_____________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address of Principal Executive Identification No.
Offices and Telephone Number
1-11299 ENTERGY CORPORATION 72-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
1-10764 ENTERGY ARKANSAS, INC. 71-0005900
(an Arkansas corporation)
425 West Capitol Avenue, 40th Floor
Little Rock, Arkansas 72201
Telephone (501) 377-4000
1-2703 ENTERGY GULF STATES, INC. 74-0662730
(a Texas corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409) 838-6631
1-8474 ENTERGY LOUISIANA, INC. 72-0245590
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
0-320 ENTERGY MISSISSIPPI, INC. 64-0205830
(a Mississippi corporation)
308 East Pearl Street
Jackson, Mississippi 39201
Telephone (601) 368-5000
0-5807 ENTERGY NEW ORLEANS, INC. 72-0273040
(a Louisiana corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 529-5262
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
333-33331 ENTERGY LONDON INVESTMENTS PLC N/A
(a limited company under the laws of
England and Wales)
Templar House
81-87 High Holborn
London WC1V 6NU England
Telephone 011-44-171-242-9050
_____________________________________________________________________
<PAGE>
Indicate by check mark whether the registrants (1) have filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrants were required to file
such reports), and (2) have been subject to such filing requirements
for the past 90 days.
Yes X No
Common Stock Outstanding Outstanding at April 30, 1998
Entergy Corporation ($0.01 par value) 246,400,397
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1998
Page Number
Definitions 1
Management's Financial Discussion and Analysis - Liquidity and
Capital Resources 3
Management's Financial Discussion and Analysis - Significant
Factors and Known Trends 6
Results of Operations and Financial Statements:
Entergy Corporation and Subsidiaries:
Results of Operations 9
Consolidated Statements of Income and Comprehensive Income 11
Consolidated Statements of Cash Flows 12
Consolidated Balance Sheets 14
Selected Operating Results 16
Entergy Arkansas, Inc.:
Results of Operations 17
Statements of Income 18
Statements of Cash Flows 19
Balance Sheets 20
Selected Operating Results 22
Entergy Gulf States, Inc.:
Results of Operations 24
Statements of Income 26
Statements of Cash Flows 27
Balance Sheets 28
Selected Operating Results 30
Entergy Louisiana, Inc.:
Results of Operations 31
Statements of Income 32
Statements of Cash Flows 33
Balance Sheets 34
Selected Operating Results 36
Entergy Mississippi, Inc.:
Results of Operations 37
Statements of Income 38
Statements of Cash Flows 39
Balance Sheets 40
Selected Operating Results 42
Entergy New Orleans, Inc.:
Results of Operations 43
Statements of Income (Loss) 44
Statements of Cash Flows 45
Balance Sheets 46
Selected Operating Results 48
System Energy Resources, Inc.:
Results of Operations 49
Statements of Income 50
Statements of Cash Flows 51
Balance Sheets 52
Entergy London Investments plc and Subsidiary:
Results of Operations 54
Consolidated Statements of Income and Comprehensive Income 56
Consolidated Statements of Cash Flows 57
Consolidated Balance Sheets 58
Notes to Financial Statements for Entergy Corporation and
Subsidiaries 60
Part II:
Item 1. Legal Proceedings 65
Item 5. Other Information 66
Item 6. Exhibits and Reports on Form 8-K 67
Signature 69
<PAGE>
This combined Quarterly Report on Form 10-Q is separately filed
by Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States,
Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc., System Energy Resources, Inc, and Entergy London
Investments plc. Information contained herein relating to any
individual company is filed by such company on its own behalf. Each
company makes representations only as to itself and makes no other
representations whatsoever as to any other company. This combined
Quarterly Report on Form 10-Q supplements and updates the Annual
Report on Form 10-K for the calendar year ended December 31, 1997,
filed by the individual registrants with the SEC, and should be read
in conjunction therewith.
EXCHANGE RATES
For the convenience of the reader, this Form 10-Q contains
translations of certain British pounds sterling (BPS) amounts into
U.S. dollars at specified rates, or, if not so specified, the noon
buying rate in New York City for cable transfers in BPS as certified
for customs purposes by the Federal Reserve Bank of New York (the
"Noon Buying Rate") on March 31, 1998 of $1.6725 = BPS1.00. No
representation is made that the BPS amounts have been, could have
been or could be converted into U.S. dollars at the rates indicated
or at any other rates.
The following table sets out, for the periods indicated, certain
information concerning the exchange rates between BPS and U.S.
dollars based on the Noon Buying Rate in New York City for cable
transfers in pounds sterling as certified for customs purposes by the
Federal Reserve Bank of New York.
Period Period Average High Low
End (1)
($ per BPS1.00)
Quarter ended March 31, 1997 1.64 1.63 1.71 1.59
Year ended December 31, 1997 1.65 1.64 1.71 1.58
Quarter ended March 31, 1998 1.67 1.65 1.69 1.61
(1) The average of the Noon Buying Rates in effect on the last
business day of each month during the relevant period.
Forward Looking Information
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, Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc., System Energy Resources, Inc., Entergy London
Investments plc or their affiliated companies may be influenced by
factors that could cause actual outcomes to be materially different
than anticipated. 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, interest rate changes, changes in
foreign currency exchange rates, and other factors.
<PAGE>
DEFINITIONS
Certain abbreviations or acronyms used in the text are defined below:
Abbreviation or Acronym Term
ALJ Administrative Law Judge
ANO Arkansas Nuclear One Plant
ANO 1 Unit No. 1 of ANO
ANO 2 Unit No. 2 of ANO
APSC Arkansas Public Service Commission
BPS British pounds sterling
Cajun Cajun Electric Power Cooperative, Inc.
Capital Funds Agreement Agreement, dated as of June 21, 1974, as
amended, between System Energy and Entergy
Corporation, and the assignments thereof
Council Council of the City of New Orleans,
Louisiana
domestic utility companies Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, collectively
Entergy Entergy Corporation and its various direct
and indirect subsidiaries
Entergy Arkansas Entergy Arkansas, Inc.
Entergy Corporation Entergy Corporation, a Delaware corporation,
successor to Entergy Corporation, a Florida
corporation
Entergy Gulf States Entergy Gulf States, Inc. (including wholly
owned subsidiaries - Varibus Corporation,
GSG&T, Inc., Prudential Oil & Gas, Inc., and
Southern Gulf Railway Company)
Entergy London Entergy London Investments plc, formerly
Entergy Power UK plc (including its wholly
owned subsidiary, London Electricity plc)
Entergy Louisiana Entergy Louisiana, Inc.
Entergy Mississippi Entergy Mississippi, Inc.
Entergy New Orleans Entergy New Orleans, Inc.
Entergy Operations Entergy Operations, Inc., a subsidiary of
Entergy Corporation that has operating
responsibility for ANO, Grand Gulf 1, River
Bend, and Waterford 3
Entergy Services Entergy Services, Inc.
EPA U.S. Environmental Protection Agency
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
Form 10-K The combined Annual Report on Form 10-K for
the year ended December 31, 1997, of
Entergy, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, System
Energy, and Entergy London
Grand Gulf 1 Unit No. 1 (nuclear) of the Grand Gulf Plant
London Electricity London Electricity plc - a regional electric
company serving London, England, which was
acquired by Entergy effective February 1,
1997
MPSC Mississippi Public Service Commission
NRC Nuclear Regulatory Commission
Owner Participant A corporation that, in connection with the
Waterford 3 sale and leaseback transactions,
has acquired a beneficial interest in a
trust, the Owner Trustee of which is the
owner and lessor of undivided interests in
Waterford 3
Owner Trustee Each institution and/or individual acting as
Owner Trustee under a trust agreement with
an Owner Participant in connection with the
Waterford 3 sale and leaseback transactions
PUHCA Public Utility Holding Company Act of 1935,
as amended
PUCT Public Utility Commission of Texas
River Bend River Bend Nuclear Plant, owned by Entergy
Gulf States
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting Standards
as promulgated by the Financial Accounting
Standards Board
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.
UK The United Kingdom of Great Britain and
Northern Ireland
Waterford 3 Unit No. 3 (nuclear) of the Waterford Plant
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Net cash flow from operations for Entergy Corporation, the
domestic utility companies, System Energy, and Entergy London for the
three months ended March 31, 1998 and 1997 was as follows:
Three Months Three Months
Company Ended 3/31/98 Ended 3/31/97
(In Millions)
Entergy Corporation $274.5 $505.2
Entergy Arkansas $102.6 $142.6
Entergy Gulf States $114.7 $110.7
Entergy Louisiana $ 64.7 $ 76.2
Entergy Mississippi $ 24.5 $ 35.7
Entergy New Orleans $ 1.7 $ 12.6
System Energy $ 62.8 $ 69.8
Entergy London $ 64.1 $ 99.6
For the first quarter of 1998, cash flow from operations
declined compared to 1997 in part due to lower domestic electric
operating revenues, higher purchased power expenses, and higher other
operation and maintenance expenses, as discussed in "Entergy
Corporation and Subsidiaries, Management's Financial Discussion and
Analysis, Results of Operations." Revenue collections under rate
phase-in plans that exceed current cash requirements for the related
costs continue to contribute to cash flow from operations. In the
income statement, revenue collections from phase-in plans are offset
by the amortization of the previously deferred costs so that there is
no effect on net income. These phase-in plans which currently
contribute to Entergy Corporation's cash position will expire in
November 1998 for Entergy Arkansas, in September 1998 for Entergy
Mississippi, and in 2001 for Entergy New Orleans. Entergy Gulf
States' Louisiana retail phase-in plan for River Bend expired in
February 1998. Net cash flow used in operating activities for the
competitive growth businesses was $10.1 million primarily due to the
business expansion activities of Entergy Power Development
Corporation and Entergy Technology Holding Company. In accordance
with the purchase method of accounting, London Electricity's results
of operations are not included in Entergy Corporation and
Subsidiaries' and Entergy London's Statements of Consolidated Cash
Flows prior to February 1, 1997, the effective date of the
acquisition of London Electricity.
Financing Sources
London Electricity is Entergy London's sole investment and only
asset. Entergy London is therefore dependent upon dividends from
London Electricity for all of its cash flow. In addition to London
Electricity's cash flow from operations, Entergy London has other
primary sources of liquidity including London Electricity's several
uncommitted credit lines provided by banking institutions and London
Electricity's commercial paper program. In addition, London
Electricity intends to use availability under existing facilities, or
replacements thereof, to finance its remaining payment of windfall
profits taxes in December 1998, which will total approximately $117
million (BPS70 million).
Management believes that cash flow from operations, together
with Entergy London's existing sources of credit, will result in
sufficient financial resources being available to meet Entergy
London's projected capital needs and other expenditure requirements
for the foreseeable future. London Electricity has represented to
the Director General of Electricity Supply for the UK, in connection
with its Public Electricity Supply License, that it will use all
reasonable endeavors to maintain an investment grade rating on its
long-term debt.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Excluding London Electricity, cash from operations, supplemented
by cash on hand, was sufficient to meet substantially all investing
and financing requirements of the domestic utility companies and
System Energy, including capital expenditures, dividends, and debt
and preferred stock maturities, for the three months ended March 31,
1998.
Entergy's domestic utility companies have been able to fund
their capital requirements with cash from operations as discussed
above in "Cash Flows". Should additional cash be needed to fund
investments or to retire debt, the domestic utility companies and
System Energy each 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, System Energy, and Entergy London will continue to
refinance and/or redeem higher cost debt and preferred stock prior to
maturity. See Note 4 herein for a discussion of Entergy's recent
redemptions. Entergy's domestic utility companies and Entergy London
may continue to establish special purpose trusts or limited
partnerships as financing subsidiaries for the purpose of issuing
quarterly income preferred securities, such as those issued in 1996
by Entergy Louisiana Capital I and Entergy Arkansas Capital I, and
those issued in 1997 by Entergy Gulf States Capital I and Entergy
London Capital, L.P. Entergy Corporation, the domestic utility
companies, System Energy, and Entergy London also have the ability to
effect short-term borrowings. See Notes 4, 5, 6, 7, 9 and 10 in the
Form 10-K for additional information on Entergy's capital and
refinancing requirements in 1998-2002.
As of March 31, 1998, Entergy Corporation had $120 million
outstanding under its $300 million bank credit facility. In
addition, Entergy Corporation had $147.5 million outstanding and
Entergy Technology Holding Company (ETHC) had $100.8 million
outstanding on a joint $300 million bank line of credit as of March
31, 1998. See Note 4 to the Form 10-K for information on the
domestic utility companies', System Energy's, and Entergy London's
short-term borrowing authorizations and bank lines of credit.
Financing Uses
Management believes that productive investment by Entergy is
integral to enhancing the long-term value of its common stock.
Entergy has been expanding its investments overseas as well as in the
United States. As of March 31, 1998, Entergy had acquired or
participated in foreign electric ventures in Australia, Argentina,
Chile, China, Pakistan, Peru, and the UK. The ability of Entergy
Corporation to provide additional capital to exempt wholesale
generators or foreign utility companies currently is subject to the
SEC's regulations under PUHCA. Absent SEC approval, these
regulations limit the aggregate amount that Entergy may invest in
foreign utility companies and exempt wholesale generators to 50% of
consolidated retained earnings at the time an investment is made. As
of November 1997, Entergy Corporation no longer had capacity to make
additional investments under these regulations without SEC approval.
Entergy has applied to the SEC to obtain additional authority to make
such investments, and is also exploring means of raising capital for
other foreign investments in a manner not inconsistent with these
regulations. As of March 31, 1998, Entergy Corporation had a net
investment of $1.3 billion in equity capital in competitive growth
businesses.
To make capital investments, fund its subsidiaries, and pay
dividends, Entergy Corporation utilizes internally generated funds,
cash on hand, funds available under its bank credit facilities, and
bank financing as required. See Note 9 in the Form 10-K for a
discussion of capital requirements. Entergy Corporation receives
funds through dividend payments from its subsidiaries. During the
three months ended March 31, 1998 such dividend payments from
subsidiaries totaled $104.0 million. During the three months ended
March 31, 1998, Entergy Corporation paid $110.9 million of cash
dividends on its common stock. Declarations of dividends on
Entergy's common stock are made at the discretion of Entergy
Corporation's Board of Directors. See Note 8 in the Form 10-K for
information on dividend restrictions.
Entergy's management has announced that it is undertaking a
review of Entergy's financial strategies, with a view to optimizing
the uses of financial resources cash flow and strengthening credit
quality. As a part of such review, management will reassess, among
other things, the 1998 capital budget, allocations of capital for non-
utility investments, the possibilities for strategic purchases and/or
sales of assets, as well as whether the dividend on common stock
should be maintained at the current level. Entergy previously
announced intentions to sell an interest in certain of its non-
utility investments in a public offering. This action has been
postponed for an indefinite period.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy Corporation and Entergy Gulf States
During the fourth quarter of 1997, Entergy Gulf States
established reserves of $381 million ($227 million net of tax) for
the probable effects of a proposed agreement in principle between the
parties to the Entergy Gulf States rate proceedings in Texas. For
the three months ended March 31, 1998, Entergy Gulf States recorded
an additional reserve of $9.3 million to account for the impact of
the $40 million base rate reduction stipulated in the settlement
agreement. Entergy Gulf States expects that a similar reserve will
be required for each quarter until a resolution of the Texas case is
reached. Final resolution of these matters could negatively affect
Entergy Gulf States' ability to obtain financing, which in turn could
affect Entergy Gulf States' liquidity and ability to pay common stock
dividends to Entergy Corporation. See Note 2 for details regarding
the proposed agreement in principle.
Entergy Corporation and System Energy
Under the Capital Funds Agreement, Entergy Corporation has
agreed to supply System Energy with 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. In
addition, under supplements to the Capital Funds Agreement assigning
System Energy's rights thereunder as security for specific debt of
System Energy, Entergy Corporation has committed to make cash capital
contributions, if required, to enable System Energy to make payments
on such debt when due. The Capital Funds Agreement may be terminated
by the parties thereto, subject to the consent of certain creditors.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" in the Form 10-K, including
"Open Access Transmission", "Municipalization", "Industry
Consolidation", "Functional Unbundling", "Effects of Alternate Energy
Sources on Retail Electric Sales to Industrial and Large Commercial
Customers", and "Changes in Contract with Steam Customer" for a
discussion of the increasing competitive pressures facing Entergy and
the electric utility industry. See also "Foreign Distribution and
Supply", "Property Tax Exemptions", and "Market Risks" in the Form 10-
K for a discussion of other significant issues affecting Entergy.
Set forth below are recent developments to update the information
contained in the Form 10-K for the sections presented.
Domestic Competition and Industry Challenges
Transition to Competition Filings
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS - Transition to Competition
Filings" in the Form 10-K for a discussion of the domestic utility
companies' filings with their respective state regulators concerning
the transition to competition.
Subsequent to the APSC's approval of Entergy Arkansas'
transition to competition filing on December 12, 1997, the APSC
opened four new generic restructuring dockets and scheduled a series
of hearings throughout 1998. Comments from interested parties are
being accepted by the APSC. A final report of the APSC will be
submitted to the Legislature prior to its 1999 session. Similar
generic proceedings have also been established by the public service
commissions in Louisiana and Mississippi and by the Council.
Retail and Wholesale Rate Issues
In March 1998, certain parties to the Entergy Gulf States rate
proceedings in Texas regarding the transition to competition issues
reached an agreement in principle, subject to approval by the PUCT
and certain cities served by Entergy Gulf States, which would resolve
many of the pending rate issues. The agreement in principle has been
finalized in a formal settlement agreement, which was filed with the
PUCT on March 25, 1998. Several parties to the rate case, including
the PUCT General Counsel, have signed the settlement agreement
contingent upon the approval of certain cities served by Entergy Gulf
States, but the steering committee for those cities has recommended
that the cities not join the settlement agreement. Entergy Gulf
States cannot predict whether the settlement will be approved or
whether a settlement will be reached on other terms. See Note 2 for
additional information regarding recent developments in this
proceeding.
See Note 2 to the Form 10-K and Note 2 herein for a discussion
of the ongoing trend of regulator mandated rate reductions as well as
incentive and performance-based regulation and filings made with
state and local regulators regarding an orderly transition to a more
competitive market for electricity.
Legislative Activity
In late March 1998 the Clinton Administration released its plan
for electricity restructuring. The plan calls for customer choice by
2003 in addition to the recovery of stranded costs and repeal of
PUHCA. With little time remaining on the congressional calendar, it
appears increasingly unlikely that any comprehensive electric
restructuring legislation or a repeal of PUHCA will be enacted during
1998.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Domestic and Foreign Competitive Growth Businesses
Entergy Corporation seeks opportunities to expand its domestic
and foreign businesses that are not regulated by domestic state and
local utility regulatory authorities. Such business ventures
currently include power development and operations and retail
services related to the utility business. Refer to "MANAGEMENT'S
FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES"
in the Form 10-K for a discussion of Entergy Corporation's
investments in nonregulated and foreign energy-related businesses.
These investments may involve a greater risk than domestic regulated
utility enterprises. In the first quarter of 1998, these investments
increased consolidated net income by approximately $11 million.
At present, London Electricity has an exclusive right to supply
electricity to residential and small industrial and commercial
customers in its franchise area with demand of less than 100 KW. In
late 1998, this segment of the supply business will become open to
competition, subject to a six-month transition period. This means
the market will be fully opened with all customers having access to
competition by June 1999. See Note 2 in the Form 10-K for a
discussion of Entergy London regulatory matters.
On June 30, 1997, the UK government announced a review of the
regulatory framework governing the utilities, including electricity
and distribution. The Department of Trade and Industry green paper,
"A Fair Deal for Consumers - Modernising the Framework for Utility
Regulation", was published in late March 1998. Among the proposals
with implications for Entergy London contained in this paper are
recommendations for the separation of the electric distribution and
supply businesses, the placing of customer interests on a statutory
footing and mechanisms to ensure unearned gains are shared among all
stakeholders. Entergy London is currently preparing a detailed
response which is due by May 31, 1998.
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS" and Note 13 in the Form 10-K
for a discussion of Entergy's major nonregulated business
opportunities and foreign energy-related investments.
Domestic Deregulated Operations
Entergy Gulf States discontinued regulatory accounting
principles in 1989 for its wholesale jurisdiction and steam
department, and in 1991 for the Louisiana deregulated portion of
River Bend. In late 1997, Cajun's 30% interest in River Bend was
transferred by the Cajun bankruptcy trustee to Entergy Gulf States
and such interest is being treated as a deregulated operation. The
domestic deregulated operations of Entergy Gulf States show a net
loss of $2.9 million during the first quarter of 1998 compared to net
income of $4.6 million during the first quarter of 1997.
The decrease in net income from these deregulated operations for
the first quarter of 1998 was principally due to (1) lower revenues
from the wholesale jurisdiction resulting from reduced rates charged
to both a large wholesale customer and to Cajun for transmission
service, (2) decreased steam products revenues as a result of the
revised contractual arrangement with the steam customer, and (3)
revenues from off-system sales of the transferred 30% portion of
River Bend not fully recovering the costs associated with those
sales. These decreases were partially offset by higher revenues from
the Louisiana deregulated portion of River Bend. The future impact
of these deregulated operations on Entergy's and Entergy Gulf States'
results of operations and financial position will depend on future
operating costs, future efficiency and availability of generating
units, and future market prices for energy over the remaining life of
the assets.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Union Pacific Railroad Company (Entergy Corporation and Entergy
Arkansas)
In October 1997, Entergy Arkansas and Entergy Services
filed a civil suit against Union Pacific Railroad Company (Union
Pacific) in the United States District Court for the Middle District
of Louisiana. This lawsuit, which seeks damages and the termination
of coal shipping contracts with Union Pacific, maintains that Union
Pacific has failed to meet its contractual obligations to ship coal
to Entergy Arkansas' two large coal-fired plants and that such
failure has impaired Entergy Arkansas' ability to generate and sell
electricity from these plants. This lawsuit is entering the
discovery phase. Meanwhile, there has been little or no improvement
in the coal deliveries by the Union Pacific Railroad Company ("Union
Pacific") to Entergy Arkansas' coal fired generating stations, and
coal inventories at these stations are very low. Entergy Arkansas
has requested that Union Pacific allow another railroad to deliver
coal to the White Bluff generating station. It is not certain
whether Union Pacific will honor this request. If it does not,
Entergy will seek an order from the Federal Surface Transportation
Board requiring Union Pacific to allow the other railroad to bring
coal to the White Bluff site. If coal inventories cannot be rebuilt
for the summer season, one or more of Entergy Arkansas' coal-fired
generating stations may not be able to operate at full capacity,
which could result in increased wholesale replacement power
purchases. The operational and financial effect of Union Pacific's
failure to deliver coal to Entergy Arkansas during the second and
third quarters of 1998 will depend upon a number of factors, such as
weather, that Entergy Arkansas cannot control. However, Entergy
Arkansas will seek to mitigate the effects of inadequate coal
inventories. The ultimate outcome of the Union Pacific litigation
cannot be determined at this time.
Accounting Issues
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 for the foreseeable future.
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 "Domestic Deregulated Operations" above. Although discussions
with regulatory authorities regarding retail competition have
occurred and are expected to continue, definitive outcomes have not
yet been determined; therefore, the regulated operations continue to
apply SFAS 71. See Note 1 to the Form 10-K for additional discussion
of Entergy's application of SFAS 71.
Year 2000 Issues
Like many companies, Entergy is currently evaluating its
computer software, databases, embedded microprocessors, suppliers,
and other constituent relationships to determine the extent to which
modifications are required to prevent problems related to the year
2000, and the resources which will be required to make such
modifications. These problems could result in malfunctions in
certain software applications, databases, and computer equipment
with respect to dates on or after January 1, 2000, unless corrected.
Many of Entergy's suppliers also face year 2000 issues, which could
affect their performance and indirectly affect Entergy. Entergy has
been working on the above mentioned modifications and contingencies
throughout most of 1997, and will continue these efforts throughout
1998 and into 1999. Preliminary estimates of the total costs to be
incurred by Entergy's global enterprises in 1998 through mid-2000
have now been revised to approximately $120 million. Maintenance or
modification costs will be expensed as incurred, while the costs
of new software will be capitalized and amortized over the
software's useful life in accordance with EITF 96-14: "Accounting
for the Costs Associated with Modifying Computer Software for the
Year 2000."
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Effective February 1, 1997, Entergy Corporation acquired London
Electricity. Accordingly, consolidated net income for the three
months ended March 31, 1997 reflects London Electricity's results
subsequent to February 1, 1997. See Note 7 to the Form 10-K for
additional information regarding London Electricity.
Net Income
Consolidated net income decreased for the first quarter of 1998
primarily due to lower domestic electric operating revenues, higher
purchased power expenses, and higher other operation and maintenance
expenses, partially offset by lower fuel prices as described below.
Entergy anticipates that its overall results of operations for the
first half of 1998 will be less favorable than in 1997, primarily as
a result of domestic utility rate reductions ordered by the
regulators in 1997 and the loss of three large industrial customers
in 1997. The full effect of these events is being seen in 1998.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues and Sales", "Expenses", and "Other" below.
Revenues and Sales
The changes in electric operating revenues associated with
Entergy's domestic regulated operations for the first quarter of 1998
are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($22.7)
Rate riders (25.6)
Fuel cost recovery (64.1)
Sales volume/weather (18.3)
Other revenue (including unbilled) (10.3)
Sales for resale 9.1
-------
Total ($131.9)
=======
Electric operating revenues for the domestic utility companies
decreased for the first quarter of 1998 primarily due to lower fuel
adjustment revenues at Entergy Louisiana (which do not affect net
income), decreased rate rider revenues at Entergy Arkansas (which do
not affect net income), decreased base revenues at Entergy Gulf
States and Entergy Louisiana, and lower sales volume at Entergy
Louisiana. Fuel adjustment revenues decreased primarily due to lower
sales volume and lower unit prices at Entergy Louisiana in the first
quarter of 1998. Rate rider revenues at Entergy Arkansas decreased
primarily due to the decline in Grand Gulf 1 cost recovery rate rider
revenues reflecting scheduled reductions in the phase-in plan. Base
revenues at Entergy Gulf States decreased primarily due to aggressive
pricing strategies for targeted customer segments, the reserve
accrued in the first quarter of 1998 for rate refunds for Texas
retail customers, and a base rate reduction for the Louisiana retail
customers in the first quarter of 1998. This decrease is partially
offset by a reserve accrued in the first quarter of 1997 for Entergy
Gulf States in Louisiana. Base revenues at Entergy Louisiana
decreased due to a base rate reduction that became effective in the
third quarter of 1997. Sales volume decreased, primarily at Entergy
Louisiana, due to the loss of a large industrial customer as well as
substantially lower sales to another large industrial customer during
the current period due to customer cogeneration. Milder weather also
contributed to lower sales volume.
Competitive growth business revenues increased for the first
quarter of 1998. Entergy London revenues were higher due to an
additional month of activity under Entergy ownership recorded in 1998
compared to 1997, partially offset by a 3% price reduction, effective
April 1, 1997, for kilowatt-hours distributed. Also contributing to
the increase in competitive growth business revenues was an increase
in revenue at Entergy Power Marketing Corporation as a result of a
strong marketing effort, which is offset by increased power purchased
for resale as discussed below. The acquisition of new security
companies at Entergy Technology Holding Company also contributed to
the increase in competitive growth business revenues.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Gas operating revenues decreased for the first quarter of 1998
primarily due to a lower unit price for gas purchased for resale at
Entergy Gulf States and Entergy New Orleans.
Expenses
Operating expenses increased for the first quarter of 1998. The
increase is primarily due to increases in purchased power, other
operation and maintenance expenses, and depreciation, amortization,
and decommissioning expense. The increase was partially offset by a
reduction in fuel expenses, decreased amortization of rate deferrals,
and an increase in other regulatory credits.
The increase in purchased power is primarily the result of a
higher level of power trading by Entergy Power Marketing Corporation
and the additional month of Entergy London activity in the first
quarter of 1998. The increase in other operation and maintenance
expenses is principally due to one additional month of Entergy London
operations in 1998 as compared to 1997, the write-off of certain
investments, and the increase in the U.S. dollar to BPS exchange rate
during the first quarter of 1998 at Entergy London. Operation and
maintenance expenses of security companies acquired by Entergy
Technology Holding Company subsequent to the first quarter of 1997
also contributed to the increase in such expenses. At Entergy Gulf
States, other operation and maintenance expenses increased as a
result of the inclusion of expenses related to the 30% interest in
River Bend transferred by the Cajun bankruptcy trustee to Entergy
Gulf States in December 1997. Entergy Gulf States' 1998 results
include 100% of River Bend's operation and maintenance expenses in
its operating expenses, as compared to 70% of such expenses in the
first quarter of 1997. The increase in depreciation, amortization,
and decommissioning is primarily due to the inclusion of an
additional month of depreciation and amortization expense at Entergy
London in 1998, acquisition of additional security company assets at
Entergy Technology Holding Company and increased installment
contracts at Entergy Integrated Solutions, Inc.
Offsetting these increases was a decrease in fuel expenses
primarily at Entergy Arkansas and Entergy Louisiana due to decreased
generation and lower gas prices. Milder weather in the first quarter
of 1998 contributed to the decreased generation. The decrease in
the amortization of rate deferrals is due to a decrease in
amortization at Entergy Arkansas as prescribed in the Grand Gulf 1
rate phase-in plan. In addition, the amortization of rate deferrals
at Entergy Gulf States also decreased due to the expiration of the
Louisiana retail phase-in plan for River Bend in February 1998. The
increase in other regulatory credits is due to the net under-recovery
of Grand Gulf 1 related costs in the first quarter of 1998, as
compared to the net over-recovery in the first quarter of 1997.
Other
Miscellaneous other income - net increased for the first quarter
of 1998, primarily due to increased dividend income at Entergy Power
Development Corporation, increased profits from Entergy London's
equity method investments, and increased gains on the sale of London
Electricity fixed assets.
Interest on long-term debt increased in the first quarter of
1998 primarily due to three months of interest accrued at Entergy
London in 1998 as compared to two months in 1997. Distributions on
preferred securities of subsidiaries increased due to an issuance by
Entergy London of Cumulative Quarterly Income Preferred Securities in
November 1997.
The effective income tax rates for the first quarter of 1998 and
1997 were 44.6% and 34.6%, respectively. The increase in 1998 is
primarily due to the increased reversal of previously recorded AFUDC
amounts included in depreciation at Entergy Arkansas and Entergy Gulf
States and the impact of a research and experimentation credit
recorded in the first quarter of 1997 at Entergy Arkansas and Entergy
Louisiana.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands, Except Share Data)
<S> <C> <C>
Operating Revenues:
Domestic electric $1,320,052 $1,451,925
Natural gas 50,425 57,496
Steam products 8,400 11,089
Competitive growth businesses 934,215 525,243
---------- ----------
Total 2,313,092 2,045,753
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 348,963 398,742
Purchased power 778,674 420,962
Nuclear refueling outage expenses 22,674 17,236
Other operation and maintenance 483,688 426,087
Depreciation, amortization, and decommissioning 252,458 228,029
Taxes other than income taxes 95,794 92,991
Other regulatory credits (34,766) (21,546)
Amortization of rate deferrals 80,100 111,034
---------- ----------
Total 2,027,585 1,673,535
---------- ----------
Operating Income 285,507 372,218
---------- ----------
Other Income:
Allowance for equity funds used
during construction 2,349 3,033
Miscellaneous - net 31,573 17,393
---------- ----------
Total 33,922 20,426
---------- ----------
Interest Charges:
Interest on long-term debt 191,576 185,490
Other interest - net 10,102 11,905
Distributions on preferred securities of subsidiaries 11,178 4,172
Allowance for borrowed funds used
during construction (1,880) (2,437)
---------- ----------
Total 210,976 199,130
---------- ----------
Income Before Income Taxes 108,453 193,514
Income Taxes 48,399 67,029
---------- ----------
Net Income before Preferred Dividend Requirements and Other 60,054 126,485
Preferred and Preference Dividend Requirements of
Subsidiaries and Other 11,776 16,723
---------- ----------
Consolidated Net Income 48,278 109,762
---------- ----------
Other Comprehensive Income:
Foreign Currency Translation Adjustment 16,693 (759)
---------- ----------
Comprehensive Net Income $64,971 $109,003
========== ==========
Earnings per average common share:
Basic and diluted $0.20 $0.47
Dividends declared per common share $0.90 $0.45
Average number of common shares outstanding:
Basic 245,920,415 235,133,608
Diluted 246,092,660 235,230,360
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net Income before Preferred Dividend Requirements and Other $60,054 $126,485
Noncash items included in net income:
Amortization of rate deferrals 80,100 111,034
Other regulatory charges (credits) (34,766) (21,546)
Depreciation, amortization, and decommissioning 252,458 228,029
Deferred income taxes and investment tax credits (54,938) (53,743)
Allowance for equity funds used during construction (2,349) (3,033)
Changes in working capital:
Receivables 178,897 115,155
Fuel inventory 9,457 32,438
Accounts payable (214,906) (201,617)
Taxes accrued 71,519 119,438
Interest accrued (9,490) (10,637)
Other working capital accounts 19,789 98,914
Provision for estimated losses and reserves (62,335) (1,558)
Decommissioning trust contributions and realized change in trust assets (18,894) (14,656)
Other (97) (19,478)
-------- ----------
Net cash flow provided by operating activities $274,499 505,225
-------- ----------
Investing Activities:
Construction/capital expenditures (223,231) (125,743)
Allowance for equity funds used during construction 2,349 3,033
Nuclear fuel purchases (515) (54,155)
Proceeds from sale/leaseback of nuclear fuel 7,433 68,319
Acquisition of London Electricity, net of cash acquired - (2,021,501)
Acquisition of security companies (16,591) -
Investment in other nonregulated/nonutility properties (7,934) 12,515
-------- ----------
Net cash flow used in investing activities (238,489) (2,117,532)
-------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Financing Activities
Proceeds from the issuance of:
First mortgage bonds 112,556 84,490
Bank notes and other long-term debt 95,840 1,630,280
Preferred securities of subsidiaries trust - 82,323
Common stock 12,026 98,695
Retirement of:
First mortgage bonds (60,000) -
General and refunding mortgage bonds - (87,965)
Other long-term debt (83,208) -
Redemption of preferred stock (2,250) (101,728)
Changes in short-term borrowings - net 167,490 258,274
Preferred stock dividends paid (11,776) (16,723)
Common stock dividends paid (110,939) (105,035)
-------- ---------
Net cash flow provided by financing activities 119,739 1,842,611
-------- ---------
Effect of exchange rates on cash and cash equivalents 2,740 (758)
-------- ---------
Net increase in cash and cash equivalents 158,489 229,546
Cash and cash equivalents at beginning of period 830,547 388,703
-------- ---------
Cash and cash equivalents at end of period $989,036 $618,249
======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $207,888 $223,444
Income taxes $14,589 $3,002
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets $18,894 ($1,119)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
(In Thousands)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $66,288 $85,067
Temporary cash investments - at cost,
which approximates market 716,413 700,431
Special deposits 206,335 45,049
Total cash and cash equivalents 989,036 830,547
Notes receivable 5,589 8,157
Accounts receivable:
Customer (less allowance for doubtful accounts of
$31.7 million in 1998 and $32.8 million in 1997) 419,424 458,085
Other 216,846 225,523
Accrued unbilled revenues 461,651 580,194
Deferred fuel 126,295 150,596
Fuel inventory 109,874 119,331
Materials and supplies - at average cost 388,249 367,870
Rate deferrals 165,615 237,302
Prepayments and other 180,871 193,717
----------- -----------
Total 3,063,450 3,171,322
----------- -----------
Other Property and Investments:
Decommissioning trust funds 626,356 589,050
Non-regulated investments 588,896 568,951
Other 222,988 225,818
----------- -----------
Total 1,438,240 1,383,819
----------- -----------
Utility Plant:
Electric 25,505,909 25,310,122
Plant acquisition adjustment - Entergy Gulf States 435,094 439,160
Electric plant under leases 674,483 674,483
Property under capital leases - electric 131,197 134,278
Natural gas 176,173 169,964
Steam products 81,881 82,289
Construction work in progress 627,360 565,667
Nuclear fuel under capital leases 245,164 269,011
Nuclear fuel 70,961 72,875
----------- -----------
Total 27,948,222 27,717,849
Less - accumulated depreciation and amortization 9,798,817 9,585,021
----------- -----------
Utility plant - net 18,149,405 18,132,828
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 154,189 162,602
SFAS 109 regulatory asset - net 1,166,144 1,174,187
Unamortized loss on reacquired debt 191,981 196,891
Other regulatory assets 495,678 466,780
Long-term receivables 36,301 36,984
CitiPower license (net of amortization of $29.4 million in 1998
and $25.6 million in 1997) 493,991 486,153
London Electricity license (net of amortization of $40.3 million
in 1998 and $ 25.6 million in 1997) 1,342,226 1,327,312
Other 510,221 461,822
----------- -----------
Total 4,390,731 4,312,731
----------- -----------
TOTAL $27,041,826 $27,000,700
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $504,687 $390,674
Notes payable 602,118 428,964
Accounts payable 714,245 915,800
Customer deposits 183,736 178,162
Taxes accrued 436,791 359,996
Accumulated deferred income taxes 15,500 56,524
Interest accrued 205,739 214,763
Dividends declared 118,865 8,166
Obligations under capital leases 175,979 167,700
Other 61,817 81,303
----------- -----------
Total 3,019,477 2,802,052
----------- -----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,578,364 4,567,052
Accumulated deferred investment tax credits 574,866 587,781
Obligations under capital leases 200,784 236,000
Other 1,904,456 1,857,514
----------- -----------
Total 7,258,470 7,248,347
----------- -----------
Long-term debt 9,025,711 9,068,325
Subsidiaries' preferred stock with sinking fund 182,755 185,005
Subsidiary's preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 215,000 215,000
Company-obligated redeemable preferred securities of subsidiary
holding solely junior subordinated deferrable debentures 300,000 300,000
Shareholders' Equity:
Subsidiaries' preferred stock without sinking fund 338,455 338,455
Common stock, $.01 par value, authorized 500,000,000
shares; issued 246,556,946 shares in 1998 and 246,149,198
shares in 1997 2,466 2,461
Additional paid-in capital 4,625,592 4,613,572
Retained earnings 1,984,903 2,157,912
Cumulative foreign currency translation adjustment (53,124) (69,817)
Less - treasury stock (266,085 shares in 1998 and
306,852 shares in 1997) 7,879 10,612
----------- -----------
Total 6,890,413 7,031,971
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $27,041,826 $27,000,700
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(In Millions)
Domestic Utility Electric Operating
Revenues:
Residential $ 463.1 $ 502.1 ($39.0) (8)
Commercial 332.6 368.3 (35.7) (10)
Industrial 444.7 496.9 (52.2) (11)
Governmental 41.5 41.6 (0.1) -
------------------------------
Total retail 1,281.9 1,408.9 (127.0) (9)
Sales for resale 83.0 76.6 6.4 8
Other (44.9) (33.6) (11.3) (34)
------------------------------
Total $1,320.0 $ 1,451.9 ($131.9) (9)
==============================
Billed Electric Energy
Sales (GWH):
Residential 6,240 6,399 (159) (2)
Commercial 4,829 4,895 (66) (1)
Industrial 10,412 10,897 (485) (4)
Governmental 627 595 32 5
------------------------------
Total retail 22,108 22,786 (678) (3)
Sales for resale 1,930 2,425 (495) (20)
------------------------------
Total 24,038 25,211 (1,173) (5)
==============================
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1998 primarily due
to a decrease in electric operating revenues, partially offset by a
decrease in operating expenses.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues and Sales", "Expenses", and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1998 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues $1.6
Rate riders (27.1)
Fuel cost recovery (6.7)
Sales volume/weather (1.6)
Other revenue (including unbilled) 15.6
Sales for resale (26.6)
------
Total ($44.8)
======
Electric operating revenues decreased for the first quarter of
1998 primarily as a result of a decrease in rate rider revenue and
sales for resale, partially offset by an increase in other revenue
(primarily unbilled revenue). Rate rider revenue (which does not
affect net income) decreased primarily due to the decline in Grand
Gulf 1 cost recovery rate rider revenues reflecting scheduled
reductions in the phase-in plan. Sales for resale decreased due to a
decrease in sales to associated companies as a result of changes in
generation requirements and availability among the domestic utility
companies. Unbilled revenue increased primarily as a result of an
increase in generation and the prior year's unfavorable variance in
fuel revenues.
Expenses
Operating expenses decreased for the first quarter of 1998
primarily due to decreases in fuel expenses and in the amortization
of Grand Gulf 1 rate deferrals and an increase in other regulatory
credits. Fuel expenses decreased primarily due to a reduction in
generation related to the decrease in sales for resale. The decrease
in the amortization of Grand Gulf 1 rate deferrals is due to a
decrease in amortization prescribed in the Grand Gulf 1 rate phase-in
plan and the Stipulation and Settlement Agreement with the APSC. The
change in other regulatory credits is a result of the net under-
recovery of Grand Gulf 1 related costs in the first quarter of 1998
compared to the net over-recovery in the first quarter of 1997.
Other
The effective income tax rates for the first quarter of 1998 and
1997 were 42.7% and 17.1%, respectively. The increase in 1998 is
primarily due to the increased reversal of previously recorded AFUDC
amounts included in depreciation and the impact of a research and
experimentation credit recorded in the first quarter of 1997.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Revenues $329,869 $374,731
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 46,223 66,593
Purchased power 95,395 94,734
Nuclear refueling outage expenses 8,091 6,900
Other operation and maintenance 85,799 85,716
Depreciation, amortization, and decommissioning 45,260 41,449
Taxes other than income taxes 10,360 9,428
Other regulatory charges (credits) (10,581) 736
Amortization of rate deferrals 22,068 38,285
-------- --------
Total 302,615 343,841
-------- --------
Operating Income 27,254 30,890
-------- --------
Other Income:
Allowance for equity funds used
during construction 704 1,443
Miscellaneous - net 6,870 5,325
-------- --------
Total 7,574 6,768
-------- --------
Interest Charges:
Interest on long-term debt 23,464 24,450
Other interest - net 776 929
Distributions on preferred securities of subsidiary 1,255 1,275
Allowance for borrowed funds used
during construction (487) (868)
-------- --------
Total 25,008 25,786
-------- --------
Income Before Income Taxes 9,820 11,872
Income Taxes 4,197 2,024
-------- --------
Net Income 5,623 9,848
Preferred Stock Dividend Requirements
and Other 2,626 2,832
-------- --------
Earnings Applicable to Common Stock $2,997 $7,016
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $5,623 $9,848
Noncash items included in net income:
Amortization of rate deferrals 22,068 38,285
Other regulatory charges (credits) (10,581) 736
Depreciation, amortization, and decommissioning 45,260 41,449
Deferred income taxes and investment tax credits (9,854) (21,515)
Allowance for equity funds used during construction (704) (1,443)
Changes in working capital:
Receivables 46,353 61,901
Fuel inventory 1,151 3,511
Accounts payable 11,184 (22,825)
Taxes accrued 19,038 26,040
Interest accrued (1,462) (421)
Other working capital accounts (16,353) (6,349)
Decommissioning trust contributions and realized
change in trust assets (6,281) (4,046)
Provision for estimated losses and reserves (1,706) 3,036
Other (1,092) 14,366
--------- ---------
Net cash flow provided by operating activities 102,644 142,573
--------- ---------
Investing Activities:
Construction expenditures (28,837) (32,479)
Allowance for equity funds used during construction 704 1,443
Nuclear fuel purchases (6,832) (35,574)
Proceeds from sale/leaseback of nuclear fuel 6,832 35,595
--------- ---------
Net cash flow used in investing activities (28,133) (31,015)
--------- ---------
Financing Activities:
Proceeds from the issuance of first mortgage bonds - 84,490
Retirement of:
First mortgage bonds - (30,000)
Other long-term debt (45,500) -
Dividends paid:
Common stock - (26,400)
Preferred stock (2,626) (5,663)
--------- ---------
Net cash flow provided by (used in) financing activities (48,126) 22,427
--------- ---------
Net increase in cash and cash equivalents 26,385 133,985
Cash and cash equivalents at beginning of period 203,391 43,857
--------- ---------
Cash and cash equivalents at end of period $229,776 $177,842
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $26,891 $22,208
Income taxes $469 $4,260
Noncash investing and financing activities:
Capital lease obligations incurred - $27,500
Change in unrealized appreciation of
decommissioning trust assets $12,502 $143
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $3,386 $6,076
Temporary cash investments - at cost,
which approximates market:
Associated companies 40,395 41,389
Other 95,221 110,877
Special deposits 90,774 45,049
---------- ----------
Total cash and cash equivalents 229,776 203,391
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.8 million in 1998 and 1997) 64,320 71,910
Associated companies 35,206 46,166
Other 6,905 10,282
Accrued unbilled revenues 65,190 89,616
Fuel inventory - at average cost 27,018 28,169
Materials and supplies - at average cost 83,145 79,692
Rate deferrals 53,181 75,249
Deferred nuclear refueling outage costs 18,079 24,335
Prepayments and other 12,236 8,647
---------- ----------
Total 595,056 637,457
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,213 11,213
Decommissioning trust fund 269,356 250,573
Other - at cost (less accumulated depreciation) 4,982 4,939
---------- ----------
Total 285,551 266,725
---------- ----------
Utility Plant:
Electric 4,663,349 4,650,065
Property under capital leases 52,918 53,843
Construction work in progress 145,143 123,087
Nuclear fuel under capital lease 90,591 92,621
---------- ----------
Total 4,952,001 4,919,616
Less - accumulated depreciation and amortization 2,163,747 2,116,826
---------- ----------
Utility plant - net 2,788,254 2,802,790
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 252,275 252,712
Unamortized loss on reacquired debt 53,180 53,780
Other regulatory assets 84,738 79,461
Other 13,273 13,952
---------- ----------
Total 403,466 399,905
---------- ----------
TOTAL $4,072,327 $4,106,877
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $105,924 $60,650
Notes payable 667 667
Accounts payable:
Associated companies 70,555 59,438
Other 76,472 76,405
Customer deposits 24,433 23,437
Taxes accrued 96,365 77,327
Accumulated deferred income taxes 25,203 32,239
Interest accrued 27,364 28,826
Co-owner advances 12,068 7,666
Deferred fuel cost 2,548 16,244
Obligations under capital leases 60,810 62,623
Other 14,427 21,696
---------- ----------
Total 516,836 467,218
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 759,010 759,489
Accumulated deferred investment tax credits 102,616 103,899
Obligations under capital leases 82,700 83,841
Other 174,233 169,884
---------- ----------
Total 1,118,559 1,117,113
---------- ----------
Long-term debt 1,156,250 1,244,860
Preferred stock with sinking fund 31,027 31,027
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 60,000 60,000
Shareholder's Equity:
Preferred stock without sinking fund 116,350 116,350
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares 470 470
Additional Paid-in capital 590,134 590,134
Retained earnings 482,701 479,705
---------- ----------
Total 1,189,655 1,186,659
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,072,327 $4,106,877
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY ARKANSAS, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 120.9 $ 131.4 ($10.5) (8)
Commercial 59.5 72.6 (13.1) (18)
Industrial 72.3 81.6 (9.3) (11)
Governmental 3.4 4.3 (0.9) (21)
---------------------------
Total retail 256.1 289.9 (33.8) (12)
Sales for resale
Associated companies 34.2 60.8 (26.6) (44)
Non-associated companies 44.2 44.2 - -
Other (4.6) (20.2) 15.6 77
---------------------------
Total $ 329.9 $ 374.7 ($44.8) (12)
===========================
Billed Electric Energy
Sales (GWH):
Residential 1,504 1,518 (14) (1)
Commercial 1,003 1,008 (5) -
Industrial 1,566 1,570 (4) -
Governmental 55 60 (5) (8)
---------------------------
Total retail 4,128 4,156 (28) (1)
Sales for resale
Associated companies 1,638 2,974 (1,336) (45)
Non-associated companies 1,173 1,496 (323) (22)
---------------------------
Total 6,939 8,626 (1,687) (20)
===========================
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1998 primarily due
to a decrease in operating revenues and an increase in operating
expenses, partially offset by a decrease in interest charges and
lower income taxes.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues and Sales", "Expenses", and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1998 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($10.2)
Fuel cost recovery (1.6)
Sales volume/weather -
Other revenue (including unbilled) (13.1)
Sales for resale 8.6
------
Total ($16.3)
======
Electric operating revenues decreased for the first quarter of
1998 primarily due to decreases in base revenues and other revenue
(primarily unbilled revenue). These decreases are partially offset
by an increase in sales for resale. Base revenues decreased
primarily due to aggressive pricing strategies for targeted customer
segments, the reserve accrued in the first quarter of 1998 for rate
refunds for Texas retail customers, and a base rate reduction in
Louisiana in the first quarter of 1998. This decrease is partially
offset by a Louisiana reserve accrued in the first quarter of 1997.
Unbilled revenues decreased as a result of decreased pricing due to a
rate reduction in the first quarter of 1998 as compared to the first
quarter of 1997. Sales for resale increased due to an increase in
sales to non-associated utilities and additional revenues related to
the sale of energy from the 30% interest in River Bend transferred by
the Cajun bankruptcy trustee to Entergy Gulf States in December 1997.
Gas operating revenues decreased for the first quarter of 1998
due to a lower unit price for gas purchased for resale. Steam
operating revenues decreased for the first quarter of 1998 primarily
due to changes in the customer contract in 1996, which were not fully
effective in the first quarter of 1997.
Expenses
Operating expenses increased slightly for the first quarter of
1998 primarily due to increased other operation and maintenance
expenses, partially offset by a decrease in the amortization of rate
deferrals. Other operation and maintenance expenses increased as a
result of the inclusion of expenses related to the 30% interest in
River Bend transferred by the Cajun bankruptcy trustee to Entergy
Gulf States in December 1997. Entergy Gulf States now includes 100%
of River Bend's operation and maintenance expenses in its operating
expenses, as compared to 70% of such expenses in the first quarter of
1997. The amortization of rate deferrals decreased for the first
quarter of 1998 due to the expiration of the Louisiana retail phase-
in plan for River Bend in February 1998.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other
Interest charges decreased for the first quarter of 1998
primarily due to the retirement of certain long-term debt in 1997.
The effective income tax rates for the first quarter of 1998 and
1997 were 46.8% and 37.9%, respectively. The increase in 1998 is
primarily due to the increased reversal of previously recorded AFUDC
amounts included in depreciation.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $431,864 $448,138
Natural gas 17,245 22,101
Steam products 8,400 11,089
-------- --------
Total 457,509 481,328
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 118,286 120,392
Purchased power 78,660 79,341
Nuclear refueling outage expenses 4,549 2,645
Other operation and maintenance 98,539 83,262
Depreciation, amortization, and decommissioning 54,297 52,968
Taxes other than income taxes 30,911 29,207
Other regulatory credits (6,336) (5,865)
Amortization of rate deferrals 14,942 26,364
-------- --------
Total 393,848 388,314
-------- --------
Operating Income 63,661 93,014
-------- --------
Other Income:
Allowance for equity funds used
during construction 612 725
Miscellaneous - net 3,960 4,101
-------- --------
Total 4,572 4,826
-------- --------
Interest Charges:
Interest on long-term debt 38,371 41,986
Other interest - net 744 2,738
Distributions on preferred securities of subsidiary 1,860 1,322
Allowance for borrowed funds used
during construction (467) (619)
-------- --------
Total 40,508 45,427
-------- --------
Income Before Income Taxes 27,725 52,413
Income Taxes 12,969 19,878
-------- --------
Net Income 14,756 32,535
Preferred and Preference Stock
Dividend Requirements and Other 4,814 8,943
-------- --------
Earnings Applicable to Common Stock $9,942 $23,592
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $14,756 $32,535
Noncash items included in net income:
Amortization of rate deferrals 14,942 26,364
Other regulatory credits (6,336) (5,865)
Depreciation, amortization, and decommissioning 54,297 52,968
Deferred income taxes and investment tax credits (12,750) 6,614
Allowance for equity funds used during construction (612) (725)
Changes in working capital:
Receivables 29,735 (15,453)
Fuel inventory (3,252) 3,838
Accounts payable (23,962) (19,558)
Taxes accrued 17,416 4,981
Interest accrued 7,812 7,099
Deferred fuel 14,027 (3,648)
Other working capital accounts 6,790 12,860
Decommissioning trust contributions and realized
change in trust assets (4,005) (1,926)
Provision for estimated losses and reserves (3,574) (2,284)
Other 9,458 12,859
-------- --------
Net cash flow provided by operating activities 114,742 110,659
-------- --------
Investing Activities:
Construction expenditures (21,553) (27,932)
Allowance for equity funds used during construction 612 725
Nuclear fuel purchases (153) -
Proceeds from sale/leaseback of nuclear fuel 146 -
-------- --------
Net cash flow used in investing activities (20,948) (27,207)
-------- --------
Financing Activities:
Proceeds from the issuance of
preferred securities of subsidiary trust - 82,323
Retirement of first mortgage bonds (25,000) (41,965)
Redemption of preferred and preference stock (2,250) (89,367)
Dividends paid:
Common stock (71,358) -
Preferred and preference stock (4,814) (6,940)
-------- --------
Net cash flow used in financing activities (103,422) (55,949)
-------- --------
Net increase (decrease) in cash and cash equivalents (9,628) 27,503
Cash and cash equivalents at beginning of period 165,164 122,406
-------- --------
Cash and cash equivalents at end of period $155,536 $149,909
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $29,047 $34,925
Income taxes $7,455 -
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $2,278 $41
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $7,967 $10,549
Temporary cash investments - at cost,
which approximates market:
Associated companies 38,810 37,389
Other 108,759 117,226
---------- ----------
Total cash and cash equivalents 155,536 165,164
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.8 million in 1998 and 1997) 80,245 99,762
Associated companies 11,166 9,024
Other 24,344 32,837
Accrued unbilled revenues 70,958 74,825
Deferred fuel costs 131,730 145,757
Accumulated deferred income taxes 27,683 22,093
Fuel inventory - at average cost 40,879 37,627
Materials and supplies - at average cost 109,393 104,690
Rate deferrals 9,077 21,749
Prepayments and other 14,905 21,680
---------- ----------
Total 675,916 735,208
---------- ----------
Other Property and Investments:
Decommissioning trust fund 193,745 187,462
Other - at cost (less accumulated depreciation) 176,848 176,953
---------- ----------
Total 370,593 364,415
---------- ----------
Utility Plant:
Electric 7,186,550 7,168,668
Natural Gas 48,460 47,656
Steam products 81,881 82,289
Property under capital leases 66,677 67,946
Construction work in progress 92,100 90,333
Nuclear fuel under capital lease 48,600 54,390
Nuclear fuel 20,466 23,051
---------- ----------
Total 7,544,734 7,534,333
Less - accumulated depreciation and amortization 3,044,950 2,996,147
---------- ----------
Utility plant - net 4,499,784 4,538,186
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 96,140 98,410
SFAS 109 regulatory asset - net 376,902 376,275
Unamortized loss on reacquired debt 46,987 48,417
Other regulatory assets 86,152 86,819
Long-term receivables 36,301 36,984
Other 210,802 203,923
---------- ----------
Total 853,284 850,828
---------- ----------
TOTAL $6,399,577 $6,488,637
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $190,890 $190,890
Accounts payable:
Associated companies 55,835 48,726
Other 78,373 109,444
Customer deposits 31,424 30,311
Taxes accrued 65,734 48,318
Interest accrued 52,966 45,154
Nuclear refueling reserve 7,332 3,386
Obligations under capital leases 30,307 30,280
Other 17,305 17,646
---------- ----------
Total 530,166 524,155
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,127,422 1,124,644
Accumulated deferred investment tax credits 206,271 215,438
Obligations under capital leases 84,971 92,055
Deferred River Bend finance charges 4,646 9,330
Other 925,659 914,079
---------- ----------
Total 2,348,969 2,355,546
---------- ----------
Long-term debt 1,677,775 1,702,719
Preferred stock with sinking fund 66,728 68,978
Preference stock 150,000 150,000
Company - obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 85,000 85,000
Shareholder's Equity:
Preferred stock without sinking fund 51,444 51,444
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares 114,055 114,055
Additional paid-in capital 1,152,575 1,152,575
Retained earnings 222,865 284,165
---------- ----------
Total 1,540,939 1,602,239
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,399,577 $6,488,637
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY GULF STATES, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(In Millions)
Electric Department Operating
Revenues:
Residential $ 128.3 $ 133.6 ($ 5.3) (4)
Commercial 100.4 105.4 (5.0) (5)
Industrial 175.6 177.9 (2.3) (1)
Governmental 10.6 8.0 2.6 33
---------------------------
Total retail 414.9 424.9 (10.0) (2)
Sales for resale
Associated companies 1.8 9.0 (7.2) (80)
Non-associated companies 21.5 5.7 15.8 277
Other (1) (6.3) 8.6 (14.9) (173)
---------------------------
Total Electric Department $ 431.9 $ 448.2 ($ 16.3) (4)
===========================
Billed Electric Energy
Sales (GWH):
Residential 1,720 1,793 (73) (4)
Commercial 1,441 1,488 (47) (3)
Industrial 4,348 4,165 183 4
Governmental 154 115 39 34
---------------------------
Total retail 7,663 7,561 102 1
Sales for resale
Associated companies 57 46 11 24
Non-associated companies 501 664 (163) (25)
---------------------------
Total Electric Department 8,221 8,271 (50) (1)
===========================
(1) Includes the effect of the provision for rate refunds.
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1998 primarily due
to a decrease in electric operating revenues, partially offset by a
decrease in operating expenses and lower income taxes.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues and Sales", "Expenses", and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1998 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($8.4)
Fuel cost recovery (46.1)
Sales volume/weather (16.0)
Other revenue (including unbilled) (7.1)
Sales for resale (0.3)
------
Total ($77.9)
======
Electric operating revenues decreased for the first quarter of
1998 primarily due to lower fuel adjustment revenues, which do not
affect net income, decreases in base revenues and other revenues, and
lower sales volume. Fuel adjustment revenues decreased due to lower
sales volume and pricing. Base revenues decreased due to a base rate
reduction that became effective in the third quarter of 1997. The
decrease in other revenue, primarily unbilled revenue, is due to a
decrease in sales volume and pricing. Sales volume decreased due to
the loss of a large industrial customer as well as substantially
lower sales to another large industrial customer during the current
period due to customer cogeneration. Milder weather in the first
quarter of 1998 also contributed to the lower sales volume.
Expenses
Operating expenses decreased for the first quarter of 1998
primarily due to a decrease in fuel and purchased power expenses as a
result of decreased generation as a result of lower sales volume and
lower gas prices.
Other
The effective income tax rates for the first quarter of 1998 and
1997 were 46.9% and 40.8%, respectively. The increase in 1998 is
primarily due to the impact of a research and experimentation credit
recorded in the first quarter of 1997.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Revenues $356,038 $433,983
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 74,702 112,916
Purchased power 87,996 96,196
Nuclear refueling outage expenses 5,435 3,975
Other operation and maintenance 71,024 74,085
Depreciation, amortization, and decommissioning 44,078 44,371
Taxes other than income taxes 18,458 18,239
Other regulatory charges (credits) (877) 3,495
Amortization of rate deferrals - 2,826
-------- --------
Total 300,816 356,103
-------- --------
Operating Income 55,222 77,880
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 361 218
Miscellaneous - net 2,140 (641)
-------- --------
Total 2,501 (423)
-------- --------
Interest Charges:
Interest on long-term debt 28,762 30,083
Other interest - net 1,506 1,935
Distributions on preferred securities of subsidiary 1,575 1,575
Allowance for borrowed funds used
during construction (333) (378)
-------- --------
Total 31,510 33,215
-------- --------
Income Before Income Taxes 26,213 44,242
Income Taxes 12,296 18,070
-------- --------
Net Income 13,917 26,172
Preferred Stock Dividend Requirements
and Other 3,253 3,592
-------- --------
Earnings Applicable to Common Stock $10,664 $22,580
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Three Months ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $13,917 $26,172
Noncash items included in net income:
Amortization of rate deferrals - 2,826
Other regulatory charges (credits) (877) 3,495
Depreciation, amortization, and decommissioning 44,078 44,371
Deferred income taxes and investment tax credits (12,317) (17,008)
Allowance for equity funds used during construction (361) (218)
Changes in working capital:
Receivables 21,549 2,259
Accounts payable (38,381) (33,184)
Taxes accrued 29,713 23,535
Interest accrued (8,091) (21,862)
Deferred fuel 16,221 23,843
Other working capital accounts 600 18,534
Decommissioning trust contributions and realized
change in trust assets (2,860) (4,393)
Provision for estimated losses and reserves 1,120 2,586
Other 353 5,239
-------- --------
Net cash flow provided by operating activities 64,664 76,195
-------- --------
Investing Activities:
Construction expenditures (19,325) (12,421)
Allowance for equity funds used during construction 361 218
Nuclear fuel purchases - (32,685)
Proceeds from sale/leaseback of nuclear fuel - 32,685
-------- --------
Net cash flow used in investing activities (18,964) (12,203)
-------- --------
Financing Activities:
Proceeds from the issuance of first mortgage bonds 112,556 -
Retirement of first mortgage bonds (35,000) (16,000)
Redemption of preferred stock - (7,500)
Changes in short-term borrowings - net - (6,694)
Dividends paid:
Common stock (5,200) (26,900)
Preferred stock (3,253) (3,490)
-------- --------
Net cash flow provided by (used in) financing activities 69,103 (60,584)
-------- --------
Net increase in cash and cash equivalents 114,803 3,408
Cash and cash equivalents at beginning of period 49,749 23,746
-------- --------
Cash and cash equivalents at end of period $164,552 $27,154
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $36,780 $52,242
Income taxes $8,400 -
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $2,358 ($321)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $5,366 $5,148
Temporary cash investments - at cost,
which approximates market 43,625 44,601
Special deposits 115,561 -
---------- ----------
Total cash and cash equivalents 164,552 49,749
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.2 million in 1998 and 1997) 55,479 69,566
Associated companies 16,081 15,035
Other 8,897 7,441
Accrued unbilled revenues 51,910 61,874
Accumulated deferred income taxes 19,789 10,994
Materials and supplies - at average cost 83,937 82,850
Deferred nuclear refueling outage costs 21,741 27,176
Prepayments and other 15,728 10,793
---------- ----------
Total 438,114 335,478
---------- ----------
Other Property and Investments:
Nonutility property 22,525 22,525
Decommissioning trust fund 70,322 65,104
Investment in subsidiary companies - at equity 14,230 14,230
---------- ----------
Total 107,077 101,859
---------- ----------
Utility Plant:
Electric 5,071,875 5,058,130
Property under capital leases 233,513 233,513
Construction work in progress 53,386 52,632
Nuclear fuel under capital lease 48,880 57,811
Nuclear fuel 1,560 1,560
---------- ----------
Total 5,409,214 5,403,646
Less - accumulated depreciation and amortization 2,057,877 2,021,392
---------- ----------
Utility plant - net 3,351,337 3,382,254
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 273,572 278,234
Unamortized loss on reacquired debt 32,448 33,468
Other regulatory assets 29,500 29,991
Other 16,053 14,116
---------- ----------
Total 351,573 355,809
---------- ----------
TOTAL $4,248,101 $4,175,400
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $115,892 $35,300
Accounts payable:
Associated companies 42,119 43,508
Other 58,894 95,886
Customer deposits 55,512 55,331
Taxes accrued 54,956 25,243
Interest accrued 26,480 34,571
Dividends declared 3,253 3,253
Deferred fuel costs 19,489 3,268
Obligations under capital leases 42,064 29,232
Other 9,584 8,578
---------- ----------
Total 428,243 334,170
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 807,096 813,748
Accumulated deferred investment tax credits 132,879 134,276
Obligations under capital leases 6,816 28,579
Deferred interest - Waterford 3 lease obligation 18,605 17,799
Other 122,476 119,519
---------- ----------
Total 1,087,872 1,113,921
---------- ----------
Long-term debt 1,337,677 1,338,464
Preferred stock with sinking fund 85,000 85,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 70,000 70,000
Shareholder's Equity:
Preferred stock without sinking fund 100,500 100,500
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares 1,088,900 1,088,900
Capital stock expense and other (2,321) (2,321)
Retained earnings 52,230 46,766
---------- ----------
Total 1,239,309 1,233,845
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,248,101 $4,175,400
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY LOUISIANA, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 114.1 $ 133.3 ($ 19.2) (14)
Commercial 78.7 89.5 (10.8) (12)
Industrial 149.5 188.1 (38.6) (21)
Governmental 8.3 9.0 (0.7) (8)
---------------------------
Total retail 350.6 419.9 (69.3) (17)
Sales for resale
Associated companies 0.9 0.3 0.6 200
Non-associated companies 11.0 11.9 (0.9) (8)
Other (1) (6.5) 1.8 (8.3) (461)
---------------------------
Total $ 356.0 $ 433.9 ($77.9) (18)
===========================
Billed Electric Energy
Sales (GWH):
Residential 1,656 1,723 (67) (4)
Commercial 1,089 1,103 (14) (1)
Industrial 3,641 4,325 (684) (16)
Governmental 124 119 5 4
---------------------------
Total retail 6,510 7,270 (760) (10)
Sales for resale
Associated companies 28 7 21 300
Non-associated companies 153 140 13 9
---------------------------
Total 6,691 7,417 (726) (10)
===========================
(1) Includes the effect of the provision for rate refunds.
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the first quarter of 1998 primarily as
a result of an increase in operating expenses, partially offset by an
increase in electric operating revenues.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues and Sales", "Expenses", and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1998 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($2.2)
Grand Gulf rate riders 1.5
Fuel cost recovery (4.1)
Sales volume/weather 1.0
Other revenue (including unbilled) 3.2
Sales for resale 5.3
----
Total $4.7
====
Electric operating revenues increased for the first quarter of
1998 primarily due to an increase in sales for resale and other
revenue (primarily unbilled revenue), partially offset by a decrease
in fuel adjustment revenues, which do not affect net income. Sales
for resale increased as a result of an increase in sales to
associated companies primarily due to changes in generation
requirements and availability among the domestic utility companies.
The decrease in fuel adjustment revenues is due to an MPSC order,
effective May 1, 1997, that changed fuel recovery pricing to a fixed
fuel factor, which is adjusted annually. The increase in unbilled
revenue is primarily a result of the prior year's unfavorable price
variance in fuel revenues that is not recurring in the current year
due to the fixed fuel factor.
Expenses
Operating expenses increased for the first quarter of 1998
primarily due to an increase in fuel expenses and a decrease in other
regulatory credits, partially offset by decreases in purchased power
expenses and other operation and maintenance expenses. The increase
in fuel expenses is due to increased generation requirements and a
shift from higher priced purchased power to lower priced fossil fuel.
The decrease in other regulatory credits is a result of the decrease
in the under-recovery of Grand Gulf 1 related costs. Other operation
and maintenance expenses decreased primarily as a result of higher
loss reserve expenses associated with the settlement of an injury
claim and increased materials and supplies expense in the first
quarter of 1997.
Other
The effective income tax rate of 21.6% for the first quarter of
1998 remained relatively unchanged from the rate of 23.7% for the
first quarter of 1997.
<PAGE>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
Operating Revenues $205,017 $200,328
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses 51,312 40,023
Purchased power 66,594 70,359
Other operation and maintenance 27,823 30,020
Depreciation and amortization 11,315 10,699
Taxes other than income taxes 11,155 10,336
Other regulatory credits (14,578) (19,514)
Amortization of rate deferrals 34,990 35,711
-------- --------
Total 188,611 177,634
-------- --------
Operating Income 16,406 22,694
-------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 20 286
Miscellaneous - net 1,027 (312)
-------- --------
Total 1,047 (26)
-------- --------
Interest Charges:
Interest on long-term debt 9,576 10,623
Other interest - net 1,295 1,336
Allowance for borrowed funds used
during construction (40) (231)
-------- --------
Total 10,831 11,728
-------- --------
Income Before Income Taxes 6,622 10,940
Income Taxes 1,428 2,588
-------- --------
Net Income 5,194 8,352
Preferred Stock Dividend Requirements
and Other 843 1,115
-------- --------
Earnings Applicable to Common Stock $4,351 $7,237
======== ========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $5,194 $8,352
Noncash items included in net income:
Amortization of rate deferrals 34,990 35,711
Other regulatory credits (14,578) (19,514)
Depreciation and amortization 11,315 10,699
Deferred income taxes and investment tax credits (6,485) (6,269)
Allowance for equity funds used during construction (20) (286)
Changes in working capital:
Receivables 5,930 23,627
Accounts payable 1,213 (7,461)
Taxes accrued (9,085) (7,668)
Interest accrued (339) (4,197)
Other working capital accounts 64 951
Other (3,668) 1,739
-------- --------
Net cash flow provided by operating activities 24,531 35,684
-------- --------
Investing Activities:
Construction expenditures (7,908) (10,468)
Allowance for equity funds used during construction 20 286
-------- --------
Net cash flow used in investing activities (7,888) (10,182)
-------- --------
Financing Activities:
Redemption of preferred stock - (7,000)
Changes in short-term borrowings - net (13,202) (11,141)
Dividends paid:
Common stock (4,300) (9,200)
Preferred stock (842) (1,128)
-------- --------
Net cash flow used in financing activities (18,344) (28,469)
-------- --------
Net decrease in cash and cash equivalents (1,701) (2,967)
Cash and cash equivalents at beginning of period 6,816 9,498
-------- --------
Cash and cash equivalents at end of period $5,115 $6,531
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $10,871 $15,620
Income taxes ($1,879) -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $5,115 $6,816
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1 million in 1998 and 1997) 35,544 36,636
Associated companies 10,775 6,842
Other 2,908 4,139
Accrued unbilled revenues 42,453 49,993
Deferred fuel costs 15,203 14,967
Fuel inventory - at average cost 3,357 3,386
Materials and supplies - at average cost 19,093 17,657
Rate deferrals 69,979 104,969
Prepayments and other 16,680 24,896
---------- ----------
Total 221,107 270,301
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 5,531 5,531
Other - at cost (less accumulated depreciation) 7,735 7,757
---------- ----------
Total 13,266 13,288
---------- ----------
Utility Plant:
Electric 1,694,094 1,687,400
Construction work in progress 22,983 22,960
---------- ----------
Total 1,717,077 1,710,360
Less - accumulated depreciation and amortization 666,474 656,828
---------- ----------
Utility plant - net 1,050,603 1,053,532
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 24,778 22,993
Unamortized loss on reacquired debt 8,191 8,404
Other regulatory assets 87,084 64,827
Other 6,121 6,216
---------- ----------
Total 126,174 102,440
---------- ----------
TOTAL $1,411,150 $1,439,561
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $20 $20
Notes payable - associated companies 33,960 47,162
Accounts payable:
Associated companies 43,334 36,057
Other 5,212 11,276
Customer deposits 24,133 24,084
Taxes accrued 23,229 32,314
Accumulated deferred income taxes 30,893 44,277
Interest accrued 13,970 14,309
Other 2,806 2,806
---------- ----------
Total 177,557 212,305
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 253,561 244,464
Accumulated deferred investment tax credits 23,538 23,915
Other 13,409 15,892
---------- ----------
Total 290,508 284,271
---------- ----------
Long-term debt 464,205 464,156
Shareholder's Equity:
Preferred stock without sinking fund 50,381 50,381
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares 199,326 199,326
Capital stock expense and other (59) (59)
Retained earnings 229,232 229,181
---------- ----------
Total 478,880 478,829
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,411,150 $1,439,561
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY MISSISSIPPI, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 74.9 $ 75.2 ($ 0.3) -
Commercial 62.8 64.5 (1.7) (3)
Industrial 41.4 43.0 (1.6) (4)
Governmental 6.5 6.7 (0.2) (3)
---------------------------
Total retail 185.6 189.4 (3.8) (2)
Sales for resale
Associated companies 17.2 11.0 6.2 56
Non-associated companies 4.2 5.1 (0.9) (18)
Other (2.0) (5.2) 3.2 62
---------------------------
Total $ 205.0 $ 200.3 $ 4.7 2
===========================
Billed Electric Energy
Sales (GWH):
Residential 1,004 991 13 1
Commercial 836 819 17 2
Industrial 739 723 16 2
Governmental 76 80 (4) (5)
---------------------------
Total retail 2,655 2,613 42 2
Sales for resale
Associated companies 380 197 183 93
Non-associated companies 65 102 (37) (36)
---------------------------
Total 3,100 2,912 188 6
===========================
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income (loss) decreased for the first quarter of 1998
primarily due to a decrease in electric and gas operating revenues,
partially offset by a decrease in operating expenses and lower income
taxes.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues and Sales", "Expenses", and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the first quarter
of 1998 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Change in base revenues ($3.5)
Fuel cost recovery (5.6)
Sales volume/weather (1.7)
Other revenue (including unbilled) (0.2)
Sales for resale 1.9
-----
Total ($9.1)
=====
Electric operating revenues decreased for the first quarter of
1998 primarily due to decreases in base revenues, fuel adjustment
revenues, and sales volume partially offset by an increase in sales
for resale. Fuel adjustment revenues (which do not affect net
income) decreased because of lower fuel prices. The decrease in 1998
base revenues is primarily due to reductions in residential and
commercial rates that went into effect in August 1997. Sales volume
decreased due to milder weather in the current period. The increase
in sales for resale resulted from an increase in electric sales to
associated companies primarily due to change in the generation
requirements and availability among the domestic utility companies.
Additionally, Entergy New Orleans wrote off unrecoverable receivables
of $1.6 million during the first quarter of 1998 contributing to the
net decrease in other revenue.
Gas operating revenues decreased for the first quarter of 1998
primarily due to a lower unit purchase price for gas purchased for
resale.
Expenses
Operating expenses decreased for the first quarter of 1998
primarily due to decreases in fuel and purchased power expenses and
an increase in other regulatory credits. These decreases are
partially offset by an increase in other operation and maintenance
expenses. Gas purchased for resale decreased due to lower gas
prices. This decrease is partially offset by an increase in fuel
expenses as a result of increased generation requirements and a shift
from higher priced purchased power to lower priced fossil fuel. The
increase in other regulatory credits is primarily a result of the net
under-recovery of Grand Gulf 1 related costs in the first quarter of
1998 compared to the net over-recovery in the first quarter of 1997.
Other operation and maintenance expenses increased for the first
quarter of 1998 primarily due to an increase in administrative and
general salary expense.
Other
The effective income tax rates for the first quarter of 1998 and
1997 were (7.4%) and 43.8%, respectively. The income tax benefit
generated from the net loss in the first quarter of 1998 was offset
by the increased reversal of previously recorded AFUDC amounts
included in depreciation.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF INCOME (LOSS)
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $80,482 $89,561
Natural gas 33,181 35,395
-------- --------
Total 113,663 124,956
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 38,891 42,782
Purchased power 34,761 36,582
Other operation and maintenance 17,143 15,255
Depreciation and amortization 5,781 5,193
Taxes other than income taxes 9,488 8,886
Other regulatory charges (credits) (2,393) (345)
Amortization of rate deferrals 8,101 7,848
-------- --------
Total 111,772 116,201
-------- --------
Operating Income 1,891 8,755
-------- --------
Other Income:
Allowance for equity funds used
during construction 99 80
Miscellaneous - net 765 31
-------- --------
Total 864 111
-------- --------
Interest Charges:
Interest on long-term debt 3,430 3,623
Other interest - net 241 291
Allowance for borrowed funds used
during construction (76) (63)
-------- --------
Total 3,595 3,851
-------- --------
Income (Loss) Before Income Taxes (840) 5,015
Income Taxes 62 2,197
-------- --------
Net Income (Loss) (902) 2,818
Preferred Stock Dividend Requirements
and Other 241 241
-------- --------
Earnings Applicable to Common Stock ($1,143) $2,577
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income (loss) ($902) $2,818
Noncash items included in net income (loss):
Amortization of rate deferrals 8,101 7,848
Other regulatory charges (credits) (2,393) (345)
Depreciation and amortization 5,781 5,193
Deferred income taxes and investment tax credits (3,696) (3,654)
Allowance for equity funds used during construction (99) (80)
Changes in working capital:
Receivables 4,216 6,890
Accounts payable (4,327) (2,210)
Taxes accrued 1,879 7,052
Interest accrued (2,675) (2,602)
Other working capital accounts (3,196) (10,556)
Other (1,000) 2,241
------- -------
Net cash flow provided by operating activities 1,689 12,595
------- -------
Investing Activities:
Construction expenditures (3,426) (684)
Allowance for equity funds used during construction 99 80
------- -------
Net cash flow used in investing activities (3,327) (604)
------- -------
Financing Activities:
Dividends paid:
Common stock - (2,800)
Preferred stock (241) (482)
------- -------
Net cash flow used in financing activities (241) (3,282)
------- -------
Net increase (decrease) in cash and cash equivalents (1,879) 8,709
Cash and cash equivalents at beginning of period 11,376 17,510
------- -------
Cash and cash equivalents at end of period $9,497 $26,219
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $6,195 $6,360
Income taxes - net $2,323
-
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $1,834 $4,321
Temporary cash investments - at cost,
which approximates market:
Associated companies 2,282 1,918
Other 5,381 5,137
-------- --------
Total cash and cash equivalents 9,497 11,376
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million in 1998 and 1997) 25,006 26,913
Associated companies 2,304 1,081
Other 3,752 4,155
Accrued unbilled revenues 12,954 16,083
Deferred electric fuel and resale gas costs 5,552 9,384
Materials and supplies - at average cost 9,572 9,389
Rate deferrals 33,378 35,336
Prepaid income taxes 8,619 54
Prepayments and other 1,644 6,033
-------- --------
Total 112,278 119,804
-------- --------
Other Property and Investments:
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
Utility Plant:
Electric 509,716 508,338
Natural gas 127,712 122,308
Construction work in progress 15,495 19,184
-------- --------
Total 652,923 649,830
Less - accumulated depreciation and amortization 360,774 355,854
-------- --------
Utility plant - net 292,149 293,976
-------- --------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 58,049 64,192
SFAS 109 regulatory asset - net 234 1,202
Unamortized loss on reacquired debt 1,388 1,435
Other regulatory assets 15,503 13,392
Other 870 890
-------- --------
Total 76,044 81,111
-------- --------
TOTAL $483,730 $498,150
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Accounts payable:
Associated companies $15,106 $15,922
Other 13,994 17,505
Customer deposits 17,474 16,982
Taxes accrued 7,149 5,270
Accumulated deferred income taxes 9,824 11,544
Interest accrued 2,374 5,049
Provision for rate refund - 3,108
Other 2,232 2,231
-------- --------
Total 68,153 77,611
-------- --------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 58,080 61,000
Accumulated deferred investment tax credits 7,270 7,396
Accumulated provision for property insurance 15,487 15,487
Other 15,538 16,327
-------- --------
Total 96,375 100,210
-------- --------
Long-term debt 168,969 168,953
Shareholder's Equity:
Preferred stock without sinking fund 19,780 19,780
Common Shareholder's Equity:
Common stock, $4 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares 33,744 33,744
Additional paid-in capital 36,294 36,294
Retained earnings subsequent to the elimination of
the accumulated deficit on November 30, 1988 60,415 61,558
-------- --------
Total 150,233 151,376
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $483,730 $498,150
======== ========
See Notes to Financial Statements.
<PAGE>
ENTERGY NEW ORLEANS, INC.
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 24.9 $ 28.7 ($ 3.8) (13)
Commercial 31.3 36.3 (5.0) (14)
Industrial 5.9 6.2 (0.3) (5)
Governmental 12.7 13.6 (0.9) (7)
---------------------------
Total retail 74.8 84.8 (10.0) (12)
Sales for resale
Associated companies 3.4 1.9 1.5 79
Non-associated companies 2.1 1.7 0.4 24
Other (1) 0.2 1.2 (1.0) (83)
---------------------------
Total $ 80.5 $ 89.6 ($ 9.1) (10)
===========================
Billed Electric Energy
Sales (GWH):
Residential 355 374 (19) (5)
Commercial 459 478 (19) (4)
Industrial 118 114 4 4
Governmental 219 221 (2) (1)
---------------------------
Total retail 1,151 1,187 (36) (3)
Sales for resale
Associated companies 123 47 76 162
Non-associated companies 38 23 15 65
---------------------------
Total 1,312 1,257 55 4
===========================
(1) Includes the effect of the provision for rate refunds.
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income for the first quarter of 1998 remained relatively
unchanged as compared to the same period in 1997.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 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. See
Note 2 to the Form 10-K for a discussion of System Energy's proposed
rate increase, which is subject to refund.
Expenses
Operating expenses decreased for the first quarter of 1998
primarily due to lower depreciation, amortization, and
decommissioning expenses as a result of the recognition of additional
depreciation in the first quarter of 1997 associated with the sale
and leaseback in 1989 of a portion of Grand Gulf 1.
Other
Other income increased for the first quarter of 1998 primarily
due to increased interest income from short- term investments.
The effective income tax rate of 45.2% for the first quarter of
1998 remained relatively unchanged from the rate of 44.2% for the
first quarter of 1997.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Revenues $148,606 $155,662
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 10,847 12,017
Nuclear refueling outage expenses 4,599 3,717
Other operation and maintenance 21,281 20,390
Depreciation, amortization, and decommissioning 33,158 38,797
Taxes other than income taxes 6,762 6,425
-------- --------
Total 76,647 81,346
-------- --------
Operating Income 71,959 74,316
-------- --------
Other Income:
Allowance for equity funds used
during construction 553 280
Miscellaneous - net 3,105 1,323
-------- --------
Total 3,658 1,603
-------- --------
Interest Charges:
Interest on long-term debt 29,576 30,758
Other interest - net 1,653 1,782
Allowance for borrowed funds used
during construction (476) (279)
-------- --------
Total 30,753 32,261
-------- --------
Income Before Income Taxes 44,864 43,658
Income Taxes 20,277 19,313
-------- --------
Net Income $24,587 $24,345
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $24,587 $24,345
Noncash items included in net income:
Depreciation, amortization, and decommissioning 33,158 38,797
Deferred income taxes and investment tax credits (11,325) (11,568)
Allowance for equity funds used during construction (553) (280)
Changes in working capital:
Receivables (717) (2,294)
Accounts payable (1,137) (2,241)
Taxes accrued 13,431 15,587
Interest accrued (11,348) (2,171)
Other working capital accounts 1,223 (220)
Decommissioning trust contributions and realized
change in trust assets (5,748) (1,579)
FERC Settlement - refund obligation (1,226) (1,082)
Provision for estimated losses and reserves 19,291 12,808
Other 3,130 (263)
-------- --------
Net cash flow provided by operating activities 62,766 69,839
-------- --------
Investing Activities:
Construction expenditures (10,166) (1,699)
Allowance for equity funds used during construction 553 280
Nuclear fuel purchases (608) (39)
Proceeds from sale/leaseback of nuclear fuel 608 39
-------- --------
Net cash flow used in investing activities (9,613) (1,419)
-------- --------
Financing Activities:
Common stock dividends paid (23,100) (37,100)
-------- --------
Net cash flow used in financing activities (23,100) (37,100)
-------- --------
Net increase in cash and cash equivalents 30,053 31,320
Cash and cash equivalents at beginning of period 206,410 92,315
-------- --------
Cash and cash equivalents at end of period $236,463 $123,635
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $17,982 $32,398
Income taxes $3,600 -
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $1,274 ($982)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $823 $792
Temporary cash investments - at cost,
which approximates market:
Associated companies 70,187 55,891
Other 165,453 149,727
---------- ----------
Total cash and cash equivalents 236,463 206,410
Accounts receivable:
Associated companies 80,092 79,262
Other 4,027 4,140
Materials and supplies - at average cost 63,126 63,782
Deferred nuclear refueling outage costs 4,459 7,777
Prepayments and other 6,392 3,658
---------- ----------
Total 394,559 365,029
---------- ----------
Other Property and Investments:
Decommissioning trust fund 92,933 85,912
---------- ----------
Utility Plant:
Electric 3,025,236 3,025,389
Electric plant under leases 440,970 440,970
Construction work in progress 46,610 36,445
Nuclear fuel under capital lease 57,093 64,190
---------- ----------
Total 3,569,909 3,566,994
Less - accumulated depreciation and amortization 1,115,791 1,086,820
---------- ----------
Utility plant - net 2,454,118 2,480,174
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 238,384 243,027
Unamortized loss on reacquired debt 49,786 51,386
Other regulatory assets 192,702 192,290
Other 13,917 14,213
---------- ----------
Total 494,789 500,916
---------- ----------
TOTAL $3,436,399 $3,432,031
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $70,000 $70,000
Accounts payable:
Associated companies 30,212 29,131
Other 16,904 19,122
Taxes accrued 89,106 75,675
Interest accrued 30,974 42,322
Obligations under capital leases 39,139 41,977
Other 1,324 1,341
---------- ----------
Total 277,659 279,568
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 545,996 562,051
Accumulated deferred investment tax credits 99,302 100,171
Obligations under capital leases 17,954 22,213
FERC Settlement - refund obligation 47,074 48,300
Other 262,808 227,847
---------- ----------
Total 973,134 960,582
---------- ----------
Long-term debt 1,334,186 1,341,948
Common Shareholder's Equity:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares 789,350 789,350
Retained earnings 62,070 60,583
---------- ----------
Total 851,420 849,933
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,436,399 $3,432,031
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Results of Operations
The following discussion compares the results of operations for
the first quarter of 1998 with the results of operations for the
first quarter of 1997. The first quarter of 1997 includes two months
of results for London Electricity due to its acquisition effective
February 1, 1997.
Net Income
Net income decreased for the first quarter of 1998 primarily due
to an increase in interest charges and operating expenses, partially
offset by an increase in operating revenues.
Significant factors affecting the results of operations and
causing variances between the first quarter of 1998 and 1997 are
discussed under "Revenues", "Expenses", and "Other" below.
Revenues
Operating revenues increased for the first quarter of 1998 due
principally to the inclusion of an additional month of operations in
1998 as compared to 1997. The changes in operating revenues for the
first quarter of 1998 are as follows:
First Quarter
Description Increase/(Decrease)
(In Millions)
Electricity distribution $47
Electricity supply 167
Other 16
Intra-business (55)
----
Total $175
====
Two principal factors determine the amount of revenues produced
by the main electricity distribution and supply businesses: the unit
prices of the electricity distributed and supplied (which are
controlled by the Distribution Price Control Formula and Supply Price
Control Formula, respectively, which determine the maximum average
price per unit (kilowatt hour) of electricity that may be charged)
and the number of electricity units distributed and supplied which
depends on the demand of London Electricity's customers for
electricity within its Franchise Area. Demand varies based upon
weather conditions and economic activity. London Electricity is
expected to have the exclusive right to supply all franchise supply
customers in its Franchise Area until late 1998.
Revenues from the distribution business increased for the first
quarter of 1998, principally due to an increase in units distributed
as a result of there being three months of London Electricity
operations in the first quarter of 1998 compared to only two months
in the first quarter of 1997. Also contributing to the total
increase was the increase in the U.S. dollar to BPS average exchange
rate from 1.61 to 1.00 in the first quarter of 1997 to 1.65 to 1.00
during the first quarter of 1998. Partially offsetting these factors
was a 3% distribution price reduction effective April 1, 1997 and a
decline in the overall level of sales volume due to milder than
normal weather in the first quarter of 1998
<PAGE>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Franchise supply customers, who are generally residential and
small commercial rather than industrial customers, comprised 61% of
total supply sales volume for the first quarter of 1998. The volume
of unit sales of electricity for franchise supply customers is
influenced largely by the number of customers in London Electricity's
Franchise Area, weather conditions and prevailing economic
conditions. Unit sales to non-franchise supply customers, who are
typically large commercial and industrial businesses, constituted 39%
of total sales volume for the first quarter of 1998. Sales to non-
franchise supply customers are determined primarily by the success of
the supply business in contracting to supply customers with
electricity both inside and outside of London Electricity's Franchise
Area. Such sales have declined as a percentage of the total supply
sales mix from 43% for the first quarter of 1997.
During the first quarter of 1998, the number of electricity
units supplied increased by 45% from the first quarter of 1997 (which
contains only two months of London Electricity operations) while
total revenues produced by the supply business increased by 49%, due
in part to the higher exchange rate in the first quarter of 1998.
Volume increased for both franchise supply customers and non-
franchise supply customers as compared with 1997 due to the
additional month included in the first quarter of 1998 results. This
increase was partially offset by a decline in the overall level of
sales volume due to milder than normal weather in the first quarter
of 1998
Expenses
Operating expenses increased for the first quarter of 1998
primarily due to increases in purchased power expense, depreciation
and amortization expense and in other operation and maintenance
costs. These increases were due principally to one additional month
of operations reported in 1998 as compared to 1997, as well as the
write-off of certain investments. Also contributing to the total
increase was the increase in the U.S. dollars to BPS exchange rate
during the first quarter of 1998.
Other
Net interest charges increased for the first quarter of 1998 due
principally to three months of interest accrual in 1998 as compared
to only two months in 1997 as well as to distributions on preferred
securities of subsidiaries which were issued in late 1997.
Other income (deductions) increased for the first quarter of
1998 due principally to increased profits from Entergy London's
equity method investments, and increased gains on the sale of London
Electricity fixed assets.
The effective income tax rates for the first quarter of 1998 and
1997 were 30.7% and 35.2%, respectively. The decrease in 1998 is
principally due to the reduction in the UK corporation tax rate from
33% to 31%, effective as of April 1, 1997.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Revenues $550,790 $375,956
Operating Expenses:
Purchased power 366,896 263,298
Depreciation and amortization 33,745 20,761
Other operation and maintenance costs 94,186 52,788
-------- --------
Total 494,827 336,847
-------- --------
Operating Income 55,963 39,109
-------- --------
Other income (deductions):
Interest and dividend income 1,423 322
Miscellaneous - net 7,316 1,609
-------- --------
Total 8,739 1,931
-------- --------
Interest Charges:
Distributions on preferred securities of subsidiary 6,469 -
Other interest - net 41,105 20,439
-------- --------
Total 47,574 20,439
-------- --------
Income Before Income Taxes 17,128 20,601
Income Taxes 5,251 7,242
-------- --------
Net Income 11,877 13,359
Other comprehensive income:
Foreign currency translation adjustments 12,255 2,368
-------- --------
Other comprehensive income 12,255 2,368
-------- --------
Comprehensive income $24,132 $15,727
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net Income $11,877 $13,359
Noncash items included in net income:
Depreciation and amortization 33,745 20,761
Deferred income taxes 257 5,633
Imputed interest on parent company debt 27,154 -
Changes in assets and liabilities:
Inventory 1,569 1,448
Accounts receivable and unbilled revenue 70,358 (8,047)
Other receivables 16,278 49,248
Prepayments and other 7,271 (15,128)
Long-term receivables and other (6,764) (56,490)
Accounts payable (49,208) (29,291)
Income taxes accrued 4,483 11,266
Interest accrued (3,421) (3,219)
Deferred revenue and other current liabilities (4,768) 322
Other liabilities (45,573) 109,761
Other 825 -
-------- --------
Net cash flow provided by operating activities 64,083 99,623
-------- --------
Investing Activities:
Construction expenditures (61,145) (57,777)
Acquisition of London, net of cash acquired - (1,889,918)
Other investments 358 11,105
-------- --------
Net cash flow used in investing activities (60,787) (1,936,590)
-------- --------
Financing Activities:
Proceeds from the issuance of:
Bank notes and other long-term debt - 1,520,883
Common Stock - 391,981
Payment of long-term debt (12,802) -
Common stock dividends paid (52,739) -
Changes in short-term borrowings - net 86,492 (32,832)
-------- --------
Net cash flow provided by financing activities 20,951 1,880,032
-------- --------
Effect of exchange rates on cash and cash equivalents 1,449 (1,851)
-------- --------
Net decrease in cash and cash equivalents 25,696 41,214
Cash and cash equivalents at beginning of period 44,388 -
-------- --------
Cash and cash equivalents at end of period $70,084 $41,214
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $23,668 $13,197
Cash paid for income taxes - $1,609
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $9,181 $ -
Temporary cash investments - at cost,
which approximates market 60,903 44,388
---------- -------------
Total cash and cash equivalents 70,084 44,388
Notes receivable 4,982 7,364
Accounts receivable:
Customer (less allowance for doubtful accounts of $ 20.8 million
in 1998 and $ 19.3 million in 1997) 143,985 139,265
Other 39,276 52,374
Accrued unbilled revenue 193,744 262,818
Accumulated deferred income taxes 12,621 12,401
Inventory 12,298 13,650
Prepayments and other 6,476 13,623
---------- -------------
Total 483,466 545,883
---------- -------------
Property, Plant, and Equipment:
Property, plant and equipment 2,454,174 2,353,181
Less - accumulated depreciation 115,250 90,021
---------- -------------
Property, plant, and equipment - net 2,338,924 2,263,160
---------- -------------
Other Property, Investments, and Assets:
Investments, long-term 11,252 11,413
Distribution license (net of accumulated amortization of $40.3 million
in 1998 and $25.6 million in 1997) 1,342,226 1,327,312
Long-term receivables 17,477 17,172
Prepaid pension asset 252,360 241,216
Other 10,268 10,079
---------- -------------
Total 1,633,583 1,607,192
---------- -------------
TOTAL $4,455,973 $4,416,235
========== =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDER'S EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $21,961 $33,814
Notes payable 332,950 240,794
Accounts payable 306,030 349,821
Customer deposits 27,643 24,946
Taxes accrued 127,682 120,981
Interest accrued 10,977 14,201
Other 767 805
---------- -------------
Total 828,010 785,362
---------- -------------
Other Liabilities:
Accumulated deferred income taxes 1,013,812 995,865
Other 251,745 299,775
---------- -------------
Total 1,265,557 1,295,640
---------- -------------
Long-term debt 1,698,473 1,669,401
Company-obligated redeemable preferred securities
of subsidiary holding solely junior subordinated
deferrable debentures 300,000 300,000
Shareholders' Equity:
Common stock, BPS1 par value, 901,000,000 shares authorized,
877,359,785 shares issued and outstanding (less Entergy UK
Limited debt adjustment of $1,371.8 million) 114,000 114,000
Additional paid-in capital 391,981 391,981
Accumulated deficit (146,544) (132,390)
Cumulative foreign currency translation 4,496 (7,759)
---------- -------------
Total 363,933 365,832
---------- -------------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,455,973 $4,416,235
========== =============
</TABLE>
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
See "Cajun - Coal Contracts" in Note 9 of the Form 10-K for
information relating to the declaratory judgment action filed by
Entergy Gulf States and the counterclaims filed by the defendants.
The oral argument on the appeal by the defendants that was set for
April 1998 has been continued with no new date set for the argument.
Capital Requirements and Financing (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, Entergy London, and System Energy)
See Note 9 in the Form 10-K for information on the domestic
utility companies', System Energy's, and Entergy London's
construction expenditures (excluding nuclear fuel) for the years
1998, 1999, and 2000 and long-term debt and preferred stock
maturities and cash sinking fund requirements for the period 1998-
2000.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
See Note 9 in the Form 10-K for information on nuclear
liability, property and replacement power insurance, related NRC
regulations, the disposal of spent nuclear fuel, other high-level
radioactive waste, and decommissioning costs associated with ANO 1,
ANO 2, River Bend, Waterford 3, and Grand Gulf 1. The
owner/licensees of each of Entergy's five nuclear units no longer
participate in the private insurance program that provides coverage
for worker tort claims filed for bodily injury caused by radiation
exposure. The nuclear incident private insurance program discussed
in Note 9 in the Form 10-K now covers this liability.
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 mid-cycle outage in March 1998. Turbine
modifications were installed in May 1997 to restore most of the
output lost due to steam generator fouling and tube plugging. The
unit may be approaching the current limit for the number of steam
generator tubes that can be plugged with the unit in operation. If
the established limit is reached during a future outage, it could
become necessary for Entergy Operations to insert sleeves in steam
generator tubes that were previously plugged.
On October 25, 1996, Entergy Corporation's Board of Directors
authorized Entergy Operations to negotiate a contract 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. Entergy
Operations has entered into a contract, subject to certain
cancellation provisions, for the design and fabrication of
replacement steam generators. A letter of intent has been signed for
the installation of the replacement steam generators. It is
anticipated that the steam generators will be installed during a
planned refueling outage in 2000. Entergy Operations periodically
meets with the NRC to discuss the results of inspections of the steam
generator tubes, as well as the timing of future inspections. In
March 1998, Entergy Arkansas filed a Petition for Declaratory Order
and Approval of New Depreciation Rates with the APSC, requesting
approval of the steam generator replacement project and appropriate
revised depreciation rates.
Environmental Issues
(Entergy Gulf States)
Entergy Gulf States has been designated as a potentially
responsible party (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 certain of these
sites. As of March 31, 1998, a remaining recorded liability of $20.1
million existed relating to the clean-up of the sites at which
Entergy Gulf States has been designated a PRP. See "Environmental
Regulation" in Item 1 of Part I of the Form 10-K for additional
discussion of the sites where Entergy Gulf States has been designated
as a PRP by the EPA and related litigation.
(Entergy Louisiana)
During 1993, the Louisiana Department of Environmental Quality
(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 chose to upgrade or close
them. As a result, a remaining recorded liability in the amount of
$6.7 million existed at March 31, 1998, for waste water upgrades and
closures. Completion of this work is pending LDEQ approval.
Cumulative expenditures relating to the upgrades and closures of
wastewater impoundments were $7.1 million as of March 31, 1998.
Waterford 3 Lease Obligations (Entergy Louisiana)
On September 28, 1989, Entergy Louisiana entered into three
transactions for the sale and leaseback of undivided interests
(aggregating approximately 9.3%) in Waterford 3. Upon the occurrence
of certain events, Entergy Louisiana may be obligated to pay amounts
sufficient to permit the Owner Participants to withdraw from the
lease transactions, and Entergy Louisiana may be required to assume
the outstanding bonds issued by the Owner Trustee to finance, in
part, its acquisition of the undivided interests in Waterford 3. See
Note 10 to the Form 10-K for further information.
Reimbursement Agreement (System Energy)
Under a bank letter of credit and reimbursement agreement,
System Energy has agreed to a number of covenants relating to the
maintenance of certain capitalization and fixed charge coverage
ratios. System Energy agreed, during the term of the agreement, to
maintain its equity at not less than 33% of its adjusted
capitalization (defined in the agreement to include certain amounts
not included in capitalization for financial statement purposes). In
addition, System Energy must maintain, with respect to each fiscal
quarter during the term of the agreement, a ratio of adjusted net
income to interest expense (calculated, in each case, as specified in
the agreement) of at least 1.60 times earnings. System Energy was in
compliance with the above covenants at March 31, 1998. See Note 9 to
the Form 10-K for further information.
Employment Litigation
(Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and Entergy New Orleans)
See Note 9 in the Form 10-K for information relating to lawsuits
filed by former employees asserting they were wrongfully terminated
and/or discriminated against on the basis of age, race, and/or sex.
(Entergy Corporation, Entergy Louisiana, and Entergy New Orleans)
Entergy Corporation, Entergy Louisiana and Entergy New Orleans
are defendants in numerous lawsuits filed in Louisiana state court on
behalf of approximately 147 plaintiffs who claim that they were
illegally terminated from their jobs due to discrimination on the
basis of age. The plaintiffs requested that the court certify the
matter as a class action. In August 1997, the district court
certified the case as a class action. The district court decision to
certify the class action was reversed by the Louisiana Fifth Circuit
Court of Appeal in April 1998. No assurance can be given as to the
timing or outcome of these proceedings.
(Entergy Corporation and Entergy Arkansas)
Entergy Corporation and Entergy Arkansas are defendants in a
number of lawsuits filed in federal court on behalf of a total of
approximately 62 plaintiffs who claim they were illegally terminated
from their jobs due to discrimination on the basis of age or race.
The first of these lawsuits, originally involving 29 plaintiffs,
was tried before a jury beginning in April 1997. Settlements were
reached with two of the plaintiffs prior to the trial. On May 1,
1997, the jury rendered findings as to 22 of the plaintiffs
indicating that Entergy had no liability to them for discrimination.
The jury did find that Entergy had intentionally discriminated
against the remaining five plaintiffs on the basis of age. Entergy
concluded settlements with these five plaintiffs during the first
quarter of 1998.
A trial date for another suit involving 18 plaintiffs,
originally scheduled for May 1997, had been set for April 1998.
However, a motion for summary judgment in favor of Entergy has been
granted. Another suit, involving a single plaintiff, was set for
trial in February 1998 and has been continued with no new trial date
set. Another of the suits, involving nine plaintiffs, has been set
for trial in June 1998. The last of these suits is in the discovery
stage and has been set for trial in July 1998.
NOTE 2. RATE AND REGULATORY MATTERS
River Bend (Entergy Corporation and Entergy Gulf States)
See Note 2 to the Form 10-K for information related to previous
developments in the original Entergy Gulf States rate proceeding in
1988 seeking recovery of River Bend plant investment and related
deferred costs. On March 13, 1998, the PUCT issued an order
disallowing recovery of $1.4 billion of company-wide abeyed plant
costs and approximately $157 million of Texas retail jurisdiction
deferred River Bend operating and carrying costs (Abeyed Deferrals).
The Texas share of the abeyed plant costs, which is not currently in
rates, is approximately $624 million, based on 1988 costs and the
jurisdictional allocation included in current rates. As of March 31,
1998, the River Bend plant costs originally disallowed for retail
ratemaking purposes in Texas and the River Bend plant costs held in
abeyance totaled (net of taxes and accumulated depreciation)
approximately $11 million and $248 million, respectively.
On April 14, 1998, an ALJ issued a proposal for decision (PFD)
in the pending judicial remand of the PUCT's 1988 decision to require
Entergy Gulf States to use tax benefits generated by disallowed
expenses to reduce rates. The PFD calls for recovery of $100.1
million plus carrying costs over a period not to exceed seven years.
Entergy Gulf States believes that additional amounts should be
allowed to account for tax liability that will result from the
recovery and for certain other matters. The PUCT is expected to
consider this PFD together with the PFD in the pending rate case
discussed below by July 1998. The PUCT can accept, reject, or modify
the proposals.
Retail Rate Proceedings
Filings with the PUCT (Entergy Corporation and Entergy Gulf States)
In March 1998, certain parties to the Entergy Gulf States rate
proceedings in Texas reached an agreement in principle, subject to
approval by the PUCT and the Cities, which would resolve a number of
pending Texas regulatory proceedings with the exception of existing
service quality issues and certain appeals of other cases by parties
who have not joined in the proposed settlement. The proposed
agreement in principle would: (i) include a base rate reduction of
$40 million on an annual basis, with a refund retroactive to June 1,
1996; (ii) provide for a recovery of $25 million of under-recovered
fuel costs; (iii) hold base rates at the same level until January 1,
2002; (iv) provide a total service quality credit of $10.4 million to
ratepayers retroactive to June 1996; and (v) allow recovery in rates,
beginning at the end of the rate freeze, of $125 million of net plant
in service related to the abeyed portion of River Bend. The
agreement in principle has been finalized in a formal settlement
agreement, which was filed with the PUCT on March 25, 1998. Several
parties to the rate case, including the PUCT General Counsel, have
signed the settlement agreement contingent upon the approval of
certain Cities served by Entergy Gulf States, but the steering
committee for those cities has recommended that the Cities not join
the Settlement Agreement. Entergy Gulf States cannot predict whether
this rate case will be settled and, if so, upon what terms. Entergy
Gulf States has established reserves to reflect the agreement in
principle based on management's estimates of the effects thereof.
These reserves of approximately $381 million (or $227 million
net of taxes) were recorded in the fourth quarter of 1997. For the
three months ended March 31, 1998, Entergy Gulf States recorded an
additional reserve of $9.3 million to account for the impact of the
$40 million base rate reduction stipulated in the settlement
agreement. Entergy Gulf States expects that a similar reserve
will be required for each quarter until a resolution of the Texas
case is reached.
On March 25, 1998, subsequent to the filing of the Settlement
Agreement, an ALJ in the rate proceeding filed a PFD that calls for a
$144 million base rate reduction, retroactive to June 1, 1996, which
would be partially offset by a $28 million fuel expense surcharge
spread over twelve months relating to the past under recovery of fuel
and purchased power expenses by Entergy Gulf States. In addition,
the PFD recommends that none of the abeyed plant costs and the Abeyed
Deferrals be included in the Entergy Gulf States' Texas
jurisdictional rates. Entergy Gulf States disagrees with the ALJ
recommendations in this PFD, which includes numerous disallowances of
the recovery of costs to which Entergy Gulf States believes it is
entitled, and will file exceptions to this PFD. Entergy Gulf States
is unable to predict at this time whether the PUCT will approve some
or all of the terms of either the settlement agreement or this PFD or
make other findings in the case. Accordingly, the ultimate outcome
of the case, and its effect on Entergy Gulf States' financial
condition, which could be material, is uncertain.
Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
On March 15, 1998, Entergy Mississippi filed its annual earnings
review with the MPSC under its formula rate plan for the 1997 test
year. In April 1998, the MPSC issued an order approving a
prospective rate reduction of $6.6 million. This rate reduction went
into effect May 1, 1998.
Grand Gulf Accelerated Recovery Tariff
On April 15, 1998, FERC approved the Grand Gulf Accelerated
Recovery Tariff that Entergy Arkansas filed as part of the settlement
agreement, which was approved by the APSC in December 1997. The
tariff was designed to allow Entergy Arkansas to pay down a portion
of its Grand Gulf obligation in advance of the implementation to
retail access in Arkansas. The tariff will go into effect January 1,
1999. See Note 2 to the Form 10-K for a discussion of the settlement
agreement with the APSC.
NOTE 3. COMMON STOCK (Entergy Corporation)
During the first quarter 1998, Entergy Corporation issued 40,767
shares of its previously repurchased common stock to satisfy stock
options exercised and stock purchases under its Equity Ownership
Plan. In addition, Entergy Corporation received proceeds of $3.3
million from the issuance of 114,585 shares of common stock under its
dividend reinvestment and stock purchase plan during the first
quarter of 1998. Additionally, during April 1998, Entergy
Corporation issued 111,141 shares of its previously repurchased
common stock to satisfy stock options exercised and stock purchases
under its Equity Ownership Plan.
NOTE 4. LONG-TERM DEBT
(Entergy Arkansas)
On April 27, 1998, Entergy Arkansas redeemed, prior to maturity,
$75 million of 9.75% Series First Mortgage Bonds due 2019, $11.7
million of 8.7% Series First Mortgage Bonds due 2022 and $4.1 million
of 10% Series First Mortgage Bonds due 2020. These bonds were
redeemed with internally generated funds.
(Entergy Louisiana)
On April 27, 1998, Entergy Louisiana redeemed, prior to
maturity, $90 million of 8.5% Series First Mortgage Bonds due 2022
and $25.6 million of 8% Series First Mortgage Bonds due 2003.
Proceeds from the issuance on March 19, 1998 of $115 million of 6.5%
Series First Mortgage Bonds due 2008 were used for these redemptions.
(Entergy Mississippi)
On April 8, 1998, Entergy Mississippi issued $80 million of
6.45% Series General and Refunding Mortgage Bonds due 2008. The
proceeds will be used to redeem on May 8, 1998, $80 million of 8.80%
General and Refunding Mortgage Bonds due 2005.
(Entergy Gulf States)
On May 1, 1998, Entergy Gulf States remarketed $28.4 million
Parish of West Feliciana Series 1985-D variable rate Pollution
Control Revenue Bonds due 2015 and $20.0 million Parish of West
Feliciana Series 1986 variable rate Pollution Control Revenue Bonds
due 2016 at a fixed interest rate of 5.8% until maturity.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On January 23, 1998, Entergy Corporation's Board of Directors
declared a common stock dividend of 45 cents per share, payable on
March 1, 1998, to holders of record on February 11, 1998. On March
25, 1998, Entergy Corporation's Board of Directors declared a common
stock dividend of 45 cents per share, payable on June 1, 1998, to
holders of record on May 13, 1998.
__________________________________
In the opinion of Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, System Energy, and Entergy London, the accompanying
unaudited condensed financial statements contain all adjustments
(consisting primarily of normal recurring accruals and reclassifying
previously reported amounts to conform to current classifications)
necessary for a fair statement of the results for the interim periods
presented. However, the business of the domestic utility companies,
System Energy, and Entergy London is subject to seasonal fluctuations
with the peak periods occurring during the third quarter for the
domestic utilities companies and System Energy and occurring during
the first quarter for Entergy London. The results for the interim
periods presented should not be used as a basis for estimating
results of operations for a full year.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Employment Litigation (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans)
See "Employment Litigation" in Item 1 of Part I of the Form 10-K
for information relating to lawsuits filed by former employees
asserting they were wrongfully terminated and/or discriminated
against due to age, race, and/or sex. See "Employment Litigation" in
Note 1 herein for developments that have occurred since the filing of
the Form 10-K.
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
See "Cajun - Coal Contracts" in Note 9 of the Form 10-K for
information relating to the declaratory judgment action filed by
Entergy Gulf States and the counterclaims filed by the defendants.
See "Cajun - Coal Contracts" in Note 1 herein for developments that
have occurred since the filing of the Form 10-K.
Catalyst Technologies, Inc. (Entergy Corporation)
See "Catalyst Technologies, Inc." in Item 1 of Part I of the
Form 10-K for information relating to the lawsuit filed by Catalyst
Technologies, Inc. In March 1998, the plaintiff filed its appeal
brief, and Entergy Corporation's response brief is due in May 1998.
The date of oral argument on the appeal has not been set.
Union Pacific Railroad Company (Entergy Corporation and Entergy
Arkansas)
In October 1997, Entergy Arkansas and Entergy Services
filed a civil suit against Union Pacific Railroad Company (Union
Pacific) in the United States District Court for the Middle District
of Louisiana. This lawsuit, which seeks damages and the termination
of coal shipping contracts with Union Pacific, maintains that Union
Pacific has failed to meet its contractual obligations to ship coal
to Entergy Arkansas' two large coal-fired plants and that such
failure has impaired Entergy Arkansas' ability to generate and sell
electricity from these plants. This lawsuit is entering the
discovery phase. Meanwhile, there has been little or no improvement
in the coal deliveries by the Union Pacific Railroad Company ("Union
Pacific") to Entergy Arkansas' coal fired generating stations, and
coal inventories at these stations are very low. Entergy Arkansas
has requested that Union Pacific allow another railroad to deliver
coal to the White Bluff generating station. It is not certain
whether Union Pacific will honor this request. If it does not,
Entergy will seek an order from the Federal Surface Transportation
Board requiring Union Pacific to allow the other railroad to bring
coal to the White Bluff site. If coal inventories cannot be rebuilt
for the summer season, one or more of Entergy Arkansas' coal-fired
generating stations may not be able to operate at full capacity,
which could result in increased wholesale replacement power
purchases. The operational and financial effect of Union Pacific's
failure to deliver coal to Entergy Arkansas during the second and
third quarters of 1998 will depend upon a number of factors, such as
weather, that Entergy Arkansas cannot control. However, Entergy
Arkansas will seek to mitigate the effects of inadequate coal
inventories. The ultimate outcome of the Union Pacific litigation
cannot be determined at this time.
Aquila Power Corporation (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans)
In March 1998, Aquila Power Corporation ("Aquila") filed a
complaint with the FERC against Entergy Services, as agent for the
domestic utility companies, alleging that Entergy's domestic utility
companies improperly reserved transmission capacity on Entergy's
transmission system, resulting in the denial of Aquila's request for
transmission service. Aquila's complaint seeks compensation for lost
profits, an order prohibiting Entergy and/or its affiliates from
engaging in similar conduct, and suspension of the domestic utility
companies' and Entergy Power Marketing Corporation's market-rate
authority. Entergy is preparing its response to the Aquila
allegations, which response will be filed by May 11, 1998.
New Orleans Ratepayers (Entergy New Orleans)
In April 1998, a group of residential and business ratepayers
filed a complaint against Entergy New Orleans in state court in
Orleans Parish on behalf of all ratepayers in New Orleans. The
plaintiffs allege that Entergy New Orleans overcharged ratepayers by
at least $300 million since 1975 in violation of limits set by the
1922 franchise ordinances passed by the City of New Orleans City
Council. The plaintiffs seek, among other things, (1) a declaratory
judgment that such franchise ordinances have been violated, and (2) a
remand to the City Council for the establishment of the amount of
overcharges plus interest. Management believes the lawsuit is
completely without merit. Entergy New Orleans has charged only those
rates authorized by the City Council, which the City Council has set
in accordance with applicable law. Entergy New Orleans will
vigorously defend itself in the lawsuit.
Item 5. Other Information
Earnings Ratios (Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, System Energy,
and Entergy London)
The domestic utility companies, System Energy, and Entergy
London have calculated ratios of earnings to fixed charges and ratios
of earnings to combined fixed charges and preferred dividends
pursuant to Item 503 of Regulation S-K of the SEC as follows:
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, March 31,
1993 1994 1995 1996 1997 1998
Entergy Arkansas 3.11(b) 2.32 2.56 2.93 2.54 2.54
Entergy Gulf States 1.54 (c)- 1.86 1.47 1.42 1.30
Entergy Louisiana 3.06 2.91 3.18 3.16 2.74 2.63
Entergy Mississippi 3.79(b) 2.12 2.92 3.40 2.98 2.94
Entergy New Orleans 4.68(b) 1.91 3.93 3.51 2.70 2.36
System Energy 1.87 1.23 2.07 2.21 2.31 2.34
Entergy London N/A N/A N/A N/A (d)- (d)-
Ratios of Earnings to Combined Fixed Charges
and Preferred Dividends
Twelve Months Ended
December 31, March 31,
1993 1994 1995 1996 1997 1998
Entergy Arkansas 2.54(b) 1.97 2.12 2.44 2.24 2.22
Entergy Gulf States(a) 1.21 (c)- 1.54 1.19 1.23 1.14
Entergy Louisiana 2.39 2.43 2.60 2.64 2.36 2.25
Entergy Mississippi 3.08(b) 1.81 2.51 2.94 2.69 2.65
Entergy New Orleans 4.12(b) 1.73 3.56 3.22 2.44 2.16
(a) "Preferred Dividends" in the case of Entergy Gulf States
also include dividends on preference stock.
(b) Earnings for the year ended December 31, 1993, include $81
million, $52 million, and $18 million for Entergy Arkansas,
Entergy Mississippi, and Entergy New Orleans, respectively,
related to a 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.
(d) As a result of the windfall profits tax of $234 million,
earnings for the twelve months ended December 31, 1997 and
March 31, 1998 for Entergy London were insufficient to
cover fixed charges by $204 million and $196 million,
respectively.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
** 4(a) - Fifty-second Supplemental Indenture, dated as of March
1, 1998, to Entergy Louisiana's Mortgage and Deed of
Trust, dated as of April 1, 1944 (filed as Exhibit A-
2(a) to Rule 24 Certificate dated April 3, 1998 in
File No. 70-9141).
** 4(b) - Twelfth Supplemental Indenture, dated as of April 1,
1998, to Entergy Mississippi's Mortgage and Deed of
Trust, dated as of February 1, 1988 (filed as Exhibit
A-2(b) to Rule 24 Certificate dated April 16, 1998 in
File No. 70-8719).
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of March 31, 1998.
27(b) - Financial Data Schedule for Entergy Arkansas as of
March 31, 1998.
27(c) - Financial Data Schedule for Entergy Gulf States as of
March 31, 1998.
27(d) - Financial Data Schedule for Entergy Louisiana as of
March 31, 1998.
27(e) - Financial Data Schedule for Entergy Mississippi as of
March 31, 1998.
27(f) - Financial Data Schedule for Entergy New Orleans as of
March 31, 1998.
27(g) - Financial Data Schedule for System Energy as of March
31, 1998.
27(h) - Financial Data Schedule for Entergy London as of March
31, 1998.
99(a) - Entergy Arkansas' Computation of Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(b) - Entergy Gulf States' Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(c) - Entergy Louisiana's Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(d) - Entergy Mississippi's Computation of Ratios of
Earnings to Fixed Charges and of Earnings to Combined
Fixed Charges and Preferred Dividends, as defined.
99(e) - Entergy New Orleans' Computation of Ratios of Earnings
to Fixed Charges and of Earnings to Combined Fixed
Charges and Preferred Dividends, as defined.
99(f) - System Energy's Computation of Ratios of Earnings to
Fixed Charges, as defined.
99(g) - Entergy London's Computation of Ratios of Earnings to
Fixed Charges, as defined.
** 99(g) - Annual Reports on Form 10-K of Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans,
System Energy, and Entergy London for the fiscal year
ended December 31, 1997, portions of which are
incorporated herein by reference as described
elsewhere in this document (filed with the SEC in File
Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-320, 0-5807,
1-9067, and 333-33331, respectively).
___________________________
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy
Corporation agrees to furnish to the Commission upon request any
instrument with respect to long-term debt that is not registered or
listed herein as an Exhibit because the total amount of securities
authorized under such agreement does not exceed ten percent of
Entergy Corporation and its subsidiaries on a consolidated basis.
* Reference is made to a duplicate list of exhibits being
filed as a part of this report on Form 10-Q for the quarter
ended March 31, 1998, which list, prepared in accordance
with Item 102 of Regulation S-T of the SEC, immediately
precedes the exhibits being filed with this report on Form
10-Q for the quarter ended March 31, 1998.
** Incorporated herein by reference as indicated.
(b) Reports on Form 8-K
Entergy Corporation and Entergy Gulf States
A Current Report on Form 8-K, dated January 14, 1998,
was filed with the SEC on January 15, 1998, reporting
information under Item 5. "Other Events".
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, each registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized. The signature
for each undersigned company shall be deemed to relate only to
matters having reference to such company or its subsidiaries.
ENTERGY CORPORATION
ENTERGY ARKANSAS, INC.
ENTERGY GULF STATES, INC.
ENTERGY LOUISIANA, INC.
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC.
SYSTEM ENERGY RESOURCES, INC.
ENTERGY LONDON INVESTMENTS PLC
/s/ Louis E. Buck
Louis E. Buck
Vice President, Chief Accounting
Officer and Assistant Secretary
(For each Registrant and for each as
Principal Accounting Officer)
Date: May 4, 1998
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation and Subsidiaries financial statements for the quarter ended March
31, 1998 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000065984
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<SUBSIDIARY>
<NUMBER> 023
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 18,149,405
<OTHER-PROPERTY-AND-INVEST> 1,438,240
<TOTAL-CURRENT-ASSETS> 3,063,450
<TOTAL-DEFERRED-CHARGES> 4,390,731
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 27,041,826
<COMMON> 2,466
<CAPITAL-SURPLUS-PAID-IN> 4,625,592
<RETAINED-EARNINGS> 1,984,903
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6,551,958
397,755
788,455
<LONG-TERM-DEBT-NET> 9,025,711
<SHORT-TERM-NOTES> 602,118
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 504,687
0
<CAPITAL-LEASE-OBLIGATIONS> 200,784
<LEASES-CURRENT> 175,979
<OTHER-ITEMS-CAPITAL-AND-LIAB> 8,794,389
<TOT-CAPITALIZATION-AND-LIAB> 27,041,826
<GROSS-OPERATING-REVENUE> 2,313,092
<INCOME-TAX-EXPENSE> 48,399
<OTHER-OPERATING-EXPENSES> 2,027,585
<TOTAL-OPERATING-EXPENSES> 2,027,585
<OPERATING-INCOME-LOSS> 285,507
<OTHER-INCOME-NET> 33,922
<INCOME-BEFORE-INTEREST-EXPEN> 319,429
<TOTAL-INTEREST-EXPENSE> 210,976
<NET-INCOME> 60,054
11,776
<EARNINGS-AVAILABLE-FOR-COMM> 64,971
<COMMON-STOCK-DIVIDENDS> 110,939
<TOTAL-INTEREST-ON-BONDS> 207,888
<CASH-FLOW-OPERATIONS> 274,499
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Arkansas, Inc. financial statements for the quarter ended March 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000007323
<NAME> ENTERGY ARKANSAS, INC.
<SUBSIDIARY>
<NUMBER> 001
<NAME> ENTERGY ARKANSAS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,788,254
<OTHER-PROPERTY-AND-INVEST> 285,551
<TOTAL-CURRENT-ASSETS> 595,056
<TOTAL-DEFERRED-CHARGES> 403,466
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,072,327
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,134
<RETAINED-EARNINGS> 482,701
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,073,305
91,027
116,350
<LONG-TERM-DEBT-NET> 1,156,250
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 105,924
0
<CAPITAL-LEASE-OBLIGATIONS> 82,700
<LEASES-CURRENT> 60,810
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,385,294
<TOT-CAPITALIZATION-AND-LIAB> 4,072,327
<GROSS-OPERATING-REVENUE> 329,869
<INCOME-TAX-EXPENSE> 4,197
<OTHER-OPERATING-EXPENSES> 302,615
<TOTAL-OPERATING-EXPENSES> 302,615
<OPERATING-INCOME-LOSS> 27,254
<OTHER-INCOME-NET> 7,574
<INCOME-BEFORE-INTEREST-EXPEN> 34,828
<TOTAL-INTEREST-EXPENSE> 25,008
<NET-INCOME> 5,623
2,626
<EARNINGS-AVAILABLE-FOR-COMM> 2,997
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 26,891
<CASH-FLOW-OPERATIONS> 102,644
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Gulf States, Inc. financial statements for the quarter ended March 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000044570
<NAME> ENTERGY GULF STATES, INC.
<SUBSIDIARY>
<NUMBER> 006
<NAME> ENTERGY GULF STATES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,499,784
<OTHER-PROPERTY-AND-INVEST> 370,593
<TOTAL-CURRENT-ASSETS> 675,916
<TOTAL-DEFERRED-CHARGES> 853,284
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,399,577
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,575
<RETAINED-EARNINGS> 222,865
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,489,495
151,728
201,444
<LONG-TERM-DEBT-NET> 1,677,775
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 190,890
0
<CAPITAL-LEASE-OBLIGATIONS> 84,971
<LEASES-CURRENT> 30,307
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,572,967
<TOT-CAPITALIZATION-AND-LIAB> 6,399,577
<GROSS-OPERATING-REVENUE> 457,509
<INCOME-TAX-EXPENSE> 12,969
<OTHER-OPERATING-EXPENSES> 393,848
<TOTAL-OPERATING-EXPENSES> 393,848
<OPERATING-INCOME-LOSS> 63,661
<OTHER-INCOME-NET> 4,572
<INCOME-BEFORE-INTEREST-EXPEN> 68,233
<TOTAL-INTEREST-EXPENSE> 40,508
<NET-INCOME> 14,756
4,814
<EARNINGS-AVAILABLE-FOR-COMM> 9,942
<COMMON-STOCK-DIVIDENDS> 71,358
<TOTAL-INTEREST-ON-BONDS> 29,047
<CASH-FLOW-OPERATIONS> 114,742
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Louisiana, Inc. financial statements for the quarter ended March 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000060527
<NAME> ENTERGY LOUISIANA, INC.
<SUBSIDIARY>
<NUMBER> 012
<NAME> ENTERGY LOUISIANA, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,351,337
<OTHER-PROPERTY-AND-INVEST> 107,077
<TOTAL-CURRENT-ASSETS> 438,114
<TOTAL-DEFERRED-CHARGES> 351,573
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,248,101
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 52,230
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,138,809
155,000
100,500
<LONG-TERM-DEBT-NET> 1,337,677
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 115,892
0
<CAPITAL-LEASE-OBLIGATIONS> 6,816
<LEASES-CURRENT> 42,064
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,351,343
<TOT-CAPITALIZATION-AND-LIAB> 4,248,101
<GROSS-OPERATING-REVENUE> 356,038
<INCOME-TAX-EXPENSE> 12,296
<OTHER-OPERATING-EXPENSES> 300,816
<TOTAL-OPERATING-EXPENSES> 300,816
<OPERATING-INCOME-LOSS> 55,222
<OTHER-INCOME-NET> 2,501
<INCOME-BEFORE-INTEREST-EXPEN> 57,723
<TOTAL-INTEREST-EXPENSE> 31,510
<NET-INCOME> 13,917
3,253
<EARNINGS-AVAILABLE-FOR-COMM> 10,664
<COMMON-STOCK-DIVIDENDS> 5,200
<TOTAL-INTEREST-ON-BONDS> 36,780
<CASH-FLOW-OPERATIONS> 64,664
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Mississippi, Inc. financial statements for the quarter ended March 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000066901
<NAME> ENTERGY MISSISSIPP, INC.
<SUBSIDIARY>
<NUMBER> 016
<NAME> ENTERGY MISSISSIPPI, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,050,603
<OTHER-PROPERTY-AND-INVEST> 13,266
<TOTAL-CURRENT-ASSETS> 221,107
<TOTAL-DEFERRED-CHARGES> 126,174
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,411,150
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 229,232
<TOTAL-COMMON-STOCKHOLDERS-EQ> 428,499
0
50,381
<LONG-TERM-DEBT-NET> 464,205
<SHORT-TERM-NOTES> 33,960
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 20
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 434,085
<TOT-CAPITALIZATION-AND-LIAB> 1,411,150
<GROSS-OPERATING-REVENUE> 205,017
<INCOME-TAX-EXPENSE> 1,428
<OTHER-OPERATING-EXPENSES> 188,611
<TOTAL-OPERATING-EXPENSES> 188,611
<OPERATING-INCOME-LOSS> 16,406
<OTHER-INCOME-NET> 1,047
<INCOME-BEFORE-INTEREST-EXPEN> 17,453
<TOTAL-INTEREST-EXPENSE> 10,831
<NET-INCOME> 5,194
843
<EARNINGS-AVAILABLE-FOR-COMM> 4,351
<COMMON-STOCK-DIVIDENDS> 4,300
<TOTAL-INTEREST-ON-BONDS> 10,871
<CASH-FLOW-OPERATIONS> 24,531
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
New Orleans, Inc. financial statements for the quarter ended March 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000071508
<NAME> ENTERGY NEW ORLEANS, INC.
<SUBSIDIARY>
<NUMBER> 017
<NAME> ENTERGY NEW ORLEANS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 292,149
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 112,278
<TOTAL-DEFERRED-CHARGES> 76,044
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 483,730
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,294
<RETAINED-EARNINGS> 60,415
<TOTAL-COMMON-STOCKHOLDERS-EQ> 130,453
0
19,780
<LONG-TERM-DEBT-NET> 168,969
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 164,528
<TOT-CAPITALIZATION-AND-LIAB> 483,730
<GROSS-OPERATING-REVENUE> 113,663
<INCOME-TAX-EXPENSE> 62
<OTHER-OPERATING-EXPENSES> 111,772
<TOTAL-OPERATING-EXPENSES> 111,772
<OPERATING-INCOME-LOSS> 1,891
<OTHER-INCOME-NET> 864
<INCOME-BEFORE-INTEREST-EXPEN> 2,755
<TOTAL-INTEREST-EXPENSE> 3,595
<NET-INCOME> (902)
241
<EARNINGS-AVAILABLE-FOR-COMM> (1,143)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 6,195
<CASH-FLOW-OPERATIONS> 1,689
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from System
Energy Resources, Inc. financial statements for the quarter ended March 31,
1998 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000202584
<NAME> SYSTEM ENERGY RESOURCES, INC.
<SUBSIDIARY>
<NUMBER> 018
<NAME> SYSTEM ENERGY RESOURCES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,454,118
<OTHER-PROPERTY-AND-INVEST> 92,933
<TOTAL-CURRENT-ASSETS> 394,559
<TOTAL-DEFERRED-CHARGES> 494,789
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,436,399
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 62,070
<TOTAL-COMMON-STOCKHOLDERS-EQ> 851,420
0
0
<LONG-TERM-DEBT-NET> 1,334,186
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 70,000
0
<CAPITAL-LEASE-OBLIGATIONS> 17,954
<LEASES-CURRENT> 39,139
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,123,700
<TOT-CAPITALIZATION-AND-LIAB> 3,436,399
<GROSS-OPERATING-REVENUE> 148,606
<INCOME-TAX-EXPENSE> 20,277
<OTHER-OPERATING-EXPENSES> 76,647
<TOTAL-OPERATING-EXPENSES> 76,647
<OPERATING-INCOME-LOSS> 71,959
<OTHER-INCOME-NET> 3,658
<INCOME-BEFORE-INTEREST-EXPEN> 75,617
<TOTAL-INTEREST-EXPENSE> 30,753
<NET-INCOME> 24,587
0
<EARNINGS-AVAILABLE-FOR-COMM> 24,587
<COMMON-STOCK-DIVIDENDS> 23,100
<TOTAL-INTEREST-ON-BONDS> 17,982
<CASH-FLOW-OPERATIONS> 62,766
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
London Investments, Inc. financial statements for the quarter ended March 31,
1998 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0001042730
<NAME> ENTERGY LONDON INVESTMENTS, INC.
<SUBSIDIARY>
<NUMBER> 036
<NAME> ENTERGY LONDON INVESTMENTS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,338,924
<OTHER-PROPERTY-AND-INVEST> 1,633,583
<TOTAL-CURRENT-ASSETS> 483,466
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,455,973
<COMMON> 114,000
<CAPITAL-SURPLUS-PAID-IN> 391,981
<RETAINED-EARNINGS> (146,544)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 363,933
0
300,000
<LONG-TERM-DEBT-NET> 1,689,473
<SHORT-TERM-NOTES> 332,950
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 21,961
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,743,152
<TOT-CAPITALIZATION-AND-LIAB> 4,455,973
<GROSS-OPERATING-REVENUE> 550,790
<INCOME-TAX-EXPENSE> 5,251
<OTHER-OPERATING-EXPENSES> 494,827
<TOTAL-OPERATING-EXPENSES> 494,827
<OPERATING-INCOME-LOSS> 55,963
<OTHER-INCOME-NET> 8,739
<INCOME-BEFORE-INTEREST-EXPEN> 64,702
<TOTAL-INTEREST-EXPENSE> 47,574
<NET-INCOME> 11,877
12,255
<EARNINGS-AVAILABLE-FOR-COMM> 24,132
<COMMON-STOCK-DIVIDENDS> 52,739
<TOTAL-INTEREST-ON-BONDS> 23,668
<CASH-FLOW-OPERATIONS> 64,083
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(a)
Entergy Arkansas, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest Charges 119,591 110,814 115,337 106,716 104,165 103,006
Interest applicable to rentals 16,860 19,140 18,158 19,121 17,529 17,582
----------------------------------------------------------
Total fixed charges, as defined 136,451 129,954 133,495 125,837 121,694 120,588
Preferred dividends, as defined (a) 30,334 23,234 27,636 24,731 16,073 15,641
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $166,785 $153,188 $161,131 $150,568 $137,767 $136,229
==========================================================
Earnings as defined:
Net Income $205,297 $142,263 $136,666 $157,798 $127,977 126,778
Add:
Provision for income taxes:
Total 82,337 29,220 72,081 84,445 59,220 58,368
Fixed charges as above 136,451 129,954 133,495 125,837 121,694 120,588
----------------------------------------------------------
Total earnings, as defined $424,085 $301,437 $342,242 $368,080 $308,891 $305,734
==========================================================
Ratio of earnings to fixed charges, as defined 3.11 2.32 2.56 2.93 2.54 2.54
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.54 1.97 2.12 2.44 2.24 2.24
==========================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed
by dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(b)
Entergy Gulf States, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest charges 210,599 204,134 200,224 193,890 180,073 175,002
Interest applicable to rentals 23,455 21,539 16,648 14,887 15,747 16,587
----------------------------------------------------------
Total fixed charges, as defined 234,054 225,673 216,872 208,777 195,820 191,589
Preferred dividends, as defined (a) 65,299 52,210 44,651 48,690 30,028 27,893
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $299,353 $277,883 $261,523 $257,467 $225,848 $219,482
==========================================================
Earnings as defined:
Income (loss) from continuing operations before extraordinary
items and the cumulative effect of accounting changes $69,462 ($82,755) $122,919 ($3,887) 59,976 42,197
Add:
Income Taxes 58,016 (62,086) 63,244 102,091 22,402 15,493
Fixed charges as above 234,054 225,673 216,872 208,777 195,820 191,589
----------------------------------------------------------
Total earnings, as defined (b) $361,532 $80,832 $403,035 $306,981 $278,198 $249,279
==========================================================
Ratio of earnings to fixed charges, as defined 1.54 0.36 1.86 1.47 1.42 1.30
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.21 0.29 1.54 1.19 1.23 1.14
==========================================================
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed
by dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
(b) Earnings for the year ended December 31, 1994, for GSU were not
adequate to cover fixed charges combined fixed charges and preferred
dividends by $144.8 million and $197.1 million, respectively.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(c)
Entergy Louisiana, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest 136,957 136,444 136,901 132,412 128,900 127,150
Interest applicable to rentals 8,519 8,332 9,332 10,601 9,203 9,587
------------------------------------------------------------
Total fixed charges, as defined 145,476 144,776 146,233 143,013 138,103 136,737
Preferred dividends, as defined (a) 40,779 29,171 32,847 28,234 22,103 22,731
------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $186,255 $173,947 $179,080 $171,247 $160,206 $159,468
============================================================
Earnings as defined:
Net Income $188,808 $213,839 $201,537 $190,762 $141,757 129,502
Add:
Provision for income taxes:
Total Taxes 110,813 63,288 117,114 118,559 98,965 93,191
Fixed charges as above 145,476 144,776 146,233 143,013 138,103 136,737
------------------------------------------------------------
Total earnings, as defined $445,097 $421,903 $464,884 $452,334 $378,825 $359,430
============================================================
Ratio of earnings to fixed charges, as defined 3.06 2.91 3.18 3.16 2.74 2.63
============================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.39 2.43 2.60 2.64 2.36 2.25
============================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(d)
Entergy Mississippi, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest 55,359 52,764 51,635 48,007 45,274 44,186
Interest applicable to rentals 1,264 1,716 2,173 2,165 1,947 1,853
-----------------------------------------------------------
Total fixed charges, as defined 56,623 54,480 53,808 50,172 47,221 46,039
Preferred dividends, as defined (a) 12,990 9,447 9,004 7,610 5,123 4,870
-----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $69,613 $63,927 $62,812 $57,782 $52,344 $50,909
==========================================================
Earnings as defined:
Net Income $101,743 $48,779 $68,667 $79,210 66,661 63,503
Add:
Provision for income taxes:
Total income taxes 55,993 12,476 34,877 41,107 26,744 25,584
Fixed charges as above 56,623 54,480 53,808 50,172 47,221 46,039
-----------------------------------------------------------
Total earnings, as defined $214,359 $115,735 $157,352 $170,489 $140,626 $135,126
===========================================================
Ratio of earnings to fixed charges, as defined 3.79 2.12 2.92 3.40 2.98 2.94
===========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 3.08 1.81 2.51 2.95 2.69 2.65
===========================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(e)
Entergy New Orleans, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
March
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest 21,092 18,272 17,802 16,304 15,287 15,044
Interest applicable to rentals 544 1,245 916 831 911 905
----------------------------------------------------------
Total fixed charges, as defined 21,636 19,517 18,718 17,135 16,198 15,949
Preferred dividends, as defined (a) 2,952 2,071 1,964 1,549 1,723 1,518
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $24,588 $21,588 $20,682 $18,684 $17,921 $17,467
===========================================================
Earnings as defined:
Net Income $47,709 $13,211 $34,386 $26,776 $15,451 $11,731
Add:
Provision for income taxes:
Total 31,938 4,600 20,467 16,216 12,142 10,007
Fixed charges as above 21,636 19,517 18,718 17,135 16,198 15,949
-----------------------------------------------------------
Total earnings, as defined $101,283 $37,328 $73,571 $60,127 $43,791 $37,687
===========================================================
Ratio of earnings to fixed charges, as defined 4.68 1.91 3.93 3.51 2.70 2.36
===========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 4.12 1.73 3.56 3.22 2.44 2.16
===========================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
(b) Earnings for the twelve months ended December 31, 1991 include the
$90 million effect of the 1991 NOPSI Settlement.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99(f)
System Energy Resources, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
March
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest 190,938 176,504 151,512 143,720 128,653 127,342
Interest applicable to rentals 6,790 7,546 6,475 6,223 6,065 5,662
---------------------------------------------------------------
Total fixed charges, as defined $197,728 $184,050 $157,987 $149,943 $134,718 $133,004
===============================================================
Earnings as defined:
Net Income $93,927 $5,407 $93,039 $98,668 $102,295 $102,537
Add:
Provision for income taxes:
Total 78,552 36,838 75,493 82,121 74,654 75,618
Fixed charges as above 197,728 184,050 157,987 149,943 134,718 133,004
---------------------------------------------------------------
Total earnings, as defined $370,207 $226,295 $326,519 $330,732 $311,667 $311,159
===============================================================
Ratio of earnings to fixed charges, as defined 1.87 1.23 2.07 2.21 2.31 2.34
===============================================================
</TABLE>
Exhibit 99(g)
Entergy London Investments
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
December 31, March 31,
1997 1998
Fixed charges, as defined:
Total Interest 178,647 205,782
Interest applicable to rentals 3,766 4,108
-------- --------
Total fixed charges, as defined $182,413 $209,890
======== ========
Earnings as defined:
Net Income ($148,856) ($138,082)
Add:
Provision for income taxes:
Total (55,536) (57,527)
Fixed charges as above 182,413 209,890
-------- -------
Total earnings, as defined ($21,979) $14,281
======== =======
Ratio of earnings to fixed charges, as defined -0.12 0.07
======== =======
