_____________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1997
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 72-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
1-10764 ENTERGY ARKANSAS, INC. 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-2703 ENTERGY GULF STATES, INC. 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-8474 ENTERGY LOUISIANA, INC. 72-0245590
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
0-320 ENTERGY MISSISSIPPI, INC. 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 368-5000
0-5807 ENTERGY NEW ORLEANS, INC. 72-0273040
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
_____________________________________________________________________
<PAGE>
Indicate by check mark whether the registrants (1) have filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrants were required to file
such reports), and (2) have been subject to such filing requirements
for the past 90 days.
Yes X No
Common Stock Outstanding Outstanding at April 30, 1997
Entergy Corporation ($0.01 par value) 237,666,428
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1997
Page Number
Definitions 1
Management's Financial Discussion and Analysis
- Liquidity and Capital Resources 3
Management's Financial Discussion and Analysis
- Significant Factors and Known Trends 6
Results of Operations and Financial Statements:
Entergy Corporation and Subsidiaries:
Results of Operations 10
Statements of Consolidated Income (Loss) 13
Statements of Consolidated Cash Flows 14
Consolidated Balance Sheets 16
Selected Operating Results 18
Entergy Arkansas, Inc.:
Results of Operations 19
Statements of Income 20
Statements of Cash Flows 21
Balance Sheets 22
Selected Operating Results 24
Entergy Gulf States, Inc.:
Results of Operations 26
Statements of Income (Loss) 28
Statements of Cash Flows 29
Balance Sheets 30
Selected Operating Results 32
Entergy Louisiana, Inc.:
Results of Operations 33
Statements of Income 34
Statements of Cash Flows 35
Balance Sheets 36
Selected Operating Results 38
Entergy Mississippi, Inc.:
Results of Operations 39
Statements of Income 40
Statements of Cash Flows 41
Balance Sheets 42
Selected Operating Results 44
Entergy New Orleans, Inc.:
Results of Operations 45
Statements of Income 46
Statements of Cash Flows 47
Balance Sheets 48
Selected Operating Results 50
System Energy Resources, Inc.:
Results of Operations 51
Statements of Income 52
Statements of Cash Flows 53
Balance Sheets 54
Notes to Financial Statements for Entergy
Corporation and Subsidiaries 56
Part II:
Item 1. Legal Proceedings 66
Item 5. Other Information 67
Item 6. Exhibits and Reports on Form 8-K 67
Experts 69
Signature 70
<PAGE>
This combined Quarterly Report on Form 10-Q is separately filed
by Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States,
Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc., and System Energy Resources, Inc. Information
contained herein relating to any individual company is filed by such
company on its own behalf. Each company makes representations only
as to itself and makes no other representations whatsoever as to any
other company. This combined Quarterly Report on Form 10-Q
supplements and updates the Annual Report on Form 10-K for the
calendar year ended December 31, 1996, filed by the individual
registrants with the SEC and should be read in conjunction therewith.
Investors are cautioned that forward-looking statements
contained herein with respect to the revenues, earnings, competitive
performance, or other prospects for the business of Entergy
Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, System Energy,
or their affiliated companies may be influenced by factors that could
cause actual outcomes and results to be materially different than
projected. Such factors include, but are not limited to, the effects
of weather, the performance of generating units, fuel prices and
availability, regulatory decisions and the effects of changes in law,
capital spending requirements, the evolution of competition, changes
in accounting standards, and other factors.
DEFINITIONS
Certain abbreviations or acronyms used in the text are defined below:
Abbreviation or Acronym Term
Algiers 15th Ward of the City of New Orleans,
Louisiana
ALJ Administrative Law Judge
ANO Arkansas Nuclear One Plant
ANO 1 Unit No. 1 of ANO
ANO 2 Unit No. 2 of ANO
Cajun Cajun Electric Power Cooperative, Inc.
Capital Funds Agreement Agreement, dated as of June 21, 1974, as
amended, between System Energy and Entergy
Corporation, and the assignments thereof
CitiPower CitiPower Ltd.
Council Council of the City of New Orleans,
Louisiana
domestic utility
companies Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, collectively
Entergy Entergy Corporation and its various direct
and indirect subsidiaries
Entergy Arkansas Entergy Arkansas, Inc., formerly Arkansas
Power & Light Company
Entergy Corporation Entergy Corporation, a Delaware corporation,
successor to Entergy Corporation, a Florida
corporation
Entergy Enterprises Entergy Enterprises, Inc.
Entergy Gulf States Entergy Gulf States, Inc., formerly Gulf
States Utilities Company (including wholly
owned subsidiaries - Varibus Corporation,
GSG&T, Inc., Prudential Oil & Gas, Inc., and
Southern Gulf Railway Company)
Entergy Louisiana Entergy Louisiana, Inc., formerly Louisiana
Power & Light Company
Entergy Mississippi Entergy Mississippi, Inc., formerly
Mississippi Power & Light Company
Entergy New Orleans Entergy New Orleans, Inc., formerly New
Orleans Public Service Inc.
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 Services Entergy Services, Inc.
EPA U.S. Environmental Protection Agency
EPAct Energy Policy Act of 1992
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
<PAGE>
Abbreviation or Acronym Term
Form 10-K The combined Annual Report on Form 10-K for
the year ended December 31, 1996, of
Entergy, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System
Energy
Grand Gulf 1 Unit No. 1 (nuclear) of the Grand Gulf Plant
ISES Independence Steam Electric Generating
Station
kWh Kilowatt-hour(s)
LPSC Louisiana Public Service Commission
London Electricity London Electricity plc - a regional electric
company serving London, England, which was
acquired by Entergy on February 7, 1997
Merger The combination transaction, consummated on
December 31, 1993, by which Entergy Gulf
States became a subsidiary of Entergy
Corporation and Entergy Corporation became a
Delaware corporation
MPSC Mississippi Public Service Commission
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
PCBs Polychlorinated biphenyls
PUCHA Public Utility Holding Company Act of 1935,
as amended
PUCT Public Utility Commission of Texas
PURPA Public Utility Regulatory Policies Act
River Bend River Bend Nuclear Plant, owned 70% by
Entergy Gulf States
RUS Rural Utilities Service
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting Standards
as promulgated by the Financial Accounting
Standards Board
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
Waterford 3 Unit No. 3 (nuclear) of the Waterford Plant
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Net cash flow from operations for Entergy, the domestic utility
companies, and System Energy for the first quarter of 1997 and 1996
was as follows:
First Quarter First Quarter
Company 1997 1996
(In Millions)
Entergy $486.1 $268.3
Entergy Arkansas $142.6 $111.8
Entergy Gulf States $110.7 $ 34.8
Entergy Louisiana $ 76.2 $ 88.7
Entergy Mississippi $ 35.7 $ 29.7
Entergy New Orleans $ 12.6 $ (2.9)
System Energy $ 69.8 $ 67.7
The positive cash flow from operations for the domestic utility
companies results from continued efforts to streamline operations and
to reduce costs, as well as from collections under rate phase-in
plans that exceed current cash requirements for the related costs.
In the income statement, these revenue collections are offset by the
amortization of previously deferred costs so that there is no effect
on net income. These phase-in plans will continue to contribute to
Entergy's cash position over the next several years. The Grand Gulf
1 phase-in plans will expire in 1998 for Entergy Arkansas and Entergy
Mississippi, and in 2001 for Entergy New Orleans. Entergy Gulf
States' phase-in plan for River Bend will expire in 1998, and Entergy
Louisiana's phase-in plan for Waterford 3 will expire in June 1997.
Financing Sources
As discussed in Note 8, the acquisition of London Electricity
for $2.1 billion was accomplished in February 1997. The acquisition
was financed with $1.7 billion of debt that is non-recourse to
Entergy Corporation, and $392 million of equity provided by Entergy
Corporation from available cash and borrowings under its $300 million
line of credit. Excluding the London Electricity investment, cash
from operations, supplemented by cash on hand, was sufficient to meet
substantially all investing and financing requirements of the
domestic utility companies and System Energy, including capital
expenditures, dividends, and debt and preferred stock maturities for
the first quarter of 1997.
Entergy has been able to fund the capital requirements for its
domestic utility companies with cash from operations resulting from
the items discussed above in "Cash Flows". Should additional cash be
needed to fund investments or retire debt, the domestic utility
companies and System Energy have the ability, subject to regulatory
approval and compliance with issuance tests, to issue debt or
preferred securities to meet such requirements. In addition, to the
extent market conditions and interest and dividend rates allow, the
domestic utility companies and System Energy will continue to
refinance and/or redeem higher cost debt and preferred stock prior to
maturity. The domestic utility companies may continue to establish
special purpose trusts as financing subsidiaries for the purpose of
issuing preferred trust securities, such as those issued in 1996 by
Entergy Louisiana Capital I and Entergy Arkansas Capital I, and those
issued in January 1997 by Entergy Gulf States Capital I. Entergy
Corporation, the domestic utility companies, and System Energy also
have SEC authorization to effect short-term borrowings. See Notes 4,
5, 6, 7, and 9 in the Form 10-K for additional information on
Entergy's capital and refinancing requirements in 1997-2001.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, Entergy Corporation had $275 million
outstanding on its $300 million bank credit facility which amount had
been used for the acquisition of London Electricity in February 1997.
Also, Entergy Technology Holding Company (ETHC) had $20 million
outstanding on its $100 million bank line of credit as of March 31,
1997. See Note 4 to the Form 10-K for information on the domestic
utility companies' and System Energy's short-term borrowing
authorizations and bank lines of credit.
Financing Uses
Productive investment by Entergy Corporation is integral to
enhancing the long-term value of its common stock. Entergy
Corporation has been expanding its investments in business
opportunities overseas as well as in the United States. Through the
first quarter of 1997, Entergy Corporation had acquired or
participated in foreign electric ventures in Australia, Argentina,
Chile, Pakistan, Peru, and the United Kingdom, and had acquired
several telecommunications-based businesses in the United States. As
of March 31, 1997, Entergy Corporation had a net investment of $1.2
billion in equity capital in businesses other than its domestic
utility companies. See Note 8 for a discussion of Entergy
Corporation's acquisition of London Electricity on February 7, 1997.
To make capital investments, fund its subsidiaries, and pay
dividends, Entergy Corporation will utilize internally generated
funds, cash on hand, funds available under its $300 million credit
facility, funds received from its dividend reinvestment and stock
purchase plan, and other bank financings as required. See Note 3
herein for information regarding proceeds from the issuance of common
stock related to Entergy's dividend reinvestment and stock purchase
plan in the first quarter of 1997. See Note 9 in the Form 10-K for a
discussion of capital requirements. Entergy Corporation receives
funds through dividend payments from its subsidiaries. During the
first quarter of 1997, such dividend payments from subsidiaries
totaled $102.4 million. In order to improve its capital structure,
Entergy Gulf States has not paid common stock dividends since the
third quarter of 1994. In the first quarter of 1997, Entergy
Corporation paid $105 million of common stock dividends.
Declarations of dividends on common stock are made at the discretion
of Entergy Corporation's Board of Directors. Management will not
recommend future dividend increases to the Board unless such
increases are justified by adequate earnings growth of Entergy
Corporation and its subsidiaries. See Note 8 in the Form 10-K for
information on dividend restrictions.
Entergy Corporation and Entergy Gulf States
See Notes 1 and 2 regarding River Bend and Cajun litigation. An
adverse ruling regarding River Bend could result in up to
approximately $276 million of potential write-offs (net of tax) and
up to $210 million in refunds of previously collected revenue. Such
write-offs and charges could result in substantial net losses being
reported in the future by Entergy Gulf States, with resulting adverse
adjustments to the common equity of Entergy Corporation and Entergy
Gulf States. Adverse resolution of these matters could negatively
affect Entergy Gulf States' ability to obtain financing, which could
in turn affect Entergy Gulf States' liquidity and ability to resume
paying common stock dividends.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy Corporation and System Energy
Under the Capital Funds Agreement, Entergy Corporation has
agreed to supply to System Energy sufficient capital to maintain
System Energy's equity capital at a minimum of 35% of its total
capitalization (excluding short-term debt), to permit the continued
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 thereunder 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
may be terminated by the parties thereto, subject to the consent of
certain creditors.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in the Form 10-K, including
"Open Access Transmission", "Municipalization", "Industry
Consolidation", "Functional Unbundling", and "Effects of Alternate
Energy Sources on Retail Electric Sales to Industrial and Large
Commercial Customers" for a discussion of the increasing competitive
pressures facing Entergy and the electric utility industry. See "ANO
Matters", and "Property Tax Exemptions" in the Form 10-K for a
discussion of other significant issues affecting Entergy. Set forth
below are recent developments to the Form 10-K for the sections
presented.
Competition and Industry Challenges
Transition to Competition Filings
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in the Form 10-K and Note 2
herein for a discussion of the domestic utility companies' filings
with their respective state regulators concerning the transition to
competition. Entergy Gulf States made a supplemental filing with the
PUCT on April 4, 1997, outlining a comprehensive market reform
proposal calling for the establishment of retail competition, service
quality standards, a regional power exchange, and an independent
system operator. Entergy Gulf States requested from the PUCT a
reciprocal commitment ensuring the full recovery of prudently
incurred investments previously approved by regulators. The PUCT has
scheduled the transition to competition hearings to begin in
September 1997.
The MPSC conducted hearings in April 1997 on various transition
to competition issues, including the recoverability of stranded
costs, the potential for cost shifting, and electric supply
reliability and expects to issue an order in mid-1997 outlining a
plan for restructuring the electric utility industry in Mississippi.
Entergy Arkansas filed a supplement to its transition to
competition with the APSC on May 1, 1997. This filing is similar to
the supplemental filing made by Entergy Gulf States as discussed
above. See Note 2 for additional information regarding this filing.
The Council established two new dockets in March 1997 regarding
electric and gas utility service competition in the City of New
Orleans. One docket will address competitive issues, including the
advisability of implementing competition, recoverability and
measurement of stranded costs, maximization of consumer savings from
competition and minimization of cost-shifting, and potential
conflicts between federal, state, and local regulators, as such
issues relate to electric and gas service currently being provided to
New Orleans customers by Entergy New Orleans. The second docket will
address the same issues related to the provision of electric service
to Algiers customers by Entergy Louisiana. A procedural schedule was
established which required comments to be filed in April 1997 and
sets hearings for May, July and October 1997. Entergy New Orleans
intends to file a specific transition to competition plan following
these hearings.
Retail and Wholesale Rate Issues
See Note 2 to the Form 10-K and Note 2 herein for a discussion
of the ongoing trend of regulator mandated rate reductions as well as
incentive and performance-based regulation and filings made with
state and local regulators regarding an orderly transition to a more
competitive market for electricity.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Legislative Activity
A number of bills recently have been introduced in Congress
calling for deregulation of the electric power industry. Included in
these proposals are some that would amend or repeal PUCHA and/or
PURPA. These bills generally have provisions that would give
consumers the ability to choose their own electricity service
provider. A major issue before Congress is whether the federal
government should establish a definitive timetable for all states to
offer direct retail access to customers and, if so, the timing of
such. One bill introduced in early April would require direct retail
access no later than January 1, 1999. The first three of four
scheduled congressional field hearings on electricity deregulation
were held during April and early May 1997.
Entergy has been a participant in discussions aimed at
developing legislation related to electric utility industry
restructuring and competition that could be passed by the Texas
Legislature before it adjourns June 2, 1997. Entergy intends to
continue to have an active role in these discussions.
The Arkansas Senate has passed a resolution requesting a study
of the impact of competition in the electric utility industry on the
citizens of Arkansas, the electric utility industry, and the
regulatory authority of the APSC. This study is scheduled to begin
no later than December 1, 1997.
Domestic and Foreign Investments
Entergy Corporation seeks opportunities to expand its domestic
and foreign businesses that are not regulated by domestic state and
local utility regulatory authorities. Such business ventures
currently include power development and operations and retail
services related to the utility business. Refer to "MANAGEMENT'S
FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES"
for a discussion of Entergy Corporation's 1997 investments in
nonregulated and foreign energy-related businesses. These
investments may involve a greater risk than domestic regulated
utility enterprises. In the first quarter of 1997, Entergy
Corporation's domestic and foreign energy-related investments
increased consolidated net income by approximately $28 million.
Entergy Nuclear Inc. (Entergy Nuclear) began providing
management and operations services in February 1997 for an initial
period of up to one year to Maine Yankee Atomic Power Company (Maine
Yankee) at its Maine Yankee nuclear plant. The creation of Entergy
Nuclear and its undertaking with Maine Yankee are authorized by
existing SEC orders previously granted to Entergy Enterprises.
Entergy Corporation has an application pending at the SEC to create a
different structure under which Entergy Nuclear would engage in this
business for other nuclear utilities.
As of April 30, 1997, Entergy Corporation controlled over 99% of
the common shares of London Electricity. For additional information
related to this acquisition, see Note 8 herein. Through London
Electricity, Entergy expects to gain valuable experience in the
deregulated United Kingdom electricity market that can be transferred
to the expected deregulated market in the United States. London
Electricity expects to be in a fully competitive supply market
beginning April 1998. In conjunction with the acquisition of London
Electricity, Entergy established an international retail operations
group to coordinate the retail electric operations in the United
Kingdom, Australia, and Argentina.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In February 1997, Entergy Richmond Power Corporation, a wholly-
owned subsidiary of Entergy Power Development Corporation, sold its
50% interest in Richmond Power Enterprise LP (owner of a gas-fired
electric and steam generation facility), to a third party for $10
million, realizing an after tax gain of $2.7 million.
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in the Form 10-K, and Note 8,
herein, for a discussion of Entergy's major nonregulated business
opportunities and foreign energy-related investments.
Windfall Profits Tax
As a result of Parliamentary elections held on May 1, 1997, in
which the Labour Party gained control of the British government, it
is anticipated that legislation imposing a "windfall profits tax"
will be proposed. There has been widespread speculation that such a
tax, which would raise funds to address the government's budget
deficit, would be targeted at regional electric utilities, such as
London Electricity, and possibly other utility service providers. It
is impossible to predict at this time if or when such a tax will be
enacted, or the amount of the tax. However, such a tax could have a
material adverse effect upon London Electricity's net income.
Deregulated Utility Operations
Entergy Gulf States discontinued regulatory accounting
principles in 1989 for its wholesale jurisdiction and steam
department, and in 1991 for the Louisiana deregulated portion of
River Bend. Net income from these operations during the first
quarter of 1997 was $4.6 million compared to $6.2 million during the
first quarter of 1996.
The decrease in net income from these deregulated operations for
the first quarter of 1997 was principally due to decreased steam
products revenues, partially offset by reduced operation and
maintenance expenses. The future impact of the deregulated utility
operations on Entergy's and Entergy Gulf States' results of
operations and financial position will depend on future operating
costs, future efficiency and availability of generating units, and
future market prices for energy over the remaining life of the
assets.
Accounting Issues
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" and Note 1 in the Form 10-K for
a discussion of the impact of the adoption by Entergy of SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of", effective January 1, 1996.
Continued Application of SFAS 71 - As a result of the EPAct, the
actions of regulatory bodies, and other factors, the electric utility
industry is moving toward a combination of competition and a modified
regulatory environment. The domestic utility companies' and System
Energy's financial statements currently reflect, for the most part,
assets and costs based on existing cost-based ratemaking regulations
in accordance with SFAS 71, "Accounting for the Effects of Certain
Types of Regulation" (SFAS 71). Continued applicability of SFAS 71
to the domestic utility companies' and System Energy's financial
statements requires that rates set by an independent regulator on a
cost-of-service basis be charged to and collected from customers.
In the event that all or a portion of a utility's operations
cease to meet those criteria for various reasons, including
deregulation, a change in the method of regulation, or a change in
the competitive environment for the utility's regulated services, the
utility is required to discontinue application of SFAS 71 for the
relevant portion of its operations by eliminating from the balance
sheet the effects of any actions of regulators recorded as regulatory
assets and liabilities. The effect of discontinuing the application
of SFAS 71 would have a material adverse impact on Entergy's
financial statements.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
The SEC has expressed concern regarding the continuing
applicability of SFAS 71 to the financial statements of certain
California electric utilities. California regulators have directed
these utilities to transition to a fully competitive retail
environment by 2002, with a 10 percent rate reduction for residential
and small commercial customers becoming effective January 1, 1998,
and full recovery of above market rate investment and other costs
(stranded costs). The SEC is concerned that this plan does not meet
the criteria of SFAS 71 that rates be set on an individual company
cost-of-service basis. It is anticipated that the Emerging Issues
Task Force of the FASB will address this issue during the next
several months. The ultimate resolution of this issue has
significant financial accounting and reporting implications for the
domestic utility companies' transition to competition filings.
The domestic utility companies' and System Energy's financial
statements continue to apply SFAS 71 for their regulated operations,
except for those portions of Entergy Gulf States' business described
in "Deregulated Utility Operations" above. Although discussions with
regulatory authorities regarding retail competition have occurred and
are expected to continue, management does not expect any definitive
outcomes in the foreseeable future, and therefore, the regulated
operations continue to apply SFAS 71. See Note 1 to the Form 10-K
for additional discussion of Entergy's application of SFAS 71.
Accounting for Decommissioning Costs - In February 1996, the
FASB issued an exposure draft of a proposed SFAS addressing the
accounting for decommissioning costs of nuclear generating units as
well as liabilities related to the closure and removal of all long-
lived assets. See Note 1 for a discussion of proposed changes in the
accounting for decommissioning/closure costs and the potential impact
of these changes on Entergy.
Financial Derivatives
Derivative instruments have been used by Entergy on a limited
basis. Entergy has a policy that financial derivatives are to be
used only to mitigate business risks and not for speculative
purposes. See Notes 7 and 9 to the Form 10-K and Note 4 herein for
additional information concerning Entergy's derivative instruments
outstanding as of December 31, 1996, and March 31, 1997.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
On February 7, 1997, Entergy Corporation finalized its
acquisition of London Electricity. In accordance with the purchase
method of accounting, the results of operations for the first quarter
of 1996 of Entergy Corporation and subsidiaries reported in the
Statements of Consolidated Income (Loss) and Cash Flows do not
include London Electricity's results of operations. Consolidated net
income for the first quarter of 1997 includes a positive effect due
to the inclusion of London Electricity for the portion of the first
quarter subsequent to February 1. See Note 8 for additional
information regarding London Electricity.
Net Income
Consolidated net income increased for the first quarter of 1997
primarily due to the $174 million net of tax write-off of River Bend
rate deferrals in 1996 pursuant to SFAS 121. Excluding this item,
net income would have increased $23 million for the first quarter of
1997 due to the increase in foreign utility income, resulting from
the inclusion of London Electricity and increased earnings of
CitiPower. London Electricity contributed earnings of $15.6 million
(or $0.07 per share) to first quarter consolidated net income.
CitiPower's net income increased primarily due to decreases in the
average cost of purchased power and increases in the average
temperature experienced during the first two months of 1997 in
Melbourne, Australia.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues and Sales," "Expenses," and "Other" below.
Revenues and Sales
The changes in electric operating revenues associated with
Entergy's domestic regulated operations for the first quarter of 1997
are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($23.0)
Rate riders (4.5)
Fuel cost recovery 62.9
Sales volume/weather 3.8
Other revenue (including unbilled) 13.5
Sales for resale (13.9)
-----
Total $38.8
=====
Electric operating revenues of the domestic utility companies
and System Energy increased for the first quarter of 1997 as a result
of higher fuel adjustment revenues, which do not affect net income,
partially offset by rate reductions at various domestic utility
companies. Fuel adjustment revenues increased due to higher fuel
prices.
Nonregulated and foreign energy related business revenues
increased for the first quarter of 1997 due mainly to the February
1997 acquisition of London Electricity.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Operating expenses for the portion of the first quarter of 1997
subsequent to February 1 include the operating expenses of London
Electricity, which were not included in the prior year's financial
statements. Excluding the operating expenses of London Electricity,
Entergy's operating expenses increased for the first quarter of 1997
as discussed below.
For the first quarter of 1997, fuel expenses increased as a
result of higher fuel prices as discussed above. The increase in
depreciation, amortization, and decommissioning is due to (i)
additional depreciation recorded by System Energy associated with the
sale and leaseback in 1989 of a portion of Grand Gulf 1 and (ii)
plant additions and improvements. Rate deferrals recorded in the
first quarter of 1996 relate primarily to the LPSC-approved rate
deferral of the Waterford 3 property tax first imposed in 1996. This
tax is currently included in base rates.
Other
Other income increased for the first quarter of 1997 as a result
of the 1996 write-off of River Bend rate deferrals pursuant to SFAS
121 and a decrease in Grand Gulf 1 carrying charges at Entergy
Arkansas due to a decline in the deferral balance. Excluding London
Electricity, interest on long-term debt decreased for the first
quarter of 1997 due primarily to ongoing retirement and refinancing
of higher cost debt. Interest on debt associated with the London
Electricity acquisition more than offset this decrease. Income tax
expense increased primarily due to higher pretax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands, Except Share Data)
<S> <C> <C>
Operating Revenues:
Electric $1,451,925 $1,413,068
Natural gas 57,496 57,473
Steam products 11,089 15,578
Nonregulated and foreign energy-related businesses 525,243 112,873
---------- ----------
Total 2,045,753 1,598,992
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 398,742 375,764
Purchased power 420,962 158,157
Nuclear refueling outage expenses 17,236 14,209
Other operation and maintenance 426,087 353,212
Depreciation, amortization, and decommissioning 228,029 194,567
Taxes other than income taxes 92,991 88,971
Rate deferrals (9,575) (19,802)
Amortization of rate deferrals 99,063 91,511
---------- ----------
Total 1,673,535 1,256,589
---------- ----------
Operating Income 372,218 342,403
---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 3,033 2,558
Write-off of River Bend rate deferrals - (194,498)
Miscellaneous - net 17,393 10,778
---------- ----------
Total 20,426 (181,162)
---------- ----------
Interest Charges:
Interest on long-term debt 185,490 172,843
Other interest - net 11,905 11,847
Distributions on preferred securities of subsidiaries 4,172 -
Allowance for borrowed funds used
during construction (2,437) (2,138)
Preferred and preference dividend requirements of
subsidiaries and other 16,723 18,081
---------- ----------
Total 215,853 200,633
---------- ----------
Income (Loss) Before Income Taxes 176,791 (39,392)
Income Taxes 67,029 47,680
---------- ----------
Net Income (Loss) $109,762 ($87,072)
========== ==========
Earnings (loss) per average common share $0.47 ($0.38)
Dividends declared per common share $0.45 $0.90
Average number of common shares outstanding 235,133,608 227,780,604
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income (loss) $109,762 ($87,072)
Noncash items included in net income (loss):
Write-off of River Bend rate deferrals - 194,498
Change in rate deferrals/excess capacity-net 111,036 105,388
Depreciation, amortization, and decommissioning 228,029 194,567
Deferred income taxes and investment tax credits (53,743) (45,013)
Allowance for equity funds used during construction (5,470) (2,558)
Changes in working capital:
Receivables 115,155 37,148
Fuel inventory 32,438 23,212
Accounts payable (201,617) (32,984)
Taxes accrued 119,438 65,289
Interest accrued (10,637) (65,276)
Other working capital accounts 98,914 (81,209)
Decommissioning trust contributions (14,656) (12,146)
Other (42,584) (25,535)
---------- ----------
Net cash flow provided by operating activities 486,065 268,309
---------- ----------
Investing Activities:
Construction/capital expenditures (125,743) (131,435)
Allowance for equity funds used during construction 5,470 2,558
Nuclear fuel purchases (54,155) (65,430)
Proceeds from sale/leaseback of nuclear fuel 68,319 46,872
Acquisition of CitiPower - (1,156,112)
Acquisition of London Electricity, net of cash acquired (2,021,501) -
Investment in nonregulated/nonutility properties 12,515 (5,171)
---------- ----------
Net cash flow used in investing activities (2,115,095) (1,308,718)
---------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Financing Activities:
Proceeds from the issuance of:
General and refunding mortgage bonds - 39,608
First mortgage bonds 84,490 198,250
Bank notes and other long-term debt 1,630,280 946,167
Common Stock 98,695 -
Preferred securities of subsidiaries trust 82,323 -
Retirement of:
First mortgage bonds - (133,687)
General and refunding mortgage bonds (87,965) -
Other long-term debt - (92,744)
Redemption of preferred stock (101,728) (19,704)
Changes in short-term borrowings - net 258,274 277,000
Common stock dividends paid (105,035) (99,714)
---------- ----------
Net cash flow provided by financing activities 1,859,334 1,115,176
---------- ----------
Effect of exchange rates on cash and cash equivalents (758) 40
---------- ----------
Net increase in cash and cash equivalents 229,546 74,807
Cash and cash equivalents at beginning of period 388,703 533,590
---------- ----------
Cash and cash equivalents at end of period $618,249 $608,397
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $223,444 $239,354
Income taxes $3,002 $12,032
Noncash investing and financing activities:
Change in unrealized depreciation of
decommissioning trust assets ($1,119) ($4,265)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $125,027 $34,807
Temporary cash investments - at cost,
which approximates market 391,130 346,782
Special deposits 102,092 7,114
----------- -----------
Total cash and cash equivalents 618,249 388,703
Notes receivable 9,524 1,384
Accounts receivable:
Customer (less allowance for doubtful accounts of
$26.4 million in 1997 and $9.2 million in 1996) 562,916 324,687
Other 148,717 99,066
Accrued unbilled revenues 468,238 351,429
Deferred fuel 86,965 122,184
Fuel inventory 122,195 139,603
Materials and supplies - at average cost 375,985 339,622
Rate deferrals 411,483 444,543
Prepayments and other 190,884 151,312
----------- -----------
Total 2,995,156 2,362,533
----------- -----------
Other Property and Investments:
Decommissioning trust funds 375,933 357,962
Non-regulated investments 502,629 513,058
Other 78,417 59,053
----------- -----------
Total 956,979 930,073
----------- -----------
Utility Plant:
Electric 25,039,087 22,811,164
Plant acquisition adjustment - Entergy Gulf States 451,359 455,425
Electric plant under leases 680,246 679,991
Property under capital leases - electric 143,857 147,277
Natural gas 175,093 168,143
Steam products 81,743 81,743
Construction work in progress 411,694 401,676
Nuclear fuel under capital leases 284,489 250,651
Nuclear fuel 58,030 112,625
----------- -----------
Total 27,325,598 25,108,695
Less - accumulated depreciation and amortization 9,045,596 8,885,572
----------- -----------
Utility plant - net 18,280,002 16,223,123
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 321,517 399,493
SFAS 109 regulatory asset - net 1,194,590 1,196,041
Unamortized loss on reacquired debt 212,183 217,664
Other regulatory assets 436,340 435,652
Long-term receivables 211,524 216,082
CitiPower license (net of $3.8 million of amortization) 598,897 606,214
London Electricity license (net of $6.4 million of amortization) 1,541,414 -
Other 399,960 379,419
----------- -----------
Total 4,916,425 3,450,565
----------- -----------
TOTAL $27,148,562 $22,966,294
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $412,332 $345,620
Notes payable 567,811 20,686
Accounts payable 511,661 554,558
Customer deposits 181,693 155,534
Taxes accrued 370,004 180,340
Accumulated deferred income taxes 47,248 78,010
Interest accrued 195,834 203,425
Dividends declared 5,486 8,950
Obligations under capital leases 152,077 151,287
Other 280,575 184,157
----------- -----------
Total 2,724,721 1,882,567
----------- -----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,674,949 3,770,760
Accumulated deferred investment tax credits 602,793 607,641
Obligations under capital leases 277,012 247,360
Other 1,791,020 1,298,306
----------- -----------
Total 7,345,774 5,924,067
----------- -----------
Long-term debt 9,422,701 7,590,804
Subsidiaries' preferred stock with sinking fund 200,237 216,986
Subsidiary's preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 215,000 130,000
Shareholders' Equity:
Subsidiaries' preferred stock without sinking fund 345,954 430,955
Common stock, $.01 par value, authorized 500,000,000
shares; issued 237,865,027 shares in 1997 and
234,456,457 shares in 1996 2,378 2,345
Paid-in capital 4,410,325 4,320,591
Retained earnings 2,345,917 2,341,703
Cumulative foreign currency translation adjustment 20,966 21,725
Less - treasury stock (1,131,223 shares in 1997 and
1,496,118 shares in 1996) 35,411 45,449
----------- -----------
Total 7,090,129 7,071,870
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $27,148,562 $22,966,294
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Increase/
Description 1997 1996 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Domestic Electric Operating Revenues:
Residential $ 502.1 $ 507.1 ($5.0) (1)
Commercial 368.3 354.5 13.8 4
Industrial 496.9 460.3 36.6 8
Governmental 41.6 38.7 2.9 7
--------- --------- ------
Total retail 1,408.9 1,360.6 48.3 4
Sales for resale 76.6 90.1 (13.5) (15)
Other (33.6) (37.6) 4.0 (11)
--------- --------- ------
Total $ 1,451.9 $ 1,413.1 $ 38.8 3
========= ========= ======
Billed Electric Energy
Sales (Millions of kWh):
Residential 6,399 6,667 (268) (4)
Commercial 4,895 4,792 103 2
Industrial 10,897 10,445 452 4
Governmental 595 556 39 7
--------- --------- ------
Total retail 22,786 22,460 326 1
Sales for resale 2,425 2,575 (150) (6)
--------- --------- ------
Total 25,211 25,035 176 1
========= ========= ======
</TABLE>
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1997 due to
reduced operating revenues, partially offset by lower income taxes.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues and Sales," "Expenses," and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1997 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues $0.9
Rate riders 1.4
Fuel cost recovery 3.8
Sales volume/weather (0.8)
Other revenue (including unbilled) (10.1)
Sales for resale (3.6)
-----
Total ($8.4)
=====
Electric operating revenues decreased for the first quarter of
1997 primarily due to an decrease in unbilled revenue. Unbilled
revenue decreased primarily due to milder weather in the first
quarter of 1997.
Expenses
Operating expenses increased for the first quarter of 1997
primarily due to an increase in the amortization of Grand Gulf 1
rate deferrals. The increase in the amortization of Grand Gulf 1
rate deferrals is due to an increase in amortization prescribed in
the Grand Gulf 1 rate phase-in plan.
Other
Miscellaneous other income - net decreased for the first quarter
of 1997 due to reduced Grand Gulf 1 carrying charges as a result of a
decline in the deferral balance. Income tax expense decreased for
the first quarter of 1997 because of lower pretax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Revenues $374,731 $383,081
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 66,593 65,200
Purchased power 94,734 98,625
Nuclear refueling outage expenses 6,900 7,542
Other operation and maintenance 85,716 83,265
Depreciation, amortization, and decommissioning 41,449 41,030
Taxes other than income taxes 9,428 9,018
Amortization of rate deferrals 39,021 36,446
-------- --------
Total 343,841 341,126
-------- --------
Operating Income 30,890 41,955
-------- --------
Other Income:
Allowance for equity funds used
during construction 1,443 1,090
Miscellaneous - net 5,325 8,239
-------- --------
Total 6,768 9,329
-------- --------
Interest Charges:
Interest on long-term debt 24,450 24,835
Other interest - net 929 1,027
Distributions on preferred securities of subsidiary 1,275 -
Allowance for borrowed funds used
during construction (868) (665)
-------- --------
Total 25,786 25,197
-------- --------
Income Before Income Taxes 11,872 26,087
Income Taxes 2,024 6,819
-------- --------
Net Income 9,848 19,268
Preferred Stock Dividend Requirements
and Other 2,832 4,458
-------- --------
Earnings Applicable to Common Stock $7,016 $14,810
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $9,848 $19,268
Noncash items included in net income:
Change in rate deferrals/excess capacity-net 40,661 35,953
Depreciation, amortization, and decommissioning 41,449 41,030
Deferred income taxes and investment tax credits (21,515) (18,102)
Allowance for equity funds used during construction (1,443) (1,090)
Changes in working capital:
Receivables 61,901 24,582
Fuel inventory 3,511 3,174
Accounts payable (22,825) (3,762)
Taxes accrued 26,040 26,025
Interest accrued (421) (14,743)
Other working capital accounts (6,349) 2,326
Decommissioning trust contributions (4,046) (4,140)
Provision for estimated losses and reserves 3,036 529
Other 12,726 733
-------- --------
Net cash flow provided by operating activities 142,573 111,783
-------- --------
Investing Activities:
Construction expenditures (32,479) (32,250)
Allowance for equity funds used during construction 1,443 1,090
Nuclear fuel purchases (35,574) (19,081)
Proceeds from sale/leaseback of nuclear fuel 35,595 18,470
-------- --------
Net cash flow used in investing activities (31,015) (31,771)
-------- --------
Financing Activities:
Proceeds from issuance of first mortgage bonds 84,490 84,256
Retirement of first mortgage bonds (30,000) (30,437)
Dividends paid:
Common stock (26,400) -
Preferred stock (5,663) (8,917)
-------- --------
Net cash flow provided by financing activities 22,427 44,902
-------- --------
Net increase in cash and cash equivalents 133,985 124,914
Cash and cash equivalents at beginning of period 43,857 11,798
-------- --------
Cash and cash equivalents at end of period $177,842 $136,712
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $22,208 $37,479
Income taxes $4,260 $6,460
Noncash investing and financing activities:
Acquisition of nuclear fuel $27,500 -
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $143 ($4,363)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $18,302 $5,117
Temporary cash investments - at cost,
which approximates market:
Associated companies 29,404 17,462
Other 42,228 21,278
Special deposits 87,908 -
---------- ----------
Total cash and cash equivalents 177,842 43,857
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.3 million in 1997 and 1996) 55,866 71,144
Associated companies 29,034 45,303
Other 3,557 5,862
Accrued unbilled revenues 76,715 104,764
Fuel inventory - at average cost 53,808 57,319
Materials and supplies - at average cost 83,715 72,976
Rate deferrals 136,923 153,141
Deferred excess capacity 6,630 9,005
Deferred nuclear refueling outage costs 18,552 24,534
Prepayments and other 5,838 7,491
---------- ----------
Total 648,480 595,396
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,211 11,211
Decommissioning trust fund 209,944 203,274
Other - at cost (less accumulated depreciation) 3,858 5,058
---------- ----------
Total 225,013 219,543
---------- ----------
Utility Plant:
Electric 4,588,636 4,578,728
Property under capital leases 56,977 57,869
Construction work in progress 95,239 83,524
Nuclear fuel under capital lease 104,206 79,103
Nuclear fuel - 27,500
---------- ----------
Total 4,845,058 4,826,724
Less - accumulated depreciation and amortization 2,016,518 1,976,204
---------- ----------
Utility plant - net 2,828,540 2,850,520
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 53,181 75,249
SFAS 109 regulatory asset - net 245,278 244,767
Unamortized loss on reacquired debt 55,772 56,664
Other regulatory assets 82,271 80,257
Other 31,302 31,421
---------- ----------
Total 467,804 488,358
---------- ----------
TOTAL $4,169,837 $4,153,817
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $90,052 $32,465
Notes payable 667 667
Accounts payable:
Associated companies 45,912 91,205
Other 92,557 97,589
Customer deposits 23,087 21,800
Taxes accrued 80,234 54,194
Accumulated deferred income taxes 59,149 70,506
Interest accrued 27,204 27,625
Co-owner advances 29,691 33,873
Deferred fuel cost 11,331 6,955
Obligations under capital leases 53,044 53,012
Other 13,241 17,967
---------- ----------
Total 526,169 507,858
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 777,449 785,994
Accumulated deferred investment tax credits 107,205 108,307
Obligations under capital leases 108,139 83,940
Other 117,804 113,998
---------- ----------
Total 1,110,597 1,092,239
---------- ----------
Long-term debt 1,254,122 1,255,388
Preferred stock with sinking fund 40,027 40,027
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 60,000 60,000
Shareholders' Equity:
Preferred stock without sinking fund 116,350 116,350
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares 470 470
Paid-in capital 590,169 590,169
Retained earnings 471,933 491,316
---------- ----------
Total 1,178,922 1,198,305
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,169,837 $4,153,817
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1997 and 1996
Three Months Ended Increase/
Description 1997 1996 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 131.4 $ 132.2 ($0.8) (1)
Commercial 72.6 70.6 2.0 3
Industrial 81.6 77.7 3.9 5
Governmental 4.3 4.1 0.2 5
------- ------- -----
Total retail 289.9 284.6 5.3 2
Sales for resale
Associated companies 60.8 59.8 1.0 2
Non-associated companies 44.2 48.8 (4.6) (9)
Other (20.2) (10.1) (10.1) 100
------- ------- -----
Total $ 374.7 $ 383.1 ($8.4) (2)
======= ======= =====
Billed Electric Energy
Sales (Millions of kWh):
Residential 1,518 1,571 (53) (3)
Commercial 1,008 996 12 1
Industrial 1,570 1,525 45 3
Governmental 60 56 4 7
------- ------- -----
Total retail 4,156 4,148 8 -
Sales for resale
Associated companies 2,974 2,654 320 12
Non-associated companies 1,496 1,674 (178) (11)
------- ------- -----
Total 8,626 8,476 150 2
======= ======= =====
</TABLE>
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the first quarter of 1997 primarily due
to the $174 million net of tax write-off of River Bend rate deferrals
required by the adoption of SFAS 121 in the first quarter of 1996.
Excluding the effect of the write-off, net income for the first
quarter of 1997 would have increased approximately $10.8 million due
to increased sales volume and a decrease in other operation and
maintenance expenses and interest on long-term debt.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues and Sales," "Expenses," and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1997 are as follows:
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($16.9)
Fuel cost recovery 22.3
Sales volume/weather 6.5
Other revenue (including unbilled) 17.2
Sales for resale (7.1)
-----
Total $22.0
=====
Electric operating revenues increased for the first quarter of
1997 as a result of higher fuel adjustment revenues and increased
other revenue, partially offset by a reduction in base revenue. Fuel
adjustment revenues, which do not affect net income, increased due to
elevated fuel prices. The increase in other revenue is primarily due
to an increase in unbilled revenue. Unbilled revenue increased due
to increased generation in the first quarter of 1997. Base revenues
decreased primarily due to rate reductions implemented for Louisiana
retail customers in February 1997.
Gas operating revenues increased for the first quarter of 1997
due to an increase in the fixed fuel factor granted by the LPSC.
This increase permits recovery of previously uncollected gas
revenues.
Expenses
Operating expenses increased for the first quarter of 1997 as a
result of higher fuel expenses, including purchased power, partially
offset by a decrease in other operation and maintenance expenses.
Purchased power increased because of higher energy requirements
resulting from higher sales to non-associated utilities. Other
operation and maintenance expenses decreased as a result of the
receipt by Entergy Gulf States of proceeds from the sale of Cajun's
share of River Bend power. See Note 1 for additional information.
No such sales were made in the first quarter of 1996 due to a nuclear
refueling outage at River Bend.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other
Other income increased for the first quarter of 1997, primarily
due to the write-off of River Bend rate deferrals required by the
adoption of SFAS 121 in the first quarter of 1996. Interest charges
decreased due to the retirement of certain high cost long-term debt.
Income taxes increased due to higher pretax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF INCOME (LOSS)
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $448,138 $426,177
Natural gas 22,101 14,876
Steam products 11,089 15,578
-------- --------
Total 481,328 456,631
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 120,392 117,409
Purchased power 79,341 67,834
Nuclear refueling outage expenses 2,645 2,360
Other operation and maintenance 83,262 96,741
Depreciation, amortization, and decommissioning 52,968 51,251
Taxes other than income taxes 29,207 26,334
Amortization of rate deferrals 20,499 17,644
-------- --------
Total 388,314 379,573
-------- --------
Operating Income 93,014 77,058
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 725 493
Write-off of River Bend rate deferrals - (194,498)
Miscellaneous - net 4,101 4,940
-------- --------
Total 4,826 (189,065)
-------- --------
Interest Charges:
Interest on long-term debt 41,986 46,488
Other interest - net 2,738 950
Distributions on preferred securities of subsidiary 1,322 -
Allowance for borrowed funds used
during construction (619) (428)
-------- --------
Total 45,427 47,010
-------- --------
Income (Loss) Before Income Taxes 52,413 (159,017)
Income Taxes 19,878 (6,760)
-------- --------
Net Income (Loss) 32,535 (152,257)
Preferred Stock Dividend Requirements
and Other 8,943 7,219
-------- --------
Earnings (Loss) Applicable to Common Stock $23,592 ($159,476)
======== =========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income (loss) $32,535 ($152,257)
Noncash items included in net income (loss):
Write-off of River Bend rate deferrals - 194,498
Change in rate deferrals 20,275 17,644
Depreciation, amortization, and decommissioning 52,968 51,251
Deferred income taxes and investment tax credits 6,614 (6,812)
Allowance for equity funds used during construction (725) (493)
Changes in working capital:
Receivables (15,453) 8,020
Fuel inventory 3,838 6,822
Accounts payable (19,558) (902)
Taxes accrued 4,981 (6,976)
Interest accrued 7,099 (21,462)
Deferred fuel (3,648) (30,733)
Other working capital accounts 12,860 (25,779)
Decommissioning trust contributions (1,481) (1,481)
Provision for estimated losses and reserves (2,284) 2,648
Other 12,638 777
-------- --------
Net cash flow provided by operating activities 110,659 34,765
-------- --------
Investing Activities:
Construction expenditures (27,932) (36,419)
Allowance for equity funds used during construction 725 493
Nuclear fuel purchases - (22,188)
Proceeds from sale/leaseback of nuclear fuel - 23,375
-------- --------
Net cash flow used in investing activities (27,207) (34,739)
-------- --------
Financing Activities:
Proceeds from the issuance of:
Long-term debt - 780
Preferred securities of subsidiary trust 82,323 -
Retirement of first mortgage bonds (41,965) (20,000)
Redemption of preferred and preference stock (89,367) (4,204)
Dividends paid on preferred and preference stock (6,940) (7,132)
-------- --------
Net cash flow used in financing activities (55,949) (30,556)
-------- --------
Net increase (decrease) in cash and cash equivalents 27,503 (30,530)
Cash and cash equivalents at beginning of period 122,406 234,604
-------- --------
Cash and cash equivalents at end of period $149,909 $204,074
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $34,925 $66,212
Change in unrealized appreciation of
decommissioning trust assets $41 -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $18,670 $6,573
Temporary cash investments - at cost,
which approximates market:
Associated companies 47,463 45,234
Other 83,776 70,599
---------- ----------
Total cash and cash equivalents 149,909 122,406
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.0 million in 1997 and 1996) 97,876 87,883
Associated companies 2,179 2,777
Other 31,475 30,758
Accrued unbilled revenues 80,692 75,351
Deferred fuel costs 103,151 99,503
Accumulated deferred income taxes 57,947 56,714
Fuel inventory - at average cost 41,171 45,009
Materials and supplies - at average cost 91,750 86,157
Rate deferrals 92,164 105,456
Prepayments and other 13,756 16,321
---------- ----------
Total 762,070 728,335
---------- ----------
Other Property and Investments:
Decommissioning trust fund 43,960 41,983
Other - at cost (less accumulated depreciation) 38,859 38,358
---------- ----------
Total 82,819 80,341
---------- ----------
Utility Plant:
Electric 7,137,572 7,112,021
Natural Gas 47,017 45,443
Steam products 81,743 81,743
Property under capital leases 72,363 72,800
Construction work in progress 106,291 112,137
Nuclear fuel under capital lease 43,276 49,833
---------- ----------
Total 7,488,262 7,473,977
Less - accumulated depreciation and amortization 2,890,955 2,846,083
---------- ----------
Utility plant - net 4,597,307 4,627,894
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 107,086 120,158
SFAS 109 regulatory asset - net 376,921 372,817
Unamortized loss on reacquired debt 53,071 54,761
Other regulatory assets 42,919 45,139
Long-term receivables 211,524 216,082
Other 187,450 185,921
---------- ----------
Total 978,971 994,878
---------- ----------
TOTAL $6,421,167 $6,431,448
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $150,865 $160,865
Accounts payable:
Associated companies 50,169 55,630
Other 71,444 85,541
Customer deposits 26,724 25,572
Taxes accrued 41,128 36,147
Interest accrued 56,750 49,651
Nuclear refueling reserve 15,283 12,354
Obligations under capital leases 39,650 39,110
Other 29,993 18,186
---------- ----------
Total 482,006 483,056
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,220,762 1,200,935
Accumulated deferred investment tax credits 218,289 219,188
Obligations under capital leases 75,989 83,524
Deferred River Bend finance charges 27,599 33,688
Other 535,948 539,752
---------- ----------
Total 2,078,587 2,077,087
---------- ----------
Long-term debt 1,883,401 1,915,346
Preferred stock with sinking fund 75,210 77,459
Preference stock 150,000 150,000
Company - obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 85,000 -
Shareholders' Equity:
Preferred stock without sinking fund 51,444 136,444
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares 114,055 114,055
Paid-in capital 1,152,575 1,152,689
Retained earnings 348,889 325,312
---------- ----------
Total 1,666,963 1,728,500
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,421,167 $6,431,448
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Increase/
Description 1997 1996 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Department Operating Revenues:
Residential $ 133.6 $ 134.7 ($ 1.1) (1)
Commercial 105.4 102.5 2.9 3
Industrial 177.9 160.6 17.3 11
Governmental 8.0 7.0 1.0 14
------- ------- -----
Total retail 424.9 404.8 20.1 5
Sales for resale
Associated companies 9.0 2.8 6.2 221
Non-associated companies 5.7 19.0 (13.3) (70)
Other 8.6 (0.4) 9.0 2250
------- ------- -----
Total Electric Department $ 448.2 $ 426.2 $ 22.0 5
======= ======= ======
Billed Electric Energy
Sales (Millions of kWh):
Residential 1,793 1,825 (32) (2)
Commercial 1,488 1,462 26 2
Industrial 4,165 3,901 264 7
Governmental 115 92 23 25
------- ------- -----
Total retail 7,561 7,280 281 4
Sales for resale
Associated companies 46 56 (10) (18)
Non-associated companies 664 500 164 33
------- ------- -----
Total Electric Department 8,271 7,836 435 6
======= ======= =====
</TABLE>
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1997 primarily due
to a decrease in base revenues and to an increase in other operation
and maintenance expenses. These factors were partially offset by a
decrease in income taxes.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues and Sales", "Expenses" , and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1997 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($5.7)
Fuel cost recovery 22.4
Sales volume/weather (2.2)
Other revenue (including unbilled) 4.2
Sales for resale (2.5)
-----
Total $16.2
=====
Electric operating revenues increased for the first quarter of
1997 primarily due to higher fuel adjustment revenues, which do not
affect net income. This increase was partially offset by a prior year
base rate reduction ordered in the second quarter of 1996 and lower
sales volume due to warmer weather in the first quarter of 1997.
Fuel adjustment revenues increased due to higher fuel prices.
Expenses
Operating expenses increased for the first quarter of 1997 as a
result of increases in fuel expenses, higher other operation and
maintenance expenses, and the impact of 1996 rate deferrals, as
discussed below. The increase in fuel expenses for the first quarter
of 1997 is primarily the result of higher fuel prices. Other
operation and maintenance expenses increased due to higher nuclear
maintenance expenses. Waterford 3 property taxes recorded in 1996
were offset by the recording of the LPSC-approved rate deferral for
these taxes. Depreciation expense increased due to plant additions
and improvements.
Other
Income taxes decreased due to lower pretax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF INCOME
For the Three Months ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Revenues $433,983 $417,767
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 112,916 90,680
Purchased power 96,196 100,875
Nuclear refueling outage expenses 3,975 4,000
Other operation and maintenance 74,085 65,770
Depreciation, amortization, and decommissioning 44,371 41,741
Taxes other than income taxes 18,239 19,734
Rate deferrals (6,859)
Amortization of rate deferrals 6,321 6,660
-------- --------
Total 356,103 322,601
-------- --------
Operating Income 77,880 95,166
-------- --------
Other Income:
Allowance for equity funds used
during construction 218 277
Miscellaneous - net (641) 286
-------- --------
Total (423) 563
-------- --------
Interest Charges:
Interest on long-term debt 30,083 30,717
Other interest - net 1,935 2,336
Distributions on preferred securities of subsidiary 1,575 -
Allowance for borrowed funds used
during construction (378) (408)
-------- --------
Total 33,215 32,645
-------- --------
Income Before Income Taxes 44,242 63,084
Income Taxes 18,070 22,554
-------- --------
Net Income 26,172 40,530
Preferred Stock Dividend Requirements
and Other 3,592 4,915
-------- --------
Earnings Applicable to Common Stock $22,580 $35,615
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Three Months ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $26,172 $40,530
Noncash items included in net income:
Change in rate deferrals 2,826 6,660
Depreciation, amortization, and decommissioning 44,371 41,741
Deferred income taxes and investment tax credits (17,008) (4,169)
Allowance for equity funds used during construction (218) (277)
Changes in working capital:
Receivables 2,259 6,447
Accounts payable (33,184) (2,740)
Taxes accrued 23,535 40,406
Interest accrued (21,862) (17,143)
Deferred fuel 23,843 (3,784)
Other working capital accounts 18,534 (7,543)
Decommissioning trust contributions (4,393) (4,393)
Provision for estimated losses and reserves 2,586 (615)
Other 8,734 (6,382)
-------- --------
Net cash flow provided by operating activities 76,195 88,738
-------- --------
Investing Activities:
Construction expenditures (12,421) (26,235)
Allowance for equity funds used during construction 218 277
Nuclear fuel purchases (32,685) -
Proceeds from sale/leaseback of nuclear fuel 32,685 -
-------- --------
Net cash flow used in investing activities (12,203) (25,958)
-------- --------
Financing Activities:
Proceeds from the issuance of first mortgage bonds - 113,994
Retirement of:
First mortgage bonds (16,000) (35,000)
Other long-term debt - (44)
Redemption of preferred stock (7,500) (7,500)
Changes in short-term borrowings - net (6,694) (28,468)
Dividends paid:
Common stock (26,900) (14,400)
Preferred stock (3,490) (5,151)
-------- --------
Net cash flow (used in) provided by financing activities (60,584) 23,431
-------- --------
Net increase in cash and cash equivalents 3,408 86,211
Cash and cash equivalents at beginning of period 23,746 34,370
-------- --------
Cash and cash equivalents at end of period $27,154 $120,581
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $52,242 $48,455
Change in unrealized depreciation of
decommissioning trust assets ($321) ($94)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $4,926 $1,804
Temporary cash investments - at cost,
which approximates market 22,228 21,942
---------- ----------
Total cash and cash equivalents 27,154 23,746
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.4 million in 1997 and 1996) 75,952 73,823
Associated companies 12,060 11,606
Other 5,998 7,053
Accrued unbilled revenues 60,092 63,879
Deferred fuel costs - 18,347
Accumulated deferred income taxes 15,692 1,465
Materials and supplies - at average cost 87,548 78,449
Rate deferrals 2,923 5,749
Deferred nuclear refueling outage costs 2,412 5,300
Prepaid income tax - 24,651
Prepayments and other 11,712 10,234
---------- ----------
Total 301,543 324,302
---------- ----------
Other Property and Investments:
Nonutility property 22,492 22,525
Decommissioning trust fund 55,108 50,481
Investment in subsidiary companies - at equity 14,230 14,230
---------- ----------
Total 91,830 87,236
---------- ----------
Utility Plant:
Electric 5,005,501 4,997,456
Property under capital leases 232,582 232,582
Construction work in progress 52,768 56,180
Nuclear fuel under capital lease 62,287 38,157
Nuclear fuel 1,506 34,191
---------- ----------
Total 5,354,644 5,358,566
Less - accumulated depreciation and amortization 1,921,269 1,881,847
---------- ----------
Utility plant - net 3,433,375 3,476,719
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 292,910 295,836
Unamortized loss on reacquired debt 36,531 37,552
Other regulatory assets 27,203 30,320
Other 27,100 27,313
---------- ----------
Total 383,744 391,021
---------- ----------
TOTAL $4,210,492 $4,279,278
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $53,400 $34,275
Notes payable - associated companies 24,372 31,066
Accounts payable:
Associated companies 40,825 73,389
Other 56,245 89,550
Customer deposits 59,974 59,070
Taxes accrued 30,925 7,390
Interest accrued 27,387 49,249
Dividends declared 3,252 3,489
Deferred fuel costs 5,496 -
Obligations under capital leases 28,000 28,000
Other 5,609 4,940
---------- ----------
Total 335,485 380,418
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 826,793 831,093
Accumulated deferred investment tax credits 138,494 139,899
Obligations under capital leases 34,287 10,156
Deferred interest - Waterford 3 lease obligation 17,055 16,809
Other 118,626 114,665
---------- ----------
Total 1,135,255 1,112,622
---------- ----------
Long-term debt 1,338,229 1,373,233
Preferred stock with sinking fund 85,000 92,500
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 70,000 70,000
Shareholders' Equity:
Preferred stock without sinking fund 100,500 100,500
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares 1,088,900 1,088,900
Capital stock expense and other (2,321) (2,659)
Retained earnings 59,444 63,764
---------- ----------
Total 1,246,523 1,250,505
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,210,492 $4,279,278
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Increase/
Description 1997 1996 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 133.3 $ 135.3 ($ 2.0) (1)
Commercial 89.5 86.0 3.5 4
Industrial 188.1 175.6 12.5 7
Governmental 9.0 8.5 0.5 6
------- ------- -----
Total retail 419.9 405.4 14.5 4
Sales for resale
Associated companies 0.3 0.2 0.1 50
Non-associated companies 11.9 14.5 (2.6) (18)
Other 1.9 (2.3) 4.2 183
------- ------- -----
Total $ 434.0 $ 417.8 $ 16.2 4
======= ======= =======
Billed Electric Energy
Sales (Millions of kWh):
Residential 1,723 1,826 (103) (6)
Commercial 1,103 1,092 11 1
Industrial 4,325 4,213 112 3
Governmental 119 115 4 3
------- ------- -----
Total retail 7,270 7,246 24 -
Sales for resale
Associated companies 7 3 4 133
Non-associated companies 140 233 (93) (40)
------- ------- -----
Total 7,417 7,482 (65) (1)
======= ======= =====
</TABLE>
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1997 as a result
of an increase in other operation and maintenance expenses partially
offset by a decrease in income tax expense.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues and Sales," "Expenses," and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1997 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($0.3)
Grand Gulf rate rider (5.9)
Fuel cost recovery 8.1
Sales volume/weather -
Other revenue (including unbilled) (2.7)
Sales for resale (2.8)
-----
Total ($3.6)
=====
Electric operating revenues decreased for the first quarter of
1997, due to decreases in the Grand Gulf 1 rate rider revenues and
sales for resale, which do not affect net income. These decreases
were partially offset by an increase in the fuel adjustment revenues,
which also have no impact on net income. In connection with an
annual MPSC review, in October 1996, Entergy Mississippi's Grand Gulf
1 rate rider was decreased based on the estimate of costs over the
next year. Therefore, Grand Gulf 1 rate rider revenues for the first
quarter of 1997 were lower than revenues for the same period in 1996.
Sales for resale, specifically sales to associated companies,
decreased primarily due to changes in the generation requirements and
availability among the domestic utility companies. Fuel adjustment
clause revenues increased due to higher fuel costs, as discussed
below.
Expenses
Operating expenses increased for the first quarter of 1997 due
to increases in fuel, purchased power, and other operation and
maintenance expenses. Fuel and purchased power expenses increased as
a result of higher fuel costs for the first quarter of 1997. The
increase in other operation and maintenance expenses was partially
due to the settlement of an injury claim. Higher contract work and
materials and supplies expenses in the first quarter of 1997 also
contributed to the increase in other operation and maintenance
expense.
Rate deferrals reducing operating expenses in 1996 and 1997
represent the deferral of Entergy Mississippi's portion of the
proposed System Energy rate increase. See Note 2 for a further
discussion.
Other
Income tax expense for the first quarter of 1997 decreased
because of lower pretax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Revenues $200,328 $203,902
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 40,023 39,746
Purchased power 70,359 67,312
Other operation and maintenance 30,020 27,649
Depreciation and amortization 10,699 10,027
Taxes other than income taxes 10,336 9,585
Rate deferrals (7,614) (7,151)
Amortization of rate deferrals 23,811 26,264
-------- --------
Total 177,634 173,432
-------- --------
Operating Income 22,694 30,470
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 286 273
Miscellaneous - net (312) (78)
-------- --------
Total (26) 195
-------- --------
Interest Charges:
Interest on long-term debt 10,623 11,039
Other interest - net 1,336 940
Allowance for borrowed funds used
during construction (231) (224)
-------- --------
Total 11,728 11,755
-------- --------
Income Before Income Taxes 10,940 18,910
Income Taxes 2,588 5,986
-------- --------
Net Income 8,352 12,924
Preferred Stock Dividend Requirements
and Other 1,115 1,248
-------- --------
Earnings Applicable to Common Stock $7,237 $11,676
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $8,352 $12,924
Noncash items included in net income:
Change in rate deferrals 35,710 31,475
Depreciation and amortization 10,699 10,027
Deferred income taxes and investment tax credits (6,269) (7,907)
Allowance for equity funds used during construction (286) (273)
Changes in working capital:
Receivables 23,627 4,269
Fuel inventory 963 1,055
Accounts payable (7,461) 4,350
Taxes accrued (7,668) (10,253)
Interest accrued (4,197) (9,419)
Other working capital accounts 95 4,977
Change in other regulatory assets (18,506) (12,428)
Other (231) 927
-------- --------
Net cash flow provided by operating activities 35,684 29,724
-------- --------
Investing Activities:
Construction expenditures (10,468) (19,297)
Allowance for equity funds used during construction 286 273
-------- --------
Net cash flow used in investing activities (10,182) (19,024)
-------- --------
Financing Activities:
Retirement of first mortgage bonds - (25,000)
Redemption of preferred stock (7,000) (8,000)
Changes in short-term borrowings - net (11,141) 17,436
Dividends paid:
Common stock (9,200) (7,700)
Preferred stock (1,128) (1,392)
-------- --------
Net cash flow used in financing activities (28,469) (24,656)
-------- --------
Net decrease in cash and cash equivalents (2,967) (13,956)
Cash and cash equivalents at beginning of period 9,498 16,945
-------- --------
Cash and cash equivalents at end of period $6,531 $2,989
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $15,620 $20,860
Income taxes - $4,932
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $6,531 $2,384
Special deposits - 7,114
---------- ----------
Total cash and cash equivalents 6,531 9,498
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.4 million in 1997 and 1996) 34,510 44,809
Associated companies 1,905 4,382
Other 1,033 2,014
Accrued unbilled revenues 39,513 49,383
Fuel inventory - at average cost 5,698 6,661
Materials and supplies - at average cost 21,408 17,567
Rate deferrals 141,656 142,504
Prepayments and other 5,125 7,434
---------- ----------
Total 257,379 284,252
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 5,531 5,531
Other - at cost (less accumulated depreciation) 7,886 7,923
---------- ----------
Total 13,417 13,454
---------- ----------
Utility Plant:
Electric 1,638,705 1,633,484
Construction work in progress 48,831 47,373
---------- ----------
Total 1,687,536 1,680,857
Less - accumulated depreciation and amortization 642,726 635,754
---------- ----------
Utility plant - net 1,044,810 1,045,103
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 69,726 104,588
SFAS 109 regulatory asset - net 14,819 11,813
Unamortized loss on reacquired debt 9,042 9,254
Other regulatory assets 64,815 46,309
Other 6,628 6,693
---------- ----------
Total 165,030 178,657
---------- ----------
TOTAL $1,480,636 $1,521,466
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $96,015 $96,015
Notes payable - associated companies 39,112 50,253
Accounts payable:
Associated companies 32,164 32,878
Other 16,954 23,701
Customer deposits 26,690 26,258
Taxes accrued 18,814 26,482
Accumulated deferred income taxes 58,309 58,634
Interest accrued 16,712 20,909
Other 5,002 3,065
---------- ----------
Total 309,772 338,195
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 246,960 249,522
Accumulated deferred investment tax credits 25,045 25,422
Other 18,794 19,445
---------- ----------
Total 290,799 294,389
---------- ----------
Long-term debt 399,100 399,054
Preferred stock with sinking fund - 7,000
Shareholders' Equity:
Preferred stock without sinking fund 57,881 57,881
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares 199,326 199,326
Capital stock expense and other (42) (143)
Retained earnings 223,800 225,764
---------- ----------
Total 480,965 482,828
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,480,636 $1,521,466
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Increase/
Description 1997 1996 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 75.2 $ 77.5 ($ 2.3) (3)
Commercial 64.5 62.3 2.2 4
Industrial 43.0 40.8 2.2 5
Governmental 6.7 6.9 (0.2) (3)
------- ------- -----
Total retail 189.4 187.5 1.9 1
Sales for resale
Associated companies 11.0 13.6 (2.6) (19)
Non-associated companies 5.1 5.3 (0.2) (4)
Other (5.2) (2.5) (2.7) (108)
------- ------- -----
Total $ 200.3 $ 203.9 ($ 3.6) (2)
======= ======= ======
Billed Electric Energy
Sales (Millions of kWh):
Residential 991 1,055 (64) (6)
Commercial 819 777 42 5
Industrial 723 694 29 4
Governmental 80 81 (1) (1)
------- ------- -----
Total retail 2,613 2,607 6 -
Sales for resale
Associated companies 197 269 (72) (27)
Non-associated companies 102 116 (14) (12)
------- ------- -----
Total 2,912 2,992 (80) (3)
======= ======= =====
</TABLE>
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1997 as a result
of reduced natural gas sales, partially offset by reduced income
taxes.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues and Sales," "Expenses," and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1997 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($1.0)
Fuel cost recovery 6.3
Sales volume/weather 0.3
Other revenue (including unbilled) 0.1
Sales for resale (0.8)
----
Total $4.9
====
Electric operating revenues increased for the first quarter of
1997 due to an increase in fuel adjustment revenues, which do not
affect net income. Fuel adjustment revenues increased due to
elevated fuel prices during the period for which fuel revenues were
billed.
Gas operating revenues decreased for the first quarter of 1997
due to a lower unit purchase price for gas purchased for resale and
due to a reduction in sales. Milder weather in the first quarter of
1997 is primarily responsible the reduction in sales.
Expenses
Operating expenses increased for the first quarter of 1997 due
to increased taxes other than income taxes and increased amortization
of rate deferrals. Taxes other than income taxes increased due to
higher franchise taxes resulting from a December 1996 Council order
increasing Entergy New Orleans' annual franchise fee from 2.5% to 5%
of gross revenues. The increase in amortization of rate deferrals in
the first quarter of 1997 is primarily a result of increased over-
recovery of Grand Gulf 1 related costs in 1997 compared to 1996.
Other
Income tax expense decreased for the first quarter of 1997 due
to lower pretax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $89,561 $84,683
Natural gas 35,395 42,597
-------- --------
Total 124,956 127,280
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 42,782 41,436
Purchased power 36,582 38,739
Other operation and maintenance 15,255 16,424
Depreciation and amortization 5,193 4,971
Taxes other than income taxes 8,886 6,863
Rate deferrals (1,961) (1,401)
Amortization of rate deferrals 9,464 4,496
-------- --------
Total 116,201 111,528
-------- --------
Operating Income 8,755 15,752
-------- --------
Other Income:
Allowance for equity funds used
during construction 80 74
Miscellaneous - net 31 774
-------- --------
Total 111 848
-------- --------
Interest Charges:
Interest on long-term debt 3,623 4,059
Other interest - net 291 282
Allowance for borrowed funds used
during construction (63) (59)
-------- --------
Total 3,851 4,282
-------- --------
Income Before Income Taxes 5,015 12,318
Income Taxes 2,197 4,283
-------- --------
Net Income 2,818 8,035
Preferred Stock Dividend Requirements
and Other 241 241
-------- --------
Earnings Applicable to Common Stock $2,577 $7,794
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $2,818 $8,035
Noncash items included in net income:
Change in rate deferrals 7,848 7,565
Depreciation and amortization 5,193 4,971
Deferred income taxes and investment tax credits (3,654) 2,270
Allowance for equity funds used during construction (80) (74)
Changes in working capital:
Receivables 6,890 5,675
Accounts payable (2,210) (5,397)
Taxes accrued 7,052 2,584
Interest accrued (2,602) (2,917)
Other working capital accounts (10,556) (18,263)
Other 1,896 (7,339)
-------- -------
Net cash flow provided by (used in) operating activities 12,595 (2,890)
-------- -------
Investing Activities:
Construction expenditures (684) (7,919)
Allowance for equity funds used during construction 80 74
-------- -------
Net cash flow used in investing activities (604) (7,845)
-------- -------
Financing Activities:
Proceeds from the issuance of general and refunding mortgage bonds - 39,608
Retirement of first mortgage bonds - (23,250)
Dividends paid:
Common stock (2,800) (3,300)
Preferred stock (482) (482)
-------- -------
Net cash flow (used in) provided by financing activities (3,282) 12,576
-------- -------
Net increase in cash and cash equivalents 8,709 1,841
Cash and cash equivalents at beginning of period 17,510 49,746
-------- -------
Cash and cash equivalents at end of period $26,219 $51,587
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $6,360 $7,054
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $3,366 $1,015
Temporary cash investments - at cost,
which approximates market:
Associated companies 3,558 7,435
Other 5,111 9,060
Special deposits 14,184 -
-------- --------
Total cash and cash equivalents 26,219 17,510
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million in 1997 and 1996) 23,971 27,430
Associated companies 1,264 714
Other 2,826 1,764
Accrued unbilled revenues 12,021 17,064
Deferred electric fuel and resale gas costs 7,399 7,290
Materials and supplies - at average cost 12,913 9,904
Rate deferrals 37,818 37,692
Prepayments and other 11,542 7,157
-------- --------
Total 135,973 126,525
-------- --------
Other Property and Investments:
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
Utility Plant:
Electric 507,265 503,061
Natural gas 128,076 122,700
Construction work in progress 8,784 18,247
-------- --------
Total 644,125 644,008
Less - accumulated depreciation and amortization 352,390 347,790
-------- --------
Utility plant - net 291,735 296,218
-------- --------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 91,524 99,498
SFAS 109 regulatory asset - net 5,276 6,051
Unamortized loss on reacquired debt 1,583 1,647
Other regulatory assets 17,976 15,908
Other 806 890
-------- --------
Total 117,165 123,994
-------- --------
TOTAL $548,132 $549,996
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $12,000 $12,000
Accounts payable:
Associated companies 14,824 18,757
Other 15,853 14,130
Customer deposits 19,067 18,974
Taxes accrued 8,256 1,204
Accumulated deferred income taxes 3,429 5,584
Interest accrued 2,723 5,325
Provision for rate refund 16,274 19,465
Other 1,566 1,521
-------- --------
Total 93,992 96,960
-------- --------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 70,621 72,895
Accumulated deferred investment tax credits 7,837 7,984
Accumulated provision for property insurance 15,666 15,666
Other 28,444 24,713
-------- --------
Total 122,568 121,258
-------- --------
Long-term debt 168,904 168,888
Shareholders' Equity:
Preferred stock without sinking fund 19,780 19,780
Common Shareholder's Equity:
Common stock, $4 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares 33,744 33,744
Paid-in capital 36,294 36,294
Retained earnings subsequent to the elimination of
the accumulated deficit on November 30, 1988 72,850 73,072
-------- --------
Total 162,668 162,890
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $548,132 $549,996
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended Increase/
Description 1997 1996 (Decrease) %
(In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 28.7 $ 31.7 ($ 3.0) (9)
Commercial 36.3 33.2 3.1 9
Industrial 6.2 5.6 0.6 11
Governmental 13.6 12.2 1.4 11
------- ------- -----
Total retail 84.8 82.7 2.1 3
Sales for resale
Associated companies 1.9 1.9 0.0 -
Non-associated companies 1.7 2.5 (0.8) (32)
Other 1.2 (2.4) 3.6 (150)
------- ------- -----
Total $ 89.6 $ 84.7 $ 4.9 6
======= ======= =====
Billed Electric Energy
Sales (Millions of kWh):
Residential 374 391 (17) (4)
Commercial 478 465 13 3
Industrial 114 111 3 3
Governmental 221 212 9 4
------- ------- -----
Total retail 1,187 1,179 8 1
Sales for resale
Associated companies 47 45 2 4
Non-associated companies 23 52 (29) (56)
------- ------- -----
Total 1,257 1,276 (19) (1)
======= ======= =====
</TABLE>
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased slightly for the first quarter of 1997 as
compared to the same period in 1996 primarily as a result of lower
interest charges, partially offset by increased nuclear refueling
outage expenses and depreciation, amortization and decommissioning
expenses.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1997 and 1996 are
discussed under "Revenues," "Expenses," and "Other" below.
Revenues
Operating revenues recover operating expenses, depreciation, and
capital costs attributable to Grand Gulf 1. Capital costs are
computed by allowing a return on System Energy's common equity funds
allocable to its net investment in Grand Gulf 1 and adding to such
amount System Energy's effective interest cost for its debt allocable
to its investment in Grand Gulf 1. Operating revenues remained
relatively unchanged for the first quarter of 1997.
Expenses
Operating expenses increased for the first quarter of 1997 due
to higher nuclear refueling outage expenses and higher depreciation,
amortization, and decommissioning expenses. Nuclear refueling outage
expenses increased due to costs that were deferred from the November
1996 outage, which are now being amortized over an 18 month period
beginning December 1996. In the majority of 1996, such costs were
expensed as incurred. The increase in depreciation, amortization,
and decommissioning expense is due to the recognition of additional
depreciation associated with the sale and leaseback in 1989 of a
portion of Grand Gulf 1, in accordance with regulatory approval.
Other
Interest charges decreased for the first quarter of 1997 due to
the refinancing of higher cost long-term debt in 1996. Income taxes
decreased due to lower pretax income.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Revenues $155,662 $156,424
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 12,017 12,840
Nuclear refueling outage expenses 3,717 308
Other operation and maintenance 20,390 21,433
Depreciation, amortization, and decommissioning 38,797 31,999
Taxes other than income taxes 6,425 6,906
-------- --------
Total 81,346 73,486
-------- --------
Operating Income 74,316 82,938
-------- --------
Other Income:
Allowance for equity funds used
during construction 280 350
Miscellaneous - net 1,323 839
-------- --------
Total 1,603 1,189
-------- --------
Interest Charges:
Interest on long-term debt 30,758 37,953
Other interest - net 1,782 1,991
Allowance for borrowed funds used
during construction (279) (354)
-------- --------
Total 32,261 39,590
-------- --------
Income Before Income Taxes 43,658 44,537
Income Taxes 19,313 21,007
-------- --------
Net Income $24,345 $23,530
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $24,345 $23,530
Noncash items included in net income:
Depreciation, amortization, and decommissioning 38,797 31,999
Deferred income taxes and investment tax credits (11,568) (8,897)
Allowance for equity funds used during construction (280) (350)
Changes in working capital:
Receivables (2,294) (2,870)
Accounts payable (2,241) 17,326
Taxes accrued 15,587 13,735
Interest accrued (2,171) (10,825)
Other working capital accounts (220) (4,711)
Decommissioning trust contributions (1,579) (2,131)
FERC Settlement - refund obligation (1,082) (956)
Provision for estimated losses and reserves 12,808 13,954
Other (263) (2,137)
-------- --------
Net cash flow provided by operating activities 69,839 67,667
-------- --------
Investing Activities:
Construction expenditures (1,699) (1,384)
Allowance for equity funds used during construction 280 350
Nuclear fuel purchases (39) (733)
Proceeds from sale/leaseback of nuclear fuel 39 -
-------- --------
Net cash flow used in investing activities (1,419) (1,767)
-------- --------
Financing Activities:
Proceeds from the issuance of long term debt - 89,192
Retirement of long term debt - (92,700)
Changes in short-term borrowings - net - (2,990)
Common stock dividends paid (37,100) (23,300)
-------- --------
Net cash flow used in financing activities (37,100) (29,798)
-------- --------
Net increase in cash and cash equivalents 31,320 36,102
Cash and cash equivalents at beginning of period 92,315 240
-------- --------
Cash and cash equivalents at end of period $123,635 $36,342
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $32,398 $48,911
Income taxes - $1,500
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets ($982) $192
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $ - $26
Temporary cash investments - at cost,
which approximates market:
Associated companies 50,750 41,600
Other 72,885 50,689
---------- ----------
Total cash and cash equivalents 123,635 92,315
Accounts receivable:
Associated companies 74,455 71,337
Other 1,698 2,522
Materials and supplies - at average cost 66,823 66,302
Deferred nuclear refueling outage costs 20,772 24,005
Prepayments and other 7,644 4,929
---------- ----------
Total 295,027 261,410
---------- ----------
Other Property and Investments:
Decommissioning trust fund 66,922 62,223
---------- ----------
Utility Plant:
Electric 2,994,191 2,994,445
Electric plant under leases 447,663 447,409
Construction work in progress 43,061 41,362
Nuclear fuel under capital lease 74,719 83,558
---------- ----------
Total 3,559,634 3,566,774
Less - accumulated depreciation and amortization 1,003,292 974,472
---------- ----------
Utility plant - net 2,556,342 2,592,302
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 259,385 264,758
Unamortized loss on reacquired debt 56,185 57,785
Other regulatory assets 201,156 207,214
Other 15,387 15,601
---------- ----------
Total 532,113 545,358
---------- ----------
TOTAL $3,450,404 $3,461,293
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
1997 1996
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $10,000 $10,000
Accounts payable:
Associated companies 25,330 18,245
Other 9,510 18,836
Taxes accrued 83,410 67,823
Interest accrued 32,024 34,195
Obligations under capital leases 28,000 28,000
Other 2,089 2,306
---------- ----------
Total 190,363 179,405
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 606,908 624,020
Accumulated deferred investment tax credits 102,778 103,647
Obligations under capital leases 46,719 55,558
FERC Settlement - refund obligation 51,757 52,839
Other 184,227 165,517
---------- ----------
Total 992,389 1,001,581
---------- ----------
Long-term debt 1,418,969 1,418,869
Common Shareholder's Equity:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares 789,350 789,350
Retained earnings 59,333 72,088
---------- ----------
Total 848,683 861,438
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,450,404 $3,461,293
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Cajun - River Bend (Entergy Corporation and Entergy Gulf States)
Entergy Gulf States and Cajun, respectively, own 70% and 30%
undivided interests in River Bend (operated by Entergy Gulf States),
and 42% and 58% undivided interests in Big Cajun 2, Unit 3 (operated
by Cajun). These relationships have spawned a number of long-
standing disputes and claims between the parties. An agreement
setting forth terms for the resolution of all such disputes has been
reached by Entergy Gulf States, the Cajun bankruptcy trustee, and the
RUS, and was approved by the United States District Court for the
Middle District of Louisiana (District Court) on August 26, 1996
(Cajun Settlement). On September 6, 1996, the Committee of Unsecured
Creditors in the Cajun bankruptcy proceeding filed a Notice of Appeal
to the United States Court of Appeals for the Fifth Circuit (Fifth
Circuit), objecting that the order approving the settlement was
separate from the approval of a plan of reorganization and,
therefore, improper. The Cajun Settlement is subject to this appeal
and approvals by the appropriate regulatory agencies. Entergy Gulf
States has made filings with the FERC and the SEC seeking approval
for the transfer of certain Cajun transmission assets to Entergy Gulf
States. Management believes that it is probable that the Cajun
Settlement will ultimately be approved and consummated. On December
16, 1996, the Bankruptcy Court began hearings on the balloting and
the plan that will be adopted. See Note 9 of the Form 10-K for
additional information regarding the Cajun litigation, Cajun's
bankruptcy proceedings, and related filings.
The terms of the Cajun Settlement include, but are not limited
to, the following: (i) Cajun's interest in River Bend will be turned
over to the RUS, which will have the option to retain the interest,
sell it to a third party, or transfer it to Entergy Gulf States at no
cost; (ii) Cajun will set aside a total of $125 million for its share
of the decommissioning costs of River Bend; (iii) Cajun will transfer
certain transmission assets to Entergy Gulf States; (iv) Cajun and
Entergy Gulf States will settle transmission disputes and release
each other from claims for payment under transmission arrangements,
as discussed under "Cajun - Transmission Service" below; (v) all
funds paid by Entergy Gulf States into the registry of the District
Court will be returned to Entergy Gulf States; (vi) Cajun will be
released from its unpaid past, present, and future liability for
River Bend costs and expenses; and (vii) all litigation between Cajun
and Entergy Gulf States will be dismissed. Based on the District
Court's approval of the Cajun Settlement, the litigation accrual
established in 1994 for possible losses associated with the Cajun-
River Bend litigation was reversed in September 1996.
Cajun has not paid its full share of capital costs, operating
and maintenance expenses, and other costs for repairs and
improvements to River Bend since 1992. Cajun's unpaid portion of
River Bend operating and maintenance expenses (including nuclear
fuel) and capital costs for the first quarter of 1997 was
approximately $12.4 million. The cumulative cost to Entergy Gulf
States resulting from Cajun's failure to pay its full share of River
Bend-related costs, reduced by the proceeds from the sale by Entergy
Gulf States of Cajun's share of River Bend power and payments into
the registry of the District Court for Entergy Gulf States' portion
of expenses for Big Cajun 2, Unit 3, was $6.0 million as of March 31,
1997. Cajun's unpaid portion of the River Bend related costs is
reflected in long-term receivables which is substantially reserved
for in other deferred credits. As discussed above, the Cajun
Settlement will conclude all disputes regarding the non-payment by
Cajun of River Bend operating and maintenance expenses. Cajun
continues to pay its share of decommissioning costs for River Bend.
The RUS entered into an agreement as of February 11, 1997 for
the sale of Cajun's 30% interest in River Bend to PECO Energy Company
(PECO) pursuant to authorization granted in the Bankruptcy Court
Order of August 26, 1996. Under the terms of this agreement, the RUS
may accept proposals from other parties, and PECO has the option to
terminate. To accomplish the sale of the assets, the Cajun
bankruptcy trustee has filed a motion to sell the Cajun River Bend
interest, which motion also seeks an order extending the time by
which the Cajun Settlement must be consummated from June 1, 1997 to
December 31, 1997. The RUS and Entergy Gulf States have consented to
the motion. The motion is set for hearing on May 29, 1997 before the
Bankruptcy Court.
Cajun - Transmission Service (Entergy Corporation and Entergy Gulf
States)
Entergy Gulf States and Cajun are parties to FERC proceedings
relating to transmission service charge disputes. As a result of the
proposed Cajun Settlement, the FERC has dismissed or placed in
abeyance various proceedings pending before it, to which Cajun or the
Cajun Trustee are parties, that would be resolved by the Cajun
Settlement. See Note 9 in the Form 10-K for additional information
regarding these FERC proceedings and FERC orders issued as a result
of such proceedings.
Under Entergy Gulf States' interpretation of a 1992 FERC order,
as modified by FERC's orders issued on August 3, 1995, and October 2,
1995, and as agreed to by the Cajun bankruptcy trustee, Cajun would
owe Entergy Gulf States approximately $71.6 million as of March 31,
1997. Entergy Gulf States further estimates that if it were to
prevail in its May 1992 motion for rehearing and on certain other
issues decided adversely to Entergy Gulf States in the February 1995,
August 1995, and October 1995 FERC orders, which Entergy Gulf States
has appealed, Cajun would owe Entergy Gulf States approximately
$160.5 million as of March 31, 1997. If Cajun were to prevail in its
May 1992 motion for rehearing to FERC, and if Entergy Gulf States
were not to prevail in its May 1992 motion for rehearing to FERC, and
if Cajun were to prevail in appealing FERC's August and October 1995
orders, Entergy Gulf States estimates it would owe Cajun
approximately $114.1 million as of March 31, 1997. The above amounts
are exclusive of a $7.3 million payment by Cajun on December 31,
1990, which the parties agreed to apply to the disputed transmission
service charges. Pending FERC's ruling on the May 1992 motions for
rehearing, Entergy Gulf States has continued to bill Cajun utilizing
the historical billing methodology and has recorded underpaid
transmission charges, including interest, in the amount of $145.8
million as of March 31, 1997. This amount is reflected in long-term
receivables with an offsetting reserve in other deferred credits.
FERC has determined that the collection of the pre-petition debt of
Cajun is an issue properly decided in the bankruptcy proceeding.
Refer to "Cajun - River Bend" above for a discussion of the Cajun
Settlement.
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
On January 13, 1997, Entergy Gulf States filed a declaratory
judgment action in the U.S. Bankruptcy Court where the Cajun
bankruptcy is pending, seeking a ruling that Entergy Gulf States
would not be liable for damages to certain coal suppliers for Big
Cajun II, Unit 3, if the Cajun bankruptcy trustee were to reject
their coal contracts as a part of a plan of reorganization in the
bankruptcy proceeding. In its pleading, Entergy Gulf States takes
the position that it is not a party to, and has no liability under,
those coal contracts.
On February 12, 1997, the coal suppliers and the Cajun
bankruptcy Trustee filed a response in the declaratory judgment
action and made certain counterclaims and crossclaims. They contend
that Entergy Gulf States' declaratory judgment action should be
dismissed and, in the alternative, argue that Cajun is Entergy Gulf
States' agent in the procurement of coal for Big Cajun II, Unit 3,
and that Entergy Gulf States is a party to and has liability under
the coal supply contracts. The potential liability, should these
contracts be rejected, is uncertain, but could be materially adverse
to Entergy Gulf States.
This matter, which has not been scheduled for a hearing, will be
strongly contested by Entergy Gulf States. However, at present there
is no basis upon which to predict the timing or outcome of this
litigation.
Capital Requirements and Financing (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
See Note 9 to the Form 10-K for information on the domestic
utility companies' and System Energy's construction expenditures
(excluding nuclear fuel), for the years 1997, 1998, and 1999 and long-
term debt and preferred stock maturities and cash sinking fund
requirements for the period 1997-1999.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
See Note 9 to the Form 10-K for information on nuclear
liability, property and replacement power insurance, related NRC
regulations, the disposal of spent nuclear fuel, other high-level
radioactive waste, and decommissioning costs associated with ANO,
River Bend, Waterford 3, and Grand Gulf 1.
The FASB issued an exposure draft of a proposed SFAS (which
proposed a 1997 effective date) in February 1996 regarding the
recognition, measurement and classification of decommissioning costs
for nuclear power plants. The proposed SFAS would require measurement
of the liability for closure and removal of long-lived assets
(including decommissioning) based on discounted future cash flows.
Those future cash flows should be determined by estimating current
costs and adjusting for inflation, efficiencies that may be gained
from experience with similar activities, and consideration of
reasonable future advances in technology.
After receiving comments on the exposure draft, the FASB has
decided that the effective date for the proposed SFAS will be later
than 1997, although a final effective date has not yet been
announced. If current electric utility industry accounting practices
with respect to nuclear decommissioning and other closure costs are
changed, annual provisions for such costs could increase, the
estimated cost for decommissioning/closure could be recorded as a
liability rather than as accumulated depreciation, and trust fund
income from decommissioning trusts could be reported as investment
income rather than as a reduction to decommissioning expense.
ANO Matters (Entergy Corporation and Entergy Arkansas)
Cracks in certain steam generator tubes at ANO 2 were discovered
and repaired during an outage in March 1992. Further inspections and
repairs were conducted at subsequent refueling and mid-cycle outages,
including the most recent forced outage in November 1996. ANO 2's
output has been reduced by 23 megawatts due to steam generator
fouling and tube plugging. The unit may be approaching the current
limit for the number of steam generator tubes that can be plugged
with the unit in operation. If the established limit is reached
during a future outage, it could become necessary for Entergy
Operations to insert sleeves in steam generator tubes that were
previously plugged. On October 25, 1996, Entergy Corporation's Board
of Directors authorized Entergy Operations to negotiate a contract,
with appropriate cancellation provisions, for the fabrication and
replacement of the steam generators at ANO 2. Entergy estimates the
cost of fabrication and replacement of the steam generators to be
approximately $150 million. Letters of intent for the fabrication and
installation have been entered into by Entergy Operations, which
includes a commitment for not more than $4.2 million through May
1997. Contracts are expected to be entered into in 1997. It is
anticipated that the steam generators will be installed during a
planned refueling outage in 2000. Entergy Operations periodically
meets with the NRC to discuss the results of inspections of the steam
generator tubes, as well as the timing of future inspections.
Environmental Issues
(Entergy Arkansas)
In May 1995, Entergy Arkansas was named as a defendant in a suit
by Reynolds Metals Company (Reynolds), seeking to recover a share of
the costs associated with the clean-up of hazardous substances at a
site south of Arkadelphia, Arkansas. Reynolds alleges that it has
spent $11.2 million to clean-up the site, and that the site was
contaminated with PCBs for which Entergy Arkansas bears some
responsibility. Entergy Arkansas, voluntarily, at its expense,
completed remediation at a nearby substation site and believes that
it has no liability for contamination at that portion of the site
that is subject to the Reynolds suit and is contesting the lawsuit.
An August 1997 trial date has been tentatively scheduled. Regardless
of the outcome, Entergy Arkansas does not believe this matter would
have a materially adverse effect on its financial condition or
results of operations. See "Environmental Regulation" in Item 1 of
Part I of the Form 10-K for additional information on the PCB
contamination at the two former Reynolds plant sites in Arkansas to
which Entergy Arkansas had supplied power.
(Entergy Gulf States)
Entergy Gulf States has been designated as a potentially
responsible party for the clean-up of certain hazardous waste
disposal sites. Entergy Gulf States is currently negotiating with the
EPA and state authorities regarding the clean-up of certain of these
sites. As of March 31, 1997, a remaining recorded liability of
$21.4 million existed relating to the clean-up of the sites at which
Entergy Gulf States has been designated a potentially responsible
party. See "Environmental Regulation" in Item 1 of Part I of the
Form 10-K for additional discussion of the sites where Entergy Gulf
States has been designated as a potentially responsible party by the
EPA and related litigation.
(Entergy Louisiana)
During 1993, the Louisiana Department of Environmental Quality
issued new rules for solid waste regulation, including regulation of
wastewater impoundments. Entergy Louisiana has determined that
certain of its power plant waste water impoundments were affected by
these regulations and chose to upgrade or close them. A remaining
recorded liability in the amount of $6.7 million existed at March 31,
1997, for waste water upgrades and closures to be completed by the
end of 1997. Cumulative expenditures relating to the upgrades and
closures of waste water impoundments were $7.1 million as of March
31, 1997.
Waterford 3 Lease Obligations (Entergy Louisiana)
On September 28, 1989, Entergy Louisiana entered into three
transactions for the sale and leaseback of undivided interests
(aggregating approximately 9.3%) in Waterford 3. Upon the occurrence
of certain events, Entergy Louisiana may be obligated to pay amounts
sufficient to permit the Owner Participants to withdraw from the
lease transactions, and Entergy Louisiana may be required to assume
the outstanding bonds issued by the Owner Trustee to finance, in
part, its acquisition of the undivided interests in Waterford 3. See
Note 10 to the Form 10-K for further information.
Reimbursement Agreement (System Energy)
Under a bank letter of credit and reimbursement agreement,
System Energy has agreed to a number of covenants relating to the
maintenance of certain capitalization and fixed charge coverage
ratios. System Energy agreed, during the term of the agreement, to
maintain its equity at not less than 33% of its adjusted
capitalization (defined in the 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 agreement, a ratio of adjusted net
income to interest expense (calculated, in each case, as specified in
the agreement) of at least 1.60 times earnings. System Energy was in
compliance with the above covenants at March 31, 1997. See Note 9 to
the Form 10-K for further information.
Employment Litigation
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and Entergy New Orleans)
See Note 9 to the Form 10-K for further information relating to
lawsuits filed by former employees asserting they were wrongfully
terminated and/or discriminated against on the basis of age, race,
and/or sex.
(Entergy Corporation and Entergy Arkansas)
Entergy Corporation and Entergy Arkansas are defendants in a
number of lawsuits filed in federal court on behalf of a total of
approximately 62 plaintiffs who claim they were illegally terminated
from their jobs due to discrimination on the basis of age or race.
The first of these lawsuits, originally involving 29 plaintiffs,
was tried before a jury beginning in April 1997. Settlements were
reached with two of the plaintiffs prior to the trial. On May 1,
1997, the jury rendered findings as to 22 of the plaintiffs
indicating that Entergy had no liability to them for discrimination.
The jury did find that Entergy had intentionally discriminated
against the remaining 5 plaintiffs on the basis of age. As a result,
these plaintiffs will be awarded damages equal to twice their back
pay plus lost future wages and attorneys' fees. It is estimated that
the back pay will not exceed approximately $500,000, while damages
for lost future wages and attorneys' fees remain to be decided in an
ensuing phase of the proceedings in this case. A date for the next
phase of the case has not yet been set.
A trial date for another suit, involving 18 plaintiffs is set
for May 1997. Another of the suits is set for trial in November
1997. No trial dates have been set for the remaining cases.
NOTE 2. RATE AND REGULATORY MATTERS
River Bend (Entergy Corporation and Entergy Gulf States)
In 1988, the PUCT granted Entergy Gulf States 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). At the same time, 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 (Abeyed Deferrals).
The PUCT's order has been the subject of several appellate
proceedings, culminating in an appeal to the Texas Supreme Court
(Supreme Court). On January 31, 1997, the Supreme Court issued an
opinion reversing the PUCT's order and remanding the case to the PUCT
for further proceedings. The Supreme Court found that the PUCT had
prejudiced Entergy Gulf States' rights by attempting to defer a
ruling on the abeyed plant costs and incorrectly determined the
amount of federal income tax expense that should have been allowed in
rates. The Supreme Court ruled that the PUCT could choose either to
conduct hearings and take further evidence or to decide the case on
the original evidence. On February 18, 1997, the Texas Office of
Public Utility Counsel filed a motion for rehearing of the Supreme
Court's decision, arguing that the Supreme Court's remand should have
instructed the PUCT as to how the case should be dealt with on
remand. Entergy Gulf States filed a brief in opposition to the
motion for rehearing on February 25, 1997. Entergy Gulf States
believes it to be unlikely that the Supreme Court will grant the
motion for rehearing. No procedural schedule has yet been issued by
the PUCT concerning the case on remand.
As of March 31, 1997, the River Bend plant costs disallowed for
retail ratemaking purposes in Texas and the River Bend plant costs
held in abeyance totaled (net of taxes and depreciation)
approximately $12 million and $264 million, respectively. The
Allowed Deferrals were approximately $75 million, net of taxes and
amortization, as of March 31, 1997. Entergy Gulf States estimates it
has collected approximately $210 million of revenues as of March 31,
1997, 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 refunds could be required and future revenues
based upon the Allowed Deferrals could also be lost. However,
management believes that it is probable that the Allowed Deferrals
will continue to be recovered in rates.
As a result of the application of SFAS 121, Entergy Gulf States
wrote off Abeyed Deferrals of $169 million, net of tax, effective
January 1, 1996. In light of the continuing proceedings before the
PUCT and the courts (including the January 31, 1997 decision of the
Texas Supreme Court), Entergy Gulf States has made no write-offs or
reserves for the River Bend plant-related costs. At this time,
management and legal counsel are unable to predict the amount of the
abeyed and previously disallowed River Bend plant costs, if any, that
may ultimately be allowed in Entergy Gulf States' Texas retail rates.
In prior proceedings involving other utilities, the PUCT has
held that the original cost of nuclear power plants will be
recoverable in electric rates to the extent those costs were
prudently incurred. In another proceeding Entergy Gulf States has
previously filed with the PUCT a cost reconciliation study prepared
by Sandlin Associates, management consultants with expertise in the
cost analysis of nuclear power plants, which supports the
reasonableness of the River Bend costs held in abeyance by the PUCT.
This reconciliation study determined that approximately 82% of the
River Bend cost increase above the amount included by the PUCT in
rate base was a result of changes in federal nuclear safety
requirements, and provided other support for the remainder of the
abeyed amounts. In particular, 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 for different
reasons. Appeals of two of these PUCT decisions are currently
pending. Based upon the PUCT's prior decisions, management believes
that River Bend construction costs were prudently incurred and that
it is reasonably possible that it will recover through rates, or
otherwise through means such as a deregulated asset plan, all or
substantially all of the abeyed River Bend plant costs. In the event
of an adverse ruling in this case, a net of tax write-off, as of
March 31, 1997, of up to $276 million and up to $210 million in
refunds of previously collected revenue could be required.
Retail Rate Proceedings
Filings with the APSC
(Entergy Corporation and Entergy Arkansas)
In October 1996, Entergy Arkansas filed a proposal with the APSC
designed to achieve an orderly transition to retail electric
competition in Arkansas. Entergy Arkansas supplemented its proposal
with a May 1, 1997 filing. The proposal includes a rate decrease
totaling $158 million over a two year period beginning January 1998
and provides for a universal service charge for customers that remain
connected to Entergy Arkansas' electric facilities but choose to
purchase their electricity from another source. Although these
proposals allow for the complete recovery of the remaining plant
investment associated with ANO 1, ANO 2, and Entergy Arkansas'
portion of Grand Gulf 1 as of December 31, 1995, over a seven year
period, the NRC operating licenses for these plants permit continued
operation until the years 2014, 2018, and 2022, respectively.
Hearings are expected to begin in September 1997.
Filings with the PUCT (Entergy Corporation and Entergy Gulf States)
In December 1995, Entergy Gulf States filed a petition with the
PUCT for reconciliation of fuel and purchased power expenses for the
period January 1, 1994, through June 30, 1995. Entergy Gulf States
believes that there was an under-recovered fuel balance, including
interest, of $22.4 million as of June 1995. Hearings were concluded
in October 1996, and in April 1997 the PUCT issued its final order
which approved recovery of approximately $18.8 million of the under-
recovered fuel balance, including interest. In April 1997, various
parties to the proceeding, including Entergy Gulf States, filed
motions for rehearing, which are currently pending before the PUCT.
In accordance with the Merger agreement, Entergy Gulf States
filed a rate proceeding with the PUCT in November 1996. In April
1996, certain cities served by Entergy Gulf States (Cities)
instituted investigations of the reasonableness of Entergy Gulf
States' rates. In May 1996, the Cities agreed to forego their
pending investigation based on the assurance that any rate decrease
ordered in the November 1996 filing will be retroactive to June 1,
1996, and will accrue interest until refunded. The agreement further
provides that no base rate increase will be retroactive. Subsequent
to the November 1996 filing, the Cities passed ordinances reducing
Entergy Gulf States' rates by $43.6 million. Entergy Gulf States has
appealed these ordinances with the PUCT, and these appeals have been
consolidated in the pending rate proceeding. Included in the
November 1996 filing was a proposal to achieve an orderly transition
to retail electric competition in Texas, similar to the filing
described below that Entergy Gulf States made with the LPSC. This
filing with the PUCT will be litigated in four phases as follows: (i)
fuel factor/fuel reconciliation phase, of which Entergy Gulf States
believes there was an under-recovered fuel balance of $41.4 million,
including interest, for the period July 1, 1995 through June 30,
1996; (ii) revenue requirement phase; (iii) cost allocation/rate
design phase; and (iv) competitive issues phase. Hearings on these
matters are scheduled to begin in June 1997. No assurance can be
given as to the outcome of these hearings.
Filings with the LPSC
(Entergy Corporation and Entergy Gulf States)
On May 31, 1995, Entergy Gulf States filed its second required
post-Merger earnings analysis with the LPSC. Hearings on this review
were held in December 1995. On October 4, 1996, the LPSC issued an
order requiring a $33.3 million annual base rate reduction and a $9.6
million refund. One component of the rate reduction removes from
base rates approximately $13.4 million annually of costs that will be
recovered in the future through the fuel adjustment clause. On
October 23, 1996, Entergy Gulf States appealed the LPSC's order and
obtained an injunction to stay the order, except insofar as it
requires the $13.4 million reduction, which Entergy Gulf States
implemented in November 1996. In addition, pursuant to an October
1996 settlement with the LPSC, Entergy Gulf States will be allowed to
recover $8.1 million annually related to certain gas transportation
and storage facilities costs. This amount will be applied as an
offset against any refund that may be required by a final judgment in
Entergy Gulf States' appeal of the second post-Merger earnings review
order.
On May 31, 1996, Entergy Gulf States filed its third required
post-Merger earnings analysis with the LPSC. Based on this earnings
filing, on June 1, 1996, Entergy Gulf States implemented a $5.3
million annual rate reduction. Hearings on this filing concluded in
March 1997. An additional rate reduction may be required upon the
issuance by the LPSC of a final rate order.
(Entergy Corporation, Entergy Gulf States, and Entergy Louisiana)
In October 1996, Entergy Gulf States and Entergy Louisiana filed
proposals with the LPSC designed to achieve an orderly transition to
retail electric competition in Louisiana, while protecting certain
classes of ratepayers from bearing the burden of cost shifting. The
proposals do not increase rates for any customer class. However,
these proposals do provide for a universal service charge for
customers that remain connected to Entergy Gulf States' or Entergy
Louisiana's electric facilities but choose to purchase their
electricity from another source. In addition, the proposals include
a base rate freeze, which would be put into effect for seven years in
the Louisiana areas serviced by Entergy Gulf States and Entergy
Louisiana. Although these proposals allow for the complete recovery
of the remaining plant investment associated with River Bend, and
Waterford 3 as of December 31, 1995, over a seven year period, the
NRC operating licenses for these plants permit continued operation
until the years 2025 and 2024, respectively. Hearings on these
proposals are expected to begin in June 1997.
In February 1997, the LPSC identified certain issues embodied in
the Entergy Gulf States and Entergy Louisiana proposals that will be
included in those companies' annual rate filings expected to be made
on May 30, 1997, and other issues that now will be included in an
ongoing generic regulatory proceeding examining electric industry
restructuring.
Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
On March 15, 1997, Entergy Mississippi filed its annual earnings
review with the MPSC under its formula rate plan for the 1996 test
year. In April 1997, the MPSC issued an order requiring a
prospective rate reduction of $11.2 million. This rate reduction
went into effect May 1, 1997.
Entergy Mississippi has initiated discussions with the MPSC
regarding an orderly transition to a more competitive market for
electricity. In August 1996, Entergy Mississippi filed a proposal
with the MPSC for a rate rider to assure recovery of all Grand Gulf
costs incurred to serve customers. The rider would maintain current
rates for electric service provided by Entergy Mississippi and would
apply to customers within Entergy Mississippi's service area who
obtain electricity in the future from a source other than Entergy
Mississippi. Entergy Mississippi designed this rider to assure that
commitments made under the current system of regulation are honored
and that cost burdens are not unfairly transferred from departing
customers to those who remain on the Entergy Mississippi system. On
August 22, 1996, the MPSC remanded this proposal and established a
generic docket to consider competition for retail electric service.
Hearings on this docket concluded in April 1997, and an order is
expected mid-year.
Filings with the Council (Entergy Corporation and Entergy New
Orleans)
The Council issued a resolution in February 1997 indicating that
it will conduct an investigation of the justness and reasonableness
of Entergy New Orleans' allowed rate of return, base rates, and
adjustment clauses. The Council established hearing dates in April
1997 on the issue of rate of return, and directed Entergy New Orleans
to make a cost of service and revenue requirement filing on May 1,
1997. In April 1997, Entergy New Orleans proposed a $16 million
prospective rate reduction in order to resolve the disputed rate of
return and other issues raised in the first phase of the proceeding.
The proposed settlement would also postpone the cost of service and
revenue requirement filing until September 1997. The Council is
considering the proposed settlement and a decision is expected in May
1997. A procedural schedule has not been set with respect to these
other issues.
Proposed Rate Increase
(System Energy)
System Energy filed an application with FERC on May 12, 1995,
for a $65.5 million rate increase. The request seeks changes to
System Energy's rate schedule, including increases in the revenue
requirement associated with decommissioning costs, the depreciation
rate, and the rate of return on common equity. The request also
includes a proposed change in the accounting recognition of nuclear
refueling outage costs from that of expensing those costs as incurred
to the deferral and amortization method described in Note 1 with
respect to Entergy Arkansas. On December 12, 1995, System Energy
implemented a $65.5 million rate increase, subject to refund.
Management has decided to record a reserve for a portion of the rate
increase. Hearings on System Energy's request began in January 1996
and were completed in February 1996. On July 11, 1996, the ALJ
issued an initial decision in this proceeding that agreed with
certain of System Energy's proposals, including the change in
accounting for nuclear refueling outage costs, while rejecting a
proposed increase in return on common equity and recommending a
slight decrease. The ALJ also rejected the proposed change in the
decommissioning cost methodology. The decision of the ALJ is
preliminary and may be modified in the final decision from FERC which
is expected in the second quarter of 1997. Management is unable to
predict the final outcome of the rate increase request or the amount
of any refunds in excess of reserves that may be required.
(Entergy Mississippi)
Entergy Mississippi's allocation of the proposed System Energy
wholesale rate increase is $21.6 million annually. In July 1995,
Entergy Mississippi filed a schedule with the MPSC that defers the
retail recovery of the System Energy rate increase. The deferral
plan, which was approved by the MPSC, began in December 1995, the
effective date of the System Energy rate increase, and will end after
the issuance of a final order by FERC. The final amount of the
deferred rate increase is to be amortized over 48 months beginning in
October 1998.
(Entergy New Orleans)
Entergy New Orleans' allocation of the proposed System Energy
wholesale rate increase is $11.1 million annually. In February 1996,
Entergy New Orleans filed a plan with the Council to defer 50% of the
amount of the System Energy rate increase. The deferral began in
February 1996 and will end after the issuance of a final order by
FERC.
NOTE 3. COMMON STOCK (Entergy Corporation)
During the first quarter of 1997, Entergy Corporation issued
364,895 shares of its previously repurchased common stock, reducing
the amount held as treasury stock by approximately $10 million.
Entergy Corporation issued these shares to meet the requirements of
its various stock plans. In addition, Entergy Corporation received
proceeds of $90.7 million from the issuance of 3,408,570 shares of
common stock under its dividend reinvestment and stock purchase plan
during the first quarter of 1997.
NOTE 4. LONG-TERM DEBT
(Entergy Corporation)
See Note 7 of the Form 10-K for a discussion of Entergy Power UK
plc's credit facility. 945 million British Pounds (1.55 billion US
dollars) of variable rate borrowings were outstanding under this
facility as of March 31, 1997. The weighted average interest rate on
the borrowings outstanding as of March 31, 1997 was 7.92%.
Entergy Power UK plc (Entergy Power UK) entered into several
interest rate swaps to reduce the impact of interest rate changes on
its debt related to the London Electricity acquisition. The interest
rate swap agreements involve the exchange of fixed and floating rate
interest payments periodically over the life of the agreements
without the exchange of the underlying principal amounts. If the
counterparties to an interest rate swap agreement were to default on
contractual payments, the subsidiary could be exposed to increased
costs related to replacing the original agreement. However, Entergy
Power UK does not anticipate nonperformance by any counterparty to
any interest rate swap in effect at March 31, 1997. At March 31,
1997, Entergy Power UK was a party to a notional amount of 400
million British Pounds of interest rate swaps with maturity dates
ranging from March 2000 to September 2001.
(Entergy Arkansas)
On April 18, 1997, Entergy Arkansas redeemed, prior to its
maturity, $87.6 million of its 10.00% Series First Mortgage Bonds due
February 1, 2020, at a price equal to 100% of the principal amount
thereof, using funds deposited with the mortgage trustee pursuant to
the annual maintenance and replacement fund requirement as provided
under Entergy Arkansas' mortgage.
(Entergy New Orleans)
On April 1, 1997, Entergy New Orleans retired $12 million of its
5.875% Series First Mortgage Bonds upon maturity. These bonds were
retired with internally generated cash. As these bonds were the last
outstanding under the 1944 Mortgage and Deed of Trust of Entergy New
Orleans, the Mortgage was canceled. Entergy New Orleans will
continue to operate with its 1987 Mortgage.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On April 9, 1997, Entergy Corporation's Board of Directors
declared a common stock dividend of 45 cents per share payable on
June 1, 1997, to holders of record on May 14, 1997.
NOTE 6. RESTRUCTURING COSTS (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans)
In 1994 and 1995, Entergy implemented various restructuring
programs to reduce the number of employees and consolidate offices
and facilities. The programs were designed to reduce costs and
improve operating efficiencies. The restructuring liability
associated with these programs was $3.2 million as of December 31,
1996. Approximately $1.4 million of restructuring charges were
incurred in the first quarter of 1997, resulting in a remaining
liability of $1.8 million as of March 31, 1997. The restructuring
charges primarily include employee severance costs related to the
expected termination of approximately 2,750 employees in various
groups. As of March 31, 1997, approximately 2,740 of these employees
had either been terminated or accepted voluntary separation packages
under the restructuring plan.
In December 1996, Entergy recorded $21.3 million of
restructuring charges (of which $18 million was recorded by Entergy
Services) associated with the transition to competition.
Approximately $5.2 million of charges related to the transition to
competition were incurred in the first quarter of 1997, resulting in
a remaining liability of $16.1 million as of March 31, 1997.
NOTE 7. ACCOUNTING ISSUES (Entergy Corporation)
New Accounting Standard - In March 1997, the FASB issued SFAS
128, "Earnings per Share", effective for financial statements for
periods ending after December 15, 1997. This statement will simplify
the computation of earnings per share for many companies by
eliminating calculation provisions which were required by the prior
earnings per share standard, Accounting Principles Board Opinion 15.
The adoption of SFAS 128 is not expected to have a material effect on
the calculation of earnings per share for Entergy Corporation.
NOTE 8. ACQUISITION OF LONDON ELECTRICITY plc (Entergy
Corporation)
On December 18, 1996, Entergy made a formal cash offer to
acquire London Electricity for $2.1 billion. London Electricity is a
regional electric company serving approximately two million customers
in the metropolitan area of London, England. The offer was approved
by authorities in the United Kingdom, and as of February 7, 1997, the
offer was made unconditional. Entergy, through Entergy Power UK plc,
now controls over 99% of the common shares of London Electricity.
Through procedures available under applicable law, Entergy expects to
gain control of 100% of the common shares of London Electricity.
Entergy has included the results of operations of London Electricity
in its results of operations beginning on February 1, 1997 based on
management's determination that effective control was met on that
date. The acquisition was financed with $1.7 billion of debt that
is non-recourse to Entergy Corporation and $392 million of equity
provided by Entergy Corporation from available cash and borrowings
under its $300 million line of credit.
The cost of the London Electricity license is being amortized on
a straight-line basis over a 40 year period beginning February 1,
1997. As of March 31, 1997, the unamortized balance of the license
was $1.5 billion, which is based on a preliminary purchase price
allocation.
In accordance with the purchase method of accounting, the first
quarter results of operations for Entergy Corporation reported in its
Statements of Consolidated Income (Loss) and Cash Flows do not
reflect London Electricity's results of operations for any period
prior to February 1, 1997. The pro forma combined revenues, net
income, and earnings per common share of Entergy Corporation
presented below give effect to the acquisition as if it had occurred
on January 1, 1996 and 1997, respectively. This pro forma
information is not necessarily indicative of the results of
operations that would have occurred had the acquisition been
consummated for the period for which it is being given effect.
For the First Quarter of:
1997 1996 (a)
(In Thousands of U.S. Dollars, Except Share Data)
Operating revenues $2,294,376 $ 2,165,679
Net income (loss) $ 128,686 $ (84,968)
Earnings (loss) per average $ .55 $ (.37)
common share
(a) - Net income in 1996 includes the $174 million net of tax write-
off of River Bend rate deferrals pursuant to SFAS 121.
__________________________________
In the opinion of Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, 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 Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans 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
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Employment Litigation (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans)
See "Employment Litigation" in Item 1 of Part I of the Form 10-K
for information relating to lawsuits filed by former employees
asserting they were wrongfully terminated and/or discriminated
against due to age, race, and/or sex.
Entergy Corporation and Entergy Arkansas are defendants in a
number of lawsuits filed in federal court on behalf of a total of
approximately 62 plaintiffs who claim they were illegally terminated
from their jobs due to discrimination on the basis of age or race.
The first of these lawsuits, originally involving 29 plaintiffs,
was tried before a jury beginning in April 1997. Settlements were
reached with two of the plaintiffs prior to the trial. On May 1,
1997, the jury rendered findings as to 22 of the plaintiffs
indicating that Entergy had no liability to them for discrimination.
The jury did find that Entergy had intentionally discriminated
against the remaining 5 plaintiffs on the basis of age. As a result,
these plaintiffs will be awarded damages equal to twice their back
pay plus lost future wages and attorneys' fees. It is estimated that
the back pay will not exceed approximately $500,000, while damages
for lost future wages and attorneys' fees remain to be decided in an
ensuing phase of the proceedings in this case. A date for the next
phase of the case has not yet been set.
A trial date for another suit, involving 18 plaintiffs is set
for May 1997. Another of the suits is set for trial in November
1997. No trial dates have been set for the remaining cases.
Federal Income Tax Audit (Entergy Corporation, Entergy Louisiana, and
System Energy)
In August 1994, Entergy received an IRS report covering the
federal income tax audit of Entergy Corporation and subsidiaries for
the years 1988 - 1990. The report asserts an $80 million tax
deficiency for the 1990 consolidated federal income tax returns
related primarily to the utilization of accelerated investment tax
credits associated with Waterford 3 and Grand Gulf nuclear plants.
Changes to the initial report, made in the IRS appeal process, have
reduced the assessment related to the issue by $22 million to $58
million. Entergy and the Appeals Officer agreed to pursue a
"technical advice" ruling from the IRS National Office to address the
remainder of the issue. In March 1997, Entergy Corporation received
notification that the IRS National Office had ruled in its favor,
thereby negating the asserted deficiency and resolving the audit.
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
On January 13, 1997, Entergy Gulf States filed a declaratory
judgment action in the U.S. Bankruptcy Court where the Cajun
bankruptcy is pending, seeking a ruling that Entergy Gulf States
would not be liable for damages to certain coal suppliers for Big
Cajun II, Unit 3, if the Cajun bankruptcy trustee were to reject
their coal contracts as a part of a plan of reorganization in the
bankruptcy proceeding. In its pleading, Entergy Gulf States takes
the position that it is not a party to, and has no liability under,
those coal contracts.
On February 12, 1997, the coal suppliers and the Cajun
bankruptcy Trustee filed a response in the declaratory judgment
action and made certain counterclaims and crossclaims. They contend
that Entergy Gulf States' declaratory judgment action should be
dismissed and, in the alternative, argue that Cajun is Entergy Gulf
States' agent in the procurement of coal for Big Cajun II, Unit 3,
and that Entergy Gulf States is a party to and has liability under
the coal supply contracts. The potential liability, should these
contracts be rejected, is uncertain, but could be materially adverse
to Entergy Gulf States.
This matter, which has not been scheduled for a hearing, will be
strongly contested by Entergy Gulf States. However, at present there
is no basis upon which to predict the timing or outcome of this
litigation.
Item 5. Other Information
Earnings Ratios (Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
The domestic utility companies and System Energy have calculated
ratios of earnings to fixed charges and ratios of earnings to
combined fixed charges and preferred dividends pursuant to Item 503
of Regulation S-K of the SEC as follows:
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, March 31,
1992 1993 1994 1995 1996 1997
Entergy Arkansas 2.28 3.11(b) 2.32 2.56 2.93 2.83
Entergy Gulf States 1.72 1.54 .36(c) 1.86 1.47 2.49
Entergy Louisiana 2.79 3.06 2.91 3.18 3.16 3.04
Entergy Mississippi 2.37 3.79(b) 2.12 2.92 3.40 3.24
Entergy New Orleans 2.66 4.68(b) 1.91 3.93 3.51 3.13
System Energy 2.04 1.87 1.23 2.07 2.21 2.27
Ratios of Earnings to Combined Fixed
Charges and Preferred Dividends
Twelve Months Ended
December 31, March 31,
1992 1993 1994 1995 1996 1997
Entergy Arkansas 1.86 2.54(b) 1.97 2.12 2.44 2.40
Entergy Gulf States (a) 1.37 1.21 .29(c) 1.54 1.19 2.06
Entergy Louisiana 2.18 2.39 2.43 2.60 2.64 2.57
Entergy Mississippi 1.97 3.08(b) 1.81 2.51 2.94 2.83
Entergy New Orleans 2.36 4.12(b) 1.73 3.56 3.22 2.86
(a) "Preferred Dividends" in the case of Entergy Gulf States
also include dividends on preference stock.
(b) Earnings for the year ended December 31, 1993, include $81
million, $52 million, and $18 million for Entergy Arkansas,
Entergy Mississippi, and Entergy New Orleans, respectively,
related to the change in accounting principle to provide
for the accrual of estimated unbilled revenues.
(c) Earnings for the year ended December 31, 1994, for Entergy
Gulf States were not adequate to cover fixed charges and
combined fixed charges and preferred dividends by $144.8
million and $197.1 million, respectively.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
** 4(a) - Fifty-fourth Supplemental Indenture, dated as of March
1, 1997, to Entergy Arkansas' Mortgage and Deed of
Trust, dated as of October 1, 1944 (filed as Exhibit C-
2(a) to Form U5S for the year ended December 31,
1996).
23(a) - Consent of Sandlin Associates.
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of March 31, 1997.
27(b) - Financial Data Schedule for Entergy Arkansas as of
March 31, 1997.
27(c) - Financial Data Schedule for Entergy Gulf States as of
March 31, 1997.
27(d) - Financial Data Schedule for Entergy Louisiana as of
March 31, 1997.
27(e) - Financial Data Schedule for Entergy Mississippi as of
March 31, 1997.
27(f) - Financial Data Schedule for Entergy New Orleans as of
March 31, 1997.
27(g) - Financial Data Schedule for System Energy as of March
31, 1997.
99(a) - Entergy Arkansas Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(b) - Entergy Gulf States Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(c) - Entergy Louisiana Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(d) - Entergy Mississippi Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(e) - Entergy New Orleans 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,
Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy for the fiscal year ended December
31, 1996, 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).
___________________________
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy
Corporation agrees to furnish to the Commission upon request any
instrument with respect to long-term debt that is not registered or
listed herein as an Exhibit because the total amount of securities
authorized under such agreement does not exceed ten percent of
Entergy Corporation and its subsidiaries on a consolidated basis.
* Reference is made to a duplicate list of exhibits being
filed as a part of this report on Form 10-Q for the quarter
ended March 31, 1997, which list, prepared in accordance
with Item 102 of Regulation S-T of the SEC, immediately
precedes the exhibits being filed with this report on Form
10-Q for the quarter ended March 31, 1997.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
Entergy
A current report on Form 8-K, dated February 7, 1997,
was filed with the SEC on April 21, 1997, reporting
information under Item 7. "Financial Statements,
ProForma Financial Statements and Exhibits."
EXPERTS
The statements attributed to Sandlin Associates regarding the
analysis of River Bend construction costs of Entergy Gulf States 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
ENTERGY ARKANSAS, INC.
ENTERGY GULF STATES, INC.
ENTERGY LOUISIANA, INC.
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC.
SYSTEM ENERGY RESOURCES, INC.
/s/ Louis E. Buck
Louis E. Buck
Vice President, Chief Accounting
Officer and Assistant Secretary
(For each Registrant and for each as
Principal Accounting Officer)
Date: May 6, 1997
Exhibit 23(a)
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,
Entergy Arkansas, Inc., Entergy Gulf States, Inc. ("Entergy
Gulf States"), Entergy Louisiana, Inc., Entergy Mississippi,
Inc., Entergy New Orleans, Inc., and System Energy
Resources, Inc. We further consent to the incorporation by
reference of such reference to our firm into Entergy Gulf
States' Registration Statements on Form S-3 (File Numbers 33-
49739 and 33-51181), Form S-8 (File Numbers 2-76551 and 2-
98011) and on Form S-2 (File Number 333-17911) of such
reference and Statements.
/s/ L. S. Sandlin
SANDLIN ASSOCIATES
Management
Consultants
Pasco, Washington
May 5, 1997
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation financial statements for the quarter ended March 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000065984
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<SUBSIDIARY>
<NUMBER> 023
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 18,280,002
<OTHER-PROPERTY-AND-INVEST> 956,979
<TOTAL-CURRENT-ASSETS> 2,995,156
<TOTAL-DEFERRED-CHARGES> 4,916,425
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 27,148,562
<COMMON> 2,378
<CAPITAL-SURPLUS-PAID-IN> 4,410,325
<RETAINED-EARNINGS> 2,345,917
<TOTAL-COMMON-STOCKHOLDERS-EQ> 7,090,129
200,237
345,954
<LONG-TERM-DEBT-NET> 9,422,701
<SHORT-TERM-NOTES> 567,811
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 412,332
0
<CAPITAL-LEASE-OBLIGATIONS> 277,012
<LEASES-CURRENT> 152,077
<OTHER-ITEMS-CAPITAL-AND-LIAB> 9,011,818
<TOT-CAPITALIZATION-AND-LIAB> 27,148,562
<GROSS-OPERATING-REVENUE> 2,045,753
<INCOME-TAX-EXPENSE> 67,029
<OTHER-OPERATING-EXPENSES> 1,673,535
<TOTAL-OPERATING-EXPENSES> 1,673,535
<OPERATING-INCOME-LOSS> 372,218
<OTHER-INCOME-NET> 20,426
<INCOME-BEFORE-INTEREST-EXPEN> 392,644
<TOTAL-INTEREST-EXPENSE> 199,130
<NET-INCOME> 109,762
16,723
<EARNINGS-AVAILABLE-FOR-COMM> 109,762
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 486,065
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Arkansas, Inc. financial statements for the quarter ended March 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000007323
<NAME> ENTERGY ARKANSAS, INC.
<SUBSIDIARY>
<NUMBER> 001
<NAME> ENTERGY ARKANSAS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,828,540
<OTHER-PROPERTY-AND-INVEST> 225,013
<TOTAL-CURRENT-ASSETS> 648,480
<TOTAL-DEFERRED-CHARGES> 467,804
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,169,837
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,169
<RETAINED-EARNINGS> 471,933
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,178,922
40,027
116,350
<LONG-TERM-DEBT-NET> 1,254,122
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 90,052
0
<CAPITAL-LEASE-OBLIGATIONS> 108,139
<LEASES-CURRENT> 53,044
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,444,864
<TOT-CAPITALIZATION-AND-LIAB> 4,169,837
<GROSS-OPERATING-REVENUE> 374,731
<INCOME-TAX-EXPENSE> 2,024
<OTHER-OPERATING-EXPENSES> 343,841
<TOTAL-OPERATING-EXPENSES> 343,841
<OPERATING-INCOME-LOSS> 30,890
<OTHER-INCOME-NET> 6,768
<INCOME-BEFORE-INTEREST-EXPEN> 37,658
<TOTAL-INTEREST-EXPENSE> 25,786
<NET-INCOME> 9,848
2,832
<EARNINGS-AVAILABLE-FOR-COMM> 7,016
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 142,573
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy Gulf
States, Inc. financial statements for the quarter ended March 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000044570
<NAME> ENTERGY GULF STATES, INC.
<SUBSIDIARY>
<NUMBER> 006
<NAME> ENTERGY GULF STATES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,597,307
<OTHER-PROPERTY-AND-INVEST> 82,819
<TOTAL-CURRENT-ASSETS> 762,070
<TOTAL-DEFERRED-CHARGES> 978,971
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,421,167
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,575
<RETAINED-EARNINGS> 348,889
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,666,963
75,210
51,444
<LONG-TERM-DEBT-NET> 1,883,401
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 150,865
0
<CAPITAL-LEASE-OBLIGATIONS> 75,989
<LEASES-CURRENT> 39,650
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,529,089
<TOT-CAPITALIZATION-AND-LIAB> 6,421,167
<GROSS-OPERATING-REVENUE> 481,328
<INCOME-TAX-EXPENSE> 19,878
<OTHER-OPERATING-EXPENSES> 388,314
<TOTAL-OPERATING-EXPENSES> 388,314
<OPERATING-INCOME-LOSS> 93,014
<OTHER-INCOME-NET> 4,826
<INCOME-BEFORE-INTEREST-EXPEN> 97,840
<TOTAL-INTEREST-EXPENSE> 45,427
<NET-INCOME> 32,535
8,943
<EARNINGS-AVAILABLE-FOR-COMM> 23,592
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 110,659
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Louisiana, Inc. financial statements for the quarter ended March 31, 1997 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000060527
<NAME> ENTERGY LOUISIANA, INC.
<SUBSIDIARY>
<NUMBER> 012
<NAME> ENTERGY LOUISIANA, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,433,375
<OTHER-PROPERTY-AND-INVEST> 91,830
<TOTAL-CURRENT-ASSETS> 301,543
<TOTAL-DEFERRED-CHARGES> 383,744
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,210,492
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (2,321)
<RETAINED-EARNINGS> 59,444
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,246,523
85,000
100,500
<LONG-TERM-DEBT-NET> 1,338,229
<SHORT-TERM-NOTES> 24,372
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 53,400
0
<CAPITAL-LEASE-OBLIGATIONS> 34,287
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,400,681
<TOT-CAPITALIZATION-AND-LIAB> 4,210,492
<GROSS-OPERATING-REVENUE> 433,983
<INCOME-TAX-EXPENSE> 18,070
<OTHER-OPERATING-EXPENSES> 356,103
<TOTAL-OPERATING-EXPENSES> 356,103
<OPERATING-INCOME-LOSS> 77,880
<OTHER-INCOME-NET> (423)
<INCOME-BEFORE-INTEREST-EXPEN> 77,457
<TOTAL-INTEREST-EXPENSE> 33,215
<NET-INCOME> 26,172
3,592
<EARNINGS-AVAILABLE-FOR-COMM> 22,580
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 76,195
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Mississippi, Inc. financial statements for the quarter ended March 31, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000066901
<NAME> ENTERGY MISSISSIPPI, INC.
<SUBSIDIARY>
<NUMBER> 016
<NAME> ENTERGY MISSISSIPPI, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,044,810
<OTHER-PROPERTY-AND-INVEST> 13,417
<TOTAL-CURRENT-ASSETS> 257,379
<TOTAL-DEFERRED-CHARGES> 165,030
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,480,636
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> (42)
<RETAINED-EARNINGS> 223,800
<TOTAL-COMMON-STOCKHOLDERS-EQ> 480,965
0
57,881
<LONG-TERM-DEBT-NET> 399,100
<SHORT-TERM-NOTES> 39,112
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 96,015
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 465,444
<TOT-CAPITALIZATION-AND-LIAB> 1,480,636
<GROSS-OPERATING-REVENUE> 200,328
<INCOME-TAX-EXPENSE> 2,588
<OTHER-OPERATING-EXPENSES> 177,634
<TOTAL-OPERATING-EXPENSES> 177,634
<OPERATING-INCOME-LOSS> 22,694
<OTHER-INCOME-NET> (26)
<INCOME-BEFORE-INTEREST-EXPEN> 22,668
<TOTAL-INTEREST-EXPENSE> 11,728
<NET-INCOME> 8,352
1,115
<EARNINGS-AVAILABLE-FOR-COMM> 7,237
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 35,684
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
New Orleans, Inc. financial statements for the quarter ended March 31, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000071508
<NAME> ENTERGY NEW ORLEANS, INC.
<SUBSIDIARY>
<NUMBER> 017
<NAME> ENTERGY NEW ORLEANS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 291,735
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 135,973
<TOTAL-DEFERRED-CHARGES> 117,165
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 548,132
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,294
<RETAINED-EARNINGS> 72,850
<TOTAL-COMMON-STOCKHOLDERS-EQ> 162,668
0
19,780
<LONG-TERM-DEBT-NET> 168,904
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 12,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 204,560
<TOT-CAPITALIZATION-AND-LIAB> 548,132
<GROSS-OPERATING-REVENUE> 124,956
<INCOME-TAX-EXPENSE> 2,197
<OTHER-OPERATING-EXPENSES> 116,201
<TOTAL-OPERATING-EXPENSES> 116,201
<OPERATING-INCOME-LOSS> 8,755
<OTHER-INCOME-NET> 111
<INCOME-BEFORE-INTEREST-EXPEN> 8,866
<TOTAL-INTEREST-EXPENSE> 3,851
<NET-INCOME> 2,818
241
<EARNINGS-AVAILABLE-FOR-COMM> 2,577
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 12,595
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from System
Energy, Inc. financial statements for the quarter ended March 31, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000202584
<NAME> SYSTEM ENERGY RESOURCES, INC.
<SUBSIDIARY>
<NUMBER> 018
<NAME> SYSTEM ENERGY RESOURCES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,556,342
<OTHER-PROPERTY-AND-INVEST> 66,922
<TOTAL-CURRENT-ASSETS> 295,027
<TOTAL-DEFERRED-CHARGES> 532,113
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,450,404
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 59,333
<TOTAL-COMMON-STOCKHOLDERS-EQ> 848,683
0
0
<LONG-TERM-DEBT-NET> 1,418,969
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 10,000
0
<CAPITAL-LEASE-OBLIGATIONS> 46,719
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,098,033
<TOT-CAPITALIZATION-AND-LIAB> 3,450,404
<GROSS-OPERATING-REVENUE> 155,662
<INCOME-TAX-EXPENSE> 19,313
<OTHER-OPERATING-EXPENSES> 81,346
<TOTAL-OPERATING-EXPENSES> 81,346
<OPERATING-INCOME-LOSS> 74,316
<OTHER-INCOME-NET> 1,603
<INCOME-BEFORE-INTEREST-EXPEN> 75,919
<TOTAL-INTEREST-EXPENSE> 32,261
<NET-INCOME> 24,345
0
<EARNINGS-AVAILABLE-FOR-COMM> 24,345
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 69,839
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(a)
Entergy Arkansas, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $120,317 $107,771 $101,439 $102,339 $93,852 $93,463
Interest on notes payable 117 349 1,311 678 688 660
Amortization of expense and premium on debt-net(cr) 1,359 2,702 4,563 4,514 4,679 4,684
Other interest 2,308 8,769 3,501 7,806 5,570 5,499
Dividends on preferred securities of subsidiary trust -- -- -- -- 1,927 3,202
Interest applicable to rentals 17,657 16,860 19,140 18,158 19,121 17,051
----------------------------------------------------------------------
Total fixed charges, as defined 141,758 136,451 129,954 133,495 125,837 124,559
Preferred dividends, as defined (a) 32,195 30,334 23,234 27,636 24,731 22,109
----------------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $173,953 $166,785 $153,188 $161,131 $150,568 $146,668
======================================================================
Earnings as defined:
Net Income $130,529 $205,297 $142,263 $136,666 $157,798 148,378
Add:
Provision for income taxes:
Federal & State 57,089 58,162 83,300 105,964 128,982 127,600
Deferred - net 3,490 34,748 (17,939) (28,225) (39,772) (43,236)
Investment tax credit adjustment - net (9,989) (10,573) (36,141) (5,658) (4,765) (4,714)
Fixed charges as above 141,758 136,451 129,954 133,495 125,837 124,559
----------------------------------------------------------------------
Total earnings, as defined $322,877 $424,085 $301,437 $342,242 $368,080 $352,587
======================================================================
Ratio of earnings to fixed charges, as defined 2.28 3.11 2.32 2.56 2.93 2.83
======================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.86 2.54 1.97 2.12 2.44 2.40
======================================================================
- ------------------------
(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)
Entergy Gulf States, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $197,218 $172,494 $167,082 $181,994 $172,191 $167,870
Interest on notes payable 21,155 19,440 20,203 810 800 749
Other interest 26,564 10,561 7,957 8,074 12,019 13,857
Amortization of expense and premium on debt-net(cr) 3,479 8,104 8,892 9,346 7,455 10,274
Dividends on preferred securities of subsidiary trust -- -- -- -- -- 1,322
Interest applicable to rentals 23,759 23,455 21,539 16,648 14,887 13,860
--------------------------------------------------------------------
Total fixed charges, as defined 272,175 234,054 225,673 216,872 207,352 207,932
Preferred dividends, as defined (a) 69,617 65,299 52,210 44,651 48,690 42,994
--------------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $341,792 $299,353 $277,883 $261,523 $256,042 $250,926
====================================================================
Earnings as defined:
Income (loss) from continuing operations before
extraordinary items and the cumulative effect of
accounting changes $139,413 $69,462 ($82,755) $122,919 ($3,887) 180,905
Add:
Income Taxes 55,860 58,016 (62,086) 63,244 102,091 128,728
Fixed charges as above 272,175 234,054 225,673 216,872 207,352 207,932
--------------------------------------------------------------------
Total earnings, as defined (b) $467,448 $361,532 $80,832 $403,035 $305,556 $517,565
====================================================================
Ratio of earnings to fixed charges, as defined 1.72 1.54 0.36 1.86 1.47 2.49
====================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.37 1.21 0.29 1.54 1.19 2.06
====================================================================
(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, for GSU were not adequate
to cover fixed charges combined fixed charges and preferred dividends by
$144.8 million and $197.1 million, respectively.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(c)
Entergy Louisiana, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $128,672 $124,633 $124,820 $124,507 $117,609 $116,947
Interest on notes payable 150 898 1,948 1,932 2,143 2,466
Other interest charges 5,591 5,706 4,546 5,278 4,795 4,071
Dividends on preferred securities of subsidiary trust 2,870 4,445
Amortization of expense and premium on debt - net(cr) 7,100 5,720 5,130 5,184 4,995 5,024
Interest applicable to rentals 9,363 8,519 8,332 9,332 10,601 9,771
------------------------------------------------------------------------
Total fixed charges, as defined 150,876 145,476 144,776 146,233 143,013 142,724
Preferred dividends, as defined (a) 42,026 40,779 29,171 32,847 28,234 26,083
------------------------------------------------------------------------
Combined fixed charges and preferred dividends,
as defined $192,902 $186,255 $173,947 $179,080 $171,247 $168,807
========================================================================
Earnings as defined:
Net Income $182,989 $188,808 $213,839 $201,537 $190,762 $176,404
Add:
Provision for income taxes:
Federal and State 36,465 70,552 79,260 114,665 97,169 105,521
Deferred Federal and State - net 51,889 43,017 21,580 8,148 27,237 14,391
Investment tax credit adjustment - net (1,317) (2,756) (37,552) (5,699) (5,847) (5,836)
Fixed charges as above 150,876 145,476 144,776 146,233 143,013 142,724
------------------------------------------------------------------------
Total earnings, as defined $420,902 $445,097 $421,903 $464,884 $452,334 $433,204
========================================================================
Ratio of earnings to fixed charges, as defined 2.79 3.06 2.91 3.18 3.16 3.04
========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.18 2.39 2.43 2.60 2.64 2.57
========================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed
by dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(d)
Entergy Mississippi, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
December 31,
March 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $60,709 $52,099 $46,081 $46,241 $42,897 $42,490
Interest on notes payable 36 7 1,348 474 1,633 1,963
Other interest charges 1,636 1,795 3,581 4,164 2,237 2,303
Amortization of expense and premium on debt-net(cr) 1,685 1,458 1,754 756 1,240 1,233
Interest applicable to rentals 521 1,264 1,716 2,173 2,165 2,141
-------------------------------------------------------------------------
Total fixed charges, as defined 64,587 56,623 54,480 53,808 50,172 50,130
Preferred dividends, as defined (a) 12,823 12,990 9,447 9,004 7,720 7,222
-------------------------------------------------------------------------
Combined fixed charges and preferred dividends,
as defined $77,410 $69,613 $63,927 $62,812 $57,892 $57,352
=========================================================================
Earnings as defined:
Net Income $65,036 $101,743 $48,779 $68,667 $79,210 74,638
Add:
Provision for income taxes:
Federal and State 4,463 54,418 46,884 71,651 73,994 68,958
Deferred Federal and State - net 20,430 539 (26,763) (35,224) (29,390) (29,645)
Investment tax credit adjustment - net (1,746) 1,036 (7,645) (1,550) (3,497) (1,606)
Fixed charges as above 64,587 56,623 54,480 53,808 50,172 50,154
-------------------------------------------------------------------------
Total earnings, as defined $152,770 $214,359 $115,735 $157,352 $170,489 $162,499
=========================================================================
Ratio of earnings to fixed charges, as defined 2.37 3.79 2.12 2.92 3.40 3.24
=========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.97 3.08 1.81 2.51 2.94 2.83
=========================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(e)
Entergy New Orleans, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $22,934 $19,478 $16,382 $15,330 $14,787 $14,403
Interest on notes payable -- -- 153 130 146 133
Other interest charges 1,714 1,016 1,027 1,723 890 912
Amortization of expense and premium on debt-net(cr) 576 598 710 619 481 429
Interest applicable to rentals 444 544 1,245 916 831 867
--------------------------------------------------------------------------
Total fixed charges, as defined 25,668 21,636 19,517 18,718 17,135 16,744
Preferred dividends, as defined (a) 3,214 2,952 2,071 1,964 1,549 1,609
--------------------------------------------------------------------------
Combined fixed charges and preferred dividends,
as defined $28,882 $24,588 $21,588 $20,682 $18,684 $18,353
==========================================================================
Earnings as defined:
Net Income $26,424 $47,709 $13,211 $34,386 $26,776 $21,559
Add:
Provision for income taxes:
Federal and State 16,575 27,479 22,606 22,465 28,490 32,475
Deferred Federal and State - net (340) 5,203 (15,674) (1,364) (11,587) (17,669)
Investment tax credit adjustment - net (170) (744) (2,332) (634) (687) (675)
Fixed charges as above 25,668 21,636 19,517 18,718 17,135 16,744
--------------------------------------------------------------------------
Total earnings, as defined $68,157 $101,283 $37,328 $73,571 $60,127 $52,434
==========================================================================
Ratio of earnings to fixed charges, as defined 2.66 4.68 1.91 3.93 3.51 3.13
==========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.36 4.12 1.73 3.56 3.22 2.86
==========================================================================
- ------------------------
(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(f)
System Energy Resources, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
March 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $196,618 $184,818 $162,517 $136,916 $128,704 $120,979
Interest on notes payable -- -- 88 473 289 206
Amortization of expense and premium on debt-net 6,417 4,520 6,731 6,104 6,672 7,202
Interest applicable to rentals 6,265 6,790 7,546 6,475 6,223 5,617
Other interest charges 1,506 1,600 7,168 8,019 8,055 7,929
--------------------------------------------------------------------------
Total fixed charges, as defined $210,806 $197,728 $184,050 $157,987 $149,943 $141,933
==========================================================================
Earnings as defined:
Net Income $130,141 $93,927 $5,407 $93,039 $98,668 $ 99,483
Add:
Provision for income taxes:
Federal and State 35,082 48,314 67,477 120,830 33,146 34,124
Deferred Federal and State - net 23,648 60,690 (27,374) (41,871) 52,447 49,776
Investment tax credit adjustment - net 30,123 (30,452) (3,265) (3,466) (3,472) (3,472)
Fixed charges as above 210,806 197,728 184,050 157,987 149,943 141,933
--------------------------------------------------------------------------
Total earnings, as defined $429,800 $370,207 $226,295 $326,519 $330,732 $321,844
==========================================================================
Ratio of earnings to fixed charges, as defined 2.04 1.87 1.23 2.07 2.21 2.27
==========================================================================
</TABLE>
