================================================
Earnings as defined:
Net Income $129,765 $143,451 $130,529 $205,297 $142,263 $127,936
Add:
Provision for income taxes:
Federal & State 50,921 44,418 57,089 58,162 83,300 71,813
Deferred - net 17,943 11,048 3,490 34,748 (17,939) (7,643)
Investment tax credit adjustment - net (12,022) (1,600) (9,989) (10,573) (36,141) (34,687)
Fixed charges as above 161,226 158,238 141,758 136,451 129,954 133,092
----------------------------------------------------------
Total earnings, as defined $347,833 $355,555 $322,877 $424,085 $301,437 $290,511
==========================================================
Ratio of earnings to fixed charges, as defined 2.16 2.25 2.28 3.11 2.32 2.18
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.81 1.87 1.86 2.54 1.97 1.86
==========================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
</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, March 31,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on mortgage bonds $218,462 $201,335 $197,218 $172,494 $167,082 $166,683
Interest on notes payable 24,295 8,446 - - 763 824
Interest on long-term debt - other 12,668 19,507 21,155 19,440 19,440 19,440
Other interest 18,380 29,169 26,564 10,561 7,957 7,725
Amortization of expense and premium on debt-net(cr) 2,192 1,999 3,479 8,104 8,892 8,580
Interest applicable to rentals 23,761 24,049 23,759 23,455 21,539 19,021
----------------------------------------------------------
Total fixed charges, as defined 299,758 284,505 272,175 234,054 225,673 222,273
Preferred dividends, as defined (a) 104,484 90,146 69,617 65,299 52,210 50,271
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $404,242 $374,651 $341,792 $299,353 $277,883 $272,544
==========================================================
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) ($90,229)
Add:
Income Taxes (24,216) 48,250 55,860 58,016 (62,086) (61,281)
Fixed charges as above 299,758 284,505 272,175 234,054 225,673 222,273
----------------------------------------------------------
Total earnings, as defined $239,143 $445,146 $467,448 $361,532 $80,832 $70,763
==========================================================
Ratio of earnings to fixed charges, as defined 0.80 1.56 1.72 1.54 0.36 0.32
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 0.59 1.19 1.37 1.21 0.29 0.26
==========================================================
</TABLE>
(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 March 31, 1995 for GSU were not adequate to cover
fixed charges by $151.5 million. Earnings for the twelve months ended
March 31, 1995 for GSU were not adequate to cover fixed charges and
preferred dividends by $201.8 million.
<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, March 31,
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 $124,897
Interest on notes payable 87 -- 150 898 1,948 2,037
Other interest charges 6,378 5,924 5,591 5,706 4,546 5,231
Amortization of expense and premium on debt - net(cr) 3,397 3,282 7,100 5,720 5,130 5,153
Interest applicable to rentals 12,906 11,381 9,363 8,519 8,332 10,363
---------------------------------------------------------------
Total fixed charges, as defined 177,125 179,403 150,876 145,476 144,776 147,681
Preferred dividends, as defined (a) 42,365 41,212 42,026 40,779 29,171 28,650
---------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $219,490 $220,615 $192,902 $186,255 $173,947 $176,331
===============================================================
Earnings as defined:
Net Income $155,049 $166,572 $182,989 $188,808 $213,839 $213,806
Add:
Provision for income taxes:
Federal and State 62,236 8,684 36,465 70,552 79,260 101,351
Deferred Federal and State - net (9,655) 67,792 51,889 43,017 21,580 1,708
Investment tax credit adjustment - net 26,646 8,244 (1,317) (2,756) (37,552) (37,305)
Fixed charges as above 177,125 179,403 150,876 145,476 144,776 147,681
---------------------------------------------------------------
Total earnings, as defined $411,401 $430,695 $420,902 $445,097 $421,903 $427,241
===============================================================
Ratio of earnings to fixed charges, as defined 2.32 2.40 2.79 3.06 2.91 2.89
===============================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.87 1.95 2.18 2.39 2.43 2.42
===============================================================
</TABLE>
- ------------------------
(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>
<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, March 31,
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 $44,733
Interest on notes payable 1,512 953 36 7 1,348 1,315
Other interest charges 1,494 1,444 1,636 1,795 3,581 4,556
Amortization of expense and premium on debt-net(cr) 1,737 1,617 1,685 1,458 1,754 1,691
Interest applicable to rentals 596 574 521 1,264 1,716 2,354
----------------------------------------------------------
Total fixed charges, as defined 69,314 68,216 64,587 56,623 54,480 54,649
Preferred dividends, as defined (a) 17,584 14,962 12,823 12,990 9,447 9,013
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $86,898 $83,178 $77,410 $69,613 $63,927 $63,662
==========================================================
Earnings as defined:
Net Income $60,830 $63,088 $65,036 $101,743 $48,779 $52,303
Add:
Provision for income taxes:
Federal and State 4,027 (1,001) 4,463 54,418 46,884 53,422
Deferred Federal and State - net 35,721 32,491 20,430 539 (26,763) (31,226)
Investment tax credit adjustment - net (1,835) (1,634) (1,746) 1,036 (7,645) (7,596)
Fixed charges as above 69,314 68,216 64,587 56,623 54,480 54,649
-----------------------------------------------------------
Total earnings, as defined $168,057 $161,160 $152,770 $214,359 $115,735 $121,552
===========================================================
Ratio of earnings to fixed charges, as defined 2.42 2.36 2.37 3.79 2.12 2.22
===========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.93 1.94 1.97 3.08 1.81 1.91
===========================================================
</TABLE>
- ------------------------
(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>
<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, March 31,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on mortgage bonds $24,472 $23,865 $22,934 $19,478 $16,382 $16,168
Interest on notes payable -- -- -- -- 153 138
Other interest charges 831 793 1,714 1,016 1,027 1,346
Amortization of expense and premium on debt-net(cr) 579 565 576 598 710 710
Interest applicable to rentals 160 517 444 544 1,245 1,544
----------------------------------------------------------
Total fixed charges, as defined 26,042 25,740 25,668 21,636 19,517 19,906
Preferred dividends, as defined (a) 4,020 3,582 3,214 2,952 2,055 2,055
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $30,062 $29,322 $28,882 $24,588 $21,572 $21,961
==========================================================
Earnings as defined:
Net Income $27,542 $74,699 $26,424 $47,709 $13,211 $17,644
Add:
Provision for income taxes:
Federal and State 134 8,885 16,575 27,479 22,606 17,453
Deferred Federal and State - net 17,370 36,947 (340) 5,203 (15,674) (8,246)
Investment tax credit adjustment - net (75) (591) (170) (744) (2,332) (2,316)
Fixed charges as above 26,042 25,740 25,668 21,636 19,517 19,906
----------------------------------------------------------
Total earnings, as defined $71,013 $145,680 $68,157 $101,283 $37,328 $44,441
==========================================================
Ratio of earnings to fixed charges, as defined 2.73 5.66 2.66 4.68 1.91 2.23
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.36 4.97 2.36 4.12 1.73 2.02
==========================================================
</TABLE>
- ------------------------
(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>
<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, March 31,
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 $157,249
Interest on notes payable 0 0 0 0 88 111
Amortization of expense and premium on debt-net 10,532 7,495 6,417 4,520 6,731 6,571
Interest applicable to rentals 13,830 10,007 6,265 6,790 7,546 7,000
Other interest charges 1,460 3,617 1,506 1,600 7,168 9,466
----------------------------------------------------------
Total fixed charges, as defined $256,466 $239,657 $210,806 $197,728 $184,050 $180,397
==========================================================
Earnings as defined:
Net Income $168,677 $104,622 $130,141 $93,927 $5,407 $6,422
Add:
Provision for income taxes:
Federal and State 4,620 (26,848) 35,082 48,314 67,477 75,581
Deferred Federal and State - net 52,962 37,168 23,648 60,690 (27,374) 5,833
Investment tax credit adjustment - net 56,320 63,256 30,123 (30,452) (3,265) (3,265)
Fixed charges as above 256,466 239,657 210,806 197,728 184,050 180,397
----------------------------------------------------------
Total earnings, as defined $539,045 $417,855 $429,800 $370,207 $226,295 $264,968
==========================================================
Ratio of earnings to fixed charges, as defined 2.10 1.74 2.04 1.87 1.23 1.47
==========================================================
</TABLE>
Exhibit 99(j)
[LETTERHEAD OF CLARK, THOMAS & WINTERS]
May 9, 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 March 31, 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.
