______________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
OR
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, IRS 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>
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of Each Exchange
Registrant Title of Class on Which Registered
<S> <C> <C>
Entergy Corporation Common Stock, $0.01 Par Value - 235,117,712 New York Stock Exchange, Inc.
Shares outstanding at February 28, 1997 Chicago Stock Exchange
Incorporated
Pacific Stock Exchange
Incorporated
Entergy Arkansas Capital I 8-1/2% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
Securities, Series A
Entergy Gulf States, Inc. Preferred Stock, Cumulative, $100 Par Value:
$4.40 Dividend Series New York Stock Exchange, Inc.
$4.52 Dividend Series New York Stock Exchange, Inc.
$5.08 Dividend Series New York Stock Exchange, Inc.
$8.80 Dividend Series New York Stock Exchange, Inc.
Adjustable Rate Series B (Depository Receipts) New York Stock Exchange, Inc.
Preference Stock, Cumulative, without Par Value New York Stock Exchange, Inc.
$1.75 Dividend Series
Entergy Gulf States Capital I 8.75% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
Securities, Series A
Entergy Louisiana, Inc. 12.64% Preferred Stock, Cumulative, $25 Par New York Stock Exchange, Inc.
Value
Entergy Louisiana Capital I 9% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
Securities, Series A
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Registrant Title of Class
Entergy Arkansas, Inc. Preferred Stock, Cumulative, $100 Par Value
Preferred Stock, Cumulative, $25 Par Value
Preferred Stock, Cumulative, $0.01 Par Value
Entergy Gulf States, Inc. Preferred Stock, Cumulative, $100 Par Value
Entergy Louisiana, Inc. Preferred Stock, Cumulative, $100 Par Value
Preferred Stock, Cumulative, $25 Par Value
Entergy Mississippi, Inc. Preferred Stock, Cumulative, $100 Par Value
Entergy New Orleans, Inc. Preferred Stock, Cumulative, $100 Par Value
<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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of the registrants' knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.[ ]
The aggregate market value of Entergy Corporation Common Stock,
$0.01 Par Value, held by non-affiliates, was $6.2 billion based on the
reported last sale price of such stock on the New York Stock Exchange
on February 28, 1997. Entergy Corporation is the sole holder of the
common stock of Entergy Arkansas, Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc., and System Energy Resources, Inc.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of Entergy Corporation to be
filed in connection with its Annual Meeting of Stockholders, to be
held May 9, 1997, are incorporated by reference into Part III hereof.
<PAGE>
TABLE OF CONTENTS
Page
Number
Definitions i
Part I
Item 1.Business 1
Item 2.Properties 35
Item 3.Legal Proceedings 36
Item 4.Submission of Matters to a Vote of Security Holders36
Part II
Item 5.Market for Registrants' Common Equity and Related
Stockholder Matters 36
Item 6.Selected Financial Data 37
Item 7.Management's Discussion and Analysis of Financial
Condition and Results of Operations 37
Item 8.Financial Statements and Supplementary Data 38
Item 9.Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 182
Part III
Item 10.Directors and Executive Officers of the Registrants182
Item 11.Executive Compensation 191
Item 12.Security Ownership of Certain Beneficial Owners
and Management 198
Item 13.Certain Relationships and Related Transactions 202
Part IV
Item 14.Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 203
Experts 203
Signatures 204
Consents of Experts 211
Report of Independent Accountants on Financial Statement
Schedules 214
Index to Financial Statement Schedules S-1
Exhibit Index E-1
This combined Form 10-K 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 report should be read in its entirety. No one section of the
report deals with all aspects of the subject matter.
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.
<PAGE>
DEFINITIONS
Certain abbreviations or acronyms used in the text and notes are
defined below:
Abbreviation or Acronym Term
AFUDC Allowance for Funds Used During Construction
Algiers 15th Ward of the City of New Orleans, Louisiana
ALJ Administrative Law Judge
ANO Arkansas Nuclear One Steam Electric Generating
Station (nuclear), owned by Entergy Arkansas
ANO 1 Unit No. 1 of ANO
ANO 2 Unit No. 2 of ANO
APB Accounting Principles Board
APSC Arkansas Public Service Commission
Availability
Agreement Agreement, dated as of June 21, 1974, as amended,
among System Energy and Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New
Orleans, and the assignments thereof
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.
City of New Orleans
or City New Orleans, Louisiana
Council Council of the City of New Orleans, Louisiana
D.C. Circuit United States Court of Appeals for the District of
Columbia Circuit
DOE United States Department of Energy
domestic utility
companies Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New
Orleans, collectively
EPA Environmental Protection Agency
EPAct Energy Policy Act of 1992
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.
Entergy Power Entergy Power, Inc.
Entergy Services Entergy Services, Inc.
EPMC Entergy Power Marketing Corporation
ETHC Entergy Technology Holding Company
EWG Exempt Wholesale Generator
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
FUCO Foreign Utility Company
G&R General and Refunding
Grand Gulf Grand Gulf Steam Electric Generating Station
(nuclear), owned 90% by System Energy
Grand Gulf 1 Unit No. 1 of Grand Gulf
Grand Gulf 2 Unit No. 2 of Grand Gulf
Independence Independence Steam Electric Station (coal), owned
16% by Entergy Arkansas, 25% by Entergy
Mississippi, and 11% by Entergy Power
IRS Internal Revenue Service
kWh kilowatt-hour(s)
London Electricity London Electricity plc
LPSC Louisiana Public Service Commission
MCF 1,000 cubic feet of gas
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
MW Megawatt(s)
Nelson Unit 6 Unit No. 6 (coal) of the Nelson Steam Electric
Generating Station, owned 70% by Entergy Gulf
States
NISCO Nelson Industrial Steam Company
1991 NOPSI
Settlement Agreement, retroactive to October 4, 1991, among
Entergy New Orleans, the Council, and the Alliance
for Affordable Energy, Inc. (local consumer
advocate group), which settled certain Grand
Gulf 1 prudence issues and certain litigation
related to the resolution adopted by the Council
on February 4, 1988, disallowing Entergy New
Orleans' recovery of $135 million of previously
deferred Grand Gulf 1-related costs
1994 NOPSI
Settlement Settlement effective January 1, 1995, between
Entergy New Orleans and the Council in which
Entergy New Orleans agreed to implement a
permanent reduction in electric and gas rates and
resolve disputes with the Council in the
interpretation of the 1991 NOPSI Settlement
NRC Nuclear Regulatory Commission
PRP Potentially Responsible Party (a person or entity
that may be responsible for remediation of
environmental contamination)
PUCT Public Utility Commission of Texas
PUHCA Public Utility Holding Company Act of 1935, as
amended
PURPA Public Utility Regulatory Policies Act
Rate Cap The level of Entergy Gulf States' retail electric
base rates in effect at December 31, 1993, for the
Louisiana retail jurisdiction, and the level of
such rates in effect prior to the settlement
agreement with the PUCT on July 21, 1994, for the
Texas retail jurisdiction, which may not be
exceeded before December 31, 1998
Reallocation
Agreement 1981 Agreement, superseded in part by a June 13,
1985 decision of FERC, among Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy relating to the
sale of capacity and energy from Grand Gulf
Ritchie 2 Unit No. 2 of the R. E. Ritchie Steam Electric
Generating Station (gas/oil)
River Bend River Bend Steam Electric Generating Station
(nuclear), owned 70% by Entergy Gulf States
RUS Rural Utility Services (formerly the Rural
Electrification Administration or "REA")
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting Standards,
promulgated by the Financial Accounting Standards
Board
SMEPA South Mississippi Electric Power Agency
System Agreement Agreement, effective January 1, 1983, as modified,
among the domestic utility companies relating to
the sharing of generating capacity and other power
resources
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
Unit Power Sales
Agreement Agreement, dated as of June 10, 1982, as amended
and approved by FERC, among Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy, relating to the
sale of capacity and energy from System Energy's
share of Grand Gulf 1
Waterford 3 Unit No. 3 (nuclear) of the Waterford Steam
Electric Generating Station, owned 90.7% by
Entergy Louisiana. The remaining 9.3% undivided
interest is leased by Entergy Louisiana.
<PAGE>
PART I
Item 1. Business
BUSINESS OF ENTERGY
General
Entergy Corporation is a Delaware corporation which, through its
direct and indirect subsidiaries, engages in the domestic and foreign
electric utility business, other domestic energy-related enterprises,
and telecommunications-based businesses. It has no significant assets
other than the stock of its subsidiaries. Entergy Corporation is
registered as a public utility holding company under PUHCA. As such,
Entergy Corporation and its various direct and indirect subsidiaries
(with the exception of its EWG, FUCO, and ETHC subsidiaries) are
subject to the broad regulatory provisions of PUHCA. PUHCA
historically has limited the operations of registered holding companies
to a single, integrated public utility system and functionally related
activities.
Domestic Operations and Investments
Entergy Corporation has five wholly-owned domestic retail electric
utility subsidiaries: Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans. As of
December 31, 1996, these utility companies provided retail electric
service to approximately 2.4 million customers in portions of the
states of Arkansas, Louisiana, Mississippi, Tennessee, and Texas. In
addition, Entergy Gulf States furnishes natural gas utility service in
and around Baton Rouge, Louisiana, and Entergy New Orleans furnishes
natural gas utility service in New Orleans, Louisiana. The business of
these domestic utility companies is subject to seasonal fluctuations,
with the peak period occurring during the third quarter of each year.
During 1996, these domestic utility companies' combined electric sales
as a percentage of total electric sales were: residential - 26.5%;
commercial - 19.9%; and industrial - 41.5%. Electric revenues from
these sectors as a percentage of total electric revenues were:
residential - 35.3%; commercial - 24.4%; and industrial - 30.8%. Sales
to governmental and municipal sectors and to nonaffiliated utilities
accounted for the balance of energy sales. The major industrial
customers of these companies are in the chemical processing, petroleum
refining, paper products, and food products industries. The retail
rates and services of Entergy's domestic retail utility subsidiaries
are regulated by state and/or local utility regulatory bodies.
Entergy Corporation owns directly all of the common stock of
Entergy Power, a Delaware corporation and domestic power producer that
owns 725 MW of fossil-fueled generating assets located in Arkansas.
Entergy Power markets electric capacity and energy in the wholesale
market. Entergy Corporation also owns 100% of the voting stock of
System Energy, an Arkansas corporation that owns and leases an
aggregate 90% undivided interest in the Grand Gulf nuclear plant.
System Energy sells the capacity and energy from its interest in Grand
Gulf 1 at wholesale to its only customers, Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans (see "CAPITAL
REQUIREMENTS AND FUTURE FINANCING - Certain System Financial and
Support Agreements - Unit Power Sales Agreement," below). Both Entergy
Power's and System Energy's wholesale power sales are subject to the
jurisdiction of FERC.
Entergy Services, Inc., a Delaware corporation wholly-owned by
Entergy Corporation, provides general executive, advisory,
administrative, accounting, legal, engineering, and other services
primarily to the domestic utility companies of Entergy Corporation, but
also to Entergy Enterprises. Entergy Operations, a Delaware
corporation, is also wholly-owned by Entergy Corporation and provides
nuclear management, operations and maintenance services under contract
for ANO, River Bend, Waterford 3, and Grand Gulf 1, subject to the
owner oversight of Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and System Energy, respectively. Entergy Services and
Entergy Operations provide their services to Entergy's domestic retail
electric utility subsidiaries, generally at cost, pursuant to service
agreements approved by the SEC under PUHCA.
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans own 35%, 33%, 19%, and 13%, respectively, of the
common stock of System Fuels, a subsidiary incorporated in Louisiana
that implements and/or maintains certain programs to procure, deliver,
and store fuel supplies for those companies and for Entergy Gulf
States.
Entergy Gulf States has wholly-owned subsidiaries that (i) operate
intrastate gas pipelines in Louisiana used primarily to transport fuel
to two of Entergy Gulf States' generating stations; (ii) own the Lewis
Creek Station, a gas-fired generating plant, which is leased to and
operated by Entergy Gulf States; and (iii) own several miles of
railroad track constructed in Louisiana for the purpose of transporting
coal for use as boiler fuel at Entergy Gulf States' Nelson Unit 6
generating facility.
Entergy Enterprises is a wholly-owned nonutility subsidiary of
Entergy Corporation incorporated under Louisiana law, which invests in
and develops energy-related projects and businesses. Entergy
Enterprises, directly or through subsidiaries, markets energy-related
expertise, products, and services to third parties and provides
services to certain nonutility companies owned by Entergy. Services
provided to third-parties include (i) energy management; (ii)
management, operations and maintenance services for fossil and nuclear
generating plants; and (iii) energy efficient lighting, heating, and
cooling systems.
Entergy Power Marketing Corporation, a Delaware corporation, is a
wholly-owned subsidiary of Entergy Corporation that is in the business
of marketing electricity and generating fuels to third parties. It has
applied to the SEC for authority to deal in a wide range of energy
commodities and related financial products.
During 1996, Entergy entered into several telecommunications-based
businesses, including primarily security monitoring firms operating in
North and South Carolina, Alabama, and Florida. These businesses are
owned through Entergy Technology Holding Company, a wholly-owned
Delaware subsidiary of Entergy Corporation. Entergy Technology Holding
Company intends to engage in a variety of telecommunications based
enterprises that are exempt from regulation under PUHCA.
Foreign Operations and Investments
Since 1993, Entergy Corporation has directly or indirectly
acquired interests in a number of foreign utility businesses. Entergy
Corporation's indirect wholly-owned Australian subsidiary, CitiPower,
was acquired in 1996. CitiPower is principally engaged in the electric
distribution business in Melbourne, Australia, where it serves
approximately 238,000 retail customers. Entergy Corporation also
indirectly owns a 5% interest in Edesur, S.A., which is the retail
electric distribution company for about 1.9 million customers in Buenos
Aires, Argentina. In addition, on February 7, 1997, Entergy
Corporation acquired a controlling stock interest in London Electricity
plc, a regional electric company that is principally engaged in the
distribution of electricity for approximately 2 million customers in
and around London, England. London Electricity also engages in other
business activities, including ownership of an interest in a 1,000 MW
gas-fired combined cycle generating station and several private
electric distribution systems.
Other foreign electric generation and transmission assets in which
Entergy Corporation owns an interest are set forth below:
Investment Percent Ownership
Argentina - Costanera, 1,260 MW 6%
Argentina - Costanera, expansion, 220 MW 10%
Pakistan - Hub River, 1,292 MW 7%
Peru - Edegel - 793 MW 21%
Argentina - Transener 10%
(transmission 5,000 miles)
As of December 31, 1996, Entergy Corporation had a net investment
of $812 million in equity capital in businesses other than its domestic
retail utility businesses. Entergy Corporation continues to seek
opportunities to expand its domestic and foreign businesses that are
not regulated by domestic state and local utility regulatory
authorities. Entergy Corporation's continued acquisition of and
investments in certain foreign and domestic businesses is subject to
regulation (including the effect of exemptive provisions) under PUHCA.
International operations are subject to the risks inherent in
conducting business abroad, including possible nationalization or
expropriation, price and currency exchange controls, limitations on
foreign participation in local energy-related enterprises, and other
restrictions. Changes in the relative value of currencies occur from
time to time and their effects may be favorable or unfavorable on the
results of operations and statement of cash flows. In addition, there
are exchange control restrictions in certain countries related to the
repatriation of earnings.
Selected Data
Selected domestic customer and sales data for 1996 are summarized
in the following tables:
<TABLE>
<CAPTION>
Customers as of
December 31, 1996
Area Served Electric Gas
<S> <C> <C> <C>
Entergy Arkansas Portions of Arkansas and Tennessee 614,748 -
Entergy Gulf States Portions of Texas and Louisiana 629,583 87,384
Entergy Louisiana Portions of Louisiana 617,378 -
Entergy Mississippi Portions of Mississippi 375,456 -
Entergy New Orleans City of New Orleans, except Algiers, which
is provided electric service by Entergy Louisiana 188,913 151,528
--------- -------
Total 2,426,078 238,912
========= =======
</TABLE>
1996 - Selected Electric Energy Sales Data
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Mississippi New Orleans Energy Total(a)
(Millions of kWh)
<S> <C> <C> <C> <C> <C> <C>
Electric Department:
Sales to retail customers 17,134 31,551 30,843 11,272 5,526 - 96,326
Sales for resale:
- Affiliates 10,471 656 143 1,368 66 8,302 -
- Others 6,720 2,148 982 521 212 - 10,583
----------------------------------------------------------------------------
Total 34,325 34,355 31,968 13,161 5,804 8,302 106,909
Steam Department:
- Sales to steam
products customer - 1,826 - - - - 1,826
----------------------------------------------------------------------------
TOTAL 34,325 36,181 31,968 13,161 5,804 8,302 108,735
============================================================================
Average use per residential
customer (kWh) 11,497 14,673 14,579 13,613 11,696 - 13,455
============================================================================
</TABLE>
(a) Includes the effect of intercompany eliminations.
Entergy New Orleans sold 18,192,798 MCF of natural gas to retail
customers in 1996. Revenues from natural gas operations for each of
the three years in the period ended December 31, 1996, were material
for Entergy New Orleans, but not material for Entergy (see "INDUSTRY
SEGMENTS" below for a description of Entergy New Orleans' business
segments).
Entergy Gulf States sold 7,325,289 MCF of natural gas to retail
customers in 1996. Revenues from natural gas operations for each of
the three years in the period ended December 31, 1996, were not
material for Entergy Gulf States.
See "ENTERGY CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL DATA
- - FIVE-YEAR COMPARISON," and "SELECTED FINANCIAL DATA - FIVE-YEAR
COMPARISON OF ENTERGY ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA,
ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, and SYSTEM ENERGY," which
follow each company's financial statements in this report, for further
information with respect to operating statistics.
Employees
As of December 31, 1996, Entergy had 13,363 employees as follows:
Full-time:
Entergy Corporation -
Entergy Arkansas 1,455
Entergy Gulf States 1,566
Entergy Louisiana 756
Entergy Mississippi 742
Entergy New Orleans 328
System Energy -
Entergy Operations 3,728
Entergy Services 2,940
Other subsidiaries 1,713
------
Total Full-time 13,228
Part-time 135
------
Total Entergy 13,363
======
Competition
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" for a detailed discussion of
competitive challenges Entergy faces in the utility industry, including
the recent filings of the domestic utility companies with their
respective state and local regulatory authorities addressing transition
to competition.
CAPITAL REQUIREMENTS AND FUTURE FINANCING
Construction expenditures for the domestic utility companies and
System Energy (including environmental expenditures, which are
immaterial, and AFUDC, but excluding nuclear fuel) for the period
1997-1999 are estimated as follows:
1997 1998 1999 Total
(In Millions)
Entergy Arkansas $159 $186 $196 $541
Entergy Gulf States 140 147 150 437
Entergy Louisiana 102 99 99 300
Entergy Mississippi 63 66 68 197
Entergy New Orleans 27 28 29 84
System Energy 19 21 23 63
With the exception of Entergy Arkansas, no significant
construction costs are expected in connection with the domestic utility
companies' generating facilities. Projected construction expenditures
for the replacement of ANO 2's steam generators are included in Entergy
Arkansas' estimated figures above. See Note 9 for additional
information. Actual construction costs may vary from these estimates
because of a number of factors, including changes in load growth
estimates, changes in environmental regulations, modifications to
nuclear units to meet regulatory requirements, increasing costs of
labor, equipment and materials, and cost of capital. In addition to
construction expenditure requirements, Entergy must meet scheduled long-
term debt and preferred stock maturities and cash sinking fund
requirements. See Notes 4, 5, 6, and 7 for further capital
requirements and financing information.
Entergy Corporation's primary capital requirements are to invest
periodically in, or make loans to, its subsidiaries and to invest in
new enterprises. See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
LIQUIDITY AND CAPITAL RESOURCES," for additional discussion of Entergy
Corporation's current and future planned investments in its
subsidiaries and financial sources for such investments. The principal
source of funds for Entergy Corporation is dividend distributions from
its subsidiaries. Certain events, such as the River Bend issues
discussed in Notes 2 and 9, could limit the amount of these
distributions. Substantial write-offs or charges resulting from
adverse rulings in this matter could adversely affect Entergy Gulf
States' ability to pay dividends.
Certain System Financial and Support Agreements
Unit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
The Unit Power Sales Agreement allocates capacity and energy from
System Energy's 90% ownership and leasehold interests in Grand Gulf 1
(and the related costs) to Entergy Arkansas (36%), Entergy Louisiana
(14%), Entergy Mississippi (33%), and Entergy New Orleans (17%).
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans make payments to System Energy for their respective
entitlements of capacity and energy on a full cost-of-service basis
regardless of the quantity of energy delivered, so long as Grand Gulf 1
remains in commercial operation. Payments under the Unit Power Sales
Agreement are System Energy's only source of operating revenues. The
financial condition of System Energy depends upon the continued
commercial operation of Grand Gulf 1 and the receipt of payments from
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans. Payments made by Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans under the Unit Power Sales
Agreement are generally recovered through rates. In the case of
Entergy Arkansas and Entergy Louisiana, payments are also recovered
through sales of electricity from their respective retained shares of
Grand Gulf 1. See Note 2 for further information regarding retained
shares.
Availability Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
The Availability Agreement among System Energy and Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans was entered into in 1974 in connection with the financing by
System Energy of Grand Gulf. The Availability Agreement provided that
System Energy would join in the System Agreement on or before the date
on which Grand Gulf 1 was placed in commercial operation. It also
provided that System Energy would make available to Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans all
capacity and energy available from System Energy's share of Grand Gulf.
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans also agreed severally to pay System Energy monthly
for the right to receive capacity and energy available from Grand Gulf
in amounts that (when added to any amounts received by System Energy
under the Unit Power Sales Agreement, or otherwise) would at least
equal System Energy's total operating expenses for Grand Gulf
(including depreciation at a specified rate) and interest charges.
Under the Availability Agreement, as amended to date:
- the obligations of Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans for payments for
Grand Gulf 1 became effective upon commercial operation of
Grand Gulf 1 on July 1, 1985;
- the sale of capacity and energy generated by Grand Gulf
is governed by the Unit Power Sales Agreement;
- the September 1989 write-off of System Energy's
investment in Grand Gulf 2, amounting to approximately $900
million, is being amortized for Availability Agreement purposes
over 27 years rather than in the month the write-off was
recognized on System Energy's books; and
- the allocation percentages under the Availability
Agreement are fixed as follows: Entergy Arkansas - 17.1%;
Entergy Louisiana - 26.9%; Entergy Mississippi - 31.3%; and
Entergy New Orleans - 24.7%.
As noted above, the Unit Power Sales Agreement provides for
different allocation percentages for sales of capacity and energy from
Grand Gulf 1. However, the allocation percentages under the
Availability Agreement remain in effect and would govern payments made
under such agreement in the event of a shortfall of funds available to
System Energy from other sources, including payments by Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans to System Energy under the Unit Power Sales Agreement.
System Energy has assigned its rights to payments and advances
from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans under the Availability Agreement as security for
its first mortgage bonds and reimbursement obligations to certain banks
providing the letters of credit in connection with the equity funding
of the sale and leaseback transactions described in Note 10 under "Sale
and Leaseback Transactions - Grand Gulf 1 Lease Obligations (System
Energy)." In these assignments, Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans further agreed that, in
the event they were prohibited by governmental action from making
payments under the Availability Agreement (if, for example, FERC
reduced or disallowed such payments as constituting excessive rates),
they would then make subordinated advances to System Energy in the same
amounts and at the same times as the prohibited payments. System
Energy would not be allowed to repay these subordinated advances so
long as it remained in default under the related indebtedness or in
other similar circumstances.
Each of the assignment agreements relating to the Availability
Agreement provides that Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans shall make payments directly to
System Energy. However, if there is an event of default, Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans must make those payments directly to the holders of
indebtedness that are the beneficiaries of such assignment agreements.
The payments must be made pro rata according to the amount of the
respective obligations secured.
The obligations of Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans to make payments under the
Availability Agreement are subject to the receipt and continued
effectiveness of all necessary regulatory approvals. Sales of capacity
and energy under the Availability Agreement would require that the
Availability Agreement be submitted to FERC for approval with respect
to the terms of such sale. No such filing with FERC has been made
because sales of capacity and energy from Grand Gulf are being made
pursuant to the Unit Power Sales Agreement. Other aspects of the
Availability Agreement, including the obligations of Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans to make
subordinated advances, are subject to the jurisdiction of the SEC under
PUHCA, whose approval has been obtained. If, for any reason, sales of
capacity and energy are made in the future pursuant to the Availability
Agreement, the jurisdictional portions of the Availability Agreement
would be submitted to FERC for approval.
Since commercial operation of Grand Gulf 1 began, payments under
the Unit Power Sales Agreement to System Energy have exceeded the
amounts payable under the Availability Agreement. Accordingly, no
payments under the Availability Agreement by Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans have ever been
required. In the event such payments were required, the ability of
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans to recover from their customers amounts paid under the
Availability Agreement, or under the assignments thereof, would depend
upon the outcome of rate proceedings before state and local regulatory
authorities. In view of the controversies that arose over the
allocation of capacity and energy from Grand Gulf 1 pursuant to the
Unit Power Sales Agreement, opposition to full recovery would be likely
and the outcome of such proceedings, should they occur, is not
predictable.
The Availability Agreement may be terminated, amended, or modified
by mutual agreement of the parties thereto, upon obtaining the consent,
if required, of those holders of System Energy's indebtedness then
outstanding who have received the assignments of the Availability
Agreement.
Capital Funds Agreement (Entergy Corporation and System Energy)
System Energy and Entergy Corporation have entered into the
Capital Funds Agreement whereby Entergy Corporation has agreed to
supply System Energy with sufficient capital to (i) maintain System
Energy's equity capital at an amount equal to a minimum of 35% of its
total capitalization (excluding short-term debt) and (ii) permit the
continued commercial operation of Grand Gulf 1 and pay in full all
indebtedness for borrowed money of System Energy when due under any
circumstances.
Entergy Corporation has entered into various supplements to the
Capital Funds Agreement, and System Energy has assigned its rights
under such supplements as security for its first mortgage bonds and for
reimbursement obligations to certain banks providing letters of credit
in connection with the equity funding of the sale and leaseback
transactions described in Note 10 under "Sale and Leaseback
Transactions - Grand Gulf 1 Lease Obligations (System Energy)." Each
such supplement provides that permitted indebtedness for borrowed money
incurred by System Energy in connection with the financing of Grand
Gulf may be secured by System Energy's rights under the Capital Funds
Agreement on a pro rata basis (except for the Specific Payments, as
defined below). In addition, in the supplements to the Capital Funds
Agreement relating to the specific indebtedness being secured, Entergy
Corporation has agreed to make cash capital contributions directly to
System Energy sufficient to enable System Energy to make payments when
due on such indebtedness (Specific Payments). However, if there is an
event of default, Entergy Corporation must make those payments directly
to the holders of indebtedness benefiting from the supplemental
agreements. The payments (other than the Specific Payments) must be
made pro rata according to the amount of the respective obligations
benefiting from the supplemental agreements.
The Capital Funds Agreement may be terminated, amended, or
modified by mutual agreement of the parties thereto, upon obtaining the
consent, if required, of those holders of System Energy's indebtedness
then outstanding who have received the assignments of the Capital Funds
Agreement.
RATE MATTERS AND REGULATION
Rate Matters
The domestic utility companies' retail rates are regulated by
state and/or local regulatory authorities, as described below. FERC
regulates their wholesale rates (including intrasystem sales pursuant
to the System Agreement) and interstate transmission of electricity, as
well as rates for System Energy's sales of capacity and energy from
Grand Gulf 1 to Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans pursuant to the Unit Power Sales
Agreement.
Wholesale Rate Matters
System Energy
As described above under "CAPITAL REQUIREMENTS AND FUTURE
FINANCING - Certain System Financial and Support Agreements," System
Energy recovers costs related to its interest in Grand Gulf 1 through
rates charged to Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans for capacity and energy under the
Unit Power Sales Agreement.
On December 12, 1995, System Energy implemented a $65.5 million
rate increase, subject to refund. Refer to Note 2 for a discussion of
the rate increase request filed by System Energy with FERC.
System Agreement (Energy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
The domestic utility companies engage in the coordinated planning,
construction, and operation of generation and transmission facilities
pursuant to the terms of the System Agreement as described under
"PROPERTY - Generating Stations," below.
In connection with the Merger, FERC approved certain rate schedule
changes to integrate Entergy Gulf States into the System Agreement.
Certain commitments were also adopted to assure that the ratepayers of
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans will not be allocated higher costs. Such commitments
included: (i) a tracking mechanism to protect these companies from
certain unexpected increases in fuel costs; (ii) the exclusion of
Entergy Gulf States from the distribution of profits from power sales
contracts entered into prior to the Merger; (iii) a methodology to
estimate the cost of capital in future FERC proceedings; and (iv) a
stipulation that these companies be insulated from certain direct
effects on capacity equalization payments if Entergy Gulf States should
acquire Cajun's 30% share in River Bend. See "Regulation - Other
Regulation and Litigation," for information on appeals of FERC Merger
orders and related pending rate schedule changes.
In the December 15, 1993, order approving the Merger, FERC also
initiated a new proceeding to consider whether the System Agreement
permits certain out-of-service generating units to be included in
reserve equalization calculations under Service Schedule MSS-1 of that
agreement. In connection with this proceeding, the LPSC and the MPSC
submitted testimony seeking retroactive refunds for Entergy Louisiana
and Entergy Mississippi (estimated at $22.6 million and $13.2 million,
respectively). The FERC staff subsequently submitted testimony
concluding that Entergy's treatment was reasonable. However, because
it concluded that Entergy's treatment violated the tariff, FERC staff
maintained that refunds of approximately $7.2 million should be
ordered. Entergy submitted testimony on September 23, 1994, describing
the potential impacts (not including interest) on Service Schedule MSS-
1 calculations if extended reserve shutdown units were not included in
the MSS-1 calculations during the period 1987 through 1993. Under such
a theory, Entergy Louisiana and Entergy Mississippi would have been
overbilled by $10.6 and $8.8 million respectively, and Entergy Arkansas
and Entergy New Orleans would have been underbilled by $6.3 and $13.1
million respectively. The amounts potentially subject to refund will
continue to accrue while the case is pending.
On March 3, 1995, a FERC ALJ issued an opinion holding that the
practice of including the out-of-service units in the reserve
equalization calculations during the period 1987 through 1993 was not
permitted by Service Schedule MSS-1 and, therefore, constituted a
violation of the System Agreement. However, the ALJ found that the
violation was in good faith and had benefited the customers of Entergy
as a whole. Accordingly, the ALJ recommended that no retroactive
refunds should be ordered. The ALJ also held that the System Agreement
should be amended to allow out-of-service units to be included in
reserve equalization as proposed in an offer of settlement filed by
Entergy on February 16, 1994. The ALJ's opinion is subject to review
by FERC. If FERC concurs with the finding that the System Agreement
was violated, it would have the discretion to order that refunds be
made. If that were to occur, certain domestic utility companies may be
required to refund some or all of the amount by which they were
underbilled pursuant to the System Agreement. The domestic utility
companies cannot determine at this time whether they would be
authorized to recover through retail rates any amounts associated with
refunds that might be ordered by FERC in this proceeding. The matter
remains pending before FERC.
On March 14, 1995, the LPSC filed a complaint with FERC alleging
that the System Agreement results in unjust and unreasonable rates and
requested that FERC order a hearing on this matter. The LPSC contended
that the failure of the System Agreement to exclude curtailable load
from the determination of a domestic utility company's responsibility
for reserve equalization and transmission equalization costs results in
an unjust and unreasonable cost allocation to the domestic utility
companies that does not cause these costs to be incurred, and also
results in cross-subsidization among the domestic utility companies.
Further, the LPSC alleged that the mechanism by which the domestic
utility companies purchase energy under the System Agreement results in
unjust and unreasonable rates because it does not permit domestic
utility companies that engage in real time pricing to be charged the
marginal cost of the energy generated for the real time pricing
customer. In May 1995, the LPSC amended its original complaint,
asserting that the System Agreement should be revised to exclude
curtailable load from the cost allocation determination due to
conflicts with federal policies under PURPA and with Entergy's system
planning philosophy. On August 5, 1996, FERC dismissed the LPSC's
complaint and amended complaint. On September 30, 1996, FERC granted
the LPSC's request for rehearing, solely for the purpose of affording
FERC additional time for consideration of the matters raised on
rehearing.
In June 1995, the APSC filed a complaint with FERC alleging that,
because of changed circumstances, FERC's allocation of nuclear
decommissioning costs is no longer just and reasonable. The APSC
proposed that the System Agreement be amended to provide a new schedule
that would equalize nuclear decommissioning costs according to load
responsibility among the pre-Merger domestic utility companies. On
December 17, 1996, the APSC notified FERC that it was withdrawing its
complaint. The withdrawal became effective when FERC issued an order
accepting the withdrawal on January 29, 1997.
Open Access Transmission (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans)
On August 2, 1991, Entergy Services, as agent for Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and Entergy Power, submitted to FERC (i) proposed tariffs that, subject
to certain conditions, would provide to electric utilities "open
access" to Entergy's integrated transmission system, and (ii) rate
schedules providing for sales of wholesale power at market-based rates.
FERC approved the filing in August 1992, and various parties filed
appeals with the D.C. Circuit. The case was remanded to FERC in July
1994 for further proceedings. On October 31, 1994, Entergy Services,
as agent for Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans, filed revised
transmission tariffs. On January 6, 1995, FERC issued an order
accepting the tariffs for filing and made them effective, subject to
refund. These tariffs provide both point-to-point and network
transmission service, and are intended to provide "comparability of
service" over the Entergy transmission network. In that order, FERC
also ordered that Entergy Power's market pricing authority be
investigated, thereby making Entergy Power's market price rate
schedules subject to refund. An order in the market price rate
investigation is expected to be issued in 1997. Entergy expects that
no refunds relating to market base rates will be required.
On March 29, 1995, FERC issued a supplemental notice of proposed
rulemaking (Mega-NOPR) which would require public utilities to provide
non-discriminatory open access transmission service to wholesale
customers, and which would also provide guidance on the recovery of
wholesale and retail stranded costs. Under the proposal, public
utilities would be required to file transmission tariffs for both point-
to-point and network service. Model transmission tariffs were included
in the proposal. With regard to pending proceedings, including
Entergy's tariff proceeding, FERC directed the parties to proceed with
their cases while taking into account FERC's views expressed in the
proposed rule. Hearings relating to Entergy Services' open access
tariffs concluded on February 22, 1996, and an initial decision was
issued by the ALJ on May 21, 1996. The initial decision and offers of
partial settlement discussed below are now pending before FERC awaiting
a final decision.
In September 1995 and January 1996, Entergy Services filed offers
of partial settlement accepting certain provisions of the transmission
tariffs contained in the Mega-NOPR and resolving certain rate issues.
The remaining rate and tariff issues will be resolved as part of FERC's
rulemaking in the Mega-NOPR, or after scheduled hearings. In August
1995, EPMC filed an application for permission to make market-based
sales, but subsequently asked that action not be taken on that request
until the open access transmission service proceeding discussed above
is resolved. On December 13, 1995, Entergy Services filed revised
transmission tariffs in a separate proceeding proposing terms and
conditions for open access transmission service that are substantially
identical to the terms and conditions contained in the Mega-NOPR
transmission tariffs with rates to be the same as those determined in
the pending proceeding. On February 14, 1996, FERC accepted for filing
the revised transmission tariffs subject to the outcome of the pending
proceeding and conditionally accepted EPMC's application for market-
based sales. Subsequently, FERC accepted EPMC's application without
condition.
In an April 1996 FERC order (Order No. 888), FERC issued its final
rule on open access, nondiscriminatory transmission, and stranded
costs. In July 1996, in response to this FERC order, Entergy Services
filed, on behalf of the domestic utility companies, its open access pro
forma tariff. This tariff, which supersedes the tariffs previously
filed, is currently pending before FERC with respect to the rates for
transmission service. The rates set forth in the July 1996 tariff are
subject to the outcome of FERC action on the May 21, 1996 initial
decision and the offers of partial settlement. On January 29, 1997,
FERC accepted the non-rate terms and conditions of the July 1996
tariff, subject to limited modifications.
Retail Rate Matters
General (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans)
Certain costs related to Grand Gulf 1, Waterford 3, and River Bend
were phased into retail rates over a period of years in order to avoid
the "rate shock" associated with increasing rates to reflect all such
costs at once. The deferral period in which costs are incurred but not
currently recovered has expired for all of these programs, and Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
and Entergy New Orleans are now recovering those costs that were
previously deferred.
Entergy Gulf States is involved in several rate proceedings
involving, among other things, recovery of costs associated with River
Bend. Some rate relief has been received, but Entergy Gulf States has
been unable to obtain recognition in rates for a substantial portion of
its River Bend investment. Recovery of certain costs was disallowed
while other costs were deferred for future recovery, held in abeyance
pending further regulatory action, or treated as investments in
deregulated assets. Rate proceedings and appeals relating to these
issues are ongoing as discussed in "Entergy Gulf States" below.
As a means of minimizing the need for retail rate increases,
Entergy is committed to containing costs to the greatest degree
practicable. In accordance with this retail rate policy, some domestic
utility companies have agreed to retail rate caps and/or rate freezes
for specified periods of time.
The retail regulatory philosophy is shifting in some jurisdictions
from traditional cost-of-service regulation to incentive-rate
regulation. Management believes incentive and performance-based rate
plans encourage efficiencies and productivity while permitting
utilities and their customers to share in the resulting benefits.
Entergy Mississippi and Entergy Louisiana have implemented incentive
rate plans. Recognizing that many industrial customers have energy
alternatives, Entergy continues to work with these customers to address
their needs. In certain cases, competitive prices are negotiated using
variable-rate designs.
Entergy has initiated proceedings with its state and local
regulators regarding an orderly transition to a more competitive market
for electricity. See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS," for a discussion of the
transition to competition filings made by Entergy Mississippi, Entergy
Gulf States, Entergy Louisiana, and Entergy Arkansas with their state
and local regulators.
Least Cost Integrated Resource Planning (Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans)
Entergy continues to utilize integrated resource planning, also
known as least cost planning, in order to compete more effectively in
both retail and wholesale markets. Integrated resource planning is the
development of integrated supply and demand side strategies to meet
future electricity demands reliably, at the lowest possible cost, and
in a more competitive manner.
In the fourth quarter of 1995, the domestic utility companies
provided to their retail regulators (the APSC, the Council, the LPSC,
the MPSC, and the PUCT) a new integrated resource plan, ("IRP"), for
informational purposes only. The new IRP provides for a flexible
resource strategy to meet Entergy's additional resource requirements
over the next ten years. The integrated resource planning provides for
the utilization of capacity currently in extended reserve shutdown to
meet additional load growth, but also provides the flexibility to rely
on short-term power purchases, upgrades to existing nuclear capacity,
or cogeneration when these resources are more economical.
Entergy Arkansas
Rate Freeze
In connection with the settlement of various issues related to the
Merger, Entergy Arkansas agreed that it will not request any general
retail rate increase that would take effect before November 3, 1998,
except for certain instances. See Note 2 for a discussion of the rate
freeze as well as other aspects of the settlement agreement between
Entergy Arkansas and the APSC.
Recovery of Grand Gulf 1 Costs
Under the settlement agreement entered into with the APSC in 1985
and amended in 1988, Entergy Arkansas agreed to retain a portion of its
Grand Gulf l-related costs, recover a portion of such costs currently,
and defer a portion of such costs for future recovery. In 1996 and
subsequent years, Entergy Arkansas retains 22% of its 36% interest in
Grand Gulf 1 costs and recovers the remaining 78%. Deferrals ceased in
l990, and Entergy Arkansas is recovering a portion of the previously
deferred costs each year through l998. As of December 31, l996, the
balance of deferred costs was $228 million. Entergy Arkansas is
permitted to recover on a current basis the incremental costs of
financing the unrecovered deferrals.
Entergy Arkansas has the right to sell capacity and energy from
its retained share of Grand Gulf 1 to third parties and to sell such
energy to its retail customers at a price equal to Entergy Arkansas'
avoided energy cost. Proceeds of sales to third parties of Entergy
Arkansas' retained share of Grand Gulf l capacity and energy accrue to
the benefit of Entergy Arkansas' stockholder.
Fuel Adjustment Clause
Entergy Arkansas' retail rate schedules include a fuel adjustment
clause to recover the excess cost of fuel and purchased power incurred
in the second prior month. The fuel adjustment clause also contains a
nuclear reserve fund provision designed to cover the cost of
replacement energy during refueling outages at ANO, and an incentive
provision that rewards or penalizes Entergy Arkansas depending on the
performance of ANO.
Entergy Gulf States
Rate Cap and Other Merger-Related Rate Agreements
In 1993, the LPSC and the PUCT approved separate regulatory
proposals, which included the implementation of a five-year Rate Cap on
Entergy Gulf States' retail electric base rates in the respective
states, and provisions for passing fuel and nonfuel savings created by
the Merger to the customers. See Note 2 for a discussion of the Rate
Cap as well as other aspects of the settlement agreement between
Entergy Gulf States and the LPSC and the PUCT.
Recovery of River Bend Costs
Entergy Gulf States deferred approximately $369 million of River
Bend operating and purchased power costs, depreciation, and accrued
carrying charges, pursuant to a 1986 PUCT accounting order.
Approximately $182 million of these costs are being amortized over a 20-
year period, and the remaining $187 million was written off in the
first quarter of 1996 in accordance with SFAS 121, as discussed below.
As of December 31, 1996, the unamortized balance of the remaining costs
was $117 million. Entergy Gulf States deferred approximately $400.4
million of similar costs pursuant to a 1986 LPSC accounting order, of
which approximately $40 million was unamortized as of December 31,
1996, and are being amortized over a 10-year period ending in February
1998.
In accordance with a phase-in plan approved by the LPSC, Entergy
Gulf States deferred $294 million of its River Bend costs related to
the period February 1988 through February 1991. Entergy Gulf States
has amortized $225 million through December 31, 1996. The remainder of
$69 million will be recovered in 1997 and early 1998.
Texas Jurisdiction - River Bend
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 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 that it is 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 December 31, 1996, 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 $266 million, respectively. The Allowed Deferrals were
approximately $77 million, net of taxes and amortization, as of
December 31, 1996. Entergy Gulf States estimates it has collected
approximately $204 million of revenues as of December 31, 1996, 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 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.
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, an after-tax write off, as of December 31, 1996,
of up to $278 million could be required.
NISCO Unrecovered Costs
In 1986, the PUCT ordered that the purchased power costs from
NISCO in excess of Entergy Gulf States' avoided costs be disallowed.
The PUCT disallowance resulted in approximately $12 million to
$15 million of unrecovered purchased power costs on an annual basis,
which Entergy Gulf States continued to expense as the costs were
incurred. In April 1991, the Texas Supreme Court, on the appeal of
such order, ordered the PUCT to allow Entergy Gulf States to recover
purchased power payments in excess of its avoided cost in future
proceedings if Entergy Gulf States established to the PUCT's
satisfaction that the payments were reasonable and necessary expenses.
In January 1992, Entergy Gulf States applied to the PUCT for a new
fixed fuel factor and requested a final reconciliation of fuel and
purchased power costs incurred between December 1, 1986 and September
30, 1991. Entergy Gulf States proposed to recover net under-recoveries
and interest (including under-recoveries related to NISCO) over a
twelve-month period. In June 1993, the PUCT concluded that the
purchased power payments made to NISCO in excess of Entergy Gulf
States' avoided cost were not reasonably incurred. In October 1993,
Entergy Gulf States appealed the PUCT's order to the Travis County
District Court where the matter is still pending. As of December 31,
1996, Entergy Gulf States has expensed $140.8 million of unrecovered
purchased power costs and deferred revenue pending the appeal to the
District Court. No assurance can be given as to the timing or outcome
of the appeal.
Retail Rate Proceedings
Refer to Note 2 for a discussion of additional retail rate
proceedings which have been resolved during the current year and/or are
currently outstanding in the regulatory jurisdictions in which Entergy
Gulf States operates.
Fuel Recovery
Entergy Gulf States' Texas rate schedules include a fixed fuel
factor to recover fuel and purchased power costs not recovered in base
rates. The fixed factor may be revised every six months in accordance
with a schedule set by the PUCT for each utility. To the extent actual
costs vary from the fixed factor, refunds or surcharges are required or
permitted, respectively. Fuel costs are also subject to reconciliation
proceedings every three years. Entergy Gulf States' Louisiana electric
rate schedules include a fuel adjustment clause to recover the cost of
fuel and purchased power costs in the second prior month, adjusted by a
surcharge for deferred fuel expense arising from the monthly
reconciliation of actual fuel cost incurred with fuel revenues billed
to customers. See Note 2 for a discussion of the LPSC fuel cost
reviews.
Entergy Gulf States' Louisiana gas rates include a purchased gas
adjustment to recover the cost of purchased gas.
Steam Customer Contract
In August 1996, Entergy Gulf States entered into agreements with
its only steam customer whereby a generating facility will be leased to
such customer beginning in August 1997, the expiration date of the
previous contract. As a result of these arrangements, Entergy Gulf
States' annualized revenues are expected to decrease by approximately
$33 million, and its net income is expected to be reduced by
approximately $15 million annually. See "MANAGEMENT'S FINANCIAL
DISCUSSION AND ANALYSIS - SIGNIFICANT FACTORS AND KNOWN TRENDS," for a
further discussion.
Entergy Louisiana
Recovery of Grand Gulf 1 Costs
In a series of LPSC orders, court decisions, and agreements from
late 1985 to mid-1988, Entergy Louisiana was granted rate relief with
respect to costs associated with Waterford 3 and Entergy Louisiana's
share of capacity and energy from Grand Gulf l, subject to certain
terms and conditions. With respect to Waterford 3, Entergy Louisiana
was granted an increase aggregating $170.9 million over the period 1985-
1988, and Entergy Louisiana agreed to permanently absorb, and not
recover from retail ratepayers, $284 million of its investment in the
unit and to defer $266 million of its costs related to the years 1985-
1988 to be recovered from April 1988 through June 1997. As of December
31, 1996, Entergy Louisiana's unrecovered deferral balance was $5.7
million.
With respect to Grand Gulf 1, Entergy Louisiana agreed to retain,
and not recover from retail ratepayers, 18% of its 14% share, or
approximately 2.52%, of the costs of Grand Gulf 1's capacity and
energy. Non-fuel operation and maintenance costs for Grand Gulf 1 are
recovered through Entergy Louisiana's base rates. Additionally,
Entergy Louisiana is allowed to recover, through the fuel adjustment
clause, 4.6 cents per kWh for the energy related to its retained
portion of these costs. Alternatively, Entergy Louisiana may sell such
energy to nonaffiliated parties at prices above the fuel adjustment
clause recovery amount, subject to the LPSC's approval.
Performance-Based Formula Rate Plan
In June 1995, in conjunction with the LPSC's rate review, a
performance-based formula rate plan previously proposed by Entergy
Louisiana was approved with certain modifications. See Note 2 for a
discussion of Entergy Louisiana's performance-based formula rate plan.
Fuel Adjustment Clause
Entergy Louisiana's rate schedules include a fuel adjustment
clause to recover the cost of fuel and purchased power in the second
prior month. The fuel adjustment also includes a surcharge for
deferred fuel expense arising from the monthly reconciliation of actual
fuel cost incurred with fuel revenues billed to customers.
Entergy Mississippi
Retail Rate Proceedings
Refer to Note 2 for a discussion of the retail rate proceedings
which have been resolved during the current year and/or are currently
outstanding in the regulatory jurisdictions in which Entergy
Mississippi operates.
Rate Freeze
In connection with the settlement of various issues related to the
Merger, Entergy Mississippi agreed that it will not request any general
retail rate increase to take effect before November 3, 1998, except for
certain instances. See Note 2 for a discussion of the rate freeze as
well as other aspects of the settlement agreement between Entergy
Mississippi and the MPSC.
Recovery of Grand Gulf 1 Costs
The MPSC granted Entergy Mississippi an annual base rate increase
of approximately $326.5 million in connection with its allocated share
of Grand Gulf 1 costs. The MPSC also provided for the deferral of a
portion of such costs that were incurred each year through 1992, and
recovery of these deferrals over a period of six years ending in 1998.
As of December 31, 1996, the uncollected balance of Entergy
Mississippi's deferred costs was approximately $247 million. Entergy
Mississippi is permitted to recover the carrying charges on all
deferred amounts on a current basis.
Formula Rate Plan
Under a formulary incentive-rate plan (Formula Rate Plan)
effective March 25, 1994, Entergy Mississippi's earned rate of return
is calculated automatically every 12 months and compared to and
adjusted against a benchmark rate of return (calculated under a
separate formula within the Formula Rate Plan). The Formula Rate Plan
allows for periodic small adjustments in rates based on a comparison of
actual earned returns to benchmark returns and upon certain performance
factors. Refer to Note 2 for a discussion of the formula rate plan
filing for the 1995 test year. The formula rate plan filing for the
1996 test year will be filed in March 1997.
Fuel Adjustment Clause
Entergy Mississippi's rate schedules include a fuel adjustment
clause that recovers changes in the cost of fuel and purchased power.
The monthly fuel adjustment rate is based on projected sales and costs
for the month, adjusted for differences between actual and estimated
costs and kWh sales for the second prior month.
Entergy New Orleans
Earnings Analysis Filings
Refer to Note 2 for a discussion of the earnings analysis filings
which have been resolved during the current year and/or are currently
outstanding in the regulatory jurisdiction in which Entergy New Orleans
operates.
Recovery of Grand Gulf 1 Costs
Under Entergy New Orleans' various rate settlements with the
Council in 1986, 1988, and 1991, Entergy New Orleans agreed to absorb
and not recover from ratepayers a total of $96.2 million of its Grand
Gulf 1 costs. Entergy New Orleans was permitted to implement annual
rate increases in decreasing amounts each year through 1995, and to
defer certain costs and related carrying charges, for recovery on a
schedule extending from 1991 through 2001. As of December 31, 1996,
the uncollected balance of Entergy New Orleans' deferred costs was $136
million. The 1994 NOPSI Settlement did not affect the scheduled Grand
Gulf 1 phase-in rate increases.
Fuel Adjustment Clause
Entergy New Orleans' electric rate schedules include a fuel
adjustment clause to recover the cost of fuel in the second prior
month, adjusted by a surcharge for deferred fuel expense arising from
the monthly reconciliation of actual fuel incurred with fuel cost
revenues billed to customers. The adjustment, on a monthly basis, also
includes the difference between nonfuel Grand Gulf 1 costs paid by
Entergy New Orleans and the estimate of such costs provided in Entergy
New Orleans' Grand Gulf 1 rate settlements. Entergy New Orleans' gas
rate schedules include an adjustment to reflect gas costs in excess of
those collected in base rates, adjusted by a surcharge similar to that
included in the electric fuel adjustment clause.
Regulation
Federal Regulation (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
PUHCA
As a public utility holding company registered under PUHCA,
Entergy Corporation and its various direct and indirect subsidiaries
(with the exception of its EWG, FUCO, and ETHC subsidiaries) are
subject to the broad regulatory provisions of PUHCA. Except with
respect to investments in certain domestic power projects, foreign
utility company projects, and telecommunication projects, PUHCA limits
the operations of a registered holding company system to a single,
integrated public utility system, plus additional systems and
businesses.
Entergy Corporation and other electric utility holding companies
have supported legislation in the United States Congress which would
repeal PUHCA and transfer certain aspects of the oversight of public
utility holding companies from the SEC to FERC. Entergy believes that
PUHCA inhibits its ability to compete in the evolving electric energy
marketplace and largely duplicates the oversight activities already
performed by FERC and state and local regulators. In June 1995, the
SEC adopted a report proposing options for the repeal or significant
modification of PUHCA and proposed rule changes that would reduce the
regulations governing utility holding companies. One rule change
adopted as a result of such proposals eliminated the requirement to
receive prior authorization for capital contributions made by a parent
company to its nonutility subsidiary companies and for financing its
nonutility subsidiary companies. Such rule was appealed to the D.C.
Circuit by the City of New Orleans, and the appeal was subsequently
denied in January 1996.
Federal Power Act
The domestic utility companies, System Energy, Entergy Power, and
EPMC are subject to the Federal Power Act as administered by FERC and
the DOE. The Federal Power Act provides for regulatory jurisdiction
over the licensing of certain hydroelectric projects, the transmission
and wholesale sale of electric energy in interstate commerce, and
certain other activities, including accounting policies and practices.
Such regulation includes jurisdiction over the rates charged by System
Energy for capacity and energy provided to Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans from Grand Gulf
1.
Entergy Arkansas holds a license for two hydroelectric projects
(70 MW) that was renewed on July 2, 1980. This license, granted by
FERC, expires in February 2003.
Regulation of the Nuclear Power Industry (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy)
Regulation of Nuclear Power
Under the Atomic Energy Act of 1954 and the Energy Reorganization
Act of 1974, operation of nuclear plants is intensively regulated by
the NRC, which has broad power to impose licensing and safety-related
requirements. In the event of non-compliance, the NRC has the
authority to impose fines or shut down a unit, or both, depending upon
its assessment of the severity of the situation, until compliance is
achieved. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
and System Energy, as owners of all or a portion of ANO, River Bend,
Waterford 3, and Grand Gulf 1, respectively, and Entergy Operations, as
the licensee and operator of these units, are subject to the
jurisdiction of the NRC. Revised safety requirements promulgated by
the NRC have, in the past, necessitated substantial capital
expenditures at these nuclear plants, and additional such expenditures
could be required in the future.
The nuclear power industry faces uncertainties with respect to the
cost and long-term availability of sites for disposal of spent nuclear
fuel and other radioactive waste, nuclear plant operations, the
technological and financial aspects of decommissioning plants at the
end of their licensed lives, and requirements relating to nuclear
insurance. These matters are briefly discussed below.
Regulation of Spent Fuel and Other High-Level Radioactive Waste
Under the Nuclear Waste Policy Act of 1982, the DOE is required,
for a specified fee, to construct storage facilities for, and to
dispose of, all spent nuclear fuel and other high-level radioactive
waste generated by domestic nuclear power reactors. However, the DOE
has not yet identified a permanent storage repository and, as a result,
future expenditures may be required to increase spent fuel storage
capacity at the plant sites. For further information concerning spent
fuel disposal contracts with the DOE, schedules for initial shipments
of spent nuclear fuel, current on-site storage capacity, and costs of
providing additional on-site storage, see Note 9.
Regulation of Low-Level Radioactive Waste
The availability and cost of disposal facilities for low-level
radioactive waste resulting from normal nuclear plant operations are
subject to a number of uncertainties. Under the Low-Level Radioactive
Waste Policy Act of 1980, as amended, each state is responsible for
disposal of its own waste, and states may participate in regional
compacts to fulfill their responsibilities jointly. The States of
Arkansas and Louisiana participate in the Central Interstate Low Level
Radioactive Waste Compact (Central States Compact), and the State of
Mississippi participates in the Southeast Low Level Radioactive Waste
Compact (Southeast Compact). Two disposal sites are currently
operating in the United States, but only one site, the Barnwell
Disposal Facility (Barnwell), located in South Carolina and operated by
the Southeast Compact, is open to out-of-region generators. The
availability of Barnwell provides only temporary relief from low-level
radioactive waste storage and does not alleviate the need to develop
new disposal capacity.
Both the Central States Compact and the Southeast Compact are
working to establish additional disposal sites. Entergy, along with
other waste generators, funds the development costs for new disposal
facilities. To date, Entergy's expenditures for the development of new
disposal facilities total approximately $50 million. Future levels of
expenditures are difficult to predict. The current schedule for the
site development in both the Central States Compact and the Southeast
Compact projects that the new facilities will not be operational before
2000. Due to the political and emotional nature of siting low-level
radioactive waste disposal facilities, future delays can be
anticipated. Until long-term disposal facilities are established,
Entergy will seek continued access to existing facilities. If such
access is unavailable, Entergy will store low-level waste at its
nuclear plant sites.
Regulation of Nuclear Plant Decommissioning
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
System Energy are recovering from ratepayers portions of their
estimated decommissioning costs for ANO, River Bend, Waterford 3, and
Grand Gulf 1, respectively. These amounts are deposited in trust funds
that, together with the related earnings, can only be used for future
decommissioning costs. Estimated decommissioning costs are
periodically reviewed and updated to reflect inflation and changes in
regulatory requirements and technology, and applications are
periodically made to appropriate regulatory authorities to reflect in
rates any future changes in projected decommissioning costs. For
additional information with respect to decommissioning costs for ANO,
River Bend, Waterford 3, and Grand Gulf 1, see Note 9.
The EPAct requires all electric utilities (including Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy)
that purchased uranium enrichment services from the DOE to contribute
up to a total of $150 million annually, adjusted for inflation, up to a
total of $2.25 billion over approximately 15 years, for decontamination
and decommissioning of enrichment facilities. In accordance with the
EPAct, contributions to decontamination and decommissioning funds are
recovered through rates in the same manner as other fuel costs. See
Note 9 for the estimated annual contributions by Entergy for
decontamination and decommissioning fees.
Nuclear Insurance
The Price-Anderson Act limits public liability for a single
nuclear incident to approximately $8.92 billion. Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and System Energy have
protection with respect to this liability through a combination of
private insurance and an industry assessment program, and also have
insurance for property damage, costs of replacement power, and other
risks relating to nuclear generating units. For a discussion of
insurance applicable to the nuclear programs of Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and System Energy, see Note 9.
Nuclear Operations
General (Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and System Energy)
Entergy Operations operates ANO, River Bend, Waterford 3, and
Grand Gulf 1, subject to the owner oversight of Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and System Energy,
respectively. Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and System Energy, and the other Grand Gulf 1 and River Bend
co-owners, have retained their ownership interests in their respective
nuclear generating units. Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and System Energy have also retained their
associated capacity and energy entitlements, and pay directly or
reimburse Entergy Operations at cost for its operation of the units.
ANO Matters (Entergy Corporation and Entergy Arkansas)
Entergy Operations has made periodic inspections and repairs on
ANO 2's steam generators. In October 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 Operations
estimates the cost of fabrication and replacement of the steam
generators to be approximately $150 million. A letter of intent for
the fabrication has been signed by Entergy Operations, which includes a
commitment for not more than $3.2 million, and a contract is expected
to be entered into in 1997. If the contract to purchase the steam
generators is not canceled, the steam generators will be installed
during a planned refueling outage in 2000. See Note 9 for additional
information.
River Bend (Entergy Corporation and Entergy Gulf States)
In connection with the Merger, Entergy Gulf States filed two
applications with the NRC in January 1993 to amend the River Bend
operating license. The applications sought the NRC's consent to the
Merger and to a change in the licensed operator of the facility from
Entergy Gulf States to Entergy Operations. The NRC Staff issued the
two license amendments for River Bend, which were effective immediately
upon consummation of the Merger. On February 14, 1994, Cajun filed
with the D.C. Circuit petitions for review of the two license
amendments for River Bend. In March 1995, the D.C. Circuit ordered
that the original NRC order and license amendments be set aside, and
remanded the case to the NRC for further consideration. Subsequently,
the NRC affirmed its original findings and reissued the two license
amendments. Cajun and the Arkansas Cities and Cooperative filed
petitions for review of those NRC orders with the D. C. Circuit.
Pursuant to the Cajun Settlement, on an unopposed motion of the parties
to the proceedings before the D.C. Circuit, the D.C. Circuit ordered
that the cases be removed from the calendar for oral argument and held
in abeyance pending a further order of the court. The two license
amendments are in full force and effect.
State Regulation (Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans)
General
Entergy Arkansas is subject to regulation by the APSC and the
Tennessee Public Service Commission (TPSC). APSC regulation includes
the authority to set rates, determine reasonable and adequate service,
fix the value of property used and useful, require proper accounting,
control leasing, control the acquisition or sale of any public utility
plant or property constituting an operating unit or system, set rates
of depreciation, issue certificates of convenience and necessity and
certificates of environmental compatibility and public need, and
control the issuance and sale of securities. Regulation by the TPSC
includes the authority to set standards of service and rates for
service to customers in the state, require proper accounting, control
the issuance and sale of securities, and issue certificates of
convenience and necessity.
Entergy Gulf States is subject to the jurisdiction of the
municipal authorities of incorporated cities in Texas as to retail
rates and services within their boundaries, with appellate jurisdiction
over such matters residing in the PUCT. Entergy Gulf States is also
subject to regulation by the PUCT as to retail rates and services in
rural areas, certification of new generating plants, and extensions of
service into new areas. Entergy Gulf States is subject to regulation
by the LPSC as to electric and gas service, rates and charges,
certification of generating facilities and power or capacity purchase
contracts, depreciation, accounting, and other matters.
Entergy Louisiana is subject to regulation by the LPSC as to
electric service, rates and charges, certification of generating
facilities and power or capacity purchase contracts, depreciation,
accounting, and other matters. Entergy Louisiana is also subject to
the jurisdiction of the Council with respect to such matters within
Algiers.
Entergy Mississippi is subject to regulation as to service,
service areas, facilities, and retail rates by the MPSC. Entergy
Mississippi is also subject to regulation by the APSC as to the
certificate of environmental compatibility and public need for the
Independence Station.
Entergy New Orleans is subject to regulation by the Council as to
electric and gas service, rates and charges, standards of service,
depreciation, accounting, issuance of certain securities, and other
matters.
Franchises
Entergy Arkansas holds exclusive franchises to provide electric
service in approximately 300 incorporated cities and towns in Arkansas.
These franchises are unlimited in duration and continue until such a
time when the municipalities purchase the utility property. In
Arkansas, franchises are considered to be contracts and, therefore, are
terminable upon breach of the contract.
Entergy Gulf States holds non-exclusive franchises, permits, or
certificates of convenience and necessity to provide electric and gas
service in approximately 55 incorporated villages, cities, and towns in
Louisiana and approximately 63 incorporated cities and towns in Texas.
Entergy Gulf States ordinarily holds 50-year franchises in Texas and 60-
year franchises in Louisiana. Entergy Gulf States' current electric
franchises will expire during 2007 - 2036 in Texas and during 2015 -
2046 in Louisiana. The natural gas franchise in the City of Baton
Rouge will expire in 2015. In addition, Entergy Gulf States has
received from the PUCT a certificate of convenience and necessity to
provide electric service to areas within 21 counties in eastern Texas.
Entergy Louisiana holds non-exclusive franchises to provide
electric service in approximately 116 incorporated villages, cities,
and towns. Most of these municipal franchises have 25-year terms,
although six municipalities have granted Entergy Louisiana 60-year
franchises. Entergy Louisiana also supplies electric service in
approximately 353 unincorporated communities, all of which are located
in parishes in which Entergy Louisiana holds non-exclusive franchises.
Entergy Mississippi has received from the MPSC certificates of
public convenience and necessity to provide electric service to areas
within 45 counties in western Mississippi, which include a number of
municipalities. Under Mississippi statutory law, such certificates are
exclusive. Entergy Mississippi may continue to serve in such
municipalities upon payment of a statutory franchise fee, regardless of
whether an original municipal franchise is still in existence.
Entergy New Orleans provides electric and gas service in the City
of New Orleans pursuant to city ordinances, which state, among other
things, that the City has a continuing option to purchase Entergy New
Orleans' electric and gas utility properties.
System Energy has no distribution franchises. Its business is
currently limited to wholesale power sales.
Environmental Regulation
General
In the areas of air quality, water quality, control of toxic
substances and hazardous and solid wastes, and other environmental
matters, the facilities and operations of Entergy are subject to
regulation by various federal, state, and local authorities. Entergy
believes that its affected subsidiaries are in substantial compliance
with environmental regulations currently applicable to their respective
facilities and operations. Because environmental regulations are
subject to change, the ultimate compliance costs to Entergy cannot be
precisely estimated. However, management currently estimates that
ultimate capital expenditures for environmental compliance purposes,
including those discussed in "Clean Air Legislation," below, will not
be material for Entergy as a whole.
Clean Air Legislation
The Clean Air Act Amendments of 1990 (the Act) set up three
programs that affect Entergy: an acid rain program for control of
sulfur dioxide (SO2) and nitrogen oxides (NOx), an ozone nonattainment
area program for control of NOx and volatile organic compounds, and an
operating permits program for administration and enforcement of these
and other Clean Air Act programs.
Under the acid rain program, no additional control equipment is
expected to be required by Entergy to control SO2. The Act provides
"allowances" to most of the affected Entergy generating units for
emissions based upon past emission levels and operating
characteristics. Each allowance is an entitlement to emit one ton of
SO2 per year. Under the Act, utilities will be required to possess
allowances for SO2 emissions from affected generating units. All
Entergy generating units are classified as "Phase II" units under the
Act and are subject to SO2 allowance requirements beginning in the year
2000. Based on operating history, the domestic utility companies have
been allocated more allowances than are currently necessary for normal
operations. Management believes that it will be able to operate its
units efficiently without installing scrubbers or purchasing allowances
from outside sources, and that one or more of the domestic utility
companies may have excess allowances.
Control equipment may eventually be required for NOx reductions
due to the ozone nonattainment status of the areas served by Entergy
Gulf States in and around Beaumont and Houston, Texas. Texas
environmental authorities are studying the causes of ozone pollution
and have deferred NOx controls on power plants until at least 1999. If
Texas decides to regulate NOx, the cost of such control equipment for
the affected Entergy Gulf States plants is estimated at $10.4 million
through the year 2000.
Other Environmental Matters
The provisions of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (CERCLA), authorize
the EPA and, indirectly, the states to require generators and certain
transporters of certain hazardous substances released from or at a
site, and the owners or operators of any such site, to clean-up the
site or reimburse such clean-up costs. CERCLA has been interpreted to
impose joint and several liability on responsible parties. Entergy sent
waste materials to various disposal sites over the years. Also,
certain operating procedures and maintenance practices, which
historically were not subject to regulation, are now regulated by
environmental laws. Some of these sites have been the subject of
governmental action under CERCLA, as a result of which the domestic
utility companies have become involved with site clean-up activities.
These companies have participated to various degrees in accordance with
their respective potential liabilities in such site clean-ups and have
developed experience with clean-up costs. The domestic utility
companies have established reserves for such environmental clean-
up/restoration activities. In the aggregate, the cost of such
remediation is not considered material to these companies or to
Entergy.
Entergy Arkansas
Entergy Arkansas has received notices from time to time from the
EPA, the Arkansas Department of Pollution Control and Ecology (ADPC&E),
and others alleging that it, along with others, may be a PRP for clean-
up costs associated with various sites in Arkansas. Most of these
sites are neither owned nor operated by any Entergy company.
Contaminants at the sites include polychlorinated biphenyls (PCBs),
lead, and other hazardous substances.
At the EPA's request, Entergy Arkansas voluntarily performed
stabilization activities at the Benton Salvage site in Saline County,
Arkansas. While the EPA has not named PRPs for this site, Entergy
Arkansas has attempted to negotiate an agreement with the EPA. Entergy
Arkansas and the EPA were unable to reach an agreement satisfactory to
both parties. Region 6 EPA initiated its own clean-up of the site in
October 1996. Entergy Arkansas does not believe that its potential
liability with respect to this site will be material.
Reynolds Metals Company (Reynolds) and Entergy Arkansas notified
the EPA in 1989 of possible PCB contamination at two former Reynolds
plant sites (Jones Mill and Patterson) in Arkansas to which Entergy
Arkansas had supplied power. Subsequently, Entergy Arkansas completed
remediation at the substations serving the plant sites at a cost of
$1.7 million. Additional PCB contamination was found in a portion of a
drainage ditch that flows from the Patterson facility to the Ouachita
River. Reynolds demanded that Entergy Arkansas participate in
remediation efforts with respect to the ditch. Entergy Arkansas and
independent contractors engaged by Entergy Arkansas conducted an
investigation of the ditch contamination and the possible migration of
PCBs from the electrical equipment that Entergy Arkansas maintained at
the plant. The investigation concluded that none of the contamination
was caused by Entergy Arkansas. Entergy Arkansas has thus far expended
approximately $150,000 on investigation of the ditch. In May 1995,
Entergy Arkansas was named as a defendant in a suit by Reynolds seeking
to recover a share of its costs associated with the clean-up of
hazardous substances at the Patterson site. Reynolds alleges that it
has spent $11.2 million to clean-up the site, and that Entergy Arkansas
bears some responsibility for PCB contamination at the site. Entergy
Arkansas believes that it has no liability for contamination at the
Patterson site and is contesting the lawsuit. An August 1997 trial
date has been tentatively scheduled.
Entergy Arkansas entered into a Consent Administrative Order,
dated February 21, 1991, with the ADPC&E that named Entergy Arkansas as
a PRP for the initial stabilization associated with contamination at
the Utilities Services, Inc. state Superfund site located near Rison,
Arkansas. This site was found to have soil contaminated by PCBs and
pentachlorophenol (a wood preservative). Containers and drums that
contained PCBs and other hazardous substances were found at the site.
Entergy Arkansas' share of total remediation costs is estimated not to
exceed $5.0 million. Entergy Arkansas is attempting to identify and
notify other PRPs with respect to this site. Entergy Arkansas has
received assurances that the ADPC&E will use its enforcement authority
to allocate remediation expenses among Entergy Arkansas and any other
PRPs that can be identified. Approximately 20 PRPs have been
identified to date. Entergy Arkansas has performed the activities
necessary to stabilize the site, at a cost of approximately $400,000.
Entergy Arkansas believes that its potential liability for this site
will not be material.
Entergy Gulf States
Entergy Gulf States has been designated by the EPA as a PRP 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 these sites. Several class action and other
suits have been filed in state and federal courts seeking relief from
Entergy Gulf States and others for damages caused by the disposal of
hazardous waste and for asbestos-related disease allegedly resulting
from exposure on Entergy Gulf States premises (see "Other Regulation
and Litigation" below). While the amounts at issue may be substantial,
Entergy Gulf States believes that its results of operations and
financial condition will not be materially adversely affected by the
outcome of the suits. As of December 31, 1996, a remaining recorded
liability of $21.4 million existed relating to the clean-up of seven
sites at which Entergy Gulf States has been designated a PRP.
In 1971, Entergy Gulf States purchased property near its Sabine
generating station, known as the Bailey site, for possible expansion of
cooling water facilities. Entergy Gulf States sold the property in
1984. In October 1984, an abandoned waste site on the property was
included on the Superfund National Priorities List (NPL) by the EPA.
Entergy Gulf States has pursued negotiations with the EPA and is a
member of a task force with other PRPs for the voluntary clean-up of
the waste site. A consent decree has been signed by all PRPs for the
voluntary clean-up of the Bailey site. Remediation costs are currently
expected to be approximately $33 million, however, federal and state
agencies are still examining potential liabilities associated with
natural resource damage. Entergy Gulf States is expected to be
responsible for 2.26% of the estimated clean-up cost. This matter is
currently under negotiation with the other PRPs and the agencies.
Entergy Gulf States does not believe that its remaining responsibility
with respect to this site will be material after allowance for the
existing provision for clean-up in the amount of $629,000.
Entergy Gulf States is currently involved in a multi-phased
remedial investigation of an abandoned manufactured gas plant (MGP)
site, known as the Lake Charles Service Center, located in Lake
Charles, Louisiana. The property was the site of an MGP that is
believed to have operated from approximately 1916 to 1931. Coal tar, a
by-product of the distillation process employed at MGPs, was apparently
routed to a portion of the property for disposal. The same area has
also been used as a landfill. Under an order issued by the Louisiana
Department of Environmental Quality (LDEQ), which is currently stayed,
Entergy Gulf States was required to investigate and, if necessary, take
remedial action at the site. Preliminary estimates of remediation
costs are approximately $20 million. On February 13, 1995, the EPA
published a proposed rule adding the Lake Charles Service Center to the
NPL. Another PRP has been identified and is believed to have had a
role in the ownership and operation of the MGP. Negotiations with that
company for joint participation and possible remedial action have been
held and are expected to continue. Entergy Gulf States has agreed to
the terms of the Administrative Order on Consent (AOC) negotiated
between Entergy and the EPA. The AOC is expected to be signed by both
parties in 1997. Entergy Gulf States does not presently believe that
its ultimate responsibility with respect to this site will be material
after allowance for the existing provision for clean-up of $19.8
million.
Entergy Gulf States is currently involved in an initial
investigation of an MGP site, known as the Old Jennings Ice Plant,
located in Jennings, Louisiana. The MGP site is believed to have
operated from approximately 1909-1926. In July 1996, a petroleum-like
substance was discovered on the surface soil, a notification was made
to the LDEQ. The LDEQ was aware of this site based upon a survey
performed by an environmental consultant for the EPA. Entergy Gulf
States obtained the services of an environmental consultant to collect
core samples and to perform a search of historical records to determine
the type of operation that occurred at Jennings. Results of the core
sampling are not final, but limited amounts of contamination were found
on-site. Entergy Gulf States does not presently believe that its
ultimate responsibility with respect to this site will be material.
The amount of the existing provision for clean-up is $500,000.
Entergy Gulf States along with Entergy Louisiana has been named as
a PRP for an abandoned waste oil recycling plant site in Livingston
Parish, Louisiana, known as Combustion, Inc., which is included on the
NPL. Although most surface remediation has been completed, additional
studies related to residual groundwater contamination are expected to
continue in 1997. Entergy Gulf States and Entergy Louisiana have been
named as defendants in a class action lawsuit lodged against a group of
PRPs associated with the site. (For information regarding litigation
in connection with the Combustion, Inc. site, see "Other Regulation and
Litigation" below.) Entergy Gulf States does not presently believe
that its ultimate responsibility with respect to this site will be
material.
Entergy Gulf States received notification in 1992 from the EPA of
potential liability with respect to a site in Iota, Louisiana. This
site was the depository of a variety of wastes, including medical and
chemical wastes. During 1996, Entergy Gulf States paid approximately
$45,000 to the EPA to settle its liability for this site.
Entergy Gulf States, along with Entergy Arkansas and Entergy
Louisiana, has been notified of its potential liability with respect to
the Benton Salvage site located in Saline County, Arkansas. Although
Entergy Gulf States and Entergy Louisiana have had minor involvement in
the Benton Salvage site, no remediation is expected to be required by
these companies. See "Entergy Arkansas" above for a discussion of the
Benton Salvage site.
Entergy Louisiana, Entergy New Orleans, and System Energy
Entergy Louisiana, Entergy New Orleans, and System Energy have
received notices from the EPA and/or the states of Louisiana and
Mississippi that one or more of them may be a PRP for disposal sites
that are neither owned nor operated by any Entergy subsidiary. In
response to such notices, the sites discussed below have been
remediated:
- Entergy Louisiana, along with Entergy Arkansas and Entergy Gulf
States, was notified in 1990 of its potential liability relating to the
Benton Salvage site located in Saline County, Arkansas. Although
Entergy Gulf States and Entergy Louisiana have been involved in the
Benton Salvage site, their contributions are considered minor.
Therefore, no remediation action is required by these companies. See
"Entergy Arkansas" above for a discussion of the Benton Salvage site.
- The EPA named Entergy Louisiana and System Energy as two of the 44
PRPs for the Disposal Systems, Inc. site in Mississippi. The State of
Mississippi has indicated that it intends to have the PRPs conduct a
clean-up of the Disposal Systems, Inc. site but has not yet taken
formal action. Entergy Louisiana has settled its involvement in this
matter with the EPA. The State of Mississippi is continuing to
evaluate whether additional remediation measures are necessary.
However, further remediation costs at the site are not expected to be
material.
- From 1992 to 1994, Entergy Louisiana performed site assessments
and remedial activities at three retired power plants, known as the
Homer, Jonesboro, and Thibodaux municipal sites, previously owned and
operated by Louisiana municipalities. Entergy Louisiana purchased the
power plants as part of the acquisition of municipal electric systems
after operating them for the last few years of their useful lives. The
site assessments indicated some subsurface contamination from fuel oil.
In December 1994, Entergy Louisiana completed all remediation work at
Homer to the LDEQ's satisfaction and the LDEQ granted "No Further
Action" status in February 1995. All remediation activities at the
Jonesboro Plant were completed in May 1996. Remediation of the
Thibodaux site is expected to be completed in 1998. The costs incurred
through December 31, 1996 for the Homer, Jonesboro, and Thibodaux sites
are $22,000, $156,000, and $125,000, respectively. Remaining costs for
both Homer and Jonesboro sites are considered immaterial. Significant
remedial activities are ongoing at the Thibodaux site.
There are certain disposal sites for which Entergy Louisiana and
Entergy New Orleans have been named by the EPA as PRPs for associated
clean-up costs, but management believes no liability exists in
connection with these sites for Entergy Louisiana and Entergy New
Orleans. Such Louisiana sites include Combustion Inc., an abandoned
waste oil recycling plant site located in Livingston Parish (involving
at least 70 PRPs, including Entergy Gulf States), and the Dutchtown
site (also included on the NPL and involving 57 PRPs). Entergy
Louisiana has found no evidence of its involvement in the Combustion
Inc. site. (For information regarding litigation in connection with the
Livingston Parish site, see "Other Regulation and Litigation," below).
With respect to the Dutchtown site, Entergy New Orleans believes it has
no liability because the material it sent to this site was not a
hazardous substance.
During 1993, the LDEQ issued new rules for solid waste regulation,
including regulation of waste water impoundments. Entergy Louisiana
has determined that certain of its power plant waste water impoundments
were affected by these regulations and has chosen to upgrade or close
them. As a result, a remaining recorded liability in the amount of
$6.7 million existed at December 31, 1996, 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 December 31, 1996.
Other Regulation and Litigation
Merger (Entergy Corporation and Entergy Gulf States)
In July and August 1992, applications were filed with FERC, the
LPSC, the PUCT, and the SEC under PUHCA, seeking authorization of
various aspects of the Merger. In January 1993, Entergy Gulf States
filed two applications with the NRC seeking approval of the change in
ownership of Entergy Gulf States and an amendment to the operating
license for River Bend to reflect its operation by Entergy Operations.
All regulatory approvals were obtained in 1993 and the Merger was
consummated on December 31, 1993.
FERC's orders approving the Merger were appealed to the D.C.
Circuit by Entergy Services, the City, the Arkansas Electric Energy
Consumers (AEEC), the APSC, Cajun, the MPSC, the American Forest and
Paper Association, the State of Mississippi, the City of Benton and
other cities, and Occidental Chemical Corporation (Occidental).
Entergy Services sought review of FERC's deletion of a 40% cap on the
amount of fuel savings Entergy Gulf States may be required to transfer
to other Entergy domestic utility companies under a tracking mechanism
designed to protect the other companies from certain unexpected
increases in fuel costs. The other parties sought to overturn FERC's
decisions on various grounds, including the issues of whether FERC
appropriately conditioned the Merger to protect various interested
parties from alleged harm and FERC's reliance on Entergy's transmission
tariff to mitigate any potential anticompetitive impacts of the Merger.
On November 18, 1994, the D. C. Circuit denied motions filed by
Cajun, Occidental, and AEEC for a remand to FERC and a partial summary
grant of the petitions for review. At the same time, the D.C. Circuit
ordered that the cases be held in abeyance pending FERC's issuance of
(i) a final order on remand in the proceedings on Entergy's
transmission tariff (see discussion of tariff case in "RATE MATTERS AND
REGULATION - Rate Matters - Wholesale Rate Matters - Open Access
Transmission" above), and (ii) a final order on competition issues in
the proceedings on the Merger.
On December 30, 1993, Entergy Services submitted to FERC tariff
revisions to comply with FERC's order dated December 15, 1993,
approving the Merger. On February 4, 1994, the APSC and AEEC filed
with FERC a joint protest to the compliance filing, alleging that
Entergy should be required to insulate the ratepayers of Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans from all litigation liabilities related to Entergy Gulf States'
River Bend nuclear facility. In its May 17, 1994, order on rehearing,
FERC addressed Entergy's commitment to insulate the customers of
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans against liability resulting from certain litigation
involving River Bend. In response to FERC's clarification of Entergy's
commitment, Entergy Services filed a new compliance filing on June 16,
1994. APSC and AEEC subsequently filed protests questioning the
adequacy of Entergy's June 16, 1994, compliance filing. FERC has not
yet acted on the compliance filings.
Requests for rehearing of the SEC order approving the Merger were
filed with the SEC by Houston Industries Incorporated and its
subsidiary Houston Lighting & Power Company on December 28, 1993, and
petitions for review seeking to set aside the SEC order were filed with
the D.C. Circuit by these parties and by Cajun in February 1994. The
matter was subsequently remanded by the D.C. Circuit to the SEC for
further consideration in light of developments at FERC relating to
Entergy's transmission tariffs. On December 6, 1996, pursuant to a
settlement with Entergy Gulf States, Houston Industries Incorporated
and Houston Lighting & Power Company withdrew their petitions for
review of the SEC order.
Employment Litigation
Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and Entergy New Orleans are defendants in numerous
lawsuits described below that have been filed by former employees
asserting that they were wrongfully terminated and/or discriminated
against due to age, race, and/or sex. Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and Entergy New
Orleans are vigorously defending these suits and deny any liability to
the plaintiffs. However, no assurance can be given as to the outcome
of these cases.
(Entergy Corporation and Entergy Arkansas)
Entergy Corporation and Entergy Arkansas are defendants in five
suits 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. One of these suits
seeks class certification. A trial date is scheduled in March 1997 for
one suit comprised of 29 plaintiffs, and a trial date is scheduled in
May 1997 for another suit comprised of 18 plaintiffs. Trial dates have
not been set in the other suits.
(Entergy Corporation and Entergy Gulf States)
Entergy Corporation and Entergy Gulf States are defendants in
lawsuits involving approximately 176 plaintiffs filed in state court in
Texas by former employees who claim that they lost their jobs as a
result of the Merger. The plaintiffs in these cases have asserted
various claims, including discrimination on the basis of age, race,
and/or sex. The court has preliminarily ruled that each plaintiff's
claim should be tried separately. The first case is scheduled for
trial in June 1997.
(Entergy Corporation, Entergy Gulf States, and Entergy Louisiana)
Entergy Corporation, Entergy Gulf States and Entergy Louisiana are
defendants in a suit filed in federal court in Louisiana by
approximately 39 plaintiffs who claim, among other things, they were
wrongfully discharged from their employment on the basis of their age.
No trial date has been set for this case.
(Entergy Louisiana and Entergy New Orleans)
Entergy Louisiana and Entergy New Orleans are defendants in a suit
filed in state court in Louisiana by 110 plaintiffs who seek to certify
a class on behalf of all employees who allegedly were terminated or
required to resign on the basis of age. The court has set a hearing
for certification of the class for March 13, 1997; no trial date has
been set. Entergy Louisiana and/or Entergy New Orleans also are
defendants in approximately 27 other suits filed in federal or state
court by plaintiffs who claim they were wrongfully discharged on the
basis of age, race, or sex.
Asbestos and Hazardous Waste Suits
(Entergy Gulf States and Entergy Louisiana)
A number of plaintiffs who allegedly suffered damage or injury, or
are survivors of persons who died, allegedly as a result of exposure to
"hazardous toxic waste" that emanated from a site in Livingston Parish,
sued Entergy Gulf States and approximately 70 other defendants,
including Entergy Louisiana, in 17 suits filed in the Livingston
Parish, Louisiana District Court (State District Court). The
plaintiffs alleged that the defendants generated, transported, or
participated in the storage of such wastes at the facility, which was
previously operated as a waste oil recycling facility. These State
District Court suits, which seek damages in total amounts ranging from
$1 million to $10 billion and are now consolidated in a class action,
and three federal suits in three states other than Louisiana involving
issues arising from the same facility, have been removed and
transferred, respectively, to the U.S. District Court for the Middle
District of Louisiana. Entergy Gulf States settled all claims against
it in the suits and the settlements were approved by court order on
February 7, 1996. Entergy Louisiana received preliminary approval of a
settlement of all claims against it in the suits for approximately $2.3
million. A court date for the fairness hearing to approve the
settlement has not been set.
(Entergy Gulf States)
A total of 23 suits have been filed on behalf of approximately
4,255 plaintiffs in state and federal courts in Jefferson County,
Texas. These suits seek relief from Entergy Gulf States as well as
numerous other defendants for damages caused to the plaintiffs or
others by the alleged exposure to hazardous waste and asbestos on the
defendants' premises. All of the plaintiffs in such suits are also
suing Entergy Gulf States and all other defendants on a conspiracy
count. It is not yet known how many of the plaintiffs in the suits
discussed above worked on Entergy Gulf States' premises. There have
been numerous asbestos-related law suits filed in the District Court of
Calcasieu Parish in Lake Charles, Louisiana, on behalf of approximately
200 plaintiffs naming numerous defendants including Entergy Gulf
States. The suits allege that each plaintiff contracted an asbestos-
related disease from exposure to asbestos insulation products on the
premises of such defendants. Settlements of the Jefferson County suits
involving approximately 1,800 plaintiffs and Calcasieu Parish suits
involving approximately 91 plaintiffs are in the process of being
consummated. In May 1996, the majority of remaining cases in Calcasieu
Parish involving approximately 70 plaintiffs were settled for an
immaterial amount; there are approximately 40 cases still pending.
Entergy Gulf States' share of the settlements of these cases was not
material to its financial position or results of operations.
Cajun - River Bend Litigation (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 was 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). The
terms 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 will settle transmission
disputes and be released from claims for payment under transmission
arrangements with Entergy Gulf States 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. 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 Cajun 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 expects to make filings with
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.
The Cajun Settlement resolved Cajun's civil action instituted in
June 1989 against Entergy Gulf States, in which Cajun sought to rescind
or terminate the Joint Ownership Participation and Operating Agreement
(Operating Agreement) entered into on August 28, 1979, relating to
River Bend. In that suit, Cajun also sought to recover its alleged
$1.6 billion investment in the unit plus attorneys' fees, interest, and
costs. The Cajun Settlement resolves both the portion of the suit by
Cajun to rescind the Operating Agreement and the breach of contract
claims.
In 1992, two member cooperatives of Cajun brought an additional
independent action to declare the Operating Agreement null and void,
based upon Entergy Gulf States' failure to get prior LPSC approval
which was alleged to be necessary. Prior to its bankruptcy
proceedings, Cajun intervened as a plaintiff in this action. Entergy
Gulf States believes the suits are without merit and believes Cajun's
claim is mooted by the Cajun Settlement.
On December 21, 1994, Cajun filed a petition in the United States
Bankruptcy Court for the Middle District of Louisiana seeking relief
under Chapter 11 of the Bankruptcy Code. Proponents of all of the
plans of reorganization submitted to the Bankruptcy Court have
incorporated the Cajun Settlement as an integral condition to the
effectiveness of their plan. The timing and completion of a
reorganization plan depends on Bankruptcy Court approval and any
required regulatory approvals. The Bankruptcy Court has approved
proposals by three groups seeking to acquire the non-nuclear assets of
Cajun and has signed an order that establishes rules for how Cajun's
creditors will vote on the three plans. On December 16, 1996, the
Bankruptcy Court began hearings on the balloting and the plan that will
be adopted. The matter remains before the Bankruptcy Court.
See Note 9 for additional information regarding the Cajun
litigation, Cajun's bankruptcy proceedings, and related filings.
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. See Note 9 for
additional information regarding these FERC proceedings, FERC orders
issued as a result of such proceedings, and the potential effects of
these proceedings upon Entergy Gulf States.
On December 7, 1993, Cajun filed a complaint in the Middle
District of Louisiana alleging that Entergy Gulf States failed to
provide Cajun an opportunity to construct certain facilities that
allegedly would have reduced its rates under Service Schedule CTOC, and
is seeking an order compelling the conveyance of certain facilities and
awarding unspecified damages. Entergy Gulf States has moved to dismiss
the complaint on the basis, among others, that FERC has already
addressed the matter in the proceedings described in Note 9.
Service Area Dispute
(Entergy Corporation and Entergy Gulf States)
Entergy Gulf States was requested by Cajun and Jefferson Davis
Electric Cooperative, Inc. (Jefferson Davis), to provide the
transmission of power over Entergy Gulf States' system for delivery to
an area near Lake Charles, Louisiana. Cajun and Jefferson Davis filed
a suit in federal court in the Western District of Louisiana alleging
that Entergy Gulf States breached its obligations under the parties'
contract and violated the antitrust laws by refusing to provide the
transmission service. Cajun and Jefferson Davis seek an injunction
requiring Entergy Gulf States to provide the requested service and
unspecified treble damages for Entergy Gulf States' refusal to provide
the service. In November 1989, the federal court denied Cajun's and
Jefferson Davis' motion for a preliminary injunction. Entergy Gulf
States believes this proceeding is resolved by the Cajun Settlement.
(Entergy Corporation and Entergy Mississippi)
On October 11, 1994, twelve Mississippi cities filed a complaint
in state court against Entergy Mississippi and eight electric power
associations seeking a judgment from the court declaring
unconstitutional certain Mississippi statutes that establish the
procedure that must be followed before a municipality can acquire the
facilities and certificate rights of a utility serving in the
municipality. Specifically, the suit requests that the court declare
unconstitutional certain 1987 amendments to the Mississippi Public
Utilities Act that require that the MPSC cancel a utility's certificate
to serve in the municipality before a municipality may acquire a
utility's facilities located in the municipality. The suit also
requests that the court find that Mississippi municipalities can serve
any consumer in the boundaries of the municipality and within one mile
thereof. On January 6, 1995, Entergy Mississippi and the other
defendants filed motions to dismiss. In October 1995, the state court
dismissed the complaint. The plaintiffs have appealed the dismissal to
the Mississippi Supreme Court, where it is currently pending.
Taxes Paid Under Protest (Entergy Corporation and Entergy Louisiana)
Since the mid-1980's, Entergy Louisiana and the tax authorities of
St. Charles Parish, Louisiana (Parish), the parish in which Waterford 3
is located, have disputed use taxes paid on nuclear fuel ($6.5 million
through 1996) under protest by Entergy Louisiana. Entergy Louisiana
has been successful in lawsuits in the Parish with regard to recovering
these taxes, plus interest, and also with regard to Parish lease tax
issues pertaining to fuel financing arrangements. In June 1995, Entergy
Louisiana received a favorable decision from the Louisiana Fifth
Circuit Court of Appeals that confirmed that no such use taxes are due.
The Parish and Entergy Louisiana are currently discussing a possible
settlement of all pending tax-related litigation including the likely
return of the amounts previously paid under protest. The suits by
Entergy Louisiana with regard to state use tax paid under protest on
nuclear fuel are still pending.
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.
Entergy Corporation believes there is no material tax deficiency and is
confident that a satisfactory resolution of the matter will be
achieved.
Panda Energy Corporation Complaint (Entergy Corporation)
Panda Energy Corporation (Panda) has commenced litigation in the
Dallas District Court naming Entergy Corporation, Energy Enterprises,
Entergy Power, Entergy Power Asia, Ltd., and Entergy Power Development
Corporation as defendants. The allegations against the defendants
include, among others, tortious interference with contractual
relations, conspiracy, misappropriation of corporate opportunity,
unfair competition and fraud, and constructive trust issues. Panda
seeks damages of approximately $4.8 billion, of which $3.6 billion is
claimed in punitive damages. Entergy believes that this litigation is
unfounded, but entered into arrangements on April 30, 1996, to settle
the matter for $350,000, subject to revocation by Entergy if the court
ruled on the case.
Thereafter, the Dallas District Court entered an order of
dismissal because the plaintiff was unable to show any damages and the
facts did not support a cause of action against the defendants. As a
result, Entergy revoked the $350,000 settlement agreement. In May of
1996, Panda filed an appeal of the court's order for dismissal. Appeal
briefs have been submitted by both parties, but no date has yet been
designated for oral argument.
Catalyst Technologies, Inc. (Entergy Corporation)
In June 1993, Catalyst Technologies, Inc. (CTI) filed a petition
against Electec, Inc. (Electec), the predecessor to Entergy
Enterprises. Prior to the filing of the petition, CTI and Electec
entered into an agreement whereby CTI was required to raise a specified
amount of funding in exchange for the right to acquire Electec's
computer software technology marketing rights. CTI alleges that due to
actions of Electec, it was unable to secure the necessary funding, and,
therefore, was not able to meet the terms of the agreement. The
petition alleges breach of contract, breach of the obligation of good-
faith and fair dealing, and bad-faith breach of contract against
Electec. It was originally believed CTI was claiming damages of
approximately $36 million from Entergy Enterprises. It now appears
that CTI will allege damages ranging from $231 million to $258 million.
Entergy Enterprises' position is that CTI is not entitled to any
damages, and that even if damages were sustained, they would not exceed
$600,000. The case is scheduled for a jury trial beginning on July 14,
1997, in Civil District Court for the Parish of Orleans, Louisiana.
Entergy Enterprises is vigorously contesting these claims.
EARNINGS RATIOS OF DOMESTIC UTILITY COMPANIES AND SYSTEM ENERGY
The domestic utility companies' and System Energy's ratios of
earnings to fixed charges and ratios of earnings to combined fixed
charges and preferred dividends pursuant to Item 503 of SEC Regulation
S-K are as follows:
Ratios of Earnings to Fixed Charges
Years Ended December 31,
1992 1993 1994 1995 1996
Entergy Arkansas 2.28 3.11(b) 2.32 2.56 2.93
Entergy Gulf States 1.72 1.54 .36(c) 1.86 1.47
Entergy Louisiana 2.79 3.06 2.91 3.18 3.16
Entergy Mississippi 2.37 3.79(b) 2.12 2.92 3.54
Entergy New Orleans 2.66 4.68(b) 1.91 3.93 3.51
System Energy 2.04 1.87 1.23 2.07 2.21
Ratios of Earnings to Combined Fixed
Charges and Preferred Dividends
Years Ended December 31,
1992 1993 1994 1995 1996
Entergy Arkansas 1.86 2.54(b) 1.97 2.12 2.44
Entergy Gulf States(a) 1.37 1.21 .29(c) 1.54 1.19
Entergy Louisiana 2.18 2.39 2.43 2.60 2.64
Entergy Mississippi 1.97 3.08(b) 1.81 2.51 3.07
Entergy New Orleans. 2.36 4.12(b) 1.73 3.56 3.22
(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
approximately $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.
INDUSTRY SEGMENTS
Entergy New Orleans
Narrative Description of Entergy New Orleans Industry Segments
Electric Service
Entergy New Orleans supplied retail electric service to 188,912
customers as of December 31, 1996. During 1996, 40% of electric
operating revenues was derived from residential sales, 39% from
commercial sales, 6% from industrial sales, and 15% from sales to
governmental and municipal customers.
Natural Gas Service
Entergy New Orleans supplied retail natural gas service to 151,528
customers as of December 31, 1996. During 1996, 56% of gas operating
revenues was derived from residential sales, 19% from commercial sales,
9% from industrial sales, and 16% from sales to governmental and
municipal customers. (See "FUEL SUPPLY - Natural Gas Purchased for
Resale.")
Selected Financial Information Relating to Industry Segments
For selected financial information relating to Entergy New
Orleans' industry segments, see Entergy New Orleans' financial
statements and Note 15.
Employees by Segment
Entergy New Orleans' full-time employees by industry segment as of
December 31, 1996, were as follows:
Electric 219
Gas 109
---
Total 328
===
(For further information with respect to Entergy New Orleans'
segments, see "PROPERTY.")
Entergy Gulf States
For the year ended December 31, 1996, 95% of Entergy Gulf States'
operating revenues was derived from the electric utility business. Of
the remaining operating revenues 3% was derived from the steam business
and 2% from the natural gas business.
PROPERTY
Generating Stations
The total capability of Entergy's owned and leased generating
stations as of December 31, 1996, by company and by fuel type, is
indicated below:
Owned and Leased Capability MW(1)
Gas
Turbine
and
Internal
Company Total Fossil Nuclear Combustion Hydro
Entergy Arkansas 4,373 (2) 2,379 1,694 230 (4) 70
Entergy Gulf States 6,558 (2) 5,828 655 75 -
Entergy Louisiana 5,423 (2) 4,329 1,075 19 -
Entergy Mississippi 3,063 (2) 3,052 - 11 -
Entergy New Orleans 934 (2) 918 - 16 -
System Energy 1,061 - 1,061 - -
-----------------------------------------------
Total 21,412 (3) 16,506 (3) 4,485 351 70
===============================================
(1) "Owned and Leased Capability" is the dependable load carrying
capability as demonstrated under actual operating conditions based
on the primary fuel (assuming no curtailments) that each station
was designed to utilize.
(2) Excludes the capacity of fossil-fueled generating stations placed
on extended reserve as follows: Entergy Arkansas - 506 MW; Entergy
Gulf States - 405 MW; Entergy Louisiana - 157 MW; Entergy
Mississippi - 73 MW; and Entergy New Orleans - 143 MW. Generating
stations that are not expected to be utilized in the near-term to
meet load requirements are placed in extended reserve shutdown in
order to minimize operating expenses.
(3) Excludes net capability of generating facilities owned by Entergy
Power, which owns 725 MW of fossil-fueled capacity.
(4) Includes 188 MW of capacity leased by Entergy Arkansas through
1999.
Load and capacity projections are regularly reviewed in order to
coordinate and recommend the location and time of installation of
additional generating capacity and of interconnections in light of the
availability of power, the location of new loads, and maximum economy
to Entergy. Based on load and capability projections and bulk power
availability, Entergy has no current plans to install additional
generating capacity. When new generation resources are needed, Entergy
expects to meet this need by means other than construction of new base
load generating capacity. In the meantime, Entergy will meet capacity
needs by, among other things, purchasing power in the wholesale power
market and/or removing generating stations from extended reserve
shutdown.
Under the terms of the System Agreement, certain generating
capacity and other power resources are shared among the domestic
utility companies. Among other things, the System Agreement provides
that parties having generating reserves greater than their load
requirements (long companies) shall receive payments from those parties
having deficiencies in generating reserves (short companies) and an
amount sufficient to cover certain of the long companies' costs,
including operating expenses, fixed charges on debt, dividend
requirements on preferred and preference stock, and a fair rate of
return on common equity investment. Under the System Agreement, these
charges are based on costs associated with the long companies' steam
electric generating units fueled by oil or gas. In addition, for all
energy exchanged among the domestic utility companies under the System
Agreement, the short companies are required to pay the cost of fuel
consumed in generating such energy plus a charge to cover other
associated costs (see "RATE MATTERS AND REGULATION - Rate Matters -
Wholesale Rate Matters - System Agreement," above, for a discussion of
FERC proceedings relating to the System Agreement).
Entergy's business is subject to seasonal fluctuations, with the
peak period occurring in the summer months. The 1996 peak demand of
19,444 MW occurred on July 22, 1996. The net capability at the time of
peak was 21,127 MW, net of off-system firm sales of 285 MW. The
capacity margin at the time of the peak was approximately 8.0%
excluding units placed on extended reserve and capacity owned by
Entergy Power.
Interconnections
The electric power supply facilities of Entergy consist
principally of steam-electric production facilities strategically
located with reference to availability of fuel, protection of local
loads, and other controlling economic factors. These are
interconnected by a transmission system operating at various voltages
up to 500 kilovolts. Generally, with the exception of Grand Gulf 1,
Entergy Power's capacity and a small portion of Entergy Mississippi's
capacity, operating facilities or interests therein are owned by the
domestic utility company serving the area in which the facilities are
located. However, all of Entergy's generating facilities are centrally
dispatched and operated in order to obtain the lowest cost sources of
energy with a minimum of investment and the most efficient use of
plant.
In addition to the many neighboring utilities with which the
domestic utility companies interconnect, the domestic utility companies
are members of the Southwest Power Pool, the primary purpose of which
is to ensure the reliability and adequacy of the electric bulk power
supply in the southwest region of the United States. The Southwest
Power Pool is a member of the North American Electric Reliability
Council. The domestic utility companies are also members of the
Western Systems Power Pool.
Gas Property
As of December 31, 1996, Entergy New Orleans distributed and
transported natural gas for distribution solely within the limits of
the City of New Orleans through a total of 1,439 miles of gas
distribution mains and 40 miles of gas transmission pipelines. Koch
Gateway Pipeline Company is a principal supplier of natural gas to
Entergy New Orleans, delivering to six of Entergy New Orleans' 14
delivery points.
As of December 31, 1996, the gas properties of Entergy Gulf States
were not material to Entergy Gulf States.
Titles
Entergy's generating stations are generally located on properties
owned in fee simple. The greater portion of the transmission and
distribution lines of the domestic utility companies has been
constructed over property of private owners pursuant to easements or on
public highways and streets pursuant to appropriate franchises. The
rights of each domestic utility company in the realty on which its
facilities are located are considered by it to be adequate for its use
in the conduct of its business. Minor defects and irregularities
customarily found in properties of like size and character exist, but
such defects and irregularities do not materially impair the use of the
properties affected thereby. The domestic utility companies generally
have the right of eminent domain, whereby they may, if necessary,
perfect or secure titles to, or easements or servitudes on, privately-
held lands used or to be used in their utility operations.
Substantially all the physical properties owned by each domestic
utility company and System Energy, respectively, are subject to the
lien of a mortgage and deed of trust securing the first mortgage bonds
of such company. The Lewis Creek generating station is owned by GSG&T,
Inc., a subsidiary of Entergy Gulf States, and is not subject to the
lien of the Entergy Gulf States mortgage securing the first mortgage
bonds of Entergy Gulf States, but is leased to and operated by Entergy
Gulf States. In the case of Entergy Louisiana, certain properties are
also subject to the liens of second mortgages securing other
obligations of Entergy Louisiana. In the case of Entergy Mississippi
and Entergy New Orleans, substantially all of their properties and
assets are also subject to the second mortgage lien of their respective
general and refunding mortgage bond indentures.
FUEL SUPPLY
The sources of generation and average fuel cost per kWh for the
domestic utility companies and System Energy for the years 1994-1996
were:
Natural Gas Fuel Oil Nuclear Fuel Coal
% Cents % Cents % Cents % Cents
of per of per of Per of Per
Year Gen kWh Gen kWh Gen kWh Gen kWh
1996 42 2.99 1 3.03 41 .56 16 1.73
1995 50 1.99 - - 35 .60 15 1.73
1994 44 2.24 1 3.99 39 .60 16 1.82
Actual 1996 and projected 1997 sources of generation for the
domestic utility companies and System Energy are:
Natural Gas Fuel Oil Nuclear Coal
1996 1997 1996 1997 1996 1997 1996 1997
Entergy Arkansas 7% 7% - - 57% 51% 36% 42%
Entergy Gulf States 69% 66% - - 20% 19% 11% 15%
Entergy Louisiana 56% 48% - - 44% 52% - -
Entergy Mississippi 54% 71% 13% - - - 33% 29%
Entergy New Orleans 99% 100% 1% - - - - -
System Energy - - - - 100%(a) 100%(a) - -
Total 42% 39% 1% - 41% 41% 16% 20%
(a)Capacity and energy from System Energy's interest in Grand Gulf 1
is allocated as follows: Entergy Arkansas - 36%; Entergy Louisiana
- 14%; Entergy Mississippi - 33%; and Entergy New Orleans - 17%.
The balance of generation, which was immaterial, was provided by
hydroelectric power.
Natural Gas
The domestic utility companies have long-term firm and short-term
interruptible gas contracts. Long-term firm contracts comprise less
than 30% of the domestic utility companies' total requirements but can
be called upon, if necessary, to satisfy a significant percentage of
the domestic utility companies' needs. Additional gas requirements are
satisfied by short-term contracts and spot-market purchases. Entergy
Gulf States has a transportation service agreement with a gas supplier
that provides flexible natural gas service to certain generating
stations by using such supplier's pipeline and gas storage facility.
Many factors, including wellhead deliverability, storage and
pipeline capacity, and demand requirements of end users, influence the
availability and price of natural gas supplies for power plants.
Demand is tied to regional weather conditions as well as to the prices
of other energy sources. Supplies of natural gas are expected to be
adequate in 1997. However, pursuant to federal and state regulations,
gas supplies to power plants may be interrupted during periods of
shortage. To the extent natural gas supplies may be disrupted, the
domestic utility companies will use alternate fuels, such as oil, or
rely on coal and nuclear generation.
Coal
Entergy Arkansas has long-term contracts with mines in the State
of Wyoming for the supply of low-sulfur coal for the White Bluff Steam
Electric Generating Station and Independence. These contracts, which
expire in 2002 and 2011, provide for approximately 85% of Entergy
Arkansas' expected annual coal requirements. Additional requirements
are satisfied by annual spot market purchases. Entergy Gulf States has
a contract for a supply of low-sulfur Wyoming coal for Nelson Unit 6,
which should be sufficient to satisfy the fuel requirements at Nelson
Unit 6 through 2010. Cajun has advised Entergy Gulf States that Cajun
has contracts that should provide an adequate supply of coal until 1999
for the operation of Big Cajun 2, Unit 3.
Nuclear Fuel
The nuclear fuel cycle involves the mining and milling of uranium
ore to produce a concentrate, the conversion of uranium concentrate to
uranium hexafluoride gas, enrichment of that gas, fabrication of
nuclear fuel assemblies for use in fueling nuclear reactors, and
disposal of the spent fuel.
System Fuels is responsible for contracts to acquire nuclear
material to be used in fueling Entergy Arkansas', Entergy Louisiana's,
and System Energy's nuclear units and maintaining inventories of such
materials during the various stages of processing. Each of these
companies contracts for the fabrication of its own nuclear fuel and
purchases the required enriched uranium hexafluoride from System Fuels.
The requirements for Entergy Gulf States' River Bend plant are covered
by contracts made by Entergy Gulf States. Entergy Operations acts as
agent for System Fuels and Entergy Gulf States in negotiating and/or
administering nuclear fuel contracts.
In October 1989, System Fuels entered into a revolving credit
agreement with a bank that provides up to $45 million in borrowings to
finance its nuclear materials and services inventory. Should System
Fuels default on its obligations under its credit agreement, Entergy
Arkansas, Entergy Louisiana, and System Energy have agreed to purchase
nuclear materials and services under the agreement.
Based upon the planned fuel cycles for Entergy's nuclear units,
the following tabulation shows the years through which existing
contracts and inventory will provide materials and services:
Acquisition
of or
Conversion Spent
Uranium to Uranium Fuel
Concentrate Hexafluoride Enrichment Fabrication Disposal
ANO 1 (1) (1) (2) 2000 (3)
ANO 2 (1) (1) (2) 1999 (3)
River Bend (1) (1) (2) 2001 (3)
Waterford 3 (1) (1) (2) 1999 (3)
Grand Gulf 1 (1) (1) (2) 2000 (3)
(1) Current contracts will provide a significant percentage of these
materials and services through termination dates ranging from 1997-
2001. Additional materials and services required beyond these
dates are estimated to be available for the foreseeable future.
(2) Current contracts will provide a significant percentage of these
materials and services through approximately 2000.
(3) The Nuclear Waste Policy Act of 1982 provides for the disposal of
spent nuclear fuel or high level waste by the DOE.
Entergy will enter into additional arrangements to acquire nuclear
fuel beyond the dates shown above. Except as noted above, Entergy
cannot predict the ultimate availability or cost of such arrangements
at this time.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
System Energy currently have arrangements to lease nuclear fuel and
related equipment and services in aggregate amounts up to $125 million,
$70 million, $80 million, and $110 million, respectively. As of
December 31, 1996, the unrecovered cost base of Entergy Arkansas',
Entergy Gulf States', Entergy Louisiana's, and System Energy's nuclear
fuel leases amounted to approximately $79.1 million, $49.8 million,
$38.2 million, and $83.6 million, respectively. The lessors finance
the acquisition and ownership of nuclear fuel through credit agreements
and the issuance of notes. These agreements are subject to annual
renewal with, in Entergy Louisiana's and Entergy Gulf States' case, the
consent of the lenders. The credit agreements for Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and System Energy have been
extended and now have termination dates of December 1999, December
1999, January 2000, and February 2000, respectively. The debt
securities issued pursuant to these fuel lease arrangements have
varying maturities through January 31, 1999. It is expected that the
credit agreements will be extended or alternative financing will be
secured by each lessor upon the maturity of the current arrangements.
If extensions or alternative financing cannot be arranged, the lessee
in each case must purchase sufficient nuclear fuel to allow the lessor
to retire such borrowings.
Natural Gas Purchased for Resale
Entergy New Orleans has several suppliers of natural gas for
resale. Its system is interconnected with three interstate and three
intrastate pipelines. Presently, Entergy New Orleans' primary
suppliers are Koch Gas Services Company (KGS), an interstate gas
marketer, and Bridgeline and Pontchartrain, intrastate pipelines.
Entergy New Orleans has a firm gas purchase contract with KGS. The KGS
gas supply is transported to Entergy New Orleans pursuant to a
transportation service agreement with Koch Gateway Pipeline Company
(KGPC). This service is subject to FERC-approved rates. Entergy New
Orleans has firm contracts with its two intrastate suppliers and also
makes interruptible spot market purchases. In recent years, natural
gas deliveries have been subject primarily to weather-related
curtailments. However, Entergy New Orleans has experienced no such
curtailments.
After the implementation of FERC-mandated interstate pipeline
restructuring in 1993, curtailments of interstate gas supply could
occur if Entergy New Orleans' suppliers failed to perform their
obligations to deliver gas under their supply agreements. KGPC could
curtail transportation capacity only in the event of pipeline system
constraints. Based on the current supply of natural gas, and absent
extreme weather-related curtailments, Entergy New Orleans does not
anticipate any interruptions in natural gas deliveries to its
customers.
Entergy Gulf States purchases natural gas for resale under a "No-
Notice" type of agreement from Mid Louisiana Gas Company. Abandonment
of service by the present supplier would be subject to abandonment
proceedings by FERC.
Research
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans are members of the Electric Power
Research Institute (EPRI). EPRI conducts a broad range of research in
major technical fields related to the electric utility industry.
Entergy participates in various EPRI projects based on Entergy's needs
and available resources. During 1996, 1995, and 1994, Entergy
contributed approximately $9 million, $9 million, and $18 million,
respectively, for EPRI and other research programs in which Entergy was
involved.
Item 2. Properties
Refer to Item 1. "Business - PROPERTY," for information regarding
the properties of the registrants.
Item 3. Legal Proceedings
Refer to Item 1. "Business - RATE MATTERS AND REGULATION," for
details of the registrants' material rate proceedings and other
regulatory proceedings and litigation that are pending or that
terminated in the fourth quarter of 1996.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of 1996, no matters were submitted to a
vote of the security holders of Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, or System Energy.
PART II
Item 5. Market for Registrants' Common Equity and Related Stockholder
Matters
Entergy Corporation
The shares of Entergy Corporation's common stock are listed on the
New York, Chicago, and Pacific Stock Exchanges.
The high and low prices of Entergy Corporation's common stock for
each quarterly period in 1996 and 1995 were as follows:
1996 1995
High Low High Low
(In Dollars)
First 30 3/8 26 3/8 24 3/4 20
Second 28 1/2 25 1/4 25 1/2 20 7/8
Third 28 5/8 24 7/8 26 1/8 23 5/8
Fourth 29 26 3/4 29 1/4 26
Dividends of 45 cents per share were paid on Entergy Corporation's
common stock in each of the quarters of 1996 and 1995.
As of February 28, 1997, there were 92,267 stockholders of record
of Entergy Corporation.
For information with respect to Entergy Corporation's future
ability to pay dividends, refer to Note 8, "DIVIDEND RESTRICTIONS." In
addition to the restrictions described in Note 8, PUHCA provides that,
without approval of the SEC, the unrestricted, undistributed retained
earnings of any Entergy Corporation subsidiary are not available for
distribution to Entergy Corporation's common stockholders until such
earnings are made available to Entergy Corporation through the
declaration of dividends by such subsidiaries.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy
There is no market for the common stock of Entergy Corporation's
wholly owned subsidiaries. Cash dividends on common stock paid by the
subsidiaries to Entergy Corporation during 1996 and 1995, were as
follows:
1996 1995
(In Millions)
Entergy Arkansas $142.8 $ 153.4
Entergy Gulf States -- --
Entergy Louisiana $179.2 $ 221.5
Entergy Mississippi $ 79.9 $ 61.7
Entergy New Orleans $ 34.0 $ 30.6
System Energy $112.5 $ 92.8
Entergy S.A. $ 0.7 $ 3.5
Entergy Transener S.A. $ 1.7 $ 2.1
Entergy Argentina S.A. $ 0.3 --
Entergy Argentina S.A. Ltd. $ 3.1 --
In February 1997, Entergy Corporation received common stock
dividend payments from its subsidiaries totaling $66.9 million. For
information with respect to restrictions that limit the ability of
System Energy and the domestic utility companies to pay dividends, see
Note 8. In order to improve its capital structure, Entergy Gulf States
has not paid common stock dividends since the third quarter of 1994.
See "Management's Financial Discussion and Analysis - Liquidity and
Capital Resources".
Item 6. Selected Financial Data
Entergy Corporation.. Refer to information under the heading
"ENTERGY CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL DATA - FIVE-
YEAR COMPARISON."
Entergy Arkansas. Refer to information under the heading "ENTERGY
ARKANSAS, INC. SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON."
Entergy Gulf States. Refer to information under the heading
"ENTERGY GULF STATES, INC. SELECTED FINANCIAL DATA - FIVE-YEAR
COMPARISON."
Entergy Louisiana. Refer to information under the heading
"ENTERGY LOUISIANA, INC. SELECTED FINANCIAL DATA - FIVE-YEAR
COMPARISON."
Entergy Mississippi. Refer to information under the heading
"ENTERGY MISSISSIPPI, INC. SELECTED FINANCIAL DATA - FIVE-YEAR
COMPARISON."
Entergy New Orleans. Refer to information under the heading
"ENTERGY NEW ORLEANS, INC. SELECTED FINANCIAL DATA - FIVE-YEAR
COMPARISON."
System Energy. Refer to information under the heading "SYSTEM
ENERGY RESOURCES, INC. SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON."
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Entergy Corporation and Subsidiaries. Refer to information under
the heading "ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S
FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES," "
- - SIGNIFICANT FACTORS AND KNOWN TRENDS," and "- RESULTS OF OPERATIONS."
Entergy Arkansas. Refer to information under the heading "ENTERGY
ARKANSAS, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - RESULTS
OF OPERATIONS."
Entergy Gulf States. Refer to information under the heading
"ENTERGY GULF STATES, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND
ANALYSIS - RESULTS OF OPERATIONS."
Entergy Louisiana. Refer to information under the heading
"ENTERGY LOUISIANA, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
- - RESULTS OF OPERATIONS."
Entergy Mississippi. Refer to information under the heading
"ENTERGY MISSISSIPPI, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND
ANALYSIS - RESULTS OF OPERATIONS."
Entergy New Orleans. Refer to information under the heading
"ENTERGY NEW ORLEANS, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND
ANALYSIS - RESULTS OF OPERATIONS."
System Energy. Refer to information under the heading "SYSTEM
ENERGY RESOURCES, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
RESULTS OF OPERATIONS."
Item 8. Financial Statements and Supplementary Data.
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
Entergy Corporation and Subsidiaries:
Report of Management 40
Audit Committee Chairperson's Letter 41
Management's Financial Discussion and Analysis for Entergy Corporation and Subsidiaries 42
Report of Independent Accountants for Entergy Corporation and Subsidiaries 53
Management's Financial Discussion and Analysis for Entergy Corporation and Subsidiaries 54
Statements of Consolidated Income For the Years Ended December 31, 1996, 1995, and
1994 for Entergy Corporation and Subsidiaries 57
Statements of Consolidated Cash Flows For the Years Ended December 31, 1996, 1995,
and 1994 for Entergy Corporation and Subsidiaries 58
Balance Sheets, December 31, 1996 and 1995 for Entergy Corporation and Subsidiaries 60
Statements of Consolidated Retained Earnings and Paid-In Capital for the Years Ended 62
December 31, 1996, 1995, and 1994 for Entergy Corporation and Subsidiaries
Selected Financial Data - Five-Year Comparison for Entergy Corporation and Subsidiaries 63
Report of Independent Accountants for Entergy Arkansas, Inc. 65
Management's Financial Discussion and Analysis for Entergy Arkansas, Inc. 66
Statements of Income For the Years Ended December 31, 1996, 1995, and 1994 for Entergy
Arkansas, Inc. 68
Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 69
Arkansas, Inc.
Balance Sheets, December 31, 1996 and 1995 for Entergy Arkansas, Inc. 70
Statements of Retained Earnings for the Years Ended December 31, 1996, 1995, and 1994 for 72
Entergy Arkansas, Inc.
Selected Financial Data - Five-Year Comparison for Entergy Arkansas, Inc. 73
Report of Independent Accountants for Entergy Gulf States, Inc. 75
Management's Financial Discussion and Analysis for Entergy Gulf States, Inc. 76
Statements of Income (loss) For the Years Ended December 31, 1996, 1995, and 1994 for 78
Entergy Gulf States, Inc.
Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 79
Gulf States, Inc.
Balance Sheets, December 31, 1996 and 1995 for Entergy Gulf States, Inc. 80
Statements of Retained Earnings for the Years Ended December 31, 1996, 1995, and 1994 for 82
Entergy Gulf States, Inc.
Selected Financial Data - Five-Year Comparison for Entergy Gulf States, Inc. 83
Report of Independent Accountants for Entergy Louisiana, Inc. 85
Management's Financial Discussion and Analysis for Entergy Louisiana, Inc. 86
Statements of Income For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 88
Louisiana, Inc.
Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 89
Louisiana, Inc.
Balance Sheets, December 31, 1996 and 1995 for Entergy Louisiana, Inc. 90
Statements of Retained Earnings for the Years Ended December 31, 1996, 1995, and 1994 for 92
Entergy Louisiana, Inc.
Selected Financial Data - Five-Year Comparison for Entergy Louisiana, Inc. 93
Report of Independent Accountants for Entergy Mississippi, Inc. 95
Management's Financial Discussion and Analysis for Entergy Mississippi, Inc. 96
Statements of Income For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 98
Mississippi, Inc.
Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 99
Mississippi, Inc.
Balance Sheets, December 31, 1996 and 1995 for Entergy Mississippi, Inc. 100
Statements of Retained Earnings for the Years Ended December 31, 1996, 1995, and 1994 for 102
Entergy Mississippi, Inc.
Selected Financial Data - Five-Year Comparison for Entergy Mississippi, Inc. 103
Report of Independent Accountants for Entergy New Orleans, Inc. 105
Management's Financial Discussion and Analysis for Entergy New Orleans, Inc. 106
Statements of Income For the Years Ended December 31, 1996, 1995, and 1994 for Entergy New 108
Orleans, Inc.
Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994 for Entergy 109
New Orleans, Inc.
Balance Sheets, December 31, 1996 and 1995 for Entergy New Orleans, Inc. 110
Statements of Retained Earnings for the Years Ended December 31, 1996, 1995, and 1994 for 112
Entergy New Orleans, Inc.
Selected Financial Data - Five-Year Comparison for Entergy New Orleans, Inc. 113
Report of Independent Accountants for System Energy Resources, Inc. 115
Management's Financial Discussion and Analysis for System Energy Resources, Inc. 116
Statements of Income For the Years Ended December 31, 1996, 1995, and 1994 for System 118
Energy Resources, Inc.
Statements of Cash Flows For the Years Ended December 31, 1996, 1995, and 1994 for System 119
Energy Resources, Inc.
Balance Sheets, December 31, 1996 and 1995 for System Energy Resources, Inc. 120
Statements of Retained Earnings for the Years Ended December 31, 1996, 1995, and 1994 for 122
System Energy Resources, Inc.
Selected Financial Data - Five-Year Comparison for System Energy Resources, Inc.. 123
Notes to Financial Statements for Entergy Corporation and Subsidiaries 124
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
REPORT OF MANAGEMENT
The management of Entergy Corporation and subsidiaries has
prepared and is responsible for the financial statements and related
financial information included herein. The financial statements are
based on generally accepted accounting principles. Financial
information included elsewhere in this report is consistent with the
financial statements.
To meet its responsibilities with respect to financial
information, management maintains and enforces a system of internal
accounting controls that is designed to provide reasonable assurance,
on a cost-effective basis, as to the integrity, objectivity, and
reliability of the financial records, and as to the protection of
assets. This system includes communication through written policies
and procedures, an employee Code of Conduct, and an organizational
structure that provides for appropriate division of responsibility and
the training of personnel. This system is also tested by a
comprehensive internal audit program.
The independent public accountants provide an objective assessment
of the degree to which management meets its responsibility for fairness
of financial reporting. They regularly evaluate the system of internal
accounting controls and perform such tests and other procedures as they
deem necessary to reach and express an opinion on the fairness of the
financial statements.
Management believes that these policies and procedures provide
reasonable assurance that its operations are carried out with a high
standard of business conduct.
ED LUPBERGER GERALD D. MCINVALE
Chairman, President, and Chief Executive Executive Vice President and
Officer of Entergy Corporation, Chief Financial Officer
Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi,
and Entergy New Orleans
DONALD C. HINTZ
President and Chief Executive Officer of System Energy
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
AUDIT COMMITTEE CHAIRPERSON'S LETTER
The Entergy Corporation Board of Directors' Audit Committee is
comprised of five directors who are not officers of Entergy
Corporation: Lucie J. Fjeldstad, Chairperson, Admiral Kinnaird McKee,
Eugene H. Owens, Robert D. Pugh, and H. Duke Shackelford. The
committee held five meetings during 1996.
The Audit Committee oversees Entergy Corporation's financial
reporting process on behalf of the Board of Directors and provides
reasonable assurance to the Board that sufficient operating,
accounting, and financial controls are in existence and are adequately
reviewed by programs of internal and external audits.
The Audit Committee discussed with Entergy's internal auditors and
the independent public accountants (Coopers & Lybrand L.L.P.) the
overall scope and specific plans for their respective audits, as well
as Entergy Corporation's financial statements and the adequacy of
Entergy Corporation's internal controls. The committee met, together
and separately, with Entergy's internal auditors and independent public
accountants, without management present, to discuss the results of
their audits, their evaluation of Entergy Corporation's internal
controls, and the overall quality of Entergy Corporation's financial
reporting. The meetings also were designed to facilitate and encourage
private communication between the committee and the internal auditors
and independent public accountants.
LUCIE J. FJELDSTAD
Chairperson, Audit Committee
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
Net cash flow from operations for Entergy, the domestic utility
companies, and System Energy for the years ended December 31, 1996,
1995, and 1994, was as follows:
1996 1995 1994
(In Millions)
Entergy $1,458 $1,426 $1,558
Entergy Arkansas $ 377 $ 338 $ 356
Entergy Gulf States $ 322 $ 401 $ 326
Entergy Louisiana $ 352 $ 385 $ 368
Entergy Mississippi $ 182 $ 185 $ 195
Entergy New Orleans $ 44 $ 99 $ 39
System Energy $ 287 $ 96 $ 337
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. Specifically, 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
Cash from operations, supplemented by cash on hand, was sufficient
to meet substantially all investing and financing requirements of the
domestic utility companies, other than early refinancings of existing
debt, including capital expenditures, dividends, and debt/preferred
stock maturities during 1996. System Energy issued two series of first
mortgage bonds in August 1996 totaling $235 million, of which $210
million was used to meet a scheduled September 1, 1996, System Energy
debt maturity. Entergy's investments in nonregulated businesses in 1996
were funded with debt and equity capital.
Entergy has been able to fund the capital requirements for its
domestic utility businesses with cash from operations resulting from
the items discussed above in Cash Flow. 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 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
In May 1996, Entergy Corporation registered 10 million additional
shares of common stock pursuant to a new dividend reinvestment and
stock purchase plan, which became effective in July 1996. See Note 5
for further discussion.
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 end of 1996, Entergy
Corporation had acquired or participated in foreign electric ventures
in Australia, Argentina, Chile, Pakistan, and Peru, and had acquired
several telecommunications-based businesses in the United States. As
of December 31, 1996, Entergy Corporation had a net investment of $812
million in equity capital in businesses other than its domestic retail
utility business. See Note 13 for a discussion of Entergy
Corporation's acquisition of CitiPower on January 5, 1996, and Note 16
for Entergy Corporation's acquisition of London Electricity plc 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 if required. See Note 9 for a discussion of
capital requirements. Entergy Corporation receives funds through
dividend payments from its subsidiaries. During 1996, such dividend
payments from subsidiaries totaled $554.2 million. In order to improve
its capital structure, Entergy Gulf States has not paid common stock
dividends since the third quarter of 1994. In 1996, Entergy
Corporation paid $405 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 for information on dividend restrictions.
Entergy Corporation and Entergy Gulf States
See Notes 2 and 9 regarding River Bend and Cajun issues, including
recent developments. An adverse ruling regarding River Bend could
result in up to approximately $278 million of potential write-offs (net
of tax) and up to $204 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 dividends.
Entergy Corporation and System Energy
Under the Capital Funds Agreement, Entergy Corporation has agreed
to supply to System Energy sufficient capital to maintain System
Energy's equity capital at 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 as security for specific debt of System Energy,
Entergy Corporation has agreed to make cash capital contributions, if
required, to enable System Energy to make payments on such debt when
due. The Capital Funds Agreement can be terminated by the parties
thereto, subject to consent of certain creditors.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Competition and Industry Challenges
The electric utility industry traditionally has operated as a
regulated monopoly in which there was little opportunity for direct
competition in the provision of electric service. The industry is now
undergoing a transition to an environment of increased retail and
wholesale competition. The causes of the movement toward competition
are numerous and complex. They include legislative and regulatory
changes, technological advances, consumer demands, greater availability
of natural gas, environmental needs, and other factors. The
increasingly competitive environment presents opportunities to compete
for new customers, as well as the risk of loss of existing customers.
The following issues have been identified by Entergy as its major
competitive challenges.
Open Access Transmission
The EPAct addressed a wide range of energy issues and is being
implemented by both FERC and state regulators. The EPAct is designed
to promote wholesale competition among utility and nonutility
generators by amending PUHCA to exempt from regulation a class of EWGs,
among others, consisting of utility affiliates and nonutilities that
own and operate facilities for the generation and transmission of power
for sale at wholesale. The EPAct also gave FERC the authority to order
investor-owned utilities to transmit wholesale power and energy to or
for wholesale purchasers and sellers. This creates potential for
electric utilities and other power producers to gain increased access
to the transmission systems of other utilities to facilitate wholesale
sales.
In response to the EPAct, FERC commenced a rulemaking on the
subject of "stranded costs" in 1994. This rulemaking concerns a
regulatory framework for dealing with recovery of costs that were
prudently incurred by electric utilities to serve customers under the
traditional regulatory framework. These costs may become "stranded" as
a result of increased competition. The risk of exposure to stranded
costs that may result from competition in the industry will depend on
the extent and timing of retail competition, the resolution of
jurisdictional issues concerning stranded cost recovery, and the extent
to which such costs are recovered from departing or remaining
customers.
FERC issued Order No. 888 as the final order in this rulemaking in
April 1996 requiring that all public utilities subject to its
jurisdiction provide comparable wholesale transmission access through
the filing of a single open access tariff. In addition, FERC ruled
that public utilities are entitled to full recovery of prudently
incurred costs associated with wholesale requirements signed before
July 11, 1994. If the costs are stranded by retail wheeling, public
utilities should first seek recovery of these costs from the
appropriate state or local regulators. FERC indicated that it would be
the primary forum for recovery in cases where retail customers become
wholesale purchasers.
FERC also issued Order No. 889, which prescribes the requirements
and procedures for the implementation and maintenance of an open access
same-time information system by each public utility. In addition, FERC
issued a notice of proposed rulemaking concerning capacity reservation
tariffs as the next phase of its efforts to promote wholesale
competition. In July 1996, Entergy Services filed, on behalf of the
domestic utility companies, an open access proforma tariff.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In September 1996, FERC issued an order revising the original
requirement that open access same-time information service sites and
standards of conduct be in place for all transmission providers by
November 1, 1996. FERC scheduled a two-step compliance procedure in
which the operation of open access same-time information service sites
was to begin on a test basis beginning in December 1996, with full
commercial operations and compliance with the standards of conduct
beginning in January 1997. In January 1997, Entergy Services filed its
standards of conduct with FERC, and an open access same-time
information site was established.
In response to Order No. 888, Entergy Services filed a request for
clarification and rehearing regarding the following four issues: (i)
the special nature and treatment of stranded nuclear decommissioning
costs; (ii) the reciprocity rules applicable to rural electric
cooperatives; (iii) the functional unbundling requirements for
registered holding companies; and (iv) the nature of network service.
The request for rehearing is currently pending.
Transition to Competition Filings
Entergy has initiated discussions with its state and local
regulators regarding an orderly transition to a more competitive market
for electricity. As discussed in more detail in Note 2, Entergy
Arkansas, Entergy Gulf States, and Entergy Louisiana have made filings
with their respective state regulators concerning the transition to
competition. These filings call for the accelerated recovery of the
companies' nuclear investment and nuclear-related purchase obligations
over a seven-year period and for the protection of certain classes of
ratepayers from possibly unfairly bearing the burden of cost shifting
which may result from competition. The majority of the domestic
utilities' current net investment in nuclear generation shown in Note 1
is included in the proposals for accelerated recovery filed with state
regulators. See Note 2 for a discussion of Entergy Mississippi's
August 1996 transition to competition filing with the MPSC.
Retail and Wholesale Rate Issues
The retail regulatory philosophy is shifting in some jurisdictions
from traditional cost-of-service regulation to incentive-rate
regulation. Incentive and performance-based rate plans encourage
efficiencies and productivity while permitting utilities and their
customers to share in the results. Entergy Mississippi and Entergy
Louisiana have implemented incentive-rate plans.
Several of the domestic utility companies have recently been
ordered to grant base rate reductions and have refunded or credited
customers for previous overcollections of rates. The continuing
pattern of rate reductions is a characteristic of the competitive
environment in which the domestic utilities operate. See Note 2 for
additional discussion of rate reductions and incentive-rate regulation,
as well as a System Energy proposed rate increase.
Legislative Activity
Retail wheeling is the transmission and/or distribution by an
electric utility of energy produced by another entity over the
utility's transmission and distribution system to a retail customer in
the electric utility's area of service. California, Rhode Island, New
Hampshire, Massachusetts, and Pennsylvania have already initiated the
restructuring of the utility industry within their respective states.
Most other states have initiated studies of industry restructuring.
Included in the majority of the more developed proposals are plans for
utilities to have a reasonable opportunity to recover investments in
utility plant that have previously been determined to be prudently
incurred. Within the areas served by the domestic utility companies,
formal proceedings to study retail competition/industry restructuring
are being conducted by the LPSC, the MPSC, and the PUCT.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In January 1996, the Council voted to investigate retail utility
service competition. Although no date has been set, the investigation
will focus on the impact of competition, service unbundling, and
utility restructuring on consumers of retail electric and gas utility
service in New Orleans.
The PUCT has developed rules that permit greater wholesale
electric competition in Texas, as mandated by the Texas legislature in
its 1995 session. In January 1997, the PUCT submitted reports to the
Texas legislature concerning broader competitive issues such as the
unbundling of electric utility operations, market-based pricing,
performance-based ratemaking, and the identification and recovery of
potential stranded costs as part of the transition to a more
competitive electric industry environment. Currently it is uncertain
what action, if any, the legislature may take with respect to these
issues.
See Note 2 for information related to the LPSC and MPSC generic
proceedings on competition.
A number of bills were introduced in Congress during 1996 that
called for future deregulation of the electric power industry.
Included in these proposals are some that would amend or repeal PUHCA
and/or PURPA. Other provisions in some of the bills would give
consumers the ability to choose their own electricity service.
On February 20, 1997, the SEC issued new Rule 58 under PUHCA,
which will permit registered public utility holding companies to enter
into an array of energy-related businesses for which specific approval
had previously been required. These businesses include, among other
things, management, operations and maintenance contracting for energy-
related facilities, energy efficiency contracting, and the sale and
servicing of a range of electric appliances and equipment. The rule,
which will become effective on March 22, 1997, will permit broader
diversification by Entergy into these businesses.
Municipalization
In some areas of the country, municipalities (or comparable
entities) whose residents are served at retail by an investor-owned
utility pursuant to a franchise, are exploring the possibility of
establishing new electric distribution systems, or extending existing
ones. In some cases, municipalities are also seeking new delivery
points in order to serve retail customers, especially large industrial
customers, which currently receive service from an investor-owned
utility. Where successful, the establishment of a municipal system or
the acquisition by a municipal system of a utility's customers could
result in the utility's inability to recover costs that it has
incurred for the purpose of serving those customers.
Industry Consolidation
Another factor in making the transition to competition nationwide
is the continuing and accelerating trend of utility mergers. A
significant trend developing among the more recent merger
announcements is the proposed combination of electric utilities and
gas pipeline and/or distribution companies.
Functional Unbundling
An additional trend which has recently emerged is the unbundling
of traditional utility functions. In some areas of the country,
utilities are attempting to sell either all or a substantial portion
of their generation assets and will become, in large part, suppliers
of transmission and distribution services only.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Effects of Alternate Energy Sources on Retail Electric Sales to
Industrial and Large Commercial Customers
Many industrial and large commercial customers of the domestic
utility companies have cost structures that are energy sensitive. For
this reason, these customers are currently exploring, or in the future
may explore, available energy alternatives such as fuel switching,
cogeneration, self-generation, production shifting, and efficiency
measures. To the extent that these customers avail themselves of such
options, the domestic utility companies may suffer a loss of load.
Accordingly, in an effort to retain such load, certain of the domestic
utility companies, Entergy Gulf States and Entergy Louisiana in
particular, have negotiated electric service contracts with large
industrial and commercial customers with the specific aim of retaining
the load represented by these customers. Electric service under such
agreements may be provided at tariffed rates lower than would otherwise
be applicable.
The results of operations of the domestic utility companies have
not thus far been materially adversely affected as a result of the
negotiation of retail electric service agreements with industrial and
large commercial customers. This is due in large measure to the
utilities' success in reducing costs, overall load growth, increasing
sales to all customer classes, and the regulatory treatment accorded to
negotiated electric service agreements. However, in view of the
likelihood of increased competition in the electric utility business in
the future, there can be no assurance that the effect of negotiated
electric prices for industrial and large commercial customers will not
eventually have a negative effect on the results of operations of the
domestic utility companies.
During 1995, the Council approved a resolution requiring prior
approval of the regulatory treatment of any lost contribution to fixed
costs as a result of incentive-rate agreements with large industrial or
commercial customers entered into for the purposes of retaining those
customers. The Council's resolution also requires prior approval of
the regulatory treatment of stranded costs resulting from the loss of
large customers.
During 1995, Entergy Louisiana received separate notices from two
large industrial customers that will proceed with proposed cogeneration
projects for the purpose of fulfilling their future electric energy
needs. These customers will continue to purchase their energy
requirements from Entergy Louisiana until their cogeneration facilities
are completed and operational, which is expected to occur in 1997 and
1998. After that time, these customers will continue to purchase
energy from Entergy Louisiana, but at a reduced level. During 1996,
these two customers represented an aggregate of approximately 17% of
total Entergy Louisiana industrial sales, and provided 12% of total
industrial base revenues.
During 1996, Entergy Gulf States entered into agreements
concerning a steam generating station that historically has been
contractually dedicated to providing steam and cogenerated electricity
for a large industrial customer. Under these agreements, the
generating facility was leased to the customer, but Entergy Gulf States
will continue to operate the facility. The customer has announced that
it will spend $190 million to make major improvements to the facility,
including a new 150 MW gas turbine generator. As a result of these
agreements, which were entered into with the expectation that the
customer otherwise would terminate its contracts with Entergy Gulf
States and construct its own generating facilities, Entergy Gulf
States' revenues from this customer are estimated to be reduced by
approximately $33 million annually beginning in August 1997, and
Entergy Gulf States' net income is expected to be reduced by
approximately $15 million annually.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In November 1996, another industrial customer of Entergy Gulf
States with an electrical load of approximately 31 MW ceased purchasing
electricity from Entergy Gulf States due to the commencement of
operations of a cogeneration facility. This is expected to result in
an annual revenue loss to Entergy Gulf States of approximately $5.5
million, and an annual reduction in net income of approximately $3.3
million.
Domestic and Foreign Investments
Entergy Corporation seeks opportunities to expand its domestic and
foreign businesses that are not regulated by domestic state and local
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 1996 investments in domestic and foreign nonregulated
businesses. These investments may involve a greater risk than
domestically regulated utility enterprises. In 1996, Entergy
Corporation's investments in domestic and foreign nonregulated
investments reduced consolidated net income by approximately $25.4
million. While such investments did not have a positive effect on 1996
earnings, management believes they will show profits in the near term.
In an effort to expand into new energy-related businesses, Entergy
plans to commercialize the fiber optic telecommunications network that
connects system facilities and supports its internal business needs.
Entergy will provide long-haul fiber optic capacity to major
telecommunications carriers which, in turn, will market that service to
third parties. The Telecommunications Act of 1996 permits a company
such as Entergy to market such a service, subject to state and local
regulatory approval. This law contains an exemption from PUHCA that
will permit registered utility holding companies to form and capitalize
subsidiaries to engage in telephone, telecommunications, and
information service businesses without SEC approval. However, the law
requires that such telecommunications subsidiaries file for exemption
with the Federal Communications Commission, and that they not engage in
transactions with utility affiliates within their holding company
systems or acquire utility affiliates' rate-based property without
state or local regulatory approval.
During 1996, Entergy Corporation's wholly-owned subsidiary,
Entergy Technology Holding Company, entered the electronic security
monitoring business through the acquisition of six full-service
security monitoring companies. These companies serve an aggregate of
approximately 80,000 customers within the states of North Carolina,
South Carolina, Alabama, and Florida. These acquisitions represent an
investment by Entergy Corporation of approximately $83 million in the
security monitoring industry, substantially all of which was financed
by debt.
In October 1995, FERC issued an order granting EWG status to EPMC,
which was created in 1995 to become a buyer and seller of electric
energy and generating fuels. In February 1996, FERC approved market-
based rate sales of electricity by EPMC. Such approval allows EPMC to
begin providing wholesale customers with a variety of services,
including physical trading. An application currently is pending before
the SEC seeking additional authority for EPMC to purchase and sell
derivative contracts relating to electricity, gas, and fuels.
In January 1997, Entergy Corporation announced that a preliminary
agreement had been reached with Maine Yankee Atomic Power Company
(Maine Yankee) for a new nonutility subsidiary of Entergy Enterprises
to provide management and operations services for the Maine Yankee
nuclear plant. Subsequently, Entergy Nuclear, Inc. (Entergy Nuclear),
a Delaware corporation, was organized for this purpose. On February
13, 1997, an agreement to provide such services for an initial period
of up to one year was executed by Entergy Nuclear and Maine Yankee.
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.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
On January 5, 1996, Entergy Corporation finalized its acquisition
of CitiPower, an electric distribution company serving Melbourne,
Australia, and surrounding suburbs. The purchase price of CitiPower
was approximately $1.2 billion, of which $294 million represented an
equity investment by Entergy Corporation, and the remainder represented
debt that is non-recourse to Entergy Corporation. Entergy Corporation
funded the majority of the equity portion of the investment by using
$230 million of its $300 million line of credit. CitiPower serves
approximately 238,000 customers, the majority of which are commercial
customers. At the time of the acquisition, CitiPower had 846
employees.
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 and Entergy, through an English subsidiary,
controlled over 90% 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. 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.
In 1996, Entergy made a proposal to develop, finance and construct
the Saltend Project, a proposed 1,100 MW gas fired, combined cycle
cogeneration plant to be located adjacent to the British Petroleum
Company chemical facility in northeast England. The development of the
Saltend Project is subject to the negotiation of definitive agreements
and obtaining all necessary governmental approvals, which is expected
to be accomplished in 1997. The total cost of this project, which
would be developed over a period of about two years, currently is
estimated to be approximately $650 million.
On December 20, 1996, Entergy exercised an option to acquire,
through a subsidiary, a 25% equity interest in San Isidro S.A., a
Chilean company which is developing a 370 MW gas fired, combined cycle
generating facility in central Chile. Entergy's interest, which is
expected to be acquired during the first quarter of 1997, will require
an estimated $20 million cash investment as well as a guaranty of up to
$30 million relating to the payment of the turnkey contractor for the
San Isidro project. The other owner of the project, who is also the
developer, is Empresa Nacional de Electricidad, S.A. (ENDESA).
ANO Matters
Entergy Operations has made periodic inspections and repairs on
the tubes in ANO 2's steam generators, which have experienced cracking.
In October 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. See Note 9 for additional information.
Deregulated Utility Operations
Entergy Gulf States discontinued regulatory accounting principles
for its wholesale jurisdiction and steam department and the Louisiana
deregulated portion of River Bend during 1989 and 1991, respectively.
The operating income (loss) from these operations was $13.9 million in
1996, $1.2 million in 1995, and ($5.2) million in 1994.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
The increases in 1996 and 1995 net income from deregulated
operations were principally due to increased revenues, partially offset
by increased depreciation. The future impact of the deregulated
utility operations on Entergy and Entergy Gulf States' results of
operations and financial position will depend on future operating
costs, the efficiency and availability of generating units, and the
future market for energy over the remaining life of the assets. The
deregulated operations will be subject to the requirements of SFAS 121,
as discussed in Note 1, in determining the recognition of any asset
impairment.
Property Tax Exemptions
Waterford 3's local property tax exemptions expired in December
1995. In a March 1996 LPSC order, Entergy Louisiana was permitted to
defer recovery of the estimated Waterford 3 property tax from January
1996 through June 1996. The order allows for the recovery of the
property tax beginning in July 1996 and also for the recovery, from
July 1996 through June 1997, of the related deferral. In April 1996,
Louisiana authorities assessed 1996 property taxes of $19.3 million on
Waterford 3.
River Bend's local property tax exemptions expired in December
1996. The 1997 property tax is estimated to be approximately $13.2
million. The tax related to the Texas jurisdiction was included in the
rate proceeding filed with the PUCT in November 1996. Entergy Gulf
States expects that the LPSC will address the accounting treatment and
recovery of River Bend's property taxes related to the Louisiana
jurisdiction in conjunction with the fourth required Merger-related
earnings review to be filed in May 1997.
Accounting Issues
New Accounting Standard - Entergy adopted SFAS 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" (SFAS 121), effective January 1, 1996. This standard
describes circumstances that may result in assets being impaired and
provides criteria for recognition and measurement of asset impairment.
See Notes 1 and 2 for information regarding the write-off recorded in
1996 and potential additional impacts of the new accounting standard on
Entergy.
Continued Application of SFAS 71 - As a result of the EPAct, the
actions of regulators, 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 continued change in the
competitive environment for the utility's regulated services, the
utility should discontinue application of SFAS 71 for the relevant
portion. That discontinuation should be reported by elimination from
the balance sheet of the effects of any actions of regulators recorded
as regulatory assets and liabilities. The effect of discontinuing
application of SFAS 71 would have a material impact on Entergy's
financial statements.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
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 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 9 for a discussion of proposed changes in the
accounting for decommissioning/closure costs and the potential impact
of these changes on Entergy.
Financial Instruments
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 for additional information concerning Entergy's
derivative instruments outstanding as of December 31, 1996.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Entergy Corporation
We have audited the accompanying consolidated balance sheets of Entergy
Corporation and Subsidiaries as of December 31, 1996 and 1995, and the
related statements of consolidated income, retained earnings and paid-
in-capital and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements are the
responsibility of the Corporation's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Entergy Corporation and Subsidiaries as of December 31, 1996 and 1995,
and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, the
net amount of capitalized costs for River Bend exceed those costs
currently being recovered through rates. At December 31, 1996,
approximately $467 million is not currently being recovered through
rates. Based upon the regulatory decision on this matter, a write-off
of all or a portion of such costs may be required.
As discussed in Note 1 to the consolidated financial statements, at
January 1, 1996 the Company adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of". Also, as discussed in
Note 1 to the consolidated financial statements, in 1996 and 1995,
certain of the Corporation's subsidiaries changed their methods of
accounting for incremental nuclear plant outage maintenance costs.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
On January 5, 1996, Entergy Corporation finalized its acquisition
of CitiPower. In accordance with the purchase method of accounting,
the results of operations for 1995 and 1994 of Entergy Corporation and
subsidiaries reported in its Statements of Consolidated Income and Cash
Flows do not include CitiPower's results of operations. See Note 13
for additional information regarding CitiPower.
Net Income
Consolidated net income decreased in 1996 primarily due to the
$174 million net of tax write-off of River Bend rate deferrals pursuant
to SFAS 121 and the one-time recording in 1995 of the cumulative effect
of the change in accounting method for incremental nuclear refueling
outage maintenance costs at Entergy Arkansas. The effect of these
items was partially offset by the reversal of a Cajun-River Bend
litigation accrual at Entergy Gulf States. Excluding these items, net
income would have increased 17% due to decreased other operation and
maintenance expenses for domestic regulated operations as a result of
restructuring programs, as discussed in Note 12, and ongoing efficiency
improvement programs throughout Entergy.
Consolidated net income increased in 1995 due primarily to
increased electric operating revenues, decreased other operation and
maintenance expenses, the onetime recording of the cumulative effect of
the change in accounting method for incremental nuclear refueling
outage maintenance costs at Entergy Arkansas, and decreased interest
expense, partially offset by increased income taxes and decreased
miscellaneous income - net.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, are discussed under "Revenues and Sales,"
"Expenses," and "Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON," following
the financial statements, for information on operating revenues by
source and kWh sales.
The changes in electric operating revenues for the twelve months
ended December 31, 1996 and 1995, are as follows:
Increase/
(Decrease)
Description 1996 1995
(In Millions)
Change in base revenues ($117.5) $6.6
Rate riders 1.8 15.3
Fuel cost recovery 382.3 (28.0)
Sales volume/weather 108.0 141.3
Other revenue (including unbilled) (49.3) 4.3
Sales for resale 37.6 35.6
System Energy-FERC Settlement - 120.5
------ ------
Total $362.9 $295.6
====== ======
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Electric operating revenues increased in 1996 as a result of
higher fuel adjustment revenues, which do not affect net income, and an
increase in retail energy sales, partially offset by rate reductions at
various domestic utility companies. The increase in retail sales is
primarily the result of an increase in customers and customer usage.
Electric operating revenues increased in 1995 as a result of an
increase in retail energy sales, the effects of the 1994 FERC
Settlement, and increased wholesale revenues, partially offset by rate
reductions at Entergy Gulf States, Entergy Louisiana, and Entergy New
Orleans and lower fuel adjustment revenues. Warmer weather and non-
weather related volume growth contributed equally to the increase in
retail electric energy sales. The increase in sales for resale was
primarily from increased energy sales outside of Entergy's service
area. The increase in other revenues was due to the effects of the
1994 FERC Settlement and the 1994 NOPSI Settlement.
Gas operating revenues increased in 1996 due to higher unit
purchase prices for gas purchased for resale and colder than normal
weather in the first quarter of 1996.
Nonregulated and foreign-energy related business revenues
increased in 1996 due primarily to the acquisition of CitiPower. See
Note 13 for additional information regarding CitiPower.
Expenses
Operating expenses for 1996 include the operating expenses of
CitiPower, which were not included in the prior year financial
statements. See Note 13 for additional information regarding
CitiPower. Excluding the operating expenses of CitiPower, Entergy's
operating expenses increased in 1996. The following discussion
excludes the impact of the acquisition of CitiPower.
In 1996, fuel and purchased power expenses increased as a result
of higher fuel costs and an increase in energy sales. Other operation
and maintenance expenses decreased in 1996 due to lower payroll-related
expenses, resulting from restructuring programs as discussed in Note
12, in addition to ongoing operating efficiency improvement programs
throughout Entergy. Rate deferrals charged against operating expenses
in 1996 represent the deferral of Waterford 3 local property taxes and
the deferral of a portion of the proposed System Energy rate increase
at Entergy Mississippi and Entergy New Orleans. Nuclear refueling
outage expenses decreased primarily due to the effect of deferring the
nuclear refueling outage expenses at Grand Gulf 1 in the fourth quarter
of 1996 rather than recognizing those expenses as incurred. The
majority of the increase in decommissioning costs and depreciation
rates is reflected in the 1995 System Energy FERC rate increase filing,
subject to refund. See Note 2 for a discussion of the proposed rate
increase.
Operating expenses decreased in 1995 primarily due to reduced
other operation and maintenance expenses. Other operation and
maintenance expenses decreased because of lower payroll-related
expenses resulting from the restructuring program discussed in Note 12
and 1994 Merger-related costs. The decrease in operating expenses was
partially offset by an increase in nuclear refueling outage expenses
due to a 1995 refueling outage at Grand Gulf 1 and the adoption of the
change in accounting method at Entergy Arkansas.
Excluding CitiPower, interest on long-term debt decreased for
1996, due primarily to ongoing retirement and refinancing of higher
cost debt at the domestic utility companies and System Energy.
Borrowings by Entergy Corporation from a $300 million line of credit
related to CitiPower investment contributed to the increase in other
interest-net in 1996.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Interest charges decreased in 1995 as a result of the retirement
and refinancing of higher cost long-term debt.
Preferred dividend requirements decreased in 1996 and 1995 due to
stock redemption activities.
Other
Miscellaneous other income - net decreased in 1996 as a result of
the write-off of River Bend rate deferrals pursuant to SFAS 121, as
discussed in Note 2, and a decrease in Grand Gulf 1 carrying charges at
Entergy Arkansas due to a decline in the deferral balance, partially
offset by the Entergy Gulf States' reversal of a Cajun-River Bend
litigation accrual. Income tax expense increased due to higher pretax
income excluding the River Bend rate deferral write-off and the prior
year change in accounting method.
Miscellaneous other income - net decreased in 1995 due primarily
to expansion activities in nonregulated businesses. Income tax expense
increased in 1995 due to higher pretax income and the effects of the
1994 FERC Settlement.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands, Except Share Data)
<S>
Operating Revenues: <C> <C> <C>
Electric $6,450,940 $6,088,018 $5,792,410
Natural gas 134,456 103,992 118,962
Steam products 59,143 49,295 46,559
Nonregulated and foreign energy-related businessess 518,987 45,901 23,889
---------- ---------- ----------
Total 7,163,526 6,287,206 5,981,820
---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 1,635,885 1,395,889 1,450,598
Purchased power 704,744 356,596 340,067
Nuclear refueling outage expenses 55,148 84,972 63,979
Other operation and maintenance 1,577,383 1,528,351 1,613,313
Depreciation, amortization, and decommissioning 790,948 695,865 659,142
Taxes other than income taxes 353,270 300,120 284,349
Rate deferrals (33,874) - -
Amortization of rate deferrals 401,301 408,087 399,121
---------- ---------- ----------
Total 5,484,805 4,769,880 4,810,569
---------- ---------- ----------
Operating Income 1,678,721 1,517,326 1,171,251
---------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 9,951 9,629 11,903
Write-off of River Bend rate deferrals (194,498) - -
Miscellaneous - net 137,583 30,993 50,086
---------- ---------- ----------
Total (46,964) 40,622 61,989
---------- ---------- ----------
Interest Charges:
Interest on long-term debt 674,532 633,851 665,541
Other interest - net 49,053 33,749 22,354
Distributions on preferred securities of subsidiary 4,797 - -
Allowance for borrowed funds used
during construction (8,347) (8,368) (9,938)
Preferred and preference dividend requirements of
subsidiaries and other 70,536 77,969 81,718
---------- ---------- ----------
Total 790,571 737,201 759,675
---------- ---------- ----------
Income Before Income Taxes 841,186 820,747 473,565
Income Taxes 421,159 336,182 131,724
---------- ---------- ----------
Income before the Cumulative Effect
of Accounting Changes 420,027 484,565 341,841
Cumulative Effect of Accounting
Changes (net of income taxes) - 35,415 -
---------- ---------- ----------
Net Income $420,027 $519,980 $341,841
========== ========== ==========
Earnings per average common share
before cumulative effect of
accounting changes $1.83 $2.13 $1.49
Earnings per average common share $1.83 $2.28 $1.49
Dividends declared per common share $1.80 $1.80 $1.80
Average number of common shares
outstanding 229,084,241 227,669,970 228,734,843
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $420,027 $519,980 $341,841
Noncash items included in net income:
Write-off of River Bend rate deferrals 194,498 - -
Cumulative effect of a change in accounting principle - (35,415) -
Change in rate deferrals/excess capacity-net 423,036 390,177 394,344
Depreciation, amortization, and decommissioning 790,948 695,865 659,142
Deferred income taxes and investment tax credits 76,920 (31,006) (151,731)
Allowance for equity funds used during construction (9,951) (9,629) (11,903)
Amortization of deferred revenues - - (14,632)
Changes in working capital:
Receivables (30,322) (30,550) (382)
Fuel inventory (17,220) (28,956) 16,993
Accounts payable 4,011 (19,124) 65,776
Taxes accrued (27,488) 115,250 (25,689)
Interest accrued 7,176 (194) (15,255)
Other working capital accounts (121,692) (85,454) 126,058
Change in other regulatory assets (85,051) (3,876) (33,032)
Decommissioning trust contributions (52,204) (37,756) (24,755)
Provision for estimated losses and reserves 31,063 (37,752) 79,494
Other (146,238) 24,153 151,649
---------- ---------- ----------
Net cash flow provided by operating activities 1,457,513 1,425,713 1,557,918
---------- ---------- ----------
Investing Activities:
Construction/capital expenditures (571,890) (618,436) (676,180)
Allowance for equity funds used during construction 9,951 9,629 11,903
Nuclear fuel purchases (123,929) (207,501) (179,932)
Proceeds from sale/leaseback of nuclear fuel 109,980 226,607 128,675
Acquisition of CitiPower (1,156,112) - -
Investment in nonregulated/nonutility properties (76,091) (172,814) (49,859)
Proceeds from sale of Hub River stock 26,955 - -
Proceeds from sale of Independence 2 39,398 - -
Proceeds from sale of nonutility property - - 26,000
Other (32,619) (28,982) (20,151)
---------- ---------- ----------
Net cash flow used in investing activities (1,774,357) (791,497) (759,544)
---------- ---------- ----------
Financing Activities:
Proceeds from the issuance of:
General and refunding mortgage bonds 39,608 109,285 24,534
First mortgage bonds 431,906 - 59,410
Bank notes and other long-term debt 1,066,858 273,542 164,699
Common Stock 118,087 - -
Preferred securities of subsidiaries' trusts 125,963 - -
Retirement of:
First mortgage bonds (821,575) (225,800) (303,800)
General and refunding mortgage bonds (56,000) (69,200) (45,000)
Other long-term debt (145,110) (221,043) (148,962)
Premium and expense on refinancing sale/leaseback bonds - - (48,497)
Repurchase of common stock - - (119,486)
Redemption of preferred stock (157,503) (46,564) (49,091)
Changes in short-term borrowings - net (24,981) (126,200) 128,200
Common stock dividends paid (405,346) (408,553) (410,223)
---------- ---------- ----------
Net cash flow provided by (used in) financing activities 171,907 (714,533) (748,216)
---------- ---------- ----------
Effect of exchange rates on cash and cash equivalents 50 - -
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents (144,887) (80,317) 50,158
Cash and cash equivalents at beginning of period 533,590 613,907 563,749
---------- ---------- ----------
Cash and cash equivalents at end of period $388,703 $533,590 $613,907
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $677,535 $626,531 $660,150
Income taxes $373,247 $285,738 $218,667
Noncash investing and financing activities:
Capital lease obligations incurred $16,358 - $88,574
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $7,803 $16,614 ($2,198)
Acquisition of nuclear fuel $47,695 - -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $34,807 $42,822
Temporary cash investments - at cost,
which approximates market 346,782 490,768
Special deposits 7,114 -
----------- -----------
Total cash and cash equivalents 388,703 533,590
Notes receivable 1,384 6,907
Accounts receivable:
Customer (less allowance for doubtful accounts of
$9.2 million in 1996 and $7.1 million in 1995) 324,687 333,343
Other 99,066 59,176
Accrued unbilled revenues 351,429 293,461
Deferred fuel 122,184 25,924
Fuel inventory 139,603 122,167
Materials and supplies - at average cost 339,622 345,330
Rate deferrals 444,543 420,221
Prepayments and other 151,312 175,121
----------- -----------
Total 2,362,533 2,315,240
----------- -----------
Other Property and Investments:
Decommissioning trust funds 357,962 277,716
Nonregulated investments 513,058 372,453
Other 59,053 62,166
----------- -----------
Total 930,073 712,335
----------- -----------
Utility Plant:
Electric 22,811,164 21,698,593
Plant acquisition adjustment - Entergy Gulf States 455,425 471,690
Electric plant under leases 679,991 675,425
Property under capital leases - electric 147,277 145,146
Natural gas 168,143 166,872
Steam products 81,743 77,551
Construction work in progress 401,676 482,950
Nuclear fuel under capital leases 250,651 312,782
Nuclear fuel 112,625 49,100
----------- -----------
Total 25,108,695 24,080,109
Less - accumulated depreciation and amortization 8,885,572 8,259,318
----------- -----------
Utility plant - net 16,223,123 15,820,791
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 399,493 1,033,282
SFAS 109 regulatory asset - net 1,196,041 1,279,495
Unamortized loss on reacquired debt 217,664 224,131
Other regulatory assets 435,652 350,601
Long-term receivables 216,082 224,726
CitiPower license (net of $15.6 million of amortization) 606,214 -
Other 379,419 305,329
----------- -----------
Total 3,450,565 3,417,564
----------- -----------
TOTAL $22,966,294 $22,265,930
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $345,620 $558,650
Notes payable 20,686 45,667
Accounts payable 554,558 460,379
Customer deposits 155,534 140,054
Taxes accrued 180,340 207,828
Accumulated deferred income taxes 78,010 72,847
Interest accrued 203,425 195,445
Dividends declared 8,950 12,194
Obligations under capital leases 151,287 151,140
Other 184,157 247,039
----------- -----------
Total 1,882,567 2,091,243
----------- -----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 3,770,760 3,777,644
Accumulated deferred investment tax credits 607,641 612,701
Obligations under capital leases 247,360 303,664
Other 1,298,306 1,277,419
----------- -----------
Total 5,924,067 5,971,428
----------- -----------
Long-term debt 7,590,804 6,777,124
Subsidiaries' preferred stock with sinking fund 216,986 253,460
Subsidiary's preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 130,000 -
Shareholders' Equity:
Subsidiaries' preferred stock without sinking fund 430,955 550,955
Common stock, $.01 par value, authorized 500,000,000
shares; issued 234,456,457 shares in 1996 and
230,017,485 shares in 1995 2,345 2,300
Paid-in capital 4,320,591 4,201,483
Retained earnings 2,341,703 2,335,579
Cumulative foreign currency translation 21,725 -
Less - treasury stock (1,496,118 shares in 1996 and
2,251,318 in 1995) 45,449 67,642
----------- -----------
Total 7,071,870 7,022,675
----------- -----------
Commitments and Contingencies (Notes 2, 9, 10, and 16)
TOTAL $22,966,294 $22,265,930
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS AND PAID-IN CAPITAL
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $2,335,579 $2,223,739 $2,310,082
Add:
Net income 420,027 519,980 341,841
---------- ---------- ----------
Total 2,755,606 2,743,719 2,651,923
Deduct: ---------- ---------- ----------
Dividends declared on common stock 412,250 409,801 411,806
Common stock retirements - - 13,940
Capital stock and other expenses 1,653 (1,661) 2,438
---------- ---------- ----------
Total 413,903 408,140 428,184
---------- ---------- ----------
Retained Earnings, December 31 $2,341,703 $2,335,579 $2,223,739
========== ========== ==========
Paid-in Capital, January 1 $4,201,483 $4,202,134 $4,223,682
Add:
Gain (loss) on reacquisition of
subsidiaries' preferred stock 1,795 (26) (23)
Common stock issuances related to stock plans 117,560 (3,002) -
---------- ---------- ----------
Total 4,320,838 4,199,106 4,223,659
---------- ---------- ----------
Deduct:
Common stock retirements - - 22,468
Capital stock discounts and other expenses 247 (2,377) (943)
---------- ---------- ----------
Total 247 (2,377) 21,525
---------- ---------- ----------
Paid-in Capital, December 31 $4,320,591 $4,201,483 $4,202,134
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1996 1995 1994 1993 1992
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 7,163,526 $ 6,287,206 $ 5,981,820 $ 4,475,224 $ 4,098,332
Income before cumulative
effect of a change in
accounting principle $ 420,027 $ 484,565 $ 341,841 $ 458,089 $ 437,637
Earnings per share before
cumulative effect of accounting
changes $ 1.83 $ 2.13 $ 1.49 $ 2.62 $ 2.48
Dividends declared per share $ 1.80 $ 1.80 $ 1.80 $ 1.65 $ 1.45
Return on average common equity 6.41% 8.11% 5.31% 12.58% 10.31%
Book value per share, year-end (2) $ 28.51 $ 28.41 $ 27.93 $ 28.27 $ 24.35
Total assets (2) $22,966,294 $22,265,930 $22,621,874 $22,876,697 $14,239,537
Long-term obligations (1)(2) $ 8,335,150 $ 7,484,248 $ 7,817,366 $ 8,177,882 $ 5,630,505
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt),
preferred and preference stock with sinking fund, preferred
securities of subsidiary trust, and noncurrent capital lease
obligations.
(2) 1993 amounts include the effects of the Merger in accordance with
the purchase method of accounting for combinations.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating
Revenues:
Residential $2,277,647 $2,177,348 $2,127,820 $1,594,515 $1,441,628
Commercial 1,573,251 1,491,818 1,500,462 1,071,070 1,008,474
Industrial 1,987,640 1,810,045 1,834,155 1,197,695 1,098,147
Governmental 169,287 154,032 159,840 136,471 127,880
---------------------------------------------------------------
Total retail 6,007,825 5,633,243 5,622,277 3,999,751 3,676,129
Sales for resale 376,011 334,874 293,702 280,505 243,507
Other (1) 67,104 119,901 (123,569) 88,713 96,971
---------------------------------------------------------------
Total $6,450,940 $6,088,018 $5,792,410 $4,368,969 $4,016,607
===============================================================
Billed Electric Energy
Sales (Millions of kWh):
Residential 28,303 27,704 26,231 18,946 17,549
Commercial 21,234 20,719 20,050 13,420 12,928
Industrial 44,340 42,260 41,030 24,889 23,610
Governmental 2,449 2,311 2,233 1,887 1,839
---------------------------------------------------------------
Total retail 96,326 92,994 89,544 59,142 55,926
Sales for resale 10,583 10,471 7,908 8,291 7,979
---------------------------------------------------------------
Total 106,909 103,465 97,452 67,433 63,905
===============================================================
</TABLE>
(1)1994 includes the effects of the FERC Settlement, the 1994 NOPSI
Settlement, and an Entergy Gulf States reserve for rate refund.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Entergy Arkansas, Inc.
We have audited the accompanying balance sheets of Entergy Arkansas,
Inc. (formerly Arkansas Power & Light Company) as of December 31, 1996
and 1995, and the related statements of income, retained earnings and
cash flows for each of the three years in the period ended December 31,
1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December
31, 1996 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, in 1995 the Company
changed its method of accounting for incremental nuclear plant outage
maintenance costs.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1996 due primarily to the onetime
recording of the cumulative effect of the change in accounting method
in 1995 for incremental nuclear refueling outage maintenance costs as
discussed in Note 1. Excluding the above mentioned item, net income
would have increased $21.1 million in 1996 principally due to a
decrease in other operation and maintenance expenses.
Net income increased in 1995 due primarily to the onetime
recording of the cumulative effect of the change in accounting method
for incremental nuclear refueling outage maintenance costs. Excluding
the above mentioned item, net income for 1995 decreased due to an
increase in depreciation, amortization, and decommissioning expenses
and income tax expense offset by an increase in revenues from retail
energy sales and a decrease in other operation and maintenance
expenses.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, are discussed under "Revenues and Sales,"
"Expenses," and "Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON," following
the financial statements, for information on operating revenues by
source and kWh sales.
The changes in electric operating revenues for the twelve months
ended December 31, 1996, and 1995 are as follows:
Increase/
(Decrease)
Description 1996 1995
(In Millions)
Change in base revenues ($10.1) ($3.4)
Rate riders (5.3) 15.9
Fuel cost recovery 8.0 25.1
Sales volume/weather 19.5 38.2
Other revenue (including unbilled) (7.1) 9.7
Sales for resale 90.2 (28.0)
----- -----
Total $95.2 $57.5
===== =====
Electric operating revenues increased for 1996 due primarily to
increased sales for resale and retail energy sales. The increase in
sales for resale is due to higher generation availability compared to
1995. The increase in retail energy sales resulted from increased
customer usage, partially attributable to more severe weather as
compared to 1995.
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Electric operating revenues increased for 1995 due primarily to
increased retail energy sales and fuel adjustment revenues partially
offset by a decrease in sales for resale to associated companies. The
increase in sales volume/weather resulted from increased customers and
associated usage, while the remainder resulted from warmer weather in
the summer months. The decrease in sales for resale to associated
companies was caused by changes in generation availability and
requirements among the domestic utility companies.
Expenses
Operating expenses increased in 1996 because of an increase in
fuel, and purchased power expenses, partially offset by reduced
amortization of previous rate deferrals and decreased other operation
and maintenance expenses. The increase in fuel and purchased power
expenses is largely due to an increase in generation and purchases
related to the increase in sales for resale. The decrease in other
operation and maintenance expenses resulted from lower payroll
expenses. Payroll expenses decreased as a result of restructuring
costs recorded in 1995 and the resulting decrease in employees.
Operating expenses increased in 1995 because of an increase in
depreciation, amortization, and decommissioning expenses, offset by a
decrease in other operation and maintenance expenses. Depreciation,
amortization, and decommissioning expenses increased primarily due to
additions and upgrades at ANO and additions to transmission lines,
substations, and other equipment. Also, decommissioning expense
increased due to the implementation of the decommissioning rate rider
which resulted from the decommissioning study performed in 1994. The
decrease in other operation and maintenance expenses is largely due to
restructuring costs and storm damage costs recorded in 1994 .
Other
Miscellaneous other income - net decreased in 1996 due to reduced
Grand Gulf 1 carrying charges as a result of a decline in the deferral
balance. Income tax expense increased in 1996 because of higher pretax
income.
Income tax expense increased in 1995 primarily due to the write-
off in 1994 of investment tax credits in accordance with the FERC
Settlement. Income tax expense also increased due to higher pre-tax
income in 1995.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Revenues $1,743,433 $1,648,233 $1,590,742
---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 257,008 231,619 261,932
Purchased power 432,825 363,199 328,379
Nuclear refueling outage expenses 29,365 31,754 33,107
Other operation and maintenance 358,789 375,059 390,472
Depreciation, amortization, and decommissioning 167,878 162,087 149,878
Taxes other than income taxes 37,688 38,319 33,610
Amortization of rate deferrals 149,730 174,329 166,793
---------- ---------- ----------
Total 1,433,283 1,376,366 1,364,171
---------- ---------- ----------
Operating Income 310,150 271,867 226,571
---------- ---------- ----------
Other Income:
Allowance for equity funds used
during construction 3,886 3,567 4,001
Miscellaneous - net 32,591 46,227 48,049
---------- ---------- ----------
Total 36,477 49,794 52,050
---------- ---------- ----------
Interest Charges:
Interest on long-term debt 98,531 106,853 106,001
Other interest - net 6,257 8,485 4,811
Distributions on preferred securities of subsidiary 1,927 - -
Allowance for borrowed funds used
during construction (2,330) (2,424) (3,674)
---------- ---------- ----------
Total 104,385 112,914 107,138
---------- ---------- ----------
Income Before Income Taxes 242,242 208,747 171,483
Income Taxes 84,444 72,082 29,220
---------- ---------- ----------
Income before the Cumulative Effect
of Accounting Changes 157,798 136,665 142,263
Cumulative Effect of Accounting
Changes (net of income taxes) - 35,415 -
---------- ---------- ----------
Net Income 157,798 172,080 142,263
Preferred Stock Dividend Requirements
and Other 16,110 18,093 19,275
---------- ---------- ----------
Earnings Applicable to Common Stock $141,688 $153,987 $122,988
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $157,798 $172,080 $142,263
Noncash items included in net income:
Cumulative effect of a change in accounting principle - (35,415) -
Change in rate deferrals/excess capacity-net 139,701 125,504 102,959
Depreciation, amortization, and decommissioning 167,878 162,087 149,878
Deferred income taxes and investment tax credits (46,026) (33,882) (54,080)
Allowance for equity funds used during construction (3,886) (3,567) (4,001)
Changes in working capital:
Receivables (4,292) (39,209) 10,817
Fuel inventory 137 (22,895) 17,359
Accounts payable (1,112) 55,732 (32,114)
Taxes accrued 14,035 (5,080) 2,226
Interest accrued (2,615) (824) (346)
Other working capital accounts (7,529) (28,375) 20,324
Decommissioning trust contributions (18,961) (16,702) (11,581)
Provision for estimated losses and reserves 4,125 2,849 16,617
Other (22,675) 6,055 (4,744)
-------- -------- --------
Net cash flow provided by operating activities 376,578 338,358 355,577
-------- -------- --------
Investing Activities:
Construction expenditures (145,529) (165,071) (179,116)
Allowance for equity funds used during construction 3,886 3,567 4,001
Nuclear fuel purchases (26,084) (41,219) (40,074)
Proceeds from sale/leaseback of nuclear fuel 25,451 41,832 40,074
-------- -------- --------
Net cash flow used in investing activities (142,276) (160,891) (175,115)
-------- -------- --------
Financing Activities:
Proceeds from issuance of:
First mortgage bonds 84,256 - -
Other long-term debt - 118,662 27,992
Preferred securities of subsidiary trust 58,168 - -
Retirement of:
First mortgage bonds (112,807) (25,800) (800)
Other long-term debt (1,700) (124,025) (30,231)
Redemption of preferred stock (69,624) (9,500) (11,500)
Changes in short-term borrowings - net - (34,000) 12,605
Dividends paid:
Common stock (142,800) (153,400) (80,000)
Preferred stock (17,736) (18,362) (19,597)
-------- -------- --------
Net cash flow used in financing activities (202,243) (246,425) (101,531)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents 32,059 (68,958) 78,931
Cash and cash equivalents at beginning of period 11,798 80,756 1,825
-------- -------- --------
Cash and cash equivalents at end of period $43,857 $11,798 $80,756
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $94,662 $102,851 $98,787
Income taxes $110,211 $113,080 $79,553
Noncash investing and financing activities:
Capital lease obligations incurred $16,358 - $47,719
Acquisition of nuclear fuel $27,500 - -
Change in unrealized appreciation of
decommissioning trust assets $5,968 $9,128 $1,361
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $5,117 $7,780
Temporary cash investments - at cost,
which approximates market:
Associated companies 17,462 908
Other 21,278 3,110
---------- ----------
Total cash and cash equivalents 43,857 11,798
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.3 million in 1996 and $2.1 million in 1995) 71,144 81,686
Associated companies 45,303 40,577
Other 5,862 6,962
Accrued unbilled revenues 104,764 93,556
Fuel inventory - at average cost 57,319 57,456
Materials and supplies - at average cost 72,976 75,030
Rate deferrals 153,141 131,634
Deferred excess capacity 9,005 11,088
Deferred nuclear refueling outage costs 24,534 32,824
Prepayments and other 7,491 8,974
---------- ----------
Total 595,396 551,585
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,211 11,122
Decommissioning trust fund 203,274 166,832
Other - at cost (less accumulated depreciation) 5,058 5,085
---------- ----------
Total 219,543 183,039
---------- ----------
Utility Plant:
Electric 4,578,728 4,438,519
Property under capital leases 57,869 48,968
Construction work in progress 83,524 119,874
Nuclear fuel under capital lease 79,103 98,691
Nuclear fuel 27,500 -
---------- ----------
Total 4,826,724 4,706,052
Less - accumulated depreciation and amortization 1,976,204 1,846,112
---------- ----------
Utility plant - net 2,850,520 2,859,940
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 75,249 228,390
Deferred excess capacity - 5,984
SFAS 109 regulatory asset - net 244,767 219,906
Unamortized loss on reacquired debt 56,664 58,684
Other regulatory assets 80,257 68,160
Other 31,421 28,727
---------- ----------
Total 488,358 609,851
---------- ----------
TOTAL $4,153,817 $4,204,415
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $32,465 $28,700
Notes payable 667 667
Accounts payable:
Associated companies 91,205 42,156
Other 97,589 120,250
Customer deposits 21,800 18,594
Taxes accrued 54,194 40,159
Accumulated deferred income taxes 70,506 48,992
Interest accrued 27,625 30,240
Dividends declared 2,832 4,458
Co-owner advances 33,873 34,450
Deferred fuel cost 6,955 17,837
Obligations under capital leases 53,012 54,697
Other 15,135 26,238
---------- ----------
Total 507,858 467,438
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 785,994 823,471
Accumulated deferred investment tax credits 108,307 112,890
Obligations under capital leases 83,940 93,574
Other 113,998 116,762
---------- ----------
Total 1,092,239 1,146,697
---------- ----------
Long-term debt 1,255,388 1,281,203
Preferred stock with sinking fund 40,027 49,027
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 60,000 -
Shareholder's Equity:
Preferred stock without sinking fund 116,350 176,350
Common stock, no par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares in 1996 and 1995 470 470
Paid-in capital 590,169 590,844
Retained earnings 491,316 492,386
---------- ----------
Total 1,198,305 1,260,050
---------- ----------
Commitments and Contingencies (Note 2, 9, and 10)
TOTAL $4,153,817 $4,204,415
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $492,386 $491,799 $448,811
Add:
Net income 157,798 172,080 142,263
Increase in investment in subsidiary 42 - -
-------- -------- --------
Total 650,226 663,879 591,074
Deduct: -------- -------- --------
Dividends declared:
Preferred stock 16,110 18,093 19,275
Common stock 142,800 153,400 80,000
-------- -------- --------
Total 158,910 171,493 99,275
-------- -------- --------
Retained Earnings, December 31 (Note 8) $491,316 $492,386 $491,799
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY ARKANSAS, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $1,743,433 $1,648,233 $ 1,590,742 $1,591,568 $ 1,521,129
Income before cumulative
effect of accounting changes $ 157,798 $ 136,665 $ 142,263 $ 155,110 $ 130,529
Total assets $4,153,817 $4,204,415 $ 4,292,215 $4,334,105 $ 4,038,811
Long-term obligations (1) $1,439,355 $1,423,804 $ 1,446,940 $1,478,203 $ 1,453,588
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt),
preferred stock with sinking fund, preferred securities of
subsidiary trust, and noncurrent capital lease obligations.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $546,100 $542,862 $506,160 $528,734 $476,090
Commercial 323,328 318,475 307,296 306,742 291,367
Industrial 364,943 362,854 338,988 336,856 325,569
Governmental 16,989 17,084 16,698 16,670 17,700
---------------------------------------------------------------
Total retail 1,251,360 1,241,275 1,169,142 1,189,002 1,110,726
Sales for resale
Associated companies 248,211 178,885 212,314 175,784 203,470
Non-associated companies 207,887 195,844 182,920 203,696 181,558
Other 35,975 32,229 26,366 23,086 25,375
---------------------------------------------------------------
Total $1,743,433 $1,648,233 $1,590,742 $1,591,568 $1,521,129
===============================================================
Billed Electric Energy
Sales (Millions of kWh):
Residential 6,023 5,868 5,522 5,680 5,102
Commercial 4,390 4,267 4,147 4,067 3,841
Industrial 6,487 6,314 5,941 5,690 5,509
Governmental 234 243 231 230 248
---------------------------------------------------------------
Total retail 17,134 16,692 15,841 15,667 14,700
Sales for resale
Associated companies 10,471 8,386 10,591 8,307 10,357
Non-associated companies 6,720 5,066 4,906 5,643 5,056
---------------------------------------------------------------
Total 34,325 30,144 31,338 29,617 30,113
===============================================================
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Entergy Gulf States, Inc.
We have audited the accompanying balance sheets of Entergy Gulf States,
Inc. (formerly Gulf States Utilities Company) as of December 31, 1996
and 1995 and the related statements of income (loss), retained earnings
and cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December
31, 1996 in conformity with generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, the
net amount of capitalized costs for River Bend exceed those costs
currently being recovered through rates. At December 31, 1996,
approximately $467 million is not currently being recovered through
rates. Based upon the regulatory decision on this matter, a write-off
of all or a portion of such costs may be required.
As discussed in Note 1 to the consolidated financial statements, at
January 1, 1996 the Company adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of".
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1996 principally due to the $174 million
net of tax write-off of River Bend rate deferrals required by the
adoption of SFAS 121. This write-off was partially offset by the third
quarter reversal of the Cajun-River Bend litigation accrual. Excluding
the River Bend rate deferrals and the Cajun-River Bend litigation
accrual, net income for 1996 would have increased slightly due to an
increase in electric operating revenue and a decrease in other
operation and maintenance expenses.
Net income increased in 1995 principally as the result of an
increase in electric operating revenues, a decrease in other operation
and maintenance expenses, and an increase in other income. These
changes were partially offset by higher income taxes.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, are discussed under "Revenues and Sales,"
"Expenses," and "Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON," following
the financial statements, for information on operating revenues by
source and kWh sales.
The changes in electric operating revenues for the twelve months
ended December 31, 1996 and 1995, are as follows:
Increase/
(Decrease)
Description 1996 1995
(In Millions)
Change in base revenues ($60.3) $32.0
Fuel cost recovery 152.0 (29.6)
Sales volume/weather 65.1 35.0
Other revenue (including unbilled) 12.8 1.1
Sales for resale (32.6) 31.3
------ -----
Total $137.0 $69.8
====== =====
Electric operating revenues increased in 1996 primarily due to
increased fuel adjustment revenues, which do not affect net income,
increased customers, and increased customer usage. These increases
were partially offset by rate reductions in effect for both Texas and
Louisiana retail customers and increased base revenues for 1995, as
discussed below. Sales for resale to associated companies decreased as
a result of changes in generation availability and requirements among
the domestic utility companies.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Electric operating revenues increased in 1995 primarily due to
increased sales volume/weather and higher sales for resale. These
increases were partially offset by lower fuel adjustment revenues,
which do not affect net income. Base revenues also increased in 1995
as a result of rate refund reserves established in 1994, which were
subsequently reduced as a result of an amended PUCT order. The
increase in base revenues was partially offset by rate reductions in
effect for Texas and Louisiana. Sales volume/weather increased because
of warmer than normal summer weather and an increase in usage by all
customer classes. Sales for resale increased as a result of changes in
generation availability and requirements among the domestic utility
companies.
Gas operating revenues and steam operating revenues increased for
1996 primarily due to higher fuel prices and increased usage.
Expenses
Operating expenses increased in 1996 as a result of higher fuel
expenses, including purchased power, partially offset by lower other
operation and maintenance expenses. Fuel and purchase power expenses,
taken together, increased because of higher gas prices and increased
energy requirements resulting from higher energy sales. Other
operation and maintenance expenses decreased primarily due to lower
payroll-related expenses associated with restructuring programs accrued
for in 1995.
Operating expenses decreased in 1995 as a result of lower other
operation and maintenance expenses and purchased power expenses. Other
operation and maintenance expenses decreased primarily due to changes
made in 1994 for Merger-related costs, restructuring costs, and certain
pre-acquisition contingencies including unfunded Cajun-River Bend cost
and environmental clean-up cost. Purchased power expenses decreased
because of the availability of less expensive gas and nuclear fuel for
use in electric generation as well as changes in the generation
requirements among the domestic utility companies. Another reason for
the decrease in purchased power expenses in 1995 was the recording of a
provision for refund of disallowed purchase power expenses in 1994.
Other
Other income decreased in 1996 due to the write-off of River Bend
rate deferrals pursuant to the adoption of SFAS 121 (see Note 2 for
additional information). This decrease was partially offset by the
Cajun-River Bend litigation accrual reversal. Income taxes increased
primarily due to higher taxable income, which excludes the net effect
of the write-off of River Bend rate deferrals and the Cajun-River Bend
accrual reversal .
Other miscellaneous income increased in 1995 as the result of
certain adjustments made in 1994 related to pre-acquisition
contingencies including Cajun-River Bend litigation (see Note 9 for
additional information), the write-off of previously disallowed rate
deferrals, and plant held for future use. As a result of these
charges, income taxes on other income were significantly higher in 1995
compared to 1994.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF INCOME (LOSS)
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Revenues:
Electric $1,925,988 $1,788,964 $1,719,201
Natural gas 34,050 23,715 31,605
Steam products 59,143 49,295 46,559
---------- ---------- ----------
Total 2,019,181 1,861,974 1,797,365
---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 520,065 516,812 517,177
Purchased power 295,960 169,767 192,937
Nuclear refueling outage expenses 8,660 10,607 12,684
Other operation and maintenance 402,719 432,647 505,701
Depreciation, amortization, and decommissioning 206,070 202,224 197,151
Taxes other than income taxes 102,170 102,228 98,096
Amortization of rate deferrals 71,639 66,025 66,416
---------- ---------- ----------
Total 1,607,283 1,500,310 1,590,162
---------- ---------- ----------
Operating Income 411,898 361,664 207,203
---------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 2,618 1,125 1,334
Write-off of plant held for future use - - (85,476)
Write-off of River Bend rate deferrals (194,498) - -
Miscellaneous - net 69,841 22,573 (64,843)
---------- ---------- ----------
Total (122,039) 23,698 (148,985)
---------- ---------- ----------
Interest Charges:
Interest on long-term debt 181,071 191,341 195,414
Other interest - net 12,819 8,884 8,720
Allowance for borrowed funds used
during construction (2,235) (1,026) (1,075)
---------- ---------- ----------
Total 191,655 199,199 203,059
---------- ---------- ----------
Income (Loss) Before Income Taxes 98,204 186,163 (144,841)
Income Taxes 102,091 63,244 (62,086)
---------- ---------- ----------
Net Income (Loss) (3,887) 122,919 (82,755)
Preferred Stock Dividend Requirements
and Other 28,505 29,643 29,919
---------- ---------- ----------
Earnings (Loss) Applicable to Common Stock ($32,392) $93,276 ($112,674)
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income (loss) ($3,887) $122,919 ($82,755)
Noncash items included in net income (loss):
Write-off of River Bend rate deferrals 194,498 - -
Change in rate deferrals 72,597 66,025 96,979
Depreciation, amortization, and decommissioning 206,070 202,224 197,151
Deferred income taxes and investment tax credits 101,380 63,231 (62,171)
Allowance for equity funds used during construction (2,618) (1,125) (1,334)
Write-off of plant held for future use - - 85,476
Changes in working capital:
Receivables 3,691 40,193 (72,341)
Fuel inventory (12,868) (6,357) (2,336)
Accounts payable (26,706) (4,820) 60,112
Taxes accrued (1,266) 24,935 (10,378)
Interest accrued (7,186) 1,510 (4,189)
Reserve for rate refund - (56,972) 56,972
Deferred fuel (68,349) (24,840) (431)
Other working capital accounts (70,775) (16,079) 34,212
Change in other regulatory assets (17,303) 7,332 5,522
Decommissioning trust contributions (5,922) (8,147) (3,202)
Provision for estimated losses and reserves (1,885) 10,119 4,181
Other (37,116) (19,394) 24,891
-------- -------- --------
Net cash flow provided by operating activities 322,355 400,754 326,359
-------- -------- --------
Investing Activities:
Construction expenditures (154,993) (185,944) (155,989)
Allowance for equity funds used during construction 2,618 1,125 1,334
Nuclear fuel purchases (25,124) (1,425) (31,178)
Proceeds from sale/leaseback of nuclear fuel 26,523 542 29,386
-------- -------- --------
Net cash flow used in investing activities (150,976) (185,702) (156,447)
-------- -------- --------
Financing Activities:
Proceeds from the issuance of long-term debt 780 2,277 101,109
Retirement of:
First mortgage bonds (195,417) - -
Other long-term debt (50,425) (50,425) (102,425)
Redemption of preferred and preference stock (10,179) (7,283) (6,070)
Dividends paid:
Common stock - - (289,100)
Preferred and preference stock (28,336) (29,661) (30,131)
-------- -------- --------
Net cash flow used in financing activities (283,577) (85,092) (326,617)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (112,198) 129,960 (156,705)
Cash and cash equivalents at beginning of period 234,604 104,644 261,349
-------- -------- --------
Cash and cash equivalents at end of period $122,406 $234,604 $104,644
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $189,962 $187,918 $191,850
Income taxes $285 $208 $251
Noncash investing and financing activities:
Capital lease obligations incurred - - $31,178
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $1,604 $2,121 ($915)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $6,573 $13,751
Temporary cash investments - at cost,
which approximates market:
Associated companies 45,234 46,336
Other 70,599 174,517
---------- ----------
Total cash and cash equivalents 122,406 234,604
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.0 million in 1996 and $1.6 million in 1995) 87,883 110,187
Associated companies 2,777 1,395
Other 30,758 15,497
Accrued unbilled revenues 75,351 73,381
Deferred fuel costs 99,503 31,154
Accumulated deferred income taxes 56,714 43,465
Fuel inventory - at average cost 45,009 32,141
Materials and supplies - at average cost 86,157 91,288
Rate deferrals 105,456 97,164
Prepayments and other 16,321 15,566
---------- ----------
Total 728,335 745,842
---------- ----------
Other Property and Investments:
Decommissioning trust fund 41,983 32,943
Other - at cost (less accumulated depreciation) 38,358 28,626
---------- ----------
Total 80,341 61,569
---------- ----------
Utility Plant:
Electric 7,112,021 6,942,983
Natural Gas 45,443 45,789
Steam products 81,743 77,551
Property under capital leases 72,800 77,918
Construction work in progress 112,137 148,043
Nuclear fuel under capital lease 49,833 69,853
---------- ----------
Total 7,473,977 7,362,137
Less - accumulated depreciation and amortization 2,846,083 2,664,943
---------- ----------
Utility plant - net 4,627,894 4,697,194
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 120,158 419,904
SFAS 109 regulatory asset - net 372,817 453,628
Unamortized loss on reacquired debt 54,761 61,233
Other regulatory assets 45,139 27,836
Long-term receivables 216,082 224,727
Other 185,921 169,125
---------- ----------
Total 994,878 1,356,453
---------- ----------
TOTAL $6,431,448 $6,861,058
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $160,865 $145,425
Accounts payable:
Associated companies 55,630 31,349
Other 85,541 136,528
Customer deposits 25,572 21,983
Taxes accrued 36,147 37,413
Interest accrued 49,651 56,837
Nuclear refueling reserve 12,354 22,627
Obligations under capital leases 39,110 37,773
Other 18,186 86,653
---------- ----------
Total 483,056 576,588
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,200,935 1,177,144
Accumulated deferred investment tax credits 219,188 208,618
Obligations under capital leases 83,524 108,078
Deferred River Bend finance charges 33,688 58,047
Other 539,752 558,750
---------- ----------
Total 2,077,087 2,110,637
---------- ----------
Long-term debt 1,915,346 2,175,471
Preferred stock with sinking fund 77,459 87,654
Preference stock 150,000 150,000
Shareholder's Equity:
Preferred stock without sinking fund 136,444 136,444
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares in 1996 and 1995 114,055 114,055
Paid-in capital 1,152,689 1,152,505
Retained earnings 325,312 357,704
---------- ----------
Total 1,728,500 1,760,708
---------- ----------
Commitments and Contingencies (Note 2, 9, and 10)
TOTAL $6,431,448 $6,861,058
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $357,704 $264,626 $666,401
Add:
Net income (loss) (3,887) 122,919 (82,755)
-------- -------- --------
Total 353,817 387,545 583,646
Deduct: -------- -------- --------
Dividends declared:
Preferred and preference stock 28,336 29,482 29,831
Common stock - - 289,100
Preferred and preference stock
redemption and other 169 359 89
-------- -------- --------
Total 28,505 29,841 319,020
-------- -------- --------
Retained Earnings, December 31 (Note 8) $325,312 $357,704 $264,626
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $2,019,181 $1,861,974 $1,797,365 $1,827,620 $1,773,374
Income (loss) before
extraordinary items and
the cumulative effect of
accounting changes $ (3,887) $ 122,919 $ (82,755) $ 69,461 $ 139,413
Total assets $6,431,448 $6,861,058 $6,843,461 $7,137,351 $7,164,447
Long-term obligations (1) $2,226,329 $2,521,203 $2,689,042 $2,772,002 $2,798,768
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt),
preferred and preference stock with sinking fund, and noncurrent
capital lease obligations.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $612,398 $573,566 $569,997 $585,799 $560,552
Commercial 444,133 412,601 414,929 415,267 400,803
Industrial 685,178 604,688 626,047 650,230 642,298
Governmental 31,023 25,042 25,242 26,118 26,195
---------------------------------------------------------------
Total retail 1,772,732 1,615,897 1,636,215 1,677,414 1,629,848
Sales for resale
Associated companies 20,783 62,431 45,263 - -
Non-associated companies 76,173 67,103 52,967 31,898 24,485
Other (1) 56,300 43,533 (15,244) 38,649 40,203
---------------------------------------------------------------
Total $1,925,988 $1,788,964 $1,719,201 $1,747,961 $1,694,536
===============================================================
Billed Electric Energy
Sales (Millions of kWh):
Residential 8,035 7,699 7,351 7,192 6,825
Commercial 6,417 6,219 6,089 5,711 5,474
Industrial 16,661 15,393 15,026 14,294 14,413
Governmental 438 311 297 296 302
---------------------------------------------------------------
Total retail 31,551 29,622 28,763 27,493 27,014
Sales for resale
Associated companies 656 2,935 1,866 - -
Non-associated companies 2,148 2,212 1,650 666 540
---------------------------------------------------------------
Total Electric Department 34,355 34,769 32,279 28,159 27,554
Steam Department 1,826 1,742 1,659 1,597 1,722
---------------------------------------------------------------
Total 36,181 36,511 33,938 29,756 29,276
===============================================================
</TABLE>
(1) 1994 includes the effects of an Entergy Gulf States reserve for
rate refund.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Entergy Louisiana, Inc.
We have audited the accompanying balance sheets of Entergy Louisiana,
Inc. (formerly Louisiana Power & Light Company) as of December 31, 1996
and 1995, and the related statements of income, retained earnings and
cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December
31, 1996 in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1996 due principally to a decrease in base
rate revenues, partially offset by decreases in other operation and
maintenance expense and lower interest on long-term debt.
Net income decreased in 1995 due to an April 1995 rate reduction
and higher income taxes, partially offset by lower other operation and
maintenance expenses.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, are discussed under "Revenues and Sales" and
"Expenses" and "Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON," following
the financial statements, for information on operating revenues by
source and kWh sales.
The changes in operating revenues for the twelve months ended
December 31, 1996 and 1995 are as follows:
Increase/
(Decrease)
Description 1996 1995
(In Millions)
Change in base revenues ($36.4) ($29.9)
Fuel cost recovery 160.2 (35.9)
Sales volume/weather 19.7 40.7
Other revenue (including unbilled) 3.9 (23.3)
Sales for resale 6.6 12.9
------ ------
Total $154.0 ($35.5)
====== ======
Operating revenues were higher in 1996 due primarily to higher
fuel adjustment revenues, which do not affect net income, and to
increased sales of energy, principally caused by modest growth in the
number of customers. These increases were partially offset by the
impact of base rate reductions ordered in the second quarters of 1995
and 1996, and by a settlement of related rate issues during the fourth
quarter of 1995.
Operating revenues were lower in 1995, due primarily to the base
rate reduction mentioned above and to lower fuel adjustment revenues,
which do not affect net income. This decrease was partially offset by
increased customer usage, principally caused by warmer than usual
summer weather. The completion of the amortization of proceeds from
litigation with a gas supplier in the second quarter of 1994 also
contributed to the decrease in other revenue, partially offset by
higher sales to non-associated utilities.
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Operating expenses increased in 1996 due primarily to increases in
fuel and purchased power expenses, higher depreciation, and higher
taxes other than income taxes. These increases were partially offset
by a decrease in other operation and maintenance expense as a result of
restructuring charges recorded in 1995 and by the recording of rate
deferrals in 1996, as discussed below. The increase in fuel and
purchased power expenses is due to both higher gas costs and increased
energy sales. Depreciation expense increased due to capital
improvements to transmission lines and substations and due to an
increase in the depreciation rate associated with Waterford 3. Taxes
other than income taxes increased largely as a result of the expiration
of Waterford 3's local property tax exemption in December 1995. This
increase was offset for the first six months of 1996 by the recording
of the LPSC-approved rate deferral for these taxes as discussed in Note
2.
Operating expenses decreased in 1995 due to decreases in fuel and
purchased power expenses, and other operation and maintenance expenses,
partially offset by an increase in depreciation. The decrease in fuel
expenses is due to lower fuel prices partially offset by an increase in
generation. Other operation and maintenance expenses decreased because
of lower payroll-related expenses as a result of the restructuring
program discussed in Note 12, power plant waste water site closures in
1994, and a court settlement reducing legal expense. Depreciation
expense increased due to capital improvements to distribution lines and
substations and to an increase in the depreciation rate associated with
Waterford 3.
Other
Interest charges on long-term debt decreased for 1996, due to the
retirement and refinancing of higher-cost long-term debt.
For 1995, income taxes increased due to the write-off in 1994 of
deferred investment tax credits in accordance with the 1994 FERC
Settlement, a decrease in tax depreciation associated with Waterford 3,
and higher pre-tax income.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Revenues $1,828,867 $1,674,875 $1,710,415
---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 419,331 300,015 331,422
Purchased power 403,322 351,583 366,564
Nuclear refueling outage expenses 15,885 17,675 18,187
Other operation and maintenance 297,667 311,535 350,854
Depreciation, amortization, and decommissioning 167,779 161,023 151,994
Taxes other than income taxes 72,329 55,867 56,101
Rate deferrals (10,767) - -
Amortization of rate deferrals 26,875 28,422 28,422
---------- ---------- ----------
Total 1,392,421 1,226,120 1,303,544
---------- ---------- ----------
Operating Income 436,446 448,755 406,871
---------- ---------- ----------
Other Income:
Allowance for equity funds used
during construction 862 1,950 3,486
Miscellaneous - net 2,933 2,831 747
---------- ---------- ----------
Total 3,795 4,781 4,233
---------- ---------- ----------
Interest Charges:
Interest on long-term debt 122,604 129,691 129,952
Other interest - net 6,938 7,210 6,494
Distributions on preferred securities of subsidiary 2,870 - -
Allowance for borrowed funds used
during construction (1,493) (2,016) (2,469)
---------- ---------- ----------
Total 130,919 134,885 133,977
---------- ---------- ----------
Income Before Income Taxes 309,322 318,651 277,127
Income Taxes 118,560 117,114 63,288
---------- ---------- ----------
Net Income 190,762 201,537 213,839
Preferred Stock Dividend Requirements
and Other 19,947 21,307 23,319
---------- ---------- ----------
Earnings Applicable to Common Stock $170,815 $180,230 $190,520
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $190,762 $201,537 $213,839
Noncash items included in net income:
Change in rate deferrals 19,860 28,422 28,422
Depreciation, amortization, and decommissioning 167,779 161,023 151,994
Deferred income taxes and investment tax credits 18,809 2,450 (15,972)
Allowance for equity funds used during construction (862) (1,950) (3,486)
Amortization of deferred revenues - - (14,632)
Changes in working capital:
Receivables (4,889) (8,069) 1,094
Accounts payable 22,838 4,420 (6,811)
Taxes accrued (11,222) 20,472 (16,970)
Interest accrued 5,047 1,215 846
Other working capital accounts (26,831) (16,993) 31,064
Decommissioning trust contributions (8,790) (7,493) (4,815)
Change in other regulatory assets (6,385) 1,801 1,101
Provision for estimated losses and reserves 3,240 (1,996) 26,780
Other (17,685) (182) (24,833)
-------- -------- --------
Net cash flow provided by operating activities 351,671 384,657 367,621
-------- -------- --------
Investing Activities:
Construction expenditures (103,187) (120,244) (140,669)
Allowance for equity funds used during construction 862 1,950 3,486
Nuclear fuel purchases - (44,707) -
Proceeds from sale/leaseback of nuclear fuel - 47,293 -
-------- -------- --------
Net cash flow used in investing activities (102,325) (115,708) (137,183)
-------- -------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds 113,994 - -
Other long-term debt - 16,577 19,946
Preferred securities of subsidiary trust 67,795 - -
Retirement of:
First mortgage bonds (130,000) (75,000) (25,000)
Other long-term debt (270) (308) (322)
Redemption of preferred stock (67,824) (11,256) (15,038)
Changes in short-term borrowings - net (45,393) 49,305 (24,887)
Dividends paid:
Common stock (179,200) (221,500) (167,100)
Preferred stock (19,072) (21,115) (22,808)
-------- -------- --------
Net cash flow used in financing activities (259,970) (263,297) (235,209)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (10,624) 5,652 (4,771)
Cash and cash equivalents at beginning of period 34,370 28,718 33,489
-------- -------- --------
Cash and cash equivalents at end of period $23,746 $34,370 $28,718
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $118,007 $128,485 $128,000
Income taxes $125,924 $96,066 $96,422
Noncash investing and financing activities:
Capital lease obligations incurred - - $9,677
Acquisition of nuclear fuel $32,685 - -
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $301 $2,304 ($1,129)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $1,804 $3,952
Temporary cash investments - at cost,
which approximates market 21,942 30,418
---------- ----------
Total cash and cash equivalents 23,746 34,370
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.4 million in 1996 and 1995) 73,823 72,328
Associated companies 11,606 8,033
Other 7,053 8,979
Accrued unbilled revenues 63,879 62,132
Deferred fuel costs 18,347 10,200
Accumulated deferred income taxes 1,465 -
Materials and supplies - at average cost 78,449 79,799
Rate deferrals 5,749 25,609
Deferred nuclear refueling outage costs 5,300 21,344
Prepaid income tax 24,651 -
Prepayments and other 10,234 9,118
---------- ----------
Total 324,302 331,912
---------- ----------
Other Property and Investments:
Nonutility property 20,060 20,060
Decommissioning trust fund 50,481 38,560
Investment in subsidiary companies - at equity 14,230 14,230
Other - at cost (less accumulated depreciation) 2,465 1,113
---------- ----------
Total 87,236 73,963
---------- ----------
Utility Plant:
Electric 4,997,456 4,886,898
Property under capital leases 232,582 231,121
Construction work in progress 56,180 87,567
Nuclear fuel under capital lease 38,157 72,864
Nuclear fuel 34,191 1,506
---------- ----------
Total 5,358,566 5,279,956
Less - accumulated depreciation and amortization 1,881,847 1,742,306
---------- ----------
Utility plant - net 3,476,719 3,537,650
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 295,836 301,520
Unamortized loss on reacquired debt 37,552 39,474
Other regulatory assets 30,320 23,935
Other 27,313 23,069
---------- ----------
Total 391,021 387,998
---------- ----------
TOTAL $4,279,278 $4,331,523
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $34,275 $35,260
Notes payable:
Associated companies 31,066 61,459
Other - 15,000
Accounts payable:
Associated companies 73,389 37,494
Other 89,550 69,922
Customer deposits 59,070 56,924
Taxes accrued 7,390 18,612
Accumulated deferred income taxes - 3,366
Interest accrued 49,249 44,202
Dividends declared 3,489 5,149
Obligations under capital leases 28,000 28,000
Other 4,940 17,397
---------- ----------
Total 380,418 392,785
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 831,093 807,278
Accumulated deferred investment tax credits 139,899 145,561
Obligations under capital leases 10,156 43,362
Deferred interest - Waterford 3 lease obligation 16,809 23,947
Other 114,665 116,696
---------- ----------
Total 1,112,622 1,136,844
---------- ----------
Long-term debt 1,373,233 1,385,171
Preferred stock with sinking fund 92,500 100,009
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 70,000 -
Shareholder's Equity:
Preferred stock without sinking fund 100,500 160,500
Common stock, $0.01 par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares in 1996 and 1995 1,088,900 1,088,900
Capital stock expense and other (2,659) (4,836)
Retained earnings 63,764 72,150
---------- ----------
Total 1,250,505 1,316,714
---------- ----------
Commitments and Contingencies (Note 2, 9, and 10)
TOTAL $4,279,278 $4,331,523
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $72,150 $113,420 $89,849
Add:
Net income 190,762 201,537 213,839
-------- -------- --------
Total 262,912 314,957 303,688
Deduct: -------- -------- --------
Dividends declared:
Preferred stock 17,412 20,775 22,359
Common stock 179,200 221,500 167,100
Capital stock expenses 2,536 532 809
-------- -------- --------
Total 199,148 242,807 190,268
-------- -------- --------
Retained Earnings, December 31 (Note 8) $63,764 $72,150 $113,420
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY LOUISIANA, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $1,828,867 $1,674,875 $1,710,415 $ 1,731,541 $1,553,745
Net income $ 190,762 $ 201,537 $ 213,839 $ 188,808 $ 182,989
Total assets $4,279,278 $4,331,523 $4,435,439 $ 4,463,998 $4,109,148
Long-term obligations (1) $1,545,889 $1,528,542 $1,530,558 $ 1,611,436 $1,622,909
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt),
preferred stock with sinking fund, preferred securities of
subsidiary trust, and noncurrent capital lease obligations.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $609,308 $583,373 $577,084 $572,738 $518,255
Commercial 374,515 353,582 358,672 345,254 320,688
Industrial 727,505 641,196 659,061 652,574 578,741
Governmental 33,621 31,616 31,679 29,723 27,780
---------------------------------------------------------------
Total retail 1,744,949 1,609,767 1,626,496 1,600,289 1,445,464
Sales for resale
Associated companies 5,065 1,178 352 4,849 5,454
Non-associated companies 58,685 48,987 36,928 46,414 33,178
Other 20,168 14,943 46,639 79,989 69,649
---------------------------------------------------------------
Total $1,828,867 $1,674,875 $1,710,415 $1,731,541 $1,553,745
===============================================================
Billed Electric Energy
Sales (Millions of kWh):
Residential 7,893 7,855 7,449 7,368 6,996
Commercial 4,846 4,786 4,631 4,435 4,307
Industrial 17,647 16,971 16,561 15,914 15,013
Governmental 457 439 423 398 385
---------------------------------------------------------------
Total retail 30,843 30,051 29,064 28,115 26,701
Sales for resale
Associated companies 143 44 10 112 204
Non-associated companies 982 1,293 776 1,213 1,101
---------------------------------------------------------------
Total 31,968 31,388 29,850 29,440 28,006
===============================================================
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Entergy Mississippi, Inc.
We have audited the accompanying balance sheets of Entergy Mississippi,
Inc. (formerly Mississippi Power & Light Company) as of December 31,
1996 and 1995, and the related statements of income, retained earnings
and cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased in 1996 primarily due to reduced other
operation and maintenance expenses, partially offset by an increase in
income tax expense.
Net income increased in 1995 primarily due to increased revenues
and a decrease in other operation and maintenance expenses partially
offset by an increase in income tax expense.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, are discussed under "Revenues and Sales,"
"Expenses," and "Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON," following
the financial statements, for information on operating revenues by
source and kWh sales.
The changes in electric operating revenues for the twelve months
ended December 31, 1996 and 1995, are as follows:
Increase/
(Decrease)
Description 1996 1995
(In Millions)
Change in base revenues ($2.2) ($6.1)
Grand Gulf Rate Rider 7.1 (0.6)
Fuel cost recovery 33.6 12.8
Sales volume/weather 8.5 14.9
Other revenue (including unbilled) (2.1) 5.6
Sales for resale 23.7 3.4
----- -----
Total $68.6 $30.0
===== =====
Electric operating revenues increased in 1996 primarily due to
increases in fuel adjustment revenues, the Grand Gulf 1 rate rider,
sales for resale, and retail energy sales. Fuel adjustment revenues
increased in response to higher fuel costs. In connection with an
annual MPSC review, in October 1995, Entergy Mississippi's Grand Gulf 1
rate rider was adjusted upward as a result of its undercollection of
Grand Gulf 1 costs. The fuel adjustment clause and the Grand Gulf 1
rate rider do not affect net income. Sales for resale, specifically
sales to associated companies, increased primarily due to changes in
the generation requirements and availability among the domestic utility
companies. The increase in retail sales volume is primarily due to
increased customer usage.
Electric operating revenues increased in 1995 primarily due to an
increase in retail and wholesale energy sales and higher fuel
adjustment revenues, partially offset by rate reductions. Retail
energy sales increased primarily due to the impact of weather and
increased customer usage. Fuel adjustment revenues increased in
response to higher fuel costs and do not impact net income.
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Operating expenses increased in 1996 due to an increase in fuel,
and purchased power expenses, partially offset by a decrease in other
operation and maintenance expenses. Fuel and purchased power expenses
increased as a result of higher fuel costs and an increase in energy
sales. Other operation and maintenance expenses decreased as a result
of lower payroll, contract work, and materials and supplies expenses.
Payroll expenses decreased due to restructuring costs recorded in 1995
and the resulting decrease in employees. Contract work and materials
and supplies expenses decreased because of the turbine repairs at some
of Entergy Mississippi's generating plants in 1995.
Operating expenses decreased in 1995 due primarily to a decrease
in other operation and maintenance expenses. Other operation and
maintenance expense decreased in 1995 due to 1994 Merger-related costs
allocated to Entergy Mississippi and payroll expenses. No significant
Merger-related costs were allocated to Entergy Mississippi during 1995.
Payroll expenses decreased as a result of the restructuring program
announced and accrued for during 1994. In addition, maintenance
expenses decreased at various power plants.
Other
Income tax expense increased in 1996 as a result of higher pretax
income. Income tax expense increased in 1995 due primarily to the 1994
write-off of unamortized deferred investment tax credits and higher
pretax income in 1995.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Revenues $958,430 $889,843 $859,845
-------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 207,116 163,198 164,428
Purchased power 272,812 240,519 235,019
Other operation and maintenance 122,628 144,183 156,954
Depreciation, amortization, and decommissioning 40,313 38,197 36,592
Taxes other than income taxes 43,389 46,019 43,963
Amortization of rate deferrals 107,576 107,339 110,481
-------- -------- --------
Total 793,834 739,455 747,437
-------- -------- --------
Operating Income 164,596 150,388 112,408
-------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 1,143 950 1,660
Miscellaneous - net 1,662 3,036 (1,117)
-------- -------- --------
Total 2,805 3,986 543
-------- -------- --------
Interest Charges:
Interest on long-term debt 44,137 46,998 47,835
Other interest - net 3,870 4,638 4,929
Allowance for borrowed funds used
during construction (923) (806) (1,067)
-------- -------- --------
Total 47,084 50,830 51,697
-------- -------- --------
Income Before Income Taxes 120,317 103,544 61,254
Income Taxes 41,106 34,877 12,475
-------- -------- --------
Net Income 79,211 68,667 48,779
Preferred Stock Dividend Requirements
and Other 5,010 7,515 7,624
-------- -------- --------
Earnings Applicable to Common Stock $74,201 $61,152 $41,155
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $79,211 $68,667 $48,779
Noncash items included in net income:
Change in rate deferrals 130,602 114,304 109,105
Depreciation and amortization 40,313 38,197 36,592
Deferred income taxes and investment tax credits (32,887) (36,774) (34,409)
Allowance for equity funds used during construction (1,143) (950) (1,660)
Changes in working capital:
Receivables (4,123) (5,277) 33,154
Fuel inventory 20 (1,901) 3,872
Accounts payable 88 15,553 (8,783)
Taxes accrued (2,157) 7,818 (3,431)
Interest accrued (925) 1,457 (2,794)
Other working capital accounts 4,074 (21,108) 13,480
Change in other regulatory assets (28,573) 1,075 (7,219)
Other (2,534) 3,882 8,428
-------- -------- --------
Net cash flow provided by operating activities 181,966 184,943 195,114
-------- -------- --------
Investing Activities:
Construction expenditures (85,018) (79,146) (121,386)
Allowance for equity funds used during construction 1,143 950 1,660
-------- -------- --------
Net cash flow used in investing activities (83,875) (78,196) (119,726)
-------- -------- --------
Financing Activities:
Proceeds from the issuance of:
General and refunding mortgage bonds - 79,480 24,534
Other long-term debt - - 15,652
Retirement of:
General and refunding mortgage bonds (26,000) (45,000) (30,000)
First mortgage bonds (35,000) (20,000) (18,000)
Other long-term debt (15) (965) (16,045)
Redemption of preferred stock (9,876) (15,000) (15,000)
Changes in short-term borrowings - net 50,253 (30,000) 18,432
Dividends paid:
Common stock (79,900) (61,700) (45,600)
Preferred stock (5,000) (6,215) (7,762)
-------- -------- --------
Net cash flow used in financing activities (105,538) (99,400) (73,789)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (7,447) 7,347 1,599
Cash and cash equivalents at beginning of period 16,945 9,598 7,999
-------- -------- --------
Cash and cash equivalents at end of period $9,498 $16,945 $9,598
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $46,769 $48,617 $52,737
Income taxes $73,687 $67,746 $39,000
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $2,384 $2,574
Temporary cash investments - at cost,
which approximates market:
Associated companies - 3,248
Other - 11,123
Special deposits 7,114 -
---------- ----------
Total cash and cash equivalents 9,498 16,945
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.4 million in 1996 and $1.6 million in 1995) 44,809 46,214
Associated companies 4,382 1,134
Other 2,014 1,967
Accrued unbilled revenues 49,383 47,150
Fuel inventory - at average cost 6,661 6,681
Materials and supplies - at average cost 17,567 19,233
Rate deferrals 142,504 130,622
Prepayments and other 7,434 11,536
---------- ----------
Total 284,252 281,482
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 5,531 5,531
Other - at cost (less accumulated depreciation) 7,923 5,615
---------- ----------
Total 13,454 11,146
---------- ----------
Utility Plant:
Electric 1,633,484 1,559,955
Construction work in progress 47,373 55,443
---------- ----------
Total 1,680,857 1,615,398
Less - accumulated depreciation and amortization 635,754 613,712
---------- ----------
Utility plant - net 1,045,103 1,001,686
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 104,588 247,072
SFAS 109 regulatory asset - net 11,813 6,445
Unamortized loss on reacquired debt 9,254 10,105
Other regulatory assets 46,309 17,736
Other 6,693 6,311
---------- ----------
Total 178,657 287,669
---------- ----------
TOTAL $1,521,466 $1,581,983
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $96,015 $61,015
Notes payable - associated companies 50,253 -
Accounts payable:
Associated companies 32,878 24,391
Other 23,701 32,100
Customer deposits 26,258 24,339
Taxes accrued 26,482 28,639
Accumulated deferred income taxes 58,634 54,090
Interest accrued 20,909 21,834
Other 3,065 6,875
---------- ----------
Total 338,195 253,283
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 249,522 278,581
Accumulated deferred investment tax credits 25,422 27,978
Other 19,445 22,515
---------- ----------
Total 294,389 329,074
---------- ----------
Long-term debt 399,054 494,404
Preferred stock with sinking fund 7,000 16,770
Shareholder's 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 in 1996 and 1995 199,326 199,326
Capital stock expense and other (143) (218)
Retained earnings 225,764 231,463
---------- ----------
Total 482,828 488,452
---------- ----------
Commitments and Contingencies (Note 2 and 9)
TOTAL $1,521,466 $1,581,983
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $231,463 $232,011 $236,337
Add:
Net income 79,211 68,667 48,779
-------- -------- --------
Total 310,674 300,678 285,116
Deduct: -------- -------- --------
Dividends declared:
Preferred stock 4,803 5,971 7,404
Common stock 79,900 61,700 45,600
Preferred stock expenses 207 1,544 101
-------- -------- --------
Total 84,910 69,215 53,105
-------- -------- --------
Retained Earnings, December 31 (Note 8) $225,764 $231,463 $232,011
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 958,430 $ 889,843 $ 859,845 $ 883,818 $ 799,483
Net Income $ 79,211 $ 68,667 $ 48,779 $ 69,037 $ 65,036
Total assets $1,521,466 $1,581,983 $ 1,637,828 $ 1,681,992 $ 1,665,480
Long-term obligations (1) $ 406,421 $ 511,613 $ 507,555 $ 563,612 $ 576,787
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt), and
preferred stock with sinking fund, and noncurrent capital lease
obligations.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $358,264 $336,194 $332,567 $341,620 $309,614
Commercial 281,626 262,786 257,154 251,285 236,191
Industrial 185,351 178,466 184,637 182,060 169,977
Governmental 29,093 27,410 27,495 28,530 26,377
---------------------------------------------------------
Total retail 854,334 804,856 801,853 803,495 742,159
Sales for resale
Associated companies 58,749 35,928 37,747 34,640 17,988
Non-associated companies 22,814 21,906 16,728 21,100 19,995
Other 22,533 27,153 3,517 24,583 19,341
---------------------------------------------------------
Total $958,430 $889,843 $859,845 $883,818 $799,483
=========================================================
Billed Electric Energy
Sales (Millions of kWh):
Residential 4,355 4,233 4,014 3,983 3,644
Commercial 3,508 3,368 3,151 2,928 2,804
Industrial 3,063 3,044 2,985 2,787 2,631
Governmental 346 336 330 336 318
---------------------------------------------------------
Total retail 11,272 10,981 10,480 10,034 9,397
Sales for resale
Associated companies 1,368 959 1,079 758 253
Non-associated companies 521 692 512 670 937
---------------------------------------------------------
Total 13,161 12,632 12,071 11,462 10,587
=========================================================
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Entergy New Orleans, Inc.
We have audited the accompanying balance sheets of Entergy New Orleans,
Inc. (formerly New Orleans Public Service Inc.) as of December 31, 1996
and 1995, and the related statements of income, retained earnings and
cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1996 primarily due to the rate refund
recorded in December 1996, based on the Council's review of Entergy
New Orleans' 1996 earnings. The decrease in net income was partially
offset by reduced other operating and maintenance expenses.
Net income increased in 1995 principally due to 1994 refunds
associated with the 1994 NOPSI Settlement and a decrease in other
operation and maintenance expense, partially offset by a permanent
rate reduction that took place January 1, 1995.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, are discussed under "Revenues and Sales",
"Expenses", and "Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA-FIVE-YEAR COMPARISON," following the
financial statements, for information on electric operating revenues
by source and kWh sales.
The changes in electric operating revenues for the twelve months
ended December 31, 1996 and 1995 are as follows:
Increase/
(Decrease)
Description 1996 1995
(In Millions)
Change in base revenues ($8.5) $7.8
Fuel cost recovery 28.5 (0.3)
Sales volume/weather (4.8) 12.5
Other revenue (including unbilled) (1.4) 6.1
Sales for resale (0.5) 3.5
----- -----
Total $13.3 $29.6
===== =====
In 1996, electric operating revenues increased primarily due to
higher fuel adjustment revenues, caused by elevated fuel prices, which
do not affect net income. The increase was offset by a rate refund
recorded in 1996, as discussed in "Net Income" above, and lower
industrial sales attributable to a significant reduction in
electricity usage by a large customer. Electric operating revenues
increased in 1995 as a result of refunds in 1994 associated with the
1994 NOPSI Settlement and an increase in energy sales. The increase
in energy sales in 1995 was primarily due to weather effects on retail
sales and an increase in sales for resale.
Gas operating revenues in 1996 increased primarily due to higher
gas prices. This increase was offset by the rate refund recorded in
1996, as discussed in "Net Income" above. Gas operating revenues
decreased in 1995 primarily due to the rate reduction agreed to in the
NOPSI Settlement effective January 1, 1995, and a lower unit purchase
price for gas purchased for resale.
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
In 1996, operating expenses increased due to higher fuel
expenses, including purchased power, and gas purchased for resale.
This increase was offset by reduced amortization of previous rate
deferrals, the recording of rate deferrals, and lower other operation
and maintenance expenses. Fuel expenses, including gas purchased for
resale, increased as a result of significantly higher unit prices.
Purchased power increased due to changes in generation availability
and requirements among the domestic utility companies. Rate deferrals
increased due to the deferral of a portion of the System Energy rate
increase being billed to Entergy New Orleans, as discussed in Note 2.
Other operation and maintenance expenses decreased primarily due to
lower payroll expenses due to restructuring and reduced regulatory
commission expenses.
Operating expenses increased in 1995 due primarily to increased
amortization of rate deferrals, partially offset by a decrease in fuel
and other operation and maintenance expenses. Fuel expenses decreased
in 1995 primarily due to a decrease in fuel prices. Other operation
and maintenance expenses decreased primarily due to a decrease in
maintenance activity and lower payroll expenses. In 1995, the
increase in the amortization of rate deferrals is primarily a result
of the collection of larger amounts of previously deferred costs under
the 1991 NOPSI Settlement, which allowed Entergy New Orleans to record
an additional $90 million of previously incurred Grand Gulf 1-related
costs.
Other
Income taxes decreased in 1996 due to lower pretax income.
Income taxes increased in 1995 as a result of lower pretax income in
1994 due to the 1994 NOPSI Settlement and the write-off of the
unamortized balances of deferred investment tax credits pursuant to
the FERC Settlement in 1994.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Revenues:
Electric $403,254 $390,002 $360,430
Natural gas 101,023 80,276 87,357
-------- -------- --------
Total 504,277 470,278 447,787
-------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 129,059 102,314 113,735
Purchased power 176,450 145,920 145,935
Other operation and maintenance 71,421 76,510 80,656
Depreciation, amortization, and decommissioning 20,007 19,420 19,275
Taxes other than income taxes 27,388 27,805 27,814
Rate deferrals (4,866) (4,392) -
Amortization of rate deferrals 27,240 31,971 27,009
-------- -------- --------
Total 446,699 399,548 414,424
-------- -------- --------
Operating Income 57,578 70,730 33,363
-------- -------- --------
Other Income:
Allowance for equity funds used
during construction 321 158 331
Miscellaneous - net 1,146 1,639 2,141
-------- -------- --------
Total 1,467 1,797 2,472
-------- -------- --------
Interest Charges:
Interest on long-term debt 15,268 15,948 17,092
Other interest - net 1,036 1,853 1,179
Allowance for borrowed funds used
during construction (252) (127) (247)
-------- -------- --------
Total 16,052 17,674 18,024
-------- -------- --------
Income Before Income Taxes 42,993 54,853 17,811
Income Taxes 16,217 20,467 4,600
-------- -------- --------
Net Income 26,776 34,386 13,211
Preferred Stock Dividend Requirements
and Other 965 1,411 1,581
-------- -------- --------
Earnings Applicable to Common Stock $25,811 $32,975 $11,630
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $26,776 $34,386 $13,211
Noncash items included in net income:
Change in rate deferrals 35,917 31,564 24,106
Depreciation and amortization 20,007 19,420 19,275
Deferred income taxes and investment tax credits (12,274) (1,998) (18,006)
Allowance for equity funds used during construction (321) (158) (331)
Changes in working capital:
Receivables 832 (5,468) 15,362
Accounts payable (5,638) 12,566 (19,132)
Taxes accrued (4,350) 3,225 (2,832)
Interest accrued 214 (131) (230)
Income tax refund - 20,172 (20,172)
Other working capital accounts (5,216) (4,803) 18,454
Other (11,941) (9,500) 8,851
-------- ------- -------
Net cash flow provided by operating activities 44,006 99,275 38,556
-------- ------- -------
Investing Activities:
Construction expenditures (27,956) (27,836) (22,777)
Allowance for equity funds used during construction 321 158 331
-------- ------- -------
Net cash flow used in investing activities (27,635) (27,678) (22,446)
-------- ------- -------
Financing Activities:
Proceeds from the issuance of general and refunding mortgage bonds 39,608 29,805 -
Retirement of:
First mortgage bonds (23,250) - -
General and refunding mortgage bonds (30,000) (24,200) (15,000)
Redemption of preferred stock - (3,525) (1,500)
Dividends paid:
Common stock (34,000) (30,600) (33,300)
Preferred stock (965) (1,362) (1,596)
-------- ------- -------
Net cash flow used in financing activities (48,607) (29,882) (51,396)
-------- ------- -------
Net increase (decrease) in cash and cash equivalents (32,236) 41,715 (35,286)
Cash and cash equivalents at beginning of period 49,746 8,031 43,317
-------- ------- -------
Cash and cash equivalents at end of period $17,510 $49,746 $8,031
======== ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $15,357 $17,187 $17,707
Income taxes (refund) - net $31,870 ($941) $45,984
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $1,015 $1,693
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,435 10,860
Other 9,060 37,193
-------- --------
Total cash and cash equivalents 17,510 49,746
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million in 1996 and $0.5 million in 1995) 27,430 29,168
Associated companies 714 551
Other 1,764 843
Accrued unbilled revenues 17,064 17,242
Deferred electric fuel and resale gas costs 7,290 2,647
Materials and supplies - at average cost 9,904 8,950
Rate deferrals 37,692 35,191
Prepayments and other 7,157 4,529
-------- --------
Total 126,525 148,867
-------- --------
Other Property and Investments:
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
Utility Plant:
Electric 503,061 483,581
Natural gas 122,700 121,083
Construction work in progress 18,247 17,525
-------- --------
Total 644,008 622,189
Less - accumulated depreciation and amortization 347,790 335,021
-------- --------
Utility plant - net 296,218 287,168
-------- --------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 99,498 137,916
SFAS 109 regulatory asset - net 6,051 6,813
Unamortized loss on reacquired debt 1,647 1,932
Other regulatory assets 15,908 9,204
Other 890 1,047
-------- --------
Total 123,994 156,912
-------- --------
TOTAL $549,996 $596,206
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $12,000 $38,250
Accounts payable:
Associated companies 18,757 13,851
Other 14,130 24,674
Customer deposits 18,974 18,214
Taxes accrued 1,204 5,554
Accumulated deferred income taxes 5,584 9,174
Interest accrued 5,325 5,111
Provision for rate refund 19,465 11,870
Other 1,521 6,867
-------- --------
Total 96,960 133,565
-------- --------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 72,895 81,654
Accumulated deferred investment tax credits 7,984 8,618
Accumulated provision for property insurance 15,666 15,666
Other 24,713 29,654
-------- --------
Total 121,258 135,592
-------- --------
Long-term debt 168,888 155,958
Shareholders' Equity:
Preferred stock without sinking fund 19,780 19,780
Common Shareholder's Equity:
Common stock, $0.01 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares in 1996 and 1995 33,744 33,744
Paid-in capital 36,294 36,306
Retained earnings subsequent to the elimination of
the accumulated deficit on November 30, 1988 73,072 81,261
-------- --------
Total 162,890 171,091
-------- --------
Commitments and Contingencies (Note 2 and 9)
TOTAL $549,996 $596,206
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $81,261 $78,886 $100,556
Add:
Net income 26,776 34,386 13,211
-------- -------- --------
Total 108,037 113,272 113,767
Deduct: -------- -------- --------
Dividends declared:
Preferred stock 965 1,231 1,536
Common stock 34,000 30,600 33,300
Capital stock expenses - 180 45
-------- -------- --------
Total 34,965 32,011 34,881
-------- -------- --------
Retained Earnings, December 31 (Note 8) $73,072 $81,261 $78,886
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $504,277 $470,278 $447,787 $514,822 $464,879
Net Income $ 26,776 $ 34,386 $ 13,211 $ 36,761 $ 26,424
Total assets $549,996 $596,206 $592,894 $647,605 $621,691
Long-term obligations (1) $168,888 $155,958 $167,610 $193,262 $165,917
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt).
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $151,577 $141,353 $142,013 $151,423 $137,668
Commercial 149,649 144,374 162,410 167,788 160,229
Industrial 24,663 22,842 25,422 26,205 23,860
Governmental 58,561 52,880 58,726 61,548 56,023
-----------------------------------------------------
Total retail 384,450 361,449 388,571 406,964 377,780
Sales for resale
Associated companies 2,649 3,217 2,061 2,487 3,086
Non-associated companies 9,882 9,864 7,512 9,291 7,234
Other (1) 6,273 15,472 (37,714) 5,088 3,836
-----------------------------------------------------
Total $403,254 $390,002 $360,430 $423,830 $391,936
=====================================================
Billed Electric Energy
Sales (Millions of kWh):
Residential 1,998 2,049 1,896 1,914 1,806
Commercial 2,073 2,079 2,031 1,989 1,977
Industrial 481 537 518 499 457
Governmental 974 983 951 924 888
-----------------------------------------------------
Total retail 5,526 5,648 5,396 5,326 5,128
Sales for resale
Associated companies 66 149 92 89 155
Non-associated companies 212 297 202 262 250
-----------------------------------------------------
Total 5,804 6,094 5,690 5,677 5,533
=====================================================
</TABLE>
(1) 1994 includes the effects of the 1994 NOPSI Settlement.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
System Energy Resources, Inc.
We have audited the accompanying balance sheets of System Energy
Resources, Inc. as of December 31, 1996 and 1995, and the related
statements of income, retained earnings and cash flows for each of the
three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December
31, 1996 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, in 1996 the Company
changed its method of accounting for incremental nuclear plant outage
maintenance costs.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased slightly in 1996 primarily due to lower
interest charges attributed to the refinancing of higher-cost debt.
Net income increased in 1995 primarily due to the effect of the
FERC Settlement which reduced 1994 net income by $80.2 million (see
Note 2). This was partially offset by revenues being adversely
impacted by a lower return on System Energy's decreasing investment in
Grand Gulf 1.
Significant factors affecting the results of operations and
causing variances between the years 1996 and 1995, and between the
years 1995 and 1994, 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 increased in 1996 due to an increase in other
operation and maintenance expenses, and increased depreciation,
amortization, and decommissioning expenses offset by a decrease in
nuclear refueling outage expenses as discussed in "Expenses" below.
Operating revenues increased in 1995 due primarily to the effect
of the FERC Settlement on 1994 revenues as discussed in "Net Income"
above and the recovery of increased expenses in connection with a
Grand Gulf 1 refueling outage offset by a lower return on System
Energy's decreasing investment in Grand Gulf 1. Revenues attributable
to the return on investment are expected to continue to decline each
year as a result of the depreciation of System Energy's investment in
Grand Gulf 1.
Expenses
Operating expenses increased in 1996 due primarily to increases
in other operation and maintenance expenses, and depreciation,
amortization, and decommissioning expenses. Other operation and
maintenance expenses increased primarily because of higher waste
disposal costs and medical benefit charges for the year. The increase
in decommissioning costs and depreciation rates is reflected in the
1995 System Energy FERC rate increase filing, subject to refund (see
Note 2). These increases were partially offset by a decrease in
nuclear refueling outage expenses. The decrease in nuclear outage
expenses was primarily due to the effect of deferring the nuclear
refueling outage expenses in the fourth quarter of 1996 rather than
recognizing those expenses as incurred (see Note 1). Grand Gulf 1 was
on-line for 322 days in 1996 as compared with 285 days in 1995. The
increase in the on-line days was primarily due to the unit's shorter
eighth refueling outage that lasted from October 19, 1996 to November
30, 1996 (41 days), compared to a 68-day outage in 1995, and to a
lesser extent, unplanned outages in 1996 totaling 3 days, compared to
12 days for 1995.
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Operating expenses increased in 1995 due to higher nuclear
refueling outage expenses and higher depreciation, amortization, and
decommissioning costs, partially offset by lower fuel expenses as a
result of the refueling outage. Grand Gulf 1 was on-line for 285 days
in 1995 as compared with 345 days in 1994. The difference in the on-
line days was primarily due to the unit's seventh refueling outage
that lasted from April 15, 1995, to June 21, 1995 (68 days), and, to a
lesser extent, unplanned outages in 1995 totaling 12 days, compared to
20 days in 1994. Depreciation, amortization, and decommissioning
costs increased due to a $4 million increase in amortization (as a
result of the reclassification of $81 million of Grand Gulf 1 costs
and the accelerated amortization of the reclassified costs over a ten-
year period in accordance with the 1994 FERC Settlement) and $1
million in decommissioning.
Other
Interest expenses decreased in both 1996 and in 1995 due
primarily to the retirement and refinancing of higher-cost long-term
debt. In 1995, the decrease in interest expense was partially offset
by interest associated with the FERC Settlements refunds (See Note 2).
Income taxes increased in both 1996 and 1995 due to higher pretax
income.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Revenues $623,620 $605,639 $474,963
-------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 43,761 40,262 48,107
Nuclear refueling outage expenses 1,239 24,935 -
Other operation and maintenance 105,453 98,441 96,504
Depreciation, amortization, and decommissioning 128,474 100,747 93,861
Taxes other than income taxes 27,654 27,549 26,637
-------- -------- --------
Total 306,581 291,934 265,109
-------- -------- --------
Operating Income 317,039 313,705 209,854
-------- -------- --------
Other Income:
Allowance for equity funds used
during construction 1,122 1,878 1,090
Miscellaneous - net 5,234 2,492 6,402
-------- -------- --------
Total 6,356 4,370 7,492
-------- -------- --------
Interest Charges:
Interest on long-term debt 135,376 143,020 169,248
Other interest - net 8,344 8,491 7,257
Allowance for borrowed funds used
during construction (1,114) (1,968) (1,403)
-------- -------- --------
Total 142,606 149,543 175,102
-------- -------- --------
Income Before Income Taxes 180,789 168,532 42,244
Income Taxes 82,121 75,493 36,837
-------- -------- --------
Net Income $98,668 $93,039 $5,407
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $98,668 $93,039 $5,407
Noncash items included in net income:
Depreciation, amortization, and decommissioning 128,474 100,747 93,861
Deferred income taxes and investment tax credits 48,975 (45,337) (30,640)
Allowance for equity funds used during construction (1,122) (1,878) (1,090)
Changes in working capital:
Receivables 3,436 (66,433) 48,411
Accounts payable 560 (18,955) 35,469
Taxes accrued (4,825) 37,266 14,430
Interest accrued (2,548) (4,053) (8,133)
Other working capital accounts (13,430) (21,874) 14,024
Recoverable income taxes - - 92,689
Decommissioning trust contributions (18,531) (5,414) (5,157)
FERC Settlement - refund obligation (4,009) (3,540) 60,388
Provision for estimated losses and reserves 46,919 3,167 (2,371)
Other 4,290 29,725 19,699
-------- ------- --------
Net cash flow provided by operating activities 286,857 96,460 336,987
-------- ------- --------
Investing Activities:
Construction expenditures (29,469) (21,747) (20,766)
Allowance for equity funds used during construction 1,122 1,878 1,090
Nuclear fuel purchases (44,704) (51,455) (26,414)
Proceeds from sale/leaseback of nuclear fuel 43,971 52,188 -
-------- ------- --------
Net cash flow used in investing activities (29,080) (19,136) (46,090)
-------- ------- --------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds 233,656 - 59,410
Other long-term debt 133,933 73,343 -
Retirement of:
First mortgage bonds (325,101) (105,000) (260,000)
Other long-term debt (92,700) (45,320) -
Premium and expenses paid on refinancing sale/leaseback bonds - - (48,436)
Changes in short-term borrowings - net (2,990) 2,990 -
Common stock dividends paid (112,500) (92,800) (148,300)
-------- ------- --------
Net cash flow used in financing activities (165,702) (166,787) (397,326)
-------- ------- --------
Net increase (decrease) in cash and cash equivalents 92,075 (89,463) (106,429)
Cash and cash equivalents at beginning of period 240 89,703 196,132
-------- ------- --------
Cash and cash equivalents at end of period $92,315 $240 $89,703
======== ======= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $138,483 $147,492 $176,503
Income taxes (refund) $36,397 $87,016 ($39,586)
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets ($70) $3,061 ($1,515)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $26 $240
Temporary cash investments - at cost,
which approximates market:
Associated companies 41,600 -
Other 50,689 -
---------- ----------
Total cash and cash equivalents 92,315 240
Accounts receivable:
Associated companies 71,337 72,458
Other 2,522 4,837
Materials and supplies - at average cost 66,302 67,661
Deferred nuclear refueling outage costs 24,005 -
Prepayments and other 4,929 16,050
---------- ----------
Total 261,410 161,246
---------- ----------
Other Property and Investments:
Decommissioning trust fund 62,223 40,927
---------- ----------
Utility Plant:
Electric 2,994,445 2,977,303
Electric plant under leases 447,409 444,305
Construction work in progress 41,362 35,946
Nuclear fuel under capital lease 83,558 71,374
---------- ----------
Total 3,566,774 3,528,928
Less - accumulated depreciation and amortization 974,472 861,752
---------- ----------
Utility plant - net 2,592,302 2,667,176
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 264,758 291,181
Unamortized loss on reacquired debt 57,785 52,702
Other regulatory assets 207,214 203,731
Other 15,601 14,049
---------- ----------
Total 545,358 561,663
---------- ----------
TOTAL $3,461,293 $3,431,012
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND CAPITALIZATION
December 31,
1996 1995
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $10,000 $250,000
Notes payable - associated companies - 2,990
Accounts payable:
Associated companies 18,245 17,458
Other 18,836 19,063
Taxes accrued 67,823 72,648
Interest accrued 34,195 36,743
Obligations under capital leases 28,000 28,000
Other 2,306 4,211
---------- ----------
Total 179,405 431,113
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 624,020 602,182
Accumulated deferred investment tax credits 103,647 107,119
Obligations under capital leases 55,558 44,107
FERC Settlement - refund obligation 52,839 56,848
Other 165,517 94,449
---------- ----------
Total 1,001,581 904,705
---------- ----------
Long-term debt 1,418,869 1,219,917
Common Shareholder's Equity:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares in 1996 and 1995 789,350 789,350
Paid-in capital - 7
Retained earnings 72,088 85,920
---------- ----------
Total 861,438 875,277
---------- ----------
Commitments and Contingencies (Note 2, 9, and 10)
TOTAL $3,461,293 $3,431,012
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $85,920 $85,681 $228,574
Add:
Net income 98,668 93,039 5,407
-------- -------- --------
Total 184,588 178,720 233,981
Deduct: -------- -------- --------
Dividends declared 112,500 92,800 148,300
-------- -------- --------
Retained Earnings, December 31 (Note 8) $72,088 $85,920 $85,681
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1996 1995 1994 1993 1992
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 623,620 $ 605,639 $ 474,963 $ 650,768 $ 723,410
Net income $ 98,668 $ 93,039 $ 5,407 $ 93,927 $ 130,141
Total assets $3,461,293 $3,431,012 $3,613,359 $3,891,066 $3,672,441
Long-term obligations (1) $1,474,427 $1,264,024 $1,456,993 $1,536,593 $1,768,299
Electric energy sales
(Millions of kWh) 8,302 7,212 8,653 7,113 7,354
</TABLE>
(1) Includes long-term debt (excluding current maturities) and
noncurrent capital lease obligations.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Entergy
Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
The accompanying consolidated financial statements include the
accounts of Entergy Corporation and its direct subsidiaries: Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, System Energy, Entergy Services, Entergy
Operations, Entergy Power, Entergy Enterprises, Entergy Power
Operations Corporation, Entergy S.A., Entergy Power Marketing
Corporation, Entergy Power Development Corporation, Entergy Technology
Holding Company, Entergy Power Edesur Holding LTD, Entergy Transener
S.A., and Entergy Power Development International Corporation. A
number of these subsidiaries have additional subsidiaries. CitiPower
is a subsidiary of Entergy Power Development International Corporation.
All significant intercompany transactions have been eliminated.
Entergy Corporation's utility subsidiaries maintain accounts in
accordance with FERC and other regulatory guidelines. Certain
previously reported amounts have been reclassified to conform to
current classifications with no effect on net income or shareholders'
equity.
Use of Estimates in the Preparation of Financial Statements
The preparation of Entergy Corporation and its subsidiaries'
financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of December 31, 1996 and 1995, and
the reported amounts of revenues and expenses during fiscal years 1996,
1995, and 1994. Adjustments to the reported amounts of assets and
liabilities may be necessary in the future to the extent that future
estimates or actual results are different from the estimates used in
1996 financial statements.
Revenues and Fuel Costs
Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi
generate, transmit, and distribute electricity (primarily to retail
customers) in the states of Arkansas, Louisiana, and Mississippi,
respectively. Entergy Gulf States generates, transmits, and
distributes electricity primarily to retail customers in the States of
Texas and Louisiana; distributes gas at retail in the City of Baton
Rouge, Louisiana, and vicinity; and also sells steam to a large
refinery complex in Baton Rouge. Entergy New Orleans sells both
electricity and gas to retail customers in the City of New Orleans
(except for Algiers, where Entergy Louisiana is the electricity
supplier).
System Energy's operating revenues recover operating expenses,
depreciation, and capital costs attributable to Grand Gulf 1 from
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans. Capital costs are computed by allowing a return on System
Energy's common equity funds allocable to its net investment in Grand
Gulf 1, plus System Energy's effective interest cost for its debt
allocable to its investment in Grand Gulf 1. See Note 2 for a
discussion of System Energy's proposed rate increase.
A portion of Entergy Arkansas' and Entergy Louisiana's purchase of
power from Grand Gulf has not been included in the determination of the
cost of service to retail customers by the APSC and LPSC, respectively,
as described in Note 2.
The domestic utility companies accrue estimated revenues for
energy delivered since the latest billings.
The domestic utility companies' rate schedules (except Entergy
Gulf States' Texas retail rate schedules) include fuel adjustment
clauses that allow either current recovery or deferrals of fuel costs
until such costs are reflected in the related revenues. Entergy Gulf
States' Texas retail rate schedules include a fixed fuel factor
approved by the PUCT, which remains in effect until changed as part of
a general rate case, fuel reconciliation, or fixed fuel factor filing.
Utility Plant
Utility plant is stated at original cost. The original cost of
utility plant retired or removed, plus the applicable removal costs,
less salvage, is charged to accumulated depreciation. Maintenance,
repairs, and minor replacement costs are charged to operating expenses.
Substantially all of the utility plant is subject to liens of the
subsidiaries' mortgage bond indentures.
Utility plant includes the portions of Grand Gulf 1 and Waterford
3 that were sold and currently are leased back. For financial
reporting purposes, these sale and leaseback transactions are reflected
as financing transactions.
Net electric utility plant in service, by company and functional
category, as of December 31, 1996 (excluding owned and leased nuclear
fuel, the accumulated provision for decommissioning, and the plant
acquisition adjustment related to the Merger), is shown below:
<TABLE>
<CAPTION>
Production
Nuclear Other Transmission Distribution Other Total
(In Millions)
<S> <C> <C> <C> <C> <C> <C>
Entergy Arkansas $ 987 $ 390 $ 454 $ 909 $ 121 $ 2,861
Entergy Gulf States 2,357 678 449 764 224 4,472
Entergy Louisiana 2,048 239 331 717 62 3,397
Entergy Mississippi - 221 289 427 61 998
Entergy New Orleans - 17 18 161 18 214
System Energy 2,438 - 16 - 14 2,468
Entergy 7,830 1,632 1,703 3,440 611 15,216
</TABLE>
Depreciation is computed on the straight-line basis at rates based
on the estimated service lives and costs of removal of the various
classes of property. Depreciation rates on average depreciable
property are shown below:
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
1996 3.0% 3.2% 2.7% 3.0% 2.4% 3.1% 3.3%
1995 2.9% 3.3% 2.7% 3.0% 2.4% 3.1% 2.9%
1994 3.0% 3.4% 2.7% 3.0% 2.4% 3.1% 3.0%
AFUDC represents the approximate net composite interest cost of
borrowed funds and a reasonable return on the equity funds used for
construction. Although AFUDC increases both utility plant and
earnings, it is only realized in cash through depreciation provisions
included in rates.
Jointly-Owned Generating Stations
Certain Entergy Corporation subsidiaries own undivided interests
in several jointly-owned electric generating facilities and record the
investments and expenses associated with these generating stations to
the extent of their respective ownership interests. As of December 31,
1996, the subsidiaries' investment and accumulated depreciation in each
of these generating stations were as follows:
<TABLE>
<CAPTION>
Total
Megawatt Accumulated
Generating Stations Fuel Type Capability Ownership Investment Depreciation
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Entergy Arkansas
Independence Unit 1 Coal 836 31.50% $117,515 $43,646
Common Facilities Coal 15.75% 29,568 9,921
White Bluff Units 1 and 2 Coal 1,660 57.00% 396,403 166,809
Entergy Gulf States
River Bend Unit 1 Nuclear 936 70.00% 3,103,974 746,440
Roy S. Nelson Unit 6 Coal 550 70.00% 400,221 166,820
Big Cajun 2 Unit 3 Coal 540 42.00% 222,957 86,699
Entergy Mississippi -
Independence Units 1 and 2 Coal 1,678 25.00% 224,814 79,934
System Energy -
Grand Gulf Unit 1 Nuclear 1,179 90.00%(1) 3,429,562 974,472
Entergy Power -
Independence Unit 2 Coal 842 21.50% 121,666 40,585
</TABLE>
(1) Includes an 11.5% leasehold interest - See Note 10
Income Taxes
Entergy Corporation and its subsidiaries file a consolidated
federal income tax return. Income taxes are allocated to the
subsidiaries in proportion to their contribution to consolidated
taxable income. SEC regulations require that no Entergy Corporation
subsidiary pay more taxes than it would have paid if a separate income
tax return had been filed. In accordance with SFAS 109, "Accounting
for Income Taxes", deferred income taxes are recorded for all temporary
differences between the book and tax basis of assets and liabilities,
and for certain credits available for carryforward.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some portion
of the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.
Investment tax credits are deferred and amortized based upon the
average useful life of the related property in accordance with rate
treatment.
Acquisition Adjustment
Entergy Corporation, upon completion of the Merger in December
1993, recorded an acquisition adjustment in utility plant in the amount
of $380 million, representing the excess of the purchase price over the
historical cost of the Entergy Gulf States net assets acquired. During
1994, Entergy recorded an additional $124 million of acquisition
adjustment related to the resolution of certain preacquisition
contingencies and appropriate allocation of purchase price.
The acquisition adjustment is being amortized on a straight-line
basis over a 31-year period beginning January 1, 1994, which
approximates the remaining average book life of the plant acquired as a
result of the Merger. As of December 31, 1996, the unamortized balance
of the acquisition adjustment was $455 million.
Entergy's future net cash flows are expected to be sufficient to
recover the amortization of both the Merger acquisition adjustment and
the cost of the CitiPower license discussed in Note 13.
Reacquired Debt
The premiums and costs associated with reacquired debt are being
amortized over the life of the related new issuances, in accordance
with ratemaking treatment.
Cash and Cash Equivalents
Entergy considers all unrestricted highly liquid debt instruments
purchased with an original maturity of three months or less to be cash
equivalents.
Stock Options - SFAS 123
The FASB issued SFAS 123, "Accounting for Stock-Based
Compensation," in October 1995, to be effective for 1996 financial
statements. The provisions of this statement require either (a)
adoption for financial reporting purposes; or (b) disclosure of the
impact the provisions would have had on financial statements had they
been adopted. Entergy has elected the disclosure option. See Note 5
for the disclosures required by SFAS 123.
Continued Application of SFAS 71
The domestic utility companies and System Energy currently account
for the effects of regulation pursuant to SFAS 71, "Accounting for the
Effects of Certain Types of Regulation." This statement applies to the
financial statements of a rate-regulated enterprise that meets three
criteria. The enterprise must have rates that (i) are approved by the
regulator; (ii) are cost-based; and (iii) can be charged to and
collected from customers. These criteria may also be applied to
separable portions of a utility's business, such as the generation or
transmission functions, or to specific classes of customers. If an
enterprise meets these criteria, it may capitalize costs that would
otherwise be charged to expense if the rate actions of its regulator
make it probable that those costs will be recovered in future revenue.
The amount capitalized is a "regulatory asset." SFAS 71 requires that
rate-regulated enterprises assess the probability of recovering their
regulatory assets at each balance sheet date. When an enterprise
concludes that recovery of a regulatory asset is no longer probable,
the regulatory asset must be removed from the entity's balance sheet.
SFAS 101, "Accounting for the Discontinuation of Application of
FASB Statement No. 71", specifies how an enterprise that ceases to meet
the criteria for application of SFAS 71 for all or part of its
operations should report that event in its financial statements. In
general, SFAS 101 requires that the enterprise report the
discontinuation of SFAS 71 by eliminating from its balance sheet all
regulatory assets and liabilities related to the applicable segment.
Additionally, if it is determined that a regulated enterprise is no
longer recovering all of its costs and therefore no longer qualifies
for SFAS 71 accounting, it is possible that a SFAS 121 impairment (see
further discussion below) may exist which could require further write-
offs of plant assets.
As of December 31, 1996, the majority of the domestic utility
companies' and System Energy's operations continue to meet each of the
criteria required for the use of SFAS 71 and the companies have
recorded significant regulatory assets.
As described in Note 2, during 1996, FERC issued Orders No. 888
and 889 which require utilities to provide open access to their
transmission system to promote a more competitive market for wholesale
power sales. As also described in Note 2, Entergy Arkansas, Entergy
Gulf States, and Entergy Mississippi have filed transition to
competition proposals with their regulators which provide, among other
things, for accelerated recovery of certain capitalized costs to
provide for an orderly transition to a competitive retail power market.
In response to these filings, certain regulatory commissions have begun
general proceedings to consider retail competition in their
jurisdictions.
As the plans have only recently been filed with the regulators,
and those regulators have generally deferred action on the plans in
lieu of their general proceedings on competition, Entergy cannot, at
this time, predict the ultimate outcome of these proceedings.
Accordingly, the domestic utility companies and System Energy
anticipate that they will continue to meet the criteria for the
application of SFAS 71 for the foreseeable future.
Deregulated Operations
Entergy Gulf States discontinued regulatory accounting principles
for its wholesale jurisdiction and its steam department during 1989 and
for the Louisiana retail deregulated portion of River Bend in 1991.
The results of these deregulated operations (before interest charges)
for the years ended December 31, 1996, 1995, and 1994 are as follows:
1996 1995 1994
(In Thousands)
Operating Revenues $174,751 $141,171 $138,822
Operating Expenses:
Fuel, operating, and maintenance 119,784 115,799 116,386
Depreciation 31,455 31,129 27,890
------------------------------------
Total Operating Expenses 151,239 146,928 144,276
Income taxes 9,598 (6,979) (249)
------------------------------------
Net Income (Loss) From Deregulated $13,914 $1,222 ($5,205)
Utility Operations ====================================
SFAS 121
In March 1995, the FASB issued SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" (SFAS 121), which became effective January 1, 1996. This
statement describes circumstances that may result in assets (including
goodwill such as the Merger acquisition adjustment, discussed above)
being impaired. The statement also provides criteria for recognition
and measurement of asset impairment. Note 2 describes regulatory
assets of $169 million (net of tax) related to Texas retail deferred
River Bend operating and carrying costs which were written off upon the
adoption of SFAS 121 in the first quarter of 1996.
Assets which are regulated under traditional cost-of-service
ratemaking, and thereby subject to SFAS 71 accounting, are generally
not subject to impairment pursuant to SFAS 121, as this form of
regulation assures that all allowed costs are subject to recovery.
However, certain deregulated assets and other operations of the
domestic utility companies totaling approximately $1.6 billion (pre-
tax) could be affected by SFAS 121 in the future. Those assets include
Entergy Arkansas' and Entergy Louisiana's retained shares of Grand Gulf
1, Entergy Gulf States' Louisiana deregulated asset plan, the Texas
jurisdiction abeyed portion of the River Bend plant, and wholesale
jurisdiction and steam department operations. Additionally, all of
Entergy's investment in other nonregulated businesses is subject to
possible impairment pursuant to SFAS 121.
Entergy periodically reviews these assets and operations whenever
events or changes in circumstances indicate that recoverability of
these assets is uncertain. Generally, the determination of
recoverability is based on the net cash flows expected to result from
such operations and assets. Projected net cash flows depend on the
future operating costs associated with the assets, the efficiency and
availability of the assets and generating units, and the future market
and price for energy over the remaining life of the assets. Based on
current estimates of future cash flows as prescribed under SFAS 121,
management anticipates that future revenues from such assets and
operations of Entergy will fully recover all related costs.
Change in Accounting for Nuclear Refueling Outage Costs (Entergy
Corporation, Entergy Arkansas, and System Energy)
In December 1995, at the recommendation of FERC, Entergy Arkansas
changed its method of accounting for nuclear refueling outage costs.
The change, effective January 1, 1995, results in Entergy Arkansas
deferring incremental maintenance costs incurred during an outage and
amortizing those costs over the operating period immediately following
the nuclear refueling outage, which is the period that the charges are
billed to customers. Previously, estimated costs of refueling outages
were accrued over the period (generally 18 months) preceding each
scheduled outage. The effect of the change for the year ended December
31, 1995, was to decrease net income by $5.1 million (net of income
taxes of $3.3 million) or $.02 per share. The cumulative effect of the
change was to increase net income $35.4 million (net of income taxes of
$22.9 million) or $.15 per share. The pro forma effects of the change
in accounting for nuclear refueling outages in 1994, assuming the new
method was applied retroactively to that year, would have been to
decrease net income $3.2 million (net of income taxes of $2.1 million),
or $.01 per share.
System Energy filed a rate increase request with FERC in May 1995
(see Note 2), which, among other things, proposed a 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 above with respect to Entergy Arkansas. As described
in Note 2, the FERC ALJ issued an initial decision in this proceeding
in July 1996, agreeing to the change in recognition of outage costs
proposed by System Energy. Accordingly, System Energy deferred the
refueling outage costs incurred in the fourth quarter of 1996. As of
December 31, 1996, System Energy's current assets included $24.0
million in deferred nuclear refueling outage costs which will be
amortized over the next fuel cycle (approximately 18 months).
Amortization of these costs in the fourth quarter of 1996 amounted to
$1.2 million.
This change will have no impact on the net income of either
Entergy or System Energy since System Energy will recover the refueling
outage costs from Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans, and these companies will, in
turn, recover these costs from their ratepayers.
Financial Instruments
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 for additional information concerning Entergy's
derivative instruments outstanding as of December 31, 1996.
Fair Value Disclosures
The estimated fair value of financial instruments was determined
using bid prices reported by dealer markets and by nationally
recognized investment banking firms. Considerable judgment is required
in developing the estimates of fair value. Therefore, estimates are
not necessarily indicative of the amounts that Entergy could realize in
a current market exchange. In addition, gains or losses realized on
financial instruments may be reflected in future rates and not accrue
to the benefit of stockholders.
Entergy considers the carrying amounts of financial instruments
classified as current assets and liabilities to be a reasonable
estimate of their fair value because of the short maturity of these
instruments. In addition, Entergy does not expect that performance of
its obligations will be required in connection with certain off-balance
sheet commitments and guarantees considered financial instruments. Due
to this factor, and because of the related-party nature of these
commitments and guarantees, determination of fair value is not
considered practicable. See Notes 5, 7, and 9 for additional
disclosure concerning fair value methodologies.
NOTE 2. RATE AND REGULATORY MATTERS
Merger-Related Rate Agreements (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans)
In November 1993, Entergy Corporation, Entergy Arkansas, Entergy
Mississippi, and Entergy New Orleans entered into separate settlement
agreements whereby the APSC, MPSC, and Council agreed to withdraw from
the SEC proceeding related to the Merger. In return, Entergy Arkansas,
Entergy Mississippi, and Entergy New Orleans agreed, among other
things, that their retail ratepayers would be protected from (i)
increases in the cost of capital resulting from risks associated with
the Merger, (ii) recovery of any portion of the acquisition premium or
transactional costs associated with the Merger, (iii) certain direct
allocations of costs associated with Entergy Gulf States' River Bend
nuclear unit, and (iv) any losses of Entergy Gulf States resulting from
resolution of litigation in connection with its ownership of River
Bend. Entergy Arkansas and Entergy Mississippi agreed not to request
any general retail rate increase that would take effect before November
1998, except for, among other things, increases associated with the
recovery of certain Grand Gulf 1-related costs, recovery of certain
taxes, and catastrophic events, and in the case of Entergy Arkansas,
excess capacity costs and costs related to the adoption of SFAS 106
that were previously deferred. Entergy Mississippi agreed that retail
base rates under the formula rate plan would not be increased above
November 1, 1993 levels for a period of five years beginning November
9, 1993.
In 1993, the LPSC and the PUCT approved separate regulatory
proposals for Entergy Gulf States that include the following elements:
(i) a five-year Rate Cap on Entergy Gulf States' retail electric base
rates in the respective states, except for force majeure (defined to
include, among other things, war, natural catastrophes, and high
inflation); (ii) a provision for passing through to retail customers
the jurisdictional portion of the fuel savings created by the Merger;
and (iii) a mechanism for tracking nonfuel operation and maintenance
savings created by the Merger. The LPSC regulatory plan provides that
such nonfuel savings will be shared 60% by shareholders and 40% by
ratepayers during the eight years following the Merger. The LPSC plan
requires annual regulatory filings by the end of each May through the
year 2001. The PUCT regulatory plan provides that such savings will be
shared equally by shareholders and ratepayers, except that the
shareholders' portion will be reduced by $2.6 million per year on a
total company basis in years four through eight. The PUCT plan also
requires a series of regulatory filings to ensure that the ratepayers'
share of such savings be reflected in rates on a timely basis, the
first of which was made in November 1996, as discussed below in Filings
with the PUCT and Texas Cities. Subsequent filings are required in
November 1998 and in November 2001. In addition, the plan requires
Entergy Corporation to hold Entergy Gulf States' Texas retail customers
harmless from the effects of the removal by FERC of a 40% cap on the
amount of fuel savings Entergy Gulf States may be required to transfer
to other domestic utility companies under the FERC tracking mechanism
(see below). On January 14, 1994, Entergy Corporation filed a petition
for review before the D.C. Circuit seeking review of FERC's deletion of
the 40% cap provision in the fuel cost protection mechanism. The
matter is currently being held in abeyance.
FERC approved Entergy Gulf States' inclusion in the System
Agreement. Commitments were adopted to provide reasonable assurance
that the ratepayers of Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans will not be allocated higher
costs.
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 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 that it is 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 December 31, 1996, 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 $266 million, respectively. The Allowed Deferrals were
approximately $77 million, net of taxes and amortization, as of
December 31, 1996. Entergy Gulf States estimates it has collected
approximately $204 million of revenues as of December 31, 1996, 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 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.
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 December 31, 1996,
of up to $278 million 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. The proposal includes a rate decrease
totaling $123 million over a three year period beginning in mid-1997
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 (excluding the portion retained - see below) as of
December 31, 1996, over a seven year period, the NRC operating licenses
for these plants permit continued operation until the years 2014, 2018,
and 2022, respectively.
Filings with the PUCT and Texas Cities (Entergy Corporation and
Entergy Gulf States)
In March 1994, the Texas Office of Public Utility Counsel and
certain cities served by Entergy Gulf States instituted an
investigation of the reasonableness of Entergy Gulf States' rates. On
March 20, 1995, the PUCT ordered a retroactive rate reduction, which
was amended, reducing the $52.9 million annual base rate reduction to
an annual level of $36.5 million. The PUCT's action was based, in
part, upon a Texas Supreme Court decision not to require a utility to
use the prospective tax benefits generated by disallowed expenses to
reduce rates. The May 26, 1995 amended order no longer required
Entergy Gulf States to pass such prospective tax benefits on to its
customers. The rate refund ordered by the PUCT in its March 20, 1995
order, retroactive to March 31, 1994, was approximately $61.8 million
(including interest) and was refunded to customers in September,
October, and November 1995. Entergy Gulf States and other parties have
appealed the PUCT order, but no assurance can be given as to the timing
or outcome of the appeal.
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 on December 18, 1996, the ALJ issued his
recommendation which included recovery of approximately $20 million of
the under-recovered fuel balance. A final decision by the PUCT is
expected in March 1997.
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 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. 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 April 1997. No assurance can be given as to the outcome of
these hearings.
Filings with the LPSC
(Entergy Corporation and Entergy Gulf States)
Annual Earnings Reviews
In May 1994, Entergy Gulf States filed a required earnings
analysis with the LPSC for the test year preceding the Merger (1993).
On December 14, 1994, the LPSC ordered a $12.7 million annual rate
reduction for Entergy Gulf States, effective January 1995. Entergy
Gulf States received a preliminary injunction from the District Court
regarding $8.3 million of the reduction relating to the earnings effect
of a 1994 change in accounting for unbilled revenues. On January 1,
1995, Entergy Gulf States reduced rates by $4.4 million. Entergy Gulf
States filed an appeal of the entire $12.7 million rate reduction with
the District Court, which denied the appeal in July 1995. Entergy Gulf
States appealed the order to the Louisiana Supreme Court. The
preliminary injunction relating to $8.3 million of the reduction
remained in effect during the appeal. On July 2, 1996, the Louisiana
Supreme Court ruled on the appeal. The Court found that the LPSC ruled
incorrectly on the treatment of the initial balance of unbilled
revenues and the revenue annualization adjustment. As a result,
Entergy Gulf States will not be required to refund the $8.3 million.
The case was remanded to the LPSC for further proceedings related to
the revenue annualization adjustment, but as a result of a subsequent
rate adjustment pursuant to the third required post-Merger earnings
analysis discussed below, the remand was moot.
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 and obtained an injunction to
stay this order, except insofar as the order requires the $13.4 million
reduction, which Entergy Gulf States implemented in November 1996. In
addition, the LPSC order provides for the recovery of $6.8 million
annually related to certain gas transportation and storage facilities
costs. Pursuant to the October 1996 LPSC Settlement, this amount was
brought forward to $8.1 million (see "LPSC Fuel Cost Review" below).
This amount will be applied as an offset against whatever refund, if
any, 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 February 1997.
An additional rate reduction may be required upon the issuance by the
LPSC of a final rate order.
LPSC Fuel Cost Review
In November 1993, the LPSC ordered a review of Entergy Gulf
States' fuel costs for the period October 1988 through September 1991
(Phase 1) based on the number of outages at River Bend and the findings
in the June 1993 PUCT fuel reconciliation case. In July 1994, the LPSC
ruled in the Phase 1 fuel review case and ordered Entergy Gulf States
to refund approximately $27.5 million to its customers. Under the
order, a refund of $13.1 million was made through a billing credit on
August 1994 bills. In August 1994, Entergy Gulf States appealed the
remaining $14.4 million of the LPSC-ordered refund to the District
Court and obtained an injunction with respect to that portion of the
refund. On April 15, 1996, the appropriate state District Court
affirmed the LPSC decision. Entergy Gulf States has appealed this
decision to the Louisiana Supreme Court. In October 1996, Entergy Gulf
States reached a settlement with the LPSC on one of the issues
presented in this appeal, resulting in a refund to ratepayers of $5.7
million plus interest. See "October 1996 LPSC Settlement" below. In
February 1997, the Louisiana Supreme Court rendered a decision on the
remaining $8.7 million, affirming the LPSC's order insofar as it
requires a refund of $8.2 million plus interst, which Entergy Gulf
States will record in 1997, and reversing the LPSC's order insofar as
it would have required an additional $0.5 million refund.
In September 1996, the LPSC completed the second phase of its
review of Entergy Gulf States' fuel costs, which covered the period
October 1991 through December 1994 (Phase II). On October 7, 1996, the
LPSC issued an order requiring a $34.2 million refund. The ordered
refund includes a disallowance of $14.3 million of capital costs
(including interest) related to certain gas transportation and storage
facilities, which were recovered through the fuel clause, and which
have been refunded pursuant to the October 1996 LPSC Settlement.
Entergy Gulf States will be permitted to recover these costs in the
future through base rates. On October 23, 1996, Entergy Gulf States
appealed and received an injunction to stay this order, except insofar
as the order requires the $14.3 million refund. See "October 1996 LPSC
Settlement" below.
October 1996 LPSC Settlement
In October 1996, Entergy Gulf States and the LPSC reached an
agreement whereby Entergy Gulf States agreed to (i) refund certain
capital costs related to gas transportation and storage facilities that
were at issue in the Phase I and Phase II fuel cost reviews and (ii)
refund similar costs recovered subsequent to the Phase II fuel cost
review. This resulted in a total refund to customers of approximately
$32.1 million, including interest. In the future, Entergy Gulf States
will be permitted to recover through base rates the capital costs
related to such gas transportation and storage facilities. As a part
of the settlement, which covered post-Phase II costs of such facilities
in addition to the costs addressed by the LPSC's order for the second
post-Merger earnings analysis, Entergy Gulf States will be permitted to
recover through base rates $1.3 million annually in addition to the
$6.8 million annual recovery provided in the order, for a total annual
base rate recovery of $8.1 million. The settlement provides that this
amount will be applied as an offset against whatever refund, if any,
may be required by a final judgment in Entergy Gulf States' appeal of
the second post-Merger earnings review 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 possibly unfairly 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, Waterford 3, and
Entergy Louisiana's portion of Grand Gulf 1 (excluding the portion
retained - see below) as of December 31, 1996, over a seven year
period, the NRC operating licenses for these plants permit continued
operation until the years 2025, 2024, and 2022, respectively.
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 31, 1997 and April 15, 1997, respectively, and other issues that
now will be included in an ongoing generic regulatory proceeding
examining electric industry restructuring.
(Entergy Corporation and Entergy Louisiana)
On June 2, 1995, as a result of a review of the earnings of
Entergy Louisiana, a $49.4 million reduction in base rates was ordered.
In the same order, the LPSC adopted for Entergy Louisiana a performance-
based formula rate plan. The formula rate plan provides a financial
incentive to reduce costs while maintaining high levels of customer
satisfaction and system reliability. The plan allows Entergy Louisiana
the opportunity to earn a higher rate of return if it improves
performance over time. Conversely, if performance declines, the rate
of return Entergy Louisiana could earn is lowered. On June 9, 1995,
Entergy Louisiana appealed the rate reduction and sought injunctive
relief from implementation of $14.7 million of the reduction. The
$14.7 million portion of the rate reduction represents revenue imputed
to Entergy Louisiana as a result of the LPSC's conclusion that the
rates charged to three industrial customers were unreasonably low.
Subsequently, a request for a $14.7 million rate increase was filed by
Entergy Louisiana. On July 13, 1995, Entergy Louisiana was granted a
preliminary injunction by the District Court enjoining $14.7 million of
the rate reduction pending a final decision on appeal. In an order
issued on January 31, 1996, the LPSC approved a settlement reducing the
$14.7 million portion of the rate reduction to $12.35 million. Refunds
issued pursuant to this settlement had the effect of implementing the
rate reduction effective April 27, 1995, and were made in the months of
January and February 1996. The refunds and related interest resulting
from the settlement amounted to $8.9 million. The District Court case
discussed above was dismissed as part of the settlement.
On April 15, 1996, Entergy Louisiana made its first annual
performance-based formula rate plan filing based on the 1995 test year.
On June 19, 1996, the LPSC approved a $12 million annual reduction in
base rates effective July 1, 1996. This reduction was based upon the
1995 test year results under the formula rate plan and reflected the
expiration of the Waterford 3 phase-in plan discussed below, which was
partially offset by the recovery of the property taxes on Waterford 3
and the related deferral discussed below. Subsequently, additional
issues were resolved by means of a settlement conference, increasing
the base rate reduction from $12 million to $16.5 million. Hearings
have been conducted to review Entergy Louisiana's allowed return on
equity and to address certain other disputed issues. This may result
in an additional rate reduction which would be prospective only. The
LPSC's ruling is expected in the second quarter of 1997.
The property tax exemption for Waterford 3 ended in December 1995
and Entergy Louisiana was required to pay $19.3 million in property
taxes to St. Charles Parish for the 1996 tax year. In a March 1996
LPSC order, Entergy Louisiana was permitted to defer the rate recovery
of these taxes for the period January 1996 through June 1996. The
order allowed for the recovery of the property tax beginning in July
1996, and also for the recovery, from July 1996 through June 1997, of
the related deferral. In addition, Entergy Louisiana's phase-in plan
for Waterford 3 will expire in June 1997. Entergy Louisiana is
recovering deferred costs annually of approximately $28.4 million.
Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
On March 15, 1996, Entergy Mississippi filed its annual earnings
review with the MPSC under its formula rate plan for the 1995 test
year. On April 18, 1996, the MPSC issued an order approving and
adopting a joint stipulation and placing the prospective rate reduction
of $5.9 million into effect on May 1, 1996.
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.
Filings with the Council (Entergy Corporation and Entergy New Orleans)
Pursuant to the 1991 NOPSI Settlement, Entergy New Orleans is
required to make earnings filings with the Council for the 1995 and
1996 rate years. A review of Entergy New Orleans' earnings for the
test year ending September 30, 1995, required Entergy New Orleans to
credit customers $6.2 million over a 12-month period which began in
March 1996.
On October 31, 1996, Entergy New Orleans filed with the Council an
analysis of its earnings for the test year ended September 30, 1996.
Based upon this earnings review, the Council ordered a refund of $18.4
million which is being credited to customers over a 12 month period
which began in February 1997.
On December 19, 1996, the Council ordered an increase in Entergy
New Orleans' franchise fee from 2.5% to 5% of gross revenues. The
increase in the 1997 franchise fee is estimated to be $12 million. The
franchise fee is collected by Entergy New Orleans as a separate line
item on customer bills and is not a component of base rates.
In January 1997, Entergy New Orleans unilaterally proposed to the
Council to reduce rates by annual amounts of $15 million. This offer
was accepted by the Council and, effective February 1, 1997, Entergy
New Orleans implemented this base rate reduction.
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 contemplates a bifurcated review and has
established hearing dates in April 1997 on the issue of rate of return.
The Council also directed Entergy New Orleans to make a cost of service
and revenue requirement filing on May 1, 1997. A procedural schedule
has not been set with respect to these other issues.
Pursuant to a settlement reached in February 1997 with the Council
as to Entergy New Orleans' deferred integrated resource planning
expenses, the Council has conditionally allowed Entergy New Orleans to
begin recovering $5 million, subject to a hearing to determine the
prudence of such expenses. Entergy New Orleans has agreed not to seek
recovery of the remaining $6.8 million of expenses incurred.
Deregulated Asset Plan (Entergy Corporation and Entergy Gulf States)
A deregulated asset plan representing an unregulated portion
(approximately 25%) of River Bend (plant costs, generation, revenues,
and expenses) was established pursuant to a January 1992 LPSC order.
The plan allows Entergy Gulf States to sell such generation to
Louisiana retail customers at 4.6 cents per kWh or off-system at higher
prices, with certain provisions for sharing such incremental revenue
above 4.6 cents per kWh between ratepayers and shareholders.
River Bend Cost Deferrals (Entergy Corporation and Entergy Gulf
States)
Entergy Gulf States deferred approximately $369 million of River
Bend operating and purchased power costs, depreciation, and accrued
carrying charges, pursuant to a 1986 PUCT accounting order.
Approximately $182 million of these costs are being amortized over a 20-
year period, and the remaining $187 million was written off in the
first quarter of 1996 in accordance with SFAS 121, as discussed above.
As of December 31, 1996, the unamortized balance of the remaining costs
was $117 million. Entergy Gulf States deferred approximately $400.4
million of similar costs pursuant to a 1986 LPSC accounting order, of
which approximately $40 million was unamortized as of December 31,
1996, and is being amortized over a 10-year period ending in February
1998.
In accordance with a phase-in plan approved by the LPSC, Entergy
Gulf States deferred $294 million of its River Bend costs related to
the period February 1988 through February 1991. Entergy Gulf States
has amortized $225 million through December 31, 1996. The remainder of
$69 million will be recovered in 1997 and early 1998.
Grand Gulf 1 and Waterford 3 Deferrals
(Entergy Corporation and Entergy Arkansas)
Under the settlement agreement entered into with the APSC in 1985
and amended in 1988, Entergy Arkansas agreed to retain a portion of its
Grand Gulf l-related costs, recover a portion of such costs currently,
and defer a portion of such costs for future recovery. In 1996 and
subsequent years, Entergy Arkansas retains 22% of its 36% interest in
Grand Gulf 1 costs and recovers the remaining 78%. The deferrals
ceased in l990, and Entergy Arkansas is recovering a portion of the
previously deferred costs each year through 1998. As of December 31,
l996, the balance of deferred costs was $228 million. Entergy Arkansas
is permitted to recover on a current basis the incremental costs of
financing the unrecovered deferrals. In the event Entergy Arkansas is
not able to sell its retained share to third parties, it may sell such
energy to its retail customers at a price equal to its avoided energy
cost, which is currently less than Entergy Arkansas' cost of energy
from its retained share.
(Entergy Corporation and Entergy Louisiana)
In a series of LPSC orders, court decisions, and agreements from
late 1985 to mid-1988, Entergy Louisiana was granted rate relief with
respect to costs associated with Waterford 3 and Entergy Louisiana's
share of capacity and energy from Grand Gulf l, subject to certain
terms and conditions. With respect to Waterford 3, Entergy Louisiana
was granted an increase aggregating $170.9 million over the period 1985-
1988, and agreed to permanently absorb, and not recover from retail
ratepayers, $284 million of its investment in the unit and to defer
$266 million of its costs related to the years 1985-1988 to be
recovered from April 1988 through June 1997.
With respect to Grand Gulf l, in November 1988, Entergy Louisiana
agreed to retain and not recover from retail ratepayers, 18% of its 14%
share (approximately 2.52%) of the costs of Grand Gulf l capacity and
energy. Entergy Louisiana is allowed to recover through the fuel
adjustment clause 4.6 cents per kWh for the energy related to its
retained portion of these costs. Alternatively, Entergy Louisiana may
sell such energy to nonaffiliated parties at prices above the fuel
adjustment clause recovery amount, subject to the LPSC's approval.
(Entergy Corporation and Entergy Mississippi)
Entergy Mississippi entered into a plan with the MPSC that
provides, among other things, for the recovery by Entergy Mississippi,
in equal annual installments over ten years beginning October 1, 1988,
of all Grand Gulf 1-related costs deferred through September 30, 1988,
pursuant to a final order by the MPSC. Additionally, the plan provides
that Entergy Mississippi defer, in decreasing amounts, a portion of its
Grand Gulf 1-related costs over four years beginning October 1, 1988.
These deferrals are being recovered by Entergy Mississippi over a six-
year period beginning in October 1992 and ending in September 1998. As
of December 31, 1996, the uncollected balance of Entergy Mississippi's
deferred costs was approximately $247 million. The plan also allows
for the current recovery of carrying charges on all deferred amounts.
(Entergy Corporation and Entergy New Orleans)
Under Entergy New Orleans' various rate settlements with the
Council in 1986, 1988, and 1991, Entergy New Orleans agreed to absorb
and not recover from ratepayers a total of $96.2 million of its Grand
Gulf 1 costs. Entergy New Orleans was permitted to implement annual
rate increases in decreasing amounts each year through 1995, and to
defer certain costs and related carrying charges for recovery on a
schedule extending from 1991 through 2001. As of December 31, 1996,
the uncollected balance of Entergy New Orleans' deferred costs was $136
million.
February 1994 Ice Storm/Rate Rider (Entergy Corporation and Entergy
Mississippi)
A February 1994 ice storm left more than 80,000 Entergy
Mississippi customers without electric power across the service area.
Damage to transmission and distribution lines, equipment, poles, and
facilities totaled approximately $77.2 million, with $64.6 million of
these amounts capitalized as plant-related costs. The remaining
balances were recorded as a deferred debit.
Subsequent to a request by Entergy Mississippi for rate recovery,
the MPSC approved a stipulation in September 1994 with respect to the
recovery of ice storm costs recorded through April 30, 1994. Under the
stipulation, Entergy Mississippi implemented an ice storm rate rider,
which increased rates approximately $8 million for a period of five
years beginning on September 29, 1994. At the end of the five-year
period, the revenue requirement associated with the undepreciated ice
storm capitalized costs will be included in Entergy Mississippi's base
rates to the extent that this revenue requirement does not result in
Entergy Mississippi's rate of return on rate base being above the
benchmark rate of return under Entergy Mississippi's formula rate plan.
The MPSC approved a second stipulation in September 1995 which allows
for a $2.5 million rate increase for a period of four years beginning
September 28, 1995, to recover costs related to the ice storm that were
recorded after April 30, 1994. The stipulation also allows for
undepreciated ice storm capital costs recorded after April 30, 1994, to
be treated as described above.
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 first 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. In July 1995, Entergy
Mississippi filed a schedule with the MPSC that will defer the ultimate
amount 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 deferred rate increase is to be amortized
over 48 months beginning October 1998.
(Entergy New Orleans)
Entergy New Orleans' allocation of the proposed System Energy
wholesale rate increase is $9.6 million. In February 1996, Entergy New
Orleans filed a plan with the City 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.
FERC Settlement (Entergy Corporation and System Energy)
In November 1994, FERC approved an agreement settling a long-
standing dispute involving income tax allocation procedures of System
Energy. In accordance with the agreement, System Energy refunded
approximately $61.7 million to Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans, each of which in turn has
made refunds or credits to its customers (except for those portions
attributable to Entergy Arkansas' and Entergy Louisiana's retained
share of Grand Gulf 1 costs). Additionally, System Energy will refund
a total of approximately $62 million, plus interest, to Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans over the period through June 2004. The settlement also
required the write-off of certain related unamortized balances of
deferred investment tax credits by Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans. The settlement reduced
Entergy Corporation's consolidated net income for the year ended
December 31, 1994, by approximately $68.2 million, offset by the
write-off of the unamortized balances of related deferred investment
tax credits of approximately $69.4 million ($2.9 million for Entergy
Corporation; $27.3 million for Entergy Arkansas; $31.5 million for
Entergy Louisiana; $6 million for Entergy Mississippi; and $1.7 million
for Entergy New Orleans). System Energy also reclassified from utility
plant to other deferred debits approximately $81 million of other Grand
Gulf 1 costs. Although such costs are excluded from rate base, System
Energy is recovering them over a 10-year period. Interest on the $62
million refund and the loss of the return on the $81 million of other
Grand Gulf 1 costs will reduce Entergy's and System Energy's net income
by approximately $10 million annually over the next 8 years.
NOTE 3. INCOME TAXES
Entergy Corporation's and its subsidiaries' income tax expenses
for 1996, 1995, and 1994 consist of the following (in thousands):
<TABLE>
<CAPTION>
1996 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Current:
Federal $272,036 $108,583 $ 510 $ 78,629 $ 64,358 $ 23,860 $ 19,637
State 72,204 21,888 201 21,122 9,635 4,631 13,508
------------------------------------------------------------------------------
Total 344,240 130,471 711 99,751 73,993 28,491 33,145
Deferred -- net 100,572 (41,261) 106,715 24,656 (29,390) (11,587) 52,447
Investment tax credit
adjustments -- net (23,653) (4,766) (5,335) (5,847) (3,497) (687) (3,471)
------------------------------------------------------------------------------
Recorded income tax expense $421,159 $ 84,444 $102,091 $118,560 $ 41,106 $ 16,217 $ 82,121
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
1995 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Current:
Federal $306,910 $ 87,937 $ 13 $ 93,670 $ 62,436 $ 19,071 $108,920
State 60,278 18,027 - 20,994 9,215 3,394 11,910
------------------------------------------------------------------------------
Total 367,188 105,964 13 114,664 71,651 22,465 120,830
Deferred -- net 13,333 (5,363) 67,703 8,148 (35,224) (1,364) (41,871)
Investment tax credit
adjustments -- net (21,478) (5,658) (4,472) (5,698) (1,550) (634) (3,466)
------------------------------------------------------------------------------
Recorded income tax expense $359,043 $ 94,943 $ 63,244 $117,114 $ 34,877 $ 20,467 $ 75,493
==============================================================================
Charged to cummulative effect $ 22,861 $ 22,861 $ - $ - $ - $ - $ -
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
1994 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Current:
Federal $227,046 $ 64,238 $ 71 $ 68,891 $ 39,505 $ 19,557 $ 54,295
State 50,300 19,062 14 10,369 7,379 3,049 13,182
------------------------------------------------------------------------------
Total 277,346 83,300 85 79,260 46,884 22,606 67,477
Deferred -- net (54,429) (17,939) (57,911) 21,580 (26,763) (15,674) (27,375)
Investment tax credit
adjustments -- net (24,739) (8,814) (4,260) (6,048) (1,673) (681) (3,265)
Investment tax credit
amortization -FERC
Settlement (66,454) (27,327) - (31,504) (5,973) (1,651) -
------------------------------------------------------------------------------
Recorded income tax expense $131,724 $ 29,220 $(62,086) $ 63,288 $ 12,475 $ 4,600 $ 36,837
==============================================================================
</TABLE>
Entergy Corporation's and its subsidiaries' total income taxes
differ from the amounts computed by applying the statutory federal
income tax rate to income before taxes. The reasons for the
differences for the years 1996, 1995, and 1994 are (amounts in
thousands):
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
1996 Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Computed at statutory rate (35%) $319,103 $84,785 $34,371 $108,262 $42,111 $15,048 $63,626
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 54,801 10,796 19,389 11,535 4,188 1,449 7,444
Depreciation 15,829 (2,102) (6,305) 6,722 1,604 402 15,508
Rate deferrals - net 1,973 1,115 5,537 (1,829) (3,430) 580 -
Amortization of investment
tax credits (20,349) (4,608) (4,380) (5,664) (1,582) (635) (3,480)
Flow-through/permanent
differences 1,059 (845) 2,792 (449) (275) (164) -
SFAS 121 write-off 48,265 - 48,265 - - - -
Other -- net 478 (4,697) 2,422 (17) (1,510) (463) (977)
---------------------------------------------------------------------------------
Total income taxes $421,159 $84,444 $102,091 $118,560 $41,106 $16,217 $82,121
=================================================================================
Effective Income Tax Rate 46.2% 34.4% 105.5% 37.6% 34.2% 37.7% 45.4%
</TABLE>
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
1995 Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Computed at statutory rate (35%) $334,944 $93,458 $65,157 $111,528 $36,240 $19,198 $58,986
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 42,599 11,551 8,375 11,532 3,344 1,971 7,036
Depreciation 1,670 (1,510) (13,073) 2,693 739 (661) 13,482
Rate deferrals - net 1,699 975 6,240 (2,626) (3,465) 575 -
Amortization of investment
tax credits (20,549) (5,658) (4,475) (5,711) (1,548) (634) (3,480)
Other -- net (1,320) (3,873) 1,020 (302) (433) 18 (531)
----------------------------------------------------------------------------------------
Total income taxes $359,043 $94,943 $63,244 $117,114 $34,877 $20,467 $75,493
========================================================================================
Effective Income Tax Rate 37.5% 35.5% 34.0% 36.7% 33.7% 37.3% 44.8%
</TABLE>
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
1994 Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Computed at statutory rate (35%) $194,448 $60,017 ($50,694) $96,994 $21,438 $6,234 $14,785
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 13,766 7,821 (6,571) 5,147 2,465 456 7,565
Depreciation 9,995 (921) (8,188) 3,219 1,930 (586) 14,541
Rate deferrals - net 1,435 729 6,551 (2,749) (3,810) 714 -
Amortization of investment
tax credits (27,337) (10,220) (4,472) (6,305) (1,674) (681) (3,476)
Amortization of investment
tax credits - FERC Settlement (66,454) (27,327) - (31,504) (5,973) (1,651) -
Adjustment of prior year taxes 9,425 (208) (2,460) - (1,954) (423) 2,947
Other -- net (3,554) (671) 3,748 (1,514) 53 537 475
-----------------------------------------------------------------------------------
Total income taxes $131,724 $29,220 ($62,086) $63,288 $12,475 $4,600 $36,837
===================================================================================
Effective Income Tax Rate 23.7% 17.1% 42.9% 22.9% 20.4% 25.9% 87.2%
</TABLE>
Significant components of Entergy Corporation's and its
subsidiaries' net deferred tax liabilities as of December 31, 1996 and
1995, are as follows (in thousands):
<TABLE>
<CAPTION>
1996 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Deferred Tax Liabilities:
Net regulatory assets/(liabilities) ($1,406,921) ($287,217) ($434,380) ($349,667) ($21,537) ($9,717) ($304,403)
Plant-related basis differences (2,986,993) (476,364) (1,016,616) (716,974) (185,038) (50,435) (512,519)
Rate deferrals (322,530) (84,826) (68,282) (2,839) (113,669) (52,914) -
Other (143,792) (59,592) (9,243) (31,433) (7,604) (6,193) (24,917)
----------------------------------------------------------------------------------------
Total ($4,860,236) ($907,999) ($1,528,521) ($1,100,913) ($327,848) ($119,259) ($841,839)
========================================================================================
Deferred Tax Assets:
Accumulated deferred investment
tax credit 210,879 42,450 61,563 53,831 9,724 3,666 39,645
Investment tax credit carryforwards 138,779 - 138,779 - - - -
NOL carryforwards 24,990 - 24,990 - - - -
Alternative minimum tax credit 40,658 - 40,658 - - - -
Sale and leaseback 233,823 - - 108,390 - - 125,433
Removal cost 102,268 - 27,391 61,716 2,454 10,707 -
Unbilled revenues 37,692 - 17,824 14,965 (343) 5,246 -
Pension-related items 30,869 - 11,291 8,838 2,008 5,987 2,745
Rate refund 25,409 - - - - 7,077 18,332
FERC Settlement 19,079 - - - - - 19,079
Other 147,020 9,049 61,804 23,545 5,849 8,097 12,585
--------------------------------------------------------------------------------------
Total $1,011,466 $51,499 $384,300 $271,285 $19,692 $40,780 $217,819
======================================================================================
Net deferred tax liability ($3,848,770) ($856,500) ($1,144,221) ($829,628) ($308,156) ($78,479) ($624,020)
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
1995 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Deferred Tax Liabilities:
Net regulatory assets/(liabilities) ($1,494,000) ($264,166) ($512,281) ($357,528) ($17,147) ($10,723) ($332,154)
Plant-related basis differences (3,071,519) (480,465) (1,060,241) (722,680) (181,792) (50,820) (538,215)
Rate deferrals (467,691) (131,261) (104,695) (12,652) (157,168) (61,915) -
Other (117,510) (69,475) (1,814) (35,272) (9,339) (3,134) (10,365)
------------------------------------------------------------------------------------------
Total ($5,150,720) ($945,367) ($1,679,031) ($1,128,132) ($365,446) ($126,592) ($880,734)
==========================================================================================
Deferred Tax Assets:
Accumulated deferred investment
tax credit 214,505 44,260 58,653 56,008 10,702 3,910 40,973
Investment tax credit carryforwards 167,713 - 167,713 - - - -
Valuation allowance (44,597) - (44,597) - - - -
NOL carryforwards 151,141 - 151,141 - - - -
Alternative minimum tax credit 130,760 - 39,709 27,409 - - 63,642
Sale and leaseback 225,620 - - 105,788 - - 119,832
Removal cost 97,184 - 25,701 59,148 2,316 10,019 -
Unbilled revenues 42,923 - 22,384 16,850 - 3,689 -
Pension-related items 21,003 - 14,472 - 2,342 4,189 -
Operating provisions 6,795 - - - - 6,795 -
Provision - FASB 5 contingencies 7,250 7,250 - - - - -
FERC Settlement 19,978 - - - - 459 19,519
Other 259,954 21,394 110,176 52,285 17,415 6,703 34,586
-----------------------------------------------------------------------------------------
Total $1,300,229 $72,904 $545,352 $317,488 $32,775 $35,764 $278,552
=========================================================================================
Net deferred tax liability ($3,850,491) ($872,463) ($1,133,679) ($810,644) ($332,671) ($90,828) ($602,182)
=========================================================================================
</TABLE>
As of December 31, 1996, Entergy has investment tax credit (ITC)
carryforwards of $138.8 million, federal net operating loss (NOL)
carryforwards of $50.8 million, and state NOL carryforwards of $105.2
million, all related to Entergy Gulf States operations. The ITC
carryforwards include the 35% reduction required by the Tax Reform Act
of 1986 and may be applied solely against federal income tax liability
of Entergy Gulf States and, if not utilized, will expire between 1997
and 2002. At December 31, 1995, the projected amount of ITC
carryforwards which would expire unutilized was estimated to be $44.6
million, which was based upon projections of estimated taxable income
of Entergy Gulf States and, accordingly, a valuation reserve was
recorded for this amount. At December 31, 1996, management estimated
that none of the remaining ITC carryforwards would expire unutilized,
and the valuation reserve was eliminated. The alternative minimum tax
(AMT) credit carryforwards as of December 31, 1996 were $40.7 million,
all related to Entergy Gulf States operations. This AMT credit can be
carried forward indefinitely and may be applied solely against the
federal income tax liability of Entergy Gulf States.
In accordance with the System Energy FERC Settlement, the domestic
utility companies wrote off $66.6 million of unamortized deferred
investment tax credits in 1994, including $27.3 million at Entergy
Arkansas, $31.5 million at Entergy Louisiana, $6.0 million at Entergy
Mississippi, and $1.7 million at Entergy New Orleans.
In August 1994, Entergy received an IRS report covering the
federal income tax audit of Entergy Corporation and subsidiaries for
the years 1988-90. The report asserted an $80 million tax deficiency
for the 1990 tax return related primarily to the utilization of
accelerated investment tax credits associated with the 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 Corporation and the Appeals
Officer agreed to pursue a "Technical Advice" ruling from the IRS
National Office to address the remainder of the issue. Entergy
Corporation believes there is no material tax deficiency and is
confident that a satisfactory resolution of the matter will be
achieved.
NOTE 4. LINES OF CREDIT AND RELATED SHORT-TERM BORROWINGS (Entergy
Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
In November 1996, SEC authorization was received by Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy increasing short-term borrowing
limits to $235 million, $340 million, $225 million, $103 million, $35
million, and $140 million, respectively (for a total of $1.078
billion). These authorizations are effective through November 30, 2001.
Of these companies, Entergy Louisiana and Entergy Mississippi had
borrowings outstanding as of December 31, 1996. Entergy Louisiana and
Entergy Mississippi had $31.1 million and $50.3 million, respectively,
of borrowings outstanding under the money pool, an intra-system
borrowing arrangement designed to reduce the domestic utility
companies' dependence on external short-term borrowings. Entergy
Arkansas, Entergy Louisiana, and Entergy Mississippi had undrawn lines
of credit as of December 31, 1996, of $25 million, $64.2 million, and
$30 million, respectively.
In July 1995, Entergy Corporation received SEC authorization for a
$300 million bank credit facility. Thereafter, a three-year credit
agreement was signed with a group of banks in October 1995 to provide
up to $300 million of loans to Entergy Corporation. $230 million was
drawn on this facility for the acquisition of CitiPower in January 1996
and was subsequently repaid throughout the course of the year. See Note
13 for a discussion of the acquisition. As of December 31, 1996, no
amounts were outstanding against the facility. In January 1997,
Entergy Corporation filed an amendment with the SEC to increase the
authorization from $300 million to $500 million.
On September 13, 1996, Entergy Corporation and ETHC obtained a
three-year $100 million bank line of credit that may be increased up to
$300 million and can be drawn by either Entergy Corporation or ETHC
(with a guarantee from Entergy Corporation). The proceeds are to be
used exclusively for exempt telecommunication investments. As of
December 31, 1996, $20 million borrowed by Entergy Corporation was
outstanding under this facility.
Other Entergy companies have SEC authorization to borrow through
the money pool, from Entergy Corporation, and from commercial banks in
the aggregate principal amounts up to $265 million, of which $88.4
million was outstanding as of December 31, 1996. Some of these
borrowings are restricted as to use, and are secured by certain assets.
In total, Entergy had short-term commitments in the amount of
$607.6 million as of December 31, 1996, of which $575.2 million was
unused. The weighted-average interest rate on the outstanding
borrowings as of December 31, 1996, and December 31, 1995, was 6.10%
and 6.35%, respectively. Commitment fees on the lines of credit for
Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi are 0.125%
of the undrawn amounts. The commitment fees for Entergy Corporation's
$300 million credit facility and ETHC's $100 million credit facility
are currently 0.17%, but can fluctuate depending on the senior debt
ratings of the domestic utility companies. See Note 7 for a discussion
of commitments for long-term financing arrangements.
NOTE 5. PREFERRED, PREFERENCE, AND COMMON STOCK (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans)
The number of shares, authorized and outstanding, and dollar value
of preferred and preference stock for Entergy, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans as of December 31, 1996, and 1995 were:
<TABLE>
<CAPTION>
Shares
Authorized Total Call Price
and Outstanding Dollar Value Per Share as of
1996 1995 1996 1995 December 31, 1996
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Arkansas Preferred Stock
Without sinking fund
Cumulative, $100 par value:
4.32% Series 70,000 70,000 $ 7,000 $ 7,000 $103.647
4.72% Series 93,500 93,500 9,350 9,350 $107.000
4.56% Series 75,000 75,000 7,500 7,500 $102.830
4.56% 1965 Series 75,000 75,000 7,500 7,500 $102.500
6.08% Series 100,000 100,000 10,000 10,000 $102.830
7.32% Series 100,000 100,000 10,000 10,000 $103.170
7.80% Series 150,000 150,000 15,000 15,000 $103.250
7.40% Series 200,000 200,000 20,000 20,000 $102.800
7.88% Series 150,000 150,000 15,000 15,000 $103.000
Cumulative, $25 par value:
8.84% Series - 400,000 - 10,000
Cumulative, $0.01 par value:
$2.40 Series (a) - 2,000,000 - 50,000 -
$1.96 Series (a)(b) 600,000 600,000 15,000 15,000 -
--------- --------- -------- --------
Total without sinking fund 1,613,500 4,013,500 $116,350 $176,350
========= ========= ======== ========
With sinking fund:
Cumulative, $100 par value:
8.52% Series 300,000 350,000 $30,000 $35,000 $104.260
Cumulative, $25 par value:
9.92% Series 401,085 561,085 10,027 14,027 $26.320
------- ------- ------- -------
Total with sinking fund 701,085 911,085 $40,027 $49,027
======= ======= ======= =======
Fair Value of Preferred Stock with
sinking fund(d) $41,835 $51,476
======= =======
</TABLE>
<TABLE>
<CAPTION>
Shares
Authorized Total Call Price
and Outstanding Dollar Value Per Share as of
1996 1995 1996 1995 December 31, 1996
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Gulf States Preferred and Preference Stock
Preference Stock
Cumulative, without par value
7% Series (a)(b) 6,000,000 6,000,000 $150,000 $150,000 -
========= ========= ======== ========
Preferred Stock
Authorized 6,000,000, $100 par
value, cumulative
Without sinking fund
4.40% Series 51,173 51,173 $ 5,117 $ 5,117 $108.00
4.50% Series 5,830 5,830 583 583 $105.00
4.40% - 1949 Series 1,655 1,655 166 166 $103.00
4.20% Series 9,745 9,745 975 975 $102.82
4.44% Series 14,804 14,804 1,480 1,480 $103.75
5.00% Series 10,993 10,993 1,099 1,099 $104.25
5.08% Series 26,845 26,845 2,685 2,685 $104.63
4.52% Series 10,564 10,564 1,056 1,056 $103.57
6.08% Series 32,829 32,829 3,283 3,283 $103.34
7.56% Series 350,000 350,000 35,000 35,000 $101.80
8.52% Series 500,000 500,000 50,000 50,000 $102.43
9.96% Series 350,000 350,000 35,000 35,000 $102.64
--------- --------- -------- --------
Total without sinking fund 1,364,438 1,364,438 $136,444 $136,444
========= ========= ======== ========
With sinking fund:
8.80% Series 184,595 204,495 $18,459 $20,450 $100.00
9.75% Series - 19,543 - 1,954 $100.00
8.64% Series 140,000 168,000 14,000 16,800 $101.00
Adjustable Rate - A,7.39%(c) 180,000 192,000 18,000 19,200 $100.00
Adjustable Rate - B,7.44%(c) 270,000 292,500 27,000 29,250 $100.00
------- ------- ------- -------
Total with sinking fund 774,595 876,538 $77,459 $87,654
======= ======= ======= =======
Fair Value of Preference Stock and
Preferred Stock with sinking fund(d) $214,475 $219,191
======== ========
</TABLE>
<TABLE>
<CAPTION>
Shares
Authorized Total Call Price
and Outstanding Dollar Value Per Share as of
1996 1995 1996 1995 December 31, 1996
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Louisiana Preferred Stock
Without sinking fund
Cumulative, $100 par value:
4.96% Series 60,000 60,000 $ 6,000 $ 6,000 $104.25
4.16% Series 70,000 70,000 7,000 7,000 $104.21
4.44% Series 70,000 70,000 7,000 7,000 $104.06
5.16% Series 75,000 75,000 7,500 7,500 $104.18
5.40% Series 80,000 80,000 8,000 8,000 $103.00
6.44% Series 80,000 80,000 8,000 8,000 $102.92
7.84% Series 100,000 100,000 10,000 10,000 $103.78
7.36% Series 100,000 100,000 10,000 10,000 $103.36
8.56% Series - 100,000 - 10,000 -
Cumulative, $25 par value:
8.00% Series(b) 1,480,000 1,480,000 37,000 37,000 -
9.68% Series - 2,000,000 - 50,000 -
--------- --------- -------- --------
Total without sinking fund 2,115,000 4,215,000 $100,500 $160,500
========= ========= ======== ========
With sinking fund:
Cumulative, $100 par value:
7.00% Series(b) 500,000 500,000 $50,000 $50,000 -
8.00% Series(b) 350,000 350,000 35,000 35,000 -
Cumulative, $25 par value:
12.64% Series 300,000 600,370 7,500 15,009 $ 26.58
--------- --------- ------- -------
Total with sinking fund 1,150,000 1,450,370 $92,500 $100,009
========= ========= ======= ========
Fair Value of Preferred Stock with
sinking fund(d) $93,825 $103,135
======= ========
</TABLE>
<TABLE>
<CAPTION>
Shares
Authorized Total Call Price
and Outstanding Dollar Value Per Share as of
1996 1995 1996 1995 December 31, 1996
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Mississippi Preferred Stock
Without sinking fund
Cumulative, $100 par value:
4.36% Series 59,920 59,920 $ 5,992 $ 5,992 $103.86
4.56% Series 43,888 43,888 4,389 4,389 $107.00
4.92% Series 100,000 100,000 10,000 10,000 $102.88
7.44% Series 100,000 100,000 10,000 10,000 $102.81
8.36% Series (b) 200,000 200,000 20,000 20,000 -
9.16% Series 75,000 75,000 7,500 7,500 $104.06
--------- --------- -------- --------
Total without sinking fund 578,808 578,808 $ 57,881 $ 57,881
========= ========= ======== ========
With sinking fund:
Cumulative, $100 par value:
9.76% Series 70,000 140,000 $ 7,000 $14,000 $100.00
12.00% Series - 27,700 - 2,770 -
--------- --------- ------- -------
Total with sinking fund 70,000 167,700 $ 7,000 $ 16,770
========= ========= ======= ========
Fair Value of Preferred Stock with
sinking fund(d) $ 7,000 $ 16,936
======= ========
</TABLE>
<TABLE>
<CAPTION>
Shares
Authorized Total Call Price
and Outstanding Dollar Value Per Share as of
1996 1995 1996 1995 December 31, 1996
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy New Orleans Preferred Stock
Without sinking fund
Cumulative, $100 par value:
4.75% Series 77,798 77,798 $ 7,780 $ 7,780 $105.00
4.36% Series 60,000 60,000 6,000 6,000 $104.58
5.56% Series 60,000 60,000 6,000 6,000 $102.59
--------- --------- -------- --------
Total without sinking fund 197,798 197,798 $ 19,780 $ 19,780
========= ========= ======== ========
Entergy
Subsidiaries' Preference Stock
(a)(b): 6,000,000 6,000,000 $150,000 $150,000
========= ========= ======== ========
Subsidiaries' Preferred Stock:
Without sinking fund 5,869,544 10,369,544 $430,955 $550,955
========= ========== ======== ========
With sinking fund 2,695,680 3,405,693 $216,986 $253,460
========= ========= ======== ========
Fair Value of Preference Stock and
Preferred Stock with sinking fund(d) $357,135 $390,738
======== ========
</TABLE>
(a) The total dollar value represents the involuntary liquidation
value of $25 per share.
(b) These series are not redeemable as of December 31, 1996.
(c) Represents weighted-average annualized rates for 1996.
(d) Fair values were determined using bid prices reported by dealer
markets and by nationally recognized investment banking firms.
See Note 1 for additional disclosure of fair value of financial
instruments.
Changes in the preferred stock, with and without sinking fund,
preference stock, and common stock of Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans
during the last three years were:
Number of Shares
1996 1995 1994
Preferred stock retirements
Entergy Arkansas
$100 par value (50,000) (25,000) (45,000)
$25 par value (560,000) (280,000) (280,000)
$0.01 par value (2,000,000) - -
Entergy Gulf States
$100 par value (101,943) (72,834) (60,667)
Entergy Louisiana
$100 par value (100,000) - -
$25 par value (2,300,370) (450,211) (601,537)
Entergy Mississippi
$100 par value (97,700) (150,000) (150,000)
Entergy New Orleans
$100 par value - (34,495) (15,000)
Cash sinking fund requirements and mandatory redemptions for the
next five years for preferred and preference stock, outstanding as of
December 31, 1996, are:
Entergy Entergy Entergy Entergy
Entergy Arkansas Gulf States Louisiana Mississippi
(In Thousands)
1997 $21,216 $4,500 $5,966 $3,750 $7,000
1998 14,225 4,500 5,966 3,759 -
1999 60,466 4,500 5,966 50,000 -
2000 160,466 4,500 155,966 - -
2001 45,466 4,500 5,966 35,000 -
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
Entergy Mississippi have the annual noncumulative option to redeem, at
par, additional amounts of certain series of their outstanding
preferred stock.
Entergy Corporation repurchased and retired (returned to
authorized but unissued status) 1,230,000 shares of common stock at a
cost of $30.7 million in 1994. There were no stock repurchases in 1995
or 1996.
Entergy Corporation from time to time reissues treasury shares to
meet the requirements of the Stock Plan for Outside Directors
(Directors' Plan), the Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Equity Plan), and certain other stock benefit plans.
Entergy Corporation repurchased in the market 2,805,000 shares of its
common stock in 1994 at a cost of $88.8 million. The Directors' Plan
awards nonemployee directors a portion of their compensation in the
form of a fixed number of shares of Entergy Corporation common stock.
Shares awarded under the Directors' Plan were 6,750, 9,251, and 18,757
during 1996, 1995, and 1994, respectively.
During 1996, Entergy Corporation issued 755,200 shares of its
previously repurchased common stock, reducing the amount held as
treasury stock by $22.2 million. Entergy Corporation issued these
shares to meet the requirements of its various stock plans. In
addition, Entergy Corporation received proceeds of $118 million from
the issuance of 4,438,972 shares of common stock under its new dividend
reinvestment and stock purchase plan during 1996.
The Equity Plan grants stock options, equity awards, and incentive
awards to key employees of the domestic utility companies. The costs
of awards are charged to income over the period of the grant or
restricted period, as appropriate. Amounts charged to compensation
expense in 1996 were immaterial. Stock options, which comprise 50% of
the shares targeted for distribution under the Equity Plan, are granted
at exercise prices not less than market value on the date of grant.
The options are generally exercisable no less than six months nor more
than 10 years after the date of grant.
Entergy sponsors the Employee Stock Ownership Plan of Entergy
Corporation and Subsidiaries (ESOP) and the Savings Plan of Entergy
Corporation and Subsidiaries (Savings Plan). Both plans are defined
contribution plans covering eligible employees of Entergy and its
subsidiaries who have completed certain service requirements.
Entergy's subsidiaries' contributions to the ESOP and the Savings Plan,
and any income thereon, are invested in shares of Entergy Corporation
common stock. The allowed contributions to the ESOP are accrued based
on the expected utilization of additional investment tax credits in the
applicable Federal income tax return of Entergy and its subsidiaries,
and on expected voluntary participant contributions. Entergy's
subsidiaries contributed $22.8 million to the ESOP for the year ended
December 31, 1995. There were no contributions in the years ended
December 31, 1996 and 1994.
The Savings Plan provides that the employing Entergy subsidiary
may make matching contributions to the plan in an amount equal to 50
percent of the participant's basic contribution. In 1996, 1995, and
1994, Entergy's subsidiaries contributed $13.2 million, $13.2 million,
and $11.7 million, respectively, to the Entergy Savings Plan.
Entergy Gulf States sponsors the Gulf States Utilities Company
Employee Stock Ownership Plan (GSU ESOP) and the Gulf States Utilities
Company Employees' Thrift Plan (GSU Thrift Plan), which are both
defined contribution plans. The GSU ESOP is available to all Entergy
Gulf States employees, pre-Merger Entergy Gulf States employees and
post-Merger employees of Entergy Operations, whose primary work
location is River Bend, upon completion of certain eligibility
requirements. All contributions to the plan are invested in shares of
Entergy Corporation common stock. Entergy Gulf States makes
contributions to the GSU ESOP based on expected utilization of
additional investment tax credits in the Entergy Gulf States Federal
tax return and on expected participants' contributions. No additional
contributions were made to the GSU ESOP during 1996, 1995, and 1994.
The GSU Thrift Plan is available to certain Entergy Operations
employees whose primary work location is River Bend. Entergy Gulf
States makes matching contributions to the GSU Thrift Plan equal to 50
percent of a participant's basic contribution which may be invested, at
the participant's discretion, in shares of Entergy Corporation common
stock. Entergy Gulf States' contributions to the GSU Thrift Plan for
the years ended December 31, 1996, 1995, and 1994 were $.3 million,
$1.1 million, and $3.9 million, respectively.
Entergy applies APB Opinion 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for stock
options. Accordingly, no compensation cost is required to be
recognized for the stock options described above until such options are
exercised because the exercise prices are not less than market value on
the date of grant. The impact on Entergy's net income and earnings per
share would have been immaterial had compensation cost for the stock
options been determined based on the fair value at the grant dates for
awards under the option plans consistent with the method prescribed by
SFAS 123.
In applying the disclosure provisions of SFAS 123, the fair value
of each option grant is estimated on the date of grant using the Black-
Scholes option-pricing model with expected stock price volatility of
18%, 24%, and 19% in 1996, 1995, and 1994, respectively, and
additional assumptions for each of those years as follows: risk-free
interest rates of 6%, expected lives of 10 years, and dividends of
$1.80 per share.
Nonstatutory stock option transactions are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
Average Average Average
Number Option Number Option Number Option
of Options Price of Options Price of Options Price
<S> <C> <C> <C> <C> <C> <C>
Beginning-of-year balance 457,909 $25.98 170,409 $34.86 102,909 $33.46
Options granted 82,500 29.38 315,000 21.39 67,500 37.00
Options exercised (7,500) 23.38 (12,500) 23.38 - -
Options expiring unused (5,000) 35.88 (15,000) 32.75 - -
------- ------- -------
End-of-year balance 527,909 $26.45 457,909 $25.98 170,409 $34.86
======= ======= =======
Options exercisable at year-end 277,909 207,909 170,409
Weighted average fair value of
options granted $2.67 $5.48 $2.45
</TABLE>
The following table summarizes information about stock options
outstanding as of December 31, 1996:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
Weighted-Avg
Remaining Weighted- Weighted-
Range of As of Contractual Avg. Exercise As of Avg. Exercise
Exercise Prices 12/31/96 Life-Yrs. Price 12/31/96 Price
<S> <C> <C> <C> <C> <C>
$20 - $30 404,302 8.2 $23.51 154,302 $27.77
$30 - $40 123,607 6.6 $36.09 123,607 $36.09
------- -------
$20 - $40 527,909 7.8 $26.45 277,909 $31.47
======= =======
</TABLE>
To meet the requirements of the Employee Stock Investment Plan
(ESIP), Entergy Corporation is authorized to issue or acquire, through
March 31, 1997, up to 2,000,000 shares of its common stock to be held
as treasury shares. Under the ESIP, employees may be granted the
opportunity to purchase (for up to 10% of their regular annual salary,
but not more than $25,000) common stock at 85% of the market value on
the first or last business day of the plan year, whichever is lower.
Through this program, employees purchased 247,122 and 329,863 shares
for the 1995 and 1994 plan years, respectively. The 1996 plan year
runs from April 1, 1996, to March 31, 1997. In February 1997, Entergy
received authority from the SEC to extend the ESIP for an additional
period of three years ending on March 31, 2000. Under the extended
plan, Entergy Corporation may issue either treasury shares or
previously authorized but unissued shares.
NOTE 6. COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES
(Entergy Arkansas)
Entergy Arkansas Capital I (Trust) was established as a financing
subsidiary of Entergy Arkansas for the purpose of issuing common and
preferred securities. On August 14, 1996, the Trust issued $60 million
in aggregate liquidation preference amount of 8.5% Cumulative Quarterly
Income Preferred Securities (Preferred Securities) in a public offering
and $1.9 million of common securities to Entergy Arkansas. The Trust
used the proceeds from the sale of the Preferred Securities and the
common securities to purchase from Entergy Arkansas 8.5% junior
subordinated deferrable interest debentures in the amount of $61.9
million (Debentures). The Debentures held by the Trust are its only
asset and the Trust will use interest payments received on the
Debentures to make cash distributions on the Preferred Securities.
The Preferred Securities of the Trust, as well as the Debentures,
mature on September 30, 2045. The Preferred Securities are redeemable,
however, at the option of Entergy Arkansas beginning in 2001 at 100% of
their principal amount, or earlier under certain limited circumstances,
including the loss of the tax deduction arising out of the interest
paid on the Debentures. Entergy Arkansas has, pursuant to certain
agreements taken together, fully and unconditionally guaranteed payment
of distributions on the Preferred Securities. Entergy Arkansas is the
owner of all of the common securities of the Trust, which constitute 3%
of the Trust's total capital.
(Entergy Louisiana)
Entergy Louisiana Capital I (Trust) was established as a financing
subsidiary of Entergy Louisiana for the purpose of issuing common and
preferred securities. On July 16, 1996, the Trust issued $70 million
in aggregate liquidation preference amount of 9% Cumulative Quarterly
Income Preferred Securities (Preferred Securities) in a public offering
and $2.2 million of common securities to Entergy Louisiana. The Trust
used the proceeds from the sale of the Preferred Securities and the
common securities to purchase from Entergy Louisiana 9% junior
subordinated deferrable interest debentures in the amount of $72.2
million (Debentures). The Debentures held by the Trust are its only
asset and the Trust will use interest payments received on the
Debentures to make cash distributions on the Preferred Securities.
The Preferred Securities of the Trust, as well as the Debentures,
mature on September 30, 2045. The Preferred Securities are redeemable,
however, at the option of Entergy Louisiana beginning in 2001 at 100%
of their principal amount, or earlier under certain limited
circumstances, including the loss of the tax deduction arising out of
the interest paid on the Debentures. Entergy Louisiana has, pursuant
to certain agreements taken together, fully and unconditionally
guaranteed payment of distributions on the Preferred Securities.
Entergy Louisiana is the owner of all of the common securities of the
Trust, which constitute 3% of the Trust's total capital.
(Entergy Gulf States)
Entergy Gulf States Capital I (Trust) was established as a
financing subsidiary of Entergy Gulf States for the purpose of issuing
common and preferred securities. On January 28, 1997, the Trust issued
$85 million in aggregate liquidation preference amount of 8.75%
Cumulative Quarterly Income Preferred Securities (Preferred Securities)
in a public offering and $2.6 million of common securities to Entergy
Gulf States. The Trust used the proceeds from the sale of the
Preferred Securities and the common securities to purchase from Entergy
Gulf States 8.75% junior subordinated deferrable interest debentures in
the amount of $87.6 million (Debentures). The Debentures held by the
Trust are its only asset and the Trust will use interest payments
received on the Debentures to make cash distributions on the Preferred
Securities.
The Preferred Securities of the Trust, as well as the Debentures,
mature on March 31, 2046. The Preferred Securities are redeemable,
however, at the option of Entergy Gulf States beginning in 2002 at 100%
of their principal amount, or earlier under certain limited
circumstances, including the loss of the tax deduction arising out of
the interest paid on the Debentures. Entergy Gulf States has, pursuant
to certain agreements taken together, fully and unconditionally
guaranteed payment of distributions on the Preferred Securities.
Entergy Gulf States is the owner of all of the common securities of the
Trust, which constitute 3% of the Trust's total capital.
NOTE 7. LONG - TERM DEBT (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy)
The long-term debt of Entergy Corporation's subsidiaries, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy, as of December 31, 1996, was:
<TABLE>
<CAPTION>
Maturities Interest Rates Entergy Entergy Entergy Entergy Entergy System
From To From To Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Mortgage Bonds
1997 1999 5.375% 11.375% $687,000 $45,000 $321,000 $69,000 $12,000 $240,000
2000 2004 6.000% 8.250% 1,355,270 180,000 608,750 361,520 205,000
2005 2009 6.650% 7.500% 325,000 215,000 110,000
2010 2019 9.750% 75,000 75,000
2020 2026 7.000 10.000% 1,031,648 376,648 450,000 205,000
G&R Bonds
1997 1999 6.950% 11.2% 96,000 96,000
2000 2023 6.625% 8.800% 525,000 355,000 170,000
Governmental Obligations (a)
1997 2008 5.900% 10.000% 108,267 49,655 45,875 11,837 900
2009 2026 5.950% 9.875% 1,551,235 240,700 435,735 412,170 46,030 416,600
Debentures
1997 2000 7.380% 9.720% 175,000 100,000 75,000
Long-Term DOE Obligation (Note 9) 117,270 117,270
Waterford 3 Lease Obligation 353,600 353,600
8.76% (Note 10)
Grand Gulf Lease Obligation 496,480 496,000
7.02% (Note 10)
Line of Credit, variable 65,000
rate, due 1998
CitiPower Credit Line, avg. 921,553
rate 8.31% due 2000
Other Long-Term Debt 83,411 9,938
Unamortized Premium and Discount (30,310) (11,420) (5,087) (5,619) (2,861) (1,112) (4,211)
- Net ------------------------------------------------------------------------------
Total Long-Term Debt 7,936,424 1,287,853 2,076,211 1,407,508 495,069 180,888 1,428,869
Less Amount Due Within One 345,620 32,465 160,865 34,275 96,015 12,000 10,000
Year ------------------------------------------------------------------------------
Long-Term Debt Excluding Amount
Due Within One Year $7,590,804 $1,255,388 $1,915,346 $1,373,233 $399,054 $168,888 $1,418,869
==============================================================================
Fair Value of Long-Term Debt(b) $7,087,027 $1,160,377 $2,142,389 $1,104,891 $503,461 $175,566 $982,423
==============================================================================
</TABLE>
The long-term debt of Entergy Corporation's subsidiaries, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy, as of December 31, 1995, was:
<TABLE>
<CAPTION>
Maturities Interest Rates Entergy Entergy Entergy Entergy Entergy System
From To From To Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Mortgage Bonds
1996 1999 5% 10.5% $1,064,410 $75,160 $445,000 $104,000 $35,000 $35,250 $370,000
2000 2004 6% 9.75% 1,282,320 180,800 670,000 361,520 70,000
2005 2009 6.25% 11.375% 355,319 215,000 120,000 20,319
2010 2014 11.375% 50,000 50,000
2015 2019 9.75% 11.375% 95,000 75,000 20,000
2020 2024 7% 10.375% 1,008,818 373,818 450,000 185,000
G&R Bonds
1996 1999 6.95% 11.2% 152,000 122,000 30,000
2000 2023 6.625% 8.8% 485,000 355,000 170,000
Governmental Obligations (a)
1996 1998 5.9% 10% 110,868 51,495 46,300 12,518 915
2009 2023 5.95% 12.50% 1,551,235 240,700 435,735 412,170 46,030 416,600
Debentures
1996 1998 9.72% 150,000 150,000
2000 7.38% 30,000 30,000
Long-Term DOE Obligation (Note 9) 111,536 117,536
Waterford 3 Lease Obligation 353,600 353,600
8.76% (Note 10)
Grand Gulf Lease Obligation 500,000 500,000
7.02% (Note 10)
Line of Credit, variable 65,000
rate, due 1998
Other Long-Term Debt 9,156 9,156
Unamortized Premium and Discount (38,488) (13,606) (5,295) (8,017) (3,526) (1,042) (7,002)
- Net ------------------------------------------------------------------------------
Total Long-Term Debt 7,335,774 1,309,903 2,320,896 1,420,431 555,419 194,208 1,469,917
Less Amount Due Within One 558,650 28,700 145,425 35,260 61,015 38,250 250,000
Year ------------------------------------------------------------------------------
Long-Term Debt Excluding Amount
Due Within One Year $6,777,124 $1,281,203 $2,175,471 $1,385,171 $494,404 $155,958 $1,219,917
==============================================================================
Fair Value of Long-Term Debt(b) $6,666,420 $1,213,511 $2,416,932 $1,136,246 $594,365 $198,785 $1,041,581
==============================================================================
</TABLE>
(a) Consists of pollution control bonds, certain series of which are
secured by non-interest bearing first mortgage bonds.
(b) The fair value excludes lease obligations, long-term DOE
obligations, and other long-term debt and includes debt due within
one year. It is determined using bid prices reported by dealer
markets and by nationally recognized investment banking firms.
See Note 1 for additional information on disclosure of fair value
of financial instruments.
The annual long-term debt maturities (excluding lease obligations)
and annual cash sinking fund requirements for debt outstanding as of
December 31, 1996, for the next five years follow:
<TABLE>
<CAPTION>
Entergy Entergy (c) Entergy(d) Entergy Entergy System
Entergy(a) Arkansas(b) Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $345,620 $32,465 $160,865 $34,275 $96,015 $12,000 $10,000
1998 311,720 15,510 190,890 35,300 20 - 70,000
1999 233,198 1,025 71,915 238 20 - 160,000
2000 1,098,988 1,245 945 100,225 20 - 75,000
2001 279,210 1,535 123,725 18,925 25 - 135,000
</TABLE>
(a) Not included are other sinking fund requirements of approximately
$17.5 million annually which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
(b) Not included are other sinking fund requirements of approximately
$0.62 million annually which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
(c) Not included are other sinking fund requirements of approximately
$12.8 million annually which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
(d) Not included are other sinking fund requirements of approximately
$4.15 million annually which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
Entergy Gulf States has two outstanding series of pollution
control bonds collateralized by irrevocable letters of credit, which
are scheduled to expire before the scheduled maturity of the bonds.
The letter of credit collateralizing the $28.4 million variable rate
series, due December 1, 2015, expires in September 1999 and the letter
of credit collateralizing the $20 million variable rate series, due
April 1, 2016, expires in February 1999.
An Entergy subsidiary signed an agreement with several banks on
January 5, 1996, to obtain a revolving credit facility in the aggregate
amount of 1.2 billion Australian dollars (870 million US dollars) for
the acquisition of CitiPower. The facility was partially drawn down on
the same date, bears interest at an average annual rate of 8.046%, and
is non-recourse to Entergy. This facility is collateralized by all of
CitiPower's assets. Borrowings have maturities of 30 to 180 days, and
are continuously renewable for 30 to 180 day periods at the
subsidiary's option until the facility matures on June 30, 2000, unless
certain events occur which would cause the maturity date to be extended
to a date no later than December 31, 2000. The subsidiary intends to
renew obligations incurred under the agreement for a period extending
beyond one year from the balance-sheet date. As part of the CitiPower
acquisition, Entergy Corporation provided credit support, in the form
of a bank letter of credit and other agreements, totaling approximately
$70 million, which was subsequently released in January 1997.
The subsidiary entered into several interest rate swaps to reduce
the impact of interest rate changes on its debt related to the
CitiPower acquisition. The interest rate swap agreements which hedge
this debt 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. Market risks arise from
the movements in interest rates. 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, the subsidiary does not anticipate
nonperformance by any counterparty to any interest rate swap in effect
at December 31, 1996. At December 31, 1996, this subsidiary was a
party to a notional amount of $900 million Australian dollars of
interest rate swaps with maturity dates ranging from February 1999 to
December 2000.
Entergy Power UK plc, an Entergy subsidiary, executed a credit
facility with several banks on December 17, 1996, to obtain credit
facilities in the aggregate amount of approximately 1.25 billion
British Pounds (2.1 billion US dollars). Proceeds of this facility,
which is in three tranches, have been used, together with $392 million
of cash provided by Entergy, to fund the acquisition of London
Electricity plc and are available to replace London Electricity plc's
currently outstanding short-term credit lines and to provide working
capital for London Electricity plc. No borrowings were outstanding
under this credit facility at December 31, 1996. The credit facility
is non-recourse to Entergy and is collateralized by the assets of
Entergy Power UK plc, consisting of all shares of London Electricity
plc owned by it. The maturity dates of the various tranches of the
credit facility range from December 17, 1998 to December 17, 2001. The
interest rate on these facilities is the London Interbank Offered Rate
plus up to 1.50% depending on the capitalization ratio of Entergy Power
UK plc and its subsidiaries.
Under Entergy Mississippi's G&R Mortgage, G&R Bonds are issuable
based upon 70% of bondable property additions, based upon 50% of
accumulated deferred Grand Gulf 1 related costs, based upon the
retirement of certain bonds previously outstanding, or based upon the
deposit of cash with the trustee. Entergy Mississippi's G&R Mortgage
prohibits the issuance of additional first mortgage bonds (including
for refunding purposes) under Entergy Mississippi's first mortgage
indenture, except such first mortgage bonds as may hereafter be issued
from time to time at Entergy Mississippi's option to the corporate
trustee under the G&R Mortgage to provide additional security for
Entergy Mississippi's G&R Bonds.
Under Entergy New Orleans' G&R Mortgage, G&R Bonds are issuable
based upon 70% of bondable property additions or based upon 50% of
accumulated deferred Grand Gulf 1-related costs. The G&R Mortgage
precludes the issuance of any additional bonds based upon property
additions if the total amount of outstanding Rate Recovery Mortgage
Bonds issued on the basis of the uncollected balance of deferred Grand
Gulf 1-related costs exceeds 66 2/3% of the balance of such deferred
costs. As of December 31, 1996, Entergy New Orleans had no outstanding
Rate Recovery Mortgage Bonds.
NOTE 8. DIVIDEND RESTRICTIONS - (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy)
Provisions within the Articles of Incorporation or pertinent
indentures and various other agreements related to the long-term debt
and preferred stock of certain of Entergy Corporation's subsidiaries
restrict the payment of cash dividends or other distributions on their
common and preferred stock. Additionally, PUHCA prohibits Entergy
Corporation's subsidiaries from making loans or advances to Entergy
Corporation. Detailed below are the restricted retained earnings
unavailable for distribution to Entergy Corporation by subsidiary.
Restricted Earnings
(in millions)
Entergy Arkansas $291.3
Entergy Gulf States -
Entergy Louisiana -
Entergy Mississippi 135.7
Entergy New Orleans 4.0
System Energy 6.7
During 1996, cash dividends paid to Entergy Corporation by its
subsidiaries totaled $554.2 million. In February 1997, Entergy
Corporation received common stock dividend payments from its
subsidiaries totaling $66.9 million.
NOTE 9. 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
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 Cajun 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 expects to make filings with
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.
The Cajun Settlement resolves Cajun's civil action against Entergy
Gulf States, in which Cajun sought to rescind or terminate the Joint
Ownership Participation and Operating Agreement (Operating Agreement)
entered into on August 28, 1979, relating to River Bend. In that suit,
Cajun also sought to recover its alleged $1.6 billion investment in the
unit plus attorneys' fees, interest, and costs. A trial on the portion
of the suit by Cajun to rescind the Operating Agreement was completed
in March 1995. On October 24, 1995, the District Court issued a
memorandum opinion rejecting Cajun's fraud claims and denying
rescission. An appeal to the Fifth Circuit by the Cajun bankruptcy
trustee was stayed pending the Court's trial of the breach of contract
phase of the case. The Cajun Settlement resolves both the issues on
appeal and the breach of contract claims, which have not been tried.
In 1992, two member cooperatives of Cajun brought an additional
independent action to declare the Operating Agreement null and void,
based upon Entergy Gulf States' failure to get prior LPSC approval
which was alleged to be necessary. Prior to its bankruptcy
proceedings, Cajun intervened as a plaintiff in this action. Entergy
Gulf States believes the suits are without merit and believes Cajun's
claim is mooted by the Cajun Settlement.
The Cajun Settlement, agreed to in principle on April 26, 1996, by
Entergy Gulf States, the Cajun bankruptcy trustee, and the RUS, Cajun's
largest creditor, was approved by the District Court on August 26,
1996. The terms 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 will settle transmission
disputes and be released from claims for payment under transmission
arrangements with Entergy Gulf States 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. In view of Cajun's failure to fund its share of
River Bend-related operating, maintenance, and capital costs, Entergy
Gulf States has (i) credited Entergy Gulf States' share of expenses for
Big Cajun 2, Unit 3 against amounts due from Cajun to Entergy Gulf
States, and (ii) sought to market Cajun's share of power from River
Bend and apply proceeds to the amounts due from Cajun to Entergy Gulf
States. As a result, on November 2, 1994, Cajun discontinued supplying
Entergy Gulf States with its share of power from Big Cajun 2, Unit 3.
Entergy Gulf States requested an order from the District Court
requiring Cajun to supply Entergy Gulf States with this energy and
allowing Entergy Gulf States to credit amounts due to Cajun for Big
Cajun 2, Unit 3 energy against amounts Cajun owed to Entergy Gulf
States for River Bend. In December 1994, by means of a preliminary
injunction, the District Court ordered Cajun to supply Entergy Gulf
States with its share of energy from Big Cajun 2, Unit 3 and ordered
Entergy Gulf States to make payments for its share of Big Cajun 2, Unit
3 expenses to the registry of the District Court. In October 1995, the
Fifth Circuit affirmed the District Court's preliminary injunction. As
of December 31, 1996, $70.4 million had been paid by Entergy Gulf
States into the registry of the District Court. Cajun's unpaid portion
of River Bend operating and maintenance expenses (including nuclear
fuel) and capital costs for 1996 was approximately $55 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
$4.9 million as of December 31, 1996. Cajun's unpaid portion of the
River Bend-related costs is reflected in long-term receivables with an
offsetting reserve in other deferred credits. As discussed above, the
Cajun Settlement will conclude all disputes regarding the non-payment
by Cajun of operating and maintenance expenses. Cajun continues to pay
its share of decommissioning costs for River Bend.
On December 21, 1994, Cajun filed a petition in the United States
Bankruptcy Court for the Middle District of Louisiana seeking relief
under Chapter 11 of the Bankruptcy Code. In its bankruptcy
proceedings, Cajun filed a motion on January 10, 1995, to reject the
Operating Agreement as a burdensome executory contract. Entergy Gulf
States responded on January 10, 1995, with a memorandum opposing
Cajun's motion. As discussed above, this matter will be ended as a
result of the Cajun Settlement. Proponents of all of the plans of
reorganization submitted to the Bankruptcy Court have incorporated the
Cajun Settlement as an integral condition to the effectiveness of their
plan. The timing and completion of the reorganization plan depends on
Bankruptcy Court approval and any required regulatory approvals. The
Bankruptcy Court has approved proposals by three groups seeking to
acquire the non-nuclear assets of Cajun and has signed an order that
establishes rules for how Cajun's creditors will vote on the three
plans. On December 16, 1996, the Bankruptcy Court began hearings on
the balloting and the plan that will be adopted.
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. In April 1992, FERC
issued a final order in these disputes. In May 1992, Entergy Gulf
States and Cajun filed motions for rehearings on certain portions of
the order, which are still pending at FERC. In June 1992, Entergy Gulf
States filed a petition for review in the United States Court of
Appeals for the District of Columbia Circuit regarding certain of the
other issues decided by FERC. In August 1993, the Court of Appeals
rendered an opinion reversing FERC's order regarding the portion of
such disputes relating to the calculations of certain credits and
equalization charges under Entergy Gulf States' service schedules with
Cajun. The opinion remanded the issues to FERC for further proceedings
consistent with its opinion. In February 1995, FERC eliminated an
issue from the remand that Entergy Gulf States believes the Court of
Appeals directed FERC to reconsider. In orders issued on August 3,
1995, and October 2, 1995, FERC affirmed an April 1995 ruling by an ALJ
in the remanded portion of Entergy Gulf States' and Cajun's ongoing
transmission service charge disputes before FERC. Both Entergy Gulf
States and Cajun have petitioned for appeal. The Court of Appeals has
stayed the appellate proceeding pending implementation of the Cajun
Settlement (see Cajun - River Bend above, for a further discussion of
the Cajun Settlement).
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 $70.2 million as of December 31,
1996. 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 $157.3
million as of December 31, 1996. 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 $110.9
million as of December 31, 1996. 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 $144 million as of December 31, 1996. 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.
Capital Requirements and Financing (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy)
Construction expenditures (excluding nuclear fuel) for the
domestic utility companies and System Entergy for the years 1997, 1998,
and 1999 are estimated to total, $510 million, $547 million, and $565
million, respectively. Entergy will also require $986 million during
the period 1997-1999 to meet long-term debt and preferred stock
maturities and cash sinking fund requirements. Entergy plans to meet
the above requirements primarily with internally generated funds and
cash on hand, supplemented by the issuance of debt and company-
obligated mandatorily redeemable preferred securities and the use of
outstanding credit facilities. Certain domestic utility companies and
System Energy may also continue with the acquisition or refinancing of
all or a portion of certain outstanding series of preferred stock and
long-term debt. See Notes 5, 6, and 7 for further information.
Grand Gulf 1-Related Agreements
Capital Funds Agreement (Entergy Corporation and System Energy)
Entergy Corporation has agreed to supply System Energy with
sufficient capital to (i) maintain System Energy's equity capital at an
amount equal to a minimum of 35% of its total capitalization (excluding
short-term debt), and (ii) permit the continued commercial operation of
Grand Gulf 1 and pay in full all indebtedness for borrowed money of
System Energy when due under any circumstances. In addition, under
supplements to the Capital Funds Agreement assigning System Energy's
rights as security for specific debt of System Energy, Entergy
Corporation has agreed to make cash capital contributions to enable
System Energy to make payments on such debt when due.
System Energy has entered into various agreements with Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans whereby they are obligated to purchase their respective
entitlements of capacity and energy from System Energy's 90% ownership
and leasehold interest in Grand Gulf 1, and to make payments that,
together with other available funds, are adequate to cover System
Energy's operating expenses. System Energy would have to secure funds
from other sources, including Entergy Corporation's obligations under
the Capital Funds Agreement, to cover any shortfalls from payments
received from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,
and Entergy New Orleans under these agreements.
Unit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
System Energy has agreed to sell all of its 90% owned and leased
share of capacity and energy from Grand Gulf 1 to Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans in
accordance with specified percentages (Entergy Arkansas-36%, Entergy
Louisiana-14%, Entergy Mississippi-33% and Entergy New Orleans-17%) as
ordered by FERC. Charges under this agreement are paid in
consideration for the purchasing companies' respective entitlement to
receive capacity and energy and are payable irrespective of the
quantity of energy delivered so long as the unit remains in commercial
operation. The agreement will remain in effect until terminated by the
parties and approved by FERC, most likely upon Grand Gulf 1's
retirement from service. Monthly obligations for payments, including
the rate increase which was placed into effect in December 1995,
subject to refund, under the agreement are approximately $21 million,
$8 million, $19 million, and $10 million for Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans, respectively.
Availability Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans are individually obligated to make payments or
subordinated advances to System Energy in accordance with stated
percentages (Entergy Arkansas-17.1%, Entergy Louisiana-26.9%, Entergy
Mississippi-31.3%, and Entergy New Orleans-24.7%) in amounts that when
added to amounts received under the Unit Power Sales Agreement or
otherwise, are adequate to cover all of System Energy's operating
expenses as defined, including an amount sufficient to amortize Grand
Gulf 2 over 27 years. (See Reallocation Agreement terms below.) System
Energy has assigned its rights to payments and advances to certain
creditors as security for certain obligations. Since commercial
operation of Grand Gulf 1, payments under the Unit Power Sales
Agreement have exceeded the amounts payable under the Availability
Agreement. Accordingly, no payments have ever been required. If
Entergy Arkansas or Entergy Mississippi fails to make its Unit Power
Sales Agreement payments, and System Energy is unable to obtain funds
from other sources, Entergy Louisiana and Entergy New Orleans could
become subject to claims or demands by System Energy or its creditors
for payments or advances under the Availability Agreement (or the
assignments thereof) equal to the difference between their required
Unit Power Sales Agreement payments and their required Availability
Agreement payments.
Reallocation Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
System Energy, Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans entered into the Reallocation
Agreement relating to the sale of capacity and energy from Grand Gulf
and the related costs, in which Entergy Louisiana, Entergy Mississippi,
and Entergy New Orleans agreed to assume all of Entergy Arkansas'
responsibilities and obligations with respect to Grand Gulf under the
Availability Agreement. FERC's decision allocating a portion of Grand
Gulf 1 capacity and energy to Entergy Arkansas supersedes the
Reallocation Agreement as it relates to Grand Gulf 1. Responsibility
for any Grand Gulf 2 amortization amounts has been individually
allocated (Entergy Louisiana-26.23%, Entergy Mississippi-43.97%, and
Entergy New Orleans-29.80%) under the terms of the Reallocation
Agreement. However, the Reallocation Agreement does not affect Entergy
Arkansas' obligation to System Energy's lenders under the assignments
referred to in the preceding paragraph. Entergy Arkansas would be
liable for its share of such amounts if Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans were unable to meet their
contractual obligations. No payments of any amortization amounts will
be required as long as amounts paid to System Energy under the Unit
Power Sales Agreement, including other funds available to System
Energy, exceed amounts required under the Availability Agreement, which
is expected to be the case for the foreseeable future.
Reimbursement Agreement (System Energy)
In December 1988, System Energy entered into two entirely
separate, but identical, arrangements for the sales and leasebacks of
an approximate aggregate 11.5% ownership interest in Grand Gulf 1 (see
Note 10). In connection with the equity funding of the sale and
leaseback arrangements, letters of credit are required to be maintained
to secure certain amounts payable for the benefit of the equity
investors by System Energy under the leases. The current letters of
credit are effective until January 15, 2000.
Under the provisions of a bank letter of credit reimbursement
agreement, System Energy has agreed to a number of covenants relating
to the maintenance of certain capitalization and fixed charge coverage
ratios. System Energy agreed, during the term of the reimbursement
agreement, to maintain its equity at not less than 33% of its adjusted
capitalization (defined in the reimbursement agreement to include
certain amounts not included in capitalization for financial statement
purposes). In addition, System Energy must maintain, with respect to
each fiscal quarter during the term of the reimbursement agreement, a
ratio of adjusted net income to interest expense (calculated, in each
case, as specified in the reimbursement agreement) of at least 1.60
times earnings. As of December 31, 1996, System Energy's equity
approximated 34.79% of its adjusted capitalization, and its fixed
charge coverage ratio was 2.25.
Fuel Purchase Agreements
(Entergy Arkansas and Entergy Mississippi)
Entergy Arkansas has long-term contracts with mines in the State
of Wyoming for the supply of low-sulfur coal for the White Bluff Steam
Electric Generating Station and Independence (which is 25% owned by
Entergy Mississippi). These contracts, which expire in 2002 and 2011,
provide for approximately 85% of Entergy Arkansas' expected annual coal
requirements. Additional requirements are satisfied by annual spot
market purchases.
(Entergy Gulf States)
Entergy Gulf States has a contract for a supply of low-sulfur
Wyoming coal for Nelson Unit 6, which should be sufficient to satisfy
the fuel requirements at Nelson Unit 6 through 2010. Cajun has advised
Entergy Gulf States that Cajun has contracts that should provide an
adequate supply of coal until 1999 for the operation of Big Cajun 2,
Unit 3.
Entergy Gulf States has long-term gas contracts, which will
satisfy approximately 50% of its annual requirements. Such contracts
generally require Entergy Gulf States to purchase in the range of 20%
of expected total gas needs. Additional gas requirements are satisfied
under less expensive short-term contracts. Entergy Gulf States has a
transportation service agreement with a gas supplier that provides
flexible natural gas service to the Sabine and Lewis Creek generating
stations. This service is provided by the supplier's pipeline and salt
dome gas storage facility, which has a present capacity of 12.7 billion
cubic feet of natural gas.
(Entergy Louisiana)
In June 1992, Entergy Louisiana agreed to a renegotiated 20-year
natural gas supply contract. Entergy Louisiana agreed to purchase
natural gas in annual amounts equal to approximately one-third of its
projected annual fuel requirements for certain generating units.
Annual demand charges associated with this contract are estimated to be
$8.6 million through 1997, and a total of $116.6 million for the years
1998 through 2012. Entergy Louisiana recovers the cost of fuel
consumed during the generation of electricity through its fuel
adjustment clause.
Sales Agreements/Power Purchases
(Entergy Gulf States)
In 1988, Entergy Gulf States entered into a joint venture with a
primary term of 20 years with Conoco, Inc., Citgo Petroleum
Corporation, and Vista Chemical Company (Industrial Participants)
whereby Entergy Gulf States' Nelson Units 1 and 2 were sold to a
partnership (NISCO) consisting of the Industrial Participants and
Entergy Gulf States. The Industrial Participants supply the fuel for
the units, while Entergy Gulf States operates the units at the
discretion of the Industrial Participants and purchases the electricity
produced by the units. Entergy Gulf States is continuing to sell
electricity to the Industrial Participants. For the years ended
December 31, 1996, 1995, and 1994, the purchases by Entergy Gulf States
of electricity from the joint venture totaled $62.0 million, $58.5
million, and $59.4 million, respectively.
(Entergy Louisiana)
Entergy Louisiana has an agreement extending through the year 2031
to purchase energy generated by a hydroelectric facility. During 1996,
1995, and 1994, Entergy Louisiana made payments under the contract of
approximately $56.3 million, $55.7 million, and $56.3 million,
respectively. If the maximum percentage (94%) of the energy is made
available to Entergy Louisiana, current production projections would
require estimated payments of approximately $54 million in 1997, and a
total of $3.5 billion for the years 1998 through 2031. Entergy
Louisiana recovers the costs of purchased energy through its fuel
adjustment clause.
System Fuels (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy)
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans have interests in System Fuels of 35%, 33%, 19%,
and 13%, respectively. The parent companies of System Fuels agreed to
make loans to System Fuels to finance its fuel procurement, delivery,
and storage activities. As of December 31, 1996, Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans had,
respectively, approximately $11 million, $14.2 million, $5.5 million,
and $3.3 million in loans outstanding to System Fuels which mature in
2008.
In addition, System Fuels entered into a revolving credit
agreement with a bank that provides $45 million in borrowings to
finance System Fuels' nuclear materials and services inventory. Should
System Fuels default on its obligations under its credit agreement,
Entergy Arkansas, Entergy Louisiana, and System Energy have agreed to
purchase nuclear materials and services financed under the agreement.
Nuclear Insurance (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
The Price-Anderson Act limits public liability for a single
nuclear incident to approximately $8.92 billion. Protection for this
liability is provided through a combination of private insurance
(currently $200 million each for Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and System Energy) and an industry assessment
program. Under the assessment program, the maximum payment requirement
for each nuclear incident would be $79.3 million per reactor, payable
at a rate of $10 million per licensed reactor per incident per year.
Entergy has five licensed reactors. As a co-licensee of Grand Gulf 1
with System Energy, SMEPA would share 10% of this obligation. With
respect to River Bend, any assessments pertaining to this program are
allocated in accordance with the respective ownership interests of
Entergy Gulf States and Cajun. In addition, each owner/licensee of
Entergy's five nuclear units participates in a private insurance
program which provides coverage for worker tort claims filed for bodily
injury caused by radiation exposure. The program provides for a
maximum assessment of approximately $16 million for the five nuclear
units in the event losses exceed accumulated reserve funds.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
System Energy are also members of certain insurance programs that
provide coverage for property damage, including decontamination and
premature decommissioning expense, to members' nuclear generating
plants. As of December 31, 1996, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, and System Energy each was insured against
such losses up to $2.75 billion. In addition, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans are members of an insurance program that covers
certain replacement power and business interruption costs incurred due
to prolonged nuclear unit outages. Under the property damage and
replacement power/business interruption insurance programs, these
Entergy subsidiaries could be subject to assessments if losses exceed
the accumulated funds available to the insurers. As of December 31,
1996, the maximum amounts of such possible assessments were: Entergy
Arkansas - $31.1 million; Entergy Gulf States - $11.5 million; Entergy
Louisiana - $24.8 million; Entergy Mississippi - $0.7 million; Entergy
New Orleans - $0.4 million; and System Energy - $21.3 million. Under
its agreement with System Energy, SMEPA would share in System Energy's
obligation. Cajun has no share of Entergy Gulf States' obligation.
The amount of property insurance maintained for each Entergy
nuclear unit exceeds the NRC's minimum requirement for nuclear power
plant licensees of $1.06 billion per site. NRC regulations provide
that the proceeds of this insurance must be used, first, to place and
maintain the reactor in a safe and stable condition and, second, to
complete decontamination operations. Only after proceeds are dedicated
for such use and regulatory approval is secured would any remaining
proceeds be made available for the benefit of plant owners or their
creditors.
Spent Nuclear Fuel and Decommissioning Costs (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System
Energy)
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
System Energy provide for estimated future disposal costs for spent
nuclear fuel in accordance with the Nuclear Waste Policy Act of 1982.
The affected Entergy companies entered into contracts with the DOE,
whereby the DOE will furnish disposal service at a cost of one mill per
net kWh generated and sold after April 7, 1983, plus a onetime fee for
generation prior to that date. Entergy Arkansas, the only Entergy
company that generated electricity with nuclear fuel prior to that
date, elected to pay the onetime fee plus accrued interest, no earlier
than 1998, and has recorded a liability as of December 31, 1996, of
approximately $117 million for generation subsequent to 1983. The fees
payable to the DOE may be adjusted in the future to assure full
recovery. Entergy considers all costs incurred or to be incurred,
except accrued interest, for the disposal of spent nuclear fuel to be
proper components of nuclear fuel expense, and provisions to recover
such costs have been or will be made in applications to regulatory
authorities.
Delays have occurred in the DOE's program for the acceptance and
disposal of spent nuclear fuel at a permanent repository. In a
statement released February 17, 1993, the DOE asserted that it does not
have a legal obligation to accept spent nuclear fuel without an
operational repository for which it has not yet arranged. Entergy
Operations and System Fuels joined in lawsuits against the DOE, seeking
clarification of the DOE's responsibility to receive spent nuclear fuel
beginning in 1998. The original suits, filed June 20, 1994, asked for
a ruling stating that the Nuclear Waste Policy Act requires the DOE to
begin taking title to the spent fuel and to start removing it from
nuclear power plants in 1998, a mandate for the DOE's nuclear waste
management program to begin accepting fuel in 1998 and court monitoring
of the program, and the potential for escrow of payments to a nuclear
waste fund instead of directly to the DOE. Argument in the case before
a three-judge panel of the U.S. Court of Appeals was made on January
17, 1996. On July 23, 1996, the court reversed the DOE's
interpretation of the 1998 obligation and unanimously ruled that the
Nuclear Waste Policy Act creates an unconditional obligation to begin
acceptance of spent fuel by 1998, but did not make a ruling on the
remedies.
On December 17, 1996, the DOE notified contract holders that it
anticipates it will not be able to begin such acceptance until after
that date. Subsequently, on January 31, 1997, Entergy Operations and a
coalition of 36 electric utilities and 46 state agencies filed lawsuits
to suspend payments to the Nuclear Waste Fund. The lawsuits ask the
court to (i) find that the December 17, 1996 DOE letter demonstrates
breach of contract on the part of the DOE; (ii) order utilities to
place the Nuclear Waste Fund payments in an escrow account and not
provide the funds to the DOE until it fulfills its obligation, (iii)
prevent the DOE from taking adverse action against utilities that
withhold payments; and (iv) order the DOE to submit a plan to the court
describing how the agency intends to fulfill its obligation on an
ongoing basis.
In the meantime, all Entergy companies are responsible for their
spent fuel storage. Current on-site spent fuel storage capacity at
River Bend, Waterford 3, and Grand Gulf 1 is estimated to be sufficient
until 2003, 2000, and 2004, respectively. Thereafter, the affected
companies will provide additional storage. Current on-site spent fuel
storage capacity at ANO is estimated to be sufficient until 2000. An
ANO storage facility using dry casks began operation in 1996. This
facility may be expanded further as required. The initial cost of
providing the additional on-site spent fuel storage capability required
at ANO, River Bend, Waterford 3, and Grand Gulf 1 is expected to be
approximately $5 million to $10 million per unit. In addition, about
$3 million to $5 million per unit will be required every two to three
years subsequent to 2000 for ANO and every four to five years
subsequent to 2003, 2000, and 2004 for River Bend, Waterford 3, and
Grand Gulf 1, respectively, until the DOE's repository or storage
facility begins accepting such units' spent fuel.
Total decommissioning costs at December 31, 1996, for the Entergy
nuclear power plants, excluding co-owner shares, have been estimated as
follows:
<TABLE>
<CAPTION>
Total Estimated
Decommissioning Costs
(In Millions)
<S> <C>
ANO 1 and ANO 2 (based on a 1994 interim update to the 1992 cost study) $ 806.3
River Bend (based on a 1996 cost study reflecting 1996 dollars) 293.3
Waterford 3 (based on a 1994 updated study in 1993 dollars) 320.1
Grand Gulf 1 (based on a 1994 cost study using 1993 dollars) 365.9
-------------
$ 1,785.6
=============
</TABLE>
Entergy Arkansas and Entergy Louisiana are authorized to recover
in rates amounts that, when added to estimated investment income,
should be sufficient to meet the above estimated decommissioning costs
for ANO and Waterford 3, respectively. In the Texas retail
jurisdiction, Entergy Gulf States is recovering in rates River Bend
decommissioning costs (based on the 1991 cost study that totaled $267.8
million) that, with adjustments, total $204.9 million. In the
Louisiana retail jurisdiction, Entergy Gulf States is currently
recovering in rates decommissioning costs (based on a 1985 cost study)
which total $141 million. Entergy Gulf States included decommissioning
costs (based on the 1991 study) in the LPSC rate review filed in May
1995. In October 1996, the LPSC approved Entergy Gulf States rates
that include decommissioning costs based on the 1991 study. The
October 1996 LPSC order has been appealed and the decommissioning costs
based on the 1991 study have not yet been implemented. Entergy Gulf
States included decommissioning costs, based on the 1996 study, in the
LPSC rate review filed in May 1996 and in the PUCT rate review filed in
November 1996. Those reviews are still ongoing. System Energy was
previously recovering in rates amounts sufficient to fund $198 million
(in 1989 dollars) of its Grand Gulf 1 decommissioning costs. System
Energy included decommissioning costs (based on the 1994 study) in its
rate increase filing with FERC. Rates requested in this proceeding
were placed into effect in December 1995, subject to refund. FERC has
not yet issued an order in the System Energy rate case. Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy
periodically review and update estimated decommissioning costs.
Although Entergy is presently underrecovering for Grand Gulf and River
Bend based on the above estimates, applications are periodically made
to the appropriate regulatory authorities to reflect in rates any
future change in projected decommissioning costs. The amounts
recovered in rates are deposited in trust funds and reported at market
value as quoted on nationally traded markets or as determined by widely
used pricing services. These trust fund assets largely offset the
accumulated decommissioning liability that is recorded as accumulated
depreciation for Entergy Arkansas, Entergy Gulf States, and Entergy
Louisiana, and as other deferred credits for System Energy.
The cumulative liabilities and actual decommissioning expenses
recorded in 1996 by Entergy were as follows:
Cumulative Cumulative
Liabilities Liabilities
as of 1996 1996 as of
December 31, Trust Decommissioning December 31,
1995 Earnings Expenses 1996
(In Millions)
ANO 1 and ANO 2 $ 169.0 $11.5 $20.1 $200.6
River Bend 31.7 1.5 6.0 39.2
Waterford 3 37.4 2.8 8.8 49.0
Grand Gulf 1 39.4 2.3 19.0 60.7
------ ----- ----- ------
$277.5 $18.1 $53.9 $349.5
====== ===== ===== ======
In 1995 and 1994, ANO's decommissioning expense was $17.7 million,
and $12.2 million, respectively; River Bend's decommissioning expense
was $8.1 million and $3.0 million, respectively; Waterford 3's
decommissioning expense was $7.5 million and $4.8 million,
respectively; and Grand Gulf 1's decommissioning expense was $5.4
million and $5.2 million, respectively. The actual decommissioning
costs may vary from the estimates because of regulatory requirements,
changes in technology, and increased costs of labor, materials, and
equipment. Management believes that actual decommissioning costs are
likely to be higher than the estimated amounts presented above.
The SEC has questioned certain of the financial accounting
practices of the electric utility industry regarding the recognition,
measurement, and classification of decommissioning costs for nuclear
plants in the financial statements of electric utilities. In response
to these questions, the FASB has been reviewing the accounting for
decommissioning and has expanded the scope of its review to include
liabilities related to the closure and removal of all long-lived
assets. An exposure draft of the proposed SFAS (which proposed a 1997
effective date) was issued in February 1996. The proposed SFAS would
require measurement and recognition of the liability for closure and
removal of long-lived assets (including decommissioning) based on the
amount of discounted future cash flows related to closure and removal
costs at the time the liability was initially incurred. Those future
cash flows should be determined by estimating current costs for closure
and removal and adjusting for inflation, efficiencies that may be
gained from experience with similar activities, and consideration of
reasonable future advances in technology.
The initial liability would be offset by an asset that should be
presented with other plant costs on the financial statements because
the cost of decommissioning/closing the plant would be recognized as
part of the total cost of the plant asset. Changes in the
decommissioning/closure cost liability resulting from changes in
assumptions would be recognized with a corresponding adjustment to the
plant asset, and depreciation revised prospectively. Additional
increases to the liability would be recognized to reflect the increase
in the discounted cash flows resulting from the passage of time. Such
increases would be offset by a regulatory asset, to the extent such
costs are deemed probable of future recovery.
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.
The FASB is expected to issue an additional document on this issue in
the second quarter of 1997, although it has not yet been decided if
that document will be in the form of a final accounting standard or a
revised exposure draft. 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.
The EPAct has a provision that assesses domestic nuclear utilities
with fees for the decontamination and decommissioning of the DOE's past
uranium enrichment operations. The decontamination and decommissioning
assessments are being used to set up a fund into which contributions
from utilities and the federal government will be placed. Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy's
annual assessments, which will be adjusted annually for inflation, are
approximately $3.6 million, $0.9 million, $1.4 million, and $1.5
million (in 1996 dollars), respectively, for approximately 15 years.
At December 31, 1996, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and System Energy had recorded liabilities of $36.4 million,
$6.3 million, $13.8 million, and $13.6 million, respectively, for
decontamination and decommissioning fees in other current liabilities
and other noncurrent liabilities, and these liabilities were offset in
the consolidated financial statements by regulatory assets. FERC
requires that utilities treat these assessments as costs of fuel as
they are amortized and are recovered through rates in the same manner
as other fuel costs.
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 MW 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,
Entergy Operations could be required 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. A letter of intent for
the fabrication has been signed by Entergy Operations, which includes a
commitment for not more than $3.2 million, and a contract is expected
to be entered into in 1997. If a formal contract to purchase the steam
generators is not canceled, 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 in part with PCBs for which Entergy Arkansas bears some
responsibility. Entergy Arkansas, voluntarily, at its expense, has
already completed remediation at a nearby substation site and believes
that it has no liability for contamination at the site that is subject
to the Reynolds suit and is contesting the lawsuit. 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.
(Entergy Gulf States)
Entergy Gulf States has been designated as a PRP 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 these sites. Several class action and other suits have
been filed in state and federal courts seeking relief from Entergy Gulf
States and others for damages caused by the disposal of hazardous waste
and for asbestos-related disease allegedly resulting from exposure on
Entergy Gulf States premises. While the amounts at issue in the clean-
up efforts and suits may be substantial, Entergy Gulf States believes
that its results of operations and financial condition will not be
materially adversely affected by the outcome of the suits. As of
December 31, 1996, a remaining recorded liability of $21.4 million
existed relating to the clean-up of seven sites at which Entergy Gulf
States has been designated a PRP.
(Entergy Louisiana)
During 1993, the LDEQ issued new rules for solid waste regulation,
including regulation of wastewater impoundments. Entergy Louisiana has
determined that certain of its power plant wastewater impoundments were
affected by these regulations and has chosen to upgrade or close them.
As a result, a remaining recorded liability in the amount of $6.7
million existed at December 31, 1996, for wastewater upgrades and
closures to be completed in 1997. Cumulative expenditures relating to
the upgrades and closures of wastewater impoundments were $7.1 million
as of December 31, 1996.
City Franchise Ordinances (Entergy New Orleans)
Entergy New Orleans provides electric and gas service in the City
of New Orleans pursuant to City franchise ordinances that state, among
other things, the City has a continuing option to purchase Entergy New
Orleans' electric and gas utility properties.
Employment Litigation
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and Entergy New Orleans)
Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and Entergy New Orleans are defendants in numerous
lawsuits described below that have been filed by former employees
asserting that they were wrongfully terminated and/or discriminated
against due to age, race, and/or sex. Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and Entergy New
Orleans are vigorously defending these suits and deny any liability to
the plaintiffs. However, no assurance can be given as to the outcome
of these cases.
(Entergy Corporation and Entergy Arkansas)
Entergy Corporation and Entergy Arkansas are defendants in five
suits filed in federal court on behalf of approximately 62 plaintiffs
who claim they were illegally terminated from their jobs due to
discrimination on the basis of age or race. One of these suits seeks
class certification. A trial date is scheduled in March 1997 for one
suit comprised of approximately 29 plaintiffs, and a trial date is
scheduled in May 1997 for another suit comprised of approximately 18
plaintiffs. Trial dates have not been set in the other suits.
(Entergy Corporation and Entergy Gulf States)
Entergy Corporation and Entergy Gulf States are defendants in a
lawsuit involving approximately 176 plaintiffs filed in state court in
Texas by former employees who claim that they lost their jobs as a
result of the Merger. The plaintiffs in these cases have asserted
various claims, including discrimination on the basis of age, race,
and/or sex. The court has preliminarily ruled that each plaintiff's
claim should be tried separately. The first case is scheduled for
trial in June 1997.
(Entergy Corporation, Entergy Gulf States, and Entergy Louisiana)
Entergy Corporation, Entergy Gulf States and Entergy Louisiana are
defendants in a suit filed in federal court in Louisiana by
approximately 39 plaintiffs who claim, among other things, they were
wrongfully discharged from their employment on the basis of their age.
No trial date has been set for this case.
(Entergy Louisiana and Entergy New Orleans)
Entergy Louisiana and Entergy New Orleans are defendants in a suit
filed in state court in Louisiana by 110 plaintiffs who seek to certify
a class on behalf of all employees who allegedly were terminated or
required to resign on the basis of age. The court has set a hearing
for certification of the class for March 13, 1997; no trial date has
been set. Entergy Louisiana and/or Entergy New Orleans also are
defendants in approximately 27 other suits filed in federal or state
court by plaintiffs who claim they were wrongfully discharged on the
basis of age, race, or sex.
Financial Instruments
In accordance with the debt covenants included in the financing
provisions of the CitiPower acquisition, CitiPower must hedge at least
80% of its energy purchases. CitiPower's current strategy is to hedge
approximately 100% of its forecasted energy purchases through contracts
entered into with certain generators. These contracts mature through
the year 2000.
NOTE 10. LEASES
General
As of December 31, 1996, Entergy had capital leases and
noncancelable operating leases for equipment, buildings, vehicles, and
fuel storage facilities (excluding nuclear fuel leases and the sale and
leaseback transactions) with minimum lease payments as follows:
Capital Leases
Entergy Entergy
Year Entergy Arkansas Gulf States
(In Thousands)
1997 $ 27,312 $ 10,953 $ 12,475
1998 27,294 10,953 12,475
1999 27,268 10,953 12,475
2000 25,530 9,646 12,049
2001 23,400 9,646 11,623
Years thereafter 99,877 52,209 47,418
--------------------------------------
Minimum lease payments 230,681 104,360 108,515
Less: Amount
representing interest 83,741 45,151 36,104
--------------------------------------
Present value of net
minimum lease payments $146,940 $ 59,209 $ 72,411
======================================
Operating Leases
Entergy Entergy Entergy
Year Entergy Arkansas Gulf States Louisiana
(In Thousands)
1997 $ 56,232 $ 23,248 $ 8,040 $ 5,383
1998 55,358 20,999 11,867 4,778
1999 52,060 19,104 11,865 4,382
2000 47,125 17,136 11,354 3,925
2001 43,505 17,219 11,355 504
Years thereafter 211,238 29,495 67,816 2,210
------------------------------------------------
Minimum lease payments $ 465,518 $ 127,201 $ 122,297 $ 21,182
================================================
Rental expense for Entergy's leases (excluding nuclear fuel leases
and the sale and leaseback transactions) amounted to approximately
$59.7 million, $61.1 million, and $64.8 million in 1996, 1995, and
1994, respectively. These amounts include $26.0 million, $26.0
million, and $26.4 million, respectively, for Entergy Arkansas, $11.8
million, $13.0 million, and $15.3 million, respectively for Entergy
Gulf States, and $13.7 million, $13.6 million, and $12.1 million,
respectively, for Entergy Louisiana.
Nuclear Fuel Leases
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
System Energy each has arrangements to lease nuclear fuel in an
aggregate amount up to $385 million as of December 31, 1996. The
lessors finance the acquisition and ownership of nuclear fuel through
credit agreements and the issuance of notes. These agreements are
subject to annual renewal with, in Entergy Louisiana's and Entergy Gulf
States' case, the consent of the lenders. The credit agreements for
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System
Energy have been extended and now have termination dates of December
1999, December 1999, January 2000, and February 2000, respectively.
The debt securities issued pursuant to these fuel lease arrangements
have varying maturities through January 31, 1999. It is expected that
the credit agreements will be extended or alternative financing will be
secured by each lessor upon the maturity of the current arrangements.
If extensions or alternative financing cannot be arranged, the lessee
in each case must purchase sufficient nuclear fuel to allow the lessor
to retire such borrowings.
Lease payments are based on nuclear fuel use. Nuclear fuel lease
expense charged to operations by the domestic utility companies in
1996, 1995, and 1994 was $158.5 million (including interest of $21.7
million), $153.5 million (including interest of $22.1 million), and
$163.4 million (including interest of $27.3 million), respectively.
Specifically, in 1996, 1995, and 1994 Entergy Arkansas' expense was
$53.9 million, $46.8 million, and $56.2 million (including interest of
$7.1 million, $6.7 million, and $7.5 million), respectively; Entergy
Gulf States' expense was $27.1 million, $41.4 million, and $37.2
million (including interest of $4.2 million, $6.0 million, and $8.7
million), respectively; Entergy Louisiana's expense was $39.8 million,
$30.8 million, and $32.2 million (including interest of $4.9 million,
$3.7 million, and $4.3 million), respectively; System Energy's expense
was $37.7 million, $34.5 million, and $37.8 million (including interest
of $5.5 million, $5.7 million, and $6.8 million), respectively.
Sale and Leaseback Transactions
Waterford 3 Lease Obligations (Entergy Louisiana)
On September 28, 1989, Entergy Louisiana entered into three
transactions for the sale (for an aggregate cash consideration of
$353.6 million) and leaseback of three undivided portions of its 100%
ownership interest in Waterford 3. The three undivided interests in
Waterford 3 sold and leased back exclude certain transmission,
pollution control, and other facilities that are part of Waterford 3.
The interests sold and leased back are equivalent on an aggregate cost
basis to approximately a 9.3% undivided interest in Waterford 3.
Entergy Louisiana is leasing back the interests on a net lease basis
over an approximate 28-year basic lease term. Entergy Louisiana has
options to terminate the lease and to repurchase the interests in
Waterford 3 at certain intervals during the basic lease term. Further,
at the end of the basic lease term, Entergy Louisiana has an option to
renew the lease or to repurchase the undivided interests in Waterford
3.
Interests were acquired from Entergy Louisiana with funds obtained
from the issuance and sale by the purchasers of intermediate-term and
long-term secured lease obligation bonds. The lease payments to be
made by Entergy Louisiana will be sufficient to service such debt.
Entergy Louisiana did not exercise its option to repurchase the
undivided interests in Waterford 3 in September 1994. As a result,
Entergy Louisiana was required to provide collateral for the equity
portion of certain amounts payable by Entergy Louisiana under the
leases. Such collateral was in the form of a new series of non-
interest-bearing first mortgage bonds in the aggregate principal amount
of $208.2 million issued by Entergy Louisiana in September 1994.
Upon the occurrence of certain adverse events (including lease
events of default, events of loss, deemed loss events or certain
adverse "Financial Events" with respect to Entergy Louisiana), Entergy
Louisiana may be obligated to pay amounts sufficient to permit the
termination of the lease transactions and may be required to assume
the outstanding indebtedness issued to finance the acquisition of the
undivided interests in Waterford 3. "Financial Events" include, among
other things, failure by Entergy Louisiana, following the expiration of
any applicable grace or cure periods, to maintain (1) as of the end of
any fiscal quarter, total equity capital (including preferred stock) at
least equal to 30% of adjusted capitalization, or (2) in respect of the
12-month period ending on the last day of any fiscal quarter, a fixed
charge coverage ratio of at least 1.50. As of December 31, 1996,
Entergy Louisiana's total equity capital (including preferred stock)
was 46.9% of adjusted capitalization and its fixed charge coverage
ratio was 3.18.
As of December 31, 1996, Entergy Louisiana had future minimum
lease payments (reflecting an overall implicit rate of 8.76%) in
connection with the Waterford 3 sale and leaseback transactions, which
are recorded as long-term debt, as follows (in thousands):
1997 $ 39,805
1998 41,447
1999 50,530
2000 47,510
2001 46,015
Years thereafter 582,689
-----------
Total 807,996
Less: Amount representing interest 454,396
-----------
Present value of net minimum lease payments $ 353,600
===========
Grand Gulf 1 Lease Obligations (System Energy)
On December 28, 1988, System Energy entered into two arrangements
for the sale and leaseback of an aggregate 11.5% undivided ownership
interest in Grand Gulf 1 for an aggregate cash consideration of $500
million. System Energy is leasing back the undivided interest on a net
lease basis over a 26 1/2-year basic lease term. System Energy has
options to terminate the leases and to repurchase the undivided
interest in Grand Gulf 1 at certain intervals during the basic lease
term. Further, at the end of the basic lease term, System Energy has
an option to renew the leases or to repurchase the undivided interest
in Grand Gulf 1. See Note 9 with respect to certain other terms of the
transactions.
In accordance with SFAS 98, "Accounting for Leases," due to
"continuing involvement" by System Energy, the sale and leaseback
arrangements of the undivided portions of Grand Gulf 1, as described
above, are required to be reflected for financial reporting purposes as
financing transactions in System Energy's financial statements. The
amounts charged to expense for financial reporting purposes include the
interest portion of the lease obligations and depreciation of the
plant. However, operating revenues include the recovery of the lease
payments because the transactions are accounted for as sales and
leasebacks for rate-making purposes. The total of interest and
depreciation expense exceeds the corresponding revenues realized during
the early part of the lease term. Consistent with a recommendation
contained in a FERC audit report, System Energy recorded as a deferred
asset the difference between the recovery of the lease payments and the
amounts expensed for interest and depreciation and is recording such
difference as a deferred asset on an ongoing basis. The amount of this
deferred asset was $93.2 million and $85.8 million as of December 31,
1996, and 1995, respectively.
As of December 31, 1996, System Energy had future minimum lease
payments (reflecting an implicit rate of 7.02%), which are recorded as
long-term debt as follows (in thousands):
1997 $ 42,753
1998 42,753
1999 42,753
2000 42,753
2001 46,803
Years thereafter 713,264
----------
Total 931,079
Less: Amount representing interest 434,599
----------
Present value of net minimum lease payments $ 496,480
==========
NOTE 11. POSTRETIREMENT BENEFITS (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy)
Pension Plans
Entergy has two postretirement benefit plans, "Entergy Corporation
Retirement Plan for Non-Bargaining Employees" and "Entergy Corporation
Retirement Plan for Bargaining Employees", covering substantially all
of its employees. The pension plans are noncontributory and provide
pension benefits that are based on employees' credited service and
compensation during the final years before retirement. Entergy
Corporation and its subsidiaries fund pension costs in accordance with
contribution guidelines established by the Employee Retirement Income
Security Act of 1974, as amended, and the Internal Revenue Code of
1986, as amended. The assets of the plans include common and preferred
stocks, fixed income securities, interest in a money market fund, and
insurance contracts. Prior to January 1, 1995, all of Entergy's non-
bargaining employees were generally included in a plan sponsored by the
Entergy company where they were employed. However, Entergy New Orleans
was a participating employer in a plan sponsored by Entergy Louisiana.
Effective January 1, 1995, these employees became participants in a new
plan with provisions substantially identical to their previous plan.
Total 1996, 1995, and 1994 pension cost of Entergy Corporation and
its subsidiaries, including amounts capitalized, included the following
components (in thousands):
<TABLE>
<CAPTION>
1996 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $31,584 $7,605 $5,852 $4,684 $2,157 $1,147 $2,658
Interest cost on projected
benefit obligation 84,303 24,540 20,952 15,735 9,462 2,973 2,645
Actual return on plan assets (163,520) (41,183) (47,416) (41,219) (17,767) (1,826) (4,146)
Net amortization and deferral 71,260 14,015 18,732 20,313 6,382 88 526
----------------------------------------------------------------------------------
Net pension cost (income) $23,627 $4,977 ($1,880) ($487) $234 $2,382 $1,683
==================================================================================
</TABLE>
<TABLE>
<CAPTION>
1995 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned $29,282 $7,786 $6,686 $4,143 $2,152 $1,158 $2,260
during the period
Interest cost on projected 80,794 24,372 21,098 15,111 9,240 2,680 2,230
benefit obligation
Actual return on plan assets (261,864) (71,807) (82,624) (53,348) (30,443) (1,614) (8,827)
Net amortization and deferral 178,345 47,766 53,921 34,902 20,081 64 5,510
--------------------------------------------------------------------------------
Net pension cost (income) $26,557 $8,117 ($919) $808 $1,030 $2,288 $1,173
================================================================================
</TABLE>
<TABLE>
<CAPTION>
1994 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned $35,712 $8,854 $9,497 $5,441 $2,484 $1,502 $2,619
during the period
Interest cost on projected 77,943 22,651 21,335 14,473 8,648 2,740 2,148
benefit obligation
Actual return on plan assets 10,381 365 6,785 2,024 1,507 - 498
Net amortization and deferral (96,893) (24,474) (39,405) (19,981) (11,843) (970) (3,535)
Other 17,963 - 17,963 - - - -
-----------------------------------------------------------------------------
Net pension cost $45,106 $7,396 $16,175 $1,957 $796 $3,272 $1,730
=============================================================================
</TABLE>
The funded status of Entergy's various pension plans as of
December 31, 1996, and 1995 was (in thousands):
<TABLE>
<CAPTION>
1996 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Actuarial present value of
accumulated pension
plan obligation:
Vested $1,027,307 $296,181 $287,201 $193,183 $117,142 $34,466 $25,195
Nonvested 4,775 1,345 748 697 154 29 655
----------------------------------------------------------------------------------
Accumulated benefit obligation 1,032,082 297,526 287,949 193,880 117,296 34,495 25,850
----------------------------------------------------------------------------------
Plan assets at fair value 1,359,614 374,849 397,749 282,470 150,616 22,017 43,943
Projected benefit obligation 1,196,925 338,307 315,781 217,711 129,578 41,511 38,401
----------------------------------------------------------------------------------
Plan assets in excess of 162,689 36,542 81,968 64,759 21,038 (19,494) 5,542
(less than) projected benefit
obligation
Unrecognized prior service cost 36,131 14,882 11,964 5,911 4,894 1,965 1,100
Unrecognized transition asset (39,504) (11,679) (9,550) (14,037) (6,252) (767) (5,291)
Unrecognized net loss (gain) (180,525) (55,536) (132,832) (61,130) (23,769) 9,897 (4,502)
----------------------------------------------------------------------------------
Accrued pension liability ($21,209) ($15,791) ($48,450) ($4,497) ($4,089) ($8,399) ($3,151)
==================================================================================
</TABLE>
<TABLE>
<CAPTION>
1995 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Actuarial present value of
accumulated pension
plan obligation:
Vested $989,509 $298,358 $256,173 $192,697 $116,851 $44,324 $23,692
Nonvested 4,555 1,342 792 705 147 29 640
-------------------------------------------------------------------------------
Accumulated benefit obligation 994,064 299,700 256,965 193,402 116,998 44,353 24,332
-------------------------------------------------------------------------------
Plan assets at fair value 1,224,594 337,929 374,010 245,521 140,513 18,658 41,951
Projected benefit obligation 1,156,831 341,946 289,666 218,715 129,180 51,699 36,491
-------------------------------------------------------------------------------
Plan assets in excess of 67,763 (4,017) 84,344 26,806 11,333 (33,041) 5,460
(less than) projected benefit
obligation
Unrecognized prior service cost 35,946 15,042 12,021 6,469 4,883 2,224 1,180
Unrecognized transition asset (46,856) (14,015) (11,937) (16,845) (7,502) (963) (5,887)
Unrecognized net loss (gain) (94,618) (23,545) (135,303) (28,060) (13,832) 22,751 (3,074)
-------------------------------------------------------------------------------
Accrued pension liability ($37,765) ($26,535) ($50,875) ($11,630) ($5,118) ($9,029) ($2,321)
===============================================================================
</TABLE>
The significant actuarial assumptions used in computing the
information above for 1996, 1995, and 1994 were as follows: weighted-
average discount rate, 7.75% for 1996, 7.5% for 1995, and 8.5% for
1994, weighted-average rate of increase in future compensation levels,
4.6% for 1996 and 1995, and 5.1% for 1994; and expected long-term rate
of return on plan assets, 9.0% for 1996, and 8.5% for 1995 and 1994.
Transition assets of Entergy are being amortized over the greater of
the remaining service period of active participants or 15 years.
In 1994, Entergy Gulf States recorded an $18.0 million charge
related to early retirement programs in connection with the Merger, of
which $15.2 million was expensed.
Other Postretirement Benefits
Entergy also provides certain health care and life insurance
benefits for retired employees. Substantially all employees may become
eligible for these benefits if they reach retirement age while still
working for Entergy.
Effective January 1, 1993, Entergy adopted SFAS 106 which required
a change from a cash method to an accrual method of accounting for
postretirement benefits other than pensions. Entergy Arkansas and
Entergy Louisiana continue to fund these benefits on a pay-as-you-go
basis. Entergy Gulf States continues to fund a portion of these
benefits regulated by the LPSC and FERC on a pay-as-you-go basis.
During 1994, pursuant to regulatory directives, Entergy Mississippi and
Entergy New Orleans began to fund their postretirement benefit
obligations. In 1996, Entergy Gulf States and System Energy began to
fund their postretirement benefit obligations pursuant to 1995
regulatory directives issued by the PUCT and FERC, respectively.
System Energy is funding on behalf of Entergy Operations those
postretirement benefits associated with Grand Gulf 1. The assets of
the various postretirement benefit plans other than pensions include
common stocks, fixed income securities, and a money market fund. At
January 1, 1993, the actuarially determined accumulated postretirement
benefit obligation (APBO) earned by retirees and active employees was
estimated to be approximately $241.4 million and $128 million for
Entergy (other than Entergy Gulf States) and for Entergy Gulf States,
respectively. Such obligations are being amortized over a 20-year
period beginning in 1993.
The domestic utility companies have sought approval, in their
respective regulatory jurisdictions, to implement the appropriate
accounting requirements related to SFAS 106 for ratemaking purposes.
Entergy Arkansas has received an order permitting deferral, as a
regulatory asset, of the difference between its annual cash
expenditures for postretirement benefits other than pensions and the
SFAS 106 accrual, for up to a five-year period commencing January 1,
1993. Entergy Mississippi is expensing its SFAS 106 costs, which are
reflected in rates pursuant to an order from the MPSC in connection
with Entergy Mississippi's formulary incentive rate plan (see Note 2).
The LPSC ordered Entergy Gulf States and Entergy Louisiana to continue
the use of the pay-as-you-go method for ratemaking purposes for
postretirement benefits other than pensions, but the LPSC retains the
flexibility to examine individual companies' accounting for
postretirement benefits to determine if special exceptions to this
order are warranted. Entergy New Orleans is expensing its SFAS 106
costs. Pursuant to resolutions adopted in November 1993 by the Council
related to the Merger, Entergy New Orleans' SFAS 106 expenses through
October 31, 1996, were allowed by the Council for purposes of
evaluating the appropriateness of Entergy New Orleans' rates. Pursuant
to the PUCT's May 26, 1995, amended order, Entergy Gulf States is
currently collecting its SFAS 106 costs in rates.
Total 1996, 1995, and 1994 postretirement benefit cost of Entergy
Corporation and its subsidiaries, including amounts capitalized and
deferred, included the following components (in thousands):
<TABLE>
<CAPTION>
1996 Entergy Entergy Entergy Entergy Entergy
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans
<S> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $14,351 $3,128 $3,476 $2,155 $1,081 $661
Interest cost on APBO 26,133 5,580 8,164 4,283 2,171 3,085
Actual return on plan assets (1,654) - (388) - (479) (681)
Net amortization and deferral 14,214 3,397 5,370 2,694 1,458 1,977
----------------------------------------------------------------------
Net postretirement benefit cost $53,044 $12,105 $16,622 $9,132 $4,231 $5,042
======================================================================
</TABLE>
<TABLE>
<CAPTION>
1995 Entergy Entergy Entergy Entergy Entergy
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans
<S> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned $10,797 $2,777 $1,864 $2,047 $909 $650
during the period
Interest cost on APBO 25,629 5,398 8,526 4,215 1,969 3,258
Actual return on plan assets (759) - - - (245) (514)
Net amortization and deferral 11,023 2,702 4,477 2,121 988 1,876
--------------------------------------------------------------------
Net postretirement benefit cost $46,690 $10,877 $14,867 $8,383 $3,621 $5,270
====================================================================
</TABLE>
<TABLE>
<CAPTION>
1994 Entergy Entergy Entergy Entergy Entergy
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans
<S> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned $11,863 $3,080 $2,169 $2,433 $876 $813
during the period
Interest cost on APBO 23,312 5,510 6,449 4,422 1,833 3,502
Net amortization and deferral 9,891 3,833 2,832 3,066 1,122 2,569
--------------------------------------------------------------------
Net postretirement benefit cost $45,066 $12,423 $11,450 $9,921 $3,831 $6,884
====================================================================
</TABLE>
The funded status of Entergy's postretirement plans as of December
31, 1996, and 1995, was (in thousands):
<TABLE>
<CAPTION>
1996 Entergy Entergy Entergy Entergy Entergy
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of accumulated
postretirement benefit obligation:
Retirees $263,504 $56,945 $90,450 $44,083 $21,639 $36,613
Other fully eligible participants 28,507 5,599 5,728 4,063 2,753 1,694
Other active participants 73,188 15,505 16,623 11,553 5,837 3,630
----------------------------------------------------------------------
Accumulated benefit obligation 365,199 78,049 112,801 59,699 30,229 41,937
Plan assets at fair value 37,970 - 15,528 - 7,517 12,647
----------------------------------------------------------------------
Plan assets less than APBO (327,229) (78,049) (97,273) (59,699) (22,712) (29,290)
Unrecognized transition obligation 183,557 63,252 92,853 47,546 24,031 42,861
Unrecognized net loss (gain)/other (5,032) (13,414) (13,859) (7,726) (3,221) (11,704)
----------------------------------------------------------------------
Accrued postretirement benefit asset ($148,704) ($28,211) ($18,279) ($19,879) ($1,902) $1,867
(liability) ======================================================================
</TABLE>
<TABLE>
<CAPTION>
1995 Entergy Entergy Entergy Entergy Entergy
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of accumulated
postretirement benefit obligation:
Retirees $244,192 $46,633 $101,698 $36,262 $15,957 $33,652
Other fully eligible participants 48,393 9,161 17,334 7,614 4,619 3,215
Other active participants 71,464 16,745 15,980 13,288 5,692 4,306
--------------------------------------------------------------------------
Accumulated benefit obligation 364,049 72,539 135,012 57,164 26,268 41,173
Plan assets at fair value 15,494 - - - 5,151 10,343
--------------------------------------------------------------------------
Plan assets less than APBO (348,555) (72,539) (135,012) (57,164) (21,117) (30,830)
Unrecognized transition obligation 204,348 67,206 107,975 50,517 25,533 45,539
Unrecognized net loss (gain)/other (1,639) (16,757) (617) (8,556) (6,179) (13,835)
--------------------------------------------------------------------------
Accrued postretirement benefit asset ($145,846) ($22,090) ($27,654) ($15,203) ($1,763) $874
(liability) ==========================================================================
The assumed health care cost trend rate used in measuring the APBO
of Entergy was 7.6% for 1997, gradually decreasing each successive year
until it reaches 5.0% in 2005. A one percentage-point increase in the
assumed health care cost trend rate for each year would have increased
the APBO of Entergy, as of December 31, 1996, by 11.5% (Entergy
Arkansas-11.8%, Entergy Gulf States-10.4%, Entergy Louisiana-11.8%,
Entergy Mississippi-12.2% and Entergy New Orleans-10.0%), and the sum
of the service cost and interest cost by approximately 14.2% (Entergy
Arkansas-15.0%, Entergy Gulf States-12.8%, Entergy Louisiana-14.4%,
Entergy Mississippi-14.4% and Entergy New Orleans-12.8%). The assumed
discount rate and rate of increase in future compensation used in
determining the APBO were 7.75% for 1996, 7.5% for 1995, and 8.5% for
1994, and 4.6% for 1996 and 1995, and 5.1% for 1994, respectively. The
expected long-term rate of return on plan assets was 9.0% for 1996, and
8.5% for 1995 and 1994.
NOTE 12. RESTRUCTURING COSTS (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans)
In 1994, 1995, and 1996, 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 in order to enable Entergy to become a low-cost
producer. The balances as of December 31, 1994, 1995, and 1996, for
restructuring liabilities associated with these programs are shown
below by company along with the actual termination benefits paid under
the programs.
</TABLE>
<TABLE>
<CAPTION>
Liability Additional Payments Liability Additional Payments Liability
as of 1995 Made in as of 1996 Made in as of
Company 12/31/94 Charges 1995 12/31/95 Charges 1996 12/31/96
<S> <C> <C> <C> <C> <C> <C> <C>
Entergy Arkansas $12.2 $16.2 ($20.1) $8.3 $0.3 ($7.8) $0.8
Entergy Gulf States 6.5 13.1 (14.2) 5.4 0.8 (5.4) 0.8
Entergy Louisiana 6.8 6.4 (11.0) 2.2 0.4 (2.6) -
Entergy Mississippi 6.2 2.9 (6.6) 2.5 (1.7) (0.8) -
Entergy New Orleans 3.4 0.2 (3.0) 0.6 - (0.6) -
Other - 9.6 (4.4) 5.2 1.6 (5.2) 1.6
----- ----- ------ ----- ---- ------ ----
Total $35.1 $48.4 ($59.3) $24.2 $1.4 ($22.4) $3.2
===== ===== ====== ===== ==== ====== ====
</TABLE>
The restructuring charges shown above primarily included employee
severance costs related to the expected termination of approximately
2,774 employees in various groups. As of December 31, 1996, 2,723
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.
Additionally, Entergy recorded $24.3 million in 1994 (of which
$23.8 million was recorded by Entergy Gulf States) and $1.6 million in
1996 for remaining severance and augmented retirement benefits related
to the Merger. Actual termination benefits paid under the program
during 1995 and 1996 amounted to $21.6 million, and $3.4 million,
respectively. At December 31, 1996, the total remaining liability for
expected future Merger-related outlays was approximately $1 million.
NOTE 13. ACQUISITIONS (Entergy Corporation)
CitiPower
On January 5, 1996, Entergy Corporation finalized its acquisition
of CitiPower, an electric distribution company serving Melbourne,
Australia, and surrounding suburbs. The purchase price of CitiPower was
approximately $1.2 billion, of which $294 million represented an equity
investment by Entergy Corporation, and the remainder represented debt.
Entergy Corporation funded the majority of the equity portion of the
investment by drawing down $230 million of its $300 million bank
revolving credit facility, which was subsequently repaid throughout the
course of the year.
CitiPower is one of five electric distribution businesses in the
state of Victoria. CitiPower's distribution area covers approximately
10% of Victoria's population. During the twelve months ended December
31, 1996, CitiPower supplied approximately 4.2 million MWh of
electricity to over 238,000 customer sites. Approximately 37,000, or
15%, of these sites were commercial customers.
The cost of the CitiPower license is being amortized on a straight-
line basis over a 40 year period beginning January 5, 1996. As of
December 31, 1996, the unamortized balance of the license was $606
million.
In accordance with the purchase method of accounting, the results
of operations for Entergy Corporation reported in its Statements of
Consolidated Income and Cash Flows do not reflect CitiPower's results
of operations for any period prior to January 5, 1996. The pro forma
combined revenues, net income, earnings per common share before the
cumulative effect of accounting change, and earnings per common share
of Entergy Corporation presented below give effect to the acquisition
as if it had occurred on January 1, 1995. 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.
Twelve Months Ended
December 31, 1995
(In Thousands of U.S. dollars,
Except Share Data)
Operating revenues $ 6,690,406
Net income $ 503,880
Earnings per average common share
before cumulative effect of accounting $ 2.06
change
Earnings per average common share $ 2.21
CitiPower's results of operations for the twelve months ended
December 31, 1996, (beginning on January 5, 1996, at the date of
acquisition) are included in Entergy Corporation's Consolidated
Financial Statements and are stated separately below:
Twelve Months Ended
December 31, 1996
(In Thousands of U.S. dollars)
Operating revenues $384,803
Operating expenses $308,916
Interest charges $ 77,545
Other
During 1996, Entergy acquired several security companies and
assets of other security companies for a purchase price of
approximately $83 million.
NOTE 14. TRANSACTIONS WITH AFFILIATES (Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
The various domestic utility companies purchase electricity from
and/or sell electricity to other domestic utility companies, System
Energy, and Entergy Power (in the case of Entergy Arkansas) under rate
schedules filed with FERC. In addition, the domestic utility companies
and System Energy purchase fuel from System Fuels, receive technical,
advisory, and administrative services from Entergy Services, and
receive management and operating services from Entergy Operations.
As described in Note 1, all of System Energy's operating revenues
consist of billings to Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans.
The tables below contain the various affiliate transactions among
the domestic utility companies and System Entergy (in millions).
Intercompany Revenues
Entergy Entergy Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Mississippi New Orleans Energy
1996 $282.7 $21.2 $5.6 $65.9 $2.6 $623.6
1995 $195.5 $62.7 $1.6 $43.3 $3.2 $605.6
1994 $232.6 $44.4 $1.0 $45.8 $2.1 $475.0
Intercompany Operating Expenses
Entergy Entergy Entergy Entergy Entergy System
Arkansas(1) Gulf States Louisiana Mississippi New Orleans Energy
1996 $346.7 $395.7 $331.3 $294.6 $185.9 $ 8.6
1995 $316.0 $266.5 $335.5 $262.6 $164.4 $ 6.5
1994 $310.7 $296.9 $365.8 $280.2 $170.1 $10.5
(1)Includes $38.8 million in 1996, $31.0 million in 1995, and $25.7
million in 1994 for power purchased from Entergy Power.
Operating Expenses Paid or Reimbursed to Entergy Operations
Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Energy
1996 $163.3 $133.7 $ 97.7 $ 98.1
1995 $189.8 $129.1 $122.6 $116.9
1994 $221.2 $210.2 $152.5 $179.6
In addition, certain materials and services required for
fabrication of nuclear fuel are acquired and financed by System Fuels
and then sold to System Energy as needed. Charges for these materials
and services, which represent additions to nuclear fuel, amounted to
approximately $44.7 million in 1996, $51.5 million in 1995, and $26.4
million in 1994.
NOTE 15. BUSINESS SEGMENT INFORMATION (Entergy New Orleans)
Entergy New Orleans supplies electric and natural gas services in
the City. Entergy New Orleans' segment information follows:
<TABLE>
<CAPTION>
1996 1995 1994
Electric Gas Electric Gas Electric Gas
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating revenues $403,254 $101,023 $390,002 $80,276 $360,430 $87,357
Revenue from sales to
unaffiliated customers (1) $400,605 $101,023 $386,785 $80,276 $358,369 $87,357
Operating income
before income taxes $ 51,937 $ 5,641 $ 61,092 $ 9,638 $ 23,976 $ 9,387
Net utility plant $214,106 $ 63,865 $204,407 $65,236 $209,901 $67,875
Depreciation expense $ 16,525 $ 3,342 $ 15,858 $ 3,290 $ 15,743 $ 3,310
Construction expenditures $ 23,411 $ 4,545 $ 21,729 $ 6,107 $ 16,997 $ 5,780
</TABLE>
(1) Entergy New Orleans' intersegment transactions are not material
(less than 1% of sales to unaffiliated customers).
NOTE 16. SUBSEQUENT EVENT (UNAUDITED)
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 and Entergy, through an English subsidiary,
controlled over 90% 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. 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.
NOTE 17. QUARTERLY FINANCIAL DATA (UNAUDITED)
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
The business of the domestic utility companies and System Energy
is subject to seasonal fluctuations with the peak period occurring
during the third quarter. Operating results for the four quarters of
1996 and 1995 were:
<TABLE>
<CAPTION>
Operating Revenue
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
1996:
First Quarter $1,603,384 $383,081 $ 456,631 $417,767 $203,902 $127,280 $156,424
Second Quarter 1,852,525 467,990 525,567 457,847 247,479 127,829 160,369
Third Quarter 2,138,273 529,276 592,130 549,295 297,118 150,937 154,467
Fourth Quarter 1,569,344 363,086 444,853 403,958 209,931 98,231 152,360
1995:
First Quarter 1,337,400 339,596 399,346 353,462 180,559 104,494 151,664
Second Quarter 1,564,917 412,164 479,609 406,575 223,156 112,666 158,632
Third Quarter 1,955,019 530,448 540,287 529,458 280,339 146,720 144,758
Fourth Quarter 1,429,870 366,025 442,732 385,380 205,789 106,398 150,585
</TABLE>
<TABLE>
<CAPTION>
Operating Income (Loss)
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
1996:
First Quarter $342,403 $41,955 $ 77,058 $95,166 $30,470 $15,752 $82,938
Second Quarter 500,017 105,237 118,420 119,736 57,283 19,608 82,894
Third Quarter 599,704 131,319 152,022 155,755 54,696 28,319 75,270
Fourth Quarter 236,597 31,639 64,398 65,789 22,147 (6,101) 75,937
1995:
First Quarter 258,441 26,343 47,209 88,013 25,633 14,138 79,377
Second Quarter 434,623 91,180 111,918 115,637 43,523 17,420 80,704
Third Quarter 606,104 132,264 154,268 181,171 57,717 31,000 76,719
Fourth Quarter 218,158 22,080 48,269 63,934 23,515 8,172 76,905
</TABLE>
<TABLE>
<CAPTION>
Net Income (Loss)
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
1996:
First Quarter $(87,072) $19,268 $(152,257) $40,530 $12,924 $ 8,035 $23,530
Second Quarter 188,323 55,712 47,140 55,385 29,819 10,360 23,382
Third Quarter 279,881 70,791 90,965 77,302 28,205 15,221 24,749
Fourth Quarter 38,895 12,027 10,265 17,545 8,263 (6,840) 27,007
1995:
First Quarter 90,392 46,129 3,635 36,062 9,774 6,245 22,565
Second Quarter 162,703 47,844 43,353 53,082 20,578 8,688 23,802
Third Quarter 263,118 73,963 68,112 92,819 29,228 16,862 23,366
Fourth Quarter 3,767 4,144 7,819 19,574 9,087 2,591 23,306
</TABLE>
Earnings (Loss) per Average Common Share (Entergy Corporation)
1996 1995
First Quarter $(0.38) $0.40
Second Quarter $ 0.83 $0.71
Third Quarter $ 1.22 $1.16
Fourth Quarter (b) $ 0.16 $0.02
(a)See Note 12 for information regarding the recording of certain
restructuring costs in 1995.
(b)The fourth quarter of 1995 reflects an increase in net income of
$35.4 million (net of income taxes of $22.9 million) and an
increase in earnings per share of $.15 due to the recording of the
cumulative effect of the change in accounting method for
incremental nuclear refueling outage maintenance costs. See Note 1
for a discussion of the change in accounting method.
<PAGE>
Item 9. Changes In and Disagreements With Accountants On Accounting and
Financial Disclosure.
No event that would be described in response to this item has occurred
with respect to Entergy, System Energy, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, or Entergy New Orleans.
PART III
Item 10. Directors and Executive Officers of the Registrants (Entergy
Corporation, Entergy Gulf States, Entergy Mississippi, Entergy New Orleans,
and System Energy)
All officers and directors listed below held the specified positions
with their respective companies as of the date of filing this report.
ENTERGY CORPORATION
Directors
Information required by this item concerning directors of Entergy
Corporation is set forth under the heading "Election of Directors"
contained in the Proxy Statement of Entergy Corporation, (the "Proxy
Statement"), to be filed in connection with its Annual Meeting of
Stockholders to be held May 9, 1997, ("Annual Meeting"), and is
incorporated herein by reference. Information required by this item
concerning officers and directors of the remaining registrants is reported
as of December 31, 1996.
Name Age Position Period
Officers
Edwin Lupberger (a) 60 Chairman of the Board, Chief 1985-Present
Executive Officer, and Director
of Entergy Corporation
Chairman of the Board and Chief 1993-Present
Executive Officer of Entergy
Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy
New Orleans
Chairman of the Board, Chief 1994-Present
Executive Officer and Director
of Entergy Gulf States
Chairman of the Board and 1996-Present
Director of Entergy Integrated
Solutions
Chairman of the Board of System 1986-Present
Energy and Entergy Enterprises
Chairman of the Board of Entergy 1990-Present
Operations
Chairman of the Board of Entergy 1985-Present
Services
Chief Executive Officer of 1991-Present
Entergy Services
Chief Executive Officer of 1993-Present
Entergy Power, Entergy Power
Development Corporation, and
Entergy-Richmond Power
Corporation
Chief Executive Officer of 1994-Present
Entergy Pakistan, Ltd. and
Entergy Power Asia, Ltd.
Chief Executive Officer of EP 1995-Present
Edegel, Inc., Entergy Power
Development International
Corporation, Entergy Power
Holding II, Ltd., Entergy Power
Marketing Corporation, Entergy
Power Operations Corporation,
Entergy Power Operations
Holdings, Ltd., Entergy Power
Operations Pakistan LDC, Entergy
Victoria LDC, Entergy Victoria
Holdings LDC, EPG Cayman Holding
I, EPG Cayman Holding II,
Entergy Power CBA Holding, Ltd.,
and Entergy Power Edesur
Holding, Ltd.
Chief Executive Officer of 1996-Present
Entergy Power International
Holdings Corporation and Entergy
Mexico Ltd.
President of Entergy Corporation 1995-Present
President of Entergy Services and 1994-Present
Entergy Enterprises
Director of Entergy Arkansas, 1986-Present
Entergy Louisiana, Entergy
Mississippi, Entergy New
Orleans, and System Energy
Director of Entergy Operations 1994-Present
and Entergy Services
Director of Entergy Enterprises 1984-Present
Chief Executive Officer of 1995-1996
Entergy Edegel I, Inc., Entergy
Power Holding I, Ltd., and
Entergy Yacyreta I, Inc.
Chairman of the Board of Entergy 1990-1993
Power
Chief Executive Officer of 1991-1994
Entergy Enterprises
Director of System Fuels 1986-1992
Jerry L. Maulden 60 Vice Chairman of Entergy 1995-Present
Corporation
Vice Chairman and Chief Operating 1993-Present
Officer of Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
and Entergy New Orleans
Vice Chairman of Entergy Services 1992-Present
Director of Entergy Arkansas 1979-Present
Director of Entergy Gulf States 1993-Present
Director of Entergy Louisiana and 1991-Present
Entergy New Orleans
Director of Entergy Mississippi 1988-Present
Director of Entergy Operations 1990-Present
Director of System Energy 1987-Present
Director of Entergy Services 1979-Present
Chairman of the Board of Entergy 1989-1993
Arkansas
Chairman of the Board and Chief 1991-1993
Executive Officer of Entergy
Louisiana and Entergy New
Orleans
Chairman of the Board and Chief 1989-1993
Executive Officer of Entergy
Mississippi
Chief Executive Officer of 1979-1993
Entergy Arkansas
President and Chief Operating 1993-1995
Officer of Entergy Corporation
Group President, System Executive 1991-1993
- Transmission, Distribution,
and Customer Service of Entergy
Corporation
Group President, System Executive 1991-1992
- Transmission, Distribution,
and Customer Service of Entergy
Services
Director of System Fuels 1979-1992
Jerry D. Jackson 52 Executive Vice President - 1994-Present
External Affairs of Entergy
Corporation
Executive Vice President - 1995-Present
External Affairs of Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New
Orleans
Executive Vice President - 1994-Present
External Affairs of Entergy
Services
Director of Entergy Arkansas, 1992-Present
Entergy Louisiana, Entergy
Mississippi, and Entergy New
Orleans
Director of Entergy Gulf States 1994-Present
Director of Entergy Services 1990-Present
Director of Entergy Enterprises 1996-Present
Executive Vice President of 1994-1995
Marketing for Entergy
Corporation
Executive Vice President - 1995-1995
Marketing of Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
and Entergy New Orleans
Executive Vice President - 1994-1995
Marketing of Entergy Services
President and Chief 1992-1994
Administrative Officer of
Entergy Services
President of Entergy Enterprises 1991-1992
Executive Vice President - 1990-1994
Finance and External Affairs of
Entergy Corporation
Executive Vice President - 1992-1994
Finance and External Affairs and
Secretary of Entergy Arkansas,
Entergy Louisiana, Entergy
Mississippi, and Entergy New
Orleans
Executive Vice President - 1993-1994
Finance and External Affairs of
Entergy Gulf States
Executive Vice President - 1990-1992
Finance and External Affairs of
Entergy Services
Secretary of Entergy Corporation 1991-1994
Secretary of Entergy Gulf States 1994-1995
Director of System Energy 1993-1995
Director of Entergy Power and 1990-1992
Entergy Enterprises
Donald C. Hintz 54 Executive Vice President and 1994-Present
Chief Nuclear Officer of Entergy
Corporation
Executive Vice President - 1994-Present
Nuclear of Entergy Arkansas,
Entergy Gulf States, and Entergy
Louisiana
Executive Vice President of 1996-Present
Nuclear for Entergy Services
Chief Executive Officer and 1992-Present
President of System Energy and
Entergy Operations
Director of Entergy Arkansas, 1992-Present
Entergy Louisiana, Entergy
Mississippi, System Energy,
System Fuels, and Entergy
Services
Director of Entergy Gulf States 1993-Present
Director of Entergy Operations 1990-Present
Director of GSG&T, Prudential Oil 1994-Present
& Gas, Southern Gulf Railway,
and Varibus Corporation
Senior Vice President and Chief 1993-1994
Nuclear Officer of Entergy
Corporation
Senior Vice President - Nuclear 1990-1994
of Entergy Arkansas
Senior Vice President - Nuclear 1993-1994
of Entergy Gulf States.
Senior Vice President - Nuclear 1992-1994
of Entergy Louisiana
President of Entergy Operations 1992-1992
Director of Entergy New Orleans 1992-1994
Chief Operating Officer and 1990-1992
Executive Vice President of
Entergy Operations
Group Vice President - Nuclear of 1990-1992
Entergy Louisiana
Gerald D. McInvale 53 Executive Vice President and 1995-Present
Chief Financial Officer of
Entergy Corporation, Entergy
Services, Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
Entergy New Orleans, System
Energy, Entergy Enterprises,
Entergy Operations, System Fuels
Inc., Entergy Integrated
Solutions, GSG&T, Prudential Oil
& Gas, Southern Gulf Railway,
and Varibus Corporation
Executive Vice President, Chief 1996-Present
Financial Officer and Director
of Entergy Technology Holding
Company
Executive Vice President and 1996-Present
Chief Financial Officer of
Entergy Operations Services,
Inc.
Senior Vice President, Treasurer, 1994-Present
and Director of Entergy
Pakistan, Ltd. and Entergy Power
Asia, Ltd.
Senior Vice President, Treasurer, 1993-Present
and Director of Entergy Power
Development Corporation and
Entergy-Richmond Power
Corporation
Senior Vice President, Treasurer, 1995-Present
and Director of EP Edegel, Inc.,
Entergy Power Development
International Corporation,
Entergy Power Holding II, Ltd.,
Entergy Power Marketing
Corporation, Entergy Power
Operations Corporation, Entergy
Power Operations Holdings, Ltd.,
Entergy Power Operations
Pakistan LDC, Entergy Victoria
LDC, Entergy Victoria Holdings
LDC, EPG Cayman Holding I, EPG
Cayman Holding II, Entergy Power
CBA Holding, Ltd., and Entergy
Power Edesur Holding, Ltd.
Senior Vice President, Treasurer, 1996-Present
and Director of Entergy Power
International Holdings
Corporation
Senior Vice President, Treasurer, 1993-Present
and Director of Entergy Power
Senior Vice President and 1996-Present
Director or Entergy Mexico, Ltd.
Senior Vice President and 1996-Present
Treasurer of Entergy Peru S.A.
Director of Entergy Arkansas, 1995-Present
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
Entergy New Orleans, Entergy
Services, System Energy, Entergy
Operations, GSG&T, Prudential
Oil & Gas, Southern Gulf
Railway, and Varibus Corporation
Director of System Fuels 1992-Present
Director of Entergy Integrated 1993-Present
Solutions
Director of Entergy Power 1996-Present
International Corporation
Senior Vice President, Treasurer, 1995-1996
and Director of Entergy Edegel
I, Inc., Entergy Power Holding
I, Ltd., and Entergy Yacyreta I,
Inc.
Chairman of the Board of Entergy 1994-1995
Integrated Solutions
Senior Vice President and Chief 1991-1995
Financial Officer of Entergy
Corporation, Entergy Arkansas,
Entergy Louisiana, Entergy
Mississippi, Entergy New
Orleans, System Energy, Entergy
Operations, Entergy Services,
and Entergy Enterprises
Senior Vice President and Chief 1993-1995
Financial Officer of Entergy
Gulf States
Senior Vice President and Chief 1994-1995
Financial Officer of System
Fuels
Director and Acting Chief 1994-1995
Operating Officer of Entergy
Enterprises
Treasurer of Entergy Enterprises 1992-1996
Michael G. Thompson 56 Senior Vice President and General 1992-Present
Counsel of Entergy Corporation
and Entergy Services
Senior Vice President, General 1995-Present
Counsel and Secretary of Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New
Orleans
Senior Vice President-Law and 1992-Present
Secretary of Entergy Enterprises
Senior Vice President, Secretary, 1994-Present
and Director of Entergy
Pakistan, Ltd. and Entergy Power
Asia, Ltd.
Senior Vice President, Secretary, 1994-Present
and Director of Entergy Power
Marketing Corporation, Entergy
Power Operations Holding Ltd.,
and EP Edegel, Inc.
Senior Vice President, Secretary, 1995-Present
and Director of Entergy Power
Development International
Corporation, Entergy Power
Holding II, Ltd., Entergy Power
Operations Corporation, Entergy
Power Operations Pakistan LDC,
Entergy Victoria LDC, Entergy
Victoria Holdings LDC, EPG
Cayman Holding I, EPG Cayman
Holding II, Entergy Power CBA
Holding, Ltd., and Entergy Power
Edesur Holding, Ltd.
Senior Vice President, Secretary 1996-Present
and Director of Entergy Power
International Holdings
Corporation and Entergy Mexico
Ltd.
Senior Vice President, Secretary, 1992-Present
and Director of Entergy Power
Development Corporation and
Entergy-Richmond Power
Corporation
Vice President, Secretary, and 1994-Present
Director of Entergy Power
Vice President and Secretary of 1993-Present
Entergy Integrated Solutions.
Secretary of Entergy Corporation 1994-Present
Director of Entergy Integrated 1992-Present
Solutions
Director of Entergy Power 1996-Present
International Corporation and
Entergy Operations Services,
Inc.
Senior Vice President, Secretary 1994-1996
and Director of Entergy Edegel
I, Inc., and Entergy Yacyreta I,
Inc.
Senior Vice President, Secretary, 1995-1996
and Director of Entergy Power
Holding I, Ltd.
Senior Vice President, Chief 1993-1994
Legal Officer, Director and
Secretary of Entergy Power
Assistant Secretary of Entergy 1993-1994
Corporation
Senior Partner of Friday, 1987-1992
Eldredge & Clark (law firm)
S. M. Henry Brown, Jr. 58 Vice President - Federal 1989-Present
Governmental Affairs of Entergy
Corporation and Entergy Services
William J. Regan, Jr. 50 Vice President and Treasurer of 1995-Present
Entergy Corporation, Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, Entergy New
Orleans, System Energy, Entergy
Operations, Entergy Services,
System Fuels Inc., GSG&T,
Prudential Oil & Gas, Southern
Gulf Railway, and Varibus
Corporation
Vice President and Treasurer of 1996-Present
Entergy Technology Holding
Company and Entergy Operations
Services, Inc.
Treasurer of Entergy Mexico Ltd. 1996-Present
Assistant Secretary of System 1995-Present
Fuels Inc., GSG&T, Prudential
Oil & Gas, Southern Gulf
Railway, and Varibus Corporation
Senior Vice President and 1989-1995
Corporate Treasurer of United
Services Automobile Association
Louis E. Buck, Jr. 48 Vice President and Chief 1995-Present
Accounting Officer of Entergy
Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
Entergy New Orleans, System
Energy, Entergy Operations, and
Entergy Services
Assistant Secretary of Entergy 1995-Present
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, Entergy New
Orleans, Entergy Operations, and
Entergy Services
Director of Entergy Operations 1996-Present
Services
Assistant Secretary of Entergy 1996-Present
Corporation and System Energy
Resources
Vice President and Chief 1992-1995
Financial Officer of North
Carolina Electric Membership
Corporation
Manager of Finance of Texas 1988-1992
Utilities Services
John A. Brayman 50 Executive Vice President and 1995-Present
Director of Entergy Enterprises
Chairman of the Board, President, 1996-Present
Chief Executive Officer and
Director of Entergy Technology
Holding Company
Executive Vice President of 1996-Present
Business Development of Entergy
Corporation
Independent consultant 1994-1995
Senior Executive of Ameritech 1990-1994
Terry L. Ogletree 53 Executive Vice President- 1996-Present
International of Entergy
Corporation
Chief Operating Officer, 1993-Present
President and Director of
Entergy Power Development
Corporation, Entergy Power, and
Entergy-Richmond Power
Corporation
Chief Operating Officer, 1994-Present
President and Director of
Entergy Pakistan Ltd., and EP
Edegel Inc.
Chief Operating Officer, 1995-Present
President and Director of
Entergy Power Development
International Corporation, and
Entergy Power Marketing
Corporation
Chief Controlling Officer, 1995-Present
President and Director of EPG
Cayman Holding I, EPG Cayman
Holding II, Entergy Victoria
LDC, and Entergy Victoria
Holdings LDC
Chief Operating Officer, 1996-Present
President and Director of
Entergy Power International
Holdings Corporation
President and Director of Entergy 1993-Present
S.A. and Entergy Transener S.A.
President and Director of Entergy 1995-Present
Power Operations Corporation,
Entergy Power Holding II, Ltd.,
Entergy Power Operation
Holdings, Ltd., Entergy Power
Operations Pakistan LDC, Entergy
Power CBA Holding, Ltd., and
Entergy Power Edesur Holding,
Ltd.
President and Director of Entergy 1994-Present
Power Asia
President and Director of Entergy 1996-Present
Mexico Ltd.
Executive Vice President of 1996-Present
Entergy Peru S.A.
Director of Entergy Power 1996-Present
International Corporation and
Entergy Operations Services,
Inc.
President and Director of Entergy 1993-1996
Argentina and Entergy Argentina
S.A., Ltd.
President and Director of Entergy 1995-1996
Edegel I, Entergy Power Holding
I, Ltd., and Entergy Yacyreta I,
Inc.
Executive Vice President and 1994-1995
Director of Entergy Enterprises
President of Constellation Energy 1989-1993
Michael B. Bemis (b) 49 Executive Vice President of 1996-Present
Retail Services for Entergy
Corporation
Executive Vice President - Retail 1992-Present
Services and Director of Entergy
Arkansas, Entergy Louisiana, and
Entergy Mississippi
Executive Vice President - Retail 1993-Present
Services of Entergy Gulf States
Executive Vice President - Retail 1992-Present
Services of Entergy New Orleans
and Entergy Services
Director of Entergy Gulf States 1994-Present
Director of System Fuels 1992-Present
Director of Varibus Corporation, 1994-Present
Prudential Oil & Gas, Inc.,
GSG&T, and Southern Gulf
Railway Company
Director of Entergy Services, 1996-Present
Entergy Enterprises, and Entergy
Integrated Solutions
President and Chief Operating 1992-1992
Officer of Entergy Louisiana and
Entergy New Orleans
Director of Entergy New Orleans 1992-1994
Frank F. Gallaher 51 Executive Vice President of 1996-Present
Operations for Entergy
Corporation
Chairman of the Board of System 1992-Present
Fuels
Chairman of the Board and 1993-Present
Director of Varibus Corporation,
Prudential Oil & Gas, Inc.,
GSG&T, and Southern Gulf Railway
Company
Chairman of the Board and 1996-Present
Director of Entergy Operations
Services, Inc.
Executive Vice President - 1993-Present
Operations of Entergy Arkansas,
Entergy Louisiana, Entergy
Mississippi, Entergy New
Orleans, and Entergy Services
Director of Entergy Gulf States 1993-Present
Director of Entergy Services and 1992-Present
System Fuels
Senior Vice President - Fossil 1992-1993
Operations of Entergy Arkansas,
Entergy Louisiana, Entergy
Mississippi, Entergy New
Orleans, and Entergy Services
President of Entergy Gulf States 1994-1996
Richard J. Landy 51 Senior Vice President and Chief 1996-Present
Administrative Officer of
Entergy Corporation
President, Chief Executive 1996-Present
Officer and Director of Entergy
Integrated Solutions
Senior Vice President and Chief 1995-Present
Administrative Officer of
Entergy Arkansas, Entergy
Operations, Entergy Services,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
and Entergy New Orleans
Director of Entergy Enterprises, 1996-Present
Entergy Operations, and Entergy
Operations Services, Inc.
Vice President - Human Resources 1991-1995
and Administration of Entergy
Arkansas, Entergy Louisiana,
Entergy Mississippi, Entergy New
Orleans, Entergy Services, and
Entergy Operations
Vice President - Human Resources 1993-1995
and Administration of Entergy
Gulf States
ENTERGY ARKANSAS, INC.
Directors
R. Drake Keith 61 President and Director of Entergy 1989-Present
Arkansas
Chief Operating Officer of 1989-1992
Entergy Arkansas
Secretary of Entergy Arkansas 1991-1992
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Officers
Michael R. Niggli 47 Senior Vice President - Customer 1996-Present
Accounts for Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
Entergy New Orleans, and Entergy
Services
Senior Vice President - Marketing 1993-1996
of Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New
Orleans, and Entergy Services
Vice President - Customer 1993-1993
Services of Entergy Louisiana,
Entergy New Orleans, and Entergy
Services
Vice President - Strategic 1990-1992
Planning of Entergy Services
Vice President and Director of 1991-1992
Entergy Enterprises
Cecil L. Alexander 61 Vice President - Governmental 1991-Present
Affairs of Entergy Arkansas
James S. Pilgrim 61 Vice President - Customer Service 1994-Present
of Entergy Arkansas
Director, Central Region, TDCS 1993-1994
Customer Service
Central Division Manager of 1991-1993
Mississippi
C. Hiram Walters 60 Vice President - Customer Service 1993-Present
of Entergy Arkansas
Vice President - Customer Service 1994-Present
of Entergy Louisiana
Vice President - Customer 1993-Present
Service, Central Region of
Entergy Services
Senior Vice President - Customer 1991-1992
Service of Entergy Services
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
R. Drake Keith See information under the Entergy
Corporation Officers Section
above.
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section
above.
Richard J. Landy See information under the Entergy
Corporation Officers Section
above.
William J. Regan, Jr. See information under the Entergy
Corporation Officers Section
above.
Louis E. Buck, Jr. See information under the Entergy
Corporation Officers Section
above.
ENTERGY GULF STATES, INC.
Directors
Karen Johnson 52 State President - Texas and 1996-Present
Director of Entergy Gulf States
Vice President - Governmental 1994-Present
Affairs of Entergy Gulf States -
Texas
Executive Director of State Bar 1990-1994
of Texas (state agency)
John J. Cordaro 63 State President - Louisiana, and 1996-Present
Director for Entergy Gulf States
and Entergy Louisiana
President and Director of Entergy 1992-1996
Louisiana and Entergy New
Orleans
Group Vice President - External 1989-1992
Affairs of Entergy Louisiana and
Entergy New Orleans
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Officers
William E. Colston 61 Vice President - Customer Service 1994-Present
of Entergy Gulf States
Vice President - Customer Service 1993-Present
of Entergy Louisiana
Vice President - Customer Service 1993-Present
of Southern Region of Entergy
Services
Regional Director of Entergy 1992-1993
Louisiana
S. G. Cunningham, Jr. 56 Vice President - Regulatory and 1996-Present
Governmental Affairs of Entergy
Louisiana and Entergy Gulf
States
Vice President - State Regulatory 1994-1996
Affairs of Entergy Services
Vice President - Entergy 1993-1994
Corporation, Entergy Gulf States
Transition Regulatory Affairs of
Entergy Services
Vice President - Rates and 1991-1994
Regulatory Affairs of Entergy
Louisiana and Entergy New
Orleans
Vice President - Regulatory 1992-1993
Affairs of Entergy Services
J. Parker McCollough 46 Vice President - State 1996-Present
Governmental Affairs of Entergy
Gulf States
Vice President - Governmental 1996-1996
Affairs, Texas Association of
Retailors
Member- Texas House of 1989-1996
Representatives
Wright & Greenhill, PC (law firm) 1991-1993
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section
above.
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section
above.
Michael R. Niggli See information under the Entergy
Arkansas Officers Section above.
Richard J. Landy See information under the Entergy
Corporation Officers Section
above.
Karen Johnson See information under the Entergy
Gulf Sates Director section
above.
John J. Cordaro See information under the Entergy
Gulf Sates Director section
above.
William J. Regan, Jr. See information under the Entergy
Corporation Officers Section
above.
Louis E. Buck, Jr. See information under the Entergy
Corporation Officers Section
above.
ENTERGY LOUISIANA, INC.
Directors
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
John J. Cordaro See information under the Entergy
Gulf Sates Director section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Officers
James D. Bruno 57 Vice President - Customer Service 1994-Present
of Entergy Louisiana and Entergy
New Orleans
Vice President - Metro Region of 1993-Present
Entergy Services
Region Director - Metro Region of 1991-1993
Entergy Services
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
John J. Cordaro See information under the Entergy
Gulf Sates Director section
above.
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section
above.
Michael R. Niggli See information under the Entergy
Arkansas Officers Section above.
Richard J. Landy See information under the Entergy
Corporation Officers Section
above.
William E. Colston See information under the Entergy
Gulf Sates Officers section
above.
William J. Regan, Jr. See information under the Entergy
Corporation Officers Section
above.
Louis E. Buck, Jr. See information under the Entergy
Corporation Officers Section
above.
C. Hiram Walters See information under the Entergy
Arkansas Officers Section above.
S. G. Cunningham, Jr. See information under the Entergy
Gulf Sates Officers section
above.
ENTERGY MISSISSIPPI, INC.
Directors
Donald E. Meiners (c) 61 President and Director of Entergy 1992-Present
Mississippi
Chief Operating Officer and 1992-1992
Secretary of Entergy Mississippi
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Officers
Bill F. Cossar 58 Vice President - Governmental 1987-Present
Affairs of Entergy Mississippi
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Donald E. Meiners See information under the Entergy
Mississippi Directors Section
above.
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section
above.
Michael R. Niggli See information under the Entergy
Arkansas Officers Section above.
Richard J. Landy See information under the Entergy
Corporation Officers Section
above.
William J. Regan, Jr. See information under the Entergy
Corporation Officers Section
above.
Louis E. Buck, Jr. See information under the Entergy
Corporation Officers Section
above.
ENTERGY NEW ORLEANS, INC.
Directors
Daniel F. Packer 49 State President - City of New 1996-Present
Orleans
Vice President - Regulatory and 1994-1996
Governmental Affairs of Entergy
New Orleans
General Manager - Plant 1991-1994
Operations at Waterford 3
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Officers
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Michael B. Bemis See information under the Entergy
Corporation Officers Section
above.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section
above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section
above.
Michael R. Niggli See information under the Entergy
Arkansas Officers Section above.
Daniel F. Packer See information under the Entergy
New Orleans Directors Section
above.
Richard J. Landy See information under the Entergy
Corporation Officers Section
above.
James D. Bruno See information under the Entergy
Louisiana Officers Section above.
William J. Regan, Jr. See information under the Entergy
Corporation Officers Section
above.
Louis E. Buck, Jr. See information under the Entergy
Corporation Officers Section
above.
SYSTEM ENERGY RESOURCES, INC.
Directors
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Jerry L. Maulden See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
Officers
Joseph L. Blount 50 Secretary of System Energy and 1991-Present
Entergy Operations
Vice President Legal and External 1990-1993
Affairs of Entergy Operations
Edwin Lupberger See information under the Entergy
Corporation Officers Section
above.
Donald C. Hintz See information under the Entergy
Corporation Officers Section
above.
Gerald D. McInvale See information under the Entergy
Corporation Officers Section
above.
William J. Regan, Jr. See information under the Entergy
Corporation Officers Section
above.
Louis E. Buck, Jr. See information under the Entergy
Corporation Officers Section
above.
(a) Mr. Lupberger is a director of First Commerce Corporation, New
Orleans, LA, International Shipholding Corporation, New Orleans,
LA, and First National Bank of Commerce, New Orleans, LA.
(b) Mr. Bemis is a director of Deposit Guaranty National Bank,
Jackson, MS and Deposit Guaranty Corporation, Jackson, MS.
(c) Mr. Meiners is a director of Trustmark National Bank, Jackson,
MS, and Trustmark Corporation, Jackson, MS.
Each director and officer of the applicable Entergy company is
elected yearly to serve by the unanimous consent of the sole
stockholder, Entergy Corporation, in lieu of an annual meeting
scheduled to be held on May 5, 1997.
Directorships shown above are generally limited to entities
subject to Section 12 or 15(d) of the Securities and Exchange Act of
1934 or to the Investment Company Act of 1940.
Section 16(a) Beneficial Ownership Reporting Compliance
Information called for by this item concerning the directors and
officers of Entergy Corporation is set forth in the Proxy Statement of
Entergy Corporation to be filed in connection with its Annual Meeting
of Stockholders to be held on May 9, 1997, under the heading
"Compliance with Section 16(a) of the Exchange Act", which information
is incorporated herein by reference.
Item 11. Executive Compensation
ENTERGY CORPORATION
Information called for by this item concerning the directors and
officers of Entergy is set forth in the Proxy Statement under the
headings "Executive Compensation", "Nominees", and "Compensation of
Directors", which information is incorporated herein by reference.
ENTERGY ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, ENTERGY
MISSISSIPPI, ENTERGY NEW ORLEANS, AND SYSTEM ENERGY
Summary Compensation Table
The following table includes the Chief Executive Officer and the
four other most highly compensated executive officers in office as of
December 31, 1996 at Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy, (collectively, the "Named Executive Officers"). This
determination was based on total annual base salary and bonuses from
all Entergy sources earned by each officer for the year 1996. See
Item 10, "Directors and Executive Officers of the Registrants," for
information on the principal positions of the Named Executive Officers
in the table below.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy
As shown in Item 10, most Named Executive Officers are employed
by several Entergy companies. Because it would be impracticable to
allocate such officers' salaries among the various companies, the
table below includes the aggregate compensation paid by all Entergy
companies.
<PAGE>
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
(b) Restricted Securities (c) (d)
(a) Other Stock Underlying LTIP All Other
Name Year Salary Bonus Annual Awards Options Payouts Compensation
Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael B. Bemis 1996 $297,115 $168,125 $ 43,884 (e) 5,000 shares $ 0 $12,813
1995 290,000 216,909 22,844 (e) 27,500 294,282 12,063
1994 288,846 76,923 32,940 (e) 2,500 28,275 8,596
Louis E. Buck, Jr. 1996 $153,558 $ 66,187 $ 26,132 (e) 0 shares $ 0 $20,683
1995 49,039 21,280 9,151 (e) 0 0 7,529
1994 0 0 0 (e) 0 0 0
Donald C. Hintz* 1996 $343,269 $231,299 $ 12,516 (e) 5,000 shares $ 0 $14,197
1995 325,000 265,049 13,394 (e) 30,000 409,414 9,750
1994 320,769 142,749 52,389 (e) 5,000 48,379 9,710
Jerry D. Jackson 1996 $332,115 $209,489 $ 37,928 (e) 5,000 shares $ 0 $13,862
1995 325,000 256,838 43,054 (e) 30,000 422,438 9,750
1994 323,711 106,155 29,598 (e) 5,000 56,550 9,634
Edwin Lupberger** 1996 $735,577 $448,794 $123,601 (e) 10,000 shares $ 0 $23,567
1995 700,000 568,400 89,163 (e) 60,000 781,337 21,000
1994 681,539 218,789 93,816 (e) 10,000 139,525 20,446
Jerry L. Maulden 1996 $435,000 $260,301 $ 27,056 (e) 5,000 shares $ 0 $14,550
1995 435,000 353,220 26,248 (e) 30,000 422,438 13,050
1994 426,134 135,962 63,994 (e) 5,000 56,550 12,859
Gerald D. McInvale 1996 $271,730 $179,576 $ 13,995 (e) 5,000 shares $ 0 $12,051
1995 255,481 186,739 12,525 (e) 27,500 294,282 7,664
1994 244,165 66,227 14,146 (e) 2,500 28,275 7,275
William J. Regan, Jr. 1996 $190,000 $ 81,132 $ 20,684 (e) 0 shares $ 0 $ 8,852
1995 120,577 54,727 21,141 (e) 2,000 0 7,821
1994 0 0 0 (e) 0 0 0
* Chief Executive Officer of System Energy.
** Chief Executive Officer of Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans
(a) Includes bonuses earned pursuant to the Annual Incentive Plan.
(b) Amounts used in the calculation of perquisites were previously
reported in the column titled "All Other Compensation".
(c) Amounts include the value of restricted shares that vested in
1996, 1995, and 1994 (see note (e) below) under Entergy's Equity
Ownership Plan.
(d) Includes the following:
(1) 1996 benefit accruals under the Defined Contribution
Restoration Plan as follows: Mr. Bemis $4,414; Mr. Hintz
$5,798; Mr. Jackson $5,463; Mr. Lupberger $17,567; Mr.
Maulden $8,550; Mr. McInvale $3,652; Mr. Regan $1,200.
(2) 1996 employer contributions to the System Savings Plan
as follows: Mr. Bemis $4,500; Mr. Buck $1,431; Mr. Hintz
$4,500; Mr. Jackson $4,500; Mr. Lupberger $4,500; Mr.
Maulden $4,500; Mr. McInvale $4,500; Mr. Regan $4,500.
(3) 1996 employer contributions to the Employee Stock
Ownership Plan as of November 30, 1996 are as follows: Mr.
Bemis $3,899; Mr. Hintz $3,899; Mr. Jackson $3,899; Mr.
Lupberger $1,500; Mr. Maulden $1,500; Mr. McInvale $3,899.
(4) 1996 reimbursements for moving expenses as follows: Mr.
Buck $19,252; Mr. Regan $3,152.
(e) Restricted stock awarded under the Equity Ownership Plan will
vest at the end of a three year period subject to the attainment
of approved performance goals. Restricted stock awards in 1996
are reported under the "Long-Term Incentive Plan Awards" table,
and reference is made to this table for information on the
aggregate number of restricted shares awarded during 1996 and the
vesting schedule for such shares. Accumulated dividends are paid
on restricted stock when vested. The value of stock for which
restrictions were lifted in 1996, 1995, and 1994, and the
applicable portion of accumulated cash dividends, are reported in
the LTIP Payouts column in the above table.
Option Grants in 1996
The following table summarizes option grants during 1996 to the
Named Executive Officers. The absence, in the table below, of any
Named Executive Officer indicates that no options were granted to such
officer.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Entergy
Individual Grants Potential Realizable
% of Total Value
Number of Options at Assumed Annual
Securities Granted to Exercise Rates of Stock
Underlying Employees Price Price Appreciation
Options in (per Expiration for Option Term(b)
Name Granted 1996 share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Michael B. Bemis 5,000 (a) 6.1% $29.375 (a) 1/25/06 $ 92,369 $234,081
Donald C. Hintz 5,000 (a) 6.1% 29.375 (a) 1/25/06 92,369 234,081
Jerry D. Jackson 5,000 (a) 6.1% 29.375 (a) 1/25/06 92,369 234,081
Edwin Lupberger 10,000 (a) 12.1% 29.375 (a) 1/25/06 184,738 468,162
Jerry L. Maulden 5,000 (a) 6.1% 29.375 (a) 1/25/06 92,369 234,081
Gerald D. McInvale 5,000 (a) 6.1% 29.375 (a) 1/25/06 92,369 234,081
(a) Options were granted on January 25, 1996, pursuant to the Equity
Ownership Plan. All options granted on this date have an
exercise price equal to the closing price of Entergy Corporation
common stock on the New York Stock Exchange Composite
Transactions on January 25, 1996. These options became
exercisable on July 25, 1996.
(b) Calculation based on the market price of the underlying
securities assuming the market price increases over a ten-year
option period and assuming annual compounding. The column
presents estimates of potential values based on simple
mathematical assumptions. The actual value, if any, a Named
Executive Officer may realize is dependent upon the market price
on the date of option exercise.
Aggregated Option Exercises in 1996 and December 31, 1996 Option Values
The following table summarizes the number and value of all
unexercised options held by the Named Executive Officers. In 1996, no
options were exercised by any Named Executive Officer.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options Options
as of December 31, 1996 as of December 31, 1996(a)
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Michael B. Bemis 15,000 25,000 $10,625 $168,750
Donald C. Hintz 22,500 25,000 21,250 168,750
Jerry D. Jackson 19,411 25,000 0 168,750
Edwin Lupberger 48,824 50,000 42,500 337,500
Jerry L. Maulden 25,000 25,000 21,250 168,750
Gerald D. McInvale 15,000 25,000 10,625 168,750
William J. Regan, Jr. 0 2,000 0 13,500
(a) Based on the difference between the closing price of Entergy
Corporation's common stock on the New York Stock Exchange
Composite Transactions on December 31, 1996, and the option
exercise price.
Long-Term Incentive Plan Awards in 1996
The following Table summarizes awards of restricted shares of
Entergy Corporation common stock granted under the Equity Ownership
Plan in 1996 to the Named Executive Officers.
Estimated Future Payouts Under
Non-Stock Price-Based Plans(a)(b)
Performance
Number Period Until
of Maturation or
Name Shares Payout Threshold Target Maximum
<S> <C> <C> <C> <C> <C>
Edwin Lupberger 60,000 1/1/96-12/31/98 20,000 40,000 60,000
Jerry L. Maulden 37,500 1/1/96-12/31/98 12,500 25,000 37,500
Michael B. Bemis 30,000 1/1/96-12/31/98 10,000 20,000 30,000
Donald C. Hintz 30,000 1/1/96-12/31/98 10,000 20,000 30,000
Jerry D. Jackson 30,000 1/1/96-12/31/98 10,000 20,000 30,000
Gerald D. McInvale 30,000 1/1/96-12/31/98 10,000 20,000 30,000
Louis E. Buck, Jr. 4,500 1/1/96-12/31/98 1,500 3,000 4,500
William J. Regan, Jr. 4,500 1/1/96-12/31/98 1,500 3,000 4,500
</TABLE>
(a) Restricted shares awarded will vest at the end of a three-year
period, subject to the attainment of approved performance goals
for Entergy. Restrictions are lifted based upon the achievement
of the cumulative result of these goals for the performance
period. The value any Named Executive Officer may realize is
dependent upon both the number of shares that vest and the future
market price of Entergy Corporation common stock.
(b) The threshold, target, and maximum levels correspond to the
achievement of 50%, 100%, and 150%, respectively, of Equity
Ownership Plan goals. Achievement of a threshold, target, or
maximum level would result in the award of the number of shares
indicated in the respective column. Achievement of a level
between these three specified levels would result in the award of
a number of shares calculated by means of interpolation.
Pension Plan Tables
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy
Retirement Income Plan Table
Annual
Covered Years of Service
Compensation 15 20 25 30 35
$100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,000
200,000 45,500 60,000 75,000 90,000 105,000
300,000 67,500 90,000 112,500 135,000 157,500
400,000 90,000 120,000 150,000 180,000 210,000
500,000 112,500 150,000 187,500 225,000 262,500
850,000 191,250 255,000 318,750 382,500 446,250
All of the Named Executive Officers participate in a Retirement
Income Plan, a defined benefit plan, that provides a benefit for
employees at retirement from Entergy based upon (1) generally all
years of service beginning at age 21 through termination, with a
forty-year maximum, multiplied by (2) 1.5%, multiplied by (3) the
final average compensation. Final average compensation is based on
the highest consecutive 60 months of covered compensation in the last
120 months of service. The normal form of benefit for a single
employee is a lifetime annuity and for a married employee is a 50%
joint and survivor annuity. Other actuarially equivalent options are
available to each retiree. Retirement benefits are not subject to any
deduction for Social Security or other offset amounts. The amount of
the Named Executive Officers' annual compensation covered by the plan
as of December 31, 1996, is represented by the salary column in the
Summary Compensation Table above.
The credited years of service under the Retirement Income Plan,
as of December 31, 1996, for the Named Executive Officers is as
follows: Mr. Bemis 14; Mr. Buck 1, Mr. Maulden 31, and Mr. Regan 1.
The credited years of service under the respective Retirement Income
Plan, as of December 31, 1996 for the following Named Executive
Officers, as a result of entering into supplemental retirement
agreements, is as follows: Mr. Hintz 25; Mr. Jackson 17; Mr. Lupberger
33; and Mr. McInvale 24.
The maximum benefit under each Retirement Income Plan is limited
by Sections 401 and 415 of the Internal Revenue Code of 1986, as
amended; however, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy
have elected to participate in the Pension Equalization Plan sponsored
by Entergy Corporation. Under this plan, certain executives,
including the Named Executive Officers, would receive an additional
amount equal to the benefit that would have been payable under the
Retirement Income Plan, except for the Sections 401 and 410
limitations discussed above.
In addition to the Retirement Income Plan discussed above,
Entergy Arkansas, Louisiana, Mississippi, New Orleans, and System
Energy participate in the Supplemental Retirement Plan of Entergy
Corporation and Subsidiaries (SRP) and the Post-Retirement Plan of
Entergy Corporation and Subsidiaries (PRP). Participation is limited
to one of these two plans and is at the invitation of Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy. The participant may receive from the appropriate
Entergy company a monthly benefit payment not in excess of .025 (under
the SRP) or .0333 (under the PRP) times the participant's average
basic annual salary (as defined in the plans) for a maximum of 120
months. Mr. Hintz has entered into a SRP participation contract, and
all of the other Named Executive Officers, (except for Mr. Buck,
Mr. McInvale and Mr. Regan) have entered into PRP participation
contracts. Current estimates indicate that the annual payments to the
Named Executive Officers under the above plans would be less than the
payments to that officer under the System Executive Retirement Plan
discussed below.
System Executive Retirement Plan Table (1)
Annual
Covered Years of Service
Compensation 15 20 25 30+
$ 200,000 $ 90,000 $100,000 $110,000 $120,000
300,000 135,000 150,000 165,000 180,000
400,000 180,000 200,000 220,000 240,000
500,000 225,000 250,000 275,000 300,000
600,000 270,000 300,000 330,000 360,000
700,000 315,000 350,000 385,000 420,000
1,000,000 450,000 500,000 550,000 600,000
___________
(1) Benefits shown are based on a target replacement ratio of 50%
based on the years of service and covered compensation shown. The
benefits for 10, 15, and 20 or more years of service at the 45%
and 55% replacement levels would decrease (in the case of 45%) or
increase (in the case of 55%) by the following percentages: 3.0%,
4.5%, and 5.0%, respectively.
In 1993, Entergy Corporation adopted the System Executive
Retirement Plan (SERP). Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy are participating employers in the SERP. The SERP is an
unfunded defined benefit plan offered at retirement to certain senior
executives, which would currently include all the Named Executive
Officers. Participating executives choose, at retirement, between the
retirement benefits paid under provisions of the SERP or those payable
under the executive retirement benefit plans discussed above. Covered
pay under the SERP includes final annual base salary (see the Summary
Compensation Table above for the base salary covered by the SERP as of
December 31, 1996) plus the Target Incentive Award (i.e., a percentage
of final annual base salary) for the participant in effect at
retirement. Benefits paid under the SERP are calculated by multiplying
the covered pay times target pay replacement ratios (45%, 50%, or 55%,
dependent on job rating at retirement) that are attained, according to
plan design, at 20 years of credited service. The target ratios are
increased by 1% for each year of service over 20 years, up to a
maximum of 30 years of service. In accordance with the SERP formula,
the target ratios are reduced for each year of service below 20 years.
The credited years of service under this plan are identical to the
years of service for Named Executive Officers (other than Mr. Bemis,
Mr. Jackson, and Mr. McInvale) disclosed above in the section entitled
"Pension Plan Tables-Retirement Income Plan Table". Mr. Bemis, Mr.
Jackson, and Mr. McInvale have 24 years, 23 years, and 15 years,
respectively, of credited service under this plan.
The normal form of benefit for a single employee is a lifetime
annuity and for a married employee is a 50% joint and survivor
annuity. All SERP payments are guaranteed for ten years. Other
actuarially equivalent options are available to each retiree. SERP
benefits are offset by any and all defined benefit plan payments from
Entergy and from prior employers. SERP benefits are not subject to
Social Security offsets.
Eligibility for and receipt of benefits under any of the
executive plans described above are contingent upon several factors.
The participant must agree, without the specific consent of the
Entergy company for which such participant was last employed, not to
take employment after retirement with any entity that is in
competition with, or similar in nature to, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, and System Energy or any affiliate thereof. Eligibility for
benefits is forfeitable for various reasons, including violation of an
agreement with Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy, resignation of employment, or termination of employment
without Company permission.
In addition to the non-bargaining unit employees Retirement
Income Plan discussed above, Entergy Gulf States provides, among other
benefits to officers, an Executive Income Security Plan for key
managerial personnel. The plan provides participants with certain
retirement, disability, termination, and survivors' benefits. To the
extent that such benefits are not funded by the employee benefit plans
of Entergy Gulf States or by vested benefits payable by the
participants' former employers, Entergy Gulf States is obligated to
make supplemental payments to participants or their survivors. The
plan provides that upon the death or disability of a participant
during his employment, he or his designated survivors will receive (i)
during the first year following his death or disability an amount not
to exceed his annual base salary, and (ii) thereafter for a number of
years until the participant attains or would have attained age 65, but
not less than nine years, an amount equal to one-half of the
participant's annual base salary. The plan also provides supplemental
retirement benefits for life for participants retiring after reaching
age 65 equal to one-half of the participant's average final
compensation rate, with one-half of such benefit upon the death of the
participant being payable to a surviving spouse for life.
Entergy Gulf States amended and restated the plan effective March
1, 1991, to provide such benefits for life upon termination of
employment of a participating officer or key managerial employee
without cause (as defined in the plan) or if the participant separates
from employment for good reason (as defined in the plan), with 1/2 of
such benefits to be payable to a surviving spouse for life. Further,
the plan was amended to provide medical benefits for a participant and
his family when the participant separates from service. These medical
benefits generally continue until the participant is eligible to
receive medical benefits from a subsequent employer; but in the case
of a participant who is over 50 at the time of separation and was
participating in the plan on March 1, 1991, medical benefits continue
for life. By virtue of the 1991 amendment and restatement, benefits
for a participant under such plan cannot be modified once he becomes
eligible to participate in the plan.
Compensation of Directors
For information regarding compensation of the directors of
Entergy Corporation, see the Proxy Statement under the heading
"Compensation of Directors", which information is incorporated herein
by reference. Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy
currently have no non-employee directors, and none of the current
directors is compensated for his responsibilities as director.
Retired non-employee directors of Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans with a minimum
of five years of service on the respective Boards of Directors are
paid $200 a month for a term of years corresponding to the number of
years of active service as directors. Retired non-employee directors
with over ten years of service receive a lifetime benefit of $200 a
month. Years of service as an advisory director are included in
calculating this benefit. System Energy has no retired non-employee
directors.
Retired non-employee directors of Entergy Gulf States receive
retirement benefits under a plan in which all directors who served
continuously for a period of years will receive a percentage of their
retainer fee in effect at the time of their retirement for life. The
retirement benefit is 30 percent of the retainer fee for service of
not less than five nor more than nine years, 40 percent for service of
not less than ten nor more than fourteen years, and 50 percent for
fifteen or more years of service. For those directors who retired
prior to the retirement age, their benefits are reduced. The plan
also provides disability retirement and optional hospital and medical
coverage if the director has served at least five years prior to the
disability. The retired director pays one-third of the premium for
such optional hospital and medical coverage and Entergy Gulf States
pays the remaining two-thirds. Years of service as an advisory
director are included in calculating this benefit.
Employment Contracts and Termination of Employment and Change-in-
Control Arrangements
Entergy Gulf States
As a result of the Merger, Entergy Gulf States is obligated to
pay benefits under the Executive Income Security Plan to those persons
who were participants at the time of the Merger and who later
terminated their employment under circumstances described in the plan.
For additional description of the benefits under the Executive Income
Security Plan, see the "Pension Plan Tables-System Executive
Retirement Plan Table" section noted above.
Personnel Committee Interlocks and Insider Participation
The compensation of Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy executive officers was set by the Personnel Committee of
Entergy Corporation's Board of Directors, composed solely of Directors
of Entergy Corporation. No officers or employees of any Entergy
company participated in deliberations concerning compensation during
1996.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Entergy Corporation owns 100% of the outstanding common stock of
registrants Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy. The
information with respect to persons known by Entergy Corporation to be
beneficial owners of more than 5% of Entergy Corporation's outstanding
common stock is included under the heading "Voting Securities
Outstanding" in the Proxy Statement, which information is incorporated
herein by reference. The registrants know of no contractual
arrangements that may, at a subsequent date, result in a change in
control of any of the registrants.
The directors, the Named Executive Officers, and the directors
and officers as a group for Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy, respectively, beneficially owned
directly or indirectly common stock of Entergy Corporation as
indicated:
Entergy Corporation
Common Stock
Amount and Nature of
Beneficial Ownership(a)
Sole Voting
and Other
Investment Beneficial
Name Power Ownership(b)
Entergy Corporation
Michael B. Bemis ** 11,480 10,000
W. Frank Blount* 4,434 -
John A. Cooper, Jr.* 6,934 -
Lucie J. Fjeldstad* 3,384 -
Dr. Norman C. Francis* 1,200 -
Donald C. Hintz** 8,779 7,500
Jerry D. Jackson** 11,615 14,411
Robert v.d. Luft* 3,684 -
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden** 25,015 20,000
Adm. Kinnaird R. McKee* 2,467 -
Paul W. Murrill* 2,917 -
James R. Nichols* 5,078 -
Eugene H. Owen* 3,092 -
John N. Palmer, Sr.* 16,481 -
Robert D. Pugh* 6,700 6,500 (c)
H. Duke Shackelford* 8,750 4,950 (d)
Wm. Clifford Smith* 5,600 -
Bismark A. Steinhagen* 7,637 -
All directors and executive
officers 263,181 149,685
Entergy Arkansas
Michael B. Bemis*** 11,480 10,000
Donald C. Hintz*** 8,779 7,500
Jerry D. Jackson*** 11,615 14,411
R. Drake Keith* 13,189 7,174
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden*** 25,015 20,000
Gerald D. McInvale* 16,030 10,000
All directors and executive
officers 189,117 137,909
Entergy Gulf States
Michael B. Bemis*** 11,480 10,000
John J. Cordaro * 6,833 5,000
Frank F. Gallaher* 20,401 7,500
Donald C. Hintz*** 8,779 7,500
Jerry D. Jackson*** 11,615 14,411
Karen R. Johnson * 349 -
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden*** 25,015 20,000
Gerald D. McInvale * 16,030 10,000
All directors and executive
officers 180,976 135,735
Entergy Louisiana
Michael B. Bemis*** 11,480 10,000
John J. Cordaro* 6,833 5,000
Donald C. Hintz*** 8,779 7,500
Jerry D. Jackson*** 11,615 14,411
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden*** 25,015 20,000
Gerald D. McInvale * 16,030 10,000
All directors and executive
officers 187,772 135,735
Entergy Mississippi
Michael B. Bemis*** 11,480 10,000
Donald C. Hintz* 8,779 7,500
Jerry D. Jackson*** 11,615 14,411
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden*** 25,015 20,000
Gerald D. McInvale*** 16,030 10,000
Donald E. Meiners* 11,982 10,000
All directors and executive
officers 177,804 140,735
Entergy New Orleans
Michael B. Bemis** 11,480 10,000
Jerry D. Jackson*** 11,615 14,411
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden*** 25,015 20,000
Gerald D. McInvale*** 16,030 10,000
Daniel F. Packer * 3,164 -
All directors and executive
officers 160,465 123,235
System Energy
Louis E. Buck, Jr.** 80 -
Donald C. Hintz*** 8,779 7,500
Edwin Lupberger*** 34,392 41,324 (c)
Jerry L. Maulden* 25,015 20,000
Gerald D. McInvale*** 16,030 10,000
William J. Regan ** 202 -
All directors and executive
officers 89,185 78,824
* Director of the respective Company
** Named Executive Officer of the respective Company
*** Director and Named Executive Officer of the respective Company
(a) Based on information furnished by the respective individuals.
Except as noted, each individual has sole voting and investment
power. The amount owned by each individual and by all directors
and executive officers as a group does not exceed one percent of
the outstanding securities of any class of security so owned.
(b) Includes, for the Named Executive Officers, shares of Entergy
Corporation common stock in the form of unexercised stock options
awarded pursuant to the Equity Ownership Plan as follows: Michael
B. Bemis, 10,000 shares; John J. Cordaro 5,000 shares; Frank F.
Gallaher, 7,500 shares; Donald C. Hintz, 7,500 shares; Jerry D.
Jackson, 14,411 shares; R. Drake Keith, 7,174 shares; Edwin
Lupberger, 38,824 shares; Jerry L. Maulden, 20,000 shares; Gerald
D. McInvale, 10,000 shares; and Donald E. Meiners, 10,000 shares.
(c) Includes, for the Named Executive Officers, shares of Entergy
Corporation common stock held by their spouses. The named
persons disclaim beneficial ownership in these shares as follows:
Edwin Lupberger, 2,500 shares; and Robert D. Pugh, 6,500 shares.
(d) Includes 4,950 shares owned by the estate of Mrs. Shackelford, of
which H. Duke Shackelford disclaims beneficial ownership.
Item 13. Certain Relationships and Related Transactions
Information called for by this item concerning the directors and
officers of Entergy Corporation is set forth under the heading
"Certain Transactions" in the Proxy Statement, which information is
incorporated herein by reference.
See Item 10, "Directors and Executive Officers of the
Registrants," for information on certain relationships and
transactions required to be reported under this item.
Other than as provided under applicable corporate laws, Entergy
does not have policies whereby transactions involving executive
officers and directors are approved by a majority of disinterested
directors. However, pursuant to the Entergy Corporation Code of
Conduct, transactions involving an Entergy and its executive officers
must have prior approval by the next higher reporting level of that
individual, and transactions involving an Entergy company and its
directors must be reported to the secretary of the appropriate
company.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
(a)1. Financial Statements and Independent Auditors' Reports for
Entergy, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy are listed in the Index to Financial Statements (see
pages 38 and 39)
(a)2. Financial Statement Schedules
Reports of Independent Accountants on Financial Statement
Schedules (see page 214)
Financial Statement Schedules are listed in the Index to
Financial Statement Schedules (see page S-1)
(a)3. Exhibits
Exhibits for Entergy, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy are listed in the Exhibit Index (see page E-
1). Each management contract or compensatory plan or
arrangement required to be filed as an exhibit hereto is
identified as such by footnote in the Exhibit Index.
(b) Reports on Form 8-K
Entergy Corporation
A current report on Form 8-K, dated October 11, 1996, was filed
with the SEC on October 11, 1996, reporting information under
Item 5. "Other Events".
A current report on Form 8-K, dated December 18, 1996, was
filed with the SEC on December 18, 1996, reporting information
under Item 5. "Other Events".
A current report on Form 8-K, dated February 7, 1997, was filed
with the SEC on February 18, 1997, reporting information under
Item 2. "Acquisition of Assets" and Item 5. "Other Events".
Entergy Corporation and Entergy Arkansas
A current report on Form 8-K, dated October 23, 1996, was filed
with the SEC on October 29, 1996, reporting information under
Item 5. "Other Events".
Entergy Corporation and Entergy Gulf States
A current report on Form 8-K, dated November 27, 1996, was
filed with the SEC on November 27, 1996, reporting information
under Item 5. "Other Events".
EXPERTS
The statements attributed to Sandlin Associates regarding the
analysis of River Bend Construction costs of Entergy Gulf States under
Item 1. "Rate Matters and Regulation - Rate Matters - Retail Rate
Matters - Entergy Gulf States' and in Note 2 to Entergy Corporation
and Subsidiaries Consolidated Financial Statements and Entergy Gulf
States' 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>
ENTERGY CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY CORPORATION
By /s/ Louis E. Buck
Louis E. Buck, Vice President
and Chief Accounting Officer
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President and March 10, 1997
Chief Accounting Officer
(Principal Accounting Officer)
Edwin Lupberger (Chairman of the Board, Chief Executive Officer and
Director; Principal Executive Officer); Gerald D. McInvale
(Executive Vice President and Chief Financial Officer;
Principal Financial Officer); W. Frank Blount, John A.
Cooper, Jr., Lucie J. Fjeldstad, N. C. Francis, Kaneaster
Hodges, Jr., Robert v.d. Luft, Kinnaird R. McKee, Paul W.
Murrill, James R. Nichols, Eugene H. Owen, John N.
Palmer, Sr., Robert D. Pugh, H. Duke Shackelford, Wm.
Clifford Smith, and Bismark A. Steinhagen (Directors).
By: /s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
ENTERGY ARKANSAS, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY ARKANSAS, INC.
By /s/ Louis E. Buck
Louis E. Buck, Vice President,
Chief Accounting Officer and
Assistant Secretary
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President, Chief Accounting March 10, 1997
Officer and Assistant Secretary
(Principal Accounting Officer)
Edwin Lupberger (Chairman of the Board, Chief Executive
Officer and Director; Principal Executive Officer); Gerald
D. McInvale (Executive Vice President, Chief Financial
Officer, and Director; Principal Financial Officer);
Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, R.
Drake Keith, and Jerry L. Maulden (Directors).
By: /s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
ENTERGY GULF STATES, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY GULF STATES, INC.
By /s/ Louis E. Buck
Louis E. Buck, Vice President,
Chief Accounting Officer and
Assistant Secretary
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President, Chief Accounting March 10, 1997
Officer and Assistant Secretary
(Principal Accounting Officer)
Edwin Lupberger (Chairman of the Board, Chief Executive
Officer and Director; Principal Executive Officer); Gerald
D. McInvale (Executive Vice President, Chief Financial
Officer, and Director; Principal Financial Officer);
Michael B. Bemis, John J. Cordaro, Frank F. Gallaher,
Donald C. Hintz, Jerry D. Jackson, Karen R. Johnson,
and Jerry L. Maulden (Directors).
By:/s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
ENTERGY LOUISIANA, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY LOUISIANA, INC.
By /s/ Louis E. Buck
Louis E. Buck, Vice President,
Chief Accounting Officer and
Assistant Secretary
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President, Chief Accounting March 10, 1997
Officer and Assistant Secretary
(Principal Accounting Officer)
Edwin Lupberger (Chairman of the Board, Chief Executive
Officer and Director; Principal Executive Officer);
Gerald D. McInvale (Executive Vice President, Chief
Financial Officer, and Director; Principal Financial
Officer); Michael B. Bemis, John J. Cordaro, Donald C.
Hintz, Jerry D. Jackson, and Jerry L. Maulden
(Directors).
By: /s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
ENTERGY MISSISSIPPI, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY MISSISSIPPI, INC.
By /s/ Louis E. Buck
Louis E. Buck, Vice President,
Chief Accounting Officer and
Assistant Secretary
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President, Chief Accounting March 10, 1997
Officer and Assistant Secretary
(Principal Accounting Officer)
Edwin Lupberger (Chairman of the Board, Chief Executive
Officer and Director; Principal Executive Officer);
Gerald D. McInvale (Executive Vice President, Chief
Financial Officer, and Director; Principal Financial
Officer); Michael B. Bemis, Donald C. Hintz, Jerry D.
Jackson, Jerry L. Maulden, and Donald E. Meiners
(Directors).
By: /s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
ENTERGY NEW ORLEANS, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY NEW ORLEANS, INC.
By /s/ Louis E. Buck
Louis E. Buck, Vice President,
Chief Accounting Officer and
Assistant Secretary
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President, Chief Accounting March 10, 1997
Officer and Assistant Secretary
(Principal Accounting Officer)
Edwin Lupberger (Chairman of the Board, Chief Executive
Officer and Director; Principal Executive Officer);
Gerald D. McInvale (Executive Vice President, Chief
Financial Officer, and Director; Principal Financial
Officer); Jerry D. Jackson, Jerry L. Maulden, and Daniel
F. Packer (Directors).
By: /s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
SYSTEM ENERGY RESOURCES, INC.
By /s/ Louis E. Buck
Louis E. Buck, Vice President
and Chief Accounting Officer
Date: March 10, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Louis E. Buck
Louis E. Buck Vice President and March 10, 1997
Chief Accounting Officer
(Principal Accounting Officer)
Donald C. Hintz (President, Chief Executive Officer and
Director; Principal Executive Officer); Gerald D.
McInvale (Executive Vice President, Chief Financial
Officer, and Director; Principal Financial Officer); Edwin
Lupberger (Chairman of the Board), and Jerry L. Maulden
(Directors).
By: /s/ Louis E. Buck March 10, 1997
(Louis E. Buck, Attorney-in-fact)
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective
Amendment Nos. 2, 3, 4A, and 5A on Form S-8 and the related
Prospectuses to the registration statement of Entergy Corporation on
Form S-4 (File Number 33-54298) and on Form S-3 (File Numbers 333-02503
and 333-22007) of our reports dated February 13, 1997, on our audits of
the consolidated financial statements and consolidated financial
statement schedules of Entergy Corporation as of December 31, 1996 and
1995, and for each of the three years in the period ended December 31,
1996, which reports include an emphasis paragraph related to a rate-
related contingency and an explanatory paragraph related to changes in
accounting methods for the impairment of long-lived assets and for long-
lived assets to be disposed of and incremental nuclear plant outage
maintenance costs by certain of the Corporation's subsidiaries, and are
included in this Annual Report on Form 10-K.
We consent to the incorporation by reference in the registration
statements and the related Prospectuses of Entergy Arkansas, Inc.
(formerly Arkansas Power & Light Company) on Form S-3 (File Numbers 33-
36149, 33-48356, 33-50289, 333-00103 and 333-05045) of our reports
dated February 13, 1997, on our audits of the financial statements and
financial statement schedule of Entergy Arkansas, Inc. as of December
31, 1996 and 1995, and for each of the three years in the period ended
December 31, 1996, which reports include an explanatory paragraph
related to the Company's 1995 change in its method of accounting for
incremental nuclear plant outage maintenance costs, and are included in
this Annual Report on Form 10-K.
We consent to the incorporation by reference in the registration
statements and the related Prospectuses of Entergy Gulf States, Inc.
(formerly Gulf States Utilities Company) 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 our reports dated February 13,
1997, on our audits of the financial statements and financial statement
schedule of Entergy Gulf States, Inc. as of December 31, 1996 and 1995
and for each of the three years in the period ended December 31, 1996,
which reports include an emphasis paragraph related to a rate-related
contingency and an explanatory paragraph related to a change in
accounting for the impairment of long-lived assets and long-lived
assets to be disposed of, and are included in this Annual Report on
Form 10-K.
We consent to the incorporation by reference in the registration
statements and the related Prospectuses of Entergy Louisiana, Inc.
(formerly Louisiana Power & Light Company) on Form S-3 (File Numbers 33-
46085, 33-39221, 33-50937, 333-00105, 333-01329 and 333-03567) of our
reports dated February 13, 1997, on our audits of the financial
statements and financial statement schedule of Entergy Louisiana, Inc.
as of December 31, 1996 and 1995, and for each of the three years in
the period ended December 31, 1996, which are included in this Annual
Report on Form 10-K.
We consent to the incorporation by reference in the registration
statements and the related Prospectuses of Entergy Mississippi, Inc.
(formerly Mississippi Power & Light Company) on Form S-3 (File Numbers
33-53004, 33-55826 and 33-50507) of our reports dated February 13,
1997, on our audits of the financial statements and financial statement
schedule of Entergy Mississippi, Inc. as of December 31, 1996 and 1995,
and for each of the three years in the period ended December 31, 1996,
which are included in this Annual Report on Form 10-K.
We consent to the incorporation by reference in the registration
statements and the related Prospectuses of Entergy New Orleans, Inc.
(formerly New Orleans Public Service Inc.) on Form S-3 (File Numbers 33-
57926 and 333-00255) of our reports dated February 13, 1997, on our
audits of the financial statements and financial statement schedule of
Entergy New Orleans, Inc. as of December 31, 1996 and 1995, and for each
of the three years in the period ended December 31, 1996, which are
included in this Annual Report on Form 10-K.
We consent to the incorporation by reference in the registration
statements and the related Prospectuses of System Energy Resources,
Inc. on Form S-3 (File Numbers 33-47662, 33-61189 and 333-06717) of our
report dated February 13, 1997, on our audits of the financial
statements of System Energy Resources, Inc. as of December 31, 1996 and
1995, and for each of the three years in the period ended December 31,
1996, which report includes an explanatory paragraph related to the
Company's 1996 change in its method of accounting for incremental
nuclear plant outage maintenance costs, and is included in this Annual
Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
March 7, 1997
<PAGE>
EXHIBIT 23(b)
CONSENT
We consent to the reference to our firm under the heading
"Experts" and to the inclusion in this Annual Report on Form 10-K of
Entergy Gulf States, Inc. of the statements (Statements) regarding the
analysis by our Firm of River Bend construction costs which are made
herein under Part I, Item 1. Business - "Rate Matters and Regulation"
and in the discussion of Texas jurisdictional matters set forth in
Note 2 to Entergy Gulf States' Financial Statements and Note 2 to
Entergy Corporation and Subsidiaries' Consolidated Financial
Statements appearing as Item 8. of Part II of this Form 10-K, which
Statements have been prepared or reviewed by us (Sandlin Associates).
We also consent to the incorporation by reference in the registration
statements of Entergy Gulf States 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.
SANDLIN ASSOCIATES
Management Consultants
Pasco, Washington
March 10, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and the Shareholders
of Entergy Corporation
We have audited the consolidated financial statements of Entergy
Corporation and Subsidiaries and the financial statements of Entergy
Arkansas, Inc. (formerly Arkansas Power & Light Company), Entergy Gulf
States, Inc. (formerly Gulf States Utilities Company), Entergy
Louisiana, Inc. (formerly Louisiana Power & Light Company), Entergy
Mississippi, Inc. (formerly Mississippi Power & Light Company) and
Entergy New Orleans, Inc. (formerly New Orleans Public Service Inc.)
as of December 31, 1996 and 1995, and for each of the three years in
the period ended December 31, 1996, and have issued our reports,
included elsewhere in this Form 10-K, thereon dated February 13, 1997,
which reports as to Entergy Corporation and Entergy Gulf States, Inc.
include an emphasis paragraph related to a rate-related contingency
and an explanatory paragraph related to a change in accounting for
impairment of long-lived assets and long-lived assets to be disposed
of, and which reports as to Entergy Corporation and Entergy Arkansas,
Inc. include an explanatory paragraph related to changes in accounting
for incremental nuclear plant outage maintenance expenses. In
connection with our audits of such financial statements, we have also
audited the related financial statement schedules included in Item
14(a)2 of this Form 10-K.
In our opinion the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as
a whole, present fairly, in all material respects, the information
required to be included therein.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 13, 1997
<PAGE>
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule Page
I Financial Statements of Entergy Corporation:
Statements of Income - For the Years Ended December 31, 1996,
1995, and 1994 S-2
Statements of Cash Flows - For the Years Ended December 31, 1996,
1995, and 1994 S-3
Balance Sheets, December 31, 1996 and 1995 S-4
Statements of Retained Earnings and Paid-In Capital - For
the Years Ended December 31, 1996, 1995, and 1994 S-5
II Valuation and Qualifying Accounts
1996, 1995, and 1994:
Entergy Corporation and Subsidiaries S-6
Entergy Arkansas, Inc. S-7
Entergy Gulf States, Inc. S-8
Entergy Louisiana, Inc. S-9
Entergy Mississippi, Inc. S-10
Entergy New Orleans, Inc.. S-11
Schedules other than those listed above are omitted because they
are not required, not applicable or the required information is shown
in the financial statements or notes thereto.
Columns have been omitted from schedules filed because the
information is not applicable.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I-FINANCIAL STATEMENTS OF ENTERGY CORPORATION
STATEMENTS OF INCOME
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Income:
Equity in income of subsidiaries $459,350 $549,144 $369,701
Interest on temporary investments 4,840 20,641 25,496
-------- -------- --------
Total 464,190 569,785 395,197
-------- -------- --------
Expenses and Other Deductions:
Administrative and general expenses 34,402 53,872 57,846
Income taxes (credit) (1,558) (5,383) (6,350)
Taxes other than income (credit) 828 1,102 465
Interest (credit) 10,491 214 1,395
-------- -------- --------
Total 44,163 49,805 53,356
-------- -------- --------
Net Income $420,027 $519,980 $341,841
======== ======== ========
See Entergy Corporation and Subsidiaries Notes to Financial
Statements in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $420,027 $519,980 $341,841
Noncash items included in net income:
Equity in earnings of subsidiaries (459,350) (549,144) (369,701)
Deferred income taxes 8,499 (2,024) 7,007
Depreciation 1,628 1,421 959
Changes in working capital:
Receivables 3,232 2,161 (5,085)
Payables 9,919 (3,776) (11,945)
Other working capital accounts (1,170) (1,701) (2,563)
Common stock dividends received from
subsidiaries 554,200 565,589 763,400
Other (3,524) 8,652 (12,137)
-------- -------- --------
Net cash flow provided by operating activities 533,461 541,158 711,776
-------- -------- --------
Investing Activities:
Investment in subsidiaries (266,681) (477,709) (49,892)
Capital expenditures - - (3,178)
Proceeds received from the sale of property - - 26,000
Advance to subsidiary - 221,540 (11,840)
-------- -------- --------
Net cash flow used in investing activities (266,681) (256,169) (38,910)
-------- -------- --------
Financing Activities:
Changes in short-term borrowings 20,000 - (43,000)
Common stock dividends paid (405,346) (408,553) (410,223)
Issuance of common stock 118,087 - (119,486)
-------- -------- --------
Net cash flow used in financing activities (267,259) (408,553) (572,709)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (479) (123,564) 100,157
Cash and cash equivalents at beginning of period 129,144 252,708 152,551
-------- -------- --------
Cash and cash equivalents at end of period $128,665 $129,144 $252,708
======== ======== ========
See Entergy Corporation and Subsidiaries Notes to Financial Statements
in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
BALANCE SHEETS
December 31,
1996 1995
(In Thousands)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $23 $25
Temporary cash investments - at cost,
which approximates market:
Associated companies 57,986 29,180
Other 70,656 99,939
---------- ----------
Total cash and cash equivalents 128,665 129,144
Accounts receivable:
Associated companies 5,940 8,697
Other - 356
Interest receivable 378 497
Other 20,389 9,511
---------- ----------
Total 155,372 148,205
---------- ----------
Investment in Wholly-owned Subsidiaries $6,531,729 $6,354,267
---------- ----------
Deferred Debits 74,891 47,381
---------- ----------
TOTAL $6,761,992 $6,549,853
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes Payable $20,000 -
Accounts payable:
Associated companies 11,613 762
Other 22 1,142
Interest Accrued 188 -
Other current liabilities 15,638 5,930
---------- ----------
Total 47,461 7,834
---------- ----------
Deferred Credits and Noncurrent Liabilities 73,616 70,299
---------- ----------
Shareholders' Equity:
Common stock, $.01 par value, authorized
500,000,000 shares; issued 234,456,457 shares
in 1996 and 230,017,485 shares in 1995 2,345 2,300
Paid-in capital 4,320,591 4,201,483
Retained earnings 2,341,703 2,335,579
Cumulative foreign currency translation adjustment 21,725 -
Less cost of treasury stock 1,496,118 shares in
1996 and 2,251,318 shares in 1995) (45,449) (67,642)
---------- ----------
Total common shareholders' equity 6,640,915 6,471,720
---------- ----------
Total $6,761,992 $6,549,853
========== ==========
See Entergy Corporation and Subsidiaries Notes to Financial
Statements in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
STATEMENTS OF RETAINED EARNINGS AND PAID-IN CAPITAL
For the Years Ended December 31,
1996 1995 1994
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $2,335,579 $2,223,739 $2,310,082
Add:
Net income 420,027 519,980 341,841
---------- ---------- ----------
Total 2,755,606 2,743,719 2,651,923
---------- ---------- ----------
Deduct:
Dividends declared on common stock 412,250 409,801 411,806
Common stock retirements - - 13,940
Capital stock and other expenses 1,653 (1,661) 2,438
---------- ---------- ----------
Total 413,903 408,140 428,184
---------- ---------- ----------
Retained Earnings, December 31 $2,341,703 $2,335,579 $2,223,739
========== ========== ==========
Paid-in Capital, January 1 $4,201,483 $4,202,134 $4,223,682
Add:
Gain (loss) on reacquisition of
subsidiaries' preferred stock 1,795 (26) (23)
Common stock issuances related to stock plans 117,560 (3,002)
---------- ---------- ----------
Total 4,320,838 4,199,106 4,223,659
---------- ---------- ----------
Deduct:
Common stock retirements - - 22,468
Capital stock discounts and other expenses 247 (2,377) (943)
---------- ---------- ----------
Total 247 (2,377) 21,525
---------- ---------- ----------
Paid-in Capital, December 31 $4,320,591 $4,201,483 $4,202,134
========== ========== ==========
See Entergy Corporation and Subsidiaries Notes to Consolidated Financial
Statements in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, 1995, and 1994
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $7,109 $18,403 $17,690 $7,822
Other 12,337 - 12,337 -
------- ------- ------- -------
Total $19,446 $18,403 $30,027 $7,822
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $36,733 $26,136 $27,843 $35,026
Injuries and damages (Note 2) 19,981 23,373 17,209 26,145
Environmental 40,262 2,599 5,142 37,719
------- ------- ------- -------
Total $96,976 $52,108 $50,194 $98,890
======= ======= ======= =======
Year ended December 31, 1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $6,740 $14,586 $14,217 $7,109
Other $0 12,337 - $12,337
------- ------- ------- -------
Total $6,740 $26,923 $14,217 $19,446
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $32,871 $16,263 $12,401 $36,733
Injuries and damages (Note 2) 22,066 11,667 13,752 19,981
Environmental 42,739 7,639 10,116 40,262
------- ------- ------- -------
Total $97,676 $35,569 $36,269 $96,976
======= ======= ======= =======
Year ended December 31, 1994
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $8,808 $8,266 $10,334 $6,740
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $34,546 $25,592 $27,267 $32,871
Injuries and damages (Note 2) 23,096 10,993 12,023 22,066
Environmental 26,753 21,292 5,306 42,739
------- ------- ------- -------
Total $84,395 $57,877 $44,596 $97,676
======= ======= ======= =======
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the respective
provisions were created. In the case of the provision for doubtful accounts,
such deductions are reduced by recoveries of amounts previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses as
appropriate and for the estimated cost of settling claims for injuries and
damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, 1995, and 1994
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $2,058 $5,341 $5,073 $2,326
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $900 $8,808 $9,694 $14
Injuries and damages (Note 2) 1,810 2,980 1,980 2,810
Environmental 6,514 1,320 2,671 5,163
------- ------- ------- -------
Total $9,224 $13,108 $14,345 $7,987
======= ======= ======= =======
Year ended December 31, 1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,950 $3,997 $3,889 $2,058
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $1,916 $4,810 $5,826 $900
Injuries and damages (Note 2) 2,660 710 1,560 1,810
Environmental 5,350 4,435 3,271 6,514
------- ------- ------- -------
Total $9,926 $9,955 $10,657 $9,224
======= ======= ======= =======
Year ended December 31, 1994
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $2,050 $1,967 $2,067 $1,950
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $2,821 $18,782 $19,687 $1,916
Injuries and damages (Note 2) 3,259 1,316 1,915 2,660
Environmental 6,825 1,510 2,985 5,350
------- ------- ------- -------
Total $12,905 $21,608 $24,587 $9,926
======= ======= ======= =======
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses
as appropriate and for the estimated cost of settling claims for injuries
and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, 1995, and 1994
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,608 $4,709 $4,320 $1,997
======= ======= ======= =======
Accumulated Provisions
Not Deducted from Assets--
Property insurance $14,141 $5,899 $3,037 $17,003
Injuries and damages (Note 2) 5,199 7,955 3,560 9,594
Environmental 21,864 365 400 21,829
------- ------- ------- -------
Total $41,204 $14,219 $6,997 $48,426
======= ======= ======= =======
Year ended December 31, 1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $715 $3,715 $2,822 $1,608
======= ======= ======= =======
Accumulated Provisions
Not Deducted from Assets--
Property insurance $10,451 $6,396 $2,706 $14,141
Injuries and damages (Note 2) 6,922 6,243 7,966 5,199
Environmental 20,314 2,483 933 21,864
------- ------- ------- -------
Total $37,687 $15,122 $11,605 $41,204
======= ======= ======= =======
Year ended December 31, 1994
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $2,383 $701 $2,369 $715
======= ======= ======= =======
Accumulated Provisions
Not Deducted from Assets--
Property insurance $10,872 $2,170 $2,591 $10,451
Injuries and damages (Note 2) 9,469 2,970 5,517 6,922
Environmental 18,151 2,589 426 20,314
------- ------- ------- -------
Total $38,492 $7,729 $8,534 $37,687
======= ======= ======= =======
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the respective
provisions were created. In the case of the provision for doubtful accounts,
such deductions are reduced by recoveries of amounts previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses as
appropriate and for the estimated cost of settling claims for injuries and
damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, 1995, and 1994
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,390 $3,241 $3,202 $1,429
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $1,013 $4,583 $5,335 $261
Injuries and damages (Note 2) 8,414 10,646 9,617 9,443
Environmental 11,379 495 1,895 9,979
------- ------- ------- -------
Total $20,806 $15,724 $16,847 $19,683
======= ======= ======= =======
Year ended December 31, 1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,175 $2,450 $2,235 $1,390
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $814 $3,537 $3,338 $1,013
Injuries and damages (Note 2) 7,350 4,486 3,422 8,414
Environmental 16,394 (89) 4,926 11,379
------- ------- ------- -------
Total $24,558 $7,934 $11,686 $20,806
======= ======= ======= =======
Year ended December 31, 1994
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,075 $2,023 $1,923 $1,175
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $2,388 $3,120 $4,694 $814
Injuries and damages (Note 2) 4,779 5,848 3,277 7,350
Environmental 1,237 16,868 1,711 16,394
------- ------- ------- -------
Total $8,404 $25,836 $9,682 $24,558
======= ======= ======= =======
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the respective provisions were
created. In the case of the provision for doubtful accounts, such deductions are reduced by
recoveries of amounts previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses as appropriate and for
the estimated cost of settling claims for injuries and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, 1995, and 1994
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,585 $2,996 $3,207 $1,374
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $5,013 $6,846 $9,777 $2,082
Injuries and damages (Note 2) 2,565 928 588 2,905
Environmental 467 330 104 693
------- ------- ------- -------
Total $8,045 $8,104 $10,469 $5,680
======= ======= ======= =======
Year ended December 31, 1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $2,070 $1,691 $2,176 $1,585
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $3,779 $1,520 $286 $5,013
Injuries and damages (Note 2) 3,725 (1,154) 6 2,565
Environmental 684 735 952 467
------- ------- ------- -------
Total $8,188 $1,101 $1,244 $8,045
======= ======= ======= =======
Year ended December 31, 1994
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $2,470 $1,897 $2,297 $2,070
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $2,554 $1,520 $295 $3,779
Injuries and damages (Note 2) 3,478 365 118 3,725
Environmental 500 300 116 684
------- ------- ------- -------
Total $6,532 $2,185 $529 $8,188
======= ======= ======= =======
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the respective provisions were
created. In the case of the provision for doubtful accounts, such deductions are reduced by
recoveries of amounts previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses as appropriate and
for the estimated cost of settling claims for injuries and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, 1995, and 1994
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $468 $2,116 $1,888 $696
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $15,666 - $15,666
Injuries and damages (Note 2) 1,993 864 1,464 1,393
Environmental 38 89 72 55
------- ------- ------- -------
Total $17,697 $953 $1,536 $17,114
======= ======= ======= =======
Year ended December 31, 1995
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $830 $2,733 $3,095 $468
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $15,911 - $245 $15,666
Injuries and damages (Note 2) 1,409 1,382 798 1,993
Environmental (3) 75 34 38
------- ------- ------- -------
Total $17,317 $1,457 $1,077 $17,697
======= ======= ======= =======
Year ended December 31, 1994
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $830 $1,678 $1,678 $830
======= ======= ======= =======
Accumulated Provisions Not
Deducted from Assets:
Property insurance $15,911 - - $15,911
Injuries and damages (Note 2) 2,111 494 1,196 1,409
Environmental 40 25 68 (3)
------- ------- ------- -------
Total $18,062 $519 $1,264 $17,317
======= ======= ======= =======
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the respective
provisions were created. In the case of the provision for doubtful accounts,
such deductions are reduced by recoveries of amounts previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses as
appropriate and for the estimated cost of settling claims for injuries and
damages.
</TABLE>
<PAGE>
EXHIBIT INDEX
The following exhibits indicated by an asterisk
preceding the exhibit number are filed herewith. The
balance of the exhibits have heretofore been filed with
the SEC, respectively, as the exhibits and in the file
numbers indicated and are incorporated herein by
reference. The exhibits marked with a (+) are
management contracts or compensatory plans or
arrangements required to be filed herewith and required
to be identified as such by Item 14 of Form 10-K.
Reference is made to a duplicate list of exhibits being
filed as a part of this Form 10-K, which list, prepared
in accordance with Item 102 of Regulation S-T of the
SEC, immediately precedes the exhibits being physically
filed with this Form 10-K.
(3) (i) Articles of Incorporation
Entergy Corporation
(a)1 -- Certificate of Incorporation of Entergy
Corporation dated December 31, 1993, (A-1(a) to Rule 24
Certificate in 70-8059).
System Energy
(b)1 -- Amended and Restated Articles of Incorporation of
System Energy and amendments thereto through April 28,
1989 (A-1(a) to Form U-1 in 70-5399).
Entergy Arkansas
(c)1 -- Amended and Restated Articles of Incorporation of
Entergy Arkansas and amendments thereto through April
22, 1996 (3(a) to Form 10-Q for the quarter ended March
31, 1996 in 1-10764).
Entergy Gulf States
(d)1 -- Restated Articles of Incorporation of Entergy Gulf
States and amendments thereto through April 22, 1996
(3(b) to Form 10-Q for the quarter ended March 31, 1996
in 1-2703).
Entergy Louisiana
(e)1 -- Restated Articles of Incorporation of Entergy
Louisiana and amendments thereto through April 22, 1996
(3(c) to Form 10-Q for the quarter ended March 31, 1996
in 1-8474).
Entergy Mississippi
*(f)1 -- Restated Articles of Incorporation of Entergy
Mississippi and amendments thereto through January 28,
1997
Entergy New Orleans
(g)1 -- Restatement of Articles of Incorporation of
Entergy New Orleans and amendments thereto through
April 22, 1996 (3(e) to Form 10-Q for the quarter ended
March 31, 1996 in 0-5807).
(3) (ii) By-Laws
(a) -- By-Laws of Entergy Corporation effective
August 25, 1992, and as presently in effect (A-2(a) to
Rule 24 Certificate in 70-8059).
(b) -- By-Laws of System Energy effective May 4,
1989, and as presently in effect (A-2(a) in 70-5399).
(c) -- By-Laws of Entergy Arkansas as amended
effective May 5, 1994, and as presently in effect (3(d)
to Form 10-Q for the quarter ended June 30, 1994).
(d) -- By-Laws of Entergy Gulf States as amended
effective May 5, 1994, and as presently in effect (A-12
in 70-8059).
(e) -- By-Laws of Entergy Louisiana effective
January 23, 1984, and as presently in effect (A-4 in 70-
6962).
(f) -- By-Laws of Entergy Mississippi effective
April 5, 1995, and as presently in effect (3(ii)(f) to
Form 10-K for the year ended December 31, 1995 in 0-
320).
(g) -- By-Laws of Entergy New Orleans effective May
5, 1994, and as presently in effect (3(g) to Form 10-Q
for the quarter ended June 30, 1994 in 0-5807).
(4) Instruments Defining Rights of Security Holders,
Including Indentures
Entergy Corporation
(a)1 -- See (4)(b) through (4)(g) below for instruments
defining the rights of holders of long-term debt of
System Energy, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi and Entergy New
Orleans.
(a)2 -- Credit Agreement, dated as of October 3, 1989,
between System Fuels and The Yasuda Trust and Banking
Co., Ltd., New York Branch, as agent (B-1(c) to Rule 24
Certificate, dated October 6, 1989, in 70-7668).
(a)3 -- First Amendment, dated as of March 1, 1992, to
Credit Agreement, dated as of October 3, 1989, between
System Fuels and The Yasuda Trust and Banking Co.,
Ltd., New York Branch, as agent (4(a)5 to Form 10-K for
the year ended December 31, 1991 in 1-3517).
(a)4 -- Second Amendment, dated as of September 30, 1992,
to Credit Agreement dated as of October 3, 1989,
between System Fuels and The Yasuda Trust and Banking
Co., Ltd., New York Branch, as agent (4(a)6 to Form 10-
K for the year ended December 31, 1992 in 1-3517).
(a)5 -- Security Agreement, dated as of October 3, 1989,
as amended, between System Fuels and The Yasuda Trust
and Banking Co., Ltd., New York Branch, as agent
(B-3(c) to Rule 24 Certificate, dated October 6, 1989,
in 70-7668), as amended by First Amendment to Security
Agreement, dated as of March 14, 1990 (A to Rule 24
Certificate, dated March 7, 1990, in 70-7668).
(a)6 -- Consent and Agreement, dated as of October 3,
1989, among System Fuels, The Yasuda Trust and Banking
Co., Ltd., New York Branch, as agent, Entergy Arkansas,
Entergy Louisiana, and System Energy (B-5(c) to Rule 24
Certificate, dated October 6, 1989, in 70-7668).
(a)7 -- Guaranty of Entergy Corporation dated October 12,
1995 of Entergy Enterprises' payment and performance
under Guaranty of Entergy Enterprises dated October 12,
1995, of amounts payable by EP Edegel, Inc. to
reimburse Union Bank of Switzerland for drawings on
Letter of Credit in amount of $10 million (filed as
Exhibit C-1(l) to Form U5S for the year ended December
31, 1995).
(a)8 -- Guaranty and Guaranty Agreement, each dated as of
November 27, 1995, by Entergy Corporation to Union Bank
of Switzerland, as Agent, of payment and performance of
the Guaranty and Guaranty Agreement, by Entergy
Enterprises of amounts payable by EP Edegel, Inc.
pursuant to Union Bank of Switzerland Credit Agreement,
each as amended by First Amendment, dated as of March
12, 1996 between Entergy Corporation and Union Bank of
Switzerland (filed as Exhibit C-1(j) to Form U5S for
the year ended December 31, 1995).
(a)9 -- Share Sale Agreement (Revised) of December 12,
1995, relating to acquisition of CitiPower Limited,
among State Electricity Commission of Victoria, the
State of Victoria, Entergy Victoria LDC, Entergy
Victoria Holding LDC and Entergy Corporation (filed as
Exhibit C-1(o) to Form U5S for the year ended December
31, 1995 pursuant to Rule 104).
(a)10 -- Multi-Option Syndicated Facility Agreement, dated
as of January 5, 1996, among CitiPower Limited as
Borrower, Commonwealth Bank of Australia as Facility
Agent, Bank of America N.T. & S.A. as Arranger, and
Commonwealth Bank of Australia as Security Trustee
(filed as Exhibit C-1(p) to Form U5S for the year ended
December 31, 1995).
(a)11 -- Undertaking Agreement, dated as of March 7, 1996,
of Entergy Corporation to Commonwealth Bank of
Australia as Facility-Agent, of CitiPower Limited's
obligations up to maximum of $7,367,000 under the Multi-
Option Syndicated Facility Agreement (filed as Exhibit
C-1(q) to Form U5S for the year ended December 31,
1995).
*(a)12 -- Credit Agreement, dated as of September 13, 1996,
among Entergy Corporation, Entergy Technology Holding
Company, the Banks (The Bank of New York, Bank of
America NT & SA, The Bank of Nova Scotia, Banque
Nationale de Paris (Houston Agency), The First National
Bank of Chicago, The Fuji Bank Ltd., Societe Generale
Southwest Agency, and CIBC Inc.) and The Bank of New
York, as Agent (the "Entergy-ETHC Credit Agreement").
*(a)13 -- Amendment No. 1, dated as of October 22, 1996 to
Credit Agreement Entergy-ETHC Credit Agreement.
*(a)14 -- Guaranty and Acknowledgment Agreement, dated as of
October 3, 1996, by Entergy Corporation to The Bank of
New York of certain promissory notes issued by ETHC in
connection with acquisition of 280 Equity Holdings,
Ltd.
*(a)15 -- Amendment, dated as of November 21, 1996, to
Guaranty and Acknowledgment Agreement by Entergy
Corporation to The Bank of New York of certain
promissory notes issued by ETHC in connection with
acquisition of 280 Equity Holdings, Ltd.
*(a)16 -- Guaranty and Acknowledgment Agreement, dated as of
November 21, 1996, by Entergy Corporation to The Bank
of New York of certain promissory notes issued by ETHC
in connection with acquisition of Sentry.
*(a)17 -- Amended and Restated Credit Agreement, dated as of
December 12, 1996, among Entergy, the Banks (Bank of
America National Trust & Savings Association, The Bank
of New York, The Chase Manhattan Bank, Citibank, N.A.,
Union Bank of Switzerland, ABN Amro Bank N.V., The Bank
of Nova Scotia, Canadian Imperial Bank of Commerce,
Mellon Bank, N.A., First National Bank of Commerce and
Whitney National Bank) and Citibank, N.A., as Agent.
System Energy
(b)1 -- Mortgage and Deed of Trust, dated as of June 15,
1977, as amended by twenty-one Supplemental Indentures
(A-1 in 70-5890 (Mortgage); B and C to Rule 24
Certificate in 70-5890 (First); B to Rule 24
Certificate in 70-6259 (Second); 20(a)-5 to Form 10-Q
for the quarter ended June 30, 1981, in 1-3517 (Third);
A-1(e)-1 to Rule 24 Certificate in 70-6985 (Fourth); B
to Rule 24 Certificate in 70-7021 (Fifth); B to Rule 24
Certificate in 70-7021 (Sixth); A-3(b) to Rule 24
Certificate in 70-7026 (Seventh); A-3(b) to Rule 24
Certificate in 70-7158 (Eighth); B to Rule 24
Certificate in 70-7123 (Ninth); B-1 to Rule 24
Certificate in 70-7272 (Tenth); B-2 to Rule 24
Certificate in 70-7272 (Eleventh); B-3 to Rule 24
Certificate in 70-7272 (Twelfth); B-1 to Rule 24
Certificate in 70-7382 (Thirteenth); B-2 to Rule 24
Certificate in 70-7382 (Fourteenth); A-2(c) to Rule 24
Certificate in 70-7946 (Fifteenth); A-2(c) to Rule 24
Certificate in 70-7946 (Sixteenth); A-2(d) to Rule 24
Certificate in 70-7946 (Seventeenth); A-2(e) to Rule 24
Certificate dated May 4, 1993 in 70-7946 (Eighteenth);
A-2(g) to Rule 24 Certificate dated May 6, 1994, in 70-
7946 (Nineteenth); A-2(a)(1) to Rule 24 Certificate
dated August 8, 1996 in File No. 70-8511 (Twentieth);
and A-2(a)(2) to Rule 24 Certificate dated August 8,
1996 in File No. 70-8511 (Twenty-first)).
(b)2 -- Facility Lease No. 1, dated as of December 1,
1988, between Meridian Trust Company and Stephen M.
Carta (Steven Kaba, successor), as Owner Trustees, and
System Energy (B-2(c)(1) to Rule 24 Certificate dated
January 9, 1989 in 70-7561), as supplemented by Lease
Supplement No. 1 dated as of April 1, 1989 (B-22(b) (1)
to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994
(B-3(d) to Rule 24 Certificate dated January 31, 1994
in 70-8215).
(b)3 -- Facility Lease No. 2, dated as of December 1, 1988
between Meridian Trust Company and Stephen M. Carta
(Steven Kaba, successor), as Owner Trustees, and System
Energy (B-2(c)(2) to Rule 24 Certificate dated
January 9, 1989 in 70-7561), as supplemented by Lease
Supplement No. 1 dated as of April 1, 1989 (B-22(b) (2)
to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994
(B-4(d) Rule 24 Certificate dated January 31, 1994 in
70-8215).
(b)4 -- Indenture (for Unsecured Debt Securities), dated
as of September 1, 1995, between System Energy
Resources, Inc., and Chemical Bank (B-10(a) to Rule 24
Certificate in 70-8511).
Entergy Arkansas
(c)1 -- Mortgage and Deed of Trust, dated as of
October 1, 1944, as amended by fifty-three Supplemental
Indentures (7(d) in 2-5463 (Mortgage); 7(b) in 2-7121
(First); 7(c) in 2-7605 (Second); 7(d) in 2-8100
(Third); 7(a)-4 in 2-8482 (Fourth); 7(a)-5 in 2-9149
(Fifth); 4(a)-6 in 2-9789 (Sixth); 4(a)-7 in 2-10261
(Seventh); 4(a)-8 in 2-11043 (Eighth); 2(b)-9 in
2-11468 (Ninth); 2(b)-10 in 2-15767 (Tenth); D in
70-3952 (Eleventh); D in 70-4099 (Twelfth); 4(d) in
2-23185 (Thirteenth); 2(c) in 2-24414 (Fourteenth);
2(c) in 2-25913 (Fifteenth); 2(c) in 2-28869
(Sixteenth); 2(d) in 2-28869 (Seventeenth); 2(c) in
2-35107 (Eighteenth); 2(d) in 2-36646 (Nineteenth);
2(c) in 2-39253 (Twentieth); 2(c) in 2-41080
(Twenty-first); C-1 to Rule 24 Certificate in 70-5151
(Twenty-second); C-1 to Rule 24 Certificate in 70-5257
(Twenty-third); C to Rule 24 Certificate in 70-5343
(Twenty-fourth); C-1 to Rule 24 Certificate in 70-5404
(Twenty-fifth); C to Rule 24 Certificate in 70-5502
(Twenty-sixth); C-1 to Rule 24 Certificate in 70-5556
(Twenty-seventh); C-1 to Rule 24 Certificate in 70-5693
(Twenty-eighth); C-1 to Rule 24 Certificate in 70-6078
(Twenty-ninth); C-1 to Rule 24 Certificate in 70-6174
(Thirtieth); C-1 to Rule 24 Certificate in 70-6246
(Thirty-first); C-1 to Rule 24 Certificate in 70-6498
(Thirty-second); A-4b-2 to Rule 24 Certificate in
70-6326 (Thirty-third); C-1 to Rule 24 Certificate in
70-6607 (Thirty-fourth); C-1 to Rule 24 Certificate in
70-6650 (Thirty-fifth); C-1 to Rule 24 Certificate,
dated December 1, 1982, in 70-6774 (Thirty-sixth); C-1
to Rule 24 Certificate, dated February 17, 1983, in
70-6774 (Thirty-seventh); A-2(a) to Rule 24
Certificate, dated December 5, 1984, in 70-6858
(Thirty-eighth); A-3(a) to Rule 24 Certificate in
70-7127 (Thirty-ninth); A-7 to Rule 24 Certificate in
70-7068 (Fortieth); A-8(b) to Rule 24 Certificate dated
July 6, 1989 in 70-7346 (Forty-first); A-8(c) to
Rule 24 Certificate, dated February 1, 1990 in 70-7346
(Forty-second); 4 to Form 10-Q for the quarter ended
September 30, 1990 in 1-10764 (Forty-third); A-2(a) to
Rule 24 Certificate, dated November 30, 1990, in
70-7802 (Forty-fourth); A-2(b) to Rule 24 Certificate,
dated January 24, 1991, in 70-7802 (Forty-fifth);
4(d)(2) in 33-54298 (Forty-sixth); 4(c)(2) to Form 10-K
for the year ended December 31, 1992 in 1-10764 (Forty-
seventh); 4(b) to Form 10-Q for the quarter ended June
30, 1993 in 1-10764 (Forty-eighth); 4(c) to Form 10-Q
for the quarter ended June 30, 1993 in 1-10764
(Forty-ninth); 4(b) to Form 10-Q for the quarter ended
September 30, 1993 in 1-10764 (Fiftieth); 4(c) to Form
10-Q for the quarter ended September 30, 1993 in 1-
10764 (Fifty-first); 4(a) to Form 10-Q for the quarter
ended June 30, 1994 (Fifty-second); and C-2 to Form U5S
for the year ended December 31, 1995 (Fifty-third)).
(c)2 -- Indenture for Unsecured Subordinated Debt
Securities relating to Trust Securities between Entergy
Arkansas and Bank of New York (as Trustee), dated as of
August 1, 1996 (filed as Exhibit A-1(a) to Rule 24
Certificate dated August 26, 1996 in File No. 70-8723).
(c)3 -- Amended and Restated Trust Agreement of
Entergy Arkansas Capital I, dated as of August 14, 1996
(filed as Exhibit A-3(a) to Rule 24 Certificate dated
August 26, 1996 in File No. 70-8723).
(c)4 -- Guarantee Agreement between Entergy Arkansas
(as Guarantor) and The Bank of New York (as Trustee),
dated as of August 14, 1996, with respect to Entergy
Arkansas Capital I's obligations on its 8 1/2%
Cumulative Quarterly Income Preferred Securities,
Series A (filed as Exhibit A-4(a) to Rule 24
Certificate dated August 26, 1996 in File No. 70-8723).
Entergy Gulf States
(d)1 -- Indenture of Mortgage, dated September 1, 1926, as
amended by certain Supplemental Indentures (B-a-I-1 in
Registration No. 2-2449 (Mortgage); 7-A-9 in
Registration No. 2-6893 (Seventh); B to Form 8-K dated
September 1, 1959 (Eighteenth); B to Form 8-K dated
February 1, 1966 (Twenty-second); B to Form 8-K dated
March 1, 1967 (Twenty-third); C to Form 8-K dated March
1, 1968 (Twenty-fourth); B to Form 8-K dated November
1, 1968 (Twenty-fifth); B to Form 8-K dated April 1,
1969 (Twenty-sixth); 2-A-8 in Registration No. 2-66612
(Thirty-eighth); 4-2 to Form 10-K for the year ended
December 31, 1984 in 1-2703 (Forty-eighth); 4-2 to Form
10-K for the year ended December 31, 1988 in 1-2703
(Fifty-second); 4 to Form 10-K for the year ended
December 31, 1991 in 1-2703 (Fifty-third); 4 to Form 8-
K dated July 29, 1992 in 1-2703 (Fifth-fourth); 4 to
Form 10-K dated December 31, 1992 in 1-2703 (Fifty-
fifth); 4 to Form 10-Q for the quarter ended March 31,
1993 in 1-2703 (Fifty-sixth); and 4-2 to Amendment No.
9 to Registration No. 2-76551 (Fifty-seventh)).
(d)2 -- Indenture, dated March 21, 1939, accepting
resignation of The Chase National Bank of the City of
New York as trustee and appointing Central Hanover Bank
and Trust Company as successor trustee (B-a-1-6 in
Registration No. 2-4076).
(d)3 -- Trust Indenture for 9.72% Debentures due July 1,
1998 (4 in Registration No. 33-40113).
(d)4 -- Indenture for Unsecured Subordinated Debt
Securities relating to Trust Securities, dated as of
January 15, 1997 (filed as Exhibit A-11(a) to Rule 24
Certificate dated February 6, 1997 in File No. 70-
8721).
(d)5 -- Amended and Restated Trust Agreement of Entergy
Gulf States Capital I dated January 28, 1997 of Series
A Preferred Securities (filed as Exhibit A-13(a) to
Rule 24 Certificate dated February 6, 1997 in File No.
70-8721).
(d)6 -- Guarantee Agreement between Entergy Gulf States,
Inc. (as Guarantor) and The Bank of New York (as
Trustee) dated as of January 28, 1997 with respect to
Entergy Gulf States Capital I's obligation on its 8.75%
Cumulative Quarterly Income Preferred Securities,
Series A (filed as Exhibit A-14(a) to Rule 24
Certificate dated February 6, 1997 in File No. 70-
8721).
Entergy Louisiana
(e)1 -- Mortgage and Deed of Trust, dated as of April 1,
1944, as amended by fifty-one Supplemental Indentures
(7(d) in 2-5317 (Mortgage); 7(b) in 2-7408 (First);
7(c) in 2-8636 (Second); 4(b)-3 in 2-10412 (Third);
4(b)-4 in 2-12264 (Fourth); 2(b)-5 in 2-12936 (Fifth);
D in 70-3862 (Sixth); 2(b)-7 in 2-22340 (Seventh); 2(c)
in 2-24429 (Eighth); 4(c)-9 in 2-25801 (Ninth); 4(c)-10
in 2-26911 (Tenth); 2(c) in 2-28123 (Eleventh); 2(c) in
2-34659 (Twelfth); C to Rule 24 Certificate in 70-4793
(Thirteenth); 2(b)-2 in 2-38378 (Fourteenth); 2(b)-2 in
2-39437 (Fifteenth); 2(b)-2 in 2-42523 (Sixteenth);
C to Rule 24 Certificate in 70-5242 (Seventeenth); C to
Rule 24 Certificate in 70-5330 (Eighteenth); C-1 to
Rule 24 Certificate in 70-5449 (Nineteenth); C-1 to
Rule 24 Certificate in 70-5550 (Twentieth); A-6(a) to
Rule 24 Certificate in 70-5598 (Twenty-first); C-1 to
Rule 24 Certificate in 70-5711 (Twenty-second); C-1 to
Rule 24 Certificate in 70-5919 (Twenty-third); C-1 to
Rule 24 Certificate in 70-6102 (Twenty-fourth); C-1 to
Rule 24 Certificate in 70-6169 (Twenty-fifth); C-1 to
Rule 24 Certificate in 70-6278 (Twenty-sixth); C-1 to
Rule 24 Certificate in 70-6355 (Twenty-seventh); C-1 to
Rule 24 Certificate in 70-6508 (Twenty-eighth); C-1 to
Rule 24 Certificate in 70-6556 (Twenty-ninth); C-1 to
Rule 24 Certificate in 70-6635 (Thirtieth); C-1 to
Rule 24 Certificate in 70-6834 (Thirty-first); C-1 to
Rule 24 Certificate in 70-6886 (Thirty-second); C-1 to
Rule 24 Certificate in 70-6993 (Thirty-third); C-2 to
Rule 24 Certificate in 70-6993 (Thirty-fourth); C-3 to
Rule 24 Certificate in 70-6993 (Thirty-fifth); A-2(a)
to Rule 24 Certificate in 70-7166 (Thirty-sixth);
A-2(a) in 70-7226 (Thirty-seventh); C-1 to Rule 24
Certificate in 70-7270 (Thirty-eighth); 4(a) to
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1988, in 1-8474 (Thirty-ninth); A-2(b) to
Rule 24 Certificate in 70-7553 (Fortieth); A-2(d) to
Rule 24 Certificate in 70-7553 (Forty-first); A-3(a) to
Rule 24 Certificate in 70-7822 (Forty-second); A-3(b)
to Rule 24 Certificate in 70-7822 (Forty-third); A-2(b)
to Rule 24 Certificate in File No. 70-7822
(Forty-fourth); A-3(c) to Rule 24 Certificate in
70-7822 (Forty-fifth); A-2(c) to Rule 24 Certificate
dated April 7, 1993 in 70-7822 (Forty-sixth); A-3(d) to
Rule 24 Certificate dated June 4, 1993 in 70-7822
(Forth-seventh); A-3(e) to Rule 24 Certificate dated
December 21, 1993 in 70-7822 (Forty-eighth); A-3(f) to
Rule 24 Certificate dated August 1, 1994 in 70-7822
(Forty-ninth); A-4(c) to Rule 24 Certificate dated
September 28, 1994 in 70-7653 (Fiftieth) and A-2(a) to
Rule 24 Certificate dated April 4, 1996 in File No.
70-8487 (Fifty-first)).
(e)2 -- Facility Lease No. 1, dated as of September 1,
1989, between First National Bank of Commerce, as Owner
Trustee, and Entergy Louisiana (4(c)-1 in Registration
No. 33-30660).
(e)3 -- Facility Lease No. 2, dated as of September 1,
1989, between First National Bank of Commerce, as Owner
Trustee, and Entergy Louisiana (4(c)-2 in Registration
No. 33-30660).
(e)4 -- Facility Lease No. 3, dated as of September 1,
1989, between First National Bank of Commerce, as Owner
Trustee, and Entergy Louisiana (4(c)-3 in Registration
No. 33-30660).
(e)5 -- Indenture for Unsecured Subordinated Debt
Securities relating to Trust Securities, dated as of
July 1, 1996 (filed as Exhibit A-14(a) to Rule 24
Certificate dated July 25, 1996 in File No. 70-8487).
(e)6 -- Amended and Restated Trust Agreement of Entergy
Louisiana Capital I dated July 16, 1996 of Series A
Preferred Securities (filed as Exhibit A-16(a) to Rule
24 Certificate dated July 25, 1996 in File No. 70-
8487).
(e)7 -- Guarantee Agreement between Entergy Louisiana,
Inc. (as Guarantor) and The Bank of New York (as
Trustee) dated as of July 16, 1996 with respect to
Entergy Louisiana Capital I's obligation on its 9%
Cumulative Quarterly Income Preferred Securities,
Series A (filed as Exhibit A-19(a) to Rule 24
Certificate dated July 25, 1996 in File No. 70-8487).
Entergy Mississippi
(f)1 -- Mortgage and Deed of Trust, dated as of September
1, 1944, as amended by twenty-five Supplemental
Indentures (7(d) in 2-5437 (Mortgage); 7(b) in 2-7051
(First); 7(c) in 2-7763 (Second); 7(d) in 2-8484
(Third); 4(b)-4 in 2-10059 (Fourth); 2(b)-5 in 2-13942
(Fifth); A-11 to Form U-1 in 70-4116 (Sixth); 2(b)-7 in
2-23084 (Seventh); 4(c)-9 in 2-24234 (Eighth);
2(b)-9(a) in 2-25502 (Ninth); A-11(a) to Form U-1 in
70-4803 (Tenth); A-12(a) to Form U-1 in 70-4892
(Eleventh); A-13(a) to Form U-1 in 70-5165 (Twelfth);
A-14(a) to Form U-1 in 70-5286 (Thirteenth); A-15(a) to
Form U-1 in 70-5371 (Fourteenth); A-16(a) to Form U-1
in 70-5417 (Fifteenth); A-17 to Form U-1 in 70-5484
(Sixteenth); 2(a)-19 in 2-54234 (Seventeenth); C-1 to
Rule 24 Certificate in 70-6619 (Eighteenth); A-2(c) to
Rule 24 Certificate in 70-6672 (Nineteenth); A-2(d) to
Rule 24 Certificate in 70-6672 (Twentieth); C-1(a) to
Rule 24 Certificate in 70-6816 (Twenty-first); C-1(a)
to Rule 24 Certificate in 70-7020 (Twenty-second);
C-1(b) to Rule 24 Certificate in 70-7020
(Twenty-third); C-1(a) to Rule 24 Certificate in
70-7230 (Twenty-fourth); and A-2(a) to Rule 24
Certificate in 70-7419 (Twenty-fifth)).
(f)2 -- Mortgage and Deed of Trust, dated as of
February 1, 1988, as amended by tenth Supplemental
Indentures (A-2(a)-2 to Rule 24 Certificate in 70-7461
(Mortgage); A-2(b)-2 in 70-7461 (First); A-5(b) to
Rule 24 Certificate in 70-7419 (Second); A-4(b) to
Rule 24 Certificate in 70-7554 (Third); A-1(b)-1 to
Rule 24 Certificate in 70-7737 (Fourth); A-2(b) to
Rule 24 Certificate dated November 24, 1992 in 70-7914
(Fifth); A-2(e) to Rule 24 Certificate dated
January 22, 1993 in 70-7914 (Sixth); A-2(g) to Form U-1
in 70-7914 (Seventh); A-2(i) to Rule 24 Certificate
dated November 10, 1993 in 70-7914 (Eighth); A-2(j) to
Rule 24 Certificate dated July 22, 1994 in 70-7914
(Ninth); and (A-2(l) to Rule 24 Certificate dated April
21, 1995 in File 70-7914 (Tenth)).
Entergy New Orleans
(g)1 -- Mortgage and Deed of Trust, dated as of July 1,
1944, as amended by eleven Supplemental Indentures (B-3
in 2-5411 (Mortgage); 7(b) in 2-7674 (First); 4(a)-2 in
2-10126 (Second); 4(b) in 2-12136 (Third); 2(b)-4 in
2-17959 (Fourth); 2(b)-5 in 2-19807 (Fifth); D to
Rule 24 Certificate in 70-4023 (Sixth); 2(c) in 2-24523
(Seventh); 4(c)-9 in 2-26031 (Eighth); 2(a)-3 in
2-50438 (Ninth); 2(a)-3 in 2-62575 (Tenth); and A-2(b)
to Rule 24 Certificate in 70-7262 (Eleventh)).
(g)2 -- Mortgage and Deed of Trust, dated as of May 1,
1987, as amended by six Supplemental Indentures (A-2(c)
to Rule 24 Certificate in 70-7350 (Mortgage); A-5(b) to
Rule 24 Certificate in 70-7350 (First); A-4(b) to
Rule 24 Certificate in 70-7448 (Second); 4(f)4 to Form
10-K for the year ended December 31, 1992 in 0-5807
(Third); 4(a) to Form 10-Q for the quarter ended
September 30, 1993 in 0-5807 (Fourth); 4(a) to Form 8-K
dated April 26, 1995 in File No. 0-5807 (Fifth); and
4(a) to Form 8-K dated March 22, 1996 in File No.
0-5807 (Sixth)).
(10) Material Contracts
Entergy Corporation
(a)1 -- Agreement, dated April 23, 1982, among certain
System companies, relating to System Planning and
Development and Intra-System Transactions (10(a)1 to
Form 10-K for the year ended December 31, 1982, in
1-3517).
(a)2 -- Middle South Utilities System Agency Agreement,
dated December 11, 1970 (5(a)-2 in 2-41080).
(a)3 -- Amendment, dated February 10, 1971, to Middle
South Utilities System Agency Agreement, dated
December 11, 1970 (5(a)-4 in 2-41080).
(a)4 -- Amendment, dated May 12, 1988, to Middle South
Utilities System Agency Agreement, dated December 11,
1970 (5(a)-4 in 2-41080).
(a)5 -- Middle South Utilities System Agency Coordination
Agreement, dated December 11, 1970 (5(a)-3 in 2-41080).
(a)6 -- Service Agreement with Entergy Services, dated as
of April 1, 1963 (5(a)-5 in 2-41080).
(a)7 -- Amendment, dated January 1, 1972, to Service
Agreement with Entergy Services (5(a)-6 in 2-43175).
(a)8 -- Amendment, dated April 27, 1984, to Service
Agreement with Entergy Services (10(a)-7 to Form 10-K
for the year ended December 31, 1984, in 1-3517).
(a)9 -- Amendment, dated August 1, 1988, to Service
Agreement with Entergy Services (10(a)-8 to Form 10-K
for the year ended December 31, 1988, in 1-3517).
(a)10 -- Amendment, dated January 1, 1991, to Service
Agreement with Entergy Services (10(a)-9 to Form 10-K
for the year ended December 31, 1990, in 1-3517).
(a)11 -- Amendment, dated January 1, 1992, to Service
Agreement with Entergy Services (10(a)-11 for the year
ended December 31, 1994 in 1-3517).
(a)12 -- Availability Agreement, dated June 21, 1974, among
System Energy and certain other System companies (B to
Rule 24 Certificate, dated June 24, 1974, in 70-5399).
(a)13 -- First Amendment to Availability Agreement, dated
as of June 30, 1977 (B to Rule 24 Certificate, dated
June 24, 1977, in 70-5399).
(a)14 -- Second Amendment to Availability Agreement, dated
as of June 15, 1981 (E to Rule 24 Certificate, dated
July 1, 1981, in 70-6592).
(a)15 -- Third Amendment to Availability Agreement, dated
as of June 28, 1984 (B-13(a) to Rule 24 Certificate,
dated July 6, 1984, in 70-6985).
(a)16 -- Fourth Amendment to Availability Agreement, dated
as of June 1, 1989 (A to Rule 24 Certificate, dated
June 8, 1989, in 70-5399).
(a)17 -- Fifteenth Assignment of Availability Agreement,
Consent and Agreement, dated as of May 1, 1986, with
Deposit Guaranty National Bank, United States Trust
Company of New York and Malcolm J. Hood, as Trustees
(B-3(b) to Rule 24 Certificate, dated June 5, 1986, in
70-7158).
(a)18 -- Eighteenth Assignment of Availability Agreement,
Consent and Agreement, dated as of September 1, 1986,
with United States Trust Company of New York and
Gerard F. Ganey, as Trustees (C-2 to Rule 24
Certificate, dated October 1, 1986, in 70-7272).
(a)19 -- Nineteenth Assignment of Availability Agreement,
Consent and Agreement, dated as of September 1, 1986,
with United States Trust Company of New York and
Gerard F. Ganey, as Trustees (C-3 to Rule 24
Certificate, dated October 1, 1986, in 70-7272).
(a)20 -- Twenty-sixth Assignment of Availability Agreement,
Consent and Agreement, dated as of October 1, 1992,
with United States Trust Company of New York and Gerard
F. Ganey, as Trustees (B-2(c) to Rule 24 Certificate,
dated November 2, 1992, in 70-7946).
(a)21 -- Twenty-seventh Assignment of Availability
Agreement, Consent and Agreement, dated as of April 1,
1993, with United States Trust Company of New York and
Gerard F. Ganey as Trustees (B-2(d) to Rule 24
Certificate dated May 4, 1993 in 70-7946).
(a)22 -- Twenty-eighth Assignment of Availability
Agreement, Consent and Agreement, dated as of December
17, 1993, with Chemical Bank, as Agent (B-2(a) to Rule
24 Certificate dated December 22, 1993 in 70-7561).
(a)23 -- Twenty-ninth Assignment of Availability Agreement,
Consent and Agreement, dated as of April 1, 1994, with
United States Trust Company of New York and Gerard F.
Ganey as Trustees (B-2(f) to Rule 24 Certificate dated
May 6, 1994, in 70-7946).
(a)24 -- Thirtieth Assignment of Availability Agreement,
Consent and Agreement, dated as of August 1, 1996,
among System Energy, Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi and Entergy New Orleans,
and United States Trust Company of New York and Gerard
F. Ganey, as Trustees (filed as Exhibit B-2(a) to Rule
24 Certificate dated August 8, 1996 in File No. 70-
8511).
(a)25 -- Thirty-first Assignment of Availability Agreement,
Consent and Agreement, dated as of August 1, 1996,
among System Energy, Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New
Orleans, and United States Trust Company of New York
and Gerard F. Ganey, as Trustees (filed as Exhibit B-
2(b) to Rule 24 Certificate dated August 8, 1996 in
File No. 70-8511).
(a)26 -- Thirty-second Assignment of Availability
Agreement, Consent and Agreement, dated as of December
27, 1996, among System Energy, Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans, and The Chase Manhattan Bank (filed as Exhibit
B-2(a) to Rule 24 Certificate dated January 13, 1997 in
File No. 70-7561).
(a)27 -- Capital Funds Agreement, dated June 21, 1974,
between Entergy Corporation and System Energy (C to
Rule 24 Certificate, dated June 24, 1974, in 70-5399).
(a)28 -- First Amendment to Capital Funds Agreement, dated
as of June 1, 1989 (B to Rule 24 Certificate, dated
June 8, 1989, in 70-5399).
(a)29 -- Fifteenth Supplementary Capital Funds Agreement
and Assignment, dated as of May 1, 1986, with Deposit
Guaranty National Bank, United States Trust Company of
New York and Malcolm J. Hood, as Trustees (B-4(b) to
Rule 24 Certificate, dated June 5, 1986, in 70-7158).
(a)30 -- Eighteenth Supplementary Capital Funds Agreement
and Assignment, dated as of September 1, 1986, with
United States Trust Company of New York and Gerard F.
Ganey, as Trustees (D-2 to Rule 24 Certificate, dated
October 1, 1986, in 70-7272).
(a)31 -- Nineteenth Supplementary Capital Funds Agreement
and Assignment, dated as of September 1, 1986, with
United States Trust Company of New York and Gerard F.
Ganey, as Trustees (D-3 to Rule 24 Certificate, dated
October 1, 1986, in 70-7272).
(a)32 -- Twenty-sixth Supplementary Capital Funds Agreement
and Assignment, dated as of October 1, 1992, with
United States Trust Company of New York and Gerard F.
Ganey, as Trustees (B-3(c) to Rule 24 Certificate dated
November 2, 1992 in 70-7946).
(a)33 -- Twenty-seventh Supplementary Capital Funds
Agreement and Assignment, dated as of April 1, 1993,
with United States Trust Company of New York and Gerard
F. Ganey, as Trustees (B-3(d) to Rule 24 Certificate
dated May 4, 1993 in 70-7946).
(a)34 -- Twenty-eighth Supplementary Capital Funds
Agreement and Assignment, dated as of December 17,
1993, with Chemical Bank, as Agent (B-3(a) to Rule 24
Certificate dated December 22, 1993 in 70-7561).
(a)35 -- Twenty-ninth Supplementary Capital Funds Agreement
and Assignment, dated as of April 1, 1994, with United
States Trust Company of New York and Gerard F. Ganey,
as Trustees (B-3(f) to Rule 24 Certificate dated May 6,
1994, in 70-7946).
(a)36 -- Thirtieth Supplementary Capital Funds Agreement
and Assignment, dated as of August 1, 1996, among
Entergy Corporation, System Energy and United States
Trust Company of New York and Gerard F. Ganey, as
Trustees (filed as Exhibit B-3(a) to Rule 24
Certificate dated August 8, 1996 in File No. 70-8511).
(a)37 -- Thirty-first Supplementary Capital Funds Agreement
and Assignment, dated as of August 1, 1996, among
Entergy Corporation, System Energy and United States
Trust Company of New York and Gerard F. Ganey, as
Trustees (filed as Exhibit B-3(b) to Rule 24
Certificate dated August 8, 1996 in File No. 70-8511).
(a)38 -- Thirty-second Supplementary Capital Funds
Agreement and Assignment, dated as of December 27,
1996, among Entergy Corporation, System Energy and The
Chase Manhattan Bank (filed as Exhibit B-1(a) to Rule
24 Certificate dated January 13, 1997 in File No.
70-7561).
(a)39 -- First Amendment to Supplementary Capital Funds
Agreements and Assignments, dated as of June 1, 1989,
by and between Entergy Corporation, System Energy,
Deposit Guaranty National Bank, United States Trust
Company of New York and Gerard F. Ganey (C to Rule 24
Certificate, dated June 8, 1989, in 70-7026).
(a)40 -- First Amendment to Supplementary Capital Funds
Agreements and Assignments, dated as of June 1, 1989,
by and between Entergy Corporation, System Energy,
United States Trust Company of New York and Gerard F.
Ganey (C to Rule 24 Certificate, dated June 8, 1989, in
70-7123).
(a)41 -- First Amendment to Supplementary Capital Funds
Agreement and Assignment, dated as of June 1, 1989, by
and between Entergy Corporation, System Energy and
Chemical Bank (C to Rule 24 Certificate, dated June 8,
1989, in 70-7561).
+(a)42 -- Agreement between Entergy Corporation and Edwin
Lupberger (10(a)-42 to Form 10-K for the year ended
December 31, 1985, in 1-3517).
(a)43 -- Reallocation Agreement, dated as of July 28, 1981,
among System Energy and certain other System companies
(B-1(a) in 70-6624).
(a)44 -- Joint Construction, Acquisition and Ownership
Agreement, dated as of May 1, 1980, between System
Energy and SMEPA (B-1(a) in 70-6337), as amended by
Amendment No. 1, dated as of May 1, 1980 (B-1(c) in
70-6337) and Amendment No. 2, dated as of October 31,
1980 (1 to Rule 24 Certificate, dated October 30, 1981,
in 70-6337).
(a)45 -- Operating Agreement dated as of May 1, 1980,
between System Energy and SMEPA (B(2)(a) in 70-6337).
(a)46 -- Assignment, Assumption and Further Agreement
No. 1, dated as of December 1, 1988, among System
Energy, Meridian Trust Company and Stephen M. Carta,
and SMEPA (B-7(c)(1) to Rule 24 Certificate, dated
January 9, 1989, in 70-7561).
(a)47 -- Assignment, Assumption and Further Agreement
No. 2, dated as of December 1, 1988, among System
Energy, Meridian Trust Company and Stephen M. Carta,
and SMEPA (B-7(c)(2) to Rule 24 Certificate, dated
January 9, 1989, in 70-7561).
(a)48 -- Substitute Power Agreement, dated as of May 1,
1980, among Entergy Mississippi, System Energy and
SMEPA (B(3)(a) in 70-6337).
(a)49 -- Grand Gulf Unit No. 2 Supplementary Agreement,
dated as of February 7, 1986, between System Energy and
SMEPA (10(aaa) in 33-4033).
(a)50 -- Compromise and Settlement Agreement, dated June 4,
1982, between Texaco, Inc. and Entergy Louisiana (28(a)
to Form 8-K, dated June 4, 1982, in 1-3517).
+(a)51 -- Post-Retirement Plan (10(a)37 to Form 10-K for the
year ended December 31, 1983, in 1-3517).
(a)52 -- Unit Power Sales Agreement, dated as of June 10,
1982, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New
Orleans (10(a)-39 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(a)53 -- First Amendment to Unit Power Sales Agreement,
dated as of June 28, 1984, between System Energy and
Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi and Entergy New Orleans (19 to Form 10-Q
for the quarter ended September 30, 1984, in 1-3517).
(a)54 -- Revised Unit Power Sales Agreement (10(ss) in
33-4033).
(a)55 -- Middle South Utilities Inc. and Subsidiary
Companies Intercompany Income Tax Allocation Agreement,
dated April 28, 1988 (Exhibit D-1 to Form U5S for the
year ended December 31, 1987).
(a)56 -- First Amendment, dated January 1, 1990, to the
Middle South Utilities Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-2 to
Form U5S for the year ended December 31, 1989).
(a)57 -- Second Amendment dated January 1, 1992, to the
Entergy Corporation and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-3 to
Form U5S for the year ended December 31, 1992).
(a)58 -- Third Amendment dated January 1, 1994 to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
(a)59 -- Guaranty Agreement between Entergy Corporation and
Entergy Arkansas, dated as of September 20, 1990
(B-1(a) to Rule 24 Certificate, dated September 27,
1990, in 70-7757).
(a)60 -- Guarantee Agreement between Entergy Corporation
and Entergy Louisiana, dated as of September 20, 1990
(B-2(a) to Rule 24 Certificate, dated September 27,
1990, in 70-7757).
(a)61 -- Guarantee Agreement between Entergy Corporation
and System Energy, dated as of September 20, 1990
(B-3(a) to Rule 24 Certificate, dated September 27,
1990, in 70- 7757).
(a)62 -- Loan Agreement between Entergy Operations and
Entergy Corporation, dated as of September 20, 1990
(B-12(b) to Rule 24 Certificate, dated June 15, 1990,
in 70-7679).
(a)63 -- Loan Agreement between Entergy Power and Entergy
Corporation, dated as of August 28, 1990 (A-4(b) to
Rule 24 Certificate, dated September 6, 1990, in
70-7684).
(a)64 -- Loan Agreement between Entergy Corporation and
Entergy Systems and Service, Inc., dated as of
December 29, 1992 (A-4(b) to Rule 24 Certificate in
70-7947).
+(a)65 -- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a) 52 to Form 10-K for
the year ended December 31, 1989, in 1-3517).
+(a)66 -- Entergy Corporation Annual Incentive Plan (10(a)
54 to Form 10-K for the year ended December 31, 1989,
in 1-3517).
+(a)67 -- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated May
24, 1991, in 70-7831).
+(a)68 -- Retired Outside Director Benefit Plan (10(a)63 to
Form 10-K for the year ended December 31, 1991, in
1-3517).
+(a)69 -- Agreement between Entergy Corporation and Jerry D.
Jackson. (10(a) 67 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(a)70 -- Agreement between Entergy Services, Inc., a
subsidiary of Entergy Corporation, and Gerald D.
McInvale (10(a) 68 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(a)71 -- Supplemental Retirement Plan (10(a) 69 to Form 10-
K for the year ended December 31, 1992 in 1-3517).
+(a)72 -- Defined Contribution Restoration Plan of Entergy
Corporation and Subsidiaries (10(a)53 to Form 10-K for
the year ended December 31, 1989 in 1-3517).
+(a)73 -- Amendment No. 1 to the Equity Ownership Plan of
Entergy Corporation and Subsidiaries (10(a) 71 to Form
10-K for the year ended December 31, 1992 in 1-3517).
+(a)74 -- Executive Disability Plan of Entergy Corporation
and Subsidiaries (10(a) 72 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(a)75 -- Executive Medical Plan of Entergy Corporation and
Subsidiaries (10(a) 73 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(a)76 -- Stock Plan for Outside Directors of Entergy
Corporation and Subsidiaries, as amended (10(a) 74 to
Form 10-K for the year ended December 31, 1992 in 1-
3517).
+(a)77 -- Summary Description of Private Ownership Vehicle
Plan of Entergy Corporation and Subsidiaries (10(a) 75
to Form 10-K for the year ended December 31, 1992 in 1-
3517).
(a)78 -- Agreement and Plan of Reorganization Between
Entergy Corporation and Gulf States Utilities Company,
dated June 5, 1992 (1 to Current Report on Form 8-K
dated June 5, 1992 in 1-3517).
+(a)79 -- Amendment to Defined Contribution Restoration Plan
of Entergy Corporation and Subsidiaries (10(a) 81 to
Form 10-K for the year ended December 31, 1993 in 1-
11299).
+(a)80 -- System Executive Retirement Plan (10(a) 82 to Form
10-K for the year ended December 31, 1993 in 1-11299).
System Energy
(b)1 through
(b)15 -- See 10(a)-12 through 10(a)-26 above.
(b)16 through
(b)30 -- See 10(a)-27 through 10(a)-41 above.
(b)31 -- Reallocation Agreement, dated as of July 28, 1981,
among System Energy and certain other System companies
(B-1(a) in 70-6624).
(b)32 -- Joint Construction, Acquisition and Ownership
Agreement, dated as of May 1, 1980, between System
Energy and SMEPA (B-1(a) in 70-6337), as amended by
Amendment No. 1, dated as of May 1, 1980 (B-1(c) in
70-6337) and Amendment No. 2, dated as of October 31,
1980 (1 to Rule 24 Certificate, dated October 30, 1981,
in 70-6337).
(b)33 -- Operating Agreement, dated as of May 1, 1980,
between System Energy and SMEPA (B(2)(a) in 70-6337).
(b)34 -- Installment Sale Agreement, dated as of
December 1, 1983 between System Energy and Claiborne
County, Mississippi (B-1 to First Rule 24 Certificate
in 70-6913).
(b)35 -- Installment Sale Agreement, dated as of June 1,
1984, between System Energy and Claiborne County,
Mississippi (B-2 to Second Rule 24 Certificate in
70-6913).
(b)36 -- Installment Sale Agreement, dated as of
December 1, 1984, between System Energy and Claiborne
County, Mississippi (B-1 to First Rule 24 Certificate
in 70-7026).
(b)37 -- Installment Sale Agreement, dated as of May 1,
1986, between System Energy and Claiborne County,
Mississippi (B-1(b) to Rule 24 Certificate in 70-7158).
(b)38 -- Amended and Restated Installment Sale Agreement,
dated as of May 1, 1995, between System Energy and
Claiborne County, Mississippi (B-6(a) to Rule 24
Certificate in 70-8511).
(b)39 - Amended and Restated Installment Sale Agreement, dated
as of February 15, 1996, between System Energy and Claiborne
County, Mississippi (filed as Exhibit B-6(a) to Rule 24
Certificate dated March 4, 1996 in File No. 70-8511).
(b)40 -- Facility Lease No. 1, dated as of December 1,
1988, between Meridian Trust Company and Stephen M.
Carta (Stephen J. Kaba, successor), as Owner Trustees,
and System Energy (B-2(c)(1) to Rule 24 Certificate
dated January 9, 1989 in 70-7561), as supplemented by
Lease Supplement No. 1 dated as of April 1, 1989 (B-
22(b) (1) to Rule 24 Certificate dated April 21, 1989
in 70-7561) and Lease Supplement No. 2 dated as of
January 1, 1994 (B-3(d) to Rule 24 Certificate dated
January 31, 1994 in 70-8215).
(b)41 -- Facility Lease No. 2, dated as of December 1, 1988
between Meridian Trust Company and Stephen M. Carta
(Stephen J. Kaba, successor), as Owner Trustees, and
System Energy (B-2(c)(2) to Rule 24 Certificate dated
January 9, 1989 in 70-7561), as supplemented by Lease
Supplement No. 1 dated as of April 1, 1989 (B-22(b) (2)
to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994
(B-4(d) Rule 24 Certificate dated January 31, 1994 in
70-8215).
(b)42 -- Assignment, Assumption and Further Agreement
No. 1, dated as of December 1, 1988, among System
Energy, Meridian Trust Company and Stephen M. Carta,
and SMEPA (B-7(c)(1) to Rule 24 Certificate, dated
January 9, 1989, in 70-7561).
(b)43 -- Assignment, Assumption and Further Agreement
No. 2, dated as of December 1, 1988, among System
Energy, Meridian Trust Company and Stephen M. Carta,
and SMEPA (B-7(c)(2) to Rule 24 Certificate, dated
January 9, 1989, in 70-7561).
(b)44 -- Collateral Trust Indenture, dated as of January 1,
1994, among System Energy, GG1B Funding Corporation and
Bankers Trust Company, as Trustee (A-3(e) to Rule 24
Certificate dated January 31, 1994, in 70-8215), as
supplemented by Supplemental Indenture No. 1 dated
January 1, 1994, (A-3(f) to Rule 24 Certificate dated
January 31, 1994, in 70-8215).
(b)45 -- Substitute Power Agreement, dated as of May 1,
1980, among Entergy Mississippi, System Energy and
SMEPA (B(3)(a) in 70-6337).
(b)46 -- Grand Gulf Unit No. 2 Supplementary Agreement,
dated as of February 7, 1986, between System Energy and
SMEPA (10(aaa) in 33-4033).
(b)47 -- Unit Power Sales Agreement, dated as of June 10,
1982, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New
Orleans (10(a)-39 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(b)48 -- First Amendment to the Unit Power Sales Agreement,
dated as of June 28, 1984, between System Energy and
Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi and Entergy New Orleans (19 to Form 10-Q
for the quarter ended September 30, 1984, in 1-3517).
(b)49 -- Revised Unit Power Sales Agreement (10(ss) in
33-4033).
(b)50 -- Fuel Lease, dated as of February 24, 1989, between
River Fuel Funding Company #3, Inc. and System Energy
(B-1(b) to Rule 24 Certificate, dated March 3, 1989, in
70-7604).
(b)51 -- System Energy's Consent, dated January 31, 1995,
pursuant to Fuel Lease, dated as of February 24, 1989,
between River Fuel Funding Company #3, Inc. and System
Energy (B-1(c) to Rule 24 Certificate, dated February
13, 1995 in 70-7604).
(b)52 -- Sales Agreement, dated as of June 21, 1974,
between System Energy and Entergy Mississippi (D to
Rule 24 Certificate, dated June 26, 1974, in 70-5399).
(b)53 -- Service Agreement, dated as of June 21, 1974,
between System Energy and Entergy Mississippi (E to
Rule 24 Certificate, dated June 26, 1974, in 70-5399).
(b)54 -- Partial Termination Agreement, dated as of
December 1, 1986, between System Energy and Entergy
Mississippi (A-2 to Rule 24 Certificate, dated January
8, 1987, in 70-5399).
(b)55 -- Middle South Utilities, Inc. and Subsidiary
Companies Intercompany Income Tax Allocation Agreement,
dated April 28, 1988 (D-1 to Form U5S for the year
ended December 31, 1987).
(b)56 -- First Amendment, dated January 1, 1990 to the
Middle South Utilities Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-2 to
Form U5S for the year ended December 31, 1989).
(b)57 -- Second Amendment dated January 1, 1992, to the
Entergy Corporation and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-3 to
Form U5S for the year ended December 31, 1992).
(b)58 -- Third Amendment dated January 1, 1994 to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
(b)59 -- Service Agreement with Entergy Services, dated as
of July 16, 1974, as amended (10(b)-43 to Form 10-K for
the year ended December 31, 1988, in 1-9067).
(b)60 -- Amendment, dated January 1, 1991, to Service
Agreement with Entergy Services (10(b)-45 to Form 10-K
for the year ended December 31, 1990, in 1-9067).
(b)61 -- Amendment, dated January 1, 1992, to Service
Agreement with Entergy Services (10(a) -11 to Form 10-K
for the year ended December 31, 1994 in 1-3517).
(b)62 -- Operating Agreement between Entergy Operations and
System Energy, dated as of June 6, 1990 (B-3(b) to Rule
24 Certificate, dated June 15, 1990, in 70-7679).
(b)63 -- Guarantee Agreement between Entergy Corporation
and System Energy, dated as of September 20, 1990
(B-3(a) to Rule 24 Certificate, dated September 27,
1990, in 70-7757).
+(b)64 -- Agreement between System Energy and Donald C.
Hintz (10(b)47 to Form 10-K for the year ended
December 31, 1991, in 1-9067).
+(b)65 -- Agreement between Entergy Corporation and Edwin
Lupberger (10(a)-42 to Form 10-K for the year ended
December 31, 1985 in 1-3517).
+(b)66 -- Agreement between Entergy Services and Gerald D.
McInvale (10(a)-69 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
(b)67 -- Amended and Restated Reimbursement Agreement,
dated as of December 1,1988 as amended and restated as
of December 27, 1996, among System Energy Resources,
Inc., The Bank of Tokyo-Mitsubishi, Ltd., as Funding
Bank and The Chase Manhattan Bank (as successor by
merger with Chemical Bank), as administrating bank,
Union Bank of California, N.A., as documentation agent,
and the Banks named therein, as Participating Banks (B-
3(a) to Rule 24 Certificate dated January 13, 1997 in
70-7561).
Entergy Arkansas
(c)1 -- Agreement, dated April 23, 1982, among Entergy
Arkansas and certain other System companies, relating
to System Planning and Development and Intra-System
Transactions (10(a) 1 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(c)2 -- Middle South Utilities System Agency Agreement,
dated December 11, 1970 (5(a)2 in 2-41080).
(c)3 -- Amendment, dated February 10, 1971, to Middle
South Utilities System Agency Agreement, dated December
11, 1970 (5(a)-4 in 2-41080).
(c)4 -- Amendment, dated May 12, 1988, to Middle South
Utilities System Agency Agreement, dated December 11,
1970 (5(a) 4 in 2-41080).
(c)5 -- Middle South Utilities System Agency Coordination
Agreement, dated December 11, 1970 (5(a)-3 in 2-41080).
(c)6 -- Service Agreement with Entergy Services, dated as
of April 1, 1963 (5(a)-5 in 2-41080).
(c)7 -- Amendment, dated January 1, 1972, to Service
Agreement with Entergy Services (5(a)- 6 in 2-43175).
(c)8 -- Amendment, dated April 27, 1984, to Service
Agreement, with Entergy Services (10(a)- 7 to Form 10-K
for the year ended December 31, 1984, in 1-3517).
(c)9 -- Amendment, dated August 1, 1988, to Service
Agreement with Entergy Services (10(c)- 8 to Form 10-K
for the year ended December 31, 1988, in 1-10764).
(c)10 -- Amendment, dated January 1, 1991, to Service
Agreement with Entergy Services (10(c)-9 to Form 10-K
for the year ended December 31, 1990, in 1-10764).
(c)11 -- Amendment, dated January 1, 1992, to Service
Agreement with Entergy Services (10(a)-11 to Form 10-K
for the year ended December 31, 1994 in 1-3517).
(c)12 through
(c)26 -- See 10(a)-12 through 10(a)-26 above.
(c)27 -- Agreement, dated August 20, 1954, between Entergy
Arkansas and the United States of America (SPA)(13(h)
in 2-11467).
(c)28 -- Amendment, dated April 19, 1955, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-2 in 2-41080).
(c)29 -- Amendment, dated January 3, 1964, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-3 in 2-41080).
(c)30 -- Amendment, dated September 5, 1968, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-4 in 2-41080).
(c)31 -- Amendment, dated November 19, 1970, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-5 in 2-41080).
(c)32 -- Amendment, dated July 18, 1961, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-6 in 2-41080).
(c)33 -- Amendment, dated December 27, 1961, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-7 in 2-41080).
(c)34 -- Amendment, dated January 25, 1968, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-8 in 2-41080).
(c)35 -- Amendment, dated October 14, 1971, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-9 in 2-43175).
(c)36 -- Amendment, dated January 10, 1977, to the United
States of America (SPA) Contract, dated August 20, 1954
(5(d)-10 in 2-60233).
(c)37 -- Agreement, dated May 14, 1971, between Entergy
Arkansas and the United States of America (SPA) (5(e)
in 2-41080).
(c)38 -- Amendment, dated January 10, 1977, to the United
States of America (SPA) Contract, dated May 14, 1971
(5(e)-1 in 2-60233).
(c)39 -- Contract, dated May 28, 1943, Amendment to
Contract, dated July 21, 1949, and Supplement to
Amendment to Contract, dated December 30, 1949, between
Entergy Arkansas and McKamie Gas Cleaning Company;
Agreements, dated as of September 30, 1965, between
Entergy Arkansas and former stockholders of McKamie Gas
Cleaning Company; and Letter Agreement, dated June 22,
1966, by Humble Oil & Refining Company accepted by
Entergy Arkansas on June 24, 1966 (5(k)-7 in 2-41080).
(c)40 -- Agreement, dated April 3, 1972, between Entergy
Services and Gulf United Nuclear Fuels Corporation
(5(l)-3 in 2-46152).
(c)41 -- Fuel Lease, dated as of December 22, 1988, between
River Fuel Trust #1 and Entergy Arkansas (B-1(b) to
Rule 24 Certificate in 70-7571).
(c)42 -- White Bluff Operating Agreement, dated June 27,
1977, among Entergy Arkansas and Arkansas Electric
Cooperative Corporation and City Water and Light Plant
of the City of Jonesboro, Arkansas (B-2(a) to Rule 24
Certificate, dated June 30, 1977, in 70-6009).
(c)43 -- White Bluff Ownership Agreement, dated June 27,
1977, among Entergy Arkansas and Arkansas Electric
Cooperative Corporation and City Water and Light Plant
of the City of Jonesboro, Arkansas (B-1(a) to Rule 24
Certificate, dated June 30, 1977, in 70-6009).
(c)44 -- Agreement, dated June 29, 1979, between Entergy
Arkansas and City of Conway, Arkansas (5(r)-3 in
2-66235).
(c)45 -- Transmission Agreement, dated August 2, 1977,
between Entergy Arkansas and City Water and Light Plant
of the City of Jonesboro, Arkansas (5(r)-3 in 2-60233).
(c)46 -- Power Coordination, Interchange and Transmission
Service Agreement, dated as of June 27, 1977, between
Arkansas Electric Cooperative Corporation and Entergy
Arkansas (5(r)-4 in 2-60233).
(c)47 -- Independence Steam Electric Station Operating
Agreement, dated July 31, 1979, among Entergy Arkansas
and Arkansas Electric Cooperative Corporation and City
Water and Light Plant of the City of Jonesboro,
Arkansas and City of Conway, Arkansas (5(r)-6 in
2-66235).
(c)48 -- Amendment, dated December 4, 1984, to the
Independence Steam Electric Station Operating Agreement
(10(c) 51 to Form 10-K for the year ended December 31,
1984, in 1-10764).
(c)49 -- Independence Steam Electric Station Ownership
Agreement, dated July 31, 1979, among Entergy Arkansas
and Arkansas Electric Cooperative Corporation and City
Water and Light Plant of the City of Jonesboro,
Arkansas and City of Conway, Arkansas (5(r)-7 in
2-66235).
(c)50 -- Amendment, dated December 28, 1979, to the
Independence Steam Electric Station Ownership Agreement
(5(r)-7(a) in 2-66235).
(c)51 -- Amendment, dated December 4, 1984, to the
Independence Steam Electric Station Ownership Agreement
(10(c) 54 to Form 10-K for the year ended December 31,
1984, in 1-10764).
(c)52 -- Owner's Agreement, dated November 28, 1984, among
Entergy Arkansas, Entergy Mississippi, other co-owners
of the Independence Station (10(c) 55 to Form 10-K for
the year ended December 31, 1984, in 1-10764).
(c)53 -- Consent, Agreement and Assumption, dated December
4, 1984, among Entergy Arkansas, Entergy Mississippi,
other co-owners of the Independence Station and United
States Trust Company of New York, as Trustee (10(c) 56
to Form 10-K for the year ended December 31, 1984, in
1-10764).
(c)54 -- Power Coordination, Interchange and Transmission
Service Agreement, dated as of July 31, 1979, between
Entergy Arkansas and City Water and Light Plant of the
City of Jonesboro, Arkansas (5(r)-8 in 2-66235).
(c)55 -- Power Coordination, Interchange and Transmission
Agreement, dated as of June 29, 1979, between City of
Conway, Arkansas and Entergy Arkansas (5(r)-9 in
2-66235).
(c)56 -- Agreement, dated June 21, 1979, between Entergy
Arkansas and Reeves E. Ritchie ((10)(b)-90 to Form 10-K
for the year ended December 31, 1980, in 1-10764).
(c)57 -- Reallocation Agreement, dated as of July 28, 1981,
among System Energy and certain other System companies
(B-1(a) in 70-6624).
+(c)58 -- Post-Retirement Plan (10(b) 55 to Form 10-K for
the year ended December 31, 1983, in 1-10764).
(c)59 -- Unit Power Sales Agreement, dated as of June 10,
1982, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans (10(a) 39 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(c)60 -- First Amendment to Unit Power Sales Agreement,
dated as of June 28, 1984, between System Energy,
Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans (19 to Form 10-Q
for the quarter ended September 30, 1984, in 1-3517).
(c)61 -- Revised Unit Power Sales Agreement (10(ss) in
33-4033).
(c)62 -- Contract For Disposal of Spent Nuclear Fuel and/or
High-Level Radioactive Waste, dated June 30, 1983,
among the DOE, System Fuels and Entergy Arkansas
(10(b)-57 to Form 10-K for the year ended December 31,
1983, in 1-10764).
(c)63 -- Middle South Utilities, Inc. and Subsidiary
Companies Intercompany Income Tax Allocation Agreement,
dated April 28, 1988 (D-1 to Form U5S for the year
ended December 31, 1987).
(c)64 -- First Amendment, dated January 1, 1990, to the
Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-2 to
Form U5S for the year ended December 31, 1989).
(c)65 -- Second Amendment dated January 1, 1992, to the
Entergy Corporation and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-3 to
Form U5S for the year ended December 31, 1992).
(c)66 -- Third Amendment dated January 1, 1994, to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
(c)67 -- Assignment of Coal Supply Agreement, dated
December 1, 1987, between System Fuels and Entergy
Arkansas (B to Rule 24 letter filing, dated November
10, 1987, in 70-5964).
(c)68 -- Coal Supply Agreement, dated December 22, 1976,
between System Fuels and Antelope Coal Company (B-1 in
70-5964), as amended by First Amendment (A to Rule 24
Certificate in 70-5964); Second Amendment (A to Rule 24
letter filing, dated December 16, 1983, in 70-5964);
and Third Amendment (A to Rule 24 letter filing, dated
November 10, 1987 in 70-5964).
(c)69 -- Operating Agreement between Entergy Operations and
Entergy Arkansas, dated as of June 6, 1990 (B-1(b) to
Rule 24 Certificate, dated June 15, 1990, in 70-7679).
(c)70 -- Guaranty Agreement between Entergy Corporation and
Entergy Arkansas, dated as of September 20, 1990
(B-1(a) to Rule 24 Certificate, dated September 27,
1990, in 70-7757).
(c)71 -- Agreement for Purchase and Sale of Independence
Unit 2 between Entergy Arkansas and Entergy Power,
dated as of August 28, 1990 (B-3(c) to Rule 24
Certificate, dated September 6, 1990, in 70-7684).
(c)72 -- Agreement for Purchase and Sale of Ritchie Unit 2
between Entergy Arkansas and Entergy Power, dated as of
August 28, 1990 (B-4(d) to Rule 24 Certificate, dated
September 6, 1990, in 70-7684).
(c)73 -- Ritchie Steam Electric Station Unit No. 2
Operating Agreement between Entergy Arkansas and
Entergy Power, dated as of August 28, 1990 (B-5(a) to
Rule 24 Certificate, dated September 6, 1990, in
70-7684).
(c)74 -- Ritchie Steam Electric Station Unit No. 2
Ownership Agreement between Entergy Arkansas and
Entergy Power, dated as of August 28, 1990 (B-6(a) to
Rule 24 Certificate, dated September 6, 1990, in
70-7684).
(c)75 -- Power Coordination, Interchange and Transmission
Service Agreement between Entergy Power and Entergy
Arkansas, dated as of August 28, 1990 (10(c)-71 to Form
10-K for the year ended December 31, 1990, in 1-10764).
+(c)76 -- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a)52 to Form 10-K for
the year ended December 31, 1989, in 1-3517).
+(c)77 -- Entergy Corporation Annual Incentive Plan (10(a)54
to Form 10-K for the year ended December 31, 1989, in
1-3517).
+(c)78 -- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated
May 24, 1991, in 70-7831).
+(c)79 -- Agreement between Arkansas Power & Light Company
and R. Drake Keith. (10(c) 78 to Form 10-K for the year
ended December 31, 1992 in 1-10764).
+(c)80 -- Supplemental Retirement Plan (10(a)69 to Form 10-K
for the year ended December 31, 1992 in 1-3517).
+(c)81 -- Defined Contribution Restoration Plan of Entergy
Corporation and Subsidiaries (10(a)53 to Form 10-K for
the year ended December 31, 1989 in 1-3517).
+(c)82 -- Amendment No. 1 to the Equity Ownership Plan of
Entergy Corporation and Subsidiaries (10(a)71 to Form
10-K for the year ended December 31, 1992 in 1-3517).
+(c)83 -- Executive Disability Plan of Entergy Corporation
and Subsidiaries (10(a)72 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(c)84 -- Executive Medical Plan of Entergy Corporation and
Subsidiaries (10(a)73 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(c)85 -- Stock Plan for Outside Directors of Entergy
Corporation and Subsidiaries, as amended (10(a)74 to
Form 10-K for the year ended December 31, 1992 in
1-3517).
+(c)86 -- Summary Description of Private Ownership Vehicle
Plan of Entergy Corporation and Subsidiaries (10(a)75
to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(c)87 -- Agreement between Entergy Corporation and Edwin
Lupberger (10(a)-42 to Form 10-K for the year ended
December 31, 1985 in 1-3517).
+(c)88 -- Agreement between Entergy Corporation and Jerry D.
Jackson (10(a)-68 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(c)89 -- Agreement between Entergy Services and Gerald D.
McInvale (10(a)-69 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(c)90 -- Agreement between System Energy and Donald C.
Hintz (10(b)-47 to Form 10-K for the year ended
December 31, 1991 in 1-9067).
+(c)91 -- Summary Description of Retired Outside Director
Benefit Plan. (10(c) 90 to Form 10-K for the year ended
December 31, 1992 in 1-10764).
+(c)92 -- Amendment to Defined Contribution Restoration Plan
of Entergy Corporation and Subsidiaries (10(a) 81 to
Form 10-K for the year ended December 31, 1993 in 1-
11299).
+(c)93 -- System Executive Retirement Plan (10(a) 82 to Form
10-K for the year ended December 31, 1993 in 1-11299).
(c)94 -- Loan Agreement dated June 15, 1993, between
Entergy Arkansas and Independence Country, Arkansas (B-
1 (a) to Rule 24 Certificate dated July 9, 1993 in 70-
8171).
(c)95 -- Installment Sale Agreement dated January 1, 1991,
between Entergy Arkansas and Pope Country, Arkansas (B-
1 (b) to Rule 24 Certificate dated January 24, 1991 in
70-7802).
(c)96 -- Installment Sale Agreement dated November 1, 1990,
between Entergy Arkansas and Pope Country, Arkansas (B-
1 (a) to Rule 24 Certificate dated November 30, 1990 in
70-7802).
(c)97 -- Loan Agreement dated June 15, 1994, between
Entergy Arkansas and Jefferson County, Arkansas (B-1(a)
to Rule 24 Certificate dated June 30, 1994 in 70-8405).
(c)98 -- Loan Agreement dated June 15, 1994, between
Entergy Arkansas and Pope County, Arkansas (B-1(b) to
Rule 24 Certificate in 70-8405).
(c)99 -- Loan Agreement dated November 15, 1995,
between Entergy Arkansas and Pope County, Arkansas
(10(c) 96 to Form 10-K for the year ended December 31,
1995 in 1-10764).
(c)100-- Agreement as to Expenses and Liabilities between
Entergy Arkansas and Entergy Arkansas Capital I, dated
as of August 14, 1996 (4(j) to Form 10-Q for the
quarter ended September 30, 1996 in 1-10764).
Entergy Gulf States
(d)1 -- Guaranty Agreement, dated July 1, 1976, between
Entergy Gulf States and American Bank and Trust Company
(C and D to Form 8-K, dated August 6, 1976 in 1-2703).
(d)2 -- Lease of Railroad Equipment, dated as of December
1, 1981, between The Connecticut Bank and Trust Company
as Lessor and Entergy Gulf States as Lessee and First
Supplement, dated as of December 31, 1981, relating to
605 One Hundred-Ton Unit Train Steel Coal Porter Cars
(4-12 to Form 10-K for the year ended December 31, 1981
in 1-2703).
(d)3 -- Guaranty Agreement, dated August 1, 1992, between
Entergy Gulf States and Hibernia National Bank,
relating to Pollution Control Revenue Refunding Bonds
of the Industrial Development Board of the Parish of
Calcasieu, Inc. (Louisiana) (10-1 to Form 10-K for the
year ended December 31, 1992 in 1-2703).
(d)4 -- Guaranty Agreement, dated January 1, 1993, between
Entergy Gulf States and Hancock Bank of Louisiana,
relating to Pollution Control Revenue Refunding Bonds
of the Parish of Pointe Coupee (Louisiana) (10-2 to
Form 10-K for the year ended December 31, 1992 in 1-
2703).
(d)5 -- Deposit Agreement, dated as of December 1, 1983
between Entergy Gulf States, Morgan Guaranty Trust Co.
as Depositary and the Holders of Depository Receipts,
relating to the Issue of 900,000 Depositary Preferred
Shares, each representing 1/2 share of Adjustable Rate
Cumulative Preferred Stock, Series E-$100 Par Value (4-
17 to Form 10-K for the year ended December 31, 1983 in
1-2703).
(d)6 -- Letter of Credit and Reimbursement Agreement,
dated December 27, 1985, between Entergy Gulf States
and Westpac Banking Corporation relating to Variable
Rate Demand Pollution Control Revenue Bonds of the
Parish of West Feliciana, State of Louisiana, Series
1985-D (4-26 to Form 10-K for the year ended December
31, 1985 in 1-2703) and Letter Agreement amending same
dated October 20, 1992 (10-3 to Form 10-K for the year
ended December 31, 1992 in 1-2703).
(d)7 -- Reimbursement and Loan Agreement, dated as of
April 23, 1986, by and between Entergy Gulf States and
The Long-Term Credit Bank of Japan, Ltd., relating to
Multiple Rate Demand Pollution Control Revenue Bonds of
the Parish of West Feliciana, State of Louisiana,
Series 1985 (4-26 to Form 10-K, for the year ended
December 31, 1986 in 1-2703) and Letter Agreement
amending same, dated February 19, 1993 (10 to Form 10-K
for the year ended December 31, 1992 in 1-2703).
(d)8 -- Agreement effective February 1, 1964, between
Sabine River Authority, State of Louisiana, and Sabine
River Authority of Texas, and Entergy Gulf States,
Central Louisiana Electric Company, Inc., and Louisiana
Power & Light Company, as supplemented (B to Form 8-K,
dated May 6, 1964, A to Form 8-K, dated October 5,
1967, A to Form 8-K, dated May 5, 1969, and A to Form 8-
K, dated December 1, 1969, in 1-2708).
(d)9 -- Joint Ownership Participation and Operating
Agreement regarding River Bend Unit 1 Nuclear Plant,
dated August 20, 1979, between Entergy Gulf States,
Cajun, and SRG&T; Power Interconnection Agreement with
Cajun, dated June 26, 1978, and approved by the REA on
August 16, 1979, between Entergy Gulf States and Cajun;
and Letter Agreement regarding CEPCO buybacks, dated
August 28, 1979, between Entergy Gulf States and Cajun
(2, 3, and 4, respectively, to Form 8-K, dated
September 7, 1979, in 1-2703).
(d)10 -- Ground Lease, dated August 15, 1980, between
Statmont Associates Limited Partnership (Statmont) and
Entergy Gulf States, as amended (3 to Form 8-K, dated
August 19, 1980, and A-3-b to Form 10-Q for the quarter
ended September 30, 1983 in 1-2703).
(d)11 -- Lease and Sublease Agreement, dated August 15,
1980, between Statmont and Entergy Gulf States, as
amended (4 to Form 8-K, dated August 19, 1980, and A-3-
c to Form 10-Q for the quarter ended September 30, 1983
in 1-2703).
(d)12 -- Lease Agreement, dated September 18, 1980, between
BLC Corporation and Entergy Gulf States (1 to Form 8-K,
dated October 6, 1980 in 1-2703).
(d)13 -- Joint Ownership Participation and Operating
Agreement for Big Cajun, between Entergy Gulf States,
Cajun Electric Power Cooperative, Inc., and Sam Rayburn
G&T, Inc, dated November 14, 1980 (6 to Form 8-K, dated
January 29, 1981 in 1-2703); Amendment No. 1, dated
December 12, 1980 (7 to Form 8-K, dated January 29,
1981 in 1-2703); Amendment No. 2, dated December 29,
1980 (8 to Form 8-K, dated January 29, 1981 in 1-2703).
(d)14 -- Agreement of Joint Ownership Participation between
SRMPA, SRG&T and Entergy Gulf States, dated June 6,
1980, for Nelson Station, Coal Unit #6, as amended (8
to Form 8-K, dated June 11, 1980, A-2-b to Form 10-Q
For the quarter ended June 30, 1982; and 10-1 to Form 8-
K, dated February 19, 1988 in 1-2703).
(d)15 -- Agreements between Southern Company and Entergy
Gulf States, dated February 25, 1982, which cover the
construction of a 140-mile transmission line to connect
the two systems, purchase of power and use of
transmission facilities (10-31 to Form 10-K, for the
year ended December 31, 1981 in 1-2703).
+(d)16 -- Executive Income Security Plan, effective October
1, 1980, as amended, continued and completely restated
effective as of March 1, 1991 (10-2 to Form 10-K for
the year ended December 31, 1991 in 1-2703).
(d)17 -- Transmission Facilities Agreement between Entergy
Gulf States and Mississippi Power Company, dated
February 28, 1982, and Amendment, dated May 12, 1982 (A-
2-c to Form 10-Q for the quarter ended March 31, 1982
in 1-2703) and Amendment, dated December 6, 1983 (10-43
to Form 10-K, for the year ended December 31, 1983 in 1-
2703).
(d)18 -- Lease Agreement dated as of June 29, 1983, between
Entergy Gulf States and City National Bank of Baton
Rouge, as Owner Trustee, in connection with the leasing
of a Simulator and Training Center for River Bend Unit
1 (A-2-a to Form 10-Q for the quarter ended June 30,
1983 in 1-2703) and Amendment, dated December 14, 1984
(10-55 to Form 10-K, for the year ended December 31,
1984 in 1-2703).
(d)19 -- Participation Agreement, dated as of June 29,
1983, among Entergy Gulf States, City National Bank of
Baton Rouge, PruFunding, Inc. Bank of the Southwest
National Association, Houston and Bankers Life Company,
in connection with the leasing of a Simulator and
Training Center of River Bend Unit 1 (A-2-b to Form 10-
Q for the quarter ended June 30, 1983 in 1-2703).
(d)20 -- Tax Indemnity Agreement, dated as of June 29,
1983, between Entergy Gulf States and PruFunding, Inc.,
in connection with the leasing of a Simulator and
Training Center for River Bend Unit I (A-2-c to Form 10-
Q for the quarter ended June 30, 1993 in 1-2703).
(d)21 -- Agreement to Lease, dated as of August 28, 1985,
among Entergy Gulf States, City National Bank of Baton
Rouge, as Owner Trustee, and Prudential Interfunding
Corp., as Trustor, in connection with the leasing of
improvement to a Simulator and Training Facility for
River Bend Unit I (10-69 to Form 10-K, for the year
ended December 31, 1985 in 1-2703).
(d)22 -- First Amended Power Sales Agreement, dated
December 1, 1985 between Sabine River Authority, State
of Louisiana, and Sabine River Authority, State of
Texas, and Entergy Gulf States, Central Louisiana
Electric Co., Inc., and Louisiana Power and Light
Company (10-72 to Form 10-K for the year ended December
31, 1985 in 1-2703).
+(d)23 -- Deferred Compensation Plan for Directors of
Entergy Gulf States and Varibus Corporation, as amended
January 8, 1987, and effective January 1, 1987 (10-77
to Form 10-K for the year ended December 31, 1986 in 1-
2703). Amendment dated December 4, 1991 (10-3 to
Amendment No. 8 in Registration No. 2-76551).
+(d)24 -- Trust Agreement for Deferred Payments to be made
by Entergy Gulf States pursuant to the Executive Income
Security Plan, by and between Entergy Gulf States and
Bankers Trust Company, effective November 1, 1986 (10-
78 to Form 10-K for the year ended December 31, 1986 in
1-2703).
+(d)25 -- Trust Agreement for Deferred Installments under
Entergy Gulf States' Management Incentive Compensation
Plan and Administrative Guidelines by and between
Entergy Gulf States and Bankers Trust Company,
effective June 1, 1986 (10-79 to Form 10-K for the year
ended December 31, 1986 in 1-2703).
+(d)26 -- Nonqualified Deferred Compensation Plan for
Officers, Nonemployee Directors and Designated Key
Employees, effective December 1, 1985, as amended,
continued and completely restated effective as of March
1, 1991 (10-3 to Amendment No. 8 in Registration No. 2-
76551).
+(d)27 -- Trust Agreement for Entergy Gulf States'
Nonqualified Directors and Designated Key Employees by
and between Entergy Gulf States and First City Bank,
Texas-Beaumont, N.A. (now Texas Commerce Bank),
effective July 1, 1991 (10-4 to Form 10-K for the year
ended December 31, 1992 in 1-2703).
(d)28 -- Lease Agreement, dated as of June 29, 1987, among
GSG&T, Inc., and Entergy Gulf States related to the
leaseback of the Lewis Creek generating station (10-83
to Form 10-K for the year ended December 31, 1988 in 1-
2703).
(d)29 -- Nuclear Fuel Lease Agreement between Entergy Gulf
States and River Bend Fuel Services, Inc. to lease the
fuel for River Bend Unit 1, dated February 7, 1989 (10-
64 to Form 10-K for the year ended December 31, 1988 in
1-2703).
(d)30 -- Trust and Investment Management Agreement between
Entergy Gulf States and Morgan Guaranty and Trust
Company of New York (the "Decommissioning Trust
Agreement) with respect to decommissioning funds
authorized to be collected by Entergy Gulf States,
dated March 15, 1989 (10-66 to Form 10-K for the year
ended December 31, 1988 in 1-2703).
(d)31 -- Amendment No. 2 dated November 1, 1995 between
Entergy Gulf States and Mellon Bank to Decommissioning
Trust Agreement (10(d) 31 to Form 10-K for the year
ended December 31, 1995).
(d)32 -- Credit Agreement, dated as of December 29, 1993,
among River Bend Fuel Services, Inc. and Certain
Commercial Lending Institutions and CIBC Inc. as Agent
for the Lenders (10(d) 34 to Form 10-K for year ended
December 31, 1994).
(d)33 -- Amendment No. 1 dated as of January 31, to Credit
Agreement, dated as of December 31, 1993, among River
Bend Fuel Services, Inc. and certain commercial lending
institutions and CIBC Inc. as agent for Lenders (10(d)
33 to Form 10-K for the year ended December 31, 1995).
(d)34 -- Partnership Agreement by and among Conoco Inc.,
and Entergy Gulf States, CITGO Petroleum Corporation
and Vista Chemical Company, dated April 28, 1988 (10-67
to Form 10-K for the year ended December 31, 1988 in 1-
2703).
+(d)35 -- Gulf States Utilities Company Executive Continuity
Plan, dated January 18, 1991 (10-6 to Form 10-K for the
year ended December 31, 1990 in 1-2703).
+(d)36 -- Trust Agreement for Entergy Gulf States' Executive
Continuity Plan, by and between Entergy Gulf States and
First City Bank, Texas-Beaumont, N.A. (now Texas
Commerce Bank), effective May 20, 1991 (10-5 to Form 10-
K for the year ended December 31, 1992 in 1-2703).
+(d)37 -- Gulf States Utilities Board of Directors'
Retirement Plan, dated February 15, 1991 (10-8 to Form
10-K for the year ended December 31, 1990 in 1-2703).
+(d)38 -- Gulf States Utilities Company Employees' Trustee
Retirement Plan effective July 1, 1955 as amended,
continued and completely restated effective January 1,
1989; and Amendment No.1 effective January 1, 1993 (10-
6 to Form 10-K for the year ended December 31, 1992 in
1-2703).
(d)39 -- Agreement and Plan of Reorganization, dated June
5, 1992, between Entergy Gulf States and Entergy
Corporation (2 to Form 8-K, dated June 8, 1992 in 1-
2703).
+(d)40 -- Gulf States Utilities Company Employee Stock
Ownership Plan, as amended, continued, and completely
restated effective January 1, 1984, and January 1, 1985
(A to Form 11-K, dated December 31, 1985 in 1-2703).
+(d)41 -- Trust Agreement under the Gulf States Utilities
Company Employee Stock Ownership Plan, dated December
30, 1976, between Entergy Gulf States and the Louisiana
National Bank, as Trustee (2-A to Registration No. 2-
62395).
+(d)42 -- Letter Agreement dated September 7, 1977 between
Entergy Gulf States and the Trustee, delegating certain
of the Trustee's functions to the ESOP Committee (2-B
to Registration Statement No. 2-62395).
+(d)43 -- Gulf States Utilities Company Employees Thrift
Plan as amended, continued and completely restated
effective as of January 1, 1992 (28-1 to Amendment No.
8 to Registration No. 2-76551).
+(d)44 -- Restatement of Trust Agreement under the Gulf
States Utilities Company Employees Thrift Plan,
reflecting changes made through January 1, 1989,
between Entergy Gulf States and First City Bank, Texas-
Beaumont, N.A., (now Texas Commerce Bank ), as Trustee
(2-A to Form 8-K dated October 20, 1989 in 1-2703).
(d)45 -- Operating Agreement between Entergy Operations and
Entergy Gulf States, dated as of December 31, 1993 (B-
2(f) to Rule 24 Certificate in 70-8059).
(d)46 -- Guarantee Agreement between Entergy Corporation
and Entergy Gulf States, dated as of December 31, 1993
(B-5(a) to Rule 24 Certificate in 70-8059).
(d)47 -- Service Agreement with Entergy Services, dated as
of December 31, 1993 (B-6(c) to Rule 24 Certificate in
70-8059).
+(d)48 -- Amendment to Employment Agreement between J. L.
Donnelly and Entergy Gulf States, dated December 22,
1993 (10(d) 57 to Form 10-K for the year ended December
31, 1993 in 1-2703).
(d)49 -- Assignment, Assumption and Amendment Agreement to
Letter of Credit and Reimbursement Agreement between
Entergy Gulf States, Canadian Imperial Bank of Commerce
and Westpac Banking Corporation (10(d) 58 to Form 10-K
for the year ended December 31, 1993 in 1-2703).
(d)50 -- Third Amendment, dated January 1, 1994, to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
(d)51 -- Refunding Agreement between Entergy Gulf States
and West Feliciana Parish (dated December 20, 1994 (B-
12(a) to Rule 24 Certificate dated December 30, 1994 in
70-8375).
*(d)52 -- Agreement as to Expenses and Liabilities
between Entergy Gulf States and Entergy Gulf States
Capital I, dated as of January 28, 1997.
Entergy Louisiana
(e)1 -- Agreement, dated April 23, 1982, among Entergy
Louisiana and certain other System companies, relating
to System Planning and Development and Intra-System
Transactions (10(a) 1 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(e)2 -- Middle South Utilities System Agency Agreement,
dated December 11, 1970 (5(a)-2 in 2-41080).
(e)3 -- Amendment, dated as of February 10, 1971, to
Middle South Utilities System Agency Agreement, dated
December 11, 1970 (5(a)-4 in 2-41080).
(e)4 -- Amendment, dated May 12, 1988, to Middle South
Utilities System Agency Agreement, dated December 11,
1970 (5(a) 4 in 2-41080).
(e)5 -- Middle South Utilities System Agency Coordination
Agreement, dated December 11, 1970 (5(a)-3 in 2-41080).
(e)6 -- Service Agreement with Entergy Services, dated as
of April 1, 1963 (5(a)-5 in 2-42523).
(e)7 -- Amendment, dated as of January 1, 1972, to Service
Agreement with Entergy Services (4(a)-6 in 2-45916).
(e)8 -- Amendment, dated as of April 27, 1984, to Service
Agreement with Entergy Services (10(a) 7 to Form 10-K
for the year ended December 31, 1984, in 1-3517).
(e)9 -- Amendment, dated as of August 1, 1988, to Service
Agreement with Entergy Services (10(d)-8 to Form 10-K
for the year ended December 31, 1988, in 1-8474).
(e)10 -- Amendment, dated January 1, 1991, to Service
Agreement with Entergy Services (10(d)-9 to Form 10-K
for the year ended December 31, 1990, in 1-8474).
(e)11 -- Amendment, dated January 1, 1992, to Service
Agreement with Entergy Services (10(a)-11 to Form 10-K
for the year ended December 31, 1994 in 1-3517).
(e)12 through
(e)26 -- See 10(a)-12 through 10(a)-26 above.
(e)27 -- Fuel Lease, dated as of January 31, 1989, between
River Fuel Company #2, Inc., and Entergy Louisiana
(B-1(b) to Rule 24 Certificate in 70-7580).
(e)28 -- Reallocation Agreement, dated as of July 28, 1981,
among System Energy and certain other System companies
(B-1(a) in 70-6624).
(e)29 -- Compromise and Settlement Agreement, dated June 4,
1982, between Texaco, Inc. and Entergy Louisiana (28(a)
to Form 8-K, dated June 4, 1982, in 1-8474).
+(e)30 -- Post-Retirement Plan (10(c)23 to Form 10-K for the
year ended December 31, 1983, in 1-8474).
(e)31 -- Unit Power Sales Agreement, dated as of June 10,
1982, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New
Orleans (10(a) 39 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(e)32 -- First Amendment to the Unit Power Sales Agreement,
dated as of June 28, 1984, between System Energy and
Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi and Entergy New Orleans (19 to Form 10-Q
for the quarter ended September 30, 1984, in 1-3517).
(e)33 -- Revised Unit Power Sales Agreement (10(ss) in
33-4033).
(e)34 -- Middle South Utilities, Inc. and Subsidiary
Companies Intercompany Tax Allocation Agreement, dated
April 28, 1988 (D-1 to Form U5S for the year ended
December 31, 1987).
(e)35 -- First Amendment, dated January 1, 1990, to the
Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement, dated
January 1, 1990 (D-2 to Form U5S for the year ended
December 31, 1989).
(e)36 -- Second Amendment dated January 1, 1992, to the
Entergy Corporation and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-3 to
Form U5S for the year ended December 31, 1992).
(e)37 -- Third Amendment dated January 1, 1994 to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
(e)38 -- Contract for Disposal of Spent Nuclear Fuel and/or
High-Level Radioactive Waste, dated February 2, 1984,
among DOE, System Fuels and Entergy Louisiana (10(d)33
to Form 10-K for the year ended December 31, 1984, in
1-8474).
(e)39 -- Operating Agreement between Entergy Operations and
Entergy Louisiana, dated as of June 6, 1990 (B-2(c) to
Rule 24 Certificate, dated June 15, 1990, in 70-7679).
(e)40 -- Guarantee Agreement between Entergy Corporation
and Entergy Louisiana, dated as of September 20, 1990
(B-2(a), to Rule 24 Certificate, dated September 27,
1990, in 70-7757).
+(e)41 -- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a) 52 to Form 10-K for
the year ended December 31, 1989, in 1-3517).
+(e)42 -- Entergy Corporation Annual Incentive Plan (10(a)
54 to Form 10-K for the year ended December 31, 1989,
in 1-3517).
+(e)43 -- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated
May 24, 1991, in 70-7831).
+(e)44 -- Supplemental Retirement Plan (10(a) 69 to
Form 10-K for the year ended December 31, 1992 in
1-3517).
+(e)45 -- Defined Contribution Restoration Plan of Entergy
Corporation and Subsidiaries (10(a) 53 to Form 10-K for
the year ended December 31, 1989 in 1-3517).
+(e)46 -- Amendment No. 1 to the Equity Ownership Plan of
Entergy Corporation and Subsidiaries (10(a) 71 to
Form 10-K for the year ended December 31, 1992 in
1-3517).
+(e)47 -- Executive Disability Plan of Entergy Corporation
and Subsidiaries (10(a) 72 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(e)48 -- Executive Medical Plan of Entergy Corporation and
Subsidiaries (10(a) 73 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(e)49 -- Stock Plan for Outside Directors of Entergy
Corporation and Subsidiaries (10(a) 74 to Form 10-K for
the year ended December 31, 1992 in 1-3517).
+(e)50 -- Summary Description of Private Ownership Vehicle
Plan of Entergy Corporation and Subsidiaries (10(a) 75
to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(e)51 -- Agreement between Entergy Corporation and Edwin
Lupberger (10(a) 42 to Form 10-K for the year ended
December 31, 1985 in 1-3517).
+(e)52 -- Agreement between Entergy Corporation and Jerry D.
Jackson (10(a) 68 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(e)53 -- Agreement between Entergy Services and Gerald D.
McInvale (10(a) 69 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(e)54 -- Agreement between System Energy and Donald C.
Hintz (10(b) 47 to Form 10-K for the year ended
December 31, 1991 in 1-9067).
+(e)55 -- Summary Description of Retired Outside Director
Benefit Plan (10(c)90 to Form 10-K for the year ended
December 31, 1992 in 1-10764).
+(e)56 -- Amendment to Defined Contribution Restoration Plan
of Entergy Corporation and Subsidiaries (10(a) 81 to
Form 10-K for the year ended December 31, 1993 in 1-
11299).
+(e)57 -- System Executive Retirement Plan (10(a) 82 to Form
10-K for the year ended December 31, 1993 in 1-11299).
(e)58 -- Installment Sale Agreement, dated July 20, 1994,
between Entergy Louisiana and St. Charles Parish,
Louisiana (B-6(e) to Rule 24 Certificate dated August
1, 1994 in 70-7822).
(e)59 -- Installment Sale Agreement, dated November 1,
1995, between Entergy Louisiana and St. Charles Parish,
Louisiana (B-6(a) to Rule 24 Certificate dated December
19, 1995 in 70-8487).
(e)60 -- Agreement as to Expenses and Liabilities between
Entergy Louisiana, Inc. and Entergy Louisiana Capital I
dated July 16, 1996 (4(d) to Form 10-Q for the quarter
ended June 30, 1996 in 1-8474).
Entergy Mississippi
(f)1 -- Agreement dated April 23, 1982, among Entergy
Mississippi and certain other System companies,
relating to System Planning and Development and
Intra-System Transactions (10(a) 1 to Form 10-K for the
year ended December 31, 1982, in 1-3517).
(f)2 -- Middle South Utilities System Agency Agreement,
dated December 11, 1970 (5(a)-2 in 2-41080).
(f)3 -- Amendment, dated February 10, 1971, to Middle
South Utilities System Agency Agreement, dated December
11, 1970 (5(a) 4 in 2-41080).
(f)4 -- Amendment, dated May 12, 1988, to Middle South
Utilities System Agency Agreement, dated December 11,
1970 (5(a) 4 in 2-41080).
(f)5 -- Middle South Utilities System Agency Coordination
Agreement, dated December 11, 1970 (5(a)-3 in 2-41080).
(f)6 -- Service Agreement with Entergy Services, dated as
of April 1, 1963 (D in 37-63).
(f)7 -- Amendment, dated January 1, 1972, to Service
Agreement with Entergy Services (A to Notice, dated
October 14, 1971, in 37-63).
(f)8 -- Amendment, dated April 27, 1984, to Service
Agreement with Entergy Services (10(a) 7 to Form 10-K
for the year ended December 31, 1984, in 1-3517).
(f)9 -- Amendment, dated as of August 1, 1988, to Service
Agreement with Entergy Services (10(e) 8 to Form 10-K
for the year ended December 31, 1988, in 0-320).
(f)10 -- Amendment, dated January 1, 1991, to Service
Agreement with Entergy Services (10(e) 9 to Form 10-K
for the year ended December 31, 1990, in 0-320).
(f)11 -- Amendment, dated January 1, 1992, to Service
Agreement with Entergy Services (10(a)-11 to Form 10-K
for the year ended December 31, 1994 in 1-3517).
(f)12 though
(f)26 -- See 10(a)-12 - 10(a)-26 above.
(f)27 -- Installment Sale Agreement, dated as of June 1,
1974, between Entergy Mississippi and Washington
County, Mississippi (B-2(a) to Rule 24 Certificate,
dated August 1, 1974, in 70-5504).
(f)28 -- Installment Sale Agreement, dated as of July 1,
1982, between Entergy Mississippi and Independence
County, Arkansas, (B-1(c) to Rule 24 Certificate dated
July 21, 1982, in 70-6672).
(f)29 -- Installment Sale Agreement, dated as of December
1, 1982, between Entergy Mississippi and Independence
County, Arkansas, (B-1(d) to Rule 24 Certificate dated
December 7, 1982, in 70-6672).
(f)30 -- Amended and Restated Installment Sale Agreement,
dated as of April 1, 1994, between Entergy Mississippi
and Warren County, Mississippi, (B-6(a) to Rule 24
Certificate dated May 4, 1994, in 70-7914).
(f)31 -- Amended and Restated Installment Sale Agreement,
dated as of April 1, 1994, between Entergy Mississippi
and Washington County, Mississippi, (B-6(b) to Rule 24
Certificate dated May 4, 1994, in 70-7914).
(f)32 -- Substitute Power Agreement, dated as of May 1,
1980, among Entergy Mississippi, System Energy and
SMEPA (B-3(a) in 70-6337).
(f)33 -- Amendment, dated December 4, 1984, to the
Independence Steam Electric Station Operating Agreement
(10(c) 51 to Form 10-K for the year ended December 31,
1984, in 0-375).
(f)34 -- Amendment, dated December 4, 1984, to the
Independence Steam Electric Station Ownership Agreement
(10(c) 54 to Form 10-K for the year ended December 31,
1984, in 0-375).
(f)35 -- Owners Agreement, dated November 28, 1984, among
Entergy Arkansas, Entergy Mississippi and other co-
owners of the Independence Station (10(c) 55 to Form
10-K for the year ended December 31, 1984, in 0-375).
(f)36 -- Consent, Agreement and Assumption, dated December
4, 1984, among Entergy Arkansas, Entergy Mississippi,
other co-owners of the Independence Station and United
States Trust Company of New York, as Trustee (10(c) 56
to Form 10-K for the year ended December 31, 1984, in
0-375).
(f)37 -- Reallocation Agreement, dated as of July 28, 1981,
among System Energy and certain other System companies
(B-1(a) in 70-6624).
+(f)38 -- Post-Retirement Plan (10(d) 24 to Form 10-K for
the year ended December 31, 1983, in 0-320).
(f)39 -- Unit Power Sales Agreement, dated as of June 10,
1982, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans (10(a) 39 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(f)40 -- First Amendment to the Unit Power Sales Agreement,
dated as of June 28, 1984, between System Energy and
Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans (19 to Form 10-Q
for the quarter ended September 30, 1984, in 1-3517).
(f)41 -- Revised Unit Power Sales Agreement (10(ss) in
33-4033).
(f)42 -- Sales Agreement, dated as of June 21, 1974,
between System Energy and Entergy Mississippi (D to
Rule 24 Certificate, dated June 26, 1974, in 70-5399).
(f)43 -- Service Agreement, dated as of June 21, 1974,
between System Energy and Entergy Mississippi (E to
Rule 24 Certificate, dated June 26, 1974, in 70-5399).
(f)44 -- Partial Termination Agreement, dated as of
December 1, 1986, between System Energy and Entergy
Mississippi (A-2 to Rule 24 Certificate dated January
8, 1987, in 70-5399).
(f)45 -- Middle South Utilities, Inc. and Subsidiary
Companies Intercompany Income Tax Allocation Agreement,
dated April 28, 1988 (D-1 to Form U5S for the year
ended December 31, 1987).
(f)46 -- First Amendment dated January 1, 1990 to the
Middle South Utilities Inc. and Subsidiary Companies
Intercompany Tax Allocation Agreement (D-2 to Form U5S
for the year ended December 31, 1989).
(f)47 -- Second Amendment dated January 1, 1992, to the
Entergy Corporation and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-3 to
Form U5S for the year ended December 31, 1992).
(f)48 -- Third Amendment dated January 1, 1994 to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
+(f)49 -- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a) 52 to Form 10-K for
the year ended December 31, 1989, in 1-3517).
+(f)50 -- Entergy Corporation Annual Incentive Plan (10(a)
54 to Form 10-K for the year ended December 31, 1989,
in 1-3517).
+(f)51 -- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated
May 24, 1991, in 70-7831).
+(f)52 -- Supplemental Retirement Plan (10(a)69 to Form 10-K
for the year ended December 31, 1992 in 1-3517).
+(f)53 -- Defined Contribution Restoration Plan of Entergy
Corporation and Subsidiaries (10(a)53 to Form 10-K for
the year ended December 31, 1989 in 1-3517).
+(f)54 -- Amendment No. 1 to the Equity Ownership Plan of
Entergy Corporation and Subsidiaries (10(a)71 to Form
10-K for the year ended December 31, 1992 in 1-3517).
+(f)55 -- Executive Disability Plan of Entergy Corporation
and Subsidiaries (10(a)72 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(f)56 -- Executive Medical Plan of Entergy Corporation and
Subsidiaries (10(a)73 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(f)57 -- Stock Plan for Outside Directors of Entergy
Corporation and Subsidiaries, as amended (10(a)74 to
Form 10-K for the year ended December 31, 1992 in
1-3517).
+(f)58 -- Summary Description of Private Ownership Vehicle
Plan of Entergy Corporation and Subsidiaries (10(a)75
to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(f)59 -- Agreement between Entergy Corporation and Edwin
Lupberger (10(a)-42 to Form 10-K for the year ended
December 31, 1985 in 1-3517).
+(f)60 -- Agreement between Entergy Corporation and Jerry D.
Jackson (10(a)-68 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(f)61 -- Agreement between Entergy Services and Gerald D.
McInvale (10(a)-69 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(f)62 -- Agreement between System Energy and Donald C.
Hintz (10(b)-47 to Form 10-K for the year ended
December 31, 1991 in 1-9067).
+(f)63 -- Summary Description of Retired Outside Director
Benefit Plan (10(c)-90 to Form 10-K for the year ended
December 31, 1992 in 1-10764).
+(f)64 -- Amendment to Defined Contribution Restoration Plan
of Entergy Corporation and Subsidiaries (10(a) 81 to
Form 10-K for the year ended December 31, 1993 in 1-
11299).
+(f)65 -- System Executive Retirement Plan (10(a) 82 to Form
10-K for the year ended December 31, 1993 in 1-11299).
Entergy New Orleans
(g)1 -- Agreement, dated April 23, 1982, among Entergy New
Orleans and certain other System companies, relating to
System Planning and Development and Intra-System
Transactions (10(a)-1 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(g)2 -- Middle South Utilities System Agency Agreement,
dated December 11, 1970 (5(a)-2 in 2-41080).
(g)3 -- Amendment dated as of February 10, 1971, to Middle
South Utilities System Agency Agreement, dated December
11, 1970 (5(a)-4 in 2-41080).
(g)4 -- Amendment, dated May 12, 1988, to Middle South
Utilities System Agency Agreement, dated December 11,
1970 (5(a) 4 in 2-41080).
(g)5 -- Middle South Utilities System Agency Coordination
Agreement, dated December 11, 1970 (5(a)-3 in 2-41080).
(g)6 -- Service Agreement with Entergy Services dated as
of April 1, 1963 (5(a)-5 in 2-42523).
(g)7 -- Amendment, dated as of January 1, 1972, to Service
Agreement with Entergy Services (4(a)-6 in 2-45916).
(g)8 -- Amendment, dated as of April 27, 1984, to Service
Agreement with Entergy Services (10(a)7 to Form 10-K
for the year ended December 31, 1984, in 1-3517).
(g)9 -- Amendment, dated as of August 1, 1988, to Service
Agreement with Entergy Services (10(f)-8 to Form 10-K
for the year ended December 31, 1988, in 0-5807).
(g)10 -- Amendment, dated January 1, 1991, to Service
Agreement with Entergy Services (10(f)-9 to Form 10-K
for the year ended December 31, 1990, in 0-5807).
(g)11 -- Amendment, dated January 1, 1992, to Service
Agreement with Entergy Services (10(a)-11 to Form 10-K
for year ended December 31, 1994 in 1-3517).
(g)12
(g)26 -- See 10(a)-12 - 10(a)-26 above.
(g)27 -- Reallocation Agreement, dated as of July 28, 1981,
among System Energy and certain other System companies
(B-1(a) in 70-6624).
+(g)28 -- Post-Retirement Plan (10(e) 22 to Form 10-K for
the year ended December 31, 1983, in 1-1319).
(g)29 -- Unit Power Sales Agreement, dated as of June 10,
1982, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New
Orleans (10(a) 39 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(g)30 -- First Amendment to the Unit Power Sales Agreement,
dated as of June 28, 1984, between System Energy and
Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi and Entergy New Orleans (19 to Form 10-Q
for the quarter ended September 30, 1984, in 1-3517).
(g)31 -- Revised Unit Power Sales Agreement (10(ss) in
33-4033).
(g)32 -- Transfer Agreement, dated as of June 28, 1983,
among the City of New Orleans, Entergy New Orleans and
Regional Transit Authority (2(a) to Form 8-K, dated
June 24, 1983, in 1-1319).
(g)33 -- Middle South Utilities, Inc. and Subsidiary
Companies Intercompany Income Tax Allocation Agreement,
dated April 28, 1988 (D-1 to Form U5S for the year
ended December 31, 1987).
(g)34 -- First Amendment, dated January 1, 1990, to the
Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-2 to
Form U5S for the year ended December 31, 1989).
(g)35 -- Second Amendment dated January 1, 1992, to the
Entergy Corporation and Subsidiary Companies
Intercompany Income Tax Allocation Agreement (D-3 to
Form U5S for the year ended December 31, 1992).
(g)36 -- Third Amendment dated January 1, 1994 to Entergy
Corporation and Subsidiary Companies Intercompany
Income Tax Allocation Agreement (D-3(a) to Form U5S for
the year ended December 31, 1993).
+(g)37 -- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a)52 to Form 10-K for
the year ended December 31, 1989, in 1-3517).
+(g)38 -- Entergy Corporation Annual Incentive Plan (10(a)54
to Form 10-K for the year ended December 31, 1989, in
1-3517).
+(g)39 -- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated
May 24, 1991, in 70-7831).
+(g)40 -- Supplemental Retirement Plan (10(a)69 to Form 10-K
for the year ended December 31, 1992 in 1-3517).
+(g)41 -- Defined Contribution Restoration Plan of Entergy
Corporation and Subsidiaries (10(a)53 to Form 10-K for
the year ended December 31, 1989 in 1-3517).
+(g)42 -- Amendment No. 1 to the Equity Ownership Plan of
Entergy Corporation and Subsidiaries (10(a)71 to
Form 10-K for the year ended December 31, 1992 in
1-3517).
+(g)43 -- Executive Disability Plan of Entergy Corporation
and Subsidiaries (10(a)72 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(g)44 -- Executive Medical Plan of Entergy Corporation and
Subsidiaries (10(a)73 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(g)45 -- Stock Plan for Outside Directors of Entergy
Corporation and Subsidiaries, as amended (10(a)74 to
Form 10-K for the year ended December 31, 1992 in
1-3517).
+(g)46 -- Summary Description of Private Ownership Vehicle
Plan of Entergy Corporation and Subsidiaries (10(a)75
to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(g)47 -- Agreement between Entergy Corporation and Edwin
Lupberger (10(a)-42 to Form 10-K for the year ended
December 31, 1985 in 1-3517).
+(g)48 -- Agreement between Entergy Corporation and Jerry D.
Jackson (10(a)-68 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(g)49 -- Agreement between Entergy Services and Gerald D.
McInvale (10(a)-69 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(g)50 -- Agreement between System Energy and Donald C.
Hintz (10(b)-47 to Form 10-K for the year ended
December 31, 1991 in 1-9067).
+(g)51 -- Summary Description of Retired Outside Director
Benefit Plan (10(c)-90 to Form 10-K for the year ended
December 31, 1992 in 1-10764).
+(g)52 -- Amendment to Defined Contribution Restoration Plan
of Entergy Corporation and Subsidiaries (10(a) 81 to
Form 10-K for the year ended December 31, 1993 in 1-
11299).
+(g)53 -- System Executive Retirement Plan (10(a) 82 to Form
10-K for the year ended December 31, 1993 in 1-11299).
(12) Statement Re Computation of Ratios
*(a) Entergy Arkansas's Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Fixed Charges and
Preferred Dividends, as defined.
*(b) Entergy Gulf States' Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Fixed Charges and
Preferred Dividends, as defined.
*(c) Entergy Louisiana's Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Fixed Charges and
Preferred Dividends, as defined.
*(d) Entergy Mississippi's Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Fixed Charges and
Preferred Dividends, as defined.
*(e) Entergy New Orleans' Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Fixed Charges and
Preferred Dividends, as defined.
*(f) System Energy's Computation of Ratios of Earnings to
Fixed Charges, as defined.
(18) Letter Re Change in Accounting Principles
*(a) Letter from Coopers & Lybrand L.L.P. regarding change in
accounting principles for System Energy.
*(b) Letter from Coopers & Lybrand L.L.P. regarding change in
accounting principles for Entergy.
*(21) Subsidiaries of the Registrants
(23) Consents of Experts and Counsel
*(a) The consent of Coopers & Lybrand L.L.P. is contained
herein at page 211.
*(b) The consent of Sandlin Associates is contained herein
at page 213.
*(24) Powers of Attorney
(27) Financial Data Schedule
*(a) Financial Data Schedule for Entergy Corporation and
Subsidiaries as of December 31, 1996.
*(b) Financial Data Schedule for Entergy Arkansas as of
December 31, 1996.
*(c) Financial Data Schedule for Entergy Gulf States as of
December 31, 1996.
*(d) Financial Data Schedule for Entergy Louisiana as of
December 31, 1996.
*(e) Financial Data Schedule for Entergy Mississippi as of
December 31, 1996.
*(f) Financial Data Schedule for Entergy New Orleans as of
December 31, 1996.
*(g) Financial Data Schedule for System Energy as of
December 31, 1996.
_________________
* Filed herewith.
+ Management contracts or compensatory plans or arrangements.
Exhibit 3(f)(i)1
RESTATED ARTICLES OF INCORPORATION
OF
MISSISSIPPI POWER & LIGHT COMPANY
Pursuant to the provisions of Section 64 of the Mississippi
Business Corporation Law (Section 79-3-127, Mississippi Code of
1972, as amended), the undersigned Corporation adopts the
following Restated Articles of Incorporation:
FIRST: The name of the Corporation is MISSISSIPPI POWER &
LIGHT COMPANY.
SECOND: The period of its duration is ninety-nine (99)
years.
THIRD: The purpose or purposes which the Corporation is
authorized to pursue are:
To acquire, buy, hold, own, sell, lease, exchange, dispose
of, finance, deal in, construct, build, equip, improve, use,
operate, maintain and work upon:
(a) Any and all kinds of plants and systems for the
manufacture, production, storage, utilization, purchase,
sale, supply, transmission, distribution or disposition of
electricity, natural or artificial gas, water or steam, or
power produced thereby, or of ice and refrigeration of any
and every kind;
(b) Any and all kinds of telephone, telegraph, radio,
wireless and other systems, facilities and devices for the
receipt and transmission of sounds and signals, any and all
kinds of interurban, city and street railways and railroads
and bus lines for the transportation of passengers and/or
freight, transmission lines, systems, appliances, equipment
and devices and tracks, stations, buildings and other
structures and facilities;
(c) Any and all kinds of works, power plants,
manufactories, structures, substations, systems, tracks,
machinery, generators, motors, lamps, poles, pipes, wires,
cables, conduits, apparatus, devices, equipment, supplies,
articles and merchandise of every kind pertaining to or in
anywise connected with the construction, operation or
maintenance of telephone, telegraph, radio, wireless and
other systems, facilities and devices for the receipt and
transmission of sounds and signals, or of interurban, city
and street railways and railroads and bus lines, or in
anywise connected with or pertaining to the manufacture,
production, purchase, use, sale, supply, transmission,
distribution, regulation, control or application of
electricity, natural or artificial gas, water, steam, ice,
refrigeration and power or any other purposes;
To acquire, buy, hold, own, sell, lease, exchange, dispose
of, transmit, distribute, deal in, use, manufacture, produce,
furnish and supply street and interurban railway and bus service,
electricity, natural or artificial gas, light, heat, ice,
refrigeration, water and steam in any form and for any purposes
whatsoever, and any power or force or energy in any form and for
any purposes whatsoever;
To buy, sell, manufacture, produce and generally deal in
milk, cream and any articles or substances used or usable in or
in connection with the manufacture and production of ice cream,
ices, beverages and soda fountain supplies; to buy, sell,
manufacture, produce and generally deal in ice cream and ices;
To acquire, organize, assemble, develop, build up and
operate constructing and operating and other organizations and
systems, and to hire, sell, lease, exchange, turn over, deliver
and dispose of such organizations and systems in whole or in part
and as going organizations and systems and otherwise, and to
enter into and perform contracts, agreements and undertakings of
any kind in connection with any or all the foregoing powers;
To do a general contracting business;
To purchase, acquire, develop, mine, explore, drill, hold,
own and dispose of lands, interests in and rights with respect to
lands and waters and fixed and movable property;
To borrow money and contract debts when necessary for the
transaction of the business of the Corporation or for the
exercise of its corporate rights, privileges or franchises or for
any other lawful purpose of its incorporation; to issue bonds,
promissory notes, bills of exchange, debentures and other
obligations and evidences of indebtedness payable at a specified
time or times or payable upon the happening of a specified event
or events, whether secured by mortgage, pledge or otherwise or
unsecured, for money borrowed or in payment for property
purchased or acquired or any other lawful objects;
To guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of
indebtedness created by, any other corporation or corporations of
the State of Mississippi or any other state or government and,
while the owner of such stock, to exercise all the rights, powers
and privileges of individual ownership with respect thereto
including the right to vote thereon, and to consent and otherwise
act with respect thereto;
To aid in any manner any corporation or association,
domestic or foreign, or any firm or individual, any shares of
stock in which or any bonds, debentures, notes, securities,
evidences of indebtedness, contracts or obligations of which are
held by or for the Corporation or in which or in the welfare of
which the Corporation shall have any interest, and to do any acts
designed to protect, preserve, improve or enhance the value of
any property at any time held or controlled by the Corporation,
or in which it may be at any time interested; and to organize or
promote or facilitate the organization of subsidiary companies;
To purchase, hold, sell and transfer shares of its own
capital stock, provided that the Corporation shall not purchase
its own shares of capital stock except from surplus of its assets
over its liabilities including capital; and provided, further,
that the shares of its own capital stock owned by the Corporation
shall not be voted upon directly or indirectly nor counted as
outstanding for the purposes of any stockholders' quorum or vote;
In any manner to acquire, enjoy, utilize and to dispose of
patents, copyrights and trade-marks and any licenses or other
rights or interests therein and thereunder:
To purchase, acquire, hold, own or dispose of franchises,
concessions, consents, privileges and licenses necessary for and
in its opinion useful or desirable for or in connection with the
foregoing powers;
To do all and everything necessary and proper for the
accomplishment of the objects enumerated in these Restated
Articles of Incorporation or any amendment thereof or necessary
or incidental to the protection and benefits of the Corporation,
and in general to carry on any lawful business necessary or not
incidental to the attainment of the objects of the Corporation
whether or not such business is similar in nature to the objects
set forth in these Restated Articles of Incorporation or any
amendment thereof.
To do any or all things herein set forth, to the same extent
and as fully as natural persons might or could do, and in any
part of the world, and as principal, agent, contractor or
otherwise, and either alone or in conjunction with any other
persons, firms, associations or corporations;
To conduct its business in all its branches in the State of
Mississippi, other states, the District of Columbia, the
territories and colonies of the United States, and any foreign
countries, and to have one or more offices out of the State of
Mississippi and to hold, purchase, mortgage and convey real and
personal property both within and without the State of
Mississippi; provided, however, that the Corporation shall not
exercise any of the powers set forth herein for the purpose of
engaging in business as a street railway, telegraph or telephone
company unless prior thereto this Article Third shall have been
amended to set forth a description of the line and the points it
will traverse.
FOURTH: The aggregate number of shares which the Corporation
shall have authority to issue is 17,004,478 shares, divided into
2,004,476 shares of Preferred Stock of the par value of $100 per
share and 15,000,000 shares of Common Stock without par value.
The preferences, limitations and relative rights in respect
of the shares of each class and the variations in the relative
rights and preferences as between series of any preferred or
special class in series are as follows:
The Preferred Stock shall be issuable in one or more series
from time to time and the shares of each series shall have the
same rank and be identical with each other and shall have the
same relative rights except with respect to the following:
(a) The number of shares to constitute each such series
and the distinctive designation thereof;
(b) The annual rate or rates of dividends payable on
shares of such series, the dates on which dividends shall be
paid in each year and the date from which such dividends
shall commence to accumulate;
(c) The amount or amounts payable upon redemption
thereof; and
(d) The sinking fund provisions, if any, for the
redemption or purchase of shares;
which different characterics of clauses (a), (b), (c) and (d)
above may be stated and expressed with respect to each series in
the resolution or resolutions providing for the issue of such
series adopted by the Board of Directors or in these Restated
Articles of Incorporation of any amendment thereof.
A series of 60,000 shares of Preferred Stock shall:
(a) be designated "4.36% Preferred Stock Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.36 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
February 1, 1963, and such dividends to be cumulative from
the last date to which dividends upon the 4.36% Preferred
Stock Cumulative, $100 Par Value, of Mississippi Power &
Light Company, a Florida corporation, are paid;
(c) be subject to redemption in the manner provided
herein with respect to the Preferred Stock at the price of
$105.36 per share if redeemed on or before February 1, 1964,
and of $103.88 per share if redeemed after February 1, 1964,
in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption.
A series of 44,476 shares of the Preferred Stock shall:
(a) be designated "4.56% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.56 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
February 1, 1963, and such dividends to be cumulative from
the last date to which dividends upon the 4.56% Preferred
Stock, Cumulative, $100 Par Value, of Mississippi Power &
Light Company, a Florida corporation, are paid; and
(c) be subject to redemption in the manner provided
herein with respect to the Preferred Stock at the price of
$108.50 per share if redeemed on or before November 1, 1964,
and of $107.00 per share if redeemed after November 1, 1964,
in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "4.92% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.92 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
February 1, 1966, and such dividends to be cumulative from
the date of issue of said series; and
(c) be subject to redemption at the price of $106.30 per
share if redeemed on or before January 1, 1971, of $104.38
per share if redeemed after January 1, 1971 and on or before
January 1, 1976, and of $102.88 per share if redeemed after
January 1, 1976, in each case plus an amount equivalent to
the accumulated and unpaid dividends thereon, if any, to the
date fixed for redemption.
A series of 75,000 shares of the Preferred Stock shall:
(a) be designated "9.16% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $9.16 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
November 1, 1970, and such dividends to be cumulative from
the date of issue of said series; and
(c) be subject to redemption at the price of $110.93 per
share if redeemed on or before August 1, 1975, of $108.64
per share if redeemed after August 1, 1975 and on or before
August 1, 1980, of $106.35 per share if redeemed after
August 1, 1980 and on or before August 1, 1985, and of
$104.06 per share if redeemed after August 1, 1985, in each
case plus an amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date fixed for redemption;
provided, however, that no share of the 9.16% Preferred
Stock, Cumulative, $100 Par Value, shall be redeemed prior
to August 1, 1975 if such redemption is for the purpose or
in anticipation of refunding such share through the use,
directly or indirectly, of funds borrowed by the
Corporation, or through the use, directly or indirectly, of
funds derived through the issuance by the Corporation of
stock ranking prior to or on a parity with the 9.16%
Preferred Stock, Cumulative, $100 Par Value, as to dividends
or assets, if such borrowed funds have an effective interest
cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of
less than the effective dividend cost to the Corporation of
the 9.16% Preferred Stock, Cumulative, $100 Per Value.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "7.44% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $7.44 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be May
1, 1973, and such dividends to be cumulative from February
14, 1973; and
(c) be subject to redemption at the price of $108.39 per
share if redeemed on or before February 1, 1978, of $106.53
per share if redeemed after February 1, 1978 and on or
before February 1, 1983, of $104.67 per share if redeemed
after February 1, 1983 and on or before February 1, 1988,
and of $102.81 per share if redeemed after February 1, 1988,
in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption; provided, however, that no share of the 7.44%
Preferred Stock, Cumulative, $100 Par Value, shall be
redeemed prior to February 1, 1978 if such redemption is for
the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed
by the Corporation, or through the use, directly or
indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with
the 7.44% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an
effective interest cost to the Corporation (computed in
accordance with generally accepted financial practice) or
such stock has an effective dividend cost to the Corporation
(so computed) of less than the effective dividend cost to
the Corporation of the 7.44% Preferred Stock, Cumulative,
S100 Par Value.
A series of 200,000 shares of the Preferred Stock shall:
(a) be designated "17% Preferred Stock, Cumulative, $100
Par Value"
(b) have a dividend rate of $17.00 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be
November 1, 1981, and such dividends to be cumulative from
the date of issuance;
(c) be subject to redemption at the price of $117.00 per
share if redeemed on or before September 1, 1986, of $112.75
per share if redeemed after September 1, 1986 and on or
before September 1, 1991, of $108.50 per share if redeemed
after September 1, 1991 and on or before September 1, 1996,
and of $104.25 per share if redeemed after September 1,
1996, in each case plus an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the
date fixed for redemption; provided, however, that no share
of the 17% Preferred Stock Cumulative, $100 Par Value, shall
be redeemed prior to September 1, 1986 if such redemption is
for the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed
by the Corporation or through the use, directly or
indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with
the 17% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance
with generally accepted financial practice) or such stock;
has an effective dividend cost to the Corporation (so
computed) of less than the effective dividend cost to the
Corporation of the 17% Preferred Stock, Cumulative, $100 Par
Value; and
(d) be subject to redemption as and for a sinking fund
as follows: On September 1, 1986 and on each September 1
thereafter (each such date being hereinafter referred to as
a "17% Sinking Fund Redemption Date"), for so long as any
shares of the 17% Preferred Stock, Cumulative, $100 Par
Value, shall remain outstanding, the Corporation shall
redeem, out of funds legally available therefor, 10,000
shares of the 17% Preferred Stock, Cumulative, $100 Par
value (or the number of shares then outstanding if less than
10,000) at the sinking fund redemption price of $100 per
share plus, as to each share so redeemed, an amount
equivalent to the accumulated and unpaid dividends thereon,
if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 17% Preferred
Stock, Cumulative, $100 Par Value, being hereinafter
referred to as the "17% Sinking Fund Obligation"); the 17%
Sinking Fund Obligation shall be cumulative; if on any 17%
Sinking Fund Redemption Date, the Corporation shall not have
funds legally available therefor sufficient to redeem the
full number of shares required to be redeemed on that date,
the 17% Sinking Fund Obligation with respect to the shares
not redeemed shall carry forward to each successive 17%
Sinking Fund Redemption Date until such shares shall have
been redeemed; whenever on any 17% Sinking Fund Redemption
Date, the funds of the Corporation legally available for the
satisfaction of the 17% Sinking Fund Obligation and all
other sinking fund and similar obligations then existing
with respect to any other class or series of its stock
ranking on a parity as to dividends or assets with the 17%
Preferred Stock, Cumulative, $100 Par Value (such Obligation
and obligations collectively being hereinafter referred to
as the "Total Sinking Fund Obligation") are insufficient to
permit the Corporation to satisfy fully its Total Sinking
Fund Obligation on that date, the Corporation shall apply to
the satisfaction of its 17% Sinking Fund Obligation on that
date that proportion of such legally available funds which
is equal to the ratio of such 17% Sinking Fund Obligation to
such Total Sinking Fund Obligation; in addition to the 17%
Sinking Fund Obligation, the Corporation shall have the
option, which shall be noncumulative, to redeem, upon
authorization of the Board of Directors, on each 17% Sinking
Fund Redemption Date, at the aforesaid sinking fund
redemption price, up to 10,000 additional shares of the 17%
Preferred Stock, Cumulative, $100 Par Value; the Corporation
shall be entitled, at its election, to credit against its
17% Sinking Fund Obligation on any 17% Sinking Fund
Redemption Date any shares of the 17% Preferred Stock,
Cumulative, Stock Par Value (including shares of the 17%
Preferred Stock, Cumulative, $100 Par Value optionally
redeemed at the aforesaid sinking fund price) theretofore
redeemed (other than shares of the 17% Preferred Stock,
Cumulative, $100 Par Value redeemed pursuant to the 17%
Sinking Fund Obligation) purchased or otherwise acquired and
not previously credited against the 17% Sinking Fund
Obligation.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "14-3/4% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $14.75 per share per annum
payable quarterly on February 1, May 1, August 1 and
November 1 of each year, the first dividend date to be May 1
1982, and such dividends to be cumulative from the date of
issuance;
(c) be subject to redemption at the price of $114.75 per
share if redeemed after the issuance and sale and on or
before March 1, 1983, $113.11 per share if redeemed after
March 1, 1983 and on or before March 1, 1984, $111.47 per
share if redeemed after March 1, 1984 and on or before March
1, 1985, $109.83 per share if redeemed after March 1, 1985
and on or before March 1, 1986, $108.19 per share if
redeemed after March 1, 1986 and on or before March 1, 1987,
$106.56 per share if redeemed after March 1, 1987 and on or
before March 1, 1988, $104.92 per share if redeemed after
March 1, 1988 and on or before March 1, 1989, $103.28 per
share if redeemed after March 1, 1989 and on or before March
1, l990, $101.64 per share if redeemed after March 1, 1990
and on or before March 1, 1991, and $100.00 per share if
redeemed after March 1, 1991, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon,
if any, to the date fixed for redemption; provided, however,
that no share of the 14-3/4% Preferred Stock, Cumulative,
$100 Par Value, shall be redeemed prior to March 1, 1987 if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or
indirectly, of funds borrowed by the Corporation, or through
the use, directly or indirectly, of funds derived through
the issuance by the Corporation of stock ranking prior to or
on a parity with the 14-3/4% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed
funds have an effective interest cost to the Corporation
(computed in accordance with generally accepted financial
practice) or such stock has an effective dividend cost to
the Corporation (so computed) of less than the effective
dividend cost to the Corporation of the 14-3/4% Preferred
Stock, Cumulative, $100 Par Value; and
(d) be subject to redemption as and for a sinking fund
as follows. On March 1, 1990, 1991 and 1992 (each such date
being hereinafter referred to as a "14-3/4% Sinking Fund
Redemption Date"), the Corporation shall redeem, out of
funds legally available therefor, 33,333, 33,333 and 33,334
shares, respectively, of the 14-3/4% Preferred Stock,
Cumulative, $100 Par Value, at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed,
an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation
of the Corporation so to redeem the shares of the 14-3/4%
Preferred Stock, Cumulative, $100 Par Value, being
hereinafter referred to as the "14-3/4% Sinking Fund
Obligation"); the 14-3/4% Sinking Fund Obligation shall be
cumulative; if on any 14-3/4% Sinking Fund Redemption Date,
the Corporation shall not have funds legally available
therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 14-3/4% Sinking
Fund Obligation with respect to the shares not redeemed
shall carry forward to each successive 14-3/4% Sinking Fund
Redemption Date (or, in the event the 14-3/4% Sinking Fund
Obligation is not satisfied on March 1, 1992, to such date
as soon thereafter as funds are legally available to satisfy
the 14-3/4% Sinking Fund Obligation) until such shares shall
have been redeemed; whenever on any 14-3/4% Sinking Fund
Redemption Date, the funds of the Corporation legally
available for the satisfaction of the 14-3/4% Sinking Fund
Obligation and all other sinking fund and similar
obligations then existing with respect to any other class or
series of its stock ranking on a parity as to dividends or
assets with the 14-3/4% Preferred Stock, Cumulative, $100
Par Value (such Obligation and obligations collectively
being hereinafter referred to as the "Total Sinking Fund
Obligation") are insufficient to permit the Corporation to
satisfy fully its Total Sinking Fund Obligation on that
date, the Corporation shall apply to the satisfaction of its
14-3/4% Sinking Fund Obligation on that date that proportion
of such legally available funds which is equal to the ratio
of such 14-3/4% Sinking Fund Obligation to such Total
Sinking Fund Obligation.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "12.00% Preferred Stock, Cumulative,
$100 Par Value";
(b) have a dividend rate of $12.00 per share per annum
payable quarterly on February 1, May 1, August 1 and
November l of each year, the first dividend date to be May
1, 1983, and such dividends to be cumulative from the date
of issuance;
(c) be subject to redemption at the price of $112.00 per
share if redeemed on or before March 1, 1988, of $109.00 per
share if redeemed after March 1, 1988 and on or before March
1, 1993, of $106.00 per share if redeemed after March 1,
1993 and on or before March 1, 1998, and of $103.00 per
share if redeemed after March 1, 1998, in each case plus an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; provided,
however, that no share of the 12.00% Preferred Stock,
Cumulative, $100 Par Value, shall be redeemed prior to March
1, 1988 if such redemption is for the purpose or in anticipa
tion of refunding such share through the use, directly or
indirectly, of funds borrowed by the Corporation, or through
the use, directly or indirectly, of funds derived through
the issuance by the Corporation of stock ranking prior to or
on a parity with the 12.00% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed
funds have an effective interest cost to the Corporation
(computed in accordance with generally accepted financial
practice) or such stock has an effective dividend cost to
the Corporation (so computed) of less than 12.7497% to per
annum; and
(d) be subject to redemption as and for a sinking fund
as follows: on March 1, 1888 and on each March 1 thereafter
(each such date being hereinafter referred to as a "12.00%
Sinking Fund Redemption Date"), for so long as any shares of
the 12.00% Preferred Stock, Cumulative, $100 Par Value,
shall remain outstanding, the Corporation shall redeem, out
of funds legally available therefor, 5,000 shares of the
12.00% Preferred Stock, Cumulative, $100 Par Value (or the
number of shares then outstanding if less than 5,000) at the
sinking fund redemption price of $100 per share plus, as to
each share so redeemed, an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the
date of redemption (the obligation of the Corporation so to
redeem the shares of the 12.00% Preferred Stock, Cumulative,
$100 Par Value, being hereinafter referred to as the "12.00%
Sinking Fund Obligation"); the 12.00% Sinking Fund
Obligation shall be cumulative; if on any 12.00% Sinking
Fund Redemption Date, the Corporation shall not have funds
legally available therefor sufficient to redeem the full
number of shares required to be redeemed on that date, the
12.00% Sinking Fund Obligation with respect to the shares
not redeemed shall carry forward to each successive 12.00%
Sinking Fund Redemption Date until such shares shall have
been redeemed; whenever on any 12.00% Sinking Fund
Redemption Date, the funds of the Corporation legally
available for the satisfaction of the 12.00% Sinking Fund
Obligation and all other sinking fund and similar
obligations then existing with respect to any other class or
series of its stock ranking on a parity as to dividends or
assets with the 12.00% Preferred Stock Cumulative, $100 Par
Value (such Obligation and obligations collectively being
hereinafter referred to as the "Total Sinking Fund
Obligation") are insufficient to permit the Corporation to
satisfy fully its Total Sinking Fund Obligation on that
date, the Corporation shall apply to the satisfaction of its
12.00% Sinking Fund Obligation on that date that proportion
of such legally available funds which is equal to the ratio
of such 12.00% Sinking Fund Obligation to such Total Sinking
Fund Obligation; in addition to the 12.00% Sinking Fund
Obligation, the Corporation shall have the option, which
shall be noncumulative, to redeem, upon authorization of the
Board of Directors, on each 12.00% Sinking Fund Redemption
Date, at the aforesaid sinking fund redemption price, up to
5,000 additional shares of the 12.00% Preferred Stock
Cumulative, $100 Par Value; the Corporation shall be
entitled, at its election, to credit against its 12.00%
Sinking Fund Obligation on any 12.00% Sinking Fund
Redemption Date any shares of the 12.00% Preferred Stock,
Cumulative, $100 Par Value (including shares of the 12.00%
Preferred Stock Cumulative, $100 Par Value optionally
redeemed at the aforesaid sinking fund price) theretofore
redeemed (other than shares of the 12.00% Preferred Stock,
Cumulative, $100 Par Value redeemed pursuant to the 12.00%
Sinking Fund Obligation) purchased or otherwise acquired and
not previously credited against the 12.00% Sinking Fund
Obligation.
Subject to the foregoing, the distinguishing characteristics
of the Preferred Stock shall be:
(A) Each series of the Preferred Stock, pari passu with all
shares of preferred stock of any class or series then
outstanding, shall be entitled but only when and as declared by
the Board of Directors, out of funds legally available for the
payment of dividends in preference to the Common Stock, to
dividends at the rate stated and expressed with respect to such
series herein or by the resolution or resolutions providing for
the issue of such series adopted by the Board of Directors; such
dividends to be cumulative from such date and payable on such
dates in each year as may be stated and expressed in said
resolution, to stockholders of record as of a date not to exceed
40 days and not less than 10 days preceding the dividend payment
dates so fixed.
(B) If and when dividends payable on any of the Preferred
Stock of the Corporation at any time outstanding shall be in
default in an amount equal to four full quarterly payments or
more per share, and thereafter until all dividends on any such
preferred stock in default shall have been paid, the holders of
the Preferred Stock pari passu with the holders of other
preferred stock then outstanding, voting separately as a class,
shall be entitled to elect the smallest number of directors
necessary to constitute a majority of the full Board of
Directors, and, except as provided in the following paragraph,
the holders of the Common Stock, voting separately as a class,
shall be entitled to elect the remaining directors of the
Corporation. The terms of office, as directors, of all persons
who may be directors of the Corporation at the time shall
terminate upon the election of a majority of the Board of
Directors by the holders of the Preferred Stock except that if
the holders of the Common Stock shall not have elected the
remaining directors of the Corporation, then, and only in that
event, the directors of the Corporation in office just prior to
the election of a majority of the Board of Directors by the
holders of the Preferred Stock shall elect the remaining
directors of the Corporation. Thereafter, while such default
continues and the majority of the Board of Directors is being
elected by the holders of the Preferred Stock, the remaining
directors, whether elected by directors, as aforesaid, or whether
originally or later elected by holders of the Common Stock shall
continue in office until their successors are elected by holders
of the Common Stock and shall qualify.
If and when all dividends then in default on the Preferred
Stock; then outstanding shall be paid (such dividends to be
declared and paid out of any funds legally available therefor as
soon as reasonably practicable), the holders of the Preferred
Stock shall be divested of any special right with respect to the
election of directors, and the voting power of the holders of the
Preferred Stock and the holders of the Common Stock shall revert
to the status existing before the first dividend payment date on
which dividends on the Preferred Stock were not paid in full, but
always subject to the same provisions for vesting such special
rights in the holders of the Preferred Stock in case of further
like defaults in the payment of dividends thereon as described in
the immediately foregoing paragraph. Upon termination of any such
special voting right upon payment of all accumulated and unpaid
dividends on the Preferred Stock, the terms of office of all
persons who may have been elected directors of the Corporation by
vote of the holders of the Preferred Stock as a class, pursuant
to such special voting right shall forthwith terminate, and the
resulting vacancies shall be filled by the vote of a majority of
the remaining directors.
In case of any vacancy in the office of a director occurring
among the directors elected by the holders of the Preferred
Stock, voting separately as a class, the remaining directors
elected by the holders of the Preferred Stock, by affirmative
vote of a majority thereof, or the remaining director so elected
if there be but one, may elect a successor or successors to hold
office for the unexpired term or terms of the director or
directors whose place or places shall be vacant. Likewise, in
case of any vacancy in the office of a director occurring among
the directors not elected by the holders of the Preferred Stock,
the remaining directors not elected by the holders of the
Preferred Stock, by affirmative vote of a majority thereof, or
the remaining director so elected if there be but one, may elect
a successor or successors to hold office for the unexpired term
or terms of the director or directors whose place or places shall
be vacant.
Whenever the right shall have accrued to the holders of the
Preferred Stock to elect directors, voting separately as a class,
it shall be the duty of the President, a Vice-President or the
Secretary of the Corporation forthwith to call and cause notice
to be given to the shareholders entitled to vote of a meeting to
be held at such time as the Corporation's officers may fix, not
less than forty-five nor more than sixty days after the accrual
of such right, for the purpose of electing directors. The notice
so given shall be mailed to each holder of record of preferred
stock at his last known address appearing on the books of the
Corporation and shall set forth, among other things, (i) that by
reason of the fact that dividends payable on preferred stock are
in default in an amount equal to four full quarterly payments or
more per share, the holders of the Preferred Stock, voting
separately as a class, have the right to elect the smallest
number of directors necessary to constitute a majority of the
full Board of Directors of the Corporation, (ii) that any holder
of the Preferred Stock has the right, at any reasonable time, to
inspect, and make copies of, the list or lists of holders of the
Preferred Stock maintained at the principal office of the
Corporation or at the office of any Transfer Agent of the
Preferred Stock, and (iii) either the entirety of this paragraph
or the substance thereof with respect to the number of shares of
the Preferred Stock required to be represented at any meeting, or
adjournment thereof, called for the election of directors of the
Corporation. At the first meeting of stockholders held for the
purpose of electing directors during such time as the holders of
the Preferred Stock shall have the special right, voting
separately as a class, to elect directors, the presence in person
or by proxy of the holders of a majority of the outstanding
Common Stock shall be required to constitute a quorum of such
class for the election of directors, and the presence in person
or by proxy of the holders of a majority of the outstanding
Preferred Stock shall be required to constitute a quorum of such
class for the election of directors; provided, however, that in
the absence of a quorum of the holders of the Preferred Stock, no
election of directors shall be held, but a majority of the
holders of the Preferred Stock who are present in person or by
proxy shall have power to adjourn the election of the directors
to a date not less than fifteen nor more than fifty days from the
giving of the notice of such adjourned meeting hereinafter
provided for; and provided, further, that at such adjourned
meeting, the presence in person or by proxy of the holders of 35%
of the outstanding Preferred Stock shall be required to
constitute a quorum of such class for the election of directors.
In the event such first meeting of stockholders shall be so
adjourned, it shall be the duty of the President, a Vice-
President or the Secretary of the Corporation, within ten days
from the date on which such first meeting shall have been
adjourned, to cause notice of such adjourned meeting to be given
to the shareholders entitled to vote thereat, such adjourned
meeting to be held not less than fifteen days nor more than fifty
days from the giving of such second notice. Such second notice.
shall be given in the form and manner hereinabove provided for
with respect to the notice required to be given of such first
meeting of stockholders, and shall further set forth that a
quorum was not present at such first meeting and that the holders
of 35% of the outstanding Preferred Stock shall be required to
constitute a quorum of such class for the election of directors
at such adjourned meeting. If the requisite quorum of holders of
the Preferred Stock shall not be present at said adjourned
meeting, then the directors of the Corporation then in office
shall remain in office until the next Annual Meeting of the
Corporation, or special meeting in lieu thereof and until their
successors shall have been elected and shall qualify. Neither
such first meeting nor such adjourned meeting shall be held on a
date within sixty days of the date of the next Annual Meeting of
the Corporation, or special meeting in lieu thereof. At each
Annual Meeting of the Corporation, or special meeting in lieu
thereof, held during such time as the holders of the Preferred
Stock, voting separately as a class. shall have the right to
elect a majority of the Board of Directors, the foregoing
provisions of this paragraph shall govern each Annual Meeting, or
special meeting in lieu thereof, as if said Annual Meeting or
special meeting were the first meeting of stockholders held for
the purpose of electing directors after the right of the holders
of the Preferred Stock, voting separately as a class, to elect a
majority of the Board of Directors, should have accrued the
exception, that if, at any adjourned annual meeting, or special
meeting in lieu thereof, the holders of 35% of the outstanding
Preferred Stock are not present in person or by proxy, all the
directors shall be elected by a vote of the holders of a majority
of the Common Stock of the Corporation present or represented at
the meeting.
(C) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of at least
two-thirds of the total number of shares of the Preferred Stock
then outstanding:
(1) create, authorize or issue any new stock which,
after issuance would rank prior to the Preferred Stock as to
dividends, in liquidation, dissolution, winding up or
distribution, or create, authorize or issue any security
convertible into shares of any such stock except for the
purpose of providing funds for the redemption of all of the
Preferred Stock then outstanding, such new stock or security
not to be issued until such redemption shall have been
authorized and notice of such redemption given and the
aggregate redemption price deposited as provided in
paragraph (G) below; provided, however, that any such new
stock or security shall be issued within twelve months after
the vote of the Preferred Stock herein provided for
authorizing the issuance of such new stock or security; or
(2) amend, alter, or repeal any of the rights,
preferences or powers of the holders of the Preferred Stock
so as to affect adversely any such rights, preferences or
powers; provided, however, that if such amendment,
alteration or repeal affects adversely the rights,
preferences or powers of one or more, but not all, series of
Preferred Stock at the time outstanding, only the consent of
the holders of at least two-thirds of the total number of
outstanding shares of all series so affected shall be
required; and provided, further, that an amendment to
increase or decrease the authorized amount of Preferred
Stock or to create or authorize, or increase or decrease the
amount of, any class of stock; ranking on a parity with the
outstanding shares of the Preferred Stock as to dividends or
assets shall not be deemed to affect adversely the rights,
preferences or powers of the holders of the Preferred Stock
or any series thereof.
(D) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of the
holders of a majority of the total number of shares of the
Preferred Stock then outstanding:
(1) merge or consolidate with or into any other
corporation or corporations or sell or otherwise dispose of
all or substantially all of the assets of the Corporation,
unless such merger or consolidation or sale or other
disposition, or the exchange, issuance or assumption of all
securities to be issued or assumed in connection with any
such merger or consolidation or sale or other disposition,
shall have been ordered, approved or permitted under the
Public Utility Holding Company Act of 1935; or
(2) issue or assume any unsecured notes, debentures or
other securities representing unsecured indebtedness for
purposes other than (i) the refunding of outstanding
unsecured indebtedness theretofore issued or assumed by the
Corporation resulting in equal or longer maturities, or (ii)
the reacquisition, redemption or other retirement of all
outstanding shares of the Preferred Stock, if immediately
after such issue or assumption, the total principal amount
of all unsecured notes, debentures or other securities
representing unsecured indebtedness issued or assumed by the
Corporation, including unsecured indebtedness then to be
issued or assumed (but excluding the principal amount then
outstanding of any unsecured notes, debentures, or other
securities representing unsecured indebtedness having a
maturity in excess of ten (10) years and in amount not
exceeding 10% of the aggregate of (a) and (b) of this
section below) would exceed ten per centum (10%) of the
aggregate of (a) the total principal amount of all bonds or
other securities representing secured indebtedness issued or
assumed by the Corporation and then to be outstanding, and
(b) the capital and surplus of the Corporation as then to be
stated on the books of account of the Corporation. When
unsecured notes, debentures or other securities representing
unsecured debt of a maturity in excess of ten (10) years
shall become of a maturity of ten (10) years or less, it
shall then be regarded as unsecured debt of a maturity of
less than ten (10) years and shall be computed with such
debt for the purpose of determining the percentage ratio to
the sum of (a) and (b) above of unsecured debt of a maturity
of less than ten (10) years, and when provision shall have
been made, whether through a sinking fund or otherwise, for
the retirement, prior to their maturity, of unsecured notes,
debentures, or other securities representing unsecured debt
of a maturity in excess of ten (10) years, the amount of any
such security so required to be retired in less than ten
(10) years shall be regarded as unsecured debt of a maturity
of less than ten (10) years (and not as unsecured debt of a
maturity in excess of ten (10) years) and shall be computed
with such debt for the purpose of determining the percentage
ratio to the sum of (a) and (b) above of unsecured debt of a
maturity of less than ten (10) years, provided, however,
that the payment due upon the maturity of unsecured debt
having an original single maturity in excess of ten (10)
years or the payment due upon the latest maturity of any
serial debt which had original maturities in excess of ten
(10) years shall not, for purposes of this provision, be
regarded as unsecured debt of a maturity of less than ten
(10) years until such payment or payments shall be required
to be made within three (3) years; furthermore, when
unsecured notes, debentures or other securities representing
unsecured debt of a maturity of less than ten (10) years
shall exceed 10% of the sum of (a) and (b) above, no
additional unsecured notes, debentures or other securities
representing unsecured debt shall be issued or assumed
(except for the purpose set forth in (i) or (ii) above)
until such ratio is reduced to 10% of the sum of (a) and (b)
above; or
(3) issue, sell or otherwise dispose of any shares of
the Preferred Stock in addition to the 104,476 shares of the
Preferred Stock originally authorized, or of any other class
of stock ranking on a parity with the Preferred Stock as to
dividends or in liquidation, dissolution, winding up or
distribution, unless the gross income of the Corporation and
Mississippi Power & Light Company, a Florida corporation,
for a period of twelve (12) consecutive calendar months
within the fifteen (15) calendar months immediately
preceding the issuance, sale or disposition of such stock,
determined in accordance with generally accepted accounting
practices (but in any event after deducting all taxes and
the greater of (a) the amount for said period charged by the
Corporation and Mississippi Power & Light Company, a Florida
corporation, on their books to depreciation expense or (b)
the largest amount required to be provided therefor by any
mortgage indenture of the Corporation) to be available for
the payment of interest, shall have been at least one and
one-half times the sum of (i) the annual interest charges on
all interest bearing indebtedness of the Corporation and
(ii) the annual dividend requirements on all outstanding
shares of the Preferred Stock and of all other classes of
stock ranking prior to, or on a parity with, the Preferred
Stock as to dividends or distributions, including the shares
proposed to be issued; provided, that there shall be
excluded from the foregoing computation interest charges on
all indebtedness and dividends on all shares of stock which
are to be retired in connection with the issue of such
additional shares of the Preferred Stock or other class of
stocks ranking prior to, or on a parity with, the Preferred
Stock as to dividends or distributions; and provided,
further, that in any case where such additional shares of
the Preferred Stock, or other class of stock ranking on a
parity with the Preferred Stock as to dividends or
distributions, are to be issued in connection with the
acquisition of additional property, the gross income of the
property to be so acquired, computed on the same basis as
the gross income of the Corporation, may be included on a
pro forma basis in making the foregoing computation; or
(4) issue, sell, or otherwise dispose of any shares of
the Preferred Stock, in addition to the 104,476 shares of
the Preferred Stock originally authorized, or of any other
class of stock ranking on a parity with the Preferred Stock
as to dividends or distributions, unless the aggregate of
the capital of the Corporation applicable to the Common
Stock and the surplus of the Corporation shall be not less
than the aggregate amount payable on the involuntary
liquidation, dissolution, or winding up of the Corporation,
in respect of all shares of the Preferred Stock and all
shares of stock, if any, ranking prior thereto, or on a
parity therewith, as to dividends or distributions, which
will be outstanding after the issue of the shares proposed
to be issued; provided, that if, for the purposes of meeting
the requirements of this subparagraph (4), it becomes
necessary to take into consideration any earned surplus of
the Corporation, the Corporation shall not thereafter pay
any dividends on shares of the Common Stock which would
result in reducing the Corporation's Common Stock equity (as
in paragraph (H) hereinafter defined) to an amount less than
the aggregate amount payable, on involuntary liquidation,
dissolution or winding up the Corporation, on all shares of
the Preferred Stock and of any stock ranking prior to, or on
a parity with, the Preferred Stock, as to dividends or other
distributions, at the time outstanding.
(E) Each holder of Common Stock of the Corporation shall be
entitled to one vote, in person or by proxy, for each share of
such stock standing in his name on the books of the Corporation.
Except as hereinbefore expressly provided in this Section Fourth,
the holders of the Preferred Stock shall have no power to vote
and shall be entitled to no notice of any meeting of the
stockholders of the Corporation. As to matters upon which holders
of the Preferred Stock are entitled to vote as hereinbefore
expressly provided, each holder of such Preferred Stock shall be
entitled to one vote, in person or by proxy, for each share of
such Preferred Stock standing in his name on the books of the
Corporation.
(F) In the event of any voluntary liquidation, dissolution or
winding up of the Corporation, the Preferred Stock, pari passu
with all shares of preferred stock of any class or series then
outstanding, shall have a preference over the Common Stock until
an amount equal to the then current redemption price shall have
been paid. In the event of any involuntary liquidation,
dissolution or winding up of the Corporation, which shall include
any such liquidation, dissolution or winding up which may arise
out of or result from the condemnation or purchase of all or a
major portion of the properties of the Corporation, by (i) the
United States Government or any authority, agency or
instrumentality thereof, (ii) a state of the United States or any
political subdivision, authority, agency, or instrumentality
thereof, or (iii) a district, cooperative or other association or
entity not organized for profit, the Preferred Stock, pari passu
with all shares of preferred stock of any class or series then
outstanding, shall also have a preference over the Common Stock
until the full par value thereof and an amount equal to all
accumulated and unpaid dividends thereon shall have been paid by
dividends or distribution.
(G) Upon the affirmative vote of a majority of the shares of
the issued and outstanding Common Stock at any annual meeting, or
any special meeting called for that purpose, the Corporation may
at any time redeem all of any series of said Preferred Stock or
may from time to time redeem any part thereof, by paying in cash
the redemption price then applicable thereto as stated and
expressed with respect to such series in the resolution providing
for the issue of such shares adopted by the Board of Directors of
the Corporation, or in these Restated Articles of Incorporation
or any amendment thereof, plus, in each case, an amount
equivalent to the accumulated and unpaid dividends, if any, to
the date of redemption. Notice of the intention of the
Corporation to redeem all or any part of the Preferred Stock
shall be mailed not less than thirty (30) days nor more than
sixty (60) days before the date of redemption to each holder of
record of Preferred Stock to be redeemed, at his post office
address as shown by the Corporation's records, and not less than
thirty (30) days' nor more than sixty (60) days' notice of such
redemption may be published in such manner as may be prescribed
by resolution of the Board of Directors of the Corporation; and,
in the event of such publication, no defect in the mailing of
such notice shall affect the validity of the proceedings for the
redemption of any shares of Preferred Stock so to be redeemed.
Contemporaneously with the mailing or the publication of such
notice as aforesaid or at any time thereafter prior to the date
of redemption, the Corporation may deposit the aggregate
redemption price (or the portion thereof not already paid in the
redemption of such Preferred Stock so to be redeemed) with any
bank or trust company in the City of New York, New York, or in
the City of Jackson, Mississippi, named in such notice, payable
to the order of the record holders of the Preferred Stock so to
be redeemed, as the case may be, on the endorsement and surrender
of their certificates, and thereupon said holders shall cease to
be stockholders with respect to such shares; and from and after
the making of such deposit such holders shall have no interest in
or claim against the Corporation with respect to said shares, but
shall be entitled only to receive such moneys from said bank or
trust company, with interest, if any, allowed by such bank or
trust company on such moneys deposited as in this paragraph
provided, on endorsement and surrender of their certificates, as
aforesaid. Any moneys so deposited, plus interest thereon, if
any, remaining unclaimed at the end of six years from the date
fixed for redemption, if thereafter requested by resolution of
the Board of Directors, shall be repaid to the Corporation, and
in the event of such repayment to the Corporation, such holders
of record of the shares so redeemed as shall not have made claim
against such moneys prior to such repayment to the Corporation,
shall be deemed to be unsecured creditors of the Corporation for
an amount, without interest, equivalent to the amount deposited,
plus interest thereon, if any, allowed by such bank or trust
company, as above stated, for the redemption of such shares and
so paid to the Corporation. Shares of the Preferred Stock which
have been redeemed shall not be reissued. If less than all of
the shares of the Preferred Stock are to be redeemed, the shares
thereof to be redeemed shall be selected by lot, in such manner
as the Board of Directors of the Corporation shall determine, by
an independent bank or trust company selected for that purpose by
the Board of Directors of the Corporation. Nothing herein
contained shall limit any legal right of the Corporation to
purchase or otherwise acquire any shares of the Preferred Stock;
provided, however, that, so long as any shares of the Preferred
Stock are outstanding, the Corporation shall not redeem, purchase
or otherwise acquire less than all of the shares of the Preferred
Stock, if, at the time of such redemption, purchase or other
acquisition, dividends payable on the Preferred Stock shall be in
default in whole or in part, unless, prior to or concurrently
with such redemption, purchase or other acquisition, all such
defaults shall be cured or unless such redemption, purchase or
other acquisition shall have been ordered, approved or permitted
under the Public Utility Holding Company Act of 1935; and
provided further that, so long as any shares of the Preferred
Stock are outstanding, the Corporation shall not make any payment
or set aside any funds for payment into any sinking fund for the
purchase or redemption of any shares of the Preferred Stock, if,
at the time of such payment, or the setting apart of funds for
such payment, dividends payable on the Preferred Stock shall be
in default in whole or in part, unless, prior to or concurrently
with such payment or the setting apart of funds for such payment,
all such defaults shall be cured or unless such payment, or the
setting apart of funds for such payment, shall have been ordered,
approved or permitted under the Public Utility Holding Company
Act of 1935. Any shares of the Preferred Stock so redeemed,
purchased or acquired shall retired and cancelled.
(H) For the purposes of this paragraph (H) and subparagraph
(4) of paragraph (D) the term "Common Stock Equity" shall mean
the aggregate of the par value of, or stated capital represented
by, the outstanding shares (other than shares owned by the
Corporation) of stock ranking junior to the Preferred Stock as to
dividends and assets, of the premium on such junior stock and of
the surplus (including earned surplus, capital surplus and
surplus invested in plant) of the Corporation less (1) any
amounts recorded on the books of the Corporation for utility
plant and other plant in excess of the original cost thereof, (2)
unamortized debt discount and expense, capital stock discount and
expense and any other intangible items set forth on the asset
side of the balance sheet as a result of accounting convention,
(3) the excess, if any, of the aggregate amount payable on
involuntary liquidation, dissolution or winding up of the affairs
of the Corporation upon all outstanding preferred stock of the
Corporation over the aggregate par or stated value thereof and
any premiums thereon and (4) the excess, if any, for the period
beginning with January 1, 1954, to the end of the month within
ninety (90) days preceding the date as of which Common Stock
Equity is determined, of the cumulative amount computed under re
quirements contained in the Corporation's mortgage indentures
relating to minimum depreciation provisions (this cumulative
amount being the aggregate of the largest amounts separately
computed for entire periods of differing coexisting mortgage
indenture requirements), over the amount charged by the
Corporation and Mississippi Power & Light Company, a Florida
corporation, on their books for depreciation during such period,
including the final fraction of a year; provided, however, that
no deductions shall be required to be made in respect of items
referred to in subdivisions (1) and (2) of this paragraph (H) in
cases in which such items are being amortized or are provided
for, or are being provided for, by reserves. For the purpose of
this paragraph (H): (i) the term "total capitalization" shall
mean the sum of the Common Stock Equity plus item three (3) in
this paragraph (H) and the stated capital applicable to, and any
premium on, outstanding stock of the Corporation not included in
Common Stock Equity, and the principal amount of all outstanding
debt of the Corporation maturing more than twelve months after
the date of issue thereof; and (ii) the term "dividends on Common
Stock" shall embrace dividends on Common Stock (other than
dividends payable only in shares of Common Stock), distributions
on, and purchases or other acquisitions for value of, any Common
Stock of the Corporation or other stock if any, subordinate to
its Preferred Stock. So long as any shares of the Preferred
Stock are outstanding, the Corporation shall not declare or pay
any dividends on the Common Stock, except as follows:
(a) If and so long as the Common Stock Equity at the
end of the calendar month immediately preceding the date on
which a dividend on Common Stock is declared is, or as a
result of such dividend would become, less than 20% of total
capitalization, the Corporation shall not declare such
dividends in an amount which, together with all other
dividends on Common Stock paid within the year ending with
and including the date on which such dividend is payable,
exceeds 50% of the net income of the Corporation available
for dividends on the Common Stock for the twelve full
calendar months immediately preceding the month in which
such dividends are declared, except in an amount not
exceeding the aggregate of dividends on Common Stock which
under the restrictions set forth above in this subparagraph
(a) could have been, and have not been, declared; and
(b) If and so long as the Common Stock Equity at the
end of the calendar month immediately preceding the date on
which a dividend on Common Stock is declared is, or as a
result of such dividend would become, less than 25% but not
less than 20% of total capitalization, the Corporation shall
not declare dividends on the Common Stock in an amount
which, together with all other dividends on Common Stock
paid within the year ending with and including the date on
which such dividend is payable, exceeds 75% of the net
income of the Corporation and Mississippi Power & Light
Company, a Florida corporation, available for dividends on
the Common Stock for the twelve full calendar months
immediately preceding the month in which such dividends are
declared, except in an amount not exceeding the aggregate of
dividends on Common Stock which under the restrictions set
forth above in subparagraph (a) and in this subparagraph (b)
could have been and have not been declared; and
(c) If any time when the Common Stock Equity is 25% or
more of total capitalization, the Corporation may not
declare dividends on shares of the Common Stock which would
reduce the Common Stock Equity below 25% of total
capitalization, except to the extent provided in
subparagraphs (a) and (b) above.
At anytime when the aggregate of all amounts credited
subsequent to January 1, 1954, to the depreciation reserve
account of the Corporation and Mississippi Power & Light Company,
a Florida corporation, through charges to operating revenue
deductions or otherwise on the books of the Corporation and
Mississippi Power & Light Company, a Florida corporation, shall
be less than the amount computed as provided in clause (aa)
below, under requirements contained in the Corporation's mortgage
indentures, then for the purposes of subparagraphs (a) and (b)
above, in determining the earnings available for common stock
dividends during any twelve-month period, the amount to be
provided for depreciation in that period shall be (aa) the
greater of the cumulative amount charged to depreciation expense
on the books of the Corporation and Mississippi Power & Light
Company, a Florida corporation, or the cumulative amount computer
under requirements contained in the Corporation's mortgage
indentures relating to minimum depreciation provisions (the
latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing co-
existing mortgage indenture requirements) for the period from
January 1, 1954, to and including said twelve-month period, less
(bb) the greater of the cumulative amount charged to depreciation
expense on the books of the Corporation and Mississippi Power &
Light Company, a Florida corporation, or the cumulative amount
computed under requirements contained in the Corporation's
mortgage indentures relating to minimum depreciation provisions
(the latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing
coexisting mortgage indenture requirements) from January 1, 1954,
up to but excluding said twelve-month period; provided that in
the event any company other than Mississippi Power & Light
Company, a Florida corporation, is merged into the Corporation
the "cumulative amount computed under requirements contained in
the Corporation's mortgage indentures relating to minimum
depreciation provisions" referred to above shall be computed
without regard, for the period prior to the merger, of property
acquired in the merger, and the "cumulative amount charged to
depreciation expense on the books of the Corporation" shall be
exclusive of amounts provided for such property prior to the
merger.
(I) The Board of Directors are hereby expressly authorized
by resolution or resolutions to state and express the series and
distinctive serial designation of any authorized and unissued
shares of Preferred Stock proposed to be issued, the number of
shares to constitute each such series, the annual rate or rates
of dividends payable on shares of each series together with the
dates on which such dividends shall be paid in each year, the
date from which such dividends shall commence to accumulate, the
amount or amounts payable upon redemption and the sinking fund
provisions, if any, for the redemption or purchase of shares.
(J) Dividends may be paid upon the Common Stock only when (i)
dividends have been paid or declared and funds set apart for the
payment of dividends as aforesaid on the Preferred Stock from the
date(s) after which dividends thereon became cumulative, to the
beginning of the period then current, with respect to which such
dividends on the Preferred Stock are usually declared, and (ii)
all payments have been made or funds have been set aside for
payments then or theretofore due under sinking fund provisions,
if any, for the redemption or purchase of shares of any series of
the Preferred Stock, but whenever (x) there shall have been paid
or declared and funds shall have been set apart for the payment
of all such dividends upon the Preferred Stock as aforesaid, and
(y) all payments shall have been made or funds shall have been
set aside for payments then or theretofore due under sinking fund
provisions, if any, for the redemption or purchase of shares of
any series of the Preferred Stock, then, subject to the
limitations above set forth, dividends upon the Common Stock may
be declared payable then or thereafter, out of any net earnings
or surplus of assets over liabilities, including capital, then
remaining. After the payment of the limited dividends and/or
shares in distribution of assets to which the Preferred Stock is
expressly entitled in preference to the Common Stock, in
accordance with the provisions hereinabove set forth, the Common
Stock alone (subject to the rights of any class of stock
hereafter authorized) shall receive all further dividends and
shares in distribution.
(K) Subject to the limitations hereinabove set forth the
Corporation from time to time may resell any of its own stock,
purchased or otherwise acquired by it as hereinafter provided
for, at such price as may be fixed by its Board of Directors or
Executive Committee.
(L) Subject to the limitations hereinabove set forth the
Corporation in order to acquire funds with which to redeem any
outstanding Preferred Stock of any class, may issue and sell
stock of any class then authorized but unissued, bonds, notes,
evidences of indebtedness, or other securities.
(M) Subject to the limitations hereinabove set forth the
Board of Directors of the Corporation may at any time authorize
the conversion or exchange of the whole or any particular share
of the outstanding preferred stock of any class with the consent
of the holder thereof, into or for stock of any other class at
the time of such consent authorized but unissued and may fix the
terms and conditions upon which such conversion or exchange may
be made; provided that without the consent of the holders of
record of two-thirds of the shares of Common Stock outstanding
given at a meeting of the holders of the Common Stock called and
held as provided by the By-Laws or given in writing without a
meeting, the Board of Directors shall not authorize the
conversion or exchange of any preferred stock of any class into
or for Common Stock or authorize the conversion or exchange of
any preferred stock; of any class into or for preferred stock of
any other class, if by such conversion or exchange the amount
which the holders of the shares of stock so converted or
exchanged would be entitled to receive either as dividends or
shares in distribution of assets in preference to the Common
Stock would be increased.
(N) A consolidation, merger or amalgamation of the
Corporation with or into any other corporation or corporations
shall not be deemed a distribution of assets of the Corporation
within the meaning of any provisions of these Restated Articles
of Incorporation.
(O) The consideration received by the Corporation from the
sale of any additional stock without nominal or par value shall
be entered in the Corporation's capital stock account.
(P) Subject to the limitations hereinabove set forth upon
the vote of a majority of all the Directors of the Corporation
and of a majority of the total number of shares of stock then
issued and outstanding and entitled to vote, irrespective of
class (or if the vote of a larger number or different proportion
of shares is required by the laws of the State of Mississippi not
withstanding the above agreement of the stockholders of the
Corporation to the contrary, then upon the vote of the larger
number or different proportion of shares so required), the
Corporation may from time to time create or authorize one or more
other classes of stock with such preferences, designations,
rights, privileges, powers, restrictions, limitations and qualifi
cations as may be determined by said vote, which may be the same
as or different from the preferences, designations, rights,
privileges, powers, restrictions, limitations and qualifications
of the classes of stock of the Corporation then authorized. Any
such vote authorizing the creation of a new class of stock may
provide that all moneys payable by the Corporation with respect
to any class of stock thereby authorized shall be paid in the
money of any foreign country named therein or designated by the
Board of Directors, pursuant to authority therein granted, at a
fixed rate of exchange with the money of the United States of
America therein stated or provided for and all such payments
shall be made accordingly. Any such vote may authorize any shares
of any class then authorized but unissued to be issued as shares
of such new class or classes
(Q) Subject to the limitations hereinabove set forth, either
the Preferred Stock or the Common Stock or both of said classes
of stock, may be increased at any time upon vote of the holders
of a majority of the total number of shares of the Corporation
then issued and outstanding and entitled to vote thereon,
irrespective of class.
(R) If any provisions in this Section Fourth shall be in
conflict or inconsistent with any other provisions of these
Restated Articles of Incorporation of the Corporation the
provisions of this Section Fourth shall prevail and govern.
FIFTH: The Corporation will not commence business until at
least $1,000 has been received by it as consideration for the
issuance of shares.
SIXTH: Existing provisions limiting or denying to
shareholders the preemptive right to acquire additional or
treasury shares of the Corporation are:
No holder of any stock of the Corporation shall be entitled
as of right to purchase or subscribe for any part of any unissued
stock of the Corporation, or any additional stock of any class to
be issued by reason of any increase of the authorized capital
stock of the Corporation or of bonds, certificates of
indebtedness, debentures, or other securities convertible into
stock of the Corporation, but any such unissued stock or any such
additional authorized issue of new stock, or of securities
convertible into stock, may be issued and disposed of by the
Board of Directors without offering to the stockholders then of
record, or to any class of stockholders, any thereof on any
terms.
SEVENTH: Existing provisions of the Restated Articles of
Incorporation for the regulation of the internal affairs of the
Corporation are:
(a) General authority is hereby conferred upon the
Board of Directors to fix the consideration for which shares
of stock of the Corporation without nominal or par value may
be issued and disposed of, and the shares of stock of the
Corporation without nominal or par value, whether authorized
by these Restated Articles of Incorporation or by subsequent
increase of the authorized number of shares of stock or by
amendment of these Restated Articles of Incorporation by
consolidation or merger or otherwise, and/or any securities
convertible into stock of the Corporation without nominal or
par value may be issued and disposed of for such
consideration and on such terms and in such manner as may be
fixed from time to time by the Board of Directors.
(b) The issue of the whole, or any part determined by
the Board of Directors, of the shares of stock of the
Corporation as partly paid, and subject to calls thereon
until the whole thereof shall have been paid, is hereby
authorized.
(c) The Board of Directors shall have power to
authorize the payment of compensation to the directors for
services to the Corporation, including fees for attendance
at meetings of the Board of Directors or the Executive
Committee and all other committees and to determine the
amount of such compensation and fees.
(d) The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by
it, alleged to have been lost or destroyed and the Board of
Directors may, in their discretion, require the owner of the
lost or destroyed certificate, or his legal representative,
to give bond in such sum as they may direct as indemnity
against any claim that may be made against the Corporation,
its officers, employees or agents by reason thereof; a new
certificate may be issued without requiring any bond when,
in the judgment of the directors, it is proper so to do.
If the Corporation shall neglect or refuse to issue
such a new certificate and it shall appear that the owner
thereof has applied to the Corporation for a new certificate
in place thereof and has made due proof of the loss or
destruction thereof and has given such notice of his
application for such new certificate on such newspaper of
general circulation, published in the State of Mississippi
as reasonably should be approved by the Board of Directors,
and in such other newspaper as may be required by the Board
of Directors, and has tendered to the Corporation adequate
security to indemnify the Corporation, its officers
employees, or agents, and any person other than such
applicant who shall thereafter appear to be the lawful owner
of such alleged lost or destroyed certificate against
damage, loss or expense because of the issuance of such new
certificate, and the effect thereof as herein provided,
then, unless there is adequate cause why such new
certificate shall not be issued, the Corporation, upon the
receipt of said indemnity, shall issue a new certificate of
stock in place of such lost or destroyed certificate. In the
event that the Corporation shall nevertheless refuse to
issue a new certificate as aforesaid, the applicant may then
petition any court of competent jurisdiction for relief
against the failure of the Corporation to perform its
obligations hereunder. In the event that the Corporation
shall issue such new certificate, any person who shall
thereafter claim any rights under the certificate in place
of which such new certificate is issued, whether such new
certificate is issued pursuant to the judgment or decree of
such court or voluntarily by the Corporation after the
publication of notice and the receipt of proof and indemnity
as aforesaid, shall have recourse to such indemnity and the
Corporation shall be discharged from all liability to such
person by reason of such certificate and the shares
represented thereby.
(e) No stockholder shall have any right to inspect any
account, book or document of the Corporation, except as
conferred by statute or authorized by the directors.
(f) A director of the Corporation shall not be
disqualified by his office from dealing or contracting with
the Corporation either as a vendor, purchaser or otherwise,
nor shall any transaction or contract of the Corporation be
void or voidable by reason of the fact that any director or
any firm of which any director is a member or any
corporation of which any director is a shareholder, officer
or director, is in any way interested in such transaction or
contract, provided that such transaction or contract is or
shall be authorized, ratified or approved either (1) by a
vote of a majority of a quorum of the Board of Directors or
the Executive Committee, without counting in such majority
or quorum any directors so interested or members of a firm
so interested or a shareholder, officer or director of a
corporation so interested, or (2) by the written consent, or
by vote at a stockholders' meeting of the holders of record
of a majority in number of all the outstanding shares of
stock of the Corporation entitled to vote; nor shall any
director be liable to account to the Corporation for any
profits realized by or from or through any such transaction
or contract of the Corporation, authorized, ratified or
approved as aforesaid by reason of the fact that he or any
firm of which he is a member or any corporation of which he
is a shareholder, officer or director was interested in such
transaction or contract. Nothing herein contained shall
create any liability in the events above described or
prevent the authorization, ratification or approval of such
contract in any other manner provided by law.
(g) Any director may be removed, whether cause shall be
assigned for his removal or not, and his place filled at any
meeting of the stockholders by the vote of a majority of the
outstanding stock of the Corporation entitled to vote.
Vacancies in the Board of Directors, except vacancies
arising from the removal of directors, shall be filed by the
directors remaining in office.
(h) Any property of the Corporation not essential to
the conduct of its corporate business and purposes may be
sold, leased, exchanged or otherwise disposed of by
authority of its Board of Directors and the Corporation may
sell, lease or exchange all of its property and franchises
or any of its property, franchises, corporate rights or
privileges essential to the conduct of its corporate
business and purposes upon the consent of and for such
considerations and upon such terms as may be authorized by a
majority of the Board of Directors and the holders of a
majority of the outstanding shares of stock entitled to
vote, expressed in writing or by vote at a meeting called
for that purpose in the manner provided by the By-Laws of
the Corporation for special meetings of stockholders; and at
no time shall any of the plants, properties, easements,
franchises (other than corporate franchises) or securities
then owned by the Corporation be deemed to be property,
franchises, corporate rights or privileges essential to the
conduct of the corporate business and purposes of the
Corporation.
Upon the vote or consent of the stockholders required
to dissolve the Corporation, the Corporation shall have
power, as the attorney and agent of the holders of all of
its outstanding stock, to sell, assign and transfer all such
stock to a new corporation organized under the laws of the
United States, the State of Mississippi or any other state,
and to receive as the consideration therefor shares of stock
of such new corporation of the several classes into which
the stock of the Corporation is then divided, equal in
number to the number of shares of stock of the Corporation
of said several classes then outstanding, such shares of
said new corporation to have the same preferences, voting
powers, restrictions and qualifications thereof as may then
attach to the classes of stock of the Corporation then
outstanding so far as the same shall be consistent with such
laws of the United States or of the State of Mississippi or
of such other state, except that the whole or any part of
such stock or any class thereof may be stock with or without
nominal or par value. In order to make effective such a
sale, assignment and transfer, the Corporation shall have
the right to transfer all its outstanding stock on its books
and to issue and deliver new certificates therefor in such
names and amounts as such new corporation may direct without
receiving for cancellation the certificates for such stock
previously issued and then outstanding. Upon completion of
such sale, assignment and transfer, the holders of the stock
of the Corporation shall have no rights or interests in or
against the Corporation except the right, upon surrender of
certificates for stock of the Corporation properly endorsed,
if required, to receive from the Corporation certificates
for shares of stock of such new corporation of the class
corresponding to the class of the shares surrendered, equal
in number to the number of shares of the stock of the
Corporation so surrendered.
(i) Upon the written assent or pursuant to the
affirmative vote in person or by proxy of the holders of a
majority in number of the shares then outstanding and
entitled to vote, irrespective of class, (1) any or every
statute of the State of Mississippi hereafter enacted,
whereby the rights, powers or privileges of the Corporation
are or may be increased, diminished or in any way affected
or whereby the rights, powers or privileges of the
stockholders of corporations organized under the law under
which the Corporation is organized, are increased,
diminished or in any way affected or whereby effect is given
to the action taken by any part, less than all, of the
stockholders of any such corporation, shall, notwithstanding
any provisions which may at the time be contained in these
Restated Articles of Incorporation or any law, apply to the
Corporation, and shall be binding not only upon the
Corporation, but upon every stockholder thereof, to the same
extent as if such statute had been in force at the date of
the making and filing of these Restated Articles of
Incorporation and/or (2) amendments of these Restated
Articles of Incorporation authorized at the time of the
making of such amendments by the laws of the State of
Mississippi may be made.
EIGHTH: The Restated Articles of Incorporation correctly set
forth without change the corresponding provisions of the Articles
of Incorporation as heretofore amended and restated, and
supersede the original Articles of Incorporation, and all
amendments thereto, and prior Restated Articles of Incorporation
and all amendments thereto.
DATED: December 21, 1983.
MISSISSIPPI POWER & LIGHT COMPANY
By: D. C. LUTKEN
Its President
[CORPORATE SEAL]
By: F. S. YORK, JR.
Its Secretary
STATE OF MISSISSIPPI
COUNTY OF HINDS
I, Bethel Ferguson, a Notary Public, do hereby certify that
on this 21st day of December, 1983, personally appeared before me
D. C. Lutken. who, being by me first duly sworn, declared that he
is the President of Mississippi Power & Light Company, that he
signed the foregoing document as President of the Corporation,
and that the statements therein contained are true.
BETHEL FERGUSON
Notary Public
My commission expires July 23, 1987.
[NOTARY'S SEAL]
RESTATED ARTICLES OF INCORPORATION
of
MISSISSIPPI POWER & LIGHT COMPANY
Filing and Recording Data
Restated Articles of Incorporation filed with Secretary of State-
- -December 21, 1983
Certificate of Restated Articles of Incorporation issued by
Secretary of State--December 21, 1983
Certificate of Restated Articles of Incorporation and Restated
Articles of Incorporation filed for record in the office of the
Chancery Clerk of the First Judicial District of Hinds County,
Mississippi, Book 189, Page 624--December 22, 1983.
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Resolution Establishing Series of Shares
October 25, 1984
Pursuant to the provisions of Section 79-3-29 of the
Mississippi Business Corporation Law, the undersigned Corporation
submits the following statement for the purpose of establishing
and designating a series of shares and fixing and determining the
relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on October 24,
1984.
Dated this the 25th day of October, 1984.
MISSISSIPPI POWER & LIGHT COMPANY
By/s/ William Cavanaugh, III
William Cavanaugh, III
President
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this October 25, 1984, personally appeared before me William
Cavanaugh, III, who, being by me first duly sworn, declared that
he is President of Mississippi Power & Light Company, that he
executed the foregoing document as President of the Corporation,
and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
March 30, 1986
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this October 25, 1984, personally appeared before me Frank S.
York, Jr., who, being by me first duly sworn, declared that he is
Senior Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, that he executed the foregoing
document as Senior Vice President, Chief Financial Officer and
Secretary of the Corporation, and that the statements therein
contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
March 30, 1986
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 150,000 shares of the Preferred Stock shall:
(a) be designated "16.16% Preferred Stock, Cumulative, $100
Par Value;"
(b) have a dividend rate of $16.16 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be February 1, 1986, and
such dividends to be cumulative from the date of issuance;
(c) be subject to redemption at the price of $116.16 per
share if redeemed on or before November 1, 1989, of $112.12 per
share if redeemed after November 1, 1989, and on or before
November 1, 1994, of $108.08 per share if redeemed after November
1, 1994, and on or before November 1, 1999, and of $104.04 per
share if redeemed after November 1, 1999, in each case plus an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; provided,
however, that no share of the 16.16% Preferred Stock, Cumulative,
$100 Par Value, shall be redeemed prior to November 1, 1989, if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Corporation, or through the use, directly
or indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with the
16.16% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of less
than 16.2772% per annum; and
(d) be subject to redemption as and for a sinking fund as
follows: on November 1, 1989 and on each November 1 thereafter
(each such date being hereinafter referred to as a "16.16%
Sinking Fund Redemption Date"), for so long as any shares of the
16.16% Preferred Stock, Cumulative, $100 Par Value, shall remain
outstanding, the Corporation shall redeem, out of funds legally
available therefor, 7,500 shares of the 16.16% Preferred Stock,
Cumulative, $100 Par Value, (or the number of shares than
outstanding if less than 7,500) at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 16.16% Preferred
Stock, Cumulative, $100 Par Value, being hereinafter referred to
as the "16.16% Sinking Fund Obligation"); the 16.16% Sinking Fund
Obligation shall be cumulative; if on any 16.16% Sinking Fund
Redemption Date, the Corporation shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 16.16% Sinking Fund
Obligation with respect to the shares not redeemed shall carry
forward to each successive 16.16% Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any
16.16% Sinking Fund Redemption Date, the funds of the Corporation
legally available for the satisfaction of the 16.16% Sinking Fund
Obligation and all other sinking fund and similar obligations
than existing with respect to any other class or series of its
stock ranking on a parity as to dividends or assets with the
16.16% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"), are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 16.16% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 16.16% Sinking Fund Obligation to such
Total Sinking Fund Obligation; in addition to the 16.16% Sinking
Fund Obligation, the Corporation shall have the option, which
shall be noncumulative, to redeem, upon authorization of the
Board of Directors, on each 16.16% Sinking Fund Redemption Date,
at the aforesaid sinking fund redemption price, up to 7,500
additional shares of the 16.16% Preferred Stock, Cumulative $100
Par Value; the Corporation shall be entitled, at its election, to
credit against its 16.16% Sinking Fund Obligation on any 16.16%
Sinking Fund Redemption Date any shares of the Preferred Stock,
Cumulative, $100 Par Value (including shares of the 16.16%
Preferred Stock, Cumulative, $100 Par Value, optionally redeemed
at the aforesaid sinking fund price) theretofore redeemed (other
than shares of the 16.16% Preferred Stock, Cumulative, $100 Par
Value, redeemed pursuant to the 16.16% Sinking Fund Obligation)
purchased or otherwise acquired and not previously credited
against the 16.16% Sinking Fund Obligation.
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Resolution Establishing Series of Shares
July 24, 1986
Pursuant to the provisions of Section 79-3-29 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement for the purpose of establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on July 24, 1986.
Dated this the 24th day of July, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By/s/ William Cavanaugh, III
William Cavanaugh, III
President
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joseph L. Blount, a Notary Public, do hereby certify that
on this July 24, 1986, personally appeared before me William
Cavanaugh, III, who, being by me first duly sworn, declared that
he is President of Mississippi Power & Light Company, a
Mississippi corporation, that he executed the foregoing document
as President of the Corporation, and that the statements therein
contained are true.
/s/ Joseph L. Blount
Joseph L. Blount, Notary Public
My Commission Expires:
January 20, 1990
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joseph L. Blount, a Notary Public, do hereby certify that
on this July 24, 1986, personally appeared before me Frank S.
York, Jr., who, being by me first duly sworn, declared that he is
Senior Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as Senior Vice President,
Chief Financial Officer and Secretary of the Corporation, and
that the statements therein contained are true.
/s/ Joseph L. Blount
Joseph L. Blount, Notary Public
My Commission Expires:
January 20, 1990
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 350,000 shares of the Preferred Stock shall:
(a) be designated "9% Preferred Stock, Cumulative, $100 Par
Value;"
(b) have a dividend rate of $9.00 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be November 1, 1986, and
such dividends to be cumulative from the date of issuance;
(c) be subject to redemption at the price of $109.00 per
share if redeemed on or before July 1, 1991, of $106.75 per share
if redeemed after July 1, 1991, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon, if
any, to the date fixed for redemption; provided, however, that no
share of the 9% Preferred Stock, Cumulative, $100 Par Value,
shall be redeemed prior to July 1, 1991, if such redemption is
for the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed by the
Corporation, or through the use, directly or indirectly, of funds
derived through the issuance by the Corporation of stock ranking
prior to or on a parity with the 9% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed funds
have an effective interest cost to the Corporation (computed in
accordance with generally accepted financial practice) or such
stock has an effective dividend cost to the Corporation (so
computed) of less than 9.9901% per annum; and
(d) be subject to redemption as and for a sinking fund as
follows: on July 1, 1991, and on each July 1 thereafter (each
such date being hereinafter referred to as a "9% Sinking Fund
Redemption Date"), for so long as any shares of the 9% Preferred
Stock, Cumulative, $100 Par Value, shall remain outstanding, the
Corporation shall redeem, out of funds legally available
therefor, 70,000 shares of the 9% Preferred Stock, Cumulative,
$100 Par Value, (or the number of shares than outstanding if less
than 70,000) at the sinking fund redemption price of $100 per
share plus, as to each share so redeemed, an amount equivalent to
the accumulated and unpaid dividends thereon, if any, to the date
of redemption (the obligation of the Corporation so to redeem the
shares of the 9% Preferred Stock, Cumulative, $100 Par Value,
being hereinafter referred to as the "9% Sinking Fund
Obligation"); the 9% Sinking Fund Obligation shall be cumulative;
if on any 9.% Sinking Fund Redemption Date, the Corporation shall
not have funds legally available therefor sufficient to redeem
the full number of shares required to be redeemed on that date,
the 9% Sinking Fund Obligation with respect to the shares not
redeemed shall carry forward to each successive 9% Sinking Fund
Redemption Date until such shares shall have been redeemed;
whenever on any 9% Sinking Fund Redemption Date, the funds of the
Corporation legally available for the satisfaction of the 9%
Sinking Fund Obligation and all other sinking fund and similar
obligations than existing with respect to any other class or
series of its stock ranking on a parity as to dividends or assets
with the 9% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"), are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 9% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 9% Sinking Fund Obligation to such
Total Sinking Fund Obligation; the Corporation shall be entitled,
at its election, to credit against its 9% Sinking Fund Obligation
on any 9% Sinking Fund Redemption Date any shares of the
Preferred Stock, Cumulative, $100 Par Value, theretofore
redeemed (other than shares of the 9% Preferred Stock,
Cumulative, $100 Par Value, redeemed pursuant to the 9% Sinking
Fund Obligation) purchased or otherwise acquired and not
previously credited against the 9% Sinking Fund Obligation.
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Cancellation of Shares
September 1, 1986
Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The number of redeemable shares cancelled through
redemption is 20,000 shares of 17% preferred stock,
cumulative, $100 par value.
3. The aggregate number of issued shares, itemized by class
and series, after giving effect to such cancellation is
as follows:
(a) 6,275,000 shares of common stock, without par
value;
(b) 59,920 shares of 4.36% preferred stock, cumulative,
$100 par value;
(c) 43,888 shares of 4.56% preferred stock, cumulative,
$100 par value;
(d) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(e) 75,000 shares of 9.16% preferred stock, cumulative,
$100 par value;
(f) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(g) 180,000 shares of 17% preferred stock, cumulative,
$100 par value;
(h) 100,000 shares of 14.75% preferred stock,
cumulative, $100 par value;
(i) 100,000 shares of 12% preferred stock, cumulative,
$100 par value;
(j) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(k) 350,000 shares of 9% preferred stock, cumulative,
$100 par value;
4. The amount, expressed in dollars, of the stated capital
of the Corporation, after giving effect to such
cancellation is $270,205,800.00.
5. The Restated Articles of Incorporation of the
Corporation provide that the cancelled shares shall not
be reissued, and the number of shares which the
Corporation has authority to issue, itemized by class,
after giving effect to such cancellation, is as follows:
(a) 15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b) 1,984,476 shares of preferred stock, 1,258,808
shares of which are issued and outstanding as
outlined above.
Dated this the 10th day of December, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ A. H. Mapp
A. H. Mapp
Assistant Secretary and
Assistant Treasurer
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Cancellation of Shares
November 1, 1986
Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The number of redeemable shares cancelled through
redemption is 180,000 shares of 17% preferred stock,
cumulative, $100 par value.
3. The aggregate number of issued shares, itemized by class
and series, after giving effect to such cancellation is
as follows:
(a) 6,275,000 shares of common stock, without par
value;
(b) 59,920 shares of 4.36% preferred stock, cumulative,
$100 par value;
(c) 43,888 shares of 4.56% preferred stock, cumulative,
$100 par value;
(d) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(e) 75,000 shares of 9.16% preferred stock, cumulative,
$100 par value;
(f) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(g) 100,000 shares of 14.75% preferred stock,
cumulative, $100 par value;
(h) 100,000 shares of 12% preferred stock, cumulative,
$100 par value;
(i) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(j) 350,000 shares of 9% preferred stock, cumulative,
$100 par value;
4. The amount, expressed in dollars, of the stated capital
of the Corporation, after giving effect to such
cancellation is $252,205,800.00.
5. The Restated Articles of Incorporation of the
Corporation provide that the cancelled shares shall not
be reissued, and the number of shares which the
Corporation has authority to issue, itemized by class,
after giving effect to such cancellation, is as follows:
(a) 15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b) 1,804,476 shares of preferred stock, 1,078,808
shares of which are issued and outstanding as
outlined above.
Dated this the 10th day of December, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ A. H. Mapp
A. H. Mapp
Assistant Secretary and
Assistant Treasurer
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Cancellation of Shares
November 1, 1986
Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The number of redeemable shares cancelled through
redemption is 100,000 shares of 14.75% preferred stock,
cumulative, $100 par value.
3. The aggregate number of issued shares, itemized by class
and series, after giving effect to such cancellation is
as follows:
(a) 6,275,000 shares of common stock, without par
value;
(b) 59,920 shares of 4.36% preferred stock, cumulative,
$100 par value;
(c) 43,888 shares of 4.56% preferred stock, cumulative,
$100 par value;
(d) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(e) 75,000 shares of 9.16% preferred stock, cumulative,
$100 par value;
(f) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(g) 100,000 shares of 12% preferred stock, cumulative,
$100 par value;
(h) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(i) 350,000 shares of 9% preferred stock, cumulative,
$100 par value;
4. The amount, expressed in dollars, of the stated capital
of the Corporation, after giving effect to such
cancellation is $242,205,800.00.
5. The Restated Articles of Incorporation of the
Corporation provide that the cancelled shares shall not
be reissued, and the number of shares which the
Corporation has authority to issue, itemized by class,
after giving effect to such cancellation, is as follows:
(a) 15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b) 1,704,476 shares of preferred stock, 978,808 shares
of which are issued and outstanding as outlined
above.
Dated this the 10th day of December, 1986.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ Frank S. York, Jr.
Frank S. York, Jr.
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ A. H. Mapp
A. H. Mapp
Assistant Secretary and
Assistant Treasurer
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
MISSISSIPPI POWER & LIGHT COMPANY
Statement of Resolution Establishing Series of Shares
January 13, 1987
Pursuant to the provisions of Section 79-3-29 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement for the purpose of establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on January 13,
1987.
Dated this the 13th day of January, 1987.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ D. C. Lutken
D. C. Lutken
President, Chairman of
the Board and Chief
Executive Officer
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this January 13, 1987, personally appeared before me D. C.
Lutken, who, being by me first duly sworn, declared that he is
President, Chairman of the Board and Chief Executive Officer of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as President, Chairman of
the Board and Chief Executive Officer of the Corporation, and
that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
STATE OF MISSISSIPPI
COUNTY OF MINDS
I, Joy L. Spears, a Notary Public, do hereby certify that on
this January 13, 1987, personally appeared before me G. A. Goff,
who, being by me first duly sworn, declared that he is Senior
Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as Senior Vice President,
Chief Financial Officer and Secretary of the Corporation, and
that the statements therein contained are true.
/s/ Joy L. Spears
Joy L. Spears, Notary Public
My Commission Expires:
________________________
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 350,000 shares of the Preferred Stock shall:
(a) be designated "9.76% Preferred Stock, Cumulative, $100
Par Value;"
(b) have a dividend rate of $9.76 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be May 1, 1987, and such
dividends to be cumulative from the date of issuance;
(c) be subject to redemption at the price of $109.76 per
share if redeemed on or before January 1, 1988, of $108.68 per
share if redeemed after January 1, 1988, and on or before January
1, 1989, of $107.60 per share if redeemed after January 1, 1989,,
and on or before January 1, 1990, of $106.51 per share if
redeemed after January 1, 1990, and on or before January 1, 1991,
of $105.43 per share if redeemed after January 1, 1991, and on or
before January 1, 1992, of $104.34 per share if redeemed after
January 1, 1992, and on or before January 1, 1993, of $103.26 per
share if redeemed after January 1, 1993, and on or before January
1, 1994, of $102.17 per share if redeemed after January 1, 1994,
and on or before January 1, 1995, of $101.09 per share if
redeemed after January 1, 1995, and on or before January 1, 1996,
and of $100.00 per share if redeemed after January 1, 1996, in
each case plus an amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date fixed for redemption;
provided, however, that no share of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, shall be redeemed prior to January 1,
1992, if such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Corporation, or through the use, directly
or indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with the
9.76% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of less
than 9.9165% per annum; and
(d) be subject to redemption as and for a sinking fund as
follows: on January 1, 1993, and on each January 1 thereafter
(each such date being hereinafter referred to as a "9.76% Sinking
Fund Redemption Date"), for so long as any shares of the 9.76%
Preferred Stock, Cumulative, $100 Par Value, shall remain
outstanding, the Corporation shall redeem, out of funds legally
available therefor, 70,000 shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, (or the number of shares than
outstanding if less than 70,000) at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, being hereinafter referred to as the
"9.76% Sinking Fund Obligation"); the 9.76% Sinking Fund
Obligation shall be cumulative; if on any 9.76% Sinking Fund
Redemption Date, the Corporation shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 9.76% Sinking Fund
Obligation with respect to the shares not redeemed shall carry
forward to each successive 9.76% Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any 9.76%
Sinking Fund Redemption Date, the funds of the Corporation
legally available for the satisfaction of the 9.76% Sinking Fund
Obligation and all other sinking fund and similar obligations
than existing with respect to any other class or series of its
stock ranking on a parity as to dividends or assets with the
9.76% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"), are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 9.76% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 9.76% Sinking Fund Obligation to such
Total Sinking Fund Obligation; the Corporation shall be entitled,
at its election, to credit against its 9.76% Sinking Fund
Obligation on any 9.76% Sinking Fund Redemption Date any shares
of the Preferred Stock, Cumulative, $100 Par Value, theretofore
redeemed (other than shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, redeemed pursuant to the 9.76%
Sinking Fund Obligation) purchased or otherwise acquired and not
previously credited against the 9.76% Sinking Fund Obligation.
FURTHER RESOLVED That the officers of the Company are hereby
authorized and directed to execute, file, publish and record all
such statements and other documents, and to do and perform all
such other and further acts and things, as in the judgment of the
officer or officers taking such action may be necessary or
desirable for the purpose of causing the immediately preceding
resolution to become fully effective and of causing said
resolution to become and constitute an amendment of the Restated
Articles of Incorporation of the Company, all in the manner and
to the extent required by the Mississippi Business Corporation
Law.
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1987)
March 8, 1988
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 5,000 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 6,275,000 of such shares being issued and
outstanding at the date hereof; and
(b)1,699,476 shares of preferred stock, 1,323,808
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 95,000 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 8th day of March, 1988.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
By /s/ J. R. Martin
J. R. Martin
Treasurer and Assistant
Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
January 19, 1989
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 1,500 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,699,476 shares of preferred stock, 1,323,808
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 93,500 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 19th day of January, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
REGISTERED AGENT/OFFICE STATEMENT OF CHANGE
(Mark appropriate box)
X DOMESTIC X PROFIT
FOREIGN NONPROFIT
1. Name of Corporation:
Mississippi Power & Light Company
Federal Tax ID: 64-0205830
2. Current street address of registered office:
308 East Pearl Street
Jackson, Mississippi 39201
3. New street address of registered office: (No change)
4. Name of current registered agent:
Donald C. Lutken or Robert C. Grenfell
5. Name of new registered agent:
Michael B. Bemis or Robert C. Grenfell
6. (Mark appropriate box)
(X) The undersigned hereby accepts designation as
registered agent for service of process.
/s/ Michael B. Bemis
/s/ Robert C. Grenfell
( ) Statement of written consent if attached.
7. ( ) Nonprofit. The street address of the registered
office and the street address of the
principal office of its registered
agent will be identical.
(X) Profit. The street address of the registered
office and the street address of the
business office of its registered agent
will be identical.
8. The corporation has been notified of the change of
registered office.
Mississippi Power & Light Company
Corporate Name
By: Michael B. Bemis, President and COO /s/ Michael B. Bemis
PRINTED NAME/CORPORATE TITLE SIGNATURE
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
March 30, 1989
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 8,500 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,699,476 shares of preferred stock, 1,323,808
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 85,000 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 30th day of March, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
March 30, 1989
The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 5,800 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,692,176 shares of preferred stock, 1,316,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 87,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 150,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 30th day of March, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
ARTICLES OF CORRECTION
(Mark appropriate box)
X PROFIT NONPROFIT
The undersigned corporation, pursuant to Section 79-4-1.24 (if a
profit corporation) or Section 79-11-113 (if a nonprofit
corporation) of the Mississippi Code of 1972, as amended, hereby
executes the following document and sets forth:
1. The name of the corporation is:
Mississippi Power & Light Company
2. (Mark appropriate box.)
(X) The document to be corrected is Articles of
Amendment which became effective on March 31,
1989 (date).
( ) A copy of the document to be corrected is attached.
3. The aforesaid articles contain the following incorrect
statement:
See Attachment "A"
4. a. The reason such statement is incorrect is: The
reduction in the number of shares of the class and
series referred to in attachment A was incorrectly
states as 8,500, and should have been 5,800, which
incorrect statement is a component of certain other
statements made in the Articles of Amendment, all as
reflected in attachment "A".
or
b. The manner in which the execution of such document
was defective was:
5. The correction is as follows: Attachment "B", a new
executed form of Articles of Amendment, is substituted
in its entirety for the Articles of Amendment referred
to above.
6. The certificate of correction shall become effective on
March 31, 1989.
By: Mississippi Power & Light Company /s/ G. A. Goff
printed name/corporation title G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
ATTACHMENT "A"
The following incorrect statements were included in the
Articles of Amendment under Miss. Code Ann. Section 74-4-6.31
(Supp. 1988) dated March 30, 1989:
1. Paragraph 2 thereof provided as follows: "The
reduction in the number of authorized shares, itemized
by class and series, is 8,500 shares of 12% Preferred
Stock, Cumulative, $100 par value."
2. Paragraph 3(b) provided in part as follows: "1,699,476
shares of preferred stock, 1,323,808 shares of which
are issued and outstanding in the following series:
(vi) 85,000 shares of 12% preferred stock,
cumulative, $100 par value;
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988)
November 2, 1989
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988), submits the following document
and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 90,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,602,176 shares of preferred stock, 1,226,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $200 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 87,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 60,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 2nd day of November, 1989.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1972)
March 28, 1990
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1972), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of
12.009% Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,592,176 shares of preferred stock, 1,216,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $200 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 77,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 60,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 30th day of March, 1990.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1972)
November 2, 1990
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1972), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,577,176 shares of preferred stock, 1,201,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 77,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 45,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 2nd day of November, 1990.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
[Letterhead of Wise Carter Child & Caraway]
March 26, 1991
Ms. Sylvia Jacobs
Branch Supervisor-Corporations Business Services
Secretary of State of State of Mississippi
202 North Congress Street, Suite 601
Jackson, MS 39205
Re: Mississippi Power & Light Company
Articles of Amendment
Dear Ms. Jacobs:
I received your Notice of Return regarding the Articles of
Amendment we recently filed for Mississippi Power & Light Company
under Section 79-4-6.31 of the Mississippi Code. Your Notice of
Return states that we must use Form C-3 provided in the Guide for
Domestic Corporations published by the Mississippi Secretary of
State.
I draw your attention to the fact that the Articles of
Amendment we are filing are being filed under Section 79-4-6.31
(1989) of the Mississippi Code, and not Section 79-4-10.06. I
agree that if we were filing Articles of Amendment under Section
79-4-10.06, the proper form to use would be Form C-3 provided by
the Mississippi Secretary of State. However, the Articles of
Amendment we are filing are being filed only because stock was
redeemed by the corporation and is now being cancelled.
We have used the form enclosed with this letter numerous
times in the past to file Articles of Amendment pursuant to
Section 79-4-6.31, after consultation with Ray Bailey. It is my
opinion that the form for the standard Articles of Amendment
would not be appropriate for the type of amendment we are filing,
and there is no place on the form to provide the information
required under Section 79-4-6.31. Accordingly, I am returning
our duplicate originals of the Articles of Amendment and request
that you file one among the records in your office, and return
the conformed copy, marked "Filed," to my attention at the above
address.
If you have any questions, please feel free to call at the
above direct dial number.
Very truly yours,
/s/ J. Michael Cockrell
J. Michael Cockrell
DMC/st
Enclosure
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 18, 1991
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is (a) 80 shares of 4.36%
preferred stock, cumulative, $100 par value; (b) 588
shares of 4.56% preferred stock, cumulative, $100 par
value; and (c) 10,000 shares of 12% preferred stock,
cumulative, $100 par value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,566,508 shares of preferred stock, 1,191,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 67,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 45,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)350,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 18th day of March, 1991.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ G. A. Goff
G. A. Goff
Senior Vice President,
Chief Financial Officer
and Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 12, 1991
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,496,508 shares of preferred stock, 1,121,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 67,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 45,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 12th day of July, 1991.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
A. H. Mapp
Assistant Treasurer and
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
November 19, 1991
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,481,508 shares of preferred stock, 1,106,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 67,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 30,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 19th day of November, 1991.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
A. H. Mapp
Assistant Treasurer and
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 13, 1992
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 7,579,400 of such shares being issued and
outstanding at the date hereof; and
(b)1,471,508 shares of preferred stock, 1,096,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 30,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 13th day of March, 1992.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 15, 1992
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,401,508 shares of preferred stock, 1,026,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 30,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
Dated this the 15th day of July, 1992.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment - Statement of Resolution
Establishing Series of Shares
October 22, 1992
Pursuant to the provisions of Section 79-4-6.02(d) of the
Mississippi Code of 1972 (Supp. 1989), Mississippi Power & Light
Company submits the following statement for the purpose of
establishing and designating a series of shares and fixing and
determining the relative rights and preferences thereof:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The attached resolution establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof was duly adopted by the
Board of Directors of the Corporation on October 22,
1992.
Dated this the 22nd day of October, 1992.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Allan H. Mapp
Assistant Secretary and
Assistant Treasurer
MISSISSIPPI POWER & LIGHT COMPANY
Excerpts from the minutes of the Meeting
of the Board of Directors held on October 22, 1992
RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:
A series of 200,000 shares of the Preferred Stock shall:
(a) be designated as the "8.36% Preferred Stock,
Cumulative, $100 Par Value";
(b) have a dividend rate of $8.36 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be February 1, 1993, and
such dividends to be cumulative from the date of issuance; and
(c) be subject to redemption at the price of $100 par share
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption (except that no
share of the 8.36% Preferred Stock shall be redeemed on or before
October 1, 1997).
FURTHER RESOLVED That the officers of the Company are hereby
authorized and directed to execute, file and publish and record
all such statements and other documents, and to do and perform
all such other and further acts and things, as in the judgment of
the officer and officers taking such action may be necessary or
desirable for the purpose of causing the immediately preceding
resolution to become fully effective and of causing said
resolution to become and constitute an amendment of the Restated
Articles of Incorporation of the Company, all in the manner and
to the extent required by the Mississippi Business Corporation
Law.
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
November 6, 1992
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,386,508 shares of preferred stock, 1,211,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 350,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 6th day of November, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
January 12, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.76%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,316,508 shares of preferred stock, 1,141,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 57,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 12th day of January, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 10, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,306,508 shares of preferred stock, 1,131,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 47,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 10th day of March, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ A. H. Mapp
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 12, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,236,508 shares of preferred stock, 1,061,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 47,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 15,000 shares of 16.16% preferred stock,
cumulative, $100 par value;
(viii)140,000 shares of 9% preferred stock,
cumulative, $100 par value;
(ix) 280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(x) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 12th day of July, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ James W. Snider
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
November 15, 1993
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 15,000 shares of 16.16%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)1,221,508 shares of preferred stock, 1,046,508
shares of which are issued and outstanding in the
following series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 47,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 140,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)280,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 15th day of November, 1993.
MISSISSIPPI POWER & LIGHT COMPANY
By /s/ James W. Snider
Title: Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-10.06 (1989)
February 4, 1994
The undersigned corporation, pursuant to Section 79-4-10.06
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. As evidenced by the attached Stockholder's Written
Approval of Amendment authorizing 1,500,000 additional
shares of Preferred Stock of the par value of $100 per
share, the following amendment of the Restated Articles
of Incorporation, as amended (the "Charter"), was
proposed by the Board of Directors of Mississippi Power
& Light Company on October 29, 1993, was adopted by the
stockholders of the Corporation entitled to vote on the
amendment on February 4, 1994, in accordance with and in
the manner prescribed by the laws of the State of
Mississippi and the Charter of Mississippi Power & Light
Company:
The first paragraph in Article FOURTH of the Charter is
amended to read as follows:
FOURTH: The aggregate number of shares which the
Corporation shall have authority to issue is
17,721,508 shares, divided into 2,721,508 shares of
Preferred Stock of the par value of $100 per share
and 15,000,000 shares of Common Stock without par
value.
3. Pursuant to the Laws of the State of Mississippi and the
Charter of Mississippi Power & Light Company, the
holders of Preferred Stock of the par value of $100 per
share were not entitled to vote on the amendment as a
separate voting group. The holders of the outstanding
shares of common stock were the only stockholders
entitled to vote on the amendment.
4. The number of shares of common stock of the corporation
outstanding at the time of such adoption was 8,666,357;
and the number of shares entitled to vote thereon was
8,666,357.
Dated this the 4th day of February, 1994.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ Edwin Lupberger
Edwin Lupberger
Chairman of the Board and
Chief Executive Officer
By: /s/ Donald E. Meiners
Donald E. Meiners
President
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 17, 1994
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,641,508 shares of preferred stock, 966,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 37,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 140,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 17th day of March, 1994.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
August 1, 1994
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,571,508 shares of preferred stock, 896,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 37,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 70,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)210,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 1st day of August, 1994.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
January 18, 1995
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.76%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,501,508 shares of preferred stock, 826,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 37,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 70,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)140,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 18th day of January, 1995.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 7, 1995
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,491,508 shares of preferred stock, 816,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 27,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 70,000 shares of 9% preferred stock,
cumulative, $100 par value;
(viii)140,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 7th day of March, 1995.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
July 20, 1995
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.00%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,421,508 shares of preferred stock, 746,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 27,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 140,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 20th day of July, 1995.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
January 19, 1996
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 70,000 shares of 9.76%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,351,508 shares of preferred stock, 676,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 27,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 70,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 19th day of January, 1996.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
MISSISSIPPI POWER & LIGHT COMPANY
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
March 6, 1996
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Mississippi Power & Light
Company.
2. The reduction in the number of authorized shares,
itemized by class and series, is 10,000 shares of 12%
Preferred Stock, Cumulative, $100 Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,341,508 shares of preferred stock, 666,508 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(vi) 17,700 shares of 12% preferred stock,
cumulative, $100 par value;
(vii) 70,000 shares of 9.76% preferred stock,
cumulative, $100 par value; and
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 6th day of March, 1996.
MISSISSIPPI POWER & LIGHT COMPANY
By: /s/ J. W. Snider, Jr.
Assistant Secretary
OFFICE OF THE MISSISSIPPI SECRETARY OF STATE
P. O. Box 136, Jackson, MS 39205-0136 (601) 359-1333
Articles of Amendment
The undersigned persons, pursuant to Section 79-4-10.06 (if a
profit corporation) or Section 79-11-305 (if a nonprofit
corporation) of the Mississippi Code of 1972, hereby execute the
following document and set forth:
1. Type of Corporation
X Profit Nonprofit
2. Name of Corporation
Mississippi Power & Light Company
3. The future effective date is (Complete if applicable)
4. Set forth the text of each amendment adopted. (Attach page)
5. If an amendment for a business corporation provides for an
exchange, reclassification, or cancellation of issued
shares, set forth the provisions for implementing the
amendment if they are not contained in the amendment itself.
(Attach page)
6. The amendment(s) was (were) adopted on: 04/22/96
FOR PROFIT CORPORATION (Check the appropriate box)
Adopted by the incorporators directors without shareholder
action and shareholder action
was not required.
FOR NONPROFIT CORPORATION (Check the appropriate box)
Adopted by the incorporators board of directors without
member action and member
action was not required.
FOR PROFIT CORPORATION
7. If the amendment was approved by shareholders
(a) The designation, number of outstanding shares, number
of votes entitled to be cast by each voting group
entitled to vote separately on the amendment, and the
number of votes of each voting group indisputably
represented at the meeting were
No of No. of votes No. of votes
outstanding entitled to indisputably
Designation shares be case represented
Common Stock 8666357 8666357 8666357
(b) EITHER
(i) the total number of votes cast for and against the
amendment by each voting group entitled to vote
separately on the amendment was
Total no. of Total no. of
Voting Group votes case FOR votes case AGAINST
Common stock 8666357 0
OR
(ii) the total number of undistributed votes cast for
the amendment by each voting group was
Total no. of
Voting Group undisputed votes case FOR the plan
and the number of votes case for the amendment by each
voting group was sufficient for approval by that voting
group.
FOR NONPROFIT CORPORATION
8. If the amendment was approved by the members
(a) The designation, number of memberships outstanding,
number of votes entitled to be cast by each class
entitled to vote separately on the amendment, and the
number of votes of each class indisputably represented
at the meeting were
No. of No. of No. of votes
memberships votes entitled indisputably
Designation outstanding to be cast represented
(b) EITHER
(i) the total number of votes cast for and against the
amendment by each class entitled to vote separately on
the amendment was
Total no. of Total no. of
Voting votes cast FOR votes cast AGAINST
OR
(ii) the total number of undistributed votes cast for the
amendment by each class was
Total no. of undisputed
Voting class votes cast FOR the amendment
and the number of votes cast for the amendment by each voting
group was sufficient for approval by that voting group.
By: Signature /s/ Michael G. Thompson
Printed Name Michael G. Thompson
Title: Senior Vice President
The Restated Articles of Incorporation of Mississippi Power &
Light Company, as amended, are amended, effective April 22, 1996,
by deleting the title and article FIRST in their entirety and
replacing therefor the following:
RESTATED ARTICLES OF INCORPORATION
OF
ENTERGY MISSISSIPPI, INC.
FIRST: The name of the Corporation is ENTERGY MISSISSIPPI, INC.
Any additional references to "Mississippi Power & Light
Company" in said Restated Articles of Incorporation, as amended,
are changed to "Entergy Mississippi, Inc."
ENTERGY MISSISSIPPI, INC.
Articles of Amendment Under Miss. Code Ann.
Section 79-4-6.31 (1989)
January 28, 1997
The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:
1. The name of the corporation is Entergy Mississippi, Inc.
2. The reduction in the number of authorized shares,
itemized by class and series, is 17,700 shares of 12%
Preferred Stock, Cumulative, $100 Par Value and (b)
70,000 shares of 9.76% Preferred Stock, Cumulative, $100
Par Value.
3. The total number of authorized shares, itemized by class
and series, remaining after reduction of the shares is
as follows:
(a)15,000,000 shares of common stock, without par
value, 8,666,357 of such shares being issued and
outstanding at the date hereof; and
(b)2,253,808 shares of preferred stock, 578,808 shares
of which are issued and outstanding in the following
series:
(i) 59,920 shares of 4.36% preferred stock,
cumulative, $100 par value;
(ii) 43,888 shares of 4.56% preferred stock,
cumulative, $100 par value;
(iii) 100,000 shares of 4.92% preferred stock,
cumulative, $100 par value;
(iv) 75,000 shares of 9.16% preferred stock,
cumulative, $100 par value;
(v) 100,000 shares of 7.44% preferred stock,
cumulative, $100 par value;
(ix) 200,000 shares of 8.36% preferred stock,
cumulative, $100 par value.
Dated this the 28th day of January, 1997.
ENTERGY MISSISSIPPI, INC.
By: /s/ J. W. Snider, Jr.
Assistant Secretary
Exhibit 4(a) 12
$100,000,000
CREDIT AGREEMENT
Dated as of September 13, 1996
Among
ENTERGY CORPORATION
and
ENTERGY TECHNOLOGY HOLDING COMPANY,
as Borrowers
THE BANKS NAMED HEREIN
as Banks
and
THE BANK OF NEW YORK
as Agent
<PAGE>
CREDIT AGREEMENT
Dated as of September 13, 1996
ENTERGY CORPORATION, a Delaware corporation, ENTERGY
TECHNOLOGY HOLDING COMPANY, a Delaware corporation, the BANKS
listed on the signature pages hereof, and THE BANK OF NEW YORK,
as agent for the Lenders hereunder, agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION I.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Adjusted CD Rate" means, for any Interest Period for
each Adjusted CD Rate Advance made as part of the same Contract
Borrowing, an interest rate per annum equal to the sum of:
(a) the rate per annum obtained by dividing (i) the
rate of interest determined by the Agent to be the average
(rounded upward to the nearest whole multiple of 1/100 of 1% per
annum, if such average is not such a multiple) of the consensus
bid rate determined by each of the Reference Banks for the bid
rates per annum, at 9:00 A.M. (New York City time) (or as soon
thereafter as practicable) on the first day of such Interest
Period, of New York certificate of deposit dealers of recognized
standing selected by such Reference Bank for the purchase at face
value of certificates of deposit of such Reference Bank in an
amount substantially equal to such Reference Bank's Adjusted CD
Rate Advance made as part of such Contract Borrowing and with a
maturity equal to such Interest Period, by (ii) a percentage
equal to 100% minus the Adjusted CD Rate Reserve Percentage for
such Interest Period, plus
(b) the Assessment Rate for such Interest Period.
The Adjusted CD Rate for the Interest Period for each Adjusted CD
Rate Advance made as part of the same Contract Borrowing shall be
determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from the Reference Banks
on the first day of such Interest Period, subject, however, to
the provisions of Section 2.09.
"Adjusted CD Rate Advance" means a Contract Advance
that bears interest as provided in Section 2.07(b).
"Adjusted CD Rate Reserve Percentage" for the Interest
Period for each Adjusted CD Rate Advance made as part of the same
Contract Borrowing means the reserve percentage applicable on the
first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with deposits
exceeding one billion dollars with respect to liabilities
consisting of or including (among other liabilities) U.S. dollar
nonpersonal time deposits in the United States with a maturity
equal to such Interest Period.
"Advance" means a Contract Advance or an Auction
Advance.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or officer
of such Person.
"Agent" means The Bank of New York, as agent for the
Lenders hereunder, and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office witereunder,
and any successor Agent appointed hereunder.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the case
of an Auction Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office wit
ffiliate" of a person or entity means any trade or business (whether
or not incorporated) that is a member of a group of which such
person or entity is a member and that is under common control with
such person or entity within the meaning of Section 414 of the Internal
Revenue Code of 1986, and the regulations promulgated and rulings
issued thereunder, each as amended or modified from time to time.
"ERISA Plan" means an employee benef ffiliate"
of a person or entity means any trade or business (whether or not
incorporated) that is a member of a group of which such person or
entity is a member and that is under common control with such
person or entity within the meaning of Section 414 of the
Internal Revenue Code of 1986, and the regulations promulgated
and rulings issued thereunder, each as amended or modified from
time to time.
"ERISA Plan" means an employee benef ffiliate"
of a person or entity means any trade or business (whether or not
incorporated) that is a member of a group of which such person or
entity is a member and that is under common control with such
person or entity within the meaning of Section 414 of the
Internal Revenue Code of 1986, and the regulations promulgated
and rulings issued thereunder, each as amended or modified from
time to time.
"ERISA Plan" means an employee benef ffiliate"
of a person or entity means any trade or business (whether or not
incorporated) that is a member of a group of which such person or
entity is a member and that is under common control with such
person or entity within the meaning of Section 414 of the
Internal Revenue Code of 1986, and the regulations promulgated
and rulings issued thereunder, each as amended or modified from
time to time.
"ERISA Plan" means an employee benef ffiliate"
of a person or entity means any trade or business (whether or not
incorporated) that is a member of a group of which such person or
entity is a member and that is under common control with such
person or entity within the meaning of Section 414 of the
Internal Revenue Code of 1986, and the regulations promulgated
and rulings issued thereunder, each as amended or modified from
time to time.
"ERISA Plan" means an employee benef ffiliate"
of a person or entity means any trade or business (whether or not
incorporated) that is a member of a group of which such person or
entity is a member and that is under common control with such
person or entity within the meaning of Section 414 of the
Internal Revenue Code of 1986, and the regulations promulgated
and rulings issued thereunder, each as amended or modified from
time to time.
"ERISA Plan" means an employee benef ffiliate"
of a person or entity means any trade or business (whether or not
incorporated) that is a member of a group of which such person or
entity is a member and that is under common control with such
person or entity within the meaning of Section 414 of the
Internal Revenue Code of 1986, and the regulations promulgated
and rulings issued thereunder, each as amended or modified from
time to time.
"ERISA Plan" means an employee benef first day of such
Interest Period, subject, however, to the provisions of Section
2.09.
"Eurodollar Rate Advance" means a Contract Advance that
bears interest as provided in Section 2.07(c).
"Eurodollar Rate Reserve Percentage" of any Lender for
the Interest Period for any Eurodollar Rate Advance means the
reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest
Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having
a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section
6.01.
"FCC" means the United States Federal Communications
Commission.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means that certain letter agreement, dated
September 13, 1996, between Entergy and the Agent.
"Guaranteed Obligations" has the meaning specified in
Section 8.01.
"Guarantor" means Entergy, in its capacity as Guarantor
under Article VIII hereof.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Interest Period" means, for each Contract Advance made
as part of the same Contract Borrowing, the period commencing on
the date of such Contract Advance or the date of the Conversion
of any Contract Advance into such a Contract Advance and ending
on the last day of the period selected by the applicable Borrower
pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected
by such Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be 30, 60, 90, 180 or, subject
to availability from each Lender, 270 or 360 days in the case of
an Adjusted CD Rate Advance, and 1, 2, 3, 6 or, subject to
availability from each Lender, 9 or 12 months in the case of a
Eurodollar Rate Advance, in each case as the applicable Borrower
may, upon notice received by the Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the first
day of such Interest Period, select; provided, however, that:
(i) such Borrower may not select any Interest
Period that ends after the Termination Date;
(ii) Interest Periods commencing on the same date
for Contract Advances made as part of the same Contract
Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended
to occur on the next succeeding Business Day, provided that,
in the case of any Interest Period for a Eurodollar Rate
Advance, if such extension would cause the last day of such
Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on
the next preceding Business Day.
"Junior Subordinated Debentures" means any junior
subordinated deferrable interest debentures issued by any of the
Significant Subsidiaries and New Orleans from time to time.
"Lenders" means the Banks listed on the signature pages
hereof and each Person that shall become a party hereto pursuant
to Section 9.07.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset. For the purposes of this
Agreement, a Person or any of its subsidiaries shall be deemed to
own, subject to a Lien, any asset that it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Majority Lenders" means at any time Lenders holding at
least 66-2/3% of the then aggregate unpaid principal amount of
the Contract Notes held by Lenders, or, if no such principal
amount is then outstanding, Lenders having at least 66-2/3% of
the Commitments (without giving effect to any termination in
whole of the Commitments pursuant to Section 6.02), provided
that, for purposes hereof, neither Borrower, nor any of their
respective Affiliates, if a Lender, shall be included in (i) the
Lenders holding such amount of the Contract Advances or having
such amount of the Commitments or (ii) determining the aggregate
unpaid principal amount of the Contract Advances or the total
Commitments.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which Entergy or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"Non-Recourse Debt" means any Debt of any subsidiary of
Entergy that does not also constitute Debt of Entergy, any
Significant Subsidiary or New Orleans.
"Note" means a Contract Note or an Auction Note.
"Notice of Auction Borrowing" has the meaning specified
in Section 2.03(a).
"Notice of Contract Borrowing" has the meaning
specified in Section 2.02(a).
"OECD" means the Organization for Economic Cooperation
and Development.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either Borrower or of a Significant
Subsidiary that, in either case, is outstanding in a principal
amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"PUHCA" means the Public Utility Holding Company Act of
1935, as amended.
"Reference Bank" means BNY.
"Register" has the meaning specified in Section
9.07(c).
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"S&P" means Standard & Poor's Rating Group or any
successor thereto.
"SEC" means the United States Securities and Exchange
Commission.
"Senior Debt Rating" means, as to any Person, the
rating assigned by Moody's or S&P to the senior secured long-term
debt of such Person.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
"Termination Date" means September 12, 1999 or such
later date that may be established from time to time pursuant to
Section 2.17 hereof, or, in either case, the earlier date of
termination in whole of the Commitments pursuant to Section 2.05
or Section 6.02 hereof.
"Yield" means, for any Auction Advance, the effective
rate per annum at which interest on such Auction Advance is
payable, computed on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is
payable.
SECTION I.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" mean "to but
excluding."
SECTION I.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 4.01(e) hereof.
ARTICLE II.
AMOUNTS AND TERMS OF THE ADVANCES
SECTION II.01. The Contract Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set
forth, to make Contract Advances to either Borrower from time to
time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate amount (with respect
to both of the Borrowers, collectively) not to exceed at any time
outstanding the amount set opposite such Lender's name on the
signature pages hereof or, if such Lender has entered into any
Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 9.07(c), as
such amount may be reduced pursuant to Section 2.05 (such
Lender's "Commitment"), provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time
to the extent of the aggregate amount of the Auction Advances
then outstanding and such deemed use of the aggregate amount of
the Commitments shall be applied to the Lenders ratably according
to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being an "Auction Reduction"). Each
Contract Borrowing shall be in an amount not less than $2,500,000
or an integral multiple of $1,000,000 in excess thereof and shall
consist of Contract Advances of the same Type and, in the case of
Eurodollar Rate Advances or Adjusted CD Rate Advances, having the
same Interest Period made or Converted on the same day by the
Lenders ratably according to their respective Commitments. Within
the limits of each Lender's Commitment, the Borrowers may from
time to time borrow, prepay pursuant to Section 2.11 and reborrow
under this Section 2.01; provided, however, that at no time may
the principal amount outstanding hereunder exceed the aggregate
amount of the Commitments.
SECTION II.02. Making the Contract Advances. (a)
Each Contract Borrowing shall be made on notice, given (i) in the
case of a Contract Borrowing comprising Adjusted CD Rate Advances
or Eurodollar Rate Advances, not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the
proposed Contract Borrowing, and (ii) in the case of a Contract
Borrowing comprising Base Rate Advances, not later than 11:00
A.M. (New York City time) on the date of the proposed Contract
Borrowing, by the applicable Borrower to the Agent, which shall
give to each Lender prompt notice thereof. Each such notice of a
Contract Borrowing (a "Notice of Contract Borrowing") shall be by
telecopier, telex or cable, confirmed immediately in writing, in
substantially the form of Exhibit B-1 hereto, specifying therein
the requested (A) date of such Contract Borrowing, (B) Type of
Contract Advances to be made in connection with such Contract
Borrowing, (C) aggregate amount of such Contract Borrowing, and
(D) in the case of a Contract Borrowing comprising Adjusted CD
Rate Advances or Eurodollar Rate Advances, initial Interest
Period for each such Contract Advance. Each Lender shall, before
(x) 12:00 noon (New York City time) on the date of any Contract
Borrowing comprising Adjusted CD Rate Advances or Eurodollar Rate
Advances, and (y) 1:00 P.M. (New York City time) on the date of
any Contract Borrowing comprising Base Rate Advances, make
available for the account of its Applicable Lending Office to the
Agent at its address referred to in Section 9.02, in same day
funds, such Lender's ratable portion of such Contract Borrowing.
After the Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Agent
will make such funds available to the applicable Borrower at the
Agent's aforesaid address.
(b) Each Notice of Contract Borrowing shall be
irrevocable and binding on the applicable Borrower. In the case
of any Notice of Contract Borrowing requesting Adjusted CD Rate
Advances or Eurodollar Rate Advances, the applicable Borrower
shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Contract Borrowing
for such Contract Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the
Contract Advance to be made by such Lender as part of such
Contract Borrowing when such Contract Advance, as a result of
such failure, is not made on such date.
(c) Unless the Agent shall have received notice from a
Lender prior to the date of any Contract Borrowing that such
Lender will not make available to the Agent such Lender's ratable
portion of such Contract Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the
date of such Contract Borrowing in accordance with subsection (a)
of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such
date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to
the Agent, such Lender and the applicable Borrower (following the
Agent's demand on such Lender for the corresponding amount)
severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day
from the date such amount is made available to such Borrower
until the date such amount is repaid to the Agent, at (i) in the
case of such Borrower, the interest rate applicable at the time
to Contract Advances made in connection with such Contract
Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Lender's
Contract Advance as part of such Contract Borrowing for purposes
of this Agreement.
(d) The failure of any Lender to make the Contract
Advance to be made by it as part of any Contract Borrowing shall
not relieve any other Lender of its obligation, if any, hereunder
to make its Contract Advance on the date of such Contract
Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Contract Advance to be made by such
other Lender on the date of any Contract Borrowing.
SECTION II.03. The Auction Advances. (a) Each Lender
severally agrees that either Borrower may request Auction
Borrowings under this Section 2.03 from time to time on any
Business Day during the period from the date hereof until the
date occurring 15 days prior to the Termination Date in the
manner set forth below; provided that, following the making of
each Auction Borrowing, the aggregate amount of the Advances then
outstanding shall not exceed the aggregate amount of the
Commitments of the Lenders (computed without regard to any
Auction Reduction).
(i) A Borrower may request an Auction Borrowing
by delivering to the Agent (A) by telecopier, telex or
cable, confirmed immediately in writing, a notice of an
Auction Borrowing (a "Notice of Auction Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying the
date and aggregate amount of the proposed Auction Borrowing,
the maturity date for repayment of each Auction Advance to
be made as part of such Auction Borrowing (which maturity
date may not be earlier than the date occurring 14 days
after the date of such Auction Borrowing or later than the
earlier to occur of (1) 180 days after the date of the
proposed Auction Borrowing and (2) the Termination Date),
the interest payment date or dates relating thereto (which
shall occur at least every 90 days), and any other terms to
be applicable to such Auction Borrowing, not later than
10:00 A.M. (New York City time) (x) at least one Business
Day prior to the date of the proposed Auction Borrowing, if
the applicable Borrower shall specify in the Notice of
Auction Borrowing that the rates of interest to be offered
by the Lenders shall be fixed rates per annum and (y) at
least five Business Days prior to the date of the proposed
Auction Borrowing, if such Borrower shall specify in the
Notice of Auction Borrowing the basis (e.g., a quoted London
interbank offered rate or the Federal Funds Rate) to be used
by the Lenders in determining the rates of interest to be
offered by them and (B) payment in full to the Agent of the
aggregate auction administration fee specified in Section
2.04(b) hereof. The Agent, in turn, shall promptly notify
each Lender of each request for an Auction Borrowing
received by it from a Borrower by sending such Lender a copy
of the related Notice of Auction Borrowing.
(ii) Each Lender may, in its sole discretion, if
it elects to do so, irrevocably offer to make one or more
Auction Advances to the applicable Borrower as part of such
proposed Auction Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by
notifying the Agent (which shall give prompt notice thereof
to the Borrower), before 10:00 A.M. (New York City time) (A)
on the date of such proposed Auction Borrowing, in the case
of a Notice of Auction Borrowing delivered pursuant to
clause (A)(x) of paragraph (i), above, and (B) three
Business Days before the date of such proposed Auction
Borrowing, in the case of a Notice of Auction Borrowing
delivered pursuant to clause (A)(y) of paragraph (i), above,
of the minimum amount and maximum amount of each Auction
Advance that such Lender would be willing to make as part of
such proposed Auction Borrowing (which amounts, subject to
the proviso to the first sentence of this Section 2.03(a),
may exceed such Lender's Commitment), the rate or rates of
interest therefor, the basis, rate and margin used by such
Lender (if applicable) in determining the rate or rates of
interest so offered and the Yield (if different from such
rate or rates), the interest period relating thereto and
such Lender's Applicable Lending Office with respect to such
Auction Advance; provided that, if the Agent in its capacity
as a Lender shall, in its sole discretion, elect to make any
such offer, it shall notify the applicable Borrower of such
offer before 9:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the Agent by
the other Lenders. If any Lender shall elect not to make
such an offer, such Lender shall so notify the Agent, before
10:00 A.M. (New York City time) on the date on which notice
of such election is to be given to the Agent by the other
Lenders, and such Lender shall not be obligated to, and
shall not, make any Auction Advance as part of such Auction
Borrowing; provided that the failure by any Lender to give
such notice shall not cause such Lender to be obligated to
make any Auction Advance as part of such proposed Auction
Borrowing.
(iii) The applicable Borrower shall, in turn, (A)
before 11:00 A.M. (New York City time) on the date of such
proposed Auction Borrowing, in the case of a Notice of
Auction Borrowing delivered pursuant to clause (A)(x) of
paragraph (i) above and (B) before 1:00 P.M. (New York City
time) three Business Days before the date of such proposed
Auction Borrowing, in the case of a Notice of Auction
Borrowing delivered pursuant to clause (A)(y) of paragraph
(i) above, either
(1) cancel such Auction Borrowing by
giving the Agent notice to that effect, or
(2) irrevocably accept one or more of
the offers made by any Lender or Lenders pursuant to
paragraph (ii) above, in its sole discretion, subject
only to the provisions of this paragraph (iii), by
giving notice to the Agent of the amount of each
Auction Advance (which amount shall be equal to or
greater than the minimum amount, and equal to or less
than the maximum amount, notified to such Borrower by
the Agent on behalf of such Lender for such Auction
Advance pursuant to paragraph (ii) above) to be made by
each Lender as part of such Auction Borrowing, and
reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Agent notice to that
effect; provided, however, that (w) the applicable
Borrower shall not accept an offer made pursuant to
paragraph (ii) above, at any Yield if such Borrower
shall have, or shall be deemed to have, rejected any
other offer made pursuant to paragraph (ii) above, at a
lower Yield, (x) if such Borrower declines to accept,
or is otherwise restricted by the provisions of this
Agreement from accepting, the maximum aggregate
principal amount of Auction Borrowings offered at the
same Yield pursuant to paragraph (ii) above, then such
Borrower shall accept a pro rata portion of each offer
made at such Yield, based as nearly as possible on the
ratio of the aggregate principal amount of such offers
to be accepted by such Borrower to the maximum
aggregate principal amount of such offers made pursuant
to paragraph (ii) above (rounding up or down to the
next higher or lower multiple of $1,000,000), (y) no
offer made pursuant to paragraph (ii) above shall be
accepted unless the Auction Borrowing in respect of
such offer is in an integral multiple of $1,000,000 and
the aggregate amount of such offers accepted by such
Borrower is equal to at least $2,500,000, and (z) no
offer made pursuant to paragraph (ii) above shall be
accepted at any interest rate in excess of the Base
Rate then in effect plus 2% per annum (or such higher
rate as may be permitted by applicable law, regulation
or order).
Any offer or offers made pursuant to paragraph (ii) above
not expressly accepted or rejected by the applicable
Borrower in accordance with this paragraph (iii) shall be
deemed to have been rejected by such Borrower.
(iv) If the applicable Borrower notifies the
Agent that such Auction Borrowing is canceled pursuant to
clause (1) of paragraph (iii) above, the Agent shall give
prompt notice thereof to the Lenders and such Auction
Borrowing shall not be made.
(v) If the applicable Borrower accepts one or
more of the offers made by any Lender or Lenders pursuant to
clause (2) of paragraph (iii) above, the Agent shall in turn
promptly notify (A) each Lender that has made an offer as
described in paragraph (ii) above, of the date and aggregate
amount of such Auction Borrowing and whether or not any
offer or offers made by such Lender pursuant to paragraph
(ii) above have been accepted by such Borrower, (B) each
Lender that is to make an Auction Advance as part of such
Auction Borrowing of the amount of each Auction Advance to
be made by such Lender as part of such Auction Borrowing,
and (C) each Lender that is to make an Auction Advance as
part of such Auction Borrowing, upon receipt, that the Agent
has received forms of documents appearing to fulfill the
applicable conditions set forth in Article III. Each Lender
that is to make an Auction Advance as part of such Auction
Borrowing shall, before 12:00 noon (New York City time) on
the date of such Auction Borrowing specified in the notice
received from the Agent pursuant to clause (A) of the
preceding sentence or any later time when such Lender shall
have received notice from the Agent pursuant to clause (C)
of the preceding sentence, make available for the account of
its Applicable Lending Office to the Agent at its address
referred to in Section 9.02 such Lender's portion of such
Auction Borrowing, in same day funds. Upon fulfillment of
the applicable conditions set forth in Article III and after
receipt by the Agent of such funds, the Agent will make such
funds available to the applicable Borrower at the Agent's
aforesaid address. Promptly after each Auction Borrowing the
Agent will notify each Lender of the amount of the Auction
Borrowing, the consequent Auction Reduction and the dates
upon which such Auction Reduction commenced and will
terminate.
(vi) If the applicable Borrower accepts one or
more of the offers made by any Lender pursuant to clause (B)
of paragraph (iii) above, such Borrower shall indemnify such
Lender against any loss, cost or expense incurred by such
Lender as a result of any failure by such Borrower to
fulfill on or before the date specified for such Auction
Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by such
Lender to fund the Auction Advance to be made by such Lender
as part of such Auction Borrowing when such Auction Advance,
as a result of such failure, is not made on such date.
(b) Each Auction Borrowing shall be in an amount not
less than $2,500,000 or an integral multiple of $1,000,000 in
excess thereof and, following the making of each Auction
Borrowing, the Borrower shall be in compliance with the
limitation set forth in the proviso to the first sentence of
subsection (a) above.
(c) Within the limits and on the conditions set forth
in this Section 2.03, a Borrower may from time to time borrow
under this Section 2.03, repay or prepay pursuant to subsection
(d) below, and reborrow under this Section 2.03, provided that an
Auction Borrowing shall not be made within three Business Days of
the date of any other Auction Borrowing.
(d) The applicable Borrower shall repay to the Agent
for the account of each Lender that has made an Auction Advance,
or each other holder of an Auction Note, on the maturity date of
each Auction Advance (such maturity date being that specified by
such Borrower for repayment of such Auction Advance in the
related Notice of Auction Borrowing delivered pursuant to
subsection (a)(i) above and provided in the Auction Note
evidencing such Auction Advance), the then unpaid principal
amount of such Auction Advance. A Borrower shall have no right
to prepay any principal amount of any Auction Advance unless, and
then only on the terms, specified by such Borrower for such
Auction Advance in the related Notice of Auction Borrowing
delivered pursuant to subsection (a)(i)(A) above and set forth in
the Auction Note evidencing such Auction Advance.
(e) The applicable Borrower shall pay interest on the
unpaid principal amount of each Auction Advance from the date of
such Auction Advance to the date the principal amount of such
Auction Advance is repaid in full, at the rate of interest for
such Auction Advance specified by the Lender making such Auction
Advance in its notice with respect thereto delivered pursuant to
subsection (a)(ii) above, payable on the interest payment date or
dates specified by such Borrower for such Auction Advance in the
related Notice of Auction Borrowing delivered pursuant to
subsection (a)(i) above, as provided in the Auction Note
evidencing such Auction Advance; provided, however, that, if and
for so long as a Prepayment Event or an Event of Default shall
have occurred and be continuing, the unpaid principal amount of
each Auction Advance shall (to the fullest extent permitted by
law) bear interest until paid in full at a rate per annum equal
at all times to the Base Rate plus 2% per annum, payable upon
demand.
(f) The indebtedness of the applicable Borrower
resulting from each Auction Advance made to such Borrower as part
of an Auction Borrowing shall be evidenced by a separate Auction
Note of such Borrower payable to the order of the Lender making
such Auction Advance.
SECTION II.04. Fees. Entergy agrees to pay to the
Agent for the account of each Lender a commitment fee on the
average daily unused portion of such Lender's Commitment (without
giving effect to any Auction Reduction) from the date hereof in
the case of each Bank, and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the earlier to
occur of the Termination Date and, in the case of the termination
in whole of a Lender's Commitment pursuant to Section 2.05, the
date of such termination, payable on the last day of each March,
June, September and December during such period, and on the
Termination Date, at the rate per annum set forth below
determined by reference to combined Senior Debt Ratings from time
to time of the two Significant Subsidiaries (other than SERI)
having the highest Senior Debt Ratings:
Significant Subsidiary with
highest Senior Debt Rating
A- and BBB+ and BBB- and BB +
A3 Baal or Baa3 and/or
Senior or above BBB and or split Bal or
Debt Baa2 rated below
Rating or split above
rated
above
A-and A3 0.125% 0.1375% 0.18% 0.23%
or above
Significant BBB+ and 0.1375% 0.17% 0.1875% 0.25%
Subsidiary Baa1 or
with next BBB and
highest Baa2
Senior Debt or
Rating split rated
above
BBB- and 0.18% 0.1875% 0.20% 0.30%
Baa3
or
split rated
above
BB+ and/or 0.23% 0.25% 0.30% 0.30%
Bal
or below
or unrated
Any change in the commitment fee will be effective as of the date
on which S&P or Moody's, as the case may be, announces the
applicable change in any Senior Debt Rating.
SECTION II.05. (a) Reduction of the Commitments. (i)
Entergy shall have the right, upon at least three Business Days'
notice to the Agent, to terminate in whole or reduce ratably in
part the unused portions of the respective Commitments of the
Lenders, provided that the aggregate amount of the Commitments of
the Lenders shall not be reduced to an amount that is less than
the aggregate principal amount of the Auction Advances then
outstanding, and provided, further, that each partial reduction
shall be in the aggregate amount of $1,000,000 or an integral
multiple thereof.
(ii) Notwithstanding any other provision of this
Agreement or the Notes (and without further notice to the
Borrowers), 364 days following the date, if any, on which the
combined Senior Debt Ratings of the two Significant Subsidiaries
(other than SERI) having the highest Senior Debt Ratings shall be
BB+ or Bal or below, the Commitments hereunder shall terminate in
whole and this Agreement shall terminate.
(b) Increase of the Commitments. (i) Entergy may, by written
notice to the Agent (an "Increase Notice") substantially in the form
of Schedule 2.05(b) hereto, request that the aggregate Commitments
be increased up to the amount specified therein, which shall be
an integral multiple of $5,000,000 and shall not be greater than
$300,000,000 effective on the date specified in such Increase
Notice (the "Increase Date"), which shall be a Business Day
occurring not less than 25 (unless otherwise agreed to in writing
by the Lenders and the Agent) nor more than 30 days after the
date on which the Increase Notice shall have been given, and such
notice shall specify the requested amount by which the aggregate
amount of the Commitments is to increase, the names of any new
proposed lenders hereunder and the amount of their proposed
Commitments and, if the amount by which the aggregate amount of
the Commitments is requested to be increased shall exceed the
aggregate amount of the Commitments of such new proposed lenders,
the amount by which the Commitments of the existing Lenders are
requested to be increased. Promptly upon receipt of such
Increase Notice from Entergy, the Agent shall notify the Lenders
of the contents thereof. If applicable, each Lender shall
provide written notice to the Agent, no later than 21 days after
the date on which the Increase Notice shall have been given to
the Agent, of the amount, if any, by which such Lender agrees to
increase its Commitment. Promptly upon receipt of such notice
from any Lender the Agent shall notify Entergy of the contents
thereof. Upon the effectiveness of the increase in Commitments
pursuant to clause (ii) below, each of the new lenders shall
execute and deliver a counterpart of this Agreement, this
Agreement shall be amended by the Borrowers and the Agent to
reflect the increase, if any, in the Commitment of any existing
Lender and the identity and Commitments of such new lenders and
such new lenders shall be and become Lenders hereunder for all
purposes hereof and of the Loan Documents. In connection with
any such increase, the Borrowers shall execute and deliver new
Notes to appropriately reflect such new Commitments and the
Lenders (including such new lenders) shall effect such purchases
and sales among themselves of portions of the outstanding Loans
as shall be necessary to reflect such Commitments, as specified
by the Agent, and, in connection with such purchases and sales,
the applicable Borrower shall pay to each affected Lender an
amount equal to the amount such Borrower would have had to pay
pursuant to Section 9.04(b) if such Loans, or portions thereof,
were prepaid on such Increase Date.
(ii) An increase in Commitments shall become effective
on the Increase Date so long as each of the following conditions
shall have been fulfilled on and as of such date: (A) the Agent
shall have consented (such consent not to be unreasonably
withheld) to any such new lenders and to such increases in
Commitments, (B) the Agent shall have received opinions of
counsel to the Borrowers in form and substance satisfactory to
the Agent, (C) lenders who agree to become Lenders hereunder
shall have provided Commitments, together with the increased
Commitments of Lenders who shall have agreed to an increase of
their Commitments, in an aggregate amount equal to the amount of
the requested increase in the aggregate amount of the Commitments
set forth in the Increase Notice, (D) the conditions to the
making of Loans set forth in clause (i) of Section 3.02 shall be
fulfilled on and as of such Increase Date as if Loans were made
thereon and (E) the Agent shall have received such other
instruments and documents, in form and substance satisfactory to
it, as it shall have reasonably requested.
SECTION II.06. Repayment of Contract Advances. The
Borrowers shall repay the principal amount of each Contract
Advance made by each Lender in accordance with the Contract Note
to the order of such Lender and in any event no later than the
Termination Date.
SECTION II.07. Interest on Contract Advances. The
applicable Borrower shall pay interest on the unpaid principal
amount of each Contract Advance made by each Lender from the date
of such Contract Advance until such principal amount shall be
paid in full, at the following rates per annum:
(a) Base Rate Advances. If such Contract Advance is a
Base Rate Advance, a rate per annum equal at all times to the
Base Rate in effect from time to time, payable quarterly on the
last day of each March, June, September and December and on the
date such Base Rate Advance shall be Converted or paid in full.
(b) Adjusted CD Rate Advances. If such Contract
Advance is an Adjusted CD Rate Advance, a rate per annum equal at
all times during the Interest Period for such Contract Advance to
the sum of the Adjusted CD Rate for such Interest Period plus the
Applicable Margin for such Adjusted CD Rate Advance in effect
from time to time, payable on the last day of each Interest
Period for such Adjusted CD Rate Advance and on the date such
Adjusted CD Rate Advance shall be Converted or paid in full and,
if such Interest Period has a duration of more than 90 days, on
each day that occurs during such Interest Period every 90 days
from the first day of such Interest Period.
(c) Eurodollar Rate Advances. Subject to Section
2.08, if such Contract Advance is a Eurodollar Rate Advance, a
rate per annum equal at all times during the Interest Period for
such Contract Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin for such Eurodollar
Rate Advance in effect from time to time, payable on the last day
of each Interest Period for such Eurodollar Rate Advance and on
the date such Eurodollar Rate Advance shall be Converted or paid
in full and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period.
SECTION II.08. Additional Interest on Eurodollar Rate
Advances. The applicable Borrower shall pay to each Lender, so
long as such Lender shall be required under regulations of the
Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the
unpaid principal amount of each Eurodollar Rate Advance of such
Lender, from the date of such Contract Advance until such
principal amount is paid in full, at an interest rate per annum
equal at all times to the remainder obtained by subtracting (i)
the Eurodollar Rate for the Interest Period for such Contract
Advance from (ii) the rate obtained by dividing such Eurodollar
Rate by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such
Contract Advance. Such additional interest shall be determined by
such Lender and notified to the applicable Borrower through the
Agent, and such determination shall be conclusive and binding for
all purposes, absent manifest error.
SECTION II.09. Interest Rate Determination. (a) The
Reference Bank agrees to furnish to the Agent timely information
for the purpose of determining each Adjusted CD Rate or
Eurodollar Rate, as applicable.
(b) The Agent shall give prompt notice to the
applicable Borrower and the Lenders of the applicable interest
rate determined by the Agent for purposes of Section 2.07(a), (b)
or (c), and the applicable rate, if any, furnished by the
Reference Bank for the purpose of determining the applicable
interest rate under Section 2.07(b) or (c).
(c) If the Reference Bank shall not furnish timely
information to the Agent for determining the Adjusted CD Rate for
any Adjusted CD Rate Advances, or the Eurodollar Rate for any
Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the
applicable Borrower and the Lenders that the interest rate
cannot be determined for such Adjusted CD Rate Advances or
Eurodollar Rate Advances, as the case may be,
(ii) each such Advance will automatically, on the
last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance (or, if such Advance is
then a Base Rate Advance, will continue as a Base Rate
Advance), and
(iii) the obligation of the Lenders to make, or
to Convert Contract Advances into, Adjusted CD Rate Advances
or Eurodollar Rate Advances, as the case may be, shall be
suspended until the Agent shall notify the Borrowers and the
Lenders that the circumstances causing such suspension no
longer exist.
(d) If, with respect to any Eurodollar Rate Advances,
the Majority Lenders notify the Agent that the Eurodollar Rate
for any Interest Period for such Advances will not adequately
reflect the cost to such Majority Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such
Interest Period, the Agent shall forthwith so notify the
applicable Borrower and the Lenders, whereupon
(i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance, and
(ii) the obligation of the Lenders to make, or to
Convert Contract Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the
Borrowers and the Lenders that the circumstances causing
such suspension no longer exist.
SECTION.10. Conversion of Contract Advances. (a) Voluntary.
The applicable Borrower may, upon notice given to the Agent not
later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to
the provisions of Sections 2.09 and 2.13, on any Business Day,
Convert all Contract Advances of one Type made in connection with
the same Contract Borrowing into Advances of another Type; provided,
however, that any Conversion of, or with respect to, any Adjusted
CD Rate Advances or Eurodollar Rate Advances into Advances of another
Type shall be made on, and only on, the last day of an Interest
Period for such Adjusted CD Rate Advances or Eurodollar Rate
Advances, unless the applicable Borrower shall also reimburse the
Lenders in respect thereof pursuant to Section 9.04(b) on the
date of such Conversion. Each such notice of a Conversion (a
"Notice of Conversion") shall be by telecopier, telex or cable,
confirmed immediately in writing, in substantially the form of
Exhibit B-3 hereto, specifying therein (i) the date of such
Conversion, (ii) the Contract Advances to be Converted, and (iii)
if such Conversion is into, or with respect to, Adjusted CD Rate
Advances or Eurodollar Rate Advances, the duration of the
Interest Period for each such Contract Advance.
(b) Mandatory. If a Borrower shall fail to select the
Type of any Contract Advance or the duration of any Interest
Period for any Contract Borrowing comprising Eurodollar Rate
Advances or Adjusted CD Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in
Section 1.01 and Section 2.10(a), or if any proposed Conversion
of a Contract Borrowing that is to comprise Eurodollar Rate
Advances or Adjusted CD Rate Advances upon Conversion shall not
occur as a result of the circumstances described in paragraph (c)
below, the Agent will forthwith so notify such Borrower and the
Lenders, and such Advances will automatically, on the last day of
the then existing Interest Period therefor, Convert into Base
Rate Advances.
(c) Failure to Convert. Each Notice of Conversion
given pursuant to subsection (a) above shall be irrevocable and
binding on the applicable Borrower. In the case of any Contract
Borrowing that is to comprise Eurodollar Rate Advances or
Adjusted CD Rate Advances upon Conversion, the applicable
Borrower agrees to indemnify each Lender against any loss, cost
or expense incurred by such Lender if, as a result of the failure
of such Borrower to satisfy any condition to such Conversion
(including, without limitation, the occurrence of any Prepayment
Event or Event of Default, or any event that would constitute an
Event of Default or a Prepayment Event with notice or lapse of
time or both), such Conversion does not occur. The Borrower's
obligations under this subsection (c) shall survive the repayment
of all other amounts owing to the Lenders and the Agent under
this Agreement and the Notes and the termination of the
Commitments.
SECTION .11. Prepayments. The applicable Borrower
may, upon at least two Business Days' notice to the Agent stating
the proposed date and aggregate principal amount of the
prepayment, and if such notice is given such Borrower shall,
prepay the outstanding principal amounts of the Advances made as
part of the same Contract Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on
the principal amount prepaid; provided, however, that (i) each
partial prepayment shall be in an aggregate principal amount not
less than $1,000,000 or any integral multiple of $100,000 in
excess thereof and (ii) in the case of any such prepayment of an
Adjusted CD Advance or Eurodollar Rate Advance, the applicable
Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(b) on the date of such
prepayment.
SECTION .12. Increased Costs. (a) If, due to either
(i) the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements, in the
case of Adjusted CD Rate Advances, included in the Adjusted CD
Rate Reserve Percentage or, in the case of Eurodollar Rate
Advances, included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Adjusted CD
Rate Advances or Eurodollar Rate Advances, then Entergy shall
from time to time, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of
such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to Entergy and the Agent by
such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other governmental authority (whether or not having the
force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of
this type (including such Lender's commitment to lend hereunder)
or the Advances, then, upon demand by such Lender (with a copy of
such demand to the Agent), Entergy shall immediately pay to the
Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such
circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend hereunder or the
Advances made by such Lender. A certificate in reasonable detail
as to such amounts submitted to Entergy and the Agent by such
Lender shall be conclusive and binding for all purposes, absent
manifest error.
SECTION .13. Illegality. Notwithstanding any other
provision of this Agreement, if any Lender shall notify the Agent
that the introduction of or any change in or change in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (i) the obligation of the Lenders to make, or to
Convert Contract Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrowers and the
Lenders that the circumstances causing such suspension no longer
exist and (ii) the Borrowers shall forthwith prepay in full all
Eurodollar Rate Advances of all Lenders then outstanding,
together with interest accrued thereon unless, in the case of
either Borrower, such Borrower, within five Business Days of
notice from the Agent, Converts all Eurodollar Rate Advances of
all Lenders then outstanding into Advances of another Type in
accordance with Section 2.10.
SECTION .14. Payments and Computations. (a) The
Borrowers shall make each payment hereunder and under the Notes
not later than 12:00 noon (New York City time) on the day when
due in U.S. dollars to the Agent at its address referred to in
Section 9.02 in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment fees ratably
(other than amounts payable pursuant to Section 2.02(c), 2.03,
2.08, 2.12, 2.15 or 9.04(b)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office,
in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the
Register pursuant to Section 9.07(d), from and after the
effective date specified in such Assignment and Acceptance, the
Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) The applicable Borrower hereby authorizes each
Lender, if and to the extent payment owed to such Lender is not
made when due hereunder or under any Note held by such Lender, to
charge from time to time to the extent permitted by law against
any or all of such Borrower's accounts with such Lender any
amount so due.
(c) All computations of interest based on the Base
Rate shall be made by the Agent on the basis of a year of 365 or
366 days, as the case may be, and all computations of interest
based on the Adjusted CD Rate, the Eurodollar Rate or the Federal
Funds Rate and of commitment fees and interest payable on Auction
Advances shall be made by the Agent, and all computations of
interest pursuant to Section 2.08 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or
commitment fees are payable. Each determination by the Agent
(or, in the case of Section 2.08, by a Lender) of an interest
rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case
may be; provided, however, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be
made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from
the applicable Borrower prior to the date on which any payment is
due to the Lenders hereunder that such Borrower will not make
such payment in full, the Agent may assume that such Borrower has
made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent that such Borrower shall
not have so made such payment in full to the Agent, each Lender
shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Agent, at
the Federal Funds Rate.
(f) Notwithstanding anything to the contrary contained
herein, any amount payable by a Borrower hereunder or under any
Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall, to the fullest extent permitted
by law, bear interest from the date when due until paid in full
at a rate per annum equal at all times to the Base Rate plus 2%,
payable upon demand.
SECTION .15. Taxes. (a) Any and all payments by the
Borrowers hereunder or under the Contract Notes shall be made, in
accordance with Section 2.14, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender,
taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If a
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any
Lender or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.15) such Lender or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the applicable Borrower agrees to pay
any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise
from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, or otherwise with respect
to, this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) The applicable Borrower will indemnify each Lender
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.15)
paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such
Lender or the Agent (as the case may be) makes written demand
therefor. Nothing herein shall preclude the right of such
Borrower to contest any such Taxes or Other Taxes so paid, and
the Lenders in question or the Agent (as the case may be) will,
following notice from, and at the expense of, such Borrower, take
such actions as such Borrower may reasonably request to preserve
such Borrower's rights to contest such Taxes or Other Taxes, and,
promptly following receipt of any refund of amounts with respect
to Taxes or Other Taxes for which such Lenders or the Agent were
previously indemnified under this Section 2.15, pay to such
Borrower such refunded amounts (including any interest paid by
the relevant taxing authority with respect to such amounts).
(d) Prior to the date of the initial Borrowing in the
case of each Bank, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender in the case of
each other Lender, and from time to time thereafter if requested
by Entergy or the Agent, each Lender organized under the laws of
a jurisdiction outside the United States shall provide the Agent
and Entergy with the forms prescribed by the Internal Revenue
Service of the United States certifying that such Lender is
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or
exempt from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the Notes.
If for any reason during the term of this Agreement, any Lender
becomes unable to submit the forms referred to above or the
information or representations contained therein are no longer
accurate in any material respect, such Lender shall notify the
Agent and Entergy in writing to that effect. Unless Entergy and
the Agent have received forms or exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during
the term of this Agreement, any Lender becomes unable to submit
the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect,
such Lender shall notify the Agent and Entergy in writing to that
effect. Unless Entergy and the Agent have received forms or in
effect on such date; and (C) that attached thereto are true and
correct copies of all governmental and regulatory authorizations
and approvals required for the due execution, delivery and
performance of this Agreement and the Notes, including, in the
case of ETHC, a copy of the ETC Order applicable to ETHC;
(i) Copies of the consolidated balance sheets of
Entergy and its subsidiaries as of December 31, 1995, and
the related consolidated statements of income, retained
earnings and cash flows of Entergy and its subsidiaries for
the fiscal year then ended, and copies of the consolidated
financial statements of Entergy and its subsidiaries and
ETHC and its subsidiaries, respectively, as of June 30,
1996, in each case certified by a duly authorized officer of
Entergy or ETHC, as applicable, as having been prepared in
accordance with generally accepted accounting principles
consistently applied;
(ii) A favorable opinion of counsel for each
Borrower, acceptable to the Agent, substantially in the form
of Exhibit D-1 hereto and as to such other matters as any
Lender through the Agent may reasonably request;
(iii) A favorable opinion of Winthrop, Stimson,
Putnam & Roberts, counsel for the Agent, substantially in
the form of Exhibit E hereto; and
(iv) If requested by any Lender, a duly executed
and delivered Form U-1, in the form prescribed by Regulation
U issued by the Board of Governors of the Federal Reserve
System.
(e) The Agent shall have received the fees payable at
such time pursuant to the Fee Letter.
SECTION .16. Conditions Precedent to Each Contract
Borrowing. The obligation of each Lender to make a Contract
Advance on the occasion of each Contract Borrowing (including the
initial Contract Borrowing) shall be subject to the further
conditions precedent that on the date of such Contract Borrowing:
(i) The following statements shall be true (and
each of the giving of the applicable Notice of Contract
Borrowing or Notice of Conversion and the acceptance by the
applicable Borrower of any proceeds of a Contract Borrowing
shall constitute a representation and warranty by such
Borrower that on the date of such Contract Borrowing or
Conversion, as applicable, such statements are true):
(A) The representations and warranties
contained in Section 4.01 (excluding those contained
in subsections (e) and (f) thereof if such Contract
Borrowing does not increase the aggregate outstanding
principal amount of Contract Advances over the
aggregate outstanding principal amount of all Contract
Advances immediately prior to the making of such
Contract Borrowing) are correct on and as of the date
of such Contract Borrowing, before and after giving
effect to such Contract Borrowing and to the
application of the proceeds therefrom, as though made
on and as of such date; and
(B) No event has occurred and is
continuing, or would result from such Contract
Borrowing or from the application of the proceeds
therefrom, that constitutes a Prepayment Event or an
Event of Default or would constitute an Event of
Default or a Prepayment Event with notice or lapse of
time or both;
(ii) In the case of each Contract Advance to
Entergy (other than a Contract Advance all of the proceeds
of which are being used to repay all or any portion of an
Auction Borrowing of Entergy), the Agent shall have received
a copy, certified in a manner satisfactory to the Agent, of
the ETC Order applicable to the Person being acquired with
the proceeds of such Contract Advance and the other Advances
being made at such time; and
(iii) The Agent shall have received (A) in the
case of each Contract Advance to Entergy (other than a
Contract Advance all of the proceeds of which are being used
to repay all or any portion of an Auction Borrowing of
Entergy), a favorable opinion of counsel for Entergy,
acceptable to the Agent, substantially in the form of
Exhibit D-2 hereto and as to such other matters as any
Lender through the Agent may reasonably request, and (B)
such other approvals, opinions or documents with respect to
the truth of the statements set forth in clauses (i)(A) and
(i)(B) above as any Lender through the Agent may reasonably
request.
SECTION .17. Conditions Precedent to Each Auction
Borrowing. The obligation of each Lender that is to make an
Auction Advance as part of any Auction Borrowing (including the
initial Auction Borrowing) to make such Auction Advance is
subject to the conditions precedent that on the date of such
Auction Borrowing:
(i) The Agent shall have received the written
confirmatory Notice of Auction Borrowing with respect
thereto;
(ii) The Agent shall have received an Auction
Note, duly executed by the applicable Borrower, payable to
the order of such Lender for each of the Auction Advances to
be made by such Lender as part of such Auction Borrowing, in
a principal amount equal to the principal amount of the
Auction Advance to be evidenced thereby and otherwise on
such terms as were agreed to for such Auction Advance in
accordance with Section 2.03;
(iii) The following statements shall be true (and
the giving of the applicable Notice of Auction Borrowing and
the acceptance by the applicable Borrower of the proceeds of
such Auction Borrowing shall constitute a representation and
warranty by such Borrower that on the date of such Auction
Borrowing such statements are true):
(A) The representations and warranties
contained in Section 4.01 are correct on and as of the
date of such Auction Borrowing, before and after giving
effect to such Auction Borrowing and to the application
of the proceeds therefrom, as though made on and as of
such date; and
(B) No event has occurred and is
continuing, or would result from such Auction Borrowing
or from the application of the proceeds therefrom, that
constitutes a Prepayment Event or an Event of Default
or that would constitute an Event of Default or a
Prepayment Event with notice or lapse of time or both;
(iv) In the case of each Auction Advance to
Entergy (other than an Auction Advance all of the proceeds
of which are being used to repay all or any portion of a
Contract Borrowing of Entergy or an Auction Borrowing of
Entergy), the Agent shall have received a copy, certified in
a manner satisfactory to the Agent, of the ETC Order
applicable to the Person being acquired with the proceeds of
such Auction Advance and the other Advances being made at
such time; and
(v) The Agent shall have received (A) in the case
of each Auction Advance to Entergy (other than an Auction
Borrowing of Entergy all of the proceeds of which are being
used to repay all or any portion of a Contract Borrowing of
Entergy or an Auction Borrowing of Entergy), a favorable
opinion of counsel for Entergy, acceptable to the Agent,
substantially in the form of Exhibit D-2 hereto and as to
such other matters as any Lender through the Agent may
reasonably request, and (B) such other approvals, opinions
or documents with respect to the truth of the statements set
forth in clauses (iii)(A) and (B) above as any Lender
through the Agent may reasonably request.
ARTICLE I.
REPRESENTATIONS AND WARRANTIES
SECTION I.1. Representations and Warranties of
Entergy. Entergy represents and warrants as follows:
(a) Each of the Borrowers is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and is duly qualified to
do business as a foreign corporation in each jurisdiction in
which the nature of the business conducted or the property owned,
operated or leased by it requires such qualification, except
where failure to so qualify would not materially adversely affect
its condition (financial or otherwise), operations, business,
properties, or prospects.
(b) The execution, delivery and performance by each of
the Borrowers of this Agreement and the Notes are within such
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) such
Borrower's charter or bylaws, (ii) law applicable to such
Borrower or its properties or (iii) any contractual or legal
restriction binding on or affecting such Borrower or its
properties.
(c) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by each of the Borrowers of this Agreement or the
Notes except such notice as may be required to be filed with the
SEC pursuant to Section 34(f) of PUHCA.
(d) The obligations of each Borrower under this
Agreement are, and the applicable Notes when delivered hereunder
will be, legal, valid and binding obligations of such Borrower
enforceable against such Borrower in accordance with their
respective terms, subject, however, to applicable bankruptcy,
reorganization, rearrangement, moratorium or similar laws
affecting generally the enforcement of creditors' rights and
remedies and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or
at law).
(e) The consolidated financial statements of Entergy
and its subsidiaries as of December 31, 1995 and for the year
ended on such date, as set forth in Entergy's Annual Report on
Form 10-K for the fiscal year ended on such date, as filed with
the SEC, accompanied by an opinion of Coopers & Lybrand, and the
consolidated financial statements of Entergy and its subsidiaries
as of June 30, 1996, and for the three-month period ended on such
date set forth in Entergy's Quarterly Report on Form 10-Q for the
fiscal quarter ended on such date, as filed with the SEC, and the
consolidated financial statements of ETHC and its subsidiaries as
of June 30, 1996 and for the three-month period ended on such
date, copies of each of which have been furnished to each Bank,
fairly present (subject, in the case of such statements dated
June 30, 1996, to year-end adjustments) the consolidated
financial condition of, respectively, Entergy and its
subsidiaries and ETHC and its subsidiaries as at such dates and
the consolidated results of the operations of, respectively,
Entergy and its subsidiaries and ETHC and its subsidiaries for
the periods ended on such dates, in accordance with generally
accepted accounting principles consistently applied. Except as
disclosed in Entergy's Quarterly Report on Form 10-Q for the
fiscal period ended June 30, 1996, since December 31, 1995, there
has been no material adverse change in the financial condition or
operations of Entergy.
(f) Except as disclosed in Entergy's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, and
Entergy's Quarterly Report on Form 10-Q for the period ended June
30, 1996, there is no pending or threatened action or proceeding
affecting Entergy or any of its subsidiaries before any court,
governmental agency or arbitrator that, if determined adversely,
could reasonably be expected to have a material adverse effect
upon the condition (financial or otherwise), operations,
business, properties or prospects of either Borrower or on its
ability to perform its obligations under this Agreement or any
Note, or that purports to affect the legality, validity, binding
effect or enforceability of this Agreement or any Note. There
has been no change in any matter disclosed in such filings that
could reasonably be expected to result in such a material adverse
effect.
(g) No event has occurred and is continuing that
constitutes a Prepayment Event or an Event of Default or that
would constitute an Event of Default or a Prepayment Event but
for the requirement that notice be given or time elapse or both.
(h) Neither Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and not more than 25%
of the value of the assets of either Borrower and its
subsidiaries subject to the restrictions of Section 5.02(a), (b)
or (c) is, on the date hereof, represented by margin stock
(within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System).
(i) Neither Borrower is an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or an
"investment advisor" within the meaning of the Investment Company
Act of 1940, as amended. As of the date hereof, Entergy is a
"holding company" as that term is defined in, and is registered
under, PUHCA.
(j) No ERISA Termination Event has occurred, or is
reasonably expected to occur, with respect to any ERISA Plan that
may materially and adversely affect the condition (financial or
otherwise), operations, business, properties or prospects of
Entergy and its subsidiaries, taken as a whole.
(k) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) with respect to each
ERISA Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Banks, is complete and
accurate and fairly presents the funding status of such ERISA
Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(l) Entergy has not incurred, and does not reasonably
expect to incur, any withdrawal liability under ERISA to any
Multiemployer Plan.
(m) ETHC, and each Person, if any, acquired with the
proceeds of Borrowings by Entergy, is (i) an "exempt
telecommunications company" within the meaning of section
34(a)(1) of PUHCA and has obtained an ETC Order to such effect,
which ETC Order is in full force and effect, and (ii) engaged
exclusively in the businesses contemplated by section 34(a)(1) of
PUHCA. Entergy is in compliance with section 34 of PUHCA.
(n) As of the date of any Borrowing, the total
principal amount of all Debt (after giving effect to such
Borrowing) of Entergy and its subsidiaries, determined on a
consolidated basis and without duplication of liability therefor,
on such date does not exceed 65% of Capitalization determined as
of the last day of the most recently ended month; provided,
however, that for purposes of this Section 4.01(n), "Debt" and
"Capitalization" shall not include (i) Junior Subordinated
Debentures and (ii) any Debt of any subsidiary of Entergy that is
Non-Recourse Debt.
ARTICLE II
COVENANTS OF THE BORROWERS
SECTION II.1. Affirmative Covenants. So long as any
Note or any amount payable by either Borrower hereunder shall
remain unpaid or any Lender shall have any Commitment hereunder,
each of the Borrowers will, unless the Majority Lenders shall
otherwise consent in writing:
(a) Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance; Taxes.
(i) keep proper books of record and account, all
in accordance with generally accepted accounting principles;
(ii) except as otherwise permitted by Section
5.02(b), preserve and keep in full force and effect its
existence and preserve and keep in full force and effect its
licenses, rights and franchises to the extent necessary to
carry on its business;
(iii) maintain and keep, or cause to be
maintained and kept, its properties in good repair, working
order and condition, and, from time to time, make or cause
to be made all needful and proper repairs, renewals,
replacements and improvements, in each case to the extent
such properties are not obsolete and not necessary to carry
on its business;
(iv) comply in all material respects with all
applicable laws, rules, regulations and orders, such
compliance to include, without limitation, payment before
the same become delinquent of all taxes, assessments and
governmental charges imposed upon it or its property except
to the extent being contested in good faith by appropriate
proceedings, and compliance with ERISA and Environmental
Laws;
(v) maintain insurance with responsible and
reputable insurance companies or associations or through its
own program of self-insurance in such amounts and covering
such risks, and subject to such retentions or deductibles,
as is usually carried by companies engaged in similar
businesses and owning similar properties, and furnish to the
Agent, within a reasonable time after written request
therefor, such information as to the insurance carried as
any Lender, through the Agent, may reasonably request; and
(vi) pay and discharge its obligations and
liabilities in the ordinary course of business, except to
the extent that such obligations and liabilities are being
contested in good faith by appropriate proceedings.
(b) Use of Proceeds. Use the proceeds of the
Borrowings only, in the case of Borrowings by Entergy, to finance
the acquisition of one or more Persons that are "exempt
telecommunications companies" within the meaning of section
34(a)(1) of PUHCA (except that Entergy may use the proceeds of
Contract Borrowings to repay its Auction Borrowings and use the
proceeds of Auction Borrowings to repay its Contract Borrowings
or its Auction Borrowings) and, in the case of Borrowings by
ETHC, for general corporate purposes consistent with such ETHC's
status as such an "exempt telecommunications company".
(c) ETC Status. Take all actions (including obtaining
any required determinations, consents and approvals) required to
maintain at all times the status of each of ETHC and its
respective subsidiaries as, and, in the case of ETHC, engage, and
cause each of its subsidiaries to engage, only in the businesses
permitted to be engaged in by, an "exempt telecommunications
company" within the meaning of section 34(a)(1) of PUHCA.
(d) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within
60 days after the end of each of, in the case of Entergy,
the first three quarters of each fiscal year of Entergy and,
in the case of ETHC, the four quarters of each fiscal year
of ETHC, (A) consolidated balance sheets of, respectively,
Entergy and its subsidiaries and ETHC and its subsidiaries
as of the end of such quarter and (B) consolidated
statements of income and retained earnings of, respectively,
Entergy and its subsidiaries and ETHC and its subsidiaries
for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, each certified
by the duly authorized officer of Entergy as having been
prepared in accordance with generally accepted accounting
principles, consistently applied;
(ii) as soon as available and in any event within
120 days after the end of each fiscal year of Entergy, a
copy of the annual report for such year for Entergy and its
subsidiaries, containing consolidated financial statements
for such year certified by Coopers & Lybrand (or such other
nationally recognized public accounting firm as the Agent
may approve), and certified by a duly authorized officer of
Entergy as having been prepared in accordance with generally
accepted accounting principles, consistently applied;
(iii) as soon as available and in any event
within 60 days after the end of each of the first three
quarters of each fiscal year of Entergy and within 120 days
after the end of the fiscal year of Entergy, a certificate
of the duly authorized officer of Entergy, stating that no
Prepayment Event or Event of Default has occurred and is
continuing or, if a Prepayment Event or Event of Default has
occurred and is continuing, a statement setting forth
details of such Prepayment Event or Event of Default, as the
case may be, and the action that Entergy has taken and
proposes to take with respect thereto;
(iv) as soon as possible and in any event within
five days after either Borrower has knowledge of the
occurrence of each Prepayment Event, Event of Default and
each event that, with the giving of notice or lapse of time
or both, would constitute an Event of Default, continuing on
the date of such statement, a statement of the duly
authorized officer of such Borrower setting forth details of
such Prepayment Event, Event of Default or event, as the
case may be, and the actions that either or both of the
Borrowers have taken and propose to take with respect
thereto;
(v) as soon as possible and in any event within
five days after the commencement of any litigation against,
or any arbitration, administrative, governmental or
regulatory proceeding involving, Entergy or any of its
subsidiaries, that, if adversely determined, could
reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), operations,
business, properties or prospects of either Borrower, notice
of such litigation, arbitration or proceeding describing in
reasonable detail the facts and circumstances concerning
such litigation, arbitration or proceeding and Entergy's or
such subsidiary's proposed actions in connection therewith;
(vi) promptly after the sending or filing
thereof, copies of all reports that Entergy sends to its
securities holders, and copies of all reports and
registration statements that Entergy files with the SEC or
any national securities exchange pursuant to the Securities
Act of 1933 or the Exchange Act, of all certificates (if
any) pursuant to Rule 24 that either Borrower files with the
SEC pursuant to PUHCA having relevancy to this Agreement,
and of all applications and other filings made to or with
the FCC or the SEC pursuant to Section 34 of PUHCA or
otherwise having relevancy to this Agreement;
(vii) as soon as possible and in any event (A)
within 30 days after Entergy knows or has reason to know
that any ERISA Termination Event described in clause (i) of
the definition of ERISA Termination Event with respect to
any ERISA Plan has occurred and (B) within 10 days after
Entergy knows or has reason to know that any other ERISA
Termination Event with respect to any ERISA Plan has
occurred, a statement of the chief financial officer of
Entergy describing such ERISA Termination Event and the
action, if any, that Entergy proposes to take with respect
thereto;
(viii) promptly and in any event within two
Business Days after receipt thereof by Entergy from the
PBGC, copies of each notice received by Entergy in respect
of the PBGC's intention to terminate any ERISA Plan or to
have a trustee appointed to administer any ERISA Plan;
(ix) promptly, if requested by the Agent, copies
of the then current Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each
ERISA Plan;
(x) promptly and in any event within five
Business Days after receipt thereof by Entergy from a
Multiemployer Plan sponsor, a copy of each notice received
by Entergy concerning the imposition of withdrawal liability
pursuant to Section 4202 of ERISA;
(xi) promptly and in any event within five
Business Days after Moody's or S&P has changed any Senior
Debt Rating of any Significant Subsidiary, notice of such
change; and
(xii) such other information respecting the
condition or operations, financial or otherwise, of any
Borrower, any Significant Subsidiary or any subsidiary of
ETHC as any Lender through the Agent may from time to time
reasonably request.
SECTION II.2. Negative Covenants. So long as any Note
or any amount payable by either Borrower hereunder shall remain
unpaid or any Lender shall have any Commitment hereunder, Entergy
will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist any Lien
upon or with respect to any of its properties (including, without
limitation, any shares of any class of equity security of any of
Entergy's Significant Subsidiaries or of New Orleans) or ETHC's
properties, in each case to secure or provide for the payment of
Debt, other than: (i) Liens in existence on the date of this
Agreement; (ii) Liens for taxes, assessments or governmental
charges or levies to the extent not past due, or which are being
contested in good faith in appropriate proceedings diligently
conducted and for which the applicable Borrower has provided
adequate reserves for the payment thereof in accordance with
generally accepted accounting principles; (iii) pledges or
deposits in the ordinary course of business to secure obligations
under worker's compensation laws or similar legislation; (iv)
other pledges or deposits in the ordinary course of business
(other than for borrowed monies) that, in the aggregate, are not
material to the applicable Borrower; (v) purchase money mortgages
or other liens or purchase money security interests upon or in
any property acquired or held by Entergy or ETHC in the ordinary
course of business to secure the purchase price of such property
or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property; (vi) Liens imposed by
law such as materialmen's, mechanics', carriers', workers' and
repairmen's Liens and other similar Liens arising in the ordinary
course of business for sums not yet due or currently being
contested in good faith by appropriate proceedings diligently
conducted; (vii) attachment, judgment or other similar Liens
arising in connection with court proceedings, provided that such
Liens, in the aggregate for both Borrowers, shall not exceed
$50,000,000 at any one time outstanding, (viii) other Liens not
otherwise referred to in the foregoing clauses (i) through (vii)
above, provided that such Liens, in the aggregate for both
Borrowers, shall not exceed $100,000,000 at any one time and no
such Lien on any of the properties or assets of ETHC shall secure
or provide for the payment of Debt of ETHC or Entergy and (ix)
Liens created for the sole purpose of extending, renewing or
replacing in whole or in part Debt secured by any Lien permitted
pursuant to the foregoing clauses (i) through (viii) above,
provided that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so
secured at the time of such extension, renewal or replacement and
that such extension, renewal or replacement, as the case may be,
shall be limited to all or a part of the property or Debt that
secured the Lien so extended, renewed or replaced (and any
improvements on such property); provided, further, that no Lien
permitted under the foregoing clauses (i) through (ix) shall be
placed upon any shares of any class of equity security of any
Significant Subsidiary or of New Orleans unless the obligations
of the Borrowers to the Lenders hereunder are simultaneously and
ratably secured by such Lien pursuant to documentation
satisfactory to the Lenders.
(b) Mergers, Etc. Merge with or into or consolidate
with or into any other Person, or permit ETHC to do so, except
that either Borrower may merge with any other Person, provided
that, immediately after giving effect to any such merger, (i)
such Borrower is the surviving corporation or (A) the surviving
corporation shall be organized under the laws of one of the
states of the United States of America and shall assume such
Borrower's obligations hereunder in a manner acceptable to the
Majority Lenders, and (B) after giving effect to such merger, the
Senior Debt Ratings of the two Significant Subsidiaries (other
than SERI) having the highest Senior Debt Ratings shall be at
least BBB- and Baa3, (ii) no event shall have occurred and be
continuing that constitutes a Prepayment Event or an Event of
Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both, and
(iii) such Borrower shall not be liable with respect to any Debt
or allow its property to be subject to any Lien that would not be
permissible with respect to it or its property under this
Agreement on the date of such transaction.
(c) Disposition of Assets. Sell, lease, transfer,
convey or otherwise dispose of (whether in one transaction or in
a series of transactions) any shares of voting common stock (or
of stock or other instruments convertible into voting common
stock) of any Significant Subsidiary or of New Orleans, or permit
any Significant Subsidiary or New Orleans to issue, sell or
otherwise dispose of any of its shares of voting common stock (or
of stock or other instruments convertible into voting common
stock), except to Entergy or a Significant Subsidiary.
(d) Limitation on Debt. Permit the total principal
amount of all Debt of Entergy and its subsidiaries, determined on
a consolidated basis and without duplication of liability
therefor, at any time to exceed 65% of Capitalization determined
as of the last day of the most recently ended fiscal quarter of
Entergy; provided, however, that for purposes of this Section
5.02(d), "Debt" and "Capitalization" shall not include (i) Junior
Subordinated Debentures and (ii) any Debt of any subsidiary of
Entergy that is Non-Recourse Debt.
ARTICLE III.
EVENTS OF DEFAULT AND REMEDIES
SECTION III.1. Events of Default. Each of the
following events shall constitute an "Event of Default"
hereunder:
(a) Either of the Borrowers shall fail to pay any
principal of any Advance when the same becomes due and payable,
or shall fail to pay interest thereon or any other amount payable
under this Agreement or any of the Notes within three Business
Days after the same becomes due and payable; or
(b) Any representation or warranty made by either
Borrower or any of its officers herein or in connection with this
Agreement shall prove to have been incorrect or misleading in any
material respect when made; or
(c) Either of the Borrowers shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.01(b) or (c) or in Section 5.02 or (ii) any other term,
covenant or agreement contained in this Agreement on its part to
be performed or observed if the failure to perform or observe
such other term, covenant or agreement shall remain unremedied
for 30 days after written notice thereof shall have been given to
such Borrower by the Agent or any Lender; or
(d) Either of the Borrowers shall fail to pay any
principal of or premium or interest on any Debt of such Borrower
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either Borrower shall have occurred and be continuing,
in excess of $50,000,000 in the aggregate (but excluding Debt
evidenced by the Notes) when the same becomes due and payable
(whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or
(e) Any of the Borrowers, any Significant Subsidiary
or New Orleans shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against any of the Borrowers, any Significant Subsidiary or New
Orleans seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of
30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its
property) shall occur; or any of the Borrowers, any Significant
Subsidiary or New Orleans shall take any corporate action to
authorize or to consent to any of the actions set forth above in
this subsection (e); or
(f) Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against any of the
Borrowers and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 10 consecutive Business Days during
which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect; or
(g) (i) An ERISA Plan of Entergy or any ERISA
Affiliate of Entergy shall fail to maintain the minimum funding
standards required by Section 412 of the Internal Revenue Code of
1986 for any plan year or a waiver of such standard is sought or
granted under Section 412(d) of the Internal Revenue Code of
1986, or (ii) an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy is, shall have been or will be terminated or the subject
of termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
(h) Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
SECTION III.2. Remedies. If any Prepayment Event or
Event of Default shall occur and be continuing, then, and in any
such event, the Agent shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrowers, do
either or both of the following: (i) declare the obligation of
each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) declare the Notes, all
interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly
waived by the Borrowers; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to
any of the Borrowers, any Significant Subsidiary or New Orleans
under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B)
the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrowers.
ARTICLE IV.
THE AGENT
SECTION IV.1. Authorization and Action. Each Lender
hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by either of the Borrowers
pursuant to the terms of this Agreement.
SECTION IV.2. Agent's Reliance, Etc. Neither the
Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement, except for
its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may
treat the payee of any Note as the holder thereof until the Agent
receives and accepts an Assignment and Acceptance entered into by
the Lender that is the payee of such Note, as assignor, and any
assignee pursuant to Section 9.07; (ii) may consult with legal
counsel (including counsel for either of the Borrowers),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement;
(iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of either of the
Borrowers or to inspect the property (including the books and
records) of either of the Borrowers; (v) shall not be responsible
to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created
or purported to be created under or in connection with, this
Agreement or any other instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION IV.3. BNY and Affiliates. With respect to its
Commitment, the Advances made by it and the Notes issued to it,
BNY shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not
the Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include BNY in its individual
capacity. BNY and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally
engage in any kind of business with, either of the Borrowers, any
of their respective subsidiaries and any Person who may do
business with or own securities of either of the Borrowers or any
such subsidiary, all as if BNY were not the Agent and without any
duty to account therefor to the Lenders.
SECTION IV.4. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
the Agent or any other Lender and based on the financial
statements referred to in Section 4.01(e) and such other
documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION IV.5. Indemnification. The Lenders agree to
indemnify the Agent (to the extent not reimbursed by the
Borrowers), ratably according to the respective principal amounts
of the Contract Notes then held by each of them (or if no
Contract Notes are at the time outstanding or if any Contract
Notes are held by Persons that are not Lenders, ratably according
to the respective amounts of their Commitments), from and against
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by
the Agent under this Agreement, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent
that such expenses are reimbursable by either of the Borrowers
but for which the Agent is not reimbursed by the Borrowers.
SECTION IV.6. Successor Agent. The Agent may resign
at any time by giving written notice thereof to the Lenders and
Entergy and may be removed at any time with or without cause by
the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor
Agent, which, for so long as no Prepayment Event or Event of
Default has occurred and is continuing, shall be a Lender and
shall be approved by Entergy (with such approval not to be
unreasonably withheld or delayed). If no successor Agent shall
have been so appointed by the Majority Lenders and approved by
Entergy, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws
of the United States or of any other country that is a member of
the OECD having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this
Agreement. Notwithstanding the foregoing, if no Prepayment Event
or Event of Default, and no event that with the giving of notice
or the passage of time, or both, would constitute a Prepayment
Event or Event of Default, shall have occurred and be continuing,
then no successor Agent shall be appointed under this Section
7.06 without the prior written consent of Entergy, which consent
shall not be unreasonably withheld or delayed.
ARTICLE V.
GUARANTY
SECTION V.1. The Guarantor irrevocably and
unconditionally guarantees to the Creditors the full and prompt
payment, no later than the third Business Day after the giving of
notice by the Agent to the Guarantor of an Event of Default, of
all amounts payable (whether at the stated maturity, by
acceleration or otherwise) hereunder by ETHC (all such amounts
being herein collectively called the "Guaranteed Obligations").
The Guarantor understands, agrees and confirms that the Creditors
may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against the Guarantor without proceeding against
ETHC, against any security for the Guaranteed Obligations, or
under any other guaranty covering all or a portion of the
Guaranteed Obligations. All payments by the Guarantor hereunder
shall be made as provided herein.
SECTION V.2. (a) The liability of the Guarantor
hereunder is exclusive and independent of any security (if any)
for or other guaranty (if any) of the Guaranteed Obligations, and
the liability of the Guarantor hereunder shall not be affected or
impaired by (i) any direction as to application of payment by
ETHC or by any other party, (ii) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of
any other party as to the Guaranteed Obligations, (iii) any
payment on or in reduction of any such other guaranty or
undertaking, or (iv) any payment made to any Creditor on the
Guaranteed Obligations which any Creditor repays to ETHC pursuant
to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding with respect to
ETHC, and the Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such
proceeding.
(b) If claim is ever made upon any Creditor for
repayment or recovery of any amount or amounts received in
payment or on account of any of the Guaranteed Obligations and
any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of
its property or (ii) any settlement or compromise of any such
claim effected by such payee with any such claimant (including
the Guarantor), then and in such event the Guarantor agrees that
any such judgment, decree, order, settlement or compromise shall
be binding upon the Guarantor, notwithstanding any revocation
hereof or the cancellation of any instrument evidencing any
liability of the Company, and the Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid
or recovered to the same extent as if such amount had never
originally been received by any such payee.
SECTION V.3. The obligations of the Guarantor
hereunder are independent of the obligations of any other
guarantor or ETHC, and a separate action or actions may be
brought and prosecuted against the Guarantor whether or not an
action is brought against any other guarantor or ETHC and whether
or not any other guarantor or ETHC be joined in any such action
or actions. The Guarantor waives, to the fullest extent
permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof.
Any payment by ETHC or other circumstance which operates to toll
any statute of limitations as to ETHC shall operate to toll the
statute of limitations as to the Guarantor.
SECTION V.4. Except as otherwise provided in the first
sentence of Section 8.01, the Guarantor hereby waives (to the
fullest extent permitted by applicable law) notice of acceptance
hereof and notice of any liability to which this guaranty may
apply, and waives promptness, diligence, presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Agent or any
other Creditor against, and any other notice to, any party liable
thereon.
SECTION V.5. Any Creditor may at any time and from
time to time without the consent of, or notice to, the Guarantor,
without incurring responsibility to the Guarantor, without
impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole
or in part:
(a) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew, accelerate
or alter, any of the Guaranteed Obligations, any security
therefor, or any liability incurred directly or indirectly in
respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights
against the ETHC and the Guarantor or others or otherwise act or
refrain from acting;
(d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of all
or any part thereof to the payment of any liability (whether due
or not) of ETHC to creditors of ETHC;
(e) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of ETHC to the Creditors
regardless of what liabilities of ETHC remain unpaid;
(f) consent to, or waive any breach of, any act,
omission or default under this Agreement or any of the
instruments or agreements referred to herein, or otherwise amend,
modify or supplement this Agreement or any of such other
instruments or agreements; and/or
(g) act or fail to act in any manner referred to in
this Guaranty which may deprive the Guarantor of its right to
subrogation against ETHC.
SECTION V.6. No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations
or of the obligations of ETHC under this Agreement or of any
security therefor shall affect, impair or be a defense to this
guaranty, and this guaranty shall be primary, absolute and
unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a
legal or equitable discharge of a surety or guarantor except
payment in full of the Guaranteed Obligations.
SECTION V.7. This guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms
hereof shall be conclusively presumed to have been created in
reliance hereon. No failure or delay on the part of any Creditor
in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any
rights or remedies which any Creditor would otherwise have. No
notice to or demand on the Guarantor in any case shall entitle
the Guarantor to any other further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances
without notice or demand. It is not necessary for any Creditor
to inquire into the capacity or powers of the Guarantor or the
officers, directors, partners or agents acting or purporting to
act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
SECTION V.8. (a) The Guarantor waives any right
(except as shall be required by applicable statute or law and
cannot be waived) to require the Creditors to: (i) proceed
against ETHC, any other guarantor or any other party; (ii)
proceed against or exhaust any security held from ETHC, any other
guarantor or any other party; or (iii) pursue any other remedy in
the Creditors' power whatsoever. The Guarantor waives (to the
fullest extent permitted by applicable law) any defense based on
or arising out of any defense of ETHC, any other guarantor or any
other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on
or arising out of the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of ETHC other than payment in
full of the Guaranteed Obligations. The Creditors may, at their
election, foreclose on any security held by the Agent or the
other Creditors by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Creditors may
have against the Guarantor or any other party, or any security,
without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid in full. The Guarantor waives any
defense arising out of any such election by the Creditors, even
though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of the
Guarantor against ETHC or any other party or any security; and
(b) Except as otherwise provided in the first sentence
of Section 8.01, the Guarantor waives (to the fullest extent
permitted by applicable law) all presentments, demands for
performance, protests and notices, including, without limitation,
notices of nonperformance, notices of protest, notices of
dishonor, notices of acceptance of this guaranty, and notices of
the existence, creation or incurring of new or additional
indebtedness. The Guarantor assumes all responsibility for being
and keeping itself informed of ETHC's financial condition and
assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which the Guarantor assumes and incurs
hereunder, and agrees that the Creditors shall have no duty to
advise the Guarantor of information known to them regarding such
circumstances or risks.
ARTICLE VI.
MISCELLANEOUS
SECTION VI.1. Amendments, Etc. No amendment or waiver
of any provision of this Agreement or the Contract Notes, nor
consent to any departure by either of the Borrowers therefrom,
shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders and, in the case of
any such amendment, the applicable Borrower, and then such waiver
or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders (other than any Lender that is a
Borrower or an Affiliate of a Borrower), do any of the following:
(a) waive any of the conditions specified in Section 3.01, 3.02
or 3.03, (b) increase the Commitments of the Lenders or subject
the Lenders to any additional obligations, (c) reduce the
principal of, or interest on, the Contract Notes or any fees or
other amounts payable hereunder, (d) postpone any date fixed for
any payment of principal of, or interest on, the Contract Notes
or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Contract Notes, or the percentage or
number of Lenders that shall be required for the Lenders or any
of them to take any action hereunder, (f) release the Guarantor
from any of its obligations under Article VIII hereof or (g)
amend this Section 9.01; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Lenders required above to take
such action, affect the rights or duties of the Agent under this
Agreement or any Note.
SECTION VI.2. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to either of the Borrowers, c/o Entergy at its
address at 639 Loyola Avenue, New Orleans, LA 70113, Attention:
Treasurer, telecopy no. 504-576-4455; if to any Bank, at its
Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at One Wall
Street, New York, New York 10286, Attention: Dennis M. Pidherny,
telecopy no. 212-635-7923 with a copy to it at such address,
Attention: Agency Function Administration, telecopy no. 212-635-
6365; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other
parties. All such notices and communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, be effective when
deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable
company, respectively, except that notices and communications to
the Agent pursuant to Article II or VII shall not be effective
until received by the Agent. Except as otherwise provided in
Section 5.01(d), notices and other communications given by either
of the Borrowers to the Agent shall be deemed given to the
Lenders.
SECTION VI.3. No Waiver; Remedies. No failure on the
part of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION VI.4. Costs and Expenses; Indemnification.
(a) Entergy agrees to pay on demand all costs and expenses
incurred by the Agent in connection with the preparation,
execution, delivery, syndication, administration, modification
and amendment of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under
this Agreement. Any invoices to Entergy with respect to the
aforementioned expenses shall describe such costs and expenses in
reasonable detail. Entergy further agrees to pay on demand all
costs and expenses, if any (including, without limitation,
counsel fees and expenses of outside counsel and of internal
counsel), incurred by the Agent and the Lenders in connection
with the enforcement (whether through negotiations, legal
proceedings or otherwise) of, and the protection of the rights of
the Lenders under, this Agreement, the Notes and the other
documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection
with the enforcement of rights under this Section 9.04(a).
(b) If any payment of principal of, or Conversion of,
any Adjusted CD Rate Advance or Eurodollar Rate Advance is made
other than on the last day of the Interest Period for such
Contract Advance, as a result of a payment or Conversion pursuant
to Section 2.09(d), 2.10 or 2.13, acceleration of the maturity of
the Notes pursuant to Section 6.02, assignment to another Lender
upon demand of Entergy pursuant to Section 9.07(h) or (i) or for
any other reason, the applicable Borrower shall, upon demand by
any Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment
or Conversion, including, without limitation, any loss (including
loss of anticipated profits upon such Lender's representation to
such Borrower that it has made reasonable efforts to mitigate
such loss), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender
to fund or maintain such Contract Advance. Any Lender making a
demand pursuant to this Section 9.04(b) shall provide the
applicable Borrower with a written certification of the amounts
required to be paid to such Lender, showing in reasonable detail
the basis for the Lender's determination of such amounts.
(c) Entergy hereby agrees to indemnify and hold each
Lender, the Agent and their respective Affiliates and their
respective officers, directors, employees and professional
advisors (each, an "Indemnified Person") harmless from and
against any and all claims, damages, losses, liabilities, costs
or expenses (including reasonable attorneys' fees and expenses,
whether or not such Indemnified Person is named as a party to any
proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding) that any of them may incur or
which may be claimed against any of them by any person or entity
by reason of or in connection with the execution, delivery or
performance of this Agreement, the Notes or any transaction
contemplated thereby, or the use by either of the Borrowers or
any of their respective subsidiaries of the proceeds of any
Advance, except that no Indemnified Person shall be entitled to
any indemnification hereunder to the extent that such claims,
damages, losses, liabilities, costs or expenses are finally
determined by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such
Indemnified Person. Entergy's obligations under this Section
9.04(c) shall survive the repayment of all amounts owing to the
Lenders and the Agent under this Agreement and the Notes and the
termination of the Commitments. If and to the extent that the
obligations of Entergy under this Section 9.04(c) are
unenforceable for any reason, Entergy agrees to make the maximum
contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION VI.5. Right of Set-off. Upon (i) the
occurrence and during the continuance of any Event of Default or
Prepayment Event and (ii) the making of the request or the
granting of the consent specified by Section 6.02 to authorize
the Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Lender to or for
the credit or the account of either of the Borrowers against any
and all of the obligations of such Borrower now or hereafter
existing under this Agreement and any Note held by such Lender,
whether or not such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the applicable
Borrower after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.
The rights of each Lender under this Section 9.05 are in addition
to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender may have.
SECTION VI.6. Binding Effect. This Agreement shall
become effective upon execution thereof by Entergy and the Agent
and upon the receipt by the Agent of notification from each Bank
that such Bank has executed this Agreement; and thereafter the
Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Agent and each Lender and their respective
successors and assigns, except that neither of the Borrowers
shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION VI.7. Assignments and Participations. (a)
Each Lender may assign to one or more banks or other entities all
or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment, the Contract Advances owing to it and the Contract
Note or Notes held by it); provided, however, that (i) Entergy
and the Agent shall have consented to such assignment (such
consent not to be unreasonably withheld or delayed) by signing
the Assignment and Acceptance referred to in clause (iv) below;
(ii) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this
Agreement (other than any Auction Advances or Auction Notes);
(iii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $10,000,000 and shall
be an integral multiple of $1,000,000 (or shall be the total
amount of the assigning Lender's Commitment); and (iv) the
parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as
hereinafter defined), an Assignment and Acceptance, together with
any Contract Note or Notes subject to such assignment and a
processing and recordation fee of $2,500 (plus an amount equal to
out-of-pocket legal expenses of the Agent, estimated by the Agent
and advised to such parties). Upon such execution, delivery,
acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto). Notwithstanding anything to the
contrary contained in this Agreement, any Lender at any time may
assign all or any portion of its rights and obligations under
this Agreement to any Affiliate of such Lender.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of any of their
respective obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in
Section 4.01(e) and such other documents and information as it
has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee appoints
and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with the terms
of this Agreement all of the obligations which by the terms
hereof are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred
to in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Contract Advances
owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Agent and
the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any
Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(d) Upon receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with
any Contract Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrowers. Within five Business Days after its receipt of
such notice, the applicable Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered
Contract Note or Notes a new Contract Note to the order of such
assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment hereunder, a new Contract Note
to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Contract Note or
Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Contract Note or
Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
Exhibit A-1 hereto.
(e) Each Lender may assign to one or more banks or
other entities any Auction Note or Notes held by it, without the
consent of either of the Borrowers.
(f) Each Lender may sell participations to one or more
banks, financial institutions or other entities in or to all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its
Commitment to the Borrowers hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Note for all
purposes of this Agreement, and (iv) the Borrowers, the Agent and
the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and
obligations under this Agreement.
(g) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant
to this Section 9.07, disclose to the assignee or participant or
proposed assignee or participant any information relating to the
Borrowers furnished to such Lender by or on behalf of the
Borrowers; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall
agree to preserve the confidentiality of any confidential
information relating to the Borrowers received by it from such
Lender.
(h) If any Lender shall fail to consent to the
extension of the Termination Date within 30 days of receipt by
such Lender of notice of any request pursuant to Section 2.17,
then upon termination of such 30-day period, Entergy may demand
that such Lender assign in accordance with this Section 9.07 to
one or more assignees designated by Entergy and acceptable to the
Majority Lenders (provided that, for purposes of this
determination by the Majority Lenders, the non-consenting Lender
shall not be included in the Lenders holding Contract Advances or
having Commitments) all (but not less than all) of such Lender's
Commitment and the Contract Advances owing to it within the next
15 days. If any such assignee designated by Entergy shall fail to
consummate such assignment on terms acceptable to such Lender, or
if Entergy shall fail to designate any such assignee for all of
such Lender's Commitment or Advances, then such Lender may assign
such Commitment and Advances to any other assignee acceptable to
the Majority Lenders (provided that, for purposes of this
determination by the Majority Lenders, the non-consenting Lender
shall not be included in the Lenders holding Contract Advances or
having Commitments) in accordance with this Section 9.07 during
such 15-day period; it being understood for purposes of this
Section 9.07(h) that such assignment shall be conclusively deemed
to be on terms acceptable to such Lender, and such Lender shall
be compelled to consummate such assignment to an assignee
designated by Entergy, if such assignee (i) shall agree to such
assignment in substantially the form of Exhibit C hereto and (ii)
shall offer compensation to such Lender in an amount equal to the
sum of the principal amount of all Contract Advances outstanding
to such Lender plus all interest accrued thereon to the date of
such payment plus all other amounts payable by the Borrowers to
such Lender hereunder (whether or not then due) as of the date of
such payment accrued in favor of such Lender hereunder.
(i) If any Lender shall make any demand for payment
under Section 2.12 or 2.15, or if any Lender shall be the subject
of any notification or assertion of illegality under Section
2.13, then within 30 days after any such demand (if, but only if,
such demanded payment has been made by the applicable Borrower)
or notification or assertion, Entergy may, with the approval of
the Agent (which approval shall not be unreasonably withheld) and
provided that no Prepayment Event, Event of Default or event
that, with the giving of notice or lapse of time or both, would
constitute an Event of Default, shall have occurred and then be
continuing, demand that such Lender assign in accordance with
this Section 9.07 to one or more assignees designated by Entergy
and acceptable to the Agent all (but not less than all) of such
Lender's Commitment and the Contract Advances owing to it within
the period ending on the later to occur of such 30th day and the
last day of the longest of the then current Interest Periods for
such Advances. If any such assignee designated by Entergy and
approved by the Agent shall fail to consummate such assignment on
terms acceptable to such Lender, or if Entergy shall fail to
designate any such assignees acceptable to the Agent for all or
part of such Lender's Commitment or Advances, then such demand by
Entergy shall become ineffective; it being understood for
purposes of this subsection (i) that such assignment shall be
conclusively deemed to be on terms acceptable to such Lender, and
such Lender shall be compelled to consummate such assignment to
an Eligible Assignee designated by Entergy, if such Eligible
Assignee (A) shall agree to such assignment by entering into an
Assignment and Acceptance with such Lender and (B) shall offer
compensation to such Lender in an amount equal to all amounts
then owing by the Borrowers to such Lender hereunder and under
the Notes made by the Borrowers to such Lender, whether for
principal, interest, fees, costs or expenses (other than the
demanded payment referred to above and payable by the applicable
Borrower as a condition to Entergy's right to demand such
assignment), or otherwise. In addition, in the event that Entergy
shall be entitled to demand the replacement of any Lender
pursuant to this subsection (i), Entergy may, in the case of any
such Lender, with the approval of the Agent (which approval shall
not be unreasonably withheld) and provided that no Prepayment
Event, Event of Default or event that, with the giving of notice
or lapse of time or both, would constitute an Event of Default,
shall have occurred and then be continuing, terminate all (but
not less than all) such Lender's Commitment and prepay (or cause
the applicable Borrower to prepay) all (but not less than all)
such Lender's Advances not so assigned, together with all
interest accrued thereon to the date of such prepayment and all
fees, costs and expenses and other amounts then owing by the
Borrowers to such Lender hereunder and under the Note made by the
applicable Borrower to such Lender, at any time from and after
such later occurring day in accordance with Sections 2.05 and
2.11 hereof (but without the requirement stated therein for
ratable treatment of the other Lenders), if and only if, after
giving effect to such termination and prepayment, the sum of the
aggregate principal amount of the Advances of all Lenders then
outstanding does not exceed the then remaining Commitments of the
Lenders. Notwithstanding anything set forth above in this
subsection (i) to the contrary, Entergy shall not be entitled to
compel the assignment by any Lender demanding payment under
Section 2.12(a) of its Commitment and Advances or terminate and
prepay the Commitment and Advances of such Lender if, prior to or
promptly following any such demand by Entergy, such Lender shall
have changed or shall change, as the case may be, its Applicable
Lending Office for its Eurodollar Rate Advances so as to
eliminate the further incurrence of such increased cost. In
furtherance of the foregoing, any such Lender demanding payment
or giving notice as provided above agrees to use reasonable
efforts to so change its Applicable Lending Office, if to do so
would not result in the incurrence by such Lender of additional
costs or expenses which it deems material or, in the sole
judgment of such Lender, be inadvisable for regulatory,
competitive or internal management reasons.
(j) Anything in this Section 9.07 to the contrary
notwithstanding, any Lender may assign and pledge all or any
portion of its Commitment and the Advances owing to it to any
Federal Reserve Bank (and its transferees) as collateral security
pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
SECTION VI.8. Governing Law. THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
SECTION VI.9. Consent to Jurisdiction; Waiver of Jury
Trial. (a) To the fullest extent permitted by law, each of the
Borrowers hereby irrevocably (i) submits to the non-exclusive
jurisdiction of any New York State or Federal court sitting in
New York City and any appellate court from any thereof in any
action or proceeding arising out of or relating to this agreement
or any other Loan Document, and (ii) agrees that all claims in
respect of such action or proceeding may be heard and determined
in such New York State court or in such Federal court. Each of
the Borrowers hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding. Each of the Borrowers
also irrevocably consents, to the fullest extent permitted by
law, to the service of any and all process in any such action or
proceeding by the mailing by certified mail of copies of such
process to such Borrower at its address specified in Section
9.02. Each of the Borrowers agrees, to the fullest extent
permitted by law, that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) EACH OF THE BORROWERS, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY NOTE, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
SECTION .10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
ENTERGY CORPORATION
By_________________________________
Name:
Title:
ENTERGY TECHNOLOGY HOLDING
COMPANY
By__________________________________
Name:
Title:
THE BANK OF NEW YORK, as Agent
By__________________________________
Name:
Title:
Commitment BANKS
$100,000,000 THE BANK OF NEW YORK
By___________________________
Name:
Title:
<PAGE>
SCHEDULE I
LIST OF APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
Domestic Eurodollar
Name of Bank Lending Office Lending Office CD Lending Office
<S> <C> <C> <C>
The Bank of One Wall Street One Wall Street One Wall Street
New York New York, New York 10286 New York, New York 10286 New York, New York 10286
Attn: Dennis M. Pidherny/ Attn: Dennis M. Pidherny/ Attn: Dennis M. Pidherny/
Jo-Ann Evans Jo-Ann Evans Jo-Ann Evans
Telephone: 212-635-7547 Telephone: 212-635-7547 Telephone: 212-635-7547
Fax: 212-635-7923 Fax: 212-635-7923 Fax: 212-635-7923
</TABLE>
SCHEDULE 2.05(b)
FORM OF INCREASE NOTICE
The Bank of New York, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
One Wall Street
New York, New York 10286
[Date]
Ladies and Gentlemen:
The undersigned, ENTERGY CORPORATION, refers to the Credit
Agreement, dated as of ______, 1996 (the "Credit Agreement"), the
terms defined therein being used herein as therein defined, among
the undersigned, Entergy Technology Holding Company, certain
Lenders parties thereto and The Bank of New York, as Agent for
said Lenders, and hereby gives you notice pursuant to Section
2.05(b) of the Credit Agreement that the undersigned hereby
requests that the aggregate amount of the Commitments be
increased, and in that connection sets forth below the
information relating to such increase of the aggregate amount of
the Commitments (the "Requested Increase") as required by Section
2.05(b) of the Credit Agreement:
(i) The Business Day of the effectiveness of the
Requested Increase is ______, 19___ (the "Increase
Date").
(ii) The aggregate amount of the Requested Increase is
$________________.
(iii)The aggregate amount of the Commitments after
giving effect to the Requested Increase will be
$________________.
[(iv)Each of the following financial institutions is
proposed to become a Lender on the Increase Date with a
Commitment in the amount set forth opposite its name:
[set forth information]]
[(iv)Each of the following existing Lenders is
requested to increase its Commitment on the Increase
Date to the amount set forth opposite its name:
[set forth information]]
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
Increase Date:
(A) the representations and warranties contained in
Section 4.01 of the Credit Agreement are correct, before and
after giving effect to the Requested Increase, as though made on
and as of such date; and
(B) no event has occurred and is continuing, or would
result from such Requested Increase, that constitutes a
Prepayment Event or an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or
time elapse or both.
Very truly yours,
ENTERGY CORPORATION
By_________________________________
Name:
Title:
<PAGE>
EXHIBIT A-1
FORM OF CONTRACT NOTE
U.S. $ _______________ Dated: ____________, 19___
FOR VALUE RECEIVED, the undersigned, [ENTERGY CORPORATION]
[ENTERGY TECHNOLOGY HOLDING COMPANY], a Delaware corporation (the
"Borrower"), HEREBY PROMISES TO PAY to the order of
____________________ (the "Lender") for the account of its
Applicable Lending Office (such term and other capitalized terms
herein being used as defined in the Credit Agreement referred to
below) the principal sum of U.S. $___________ or, if less, the
aggregate principal amount of the Contract Advances made by the
Lender to the Borrower pursuant to the Credit Agreement
outstanding on the Termination Date, payable on the Termination
Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Contract Advance from the date of such Contract
Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in
the Credit Agreement.
Both principal and interest are payable in lawful money of
the United States of America to The Bank of New York, as Agent,
at One Wall Street, New York, New York 10286, in same day funds.
Each Contract Advance made by the Lender to the Borrower pursuant
to the Credit Agreement, and all payments made on account of
principal thereof, may be recorded by the Lender and endorsed on
the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Contract Notes referred to
in, and is entitled to the benefits of, the Credit Agreement,
dated as of __________, 1996 (the "Credit Agreement"), among the
Borrower, [Entergy Corporation] [Entergy Technology Holding
Company], the Lender and certain other banks parties thereto, and
The Bank of New York, as Agent for the Lender and such other
banks. The Credit Agreement, among other things, (i) provides for
the making of Contract Advances by the Lender to the Borrower
from time to time in an aggregate amount not to exceed at any
time outstanding the U.S. dollar amount first above mentioned,
the indebtedness of the Borrower resulting from each such
Contract Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY]
By_______________________________
Name:
Title:
<PAGE>
ADVANCES, MATURITIES AND PAYMENTS OF PRINCIPAL
Date Amount of Interest Period Principal Amount of Notation
Advance (if any) of Paid or Unpaid Made By
Advance Prepaid Principal
Balance
<PAGE>
EXHIBIT A-2
FORM OF AUCTION NOTE
U.S. $ _______________ Dated: __________ , 19___
FOR VALUE RECEIVED, the undersigned, [ENTERGY CORPORATION]
[ENTERGY TECHNOLOGY HOLDING COMPANY], a Delaware corporation (the
"Borrower"), HEREBY PROMISES TO PAY to the order of
_______________(the ""Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to
below), on __________, 19__, the principal amount of __________
Dollars ($ __________).
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is
paid in full, at the interest rate and payable on the interest
payment date or dates provided below:
[Interest Rate: ______% per annum [or]
[Description of Interest Rate Basis and
Margin] (calculated on the basis of a year of
_____ days for the actual number of days
elapsed).
Interest Payment Date or Dates:
Prepayment terms:
Both principal and interest are payable in lawful money of
the United States of America to ____________ or the account of
the Lender at the office of The Bank of New York, as Agent, at
One Wall Street, New York, New York 10286, in same day funds,
free and clear of and without any deduction, with respect to the
payee named above, for any and all present and future taxes,
deductions, charges or withholdings, and all liabilities with
respect thereto to the extent and in the manner provided in the
Credit Agreement.
This Promissory Note is one of the Auction Notes referred to
in, and is entitled to the benefits of, the Credit Agreement,
dated as of ___________ ____, 1996 (the "Credit Agreement"),
among the Borrower, [Entergy Corporation] [Entergy Technology
Holding Company], the Lender and certain other banks parties
thereto, and The Bank of New York, as Agent for the Lender and
such other banks. The Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY]
By_______________________
Name:
Title:
<PAGE>
EXHIBIT B-1
FORM OF NOTICE OF CONTRACT BORROWING
The Bank of New York, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
One Wall Street
New York, New York 10286
[Date]
Ladies and Gentlemen:
The undersigned, [ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY] refers to the Credit Agreement, dated as of
______, 1996 (the "Credit Agreement"), the terms defined therein
being used herein as therein defined, among the undersigned,
[Entergy Corporation] [Entergy Technology Holding Company],
certain Lenders parties thereto and The Bank of New York, as
Agent for said Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Contract Borrowing under the Credit
Agreement, and in that connection sets forth below the
information relating to such Contract Borrowing (the "Proposed
Contract Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Contract
Borrowing is ______, 19___.
(ii) The Type of Contract Advances to be made in
connection with the Proposed Contract Borrowing is
[Adjusted CD Rate Advances] [Base Rate Advances]
[Eurodollar Rate Advances].
(iii)The aggregate amount of the Proposed Contract
Borrowing is $________________.
(iv) The Interest Period for each Contract Advance made
as part of the Proposed Contract Borrowing is [
___days] [____ month[s]].
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Contract Borrowing:
(A) the representations and warranties contained in
Section 4.01 of the Credit Agreement are correct, before and
after giving effect to the Proposed Contract Borrowing and to the
application of the proceeds therefrom, as though made on and as
of such date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Contract Borrowing or from the
application of the proceeds therefrom, that constitutes a
Prepayment Event or an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or
time elapse or both.
[Attached hereto is a copy of the ETC Order applicable to the
Person being acquired with the proceeds of the Contract Borrowing
requested hereby. Also attached hereto is the opinion of FCC
counsel for the undersigned, substantially in the form of Exhibit
D-2 to the Credit Agreement.]<FN1>
Very truly yours,
[ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY]
By_________________________________
Name:
Title:
__________________
<FN1> Include in notices of Contract Borrowings by Entergy Corporation,
unless all of the proceeds thereof are being used to repay all or
any portion of such Borrower's outstanding Auction Borrowings.
<PAGE>
EXHIBIT B-2
FORM OF NOTICE OF AUCTION BORROWING
The Bank of New York, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
One Wall Street
New York, New York 10286
[Date]
Ladies and Gentlemen:
The undersigned, [ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY], refers to the Credit Agreement, dated
__________ , 1996 (the "Credit Agreement"), the terms defined
therein being used herein as therein defined, among the
undersigned, [Entergy Corporation] [Entergy Technology Holding
Company], certain Lenders parties thereto and The Bank of New
York, as Agent for said Lenders, and hereby gives you notice
pursuant to Section 2.03 of the Credit Agreement that the
undersigned hereby requests an Auction Borrowing under the Credit
Agreement, and in that connection sets forth the terms on which
such Auction Borrowing (the "Proposed Auction Borrowing") is
requested to be made:
(A) Date of Auction Borrowing ______________
(B) Amount of Auction Borrowing ______________
(C) Maturity Date ______________
(D) Interest Rate Basis and Margin<FN2> ______________
(E) Interest Computation Basis ______________
(F) Interest Payment Dates(s) ______________
(G) Prepayment ______________
(H) __________________________
(I) __________________________
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Auction Borrowing:
(a) the representations and warranties contained in
Section 4.01 of the Credit Agreement are correct, before and
after giving effect to the Proposed Auction Borrowing and to
the application of the proceeds therefrom, as though made on
and as of such date;
(b) no event has occurred and is continuing, or would
result from the Proposed Auction Borrowing or from the
application of the proceeds therefrom, that constitutes a
Prepayment Event or an Event of Default or would constitute
an Event of Default but for the requirement that notice be
given or time elapse or both; and
(c) the aggregate amount of the Proposed Auction
Borrowing and all other Borrowings to be made on the same
day under the Credit Agreement is within the aggregate
amount of the unused Commitments of the Lenders.
[Attached hereto is a copy of the ETC Order applicable to the
Person being acquired with the proceeds of the Auction Borrowing
requested hereby. Also attached hereto is the opinion of FCC
counsel for the undersigned, substantially in the form of Exhibit
D-2 to the Credit Agreement.]<FN3>
The undersigned hereby confirms that the Proposed Auction
Borrowing is to be made available to it in accordance with
Section 2.03(a)(v) of the Credit Agreement.
Very truly yours,
[ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY]
By_________________________________
Name:
Title:
__________________
<FN2> Include if applicable.
<FN3> Include in notices of Auction Borrowings by Entergy Corporation,
unless all of the proceeds thereof are being used to repay all or
any portion of such Borrower's outstanding Contract Borrowings or
Auction Borrowings.
<PAGE>
EXHIBIT B-3
FORM OF NOTICE OF CONVERSION
The Bank of New York, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
One Wall Street
New York, New York 10286
[Date]
Ladies and Gentlemen:
The undersigned, [ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY], refers to the Credit Agreement, dated as of
__________, 1996 (the "Credit Agreement"), the terms defined
therein being used herein as therein defined, among the
undersigned, [Entergy Corporation] [Entergy Technology Holding
Company], certain Lenders party thereto and The Bank of New York,
as Agent for said Lenders, and hereby gives you notice
irrevocably, pursuant to Section 2.10 of the Credit Agreement,
that the undersigned hereby requests a Conversion under the
Credit Agreement, and in that connection sets forth below the
information relating to such Conversion (the "Proposed
Conversion") as required by Section 2.10 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is
__________, ____.
(ii) The Type of Advances comprising the Proposed
Conversion is [Adjusted CD Rate Advances] [Base Rate
Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Conversion
is $______________.
(iv) The Type of Advances to which such Advances are
proposed to be Converted is [Adjusted CD Rate Advances]
[Base Rate Advances] [Eurodollar Rate Advances].
(v) The Interest Period for each Advance made as part
of the Proposed Conversion is [___ days] [_____ month(s)].<FN4>
The undersigned hereby represents and warrants that the
following statements are true on the date hereof, and will be
true on the date of the Proposed Conversion:
(A) The Borrower's request for the Proposed Conversion
is made in compliance with Section 2.10 of the Credit
Agreement; and
(B) The statements contained in Section 3.02(i) of the
Credit Agreement are true.
Very truly yours,
[ENTERGY CORPORATION] [ENTERGY TECHNOLOGY
HOLDING COMPANY]
By_________________________________
Title:
______________________
<FN4> Delete for Base Rate Advances.
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 19___
Reference is made to the Credit Agreement, dated as of
________________ ____, 1996 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among Entergy
Corporation, a Delaware corporation, Entergy Technology Holding
Company, a Delaware corporation (collectively with Entergy
Corporation, the "Borrowers"), the Lenders (as defined in the
Credit Agreement) and The Bank of New York, as Agent for the
Lenders (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
__________ (the "Assignor") and ________(the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse, and the Assignee hereby purchases and assumes
from the Assignor, that interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Auction Advances and Auction
Notes) which represents the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the
Credit Agreement (other than in respect of Auction Advances and
Auction Notes), including, without limitation, such interest in
the Assignor's Commitment, the Contract Advances owing to the
Assignor, and the Contract Note[s] held by the Assignor. After
giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Contract Advances owing to the
Assignee will be as set forth in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of any of their
respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv)
attaches the Contract Note[s] referred to in paragraph 1 above
and requests that the Agent exchange such Contract Note[s] for a
new Contract Note payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant
hereto or new Contract Notes payable to the order of the Assignee
in an amount equal to the Commitment assumed by the Assignee
pursuant hereto and the Assignor in an amount equal to the
Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1 hereto. Except as
specified in this Section 2, the assignment hereunder shall be
without recourse to the Assignor.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial
statements referred to in Section 4.01 thereof and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor
or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the
Credit Agreement; (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it
as a Lender; [and] (v) specifies as its CD Lending Office,
Domestic Lending Office (and address for notices) and Eurodollar
Lending Office the offices set forth beneath its name on the
signature pages hereof [and (vi) attaches the forms prescribed by
the Internal Revenue Service of the United States certifying that
it is exempt from United States withholding taxes with respect to
all payments to be made to the Assignee under the Credit
Agreement and the Notes].
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the
Agent for acceptance and recording by the Agent. The effective
date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Agent, unless otherwise specified on
Schedule 1 hereto (the "Effective Date"); provided, however, that
in no event shall this Assignment and Acceptance become effective
prior to the payment for the processing and recordation fee to
the Agent as provided in Section 8.07(a) of the Credit Agreement.
5. Upon such acceptance and recording by the Agent, as of
the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under
the Credit Agreement and the Contract Notes in respect of the
interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit
Agreement and the Contract Notes for periods prior to the
Effective Date directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
8. This Assignment and Acceptance may be signed in any
number of counterparts, each of which shall be deemed an
original, with the same effect as if the signatures thereto and
hereto were up on the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective
officers thereunto duly authorized, as of the date first above
written, such execution being made on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By_______________________________
Name:
Title:
[NAME OF ASSIGNEE]
By______________________________
Name:
Title:
CD Lending Office:
[Address]
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ___ day
of _________ , 19 __
THE BANK OF NEW YORK, as Agent
By __________________
Name:
Title:
<PAGE>
Schedule 1
to Assignment and Acceptance
Dated __________, 19___
Section 1.
Percentage Interest: ______
%
Section 2.
Assignee's Commitment: $_____
Aggregate Outstanding Principal
Amount of Contract Advances $_____
owing to the Assignee:
A Contract Note payable to the order of the Assignee
Dated: _______, 19___ $_____
Principal amount:
[A Contract Note payable to the order of the Assignor
Dated: _______, 19___ $_____]
Principal amount:
Section 3.
Effective Date<FN5>: ________, 19___
___________________
<FN5> This date should be no earlier than the date of acceptance by
the Agent.
<PAGE>
EXHIBIT D-2
FORM OF OPINION OF
COUNSEL FOR ENTERGY
[Letterhead of Laurence M. Hamric, Entergy Corporation]
[Set forth below are the substantive opinions to be provided]
Based on the foregoing, and subject to the
qualifications hereinafter expressed, it is my opinion that:
1. The Acquiree is an "exempt telecommunications
company" within the meaning of section 34(a)(1) of the Public
Utility Holding Company Act of 1935, as amended ("PUHCA").
2. The Acquiree has obtained an ETC Order with respect
to its status as an "exempt telecommunications company" within
the meaning of section 34(a)(i) of PUHCA, and such ETC Order is
in full force and effect.
3. No authorization or approval or other action by, or
notice, filing or registration with, the Securities and Exchange
Commission (the "SEC"), the Federal Communications Commission or
any other governmental or regulatory authority, other than the
ETC Order obtained with respect to the Acquiree and such notice
as may be required to be filed with the SEC pursuant to section
34(f) of PUHCA, is or will be required to be obtained or made by
the Acquiree, Entergy or any of its subsidiaries in connection
with the Borrowings the proceeds of which will be used to effect
the acquisition by Entergy of the Acquiree.
<PAGE>
EXHIBIT E
FORM OF OPINION OF
SPECIAL NEW YORK COUNSEL
FOR THE AGENT
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
_______ __, 1996
To the Agent and each Lender party to
the Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel to The Bank of New York, as
Agent, in connection with the negotiation, execution and delivery
of the Credit Agreement, dated as of September 13, 1996, among
Entergy Corporation and Entergy Technology Holding Company, as
Borrowers, the banks named therein, as Banks, and The Bank of New
York, as Agent (the "Credit Agreement"). Terms defined in the
Credit Agreement that are not otherwise defined herein are used
herein with the meanings therein ascribed to them.
For the purposes of rendering the opinions contained in
this letter, we have examined executed counterparts of the Credit
Agreement and the Notes delivered on the date hereof
(collectively, the "Loan Documents").
For the purposes of this opinion, we have assumed (i)
the authenticity of all such documents submitted to us as
originals, (ii) the due authorization, execution and delivery by
the Agent and the Banks of the Loan Documents to which they are
parties, (iii) that each of the Borrowers has the corporate
power, and has taken all necessary corporate action to authorize
it, to execute, deliver and perform each of the Loan Documents to
which it is a party, (iv) that the Loan Documents have been duly
executed and delivered by each of the Borrowers that is a party
thereto and (v) that the execution, delivery and performance in
accordance with their respective terms by each of the Borrowers
of the Loan Documents to which it is a party do not and will not
(A) require any authorization or approval or other action by, or
any notice to or filing with, any governmental authority or
regulatory body (such authorizations, approvals, actions, notices
and filings hereinafter referred to as "Governmental Approvals"),
other than any such Governmental Approvals that have been
obtained or made, are final and not subject to review or
collateral attack and are in full force and effect, or (B)
violate or conflict with, result in a breach of, or constitute a
default under (1) any contract, agreement, instrument,
certificate of incorporation, charter or by-law to which either
Borrower is a party or by which it or its properties may be bound
or (2) any Governmental Approval or any order, decision, judgment
or decree of any court or arbitrator.
Based upon the foregoing, and subject to the
qualifications and limitations set forth herein, we are of the
opinion that the Loan Documents are legal, valid and binding
obligations of the Borrowers party thereto, enforceable against
such Borrowers in accordance with their respective terms.
Our opinion above is subject to the following
qualifications and limitations:
(a) Our opinion is subject to the effect of applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and
other laws affecting the enforcement of creditors' rights
generally and to the effect of general equitable principles
(whether considered in a proceeding in equity or at law). Such
principles applied by a court might include a requirement that a
creditor act with reasonableness and good faith. Furthermore, a
court may refuse to enforce a covenant where a court deems such
covenant to be violative of applicable public policy.
(b) Our opinions are limited to the law of the State
of New York and the Federal law of the United States. Without
limiting the generality of the foregoing, we express no opinion
as to the effect of the law of any jurisdiction other than the
State of New York wherein any Lender may be located or wherein
enforcement of the Loan Documents may be sought that limits the
rates of interest legally chargeable or collectable.
This opinion is intended for the sole benefit of the
Agent and the Lenders and no other person shall be entitled to
rely hereon for any purpose.
Very truly yours,
Exhibit 4(a) 13
AMENDMENT NO. 1
dated as of October 22, 1996
to
CREDIT AGREEMENT
dated as of September 13, 1996
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of
October 22, 1996, among ENTERGY CORPORATION, a Delaware
corporation ("Entergy"), ENTERGY TECHNOLOGY HOLDING COMPANY, a
Delaware corporation, THE BANK OF NEW YORK ("BNY"), as Agent and
as the sole Lender under the Credit Agreement hereinafter
referred to, and the other financial institutions listed on the
signature pages hereof (the "New Lenders") (with capitalized
terms used but not otherwise defined herein having the meaning
ascribed thereto in the Credit Agreement hereinafter referred
to),
W I T N E S S E T H:
WHEREAS, Entergy, ETHC, BNY and the Agent have entered
into a Credit Agreement dated as of September 13, 1996 (the
"Credit Agreement"); and
WHEREAS, the Borrowers have requested, and BNY, the New
Lenders and the Agent have agreed to, the amendments to the
Credit Agreement more fully set forth in this Amendment; and
WHEREAS, such amendment shall be of benefit, either
directly or indirectly, to the Borrowers,
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrowers, BNY,
the New Lenders and the Agent agree as follows:
1. Amendments. Upon and after the Effective Date (as
defined in Section 3 below), the Credit Agreement shall be
amended as follows:
a. Section 1.01 shall be amended by amending the definitions
of "Banks", "Commitment" and "Lenders" contained therein to read
in their entirety as follows:
" 'Banks' means the banks or other
financial institutions listed on the signature pages
hereof or on the signature pages of Amendment No. 1."
" 'Commitment' means, with respect to
any Lender, the amount set forth opposite such Lender's
name on the signature pages of Amendment No. 1 or, if
such Lender has entered into any Assignment and
Acceptance, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 9.07(c),
or, if such Lender has become a Lender in connection
with an increase of Commitments pursuant to Section
2.05(b), set forth in the amendment to this Agreement
required by Section 2.05(b) in connection with such
increase, in each case as such amount may be reduced or
increased pursuant to Section 2.05."
" 'Lenders' means the Banks and each
Person that shall become a party hereto pursuant to
Section 9.07."
b. Section 1.01 shall be further amended by inserting therein
in appropriate alphabetical order definitions of "Agreement" and
"Amendment No. 1" to read in their entirety as follows:
" 'Agreement' means this Agreement,
including all schedules and exhibits hereto, as amended
or supplemented from time to time."
" 'Amendment No. 1' means Amendment No.
1 to this Agreement dated as of October 22, 1996."
c. Section 2.01 shall be amended by deleting the
words from and including "the amount set" in the fifth line
thereof through and including "(such Lender's "Commitment")"
in the eighth line thereof and inserting in lieu thereof the
words "such Lender's Commitment".
d. Section 5.01(c) shall be amended by deleting
the words "each of ETHC and its respective subsidiaries"
beginning in the second line thereof and inserting in lieu
thereof the word "ETHC". BNY and the New Lenders hereby
waive any default by the Borrowers existing on the Effective
Date under Section 5.01(c) as in effect before giving effect
to this Amendment which would not be a default under Section
5.01(c) as amended by this Amendment.
e. Schedule I to the Credit Agreement shall be
amended to read in its entirety as set forth in Schedule I
hereto.
2. Representations and Warranties. In order to induce BNY
and the New Lenders to enter into this Agreement, Entergy hereby
represents and warrants that each of the representations and
warranties set forth in Article IV of the Credit Agreement are
true and correct as though such representations and warranties
were made at and as of the Effective Date (as defined in Section
3 below) except to the extent that any such representations or
warranties are made as of a specified date or with respect to a
specified period of time, in which case such representations and
warranties shall be made as of such specified date or with
respect to such specified period. Each of the representations
and warranties made under the Credit Agreement (including those
made herein) shall survive to the extent provided therein and not
be waived by the execution and delivery of this Amendment.
3. Effective Date. The amendments to the Credit Agreement
provided for in this Amendment shall become effective as of the
date first referenced above on the date on which all of the
following conditions precedent shall have been satisfied (the
"Effective Date"):
a. The Agent shall have received this Amendment,
executed by the Borrowers, BNY, the New Lenders and the
Agent.
b. Entergy shall have paid all expenses due and
payable under Section 4 of this Amendment.
4. Payment of Expenses. Entergy hereby agrees to pay all
reasonable costs and expenses incurred by the Agent in connection
with the preparation, execution and delivery of this Amendment
and any other documents or instruments which may be delivered in
connection herewith, whether before or after the Effective Date,
including, without limitation, the reasonable fees and out-of-
pocket expenses of Winthrop, Stimson, Putnam & Roberts.
5. Counterparts. This Amendment may be executed in
counterparts and by different parties hereto in separate
counterparts, each of which, when so executed and delivered,
shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same instrument.
6. Ratification. The Credit Agreement, as amended by this
Amendment, is and shall continue to be in full force and effect
and is hereby in all respects confirmed, approved and ratified.
7. Governing Law. This Amendment and the rights and
duties of the parties hereunder shall, pursuant to New York
General Obligations Law Section 5-1401, be governed by the law of
the State of New York.
8. Reference to Agreement. From and after the Effective
Date, each reference in the Credit Agreement to "this Agreement",
"hereof", "hereunder" or words of like import, and all references
to the Credit Agreement in any and all agreements, instruments,
documents, notes, certificates and other writings of every kind
and nature shall be deemed to mean the Credit Agreement as
modified and amended by this Amendment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
ENTERGY CORPORATION
By:
Name:
Title:
ENTERGY TECHNOLOGY HOLDING COMPANY
By:
Name:
Title:
THE BANK OF NEW YORK, as Agent
By: ______________________________
Name:
Title:
Commitment
$15,000,000 THE BANK OF NEW YORK
By: ______________________________
Name:
Title:
$12,500,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: ______________________________
Name:
Title:
$12,500,000 THE BANK OF NOVA SCOTIA
By: ______________________________
Name:
Title:
$12,500,000 BANQUE NATIONALE DE PARIS
By: ______________________________
Name:
Title:
$12,500,000 THE FIRST NATIONAL BANK OF CHICAGO
By: ______________________________
Name:
Title:
$12,500,000 THE FUJI BANK, LIMITED
By: ______________________________
Name:
Title:
$12,500,000 SOCIETE GENERALE
By: ______________________________
Name:
Title:
$10,000,000 THE CANADIAN IMPERIAL BANK OF
COMMERCE
By: ______________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
LIST OF APPLICABLE LENDING OFFICES
Domestic Eurodollar
Name of Bank Lending Office Lending Office CD Lending Office
<S> <C> <C> <C>
The Bank of One Wall Street One Wall Street One Wall Street
New York New York, NY 10286 New York, NY 10286 New York, NY 10286
Attn: Kaly Bose Attn: Kaly Bose Attn: Kaly Bose
Telephone: 212-635-4693 Telephone: 212-635-4693 Telephone: 212-635-4693
Fax: 212-635-6365 Fax: 212-635-6365 Fax: 212-635-6365
Bank of 333 S. Beaudry Ave. 333 S. Beaudry Ave. 333 S. Beaudry Ave.
America NT & 19th Floor 19th Floor 19th Floor
SA Los Angeles, CA 90017 Los Angeles, CA 90017 Los Angeles, CA 90017
Attn: Laurie Ostrom Attn: Laurie Ostrom Attn: Laurie Ostrom
Telephone: 213-345-6345 Telephone: 213-345-6345 Telephone: 213-345-6345
Fax: 213-345-6550 Fax: 213-345-6550 Fax: 213-345-6550
The Bank of Atlanta Agency Atlanta Agency Atlanta Agency
Nova Scotia 600 Peachtree St N.E. 600 Peachtree St N.E. 600 Peachtree St N.E.
Suite 2700 Suite 2700 Suite 2700
Atlanta, GA 30308 Atlanta, GA 30308 Atlanta, GA 30308
Attn: F.C.H. Ashby Attn: F.C.H. Ashby Attn: F.C.H. Ashby
Telephone: 404-877-1500 Telephone: 404-877-1500 Telephone: 404-877-1500
Fax: 404-888-8998 Fax: 404-888-8998 Fax: 404-888-8998
Banque 333 Clay Street 333 Clay Street 333 Clay Street
Nationale de Suite 3400 Suite 3400 Suite 3400
Paris, Houston, TX 77002 Houston, TX 77002 Houston, TX 77002
Houston Attn: Donna Rose Attn: Donna Rose Attn: Donna Rose
Telephone: 713-951-1240 Telephone: 713-951-1240 Telephone: 713-951-1240
Fax: 713-659-1414 Fax: 713-659-1414 Fax: 713-659-1414
The First One First One First One First
of Chicago National Plaza National Plaza National Plaza
Chicago, IL 60670 Chicago, IL 60670 Chicago, IL 60670
Attn: Lynn Pozsgay Attn: Lynn Pozsgay Attn: Lynn Pozsgay
Telephone: 312-732-8705 Telephone: 312-732-8705 Telephone: 312-732-8705
Fax: 312-732-4840 Fax: 312-732-4840 Fax: 312-732-4840
The Fuji Bank 1221 McKinney Street 1221 McKinney Street 1221 McKinney Street
Ltd. Suite 4100 Suite 4100 Suite 4100
Houston, TX 77010 Houston, TX 77010 Houston, TX 77010
Attn: Jenny Lin/ Attn: Jenny/Lin Attn: Jenny/Lin
Frances Flores Frances Flores Frances Flores
Telephone: 713-650-7845 Telephone: 713-650-7845 Telephone: 713-650-7845
or 713-650-7829 or 713-650-7829 or 713-650-7829
Fax: 713-759-0048 Fax: 713-759-0048 Fax: 713-759-0048
Societe Trammel Crow Center Trammel Crow Center Trammel Crow Center
Generale 2001 Ross Avenue 2001 Ross Avenue 2001 Ross Avenue
Southwest Suite #4800 Suite #4800 Suite #4800
Agency Dallas, TX 75201 Dallas, TX 75201 Dallas, TX 75201
Attn: Tequlla English Attn: Tequlla English Attn: Tequlla English
Telephone: 214-979-2767 Telephone: 214-979-2767 Telephone: 214-979-2767
Fax: 214-754-0171 Fax: 214-754-0171 Fax: 214-754-0171
CIBC Inc. 2727 Paces Ferry Road 2727 Paces Ferry Road 2727 Paces Ferry Road
Suite 1200 Suite 1200 Suite 1200
Atlanta, GA 30339 Atlanta, GA 30339 Atlanta, GA 30339
Attn: Debra Quintero Attn: Debra Quintero Attn: Debra Quintero
Telephone: 770-319-4823 Telephone: 770-319-4823 Telephone: 770-319-4823
Fax: 770-319-4950 Fax: 770-319-4950 Fax: 770-319-4950
</TABLE>
Exhibit 4(a) 14
GUARANTY AND ACKNOWLEDGMENT AGREEMENT
Dated as of October 3, 1996
ENTERGY CORPORATION, a Delaware corporation
("Entergy"), ENTERGY TECHNOLOGY HOLDING COMPANY, a Delaware
corporation ("ETHC"), and THE BANK OF NEW YORK (the "Guaranteed
Party") hereby agree as follows (this Guaranty and Acknowledgment
Agreement being herein referred to as this "Agreement"):
W I T N E S S E T H:
WHEREAS, 280 Equity Holdings, Ltd. (the "Seller") is
the owner of a certain Promissory Note of ETHC (together with any
replacement note issued pursuant to Article I hereof, the "ETHC
Note") dated the date hereof in the principal amount of
$27,732,180;
WHEREAS, Seller has agreed to sell to The Bank of New
York and The Bank of New York has agreed to purchase from Seller
the ETHC Note under the Note Purchase Agreement between 280
Equity Holdings, Ltd. and The Bank of New York, dated as of the
date hereof (the "Note Purchase Agreement");
WHEREAS, Seller is the owner of a certain Promissory
Note of ETHC (together with any replacement note issued pursuant
to Article I hereof, the "Escrow Note") dated the date hereof in
the principal amount of $3,200,000;
WHEREAS, Seller has agreed to sell to The Bank of New
York and The Bank of New York has agreed to purchase from Seller
the Escrow Note under the Note Purchase Agreement;
WHEREAS, it is a condition to the obligation of The
Bank of New York to purchase the ETHC Note and the Escrow Note
that Entergy guarantee the full and prompt payment of such Notes
and that Entergy and ETHC make the additional agreements,
acknowledgments, representations and warranties provided for
herein;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
ISSUANCE OF REPLACEMENT NOTES
Immediately upon the purchase of the original ETHC Note
and the original Escrow Note (together with any replacement notes
issued pursuant to this Article I, the "Notes") by the Guaranteed
Party pursuant to the Note Purchase Agreement, ETHC agrees to
execute and deliver to the Guaranteed Party, against receipt of
the original ETHC Note and the original Escrow Note, replacement
promissory notes payable to the order of the Guaranteed Party in
the form attached hereto as Exhibits A and B (the "ETHC
Replacement Note" and the "Escrow Replacement Note,"
respectively, and together, the "Replacement Notes"). For
purposes hereof, all references to the ETHC Note, the Escrow Note
and Notes shall be deemed to refer to such ETHC Replacement Note,
Escrow Replacement Note and Replacement Notes, respectively.
ARTICLE II
GUARANTY
2.1. Entergy irrevocably and unconditionally
guarantees to the Guaranteed Party the full and prompt payment,
no later than the third Business Day after the giving of notice
by the Guaranteed Party to Entergy, of all amounts payable
(whether at the Maturity Date, at any Prepayment Date, by
acceleration or otherwise) under the Notes by ETHC (all such
amounts being herein collectively called the "Guaranteed
Obligations"). Entergy understands, agrees and confirms that the
Guaranteed Party may enforce this Guaranty up to the full amount
of the Guaranteed Obligations against Entergy without proceeding
against ETHC, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a
portion of the Guaranteed Obligations. All payments by Entergy
hereunder shall be made as provided herein.
2.2. (a) The liability of Entergy hereunder is
exclusive and independent of any security (if any) for or other
guaranty (if any) of the Guaranteed Obligations, and the
liability of Entergy hereunder shall not be affected or impaired
by (i) any direction as to application of payment by ETHC or by
any other party, (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations, (iii) any payment on or
in reduction of any such other guaranty or undertaking, or (iv)
any payment made to the Guaranteed Party on the Guaranteed
Obligations which the Guaranteed Party repays to ETHC pursuant to
court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding with respect to
ETHC, and Entergy waives any right to the deferral or
modification of its obligations hereunder by reason of any such
proceeding.
(b) If claim is ever made upon the Guaranteed Party
for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guaranteed Obligations and
the Guaranteed Party repays all or part of said amount by reason
of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Guaranteed Party
or any of its property or (ii) any settlement or compromise of
any such claim effected by the Guaranteed Party with any such
claimant (including Entergy), then and in such event Entergy
agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any instrument
evidencing any liability of ETHC, and Entergy shall be and remain
liable to the Guaranteed Party for the amount so repaid or
recovered to the same extent as if such amount had never
originally been received by the Guaranteed Party.
2.3. The obligations of Entergy hereunder are
independent of the obligations of any other guarantor or ETHC,
and a separate action or actions may be brought and prosecuted
against Entergy whether or not an action is brought against any
other guarantor or ETHC and whether or not any other guarantor or
ETHC be joined in any such action or actions. Entergy waives, to
the fullest extent permitted by law, the benefit of any statute
of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by ETHC or other circumstance
which operates to toll any statute of limitations as to ETHC
shall operate to toll the statute of limitations as to Entergy.
2.4. Except as otherwise provided in the first
sentence of Section 2.1 hereof, Entergy hereby waives (to the
fullest extent permitted by applicable law) notice of acceptance
hereof and notice of any liability to which this Guaranty may
apply, and waives promptness, diligence, presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Guaranteed
Party against, and any other notice to, any party liable thereon.
2.5. The Guaranteed Party may at any time and from
time to time without the consent of, or notice to, Entergy,
without incurring responsibility to Entergy, without impairing or
releasing the obligations of Entergy hereunder, upon or without
any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew, accelerate
or alter, any of the Guaranteed Obligations, any security
therefor, or any liability incurred directly or indirectly in
respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those under this Guaranty) incurred
directly or indirectly in respect thereof or of this Guaranty,
and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights
against ETHC and Entergy or others or otherwise act or refrain
from acting;
(d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those under this Guaranty) incurred directly or indirectly
in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether
due or not) of ETHC to creditors of ETHC;
(e) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of ETHC to the
Guaranteed Party regardless of what liabilities of ETHC remain
unpaid;
(f) consent to, or waive any breach of, any act,
omission or default under the Notes or any of the instruments or
agreements referred to herein, or otherwise amend, modify or
supplement the Notes or any of such other instruments or
agreements; and/or
(g) act or fail to act in any manner referred to in
this Guaranty which may deprive Entergy of its right to
subrogation against ETHC.
2.6. No invalidity, irregularity or unenforceability
of all or any part of the Guaranteed Obligations or of the
obligations of ETHC under the Notes or of any security therefor
shall affect, impair or be a defense to this Guaranty, and this
Guaranty shall be primary, absolute and unconditional notwith
standing the occurrence of any event or the existence of any
other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
2.7. This Guaranty is a continuing guaranty and all
liabilities to which it applies or may apply under the terms
hereof shall be conclusively presumed to have been created in
reliance hereon. No failure or delay on the part of the
Guaranteed Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies
herein expressly specified are cumulative and not exclusive of
any rights or remedies which the Guaranteed Party would otherwise
have. No notice to or demand on Entergy in any case shall
entitle Entergy to any other further notice or demand in similar
or other circumstances or constitute a waiver of the rights of
the Guaranteed Party to any other or further action in any
circumstances without notice or demand. It is not necessary for
the Guaranteed Party to inquire into the capacity or powers of
Entergy or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers
shall be guaranteed hereunder.
2.8. Entergy waives any right (except as shall be
required by applicable statute or law and cannot be waived) to
require the Guaranteed Party to: (i) proceed against ETHC, any
other guarantor or any other party; (ii) proceed against or
exhaust any security held from ETHC, any other guarantor or any
other party; or (iii) pursue any other remedy in the Guaranteed
Party's power whatsoever. Entergy waives (to the fullest extent
permitted by applicable law) any defense based on or arising out
of any defense of ETHC, any other guarantor or any other party
other than payment in full of the Guaranteed Obligations,
including, without limitation, any defense based on or arising
out of the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of
the liability of ETHC other than payment in full of the
Guaranteed Obligations. The Guaranteed Party may, at its
election, foreclose on any security held by the Guaranteed Party
by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any
other right or remedy the Guaranteed Party may have against
Entergy or any other party, or any security, without affecting or
impairing in any way the liability of Entergy hereunder except to
the extent the Guaranteed Obligations have been paid in full.
Entergy waives any defense arising out of any such election by
the Guaranteed Party, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Entergy against ETHC or any other party
or any security; and
2.9. Entergy assumes all responsibility for being and
keeping itself informed of ETHC's financial condition and assets,
and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which Entergy assumes and incurs
hereunder, and agrees that the Guaranteed Party shall have no
duty to advise Entergy of information known to them regarding
such circumstances or risks.
ARTICLE III
Acknowledgement, Acceptance
and Waiver of ETHC and Entergy
Each of ETHC and Entergy (i) acknowledges and accepts
the terms of the Note Purchase Agreement and the transactions
contemplated thereby, (ii) waives, solely for the benefit of
Guaranteed Party, any and all defenses that it may have at any
time to the obligations of ETHC under the Notes (or any
Replacement Note) and the obligations of Entergy hereunder,
including, but not limited to, any such defenses arising under or
related to the Stock Purchase Agreement and the transactions
contemplated thereby and (iii) agrees that the obligations of
ETHC under the Notes (and any Replacement Note) and the
obligations of Entergy hereunder are irrevocable and
unconditional in accordance with the terms thereof.
ARTICLE IV
Representations and Warranties of ETHC and Entergy
Each of ETHC and Entergy represents and warrants as of
the date hereof to the Guaranteed Party as follows:
4.1 Existence and Good Standing. Each of ETHC and
Entergy is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is duly registered
and qualified to do business in each jurisdiction in which the
character of its properties or nature of its businesses requires
such registration and qualification. Each of ETHC and Entergy
has all requisite power and authority to execute and deliver, and
perform its obligations under, this Agreement and the Notes (and
any Replacement Note) and to consummate the transactions
contemplated hereby and thereby.
4.2 Validity of Agreement and Notes. The execution,
delivery and performance of this Agreement and the Notes (and any
Replacement Note) by each of ETHC and Entergy have been duly
authorized by all necessary action on the part of each of ETHC
and Entergy. This Agreement and the Notes have been (and any
Replacement Note will be) duly executed and delivered by each of
ETHC and Entergy and are (or, in the case of any Replacement
Note, will be) the valid and legally binding obligations of each
of ETHC and Entergy, enforceable against each of ETHC and Entergy
in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally or by
the availability of equitable remedies. Neither the execution
and delivery of this Agreement and the Notes (and any Replacement
Note) nor the compliance by each of ETHC and Entergy with the
terms and provisions hereof and thereof will conflict with,
constitute a default under or result in a breach by either ETHC
or Entergy of any of the terms, conditions or provisions of (i)
any law or any rule, ordinance, regulation, order, judgment or
decree of any court, arbitrator or governmental instrumentality
applicable to either ETHC or Entergy or their respective
properties, (ii) the certificate of incorporation or by-laws of
either ETHC or Entergy, or (iii) any lien, lease, agreement,
contract or instrument to which either ETHC or Entergy is a party
or by which either ETHC or Entergy or their respective properties
may be bound.
4.3 Consents. No license, approval, order or
authorization of, or registration, filing or declaration with,
any governmental or regulatory authority is required to be
obtained or made by either ETHC or Entergy on or prior to the
date hereof, and all consents of any third party required to be
obtained by either ETHC or Entergy, in connection with the
execution, delivery and performance of this Agreement and the
Notes (and any Replacement Note) by ETHC and Entergy or the
consummation of the transactions contemplated hereby have been
obtained.
4.4 Litigation. There is no action, suit, proceeding,
investigation, claim or inquiry pending or, to the knowledge of
either ETHC or Entergy, threatened which questions the validity
of, or, if adversely determined, would materially adversely
affect either ETHC's or Entergy's performance of, this Agreement
or the Notes (or any Replacement Note) or the transactions
contemplated hereby or thereby.
ARTICLE V
Covenants of ETHC and Entergy
Affirmative Covenants
So long as the Notes or any amount payable by either
ETHC or Entergy hereunder or thereunder shall remain unpaid, each
of ETHC and Entergy shall, unless the Guaranteed Party shall
otherwise consent in writing:
1. Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance; Taxes.
(a) keep proper books of record and account, all in
accordance with generally accepted accounting principles;
(b) except as otherwise permitted by Section 5.5 under
the caption "Negative Covenants" below, preserve and keep in full
force and effect its existence and preserve and keep in full
force and effect its licenses, rights and franchises to the
extent necessary to carry on its business;
(c) maintain and keep, or cause to be maintained and
kept, its properties in good repair, working order and condition,
and, from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements and improvements, in each
case to the extent such properties are not obsolete and not
necessary to carry on its business;
(d) comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance
to include, without limitation, payment before the same become
delinquent of all taxes, assessments and governmental charges
imposed upon it or its property except to the extent being
contested in good faith by appropriate proceedings, and
compliance with ERISA and Environmental Laws;
(e) maintain insurance with responsible and reputable
insurance companies or associations or through its own program of
self-insurance in such amounts and covering such risks, and
subject to such retentions or deductibles, as is usually carried
by companies engaged in similar businesses and owning similar
properties, and furnish to the Guaranteed Party, within a
reasonable time after written request therefor, such information
as to the insurance carried as the Guaranteed Party may
reasonably request; and
(f) pay and discharge its obligations and liabilities
in the ordinary course of business, except to the extent that
such obligations and liabilities are being contested in good
faith by appropriate proceedings.
5.2. ETC Status. Take all actions (including
obtaining any required determinations, consents and approvals)
required to maintain at all times the status of each of ETHC and
its respective subsidiaries as, and, in the case of ETHC, engage,
and cause each of its subsidiaries to engage, only in the
businesses permitted to be engaged in by, an "exempt
telecommunications company" within the meaning of section
34(a)(1) of PUHCA.
5.3. Reporting Requirements. Furnish to the
Guaranteed Party:
(a) as soon as available and in any event within 60
days after the end of each of, in the case of Entergy, the first
three quarters of each fiscal year of Entergy and, in the case of
ETHC, the four quarters of each fiscal year of ETHC, (A)
consolidated balance sheets of, respectively, Entergy and its
subsidiaries and ETHC and its subsidiaries as of the end of such
quarter and (B) consolidated statements of income and retained
earnings of, respectively, Entergy and its subsidiaries and ETHC
and its subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
each certified by the duly authorized officer of Entergy as
having been prepared in accordance with generally accepted
accounting principles, consistently applied;
(b) as soon as available and in any event within 120
days after the end of each fiscal year of Entergy, a copy of the
annual report for such year for Entergy and its subsidiaries,
containing consolidated financial statements for such year
certified by Coopers & Lybrand (or such other nationally
recognized public accounting firm as the Guaranteed Party may
approve), and certified by a duly authorized officer of Entergy
as having been prepared in accordance with generally accepted
accounting principles, consistently applied;
(c) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of Entergy and within 120 days after the end of the
fiscal year of Entergy, a certificate of the duly authorized
officer of Entergy, stating that no Prepayment Event or Event of
Default has occurred and is continuing or, if a Prepayment Event
or Event of Default has occurred and is continuing, a statement
setting forth details of such Prepayment Event or Event of
Default, as the case may be, and the action that Entergy has
taken and proposes to take with respect thereto;
(d) as soon as possible and in any event within five
days after either ETHC or Entergy has knowledge of the occurrence
of each Prepayment Event, Event of Default and each event that,
with the giving of notice or lapse of time or both, would
constitute an Event of Default, a statement of the duly
authorized officer of ETHC or Entergy, as the case may be,
setting forth details of such Prepayment Event, Event of Default
or event, as the case may be, and the actions that either or both
of ETHC and Entergy have taken and propose to take with respect
thereto;
(e) as soon as possible and in any event within five
days after the commencement of any litigation against, or any
arbitration, administrative, governmental or regulatory
proceeding involving, Entergy or any of its subsidiaries, that,
if adversely determined, could reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), operations, business, properties or prospects of
either ETHC or Entergy, notice of such litigation, arbitration or
proceeding describing in reasonable detail the facts and
circumstances concerning such litigation, arbitration or
proceeding and Entergy's or such subsidiary's proposed actions in
connection therewith;
(f) promptly after the sending or filing thereof,
copies of all reports that Entergy sends to its securities
holders, and copies of all reports and registration statements
that Entergy files with the SEC or any national securities
exchange pursuant to the Securities Act of 1933 or the Exchange
Act, of all certificates (if any) pursuant to Rule 24 that either
ETHC or Entergy files with the SEC pursuant to PUHCA having
relevancy to the Notes, and of all applications and other filings
made to or with the FCC or the SEC pursuant to Section 34 of
PUHCA or otherwise having relevancy to the Notes;
(g) as soon as possible and in any event (A) within 30
days after Entergy knows or has reason to know that any ERISA
Termination Event described in clause (i) of the definition of
ERISA Termination Event with respect to any ERISA Plan has
occurred and (B) within 10 days after Entergy knows or has reason
to know that any other ERISA Termination Event with respect to
any ERISA Plan has occurred, a statement of the chief financial
officer of Entergy describing such ERISA Termination Event and
the action, if any, that Entergy proposes to take with respect
thereto;
(h) promptly and in any event within two Business Days
after receipt thereof by Entergy from the PBGC, copies of each
notice received by Entergy in respect of the PBGC's intention to
terminate any ERISA Plan or to have a trustee appointed to
administer any ERISA Plan;
(i) promptly, if requested by the Guaranteed Party,
copies of the then current Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each ERISA
Plan;
(j) promptly and in any event within five Business
Days after receipt thereof by Entergy from a Multiemployer Plan
sponsor, a copy of each notice received by Entergy concerning the
imposition of withdrawal liability pursuant to Section 4202 of
ERISA;
(k) promptly and in any event within five Business
Days after Moody's or S&P has changed any Senior Debt Rating of
any Significant Subsidiary, notice of such change; and
(l) such other information respecting the condition or
operations, financial or otherwise, of ETHC, Entergy, any
Significant Subsidiary or any subsidiary of ETHC as the
Guaranteed Party may from time to time reasonably request.
Negative Covenants
So long as the Notes or any amount payable by either
ETHC of Entergy hereunder or thereunder shall remain unpaid,
Entergy shall not, without the written consent of the Guaranteed
Party:
5.4. Liens, Etc. Create or suffer to exist any Lien
upon or with respect to any of its properties (including, without
limitation, any shares of any class of equity security of any of
Entergy's Significant Subsidiaries or of New Orleans) or ETHC's
properties, in each case to secure or provide for the payment of
Debt, other than: (i) Liens in existence on the date hereof; (ii)
Liens for taxes, assessments or governmental charges or levies to
the extent not past due, or which are being contested in good
faith in appropriate proceedings diligently conducted and for
which ETHC or Entergy, as the case may be, has provided adequate
reserves for the payment thereof in accordance with generally
accepted accounting principles; (iii) pledges or deposits in the
ordinary course of business to secure obligations under worker's
compensation laws or similar legislation; (iv) other pledges or
deposits in the ordinary course of business (other than for
borrowed monies) that, in the aggregate, are not material to ETHC
or Entergy, as the case may be; (v) purchase money mortgages or
other liens or purchase money security interests upon or in any
property acquired or held by Entergy or ETHC in the ordinary
course of business to secure the purchase price of such property
or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property; (vi) Liens imposed by
law such as materialmen's, mechanics', carriers', workers' and
repairmen's Liens and other similar Liens arising in the ordinary
course of business for sums not yet due or currently being
contested in good faith by appropriate proceedings diligently
conducted; (vii) attachment, judgment or other similar Liens
arising in connection with court proceedings, provided that such
Liens, in the aggregate for both ETHC and Entergy, shall not
exceed $50,000,000 at any one time outstanding, (viii) other
Liens not otherwise referred to in the foregoing clauses (i)
through (vii) above, provided that such Liens, in the aggregate
for both ETHC and Entergy, shall not exceed $100,000,000 at any
one time and no such Lien on any of the properties or assets of
ETHC shall secure or provide for the payment of Debt of ETHC or
Entergy and (ix) Liens created for the sole purpose of extending,
renewing or replacing in whole or in part Debt secured by any
Lien permitted pursuant to the foregoing clauses (i) through
(viii) above, provided that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or
replacement and that such extension, renewal or replacement, as
the case may be, shall be limited to all or a part of the
property or Debt that secured the Lien so extended, renewed or
replaced (and any improvements on such property); provided,
further, that no Lien permitted under the foregoing clauses (i)
through (ix) shall be placed upon any shares of any class of
equity security of any Significant Subsidiary or of New Orleans
unless the obligations of ETHC and Entergy to the Guaranteed
Party hereunder are simultaneously and ratably secured by such
Lien pursuant to documentation satisfactory to the Guaranteed
Party.
5.5. Mergers, Etc. Merge with or into or consolidate
with or into any other Person, or permit ETHC to do so, except
that either ETHC or Entergy may merge with any other Person,
provided that, immediately after giving effect to any such
merger, (i) ETHC or Entergy, as the case may be, is the surviving
corporation or (A) the surviving corporation shall be organized
under the laws of one of the states of the United States of
America and shall assume ETHC's or Entergy's, as the case may be,
obligations hereunder in a manner acceptable to the Guaranteed
Party, and (B) after giving effect to such merger, the Senior
Debt Ratings of the two Significant Subsidiaries (other than
SERI) having the highest Senior Debt Ratings shall be at least
BBB- and Baa3, (ii) no event shall have occurred and be
continuing that constitutes a Prepayment Event or an Event of
Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both, and
(iii) ETHC or Entergy, as the case may be, shall not be liable
with respect to any Debt or allow its property to be subject to
any Lien that would not be permissible with respect to it or its
property hereunder on the date of such transaction.
5.6. Disposition of Assets. Sell, lease, transfer,
convey or otherwise dispose of (whether in one transaction or in
a series of transactions) any shares of voting common stock (or
of stock or other instruments convertible into voting common
stock) of any Significant Subsidiary or of New Orleans, or permit
any Significant Subsidiary or New Orleans to issue, sell or
otherwise dispose of any of its shares of voting common stock (or
of stock or other instruments convertible into voting common
stock), except to Entergy or a Significant Subsidiary.
5.7. Limitation on Debt. Permit the total principal
amount of all Debt of Entergy and its subsidiaries, determined on
a consolidated basis and without duplication of liability
therefor, at any time to exceed 65% of Capitalization determined
as of the last day of the most recently ended fiscal quarter of
Entergy; provided, however, that for purposes of this Section
5.7, "Debt" and "Capitalization" shall not include (i) Junior
Subordinated Debentures and (ii) any Debt of any subsidiary of
Entergy that is Non-Recourse Debt.
ARTICLE VI
Miscellaneous
6.1 Expenses. ETHC and Entergy hereby agree, jointly
and severally, to pay all costs and expenses incurred by the
Guaranteed Party in connection with the preparation, execution,
delivery, administration, enforcement or attempted enforcement of
this Agreement, the ETHC Note, the Escrow Note, the Note Purchase
Agreement, the Seller Note and any other instruments or documents
which may be delivered in connection with this Agreement, the
ETHC Note, the Escrow Note, the Note Purchase Agreement or the
Seller Note including, but not limited to, the reasonable fees
and expenses of counsel to the Guaranteed Party.
6.2 Entire Agreement; Assignment. This Agreement
constitutes the entire agreement between the parties as to the
subject matter hereof and shall be binding upon and inure to the
benefit of the parties and their respective legal
representatives, successors and assigns; provided, however, that
no party may assign this Agreement, in whole or in part, or any
of their respective rights, interests or obligations hereunder,
without the prior written consent of the other parties. Any
amendments or supplements to this Agreement must be made in
writing and duly executed by each of the parties hereto.
6.3 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an
original, and all such counterparts taken together shall
constitute but one instrument.
6.4 Governing Law. The rights and duties of
Guaranteed Party, ETHC and Entergy shall, pursuant to New York
General Obligations Law Section 5-1401, be governed by the law of
the State of New York.
ARTICLE VI
Definitions
As used herein, the following terms shall have the
following meanings:
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Capitalization" means, as of any date of
determination, with respect to Entergy and its subsidiaries
determined on a consolidated basis, an amount equal to the sum of
(i) the total principal amount of all Debt of Entergy and its
subsidiaries outstanding on such date, (ii) Consolidated Net
Worth as of such date and (iii) to the extent not otherwise
included in Capitalization, all preferred stock and other
preferred securities of Entergy and its subsidiaries outstanding
on such date.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"Environmental Laws" means any federal, state or local
laws, ordinances or codes, rules, orders, or regulations relating
to pollution or protection of the environment, including, without
limitation, laws relating to hazardous substances, laws relating
to reclamation of land and waterways and laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollution, contaminants,
chemicals, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Escrow Note" means the Promissory Note, dated the date
hereof, issued by ETHC to 280 Equity Holdings, Ltd. in the
principal amount of $3,200,000 and the Escrow Replacement Note
issued pursuant to Article I hereof.
"Escrow Replacement Note" means the replacement note
issued pursuant to Article I hereof against receipt of the
original Escrow Note.
"ETHC Note" means the Promissory Note, dated the date
hereof, issued by ETHC to 280 Equity Holdings, Ltd. in the
principal amount of $27,732,180 and the ETHC Replacement Note
issued pursuant to Article I hereof.
"ETHC Replacement Note" means the replacement note
issued pursuant to Article I hereof against receipt of the
original ETHC Note.
"ETHC" means Entergy Technology Holding Company.
"Event of Default" has the meaning specified in the
ETHC Replacement Note under the caption "Events of Default".
"FCC" means the United States Federal Communications
Commission.
"Guaranty" means the guaranty by Entergy provided
herein.
"Guaranteed Obligations" has the meaning specified in
Section 2.1 hereof.
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Junior Subordinated Debentures" means any junior
subordinated deferrable interest debentures issued by any of the
Significant Subsidiaries and New Orleans from time to time.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset. For the purposes hereof, a Person
or any of its subsidiaries shall be deemed to own, subject to a
Lien, any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such asset.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the tenth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which Entergy or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"Non-Recourse Debt" means any Debt of any subsidiary of
Entergy that does not also constitute Debt of Entergy, any
Significant Subsidiary or New Orleans.
"Note Purchase Agreement" means the Note Purchase
Agreement, dated as of the date hereof, between 280 Equity
Holdings, Ltd. and The Bank of New York, as amended from time to
time.
"Notes" means the ETHC Note and the Escrow Note.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" shall have the meaning ascribed to
that term in the ETHC Replacement Note.
"Prepayment Event" shall have the meaning ascribed to
that term in the ETHC Note.
"PUHCA" means the Public Utility Holding Company Act of
1935, as amended.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"S&P" means Standard & Poor's Rating Group or any
successor thereto.
"SEC" means the United States Securities and Exchange
Commission.
"Seller" means 280 Equity Holdings, Ltd.
"Seller Note" means the Demand Promissory Note, dated
the date hereof, issued by 280 Equity Holdings, Ltd. to The Bank
of New York.
"Senior Debt Rating" means, as to any Person, the
rating assigned by Moody's or S&P to the senior secured long-term
debt of such Person.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Stock Purchase Agreement" means a certain stock
purchase agreement among Seller, ETHC and certain other parties.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
THE BANK OF NEW YORK
By:______________________________
Name:
Title:
ENTERGY TECHNOLOGY HOLDING COMPANY
By:______________________________
Name:
Title:
ENTERGY CORPORATION
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF ETHC REPLACEMENT NOTE
PROMISSORY NOTE
$27,732,180 ___________, 1996
FOR VALUE RECEIVED, ENTERGY TECHNOLOGY HOLDING COMPANY
("ETHC") hereby promises to pay to the order of THE BANK OF NEW
YORK (the "Bank"), on the Maturity Date (as defined below), in
such manner and to such account as the Bank shall designate, in
lawful money of the United States of America, in immediately
available funds, the principal amount of TWENTY-SEVEN MILLION
SEVEN HUNDRED THIRTY-TWO THOUSAND ONE HUNDRED AND EIGHTY DOLLARS
($27,732,180).
ETHC shall pay interest on the unpaid principal amount
hereof for each day, in like money and funds and in such manner
and to such designated account, at a rate per annum equal to __%,
such interest to be payable (i) quarterly in arrears on each
January 3rd, April 3rd, July 3rd and October 3rd, until the
Maturity Date, (ii) when the principal amount hereof shall be due
(whether on the Maturity date, upon acceleration or otherwise)
and (iii) on the date of any prepayment hereof. Overdue
principal and, to the extent permitted under applicable law,
interest shall bear interest for each day from the due date
thereof until paid in full at a rate per annum equal to (i) the
rate of interest otherwise payable hereunder plus (ii) 2%, such
interest to be payable on demand. Interest shall be computed on
the basis of a year of 360 days consisting of twelve 30 day
months.
This Promissory Note is entitled to the benefits of the
Guaranty provided in the Guaranty Agreement (as defined below).
Except as hereinafter provided in the following two
sentences, this Promissory Note may not be prepaid. ETHC may
prepay this Promissory Note, in whole but not in part, at any
time at the applicable Prepayment Price (as defined below),
provided, however, that no such prepayment may be made unless
ETHC shall have simultaneously prepaid the Escrow Replacement
Note in the manner provided for therein. The Bank shall have the
right, on not less than five days' prior written notice to ETHC,
to require ETHC to prepay this Promissory Note on any Prepayment
Date at the applicable Prepayment Price. The Prepayment Price
payable in connection with any such prepayment shall be paid no
later than 1:00 p.m. (New York time) in such manner and to such
account as the Bank shall designate, in lawful money of the
United States of America, in immediately available funds.
Whenever any payment to be made pursuant hereto shall
be due on a day that is not a Business Day (as defined below),
such payment shall be made on the next succeeding business day,
and any such extension of time shall be included in computing
interest, if any, with respect to such payment.
Presentment, protest and notice of dishonor are hereby
waived by ETHC.
EVENTS OF DEFAULT
Each of the following events shall constitute an "Event
of Default" hereunder:
1. ETHC shall fail to pay interest on any amount
payable under this Promissory Note or the Escrow Replacement Note
within three Business Days after such interest becomes due and
payable; or
2. Any representation or warranty made by either ETHC
or Entergy or any of its officers in the Guaranty Agreement or
otherwise in connection with this Promissory Note shall prove to
have been incorrect or misleading in any material respect when
made; or
3. Either ETHC or Entergy shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.2 under the caption "Affirmative Covenants" of the Guaranty
Agreement or in any paragraph under the caption "Negative
Covenants" therein or (ii) any other term, covenant or agreement
contained in the Guaranty Agreement (and not otherwise addressed
in this paragraph 3) on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to ETHC or Entergy, as the
case may be, by the Bank; or
4. Either Entergy or ETHC shall assert or shall have
instituted any proceeding seeking to establish that the Guaranty
Agreement is unenforceable or invalid in any material respect;
5. Either ETHC or Entergy shall default in any
obligation in any interest rate swap agreement or other hedging
agreement between ETHC and the Guaranteed Party entered into in
connection with or otherwise related to this Promissory Note;
6. (i) Either ETHC or Entergy shall fail to pay any
principal of or premium or interest on any Debt of such Person
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either ETHC or Entergy shall have occurred and be
continuing, in excess of $50,000,000 in the aggregate (but
excluding Debt evidenced by this Promissory Note) when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt,
or (ii) any default shall exist under any agreement pursuant to
which a lender has, or lenders have, committed to lend a
principal amount in excess of $50,000,000 to ETHC or Entergy; or
7. ETHC, Entergy, any Significant Subsidiary or New
Orleans shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
ETHC or Entergy, any Significant Subsidiary or New Orleans
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or ETHC, Entergy, any Significant Subsidiary or New
Orleans shall take any corporate action to authorize or to
consent to any of the actions set forth above in this paragraph
7; or
8. Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against ETHC or Entergy
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive Business Days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
9. (i) An ERISA Plan of Entergy or any ERISA Affiliate
of Entergy shall fail to maintain the minimum funding standards
required by Section 412 of the Internal Revenue Code of 1986 for
any plan year or a waiver of such standard is sought or granted
under Section 412(d) of the Internal Revenue Code of 1986, or
(ii) an ERISA Plan of Entergy or any ERISA Affiliate of Entergy
is, shall have been or will be terminated or the subject of
termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
10. Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
RIGHTS UPON PREPAYMENT EVENT OR EVENT OF DEFAULT
If any Prepayment Event or Event of Default shall occur
and be continuing, then, and in any such event, the Bank may, by
notice to ETHC and Entergy, declare all amounts owing by ETHC
under this Promissory Note to be forthwith due and payable in an
amount equal to the applicable Prepayment Price, whereupon all
such amounts shall become and be forthwith due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by ETHC and Entergy;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to either of ETHC or Entergy,
any Significant Subsidiary or New Orleans under the Federal
Bankruptcy Code, all amounts owing by ETHC under this Promissory
Note shall automatically become and be due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by ETHC and Entergy.
DEFINITIONS
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Escrow Note" means the Promissory Note issued by ETHC
to 280 Equity Holdings, Ltd., dated the date hereof, in the
principal amount of $3,200,000.
"Escrow Replacement Note" means the Promissory Note,
dated the date hereof, issued by ETHC to The Bank of New York
against receipt of the original Escrow Note, pursuant to Article
I of the Guaranty Agreement.
"ETHC" means Entergy Technology Holding Company.
"Event of Default" has the meaning specified herein
under the caption "Events of Default".
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty" means the guaranty by Entergy provided in
the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty and
Acknowledgment Agreement, dated as of the date hereof, among the
Guaranteed Party, ETHC and Entergy.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the tenth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" means (i) the first anniversary of
the date hereof and each semi-annual anniversary thereof and
occurring thereafter and (ii) any date on which a material change
(as determined by the Bank) in the character or extent of the
business or assets of ETHC shall have occurred, including, but
not limited to, a material acquisition or disposition by ETHC,
and any date following any such occurrence.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either ETHC or Entergy or of a
Significant Subsidiary that, in either case, is outstanding in a
principal amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"Prepayment Price" means, with respect to any
prepayment hereof or acceleration of the maturity hereof as
provided above under the caption "Rights Upon Prepayment Event or
Event of Default", the sum, determined as of the date of such
prepayment or acceleration, of (a) the amount of accrued and
unpaid interest on this Promissory Note through but excluding the
date of prepayment or payment upon acceleration, as the case may
be, and (b) the present value, based on the yield to maturity of
U.S. Dollar Libor swaps having payment dates comparable to the
payment dates for principal of and interest on this Promissory
Note, of the unpaid principal amount of this Promissory Note to
be paid on the Maturity Date hereof and interest on such
principal amount, to be paid quarterly as provided in this
Promissory Note, for the period from and including the date of
prepayment or acceleration through but excluding the Maturity
Date as determined by the Bank in its sole discretion, such
determination to be conclusive absent manifest error.
"Promissory Note" means this Promissory Note.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
MISCELLANEOUS
No delay by the Bank in exercising any right with
respect to any of the obligations evidenced hereby shall operate
as a waiver thereof, nor shall the exercise of any right with
respect to such obligations waive or preclude the later exercise
of any other right with respect to such obligations or the later
exercise of any right with respect to any other obligations
evidenced hereby.
Any notice to ETHC or Entergy to be given hereunder or
in connection herewith shall be in writing and shall be sent by
mail to 639 Loyola Avenue, New Orleans, Louisiana, 70113, Mail
Stop L-ENT-15E, Attention: Vice President and Treasurer, or by
telecopier to (504) 576-4455.
The rights and duties of the Bank (and its successors
and assigns) and ETHC under this Promissory Note shall, pursuant
to New York General Obligations Law Section 5-1401, be governed
by the law of the State of New York.
ENTERGY TECHNOLOGY HOLDING COMPANY
By__________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF ESCROW REPLACEMENT NOTE
PROMISSORY NOTE
$3,200,000 ___________, 1996
FOR VALUE RECEIVED, ENTERGY TECHNOLOGY HOLDING COMPANY
("ETHC") hereby promises to pay to the order of THE BANK OF NEW
YORK (the "Bank"), on the Maturity Date (as defined below), in
such manner and to such account as the Bank shall designate, in
lawful money of the United States of America, in immediately
available funds, the principal amount of THREE MILLION TWO
HUNDRED THOUSAND DOLLARS ($3,200,000).
ETHC shall pay interest on the unpaid principal amount
hereof for each day, in like money and funds and in such manner
and to such designated account, at a rate per annum equal to __%,
such interest to be payable (i) quarterly in arrears on each
January 3rd, April 3rd, July 3rd and October 3rd, until the
Maturity Date, (ii) when the principal amount hereof shall be due
(whether on the Maturity date, upon acceleration or otherwise)
and (iii) on the date of any prepayment hereof. Overdue
principal and, to the extent permitted under applicable law,
interest shall bear interest for each day from the due date
thereof until paid in full at a rate per annum equal to (i) the
rate of interest otherwise payable hereunder plus (ii) 2%, such
interest to be payable on demand. Interest shall be computed on
the basis of a year of 360 days consisting of twelve 30 day
months.
This Promissory Note is entitled to the benefits of the
Guaranty provided in the Guaranty Agreement (as defined below).
Except as hereinafter provided in the following two
sentences, this Promissory Note may not be prepaid. ETHC may
prepay this Promissory Note, in whole but not in part, at any
time at the applicable Prepayment Price (as defined below),
provided, however, that no such prepayment may be made unless
ETHC shall have simultaneously prepaid the ETHC Replacement Note
in the manner provided for therein. The Bank shall have the
right, on not less than five days' prior written notice to ETHC,
to require ETHC to prepay this Promissory Note on any Prepayment
Date at the applicable Prepayment Price. The Prepayment Price
payable in connection with any such prepayment shall be paid no
later than 1:00 p.m. (New York time) in such manner and to such
account as the Bank shall designate, in lawful money of the
United States of America, in immediately available funds.
Whenever any payment to be made pursuant hereto shall
be due on a day that is not a Business Day (as defined below),
such payment shall be made on the next succeeding business day,
and any such extension of time shall be included in computing
interest, if any, with respect to such payment.
Presentment, protest and notice of dishonor are hereby
waived by ETHC.
EVENTS OF DEFAULT
Each of the following events shall constitute an "Event
of Default" hereunder:
1. ETHC shall fail to pay interest on any amount
payable under this Promissory Note or the EHTC Replacement Note
within three Business Days after such interest becomes due and
payable; or
2. Any representation or warranty made by either ETHC
or Entergy or any of its officers in the Guaranty Agreement or
otherwise in connection with this Promissory Note shall prove to
have been incorrect or misleading in any material respect when
made; or
3. Either ETHC or Entergy shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.2 under the caption "Affirmative Covenants" of the Guaranty
Agreement or in any paragraph under the caption "Negative
Covenants" therein or (ii) any other term, covenant or agreement
contained in the Guaranty Agreement (and not otherwise addressed
in this paragraph 3) on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to ETHC or Entergy, as the
case may be, by the Bank; or
4. Either Entergy or ETHC shall assert or shall have
instituted any proceeding seeking to establish that the Guaranty
Agreement is unenforceable or invalid in any material respect;
5. Either ETHC or Entergy shall default in any
obligation in any interest rate swap agreement or other hedging
agreement between ETHC and the Guaranteed Party entered into in
connection with or otherwise related to this Promissory Note;
6. (i) Either ETHC or Entergy shall fail to pay any
principal of or premium or interest on any Debt of such Person
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either ETHC or Entergy shall have occurred and be
continuing, in excess of $50,000,000 in the aggregate (but
excluding Debt evidenced by this Promissory Note) when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt,
or (ii) any default shall exist under any agreement pursuant to
which a lender has, or lenders have, committed to lend a
principal amount in excess of $50,000,000 to ETHC or Entergy; or
7. ETHC, Entergy, any Significant Subsidiary or New
Orleans shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
ETHC or Entergy, any Significant Subsidiary or New Orleans
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or ETHC, Entergy, any Significant Subsidiary or New
Orleans shall take any corporate action to authorize or to
consent to any of the actions set forth above in this paragraph
7; or
8. Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against ETHC or Entergy
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive Business Days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
9. (i) An ERISA Plan of Entergy or any ERISA Affiliate
of Entergy shall fail to maintain the minimum funding standards
required by Section 412 of the Internal Revenue Code of 1986 for
any plan year or a waiver of such standard is sought or granted
under Section 412(d) of the Internal Revenue Code of 1986, or
(ii) an ERISA Plan of Entergy or any ERISA Affiliate of Entergy
is, shall have been or will be terminated or the subject of
termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
10. Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
RIGHTS UPON PREPAYMENT EVENT OR EVENT OF DEFAULT
If any Prepayment Event or Event of Default shall occur
and be continuing, then, and in any such event, the Bank may, by
notice to ETHC and Entergy, declare all amounts owing by ETHC
under this Promissory Note to be forthwith due and payable in an
amount equal to the applicable Prepayment Price, whereupon all
such amounts shall become and be forthwith due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by ETHC and Entergy;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to either of ETHC or Entergy,
any Significant Subsidiary or New Orleans under the Federal
Bankruptcy Code, all amounts owing by ETHC under this Promissory
Note shall automatically become and be due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by ETHC and Entergy.
DEFINITIONS
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"ETHC" means Entergy Technology Holding Company.
"ETHC Note" means the Promissory Note issued by ETHC to
280 Equity Holdings, Ltd., dated the date hereof, in the
principal amount of $27,732,180.
"ETHC Replacement Note" means the Promissory Note,
dated the date hereof, issued by ETHC to The Bank of New York
against receipt of the original ETHC Note, pursuant to Article I
of the Guaranty Agreement.
"Event of Default" has the meaning specified herein
under the caption "Events of Default".
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty" means the guaranty by Entergy provided in
the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty and
Acknowledgment Agreement, dated as of the date hereof, among the
Guaranteed Party, ETHC and Entergy.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the tenth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" means (i) the first anniversary of
the date hereof and each semi-annual anniversary thereof and
occurring thereafter and (ii) any date on which a material change
(as determined by the Bank) in the character or extent of the
business or assets of ETHC shall have occurred, including, but
not limited to, a material acquisition or disposition by ETHC,
and any date following any such occurrence.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either ETHC or Entergy or of a
Significant Subsidiary that, in either case, is outstanding in a
principal amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"Prepayment Price" means, with respect to any
prepayment hereof or acceleration of the maturity hereof as
provided above under the caption "Rights Upon Prepayment Event or
Event of Default", the sum, determined as of the date of such
prepayment or acceleration, of (a) the amount of accrued and
unpaid interest on this Promissory Note through but excluding the
date of prepayment or payment upon acceleration, as the case may
be, and (b) the present value, based on the yield to maturity of
U.S. Dollar Libor swaps having payment dates comparable to the
payment dates for principal of and interest on this Promissory
Note, of the unpaid principal amount of this Promissory Note to
be paid on the Maturity Date hereof and interest on such
principal amount, to be paid quarterly as provided in this
Promissory Note, for the period from and including the date of
prepayment or acceleration through but excluding the Maturity
Date as determined by the Bank in its sole discretion, such
determination to be conclusive absent manifest error.
"Promissory Note" means this Promissory Note.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
MISCELLANEOUS
No delay by the Bank in exercising any right with
respect to any of the obligations evidenced hereby shall operate
as a waiver thereof, nor shall the exercise of any right with
respect to such obligations waive or preclude the later exercise
of any other right with respect to such obligations or the later
exercise of any right with respect to any other obligations
evidenced hereby.
Any notice to ETHC or Entergy to be given hereunder or
in connection herewith shall be in writing and shall be sent by
mail to 639 Loyola Avenue, New Orleans, Louisiana, 70113, Mail
Stop L-ENT-15E, Attention: Vice President and Treasurer, or by
telecopier to (504) 576-4455.
The rights and duties of the Bank (and its successors
and assigns) and ETHC under this Promissory Note shall, pursuant
to New York General Obligations Law Section 5-1401, be governed
by the law of the State of New York.
ENTERGY TECHNOLOGY HOLDING COMPANY
By__________________________
Name:
Title:
Exhibit 4(a) 15
November 21, 1996
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
Entergy Technology Holding Company
c/o Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
Re: Guaranty and Acknowledgment Agreement
dated as of October 3, 1996
Ladies and Gentlemen:
Reference is made to the Guaranty and
Acknowledgement Agreement dated as of October 3, 1996 (the
"Guaranty Agreement") among each of you and the undersigned.
The undersigned hereby agrees with you that
the Guaranty Agreement shall be amended as follows:
(a) Section 5.2 shall be amended by deleting the
words "each of ETHC and its respective subsidiaries"
beginning in the third line thereof and inserting in lieu
thereof the word "ETHC"; and
(b) Section 6.1 shall be amended as follows:
(i) by inserting "; Indemnification" immediately
following the word "Expenses" and immediately preceding
the period in the heading of such Section 6.1;
(ii) by inserting "(a)" immediately preceding the
existing paragraph; and
(iii) by inserting a clause (b) reading in its
entirety as follows:
"(b) ETHC and Entergy hereby agree, jointly and
severally, to indemnify and hold the Guaranteed Party
and its Affiliates and its officers, directors,
employees and professional advisors (each, an
"Indemnified Person") harmless from and against any and
all claims, damages, losses, liabilities, costs or
expenses (including reasonable attorney's fees and
expenses, whether or not such Indemnified Person is
named as a party to any proceeding or is otherwise
subjected to judicial or legal process arising from any
such proceeding) that any of them may incur or which may
be claimed against any of them by any person or entity
by reason of or in connection with the execution,
delivery or performance of this Agreement, the ETHC
Note, the Escrow Note, the Note Purchase Agreement, the
Seller Note and any other instruments or documents which
may be delivered in connection with this Agreement, the
ETHC Note, the Escrow Note, the Note Purchase Agreement
or the Seller Note or any transaction contemplated
thereby, except that no Indemnified Person shall be
entitled to any indemnification hereunder to the extent
that such claims, damages, losses, liabilities, costs or
expenses are finally determined by a court of competent
jurisdiction to have resulted from the gross negligence
or willful misconduct of such Indemnified Person. The
obligations of each of ETHC and Entergy under this
Section 6.1(b) shall survive the repayment of all
amounts owing to the Guaranteed Party, in such capacity
or otherwise, under this Agreement and the Notes. If
and to the extent that the obligations of ETHC and
Entergy under this Section 6.1(b) are unenforceable for
any reason, ETHC and Entergy agree, jointly and
severally, to make the maximum contribution to the
payment and satisfaction thereof which is permissible
under applicable law."
(c) Article VI shall be amended by inserting the
following definition in alphabetical order:
"Affiliate" means, as to any Person, any other
Person that, directly or indirectly, controls, is
controlled by or is under common control with such
Person or is a director or officer of such Person.
In connection with the amendment contemplated by
clause (a) above, the undersigned hereby waives (i) any
failure to comply with Section 5.2 of the Guaranty Agreement
as in effect before giving effect to the foregoing amendment
that may have occurred and that would not be a failure to
comply with Section 5.2 as amended hereby and (ii) any Event
of Default that may have arisen under either the ETHC Note or
the Escrow Note (each as defined in the Guaranty Agreement)
as a result of any such failure to comply with Section 5.2 as
in effect before giving effect to the foregoing amendment.
Except as amended hereby and except to the extent
waived hereunder, the Guaranty Agreement, the ETHC Note and
the Escrow Note remain in full force and effect and are
hereby ratified and confirmed.
The rights and duties of the undersigned and each
of you under this letter agreement shall, pursuant to New
York General Obligations Law Section 5-1401, be governed by
the law of the State of New York.
This letter agreement may be executed in multiple
counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together
constitute but one letter agreement.
Please confirm your acceptance of the foregoing by
signing below where provided.
THE BANK OF NEW YORK
By:
Name:
Title:
Accepted and agreed:
ENTERGY CORPORATION
By:
Name:
Title:
ENTERGY TECHNOLOGY HOLDING COMPANY
By:
Name:
Title:
Exhibit 4(a) 16
GUARANTY AND ACKNOWLEDGMENT AGREEMENT
Dated as of November 21, 1996
ENTERGY CORPORATION, a Delaware corporation
("Entergy"), ENTERGY TECHNOLOGY HOLDING COMPANY, a Delaware
corporation ("ETHC"), and THE BANK OF NEW YORK (the "Guaranteed
Party") hereby agree as follows (this Guaranty and Acknowledgment
Agreement being herein referred to as this "Agreement"):
W I T N E S S E T H:
WHEREAS, Bariston Associates, Inc. (the "Seller") is
the owner of a certain Promissory Note of ETHC (together with any
replacement note issued pursuant to Article I hereof, the "ETHC
Note") dated the date hereof in the principal amount of
$38,837,996.35;
WHEREAS, Seller has agreed to sell to The Bank of New
York and The Bank of New York has agreed to purchase from Seller
the ETHC Note under the Note Purchase Agreement between Bariston
Associates, Inc. and The Bank of New York, dated as of the date
hereof (the "Note Purchase Agreement");
WHEREAS, Seller is the owner of a certain Promissory
Note of ETHC (together with any replacement note issued pursuant
to Article I hereof, the "Escrow Note") dated the date hereof in
the principal amount of $2,162,003.65;
WHEREAS, Seller has agreed to sell to The Bank of New
York and The Bank of New York has agreed to purchase from Seller
the Escrow Note under the Note Purchase Agreement;
WHEREAS, it is a condition to the obligation of The
Bank of New York to purchase the ETHC Note and the Escrow Note
that Entergy guarantee the full and prompt payment of such Notes
and that Entergy and ETHC make the additional agreements,
acknowledgments, representations and warranties provided for
herein;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
ISSUANCE OF REPLACEMENT NOTES
Immediately upon the purchase of the original ETHC Note
and the original Escrow Note (together with any replacement notes
issued pursuant to this Article I, the "Notes") by the Guaranteed
Party pursuant to the Note Purchase Agreement, ETHC agrees to
execute and deliver to the Guaranteed Party, against receipt of
the original ETHC Note and the original Escrow Note, replacement
promissory notes payable to the order of the Guaranteed Party in
the form attached hereto as Exhibits A and B (the "ETHC
Replacement Note" and the "Escrow Replacement Note,"
respectively, and together, the "Replacement Notes"). For
purposes hereof, all references to the ETHC Note, the Escrow Note
and Notes shall be deemed to refer to such ETHC Replacement Note,
Escrow Replacement Note and Replacement Notes, respectively.
ARTICLE II
GUARANTY
2.1. Entergy irrevocably and unconditionally
guarantees to the Guaranteed Party the full and prompt payment,
no later than the third Business Day after the giving of notice
by the Guaranteed Party to Entergy, of all amounts payable
(whether at the Maturity Date, at any Prepayment Date, by
acceleration or otherwise) under the Notes by ETHC (all such
amounts being herein collectively called the "Guaranteed
Obligations"). Entergy understands, agrees and confirms that the
Guaranteed Party may enforce this Guaranty up to the full amount
of the Guaranteed Obligations against Entergy without proceeding
against ETHC, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a
portion of the Guaranteed Obligations. All payments by Entergy
hereunder shall be made as provided herein.
2.2. (a) The liability of Entergy hereunder is
exclusive and independent of any security (if any) for or other
guaranty (if any) of the Guaranteed Obligations, and the
liability of Entergy hereunder shall not be affected or impaired
by (i) any direction as to application of payment by ETHC or by
any other party, (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations, (iii) any payment on or
in reduction of any such other guaranty or undertaking, or (iv)
any payment made to the Guaranteed Party on the Guaranteed
Obligations which the Guaranteed Party repays to ETHC pursuant to
court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding with respect to
ETHC, and Entergy waives any right to the deferral or
modification of its obligations hereunder by reason of any such
proceeding.
(b) If claim is ever made upon the Guaranteed Party
for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guaranteed Obligations and
the Guaranteed Party repays all or part of said amount by reason
of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Guaranteed Party
or any of its property or (ii) any settlement or compromise of
any such claim effected by the Guaranteed Party with any such
claimant (including Entergy), then and in such event Entergy
agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any instrument
evidencing any liability of ETHC, and Entergy shall be and remain
liable to the Guaranteed Party for the amount so repaid or
recovered to the same extent as if such amount had never
originally been received by the Guaranteed Party.
2.3. The obligations of Entergy hereunder are
independent of the obligations of any other guarantor or ETHC,
and a separate action or actions may be brought and prosecuted
against Entergy whether or not an action is brought against any
other guarantor or ETHC and whether or not any other guarantor or
ETHC be joined in any such action or actions. Entergy waives, to
the fullest extent permitted by law, the benefit of any statute
of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by ETHC or other circumstance
which operates to toll any statute of limitations as to ETHC
shall operate to toll the statute of limitations as to Entergy.
2.4. Except as otherwise provided in the first
sentence of Section 2.1 hereof, Entergy hereby waives (to the
fullest extent permitted by applicable law) notice of acceptance
hereof and notice of any liability to which this Guaranty may
apply, and waives promptness, diligence, presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Guaranteed
Party against, and any other notice to, any party liable thereon.
2.5. The Guaranteed Party may at any time and from
time to time without the consent of, or notice to, Entergy,
without incurring responsibility to Entergy, without impairing or
releasing the obligations of Entergy hereunder, upon or without
any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew, accelerate
or alter, any of the Guaranteed Obligations, any security
therefor, or any liability incurred directly or indirectly in
respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those under this Guaranty) incurred
directly or indirectly in respect thereof or of this Guaranty,
and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights
against ETHC and Entergy or others or otherwise act or refrain
from acting;
(d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those under this Guaranty) incurred directly or indirectly
in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether
due or not) of ETHC to creditors of ETHC;
(e) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of ETHC to the
Guaranteed Party regardless of what liabilities of ETHC remain
unpaid;
(f) consent to, or waive any breach of, any act,
omission or default under the Notes or any of the instruments or
agreements referred to herein, or otherwise amend, modify or
supplement the Notes or any of such other instruments or
agreements; and/or
(g) act or fail to act in any manner referred to in
this Guaranty which may deprive Entergy of its right to
subrogation against ETHC.
2.6. No invalidity, irregularity or unenforceability
of all or any part of the Guaranteed Obligations or of the
obligations of ETHC under the Notes or of any security therefor
shall affect, impair or be a defense to this Guaranty, and this
Guaranty shall be primary, absolute and unconditional notwith
standing the occurrence of any event or the existence of any
other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
2.7. This Guaranty is a continuing guaranty and all
liabilities to which it applies or may apply under the terms
hereof shall be conclusively presumed to have been created in
reliance hereon. No failure or delay on the part of the
Guaranteed Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies
herein expressly specified are cumulative and not exclusive of
any rights or remedies which the Guaranteed Party would otherwise
have. No notice to or demand on Entergy in any case shall
entitle Entergy to any other further notice or demand in similar
or other circumstances or constitute a waiver of the rights of
the Guaranteed Party to any other or further action in any
circumstances without notice or demand. It is not necessary for
the Guaranteed Party to inquire into the capacity or powers of
Entergy or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers
shall be guaranteed hereunder.
2.8. Entergy waives any right (except as shall be
required by applicable statute or law and cannot be waived) to
require the Guaranteed Party to: (i) proceed against ETHC, any
other guarantor or any other party; (ii) proceed against or
exhaust any security held from ETHC, any other guarantor or any
other party; or (iii) pursue any other remedy in the Guaranteed
Party's power whatsoever. Entergy waives (to the fullest extent
permitted by applicable law) any defense based on or arising out
of any defense of ETHC, any other guarantor or any other party
other than payment in full of the Guaranteed Obligations,
including, without limitation, any defense based on or arising
out of the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of
the liability of ETHC other than payment in full of the
Guaranteed Obligations. The Guaranteed Party may, at its
election, foreclose on any security held by the Guaranteed Party
by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any
other right or remedy the Guaranteed Party may have against
Entergy or any other party, or any security, without affecting or
impairing in any way the liability of Entergy hereunder except to
the extent the Guaranteed Obligations have been paid in full.
Entergy waives any defense arising out of any such election by
the Guaranteed Party, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Entergy against ETHC or any other party
or any security; and
2.9. Entergy assumes all responsibility for being and
keeping itself informed of ETHC's financial condition and assets,
and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which Entergy assumes and incurs
hereunder, and agrees that the Guaranteed Party shall have no
duty to advise Entergy of information known to them regarding
such circumstances or risks.
ARTICLE III
Acknowledgement, Acceptance
and Waiver of ETHC and Entergy
Each of ETHC and Entergy (i) acknowledges and accepts
the terms of the Note Purchase Agreement and the transactions
contemplated thereby, (ii) waives, solely for the benefit of
Guaranteed Party, any and all defenses that it may have at any
time to the obligations of ETHC under the Notes (or any
Replacement Note) and the obligations of Entergy hereunder,
including, but not limited to, any such defenses arising under or
related to the Stock Purchase Agreement and the transactions
contemplated thereby and (iii) agrees that the obligations of
ETHC under the Notes (and any Replacement Note) and the
obligations of Entergy hereunder are irrevocable and
unconditional in accordance with the terms thereof.
ARTICLE IV
Representations and Warranties of ETHC and Entergy
Each of ETHC and Entergy represents and warrants as of
the date hereof to the Guaranteed Party as follows:
4.1 Existence and Good Standing. Each of ETHC and
Entergy is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is duly registered
and qualified to do business in each jurisdiction in which the
character of its properties or nature of its businesses requires
such registration and qualification. Each of ETHC and Entergy
has all requisite power and authority to execute and deliver, and
perform its obligations under, this Agreement and the Notes (and
any Replacement Note) and to consummate the transactions
contemplated hereby and thereby.
4.2 Validity of Agreement and Notes. The execution,
delivery and performance of this Agreement and the Notes (and any
Replacement Note) by each of ETHC and Entergy have been duly
authorized by all necessary action on the part of each of ETHC
and Entergy. This Agreement and the Notes have been (and any
Replacement Note will be) duly executed and delivered by each of
ETHC and Entergy and are (or, in the case of any Replacement
Note, will be) the valid and legally binding obligations of each
of ETHC and Entergy, enforceable against each of ETHC and Entergy
in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally or by
the availability of equitable remedies. Neither the execution
and delivery of this Agreement and the Notes (and any Replacement
Note) nor the compliance by each of ETHC and Entergy with the
terms and provisions hereof and thereof will conflict with,
constitute a default under or result in a breach by either ETHC
or Entergy of any of the terms, conditions or provisions of (i)
any law or any rule, ordinance, regulation, order, judgment or
decree of any court, arbitrator or governmental instrumentality
applicable to either ETHC or Entergy or their respective
properties, (ii) the certificate of incorporation or by-laws of
either ETHC or Entergy, or (iii) any lien, lease, agreement,
contract or instrument to which either ETHC or Entergy is a party
or by which either ETHC or Entergy or their respective properties
may be bound.
4.3 Consents. No license, approval, order or
authorization of, or registration, filing or declaration with,
any governmental or regulatory authority is required to be
obtained or made by either ETHC or Entergy on or prior to the
date hereof, and all consents of any third party required to be
obtained by either ETHC or Entergy, in connection with the
execution, delivery and performance of this Agreement and the
Notes (and any Replacement Note) by ETHC and Entergy or the
consummation of the transactions contemplated hereby have been
obtained.
4.4 Litigation. There is no action, suit, proceeding,
investigation, claim or inquiry pending or, to the knowledge of
either ETHC or Entergy, threatened which questions the validity
of, or, if adversely determined, would materially adversely
affect either ETHC's or Entergy's performance of, this Agreement
or the Notes (or any Replacement Note) or the transactions
contemplated hereby or thereby.
ARTICLE V
Covenants of ETHC and Entergy
Affirmative Covenants
So long as the Notes or any amount payable by either
ETHC or Entergy hereunder or thereunder shall remain unpaid, each
of ETHC and Entergy shall, unless the Guaranteed Party shall
otherwise consent in writing:
1. Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance; Taxes.
(a) keep proper books of record and account, all in
accordance with generally accepted accounting principles;
(b) except as otherwise permitted by Section 5.5 under
the caption "Negative Covenants" below, preserve and keep in full
force and effect its existence and preserve and keep in full
force and effect its licenses, rights and franchises to the
extent necessary to carry on its business;
(c) maintain and keep, or cause to be maintained and
kept, its properties in good repair, working order and condition,
and, from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements and improvements, in each
case to the extent such properties are not obsolete and not
necessary to carry on its business;
(d) comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance
to include, without limitation, payment before the same become
delinquent of all taxes, assessments and governmental charges
imposed upon it or its property except to the extent being
contested in good faith by appropriate proceedings, and
compliance with ERISA and Environmental Laws;
(e) maintain insurance with responsible and reputable
insurance companies or associations or through its own program of
self-insurance in such amounts and covering such risks, and
subject to such retentions or deductibles, as is usually carried
by companies engaged in similar businesses and owning similar
properties, and furnish to the Guaranteed Party, within a
reasonable time after written request therefor, such information
as to the insurance carried as the Guaranteed Party may
reasonably request; and
(f) pay and discharge its obligations and liabilities
in the ordinary course of business, except to the extent that
such obligations and liabilities are being contested in good
faith by appropriate proceedings.
5.2. ETC Status. Take all actions (including
obtaining any required determinations, consents and approvals)
required to maintain at all times the status of ETHC as, and, in
the case of ETHC, engage, and cause each of its subsidiaries to
engage, only in the businesses permitted to be engaged in by, an
"exempt telecommunications company" within the meaning of section
34(a)(1) of PUHCA.
5.3. Reporting Requirements. Furnish to the
Guaranteed Party:
(a) as soon as available and in any event within 60
days after the end of each of, in the case of Entergy, the first
three quarters of each fiscal year of Entergy and, in the case of
ETHC, the four quarters of each fiscal year of ETHC, (A)
consolidated balance sheets of, respectively, Entergy and its
subsidiaries and ETHC and its subsidiaries as of the end of such
quarter and (B) consolidated statements of income and retained
earnings of, respectively, Entergy and its subsidiaries and ETHC
and its subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
each certified by the duly authorized officer of Entergy as
having been prepared in accordance with generally accepted
accounting principles, consistently applied;
(b) as soon as available and in any event within 120
days after the end of each fiscal year of Entergy, a copy of the
annual report for such year for Entergy and its subsidiaries,
containing consolidated financial statements for such year
certified by Coopers & Lybrand (or such other nationally
recognized public accounting firm as the Guaranteed Party may
approve), and certified by a duly authorized officer of Entergy
as having been prepared in accordance with generally accepted
accounting principles, consistently applied;
(c) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of Entergy and within 120 days after the end of the
fiscal year of Entergy, a certificate of the duly authorized
officer of Entergy, stating that no Prepayment Event or Event of
Default has occurred and is continuing or, if a Prepayment Event
or Event of Default has occurred and is continuing, a statement
setting forth details of such Prepayment Event or Event of
Default, as the case may be, and the action that Entergy has
taken and proposes to take with respect thereto;
(d) as soon as possible and in any event within five
days after either ETHC or Entergy has knowledge of the occurrence
of each Prepayment Event, Event of Default and each event that,
with the giving of notice or lapse of time or both, would
constitute an Event of Default, a statement of the duly
authorized officer of ETHC or Entergy, as the case may be,
setting forth details of such Prepayment Event, Event of Default
or event, as the case may be, and the actions that either or both
of ETHC and Entergy have taken and propose to take with respect
thereto;
(e) as soon as possible and in any event within five
days after the commencement of any litigation against, or any
arbitration, administrative, governmental or regulatory
proceeding involving, Entergy or any of its subsidiaries, that,
if adversely determined, could reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), operations, business, properties or prospects of
either ETHC or Entergy, notice of such litigation, arbitration or
proceeding describing in reasonable detail the facts and
circumstances concerning such litigation, arbitration or
proceeding and Entergy's or such subsidiary's proposed actions in
connection therewith;
(f) promptly after the sending or filing thereof,
copies of all reports that Entergy sends to its securities
holders, and copies of all reports and registration statements
that Entergy files with the SEC or any national securities
exchange pursuant to the Securities Act of 1933 or the Exchange
Act, of all certificates (if any) pursuant to Rule 24 that either
ETHC or Entergy files with the SEC pursuant to PUHCA having
relevancy to the Notes, and of all applications and other filings
made to or with the FCC or the SEC pursuant to Section 34 of
PUHCA or otherwise having relevancy to the Notes;
(g) as soon as possible and in any event (A) within 30
days after Entergy knows or has reason to know that any ERISA
Termination Event described in clause (i) of the definition of
ERISA Termination Event with respect to any ERISA Plan has
occurred and (B) within 10 days after Entergy knows or has reason
to know that any other ERISA Termination Event with respect to
any ERISA Plan has occurred, a statement of the chief financial
officer of Entergy describing such ERISA Termination Event and
the action, if any, that Entergy proposes to take with respect
thereto;
(h) promptly and in any event within two Business Days
after receipt thereof by Entergy from the PBGC, copies of each
notice received by Entergy in respect of the PBGC's intention to
terminate any ERISA Plan or to have a trustee appointed to
administer any ERISA Plan;
(i) promptly, if requested by the Guaranteed Party,
copies of the then current Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each ERISA
Plan;
(j) promptly and in any event within five Business
Days after receipt thereof by Entergy from a Multiemployer Plan
sponsor, a copy of each notice received by Entergy concerning the
imposition of withdrawal liability pursuant to Section 4202 of
ERISA;
(k) promptly and in any event within five Business
Days after Moody's or S&P has changed any Senior Debt Rating of
any Significant Subsidiary, notice of such change; and
(l) such other information respecting the condition or
operations, financial or otherwise, of ETHC, Entergy, any
Significant Subsidiary or any subsidiary of ETHC as the
Guaranteed Party may from time to time reasonably request.
Negative Covenants
So long as the Notes or any amount payable by either
ETHC of Entergy hereunder or thereunder shall remain unpaid,
Entergy shall not, without the written consent of the Guaranteed
Party:
5.4. Liens, Etc. Create or suffer to exist any Lien
upon or with respect to any of its properties (including, without
limitation, any shares of any class of equity security of any of
Entergy's Significant Subsidiaries or of New Orleans) or ETHC's
properties, in each case to secure or provide for the payment of
Debt, other than: (i) Liens in existence on the date hereof; (ii)
Liens for taxes, assessments or governmental charges or levies to
the extent not past due, or which are being contested in good
faith in appropriate proceedings diligently conducted and for
which ETHC or Entergy, as the case may be, has provided adequate
reserves for the payment thereof in accordance with generally
accepted accounting principles; (iii) pledges or deposits in the
ordinary course of business to secure obligations under worker's
compensation laws or similar legislation; (iv) other pledges or
deposits in the ordinary course of business (other than for
borrowed monies) that, in the aggregate, are not material to ETHC
or Entergy, as the case may be; (v) purchase money mortgages or
other liens or purchase money security interests upon or in any
property acquired or held by Entergy or ETHC in the ordinary
course of business to secure the purchase price of such property
or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property; (vi) Liens imposed by
law such as materialmen's, mechanics', carriers', workers' and
repairmen's Liens and other similar Liens arising in the ordinary
course of business for sums not yet due or currently being
contested in good faith by appropriate proceedings diligently
conducted; (vii) attachment, judgment or other similar Liens
arising in connection with court proceedings, provided that such
Liens, in the aggregate for both ETHC and Entergy, shall not
exceed $50,000,000 at any one time outstanding, (viii) other
Liens not otherwise referred to in the foregoing clauses (i)
through (vii) above, provided that such Liens, in the aggregate
for both ETHC and Entergy, shall not exceed $100,000,000 at any
one time and no such Lien on any of the properties or assets of
ETHC shall secure or provide for the payment of Debt of ETHC or
Entergy and (ix) Liens created for the sole purpose of extending,
renewing or replacing in whole or in part Debt secured by any
Lien permitted pursuant to the foregoing clauses (i) through
(viii) above, provided that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or
replacement and that such extension, renewal or replacement, as
the case may be, shall be limited to all or a part of the
property or Debt that secured the Lien so extended, renewed or
replaced (and any improvements on such property); provided,
further, that no Lien permitted under the foregoing clauses (i)
through (ix) shall be placed upon any shares of any class of
equity security of any Significant Subsidiary or of New Orleans
unless the obligations of ETHC and Entergy to the Guaranteed
Party hereunder are simultaneously and ratably secured by such
Lien pursuant to documentation satisfactory to the Guaranteed
Party.
5.5. Mergers, Etc. Merge with or into or consolidate
with or into any other Person, or permit ETHC to do so, except
that either ETHC or Entergy may merge with any other Person,
provided that, immediately after giving effect to any such
merger, (i) ETHC or Entergy, as the case may be, is the surviving
corporation or (A) the surviving corporation shall be organized
under the laws of one of the states of the United States of
America and shall assume ETHC's or Entergy's, as the case may be,
obligations hereunder in a manner acceptable to the Guaranteed
Party, and (B) after giving effect to such merger, the Senior
Debt Ratings of the two Significant Subsidiaries (other than
SERI) having the highest Senior Debt Ratings shall be at least
BBB- and Baa3, (ii) no event shall have occurred and be
continuing that constitutes a Prepayment Event or an Event of
Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both, and
(iii) ETHC or Entergy, as the case may be, shall not be liable
with respect to any Debt or allow its property to be subject to
any Lien that would not be permissible with respect to it or its
property hereunder on the date of such transaction.
5.6. Disposition of Assets. Sell, lease, transfer,
convey or otherwise dispose of (whether in one transaction or in
a series of transactions) any shares of voting common stock (or
of stock or other instruments convertible into voting common
stock) of any Significant Subsidiary or of New Orleans, or permit
any Significant Subsidiary or New Orleans to issue, sell or
otherwise dispose of any of its shares of voting common stock (or
of stock or other instruments convertible into voting common
stock), except to Entergy or a Significant Subsidiary.
5.7. Limitation on Debt. Permit the total principal
amount of all Debt of Entergy and its subsidiaries, determined on
a consolidated basis and without duplication of liability
therefor, at any time to exceed 65% of Capitalization determined
as of the last day of the most recently ended fiscal quarter of
Entergy; provided, however, that for purposes of this Section
5.7, "Debt" and "Capitalization" shall not include (i) Junior
Subordinated Debentures and (ii) any Debt of any subsidiary of
Entergy that is Non-Recourse Debt.
ARTICLE VI
Miscellaneous
6.1 Expenses; Indemnification. (a) ETHC and Entergy
hereby agree, jointly and severally, to pay all costs and
expenses incurred by the Guaranteed Party in connection with the
preparation, execution, delivery, administration, enforcement or
attempted enforcement of this Agreement, the ETHC Note, the
Escrow Note, the Note Purchase Agreement, the Seller Note and any
other instruments or documents which may be delivered in
connection with this Agreement, the ETHC Note, the Escrow Note,
the Note Purchase Agreement or the Seller Note including, but not
limited to, the reasonable fees and expenses of counsel to the
Guaranteed Party.
(b) ETHC and Entergy hereby agree, jointly and
severally, to indemnify and hold the Guaranteed Party and its
Affiliates and its officers, directors, employees and
professional advisors (each, an "Indemnified Person") harmless
from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorney's
fees and expenses, whether or not such Indemnified Person is
named as a party to any proceeding or is otherwise subjected to
judicial or legal process arising from any such proceeding) that
any of them may incur or which may be claimed against any of them
by any person or entity by reason of or in connection with the
execution, delivery or performance of this Agreement, the ETHC
Note, the Escrow Note, the Note Purchase Agreement, the Seller
Note and any other instruments or documents which may be
delivered in connection with this Agreement, the ETHC Note, the
Escrow Note, the Note Purchase Agreement or the Seller Note or
any transaction contemplated thereby, except that no Indemnified
Person shall be entitled to any indemnification hereunder to the
extent that such claims, damages, losses, liabilities, costs or
expenses are finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. The obligations
of each of ETHC and Entergy under this Section 6.1(b) shall
survive the repayment of all amounts owing to the Guaranteed
Party, in such capacity or otherwise, under this Agreement and
the Notes. If and to the extent that the obligations of ETHC and
Entergy under this Section 6.1(b) are unenforceable for any
reason, ETHC and Entergy agree, jointly and severally, to make
the maximum contribution to the payment and satisfaction thereof
which is permissible under applicable law.
6.2 Entire Agreement; Assignment. This Agreement
constitutes the entire agreement between the parties as to the
subject matter hereof and shall be binding upon and inure to the
benefit of the parties and their respective legal
representatives, successors and assigns; provided, however, that
no party may assign this Agreement, in whole or in part, or any
of their respective rights, interests or obligations hereunder,
without the prior written consent of the other parties. Any
amendments or supplements to this Agreement must be made in
writing and duly executed by each of the parties hereto.
6.3 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an
original, and all such counterparts taken together shall
constitute but one instrument.
6.4 Governing Law. The rights and duties of
Guaranteed Party, ETHC and Entergy shall, pursuant to New York
General Obligations Law Section 5-1401, be governed by the law of
the State of New York.
ARTICLE VI
Definitions
As used herein, the following terms shall have the
following meanings:
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or officer
of such Person.
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Capitalization" means, as of any date of
determination, with respect to Entergy and its subsidiaries
determined on a consolidated basis, an amount equal to the sum of
(i) the total principal amount of all Debt of Entergy and its
subsidiaries outstanding on such date, (ii) Consolidated Net
Worth as of such date and (iii) to the extent not otherwise
included in Capitalization, all preferred stock and other
preferred securities of Entergy and its subsidiaries outstanding
on such date.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"Environmental Laws" means any federal, state or local
laws, ordinances or codes, rules, orders, or regulations relating
to pollution or protection of the environment, including, without
limitation, laws relating to hazardous substances, laws relating
to reclamation of land and waterways and laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollution, contaminants,
chemicals, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Escrow Note" means the Promissory Note, dated the date
hereof, issued by ETHC to Bariston Associates, Inc. in the
principal amount of $2,162,003.65 and the Escrow Replacement Note
issued pursuant to Article I hereof.
"Escrow Replacement Note" means the replacement note
issued pursuant to Article I hereof against receipt of the
original Escrow Note.
"ETHC Note" means the Promissory Note, dated the date
hereof, issued by ETHC to Bariston Associates, Inc. in the
principal amount of $38,837,996.35 and the ETHC Replacement Note
issued pursuant to Article I hereof.
"ETHC Replacement Note" means the replacement note
issued pursuant to Article I hereof against receipt of the
original ETHC Note.
"ETHC" means Entergy Technology Holding Company.
"Event of Default" has the meaning specified in the
ETHC Replacement Note under the caption "Events of Default".
"FCC" means the United States Federal Communications
Commission.
"Guaranty" means the guaranty by Entergy provided
herein.
"Guaranteed Obligations" has the meaning specified in
Section 2.1 hereof.
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Junior Subordinated Debentures" means any junior
subordinated deferrable interest debentures issued by any of the
Significant Subsidiaries and New Orleans from time to time.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset. For the purposes hereof, a Person
or any of its subsidiaries shall be deemed to own, subject to a
Lien, any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such asset.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the fourth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which Entergy or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"Non-Recourse Debt" means any Debt of any subsidiary of
Entergy that does not also constitute Debt of Entergy, any
Significant Subsidiary or New Orleans.
"Note Purchase Agreement" means the Note Purchase
Agreement, dated as of the date hereof, between Bariston
Associates, Inc. and The Bank of New York, as amended from time
to time.
"Notes" means the ETHC Note and the Escrow Note.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" shall have the meaning ascribed to
that term in the ETHC Replacement Note.
"Prepayment Event" shall have the meaning ascribed to
that term in the ETHC Replacement Note.
"PUHCA" means the Public Utility Holding Company Act of
1935, as amended.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"S&P" means Standard & Poor's Rating Group or any
successor thereto.
"SEC" means the United States Securities and Exchange
Commission.
"Seller" means Bariston Associates, Inc.
"Seller Note" means the Demand Promissory Note, dated
the date hereof, issued by Bariston Associates, Inc. to The Bank
of New York.
"Senior Debt Rating" means, as to any Person, the
rating assigned by Moody's or S&P to the senior secured long-term
debt of such Person.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Stock Purchase Agreement" means a certain stock
purchase agreement among Seller, ETHC and certain other parties.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
THE BANK OF NEW YORK
By:______________________________
Name:
Title:
ENTERGY TECHNOLOGY HOLDING COMPANY
By:______________________________
Name:
Title:
ENTERGY CORPORATION
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF ETHC REPLACEMENT NOTE
PROMISSORY NOTE
$[_________] ___________, 1996
FOR VALUE RECEIVED, ENTERGY TECHNOLOGY HOLDING COMPANY
("ETHC") hereby promises to pay to the order of THE BANK OF NEW
YORK (the "Bank"), on the Maturity Date (as defined below), in
such manner and to such account as the Bank shall designate, in
lawful money of the United States of America, in immediately
available funds, the principal amount of [_____________________].
ETHC shall pay interest on the unpaid principal amount
hereof for each day, in like money and funds and in such manner
and to such designated account, at a rate per annum equal to __%,
such interest to be payable (i) quarterly in arrears on each
February 21, May 21, August 21 and November 21, until the
Maturity Date, (ii) when the principal amount hereof shall be due
(whether on the Maturity date, upon acceleration or otherwise)
and (iii) on the date of any prepayment hereof. Overdue
principal and, to the extent permitted under applicable law,
interest shall bear interest for each day from the due date
thereof until paid in full at a rate per annum equal to (i) the
rate of interest otherwise payable hereunder plus (ii) 2%, such
interest to be payable on demand. Interest shall be computed on
the basis of a year of 360 days consisting of twelve 30 day
months.
This Promissory Note is entitled to the benefits of the
Guaranty provided in the Guaranty Agreement (as defined below).
Except as hereinafter provided in the following two
sentences, this Promissory Note may not be prepaid. ETHC may
prepay this Promissory Note, in whole but not in part, at any
time at the applicable Prepayment Price (as defined below),
provided, however, that no such prepayment may be made unless
ETHC shall have simultaneously prepaid the Escrow Replacement
Note in the manner provided for therein. The Bank shall have the
right, on not less than five days' prior written notice to ETHC,
to require ETHC to prepay this Promissory Note on any Prepayment
Date at the applicable Prepayment Price. The Prepayment Price
payable in connection with any such prepayment shall be paid no
later than 1:00 p.m. (New York time) in such manner and to such
account as the Bank shall designate, in lawful money of the
United States of America, in immediately available funds.
Whenever any payment to be made pursuant hereto shall
be due on a day that is not a Business Day (as defined below),
such payment shall be made on the next succeeding business day,
and any such extension of time shall be included in computing
interest, if any, with respect to such payment.
Presentment, protest and notice of dishonor are hereby
waived by ETHC.
EVENTS OF DEFAULT
Each of the following events shall constitute an "Event
of Default" hereunder:
1. ETHC shall fail to pay interest on any amount
payable under this Promissory Note or the Escrow Replacement Note
within three Business Days after such interest becomes due and
payable; or
2. Any representation or warranty made by either ETHC
or Entergy or any of its officers in the Guaranty Agreement or
otherwise in connection with this Promissory Note shall prove to
have been incorrect or misleading in any material respect when
made; or
3. Either ETHC or Entergy shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.2 under the caption "Affirmative Covenants" of the Guaranty
Agreement or in any paragraph under the caption "Negative
Covenants" therein or (ii) any other term, covenant or agreement
contained in the Guaranty Agreement (and not otherwise addressed
in this paragraph 3) on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to ETHC or Entergy, as the
case may be, by the Bank; or
4. Either Entergy or ETHC shall assert or shall have
instituted any proceeding seeking to establish that the Guaranty
Agreement is unenforceable or invalid in any material respect;
5. Either ETHC or Entergy shall default in any
obligation in any interest rate swap agreement or other hedging
agreement between ETHC and the Guaranteed Party entered into in
connection with or otherwise related to this Promissory Note;
6. (i) Either ETHC or Entergy shall fail to pay any
principal of or premium or interest on any Debt of such Person
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either ETHC or Entergy shall have occurred and be
continuing, in excess of $50,000,000 in the aggregate (but
excluding Debt evidenced by this Promissory Note) when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt,
or (ii) any default shall exist under any agreement pursuant to
which a lender has, or lenders have, committed to lend a
principal amount in excess of $50,000,000 to ETHC or Entergy; or
7. ETHC, Entergy, any Significant Subsidiary or New
Orleans shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
ETHC or Entergy, any Significant Subsidiary or New Orleans
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or ETHC, Entergy, any Significant Subsidiary or New
Orleans shall take any corporate action to authorize or to
consent to any of the actions set forth above in this paragraph
7; or
8. Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against ETHC or Entergy
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive Business Days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
9. (i) An ERISA Plan of Entergy or any ERISA Affiliate
of Entergy shall fail to maintain the minimum funding standards
required by Section 412 of the Internal Revenue Code of 1986 for
any plan year or a waiver of such standard is sought or granted
under Section 412(d) of the Internal Revenue Code of 1986, or
(ii) an ERISA Plan of Entergy or any ERISA Affiliate of Entergy
is, shall have been or will be terminated or the subject of
termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
10. Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
RIGHTS UPON PREPAYMENT EVENT OR EVENT OF DEFAULT
If any Prepayment Event or Event of Default shall occur
and be continuing, then, and in any such event, the Bank may, by
notice to ETHC and Entergy, declare all amounts owing by ETHC
under this Promissory Note to be forthwith due and payable in an
amount equal to the applicable Prepayment Price, whereupon all
such amounts shall become and be forthwith due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by ETHC and Entergy;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to either of ETHC or Entergy,
any Significant Subsidiary or New Orleans under the Federal
Bankruptcy Code, all amounts owing by ETHC under this Promissory
Note shall automatically become and be due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by ETHC and Entergy.
DEFINITIONS
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Escrow Note" means the Promissory Note issued by ETHC
to Bariston Associates, Inc., dated the date hereof, in the
principal amount of $[__________].
"Escrow Replacement Note" means the Promissory Note,
dated the date hereof, issued by ETHC to The Bank of New York
against receipt of the original Escrow Note, pursuant to Article
I of the Guaranty Agreement.
"ETHC" means Entergy Technology Holding Company.
"Event of Default" has the meaning specified herein
under the caption "Events of Default".
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty" means the guaranty by Entergy provided in
the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty and
Acknowledgment Agreement, dated as of the date hereof, among the
Guaranteed Party, ETHC and Entergy.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the fourth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" means (i) the first anniversary of
the date hereof and each semi-annual anniversary thereof and
occurring thereafter and (ii) any date on which a material change
(as determined by the Bank) in the character or extent of the
business or assets of ETHC shall have occurred, including, but
not limited to, a material acquisition or disposition by ETHC,
and any date following any such occurrence.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either ETHC or Entergy or of a
Significant Subsidiary that, in either case, is outstanding in a
principal amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"Prepayment Price" means, with respect to any
prepayment hereof or acceleration of the maturity hereof as
provided above under the caption "Rights Upon Prepayment Event or
Event of Default", the sum, determined as of the date of such
prepayment or acceleration, of (a) the amount of accrued and
unpaid interest on this Promissory Note through but excluding the
date of prepayment or payment upon acceleration, as the case may
be, and (b) the present value, based on the yield to maturity of
U.S. Dollar Libor swaps having payment dates comparable to the
payment dates for principal of and interest on this Promissory
Note, of the unpaid principal amount of this Promissory Note to
be paid on the Maturity Date hereof and interest on such
principal amount, to be paid quarterly as provided in this
Promissory Note, for the period from and including the date of
prepayment or acceleration through but excluding the Maturity
Date as determined by the Bank in its sole discretion, such
determination to be conclusive absent manifest error.
"Promissory Note" means this Promissory Note.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
MISCELLANEOUS
No delay by the Bank in exercising any right with
respect to any of the obligations evidenced hereby shall operate
as a waiver thereof, nor shall the exercise of any right with
respect to such obligations waive or preclude the later exercise
of any other right with respect to such obligations or the later
exercise of any right with respect to any other obligations
evidenced hereby.
Any notice to ETHC or Entergy to be given hereunder or
in connection herewith shall be in writing and shall be sent by
mail to 639 Loyola Avenue, New Orleans, Louisiana, 70113, Mail
Stop L-ENT-15E, Attention: Vice President and Treasurer, or by
telecopier to (504) 576-4455.
The rights and duties of the Bank (and its successors
and assigns) and ETHC under this Promissory Note shall, pursuant
to New York General Obligations Law Section 5-1401, be governed
by the law of the State of New York.
ENTERGY TECHNOLOGY HOLDING COMPANY
By__________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF ESCROW REPLACEMENT NOTE
PROMISSORY NOTE
$[__________] ___________, 1996
FOR VALUE RECEIVED, ENTERGY TECHNOLOGY HOLDING COMPANY
("ETHC") hereby promises to pay to the order of THE BANK OF NEW
YORK (the "Bank"), on the Maturity Date (as defined below), in
such manner and to such account as the Bank shall designate, in
lawful money of the United States of America, in immediately
available funds, the principal amount of [_____________________].
ETHC shall pay interest on the unpaid principal amount
hereof for each day, in like money and funds and in such manner
and to such designated account, at a rate per annum equal to __%,
such interest to be payable (i) quarterly in arrears on each
February 21, May 21, August 21 and November 21, until the
Maturity Date, (ii) when the principal amount hereof shall be due
(whether on the Maturity date, upon acceleration or otherwise)
and (iii) on the date of any prepayment hereof. Overdue
principal and, to the extent permitted under applicable law,
interest shall bear interest for each day from the due date
thereof until paid in full at a rate per annum equal to (i) the
rate of interest otherwise payable hereunder plus (ii) 2%, such
interest to be payable on demand. Interest shall be computed on
the basis of a year of 360 days consisting of twelve 30 day
months.
This Promissory Note is entitled to the benefits of the
Guaranty provided in the Guaranty Agreement (as defined below).
Except as hereinafter provided in the following two
sentences, this Promissory Note may not be prepaid. ETHC may
prepay this Promissory Note, in whole but not in part, at any
time at the applicable Prepayment Price (as defined below),
provided, however, that no such prepayment may be made unless
ETHC shall have simultaneously prepaid the ETHC Replacement Note
in the manner provided for therein. The Bank shall have the
right, on not less than five days' prior written notice to ETHC,
to require ETHC to prepay this Promissory Note on any Prepayment
Date at the applicable Prepayment Price. The Prepayment Price
payable in connection with any such prepayment shall be paid no
later than 1:00 p.m. (New York time) in such manner and to such
account as the Bank shall designate, in lawful money of the
United States of America, in immediately available funds.
Whenever any payment to be made pursuant hereto shall
be due on a day that is not a Business Day (as defined below),
such payment shall be made on the next succeeding business day,
and any such extension of time shall be included in computing
interest, if any, with respect to such payment.
Presentment, protest and notice of dishonor are hereby
waived by ETHC.
EVENTS OF DEFAULT
Each of the following events shall constitute an "Event
of Default" hereunder:
1. ETHC shall fail to pay interest on any amount
payable under this Promissory Note or the ETHC Replacement Note
within three Business Days after such interest becomes due and
payable; or
2. Any representation or warranty made by either ETHC
or Entergy or any of its officers in the Guaranty Agreement or
otherwise in connection with this Promissory Note shall prove to
have been incorrect or misleading in any material respect when
made; or
3. Either ETHC or Entergy shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.2 under the caption "Affirmative Covenants" of the Guaranty
Agreement or in any paragraph under the caption "Negative
Covenants" therein or (ii) any other term, covenant or agreement
contained in the Guaranty Agreement (and not otherwise addressed
in this paragraph 3) on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to ETHC or Entergy, as the
case may be, by the Bank; or
4. Either Entergy or ETHC shall assert or shall have
instituted any proceeding seeking to establish that the Guaranty
Agreement is unenforceable or invalid in any material respect;
5. Either ETHC or Entergy shall default in any
obligation in any interest rate swap agreement or other hedging
agreement between ETHC and the Guaranteed Party entered into in
connection with or otherwise related to this Promissory Note;
6. (i) Either ETHC or Entergy shall fail to pay any
principal of or premium or interest on any Debt of such Person
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either ETHC or Entergy shall have occurred and be
continuing, in excess of $50,000,000 in the aggregate (but
excluding Debt evidenced by this Promissory Note) when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt,
or (ii) any default shall exist under any agreement pursuant to
which a lender has, or lenders have, committed to lend a
principal amount in excess of $50,000,000 to ETHC or Entergy; or
7. ETHC, Entergy, any Significant Subsidiary or New
Orleans shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
ETHC or Entergy, any Significant Subsidiary or New Orleans
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or ETHC, Entergy, any Significant Subsidiary or New
Orleans shall take any corporate action to authorize or to
consent to any of the actions set forth above in this paragraph
7; or
8. Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against ETHC or Entergy
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive Business Days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
9. (i) An ERISA Plan of Entergy or any ERISA Affiliate
of Entergy shall fail to maintain the minimum funding standards
required by Section 412 of the Internal Revenue Code of 1986 for
any plan year or a waiver of such standard is sought or granted
under Section 412(d) of the Internal Revenue Code of 1986, or
(ii) an ERISA Plan of Entergy or any ERISA Affiliate of Entergy
is, shall have been or will be terminated or the subject of
termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
10. Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
RIGHTS UPON PREPAYMENT EVENT OR EVENT OF DEFAULT
If any Prepayment Event or Event of Default shall occur
and be continuing, then, and in any such event, the Bank may, by
notice to ETHC and Entergy, declare all amounts owing by ETHC
under this Promissory Note to be forthwith due and payable in an
amount equal to the applicable Prepayment Price, whereupon all
such amounts shall become and be forthwith due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by ETHC and Entergy;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to either of ETHC or Entergy,
any Significant Subsidiary or New Orleans under the Federal
Bankruptcy Code, all amounts owing by ETHC under this Promissory
Note shall automatically become and be due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by ETHC and Entergy.
DEFINITIONS
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"ETHC" means Entergy Technology Holding Company.
"ETHC Note" means the Promissory Note issued by ETHC to
Bariston Associates, Inc., dated the date hereof, in the
principal amount of $[__________].
"ETHC Replacement Note" means the Promissory Note,
dated the date hereof, issued by ETHC to The Bank of New York
against receipt of the original ETHC Note, pursuant to Article I
of the Guaranty Agreement.
"Event of Default" has the meaning specified herein
under the caption "Events of Default".
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty" means the guaranty by Entergy provided in
the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty and
Acknowledgment Agreement, dated as of the date hereof, among the
Guaranteed Party, ETHC and Entergy.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the fourth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" means (i) the first anniversary of
the date hereof and each semi-annual anniversary thereof and
occurring thereafter and (ii) any date on which a material change
(as determined by the Bank) in the character or extent of the
business or assets of ETHC shall have occurred, including, but
not limited to, a material acquisition or disposition by ETHC,
and any date following any such occurrence.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either ETHC or Entergy or of a
Significant Subsidiary that, in either case, is outstanding in a
principal amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"Prepayment Price" means, with respect to any
prepayment hereof or acceleration of the maturity hereof as
provided above under the caption "Rights Upon Prepayment Event or
Event of Default", the sum, determined as of the date of such
prepayment or acceleration, of (a) the amount of accrued and
unpaid interest on this Promissory Note through but excluding the
date of prepayment or payment upon acceleration, as the case may
be, and (b) the present value, based on the yield to maturity of
U.S. Dollar Libor swaps having payment dates comparable to the
payment dates for principal of and interest on this Promissory
Note, of the unpaid principal amount of this Promissory Note to
be paid on the Maturity Date hereof and interest on such
principal amount, to be paid quarterly as provided in this
Promissory Note, for the period from and including the date of
prepayment or acceleration through but excluding the Maturity
Date as determined by the Bank in its sole discretion, such
determination to be conclusive absent manifest error.
"Promissory Note" means this Promissory Note.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
MISCELLANEOUS
No delay by the Bank in exercising any right with
respect to any of the obligations evidenced hereby shall operate
as a waiver thereof, nor shall the exercise of any right with
respect to such obligations waive or preclude the later exercise
of any other right with respect to such obligations or the later
exercise of any right with respect to any other obligations
evidenced hereby.
Any notice to ETHC or Entergy to be given hereunder or
in connection herewith shall be in writing and shall be sent by
mail to 639 Loyola Avenue, New Orleans, Louisiana, 70113, Mail
Stop L-ENT-15E, Attention: Vice President and Treasurer, or by
telecopier to (504) 576-4455.
The rights and duties of the Bank (and its successors
and assigns) and ETHC under this Promissory Note shall, pursuant
to New York General Obligations Law Section 5-1401, be governed
by the law of the State of New York.
ENTERGY TECHNOLOGY HOLDING COMPANY
By__________________________
Name:
Title:
Exhibit 4(a) 17
U.S. $300,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 12, 1996
Among
ENTERGY CORPORATION
as Borrower
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A.
as Agent
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 12, 1996
THIS AMENDED AND RESTATED CREDIT AGREEMENT among ENTERGY
CORPORATION, a Delaware corporation (the Borrower ), the banks
(the Banks ) listed on the signature pages hereof, and Citibank,
N.A. ( Citibank ), as agent (the Agent ).
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Agent entered into
a Credit Agreement, dated as of October 10, 1995 (the Original
Credit Agreement ).
WHEREAS, the Borrower has requested that the Lenders and the
Agent amend certain provisions of the Original Credit Agreement.
WHEREAS, the Agent and the Majority Lenders are willing to
amend the Original Credit Agreement to provide as set forth
below.
NOW, THEREFORE, the parties hereto, in consideration of
their mutual covenants and agreements hereinafter set forth, and
subject to the condition set forth in Section 8.06, do hereby
agree that the Original Credit Agreement is amended and restated
in its entirety to read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
DEFINITIONS AND ACCOUNTING TERMS;
SECTION 1.1. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
Adjusted CD Rate means, for any Interest Period for
each Adjusted CD Rate Advance made as part of the same
Contract Borrowing, an interest rate per annum equal to the
sum of:
(a) the rate per annum obtained by dividing (i) the
rate of interest determined by the Agent to be the average
(rounded upward to the nearest whole multiple of 1/100 of 1%
per annum, if such average is not such a multiple) of the
consensus bid rate determined by each of the Reference Banks
for the bid rates per annum, at 9:00 A.M. (New York City
time) (or as soon thereafter as practicable) on the first
day of such Interest Period, of New York certificate of
deposit dealers of recognized standing selected by such
Reference Bank for the purchase at face value of
certificates of deposit of such Reference Bank in an amount
substantially equal to such Reference Bank s Adjusted CD
Rate Advance made as part of such Contract Borrowing and
with a maturity equal to such Interest Period, by (i) a
percentage equal to 100% minus the Adjusted CD Rate Reserve
Percentage for such Interest Period, plus
(a) the Assessment Rate for such Interest Period.
The Adjusted CD Rate for the Interest Period for each
Adjusted CD Rate Advance made as part of the same Contract
Borrowing shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent from
the Reference Banks on the first day of such Interest
Period, subject, however, to the provisions of Section 2.09.
Adjusted CD Rate Advance means a Contract Advance
that bears interest as provided in Section 2.07(b).
Adjusted CD Rate Reserve Percentage for the Interest
Period for each Adjusted CD Rate Advance made as part of the
same Contract Borrowing means the reserve percentage
applicable on the first day of such Interest Period under
regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits
exceeding one billion dollars with respect to liabilities
consisting of or including (among other liabilities) U.S.
dollar nonpersonal time deposits in the United States with a
maturity equal to such Interest Period.
Advance means a Contract Advance or an Auction
Advance.
Affiliate means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or
is under common control with such Person or is a director or
officer of such Person.
Agreement means this Amended and Restated Credit
Agreement, as amended, supplemented or modified from time to
time.
Applicable Lending Office means, with respect to each
Lender, such Lender s Domestic Lending Office in the case of
a Base Rate Advance, such Lender s CD Lending Office in the
case of an Adjusted CD Rate Advance, and such Lender s
Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of an Auction Advance, the office
of such Lender notified by such Lender to the Agent as its
Applicable Lending Office with respect to such Auction
Advance.
Applicable Margin means, on any date, for any
Adjusted CD Rate Advance or Eurodollar Rate Advance, the
interest rate per annum set forth below, determined by
reference to the combined Senior Debt Ratings from time to
time of the two Significant Subsidiaries (other than SERI)
having the highest Senior Debt Ratings.
Significant Subsidiary with
highest Senior Debt Rating
A- and A3 BBB+ and BBB- and
Senior or above Baa1 or Baa3 or
Debt BBB and split rated
Ratings Baa2 above
or split BB+ and/or
rated Ba1 or
above below or
unrated
A- and A3 E--0.35% E--0.40% E--0.48% E--0.75%
or above CD-0.475% CD--0.525% CD--0.605%
CD--0.875%
Significant BBB+ and
Subsidiary Baa1 or E--0.40% E--0.45% E--0.50% E--0.80%
with next BBB and Baa2 CD--0.525% CD--0.575% CD--0.655%
highest or
Senior split rated
Debt Rating above
CD--0.925%
BBB- and
Baa3 or E--0.48% E--0.50% E--0.55% E--0.875%
split CD-0.605% CD--0.655% CD--0.675%
rated
above
CD--1.00%
BB+ and/or
Ba1 or E--0.75% E--0.80% E--0.875% E--0.875%
below or CD-0.875% CD--0.925% CD--1.00%
unrated CD--1.00%
E = Eurodollar Rate Advance Margin
CD = Adjusted CD Rate Advance Margin
Any change in the Applicable Margin will be effective as of
the date on which S&P or Moody s, as the case may be,
announces the applicable change in any Senior Debt Rating.
Assessment Rate for the Interest Period for each
Adjusted CD Rate Advance made as part of the same Contract
Borrowing means the annual assessment rate estimated by the
Agent on the first day of such Interest Period for
determining the then current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation (or
any successor) for insuring U.S. dollar deposits of Citibank
in the United States.
Assignment and Acceptance means an assignment and
acceptance entered into by a Lender and an assignee of that
Lender, and accepted by the Agent, in substantially the form
of Exhibit C hereto.
Auction Advance means an advance by a Lender to the
Borrower as part of an Auction Borrowing resulting from the
auction bidding procedure described in Section 2.03.
Auction Borrowing means a borrowing consisting of
simultaneous Auction Advances from each of the Lenders whose
offer to make one or more Auction Advances as part of such
borrowing has been accepted by the Borrower under the
auction bidding procedure described in Section 2.03.
Auction Note means a promissory note of the Borrower
payable to the order of any Lender, in substantially the
form of Exhibit A-2 hereto, evidencing the indebtedness of
the Borrower to such Lender resulting from an Auction
Advance made by such Lender.
Auction Reduction has the meaning specified in
Section 2.01.
Base Rate means, for any period, a fluctuating
interest rate per annum at all times equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank s base rate; and
(a) 1/2 of 1% per annum above the Federal Funds Rate
in effect from time to time.
Base Rate Advance means a Contract Advance which
bears interest as provided in Section 2.07(a).
Borrowing means a Contract Borrowing or an Auction
Borrowing.
Business Day means a day of the year on which banks
are not required or authorized to close in New York City
and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
Capitalization means, as of any date of
determination, with respect to the Borrower and its
subsidiaries determined on a consolidated basis, an amount
equal to the sum of (i) the total principal amount of all
Debt of the Borrower and its subsidiaries outstanding on
such date, (i) Consolidated Net Worth as of such date and
(i) to the extent not otherwise included in Capitalization,
all preferred stock and other preferred securities of the
Borrower and its subsidiaries, including preferred
securities issued by any subsidiary trust, outstanding on
such date.
CD Lending Office means, with respect to any Lender,
the office of such Lender specified as its CD Lending
Office opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a
Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the
Agent.
Commitment has the meaning specified in Section 2.01.
Consolidated Net Worth means the sum of the capital
stock (excluding treasury stock and capital stock subscribed
for and unissued) and surplus (including earned surplus,
capital surplus and the balance of the current profit and
loss account not transferred to surplus) accounts of the
Borrower and its subsidiaries appearing on a consolidated
balance sheet of the Borrower and its subsidiaries prepared
as of the date of determination in accordance with generally
accepted accounting principles consistent with those applied
in the preparation of the financial statements referred to
in Section 4.01(e), after eliminating all intercompany
transactions and all amounts properly attributable to
minority interests, if any, in the stock and surplus of
subsidiaries.
Contract Advance means an advance by a Lender to the
Borrower as part of a Contract Borrowing and refers to an
Adjusted CD Rate Advance, a Base Rate Advance or a
Eurodollar Rate Advance, each of which shall be a Type of
Contract Advance.
Contract Borrowing means a borrowing consisting of
simultaneous Contract Advances of the same Type made by each
of the Lenders pursuant to Section 2.01 or Converted
pursuant to Section 2.09 or 2.10.
Contract Note means a promissory note of the Borrower
payable to the order of any Lender, in substantially the
form of Exhibit A-1 hereto, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from
the Contract Advances made by such Lender.
Convert , Conversion and Converted each refers to a
conversion of Contract Advances of one Type into Contract
Advances of another Type or the selection of a new, or the
renewal of the same, Interest Period for Eurodollar Rate
Advances or CD Rate Advances, as the case may be, pursuant
to Section 2.09 or 2.10.
Debt of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether
contingent or otherwise) of such Person (i) for borrowed
money or evidenced by bonds, debentures, notes, or other
similar instruments, (i) to pay the deferred purchase price
of property or services (other than such obligations
incurred in the ordinary course of business on customary
trade terms, provided that such obligations are not more
than 30 days past due), (i) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases,
(i) under reimbursement agreements or similar agreements
with respect to the issuance of letters of credit (other
than obligations in respect of letters of credit opened to
provide for the payment of goods or services purchased in
the ordinary course of business), (i) under any Guaranty
Obligations and (i) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA.
Domestic Lending Office means, with respect to any
Lender, the office of such Lender specified as its Domestic
Lending Office opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
Eligible Assignee means a Person (a) (i) that is
(A) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in
excess of $500,000,000; (A) a commercial bank organized
under the laws of any other country which is a member of the
OECD, or a political subdivision of any such country, and
having total assets in excess of $500,000,000, provided that
such bank is acting through a branch or agency located in
the United States or another country which is also a member
of OECD; or (A) a Lender or a commercial bank Affiliate of
any Lender immediately prior to an assignment and (i) whose
long-term public senior debt securities are rated at least
BBB- by Standard & Poor s Corporation or at least Baa3" by
Moody s Investors Service, Inc.; or (a) that is approved by
the Borrower (whose approval shall not be unreasonably
withheld), the Agent and the Majority Lenders.
Entergy Arkansas means Entergy Arkansas, Inc.,
formerly Arkansas Power & Light Company, an Arkansas
corporation.
Entergy Gulf States means Entergy Gulf States, Inc.,
formerly Gulf States Utilities Company, a Texas corporation.
Entergy Louisiana means Entergy Louisiana, Inc.,
formerly Louisiana Power & Light Company, a Louisiana
corporation.
Entergy Mississippi means Entergy Mississippi, Inc.,
formerly Mississippi Power & Light Company, a Mississippi
corporation.
Entergy New Orleans means Entergy New Orleans, Inc.,
formerly New Orleans Public Service Inc., a Louisiana
corporation.
Environmental Laws means any federal, state or local
laws, ordinances or codes, rules, orders, or regulations
relating to pollution or protection of the environment,
including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and
waterways and laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or
wastes into the environment (including, without limitation,
ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollution, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes.
ERISA means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder, each
as amended and modified from time to time.
ERISA Affiliate of a person or entity means any trade
or business (whether or not incorporated) that is a member
of a group of which such person or entity is a member and
that is under common control with such person or entity
within the meaning of Section 414 of the Internal Revenue
Code of 1986, and the regulations promulgated and rulings
issued thereunder, each as amended or modified from time to
time.
ERISA Plan means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such
Person subject to Title IV of ERISA.
ERISA Termination Event means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject
to the provision for 30-day notice to PBGC), or (i) the
withdrawal of the Borrower or any of its ERISA Affiliates
from an ERISA Plan during a plan year in which the Borrower
or any of its ERISA Affiliates was a substantial employer
as defined in Section 4001(a)(2) of ERISA, or (i) the filing
of a notice of intent to terminate an ERISA Plan or the
treatment of an ERISA Plan amendment as a termination under
Section 4041 of ERISA, or (i) the institution of proceedings
to terminate an ERISA Plan by the PBGC or to appoint a
trustee to administer any ERISA Plan, or (i) any other event
or condition that would constitute grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer any ERISA Plan.
Eurocurrency Liabilities has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
Eurodollar Lending Office means, with respect to any
Lender, the office of such Lender specified as its
Eurodollar Lending Office opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Agent.
Eurodollar Rate means, for the Interest Period for
each Eurodollar Rate Advance made as part of the same
Contract Borrowing, an interest rate per annum equal to the
average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the
Reference Banks in London, England, to prime banks in the
London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period
in an amount substantially equal to such Reference Bank s
Eurodollar Rate Advance made as part of such Contract
Borrowing and for a period equal to such Interest Period.
The Eurodollar Rate for the Interest Period for each
Eurodollar Rate Advance made as part of the same Contract
Borrowing shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent from
the Reference Banks two Business Days before the first day
of such Interest Period, subject, however, to the provisions
of Section 2.09.
Eurodollar Rate Advance means a Contract Advance that
bears interest as provided in Section 2.07(c).
Eurodollar Rate Reserve Percentage of any Lender for
the Interest Period for any Eurodollar Rate Advance means
the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those
days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued
from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
Events of Default has the meaning specified in
Section 6.01.
Federal Funds Rate means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Agent from three Federal funds brokers of recognized
standing selected by it.
Fee Letter means that certain letter agreement, dated
October 10, 1995, between the Borrower and the Agent.
Guaranty Obligations means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against
loss in respect of, Debt of any Person and (i) other
guaranty or similar obligations in respect of the financial
obligations of others, including, without limitation,
Support Obligations.
Interest Period means, for each Contract Advance made
as part of the same Contract Borrowing, the period
commencing on the date of such Contract Advance or the date
of the Conversion of any Contract Advance into such a
Contract Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be 30, 60, 90 or 180 days in
the case of an Adjusted CD Rate Advance, and 1, 2, 3 or 6
months in the case of a Eurodollar Rate Advance, in each
case as the Borrower may, upon notice received by the Agent
not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(i) the Borrower may not select any Interest
Period that ends after the Termination Date;
(i) Interest Periods commencing on the same date
for Contract Advances made as part of the same Contract
Borrowing shall be of the same duration; and
(i) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day,
provided, in the case of any Interest Period for a
Eurodollar Rate Advance, that if such extension would
cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding
Business Day.
Junior Subordinated Debentures means any junior
subordinated deferrable interest debentures issued by any
Significant Subsidiary or Entergy New Orleans from time to
time.
Lenders means the Banks listed on the signature pages
hereof and each Person that shall become a party hereto
pursuant to Section 8.07.
Lien means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset. For the purposes of this
Agreement, a Person or any of its subsidiaries shall be
deemed to own, subject to a Lien, any asset that it has
acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such asset.
Majority Lenders means at any time Lenders holding at
least 66-2/3% of the then aggregate unpaid principal amount
of the Contract Notes held by Lenders, or, if no such
principal amount is then outstanding, Lenders having at
least 66-2/3% of the Commitments (without giving effect to
any termination in whole of the Commitments pursuant to
Section 6.02), provided, that for purposes hereof, neither
the Borrower, nor any of its Affiliates, if a Lender, shall
be included in (i) the Lenders holding such amount of the
Contract Advances or having such amount of the Commitments
or (i) determining the aggregate unpaid principal amount of
the Contract Advances or the total Commitments.
Moody s means Moody s Investors Service, Inc. or any
successor thereto.
Multiemployer Plan means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
three plan years made or accrued an obligation to make
contributions.
Non-Recourse Debt means any Debt of any subsidiary of
the Borrower that does not constitute Debt of the Borrower,
any Significant Subsidiary or Entergy New Orleans.
Note means a Contract Note or an Auction Note.
Notice of Contract Borrowing has the meaning
specified in Section 2.02(a).
Notice of Auction Borrowing has the meaning specified
in Section 2.03(a).
OECD means the Organization for Economic Cooperation
and Development.
Original Credit Agreement has the meaning assigned to
that term in the recitals to this Agreement.
PBGC means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions
under ERISA.
Person means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency
thereof.
Prepayment Event means the occurrence of any event or
the existence of any condition under any agreement or
instrument relating to any Debt of the Borrower or of a
Significant Subsidiary that, in either case, is outstanding
in a principal amount in excess of $50,000,000 in the
aggregate, which occurrence or event results in the
declaration of such Debt being due and payable, or required
to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof.
Reference Banks means Citibank, The Bank of New York
and Union Bank of Switzerland.
Register has the meaning specified in
Section 8.07(c).
Reportable Event has the meaning assigned to that
term in Title IV of ERISA.
S&P means Standard & Poor s Rating Group or any
successor thereto.
SEC means the United States Securities and Exchange
Commission.
SEC Order has the meaning specified in
Section 3.01(a)(iii).
Senior Debt Rating means, as to any Person, the
rating assigned by Moody s or S&P to the senior secured long-
term debt of such Person.
SERI means Systems Energy Resources, Inc., an
Arkansas corporation.
Significant Subsidiary means Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
SERI and any other domestic regulated utility subsidiary of
the Borrower: (i) the total assets (after intercompany
eliminations) of which exceed 5% of the total assets of the
Borrower and its subsidiaries or (i) the net worth of which
exceeds 5% of the Consolidated Net Worth of the Borrower and
its subsidiaries, in each case as shown on the most recent
audited consolidated balance sheet of the Borrower and its
subsidiaries.
Support Obligations means any financial obligation,
contingent or otherwise, of any Person guaranteeing or
otherwise supporting any Debt or other obligation of any
other Person in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such
Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such
Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt,
(i) to purchase property, securities or services for the
purpose of assuring the owner of such Debt of the payment of
such Debt, (i) to maintain working capital, equity capital,
available cash or other financial statement condition of the
primary obligor so as to enable the primary obligor to pay
such Debt, (i) to provide equity capital under or in respect
of equity subscription arrangements so as to assure any
Person with respect to the payment of such Debt or the
performance of such obligation, or (i) to provide financial
support for the performance of, or to arrange for the
performance of, any non-monetary obligations or non-funded
debt payment obligations (including, without limitation,
guaranties of payments under power purchase or other similar
arrangements) of the primary obligor.
Termination Date means October 10, 1998, or such
later date that may be established from time to time
pursuant to Section 2.17 hereof, or, in either case, the
earlier date of termination in whole of the Commitments
pursuant to Section 2.05 or Section 6.02 hereof.
Yield means, for any Auction Advance, the effective
rate per annum at which interest on such Auction Advance is
payable, computed on the basis of a year of 360 days for the
actual number of days (including the first day but excluding
the last day) occurring in the period for which such
interest is payable.
SECTION 1.2. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word from means from and
including and the words to and until each means to but
excluding .
SECTION 1.3. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred
to in Section 4.01(e) hereof.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AMOUNTS AND TERMS OF THE ADVANCES;
SECTION 2.1. The Contract Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to
make Contract Advances to the Borrower from time to time on any
Business Day during the period from the date hereof until the
Termination Date in an aggregate amount not to exceed at any time
outstanding the amount set opposite such Lender s name on
Schedule III hereto or, if such Lender has entered into any
Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(c), as
such amount may be reduced pursuant to Section 2.05 (such Lender
s Commitment ), provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time
to the extent of the aggregate amount of the Auction Advances
then outstanding and such deemed use of the aggregate amount of
the Commitments shall be applied to the Lenders ratably according
to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being an Auction Reduction ). Each
Contract Borrowing shall be in an amount not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof and shall
consist of Contract Advances of the same Type and, in the case of
Eurodollar Rate Advances or Adjusted CD Rate Advances, having the
same Interest Period made or Converted on the same day by the
Lenders ratably according to their respective Commitments.
Within the limits of each Lender s Commitment, the Borrower may
from time to time borrow, prepay pursuant to Section 2.11 and
reborrow under this Section 2.01; provided, however, that at no
time may the principal amount outstanding hereunder exceed the
aggregate amount of the Commitments.
SECTION 2.2. Making the Contract Advances. (a) Each
Contract Borrowing shall be made on notice, given (i) in the case
of a Contract Borrowing comprising Adjusted CD Rate Advances or
Eurodollar Rate Advances, not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the
proposed Contract Borrowing, and (i) in the case of a Contract
Borrowing comprising Base Rate Advances, not later than
11:00 A.M. (New York City time) on the date of the proposed
Contract Borrowing, by the Borrower to the Agent, which shall
give to each Lender prompt notice thereof. Each such notice of a
Contract Borrowing (a Notice of Contract Borrowing ) shall be by
telecopier, telex or cable, confirmed immediately in writing, in
substantially the form of Exhibit B-1 hereto, specifying therein
the requested (A) date of such Contract Borrowing, (A) Type of
Contract Advances to be made in connection with such Contract
Borrowing, (A) aggregate amount of such Contract Borrowing, and
(A) in the case of a Contract Borrowing comprising Adjusted CD
Rate Advances or Eurodollar Rate Advances, initial Interest
Period for each such Contract Advance. Each Lender shall, before
(x) 12:00 noon (New York City time) on the date of any Contract
Borrowing comprising Adjusted CD Rate Advances or Eurodollar Rate
Advances, and (y) 1:00 P.M. (New York City time) on the date of
any Contract Borrowing comprising Base Rate Advances, make
available for the account of its Applicable Lending Office to the
Agent at its address referred to in Section 8.02, in same day
funds, such Lender s ratable portion of such Contract Borrowing.
After the Agent s receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Agent
will make such funds available to the Borrower at the Agent s
aforesaid address.
(b) Each Notice of Contract Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Notice of
Contract Borrowing requesting Adjusted CD Rate Advances or
Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date
specified in such Notice of Contract Borrowing for such Contract
Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Contract Advance to be
made by such Lender as part of such Contract Borrowing when such
Contract Advance, as a result of such failure, is not made on
such date.
(c) Unless the Agent shall have received notice from a
Lender prior to the date of any Contract Borrowing that such
Lender will not make available to the Agent such Lender s ratable
portion of such Contract Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the
date of such Contract Borrowing in accordance with subsection (a)
of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Agent, such Lender and the Borrower (following the Agent s demand
on such Lender for the corresponding amount) severally agree to
repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Contract
Advances made in connection with such Contract Borrowing and
(i) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender s Contract Advance
as part of such Contract Borrowing for purposes of this
Agreement.
(d) The failure of any Lender to make the Contract Advance
to be made by it as part of any Contract Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to
make its Contract Advance on the date of such Contract Borrowing,
but no Lender shall be responsible for the failure of any other
Lender to make the Contract Advance to be made by such other
Lender on the date of any Contract Borrowing.
SECTION 2.3. The Auction Advances. (a) Each Lender
severally agrees that the Borrower may request Auction Borrowings
under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring
15 days prior to the Termination Date in the manner set forth
below; provided that, following the making of each Auction
Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the
Lenders (computed without regard to any Auction Reduction).
(i) The Borrower may request an Auction Borrowing by
delivering to the Agent (A) by telecopier, telex or cable,
confirmed immediately in writing, a notice of an Auction
Borrowing (a Notice of Auction Borrowing ), in
substantially the form of Exhibit B-2 hereto, specifying the
date and aggregate amount of the proposed Auction Borrowing,
the maturity date for repayment of each Auction Advance to
be made as part of such Auction Borrowing (which maturity
date may not be earlier than the date occurring 14 days
after the date of such Auction Borrowing or later than the
earlier to occur of (1) 180 days after the date of the
proposed Auction Borrowing and (1) the Termination Date),
the interest payment date or dates relating thereto (which
shall occur at least every 90 days), and any other terms to
be applicable to such Auction Borrowing, not later than
10:00 A.M. (New York City time) (x) at least one Business
Day prior to the date of the proposed Auction Borrowing, if
the Borrower shall specify in the Notice of Auction
Borrowing that the rates of interest to be offered by the
Lenders shall be fixed rates per annum and (y) at least five
Business Days prior to the date of the proposed Auction
Borrowing, if the Borrower shall specify in the Notice of
Auction Borrowing the basis (such as a quoted London
interbank offered rate or the Federal Funds Rate) to be used
by the Lenders in determining the rates of interest to be
offered by them and (A) payment in full to the Agent of the
aggregate auction administration fee specified in
Section 2.04(b) hereof. The Agent shall in turn promptly
notify each Lender of each request for an Auction Borrowing
received by it from the Borrower by sending such Lender a
copy of the related Notice of Auction Borrowing.
(ii) Each Lender may, in its sole discretion, if it
elects to do so, irrevocably offer to make one or more
Auction Advances to the Borrower as part of such proposed
Auction Borrowing at a rate or rates of interest specified
by such Lender in its sole discretion, by notifying the
Agent (which shall give prompt notice thereof to the
Borrower), before 10:00 A.M. (New York City time) (A) on the
date of such proposed Auction Borrowing, in the case of a
Notice of Auction Borrowing delivered pursuant to
clause (A)(x) of paragraph (i), above, and (A) three
Business Days before the date of such proposed Auction
Borrowing, in the case of a Notice of Auction Borrowing
delivered pursuant to clause (A)(y) of paragraph (i), above,
of the minimum amount and maximum amount of each Auction
Advance that such Lender would be willing to make as part of
such proposed Auction Borrowing (which amounts may, subject
to the proviso to the first sentence of this
Section 2.03(a), exceed such Lender s Commitment), the rate
or rates of interest therefor, the basis, rate and margin
used by such Lender (if applicable) in determining the rate
or rates of interest so offered and the Yield (if different
from such rate or rates), the interest period relating
thereto and such Lender s Applicable Lending Office with
respect to such Auction Advance; provided that if the Agent
in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Borrower
of such offer before 9:00 A.M. (New York City time) on the
date on which notice of such election is to be given to the
Agent by the other Lenders. If any Lender shall elect not
to make such an offer, such Lender shall so notify the
Agent, before 10:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the Agent by
the other Lenders, and such Lender shall not be obligated
to, and shall not, make any Auction Advance as part of such
Auction Borrowing; provided that the failure by any Lender
to give such notice shall not cause such Lender to be
obligated to make any Auction Advance as part of such
proposed Auction Borrowing.
(iii) The Borrower shall, in turn, (A) before
11:00 A.M. (New York City time) on the date of such proposed
Auction Borrowing, in the case of a Notice of Auction
Borrowing delivered pursuant to clause (A)(x) of
paragraph (i), above and (A) before 1:00 P.M. (New York City
time) three Business Days before the date of such proposed
Auction Borrowing, in the case of a Notice of Auction
Borrowing delivered pursuant to clause (A)(y) of
paragraph (i), above, either
(1) cancel such Auction Borrowing by giving the
Agent notice to that effect, or
(2) irrevocably accept one or more of the offers
made by any Lender or Lenders pursuant to
paragraph (ii) above, in its sole discretion, subject
only to the provisions of this paragraph (iii), by
giving notice to the Agent of the amount of each
Auction Advance (which amount shall be equal to or
greater than the minimum amount, and equal to or less
than the maximum amount, notified to the Borrower by
the Agent on behalf of such Lender for such Auction
Advance pursuant to paragraph (ii) above) to be made by
each Lender as part of such Auction Borrowing, and
reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Agent notice to that
effect; provided, however, that (w) the Borrower shall
not accept an offer made pursuant to paragraph (ii)
above, at any Yield if the Borrower shall have, or
shall be deemed to have, rejected any other offer made
pursuant to paragraph (ii) above, at a lower Yield,
(x) if the Borrower declines to accept, or is otherwise
restricted by the provisions of this Agreement from
accepting, the maximum aggregate principal amount of
Auction Borrowings offered at the same Yield pursuant
to paragraph (ii) above, then the Borrower shall accept
a pro rata portion of each offer made at such Yield,
based as nearly as possible on the ratio of the
aggregate principal amount of such offers to be
accepted by the Borrower to the maximum aggregate
principal amount of such offers made pursuant to
paragraph (ii) above (rounding up or down to the next
higher or lower multiple of $1,000,000), (y) no offer
made pursuant to paragraph (ii) above shall be accepted
unless the Auction Borrowing in respect of such offer
is in an integral multiple of $1,000,000 and the
aggregate amount of such offers accepted by the
Borrower is equal to at least $5,000,000, and (z) no
offer made pursuant to paragraph (ii) above shall be
accepted at any interest rate in excess of the Base
Rate then in effect plus 2% per annum (or such higher
rate as may be permitted by applicable law, regulation
or order).
Any offer or offers made pursuant to paragraph (ii) above
not expressly accepted or rejected by the Borrower in
accordance with this paragraph (iii) shall be deemed to have
been rejected by the Borrower.
(iv) If the Borrower notifies the Agent that such
Auction Borrowing is canceled pursuant to clause (1) of
paragraph (iii) above, the Agent shall give prompt notice
thereof to the Lenders and such Auction Borrowing shall not
be made.
(v) If the Borrower accepts one or more of the offers
made by any Lender or Lenders pursuant to clause (2) of
paragraph (iii) above, the Agent shall in turn promptly
notify (A) each Lender that has made an offer as described
in paragraph (ii) above, of the date and aggregate amount of
such Auction Borrowing and whether or not any offer or
offers made by such Lender pursuant to paragraph (ii) above
have been accepted by the Borrower, (A) each Lender that is
to make an Auction Advance as part of such Auction Borrowing
of the amount of each Auction Advance to be made by such
Lender as part of such Auction Borrowing, and (A) each
Lender that is to make an Auction Advance as part of such
Auction Borrowing, upon receipt, that the Agent has received
forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to
make an Auction Advance as part of such Auction Borrowing
shall, before 12:00 noon (New York City time) on the date of
such Auction Borrowing specified in the notice received from
the Agent pursuant to clause (A) of the preceding sentence
or any later time when such Lender shall have received
notice from the Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its
Applicable Lending Office to the Agent at its address
referred to in Section 8.02 such Lender s portion of such
Auction Borrowing, in same day funds. Upon fulfillment of
the applicable conditions set forth in Article III and after
receipt by the Agent of such funds, the Agent will make such
funds available to the Borrower at the Agent s aforesaid
address. Promptly after each Auction Borrowing the Agent
will notify each Lender of the amount of the Auction
Borrowing, the consequent Auction Reduction and the dates
upon which such Auction Reduction commenced and will
terminate.
(vi) If the Borrower accepts one or more of the offers
made by any Lender pursuant to clause (B) of paragraph (iii)
above, the Borrower shall indemnify such Lender against any
loss, cost or expense incurred by such Lender as a result of
any failure by the Borrower to fulfill on or before the date
specified for such Auction Borrowing the applicable
conditions set forth in Article III, including, without
limitation, any loss, cost or expense incurred by reason of
the liquidation or redeployment of deposits or other funds
acquired by such Lender to fund the Auction Advance to be
made by such Lender as part of such Auction Borrowing when
such Auction Advance, as a result of such failure, is not
made on such date.
(b) Each Auction Borrowing shall be in an amount not less
than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and, following the making of each Auction Borrowing, the
Borrower shall be in compliance with the limitation set forth in
the proviso to the first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in
this Section 2.03, the Borrower may from time to time borrow
under this Section 2.03, repay or prepay pursuant to
subsection (d) below, and reborrow under this Section 2.03,
provided that an Auction Borrowing shall not be made within three
Business Days of the date of any other Auction Borrowing.
(d) The Borrower shall repay to the Agent for the account
of each Lender that has made an Auction Advance, or each other
holder of an Auction Note, on the maturity date of each Auction
Advance (such maturity date being that specified by the Borrower
for repayment of such Auction Advance in the related Notice of
Auction Borrowing delivered pursuant to subsection (a)(i) above
and provided in the Auction Note evidencing such Auction
Advance), the then unpaid principal amount of such Auction
Advance. The Borrower shall have no right to prepay any
principal amount of any Auction Advance unless, and then only on
the terms, specified by the Borrower for such Auction Advance in
the related Notice of Auction Borrowing delivered pursuant to
subsection (a)(i)(A) above and set forth in the Auction Note
evidencing such Auction Advance.
(e) The Borrower shall pay interest on the unpaid principal
amount of each Auction Advance from the date of such Auction
Advance to the date the principal amount of such Auction Advance
is repaid in full, at the rate of interest for such Auction
Advance specified by the Lender making such Auction Advance in
its notice with respect thereto delivered pursuant to
subsection (a)(ii) above, payable on the interest payment date or
dates specified by the Borrower for such Auction Advance in the
related Notice of Auction Borrowing delivered pursuant to
subsection (a)(i) above, as provided in the Auction Note
evidencing such Auction Advance; provided, however, that, if and
for so long as a Prepayment Event or an Event of Default shall
have occurred and be continuing, the unpaid principal amount of
each Auction Advance shall (to the fullest extent permitted by
law) bear interest until paid in full at a rate per annum equal
at all times to the Base Rate plus 2% per annum, payable upon
demand.
(f) The indebtedness of the Borrower resulting from each
Auction Advance made to the Borrower as part of an Auction
Borrowing shall be evidenced by a separate Auction Note of the
Borrower payable to the order of the Lender making such Auction
Advance.
SECTION 2.4. Fees. (a) The Borrower agrees to pay to the
Agent for the account of each Lender a commitment fee on the
average daily unused portion of such Lender s Commitment (without
giving effect to any Auction Reduction) from the date hereof in
the case of each Bank, and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the earlier to
occur of the Termination Date and, in the case of the termination
in whole of a Lender s Commitment pursuant to Section 2.05, the
date of such termination, payable on the last day of each March,
June, September and December during such period, and on the
Termination Date, at the rate per annum set forth below
determined by reference to combined Senior Debt Ratings from time
to time of the two Significant Subsidiaries (other than SERI)
having the highest Senior Debt Ratings:
Significant Subsidiary with
highest Senior Debt Rating
A- and BBB+ and BBB- and
Senior A3 or Baa1 or Baa3
Debt Rating above BBB and or split
Baa2 or rated
split above
rated BB+ and/or
above Ba1 or
below or
unrated
A- and A3
or above .125% .1375% .18%
.23%
Significant BBB+ and
Subsidiary Baa1 or
with next BBB and .1375% .17% .1875%
highest Baa2 or
Senior Debt split rated
Rating above
.25%
BBB- and
Baa3 .18% .1875% .20%
or
split rated
above
.30%
BB+ and/or
Ba1 or .23% .25% .30%
below or
unrated
.30%
Any change in the commitment fee will be effective as of the date
on which S&P or Moody s, as the case may be, announces the
applicable change in any Senior Debt Rating.
(b) The Borrower agrees to pay to the Agent for its own
account an auction administration fee in the amount of $2,000 in
respect of each Auction Borrowing requested by the Borrower
pursuant to Section 2.03(a)(i), payable on the date of such
request.
SECTION 2.5. Reduction of the Commitments. (a) The
Borrower shall have the right, upon at least three Business Days
notice to the Agent, to terminate in whole or reduce ratably in
part the unused portions of the respective Commitments of the
Lenders, provided that the aggregate amount of the Commitments of
the Lenders shall not be reduced to an amount that is less than
the aggregate principal amount of the Auction Advances then
outstanding, and provided, further, that each partial reduction
shall be in the aggregate amount of $1,000,000 or an integral
multiple thereof.
(b) Notwithstanding any other provision of this Agreement
or the Notes (and without further notice to the Borrower),
364 days following the date, if any, on which the combined Senior
Debt Ratings of the two Significant Subsidiaries (other than
SERI) having the highest Senior Debt Ratings shall be BB+or Ba1
or below, the Commitments hereunder shall terminate in whole and
this Agreement shall terminate.
SECTION 2.6. Repayment of Contract Advances. The Borrower
shall repay the principal amount of each Contract Advance made by
each Lender in accordance with the Contract Note to the order of
such Lender.
SECTION 2.7. Interest on Contract Advances. The Borrower
shall pay interest on the unpaid principal amount of each
Contract Advance made by each Lender from the date of such
Contract Advance until such principal amount shall be paid in
full, at the following rates per annum:
(a) Base Rate Advances. If such Contract Advance is a
Base Rate Advance, a rate per annum equal at all times to
the Base Rate in effect from time to time, payable quarterly
on the last day of each March, June, September and December
and on the date such Base Rate Advance shall be Converted or
paid in full.
(b) Adjusted CD Rate Advances. If such Contract
Advance is an Adjusted CD Rate Advance, a rate per annum
equal at all times during the Interest Period for such
Contract Advance to the sum of the Adjusted CD Rate for such
Interest Period plus the Applicable Margin for such Adjusted
CD Rate Advance in effect from time to time, payable on the
last day of each Interest Period for such Adjusted CD Rate
Advance and on the date such Adjusted CD Rate Advance shall
be Converted or paid in full and, if such Interest Period
has a duration of more than 90 days, on each day that occurs
during such Interest Period every 90 days from the first day
of such Interest Period.
(c) Eurodollar Rate Advances. Subject to
Section 2.08, if such Contract Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the
Interest Period for such Contract Advance to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable
Margin for such Eurodollar Rate Advance in effect from time
to time, payable on the last day of each Interest Period for
such Eurodollar Rate Advance and on the date such Eurodollar
Rate Advance shall be Converted or paid in full and, if such
Interest Period has a duration of more than three months, on
each day that occurs during such Interest Period every three
months from the first day of such Interest Period.
SECTION 2.8. Additional Interest on Eurodollar Rate
Advances. The Borrower shall pay to each Lender, so long as such
Lender shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender,
from the date of such Contract Advance until such principal
amount is paid in full, at an interest rate per annum equal at
all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Contract Advance
from (i) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage of such Lender for such Interest Period, payable on
each date on which interest is payable on such Contract Advance.
Such additional interest shall be determined by such Lender and
notified to the Borrower through the Agent, and such
determination shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.9. Interest Rate Determination. (a) Each
Reference Bank agrees to furnish to the Agent timely information
for the purpose of determining each Adjusted CD Rate or
Eurodollar Rate, as applicable. If any one or more of the
Reference Banks shall not furnish such timely information to the
Agent for the purpose of determining any such interest rate, the
Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
(b) The Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the
Agent for purposes of Section 2.07(a), (b) or (c), and the
applicable rate, if any, furnished by each Reference Bank for the
purpose of determining the applicable interest rate under
Section 2.07(b) or (c).
(c) If fewer than two Reference Banks furnish timely
information to the Agent for determining the Adjusted CD Rate for
any Adjusted CD Rate Advances, or the Eurodollar Rate for any
Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for
such Adjusted CD Rate Advances or Eurodollar Rate Advances,
as the case may be,
(ii) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert
into a Base Rate Advance (or if such Advance is then a Base
Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make, or to
Convert Contract Advances into, Adjusted CD Rate Advances or
Eurodollar Rate Advances, as the case may be, shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no
longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders notify the Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect
the cost to such Majority Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such
Interest Period, the Agent shall forthwith so notify the Borrower
and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance, and
(ii) the obligation of the Lenders to make, or to
Convert Contract Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower
and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.10. Conversion of Contract Advances.
(a) Voluntary. The Borrower may, upon notice given to the
Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.09 and 2.13, on any
Business Day, Convert all Contract Advances of one Type made in
connection with the same Contract Borrowing into Advances of
another Type; provided, however, that any Conversion of, or with
respect to, any Adjusted CD Rate Advances or Eurodollar Rate
Advances into Advances of another Type shall be made on, and only
on, the last day of an Interest Period for such Adjusted CD Rate
Advances or Eurodollar Rate Advances, unless the Borrower shall
also reimburse the Lenders in respect thereof pursuant to
Section 8.04(b) on the date of such Conversion. Each such notice
of a Conversion (a Notice of Conversion ) shall be by
telecopier, telex or cable, confirmed immediately in writing, in
substantially the form of Exhibit B-3 hereto, specifying therein
(i) the date of such Conversion, (i) the Contract Advances to be
Converted, and (i) if such Conversion is into, or with respect
to, Adjusted CD Rate Advances or Eurodollar Rate Advances, the
duration of the Interest Period for each such Contract Advance.
(b) Mandatory. If a Borrower shall fail to select the Type
of any Contract Advance or the duration of any Interest Period
for any Contract Borrowing comprising Eurodollar Rate Advances or
Adjusted CD Rate Advances in accordance with the provisions
contained in the definition of Interest Period in Section 1.01
and Section 2.10(a), or if any proposed Conversion of a Contract
Borrowing that is to comprise Eurodollar Rate Advances or
Adjusted CD Rate Advances upon Conversion shall not occur as a
result of the circumstances described in paragraph (c) below, the
Agent will forthwith so notify the Borrower and the Lenders, and
such Advances will automatically, on the last day of the then
existing Interest Period therefor, Convert into Base Rate
Advances.
(c) Failure to Convert. Each notice of Conversion given
pursuant to subsection (a) above shall be irrevocable and binding
on the Borrower. In the case of any Contract Borrowing that is
to comprise Eurodollar Rate Advances or Adjusted CD Rate Advances
upon Conversion, the Borrower agrees to indemnify each Lender
against any loss, cost or expense incurred by such Lender if, as
a result of the failure of the Borrower to satisfy any condition
to such Conversion (including, without limitation, the occurrence
of any Prepayment Event or Event of Default, or any event that
would constitute an Event of Default or a Prepayment Event with
notice or lapse of time or both), such Conversion does not occur.
The Borrower s obligations under this subsection (c) shall
survive the repayment of all other amounts owing to the Lenders
and the Agent under this Agreement and the Notes and the
termination of the Commitments.
SECTION 2.11. Prepayments. The Borrower may, upon at least
two Business Days notice to the Agent stating the proposed date
and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding
principal amounts of the Advances made as part of the same
Contract Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (i) each partial
prepayment shall be in an aggregate principal amount not less
than $1,000,000 or any integral multiple of $100,000 in excess
thereof and (i) in the case of any such prepayment of an Adjusted
CD Advance or Eurodollar Rate Advance, the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(b) on the date of such prepayment.
SECTION 2.12. Increased Costs. (a) If, due to either
(i) the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements, in the
case of Adjusted CD Rate Advances, included in the Adjusted CD
Rate Reserve Percentage or, in the case of Eurodollar Rate
Advances, included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation or (i) the
compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Adjusted CD
Rate Advances or Eurodollar Rate Advances, then the Borrower
shall from time to time, upon demand by such Lender (with a copy
of such demand to the Agent), pay to the Agent for the account of
such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to the Borrower and the Agent
by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines that compliance with any law
or regulation or any guideline or request from any central bank
or other governmental authority (whether or not having the force
of law) affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender s
commitment to lend hereunder and other commitments of this type
(including such Lender s commitment to lend hereunder) or the
Advances, then, upon demand by such Lender (with a copy of such
demand to the Agent), the Borrower shall immediately pay to the
Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such
circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the
existence of such Lender s commitment to lend hereunder or the
Advances made by such Lender. A certificate in reasonable detail
as to such amounts submitted to the Borrower and the Agent by
such Lender shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.13. Illegality. Notwithstanding any other
provision of this Agreement, if any Lender shall notify the Agent
that the introduction of or any change in or change in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (i) the obligation of the Lenders to make, or to
Convert Contract Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer
exist and (i) the Borrower shall forthwith prepay in full all
Eurodollar Rate Advances of all Lenders then outstanding,
together with interest accrued thereon, unless the Borrower,
within five Business Days of notice from the Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into
Advances of another Type in accordance with Section 2.10.
SECTION 2.14. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later
than 12:00 noon (New York City time) on the day when due in U.S.
dollars to the Agent at its address referred to in Section 8.02
in same day funds. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or
interest or commitment fees ratably (other than amounts payable
pursuant to Section 2.02(c), 2.03, 2.08, 2.12, 2.15 or 8.04(b))
to the Lenders for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any
other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to
the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments
in such payments for periods prior to such effective date
directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to
the extent payment owed to such Lender is not made when due
hereunder or under any Note held by such Lender, to charge from
time to time to the extent permitted by law against any or all of
the Borrower s accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate
shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of interest based
on the Adjusted CD Rate, the Eurodollar Rate or the Federal Funds
Rate and of commitment fees and interest payable on Auction
Advances shall be made by the Agent, and all computations of
interest pursuant to Section 2.08 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or
commitment fees are payable. Each determination by the Agent
(or, in the case of Section 2.08, by a Lender) of an interest
rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case
may be; provided, however, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be
made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent that the Borrower shall not
have so made such payment in full to the Agent, each Lender shall
repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date
such Lender repays such amount to the Agent, at the Federal Funds
Rate.
(f) Notwithstanding anything to the contrary contained
herein, any amount payable by the Borrower hereunder or under any
Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall (to the fullest extent permitted
by law) bear interest from the date when due until paid in full
at a rate per annum equal at all times to the Base Rate plus 2%,
payable upon demand.
SECTION 2.15. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Contract Notes shall be made, in
accordance with Section 2.14, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender,
taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of such Lender s Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as Taxes ). If the
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any
Lender or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.15) such Lender or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no
such deductions been made, (i) the Borrower shall make such
deductions and (i) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment
made hereunder or under the Notes or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement
or the Notes (hereinafter referred to as Other Taxes ).
(c) The Borrower will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.15) paid by such Lender
or the Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender or the Agent (as
the case may be) makes written demand therefor. Nothing herein
shall preclude the right of the Borrower to contest any such
Taxes or Other Taxes so paid, and the Lenders in question or the
Agent (as the case may be) will, following notice from, and at
the expense of, the Borrower, take such actions as the Borrower
may reasonably request to preserve the Borrower s rights to
contest such Taxes or Other Taxes, and, promptly following
receipt of any refund of amounts with respect to Taxes or Other
Taxes for which such Lenders or the Agent were previously
indemnified under this Section 2.15, pay to the Borrower such
refunded amounts (including any interest paid by the relevant
taxing authority with respect to such amounts).
(d) Prior to the date of the initial Borrowing in the case
of each Bank, and on the date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter if requested by the
Borrower or the Agent, each Lender organized under the laws of a
jurisdiction outside the United States shall provide the Agent
and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Lender
is exempt from United States withholding taxes with respect to
all payments to be made to such Lender hereunder and under the
Notes. If for any reason during the term of this Agreement, any
Lender becomes unable to submit the forms referred to above or
the information or representations contained therein are no
longer accurate in any material respect, such Lender shall notify
the Agent and the Borrower in writing to that effect. Unless the
Borrower and the Agent have received forms or other documents
satisfactory to them indicating that payments hereunder or under
any Note are not subject to United States withholding tax, the
Borrower or, if the Borrower fails to do so, the Agent, shall
withhold taxes from such payments at the applicable statutory
rate in the case of payments to or for any Lender organized under
the laws of a jurisdiction outside the United States.
(e) Any Lender claiming any additional amounts payable
pursuant to this Section 2.15 shall use its best efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable
Lending Office or take other actions customary or otherwise
reasonable under the circumstances if the making of such a change
or the taking of such actions would avoid the need for, or reduce
the amount of, any such additional amounts which may thereafter
accrue and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such Lender.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.15 shall
survive the payment in full of principal and interest hereunder
and under the Notes.
SECTION 2.16. Sharing of Payments, Etc. If any Lender
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of
the Contract Advances made by it (other than pursuant to
Section 2.02(c), 2.08, 2.12, 2.15 or 8.04(b)) in excess of its
ratable share of payments on account of the Contract Advances
obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in the Contract
Advances made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each
of them, provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount
equal to such Lender s ratable share (according to the proportion
of (i) the amount of such Lender s required repayment to (i) the
total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees
that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.16 may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.17. Extension of Termination Date. (a) Unless
the Termination Date shall have occurred, at least 90 but not
more than 180 days prior to the then-effective Termination Date,
the Borrower may request the Lenders, by written notice to the
Agent, to consent to a one-year extension of the Termination
Date. Each Lender shall, in its sole discretion, determine
whether to consent to such request and shall notify the Agent of
its determination within 30 days of such Lender s receipt of
notice of such request. If such request shall have been
consented to by all the Lenders, the Agent shall notify the
Borrower in writing of such consent, and such extension shall
become effective upon the delivery by the Borrower to the Agent
and each Lender, on or prior to the then effective Termination
Date, of (i) a certificate of a duly authorized officer of the
Borrower, dated such date, as to the accuracy, both before and
after giving effect to such proposed extension, of the
representations and warranties set forth in Section 4.01
(including, without limitation, with respect to any required
governmental approvals) and as to the absence, both before and
after giving effect to such proposed extension, of any Prepayment
Event, any Event of Default or any event that with the giving of
notice or the passage of time or both would constitute an Event
of Default and (i) an opinion of counsel to the Borrower as to
the extension of the Termination Date and such other matters as
any Lender, through the Agent, may reasonably request.
(b) Notwithstanding any other provision of this Agreement,
the Termination Date may be extended no more than twice pursuant
to subsection (a) above.
ARTICLE III
CONDITIONS OF LENDING
CONDITIONS OF LENDING;
SECTION 3.1. Condition Precedent to Initial Advances. The
obligation of each Lender to make its initial Advance is subject
to the conditions precedent that on or before the date of such
Advance:
(a) The Agent shall have received the following, each
dated the same date (except for the financial statements
referred to in paragraph (iv) below), in form and substance
satisfactory to the Agent and (except for the Contract
Notes) with one copy for each Lender:
(i) The Contract Notes payable to the order of
each of the Lenders, respectively;
(ii) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this
Agreement and the Notes, and of all documents
evidencing other necessary corporate action with
respect to this Agreement and the Notes;
(iii) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying (A) the
names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the
Notes and the other documents to be delivered
hereunder; (A) that attached thereto are true and
correct copies of the Certificate of Incorporation and
the By-laws of the Borrower, in each case in effect on
such date; and (A) that attached thereto are true and
correct copies of all governmental and regulatory
authorizations and approvals required for the due
execution, delivery and performance of this Agreement
and the Notes, including, without limitation, a copy of
the order (File No. 70-8149) of the SEC under the
Public Utility Holding Company Act of 1935 authorizing
the Borrower s execution, delivery and performance of
this Agreement and the Notes (the SEC Order );
(iv) Copies of the consolidated balance sheets of
the Borrower and its subsidiaries as of December 31,
1994, and the related consolidated statements of
income, retained earnings and cash flows of the
Borrower and its subsidiaries for the fiscal year then
ended, and copies of the consolidated financial
statements of the Borrower and its subsidiaries as of
June 30, 1995, in each case certified by a duly
authorized officer of the Borrower as having been
prepared in accordance with generally accepted
accounting principles consistently applied;
(v) A favorable opinion of counsel for the
Borrower, acceptable to the Agent, substantially in the
form of Exhibit D hereto and as to such other matters
as any Lender through the Agent may reasonably request;
(vi) A favorable opinion of King & Spalding,
Special New York counsel for the Agent, substantially
in the form of Exhibit E hereto; and
(vii) A duly executed and delivered Form U-1,
in the form prescribed by Regulation U issued by the
Board of Governors of the Federal Reserve System.
(b) The Agent shall have received the fees payable
pursuant to the Fee Letter.
SECTION 3.2. Conditions Precedent to Each Contract
Borrowing. The obligation of each Lender to make a Contract
Advance on the occasion of each Contract Borrowing (including the
initial Contract Borrowing) shall be subject to the further
conditions precedent that on the date of such Contract Borrowing
(i) the following statements shall be true (and each of the
giving of the applicable Notice of Contract Borrowing or Notice
of Conversion and the acceptance by the Borrower of any proceeds
of a Contract Borrowing shall constitute a representation and
warranty by the Borrower that on the date of such Contract
Borrowing or Conversion, as applicable, such statements are
true):
(A) The representations and warranties contained
in Section 4.01 (excluding those contained in
subsections (e) and (f) thereof if such Contract
Borrowing does not increase the aggregate outstanding
principal amount of Contract Advances over the
aggregate outstanding principal amount of all Contract
Advances immediately prior to the making of such
Contract Borrowing) are correct on and as of the date
of such Contract Borrowing, before and after giving
effect to such Contract Borrowing and to the
application of the proceeds therefrom, as though made
on and as of such date;
(B) No event has occurred and is continuing, or
would result from such Contract Borrowing or from the
application of the proceeds therefrom, that constitutes
a Prepayment Event or an Event of Default or would
constitute an Event of Default or a Prepayment Event
with notice or lapse of time or both; and
(ii) The Agent shall have received such other
approvals, opinions or documents with respect to the truth
of the foregoing statements (A) and (B) as any Lender
through the Agent may reasonably request.
SECTION 3.3. Conditions Precedent to Each Auction
Borrowing. The obligation of each Lender that is to make an
Auction Advance as part of any Auction Borrowing (including the
initial Auction Borrowing) to make such Auction Advance is
subject to the conditions precedent that on the date of such
Auction Borrowing:
(i) The Agent shall have received the written
confirmatory Notice of Auction Borrowing with respect
thereto;
(ii) The Agent shall have received an Auction Note,
duly executed by the Borrower, payable to the order of such
Lender for each of the Auction Advances to be made by such
Lender as part of such Auction Borrowing, in a principal
amount equal to the principal amount of the Auction Advance
to be evidenced thereby and otherwise on such terms as were
agreed to for such Auction Advance in accordance with
Section 2.03;
(iii) The following statements shall be true (and
each of the giving of the applicable Notice of Auction
Borrowing and the acceptance by a Borrower of the proceeds
of such Auction Borrowing shall constitute a representation
and warranty by the Borrower that on the date of such
Auction Borrowing such statements are true):
(A) The representations and warranties contained
in Section 4.01 are correct on and as of the date of
such Auction Borrowing, before and after giving effect
to such Auction Borrowing and to the application of the
proceeds therefrom, as though made on and as of such
date, and
(B) No event has occurred and is continuing, or
would result from such Auction Borrowing or from the
application of the proceeds therefrom, that constitutes
a Prepayment Event or an Event of Default or that would
constitute an Event of Default or a Prepayment Event
with notice or lapse of time or both; and
(C) The Borrower shall have delivered to the
Agent copies of such other approvals and documents with
respect to the truth of the foregoing statements (A)
and (B) as any Lender through the Agent may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES;
SECTION 4.1. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to
do business as a foreign corporation in each jurisdiction in
which the nature of the business conducted or the property
owned, operated or leased by it requires such qualification,
except where failure to so qualify would not materially
adversely affect its condition (financial or otherwise),
operations, business, properties, or prospects.
(b) The execution, delivery and performance by the
Borrower of this Agreement and the Notes are within the
Borrower s corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene
(i) the Borrower s charter or by-laws, (i) law applicable to
the Borrower or its properties or (i) any contractual or
legal restriction binding on or affecting the Borrower or
its properties.
(c) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution,
delivery and performance by the Borrower of this Agreement
or the Notes, except for the following (each of which has
been duly filed or obtained, and is final and in full force
and effect): (i) the filing of the Declaration on Form U-1
and amendments and exhibits thereto in File No. 70-8149 and
(i) the SEC Order.
(d) This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance
with their respective terms, subject, however, to any
applicable bankruptcy, reorganization, rearrangement,
moratorium or similar laws affecting generally the
enforcement of creditors rights and remedies and to general
principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
(e) The consolidated financial statements of the
Borrower and its subsidiaries as of December 31, 1994 and
for the year ended on such date, as set forth in the
Borrower s Annual Report on Form 10-K for the fiscal year
ended on such date, as filed with the SEC, accompanied by an
opinion of Coopers & Lybrand, and the consolidated financial
statements of the Borrower and its subsidiaries as of June
30, 1995, and for the six-month period ended on such date
set forth in the Borrower s Quarterly Report on Form 10-Q
for the fiscal quarter ended on such date, as filed with the
SEC, copies of each of which have been furnished to each
Bank, fairly present (subject, in the case of such
statements dated June 30, 1995, to year-end adjustments) the
consolidated financial condition of the Borrower and its
subsidiaries as at such dates and the consolidated results
of the operations of the Borrower and its subsidiaries for
the periods ended on such dates, in accordance with
generally accepted accounting principles consistently
applied. Except as disclosed in the Borrower s Quarterly
Report on Form 10-Q for the fiscal period ended June 30,
1995, since December 31, 1994, there has been no material
adverse change in the financial condition or operations of
the Borrower.
(f) Except as disclosed in the Borrower s Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, and the Borrower s Quarterly Report on Form 10-Q for
the period ended June 30, 1995, there is no pending or
threatened action or proceeding affecting the Borrower or
any of its subsidiaries before any court, governmental
agency or arbitrator that, if determined adversely, could
reasonably be expected to have a material adverse effect
upon the condition (financial or otherwise), operations,
business, properties or prospects of the Borrower or on its
ability to perform its obligations under this Agreement or
any Note, or that purports to affect the legality, validity,
binding effect or enforceability of this Agreement or any
Note. There has been no change in any matter disclosed in
such filings that could reasonably be expected to result in
such a material adverse effect.
(g) No event has occurred and is continuing that
constitutes a Prepayment Event or an Event of Default or
that would constitute an Event of Default or a Prepayment
Event but for the requirement that notice be given or time
elapse or both.
(h) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by
the Board of Governors of the Federal Reserve System), and
not more than 25% of the value of the assets of the Borrower
and its subsidiaries subject to the restrictions of
Section 5.02(a), (c) or (d) is, on the date hereof,
represented by margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal
Reserve System).
(i) The Borrower is not an investment company or a
company controlled by an investment company within the
meaning of the Investment Company Act of 1940, as amended,
or an investment advisor within the meaning of the
Investment Company Act of 1940, as amended. The Borrower is
a holding company as that term is defined in, and is
registered under, the Public Utility Holding Company Act of
1935.
(j) No ERISA Termination Event has occurred, or is
reasonably expected to occur, with respect to any ERISA Plan
that may materially and adversely affect the condition
(financial or otherwise), operations, business, properties
or prospects of the Borrower and its subsidiaries, taken as
a whole.
(k) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) with respect to each
ERISA Plan, copies of which have been filed with the
Internal Revenue Service and furnished to the Banks, is
complete and accurate and fairly presents the funding status
of such ERISA Plan, and since the date of such Schedule B
there has been no material adverse change in such funding
status.
(l) The Borrower has not incurred, and does not
reasonably expect to incur, any withdrawal liability under
ERISA to any Multiemployer Plan.
ARTICLE V
COVENANTS OF THE BORROWER
COVENANTS OF THE BORROWER;
SECTION 5.1. Affirmative Covenants. So long as any Note or
any amount payable by the Borrower hereunder shall remain unpaid
or any Lender shall have any Commitment hereunder, the Borrower
will, unless the Majority Lenders shall otherwise consent in
writing:
(a) Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance; Taxes.
(i) keep proper books of record and account, all
in accordance with generally accepted accounting
principles;
(ii) except as otherwise permitted by Section
5.02(c), preserve and keep in full force and effect its
existence and preserve and keep in full force and
effect its licenses, rights and franchises to the
extent necessary to carry on its business;
(iii) maintain and keep, or cause to be
maintained and kept, its properties in good repair,
working order and condition, and from time to time make
or cause to be made all needful and proper repairs,
renewals, replacements and improvements, in each case
to the extent such properties are not obsolete and not
necessary to carry on its business;
(iv) comply in all material respects with all
applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying
before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or
its property, except to the extent being contested in
good faith by appropriate proceedings, and compliance
with ERISA and Environmental Laws;
(v) maintain insurance with responsible and
reputable insurance companies or associations or
through its own program of self-insurance in such
amounts and covering such risks as is usually carried
by companies engaged in similar businesses and owning
similar properties in the same general areas in which
it operates and furnish to the Agent, within a
reasonable time after written request therefor, such
information as to the insurance carried as any Lender,
through the Agent, may reasonably request; and
(vi) pay and discharge its obligations and
liabilities in the ordinary course of business, except
to the extent that such obligations and liabilities are
being contested in good faith by appropriate
proceedings.
(b) Use of Proceeds. The Borrower may use the
proceeds of the Borrowings for only: (i) general corporate
purposes, and (i), subject to the terms and conditions of
this Agreement, repurchases of common stock of the Borrower
and/or investments in nonregulated and/or nonutility
businesses.
(c) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within
60 days after the end of each of the first three
quarters of each fiscal year of the Borrower, (A)
consolidated balance sheets of the Borrower and its
subsidiaries as of the end of such quarter and (A)
consolidated statements of income and retained earnings
of the Borrower and its subsidiaries for the period
commencing at the end of the previous fiscal year and
ending with the end of such quarter, each certified by
the duly authorized officer of the Borrower as having
been prepared in accordance with generally accepted
accounting principles, consistently applied;
(ii) as soon as available and in any event within
120 days after the end of each fiscal year of the
Borrower, a copy of the annual report for such year for
the Borrower and its subsidiaries, containing
consolidated financial statements for such year
certified without qualification by Coopers & Lybrand
(or such other nationally recognized public accounting
firm as the Agent may approve), and certified by a duly
authorized officer of the Borrower as having been
prepared in accordance with generally accepted
accounting principles, consistently applied;
(iii) as soon as available and in any event
within 60 days after the end of each of the first three
quarters of each fiscal year of the Borrower and within
120 days after the end of the fiscal year of the
Borrower, a certificate of the duly authorized officer
of the Borrower, stating that no Prepayment Event or
Event of Default has occurred and is continuing, or if
a Prepayment Event or Event of Default has occurred and
is continuing, a statement setting forth details of
such Prepayment Event or Event of Default, as the case
may be, and the action that the Borrower has taken and
proposes to take with respect thereto;
(iv) as soon as possible and in any event within
five days after the Borrower has knowledge of the
occurrence of each Prepayment Event, Event of Default
and each event that, with the giving of notice or lapse
of time or both, would constitute an Event of Default,
continuing on the date of such statement, a statement
of the duly authorized officer of the Borrower setting
forth details of such Prepayment Event, Event of
Default or event, as the case may be, and the actions
that the Borrower has taken and proposes to take with
respect thereto;
(v) as soon as possible and in any event within
five days after the Borrower receives notice of the
commencement of any litigation against, or any
arbitration, administrative, governmental or regulatory
proceeding involving, the Borrower or any of its
subsidiaries, that, if adversely determined, could
reasonably be expected to have a material adverse
effect on the condition (financial or otherwise),
operations, business, properties or prospects of the
Borrower, notice of such litigation describing in
reasonable detail the facts and circumstances
concerning such litigation and the Borrower s or such
subsidiary s proposed actions in connection therewith;
(vi) promptly after the sending or filing thereof,
copies of all reports that the Borrower sends to any of
its securities holders, and copies of all reports and
registration statements which the Borrower files with
the SEC or any national securities exchange pursuant to
the Securities Act of 1933 or the Exchange Act, and of
all certificates pursuant to Rule 24 which the Borrower
files with the SEC pursuant to the Public Utility
Holding Company Act of 1935 in connection with the
proceeding of the SEC in File No. 70-8149 related to
the SEC Order or any subsequent proceedings related
thereto;
(vii) as soon as possible and in any event
(A) within 30 days after the Borrower knows or has
reason to know that any ERISA Termination Event
described in clause (i) of the definition of ERISA
Termination Event with respect to any ERISA Plan has
occurred and (A) within 10 days after the Borrower
knows or has reason to know that any other ERISA
Termination Event with respect to any ERISA Plan has
occurred, a statement of the chief financial officer of
the Borrower describing such ERISA Termination Event
and the action, if any, that the Borrower proposes to
take with respect thereto;
(viii) promptly and in any event within two
Business Days after receipt thereof by the Borrower
from the PBGC, copies of each notice received by the
Borrower of the PBGC s intention to terminate any ERISA
Plan or to have a trustee appointed to administer any
ERISA Plan;
(ix) promptly and in any event within 30 days
after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series)
with respect to each ERISA Plan;
(x) promptly and in any event within five
Business Days after receipt thereof by the Borrower
from a Multiemployer Plan sponsor, a copy of each
notice received by the Borrower concerning the
imposition of withdrawal liability pursuant to Section
4202 of ERISA;
(xi) promptly and in any event within five
Business Days after Moody s or S&P has changed any
Senior Debt Rating of any Significant Subsidiary,
notice of such change; and
(xii) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its subsidiaries as any Lender
through the Agent may from time to time reasonably
request.
SECTION 5.2. Negative Covenants. So long as any Note or
any amount payable by the Borrower hereunder shall remain unpaid
or any Lender shall have any Commitment hereunder, the Borrower
will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist any Lien
upon or with respect to any of its properties (including,
without limitation, any shares of any class of equity
security of any of its Significant Subsidiaries or of
Entergy New Orleans), in each case to secure or provide for
the payment of Debt, other than: (i) Liens in existence on
the date of this Agreement; (i) Liens for taxes, assessments
or governmental charges or levies to the extent not past
due, or which are being contested in good faith in
appropriate proceedings diligently conducted and for which
the Borrower has provided adequate reserves for the payment
thereof in accordance with generally accepted accounting
principles; (i) pledges or deposits in the ordinary course
of business to secure obligations under worker s
compensation laws or similar legislation; (i) other pledges
or deposits in the ordinary course of business (other than
for borrowed monies) that, in the aggregate, are not
material to the Borrower; (i) purchase money mortgages or
other liens or purchase money security interests upon or in
any property acquired or held by the Borrower in the
ordinary course of business to secure the purchase price of
such property or to secure indebtedness incurred solely for
the purpose of financing the acquisition of such property;
(i) Liens imposed by law such as materialmen s, mechanics ,
carriers , workers and repairmen s Liens and other similar
Liens arising in the ordinary course of business for sums
not yet due or currently being contested in good faith by
appropriate proceedings diligently conducted; (i)
attachment, judgment or other similar Liens arising in
connection with court proceedings, provided that such Liens,
in the aggregate, shall not exceed $50,000,000 at any one
time outstanding, (i) other Liens not otherwise referred to
in the foregoing clauses (i) through (vii) above, provided
that such Liens, in the aggregate, shall not exceed
$100,000,000 at any one time and (i) Liens created for the
sole purpose of extending, renewing or replacing in whole or
in part Debt secured by any Lien referred in the foregoing
clauses (i) through (viii) above, provided that the
principal amount of indebtedness secured thereby shall not
exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement and that
such extension, renewal or replacement, as the case may be,
shall be limited to all or a part of the property or Debt
that secured the Lien so extended, renewed or replaced (and
any improvements on such property); provided, further, that
no Lien permitted under the foregoing clauses (i) through
(ix) shall be placed upon any shares of any class of equity
security of any Significant Subsidiary or of Entergy New
Orleans unless the obligations of the Borrower to the
Lenders hereunder are simultaneously and ratably secured by
such Lien pursuant to documentation satisfactory to the
Lenders.
(b) Limitation on Debt. Permit the total principal
amount of all Debt of the Borrower and its subsidiaries,
determined on a consolidated basis and without duplication
of liability therefor, at any time to exceed 65% of
Capitalization determined as of the last day of the most
recently ended fiscal quarter of the Borrower; provided,
however, that for purposes of this Section 5.02(b) Debt
and Capitalization shall not include (i) Junior
Subordinated Debentures issued to a subsidiary trust which
has issued preferred securities that are included in the
calculation of Capitalization and (i) any Debt of any
subsidiary of the Borrower that is Non-Recourse Debt.
(c) Mergers, Etc. Merge with or into or consolidate
with or into any other Person, except that the Borrower may
merge with any other Person, provided that, immediately
after giving effect to any such merger, (i) the Borrower is
the surviving corporation or (A) the surviving corporation
is organized under the laws of one of the states of the
United States of America and assumes the Borrower s
obligations hereunder in a manner acceptable to the Majority
Lenders, and (A) after giving effect to such merger, the
Senior Debt Ratings of the two Significant Subsidiaries
(other than SERI) having the highest Senior Debt Ratings
shall be at least BBB- and Baa3, (i) no event shall have
occurred and be continuing that constitutes a Prepayment
Event or an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both, and (i) the Borrower shall not be liable
with respect to any Debt or allow its property to be subject
to any Lien which would not be permissible with respect to
it or its property under this Agreement on the date of such
transaction.
(d) Disposition of Assets. Sell, lease, transfer,
convey or otherwise dispose of (whether in one transaction
or in a series of transactions) any shares of voting common
stock (or of stock or other instruments convertible into
voting common stock) of any Significant Subsidiary or of
Entergy New Orleans, or permit any Significant Subsidiary or
Entergy New Orleans to issue, sell or otherwise dispose of
any of its shares of voting common stock (or of stock or
other instruments convertible into voting common stock),
except to the Borrower or a Significant Subsidiary.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
EVENTS OF DEFAULT AND REMEDIES;
SECTION 6.1. Events of Default. Each of the following
events shall constitute an Event of Default hereunder:
(a) The Borrower shall fail to pay any principal of
any Advance when the same becomes due and payable, or shall
fail to pay interest thereon or any other amount payable
under this Agreement or any of the Notes within three
Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the
Borrower herein or by the Borrower (or any of its officers)
in connection with this Agreement shall prove to have been
incorrect or misleading in any material respect when made;
or
(c) The Borrower shall fail to perform or observe
(i) any term, covenant or agreement contained in
Section 5.01(b) or 5.02 or (i) any other term, covenant or
agreement contained in this Agreement on its part to be
performed or observed if the failure to perform or observe
such other term, covenant or agreement shall remain
unremedied for 30 days after written notice thereof shall
have been given to the Borrower by the Agent or any Lender;
or
(d) The Borrower shall fail to pay any principal of or
premium or interest on any Debt of the Borrower that is
outstanding in a principal amount in excess of $50,000,000
in the aggregate (but excluding Debt evidenced by the Notes)
when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or
(e) The Borrower, any Significant Subsidiary or
Entergy New Orleans shall generally not pay its debts as
such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower,
any Significant Subsidiary or Entergy New Orleans seeking to
adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for
any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by
it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall
occur; or the Borrower, any Significant Subsidiary or
Entergy New Orleans shall take any corporate action to
authorize or to consent to any of the actions set forth
above in this subsection (e); or
(f) Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against the Borrower
and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (i)
there shall be any period of 10 consecutive Business Days
during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(g) (i) An ERISA Plan of the Borrower or any ERISA
Affiliate of the Borrower shall fail to maintain the minimum
funding standards required by Section 412 of the Internal
Revenue Code of 1986 for any plan year or a waiver of such
standard is sought or granted under Section 412(d) of the
Internal Revenue Code of 1986, or (i) an ERISA Plan of the
Borrower or any ERISA Affiliate of the Borrower is, shall
have been or will be terminated or the subject of
termination proceedings under ERISA, or (i) the Borrower or
any ERISA Affiliate of the Borrower has incurred or will
incur a liability to or on account of an ERISA Plan under
Section 4062, 4063 or 4064 of ERISA and there shall result
from such event either a liability or a material risk of
incurring a liability to the PBGC or an ERISA Plan, or (i)
any ERISA Termination Event with respect to an ERISA Plan of
the Borrower or any ERISA Affiliate of the Borrower shall
have occurred, and in the case of any event described in
clauses (i) through (iv), (A) such event (if correctable)
shall not have been corrected and (A) the then-present
value of such ERISA Plan s vested benefits exceeds the then-
current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an
ERISA Termination Event involving the withdrawal of a
substantial employer (as defined in Section 4001(a)(2) of
ERISA), the withdrawing employer s proportionate share of
such excess shall exceed such amount).
SECTION 6.2. Remedies. If any Prepayment Event or Event of
Default shall occur and be continuing, then, and in any such
event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (i)
shall at the request, or may with the consent, of the Majority
Lenders, by notice to the Borrower, declare the Notes, all
interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to
the Borrower, any Significant Subsidiary or Entergy New Orleans
under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (A)
the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
THE AGENT;
SECTION 7.1. Authorization and Action. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and
such instructions shall be binding upon all Lenders and all
holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or applicable
law. The Agent agrees to give to each Lender prompt notice of
each notice given to it by the Borrower pursuant to the terms of
this Agreement.
SECTION 7.2. Agent s Reliance, Etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them
under or in connection with this Agreement, except for its or
their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of any Note as the holder thereof until
the Agent receives and accepts an Assignment and Acceptance
entered into by the Lender which is the payee of such Note, as
assignor, and any assignee pursuant to Section 8.07; (i) may
consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (i) makes no warranty or
representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement;
(i) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to
inspect the property (including the books and records) of the
Borrower; (i) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any
lien or security interest created or purported to be created
under or in connection with, this Agreement or any other
instrument or document furnished pursuant hereto; and (i) shall
incur no liability under or in respect of this Agreement by
acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.3. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Notes issued to it,
Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though
it were not the Agent; and the term Lender or Lenders shall,
unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of,
and generally engage in any kind of business with, the Borrower,
any of its subsidiaries and any Person who may do business with
or own securities of the Borrower or any such subsidiary, all as
if Citibank were not the Agent and without any duty to account
therefor to the Lenders.
SECTION 7.4. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
the Agent or any other Lender and based on the financial
statements referred to in Section 4.01(e) and such other
documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.5. Indemnification. The Lenders agree to
indemnify the Agent (to the extent not reimbursed by the
Borrower), ratably according to the respective principal amounts
of the Contract Notes then held by each of them (or if no
Contract Notes are at the time outstanding or if any Contract
Notes are held by Persons which are not Lenders, ratably
according to the respective amounts of their Commitments), from
and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any action taken
or omitted by the Agent under this Agreement, provided that no
Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent
s gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this
Agreement, to the extent that such expenses are reimbursable by
the Borrower but for which the Agent is not reimbursed by the
Borrower.
SECTION 7.6. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by
the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor
Agent, which, for so long as no Prepayment Event or Event of
Default has occurred and is continuing, shall be a Lender and
shall be approved by the Borrower (with such approval not to be
unreasonably withheld or delayed). If no successor Agent shall
have been so appointed by the Majority Lenders and approved by
the Borrower, and shall have accepted such appointment, within 30
days after the retiring Agent s giving of notice of resignation
or the Majority Lenders removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws
of the United States or of any other country that is a member of
the OECD having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent s
resignation or removal hereunder as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this
Agreement. Notwithstanding the foregoing, if no Prepayment Event
or Event of Default, and no event that with the giving of notice
or the passage of time, or both, would constitute an Prepayment
Event or Event of Default, shall have occurred and be continuing,
then no successor Agent shall be appointed under this Section
7.06 without the prior written consent of the Borrower, which
consent shall not be unreasonably withheld or delayed.
ARTICLE VIII
MISCELLANEOUS
MISCELLANEOUS;
SECTION 8.1. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Contract Notes, nor
consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed
by the Majority Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the
Lenders (other than any Lender that is the Borrower or an
Affiliate of the Borrower), do any of the following: (a) waive
any of the conditions specified in Section 3.01, 3.02 or 3.03,
(a) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (a) reduce the principal
of, or interest on, the Contract Notes or any fees or other
amounts payable hereunder, (a) postpone any date fixed for any
payment of principal of, or interest on, the Contract Notes or
any fees or other amounts payable hereunder, (a) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Contract Notes, or the number of Lenders,
which shall be required for the Lenders or any of them to take
any action hereunder or (a) amend this Section 8.01 or Section
2.17(a); and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action,
affect the rights or duties of the Agent under this Agreement or
any Note.
SECTION 8.2. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at 639 Loyola
Avenue, New Orleans, LA 70113, Attention: Treasurer; if to any
Bank, at its Domestic Lending Office specified opposite its name
on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; and if to the Agent, at its
address at 399 Park Avenue, New York, New York 10043, Attention:
Utilities Department, North American Finance Group; or, as to
each party, at such other address as shall be designated by such
party in a written notice to the other parties. All such notices
and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Agent pursuant to
Article II or VII shall not be effective until received by the
Agent. Except as otherwise provided in Section 5.01(c), notices
and other communications given by the Borrower to the Agent shall
be deemed given to the Lenders.
SECTION 8.3. No Waiver; Remedies Remedies;. No failure on
the part of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 8.4. Costs and Expenses; Indemnification
Indemnification;. (a) The Borrower agrees to pay on demand all
costs and expenses incurred by the Agent in connection with the
preparation, execution, delivery, syndication administration,
modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under
this Agreement. Any invoices to the Borrower with respect to the
aforementioned expenses shall describe such costs and expenses in
reasonable detail. The Borrower further agrees to pay on demand
all costs and expenses, if any (including, without limitation,
counsel fees and expenses of outside counsel and of internal
counsel), incurred by the Agent and the Lenders in connection
with the enforcement (whether through negotiations, legal
proceedings or otherwise) of, and the protection of the rights of
the Lenders under, this Agreement, the Notes and the other
documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection
with the enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of, or Conversion of, any
Adjusted CD Rate Advance or Eurodollar Rate Advance is made other
than on the last day of the Interest Period for such Contract
Advance, as a result of a payment or Conversion pursuant to
Section 2.09(d), 2.10 or 2.13, acceleration of the maturity of
the Notes pursuant to Section 6.02, assignment to another Lender
upon demand of the Borrower pursuant to Section 8.07(h) or (i) or
for any other reason, the Borrower shall, upon demand by any
Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss
(including loss of anticipated profits upon such Lender s
representation to the Borrower that it has made reasonable
efforts to mitigate such loss), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other
funds acquired by any Lender to fund or maintain such Contract
Advance. Any Lender making a demand pursuant to this Section
8.04(b) shall provide the Borrower with a written certification
of the amounts required to be paid to such Lender, showing in
reasonable detail the basis for the Lender s determination of
such amounts; provided, however, that no Lender shall be required
to disclose any confidential or proprietary information in any
certification provided pursuant hereto, and the failure of any
Lender to provide such certification shall not affect the
obligations of the Borrower hereunder.
(c) The Borrower hereby agrees to indemnify and hold each
Lender, the Agent and their respective Affiliates and their
respective officers, directors, employees and professional
advisors (each, an Indemnified Person ) harmless from and
against any and all claims, damages, losses, liabilities, costs
or expenses (including reasonable attorney s fees and expenses,
whether or not such Indemnified Person is named as a party to any
proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding) that any of them may incur or
which may be claimed against any of them by any person or entity
by reason of or in connection with the execution, delivery or
performance of this Agreement, the Notes or any transaction
contemplated thereby, or the use by the Borrower or any of its
subsidiaries of the proceeds of any Advance, except that no
Indemnified Person shall be entitled to any indemnification
hereunder to the extent that such claims, damages, losses,
liabilities, costs or expenses are finally determined by a court
of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. The
Borrower s obligations under this Section 8.04(c) shall survive
the repayment of all amounts owing to the Lenders and the Agent
under this Agreement and the Notes and the termination of the
Commitments. If and to the extent that the obligations of the
Borrower under this Section 8.04(c) are unenforceable for any
reason, the Borrower agrees to make the maximum contribution to
the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 8.5. Right of Set-off. Upon (i) the occurrence
and during the continuance of any Event of Default or Prepayment
Event and (i) the making of the request or the granting of the
consent specified by Section 6.02 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of
Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this
Agreement and any Note held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such
Note and although such obligations may be unmatured. Each Lender
agrees promptly to notify the Borrower after any such set-off and
application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off
and application. The rights of each Lender under this Section
8.05 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender
may have.
SECTION 8.6. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, the
Agent and Lenders constituting the Majority Lenders (as defined
in the Original Credit Agreement) and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Agent and each
Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 8.7. Assignments and Participations. (a) Each
Lender may assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment, the Contract Advances owing to it and the Contract
Note or Notes held by it); provided, however, that (i) the
Borrower and the Agent shall have consented to such assignment
(such consent not to be unreasonably withheld or delayed) by
signing the Assignment and Acceptance referred to in clause (iv)
below; (i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this
Agreement (other than any Auction Advances or Auction Notes); (i)
the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $10,000,000 and shall
be an integral multiple of $1,000,000 (or shall be the total
amount of the assigning Lender s Commitment); and (i) the parties
to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment
and Acceptance, together with any Contract Note or Notes subject
to such assignment and a processing and recordation fee of $2,500
(plus an amount equal to out-of-pocket legal expenses of the
Agent, estimated by the Agent and advised to such parties). Upon
such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released
from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion
of an assigning Lender s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
Notwithstanding anything to the contrary contained in this
Agreement, any Lender at any time may assign all or any portion
of its rights and obligations under this Agreement to any
Affiliate of such Lender.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (i) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (i) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01(e)
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (i) such assignee will,
independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement; (i) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (i) such assignee agrees that
it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to
be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitment of, and
principal amount of the Contract Advances owing to, each Lender
from time to time (the Register ). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with
any Contract Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (i) record the information contained
therein in the Register and (i) give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Contract
Note or Notes a new Contract Note to the order of such assignee
in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Contract Note to the order
of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Contract Note or Notes shall
be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Contract Note or Notes,
shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
Exhibit A-1 hereto.
(e) Each Lender may assign to one or more banks or other
entities any Auction Note or Notes held by it, without the
consent of the Borrower.
(f) Each Lender may sell participations to one or more
banks, financial institutions or other entities in or to all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) such Lender s obligations
under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged, (i)
such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (i) such Lender
shall remain the holder of any such Note for all purposes of this
Agreement, and (i) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender s rights and obligations under this
Agreement.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 8.07, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall
agree to preserve the confidentiality of any confidential
information relating to the Borrower received by it from such
Lender.
(h) If any Lender shall fail to consent to the extension of
the Termination Date within 30 days of receipt by such Lender of
notice of any request pursuant to Section 2.17, then upon
termination of such 30-day period, the Borrower may demand that
such Lender assign in accordance with this Section 8.07 to one or
more assignees designated by the Borrower and acceptable to the
Majority Lenders (provided that, for purposes of this
determination by the Majority Lenders, the non-consenting Lender
shall not be included in the Lenders holding Contract Advances or
having Commitments) all (but not less than all) of such Lender s
Commitment and the Contract Advances owing to it within the next
15 days. If any such assignee designated by the Borrower shall
fail to consummate such assignment on terms acceptable to such
Lender, or if the Borrower shall fail to designate any such
assignee for all of such Lender s Commitment or Advances, then
such Lender may assign such Commitment and Advances to any other
assignee acceptable to the Majority Lenders (provided that, for
purposes of this determination by the Majority Lenders, the non-
consenting Lender shall not be included in the Lenders holding
Contract Advances or having Commitments) in accordance with this
Section 8.07 during such 15-day period; it being understood for
purposes of this Section 8.07(h) that such assignment shall be
conclusively deemed to be on terms acceptable to such Lender, and
such Lender shall be compelled to consummate such assignment to
an assignee designated by the Borrower, if such assignee
(i) shall agree to such assignment in substantially the form of
Exhibit C hereto and (i) shall offer compensation to such Lender
in an amount equal to the sum of the principal amount of all
Contract Advances outstanding to such Lender plus all interest
accrued thereon to the date of such payment plus all other
amounts payable by the Borrower to such Lender hereunder (whether
or not then due) as of the date of such payment accrued in favor
of such Lender hereunder.
(i) If any Lender shall make any demand for payment under
Section 2.12 or 2.15, or if any Lender shall be the subject of
any notification or assertion of illegality under Section 2.13,
then within 30 days after any such demand (if, but only if, such
demanded payment has been made by the Borrower) or notification
or assertion, the Borrower may, with the approval of the Agent
(which approval shall not be unreasonably withheld) and provided
that no Prepayment Event, Event of Default or event that, with
the giving of notice or lapse of time or both, would constitute
an Event of Default, shall then have occurred and be continuing,
demand that such Lender assign in accordance with this Section
8.07 to one or more assignees designated by the Borrower and
acceptable to the Majority Lenders (provided that, for purposes
of this determination by the Majority Lenders, the Lender making
a demand for payment or subject to a notification or assertion of
illegality shall not be included in the Lenders holding Contract
Advances or having Commitments) all (but not less than all) of
such Lender s Commitment and the Contract Advances owing to it
within the period ending on the later to occur of such 30th day
and the last day of the longest of the then current Interest
Periods for such Advances. If any such assignee designated by
the Borrower and approved by the Majority Lenders shall fail to
consummate such assignment on terms acceptable to such Lender, or
if the Borrower shall fail to designate any such assignees
acceptable to the Majority Lenders for all or part of such Lender
s Commitment or Advances, then such demand by the Borrower shall
become ineffective; it being understood for purposes of this
subsection (i) that such assignment shall be conclusively deemed
to be on terms acceptable to such Lender, and such Lender shall
be compelled to consummate such assignment to an Eligible
Assignee designated by the Borrower, if such Eligible Assignee
(A) shall agree to such assignment by entering into an Assignment
and Acceptance with such Lender and (A) shall offer compensation
to such Lender in an amount equal to all amounts then owing by
the Borrower to such Lender hereunder and under the Note made by
the Borrower to such Lender, whether for principal, interest,
fees, costs or expenses (other than the demanded payment referred
to above and payable by the Borrower as a condition to the
Borrower s right to demand such assignment), or otherwise. In
addition, in the event that the Borrower shall be entitled to
demand the replacement of any Lender pursuant to this subsection
(i), the Borrower may, in the case of any such Lender, with the
approval of the Agent (which approval shall not be unreasonably
withheld) and provided that no Prepayment Event, Event of Default
or event that, with the giving of notice or lapse of time or
both, would constitute an Event of Default, shall then have
occurred and be continuing, terminate all (but not less than all)
such Lender s Commitment and prepay all (but not less than all)
such Lender s Advances not so assigned, together with all
interest accrued thereon to the date of such prepayment and all
fees, costs and expenses and other amounts then owing by the
Borrower to such Lender hereunder and under the Note made by the
Borrower to such Lender, at any time from and after such later
occurring day in accordance with Sections 2.05 and 2.11 hereof
(but without the requirement stated therein for ratable treatment
of the other Lenders), if and only if, after giving effect to
such termination and prepayment, the sum of the aggregate
principal amount of the Advances of all Lenders then outstanding
does not exceed the then remaining Commitments of the Lenders.
Notwithstanding anything set forth above in this subsection (i)
to the contrary, the Borrower shall not be entitled to compel the
assignment by any Lender demanding payment under Section 2.12(a)
of its Commitment and Advances or terminate and prepay the
Commitment and Advances of such Lender if, prior to or promptly
following any such demand by the Borrower, such Lender shall have
changed or shall change, as the case may be, its Applicable
Lending Office for its Eurodollar Rate Advances so as to
eliminate the further incurrence of such increased cost. In
furtherance of the foregoing, any such Lender demanding payment
or giving notice as provided above agrees to use reasonable
efforts to so change its Applicable Lending Office if, to do so,
would not result in the incurrence by such Lender of additional
costs or expenses which it deems material or, in the sole
judgment of such Lender, be inadvisable for regulatory,
competitive or internal management reasons.
(j) Anything in this Section 8.07 to the contrary
notwithstanding, any Lender may assign and pledge all or any
portion of its Commitment and the Advances owing to it to any
Federal Reserve Bank (and its transferees) as collateral security
pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
SECTION 8.8. Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 8.9. Consent to Jurisdiction; Waiver of Jury Trial
Waiver of Jury Trial;. (a) To the fullest extent permitted by
law, the Borrower hereby irrevocably (i) submits to the non-
exclusive jurisdiction of any New York State or Federal court
sitting in New York City and any appellate court from any thereof
in any action or proceeding arising out of or relating to this
agreement or any other Loan Document, and (i) agrees that all
claims in respect of such action or proceeding may be heard and
determined in such New York State court or in such Federal court.
The Borrower hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Borrower also
irrevocably consents, to the fullest extent permitted by law, to
the service of any and all process in any such action or
proceeding by the mailing by certified mail of copies of such
process to the Borrower at its address specified in Section 8.02.
The Borrower agrees, to the fullest extent permitted by law, that
a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(b) THE BORROWER, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY NOTE, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
SECTION 8.10. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
ENTERGY CORPORATION
By
Name: William J. Regan Jr.
Title: Vice President and Treasurer
CITIBANK, N.A.,
as Agent
By
Name:
Title:
Banks
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By
Name:
Title:
THE BANK OF NEW YORK
By
Name:
Title:
THE CHASE MANHATTAN BANK
By
Name:
Title:
CITIBANK, N.A.
By
Name:
Title:
UNION BANK OF SWITZERLAND
By
Name:
Title:
By
Name:
Title:
ABN AMRO BANK N.V.
By
Name:
Title:
By
Name:
Title:
THE BANK OF NOVA SCOTIA
By
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
By
Name:
Title:
MELLON BANK, N.A.
By
Name:
Title:
FIRST NATIONAL BANK OF
COMMERCE
By
Name:
Title:
WHITNEY NATIONAL BANK
By
Name:
Title:
<PAGE>
SCHEDULE I
ENTERGY CORPORATION
$300,000,000 Credit Agreement
Name of Bank Domestic Eurodollar CD
Lending Office Lending Office Lending Office
ABN AMRO Bank 135 South LaSalle 135 South LaSalle 135 South LaSalle
N.V. Street Street Street
Suite 711 Suite 711 Suite 711
Chicago, IL 60603 Chicago, IL 60603 Chicago, IL 60603
Attn: Peter D. Gaw/ Attn: Peter D. Gaw/ Attn: Peter D. Gaw/
Kevin S. Kevin S. Kevin S.
McFadden McFadden McFadden
Telephone: 312-904- Telephone: 312-904- Telephone: 312-904-
2065 2065 2065
312- 312- 312-
904-2131 904-2131 904-2131
Fax: 312-904-6387 Fax: 312-904-6387
Fax: 312-904-6387
Bank of America 333 S. Beaudry 333 S. Beaudry 333 S. Beaudry
National Trust & Avenue Avenue Avenue
Savings 19th Floor 19th Floor 19th Floor
Association Los Angeles, CA Los Angeles, CA Los Angeles, CA
90017 90017 90017
Attn: Yolanda Attn: Yolanda Attn: Yolanda
Harper Harper Harper
Telephone: 213-345- Telephone: 213-345- Telephone: 312-345-
6536 6536 6536
Fax: 213-345-6550 Fax: 213-345-6550
Fax: 213-345-6550
The Bank of New 1 Wall Street 1 Wall Street 1 Wall Street
York New York, NY 10286 New York, NY 10286 New York, NY 10286
Attn: Dennis M. Attn: Dennis M. Attn: Dennis M.
Pidherny/ Pidherny/ Pidherny/
Jo-Anne Evans Jo-Anne Evans Jo-Anne Evans
Telephone: 212-635- Telephone: 212-635- Telephone: 212-635-
7547 7547 7923
Fax: 212-635-7923 Fax: 212-635-7923
Fax: 212-635-7923
The Bank of Nova 600 Peachtree 600 Peachtree 600 Peachtree
Scotia Street N.E. Street N.E. Street N.E.
Atlanta, GA 30308 Atlanta, GA 30308 Atlanta, GA 30308
Attn: F.C.H. Ashby Attn: F.C.H. Ashby Attn: F.C.H. Ashby
Telephone: 404-877- Telephone: 404-877- Telephone: 404-877-
1500 1500 1500
Fax: 404-888-8998 Fax: 404-888-8998
Fax: 404-888-8998
CIBC, Inc. 2727 Paces Ferry 2727 Paces Ferry 2727 Paces Ferry
Road Road Road
Two Paces West Two Paces West Two Paces West
Suite 1200 Suite 1200 Suite 1200
Atlanta, GA 30339 Atlanta, GA 30339 Atlanta, GA 30339
Attn: Debra Attn: Debra Attn: Debra
Quintero Quintero Quintero
Telephone: 404-319- Telephone: 404-319- Telephone: 404-319-
4823 4823 4823
Fax: 404-319-4950 Fax: 404-319-4950
Fax: 404-319-4950
The Chase 270 Park Avenue 270 Park Avenue 270 Park Avenue
Manhattan New York, NY 10017 New York, NY 10017 New York, NY 10017
Bank Attn: John F. Attn: John F. Attn: John F.
Gahebe Gahebe Gahebe
Telephone: 212-270- Telephone: 212-270- Telephone: 212-270-
3531 3531 3531
Fax: 212-270-4711 Fax: 212-270-4711
Fax: 212-270-4711
Citibank, N.A. One Court Square One Court Square One Court Square
Seventh Floor, Zone Seventh Floor, Zone Seventh Floor, Zone
1 1 1
Long Island City, Long Island City, Long Island City,
NY 11120 NY 11120 NY 11120
Attn: John Mann Attn: John Mann Attn: John Mann
Telephone: 718-248- Telephone: 718-248- Telephone: 718-248-
4504 4504 4504
Fax: 718-248-4844 Fax: 718-248-4844
Fax: 718-248-4844
First National 201 St. Charles 201 St. Charles 201 St. Charles
Bank of Avenue Avenue Avenue
Commerce 28th Floor 28th Floor 28th Floor
New Orleans, LA New Orleans, LA New Orleans, LA
70170 70170 70170
Attn: J. Charles Attn: J. Charles Attn: J. Charles
Freel, Jr. Freel, Jr. Freel, Jr.
Telephone: 504-623- Telephone: 504-623- Telephone: 504-623-
1638 1638 1638
Fax: 504-623-1316 Fax: 504-623-1316
Fax: 504-623-1316
Mellon Bank, Three Mellon Bank Three Mellon Bank Three Mellon Bank
N.A. Center Center Center
Room 2332 Room 2332 Room 2332
Pittsburgh, PA Pittsburgh, PA Pittsburgh, PA
15259 15259 15259
Attn: Suzanne Cooke Attn: Suzanne Cooke Attn: Suzanne Cooke
Telephone: 412-236- Telephone: 412-236- Telephone: 412-236-
0437 0437 0437
Fax: 412-236-2027 Fax: 412-236-2027
Fax: 412-236-2027
Union Bank of 299 Park Avenue 299 Park Avenue 299 Park Avenue
Switzerland New York, NY 10171 New York, NY 10171 New York, NY 10171
Attn: Michael Flynn Attn: Michael Flynn Attn: Michael Flynn
Telephone: 212-821- Telephone: 212-821- Telephone: 212-821-
3705 3705 3705
Fax: 212-821-3259 Fax: 212-821-3259
Fax: 212-821-3259
Whitney National 228 St. Charles 228 St. Charles 228 St. Charles
Bank Avenue Avenue Avenue
New Orleans, LA New Orleans, LA New Orleans, LA
70130 70130 70130
Attn: Patricia E. Attn: David Damour Attn: David Damour
Taylor Telephone: 504-586- Telephone: 504-586-
Telephone: 504-586- 2479 2479
7208 Fax: 504-586-3502
Fax: 504-586-7383
Fax: 504-586-3502
<PAGE>
SCHEDULE III
COMMITMENT SCHEDULE
Name of Lender
Commitment Amount
Bank of America National Trust & Savings
Association
$36,000,000
The Bank of New York
$36,000,000
The Chase Manhattan Bank
$36,000,000
Citibank, N.A.
$36,000,000
Union Bank of Switzerland
$36,000,000
ABN Amro Bank N.V.
$25,000,000
The Bank of Nova Scotia
$25,000,000
Canadian Imperial Bank of Commerce
$25,000,000
Mellon Bank, N.A.
$25,000,000
First National Bank of Commerce
$10,000,000
Whitney National Bank
$10,000,000
Total Commitment:
$300,000,000
<PAGE>
EXHIBIT A-1
FORM OF CONTRACT NOTE
U.S.$ Dated:
, 19
FOR VALUE RECEIVED, the undersigned, ENTERGY CORPORATION, a
Delaware corporation (the Borrower ), HEREBY PROMISES TO PAY to
the order of (the
Lender ) for the account of its Applicable Lending Office (such
term and other capitalized terms herein being used as defined in
the Credit Agreement referred to below) the principal sum of
U.S.$10,000,000 or, if less, the aggregate principal amount of
the Contract Advances made by the Lender to the Borrower pursuant
to the Credit Agreement outstanding on the Termination Date,
payable on the Termination Date.
The Borrower promises to pay interest on the unpaid
principal amount of each Contract Advance from the date of such
Contract Advance until such principal amount is paid in full, at
such interest rates, and payable at such times, as are specified
in the Credit Agreement.
Both principal and interest are payable in lawful money of
the United States of America to Citibank, N.A., as Agent, at 399
Park Avenue, New York, New York 10043, in same day funds. Each
Contract Advance made by the Lender to the Borrower pursuant to
the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which
is part of this Promissory Note.
This Promissory Note is one of the Contract Notes referred
to in, and is entitled to the benefits of, the Amended and
Restated Credit Agreement, dated as of , 1996
(the Credit Agreement ), among the Borrower, the Lender and
certain other banks parties thereto, and Citibank, N.A., as Agent
for the Lender and such other banks. The Credit Agreement, among
other things, (i) provides for the making of Contract Advances by
the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar
amount first above mentioned, the indebtedness of the Borrower
resulting from each such Contract Advance being evidenced by this
Promissory Note, and (i) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein
specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ENTERGY CORPORATION
By
Name:
Title:
<PAGE>
ADVANCES, MATURITIES AND PAYMENTS OF PRINCIPAL
Date Amount of Interest Principal Amount of Unpaid
Advance Period Paid or Principal Balance
(if any) Prepaid Notation Made By
of Advance
<PAGE>
EXHIBIT A-2
FORM OF AUCTION NOTE
U.S.$______________ Dated: __________, 19__
FOR VALUE RECEIVED, the undersigned, ENTERGY CORPORATION,
a Delaware corporation (the Borrower ), HEREBY PROMISES TO PAY
to the order of (the Lender ) for
the account of its Applicable Lending Office (as defined in the
Credit Agreement referred to below), on , 19 , the
principal amount of Dollars ($ ).
The Borrower promises to pay interest on the unpaid
principal amount hereof from the date hereof until such principal
amount is paid in full, at the interest rate and payable on the
interest payment date or dates provided below:
[Interest Rate: ____% per annum] [or] [Description
of Interest Rate Basis and Margin] (calculated on
the basis of a year of ____ days for the actual
number of days elapsed).
Interest Payment Date or Dates: __________
Prepayment terms:______________________
Both principal and interest are payable in lawful money of
the United States of America to or the
account of the Lender at the office of Citibank, N.A., as Agent,
at 399 Park Avenue, New York, New York 10043, in same day funds,
free and clear of and without any deduction, with respect to the
payee named above, for any and all present and future taxes,
deductions, charges or withholdings, and all liabilities with
respect thereto to the extent and in the manner provided in the
Credit Agreement.
This Promissory Note is one of the Auction Notes referred
to in, and is entitled to the benefits of, the Amended and
Restated Credit Agreement, dated as of __________ ___, 1996 (the
Credit Agreement ), among the Borrower, the Lender and certain
other banks parties thereto, and Citibank, N.A., as Agent for the
Lender and such other banks. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest
and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ENTERGY CORPORATION
By
Name:
Title:
<PAGE>
EXHIBIT B-1
FORM OF NOTICE OF CONTRACT BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, Entergy Corporation, refers to the
Amended and Restated Credit Agreement, dated as of __________
___, 1996 (the Credit Agreement , the terms defined therein
being used herein as therein defined), among the undersigned,
certain Lenders parties thereto and Citibank, N.A., as Agent for
said Lenders, and hereby gives you notice, irrevocably, pursuant
to Section 2.02 of the Credit Agreement that the undersigned
hereby requests a Contract Borrowing under the Credit Agreement,
and in that connection sets forth below the information relating
to such Contract Borrowing (the Proposed Contract Borrowing ) as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Contract Borrowing
is , 19 .
(i) The Type of Contract Advances to be made in
connection with the Proposed Contract Borrowing is [Adjusted CD
Rate Advances] [Base Rate Advances] [Eurodollar Rate Advances].
(i) The aggregate amount of the Proposed Contract
Borrowing is $ .
(iv) The Interest Period for each Contract Advance made as
part of the Proposed Contract Borrowing is [ days] [
month[s]].
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Contract Borrowing:
(A) the representations and warranties contained in
Section 4.01 of the Credit Agreement are correct, before
and after giving effect to the Proposed Contract Borrowing
and to the application of the proceeds therefrom, as
though made on and as of such date; and
(A) no event has occurred and is continuing, or would
result from such Proposed Contract Borrowing or from the
application of the proceeds therefrom, that constitutes a
Prepayment Event or an Event of Default or would
constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
Very truly yours,
ENTERGY CORPORATION
By
Name:
Title:
<PAGE>
EXHIBIT B-2
FORM OF NOTICE OF AUCTION BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, Entergy Corporation, refers to the
Amended and Restated Credit Agreement, dated as of __________
___, 1996 (the Credit Agreement , the terms defined therein
being used herein as therein defined), among the undersigned,
certain Lenders parties thereto and Citibank, N.A., as Agent for
said Lenders, and hereby gives you notice pursuant to Section
2.03 of the Credit Agreement that the undersigned hereby requests
an Auction Borrowing under the Credit Agreement, and in that
connection sets forth the terms on which such Auction Borrowing
(the Proposed Auction Borrowing ) is requested to be made:
(A) Date of Auction Borrowing
(A) Amount of Auction Borrowing
(A) Maturity Date
(A) Interest Rate Basis and Margin
(A) Interest Computation Basis
(A) Interest Payment Date(s)
(A) Prepayment
(H)
(I)
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Auction Borrowing:
(a) the representations and warranties contained in
Section 4.01 of the Credit Agreement are correct, before
and after giving effect to the Proposed Auction Borrowing
and to the application of the proceeds therefrom, as
though made on and as of such date;
(a) no event has occurred and is continuing, or would
result from the Proposed Auction Borrowing or from the
application of the proceeds therefrom, that constitutes a
Prepayment Event or an Event of Default or would
constitute an Event of Default but for the requirement
that notice be given or time elapse or both; and
(a) the aggregate amount of the Proposed Auction
Borrowing and all other Borrowings to be made on the same
day under the Credit Agreement is within the aggregate
amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed Auction
Borrowing is to be made available to it in accordance with
Section 2.03(a)(v) of the Credit Agreement.
Very truly yours,
ENTERGY CORPORATION
By
Name:
Title:
<PAGE>
EXHIBIT B-3
FORM OF NOTICE OF CONVERSION
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, Entergy Corporation, refers to the
Amended and Restated Credit Agreement, dated as of
, 1996 (the Credit Agreement , the terms defined therein being
used herein as therein defined), among the undersigned, certain
Lenders party thereto and Citibank, N.A., as Agent for said
Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.10 of the Credit Agreement, that the undersigned hereby
requests a Conversion under the Credit Agreement, and in that
connection sets forth below the information relating to such
Conversion (the Proposed Conversion ) as required by
Section 2.10 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is
__________, _____.
(i) The Type of Advances comprising the Proposed
Conversion is [Adjusted CD Rate Advances] [Base Rate
Advances] [Eurodollar Rate Advances].
(i) The aggregate amount of the Proposed Conversion is
$__________.
(i) The Type of Advances to which such Advances are
proposed to be Converted is [Adjusted CD Rate Advances]
[Base Rate Advances] [Eurodollar Rate Advances].
(i) The Interest Period for each Advance made as part
of the Proposed Conversion is [ days]
[ month(s)].*
The undersigned hereby represents and warrants that
the following statements are true on the date hereof, and
will be true on the date of the Proposed Conversion:
(A) The Borrower s request for the Proposed Conversion
is made in compliance with Section 2.10 of the Credit
Agreement; and
(A) The statements contained in Section 3.02 of the
Credit Agreement are true.
Very truly yours,
ENTERGY CORPORATION
By
Title:
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ___________, 19__
Reference is made to the Amended and Restated Credit
Agreement, dated as of __________ ___, 1996 (as amended, modified
or supplemented from time to time, the Credit Agreement ), among
Entergy Corporation, a corporation (the Borrower
), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as Agent for the Lenders (the Agent ). Terms defined in
the Credit Agreement are used herein with the same meaning.
(the Assignor ) and (the
Assignee ) agree as follows:
(a) The Assignor hereby sells and assigns to the Assignee
without recourse, and the Assignee hereby purchases and assumes
from the Assignor, that interest in and to all of the Assignor s
rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Auction Advances and Auction
Notes) which represents the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the
Credit Agreement (other than in respect of Auction Advances and
Auction Notes), including, without limitation, such interest in
the Assignor s Commitment, the Contract Advances owing to the
Assignor, and the Contract Note[s] held by the Assignor. After
giving effect to such sale and assignment, the Assignee s
Commitment and the amount of the Contract Advances owing to the
Assignee will be as set forth in Section 2 of Schedule 1.
(b) The Assignor (A) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any
adverse claim; (B) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; (C) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any
of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and
(D) attaches the Contract Note[s] referred to in paragraph 1
above and requests that the Agent exchange such Contract Note[s]
for a new Contract Note payable to the order of the Assignee in
an amount equal to the Commitment assumed by the Assignee
pursuant hereto or new Contract Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to
the Commitment retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
Except as specified in this Section 2, the assignment hereunder
shall be without recourse to the Assignor.
(c) The Assignee (A) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial
statements referred to in Section 4.01 thereof and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this
Assignment and Acceptance; (B) agrees that it will, independently
and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (C) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental
thereto; (D) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; [and]
(E) specifies as its CD Lending Office, Domestic Lending Office
(and address for notices) and Eurodollar Lending Office the
offices set forth beneath its name on the signature pages hereof
[and (vi) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that it is exempt from
United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement and the
Notes].
(d) Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, it will be delivered
to the Agent for acceptance and recording by the Agent. The
effective date of this Assignment and Acceptance shall be the
date of acceptance thereof by the Agent, unless otherwise
specified on Schedule 1 hereto (the Effective Date ); provided,
however, that in no event shall this Assignment and Acceptance
become effective prior to the payment for the processing and
recordation fee to the Agent as provided in Section 8.07(a) of
the Credit Agreement.
(e) Upon such acceptance and recording by the Agent, as
of the Effective Date, (A) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender
thereunder and (B) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
(f) Upon such acceptance and recording by the Agent, from
and after the Effective Date, the Agent shall make all payments
under the Credit Agreement and the Contract Notes in respect of
the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit
Agreement and the Contract Notes for periods prior to the
Effective Date directly between themselves.
(g) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
(h) This Assignment and Acceptance may be signed in any
number of counterparts, each of which shall be deemed an
original, with the same effect as if the signatures thereto and
hereto were up on the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective
officers thereunto duly authorized, as of the date first above
written, such execution being made on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By
Name:
Title:
[NAME OF ASSIGNEE]
By
Name:
Title:
CD Lending Office:
[Address]
Domestic Lending Office (and
address for notices):
[Address]
<PAGE>
Eurodollar Lending Office:
[Address]
Accepted this day
of , 19
CITIBANK, N.A., as Agent
By
Name:
Title:
Schedule 1
to
Assignment and Acceptance
Dated __________, 19__
Section (i)
Percentage Interest: %
Section (j)
Assignee s Commitment: $
Aggregate Outstanding Principal
Amount of Contract Advances owing to the Assignee: $
A Contract Note payable to the order of the Assignee
Dated: _________, 19__
Principal amount: $
[A Contract Note payable to the order of the Assignor
Dated: _________, 19__
Principal amount: $ ]
Section (k)
Effective Date : _________, 19__
<PAGE>
EXHIBIT D
FORM OF OPINION OF
COUNSEL FOR THE BORROWER
[Date]
To each of the Lenders parties to the
Credit Agreement referred to on the
Signature Page Hereof and to
Citibank, N.A., as Agent
Entergy Corporation
Ladies and Gentlemen:
I have acted as counsel to Entergy Corporation, a Delaware
corporation (the Borrower ), in connection with the preparation,
execution and delivery of the Amended and Restated Credit
Agreement, dated as of ______________ ___, 1996, by and among the
Borrower, the Banks parties thereto and the other Lenders from
time to time parties thereto and Citibank, N.A., as Agent. This
opinion is furnished to you at the request of the Borrower
pursuant to 3.01(a)(v) of the Credit Agreement. Unless
otherwise defined herein or unless the context otherwise
requires, terms defined in the Credit Agreement are used herein
as therein defined.
In such capacity, I have examined:
(i) Counterparts of the Credit Agreement, executed by
the Borrower;
(ii) The Contract Notes, executed by the Borrower;
(iii) The form of the Auction Notes to be executed
and delivered by the Borrower in connection with
Auction Borrowings;
(iv) The Certificate of Incorporation of the Borrower
(the Charter );
(v) The Bylaws of the Borrower (the Bylaws );
(vi) A certificate of the Secretary of State of the
State of Delaware, dated __________, 1996,
attesting to the continued corporate existence
and good standing of the Borrower in that State;
(vii) A Certificate of the Secretary of State of
the State of Louisiana, dated __________, 1996,
attesting that the Borrower is a foreign
corporation duly qualified to conduct business in
that state;
(viii) A copy of the Order dated July 27, 1995, of
the Securities and Exchange Commission (File No.
70-8149) under the Public Utility Holding Company
Act of 1935 (the SEC Order ); and
(ix) The other documents furnished by the Borrower to
the Agent pursuant to Section 3.01(a) of the
Credit Agreement.
I have also examined such other corporate records of the
Borrower, certificates of public officials and of officers of the
Borrower, and agreements, instruments and other documents, as I
have deemed necessary as a basis for the opinions expressed
below.
In my examination, I have assumed the genuineness of all
signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, and
the conformity with the originals of all documents submitted to
me as copies. In making my examination of documents and
instruments executed or to be executed by persons other than the
Borrower, I have assumed that each such other person had the
requisite power and authority to enter into and perform fully its
obligations thereunder, the due authorization by each such other
person for the execution, delivery and performance thereof and
the due execution and delivery thereof by or on behalf of such
person of each such document and instrument. In the case of any
such person that is not a natural person, I have also assumed,
insofar as it is relevant to the opinions set forth below, that
each such other person is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it was
created, and is duly qualified and in good standing in each other
jurisdiction where the failure to be so qualified could
reasonably be expected to have a material effect upon its ability
to execute, deliver and/or perform its obligations under any such
document or instrument. I have further assumed that each
document, instrument, agreement, record and certificate reviewed
by me for purposes of rendering the opinions expressed below has
not been amended by any oral agreement, conduct or course of
dealing between the parties thereto.
As to questions of fact material to the opinions expressed
herein, I have relied upon certificates and representations of
officers of the Borrower (including but not limited to those
contained in the Credit Agreement and certificates delivered upon
the execution and delivery of the Credit Agreement) and of
appropriate public officials, without independent verification of
such matters except as otherwise described herein.
Whenever my opinions herein with respect to the existence
or absence of facts are stated to be to my knowledge or
awareness, it is intended to signify that no information has come
to my attention or the attention of other counsel working under
my direction in connection with the preparation of this opinion
letter that would give me or them actual knowledge of the
existence or absence of such facts. However, except to the
extent expressly set forth herein, neither I nor they have
undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to my or
their knowledge of the existence or absence of such facts should
be assumed.
On the basis of the foregoing, having regard for such legal
consideration as I deem relevant, and subject to the other
limitations and qualifications contained in this letter, I am of
the opinion that:
(l) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business as a foreign
corporation in each jurisdiction in which the nature of the
business conducted or the property owned, operated or leased by
it requires such qualification.
(m) The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within the
Borrower s corporate powers, have been duly authorized by all
necessary corporate action and do not contravene (i) the Charter
or the Bylaws or (ii) law or (iii) any contractual or legal
restriction binding on or affecting the Borrower. The Credit
Agreement and the Contract Notes have been duly executed and
delivered on behalf of the Borrower. When completed in the form
thereof attached as Exhibit A-2 to the Credit Agreement, and
executed by an authorized officer of the Borrower and delivered
on behalf of the Borrower, each Auction Note will have been duly
executed and delivered by the Borrower.
(n) No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Borrower of the Credit Agreement and the
Notes, except for the SEC Order, which has been obtained, is
final and in full force and effect, and is not the subject of any
appeal.
(o) Except as disclosed in the Borrower s Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, and in the
Borrower s Quarterly Report on Form 10-Q for the period ended
September 30, 1996, there is no pending or, to the best of my
knowledge, threatened action or proceeding affecting the Borrower
or any of its subsidiaries before any court, governmental agency
or arbitrator that reasonably could be expected to affect
materially and adversely the condition (financial or otherwise),
operations, business, properties or prospects of the Borrower or
its ability to perform its obligations under the Credit Agreement
or any Note, or that purports to affect the legality, validity,
binding effect or enforceability of the Credit Agreement or any
Note. To the best of my knowledge, after inquiry, there has been
no change in any matter disclosed in such filings that reasonably
could be expected to result in such a material adverse effect.
(p) The Borrower is no an investment company or a
company controlled by an investment company , within the
meaning of the Investment Company Act of 1940, as amended, or an
investment adviser within the meaning of the Investment Advisers
Act of 1940, as amended.
(q) The Credit Agreement and the Contract Notes
constitute, and the Auction Notes, when completed in the form
thereof attached as Exhibit A-2 to the Credit Agreement and
executed by an authorized officer of the Borrower and delivered
on behalf of the Borrower in accordance with the terms of the
Credit Agreement, will constitute, the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
My opinions above are subject to the following
qualifications:
(i) My opinions are subject, as to enforceability, to
(A) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting
creditors rights generally and (B) the
application of general principles of equity,
including but not limited to the right to have
specific performance of contract obligations,
regardless of whether considered in a proceeding
in equity or at law.
(ii) My opinion in paragraph 1 above, insofar as it
relates to the due incorporation, valid existence
and good standing of the Borrower under Delaware
law, is given exclusively in reliance upon a
certification of the Secretary of State of
Delaware, upon which I believe I am justified in
relying. A copy of such certification has been
provided to you.
(iii) My opinion set forth in paragraph 3 above as
to the obtaining of necessary governmental and
regulatory approvals is based solely upon a
review of those laws that, in my experience, are
normally applicable to the Borrower in connection
with transactions of the type contemplated by the
Credit Agreement.
(iv) My opinion in paragraph 6 above as to the
legality, validity, binding nature and
enforceability of the Credit Agreement and the
Notes is given in reliance upon a legal opinion
of even date herewith of Reid & Priest, LLP, New
York counsel to the Borrower, and is subject to
the assumptions, limitations and qualifications
contained therein. A copy of the legal opinion
of Reid & Priest, LLP, is being provided to you
contemporaneously herewith.
Notwithstanding the qualifications set forth above, I have no
actual knowledge of any matter within the scope of said
qualifications that would cause me to change the opinions set
forth in this letter.
I am licensed to practice law only in the States of
Louisiana and Texas and the Commonwealth of Virginia and, except
as otherwise provided herein, my role as counsel to the Company
is limited to matters involving the laws of the State of
Louisiana and the federal laws of the United States of America.
Except to the extent otherwise expressly set forth herein, and
except with respect to matters governed by the General
Corporation Law of Delaware, I render no opinion on the laws of
any other jurisdiction or any subdivision thereof, and have made
no independent investigation into any such laws except as
specifically provided herein.
My opinions are expressed as of the date hereof, and I do
not assume any obligation to update or supplement my opinions to
reflect any fact or circumstance that hereafter comes to my
attention, or any change in law that hereafter occurs.
This opinion letter is being provided exclusively to and
for the benefit of the addressees hereof. It is not to be
furnished to or relied upon by any other party for any other
purpose, without prior express written authorization from us,
except that (A) Reid & Priest may rely hereon in connection with
their opinion to you of even date herewith on behalf of the
Borrower as to matters of New York law, (B) King & Spalding
hereby is authorized to rely on this letter in the rendering of
their opinion to the Lenders dated as of the date hereof; and any
addressee of this letter may deliver a copy hereof to any person
that becomes a Lender under the Credit Agreement after the date
hereof, and such person may rely on this opinion as if it had
been addressed and delivered to it on the date hereof as an
original Bank that was a party to the Credit Agreement.
Very truly yours,
Laurence M. Hamric
Bank Addressees:
<PAGE>
EXHIBIT E
OPINION OF SPECIAL NEW YORK
COUNSEL TO THE AGENT
[Date]
To each of the Lenders parties to the
Credit Agreement referred to below,
and to Citibank, N.A., as Agent
Entergy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to Citibank,
N.A., individually and as Agent, in connection with the
preparation, execution and delivery of the Amended and Restated
Credit Agreement, dated as of , 1996
(the Credit Agreement ), among Entergy Corporation, the Banks
parties thereto and Citibank, N.A., as Agent. Terms defined in
the Credit Agreement are used herein as therein defined.
In this connection, we have examined the following
documents:
(r) a counterpart of the Credit Agreement, executed by the
parties thereto;
(s) the Contract Notes to the order of each Bank;
(t) the form of the Auction Notes, attached as Exhibit A-2
to the Credit Agreement, to be executed and delivered by
the Borrower in connection with any Auction Borrowing; and
(u) the other documents furnished to the Agent pursuant to
Section 3.01(a) of the Credit Agreement, including (without
limitation) the opinion (the Opinion ) of Laurence M.
Hamric, counsel to the Borrower.
In our examination of the documents referred to above, we
have assumed the authenticity of all such documents submitted to
us as originals, the genuineness of all signatures, the due
authority of the parties executing such documents and the
conformity to the originals of all such documents submitted to us
as copies. We have also assumed that you have independently
evaluated, and are satisfied with, the creditworthiness of the
Borrower and the business terms reflected in the Credit
Agreement. We have relied, as to factual matters, on the
documents we have examined.
To the extent that our opinions expressed below involve
conclusions as to matters governed by law other than the law of
the State of New York, we have relied upon the Opinion and have
assumed without independent investigation the correctness of the
matters set forth therein, our opinions expressed below being
subject to the assumptions, qualifications and limitations set
forth in the Opinion.
Based upon and subject to the foregoing, and subject to the
qualifications set forth below, we are of the opinion that the
Credit Agreement and the Contract Notes are, and upon their
completion, execution and delivery in accordance with the terms
of the Credit Agreement, the Auction Notes will be, the legal,
valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
Our opinion is subject to the following qualifications:
(i) The enforceability of the Borrower s obligations under
the Credit Agreement and the Notes is subject to the effect of
any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar law affecting creditors
rights generally.
(ii) The enforceability of the Borrower s obligations under
the Credit Agreement and the Notes is subject to the effect of
general principles of equity, including (without limitation)
concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether considered in a proceeding in
equity or at law). Such principles of equity are of general
application, and, in applying such principles, a court, among
other things, might not allow a contracting party to exercise
remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
(iii) We note further that, in addition to the application
of equitable principles described above, courts have imposed an
obligation on contracting parties to act reasonably and in good
faith in the exercise of their contractual rights and remedies,
and may also apply public policy considerations in limiting the
right of parties seeking to obtain indemnification under
circumstances where the conduct of such parties is determined to
have constituted negligence.
(iv) We express no opinion herein as to (A) Section 8.05 of
the Credit Agreement, (B) the enforceability of provisions
purporting to grant to a party conclusive rights of
determination, (C) the availability of specific performance or
other equitable remedies, (D) the enforceability of rights to
indemnity under federal or state securities laws or (E) the
enforceability of waivers by parties of their respective rights
and remedies under law.
(v) Our opinions expressed above are limited to the law of
the State of New York, and we do not express any opinion herein
concerning any other law.
The foregoing opinion is solely for your benefit and may
not be relied upon by any other person or entity, other than any
Person that may become a Lender under the Credit Agreement after
the date hereof.
Very truly yours,
Include if applicable.
Delete for Base Rate Advances
If the Assignee is organized under the laws of a
jurisdiction outside the United States.
This date should be no earlier than the date of
acceptance by the Agent.
Exhibit 10(d) 52
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of January 28, 1997, between Entergy
Gulf States, Inc., a Texas corporation ("Entergy Gulf States"),
and Entergy Gulf States Capital I, a Delaware business trust (the
"Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive Debentures
from Entergy Gulf States and to issue its 8.75% Cumulative
Quarterly Income Preferred Securities, Series A (the "Preferred
Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust
Agreement of the Trust dated as of January 28, 1997 as the same
may be amended from time to time (the "Trust Agreement");
WHEREAS, Entergy Gulf States will directly own all of
the Common Securities and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by
each holder of the Preferred Securities, which purchase Entergy
Gulf States hereby agrees shall benefit Entergy Gulf States and
which purchase Entergy Gulf States acknowledges will be made in
reliance upon the execution and delivery of this Agreement,
Entergy Gulf States, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Entergy Gulf States.
Subject to the terms and conditions hereof, Entergy Gulf States
hereby irrevocably and unconditionally guarantees the full
payment, when and as due, of any and all Obligations (as
hereinafter defined) to each person or entity to whom the Trust
is now or hereafter becomes indebted or liable (the
"Beneficiaries"). As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than
obligations of the Trust to pay to holders of any Preferred
Securities the amounts due such holders pursuant to the terms of
the Preferred Securities. This Agreement is intended to be for
the benefit of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Preferred Securities or any Beneficiary must restore payment of
any sums paid under the Preferred Securities, under any
Obligation, under the Guarantee Agreement dated the date hereof
by Entergy Gulf States and The Bank of New York, as guarantee
trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Entergy Gulf States
hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and Entergy Gulf
States hereby waives presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption
and all other notices and demands.
Section 1.04. No Impairment. The obligations,
covenants, agreements and duties of Entergy Gulf States under
this Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of
the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, Entergy Gulf States with respect to
the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
this Agreement directly against Entergy Gulf States and Entergy
Gulf States waives any right or remedy to require that any action
be brought against the Trust or any other person or entity before
proceeding against Entergy Gulf States.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and
agreements contained in this Agreement shall bind the successors,
assigns, receivers, trustees and representatives of Entergy Gulf
States and shall inure to the benefit of the Beneficiaries.
Section 2.02. Amendment. So long as there remains any
Beneficiary or any Preferred Securities of any series are
outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
Section 2.03. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
Entergy Gulf States Capital I
c/o Steven C. McNeal, Administrative Trustee
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No.: (504) 576-4455
Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No.: (504) 576-4455
Attention: Treasurer
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
Section 2.05. Limited Liability. The holders of the
Preferred Securities, in their capacities as such, shall not be
personally liable for any liabilities or obligations of the Trust
arising out of this Agreement, and the parties hereto hereby
agree that the holders of the Preferred Securities, in their
capacities as such, shall be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware.
THIS EXPENSE AGREEMENT is executed as of the day and
year first above
written.
ENTERGY GULF STATES, INC.
By: /s/ William J. Regan, Jr.
______________________________
Name: William J. Regan, Jr.
Title: Vice President and Treasurer
ENTERGY GULF STATES CAPITAL I
By: /s/ Frank Williford IV
______________________________
Frank Williford IV
not in his individual capacity,
but solely as Administrative Trustee
<TABLE>
<CAPTION>
Exhibit 12(a)
Entergy Arkansas, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
December 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $133,854 $120,317 $107,771 $101,439 $102,339 $93,852
Interest on notes payable -- 117 349 1,311 678 688
Amortization of expense and premium on debt-net(cr) 1,112 1,359 2,702 4,563 4,514 4,679
Other interest 1,303 2,308 8,769 3,501 7,806 5,570
Dividends on preferred securities of subsidiary trust -- -- -- -- -- 1,927
Interest applicable to rentals 21,969 17,657 16,860 19,140 18,158 19,121
------------------------------------------------------------------------
Total fixed charges, as defined 158,238 141,758 136,451 129,954 133,495 125,837
Preferred dividends, as defined (a) 31,458 32,195 30,334 23,234 27,636 24,731
------------------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $189,696 $173,953 $166,785 $153,188 $161,131 $150,568
========================================================================
Earnings as defined:
Net Income $143,451 $130,529 $205,297 $142,263 $136,666 $157,798
Add:
Provision for income taxes:
Federal & State 44,418 57,089 58,162 83,300 105,964 128,982
Deferred - net 11,048 3,490 34,748 (17,939) (28,225) (39,772)
Investment tax credit adjustment - net (1,600) (9,989) (10,573) (36,141) (5,658) (4,765)
Fixed charges as above 158,238 141,758 136,451 129,954 133,495 125,837
------------------------------------------------------------------------
Total earnings, as defined $355,555 $322,877 $424,085 $301,437 $342,242 $368,080
========================================================================
Ratio of earnings to fixed charges, as defined 2.25 2.28 3.11 2.32 2.56 2.93
========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.87 1.86 2.54 1.97 2.12 2.44
========================================================================
- ------------------------
(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 12(b)
Entergy Gulf States, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
December 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $201,335 $197,218 $172,494 $167,082 $181,994 $172,191
Interest on notes payable 27,953 21,155 19,440 20,203 810 800
Other interest 29,169 26,564 10,561 7,957 8,074 12,019
Amortization of expense and premium on
debt-net(cr) 1,999 3,479 8,104 8,892 9,346 7,455
Interest applicable to rentals 24,049 23,759 23,455 21,539 16,648 14,887
---------------------------------------------------------------------------
Total fixed charges, as defined 284,505 272,175 234,054 225,673 216,872 207,352
Preferred dividends, as defined (a) 90,146 69,617 65,299 52,210 44,651 48,690
---------------------------------------------------------------------------
Combined fixed charges and preferred
dividends, as defined $374,651 $341,792 $299,353 $277,883 $261,523 $256,042
===========================================================================
Earnings as defined:
Income (loss) from continuing operations before extraordinary items and
the cumulative effect of accounting changes $112,391 $139,413 $69,462 ($82,755) $122,919 ($3,887)
Add:
Income Taxes 48,250 55,860 58,016 (62,086) 63,244 102,091
Fixed charges as above 284,505 272,175 234,054 225,673 216,872 207,352
---------------------------------------------------------------------------
Total earnings, as defined (b) $445,146 $467,448 $361,532 $80,832 $403,035 $305,556
===========================================================================
Ratio of earnings to fixed charges, as defined 1.56 1.72 1.54 0.36 1.86 1.47
===========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.19 1.37 1.21 0.29 1.54 1.19
===========================================================================
(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 12(c)
Entergy Louisiana, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
December 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $158,816 $128,672 $124,633 $124,820 $124,507 $117,609
Interest on notes payable -- 150 898 1,948 1,932 2,143
Other interest charges 5,924 5,591 5,706 4,546 5,278 4,795
Dividends on preferred securities of
subsidiary trust 2,870
Amortization of expense and premium on
debt - net(cr) 3,282 7,100 5,720 5,130 5,184 4,995
Interest applicable to rentals 11,381 9,363 8,519 8,332 9,332 10,601
--------------------------------------------------------------------------
Total fixed charges, as defined 179,403 150,876 145,476 144,776 146,233 143,013
Preferred dividends, as defined (a) 41,212 42,026 40,779 29,171 32,847 28,234
--------------------------------------------------------------------------
Combined fixed charges and preferred
dividends, as defined $220,615 $192,902 $186,255 $173,947 $179,080 $171,247
==========================================================================
Earnings as defined:
Net Income $166,572 $182,989 $188,808 $213,839 $201,537 $190,762
Add:
Provision for income taxes:
Federal and State 8,684 36,465 70,552 79,260 114,665 97,169
Deferred Federal and State - net 67,792 51,889 43,017 21,580 8,148 27,237
Investment tax credit adjustment - net 8,244 (1,317) (2,756) (37,552) (5,699) (5,847)
Fixed charges as above 179,403 150,876 145,476 144,776 146,233 143,013
--------------------------------------------------------------------------
Total earnings, as defined $430,695 $420,902 $445,097 $421,903 $464,884 $452,334
==========================================================================
Ratio of earnings to fixed charges, as defined 2.40 2.79 3.06 2.91 3.18 3.16
==========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.95 2.18 2.39 2.43 2.60 2.64
==========================================================================
- ------------------------
(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 12(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,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $63,628 $60,709 $52,099 $46,081 $46,241 $42,897
Interest on notes payable 953 36 7 1,348 474 1,633
Other interest charges 1,444 1,636 1,795 3,581 4,164 2,237
Amortization of expense and premium on
debt-net(cr) 1,617 1,685 1,458 1,754 756 1,240
Interest applicable to rentals 574 521 1,264 1,716 2,173 2,165
-------------------------------------------------------------------------
Total fixed charges, as defined 68,216 64,587 56,623 54,480 53,808 50,172
Preferred dividends, as defined (a) 14,962 12,823 12,990 9,447 9,004 7,720
-------------------------------------------------------------------------
Combined fixed charges and preferred
dividends, as defined $83,178 $77,410 $69,613 $63,927 $62,812 $57,892
=========================================================================
Earnings as defined:
Net Income $63,088 $65,036 $101,743 $48,779 $68,667 $79,210
Add:
Provision for income taxes:
Federal and State (1,001) 4,463 54,418 46,884 71,651 73,994
Deferred Federal and State - net 32,491 20,430 539 (26,763) (35,224) (29,390)
Investment tax credit adjustment - net (1,634) (1,746) 1,036 (7,645) (1,550) 3,497
Fixed charges as above 68,216 64,587 56,623 54,480 53,808 50,172
--------------------------------------------------------------------------
Total earnings, as defined $161,160 $152,770 $214,359 $115,735 $157,352 $177,483
==========================================================================
Ratio of earnings to fixed charges, as defined 2.36 2.37 3.79 2.12 2.92 3.54
==========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.94 1.97 3.08 1.81 2.51 3.07
==========================================================================
- ------------------------
(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 12(e)
Entergy New Orleans, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
December 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $23,865 $22,934 $19,478 $16,382 $15,330 $14,787
Interest on notes payable -- -- -- 153 130 146
Other interest charges 793 1,714 1,016 1,027 1,723 890
Amortization of expense and premium on
debt-net(cr) 565 576 598 710 619 481
Interest applicable to rentals 517 444 544 1,245 916 831
-------------------------------------------------------------------------
Total fixed charges, as defined 25,740 25,668 21,636 19,517 18,718 17,135
Preferred dividends, as defined (a) 3,582 3,214 2,952 2,071 1,964 1,549
-------------------------------------------------------------------------
Combined fixed charges and preferred
dividends, as defined $29,322 $28,882 $24,588 $21,588 $20,682 $18,684
=========================================================================
Earnings as defined:
Net Income $74,699 $26,424 $47,709 $13,211 $34,386 $26,776
Add:
Provision for income taxes:
Federal and State 8,885 16,575 27,479 22,606 22,465 28,490
Deferred Federal and State - net 36,947 (340) 5,203 (15,674) (1,364) (11,587)
Investment tax credit adjustment - net (591) (170) (744) (2,332) (634) (687)
Fixed charges as above 25,740 25,668 21,636 19,517 18,718 17,135
--------------------------------------------------------------------------
Total earnings, as defined $145,680 $68,157 $101,283 $37,328 $73,571 $60,127
==========================================================================
Ratio of earnings to fixed charges, as defined 5.66 2.66 4.68 1.91 3.93 3.51
==========================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 4.97 2.36 4.12 1.73 3.56 3.22
==========================================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
(b) Earnings for the twelve months ended December 31, 1991 include the $90
million effect of the 1991 NOPSI Settlement.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(f)
System Energy Resources, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
December 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest on long-term debt $218,538 $196,618 $184,818 $162,517 $136,916 $128,704
Interest on notes payable -- -- -- 88 473 289
Amortization of expense and premium on
debt-net 7,495 6,417 4,520 6,731 6,104 6,672
Interest applicable to rentals 10,007 6,265 6,790 7,546 6,475 6,223
Other interest charges 3,617 1,506 1,600 7,168 8,019 8,055
--------------------------------------------------------------------------
Total fixed charges, as defined $239,657 $210,806 $197,728 $184,050 $157,987 $149,943
==========================================================================
Earnings as defined:
Net Income $104,622 $130,141 $93,927 $5,407 $93,039 $98,668
Add:
Provision for income taxes:
Federal and State (26,848) 35,082 48,314 67,477 120,830 33,146
Deferred Federal and State - net 37,168 23,648 60,690 (27,374) (41,871) 52,447
Investment tax credit adjustment - net 63,256 30,123 (30,452) (3,265) (3,466) (3,472)
Fixed charges as above 239,657 210,806 197,728 184,050 157,987 149,943
--------------------------------------------------------------------------
Total earnings, as defined $417,855 $429,800 $370,207 $226,295 $326,519 $330,732
==========================================================================
Ratio of earnings to fixed charges, as defined 1.74 2.04 1.87 1.23 2.07 2.21
==========================================================================
</TABLE>
Exhibit 18(a)
February 13, 1997
System Energy Resources, Inc.
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Gentlemen:
We are providing this letter to you for inclusion as an exhibit
to your Form 10-K filing pursuant to Item 601 of Regulation S-K.
We have read management's justification contained in the
Company's Financial Statements which are included in its Form 10-
K for the year ended December 31, 1996, for the change in
accounting principle from expensing incremental nuclear plant
outage maintenance costs during the operating period in which
they were incurred to capitalizing incremental nuclear plant
outage maintenance costs as incurred and amortizing them to
expense during the operating period between outages. Based on
our reading of the data, including documents relating to the
Company's May 1995 filing with the Federal Energy Regulatory
Commission requesting a rate increase, and discussions with
Company officials of the business judgment and business planning
factors relating to the change, we believe management's
justification to be reasonable. Accordingly, we concur that the
newly adopted accounting principle described above is preferable
in the Company's circumstances to the method previously applied.
Very truly yours,
COOPERS & LYBRAND L.L.P.
Exhibit 18(b)
February 13, 1997
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
Gentlemen:
We are providing this letter to you for inclusion as an exhibit
to your Form 10-K filing pursuant to Item 601 of Regulation S-K.
We have read management's justification contained in the
Company's Financial Statements which are included in its Form 10-
K for the year ended December 31, 1996, for the change in
accounting principle of System Energy Resources, Inc. from
expensing incremental nuclear plant outage maintenance costs
during the operating period in which they were incurred to
capitalizing incremental nuclear plant outage maintenance costs
as incurred and amortizing them to expense during the operating
period between outages. Based on our reading of the data,
including documents relating to the Company's May 1995 filing
with the Federal Energy Regulatory Commission requesting a rate
increase, and discussions with Company officials of the business
judgment and business planning factors relating to the change, we
believe management's justification to be reasonable.
Accordingly, we concur that the newly adopted accounting
principle described above is preferable in the Company's
circumstances to the method previously applied.
Very truly yours,
COOPERS & LYBRAND L.L.P.
Exhibit 21
The seven registrants, Entergy Corporation, System Energy Resources,
Inc., Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana,
Inc., Entergy Mississippi, Inc., and Entergy New Orleans, Inc., and their
active subsidiaries, are listed below:
State or Other
Jurisdiction of
Incorporation
Entergy Corporation Delaware
System Energy Resources, Inc. (a) Arkansas
Entergy Arkansas, Inc. (a) Arkansas
Entergy Arkansas Capital I (b) Delaware
The Arklahoma Corporation (b) Arkansas
Entergy Gulf States, Inc. (a) Texas
Entergy Gulf States Capital I (c) Delaware
Varibus Corporation (c) Texas
GSG&T, Inc. (c) Texas
Southern Gulf Railway Company (c) Texas
Prudential Oil & Gas, Inc. (c) Texas
Entergy Louisiana, Inc. (a) Louisiana
Entergy Louisiana Capital I (d) Delaware
Entergy Mississippi, Inc. (a) Mississippi
Entergy New Orleans, Inc. (a) Louisiana
System Fuels, Inc. (e) Louisiana
Entergy Services, Inc. (a) Delaware
Entergy Power, Inc. (a) Delaware
Entergy Operations, Inc. (a) Delaware
Entergy Enterprises, Inc. (a) Louisiana
Entergy S.A. (a) Argentina
Entergy Transener S.A. (a) Argentina
Entergy Power Development Corporation (a) Delaware
Entergy Richmond Power Corporation Delaware
Entergy Integrated Solutions, Inc. Delaware
Entergy Pakistan Ltd. Delaware
Entergy Power Asia Ltd. Cayman Islands
Entergy Power Development International Corporation (a) Delaware
EP Edegel, Inc. Delaware
Entergy Power CBA Holding II Ltd. Bermuda
EPG Cayman Holding I Cayman Islands
EPG Cayman Holding II Cayman Islands
Entergy Victoria LDC Cayman Islands
Entergy Victoria Holding, LDC Cayman Islands
CitiPower Trust Australia
CitiPower Ltd. Australia
Entergy Power Edesur Holding, Ltd. (a) Bermuda
Entergy Power Marketing Corporation (a) Delaware
Entergy Power Operations Corporation (a) Delaware
Entergy Power Holding II, Ltd. Cayman Islands
Entergy Power Operations Holdings, Ltd. Cayman Islands
Entergy Power Operations Pakistan LDC Cayman Islands
Entergy Nuclear, Inc. Delaware
Entergy Operations Services, Inc. Delaware
Entergy Mexico, Ltd. Cayman Islands
Entergy Peru S.A. Peru
Entergy do Brasil LTDA Brazil
Entergy Technology Holding Company (a) Delaware
Entergy Power UK Holding Ltd. England
Entergy Power UK plc England
London Electricity plc England
_______________________
(a)Entergy Corporation owns all of the Common Stock of System Energy
Resources, Inc., Entergy Arkansas Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc., Entergy Services, Inc., Entergy Power, Inc., Entergy
Operations, Inc., Entergy Enterprises, Inc., Entergy S.A., Entergy
Transener S.A., Entergy Power Development Corporation, Entergy Power
Development International Corporation, Entergy Power Edesur Holding,
Ltd., Entergy Power Marketing Corporation, Entergy Power Operations
Corporation, and Entergy Technology Holding Company.
(b)Entergy Arkansas, Inc. 100 % of the common stock of Entergy Arkansas
Capital I and 34% of the Common Stock of The Arklahoma Corporation.
(c)Entergy Gulf States, Inc. owns all of the Common Stock of Entergy Gulf
States Capital I, Varibus Corporation, GSG&T, Inc., Southern Gulf
Railway Company, and Prudential Oil & Gas, Inc.
(d)Entergy Louisiana, Inc. owns all of the common stock of Entergy
Louisiana Capital I.
(e)The capital stock of System Fuels, Inc. is owned in proportions of 35%,
33%, 19% and 13% by Entergy Arkansas, Inc., Entergy Louisiana, Inc.,
Entergy Mississippi, Inc., and Entergy New Orleans, Inc., respectively.
Exhibit 24
DATE: January 30, 1997
TO: Louis E. Buck, Jr.
Laurence M. Hamric
FROM: Edwin Lupberger, et. al.
SUBJECT: Power of Attorney; 1996 Form 10-K
Entergy Corporation, referred to herein as the Company, will
file with the Securities and Exchange Commission its Annual
Report on Form 10-K for the year ended December 31, 1996
pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
The Company and the undersigned, in their respective
capacities as directors and/or officers of said Company as
specified in Attachment I, do each hereby make, constitute
and appoint Louis E. Buck, Jr. and Laurence M. Hamric, and
each of them, their true and lawful Attorneys (with full
power of substitution) for each of the undersigned and in
his or her name, place and stead to sign and cause to be
filed with the Securities and Exchange Commission the
aforementioned Annual Report on Form 10-K and any amendments
thereto.
Yours very truly,
Entergy Corporation
By: /s/ Edwin Lupberger /s/ Gerald D. McInvale
Edwin Lupberger Gerald D. McInvale
Chairman of the Board, President Executive Vice President and
and Chief Executive Officer Chief Financial Officer
/s/ W. Frank Blount /s/ John A. Cooper, Jr.
W. Frank Blount John A. Cooper, Jr.
/s/ Lucie J.Fjeldstad /s/ Norman C. Francis
Lucie J. Fjeldstad Norman C. Francis
/s/ Robert v.d.Luft /s/ Edwin Lupberger
Robert v.d. Luft Edwin Lupberger
/s/ Kinnaird R. McKee /s/ Paul W. Murrill
Kinnaird R. McKee Paul W. Murrill
/s/ James R. Nichols /s/ Eugene H. Owen
James R. Nichols Eugene H. Owen
/s/ John N. Palmer, Sr. /s/ Robert D. Pugh
John N. Palmer, Sr. Robert D. Pugh
/s/ H. Duke Shackelford /s/ Wm. Clifford Smith
H. Duke Shackelford Wm. Clifford Smith
/s/ Bismark A. Steinhagen
Bismark A. Steinhagen
Entergy Corporation
Chairman of the Board, President, Chief Executive Officer and
Director (principal executive officer) - Edwin Lupberger
Executive Vice President and Chief Financial Officer (principal
financial officer) - Gerald D. McInvale
Directors - W. Frank Blount, John A. Cooper, Jr., Lucie J.
Fjeldstad, Norman C. Francis, Robert v.d. Luft, Kinnaird R.
McKee, Paul W. Murrill, James R. Nichols, Eugene H. Owen, John N.
Palmer, Sr., Robert D. Pugh, H. Duke Shackelford, Wm. Clifford
Smith, Bismark A. Steinhagen.
<PAGE>
DATE: January 30, 1997
TO: Louis E. Buck, Jr.
Laurence M. Hamric
FROM: Edwin Lupberger, et. al.
SUBJECT: Power of Attorney; 1996 Form 10-K
Entergy Arkansas, Entergy Gulf States, Inc., Entergy Louisiana,
Inc., Entergy Mississippi, Inc., Entergy New Orleans, Inc., and
System Energy Resources, Inc. (collectively referred to herein as
the Companies) will file with the Securities and Exchange
Commission their respective Annual Reports on Form 10-K for the
year ended December 31, 1996 pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
The Companies and the undersigned, in their respective capacities
as directors and/or officers of said Companies as specified in
Attachment I, do each hereby make, constitute and appoint Louis
E. Buck and Laurence M. Hamric, and each of them, their true and
lawful Attorneys (with full power of substitution) for each of
the undersigned and in his or her name, place and stead to sign
and cause to be filed with the Securities and Exchange Commission
the aforementioned Annual Report on Form 10-K and any amendments
thereto.
Yours very truly,
Entergy Arkansas, Inc.
Entergy Gulf States, Inc.
Entergy Louisiana, Inc.
Entergy Mississippi, Inc.
Entergy New Orleans, Inc.
System Energy Resources, Inc.
By:/s/ Edwin Lupberger By:/s/ Gerald D. McInvale
Edwin Lupberger Gerald D. McInvale
Chairman of the Board and Executive Vice President and
Chief Executive Officer Chief Executive Officer
/s/ Michael B. Bemis /s/ John J. Cordaro
Michael B. Bemis John J. Cordaro
/s/ Frank F. Gallaher /s/ Donald C. Hintz
Frank F. Gallaher Donald C. Hintz
/s/ Jerry D. Jackson /s/ R. Drake Keith
Jerry D. Jackson R. Drake Keith
/s/ Edwin Lupberger /s/ Jerry L. Maulden
Edwin Lupberger Jerry L. Maulden
/s/ Donald E. Meiners /s/ Gerald D. McInvale
Donald E. Meiners Gerald D. McInvale
/s/ Karen R. Johnson /s/ Daniel F. Packer
Karen R. Johnson Daniel F. Packer
Entergy Arkansas, Inc.
Chairman of the Board, Chief Executive Officer and Director
(principal executive officer) - Edwin Lupberger
Executive Vice President and Chief Financial Officer
(principal financial officer) - Gerald D. McInvale
Directors - Michael B. Bemis, Donald C. Hintz, Jerry D.
Jackson, R. Drake Keith, Jerry L. Maulden, Gerald D.
McInvale.
Entergy Gulf States, Inc.
Chairman of the Board, Chief Executive Officer and Director
(principal executive officer) - Edwin Lupberger
Executive Vice President and Chief Financial Officer
(principal financial officer) - Gerald D. McInvale
Directors - Michael B. Bemis, John J. Cordaro, Frank F.
Gallaher, Donald C. Hintz, Jerry D. Jackson, Karen R.
Johnson, Jerry L. Maulden, Gerald D. McInvale.
Entergy Louisiana, Inc.
Chairman of the Board, Chief Executive Officer and Director
(principal executive officer) - Edwin Lupberger
Executive Vice President and Chief Financial Officer
(principal financial officer) - Gerald D. McInvale
Directors - Michael B. Bemis, John J. Cordaro, Donald C.
Hintz, Jerry D. Jackson, Jerry L. Maulden, Gerald D.
McInvale.
Entergy Mississippi, Inc.
Chairman of the Board, Chief Executive Officer and Director
(principal executive officer) - Edwin Lupberger
Executive Vice President and Chief Financial Officer
(principal financial officer) - Gerald D. McInvale
Directors - Michael B. Bemis, Donald C. Hintz, Jerry D.
Jackson, Jerry L. Maulden, Donald E. Meiners, Gerald D.
McInvale.
Entergy New Orleans, Inc.
Chairman of the Board, Chief Executive Officer and Director
(principal executive officer) - Edwin Lupberger
Executive Vice President and Chief Financial Officer
(principal financial officer) - Gerald D. McInvale
Directors - Jerry D. Jackson, Jerry L. Maulden, Gerald D.
McInvale, Daniel F. Packer.
System Energy Resources, Inc.
President, Chief Executive Officer and Director (principal
executive officer) - Donald C. Hintz
Executive Vice President and Chief Financial Officer
(principal financial officer) - Gerald D. McInvale
Directors - Edwin Lupberger, Jerry L. Maulden, Gerald D.
McInvale.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation's financial statements for the year ended December 31, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000065984
<NAME> ENTERGY CORPORATION
<SUBSIDIARY>
<NUMBER> 022
<NAME> ENTERGY CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 16,223,123
<OTHER-PROPERTY-AND-INVEST> 930,073
<TOTAL-CURRENT-ASSETS> 2,362,533
<TOTAL-DEFERRED-CHARGES> 3,450,565
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 22,966,294
<COMMON> 2,345
<CAPITAL-SURPLUS-PAID-IN> 4,320,591
<RETAINED-EARNINGS> 2,341,703
<TOTAL-COMMON-STOCKHOLDERS-EQ> 7,071,870
216,986
430,955
<LONG-TERM-DEBT-NET> 7,590,804
<SHORT-TERM-NOTES> 20,686
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 345,620
0
<CAPITAL-LEASE-OBLIGATIONS> 247,360
<LEASES-CURRENT> 151,287
<OTHER-ITEMS-CAPITAL-AND-LIAB> 7,297,957
<TOT-CAPITALIZATION-AND-LIAB> 22,966,294
<GROSS-OPERATING-REVENUE> 7,163,526
<INCOME-TAX-EXPENSE> 421,159
<OTHER-OPERATING-EXPENSES> 5,484,805
<TOTAL-OPERATING-EXPENSES> 5,484,805
<OPERATING-INCOME-LOSS> 1,678,721
<OTHER-INCOME-NET> (46,964)
<INCOME-BEFORE-INTEREST-EXPEN> 1,631,757
<TOTAL-INTEREST-EXPENSE> 790,571
<NET-INCOME> 420,027
0
<EARNINGS-AVAILABLE-FOR-COMM> 420,027
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 1,457,513
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Arkansas' financial statements for the year ended December 31, 1996 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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,850,520
<OTHER-PROPERTY-AND-INVEST> 219,543
<TOTAL-CURRENT-ASSETS> 595,396
<TOTAL-DEFERRED-CHARGES> 488,358
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,153,817
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,169
<RETAINED-EARNINGS> 491,316
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,198,305
40,027
116,350
<LONG-TERM-DEBT-NET> 1,255,388
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 32,465
0
<CAPITAL-LEASE-OBLIGATIONS> 83,940
<LEASES-CURRENT> 53,012
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,490,013
<TOT-CAPITALIZATION-AND-LIAB> 4,153,817
<GROSS-OPERATING-REVENUE> 1,743,433
<INCOME-TAX-EXPENSE> 84,444
<OTHER-OPERATING-EXPENSES> 1,433,283
<TOTAL-OPERATING-EXPENSES> 1,433,283
<OPERATING-INCOME-LOSS> 310,150
<OTHER-INCOME-NET> 36,477
<INCOME-BEFORE-INTEREST-EXPEN> 346,627
<TOTAL-INTEREST-EXPENSE> 104,385
<NET-INCOME> 157,798
16,110
<EARNINGS-AVAILABLE-FOR-COMM> 141,688
<COMMON-STOCK-DIVIDENDS> 142,800
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 376,578
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Gulf States' financial statements for the year ended December 31, 1996 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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,627,894
<OTHER-PROPERTY-AND-INVEST> 80,341
<TOTAL-CURRENT-ASSETS> 728,335
<TOTAL-DEFERRED-CHARGES> 994,878
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,431,448
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,689
<RETAINED-EARNINGS> 325,312
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,728,500
77,459
136,444
<LONG-TERM-DEBT-NET> 1,915,346
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 160,865
0
<CAPITAL-LEASE-OBLIGATIONS> 83,524
<LEASES-CURRENT> 39,110
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,426,644
<TOT-CAPITALIZATION-AND-LIAB> 6,431,448
<GROSS-OPERATING-REVENUE> 2,019,181
<INCOME-TAX-EXPENSE> 102,091
<OTHER-OPERATING-EXPENSES> 1,607,283
<TOTAL-OPERATING-EXPENSES> 1,607,283
<OPERATING-INCOME-LOSS> 411,898
<OTHER-INCOME-NET> (122,039)
<INCOME-BEFORE-INTEREST-EXPEN> 289,859
<TOTAL-INTEREST-EXPENSE> 191,655
<NET-INCOME> (3,887)
28,505
<EARNINGS-AVAILABLE-FOR-COMM> (32,392)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 322,355
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Louisiana's financial statements for the year ended December 31, 1996 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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,476,719
<OTHER-PROPERTY-AND-INVEST> 87,236
<TOTAL-CURRENT-ASSETS> 324,302
<TOTAL-DEFERRED-CHARGES> 391,021
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,279,278
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (2,659)
<RETAINED-EARNINGS> 63,764
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,250,505
92,500
100,500
<LONG-TERM-DEBT-NET> 1,373,233
<SHORT-TERM-NOTES> 31,066
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 34,275
0
<CAPITAL-LEASE-OBLIGATIONS> 10,156
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,459,543
<TOT-CAPITALIZATION-AND-LIAB> 4,279,278
<GROSS-OPERATING-REVENUE> 1,828,867
<INCOME-TAX-EXPENSE> 118,560
<OTHER-OPERATING-EXPENSES> 1,392,421
<TOTAL-OPERATING-EXPENSES> 1,392,421
<OPERATING-INCOME-LOSS> 436,446
<OTHER-INCOME-NET> 3,795
<INCOME-BEFORE-INTEREST-EXPEN> 440,241
<TOTAL-INTEREST-EXPENSE> 130,919
<NET-INCOME> 190,762
19,947
<EARNINGS-AVAILABLE-FOR-COMM> 170,815
<COMMON-STOCK-DIVIDENDS> 179,200
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 351,671
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Mississippi's financial statements for the year ended December 31, 1996 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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,045,103
<OTHER-PROPERTY-AND-INVEST> 13,454
<TOTAL-CURRENT-ASSETS> 284,252
<TOTAL-DEFERRED-CHARGES> 178,657
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,521,466
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> (143)
<RETAINED-EARNINGS> 225,764
<TOTAL-COMMON-STOCKHOLDERS-EQ> 482,828
7,000
57,881
<LONG-TERM-DEBT-NET> 399,054
<SHORT-TERM-NOTES> 50,253
<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> 486,316
<TOT-CAPITALIZATION-AND-LIAB> 1,521,466
<GROSS-OPERATING-REVENUE> 958,430
<INCOME-TAX-EXPENSE> 41,106
<OTHER-OPERATING-EXPENSES> 793,834
<TOTAL-OPERATING-EXPENSES> 793,834
<OPERATING-INCOME-LOSS> 164,596
<OTHER-INCOME-NET> 2,805
<INCOME-BEFORE-INTEREST-EXPEN> 167,401
<TOTAL-INTEREST-EXPENSE> 47,084
<NET-INCOME> 79,211
5,010
<EARNINGS-AVAILABLE-FOR-COMM> 74,201
<COMMON-STOCK-DIVIDENDS> 79,900
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 181,966
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
New Orleans' financial statements for the year ended December 31, 1996 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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 296,218
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 126,525
<TOTAL-DEFERRED-CHARGES> 123,994
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 549,996
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,294
<RETAINED-EARNINGS> 73,072
<TOTAL-COMMON-STOCKHOLDERS-EQ> 162,890
0
19,780
<LONG-TERM-DEBT-NET> 168,888
<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> 206,218
<TOT-CAPITALIZATION-AND-LIAB> 549,996
<GROSS-OPERATING-REVENUE> 504,277
<INCOME-TAX-EXPENSE> 16,217
<OTHER-OPERATING-EXPENSES> 446,699
<TOTAL-OPERATING-EXPENSES> 446,699
<OPERATING-INCOME-LOSS> 57,578
<OTHER-INCOME-NET> 1,467
<INCOME-BEFORE-INTEREST-EXPEN> 59,045
<TOTAL-INTEREST-EXPENSE> 16,052
<NET-INCOME> 26,776
965
<EARNINGS-AVAILABLE-FOR-COMM> 25,811
<COMMON-STOCK-DIVIDENDS> 34,000
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 44,006
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from System
Energy's financial statements for the year ended December 31, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000202584
<NAME> SYSTEM ENERGY
<SUBSIDIARY>
<NUMBER> 018
<NAME> SYSTEM ENERGY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,592,302
<OTHER-PROPERTY-AND-INVEST> 62,223
<TOTAL-CURRENT-ASSETS> 261,410
<TOTAL-DEFERRED-CHARGES> 545,358
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,461,293
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 72,088
<TOTAL-COMMON-STOCKHOLDERS-EQ> 861,438
0
0
<LONG-TERM-DEBT-NET> 1,418,869
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 10,000
0
<CAPITAL-LEASE-OBLIGATIONS> 55,558
<LEASES-CURRENT> 28,000
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,087,428
<TOT-CAPITALIZATION-AND-LIAB> 3,461,293
<GROSS-OPERATING-REVENUE> 623,620
<INCOME-TAX-EXPENSE> 82,121
<OTHER-OPERATING-EXPENSES> 306,581
<TOTAL-OPERATING-EXPENSES> 306,581
<OPERATING-INCOME-LOSS> 317,039
<OTHER-INCOME-NET> 6,356
<INCOME-BEFORE-INTEREST-EXPEN> 323,395
<TOTAL-INTEREST-EXPENSE> 142,606
<NET-INCOME> 98,668
0
<EARNINGS-AVAILABLE-FOR-COMM> 98,668
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 286,857
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
