_____________________________________________________________________
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 September 30, 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 October 31, 1998
Entergy Corporation ($0.01 par value) 246,596,137
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 reports herein 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,
and the Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998 and June 30, 1998, 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, at 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 September 30, 1998 of $1.6989 = BPS1.00. No
representation is made that the BPS amounts have been, could have
been, or could be converted into U.S. dollars at the rates indicated
or at any other rates.
The following table sets out, for the periods indicated, certain
information concerning the exchange rates between BPS and U.S.
dollars based on the Noon Buying Rate in New York City for cable
transfers in pounds sterling as certified for customs purposes by the
Federal Reserve Bank of New York.
<TABLE>
<CAPTION>
Period Period End Average (1) High Low
($ per BPS1.00)
<S> <C> <C> <C> <C>
Three months ended September 30, 1997 1.62 1.63 1.69 1.58
Nine months ended September 30, 1997 1.62 1.63 1.71 1.58
Twelve months ended December 31, 1997 1.65 1.64 1.71 1.58
Three months ended September 30, 1998 1.70 1.65 1.71 1.62
Nine months ended September 30, 1998 1.70 1.65 1.71 1.61
</TABLE>
(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 and changes in
financial markets generally, changes in foreign currency exchange
rates, the availability and cost of personnel trained in the year
2000 compliance area, the ability to locate and correct computer
codes relevant to year 2000 issues, and other factors.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 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 13
Consolidated Statements of Income and
Comprehensive Income 17
Consolidated Statements of Cash Flows 18
Consolidated Balance Sheets 20
Selected Operating Results 22
Entergy Arkansas, Inc.:
Results of Operations 23
Statements of Income 25
Statements of Cash Flows 27
Balance Sheets 28
Selected Operating Results 30
Entergy Gulf States, Inc.:
Results of Operations 31
Statements of Income 33
Statements of Cash Flows 35
Balance Sheets 36
Selected Operating Results 38
Entergy Louisiana, Inc.:
Results of Operations 39
Statements of Income 41
Statements of Cash Flows 43
Balance Sheets 44
Selected Operating Results 46
Entergy Mississippi, Inc.:
Results of Operations 47
Statements of Income 49
Statements of Cash Flows 51
Balance Sheets 52
Selected Operating Results 54
Entergy New Orleans, Inc.:
Results of Operations 55
Statements of Income 57
Statements of Cash Flows 59
Balance Sheets 60
Selected Operating Results 62
System Energy Resources, Inc.:
Results of Operations 63
Statements of Income 64
Statements of Cash Flows 65
Balance Sheets 66
Entergy London Investments plc and Subsidiary:
Results of Operations 68
Consolidated Statements of Income (Loss) and
Comprehensive Income 70
Consolidated Statements of Cash Flows 71
Consolidated Balance Sheets 72
Notes to Financial Statements for Entergy Corporation and
Subsidiaries 74
Part II:
Item 1. Legal Proceedings 83
Item 4. Submission of Matters to a Vote of
Security Holders 84
Item 5. Other Information 85
Item 6. Exhibits and Reports on Form 8-K 86
Signature 88
<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
EPA U.S. Environmental Protection Agency
EPDC Energy Power Development Corporation
EPI Entergy Power, Inc.
EPMC Entergy Power Marketing Corp.
ETHC Entergy Technology Holding Company
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)
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.
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
GWH one million kilowatt-hours
Independence Independence Steam Electric Station (coal),
owned 16% by Entergy Arkansas, 25% by Entergy
Mississippi, and 11% by EPI
LPSC Louisiana Public Service Commission
London Electricity London Electricity plc - a regional electric
company serving London, England, which was
acquired by Entergy effective February 1, 1997
Merger The combination transaction, consummated on
December 31, 1993, by which Entergy Gulf States
became a subsidiary of Entergy Corporation and
Entergy Corporation became a Delaware
corporation
MPSC Mississippi Public Service Commission
<PAGE>
Abbreviation or Acronym Term
NRC Nuclear Regulatory Commission
Owner Participant A corporation that, in connection with the
Waterford 3 sale and leaseback transactions, has
acquired a beneficial interest in a trust, the
Owner Trustee of which is the owner and lessor
of undivided interests in Waterford 3
Owner Trustee Each institution and/or individual acting as
Owner Trustee under a trust agreement with an
Owner Participant in connection with the
Waterford 3 sale and leaseback transactions
PUCT Public Utility Commission of Texas
PUHCA Public Utility Holding Company Act of 1935, as
amended
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
White Bluff White Bluff Steam Electric Generating Station,
57% owned by Entergy Arkansas
<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 nine months
ended September 30, 1998 and 1997 was as follows:
Nine Months Nine Months
Company Ended 9/30/98 Ended 9/30/97
(In Millions)
Entergy Corporation $ 1,272.6 $1,574.7
Entergy Arkansas $ 272.4 $ 400.5
Entergy Gulf States $ 322.2 $ 382.6
Entergy Louisiana $ 261.2 $ 271.6
Entergy Mississippi $ 151.5 $ 141.0
Entergy New Orleans $ 34.9 $ 36.8
System Energy $ 184.9 $ 201.0
Entergy London $ 326.5 $ 200.4
For the first nine months of 1998, cash flow from operations
declined compared to 1997 principally due to rate reductions at Entergy
Arkansas, Entergy Gulf States, and Entergy New Orleans, 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, and in 2001 for Entergy New Orleans. Entergy Gulf
States' Louisiana retail phase-in plan for River Bend expired in February
1998, and Entergy Mississippi's phase-in plan for Grand Gulf 1 expired in
September 1998. Competitive businesses contributed $202.8 million to
Entergy Corporation's cash flow from operations for the first nine months
of 1998. Substantially all of such contributions came from London
Electricity and CitiPower Pty, both of which are expected to be sold by
Entergy during the next year. In accordance with the purchase method of
accounting, London Electricity's results of operations are not included
in the Entergy Corporation and Subsidiaries and the Entergy London
Consolidated Statements of Cash Flows prior to February 1, 1997, the
effective date of the acquisition of London Electricity.
Financing Sources
Cash from operations, supplemented by cash on hand, was sufficient
to meet substantially all investing and financing requirements of the
domestic utility companies and System Energy, including capital
expenditures, dividends, and debt and preferred stock maturities, for the
nine months ended September 30, 1998. 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. Although the rate proceedings in Texas discussed
in Note 2 could have a material adverse impact on Entergy Gulf States'
cash flows from operations, management believes that Entergy Gulf States'
cash flow from operations will be sufficient to fund its capital
requirements for the foreseeable future. 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 for a discussion of Entergy's recent redemptions.
Entergy's domestic utility companies 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
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
issued in 1996 by Entergy Louisiana Capital I and Entergy Arkansas
Capital I, and those issued in 1997 by Entergy Gulf States Capital I.
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 and its subsidiaries' capital and refinancing
requirements in 1998-2002.
As of September 30, 1998, Entergy Corporation had no loans
outstanding under a $250 million bank credit facility that expires in
September 1999. In addition, Entergy Corporation had $165.5 million
outstanding and ETHC had $82.8 million outstanding under a joint $300
million bank line of credit that also expires in September 1999. See
Note 4 to the Form 10-K for information on the short-term borrowing
authorizations and bank lines of credit of the domestic utility
companies, System Energy, and Entergy London.
London Electricity is Entergy London's only asset. Dividends paid
by London Electricity provide Entergy London with its sole source of cash
flow to pay its debt service. In addition to London Electricity's cash
flow from operations, Entergy London has other primary sources of
liquidity, including a commercial paper program and several committed and
uncommitted credit lines provided to London Electricity by banking
institutions. London Electricity intends to use credit available under
existing facilities to finance its remaining payment of windfall profits
taxes in December 1998, which will total approximately $119 million
(BPS70 million).
Management believes that cash flow from operations, together with
Entergy London's sources of credit, will provide sufficient financial
resources to meet London Electricity and 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.
Financing Uses
During the last several years, Entergy has made a number of utility-
related investments overseas. These include investments in electricity-
related businesses in the UK, Australia, Argentina, Chile, Peru,
Pakistan, and China. 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. Since November 1997, Entergy Corporation has not had
the 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 foreign electricity-related investments in a
manner consistent with these regulations. As of September 30, 1998,
Entergy Corporation had a net investment of $1.3 billion in equity
capital in businesses other than the domestic utility businesses.
However, if London Electricity and CitiPower are sold during the next
twelve months, as expected, it is anticipated that Entergy may
regain substantial ability to make investments under the SEC's
PUHCA regulations, regardless of whether the SEC has acted on the
pending application. See Note 7.
In addition to its electricity-related foreign investments, Entergy
has made investments in security monitoring and other telecommunications
related businesses in the United States. Entergy's security monitoring
businesses are currently being offered for sale. No specific SEC
approvals are required for such investments, and there is no maximum
regulatory limit on such investments. Entergy has also made investments
in energy-related businesses, including power marketing. Under PUHCA,
the SEC imposes a limit equal to 15% of consolidated capitalization on
the amount that may be invested in such businesses without specific SEC
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
approval. Entergy currently has considerable capacity to make additional
investments of this type before such limits would be exceeded.
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 nine months ended
September 30, 1998 such dividend payments from the domestic utility
companies and System Energy totaled $488.5 million. During the nine
months ended September 30, 1998, Entergy Corporation paid $296 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 (the Board). On August 2, 1998 and
October 30, 1998 the Board declared quarterly dividends of $.30 per share
on Entergy's common stock. These dividends represent a $.15 per share
reduction from the prior level of Entergy's quarterly common stock
dividends. The reduction was made in order to strengthen Entergy's
financial position and fund investments. The Board will continue to
evaluate the level of the dividend on Entergy's common stock, based upon
Entergy's earnings and the Board's assessment of the financial strength
of Entergy. See Note 8 in the Form 10-K for information on dividend
restrictions.
On October 30, 1998, Entergy Corporation's Board approved a plan for
the repurchase in the open market of up to 5 million shares of common
stock for an aggregate consideration of up to $250 million through
December 31, 2001. Substantially all of the repurchased shares are
expected to be used to fulfill the requirements of various compensation
and benefit plans.
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
outcome of the pending rate case and abeyed plant cost proceedings in
Texas based on management's estimates of the effects thereof. Entergy
Gulf States recorded additional reserves of $123.5 million ($73.6 million
net of tax) in 1998 which include $101.3 million ($60.3 million net of
tax) for the retroactive rate reductions for the nine months ended
September 30, 1998, and $22.2 million ($13.3 million net of tax) for the
prospective portion of the rate reduction for the three months ended
September 30, 1998 based on management's estimates. Refunds to customers
began in August 1998, pursuant to the PUCT's order. Final resolution of
these matters could have a material adverse effect on Entergy Gulf
States' cash flow, return on investment, and ability to obtain financing,
which in turn could affect Entergy Gulf States' liquidity and ability to
pay common stock dividends to Entergy Corporation. See "Entergy
Corporation and Subsidiaries, Management's Financial Discussion and
Analysis, Significant Factors and Known Trends, Retail and Wholesale Rate
Issues" and Note 2 for additional information.
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 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.
The APSC conducted hearings in three of these dockets in May 1998, in
which the majority of the participating parties indicated that
competition in the electric industry in Arkansas should begin by January
1, 2002. On October 1, 1998, the APSC submitted to the Arkansas
Legislature its "Report on Restructuring the Arkansas Electric Utility
Industry". This report recommended that electric generation supply
competition in the electric industry in Arkansas start no later than the
beginning of 2002. The report also recommends that the APSC be given the
authority to address the following: market power, including affiliate
codes of conduct; potential divestiture of utility assets; the
determination, recovery, and securitization of stranded costs; and
reliability of electric service. Arkansas law requires that legislation
be enacted before competition is allowed in the state's retail electric
utility industry. The Arkansas Legislature is expected to address the
deregulation of the electric industry during its 1999 legislative
session.
The MPSC issued a Revised Proposed Transition Plan (the Plan) in
June 1998 that included deletion of the previous prohibition on
securitization of stranded costs and provided for enabling legislation
necessary to implement the Plan in 2000. The Plan also provides for
retail competition in Mississippi to begin January 1, 2001 and for
recovery of allowable stranded costs through a non-bypassable charge
during a transition period between January 2001 and the end of 2004. The
MPSC conducted hearings in September 1998 on the market power and
reliability studies previously filed (as requested by the MPSC) by the
investor-owned utilities in Mississippi and has scheduled a hearing for
November 1998 to address certification requirements and load dispatch and
control rules. The LPSC and the Council have also established generic
proceedings similar to those in Arkansas and Mississippi.
During two recent technical conferences, Entergy has urged the FERC
to consider the formation of a regional transmission company (Transco) as
an acceptable alternative to an Independent System Operator (ISO) for the
transmission of electricity. As currently contemplated by Entergy,
Transco would be a FERC-regulated regional transmission company that
would operate independently of Entergy's utility subsidiaries. Under the
proposal, the transmission system and the employees who operate and
maintain it would be transferred from Entergy's utility subsidiaries to a
separate legal entity owned by Entergy, which would then be responsible
for the operation and maintenance of the transmission system. The
domestic utility companies would retain a passive ownership interest in
the Transco, but would not control or otherwise direct the operation and
management of Transco. Entergy anticipates filing with the FERC in late
1998 or early 1999, seeking a declaration as to whether a Transco would
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
be consistent with applicable FERC precedent on the formation of
independent regional entities. Subsequent filings will be made with
the FERC and the applicable state regulatory authorities seeking
necessary approvals for the formation of the Transco.
Retail and Wholesale Rate Issues
See Note 2 to the Form 10-K for information regarding the settlement
agreement filed with the APSC and the establishment of a transition cost
account. The estimated reserve recorded in December 1997 was adjusted in
September 1998 as a result of a mid-year streamlined earnings review
procedure for a negative net income impact of $3.7 million. Entergy
Arkansas also recorded an additional reserve of $27.9 million in
September 1998 in the transition cost account to reflect the estimated
1998 accrual of excess earnings. Additional reserves may also be
required in 1999 based on earnings reviews.
On June 30, 1998, the PUCT began its deliberations on the Entergy
Gulf States rate case filed in November 1996. The PUCT did not accept
settlements filed in March and June by Entergy Gulf States and various
intervenor groups. On July 22, 1998, the PUCT issued an order and after
making modifications on rehearing, issued a second order on rehearing on
October 14, 1998. The second order on rehearing reduces Entergy Gulf
States' Texas rates by $111 million annually effective December 1, 1998,
offset through May 1999 by the accelerated recovery of accounting order
deferrals, resulting in a net reduction of $69 million on an annual basis
through that date. This order also required a refund of $76 million.
This refund is calculated as a rate reduction and service quality refund
retroactive to June 1, 1996, offset by the accelerated recovery of the
accounting order deferrals, actual taxes paid, and a fuel surcharge.
This refund amount was reduced by $32 million from the original refund
ordered in the July 22, 1998 order, but was offset by the passage of time
from the original rate reduction's assumed effective date of August 1998
to the new assumed effective date of December 1, 1998. Entergy Gulf
States established reserves of $381 million ($227 million net of tax) in
the fourth quarter of 1997 for the probable outcome of the pending rate
case and abeyed plant cost proceedings in Texas based on management's
estimates of the effects thereof. Entergy Gulf States recorded
additional reserves of $123.5 million ($73.6 million net of tax) in 1998
based on management's estimates which include $101.3 million ($60.3
million net of tax) for the retroactive rate reductions for the nine
months ended September 30, 1998 and $22.2 million ($13.3 million net of
tax) for the prospective portion of the rate reduction for the three
months ended September 30, 1998. The results of operations of Entergy
Gulf States for the three and nine months ended September 30, 1998
reflect these corresponding charges in operating revenues. See Note 2
for further discussion of accounting order deferrals and actual taxes
paid.
The PUCT's October 14, 1998 order on rehearing, if sustained, is
expected to have a material adverse effect on Entergy Gulf States'
revenues, cash flows, and net income. Entergy Gulf States will file a
motion for reconsideration with the PUCT. The PUCT has until November
28, 1998 to act on the motion, or the motion is overruled by operation of
law. Entergy Gulf States plans to seek such further remedies as may be
available to it, including appealing the order if the motion for
reconsideration fails to alter what Entergy Gulf States believes is an
incorrect result based on the evidence before the PUCT. On July 29,
1998, a Texas state district court granted Entergy Gulf States' request
for a temporary restraining order until August 12, 1998 to prevent
enforcement of the PUCT's July 22, 1998 order. Subsequent to this,
Entergy Gulf States entered an agreement with the PUCT that allowed for
refunds pursuant to the PUCT's order to begin in August 1998 and delayed
the implementation of the ordered rate decrease until 18 days following
the issuance by the PUCT of a final and appealable order.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
A component of the rulings discussed above was a disallowance by the
PUCT of recovery of approximately $49 million of Entergy's affiliate
costs allocated to Entergy Gulf States in Texas. Entergy's affiliate
costs result from managing Entergy Gulf States' fossil and nuclear
generating plants and transmission and distribution systems, as well as
providing human resources, accounting, legal, and other necessary
services to Entergy Gulf States and Entergy Corporation's other electric
utility subsidiaries. The PUCT had previously issued proposed rules
governing affiliate transactions of Texas utility companies, including
Entergy Gulf States. Hearings concerning the proposed rules were
conducted by the PUCT in July 1998. However, the PUCT has withdrawn
these proposed rules pending the outcome of the 1999 legislative session.
The rules, if adopted in their proposed form, could severely restrict the
types and extent of services provided to Entergy Gulf States by Entergy
Services and Entergy Operations and will result in higher costs to
Entergy Gulf States for equivalent services. It is not certain when or
in what form the rules may be adopted.
On March 13, 1998, on remand from the Supreme Court of Texas, the
PUCT ruled by a vote of two to one that Entergy Gulf States should not be
allowed to recover in rates any of the $1.4 billion of abeyed costs
associated with its Texas jurisdictional investment in River Bend. These
costs have been held in abeyance since 1988, during which time they have
been the subject of appeals by Entergy Gulf States. Entergy Gulf States
filed a motion for rehearing on this issue with the PUCT on April 2,
1998. This motion was denied by the PUCT by order dated July 8, 1998.
Entergy Gulf States has again appealed the PUCT's decision on this matter
to the Travis County District Court in Texas and it is currently in the
scheduling process. Based on advice of counsel, management believes that
it is probable that the matter will be remanded again to the PUCT for a
further ruling on the prudence of the abeyed plant costs and it is
reasonably possible that some portion of these costs will be included in
rate base.
On September 8, 1998, Entergy Gulf States filed an application with
the PUCT for an increase in its fixed fuel factor and a surcharge to
Texas retail customers for the cumulative under-recovery of fuel and
purchased power costs. The proposed increase in the fixed fuel factor
would result in increased revenues of $55.6 million annually compared to
the current fixed fuel factor. The proposed surcharge is designed to
recover $128.1 million, including interest, for fuel under-recoveries
incurred during the period July 1, 1996 through June 30, 1998. Hearings
on the merits were held in October 1998, and the PUCT is required to rule
on the application by December 7, 1998. All amounts at issue in this
proceeding will be subject to review in a future fuel reconciliation
proceeding before the PUCT, at which time the PUCT will consider the
reasonableness of Entergy Gulf States' fuel and purchased power expenses
extending back to July 1, 1996. Entergy Gulf States cannot predict the
outcome of this proceeding.
In July 1998, Entergy Gulf States agreed to implement an $18 million
rate reduction for Louisiana retail electric customers effective July 29,
1998 to reflect reductions that are expected to occur as a result of
Entergy Gulf States' annual LPSC earnings reviews. Proceedings on issues
in the second, third, and fourth post-Merger earnings analyses will
continue.
On September 10, 1998, the LPSC issued an order in the third
required post-Merger earnings analysis that required a refund of $44.8
million for the period June 1, 1996 through May 31, 1997, and a
prospective rate reduction of $54.6 million effective September 20, 1998.
Due to the $18 million reduction that was implemented on July 29, 1998,
an additional prospective reduction of $36.6 million would be required as
a result of the third earnings analysis. Entergy Gulf States has not
reserved for this reduction. Entergy Gulf States has appealed this order
and has been granted injunctive relief pending a final decision on
appeal.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In July 1998, the LPSC also issued an order extending the Formula
Rate Plan (FRP) for Entergy Louisiana through three additional annual
filings. On September 10, 1998, Entergy Louisiana filed its FRP
Evaluation Report, based on a 1997 test year. The filing indicated that
earnings were such that no change in rates would be warranted with the
exception of the elimination of a $3.7 million one-time credit that will
result in a rate increase of this amount. Hearings will be conducted on
this filing.
On September 18, 1998, the MPSC announced a net rate reduction of
$127.1 million, effective October 1, 1998 for all Entergy Mississippi
customers. The reduction was scheduled to coincide with the expiration
of the phase-in plan, which was implemented in the late 1980's in regard
to Entergy Mississippi's portion of costs of System Energy's Grand Gulf 1
unit. The reduction was partially offset by the accelerated recovery of
Entergy Mississippi's Grand Gulf purchased power obligation and the
recovery of a portion of Entergy Mississippi's allocation of the proposed
System Energy wholesale rate increase. See Note 2 for further discussion
of these offsets. The rate reduction will not result in a decrease in
Entergy Mississippi's income, as the phase-in plan deferrals have now
been fully amortized and there is no further expense associated with the
phase-in plan to be recognized.
See Note 2 to the Form 10-K and Note 2 herein for additional
information regarding the above rate actions as well as a discussion of
the ongoing trend of regulatory mandated rate reductions, incentive and
performance-based regulation, and filings made with state and local
regulators regarding an orderly transition to a more competitive market
for electricity.
Domestic and Foreign Competitive Businesses
Following the conclusion of Entergy's Board of Directors meeting on
August 2, 1998, management announced its intention to focus Entergy's
resources on its domestic utilities, international power generation,
nuclear operations, and power trading and marketing. Consistent with
this intention, management expects to sell several businesses before the
end of 1999. These businesses include the international distribution
businesses of London Electricity and CitiPower Pty., Entergy's security
monitoring business, and portions of Entergy's telecommunications
interests. See Note 7 for further information. Proceeds from the sales
will be used, in part, to pay off debt associated with the acquisition of
these businesses. Also refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND
ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES" in the Form 10-K for a
discussion of Entergy Corporation's current investments in nonregulated
and foreign energy-related businesses. These investments may involve a
greater risk than domestic regulated utility enterprises.
For the nine months ended September 30, 1998, these investments
contributed approximately $79 million to Entergy Corporation's
consolidated net income. Entergy's investment in Entergy London
contributed $161 million to net income for the nine months ended
September 30, 1998, including $97 million due to recognition of foreign
tax credits and other tax benefits and $39 million net of tax due to
capitalization of information technology systems development costs, an
adjustment to pension surplus based on actuarial studies, and a decrease
in a provision for restructuring. Domestic power marketing operations
and foreign power development and generation operations incurred net
losses of $21 million and $6 million, respectively, for the nine months
ended September 30, 1998, as a result of power trading losses and a
counterparty default. CitiPower Pty., an Australian distribution
business, contributed $21 million; and Edesur, S. A., an Argentine
distribution business, contributed $5.2 million to net income. Entergy's
domestic unregulated energy-related retail businesses had a net loss of
$81 million for the nine months ended September 30, 1998, partially as a
result of the net of tax loss of $36 million on the September 30, 1998
sale of Efficient Solutions, Inc., formerly Entergy Integrated Solutions,
Inc.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
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, however,
this segment of the supply business will be opened to competition,
subject to a six-month transition period. This means the retail market
will be fully opened and all customers will have access to competition by
June 1999. See Note 2 in the Form 10-K for a discussion of Entergy
London regulatory matters.
In September 1998, Damhead Creek, a 775 MW combined cycle gas
turbine merchant power plant located in Southeast England, entered the
construction phase. Agreements have been finalized regarding interim
financing and construction and gas supply contracts. Damhead Creek's
power will be sold through the England and Wales Electricity Pool. The
target date for commercial operation is the fourth quarter of 2000. See
Note 4 for information regarding the financing.
In September 1998, EPMC entered into a six-year energy management
agreement (beginning January 1, 2000) with Ormet Primary Aluminum
Corporation, which produces high-quality aluminum products for the
fabrication, extrusion, and conversion markets. Under the terms of the
contract, EPMC will acquire and optimize supply of up to 535 megawatts of
electricity for Ormet's aluminum reduction plant and rolling mill in
Hannibal, Ohio.
In October 1998, Entergy Nuclear, Inc. (Entergy Nuclear) and the
Maine Yankee Atomic Power Company, which owns the Maine Yankee nuclear
plant, signed a long-term contract that calls for Entergy Nuclear to
provide management oversight of decommissioning activities at Maine
Yankee through the projected completion of such activities in 2004.
Management believes this arrangement is the first of its kind for
decommissioning and reflects a growing trend among utilities to utilize
outside management for nuclear activities.
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS", Note 7, 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 showed operating income of $2.3 million and an operating loss
of $3.3 million during the three and nine months ended September 30,
1998, respectively, compared to operating income of $6.6 million and
$15.8 million during the comparable periods in 1997.
The decrease in operating income from these deregulated operations
for the three and nine months ended September 30, 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, and (2) revenues from off-system sales of the
transferred 30% portion of River Bend not fully recovering the costs
associated with those sales. For the nine months ended September 30,
1998, the decrease in operating income was also due to decreased steam
products revenues as a result of the revised contractual arrangement with
the steam customer. 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
operating costs, efficiency and availability of generating units, and
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
Accounting Issues
New Accounting Standards - In June 1998, the FASB issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," which
will be effective for Entergy in 2000. In early 1998, the American
Institute of Certified Public Accountants issued Statement of Position
(SOP) 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use", which will be effective for Entergy in 1999.
The adoption of SFAS 133 and SOP 98-1 is not expected to have a material
effect on the financial position, results of operations, or cash flows of
Entergy. See Note 6 herein for additional developments concerning these
new accounting standards.
Continued Application of SFAS 71 - 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 regulation 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
Entergy has been evaluating its computer software and hardware,
databases, embedded microprocessors (collectively referred to as "IT and
non-IT assets"), suppliers, and other relationships to determine which
actions are required to prevent problems related to the year 2000, and
the resources required to take such actions. These problems may result
in malfunctions in certain software applications, databases, and computer
equipment with respect to dates on or after January 1, 2000, unless
corrected. These malfunctions could disrupt operations of nuclear or
fossil generating plants, operation of transmission and distribution
systems, access to interconnections with neighboring utilities, and cause
other operational problems.
Entergy has adopted a four-step approach to address Year 2000 issues
including: 1) an inventory of all IT and non-IT assets; 2) an assessment
to determine if the assets are critical to the business and, if so,
whether Year 2000 has an impact; 3) remediation to fix or replace systems
determined to be Year 2000 deficient; and 4) certification of such
critical systems to confirm Year 2000 compliance.
Entergy has substantially completed its inventory of IT and non-IT
assets, has identified systems and equipment that could be affected by
the millennium change, and has assessed the risk of potential failure for
most of its assets. Management defines year 2000 compliant services or
products as those that perform the business, office automation, or
process control requirements as designed into the twenty-first century.
Management defines an asset as "certified" as year 2000 compliant after
it has been modified or upgraded if necessary, tested, and deployed in
the operating environment. Certification of Entergy's assets that
significantly affect operations is scheduled to be substantially complete
by the end of the first quarter of 1999, and is on schedule and
approximately 40% complete at this time. Certification will continue for
assets that do not significantly affect operations, but do impact
efficiency and profitability, throughout 1999.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Entergy is currently performing an assessment of its vendors that
affect Entergy's operations. Entergy's goal is to receive written
confirmation of the year 2000 compliance of its critical vendors.
Alternative suppliers or contingency plans will be considered for those
suppliers who do not demonstrate a sufficient effort towards year 2000
readiness. Entergy intends to implement year 2000 contingency plans for
suppliers throughout 1998 and 1999.
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. Management's current estimate of maintenance
and modification costs related to year 2000 issues to be incurred in 1998
through mid-2000 is approximately $81 million, of which approximately $15
million has been incurred through September 1998. These expenses are
being funded through operating cash flows. Capitalized costs related to
year 2000 issues are not considered material.
An independent consultant has been engaged to assist management in
its assessment of the risks of year 2000 malfunctions. This assessment
is currently in progress. Based on the risk determinations of this
assessment, and the results of certification activities, management will
create and implement contingency plans to address year 2000 issues, as
needed, throughout 1999.
Please see "Forward Looking Information" herein.
<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 nine months
ended September 30, 1997 reflects London Electricity's results subsequent
to February 1, 1997.
Net Income
Consolidated net income increased for the three and nine months
ended September 30, 1998, primarily due to higher competitive business
revenues and lower income taxes, partially offset by an increase in
operating expenses. The increase in competitive business revenues was
partially offset by losses at EPMC due to increased power trading and a
counterparty default. Additional reserves were recorded for rate
reductions ordered by the PUCT with respect to Texas retail customers
which totaled $13.3 million and $73.6 million net of tax for the three
and nine months ended September 30, 1998, respectively. Income taxes
were lower for the three and nine months ended September 30, 1998 due to
an additional reduction in the UK corporation tax rate from 31% to 30% in
the third quarter of 1998 and the recording of a one-time windfall
profits tax at London Electricity in July 1997. This decrease was
partially offset by a one-time reduction in income tax expense for London
Electricity due to a reduction in the UK corporation tax rate from 33% to
31% in July 1997. Excluding the effects of the additional reserves in
1998 and the net tax adjustments in 1998 and 1997, net income would have
decreased approximately $17.8 million, net of tax, for the three months
ended September 30, 1998, and increased approximately $39.1 million, net
of tax, for the nine months ended September 30, 1998 compared to the
respective periods ended September 30, 1997.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 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 three and nine months ended
September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base revenues ($66.5) ($238.5)
Rate riders (17.5) (54.0)
Fuel cost recovery 17.0 (39.1)
Sales volume/weather 86.8 158.0
Other revenue (including unbilled) (20.2) 8.4
Sales for resale 34.8 67.4
----- ------
Total $34.4 ($97.8)
===== ======
Electric operating revenues for the domestic utility companies
increased for the three months ended September 30, 1998, primarily due to
increased sales volume at all domestic utility companies, increased sales
for resale at Entergy Gulf States, and increased fuel cost recovery
revenues at Entergy Gulf States, Entergy
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Mississippi, and Entergy New Orleans. Sales volume increased as a result
of significantly warmer weather in the third quarter of 1998. Sales for
resale at Entergy Gulf States 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. Fuel cost
recovery revenues, which do not impact net income, increased at Entergy
Gulf States, Entergy Mississippi, and Entergy New Orleans primarily due
to increased fuel prices and increased generation. Partially offsetting
these increases were decreases in base revenue, rate rider revenue, and
other revenue (primarily unbilled). Base revenues decreased at Entergy
Gulf States primarily due to reserves recorded for rate reductions
ordered by the PUCT with respect to Texas retail customers, aggressive
pricing strategies for targeted customer segments, and base rate
reductions in Louisiana that became effective in March and July 1998.
Rate rider revenue, which does not affect net income, decreased at
Entergy Arkansas due to the decline in Grand Gulf 1 cost recovery rate
rider revenues reflecting scheduled reductions in the phase-in plan and
the Stipulation and Settlement Agreement with the APSC. Unbilled revenue
decreased at Entergy Louisiana primarily as a result of decreased sales
to three large industrial customers and a decrease in sales volume due to
distribution outages caused by major storms at the end of September 1998.
Electric operating revenues for the domestic utility companies
decreased for the nine months ended September 30, 1998. The decrease was
primarily due to a decrease in base revenues at Entergy Gulf States,
decreased rate rider revenue at Entergy Arkansas, and decreased fuel cost
recovery revenues at Entergy Louisiana. Base revenues at Entergy Gulf
States decreased primarily due to reserves recorded during the nine
months ended September 30, 1998 for rate reductions ordered by the PUCT
with respect to Texas retail customers, aggressive pricing strategies for
targeted customer segments, and base rate reductions in Louisiana that
became effective in March and July 1998. The decrease in rate rider
revenue at Entergy Arkansas, which does not affect net income, was due to
the scheduled decline in Grand Gulf 1 cost recovery rate rider revenues
as provided in the phase-in plan. Fuel cost recovery revenues at Entergy
Louisiana decreased due to lower pricing resulting from a change in
generation mix. Partially offsetting these decreases were increases in
sales volume and sales for resale. Sales volume increased for all
domestic utility companies as a result of significantly warmer weather in
1998. Sales for resale at Entergy Gulf States increased due to an
increase in sales to non-associated utilities and additional revenues
related to the sale of energy from River Bend as discussed above.
Competitive business revenues increased for the three and nine
months ended September 30, 1998, primarily due to the significant
increase in revenue at EPMC and EPI. This revenue increased as a result
of increased sales volume on the spot market driven by increased demand
resulting from increased marketing efforts and significantly warmer
weather in 1998. This increase was offset for EPMC by increased power
purchased for resale as discussed in expenses below. Entergy London
revenues for the nine months ended September 30, 1998 were higher due to
nine months of activity under Entergy ownership recorded in 1998 compared
to eight months in 1997, partially offset by the impact of a 3% price
reduction, effective April 1, 1997, for kilowatt-hours distributed. An
additional 3% price reduction, effective April 1, 1998, also impacted the
three and nine months ended September 30, 1998.
Expenses
Operating expenses increased for the three and nine months ended
September 30, 1998. The increase in the three months ended September 30,
1998 was primarily due to increases in fuel expenses, purchased power
expenses, other operation and maintenance expenses, and other regulatory
charges, partially offset by the decreased amortization of rate
deferrals. The increase in the nine months ended September 30, 1998 was
primarily due to increases in purchased power expenses, other operation
and maintenance expenses, depreciation, amortization, and decommissioning
expense, and other regulatory charges, partially offset by a decrease in
amortization of rate deferrals.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The increase in fuel expenses for the three months ended September
30, 1998 was primarily due to increased volume of fuel purchased for
resale at EPMC. The increase in purchased power expenses for the three
and nine months ended September 30, 1998 was primarily the result of
significantly increased power trading by EPMC. Also, for the three
months ended September 30, 1998, the increase in purchased power expenses
at EPMC was due to a $44 million counterparty default. Other regulatory
charges for the three and nine months ended September 30, 1998, increased
due to additional accruals made in 1998 for the transition cost account
at Entergy Arkansas and the over-recovery of Grand Gulf 1-related costs
at Entergy Mississippi. The increase in other operation and maintenance
expenses for the three and nine months ended September 30, 1998 was
principally due to: i) the write-off of certain costs related to
Efficient Solutions, Inc. and ETHC's security companies in preparation
for the sale; ii) the additional operation and maintenance expenses of
security companies acquired by ETHC; and iii) increased transmission
expenses at EPMC due to significantly increased power trading sales
volume. These increases in other operation and maintenance expenses were
partially offset by capitalization of information technology systems
development costs, an adjustment to pension surplus based on actuarial
studies, and a decrease in a provision for restructuring at London
Electricity. The decrease in the amortization of rate deferrals was
caused by a lower amortization as prescribed in the Grand Gulf 1 rate
phase-in plan and the Stipulation and Settlement Agreement with the APSC
at Entergy Arkansas and the expiration of the Louisiana retail phase-in
plan for River Bend in February 1998 at Entergy Gulf States.
Other
The decrease in other income was a result of the loss on the sale of
Efficient Solutions, Inc. in September 1998. See Note 7 for further
information.
Interest on long-term debt decreased for the three and nine months
ended September 30, 1998, primarily due to the retirement, redemption, or
refinancing of certain long-term debt in 1998 at Entergy Arkansas,
Entergy Gulf States, and System Energy.
The effective income tax rates for the three months ended September
30, 1998 and 1997 were 22.9% and 79.0%, respectively. The effective
income tax rates for the nine months ended September 30, 1998 and 1997
were 26.4% and 57.3%, respectively. The decreases were due to i) the
impact of the one-time windfall profits tax recorded in July 1997,
partially offset by a reduction in the UK corporation tax rate from 33%
to 31% in the same period, ii) the recording of a $44 million deferred
tax benefit in June 1998 related to expected utilization of Entergy's
capital loss carryforwards, and iii) the impact of an additional
reduction in the UK corporation tax rate from 31% to 30% in the third
quarter of 1998. The decrease in the three months ended September 30,
1998 was also due to decreased pretax income at certain competitive
businesses and the expected utilization of foreign tax credits.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands, Except Share Data)
<S> <C> <C> <C> <C>
Operating Revenues:
Domestic electric $2,032,463 $1,998,058 $4,854,872 $4,952,725
Natural gas 17,003 17,516 91,616 98,037
Steam products 11,626 11,142 32,151 35,103
Competitive businesses 2,526,355 770,871 4,430,714 1,935,565
---------- ---------- ---------- ----------
Total 4,587,447 2,797,587 9,409,353 7,021,430
---------- ---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 579,961 509,532 1,256,778 1,248,052
Purchased power 2,423,958 702,582 4,010,896 1,593,270
Nuclear refueling outage expenses 20,445 18,675 64,134 49,083
Other operation and maintenance 482,129 420,012 1,466,322 1,358,929
Depreciation, amortization, and decommissioning 256,375 246,736 753,922 716,051
Taxes other than income taxes 91,033 92,233 277,145 275,429
Other regulatory charges (credits) 71,542 22,541 11,759 (34,230)
Amortization of rate deferrals 71,331 112,659 219,507 336,124
---------- ---------- ---------- ----------
Total 3,996,774 2,124,970 8,060,463 5,542,708
---------- ---------- ---------- ----------
Operating Income 590,673 672,617 1,348,890 1,478,722
---------- ---------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 4,027 1,777 9,650 7,845
Sale of non-regulated business (68,590) - (68,590) -
Miscellaneous - net 18,660 (914) 68,440 45,703
---------- ---------- ---------- ----------
Total (45,903) 863 9,500 53,548
---------- ---------- ---------- ----------
Interest Charges:
Interest on long-term debt 182,899 208,909 565,785 599,709
Other interest - net 11,481 16,541 35,636 39,594
Distributions on preferred securities of subsidiaries 13,407 4,709 33,535 13,591
Allowance for borrowed funds used
during construction (3,453) (1,455) (8,015) (6,332)
---------- ---------- ---------- ----------
Total 204,334 228,704 626,941 646,562
---------- ---------- ---------- ----------
Income Before Income Taxes 340,436 444,776 731,449 885,708
Income Taxes 77,839 351,455 192,820 507,323
---------- ---------- ---------- ----------
Net Income before Preferred Dividend Requirements and Other 262,597 93,321 538,629 378,385
Preferred and Preference Dividend Requirements of
Subsidiaries and Other 11,611 12,379 35,091 41,405
---------- ---------- ---------- ----------
Consolidated Net Income 250,986 80,942 503,538 336,980
Other Comprehensive Income:
Foreign Currency Translation Adjustment (14,708) (15,885) (18,556) (27,407)
---------- ---------- ---------- ----------
Comprehensive Net Income $236,278 $65,057 $484,982 $309,573
========== ========== ========== ==========
Earnings per average common share:
Basic and diluted $1.02 $0.33 $2.04 $1.41
Dividends declared per common share $0.30 $0.90 $1.20 $1.80
Average number of common shares outstanding:
Basic 246,615,620 242,172,319 246,331,931 238,653,723
Diluted 246,699,893 242,258,956 246,432,782 238,735,315
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income before preferred dividend requirements and other $538,629 $378,385
Noncash items included in net income:
Amortization of rate deferrals 219,507 336,124
Other regulatory charges 11,759 (34,230)
Depreciation, amortization, and decommissioning 753,922 716,051
Deferred income taxes and investment tax credits (125,224) (169,887)
Allowance for equity funds used during construction (9,650) (7,845)
Sale of non-regulated businesses 68,590 -
Changes in working capital:
Receivables (438,679) (175,147)
Fuel inventory 26,119 68,892
Accounts payable 286,360 59,540
Taxes accrued 338,440 387,233
Windfall profit tax liability - 234,080
Interest accrued (19,151) (30,923)
Deferred fuel (121,413) (31,819)
Other working capital accounts (94,325) (71,912)
Reserve for rate refund 76,883 -
Provision for estimated losses and reserves (132,556) (40,814)
Decommissioning trust contributions and realized change in trust assets (56,915) (50,950)
Other (49,742) 7,937
---------- ----------
Net cash flow provided by operating activities 1,272,554 1,574,715
---------- ----------
Investing Activities:
Construction/capital expenditures (712,671) (554,638)
Allowance for equity funds used during construction 9,650 7,845
Nuclear fuel purchases (59,409) (52,323)
Proceeds from sale/leaseback of nuclear fuel 78,969 91,504
Acquisition of London Electricity, net of cash acquired - (1,951,701)
Investment in other nonregulated/nonutility properties (40,704) (10,576)
Sale of non-regulated businesses (21,893) -
Other (35,595) (25,863)
---------- ----------
Net cash flow used in investing activities (781,653) (2,495,752)
---------- ----------
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Financing Activities:
Proceeds from the issuance of:
General and refunding mortgage bonds 78,703 64,827
First mortgage bonds 141,994 84,064
Bank notes and other long-term debt 282,219 1,717,569
Preferred securities of subsidiary trusts and partnerships - 82,323
Common stock 15,333 238,193
Retirement of:
First mortgage bonds (351,335) (327,692)
General and refunding mortgage bonds (110,000) (7,622)
Other long-term debt (211,754) (76,583)
Redemption of preferred stock (10,250) (119,367)
Changes in short-term borrowings - net (17,964) 103,454
Preferred stock dividends paid (35,217) (39,540)
Common stock dividends paid (296,022) (328,182)
---------- ----------
Net cash flow provided by (used in) financing activities (514,293) 1,391,444
---------- ----------
Effect of exchange rates on cash and cash equivalents 1,006 2,655
---------- ----------
Net increase (decrease) in cash and cash equivalents (22,386) 473,062
Cash and cash equivalents at beginning of period 830,547 388,703
---------- ----------
Cash and cash equivalents at end of period $808,161 $861,765
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $654,846 $650,190
Income taxes $97,775 $116,761
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets ($4,696) $16,309
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
(In Thousands)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $101,056 $85,067
Temporary cash investments - at cost,
which approximates market 707,105 700,431
Special deposits - 45,049
----------- -----------
Total cash and cash equivalents 808,161 830,547
Notes receivable 9,490 8,157
Accounts receivable:
Customer (less allowance for doubtful accounts of
$31 million in 1998 and $32.8 million in 1997) 580,825 458,085
Other 517,060 225,523
Accrued unbilled revenues 564,447 580,194
Deferred fuel costs 272,009 150,596
Accumulated deferred income taxes 18,800 -
Fuel inventory 93,212 119,331
Materials and supplies - at average cost 392,778 367,870
Rate deferrals 46,710 237,302
Prepayments and other 170,600 193,717
----------- -----------
Total 3,474,092 3,171,322
----------- -----------
Other Property and Investments:
Decommissioning trust funds 641,270 589,050
Non-regulated investments 529,023 568,951
Other 222,526 225,818
----------- -----------
Total 1,392,819 1,383,819
----------- -----------
Utility Plant:
Electric 25,774,603 25,310,122
Plant acquisition adjustment - Entergy Gulf States 426,961 439,160
Electric plant under leases 675,317 674,483
Property under capital leases - electric 117,772 134,278
Natural gas 183,438 169,964
Steam products 83,037 82,289
Construction work in progress 811,872 565,667
Nuclear fuel under capital leases 254,062 269,011
Nuclear fuel 59,959 72,875
----------- -----------
Total 28,387,021 27,717,849
Less - accumulated depreciation and amortization 10,205,316 9,585,021
----------- -----------
Utility plant - net 18,181,705 18,132,828
----------- -----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 133,687 162,602
SFAS 109 regulatory asset - net 1,148,885 1,174,187
Unamortized loss on reacquired debt 184,931 196,891
Other regulatory assets 514,416 466,780
Long-term receivables 35,163 36,984
CitiPower license (net of amortization of $32.2 million in 1998
and $25.6 million in 1997) 436,738 486,153
London Electricity license (net of amortization of $58.5 million
in 1998 and $31.1 million in 1997) 1,344,518 1,327,312
Other 523,305 461,822
----------- -----------
Total 4,321,643 4,312,731
----------- -----------
TOTAL $27,370,259 $27,000,700
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $323,992 $390,674
Notes payable 414,052 428,964
Accounts payable 1,197,566 915,800
Customer deposits 178,877 178,162
Taxes accrued 702,078 359,996
Accumulated deferred income taxes - 56,524
Interest accrued 194,873 214,763
Dividends declared 8,040 8,166
Obligations under capital leases 138,526 167,700
Other 26,295 81,303
----------- -----------
Total 3,184,299 2,802,052
----------- -----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,502,106 4,567,052
Accumulated deferred investment tax credits 572,115 587,781
Obligations under capital leases 233,482 236,000
Other 1,855,571 1,857,514
----------- -----------
Total 7,163,274 7,248,347
----------- -----------
Long-term debt 8,942,186 9,068,325
Subsidiaries' preferred stock with sinking fund 178,755 185,005
Subsidiary's preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts holding
solely junior subordinated deferrable debentures 215,000 215,000
Company-obligated redeemable preferred securities of subsidiary
partnership holding solely junior subordinated deferrable debentures 300,000 300,000
Shareholders' Equity:
Subsidiaries' preferred stock without sinking fund 334,455 338,455
Common stock, $.01 par value, authorized 500,000,000
shares; issued 246,763,336 shares in 1998 and 246,149,198
shares in 1997 2,468 2,461
Additional paid-in capital 4,629,098 4,613,572
Retained earnings 2,365,285 2,157,912
Cumulative foreign currency translation adjustment (88,373) (69,817)
Less - treasury stock (222,354 shares in 1998 and
306,852 shares in 1997) 6,188 10,612
----------- -----------
Total 7,236,745 7,031,971
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $27,370,259 $27,000,700
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
Domestic Electric Operating Revenues:
Residential $ 844.5 $ 803.6 $ 40.9 5
Commercial 454.9 466.2 (11.3) (2)
Industrial 496.3 532.6 (36.3) (7)
Governmental 48.9 46.8 2.1 4
---------------------------------
Total retail 1,844.6 1,849.2 (4.6) -
Sales for resale 144.9 110.1 34.8 32
Other 43.0 38.8 4.2 11
---------------------------------
Total $ 2,032.5 $ 1,998.1 $ 34.4 2
=================================
Billed Electric Energy
Sales (GWH):
Residential 11,229 9,892 1,337 14
Commercial 7,122 6,563 559 9
Industrial 11,311 11,425 (114) (1)
Governmental 745 693 52 8
---------------------------------
Total retail 30,407 28,573 1,834 6
Sales for resale 3,005 2,883 122 4
---------------------------------
Total 33,412 31,456 1,956 6
=================================
Nine Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
Domestic Electric Operating Revenues:
Residential $ 1,811.2 $ 1,759.9 $ 51.3 3
Commercial 1,148.4 1,197.0 (48.6) (4)
Industrial 1,380.5 1,506.5 (126.0) (8)
Governmental 133.2 128.8 4.4 3
---------------------------------
Total retail 4,473.3 4,592.2 (118.9) (3)
Sales for resale 335.2 267.8 67.4 25
Other 46.4 92.7 (46.3) (50)
---------------------------------
Total $ 4,854.9 $ 4,952.7 ($97.8) (2)
=================================
Billed Electric Energy
Sales (GWH):
Residential 24,166 21,823 2,343 11
Commercial 17,446 16,410 1,036 6
Industrial 32,577 33,560 (983) (3)
Governmental 2,042 1,886 156 8
---------------------------------
Total retail 76,231 73,679 2,552 3
Sales for resale 7,580 7,136 444 6
---------------------------------
Total 83,811 80,815 2,996 4
=================================
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the three and nine months ended September
30, 1998 primarily due to decreases in electric operating revenues,
partially offset by decreases in operating expenses and interest expense.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 1998 and
1997 are discussed under "Revenues and Sales", "Expenses", and "Other"
below.
Revenues and Sales
The changes in electric operating revenues for the three and nine
months ended September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base revenues ($1.6) ($3.7)
Rate riders (30.3) (77.8)
Fuel cost recovery (11.1) (18.6)
Sales volume/weather 27.7 50.2
Other revenue (including unbilled) 0.2 17.5
Sales for resale (3.7) (63.6)
------ ------
Total ($18.8) ($96.0)
====== ======
Electric operating revenues decreased for the three and nine months
ended September 30, 1998, primarily due to a decrease in rate rider
revenue and fuel cost recovery revenues, which do not affect net income,
partially offset by an increase in sales volume. Electric operating
revenues decreased for the nine months ended September 30, 1998, also due
to a decrease in sales for resale, partially offset by an increase in
other revenue (including unbilled). Rate rider revenue, which does not
affect net income, decreased due to the decline in Grand Gulf 1 cost
recovery rate rider revenues reflecting scheduled reductions in the phase-
in plan and the Stipulation and Settlement Agreement with the APSC. See
Note 2 for further discussion. Fuel cost recovery revenues decreased due
to unfavorable pricing resulting from a change to a fixed fuel factor in
January 1998, partially offset by an increase in generation. Sales
volume increased as a result of significantly warmer weather in 1998.
Sales for resale decreased for the nine months ended September 30,
1998, due to a decrease in sales to associated companies. This decrease
was a result of reduced generation due to outages at both ANO1 and ANO2
and restricted generation at the Independence and White Bluff coal plants
due to disruption in coal deliveries during the second quarter of 1998.
Unbilled revenue increased for the nine months ended September 30, 1998,
primarily as a result of increased sales volume due to warmer weather.
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Operating expenses decreased for the three and nine months ended
September 30, 1998, primarily due to decreases in fuel expenses and the
amortization of Grand Gulf 1 rate deferrals, partially offset by an
increase in other regulatory charges. Fuel expenses decreased primarily
due to the impact of the under-recovered deferred fuel cost in excess of
the fixed fuel factor billed to retail customers. The decrease in the
amortization of Grand Gulf 1 rate deferrals was 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 increase in
other regulatory charges was a result of additional accruals made in 1998
for the transition cost account. See Note 2 for further discussion of
the Stipulation and Settlement Agreement with the APSC and the transition
cost account. The increase in other regulatory charges was partially
offset by an increase in the net under-recovery of Grand Gulf 1-related
costs.
Other
Interest charges decreased for the three and nine months ended
September 30, 1998 primarily due to the retirement of certain long-term
debt in 1998.
The effective income tax rate of 39.4% for the three months ended
September 30, 1998 remained relatively unchanged from the rate of 38.5%
for the three months ended September 30, 1997. For the nine months ended
September 30, 1998 and 1997, the effective income tax rates were 39.2%
and 37.3%, respectively. The increase in 1998 was primarily due to the
increased reversal of previously recorded AFUDC amounts included in
depreciation.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $527,059 $545,849 $1,248,205 $1,344,199
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 63,469 72,147 138,834 201,494
Purchased power 116,085 123,871 326,397 327,725
Nuclear refueling outage expenses 8,128 7,639 23,947 19,905
Other operation and maintenance 79,706 80,280 256,002 252,081
Depreciation, amortization, and decommissioning 44,303 42,745 134,336 125,529
Taxes other than income taxes 8,481 9,114 28,681 27,643
Other regulatory charges 43,983 22,957 21,878 14,208
Amortization of rate deferrals 22,067 38,408 66,202 115,162
-------- -------- ---------- ----------
Total 386,222 397,161 996,277 1,083,747
-------- -------- ---------- ----------
Operating Income 140,837 148,688 251,928 260,452
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 1,934 (316) 4,266 2,572
Miscellaneous - net 2,092 4,573 10,640 14,987
-------- -------- ---------- ----------
Total 4,026 4,257 14,906 17,559
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 20,974 23,368 66,095 71,595
Other interest - net 2,307 950 3,667 2,850
Distributions on preferred securities of subsidiary trust 1,275 1,275 3,825 3,825
Allowance for borrowed funds used
during construction (1,383) 105 (3,034) (1,632)
-------- -------- ---------- ----------
Total 23,173 25,698 70,553 76,638
-------- -------- ---------- ----------
Income Before Income Taxes 121,690 127,247 196,281 201,373
Income Taxes 47,959 48,996 76,960 75,189
-------- -------- ---------- ----------
Net Income 73,731 78,251 119,321 126,184
Preferred Stock Dividend Requirements
and Other 2,526 2,733 7,745 8,363
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $71,205 $75,518 $111,576 $117,821
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $119,321 $126,184
Noncash items included in net income:
Amortization of rate deferrals 66,202 115,162
Other regulatory charges 21,878 14,208
Depreciation, amortization, and decommissioning 134,336 125,529
Deferred income taxes and investment tax credits (19,501) (58,694)
Allowance for equity funds used during construction (4,266) (2,572)
Changes in working capital:
Receivables (78,001) (13,783)
Fuel inventory 890 40,975
Accounts payable 41,397 (20,826)
Taxes accrued 82,721 95,308
Interest accrued (2,566) 767
Deferred fuel costs (65,408) 7,688
Other working capital accounts (8,836) (34,326)
Decommissioning trust contributions and realized
change in trust assets (17,776) (18,255)
Provision for estimated losses and reserves (3,800) 5,878
Other 5,816 17,262
--------- ---------
Net cash flow provided by operating activities 272,407 400,505
--------- ---------
Investing Activities:
Construction expenditures (122,209) (101,796)
Allowance for equity funds used during construction 4,266 2,572
Nuclear fuel purchases (38,354) (36,633)
Proceeds from sale/leaseback of nuclear fuel 38,354 36,553
--------- ---------
Net cash flow used in investing activities (117,943) (99,304)
--------- ---------
Financing Activities:
Proceeds from the issuance of first mortgage bonds - 84,064
Retirement of:
First mortgage bonds (105,774) (117,587)
Other long term debt (45,500) -
Redemption of preferred stock (4,000) (4,000)
Dividends paid:
Common stock (92,600) (97,200)
Preferred stock (7,844) (8,462)
--------- ---------
Net cash flow used in financing activities (255,718) (143,185)
--------- ---------
Net increase (decrease) in cash and cash equivalents (101,254) 158,016
Cash and cash equivalents at beginning of period 203,391 43,857
--------- ---------
Cash and cash equivalents at end of period $102,137 $201,873
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $64,367 $63,660
Income taxes $13,521 $29,011
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $35 $12,867
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $15,013 $6,076
Temporary cash investments - at cost,
which approximates market:
Associated companies 18,311 41,389
Other 68,813 110,877
Special deposits - 45,049
---------- ----------
Total cash and cash equivalents 102,137 203,391
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.8 million in 1998 and 1997) 110,844 71,910
Associated companies 74,918 46,166
Other 7,742 10,282
Accrued unbilled revenues 102,471 89,616
Deferred fuel costs 49,164 -
Fuel inventory - at average cost 27,279 28,169
Materials and supplies - at average cost 87,931 79,692
Rate deferrals 9,046 75,249
Deferred nuclear refueling outage costs 25,540 24,335
Prepayments and other 11,006 8,647
---------- ----------
Total 608,078 637,457
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,213 11,213
Decommissioning trust fund 268,384 250,573
Other - at cost (less accumulated depreciation) 4,984 4,939
---------- ----------
Total 284,581 266,725
---------- ----------
Utility Plant:
Electric 4,709,866 4,650,065
Property under capital leases 51,539 53,843
Construction work in progress 189,875 123,087
Nuclear fuel under capital lease 99,871 92,621
---------- ----------
Total 5,051,151 4,919,616
Less - accumulated depreciation and amortization 2,252,355 2,116,826
---------- ----------
Utility plant - net 2,798,796 2,802,790
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 252,407 252,712
Unamortized loss on reacquired debt 52,706 53,780
Other regulatory assets 102,328 79,461
Other 22,781 13,952
---------- ----------
Total 430,222 399,905
---------- ----------
TOTAL $4,121,677 $4,106,877
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $865 $60,650
Notes payable 667 667
Accounts payable:
Associated companies 84,450 59,438
Other 92,790 76,405
Customer deposits 25,318 23,437
Taxes accrued 160,048 77,327
Accumulated deferred income taxes 13,568 32,239
Interest accrued 26,260 28,826
Co-owner advances 11,443 7,666
Deferred fuel costs - 16,244
Obligations under capital leases 47,788 62,623
Other 19,005 21,696
---------- ----------
Total 482,202 467,218
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 761,496 759,489
Accumulated deferred investment tax credits 100,050 103,899
Obligations under capital leases 103,621 83,841
Other 211,365 169,884
---------- ----------
Total 1,176,532 1,117,113
---------- ----------
Long-term debt 1,170,266 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
Shareholders' Equity:
Preferred stock without sinking fund 112,350 116,350
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 498,696 479,705
---------- ----------
Total 1,201,650 1,186,659
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,121,677 $4,106,877
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1998 and 1997
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 208.0 $ 194.1 $ 13.9 7
Commercial 91.7 105.5 (13.8) (13)
Industrial 98.2 112.6 (14.4) (13)
Governmental 4.2 5.2 (1.0) (19)
------------------------------
Total retail 402.1 417.4 (15.3) (4)
Sales for resale:
Associated companies 39.1 53.8 (14.7) (27)
Non-associated companies 78.0 67.0 11.0 16
Other 7.8 7.6 0.2 3
------------------------------
Total $ 527.0 $ 545.8 ($18.8) (3)
==============================
Billed Electric Energy
Sales (GWH):
Residential 2,368 2,031 337 17
Commercial 1,510 1,391 119 9
Industrial 1,901 1,833 68 4
Governmental 67 67 - -
------------------------------
Total retail 5,846 5,322 524 10
Sales for resale:
Associated companies 1,523 2,102 (579) (28)
Non-associated companies 1,425 2,012 (587) (29)
------------------------------
Total 8,794 9,436 (642) (7)
==============================
Nine Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
Electric Operating Revenues:
Residential $ 447.2 $ 430.7 $ 16.5 4
Commercial 220.0 254.0 (34.0) (13)
Industrial 248.9 278.4 (29.5) (11)
Governmental 11.2 14.1 (2.9) (21)
------------------------------
Total retail 927.3 977.2 (49.9) (5)
Sales for resale:
Associated companies 98.7 176.2 (77.5) (44)
Non-associated companies 176.1 162.2 13.9 9
Other 46.1 28.6 17.5 61
-------------------------------
Total $1,248.2 $ 1,344.2 ($96.0) (7)
===============================
Billed Electric Energy
Sales (GWH):
Residential 5,229 4,640 589 13
Commercial 3,629 3,371 258 8
Industrial 5,109 4,944 165 3
Governmental 178 184 (6) (3)
------------------------------
Total retail 14,145 13,139 1,006 8
Sales for resale:
Associated companies 4,022 7,982 (3,960) (50)
Non-associated companies 3,835 5,023 (1,188) (24)
------------------------------
Total 22,002 26,144 (4,142) (16)
==============================
</TABLE>
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three months ended September 30, 1998,
primarily due to an increase in operating revenues and a decrease in
interest charges, partially offset by higher income taxes. Net income
decreased for the nine months ended September 30, 1998, primarily due to
a decrease in operating revenues, partially offset by a decrease in
interest charges and lower income taxes. The changes in operating
revenues for the three and nine months ended September 30, 1998 reflected
additional reserves recorded for rate reductions ordered by the PUCT with
respect to Texas retail customers which totaled $13.3 million and $73.6
million net of tax, respectively. Excluding the effects of the
additional reserves, net income for the three and nine months ended
September 30, 1998 would have increased approximately $20.8 million and
$31.1 million, respectively. See Note 2 for a discussion of the
additional reserves recorded for rate reductions ordered by the PUCT with
respect to Texas retail customers.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 1998 and
1997 are discussed under "Revenues and Sales", "Expenses", and "Other"
below.
Revenues and Sales
The changes in electric operating revenues for the three and nine
months ended September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base revenues ($58.4) ($183.2)
Fuel cost recovery 28.3 28.6
Sales volume/weather 23.0 49.1
Other revenue (including unbilled) (1.4) (0.6)
Sales for resale 17.5 46.5
---- ------
Total $9.0 ($59.6)
==== ======
Electric operating revenues increased for the three months ended
September 30, 1998 primarily due to increases in fuel cost recovery
revenues, which do not impact net income, and higher sales volume and
sales for resale, partially offset by a decrease in base revenues.
Electric operating revenues decreased for the nine months ended September
30, 1998 primarily due to the decrease in base revenues exceeding the
impact of higher sales volume and increases in fuel cost recovery
revenues and sales for resale. Base revenues decreased primarily due to
reserves recorded during the three and nine months ended September 30,
1998 for rate reductions ordered by the PUCT with respect to Texas retail
customers, aggressive pricing strategies for targeted customer segments,
and base rate reductions in Louisiana that became effective in March and
July 1998. The increase in fuel cost recovery revenues, which do not
affect net income, was due to higher fuel prices and increased generation
in 1998. Sales volume increased due to significantly warmer weather in
1998. Sales for resale increased due to 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 and an
increase in sales to non-associated utilities as a result of an increase
in the average price of wholesale energy.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Gas operating revenues decreased for the nine months ended September
30, 1998 due to a lower unit price for gas purchased for resale. Steam
operating revenues decreased for the nine months ended September 30, 1998
primarily due to changes in the customer contract, which took effect in
August 1997.
Expenses
Operating expenses for the three and nine months ended September 30,
1998 remained relatively unchanged reflecting increases in other
operation and maintenance expenses, taxes other than income taxes, and a
net increase in fuel and purchased power expenses, which were 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
for the three and nine months ended September 30, 1997. Taxes other than
income taxes increased due to increased franchise, ad valorem, and
payroll taxes. The net increase in fuel and purchased power expenses was
primarily due to an increase in generation, partially offset by the
impact of the under-recovered deferred fuel costs in excess of the fixed
fuel factor billed to Texas retail customers. The amortization of rate
deferrals decreased due to the expiration of the Louisiana retail phase-
in plan for River Bend in February 1998.
Other
Interest charges decreased for the three and nine months ended
September 30, 1998 primarily due to the retirement, redemption, or
refinancing of certain long-term debt in 1997 and 1998.
For the three months ended September 30, 1998 and 1997, the
effective income tax rates were 42.0% and 40.4%, respectively. The
effective income tax rates for the nine months ended September 30, 1998
and 1997 were 43.9% and 37.4%, respectively. The changes in the
effective income tax rates in 1998 were primarily due to a decrease in
the flow-through of tax benefits related to operating reserves and the
increased reversal of previously recorded AFUDC amounts included in
depreciation.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $593,326 $584,357 $1,430,665 $1,490,234
Natural gas 4,410 4,476 27,710 32,387
Steam products 11,626 11,141 32,151 35,102
-------- -------- ---------- ----------
Total 609,362 599,974 1,490,526 1,557,723
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 159,442 152,511 406,696 411,595
Purchased power 95,358 93,208 254,990 238,977
Nuclear refueling outage expenses 3,403 1,569 11,627 6,787
Other operation and maintenance 99,802 93,978 296,502 269,422
Depreciation, amortization, and decommissioning 50,865 53,768 157,902 160,569
Taxes other than income taxes 33,191 25,800 92,159 81,810
Other regulatory credits (1,373) (5,602) (10,424) (17,550)
Amortization of rate deferrals 2,270 26,377 19,480 79,091
-------- -------- ---------- ----------
Total 442,958 441,609 1,228,932 1,230,701
-------- -------- ---------- ----------
Operating Income 166,404 158,365 261,594 327,022
-------- -------- ---------- ----------
Other Income:
Allowance for equity funds used
during construction 757 235 2,057 1,686
Miscellaneous - net 7,357 7,029 13,855 15,618
-------- -------- ---------- ----------
Total 8,114 7,264 15,912 17,304
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 37,104 40,516 114,192 124,257
Other interest - net 1,132 4,704 2,847 8,420
Distributions on preferred securities of subsidiary trust 1,859 1,859 5,578 5,041
Allowance for borrowed funds used
during construction (611) (156) (1,625) (1,395)
-------- -------- ---------- ----------
Total 39,484 46,923 120,992 136,323
-------- -------- ---------- ----------
Income Before Income Taxes 135,034 118,706 156,514 208,003
Income Taxes 56,721 47,966 68,686 77,700
-------- -------- ---------- ----------
Net Income 78,313 70,740 87,828 130,303
Preferred and Preference Stock
Dividend Requirements and Other 4,747 5,025 14,335 18,963
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $73,566 $65,715 $73,493 $111,340
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Nine Months Ended
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $87,828 $130,303
Noncash items included in net income:
Amortization of rate deferrals 19,480 79,091
Other regulatory credits (10,424) (17,550)
Depreciation, amortization, and decommissioning 157,902 160,569
Deferred income taxes and investment tax credits 4,456 22,299
Allowance for equity funds used during construction (2,057) (1,686)
Changes in working capital:
Receivables (16,460) (55,099)
Fuel inventory 6,560 19,761
Accounts payable (9,621) 26,758
Taxes accrued 65,956 60,741
Interest accrued 8,189 6,211
Deferred fuel costs (43,391) (29,208)
Other working capital accounts (323) (4,059)
Decommissioning trust contributions and realized
change in trust assets (10,024) (7,131)
Provision for estimated losses and reserves (4,978) (16,811)
Reserve for rate refund 76,883 -
Other (7,798) 8,361
--------- ---------
Net cash flow provided by operating activities 322,178 382,550
--------- ---------
Investing Activities:
Construction expenditures (77,904) (96,998)
Allowance for equity funds used during construction 2,057 1,686
Nuclear fuel purchases (226) (11,580)
Proceeds from sale/leaseback of nuclear fuel 219 11,580
--------- ---------
Net cash flow used in investing activities (75,854) (95,312)
--------- ---------
Financing Activities:
Proceeds from the issuance of :
Long-term debt 21,600 -
Preferred securities of subsidiary trust - 82,323
Retirement of:
First mortgage bonds (25,000) (57,240)
Other long-term debt (72,090) (50,865)
Redemption of preferred and preference stock (6,250) (93,367)
Dividends paid:
Common stock (109,400) (48,200)
Preferred and preference stock (14,362) (16,960)
--------- ---------
Net cash flow used in financing activities (205,502) (184,309)
--------- ---------
Net increase in cash and cash equivalents 40,822 102,929
Cash and cash equivalents at beginning of period 165,164 122,406
--------- ---------
Cash and cash equivalents at end of period $205,986 $225,335
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $101,855 $118,834
Income taxes $23,164 $2,631
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets ($4,907) $2,129
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $17,018 $10,549
Temporary cash investments - at cost,
which approximates market:
Associated companies 35,770 37,389
Other 153,198 117,226
---------- ----------
Total cash and cash equivalents 205,986 165,164
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.8 million in 1998 and 1997) 103,075 99,762
Associated companies 7,395 9,024
Other 29,251 32,837
Accrued unbilled revenues 93,187 74,825
Deferred fuel costs 189,148 145,757
Accumulated deferred income taxes 29,656 22,093
Fuel inventory - at average cost 31,067 37,627
Materials and supplies - at average cost 107,326 104,690
Rate deferrals 9,077 21,749
Prepayments and other 28,116 21,680
---------- ----------
Total 833,284 735,208
---------- ----------
Other Property and Investments:
Decommissioning trust fund 192,580 187,462
Other - at cost (less accumulated depreciation) 176,008 176,953
---------- ----------
Total 368,588 364,415
---------- ----------
Utility Plant:
Electric 7,234,921 7,168,668
Natural gas 50,990 47,656
Steam products 83,037 82,289
Property under capital leases 56,319 67,946
Construction work in progress 95,158 90,333
Nuclear fuel under capital lease 37,738 54,390
Nuclear fuel 15,697 23,051
---------- ----------
Total 7,573,860 7,534,333
Less - accumulated depreciation and amortization 3,138,741 2,996,147
---------- ----------
Utility plant - net 4,435,119 4,538,186
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 91,602 98,410
SFAS 109 regulatory asset - net 379,332 376,275
Unamortized loss on reacquired debt 44,313 48,417
Other regulatory assets 83,175 86,819
Long-term receivables 35,163 36,984
Other 218,284 203,923
---------- ----------
Total 851,869 850,828
---------- ----------
TOTAL $6,488,860 $6,488,637
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $140,515 $190,890
Accounts payable:
Associated companies 59,801 48,726
Other 88,748 109,444
Customer deposits 31,440 30,311
Taxes accrued 114,274 48,318
Interest accrued 53,343 45,154
Nuclear refueling reserve 14,431 3,386
Obligations under capital leases 34,153 30,280
Other 14,221 17,646
---------- ----------
Total 550,926 524,155
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,142,622 1,124,644
Accumulated deferred investment tax credits 211,638 215,438
Obligations under capital leases 59,904 92,055
Other 981,941 923,409
---------- ----------
Total 2,396,105 2,355,546
---------- ----------
Long-term debt 1,677,768 1,702,719
Preferred stock with sinking fund 62,729 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
Shareholders' 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 248,258 284,165
---------- ----------
Total 1,566,332 1,602,239
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,488,860 $6,488,637
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollar In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 202.7 $ 210.7 ($ 8.0) (4)
Commercial 113.8 125.3 (11.5) (9)
Industrial 189.1 189.2 (0.1) -
Governmental 7.7 8.6 (0.9) (10)
------------------------------
Total retail 513.3 533.8 (20.5) (4)
Sales for resale:
Associated companies 3.2 7.6 (4.4) (58)
Non-associated companies 39.4 17.5 21.9 125
Other (1) 37.4 25.4 12.0 47
------------------------------
Total $ 593.3 $ 584.3 $ 9.0 2
==============================
Billed Electric Energy
Sales (GWH):
Residential 3,210 2,845 365 13
Commercial 2,102 1,935 167 9
Industrial 4,631 4,739 (108) (2)
Governmental 141 131 10 8
------------------------------
Total retail 10,084 9,650 434 4
Sales for resale:
Associated companies 85 181 (96) (53)
Non-associated companies 1,162 438 724 165
------------------------------
Total 11,331 10,269 1,062 10
==============================
Nine Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollar In Millions)
Electric Operating Revenues:
Residential $ 470.5 $ 477.8 ($ 7.3) (2)
Commercial 317.4 337.6 (20.2) (6)
Industrial 539.3 544.1 (4.8) (1)
Governmental 29.0 25.1 3.9 16
------------------------------
Total retail 1,356.2 1,384.6 (28.4) (2)
Sales for resale:
Associated companies 13.3 13.1 0.2 2
Non-associated companies 88.1 41.8 46.3 111
Other (1) (27.0) 50.7 (77.7) (153)
-------------------------------
Total $1,430.6 $ 1,490.2 ($ 59.6) (4)
===============================
Billed Electric Energy
Sales (GWH):
Residential 6,878 6,282 596 9
Commercial 5,190 4,953 237 5
Industrial 13,594 13,459 135 1
Governmental 460 359 101 28
------------------------------
Total retail 26,122 25,053 1,069 4
Sales for resale:
Associated companies 347 380 (33) (9)
Non-associated companies 2,609 1,077 1,532 142
------------------------------
Total 29,078 26,510 2,568 10
==============================
(1) Includes the effect of the provision for rate refunds.
</TABLE>
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three and nine months ended September
30, 1998 primarily due to a decrease in operating expenses, partially
offset by a decrease in electric operating revenues and higher income
taxes.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 1998 and
1997 are discussed under "Revenues and Sales", "Expenses", and "Other"
below.
Revenues and Sales
The changes in electric operating revenues for the three and nine
months ended September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base revenues ($1.7) ($34.9)
Fuel cost recovery (26.9) (85.3)
Sales volume/weather 18.4 25.7
Other revenue (including unbilled) (7.3) (0.2)
Sales for resale 0.6 11.8
------ ------
Total ($16.9) ($82.9)
====== ======
Electric operating revenues decreased for the three months ended
September 30, 1998 primarily due to lower fuel cost recovery revenues,
which do not affect net income, and a decrease in other revenue
(primarily unbilled revenue), partially offset by an increase in sales
volume. Electric operating revenues decreased for the nine months ended
September 30, 1998 primarily due to a decrease in base revenues and lower
fuel cost recovery revenues, which do not affect net income, partially
offset by increases in sales volume and sales for resale. Fuel cost
recovery revenues decreased due to lower pricing resulting from a change
in generation mix. The decrease in unbilled revenue for the three months
ended September 30, 1998 was primarily a result of decreased sales to
three large industrial customers and a decrease in sales volume in late
September 1998 due to distribution outages caused by major storms. Sales
volume increased for the three and nine months ended September 30, 1998
due to significantly warmer weather in 1998. This increase in sales
volume was partially offset by the loss of a large industrial customer as
well as substantially lower sales to two other large industrial
customers. For the nine months ended September 1998, base revenues
decreased due to a base rate reduction that became effective in the third
quarter of 1997. Sales for resale increased for the nine months ended
September 1998 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.
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Operating expenses decreased for the three and nine months ended
September 30, 1998 primarily due to a decrease in fuel expenses,
purchased power expenses, and other operation and maintenance expenses.
Fuel expenses decreased due to lower gas prices and a shift in mix to
nuclear fuel. Purchased power expenses decreased due to shifting
generation requirements in 1997 as a result of the extended refueling
outage at the Waterford 3 nuclear plant and to increased generation in
the third quarter of 1998. Other operation and maintenance expenses
decreased due to non-refueling outage related contract work and
maintenance performed at Waterford 3 in 1997.
Other
For the three and nine months ended September 30, 1998 and 1997, the
effective income tax rates were relatively unchanged at 39.8% versus
39.7% and 40.9% versus 40.3%, respectively.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $537,632 $554,486 $1,317,785 $1,400,732
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 134,631 152,609 280,340 326,588
Purchased power 102,559 113,235 291,914 323,988
Nuclear refueling outage expenses 5,435 5,267 16,305 10,566
Other operation and maintenance 72,275 75,251 215,785 231,637
Depreciation, amortization, and decommissioning 40,102 42,877 127,332 128,343
Taxes other than income taxes 18,237 17,892 53,708 53,712
Other regulatory charges (credits) - (634) (1,754) 6,382
Amortization of rate deferrals - 13 - 5,749
-------- -------- ---------- ----------
Total 373,239 406,510 983,630 1,086,965
-------- -------- ---------- ----------
Operating Income 164,393 147,976 334,155 313,767
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 586 601 1,406 1,038
Miscellaneous - net 339 (789) 2,708 (1,706)
-------- -------- ---------- ----------
Total 925 (188) 4,114 (668)
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 27,180 27,921 84,790 88,011
Other interest - net 1,665 1,635 4,682 4,846
Distributions on preferred securities of subsidiary trust 1,575 1,575 4,725 4,725
Allowance for borrowed funds used
during construction (535) (555) (1,285) (1,311)
-------- -------- ---------- ----------
Total 29,885 30,576 92,912 96,271
-------- -------- ---------- ----------
Income Before Income Taxes 135,433 117,212 245,357 216,828
Income Taxes 53,963 46,531 100,424 87,368
-------- -------- ---------- ----------
Net Income 81,470 70,681 144,933 129,460
Preferred Stock Dividend Requirements
and Other 3,253 3,251 9,760 10,097
-------- -------- ---------- ----------
Earnings Applicable to Common Stock $78,217 $67,430 $135,173 $119,363
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $144,933 $129,460
Noncash items included in net income:
Amortization of rate deferrals - 5,749
Other regulatory charges (credits) (1,754) 6,382
Depreciation, amortization, and decommissioning 127,332 128,343
Deferred income taxes and investment tax credits 4,842 (8,136)
Allowance for equity funds used during construction (1,406) (1,038)
Changes in working capital:
Receivables (60,531) (48,067)
Accounts payable (12,276) (15,502)
Taxes accrued 108,558 100,900
Interest accrued 1,895 (23,166)
Deferred fuel costs (18,217) 5,296
Other working capital accounts 14,826 (1,525)
Other deferred credits (26,479) 4,164
Decommissioning trust contributions and realized
change in trust assets (11,062) (8,363)
Provision for estimated losses and reserves 1,251 5,046
Other (10,674) (7,898)
--------- ---------
Net cash flow provided by operating activities 261,238 271,645
--------- ---------
Investing Activities:
Construction expenditures (62,672) (60,071)
Allowance for equity funds used during construction 1,406 1,038
Nuclear fuel purchases (22,293) (43,332)
Proceeds from sale/leaseback of nuclear fuel 9,872 43,332
--------- ---------
Net cash flow used in investing activities (73,687) (59,033)
--------- ---------
Financing Activities:
Proceeds from the issuance of first mortgage bonds 112,556 -
Retirement of:
First mortgage bonds (150,561) (34,000)
Other long-term debt (175) (262)
Redemption of preferred stock - (7,500)
Changes in short-term borrowings - net - (31,066)
Dividends paid:
Common stock (138,500) (111,200)
Preferred stock (9,760) (9,997)
--------- ---------
Net cash flow used in financing activities (186,440) (194,025)
--------- ---------
Net increase in cash and cash equivalents 1,111 18,587
Cash and cash equivalents at beginning of period 49,749 23,746
--------- ---------
Cash and cash equivalents at end of period $50,860 $42,333
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized 86,292 $101,334
Income taxes $21,150 ($1,754)
Noncash investing and financing activities:
Change in unrealized appreciation/(depreciation) of
decommissioning trust assets ($138) $1,877
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $2,705 $5,148
Temporary cash investments - at cost,
which approximates market 48,155 44,601
---------- ----------
Total cash and cash equivalents 50,860 49,749
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.2 million in 1998 and 1997) 122,065 69,566
Associated companies 17,827 15,035
Other 8,785 7,441
Accrued unbilled revenues 65,770 61,874
Deferred fuel costs 14,949 -
Accumulated deferred income taxes 8,727 10,994
Materials and supplies - at average cost 81,706 82,850
Deferred nuclear refueling outage costs 10,884 27,176
Prepayments and other 11,596 10,793
---------- ----------
Total 393,169 335,478
---------- ----------
Other Property and Investments:
Nonutility property 22,525 22,525
Decommissioning trust fund 76,028 65,104
Investment in subsidiary companies - at equity 14,230 14,230
---------- ----------
Total 112,783 101,859
---------- ----------
Utility Plant:
Electric 5,093,145 5,058,130
Property under capital leases 233,513 233,513
Construction work in progress 73,878 52,632
Nuclear fuel under capital lease 42,613 57,811
Nuclear fuel 13,982 1,560
---------- ----------
Total 5,457,131 5,403,646
Less - accumulated depreciation and amortization 2,133,131 2,021,392
---------- ----------
Utility plant - net 3,324,000 3,382,254
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 263,432 278,234
Unamortized loss on reacquired debt 31,668 33,468
Other regulatory assets 27,910 29,991
Other 16,209 14,116
---------- ----------
Total 339,219 355,809
---------- ----------
TOTAL $4,169,171 $4,175,400
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $294 $35,300
Accounts payable:
Associated companies 43,443 43,508
Other 83,675 95,886
Customer deposits 55,936 55,331
Taxes accrued 133,801 25,243
Interest accrued 36,466 34,571
Dividends declared 3,253 3,253
Deferred fuel costs - 3,268
Obligations under capital leases 16,932 29,232
Other 6,166 8,578
---------- ----------
Total 379,966 334,170
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 804,914 813,748
Accumulated deferred investment tax credits 130,085 134,276
Obligations under capital leases 25,682 28,579
Deferred interest - Waterford 3 lease obligation 9,942 17,799
Other 94,291 119,519
---------- ----------
Total 1,064,914 1,113,921
---------- ----------
Long-term debt 1,338,758 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
Shareholders' Equity:
Preferred stock without sinking fund 100,500 100,500
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares 1,088,900 1,088,900
Capital stock expense and other (2,321) (2,321)
Retained earnings 43,454 46,766
---------- ----------
Total 1,230,533 1,233,845
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,169,171 $4,175,400
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 224.1 $ 222.6 $ 1.5 1
Commercial 112.1 116.8 (4.7) (4)
Industrial 155.0 180.2 (25.2) (14)
Governmental 8.8 9.1 (0.3) (3)
------------------------------
Total retail 500.0 528.7 (28.7) (5)
Sales for resale:
Associated companies 3.7 2.7 1.0 37
Non-associated companies 16.0 16.4 (0.4) (2)
Other 17.9 6.7 11.2 167
------------------------------
Total $ 537.6 $ 554.5 ($16.9) (3)
==============================
Billed Electric Energy
Sales (GWH):
Residential 3,058 2,738 320 12
Commercial 1,615 1,502 113 8
Industrial 3,805 3,918 (113) (3)
Governmental 125 119 6 5
------------------------------
Total retail 8,603 8,277 326 4
Sales for resale:
Associated companies 76 72 4 6
Non-associated companies 207 256 (49) (19)
------------------------------
Total 8,886 8,605 281 3
==============================
Nine Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
Electric Operating Revenues:
Residential $ 465.1 $ 475.4 ($ 10.3) (2)
Commercial 274.6 291.4 (16.8) (6)
Industrial 441.0 538.0 (97.0) (18)
Governmental 24.5 26.2 (1.7) (6)
------------------------------
Total retail 1,205.2 1,331.0 (125.8) (9)
Sales for resale:
Associated companies 14.0 3.5 10.5 300
Non-associated companies 42.8 41.5 1.3 3
Other 55.8 24.7 31.1 126
-------------------------------
Total $1,317.8 $ 1,400.7 ($82.9) (6)
===============================
Billed Electric Energy
Sales (GWH):
Residential 6,620 6,042 578 10
Commercial 3,979 3,732 247 7
Industrial 11,120 12,511 (1,391) (11)
Governmental 364 348 16 5
------------------------------
Total retail 22,083 22,633 (550) (2)
Sales for resale:
Associated companies 311 98 213 217
Non-associated companies 619 616 3 -
------------------------------
Total 23,013 23,347 (334) (1)
==============================
</TABLE>
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three and nine months ended September
30, 1998 primarily due to an increase in electric operating revenues,
partially offset by an increase in operating expenses and higher income
taxes.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 1998 and
1997 are discussed under "Revenues and Sales", "Expenses", and "Other"
below.
Revenues and Sales
The changes in electric operating revenues for the three and nine
months ended September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base revenues ($3.5) ($9.0)
Grand Gulf rate rider 12.8 23.8
Fuel cost recovery 9.1 15.0
Sales volume/weather 10.9 21.2
Other revenue (including unbilled) (2.8) 14.0
Sales for resale 3.3 25.5
----- -----
Total $29.8 $90.5
===== =====
Electric operating revenues increased for the three and nine months
ended September 30, 1998 primarily due to increases in Grand Gulf rate
rider revenue, sales volume, and fuel cost recovery revenues. The
increase in other revenues (primarily unbilled revenues) and sales for
resale also contributed to the increase in electric operating revenues
for the nine months ended September 30, 1998. The increase in the Grand
Gulf rate rider revenue, which does not affect net income, and in sales
volume was primarily due to significantly warmer weather in 1998. The
increase in fuel costs recovery revenues, which do not affect net income,
was due to increased generation in 1998 as well as, for the nine months
ended September 30, 1998, an MPSC order, effective May 1, 1997, that
changed fuel recovery pricing to a fixed fuel factor, subject to annual
review. For the nine months ended September 30, 1998, unbilled revenue
increased due to increased sales volume and favorable pricing
attributable to the application of the fixed fuel factor in 1998. For
the nine months ended September 30, 1998, sales for resale increased as a
result of an increase in sales to associated companies primarily due to
increased generation and availability among the domestic utility
companies.
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Operating expenses increased for the three and nine months ended
September 30, 1998 primarily due to an increase in fuel expenses and
other regulatory charges (credits) which, for the nine months ended
September 30, 1998, was partially offset by a decrease in purchased power
expenses. The increase in fuel expenses was due to the impact of the
under-recovery of deferred fuel costs in excess of the fixed fuel factor
applied in 1997. In January 1998, Entergy Mississippi increased its
fixed fuel factor to more accurately recover actual fuel expenses. The
increase in other regulatory charges (credits), which do not materially
affect net income, was a result of the over-recovery of Grand Gulf 1-
related costs due to increased sales. The decrease in purchased power
expense for the nine months ended September 30, 1998 was due to a shift
from higher priced purchased power to lower priced fossil fuel.
Other
The effective income tax rate of 35.7% for the three months ended
September 30, 1998 remained relatively unchanged from the rate of 35.4%
for the three months ended September 30, 1997. For the nine months ended
September 30, 1998 and 1997, the effective income tax rates were 34.8%
and 33.6%, respectively. The increase in 1998 was primarily due to the
impact of excess deferred taxes on rate deferrals and the amortization of
investment tax credits.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $324,784 $294,983 $798,709 $708,203
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 85,859 72,379 196,260 138,928
Purchased power 71,404 71,441 210,030 218,015
Other operation and maintenance 30,631 32,227 90,861 95,704
Depreciation and amortization 10,900 10,739 33,294 32,120
Taxes other than income taxes 12,061 12,058 34,259 33,471
Other regulatory charges (credits) 24,912 7,596 2,883 (33,090)
Amortization of rate deferrals 34,989 35,711 104,968 107,134
-------- -------- -------- --------
Total 270,756 242,151 672,555 592,282
-------- -------- -------- --------
Operating Income 54,028 52,832 126,154 115,921
-------- -------- -------- --------
Other Income:
Allowance for equity funds used
during construction 17 - 17 560
Miscellaneous - net 971 399 3,002 662
-------- -------- -------- --------
Total 988 399 3,019 1,222
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 9,153 9,798 28,614 31,211
Other interest - net 577 1,154 2,737 3,477
Allowance for borrowed funds used
during construction (287) (20) (420) (482)
-------- -------- -------- --------
Total 9,443 10,932 30,931 34,206
-------- -------- -------- --------
Income Before Income Taxes 45,573 42,299 98,242 82,937
Income Taxes 16,252 14,964 34,215 27,851
-------- -------- -------- --------
Net Income 29,321 27,335 64,027 55,086
Preferred Stock Dividend Requirements
and Other 843 1,129 2,527 3,258
-------- -------- -------- --------
Earnings Applicable to Common Stock $28,478 $26,206 $61,500 $51,828
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $64,027 $55,086
Noncash items included in net income:
Amortization of rate deferrals 104,968 107,134
Other regulatory charges (credits) 2,883 (33,090)
Depreciation and amortization 33,294 32,120
Deferred income taxes and investment tax credits (35,446) (29,761)
Allowance for equity funds used during construction (17) (560)
Changes in working capital:
Receivables (50,180) (18,818)
Fuel inventory 809 5,011
Accounts payable 14,255 5,316
Taxes accrued 43,546 38,807
Interest accrued (1,212) (7,751)
Other working capital accounts (7,703) (12,506)
Other (17,740) 20
--------- ---------
Net cash flow provided by operating activities 151,484 141,008
--------- ---------
Investing Activities:
Construction expenditures (31,391) (37,378)
Allowance for equity funds used during construction 17 560
--------- ---------
Net cash flow used in investing activities (31,374) (36,818)
--------- ---------
Financing Activities:
Proceeds from the issuance of general and refunding
mortgage bonds 78,703 64,827
Retirement of:
General and refunding mortgage bonds (80,000) (96,000)
Other long-term debt (20) (15)
Redemption of preferred stock - (14,500)
Changes in short-term borrowings - net (47,162) (7,132)
Dividends paid:
Common stock (66,000) (53,400)
Preferred stock (2,527) (3,156)
--------- ---------
Net cash flow used in financing activities (117,006) (109,376)
--------- ---------
Net increase (decrease) in cash and cash equivalents 3,104 (5,186)
Cash and cash equivalents at beginning of period 6,816 9,498
--------- ---------
Cash and cash equivalents at end of period $9,920 $4,312
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $31,165 $41,044
Income taxes $18,926 $11,670
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $8,999 $6,816
Temporary cash investments - at cost,
which approximates market 921 -
---------- ----------
Total cash and cash equivalents 9,920 6,816
Accounts receivable:
Customer (less allowance for doubtful accounts
of $.9 million in 1998 and 1997) 67,280 36,636
Associated companies 10,792 6,842
Other 1,146 4,139
Accrued unbilled revenues 68,572 49,993
Deferred fuel costs 14,289 14,967
Fuel inventory - at average cost 2,577 3,386
Materials and supplies - at average cost 17,500 17,657
Rate deferrals - 104,969
Prepayments and other 4,790 24,896
---------- ----------
Total 196,866 270,301
---------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 5,531 5,531
Other - at cost (less accumulated depreciation) 7,633 7,757
---------- ----------
Total 13,164 13,288
---------- ----------
Utility Plant:
Electric 1,715,139 1,687,400
Construction work in progress 26,163 22,960
---------- ----------
Total 1,741,302 1,710,360
Less - accumulated depreciation and amortization 684,605 656,828
---------- ----------
Utility plant - net 1,056,697 1,053,532
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 27,702 22,993
Unamortized loss on reacquired debt 8,205 8,404
Other regulatory assets 88,261 64,827
Other 6,599 6,216
---------- ----------
Total 130,767 102,440
---------- ----------
TOTAL $1,397,494 $1,439,561
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $20 $20
Notes payable - associated companies - 47,162
Accounts payable:
Associated companies 43,067 36,057
Other 18,521 11,276
Customer deposits 17,389 24,084
Taxes accrued 75,860 32,314
Accumulated deferred income taxes 600 44,277
Interest accrued 13,097 14,309
Other 3,183 2,806
---------- ----------
Total 171,737 212,305
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 258,147 244,464
Accumulated deferred investment tax credits 22,784 23,915
Other 6,950 15,892
---------- ----------
Total 287,881 284,271
---------- ----------
Long-term debt 463,547 464,156
Shareholders' 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 224,681 229,181
---------- ----------
Total 474,329 478,829
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $1,397,494 $1,439,561
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 139.2 $ 120.9 $ 18.3 15
Commercial 89.4 80.5 8.9 11
Industrial 46.0 44.3 1.7 4
Governmental 7.7 7.3 0.4 5
---------------------------
Total retail 282.3 253.0 29.3 12
Sales for resale:
Associated companies 29.3 27.8 1.5 5
Non-associated companies 8.3 6.5 1.8 28
Other 4.9 7.7 (2.8) (36)
---------------------------
Total $ 324.8 $ 295.0 $ 29.8 10
===========================
Billed Electric Energy
Sales (GWH):
Residential 1,750 1,517 233 15
Commercial 1,246 1,125 121 11
Industrial 830 806 24 3
Governmental 101 94 7 7
---------------------------
Total retail 3,927 3,542 385 11
Sales for resale:
Associated companies 903 715 188 26
Non-associated companies 162 126 36 29
---------------------------
Total 4,992 4,383 609 14
===========================
Nine Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
Electric Operating Revenues:
Residential $ 297.1 $ 264.8 $ 32.3 12
Commercial 221.9 206.9 15.0 7
Industrial 130.9 127.8 3.1 2
Governmental 21.0 20.4 0.6 3
---------------------------
Total retail 670.9 619.9 51.0 8
Sales for resale:
Associated companies 71.2 49.5 21.7 44
Non-associated companies 19.7 15.9 3.8 24
Other 36.9 22.9 14.0 61
---------------------------
Total $ 798.7 $ 708.2 $ 90.5 13
===========================
Billed Electric Energy
Sales (GWH):
Residential 3,759 3,338 421 13
Commercial 3,021 2,778 243 9
Industrial 2,359 2,279 80 4
Governmental 260 251 9 4
---------------------------
Total retail 9,399 8,646 753 9
Sales for resale:
Associated companies 2,136 1,145 991 87
Non-associated companies 373 309 64 21
---------------------------
Total 11,908 10,100 1,808 18
===========================
</TABLE>
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three and nine months ended September
30, 1998 primarily due to an increase in electric operating revenues,
partially offset by an increase in operating expenses.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 1998 and
1997 are discussed under "Revenues and Sales", "Expenses", and "Other"
below.
Revenues and Sales
The changes in electric operating revenues for the three and nine
months ended September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Change in base revenues ($1.3) ($7.7)
Fuel cost recovery 17.6 21.2
Sales volume/weather 6.8 11.8
Other revenue (including unbilled) 2.1 5.2
Sales for resale 1.1 1.1
----- -----
Total $26.3 $31.6
===== =====
Electric operating revenues increased for the three and nine months
ended September 30, 1998 primarily due to increases in fuel cost recovery
revenues, sales volume, and other revenue (primarily unbilled revenue),
partially offset by a decrease in base revenues. Fuel cost recovery
revenues, which do not affect net income, increased primarily due to
higher fuel prices and increased generation. The increase in sales
volume was primarily due to significantly warmer weather in 1998. The
increase in unbilled revenue was primarily due to the impact of a
September 1997 price refund, which lowered unbilled revenue at September
30, 1997. Base revenues decreased primarily due to reductions in
residential and commercial rates that went into effect in August 1997.
Expenses
Operating expenses increased for the three and nine months ended
September 30, 1998 primarily due to increases in fuel expense and other
regulatory charges and, for the nine months ended September 30, 1998, an
increase in purchased power. Fuel expenses increased primarily due to
an increase in deferred electric fuel costs for the three months ended
September 30, 1998, resulting from a net over-recovery of fuel costs in
the third quarter of 1998 as compared to a net under-recovery of fuel
costs in the third quarter of 1997. The increase in deferred electric
fuel costs for the nine months ended September 30, 1998 was partially
offset by an under-recovery of fuel costs requirements in the first and
second quarters of 1998 due to increased generation. Additionally, for
the nine months ended September 30, 1998, fuel oil expenses increased
due to increased generation requirements and increased usage of fossil
fuel. Partially offsetting the increase in fuel expenses was decreased
gas purchased for resale expense due to lower gas prices. The increase
in other regulatory charges, which do not materially affect net income,
was primarily due to the increased over-recovery of Grand Gulf 1-related
costs for the three and nine months ended September 30, 1998 compared to
the net under-recovery for the same periods in 1997. Purchased power
expenses increased for the nine months ended
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
September 30, 1998 primarily due to increased generation requirements as
a result of significantly warmer weather in the second and third
quarters of 1998.
Other
For the three and nine months ended September 30, 1998 and 1997, the
effective income tax rates were relatively unchanged at 39.5% versus
40.0% and 41.6% versus 42.5%, respectively.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $153,215 $126,901 $340,672 $309,050
Natural gas 12,593 13,039 63,905 65,649
-------- -------- -------- --------
Total 165,808 139,940 404,577 374,699
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 47,512 28,146 103,196 96,586
Purchased power 44,058 46,958 130,886 119,922
Other operation and maintenance 20,677 19,443 57,763 52,125
Depreciation and amortization 5,224 5,477 16,303 16,068
Taxes other than income taxes 12,102 11,448 30,827 28,940
Other regulatory charges (credits) 4,020 (1,776) (824) (4,180)
Amortization of rate deferrals 12,005 12,148 28,857 28,987
-------- -------- -------- --------
Total 145,598 121,844 367,008 338,448
-------- -------- -------- --------
Operating Income 20,210 18,096 37,569 36,251
-------- -------- -------- --------
Other Income (Deductions):
Allowance for equity funds used
during construction 125 99 214 259
Miscellaneous - net 376 (27) 498 (7)
-------- -------- -------- --------
Total 501 72 712 252
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 3,547 3,429 10,406 10,488
Other interest - net 294 485 771 1,064
Allowance for borrowed funds used
during construction (97) (68) (165) (194)
-------- -------- -------- --------
Total 3,744 3,846 11,012 11,358
-------- -------- -------- --------
Income Before Income Taxes 16,967 14,322 27,269 25,145
Income Taxes 6,709 5,732 11,336 10,699
-------- -------- -------- --------
Net Income 10,258 8,590 15,933 14,446
Preferred Stock Dividend Requirements
and Other 242 242 724 724
-------- -------- -------- --------
Earnings Applicable to Common Stock $10,016 $8,348 $15,209 $13,722
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $15,933 $14,446
Noncash items included in net income:
Amortization of rate deferrals 28,857 28,987
Other regulatory charges (credits) (824) (4,180)
Depreciation and amortization 16,303 16,068
Deferred income taxes and investment tax credits (12,696) (1,690)
Allowance for equity funds used during construction (214) (259)
Changes in working capital:
Receivables (24,676) (801)
Accounts payable 2,161 (1,323)
Taxes accrued 19,638 12,233
Interest accrued (3,054) (2,426)
Deferred fuel and resale gas costs 4,925 (4,586)
Other working capital accounts 528 (12,288)
Other (11,977) (7,390)
--------- ---------
Net cash flow provided by operating activities 34,904 36,791
--------- ---------
Investing Activities:
Construction expenditures (12,073) (7,652)
Allowance for equity funds used during construction 214 259
--------- ---------
Net cash flow used in investing activities (11,859) (7,393)
--------- ---------
Financing Activities:
Proceeds from the issuance of general and refunding mortgage bonds 29,438 -
Retirement of:
First mortgage bonds - (12,000)
General and refunding mortgage bonds (30,000) -
Dividends paid:
Common stock (9,700) (26,000)
Preferred stock (724) (965)
--------- ---------
Net cash flow used in financing activities (10,986) (38,965)
--------- ---------
Net increase (decrease) in cash and cash equivalents 12,059 (9,567)
Cash and cash equivalents at beginning of period 11,376 17,510
--------- ---------
Cash and cash equivalents at end of period $23,435 $7,943
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $13,259 $13,535
Income taxes - net $5,462 $4,309
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $6,823 $4,321
Temporary cash investments - at cost,
which approximates market:
Associated companies 3,492 1,918
Other 13,120 5,137
-------- --------
Total cash and cash equivalents 23,435 11,376
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million in 1998 and 1997) 48,607 26,913
Associated companies 921 1,081
Other 3,465 4,155
Accrued unbilled revenues 19,915 16,083
Deferred electric fuel and resale gas costs 4,459 9,384
Materials and supplies - at average cost 8,615 9,389
Rate deferrals 28,587 35,336
Prepayments and other 4,800 6,087
-------- --------
Total 142,804 119,804
-------- --------
Other Property and Investments:
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
Utility Plant:
Electric 514,074 508,338
Natural gas 132,448 122,308
Construction work in progress 15,676 19,184
-------- --------
Total 662,198 649,830
Less - accumulated depreciation and amortization 369,374 355,854
-------- --------
Utility plant - net 292,824 293,976
-------- --------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 42,085 64,192
SFAS 109 regulatory asset - net - 1,202
Unamortized loss on reacquired debt 1,453 1,435
Other regulatory assets 18,966 13,392
Other 1,409 890
-------- --------
Total 63,913 81,111
-------- --------
TOTAL $502,800 $498,150
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
Current Liabilities:
Accounts payable:
Associated companies $17,164 $15,922
Other 18,424 17,505
Customer deposits 17,991 16,982
Taxes accrued 24,908 5,270
Accumulated deferred income taxes 6,015 11,544
Interest accrued 1,995 5,049
Provision for rate refund - 3,108
Other 2,797 2,231
-------- --------
Total 89,294 77,611
-------- --------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 51,725 61,000
Accumulated deferred investment tax credits 7,019 7,396
Accumulated provision for property insurance 15,322 15,487
SFAS 109 regulatory liability - net 1,001
Other 12,552 16,327
-------- --------
Total 87,619 100,210
-------- --------
Long-term debt 169,002 168,953
Shareholders' Equity:
Preferred stock without sinking fund 19,780 19,780
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 67,067 61,558
-------- --------
Total 156,885 151,376
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $502,800 $498,150
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
<S> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $ 70.4 $ 55.3 $ 15.1 27
Commercial 47.8 38.3 9.5 25
Industrial 8.1 6.3 1.8 29
Governmental 20.5 16.6 3.9 23
----------------------------
Total retail 146.8 116.5 30.3 26
Sales for resale:
Associated companies 1.5 0.8 0.7 88
Non-associated companies 3.2 2.8 0.4 14
Other (1) 1.7 6.8 (5.1) (75)
----------------------------
Total $ 153.2 $ 126.9 $ 26.3 21
============================
Billed Electric Energy
Sales (GWH):
Residential 844 761 83 11
Commercial 648 610 38 6
Industrial 144 128 16 13
Governmental 311 285 26 9
----------------------------
Total retail 1,947 1,784 163 9
Sales for resale:
Associated companies 42 22 20 91
Non-associated companies 50 51 (1) (2)
----------------------------
Total 2,039 1,857 182 10
============================
Nine Months Ended Increase/
Description 1998 1997 (Decrease) %
(Dollars In Millions)
Electric Operating Revenues:
Residential $ 131.3 $ 111.2 $ 20.1 18
Commercial 114.5 107.2 7.3 7
Industrial 20.4 18.2 2.2 12
Governmental 47.4 43.1 4.3 10
----------------------------
Total retail 313.6 279.7 33.9 12
Sales for resale:
Associated companies 6.8 7.8 (1.0) (13)
Non-associated companies 8.5 6.4 2.1 33
Other (1) 11.8 15.2 (3.4) (22)
----------------------------
Total $ 340.7 $ 309.1 $ 31.6 10
============================
Billed Electric Energy
Sales (GWH):
Residential 1,680 1,521 159 10
Commercial 1,628 1,576 52 3
Industrial 395 367 28 8
Governmental 780 745 35 5
----------------------------
Total retail 4,483 4,209 274 7
Sales for resale:
Associated companies 222 247 (25) (10)
Non-associated companies 145 112 33 29
----------------------------
Total 4,850 4,568 282 6
============================
(1) Includes the effect of the provision for rate refunds.
</TABLE>
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income for the three and nine months ended September 30, 1998
remained relatively unchanged as compared to the same periods in 1997.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 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 three and nine months ended
September 30, 1998 primarily due to lower other operation and maintenance
expenses. The decrease in operating expenses for the nine months ended
September 30, 1998, was also impacted by lower fuel expenses and
depreciation, amortization, and decommissioning expenses. The decrease
in other operation and maintenance expenses was due primarily to the
impact of various materials and supplies refunds, an insurance refund,
and a decrease in contract labor. Fuel expenses decreased because of
lower generation due to a scheduled nuclear refueling outage in April and
May of this year. Depreciation, amortization, and decommissioning
expenses were lower as a result of the recognition of additional
depreciation in the nine months ended September 30, 1997 associated with
the sale and leaseback in 1989 of a portion of Grand Gulf 1.
Other
Interest on long-term debt decreased for the three and nine months
ended September 30, 1998 as a result of the redemption of a series of
First Mortgage Bonds in April 1998.
For the three and nine months ended September 30, 1998 and 1997 the
effective income tax rates were relatively unchanged at 45.1% versus
46.0% and 45.2% versus 44.8%, respectively.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $152,083 $160,573 $445,025 $477,255
-------- -------- -------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 12,278 12,270 29,308 36,728
Nuclear refueling outage expenses 3,479 4,202 12,255 11,826
Other operation and maintenance 22,513 28,431 66,285 77,228
Depreciation, amortization, and decommissioning 38,477 36,238 104,067 110,951
Taxes other than income taxes 6,564 6,619 20,202 19,825
-------- -------- -------- --------
Total 83,311 87,760 232,117 256,558
-------- -------- -------- --------
Operating Income 68,772 72,813 212,908 220,697
-------- -------- -------- --------
Other Income:
Allowance for equity funds used
during construction 608 1,169 1,689 1,730
Miscellaneous - net 3,058 2,323 8,670 5,564
-------- -------- -------- --------
Total 3,666 3,492 10,359 7,294
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt 25,617 30,079 84,068 91,940
Other interest - net 1,560 1,720 4,827 5,331
Allowance for borrowed funds used
during construction (542) (761) (1,488) (1,318)
-------- -------- -------- --------
Total 26,635 31,038 87,407 95,953
-------- -------- -------- --------
Income Before Income Taxes 45,803 45,267 135,860 132,038
Income Taxes 20,664 20,818 61,355 59,151
-------- -------- -------- --------
Net Income $25,139 $24,449 $74,505 $72,887
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net income $74,505 $72,887
Noncash items included in net income:
Depreciation, amortization, and decommissioning 104,067 110,951
Deferred income taxes and investment tax credits (28,736) (30,168)
Allowance for equity funds used during construction (1,689) (1,730)
Changes in working capital:
Receivables 1,283 (8,110)
Accounts payable (4,318) 5,380
Taxes accrued 21,590 6,146
Interest accrued (10,830) 169
Other working capital accounts (6,621) 14,423
Decommissioning trust contributions and realized
change in trust assets (18,053) (17,202)
FERC Settlement - refund obligation (3,795) (3,351)
Provision for estimated losses and reserves 51,503 30,303
Other 6,016 21,298
--------- ---------
Net cash flow provided by operating activities 184,922 200,996
--------- ---------
Investing Activities:
Construction expenditures (20,004) (25,403)
Allowance for equity funds used during construction 1,689 1,730
Nuclear fuel purchases (30,523) (39)
Proceeds from sale/leaseback of nuclear fuel 30,523 39
--------- ---------
Net cash flow used in investing activities (18,315) (23,673)
--------- ---------
Financing Activities:
Retirement of:
First mortgage bonds (70,000) (10,000)
Other long-term debt (7,861) (7,319)
Common stock dividends paid (72,300) (84,000)
--------- ---------
Net cash flow used in financing activities (150,161) (101,319)
--------- ---------
Net increase in cash and cash equivalents 16,446 76,004
Cash and cash equivalents at beginning of period 206,410 92,315
--------- ---------
Cash and cash equivalents at end of period $222,856 $168,319
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $87,298 $89,681
Income taxes $63,664 $77,016
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets $314 ($564)
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $686 $792
Temporary cash investments - at cost,
which approximates market:
Associated companies 46,695 55,891
Other 175,475 149,727
---------- ----------
Total cash and cash equivalents 222,856 206,410
Accounts receivable:
Associated companies 77,827 79,262
Other 4,292 4,140
Materials and supplies - at average cost 62,332 63,782
Deferred nuclear refueling outage costs 16,331 7,777
Prepayments and other 3,357 3,658
---------- ----------
Total 386,995 365,029
---------- ----------
Other Property and Investments:
Decommissioning trust fund 104,279 85,912
---------- ----------
Utility Plant:
Electric 3,029,956 3,025,389
Electric plant under leases 441,803 440,970
Construction work in progress 52,872 36,445
Nuclear fuel under capital lease 73,839 64,190
---------- ----------
Total 3,598,470 3,566,994
Less - accumulated depreciation and amortization 1,169,371 1,086,820
---------- ----------
Utility plant - net 2,429,099 2,480,174
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 227,011 243,027
Unamortized loss on reacquired debt 46,587 51,386
Other regulatory assets 193,775 192,290
Other 13,614 14,213
---------- ----------
Total 480,987 500,916
---------- ----------
TOTAL $3,401,360 $3,432,031
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
September 30, 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 $160,000 $70,000
Accounts payable:
Associated companies 25,637 29,131
Other 18,298 19,122
Taxes accrued 97,265 75,675
Interest accrued 31,492 42,322
Obligations under capital leases 36,156 41,977
Other 1,523 1,341
---------- ----------
Total 370,371 279,568
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 516,858 562,051
Accumulated deferred investment tax credits 97,564 100,171
Obligations under capital leases 37,683 22,213
FERC Settlement - refund obligation 44,505 48,300
Other 307,877 227,847
---------- ----------
Total 1,004,487 960,582
---------- ----------
Long-term debt 1,174,350 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 62,802 60,583
---------- ----------
Total 852,152 849,933
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $3,401,360 $3,432,031
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The following discussion compares the results of operations for the
three and nine months ended September 30, 1998 with the results of
operations for the respective periods in 1997. The nine months ended
September 30, 1997 includes eight months of results of operations for
London Electricity due to its acquisition effective February 1, 1997.
Net Income
Net income increased for the three and nine months ended September
30, 1998 primarily due to decreases in income tax expenses, and, for the
nine months ended, an increase in operating revenues, partially offset by
an increase in operating expenses. Excluding the effects of the windfall
profits tax in 1997 and the corporation tax rate changes in 1998 and
1997, which are discussed under "Other" below, net income would have
increased approximately $40 million and $50 million for the three and
nine months ended September 30, 1998, respectively.
Significant factors affecting the results of operations and causing
variances between the three and nine months ended September 30, 1998 and
1997 are discussed under "Revenues", "Expenses", and "Other" below.
Revenues
The changes in operating revenues for the three and nine months
ended September 30, 1998 are as follows:
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Electricity distribution $17.0 $68.3
Electricity supply 3.9 177.8
Other 7.9 40.4
Intra-business (8.0) (65.8)
----- ------
Total $20.8 $220.7
===== ======
Two principal factors determine the amount of revenues produced by
the main electricity distribution and supply businesses: (1) the unit
prices of the electricity distributed and supplied (which are controlled
by the Distribution Price Control Formula and, for franchise customers,
the Supply Price Control Formula, respectively, which determine the
maximum average price per unit (kilowatt hour) of electricity that may be
charged) and (2) 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 will 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 three and
nine months ended September 30, 1998. The increase for the three month
period was primarily due to an increase in the BPS to U.S. dollar
exchange rate for the period, a change in the seasonal tariff structure
to recover higher system costs in the summer months, and a one time
recovery of meter installation costs. The increase for the nine month
period was principally due to an increase in units distributed as a
result of the additional month of activity in 1998. Partially offsetting
these factors was a distribution price reduction effective April 1, 1997.
<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 customers, comprised 56% and 59% of total supply sales volume
for the three and nine months ended September 30, 1998, respectively.
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 44% and 41% of total
supply sales volume for the three and nine months ended September 30,
1998, respectively. 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 46% and 45% for the comparable periods
of 1997.
During the three months ended September 30, 1998, the number of
electricity units supplied decreased by 6% compared to the same period in
1997, while total revenues produced by the supply business increased by
1%. The increase in revenue was due to an increase in the BPS to U.S.
dollar exchange rate for the three months ended September 30, 1998
compared to the same period in 1997. Sales volume decreased by 1% for
franchise customers and decreased by 12% for non-franchise customers for
the three months ended September 30, 1998. The decrease in sales volume
for non-franchise customers was due principally to a strategy of pursuing
customers with higher profit margins.
During the nine months ended September 30, 1998, the number of
electricity units supplied increased by 9% due to the additional month
included in 1998 results.
Other revenues increased for the three and nine month periods ended
September 30, 1998, primarily due to increased marketing of natural gas
to retail customers.
Expenses
Operating expenses decreased for the three months ended September
30, 1998 primarily due to capitalization of costs related to information
technology systems development, an adjustment to pension surplus based on
actuarial studies, and a reduction of a provision for restructuring to
more appropriately reflect the remaining liability. Operating expenses
increased for the nine months ended September 30, 1998 due principally to
one additional month of operations included in 1998 compared to 1997.
Other
Interest charges increased for the nine months ended September 30,
1998, compared to the same periods in 1997, due principally to an
increase in the average level of debt and preferred securities
outstanding during 1998 compared to 1997. The increase in average debt
levels was due principally to the acquisition of London Electricity
effective February 1, 1997 that was not fully funded until May 1997.
Such increase was partially offset by the November 1997 decrease in debt
due to the transfer of a $114 million facility to Entergy London's parent
in exchange for additional equity. Interest charges for the three months
ended September 30, 1998 decreased primarily due to the transfer of the
$114 million facility.
Income tax expense for the three and nine months ended September 30,
1998 declined due to the one-time windfall profits tax of $234 million
enacted by the UK government and recorded in July 1997, which was offset
by the $65 million favorable impact of the reduction in the UK
corporation tax rate from 33% to 31% in the same period. Income tax
expense was also lower due to the $31 million favorable impact of the
additional reduction in the UK corporation tax rate from 31% to 30%
recorded in the third quarter of 1998.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues $464,760 $443,975 $1,494,552 $1,273,899
-------- -------- ----------- -----------
Operating Expenses:
Purchased power 277,581 277,713 940,815 830,711
Depreciation and amortization 34,221 30,639 103,241 84,336
Other operation and maintenance costs 57,959 89,800 225,324 228,190
-------- -------- ----------- -----------
Total 369,761 398,152 1,269,380 1,143,237
-------- -------- ----------- -----------
Operating Income 94,999 45,823 225,172 130,662
-------- -------- ----------- -----------
Other Income (Deductions):
Interest and dividend income 2,699 6,312 6,849 9,997
Gain (loss) on disposition of property 1,499 (4,759) 6,587 6,271
Miscellaneous - net 3,216 2,413 11,534 5,215
-------- -------- ----------- -----------
Total 7,414 3,966 24,970 21,483
-------- -------- ----------- -----------
Interest Charges:
Distributions on preferred securities of subsidiary partnership 6,469 - 19,406 -
Other interest - net 43,979 53,932 128,183 118,983
-------- -------- ----------- -----------
Total 50,448 53,932 147,589 118,983
-------- -------- ----------- -----------
Income (Loss) Before Income Taxes 51,965 (4,143) 102,553 33,162
Income Taxes (Benefit) (15,638) 168,127 22 180,470
-------- -------- ----------- -----------
Net Income (Loss) 67,603 (172,270) 102,531 (147,308)
Other comprehensive income:
Foreign currency translation adjustments 14,749 (7,023) 24,974 1,143
-------- -------- ----------- -----------
Comprehensive Income $82,352 ($179,293) $127,505 ($146,165)
======== ========= =========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
1998 1997
(In Thousands)
<S> <C> <C>
Operating Activities:
Net Income (Loss) $102,531 ($147,308)
Noncash items included in net income:
Depreciation and amortization 103,241 84,336
Deferred income taxes (15,145) (63,671)
Imputed interest on parent company debt 84,369 -
Changes in assets and liabilities:
Inventory (3,704) 937
Accounts receivable and unbilled revenue 108,883 (7,406)
Other receivables 23,023 38,818
Prepayments and other 543 (2,030)
Long-term receivables and other (17,966) (573)
Accounts payable 11,519 46,402
Income taxes accrued 14,582 223,738
Interest accrued 7,113 10,566
Deferred revenue and other current liabilities (4,312) 14,171
Other liabilities (87,006) 2,431
Other (1,192) -
--------- ----------
Net cash flow provided by operating activities 326,479 200,411
--------- ----------
Investing Activities:
Construction expenditures (151,367) (98,352)
Acquisition of London Electricity, net of cash acquired - (1,951,701)
Other investments (20,031) 6,656
--------- ----------
Net cash flow used in investing activities (171,398) (2,043,397)
--------- ----------
Financing Activities:
Proceeds from the issuance of:
Bank notes and other long-term debt - 1,717,479
Common Stock - 391,953
Retirement of long-term debt (6,957) -
Common stock dividends paid (110,688) -
Changes in short-term borrowings - net (13,142) (184,571)
--------- ----------
Net cash flow provided by (used in) financing activities (130,787) 1,924,861
--------- ----------
Effect of exchange rates on cash and cash equivalents 2,806 (1,279)
--------- ----------
Net increase in cash and cash equivalents 27,100 80,596
Cash and cash equivalents at beginning of period 44,388 -
--------- ----------
Cash and cash equivalents at end of period $71,488 $80,596
========= ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $142,233 $100,951
Income taxes - net $8,247 $9,927
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Unaudited)
1998 1997
ASSETS (In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $4,049 $ -
Temporary cash investments - at cost,
which approximates market 67,439 44,388
---------- ----------
Total cash and cash equivalents 71,488 44,388
Notes receivable 5,056 7,364
Accounts receivable:
Customer (less allowance for doubtful accounts of $19.9 million
in 1998 and $21.9 million in 1997) 121,512 139,265
Other 33,070 52,374
Accrued unbilled revenue 182,286 262,818
Accumulated deferred income taxes 43,833 12,401
Inventory 17,889 13,650
Prepayments and other 13,514 13,623
---------- ----------
Total 488,648 545,883
---------- ----------
Property, Plant, and Equipment:
Property, plant and equipment 2,579,882 2,353,181
Less - accumulated depreciation 168,187 90,021
---------- ----------
Property, plant, and equipment - net 2,411,695 2,263,160
---------- ----------
Other Property, Investments, and Assets:
Investments, long-term 32,296 11,413
Distribution license (net of accumulated amortization of $58.5 million
in 1998 and $31.3 million in 1997) 1,344,518 1,327,312
Long-term receivables 17,735 17,172
Prepaid pension asset 266,655 241,216
Other 11,282 10,079
---------- ----------
Total 1,672,486 1,607,192
---------- ----------
TOTAL $4,572,829 $4,416,235
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LONDON INVESTMENTS PLC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, 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 $22,299 $33,814
Notes payable 235,241 240,794
Accounts payable 373,096 349,821
Customer deposits 27,713 24,946
Taxes accrued 139,881 120,981
Interest accrued 21,950 14,201
Other 728 805
---------- ----------
Total 820,908 785,362
---------- ----------
Other Liabilities:
Accumulated deferred income taxes 1,041,685 995,865
Other 214,268 299,775
---------- ----------
Total 1,255,953 1,295,640
---------- ----------
Long-term debt 1,729,691 1,669,401
Company-obligated redeemable preferred securities
of subsidiary partnership 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 $1,376.5 million in 1998 and
$1,371.8 million in 1997) 114,000 114,000
Additional paid-in capital 391,981 391,981
Accumulated deficit (56,919) (132,390)
Cumulative foreign currency translation 17,215 (7,759)
---------- ----------
Total 466,277 365,832
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $4,572,829 $4,416,235
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
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 against the coal suppliers to Big Cajun 2, a coal-fired power
station located in Point Coupee Parish, Louisiana, in which Entergy Gulf
States owns a 42% undivided interest in Unit 3. Entergy Gulf States
filed a similar petition for a declaratory judgment against the rail and
barge companies that transport the coal from Wyoming to Big Cajun 2. A
motion for summary judgment in that proceeding was filed by Entergy Gulf
States and denied by the Cajun bankruptcy judge. Concurrently with this
denial, the bankruptcy judge filed a report with the district court,
recommending that the appeal by the coal suppliers be remanded for
reconsideration by the bankruptcy judge in light of his decision in the
coal transporters' action.
The district court remanded the declaratory judgment proceeding
against the coal suppliers back to the bankruptcy court, and a trial was
held on the issue of liability of Entergy Gulf States to both the coal
suppliers and transporters. No assurance can be given regarding the
timing or outcome of this proceeding. Collectively, the coal suppliers
and transporters have asserted claims in the Cajun bankruptcy case that
exceed $1.6 billion. Entergy Gulf States believes these claims to be
without merit and significantly exaggerated as to the damages alleged.
While their position is not entirely clear, the coal suppliers and
transporters apparently allege that Entergy Gulf States, as a joint
venturer with Cajun in Big Cajun 2, should be responsible under Louisiana
law for as much as 100% of their alleged claims against Cajun, despite
Entergy Gulf States only owning 14% of the entire power station. Entergy
Gulf States believes that it has no liability to either the coal
suppliers or transporters. Entergy Gulf States' position is that it was
not engaged in a joint venture with Cajun but rather that Cajun was the
operator of Unit 3 in which Entergy Gulf States owns an undivided
interest.
Whether liability will ultimately be asserted against Entergy Gulf
States by the coal suppliers and transporters depends upon which plan of
reorganization is confirmed in the Cajun bankruptcy case. Two competing
plans of reorganization have been filed and are still pending in the
bankruptcy case, one of which contains settlements with the coal
suppliers and transporters that would satisfy their claims. The district
judge disqualified the other plan of reorganization, which did not
contain a settlement with the coal suppliers and transporters, but the
United States Court of Appeals for the Fifth Circuit reversed the
decision of the district judge in August 1998. A decision by the
bankruptcy judge on whether to confirm one of the two competing plans of
reorganization is now pending. No assurance can be given regarding the
timing or outcome of this decision.
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. In August 1998, Entergy announced
a new strategic direction that includes the expected sale of London
Electricity. See Note 7 for further information.
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 previously participated in a private insurance program that
provides coverage for certain worker tort claims filed for bodily injury
caused by radiation exposure. The program continues to provide for a
maximum aggregate assessment of approximately $16 million for the five
nuclear units in the event that losses exceed accumulated reserve funds.
ANO Matters (Entergy Corporation and Entergy Arkansas)
See Note 9 in the Form 10-K for information on cracks in a number of
steam generator tubes at ANO 2 that were discovered and repaired during
an outage in March 1992. Further repairs were conducted at subsequent
refueling and mid-cycle outages, including the most recent mid-cycle
outage in March 1998. 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. In July 1998, Entergy Operations
entered into a contract, with certain cancellation provisions, for the
installation of the replacement steam generators.
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
September 30, 1998, a remaining recorded liability of $20 million existed
relating to the clean up of the remaining 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. Cumulative expenditures
relating to the upgrades and closures of wastewater impoundments were
$7.1 million as of September 30, 1998. A remaining recorded liability in
the amount of $6.7 million existed at September 30, 1998 for wastewater
upgrades and closures. Completion of this work is pending LDEQ approval.
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, which were refinanced in
1997. 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 September 30, 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. In May 1997, the jury
rendered findings as to 22 of the plaintiffs indicating that Entergy had
no liability to them for discrimination. These plaintiffs have appealed
that decision. 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.
The remaining lawsuits have predominantly either been settled for
nominal amounts or decided by summary judgment in favor of Entergy.
However, certain plaintiff appeals are still pending.
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). On June 30, 1998, the PUCT affirmed
its March 1998 decision on Motions for Rehearing, and issued an order to
that effect on July 8, 1998. Entergy Gulf States has again appealed the
PUCT's decision in the Texas courts. Based on advice of counsel,
management believes that it is probable that the matter will be remanded
again to the PUCT for further ruling on the prudence of the abeyed plant
costs, and it is reasonably possible that some portion of these costs
will be included in rate base. Therefore, management believes that the
reserves discussed below in "Retail Rate Proceedings, Filings with the
PUCT," are adequate to reflect the probable outcome of the abeyed plant
costs proceeding, but no assurance can be given that additional future
reserves or write-offs will not be required. The Texas share of these
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 September 30, 1998, the River Bend plant costs disallowed
for retail ratemaking purposes in Texas and the River Bend plant costs
held in abeyance totaled (net of taxes and depreciation) approximately
$11 million and $244 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 (actual taxes paid). The PFD called 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 liabilities that will result from the recovery
and for certain other matters. On June 30, 1998, the PUCT adjusted the
PFD to call for the recovery of $74 million primarily by reducing the
allowed carrying costs from the overall rate of return to the amount
allowed for the over and under billing for utility service. These costs
were used to offset the retroactive rate refund discussed herein.
Retail Rate Proceedings
Filings with the APSC (Entergy Corporation and Entergy Arkansas)
See Note 2 to the Form 10-K for information regarding the settlement
agreement filed with the APSC and the establishment of a transition cost
account. The estimated reserve recorded in December 1997 was adjusted in
September 1998 as a result of a mid-year streamlined earnings review
procedure for a negative net income impact of $3.7 million. Entergy
Arkansas also recorded an additional reserve of $27.9 million in
September 1998 in the transition cost account to reflect the estimated
1998 accrual of excess earnings. The results of operations of Entergy
Arkansas for the three and nine months ended September 30, 1998 reflect
these charges in operating expenses. Additional reserves may also be
required in 1999 based on earnings reviews, which will have similar net
income effects.
Filings with the PUCT (Entergy Corporation and Entergy Gulf States)
On June 30, 1998, the PUCT began its deliberations on the Entergy
Gulf States' rate case filed in November 1996. The PUCT did not accept
settlements filed in March and June by Entergy Gulf States and various
intervenor groups. On July 22, 1998, the PUCT issued an order and after
making modifications on rehearing, issued its second order on rehearing
on October 14, 1998. The second order on rehearing reduces Entergy Gulf
States' Texas rates by $111 million annually effective December 1, 1998,
offset through May 1999 by accelerated recovery of accounting order
deferrals, resulting in a net reduction of $69 million on an annual basis
through that date. This order also required a refund of $76 million.
This refund is calculated as a rate reduction and service quality refund
retroactive to June 1, 1996, offset by the accelerated recovery of the
accounting order deferrals, actual taxes paid, and a fuel surcharge.
This refund amount was reduced by $32 million from the original refund
ordered in the July 22, 1998 order, but was offset by the passage of time
from the original rate reduction's assumed effective date of August 1998
to the new assumed effective date of December 1, 1998. Entergy Gulf
States established reserves of approximately $381 million ($227 million
net of taxes) in the fourth quarter of 1997 to reflect the probable
outcome of the rate case and abeyed plant cost proceedings based on
management's estimates of the effects thereof. Entergy Gulf States
recorded additional reserves of $123.5 million ($73.6 million net of
taxes) in 1998 based on management's estimates which include $101.3
million ($60.3 million net of tax) for the retroactive rate actions for
the nine months ended September 30, 1998, and $22.2 million ($13.3
million net of tax) for the prospective portion of the rate reduction for
the three months ended September 30, 1998. The results of operations of
Entergy Gulf States for the three and nine months ended September 30,
1998 reflect these corresponding charges in operating revenues.
The PUCT's October 14, 1998 order on rehearing, if sustained, is
expected to have a material adverse effect on Entergy Gulf States'
revenues, cash flow, and net income. Entergy Gulf States has filed a
motion for reconsideration with the PUCT. The PUCT has until November
28, 1998 to act on the motion or the motion is overruled by operation of
law. Entergy Gulf States plans to seek such further remedies as may be
available to it, including appealing the order if the motion for
reconsideration fails to alter what Entergy Gulf States believes is an
incorrect result based on the evidence before the PUCT. On July 29,
1998, a Texas state district court granted Entergy Gulf States' request
for a temporary restraining order until August 12, 1998 to prevent
enforcement of the PUCT's July 22, 1998 order. Subsequent to this,
Entergy Gulf States entered an agreement with the PUCT that allowed for
refunds pursuant to the PUCT's order to begin in August 1998 and delayed
the implementation of the ordered rate decrease until 18 days following
issuance by the PUCT of a final and appealable order.
A component of the rulings discussed above was a disallowance by the
PUCT of recovery of approximately $49 million of Entergy's affiliate
costs allocated to Entergy Gulf States in Texas. Entergy's affiliate
costs result from managing Entergy Gulf States' fossil and nuclear
generating plants and transmission and distribution systems, as well as
providing human resources, accounting, legal, and other necessary
services to Entergy Gulf States and Entergy Corporation's other electric
utility subsidiaries. The PUCT had previously issued proposed rules
governing affiliate transactions of Texas utility companies, including
Entergy Gulf States. Hearings concerning the proposed rules were
conducted by the PUCT in July 1998. However, the PUCT has withdrawn
these proposed rules pending the outcome of the 1999 legislative session.
The rules, if adopted in their proposed form, could severely restrict the
types and extent of services provided to Entergy Gulf States by Entergy
Services and Entergy Operation, and will result in higher costs to
Entergy Gulf States for equivalent services. It is not certain when or
in what form the rules may be adopted.
On September 8, 1998, Entergy Gulf States filed an application with
the PUCT for an increase in its fixed fuel factor and a surcharge to
Texas retail customers for the cumulative under-recovery of fuel and
purchased power costs. The proposed increase in the fixed fuel factor
would result in increased revenues of $55.6 million annually compared to
the current fixed fuel factor. The proposed surcharge is designed to
recover $128.1 million, including interest, for fuel under-recoveries
incurred during the period July 1, 1996 through June 30, 1998. Hearings
on the merits were held in October 1998, and the PUCT is required to rule
on the application by December 7, 1998. All amounts at issue in this
proceeding will be subject to review in a future fuel reconciliation
proceeding before the PUCT, at which time the PUCT will consider the
reasonableness of Entergy Gulf States' fuel and purchased power expenses
extending back to July 1, 1996. Entergy Gulf States cannot predict the
outcome of this proceeding.
Filings with the LPSC
(Entergy Corporation and Entergy Gulf States)
On May 29, 1998, Entergy Gulf States filed its fifth required post-
Merger earnings analysis with the LPSC. No rate reduction was shown to
be required in this filing. Entergy Gulf States' filing will be subject
to further review by the LPSC, which may result in a change in rates.
Hearings are scheduled to begin in April 1999.
In July 1998, Entergy Gulf States agreed to implement an $18 million
rate reduction effective July 29, 1998 to reflect reductions that are
expected to occur as a result of Entergy Gulf States' annual earnings
reviews. Proceedings on issues in the second, third, and fourth post-
Merger earnings analyses will continue.
On September 10, 1998, the LPSC issued an order in the third
required post-Merger earnings analysis that required a refund of $44.8
million for the period June 1, 1996 through May 31, 1997, and a
prospective rate reduction of $54.6 million effective September 20, 1998.
Due to the $18 million reduction that was implemented effective July 29,
1998, an additional prospective reduction of only $36.6 million would be
required as a result of the third earnings analysis. Entergy Gulf States
has not reserved for this reduction. Entergy Gulf States has appealed
this order and has been granted injunctive relief pending a final
decision on appeal.
(Entergy Corporation and Entergy Louisiana)
On April 15, 1996, Entergy Louisiana made its first annual
performance-based formula rate plan filing based on the 1995 test year.
On June 19, 1996, the LPSC approved a $12 million annual reduction in
base rates effective July 1, 1996. Subsequently, additional issues were
resolved by means of a settlement conference, increasing the base rate
reduction to $16.5 million. On January 21, 1998, the LPSC approved an $8
million prospective annual rate reduction reflecting a change in Entergy
Louisiana's allowed return on equity, together with a $4 million refund
making this change effective July 1, 1997.
On May 30, 1997, Entergy Louisiana made its annual formula rate plan
filing with the LPSC for the 1996 test year. This filing resulted in a
total rate reduction of approximately $54.5 million, which was
implemented beginning in the first filing cycle of July 1997. Rates were
reduced by an additional $0.7 million effective July 1, 1997, and by an
additional $2.9 million effective March 1998. A final order is expected
during the fourth quarter of 1998.
The LPSC determined in July 1998 that the annual formula rate plan
filings for Entergy Louisiana would be extended for an additional three
years, through an April 2000 filing for the 1999 test year. In September
1998, Entergy Louisiana made its third annual formula rate plan filing
with the LPSC for the 1997 test year. The filing indicated that earnings
were such that no change in rates would be warranted with the exception
of the elimination of a $3.7 million one-time credit that will result in
a rate increase of this amount. Hearings will be conducted on this
filing.
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.
Filings with the Council (Entergy Corporation and Entergy New Orleans)
Entergy New Orleans made its cost of service and revenue
requirement filing in conjunction with its transition to competition
plan on September 17, 1997. Hearings on the ratemaking issues in the
filing were held in July 1998. Entergy New Orleans filed a
settlement agreement before the Council, which was approved on
November 5, 1998. The settlement agreement required base rate
reductions for Entergy New Orleans' electric customers of $7.1
million effective January 1, 1999; $3.2 million effective October 1,
1999; and $16.1 million effective October 1, 2000. The agreement
also required a $1.9 million base rate reduction for Entergy New
Orleans' gas customers effective January 1999. The settlement
prohibited Entergy New Orleans from seeking any base rate increases
prior to October 1, 2001.
Grand Gulf Accelerated Recovery Tariff
(Entergy Arkansas)
In April 1998, FERC approved the Grand Gulf Accelerated Recovery
Tariff that Entergy Arkansas filed as part of the settlement agreement
that 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.
(Entergy Mississippi)
On September 29, 1998, FERC approved the Grand Gulf Accelerated
Recovery Tariff for Entergy Mississippi's allocable portion of Grand Gulf
that was filed with the FERC in August 1998. The tariff provides for the
acceleration of Entergy Mississippi's Grand Gulf purchased power
obligation in an amount totaling $221.3 million over the period October
1, 1998 through June 30, 2004 and is used to offset the rate reduction
described below.
River Bend Cost Deferrals (Entergy Corporation and Entergy Gulf States)
Entergy Gulf States deferred approximately $369 million of River
Bend operating and purchased power costs, depreciation, and accrued
carrying charges, pursuant to a 1986 PUCT accounting order.
Approximately $182 million of these costs were being amortized over a 20-
year period, and the remaining $187 million was written off in the first
quarter of 1996 in accordance with SFAS 121. These accounting order
deferrals have been given accelerated recovery in the July 22, 1998 PUCT
order discussed above. Entergy Gulf States has not recorded such
accelerated recovery pending the resolution of its motion for
reconciliation of the order. For further discussion, see Retail Rate
Proceedings above.
Grand Gulf 1 Deferrals (Entergy Corporation and Entergy Mississippi)
See Note 2 of the Form 10-K for information regarding Entergy
Mississippi's plan with the MPSC for recovery of previously deferred
Grand Gulf 1-related costs. The completion of the recovery of the
deferred costs and associated carrying charges, offset by i) the
accelerated recovery of Entergy Mississippi's Grand Gulf purchased power
obligation and ii) the recovery of a portion of Entergy Mississippi's
allocation of the proposed System Energy wholesale rate increase
discussed herein, results in a $127.1 million annual rate reduction for
Entergy Mississippi as of October 1, 1998. The reduction will not result
in a decrease in Entergy Mississippi's income as the phase-in plan
deferrals have now been fully amortized and no further expense associated
with the phase-in plan will be recognized.
Proposed Rate Increase (Entergy Mississippi)
See Note 2 of the Form 10-K for information regarding System
Energy's application with FERC for a rate increase and Entergy
Mississippi's allocation of the proposed rate increase. On August 12,
1998, Entergy Mississippi filed a revised deferral plan with the MPSC
that provides for recovery of a portion of the System Energy rate
increase effective October 1, 1998. Under the revised plan, Entergy
Mississippi will continue to defer until September 30, 2000, or until the
issuance of a final order by the FERC, the difference between the System
Energy rate increase and the amount of the increase approved by the ALJ's
initial decision ("ALJ Decision Level") issued on July 11, 1996. This
deferred amount will be amortized over 54 months beginning October 2000.
Entergy Mississippi began recovery of its allocation at the ALJ Decision
Level in October 1998. The previously deferred portion of the ALJ
Decision Level, including carrying charges, will be recovered over 48
months.
NOTE 3. COMMON STOCK (Entergy Corporation)
During the nine months ended September 30, 1998, Entergy Corporation
issued 284,498 shares of its previously repurchased common stock to
satisfy stock options exercised and stock purchases under its Equity
Ownership Plan. During the third quarter of 1998, Entergy Corporation
repurchased 200,000 shares from the trust originally established to hold
the shares expected to be awarded under the 1996-1998 Long-term Incentive
Plan. In addition, Entergy Corporation received proceeds of $8.6
million from the issuance of 320,030 shares of common stock under its
dividend reinvestment and stock purchase plan during the nine months
ended September 30, 1998.
NOTE 4. LONG-TERM DEBT
(Entergy Gulf States)
On October 1, 1998, Entergy Gulf States retired $40 million of 6.75%
Series First Mortgage Bonds upon maturity.
On November 1, 1998, Entergy Gulf States retired $75 million of
7.35% Series First Mortgage Bonds upon maturity.
(System Energy Resources)
On November 4, 1998, System Energy Resources issued $216 million of
5 7/8% Pollution Control Revenue Bonds due April 1, 2022. The proceeds
will be used to redeem on December 1, 1998, $10.0 million of the $49.5
million of 9.5% Series Pollution Control Revenue Bonds due 2013 and $206
million of 9.875% Series C Pollution Control Revenue Bonds due 2014.
(Entergy Corporation)
See Note 7 in the Form 10-K for a discussion of the financing of
EPDC's Damhead Creek project. In September 1998, a subsidiary of EPDC
entered into a BPS75 million ($127.5 million) six-month bridge financing
to fund certain construction and development costs related to the
project. Contemporaneously with the bridge financing, EPDC obtained a
commitment letter for the long-term financing requirements of the
project, which is expected to be completed by the end of the term of the
bridge financing.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On October 30, 1998, Entergy Corporation's Board of Directors
declared a common stock dividend of $.30 per share, payable on December
1, 1998, to holders of record on November 12, 1998.
NOTE 6. ACCOUNTING ISSUES (Entergy Corporation and Entergy London)
New Accounting Standards - In June 1998, the FASB issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," which
will be effective for Entergy in 2000. This statement requires that all
derivatives be recognized in the statement of financial position as
either assets or liabilities and measured at fair value. The statement
also requires the designation and reassessment of all hedging
relationships. The changes in fair value of derivatives will be
recognized in earnings or in comprehensive income, depending on the type
of hedge relationship involved. The adoption of SFAS 133 is not expected
to have a material effect on the financial position, results of
operations, or cash flows of Entergy Corporation or Entergy London.
During 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use", which will be
effective for Entergy in 1999. This SOP requires that computer software
costs that are incurred in the preliminary project stage be expensed as
incurred. Once the capitalization criteria of the SOP have been met,
external direct cost of materials and services used in developing or
obtaining internal use computer software, as well as payroll and payroll-
related costs of employees (to the extent of time spent directly on
internal use computer software projects), and interest costs incurred in
developing such computer software should be capitalized. Training costs
and data conversion costs should be expensed as incurred, with certain
exceptions. The adoption of SOP 98-1 is not expected to have a material
effect on the financial position, results of operations, or cash flows of
Entergy Corporation.
NOTE 7. DISPOSITION OF SUBSIDIARY BUSINESSES (Entergy Corporation and
Entergy London)
On August 2, 1998, Entergy's Board of Directors approved a new
strategic direction for Entergy that includes the expected sale of
several businesses before the end of 1999. These businesses include
London Electricity, CitiPower Pty., Entergy Security, Inc., Efficient
Solutions, Inc., and certain portions of Entergy's telecommunications
businesses.
On September 30, 1998, Entergy sold its energy management
subsidiary, Efficient Solutions, Inc. (formerly Entergy Integrated
Solutions, Inc.) The loss on the sale of $68.6 million ($35.9 million
net of tax) is reflected in other income in the accompanying Consolidated
Statements of Income and Comprehensive Income.
The remaining businesses expected to be sold collectively represent
$5.7 billion of Entergy's total assets as of September 30, 1998 and
generated $174 million of Entergy's net income for the nine months then
ended. Management believes that the sale price of these businesses will
exceed their net book value at September 30, 1998. Accordingly, no
adjustment has been recorded at September 30, 1998 for the carrying
amount of these businesses in the accompanying financial statements.
__________________________________
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. Oral argument on the plaintiff's appeal has been set for November
1998.
Union Pacific Railroad Company (Entergy Corporation and Entergy
Arkansas)
See "Union Pacific Railroad Company" in Item 1 of Part II of the
1998 first and second quarter Entergy Forms 10-Q for a discussion of the
civil suit filed by Entergy Arkansas and Entergy Services against Union
Pacific Railroad Company.
Aquila Power Corporation (Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans)
See "Aquila Power Corporation" in Item 1 of Part II of the 1998
second quarter Entergy Form 10-Q for a discussion of the complaint filed
with the FERC by Aquila Power Corporation against Entergy Services, as
agent for the domestic utility companies.
Ratepayer Lawsuits (Entergy Corporation, Entergy Louisiana, and Entergy
New Orleans)
See "Ratepayer Lawsuits" in Item 1 of Part II of the 1998 second
quarter Entergy Form 10-Q for a discussion of the lawsuits filed by
ratepayers in Louisiana state courts in Orleans and East Baton Rouge
Parishes, and with the LPSC.
Asbestos Litigation (Entergy Gulf States, Entergy Louisiana, and
Entergy New Orleans)
See "Asbestos Litigation" in Item 1 of Part II of the 1998 second
quarter Entergy Form 10-Q for a discussion of the numerous individual
and class action lawsuits filed against Entergy's domestic utility
subsidiaries, and in particular Entergy Gulf States, Entergy Louisiana,
and Entergy New Orleans on behalf of persons claiming injury as a result
of exposure to asbestos.
Panda Energy Corporation (Entergy Corporation)
In 1994, Panda Energy Corporation (Panda) commenced litigation in
Texas in the Dallas District Court against Entergy Corporation. Entergy
Enterprises, Inc., EPI, Entergy Power Asia, Ltd., and Entergy Power
Development Corporation, direct and indirect wholly owned subsidiaries
of Entergy Corporation, are also named as defendants. The allegations
include, among others, tortious interference with contractual relations,
conspiracy, misappropriation of corporate opportunity, unfair
competition and fraud, and constructive trust issues. Panda seeks
damages of approximately $4.8 billion, of which $3.6 billion is claimed
in punitive damages. The district court granted the defendants' motion
for summary judgment and dismissed the lawsuit, finding that Panda is
unable to show damages and that the facts alleged do not support a cause
of action against the defendants. In August 1998, an appellate court
reversed the dismissal and remanded the lawsuit to the trial court. The
defendants petitioned the appellate court for rehearing, but that
petition was denied in October 1998. Entergy Gulf States expects to
petition the Texas Supreme Court for review of the appellate court
decision.
Franchise Fee Litigation (Entergy Gulf States)
In September 1998, the City of Nederland filed a petition against
Entergy Gulf States, and Entergy Services, Inc. in state court in
Jefferson County, Texas purportedly on behalf of all Texas
municipalities that have ordinances or agreements with Entergy Gulf
States. The lawsuit alleges that Entergy Gulf States has been
underpaying its franchise fees due to failure to properly calculate its
gross receipts. Plaintiff seeks a judgment for the allegedly underpaid
fees and punitive damages. Entergy will vigorously defend itself in the
lawsuit.
Fiber Optic Cable Litigation (Entergy Corporation)
In May 1998, a group of property owners filed a petition against
Entergy Corporation, Entergy Gulf States, Entergy Services, and ETHC in
state court in Jefferson County, Texas purportedly on behalf of all
property owners throughout the Entergy service area who have conveyed
easements to the defendants. The lawsuit alleges that Entergy placed
fiber optic cable across their property without obtaining appropriate
easements. The plaintiffs seek actual damages for the use of the land
and a share of the profits made through use of the fiber optic cables
and punitive damages. Entergy will vigorously defend itself in the
lawsuit.
Item 4. Submission of Matters to a Vote of Security Holders
During the third quarter of 1998, no matters were submitted to a
vote of the security holders of Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, System Energy, or Entergy London.
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, Sept 30,
1993 1994 1995 1996 1997 1998
Entergy Arkansas 3.11(b) 2.32 2.56 2.93 2.54 2.57
Entergy Gulf States 1.54 (c)- 1.86 1.47 1.42 1.17
Entergy Louisiana 3.06 2.91 3.18 3.16 2.74 2.98
Entergy Mississippi 3.79(b) 2.12 2.92 3.40 2.98 3.48
Entergy New Orleans 4.68(b) 1.91 3.93 3.51 2.70 2.87
System Energy 1.87 1.23 2.07 2.21 2.31 2.45
Entergy London N/A N/A N/A N/A 1.16 1.47
Ratios of Earnings to Combined Fixed Charges
and Preferred Dividends
Twelve Months Ended
December 31, Sept 30,
1993 1994 1995 1996 1997 1998
Entergy Arkansas 2.54(b) 1.97 2.12 2.44 2.24 2.27
Entergy Gulf States (a) 1.21 (c)- 1.54 1.19 1.23 1.01
Entergy Louisiana 2.39 2.43 2.60 2.64 2.36 2.56
Entergy Mississippi 3.08(b) 1.81 2.51 2.95 2.69 3.14
Entergy New Orleans 4.12(b) 1.73 3.56 3.22 2.44 2.59
(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.
Shareholder Proposals (Entergy Corporation)
Stockholders wishing to bring a proposal before the 1999 Annual
Meeting of Stockholders, but not to include it in Entergy Corporation's
Proxy Statement, must cause written notice of the proposal to be received
by the Secretary of the Company at the principal executive offices in New
Orleans, Louisiana by no later than February 13, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
3(a) - By-laws of Entergy, as amended and currently in effect.
3(b) - By-laws of Entergy Arkansas, as amended and currently in
effect.
3(c) - By-laws of Entergy Gulf States, as amended and currently
in effect.
3(d) - By-laws of Entergy Louisiana, as amended and currently in
effect.
3(e) - By-laws of Entergy Mississippi, as amended and currently
in effect.
3(f) - By-laws of Entergy New Orleans, as amended and currently
in effect.
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of September 30, 1998.
27(b) - Financial Data Schedule for Entergy Arkansas as of
September 30, 1998.
27(c) - Financial Data Schedule for Entergy Gulf States as of
September 30, 1998.
27(d) - Financial Data Schedule for Entergy Louisiana as of
September 30, 1998.
27(e) - Financial Data Schedule for Entergy Mississippi as of
September 30, 1998.
27(f) - Financial Data Schedule for Entergy New Orleans as of
September 30, 1998.
27(g) - Financial Data Schedule for System Energy as of September
30, 1998.
27(h) - Financial Data Schedule for Entergy London as of
September 30, 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(h) - 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).
** 99(i) - Quarterly Reports on Form 10-Q of Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, System Energy,
and Entergy London for the quarter ended March 31, 1998,
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).
** 99(j) - Quarterly Reports on Form 10-Q of Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, System Energy,
and Entergy London for the quarter ended June 30, 1998,
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 September 30, 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 September 30,
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 July 14, 1998,
was filed with the SEC on July 24, 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.
/s/ Nathan E. Langston
Nathan E. Langston
Vice President and Chief Accounting Officer
(For each Registrant and for each as
Principal Accounting Officer)
ENTERGY LONDON INVESTMENTS PLC
/s/ Nathan E. Langston
Nathan E. Langston
Director and Vice President and Audit Controller
Date: November 6, 1998
Exhibit 3(a)
BYLAWS
OF
ENTERGY CORPORATION
AS AMENDED SEPTEMBER 14, 1998
ARTICLE I.
OFFICES.
The principal business office of the Corporation shall
be in New Orleans, Louisiana. The Corporation may also have
offices at such other places as the Board of Directors may
from time to time designate or the business of the
Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS.
SECTION 1. Place of Meetings. All meetings of
stockholders, whether annual or special, shall be held at
the office of the Corporation in the City of New Orleans,
Parish of Orleans, State of Louisiana, unless some other
place for said meeting, either within or without the State
of Delaware, shall have been fixed by the Board of Directors
and set forth in the notice of meeting.
SECTION 2. Annual Meeting. The annual meeting of
stockholders for the election of Directors and the
transaction of such other business as may properly come
before the meeting shall be held on such date and at such
time of day as shall have been fixed by resolution of the
Board of Directors. With respect to any such annual meeting
of stockholders, the Corporation shall solicit proxies,
relating to all matters proposed by the management of the
Corporation at the time of such solicitation, to be
submitted for action at said annual meeting, from the
holders of all securities of the Corporation entitled to
vote at such annual meeting.
SECTION 3. Special Meetings. Special meetings of the
stockholders may be held at any time upon the call of a
majority of the entire Board of Directors, the Chairman of
the Board, the person, if any, designated by the Board of
Directors as the Chief Executive Officer, a majority of the
entire Executive Committee of the Board of Directors, if
there should be one, or by the holders of not less than a
majority of the outstanding stock entitled to vote at the
special meeting. The notice of each special meeting shall
state the place, date, hour, and purpose or purposes of the
proposed meeting, and the business transacted at such
meeting shall be confined to such purpose or purposes. Such
written notice shall be given not less than ten nor more
than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting. In the event
that a special meeting is called by the holders of not less
than a majority of the outstanding stock entitled to vote at
the special meeting in accordance with the provisions of the
Articles of Incorporation and this Section 3 of Article II,
the Board of Directors shall, within ten days of receipt of
such call (i) fix a record date, which record date shall not
precede the date upon which the resolution fixing the record
date is adopted by the Board of Directors, and which record
date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by
the Board of Directors and (ii) set a special meeting date,
which meeting date shall be not less than ten nor more than
sixty days after the record date established pursuant to
clause (i).
SECTION 4. Stockholders' Lists. A complete list of the
stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order, with the
residence of each, and the number of shares held by each,
shall be prepared by the Secretary and filed in the
principal business office of the Corporation, and shall be
open to the examination of any stockholder, during the usual
hours for business at least ten days before any meeting, at
the place where such meeting is to be held, or at another
location within the city where such meeting is to be held
specified in the notice, and shall be available at the time
and place of such meeting and open to the examination of any
stockholder.
SECTION 5. Notice. A written or printed notice, signed
by the Chairman of the Board, a President, a Vice President,
the Secretary or an Assistant Secretary, the Treasurer or an
Assistant Treasurer, of the time, place and purpose or
purposes of every meeting of stockholders shall be served
upon or mailed or caused to be mailed, postage prepaid, by
the Secretary or the officer performing his duties not less
than ten nor more than sixty days before such meeting to
each stockholder of record entitled to vote at his home
address as it appears upon the stock book of the
Corporation.
SECTION 6. Inspectors Of Election. At any meeting of
stockholders the Chairman of the meeting shall appoint two
persons, who need not be stockholders, to act as Inspectors
of Election. No Director or candidate for the office of
Director shall be appointed as such Inspector. Before
entering upon the discharge of his duties, each Inspector
shall first take and subscribe an oath faithfully to execute
the duties of Inspector at such meeting with strict
impartiality and according to the best of his ability. The
Inspectors shall take charge of the polls and after the
balloting shall make a certificate of the result of the vote
taken which shall be filed with the minutes of the meeting.
SECTION 7. Organization. The chief executive officer
or, in his absence, a person appointed by him or, in default
of such appointment, the officer next in seniority of
position, shall call meetings of the stockholders to order
and shall act as chairman thereof. The Secretary of the
Corporation, if present, shall act as secretary of all
meetings of stockholders, and in his absence, the presiding
officer may appoint a secretary.
SECTION 8. Order of Business. At all meetings of the
stockholders the order of business shall be as follows:
(a) call to order;
(b) appointment of a Secretary, if necessary;
(c) presentation of proof of the due calling of the
meeting;
(d) presentation and examination of proxies, and
determination of the number of shares present in
person or by proxy and entitled to vote;
(e) reading and settlement of the minutes of the
previous meeting;
(f) reports of officers and committees, if any;
(g) the election of Directors if the meeting is an
annual meeting or a meeting called for that
purpose;
(h) unfinished business;
(i) new business; and
(j) adjournment.
ARTICLE III.
DIRECTORS
SECTION 1. General Powers. The property, affairs and
business of the Corporation shall be managed by the Board of
Directors.
SECTION 2. Term of Office. The term of office of each
Director shall be until the next annual meeting of
stockholders and until his successor is duly elected and
qualified or until the earlier death, resignation or removal
of such Director.
SECTION 3. Resignations. Any Director may resign at any
time by giving notice of such resignation to the Board of
Directors, the Chairman of the Board, the Vice Chairman, a
President, a Vice President, the Secretary or an Assistant
Secretary of the Corporation. Unless otherwise specified
therein, such resignation shall take effect upon receipt
thereof by the Board of Directors or any such officer.
SECTION 4. Meetings. Notice. Meetings of the Board of
Directors shall be held at such place, within or without the
State of Delaware, as may from time to time be fixed by
resolution of the Board or by the Chairman of the Board, the
Vice Chairman, a President or a Vice President and as may be
specified in the notice or waiver of notice of any meeting.
Meetings may be held at any time upon the call of the Chief
Executive Officer of the Corporation or any two of the
Directors by oral, telegraphic or written notice, duly
given, or sent or mailed to each Director not less than
twenty-four hours before such meeting. Regular meetings of
the Board may be held without notice at such time and place
as shall from time to time be determined by resolution of
the Board, but in any event at intervals of not more than
three months.
SECTION 5. Nomination of Directors. Only persons who
are nominated in accordance with the following procedures
shall be eligible for election as Directors. Nominations of
persons for election to the Board of Directors of the
Corporation may be made at any annual meeting of
stockholders properly held for such purpose or at any
special meeting of stockholders called for the purpose of
electing directors (a) by or at the direction of the Board,
(b) by any committee or person appointed by the Board for
such purpose, or (c) by any stockholder of the Corporation
who is a stockholder of record on the date of the giving of
the notice provided for in this Section 5 of Article III and
on the record date for the determination of stockholders
entitled to vote for the election of Directors at the
meeting who complies with the notice procedures set forth in
this Section 5 of Article III. Such nominations by any
stockholder of record shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice shall have been delivered to
or mailed and received at the principal executive offices of
the Corporation (a) in the case of an annual meeting not
less than 60 days nor more than 85 days prior to the
anniversary date of the immediately preceding annual meeting
of the stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not
within thirty (30) days before or after such anniversary
date, notice by the stockholder to be timely must be so
delivered or received not later than the close of business
on the 10th day following the earlier of the date on which
such notice or public disclosure of the date of the meeting
was given or made and (b) in the case of a special meeting
of stockholders called for the purpose of electing
directors, not later than the close of business on the 10th
day following the earlier of the date on which notice or
public disclosure of the date of the special meeting was
given or made. Such stockholder's notice to the Secretary
shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a
Director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or
employment of the person, (iii) the class and number of
shares of capital stock of the Corporation and any of its
subsidiaries which are owned beneficially or of record by
the person and (iv) any other information relating to the
person that is required to be disclosed in solicitations of
proxies for election of Directors pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the
Public Utility Holding Company Act of 1935, as amended, and
any rules or regulations promulgated thereunder, and (b) as
to the stockholder giving the notice (i) the name and record
address of the stockholder, (ii) the class and number of
shares of capital stock of the Corporation which are owned
beneficially or of record by the stockholder, (iii) a
description of all arrangements or understandings between
such stockholder and any other person or persons (including
their names) pursuant to which the nominations are to be
made by the stockholder, (iv) a representation that such
stockholder intends to appear in person or by proxy at the
meeting to nominate the persons named in its notice and (v)
any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or
other filings required to be made in connection with
solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. The Corporation may
require any proposed nominee to furnish his written consent
to serve if elected and such other information as may
reasonably be required by the Corporation to determine the
eligibility of such proposed nominee to serve as a Director
of the Corporation. No person shall be eligible for election
as a Director of the Corporation if his election to the
Board of Directors would cause the Corporation to be in
violation of any applicable statute, rule or regulation, and
unless nominated in accordance with the procedures set forth
herein.
The Chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a
nomination was not made in accordance with the foregoing
procedures, and the defective nomination shall be
disregarded.
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES.
SECTION 1. Executive Committee. The Board of
Directors may appoint an Executive Committee of not less
than three or more than five members, to serve during the
pleasure of the Board, to consist of the Chief Executive
Officer and such additional Directors as the Board may from
time to time designate. The Chief Executive Officer of the
Corporation shall be Chairman of the Executive Committee.
SECTION 2. Procedure. The Executive Committee shall
meet at the call of the Chairman of the Executive Committee
or of any two members. A majority of the members shall be
necessary to constitute a quorum and action shall be taken
by a majority vote of those present.
SECTION 3. Powers and Reports. During the intervals
between the meetings of the Board of Directors, the
Executive Committee shall possess and may exercise all the
powers of the Board in the management and direction of the
business and affairs of the Corporation. The taking of
action by the Executive Committee shall be conclusive
evidence that the Board was not in session when such action
was taken. The Executive Committee shall keep regular
minutes of its proceedings and all action by the Executive
Committee shall be reported to the Board at its meeting next
following the meeting of the Executive Committee and shall
be subject to revision or alteration by the Board; provided,
that no rights of third parties shall be affected by such
revision or alteration.
SECTION 4. Other Committees. From time to time the
Board of Directors, by the affirmative vote of a majority of
the whole Board, may appoint other committees for any
purpose or purposes, and such committees shall have powers
as shall be conferred by the resolution of appointment.
ARTICLE V.
OFFICERS.
SECTION 1. Executive Officers. The Board of Directors
shall elect individuals to occupy at least three executive
offices: Secretary, Treasurer and at least one other office,
being either Chairman of the Board, President or Vice
President. In its discretion, the Board of Directors may
elect individuals to occupy other executive offices,
including (if not so elected above) Chairman of the Board,
Vice Chairman of the Board, one or more Presidents or Vice
Presidents and whatever other executive offices which the
Board sees fit to fill. The Board of Directors shall, by
resolution, designate one executive officer as the Chief
Executive Officer of the Corporation who, subject to the
direction of the Board of Directors and of the Executive
Committee, shall have direct charge of and general
supervision over the business and affairs of the
Corporation. The officers shall be elected annually by the
Board of Directors at its first meeting following the annual
meeting of stockholders, and each shall hold office until
his successor shall have been duly elected and qualified, or
until he shall have died or resigned or shall have been
removed by majority vote of the whole Board. The powers and
duties of Secretary and Treasurer may be exercised and
performed by the same person, and a Vice President may at
the same time hold any other office except President.
SECTION 2. Chairman of the Board. If a Chairman of the
Board is elected by the Board of Directors, he shall be a
member of the Board of Directors, shall preside at all
meetings of the Board of Directors, and shall have such
other duties as from time to time may be assigned to him by
the Board of Directors, by the Executive Committee or, if
the Chairman of the Board is not the designated Chief
Executive Officer of the Corporation, by such Chief
Executive Officer.
SECTION 3. President. If one or more Presidents are
elected by the Board of Directors, each such President shall
perform duties incident to the office of a president of a
corporation and such other duties as from time to time may
be assigned to him by the Board of Directors, by the
Executive Committee or, if any such President is not
designated the Chief Executive Officer of the Corporation,
by the Chief Executive Officer.
SECTION 4. Vice Presidents. Each Vice President shall
have such powers and shall perform such duties as from time
to time may be conferred upon or assigned to him by the
Board of Directors or the Executive Committee, or as may be
delegated to him by the Chief Executive Officer.
SECTION 5. Secretary. The Secretary shall keep the
minutes of all meetings of the stockholders and of the Board
of Directors in books provided for the purpose, he shall see
that all notices are duly given in accordance with the
provisions of law and these By-laws; he shall be custodian
of the records and of the corporate seal of the Corporation;
he shall see that the corporate seal is affixed to all
documents the execution of which under the seal is duly
authorized, and when the seal is so affixed he may attest
the same; he may sign, with the Chairman of the Board, the
Vice Chairman of the Board, a President or a Vice President,
certificates of stock of the Corporation; and in general, he
shall perform all duties incident to the office of a
secretary of a corporation, and such other duties as
from time to time may be assigned to him by the Chief
Executive Officer, the Chairman of the Board, the Vice
Chairman of the Board, a President, the Board of Directors
or the Executive Committee.
The Secretary shall also keep, or cause to be kept, a
stock book, containing the name, alphabetically arranged, of
all persons who are stockholders of the Corporation, showing
their places of residence, the number of shares held by them
respectively, and the time when they respectively became the
owners thereof.
SECTION 6. Treasurer. The Treasurer shall have charge
of and be responsible for all funds, securities, receipts
and disbursements of the Corporation, and shall deposit, or
cause to be deposited, in the name of the Corporation, all
moneys or other valuable effects in such banks, trust
companies or other depositories as shall, from time to time,
be selected by the Board of Directors; he may endorse for
collection on behalf of the Corporation, checks, notes and
other obligations; he may sign receipts and vouchers for
payments made to the Corporation; singly or jointly with
another person as the Board of Directors may authorize, he
may sign checks of the Corporation and pay out and dispose
of the proceeds under the direction of the Board; he shall
render or cause to be rendered to the Chairman of the Board,
the President and the Board of Directors, whenever
requested, an account of the financial condition of the
Corporation; he may sign, with the Chairman of the Board,
the Vice Chairman of the Board, a President or a Vice
President, certificates of stock of the Corporation; and in
general, shall perform all the duties incident to the office
of a treasurer of a corporation, and such other duties as
from time to time may be assigned to him by the Chairman of
the Board, the Vice Chairman of the Board, a President, the
Board of Directors or the Executive Committee.
SECTION 7. Subordinate Officers. The Board of Directors
may appoint such assistant secretaries, assistant treasurers
and other subordinate officers as it may deem desirable.
Each such officer shall hold office for such period, have
such authority and perform such duties as the Board of
Directors may prescribe. The Board of Directors may, from
time to time, authorize any officer to appoint and remove
subordinate officers and to prescribe the powers and duties
thereof.
SECTION 8. Vacancies. Absences. Any vacancy in any of
the above offices may be filled for the unexpired portion of
the term by the Board of Directors, at any regular or
special meeting. Except when the law requires the act of a
particular officer, the Board of Directors or the Executive
Committee whenever necessary may, in the absence of any
officer, designate any other officer or properly qualified
employee, to perform the duties of the one absent for the
time being, and such designated officer or employee shall
have, when so acting, all the powers herein given to such
absent officer.
SECTION 9. Resignations. Any officer may resign at any
time by giving written notice of such resignation to the
Board of Directors, the Chairman of the Board, the Vice
Chairman of the Board, a President or the Secretary. Unless
otherwise specified therein, such resignation shall take
effect upon written receipt thereof by the Board of
Directors or by such officer.
ARTICLE VI.
CAPITAL STOCK.
SECTION 1. Stock Certificates. Every stockholder shall
be entitled to have a certificate certifying the number of
shares owned by him in the Corporation. Certificates of
stock shall be signed by the Chairman of Board, the Vice
Chairman of the Board, a President or a Vice President and
the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, and sealed with the seal of the
Corporation. Such seal may be facsimile, engraved or
printed. Where such certificate is signed (1) by a transfer
agent or an assistant transfer agent, other than the
Corporation itself, or (2) by a transfer clerk acting on
behalf of the Corporation and a registrar, the signature of
the Chairman of the Board, the Vice Chairman of the Board,
any such President, Vice President, Treasurer, Secretary,
Assistant Treasurer or Assistant Secretary may be facsimile.
In case any officer or officers who shall have signed, or
whose facsimile signature or signatures shall have been used
on any such certificate or certificates shall cease to be
such officer or officers of the Corporation, whether because
of death, resignation or otherwise, before such certificate
or certificates shall have been delivered by the
Corporation, such certificate or certificates may
nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or
signatures shall have been used thereon had not ceased to be
such officer or officers of the Corporation.
SECTION 2. Transfer of Shares. The shares of stock of
the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by his
attorney lawfully constituted, upon surrender for
cancellation of certificates for the same number of shares,
with an assignment and power of transfer endorsed thereon or
attached thereto, duly executed, with such proof or guaranty
of the authenticity of the signature as the Corporation or
its agents may reasonably require. The Board of Directors
may appoint one or more transfer agents and registrars of
the stock of the Corporation. The Corporation shall be
entitled to treat the holder of record of any share or
shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the
part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided
by law.
SECTION 3. Record Dates. The Board of Directors may fix
a date, not greater than sixty days nor less than ten days
in advance of the date of any meeting of stockholders or
adjournment thereof, and may fix a date not exceeding sixty
days prior to the date stockholders are entitled to receive
payment of any dividend, or in order to make a determination
of stockholders for any other purpose, as a record date for
the purpose of determining stockholders entitled to notice
of, or to vote at, any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any
dividend, or for any other purpose; and in such case only
such stockholders as shall be stockholders of record on the
date so fixed shall be entitled to notice of, or to vote at,
such meeting of stockholders or any adjournment thereof, or
entitled to receive payment of such dividend, or for such
other purpose, notwithstanding any transfer of stock on the
books of the Corporation after the record date so fixed. In
order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days
after the date upon which the resolution fixing the record
date is adopted by the Board of Directors. Any stockholder
of record seeking to have the stockholders authorize or take
corporate action by written consent shall, by written notice
to the Secretary, request the Board of Directors to fix a
record date. The Board of Directors shall promptly, but in
all events within ten days after the date on which such a
request is received, adopt a resolution fixing the record
date. If no record date has been fixed by the Board of
Directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is
required by law, shall be the first date on which a signed
written consent setting forth the action taken or proposed
to be taken is delivered to the Corporation in accordance
with this Section 3 of Article VI. If no record date has
been fixed by the Board of Directors and prior action by the
Board of Directors is required by law, the record date for
determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of
business on the day on which the Board of Directors adopts
the resolution taking such prior action.
ARTICLE VII
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All
checks and drafts on the Corporation's bank accounts and all
bills of exchange, promissory notes, acceptances,
obligations and other instruments for the payment of money,
shall be signed by the Chairman of the Board, the Vice
Chairman of the Board, any President or Vice President and
by the Treasurer or any Assistant Treasurer, or shall be
signed by such other officer or officers, person or persons,
as shall be thereunto authorized by the Board of Directors
or the Executive Committee.
SECTION 2. Execution of Contracts, Assignments. etc.
All contracts, agreements, endorsements, assignments,
transfers, stock powers, and other instruments shall be
signed by the Chief Executive Officer, the Chairman of the
Board, the Vice Chairman of the Board or any President or
Vice President or shall be signed by such officer or
officers, person or persons, as shall be thereunto
authorized by the Board of Directors or the Executive
Committee or by the Chief Executive Officer, Chairman of the
Board or a President pursuant to authorization by the Board
of Directors.
SECTION 3. Voting of Stock and Execution of Proxies.
The Chairman of the Board, the Vice Chairman of the Board,
any President or Vice President or any other officer of the
Corporation designated by the Board of Directors, the
Executive Committee, the Chairman of the Board, or a
President, shall be authorized to attend any meeting of the
stockholders of any other corporation in which the
Corporation is an owner of stock and to vote such stock upon
all matters coming before such meeting. The Chairman of the
Board, the Vice Chairman of the Board or any President or
Vice President may sign and issue proxies to vote shares of
stock of other corporations owned by the Corporation.
ARTICLE VIII.
WAIVERS.
Whenever under the provisions of these By-laws or of
any law the stockholders or Directors are authorized to hold
any meeting or take any action after notice or after the
lapse of any prescribed period of time, such meeting or
action may be held or taken without notice and without such
lapse of time, on written waiver of such notice and lapse of
time signed by every person entitled to such notice or by
his attorney or attorneys thereunto authorized, either
before or after the meeting or action to which such notice
relates.
ARTICLE IX.
SEAL.
The seal of the Corporation shall show the year of its
incorporation and shall be in such form as the Board of
Directors shall prescribe. The seal on any corporate
obligation for the payment of money may be a facsimile,
engraved or printed.
ARTICLE X.
INDEMNIFICATION.
SECTION 1. Power to Indemnify in Actions, Suits or
Proceedings other Than Those by or in the Right of the
Corporation. Subject to Section 3 of this Article X the
Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to or witness or other
participant in, any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of
the Corporation by reason) of the fact that he is or was a
director or officer of the Corporation, or is or was a
director or officer of the Corporation serving at the
request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 2. Power to Indemnify in Actions, Suits or
Proceedings by or in the Right of the Corporation. Subject
to Section 3 of this Article X, the Corporation shall
indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that
he is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; except
that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and
only to the extent that the Court of Chancery or the court
in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other
court shall deem proper.
SECTION 3. Authorization of Indemnification. Any
indemnification under this Article X (unless ordered by a
court) shall be made by the Corporation only as authorized
in the specific case upon a determination that
indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of
conduct set forth in Section 1 or Section 2 of this Article
X, as the case may be. Such determination shall be made (i)
by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such a quorum is not
obtainable or, even if obtainable, by majority vote of a
committee duly designated by the Board of Directors (in
which directors who are parties may participate) consisting
solely of two or more directors not at the time parties to
such action, suit or proceeding, or (iii) if such a quorum
is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal
counsel in a written opinion, or (iv) by the stockholders.
To the extent, however, that a director or officer of the
Corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding described
above, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization
in the specific case.
Any indemnification under this Article X shall be made
promptly and, in any event, to the extend practicable,
within sixty days of receipt by the Corporation of the
written request of the person to be indemnified.
SECTION 4. Good Faith Defined. For purposes of any
determination under Section 3 of this Article X, a person
shall be deemed to have acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any
criminal action or proceeding, to have had no reasonable
cause to believe his conduct was unlawful, if his action is
based on the records or books of account of the Corporation
or another enterprise, or on information supplied to him by
the officers of the Corporation or another enterprise in the
course of their duties, or on the advice of legal counsel
for the Corporation or another enterprise or on information
or records given or reports made to the Corporation or
another enterprise by an independent certified public
accountant or by an appraiser or other expert selected with
reasonable care by the Corporation or another enterprise.
The term ''another enterprise'' as used in this Section 4
shall mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise of
which such person is or was sending at the request of the
Corporation as a director, officer, employee or agent. The
provisions of this Section 4 shall not be deemed to be
exclusive or to limit in any way the circumstances in which
a person may be deemed to have met the applicable standard
of conduct set forth in Sections 1 or 2 of this Article X,
as the case may be.
SECTION 5. Indemnification by a Court. Notwithstanding
any contrary determination in the specific case under
Section 3 of this Article and notwithstanding the absence of
any determination thereunder, any director or officer may
apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise
permissible under Sections 1 and 2 of this Article X. The
basis of such indemnification by a court shall be a
determination by such court that indemnification of the
director or officer is proper in the circumstances because
he has met the applicable standards of conduct set forth in
Sections 1 or 2 of this Article X, as the case may be.
Neither a contrary determination in the specify case under
Section 3 of this Article X nor the absence of any
determination thereunder shall be a defense to such
application or create a presumption that the director or
officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for
indemnification pursuant to this Section 5 shall be given to
the Corporation promptly upon the filing of such application
If successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid
the expense of prosecuting such application.
SECTION 6. Expenses Payable in Advance. Expenses
incurred by a director or officer in defending or
investigating a threatened or pending action, suit or
proceeding shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding
within fourteen days after receipt by the Corporation of a
written statement from such director or officer requesting
such an advancement, together with an undertaking, if
required by law at the time of such advance, by or on behalf
of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article
X.
SECTION 7. Nonexclusivity of Indemnification and
Advancement of Expenses. The indemnification and advancement
of expenses provided by or granted pursuant to this Article
X shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may
be entitled under any By-law, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the
direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action taken (or
omitted to be taken) in his official capacity and as to
action taken (or omitted to be taken) in another capacity
while holding such office, it being the policy of the
Corporation that indemnification of the persons specified in
Sections 1 and 2 of this Article X shall be made to the
fullest extent permitted by law. The provisions of this
Article X shall not be deemed to prelude the indemnification
of any person who is not specified in Sections 1 or 2 of
this Article X but whom the Corporation has the power or
obligation to indemnify under the provisions of the General
Corporation Law of the State of Delaware, or otherwise.
SECTION 8. Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any
expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such
expense, liability or loss under the General Corporation Law
of the State of Delaware or the provisions of this Article
X. The Corporation may also obtain a letter of credit, act
as self-insurer, create a reserve, trust, escrow, cash
collateral or other fund or account, enter into
indemnification agreements, pledge or grant a security
interest in any assets or properties of the Corporation, or
use any other mechanism or arrangement whatsoever in such
amounts, at such costs, and upon such other terms and
conditions as the Board of Directors shall deem appropriate
for the protection of any or all such persons.
SECTION 9. Certain Definitions. For purposes of this
Article X, references to ''the Corporation" shall include,
in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority
to indemnify its directors and officers, so that any person
who is or as a director or officer of such constituent
corporation, or is or was a director or officer of such
constituent corporation serving at the request of such
constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, shall
stand in the same position under the provisions of this
Article X with respect to the resulting or surviving
corporation as he would have with respect to such
constituent corporation if its separate existence had
continued. For purposes of this Article X, references to
"fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to
"serving at the request of the Corporation'' shall include
any service as a director or officer of the Corporation
which imposes duties on, or involves services by, such
director or officer with respect to an employee benefit
plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in
a manner "not opposed to the best interests of the
Corporation" as referred to in this Article X.
SECTION 10. Survival of Indemnification and Advancement
of Expenses. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article X shall,
unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 11. Limitation on Indemnification.
Notwithstanding anything contained in this Article to the
contrary, except for proceedings to enforce rights to
indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indemnify
any director or officer in connection with a proceeding (or
part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation.
SECTION 12. Indemnification of Employees and Agents.
The Corporation may, to the extent authorized from time to
time by the Board of Directors, provide rights to
indemnification and to the advancement of expenses to
directors, employees and agents of the Corporation or of its
wholly or partially owned, direct or indirect affiliated or
subsidiary companies similar to those conferred in this
Article X to directors and officers of the Corporation.
SECTION 13. Repeal or Modification. All rights to
indemnification and to advancement of expenses under this
Article X shall be deemed to be a contract between the
Corporation and each director and officer who serves or has
served in any such capacity, and each other person as to
whom the Corporation has agreed to grant indemnity at any
time while this Article is in effect. Any repeal or
modification of this Article or any repeal or modification
of relevant provisions of the General Corporation Law of the
State of Delaware or any other applicable law shall not in
any way diminish any right to indemnification or to
advancement of expenses of such director, officer or other
person as to whom the Corporation has agreed to grant
indemnity, or the obligations of the Corporation, arising
hereunder for claims relating to matters occurring prior to
such repeal or modification.
SECTION 14. Separability. If this Article X or any
portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each director and officer, and each
employee, agent and other person as to whom the Corporation
has agreed to grant indemnity to the full extent permitted
by any applicable portion of this Article X that shall not
have been invalidated and to the full extent permitted by
applicable law.
ARTICLE Xl.
AMENDMENTS.
SECTION 1. Amendments. Subject to the provisions of
applicable law and of the Certificate of Incorporation,
these By-laws may be altered, amended or repealed and new By-
laws adopted either (1) at any annual or special meeting of
the stockholders at which a quorum is present or
represented, provided notice of the proposed amendment shall
have been contained in the notice of meeting, or (2) by the
Board of Directors at any regular or special meeting at
which a quorum is present, provided notice of the proposed
amendment shall have been given. Any repeal, alteration,
amendment or adoption of any new By-law must be approved by
either the holders of a majority of the outstanding stock
entitled to vote thereon or by a majority of the entire
Board of Directors then in office, except that any repeal,
alteration, amendment or adoption of any new By-law which is
inconsistent with ARTICLE X of the By-laws must be approved
by either the holders of two-thirds (66 2/3%) of the
outstanding capital stock entitled to vote thereon or by a
majority of the entire Board of Directors then in office.
SECTION 2. Entire Board of Director. As used in this
Article XI and in these By-laws generally, the term "entire
Board of Directors" means the total number of directors
which the Corporation would have if there were no vacancies.
ARTICLE XII.
STOCKHOLDER-PROPOSED BUSINESS AT ANNUAL MEETINGS.
To properly bring business before the annual meeting of
stockholders, a stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To
be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of
the Corporation not less than 60 days nor more than 85 days
prior to the anniversary date of the immediately preceding
annual meeting of stockholders; provided, however, that in
the event that the annual meeting is called for a date that
is not within thirty (30) days before or after such
anniversary date, notice by the stockholder to be timely
must be so delivered or received not later than the close of
business on the 10th day following the earlier of the date
on which such notice or public disclosure of the date of the
meeting was given or made. A stockholder's notice to the
Secretary shall set forth as to each item of business the
stockholder proposes to bring before the annual meeting (i)
a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and
record address of the stockholder proposing such business,
(iii) the class and number of shares of the capital stock of
the Corporation which are owned beneficially or of record by
the stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person
or persons (including their names) in connection with the
proposal of such business by such stockholder and any
material interest of such stockholder in such business and
(v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such
business before the meeting.
Notwithstanding anything in the By-laws to the
contrary, no business shall be brought before the annual
meeting by a stockholder or conducted at such annual meeting
except in accordance with the procedures set forth in this
Article XII; provided, however, that nothing in this Article
Xll shall be deemed to prelude discussion by any stockholder
of any business properly brought before the annual meeting.
The Chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business
was not properly brought before the meeting in accordance
with the provisions of this Article XII, and any such
business shall not be transacted.
Exhibit 3(b)
BYLAWS
OF
ENTERGY ARKANSAS, INC.
AS OF OCTOBER 5, 1998
ARTICLE I
OFFICES
The principal business office of the Company shall be in
Little Rock, Arkansas. The Company may also have offices at
such other places as the Board of Directors may from time to
time designate.
ARTICLE II
SHAREHOLDERS
Section 1. PLACE OF HOLDING MEETINGS. Meetings of the
shareholders shall be held in the offices of the Company in
the City of Little Rock, State of Arkansas; or may be held at
other places in or outside the State of Arkansas.
Section 2. ANNUAL MEETINGS OF SHAREHOLDERS - ELECTION
OF DIRECTORS. The annual meeting of the shareholders for the
election of directors and the transaction of such other
corporate business as may properly come before such meeting,
shall be held on the third Wednesday in May unless such day
is a legal holiday, in which case such meeting shall be held
on the first day thereafter which is not a legal holiday,
unless the shareholders elect to hold the annual meeting on a
substitute date.
At each annual meeting the shareholders entitled to vote
shall elect directors in the number provided by these Bylaws
to serve until the next annual meeting, unless there is
arrearage in the payment of preferred stock dividends as
hereinafter stated. If dividends payable on any shares of the
Preferred Stock at any time outstanding shall be in arrears
in an amount equal to or greater than the aggregate dividends
accumulated on the outstanding Preferred Stock in any period
of twelve (12) months, then the holders of the Preferred
Stock, voting separately from the holders of the Common
Stock, shall be entitled to elect the smallest number of
directors necessary to constitute a majority of the then
authorized number of directors, and the remaining directors
shall be elected as first provided in this section; provided
that if and when accumulated and unpaid dividends on the then
outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment, then at the next annual
meeting of the shareholders, or earlier at a special meeting
of the shareholders duly convened for such purpose, new
directors may be elected by the vote of the shareholders of
the Company as first provided in this section.
In the event of the failure to hold the annual meeting
of shareholders, or should be shareholders fail to elect
directors at the annual meeting, then in either case the
director for the ensuing year may be elected at a special
meeting of the shareholders called for such purpose.
At each annual meeting the shareholders may transact
such other corporate business as may properly come before
said meeting.
Section 3. SPECIAL MEETING OF SHAREHOLDERS. Special
meetings of the shareholders entitled to vote upon any
matters may be held upon call of the Chairman of the Board,
the President, the Board of Directors, the Executive
Committee, or shareholders holding at least ten percent (10%)
of all the votes entitled to be cast on any issue proposed to
be considered at the proposed special meeting, provided that
such shareholders deliver to the Company's secretary one or
more written demands for the meeting describing the purpose
or purposes for which it is to be held. Notice of special
meetings shall be given in regular manner.
Section 4. NOTICE OF SHAREHOLDERS MEETINGS. Written or
printed notice of all meetings of shareholders stating the
date, time, and place of the meeting and in the case of a
special meeting a description of the purpose or purposes for
which the meeting is being called shall be mailed by either
the Chairman of the Board, the President, or the Secretary to
each shareholder of record entitled to vote at his last known
post office address, at least ten (10) days and no more than
sixty (60) days before the meeting except as otherwise
provided by law. Such notice shall be deemed to be given when
deposited in the mail, postage prepaid, directed to the
shareholder at his post office address as it appeals on the
records of the Company. For any meeting of shareholders
called to consider matters on which all the shareholders are
not entitled to vote, notice need not be sent to those
shareholders who are not entitled to vote at such meeting but
only to those shareholders of the class or classes entitled
to vote.
Section 5. QUORUM; VOTE REQUIRED FOR ACTION. A
majority of the votes entitled to be cast by the shareholders
of the Company representing a separate voting group must be
present in person or by proxy at each meeting of the
shareholders to constitute a quorum. A majority of the votes
cast by a voting group shall decide every question or matter
submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Amended and Restated
Articles of Incorporation.
Section 6. ADJOURNMENTS. Any meeting of shareholders,
annual or special, may adjourn from time to time to reconvene
at the same or some other place, and notice. need not be
given of any such adjourned meeting if the time and place
thereof are announced at the meeting in which the adjournment
is taken. At the adjourned meeting the Company may transact
any business which might have been transacted at the original
meeting. If after the adjournment a new record date is fixed
for the adjourned meeting, which must be done if the meeting
is adjourned to a date more than one hundred twenty (120)
days after the date fixed for the original meeting, a notice
of the adjourned meeting shall be given to each shareholder
of record entitled to vote at the meeting in the manner
provided by these Bylaws.
Section 7. OFFICERS FOR SHAREHOLDERS MEETINGS.
Meetings of. shareholders shall be presided over by (in the
order following) the Chairman of the Board, the President, or
such officer as may be named for the purpose by resolution of
the Board of Directors, or if no such officer is present, by
a Chairman elected at the meeting. The Secretary of the
Company shall act as Secretary of such meeting, if present.
In his absence or incapacity to serve, the presiding Chairman
may appoint a Secretary.
Section 8. PROXIES. Each shareholder entitled to vote
at a meeting of shareholders may authorize another person or
persons to act for him by proxy, but no such proxy shall be
voted or acted upon after eleven (11) months from its date,
unless the proxy provides for longer period. A duly executed
proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with
an interest sufficient at law to support an irrevocable
power. A shareholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or
by filing an instrument in writing revoking the proxy or
another duly executed proxy bearing a later date with the
Secretary of the Company. Proxies shall be dated and shall be
filed with the records of the meeting.
Section 9. FIXING DATE FOR DETERMINATION OF
SHAREHOLDERS OF RECORD. In order that the Company may
determine the shareholders entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, or
to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to
exercise any rights in respect to any change, conversion, or
exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record
date, which shall not be more than seventy (70) days nor less
than ten (10) days before the date of such meeting nor more
than seventy (70) days prior to any other action. If no
record date is flexed: (i) the record date for determining
shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day
next preceding the day on which notice is given or, if notice
is waived, at the close of business on the day next preceding
the day on which the meeting is held; and (ii) the record
date for determining shareholders for any other purpose shall
be at the close of business on the date on which the Board of
Directors adopts a resolution relating thereto. A
determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting; provided, however, the Board of
Directors may fix a new record date for the adjourned
meeting, which it must do if the meeting is adjourned to a
date more than one hundred and twenty (120) days after the
date fixed for the original meeting.
Section 10. LIST OF SHAREHOLDERS ENTITLED TO VOTE.
After fixing the record date for a meeting, the Secretary
shall prepare an alphabetical listing of the names of all of
the shareholders of the Company who are entitled to notice of
the shareholders' meeting, which list must be arranged by
voting group (and within each voting group by class or series
of shares) and must show the address of and number of shares
held by each such shareholder. The shareholders list must be
made available for inspection by any shareholder, beginning
two (2) business days after notice of the meeting is given
for which the list was prepared and continuing through the
meeting, at the Company's main office or at a place
identified in the meeting notice in the city where the
meeting will be held. A shareholder, his agent, or attorney
shall be entitled on written demand to inspect and to copy
the list during regular business hours and during the period
it is available for inspection. The Company shall make the
shareholders list available at the meeting, any shareholder,
his agent, or attorney shall be entitled to inspect the list
at any time during the meeting or any adjournment thereof.
Section 11. INFORMAL ACTION BY SHAREHOLDERS. Unless
otherwise restricted by law or the Amended and Restated
Articles of Incorporation, any action required or permitted
to be taken at any annual or special meeting of the
shareholders may be taken without a meeting, without prior
notice and without a vote, if one or more written consents,
setting forth the action taken, shall be signed by the
holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled
to vote thereon were present and voted. All written consents
executed by one or more shareholders shall be included in the
minutes or filed with the corporate records. Prompt notice of
the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those
shareholders who have not consented in writing. In addition,
if it is required by law that notice of the proposed action
be given to nonvoting shareholders and the action is to be
taken by written consent of the voting shareholders, the
Company must give its nonvoting shareholders written notice
of the proposed action at least ten (10) days before the
action is taken.
ARTICLE III
DIRECTORS
Section 1. NUMBER; GENERAL DUTIES; TERM; ELIGIBILITY;
AND REMOVAL. The shareholders or the Board of Directors
shall have the power from time to time to fix the number of
directors of the Company, provided that the number so fixed
shall not be less than three (3) or more than fifteen (15).
Ownership of capital stock of the Company shall not be a
prerequisite to serving as a Director.
Any Director, who is also an officer (except the chief
executive officer or a former chief executive officer) or
employee of the Company, shall not be eligible for re-
election after the date of his retirement as an officer or
employee of the Company; however, he shall be permitted to
complete the regular term of the office as a Director which
he is serving at the time of his retirement. A Director who
is or has previously been the Company's chief executive
officer at the time of his retirement from active employment
with the Company, or a Director who is not an officer or
employee of the Company, shall not be eligible for re-
election after his seventieth birthday, but he shall be
permitted to complete the regular term of office as a
Director which he is serving at the time he reaches his
seventieth birthday.
Directors shall continue to serve until their successors
are duly elected and qualified, unless prevented by death,
resignation or inability to serve or by removal as provided
in the Amended and Restated Articles of Incorporation.
Section 2. QUORUM: VOTE REQUIRED FOR ACTION. A majority
of the directors shall constitute a quorum at any meeting,
except when otherwise provided by law; provided, however,
that a majority of the directors present may adjourn any
meeting, from time to time, and the meeting may be held, as
adjourned, without further notice; if at least one-third
(1/3) of the directors are present at the meeting. Except in
cases in which the Amended and Restated Articles of
Incorporation or these Bylaws provide otherwise the vote of a
majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.
Section 3. ORGANIZATION. Meetings of the Board of
Directors shall be presided over by the Chairman of the
Board, if any, or in his absence by a Vice Chairman of the
Board, if any, or in his absence by the President, or in
their absence, by a Chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his
absence the Chairman of the meeting may appoint any person to
act as secretary of the meeting.
Section 4. MEETINGS AND NOTICES OF MEETINGS. Meetings
of the Board of Directors shall be held at the times fixed by
resolution of the Board, or upon call of the Chairman of the
Board, the President, or any two directors, and may be held
at any place within or without the State of Arkansas. The
Secretary, or an officer performing his duties, shall give
reasonable notice (which must be at least two (2) days' prior
notice) of all meetings of the directors called, provided
that a meeting may be held without notice immediately after
the annual election, and notice need not be given of regular
meetings held at times fixed by resolution of the Board.
Meetings may be held at any time without notice if all the
directors are present, or if those not present waive notice
either before or after the meeting.
Section 5. FEES AND COMPENSATION OF DIRECTORS. The
Board of Directors shall have the power to authorize the
payment of compensation to the directors for services to the
Company, including fees for attendance at meetings of the
Board of Directors. of the Executive Committee, and all other
committees, and to determine the amount of such compensation
and fees.
Section 6. ELECTION OF OFFICERS. The Board of Directors
shall elect officers of the Corporation as designated in
Article V of these bylaws.
Section 7. SALARIES OF OFFICERS. The Board of Directors
shall fix salaries and compensation to be paid to officers of
the Company or shall designate such person who shall be
authorized to fix salaries and compensation to be paid to
officers of the Company.
Section 8. VACANCIES. Vacancies occurring among the
directors shall be filled as provided in the Amended and
Restated Articles.
Section 9. INFORMAL ACTION BY DIRECTORS. Unless
otherwise restricted by the Amended and Restated Articles of
Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of
Directors, or any committee thereof, may be taken without a
meeting if all members of the Board or such committee, as the
case may be, consent thereto in writing, and the writing or
writings are filed with the minutes or proceedings of the
Board or committee. Action taken under this section of the
Bylaws is effective when the last director signs the consent,
unless the consent specifies a different effective date.
Section 10. TELEPHONIC MEETINGS PERMITTED. Members of
the Board of Directors, or any committee designated by the
Board, may participate in a meeting of such Board or
committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can simultaneously hear each
other, and participation in a meeting pursuant to this Bylaw
shall constitute presence in person at such meeting.
Section 11. GENERAL POWERS OF DIRECTORS. The Board of
Directors shall have the power to manage the business of the
Company and, subject to the restrictions imposed by law and
by the Amended and Restated Articles of Incorporation, may
exercise all the powers of the Company.
Section 12. CHAIRMAN OF THE BOARD. The Board of
Directors shall designate one of its members as Chairman of
the Board. The position of Chairman of the Board is not an
officer position; therefore, the Chairman of the Board need
not be an officer of the Corporation.
ARTICLE IV
COMMITTEES
Section 1. EXECUTIVE COMMITTEE. The Board of Directors
may, by resolution passed by a majority of the whole Board of
Directors, appoint an Executive Committee of not less than
two or more than four members, to serve at the pleasure of
the Board of Directors. Such Committee shall have and may
exercise all the powers of the Board of Directors during the
intervals between its meetings, which may be lawfully
delegated, subject to such limitations which may be provided
by resolution of the Board of Directors.
Section 2. OTHER COMMITTEES. The Board of Directors may
by resolution appoint other committees of directors to
perform such duties and take such action as may be lawfully
delegated and as the Board may authorize and direct. The
Board shall have the power at any time to change the
membership of such committees, to fill vacancies in committee
personnel and rescind the power and authority of such
committees.
Section 3. MINUTES OF MEETINGS. All committees shall
keep regular minutes of their proceedings and report the same
to the Board of Directors.
Section 4. EX-OFFICIO MEMBERS. The Chairman of the
Board of Directors and the President of the Company shall
both be ex-officio members of each duly appointed committee.
Section 5. COMMITTEE RULES. Unless the Board of
Directors otherwise provides, each committee designated by
the Board of Directors may make, alter, and repeal rules for
the conduct of its business. In the absence of such rules,
each committee shall conduct its business in the same manner
as the Board of Directors conduct its business pursuant to
Article III of these Bylaws.
ARTICLE V
OFFICERS
Section 1. The Board of Directors shall elect
individuals to occupy at least three executive offices:
President, Secretary and Treasurer. In its discretion, the
Board of Directors may elect individuals to occupy other
executive offices, including Chief Executive Officer, Vice
Chairman, Chief Operating Officer, Vice President and such
other executive offices as the Board shall designate.
Officers shall be elected annually and shall hold office
until their respective successors shall have been duly
elected and qualified, or until such officer shall have died
or resigned or shall have been removed by majority vote of
the whole Board. To the extent permitted by the laws of the
State of Arkansas, individuals may occupy more than one
office.
Section 2. PRESIDENT. The President shall perform
duties incident to the office of a president of a corporation
and such other duties as from time to time may be assigned to
him by the Board of Directors, by the Executive Committee or,
if the Board has elected a Chief Executive Officer and if the
Chief Executive Officer is not the President, by the Chief
Executive Officer.
Section 3. VICE PRESIDENTS. Each Vice President shall
have such powers and shall perform such duties as from time
to time may be conferred upon or assigned to him by the Board
of Directors or the Executive Committee, or as may be
delegated to him by the President or the Chief Executive
Officer.
Section 4. SECRETARY. The Secretary shall keep the
minutes of all meetings of the stockholders and of the Board
of Directors in books provided for the purpose; shall see
that all notices are duly given in accordance with the
provisions of law and these bylaws; shall be custodian of the
records and of the corporate seal of the Corporation; shall
see that the corporate seal is affixed to all documents the
execution of which under the seal is duly authorized, and
when the seal is so affixed he may attest the same; may sign,
with the Chairman of the Board, a Vice Chairman, the
President or a Vice President, certificates of stock of the
Corporation; and, in general, shall perform all duties
incident to the office of a secretary of a corporation, and
such other duties as from time to time may be assigned to the
Secretary by the Chief Executive Officer, the Chairman of the
Board, a Vice Chairman, the President, the Board of Directors
or the Executive Committee.
The Secretary shall also keep, or cause to be kept, a
stock book, containing the name, alphabetically arranged, of
all persons who are stockholders of the Corporation, showing
their places of residence, the number of shares held by them
respectively, and the time when they respectively became the
owners thereof.
Section 5. TREASURER. The Treasurer shall have charge
of and be responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause
to be deposited, in the name of the Corporation, all moneys
or other valuable effects in such banks, trust companies or
other depositories as shall, from time to time, be selected
by the Board of Directors. The Treasurer may endorse for
collection on behalf of the Corporation, checks, notes and
other obligations; may sign receipts and vouchers for
payments made to the Corporation singly or jointly with
another person as the Board of Directors may authorize; may
sign checks of the Corporation and pay out and dispose of the
proceeds under the direction of the Board; shall render or
cause to be rendered to the Chairman of the Board, the
President and the Board of Directors, whenever requested, an
account of the financial condition of the Corporation; may
sign, with the Chairman of the Board, a Vice Chairman, the
President or a Vice President, certificates of stock of the
Corporation; and, in general, shall perform all the duties
incident to the office of a treasurer of a corporation, and
such other duties as from time to time may be assigned to him
by the Chairman of the Board, a Vice Chairman, the President,
the Board of Directors or the Executive Committee.
Section 6. SUBORDINATE OFFICERS. The Board of Directors
may appoint such assistant secretaries, assistant treasurers
and other officers as it may deem desirable. Each such
officer shall hold office for such period, have such
authority and perform such duties as the Board of Directors
may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove such officers and
to prescribe the powers and duties thereof.
Section 7. VACANCIES; ABSENCES. Any vacancy in any of
the above offices may be filled for the unexpired portion of
the term by the Board of Directors at any regular or special
meeting. Except when the law requires the act of a
particular officer, the Board of Directors or the Executive
Committee, whenever necessary, may, in the absence of any
officer, designate any other officer or properly qualified
employee, to perform the duties of the one absent for the
time being, and such designated officer or employee shall
have, when so acting, all the powers herein given to such
absent officer.
Section 8. RESIGNATIONS. Any officer may resign at any
time by giving written notice of such resignation to the
Board of Directors, the Chairman of the Board, a Vice
Chairman, the President or the Secretary. Unless otherwise
specified therein, such resignation shall take effect upon
written receipt thereof by the Board of Directors or by such
officer.
ARTICLE VI
CAPITAL STOCK
Section 1. CERTIFICATES OF STOCK. Certificates of stock
of the Company must bear the corporate seal of the Company
and shall be signed by the President or a Vice President and
by the Treasurer or an Assistant Treasurer, the Secretary, or
an Assistant Secretary of the Company, but when any such
certificate is signed by a Transfer Agent or Registrar, the
signature of any such corporate officer and the corporate
seal upon such certificate may be facsimiles, engraved or
printed. The stock of the Company shall be transferable or
assign able on the books of the Company by the holders in
person or by attorney on the surrender of the certificates
therefore duly endorsed. The Board 3f Directors may appoint
one or more transfer agents and registrars of the stock.
Section 2. LOST, STOLEN OR DESTROYED STOCK
CERTIFICATES: ISSUANCE OF NEW CERTIFICATES. The company may
issue a new certificate of stock in the place of any
certificate theretofore issued by it, alleged to have been
lost, stolen, or destroyed, and the Company may require the
owner of the lost, stolen, or destroyed certificate, or his
legal representative, to give the Company a bond sufficient
to indemnify it against any claim that may be made against it
on account of the alleged loss, theft, or destruction of any
such certificate or the issuance of such new certificate.
Section 3. CLASSES OF STOCK - DESIGNATION. If the
Company shall be authorized to issue more than one class of
stock or more than one series of any class, the designations,
preferences and relative, participating, option or other
special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such
preferences or rights shall be set forth in full or
summarized on the face or back of the certificate which the
Company shall issue to represent such class or series of
stock, provided, that except as otherwise provided by
Arkansas law, in lieu of the foregoing requirements there may
be set forth on the face or back of the certificate which the
Company shall issue to represent such class or series of
stock, a statement that the Company will furnish without
charge to each shareholder who so requests the designations,
preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such
preferences or rights.
Section 4. DIVIDENDS. The directors may declare
dividends upon the capital stock of the Company as and when
they deem advisable and according to law.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS
EMPLOYEES AND AGENTS
Section 1. RIGHT TO INDEMNIFICATION. Each person
(including here and hereinafter, the heirs, executors,
administrators, or estate of such person) (1) who is or was a
director or officer of the Company, (2) who is or was an
employee of the Company other than an officer, (3) who is or
was an agent of the Company and whom the Corporation has
expressly agreed to indemnify, or (4) who is or was serving
at the request of the Company as a director, officer or
employee of another corporation, partnership, joint venture,
trust or other enterprise shall be indemnified by the Company
as of right to the fullest extent permitted or authorized by
the Arkansas Business Corporation Act of 1987 (sometimes
referred to herein as the "1987 Act") or subsequent
legislation (but in the case of any such subsequent
legislation, only to the extent that it permits the Company
to provide broader indemnification rights than permitted
prior to such legislation), against any liability or expense,
awarded or assessed against him, or incurred by him, or paid
or to be paid by him in settlement thereof, in his capacity
as such director, officer, employee or agent,. or arising out
of his status as such director, officer, employee, or agent,
including expenses and amounts paid by him in settlement of
any proceeding asserted or brought against him by or in the
right of any person, including the Company, in any such
capacity or arising out of his status as such. Each director,
officer, employee, or agent of the Company to whom
indemnification rights under this Article VII have been or
may be granted is referred to herein as an "Indemnified
Person".
The Board of Directors may, upon approval of such
director, officer, employee, or agent of the Company,
authorize the Company's counsel to represent such person in
any proceeding, whether or not the Company is a party to such
proceeding.
Notwithstanding the foregoing, except as specified in
Section 3 of this Article, the Company shall indemnify an
Indemnified Person in connection with a proceeding (or part
thereof) initiated by such Indemnified Person only if
authorization for such proceeding (or part thereof) was not
denied by the Board of Directors of the Company prior to
sixty (60) days after receipt by the Company of written
notice thereof from such person.
Section 2. ADVANCEMENT OF EXPENSES. Costs, charges and
expenses incurred by a director, officer or employee in
defending a proceeding shall be paid by the Company to the
fullest extent permitted or authorized by the applicable
Arkansas Act pursuant to Section 1 of this Article or
subsequent legislation (but in the case of any such
subsequent legislation, only to the extent that it permits
the Company to provide broader rights to advance costs,
charges and expenses than permitted prior to such
legislation) in advance of the final disposition of such
proceeding, within fourteen (14) days after the receipt by
the Company of a written statement from such director,
officer or employee requesting such an advancement together
with an undertaking, if required by law at the time of such
advance, by or on behalf of the person seeking such advance,
to repay all amounts so advanced in the event that it shall
ultimately be determined that such person is not entitled to
be indemnified by the Company as authorized in this Article.
In the case of agents of the Company, advancements of costs,
charges and expenses may be made upon such other terms and
conditions as the Board of Directors may deem appropriate.
Section 3. PROCEDURE FOR INDEMNIFICATION AND OBTAINING
ADVANCEMENT OF EXPENSES. Any indemnification of liabilities
and expenses or advancement of expenses under this Article
shall be made promptly, and, in the case of indemnification,
in any event within sixty (60) days of receipt by the Company
of the written request of the Indemnified Person, or, in the
case of advancement of expenses, as set forth in Section 2 of
this Article. If the Company denies such request in whole or
in part or if no disposition thereof is made within the
applicable time limit or if the Company otherwise fails to
provide indemnification or advancement as provided for in
this Article, and despite any contrary determination by or on
behalf of the Company in the specific case, the Indemnified
Person may enforce his right to indemnification or
advancement, or both, in an appropriate proceeding brought in
a court of competent jurisdiction and shall be entitled to
such indemnification or advancement, or both, as the court
shall by order direct. Such person's reasonable expenses in
obtaining court-ordered indemnification or. advancement shall
be reimbursed by the Company. No such contrary determination
by or on behalf of the Company shall be a defense to such
proceeding or create a presumption. that the claimant has not
met the applicable standard of conduct, if any, for
indemnification or for an advancement pursuant to Section 1
or Section 2 of this Article. It shall be a defense to any
such action that the claimant has not met the applicable
standard of conduct, if any, pursuant to Section 1 or Section
2 of this Article.
Section 4. OTHER RIGHTS: CONTINUATION OF RIGHT TO
INDEMNIFICATION AND ADVANCEMENTS. The rights to
indemnification and to advancements provided by this Article
shall not be deemed exclusive of any other or further rights
to which a person seeking indemnification or advancements may
be entitled under any law (common or statutory), agreement,
vote of shareholders or disinterested directors or otherwise,
either as to action taken or omitted to be taken in his
official capacity or as to action taken or omitted to be
taken in another capacity while holding office or while
employed by or acting as agent for the Company, and shall
continue as to an Indemnified Person who has ceased to be a
director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person. All rights to indemnification and to advancements of
expenses under this Article shall be deemed to be a contract
between the Company and each Indemnified Person. Any repeal
or modification of this Article or any repeal or modification
of relevant provisions of the applicable Arkansas Business
Corporation Act or any other applicable law shall not m any
way diminish any right to indemnification or to advancement
of expenses of such Indemnified Person, or the obligations of
the Company, arising hereunder for claims relating to matters
occurring prior to such repeal or modification.
Section 5. INSURANCE AND OTHER ARRANGEMENTS. The
Company may maintain insurance, at its expense, to protect
itself and/or any person who is or was or has agreed to
become a director, officer, employee or agent of the Company,
or is or was serving at the request of the Company as a
director, officer, employee or agent of another company,
partnership, joint venture, trust or other enterprise against
any liability asserted against him or incurred by him or on
his behalf in any such capacity, or arising out of his status
as such, whether or not the Company would have the legal
power to directly indemnify him against such liability. The
Company may also obtain a letter of credit, act as self-
insurer, create a reserve, trust, escrow, cash collateral or
other fund or account, enter into indemnification agreements,
pledge or grant a security interest in any asset or
properties of the Company, or use any other mechanism or
arrangement whatsoever in such amounts, at such costs, and
upon such other terms and conditions as the Board of
Directors shall deem appropriate for the protection of any or
all such persons.
Section 6. SEPARABILITY. If this Article or any portion
hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the Company shall be
nevertheless indemnify each director and officer, and each
employee and agent of the Company as to whom the Company has
agreed to grant indemnity, as to liabilities and expenses,
and amounts paid or to be paid in settlement with respect to
any proceeding, including an action by or in the right of the
Company, to the full extent permitted by any applicable
portion of this Article that shall not have been invalidated
and to the full extent permitted by applicable law.
Section 7. TERMS. For purposes of this Article and in
each case without limiting the generality thereof, the term
"other enterprises" includes employee benefit plans; the term
"expenses" includes reasonable counsel fees; the term
"liability" includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed
on a person with respect to any employee benefit plan), and
expenses actually and reasonably incurred with respect to a
proceeding; the term "proceeding" includes any threatened,
pending, or completed action, suit, or other type of
proceeding, whether civil, criminal, administrative, or
investigative; and the term "serving at the request of the
Company" includes any service as a director, officer,
employee or agent of the Company that imposes duties on or
involves services by such persons, including duties relating
to an employee benefit plan and its participants or
beneficiaries.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 1. DEPOSITARIES. The Board of Directors is
authorized to select such depositaries as it shall deem
proper for the funds of the Company, or may authorize the
proper officers of the Company to do so. Checks and drafts
against such deposited funds shall be signed and
countersigned by officers or persons to be specifically
specified by the Board of Directors.
Section 2. WAIVERS. Whenever under the provisions of
these Bylaws or of any law the shareholders or directors are
authorized to hold any meeting or take any action after
notice or after the lapse of any prescribed period of time,
such meeting or action may be held or taken without notice
and without such lapse of time, on written waiver of such
notice and lapse of time signed by every person entitled to
such notice who did not properly receive such notice or by
his attorney or attorneys thereunto authorized, either before
or after the meeting or action to which such notice relates.
Attendance of a person at a meeting shall constitute a waiver
of notice of such meeting, unless the person at the beginning
of the meeting objects to holding the meeting or transacting
business at the meeting, and with respect to directors does
not vote for or assent to the action taken. In addition, with
respect to shareholders, attendance of a person at a meeting
shall constitute a waiver of objection to consideration of a
particular matter at the meeting that is not within the
purpose or purposes described in the meeting notice, unless
the person objects to considering the matter when it is
presented. All waivers of notice shall be filed with the
minutes of the meeting.
Section 3. EXECUTION OF CHECKS, NOTES, ETC. All checks
and drafts on the Company's bank accounts and all bills of
exchange, promissory notes, acceptances, obligations and
other instruments for the payment of money shall be signed by
the President or any Vice President and by the Treasurer or
any Assistant Treasurer, or shall be signed by such other
officer or officers, person or persons, as shall be thereunto
authorized by the Board of Directors or the Executive
Committee, or shall be signed by such officer or officers,
person or persons, as shall be thereunto authorized in the
indenture relating to a security issued by the Company
provided that when specifically authorized by the Board of
Directors, the signature of any corporate officer or other
person and the corporate seal upon instruments described
above may be facsimile, engraved or printed.
Section 4. CORPORATE SEAL. The corporate seal of the
Company shall be in such form as required by law and as the
Board of Directors shall prescribe. The seal on any corporate
obligation for the payment of money may be a facsimile,
engraved or printed.
Section 5. DIRECTORS EMERITUS AND ADVISORY DIRECTORS.
Any individual who shall have served as a Director of this
Company may by action of either the shareholders or the Board
of Directors be declared to be a Director Emeritus for the
remainder of his natural life as recognition of the past
services rendered to the Company. A Director Emeritus, as
such, shall not have the right to vote at meetings of the
Board of Directors. A Director Emeritus shall receive from
the Company such remuneration as shall be fixed by the Board
of Directors.
Any individual who shall have served as a Director of
this Company may by action of either the shareholders or the
Board of Directors be declared to be an Advisory Director who
shall serve for a term not exceeding one (1) year from the
date of his election. An Advisory Director, as such, shall
not have the right to vote at meetings of the Board of
Directors. An Advisory Director shall receive from the
Company such remuneration as shall be fixed by the Board of
Directors.
Section 6. INSPECTION OF BYLAWS. A copy of the Bylaws,
with all amendments thereto, shall at all times be kept in a
convenient place at the main office of the Company, and shall
be open for inspection to all shareholders during normal
business hours.
Section 7. INTERESTED DIRECTORS AND OFFICERS: QUORUM.
No contract or transaction between the Company and one or
more of its directors or officers, or between the Company and
any other company, partnership, association, or other
organization in which one or more of its directors or
officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason,
or solely because the director or officer is present at or
participates in the meeting of the Board or committee thereof
which authorizes the contract or transaction, or solely
because his or their votes are counted for such purposes, if:
(l) the material facts as to his relationship or interest and
as to the contract or transaction are disclosed or known to
the Board of Directors or the committee, and the Board or
committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the
disinterested directors; provided, however, that the contract
or transaction may not be authorized, approved, or ratified
by a single director; or (2) the material facts as to his
relationship or interest and as to the contract or
transaction are disclosed or are known to the shareholders
entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by a vote of the
shareholders; or (3) the contract or transaction is fair to
the Company. If a majority of the disinterested directors
vote to authorize, approve, or ratify the contract or
transaction, a quorum shall be deemed present for purpose of
taking action under this Section 7. If the contract or the
transaction is approved by shareholders, the shares owned by
or voted under the control of an interested director or an
interested company, partnership, association, or other
organization in which one or more of the Company's directors
or officers are directors or officers, or have a financial
interest, shall not be counted in the vote of shareholders.
The vote of such shares, however, shall be counted in
determining whether the transaction or contract is approved
under the Amended and Restated Articles of Incorporation or
the Arkansas Business Corporation Act of 1981. A majority of
the shares that are entitled to be counted in a vote on the
transaction or contract under this Section 7 constitutes a
quorum for the purpose of taking action under this Section 7.
Section 8. FORM OF RECORDS. Any records maintained by
the Company in the regular course of its business, including
a stock ledger, books of account, and minute books, may be
kept on, or by in the form of, punch cards, magnetic tape,
photographs, microphotographs, or any other information
storage device, provided that the records so kept can be
converted into clearly legible form within a reasonable time.
The Company shall so convert any records so kept upon the
request of any person entitled to inspect the same.
Section 9. AMENDMENT OF BYLAWS. Except as otherwise
provided by law and the Articles of Incorporation, these
Bylaws may be amended, changed or altered by either the
shareholders or Board of Directors at a duly convened
meeting, the notice of which includes notice of the proposed
amendment, change or alteration.
Exhibit 3(c)
BYLAWS
OF
ENTERGY GULF STATES, INC.
AS OF OCTOBER 5, 1998
ARTICLE I.
Name.
The name of this Corporation shall be ENTERGY GULF
STATES, INC.
ARTICLE II.
Shareholders' Meetings.
All meetings of the Shareholders shall be held at a
place and time to be set either by the Shareholders or by the
Board of Directors. With or without motion, the Chairman of
any meeting of the Shareholders may appoint Inspectors and
Tellers for such meeting who shall examine into the
qualifications of the Shareholders present in person or
represented at the meeting by proxy, report the shares
represented at the meeting and tabulate the vote on such
matters as may come before the meeting.
ARTICLE III.
Annual Meeting.
The Annual Meeting of the Shareholders of this
Corporation shall be held on a date selected either by the
Shareholders or by the Board of Directors
ARTICLE IV.
Special Meetings.
Special Meetings of the Shareholders of this Corporation
shall be held whenever called by the Chairman of the Board of
Directors, the Vice Chairman, the President, a Vice President
or a majority of the Board of Directors, or whenever the
holder or holders of one-tenth (1/10) of the shares of the
capital stock issued and outstanding and entitled to vote
shall make written application therefor to the Secretary or
an Assistant Secretary, stating the time and purpose of the
meeting applied for. Special Meetings of the Shareholders
shall also be held following the accrual or termination of
the right of the preferred stock of the Corporation, voting
as a class, to elect the smallest number of Directors of this
Corporation necessary to constitute a majority of the members
of the Board of Directors, whenever requested to be called in
the manner provided in Paragraph 6 of Article VI of the
Restated Articles of Incorporation of the Corporation as
amended.
ARTICLE V.
Notice of Shareholders' Meetings.
Written or printed notice of all Shareholders' Meetings,
stating the time and place, and, in the case of Special
Meetings, the purpose or purposes for which such meetings are
called, shall be delivered by the Secretary or an Assistant
Secretary, by mail, to each Shareholder of record, having
voting power in respect of the business to be transacted
thereat, at his or her registered address, at least ten (10)
and not more than sixty (60) days prior to the date of the
meeting, and the person giving such notice shall make
affidavit in relation thereto; provided that such notice
shall be deemed to be delivered when deposited in the United
States mail addressed to the Shareholder at his address as it
appears on the stock transfer books of the Corporation, with
postage thereon prepaid, and further provided that notice of
any such meeting shall be deemed to be sufficiently delivered
to any Shareholder who, while the provisions of the Trading
with the Enemy Act (Public Act No. 91 of the Sixty-fifth
Congress of the United States of America, as now or hereafter
amended) shall be operative, shall appear from the stock
books to be or shall be known to the Corporation to be an
"enemy" or "ally of enemy" as defined in the said Act and
whose address appearing on such stock books is outside the
United States, or the mailing to whom of notice shall at the
time be prohibited by any other law of the United States of
America or by any executive order or regulation issued or
promulgated by any officer or agency of the United States of
America (a) if, at least ten (10) days prior to the date of
the meeting, a copy of the notice of the meeting shall be
mailed to any person or agency who by any such law, order or
regulation shall have been duly designated to receive such
notice or duty designated or appointed as custodian of the
property of such Shareholder; or (b) if a brief notice of
such meeting, including, in the case of a Special Meeting,
either a brief statement of the objects for which such
meeting is called or a statement as to where there may be
obtained a copy of a written notice containing a statement of
such objects, shall be published by the Corporation at least
once, not less than ten (10) days before the meeting in a
daily newspaper published in the English language and of
general circulation in the City of Beaumont, Texas.
Any meeting at which all Shareholders having voting
power in respect of the business to be transacted thereat are
present, either in person or represented by proxy, or of
which those not present have waived notice in writing, shall
be a legal meeting for the transaction of business,
notwithstanding that notice has not been given as herein
before provided.
ARTICLE VI.
Waiver of Notice.
Notice of any Shareholders' Meeting may be waived by any
Shareholder and the presence at any meeting, either in person
or by proxy, of a Shareholder having voting power in respect
of the business to be transacted thereat shall be deemed as
to such Shareholder a waiver of notice of the meeting.
ARTICLE VII.
Quorum.
At any meeting of the Shareholders, a majority of the
shares of capital stock issued and outstanding and entitled
to vote in respect of the business to be transacted thereat,
represented by such Shareholders of record in person or by
proxy, shall constitute a quorum, but a less interest may
adjourn any meeting from time to time and the same shall be
held as adjourned without further notice. When a quorum is
present at any meeting, the vote of the holders of a majority
of the shares of capital stock entitled to vote represented
thereat shall decide all questions brought before such
meeting, unless the question is one upon which by express
provision of law or of the Articles of Incorporation of the
Corporation or of these Bylaws a larger or different vote is
required, in which case such express provision shall govern
and control the decision of such question. The provisions of
this Article are, however, subject to the provisions of
Paragraphs 6 and 13 of Article VI of the Articles of
Incorporation of the Corporation as amended.
ARTICLE VIII.
Proxy and Voting.
The voting power of the respective classes of stock of
the Corporation shall be as provided in Article VI of the
Articles of Incorporation of the Corporation as amended.
Shareholders of record entitled to vote may vote at any
meeting either in person or by proxy in writing, which shall
be filed with the Secretary of the meeting before being
voted. Such proxies shall entitle the holders thereof to vote
at any adjournment of such meeting, but shall not be valid
after the final adjournment thereof or after eleven (11)
months from the date of its execution unless otherwise
provided in the proxy. Each holder of record of stock of the
Corporation of any class shall, as to all matters in respect
of which such class of stock has voting power, be entitled to
one vote for each share of stock of such class standing in
his name on the books of the Corporation.
ARTICLE IX.
Board of Directors.
The Shareholders or the Board of Directors shall have
the power from time to time to fix the number of directors of
the Company, provided that the number so fixed shall not be
less than three (3) or more than fifteen (15).
No person shall be eligible for election or re-election
as a Director of the Company after attaining age seventy (70)
except as otherwise permitted by the Board by special
resolution heretofore adopted. Any Director who retires from
active employment by the Company shall, concurrently with
such retirement, resign as a Director of the Company
The foregoing provisions placing qualifications on the
eligibility of Directors are, however, subject to Paragraphs
6 and 13 of Clause E of Article V~ of the Restated Articles
of Incorporation of the Corporation as amended.
ARTICLE X.
Powers of Directors.
The Board of Directors shall have the entire management
of the business of the Corporation. In the management and
control of the property, business and affairs of the
Corporation, the Board of Directors is hereby vested with all
the powers possessed by the Corporation itself, so far as
this delegation of authority is not inconsistent with the
laws of the State of Texas, with the Articles of
Incorporation of the Corporation or with these Bylaws. The
Board of Directors shall have power to determine what
constitutes net earnings, profits and surplus, respectively,
what amount shall be reserved for working capital and for any
other purposes, and what amount shall be declared as
dividends, and such determination of the Board of Directors
shall be final and conclusive.
ARTICLE XI.
Fees of Directors and Others.
The Board of Directors shall have power to fix and
determine the fee or fees to be paid members of the Board of
Directors or any Committees appointed by the Directors or
Shareholders for attendance at meetings of said Directors or
Committees. Any fees so fixed and determined by the Board of
Directors shall be subject to revision or amendment by the
Shareholders.
ARTICLE XII.
Executive and Other Committees.
The Board of Directors may, by resolution passed by a
majority of the whole Board of Directors, appoint an
Executive Committee of not less than two or more than four
members, to serve at the pleasure of the Board of Directors.
Such Committee shall have and may exercise all the powers of
the Board of Directors during the intervals between its
meetings, which may be lawfully delegated, subject to such
limitations which may be provided by resolution of the Board
of Directors.
The Board of Directors may likewise appoint from its
number or from the Shareholders other Committees from time to
time, the number composing such Committees and the powers
conferred upon the same to be determined by vote of the Board
of Directors.
ARTICLE XIII.
Meetings.
Regular Meetings of the Board of Directors shall be held
at such places within or without the State of Texas and at
such times as the Board by vote may determine from time to
time, and if so determined no notice thereof need be given.
Special Meetings of the Board of Directors may be held at any
time or place, either within or without the State of Texas.
whenever called by the Chairman of the Board of Directors,
the Vice Chairman, the President, a Vice President, the
Secretary, an Assistant Secretary or three or more Directors,
notice thereof being given to each Director by the Secretary
or an Assistant Secretary or officer calling the meeting, or
at any time without formal notice provided all the Directors
are present or those not present have waived notice thereof.
Notice of Special Meetings, stating the time and place
thereof, shall be given by mailing the same to each Director
at his residence or business address at least two days before
the meeting or by delivering the same to him personally or by
telephoning or telegraphing the same to him at his residence
or business address at least one day before the meeting
ARTICLE XIV.
Quorum.
A majority of the Board of Directors shall constitute a
quorum for the transaction of business, but a less number may
adjourn any meeting from time to time and the same may be
held without further notice. When a quorum is present at any
meeting, a majority vote of the members in attendance thereat
shall decide any question brought before such meeting, except
as otherwise provided by law or by these Bylaws
ARTICLE XV.
Officers.
The Board of Directors shall elect individuals to occupy
at least three executive offices: President, Secretary and
Treasurer. In its discretion, the Board of Directors may
elect individuals to occupy other executive offices,
including Chief Executive Officer, Vice Chairman, Chief
Operating Officer, Vice President and such other executive
offices as the Board shall designate. Officers shall be
elected annually and shall hold office until their respective
successors shall have been duly elected and qualified, or
until such officer shall have died or resigned or shall have
been removed by majority vote of the whole Board. To
the extent permitted by the laws of the State of Texas,
individuals may occupy more than one office.
ARTICLE XVI.
Subordinate Officers.
The Board of Directors may appoint such assistant
secretaries, assistant treasurers and other officers as it
may deem desirable. Each such officer shall hold office for
such period, have such authority and perform such duties as
the Board of Directors may prescribe. The Board of Directors
may, from time to time, authorize any officer to appoint and
remove such officers and to prescribe the powers and duties
thereof.
ARTICLE XVII.
Chairman of the Board.
The Board of Directors shall designate one of its
members as Chairman of the Board. The position of Chairman
of the Board is not an officer position; therefore the
Chairman of the Board need not be an officer of the Company.
ARTICLE XVIII.
President.
The President shall perform duties incident to the
office of a president of a corporation and such other duties
as from time to time may be assigned to him by the Board of
Directors, by the Executive Committee or, if the Board has
elected a Chief Executive Officer and if the Chief Executive
Officer is not the President, by the Chief Executive Officer.
ARTICLE XIX.
Vice President.
Each Vice President shall have such powers and shall
perform such duties as from time to time may be conferred
upon or assigned to him by the Board of Directors or the
Executive Committee, or as may be delegated to him by the
President or the Chief Executive Officer.
ARTICLE XX.
Secretary.
The Secretary shall keep the minutes of all meetings of
the stockholders and of the Board of Directors in books
provided for the purpose; shall see that all notices are duly
given in accordance with the provisions of law and these
bylaws; shall be custodian of the records and of the
corporate seal of the Corporation; shall see that the
corporate seal is affixed to all documents the execution of
which under the seal is duly authorized, and when the seal is
so affixed he may attest the same; may sign, with the
Chairman of the Board, a Vice Chairman, the President or a
Vice President, certificates of stock of the Corporation;
and, in general, shall perform all duties incident to the
office of a secretary of a corporation, and such other duties
as from time to time may be assigned to the Secretary by the
Chief Executive Officer, the Chairman of the Board, a Vice
Chairman, the President, the Board of Directors or the
Executive Committee. The Secretary shall also keep, or cause
to be kept, a stock book, containing the name, alphabetically
arranged, of all persons who are stockholders of the
Corporation, showing their places of residence, the number of
shares held by them respectively, and the time when they
respectively became the owners thereof.
ARTICLE XXI.
Treasurer and Controller.
The Treasurer shall have charge of and be responsible
for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in
the name of the Corporation, all moneys or other valuable
effects in such banks, trust companies or other depositories
as shall, from time to time, be selected by the Board of
Directors. The Treasurer may endorse for collection on
behalf of the Corporation, checks, notes and other
obligations; may sign receipts and vouchers for payments made
to the Corporation singly or jointly with another person as
the Board of Directors may authorize; may sign checks of the
Corporation and pay out and dispose of the proceeds under the
direction of the Board; shall render or cause to be rendered
to the Chairman of the Board, the President and the Board of
Directors, whenever requested, an account of the financial
condition of the Corporation; may sign, with the Chairman of
the Board, a Vice Chairman, the President or a Vice
President, certificates of stock of the Corporation; and, in
general, shall perform all the duties incident to the office
of a treasurer of a corporation, and such other duties as
from time to time may be assigned to him by the Chairman of
the Board, a Vice Chairman, the President, the Board of
Directors or the Executive Committee.
ARTICLE XXII.
Resignations.
Any officer may resign at any time by giving written
notice of such resignation to the Board of Directors, a
Chairman of the Board, the Vice Chairman, the President or
the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon written receipt thereof by
the Board of Directors or by such officer.
ARTICLE XXIII.
Vacancies, Absences.
Any vacancy in any of the above offices may be filled
for the unexpired portion of the term by the Board of
Directors at any regular or special meeting. Except when the
law requires the act of a particular officer, the Board of
Directors or the Executive Committee, whenever necessary,
may, in the absence of any officer, designate any other
officer or properly qualified employee, to perform the duties
of the one absent for the time being, and such designated
officer or employee shall have, when so acting, all the
powers herein given to such absent officer.
ARTICLE XXIV.
Capital Stock.
The amount of capital stock, and of each class thereof,
shall be as fixed in the Articles of Incorporation or in any
lawful amendments thereto and the votes of the Corporation
from time to time
ARTICLE XXV.
Certificates of Stock.
Every Shareholder shall be entitled to a certificate or
certificates representing shares of the capital stock of the
Corporation in such form, complying with the law as may be
prescribed by the Board of Directors, duly numbered and
sealed with the corporate seal of the Corporation and setting
forth the number and kind of shares to which such Shareholder
is entitled. Such certificates shall be signed by the
Chairman of the Board of Directors, the Vice Chairman, the
President or a Vice President and by the Secretary or an
Assistant Secretary. The Board of Directors may also appoint
one or more Transfer Agents and/or Registrars for the stock
of any class or classes and may require stock certificates to
be countersigned by one or more of them. If certificates
representing shares of capital stock of this Corporation are
manually signed either by a Transfer Agent or by a Registrar,
the signatures thereon of the Chairman of the Board of
Directors, the Vice Chairman, the President or a Vice
President and the Secretary or an Assistant Secretary of this
Corporation may be facsimiles, engraved or printed. Any
provisions of these Bylaws with reference to the signing of
stock certificates shall include, in cases above permitted,
such facsimile signatures. In case any officer or officers
who shall have signed, or whose facsimile signature or
signatures shall have been used on, any such certificate or
certificates, shall cease to be such officer or officers of
this Corporation, whether because of death, resignation or
otherwise, before such certificate or certificates shall have
been delivered by this Corporation, such certificate or
certificates may nevertheless be adopted by the Board of
Directors of this Corporation and be issued and delivered as
though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or
officers of this Corporation. Any stock certificates bearing
facsimile signatures of officers of this Corporation, as
above provided, may also bear a facsimile of the seal of this
Corporation.
ARTICLE XXVI.
Transfer of Stock.
Shares of stock may be transferred by delivery of the
certificate accompanied either by an assignment in writing on
the back of the certificate or by a written power of attorney
to sell, assign and transfer the same signed by the person
appearing by the certificate to be the owner of the shares
represented thereby. No transfer shall affect the right of
the Corporation to pay any dividend due upon the stock, or to
treat the holder of record as the holder in fact, until such
transfer is recorded upon the books of the Corporation or a
new certificate is issued to the person to whom it has been
so transferred. It shall be the duty of every Shareholder to
notify the Corporation of his post office address.
The Board of Directors shall have power to close the
stock transfer books of this Corporation for a period not
exceeding 50 days preceding the date of any meeting of
Shareholders or the date for payment of any dividend or the
date for the allotment of rights or the date when any change
or conversion or exchange of capital stock shall go into
effect; provided, however, that in lieu of closing the stock
transfer books as aforesaid, the Board of Directors may fix
in advance a date, not exceeding 60 days preceding the date
of any meeting of Shareholders or the date for the payment of
any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital
stock shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of, and
to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any
such allotment or rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital
stock, and in such case only such Shareholders as shall be
Shareholders of record on the date so fixed shall be entitled
to such notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend,
or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of
any stock on the books of this Corporation after any such
record date fixed as aforesaid
ARTICLE XXVII.
Loss of Certificates.
In case of the loss, mutilation or destruction of a
certificate representing shares of stock, a duplicate
certificate may be issued upon such terms as the Board of
Directors may prescribe
ARTICLE XXVIII.
Seal.
The seal of this Corporation shall consist of a
flat-faced circular die with the words and figures "GULF
STATES UTILITIES COMPANY CORPORATE SEAL 1925 TEXAS" cut or
engraved thereon
ARTICLE XXIX.
Books and Records.
Unless otherwise expressly required by the laws of the
State of Texas, the books and the records of the Corporation
may be kept outside of the State of Texas at such place or
places as may be designated from time to time by the Board of
Directors.
ARTICLE XXX.
Amendments.
These Bylaws may be amended, added to, altered or
repealed by the Board of Directors of the Company. In the
event of any such amendment, alteration or repeal of these
Bylaws by the Board of Directors, the notice of the Annual
Meeting of the Shareholders which shall thereafter first be
sent to the Shareholders shall state that the Bylaws have
been so amended, added to, altered or repealed and shall
describe or set forth or be accompanied by statement
describing or setting forth such amendment, addition,
alteration or the text ~f any article which has been
repealed. Notwithstanding anything hereinabove contained,
these Bylaws may be amended, added to, altered or repealed at
any Annual or Special Meeting of the Shareholders by vote in
either case of a majority of the voting power of the shares
of the capital stock issued and outstanding and entitled to
vote in respect thereof, unless the question is one upon
which by express provisions of law or of the Articles of
Incorporation or of these Bylaws a larger or different vote
is required, in which case such express provision shall
govern and control the decision of such question, provided,
however, that notice is given in the call of said meeting
that an amendment, addition, alteration or repeal is to be
acted upon.
ARTICLE XXXI.
Indemnification.
A. The Corporation shall indemnify any person who was or
is a named defendant or respondent or is threatened to be
made a named defendant or respondent in a proceeding (which
shall ;include any threatened, pending or completed action,
suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action,
suit or proceeding, and any inquiry or investigation that
could lead to such an action, suit, or proceeding including
but not limited to any action, suit or proceeding brought by
or in behalf of the Corporation) because the person is or was
a director, officer, or employee of the Corporation, and any
person who, while a director, officer, or employee is or was
serving at the request of the Corporation as a director,
officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another domestic or foreign
corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan, or other enterprise, or is or
was a nominee or designee of the Corporation who is or was
serving at the request of the Corporation as a director or
officer of any domestic or foreign corporation which is owned
in whole or part by the Corporation, against, judgments,
penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses (including but not
limited to court costs and attorneys' fees) actually incurred
by the person in connection with such proceeding, if the
person (1) conducted himself or herself in good faith, (2)
reasonably believed in the case of conduct in his or her
official capacity as a director, officer, or employee of the
Corporation, that his or her conduct was in the Corporation's
best interests and in all other cases that his or her conduct
was at least not opposed to the Corporation's best interests
and (3) in the case of any criminal proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
This indemnity is expressly intended to apply regardless of
the sole, concurrent, or contributing negligence or fault of
the person to be indemnified provided that the standards of
conduct described in clauses (l), (2), and (3) are met. In
addition to the other standards of conduct described in
clauses (1), (2), and (3), indemnification and payment or
reimbursement of expenses of employees under this Article
XXXIII shall be provided for an employee (who is not a
director or officer) only when the employee's conduct was
within the course and scope of his or her employment by the
Corporation.
B. The Corporation shall indemnify a director, officer,
or employee, or such A nominee or designee or person who, at
the request of the Corporation, is serving in capacities
described above against reasonable expenses (including but
not limited to court costs and attorneys' fees) incurred by
him or her in connection with a proceeding in which he or she
is a named defendant or respondent because he or she is or
was a director, officer, or employee, or such a nominee or
designee if he or she has been wholly successful, on the
merits or otherwise, in the defense of the proceeding.
C. Indemnification provided under Section A shall be
made by the Corporation (except as provided in Section B)
only if it is determined in accordance with the following
procedures that the person has met the requirements set forth
in Section A and that indemnification is permissible Such
determination that indemnification is permissible under
Section A shall be made (1) by a majority vote of a quorum
consisting of directors who at the time of the vote were not
named defendants or respondents in the proceeding, or (2) if
such a quorum cannot be obtained by a majority vote of a
committee of the board of directors, designated to act in the
matter by a majority vote of all directors, consisting solely
of two or more directors who at the time of the vote are not
named defendants or respondents in the proceeding, or (3) by
special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subsections
(1) or (2) of this Section C, or, if such a quorum cannot be
obtained and such a committee cannot be established, by a
majority vote of all directors, or (4) by the shareholders in
a vote that excludes the shares held by directors who are
named defendants or respondents in the proceeding.
The termination of a proceeding by judgment, order,
settlement, or conviction, or on a plea of nolo contendere or
its equivalent is not of itself determinative that the
persons did not meet the requirements set forth in Section A
above. A person shall be deemed to have been found liable in
respect of any claim, issue or matter only after the person
shall have been so adjudged by a court of competent
jurisdiction after exhaustion of all appeals therefrom,
The provisions of Section A are intended to make
mandatory the indemnification permitted therein and, together
with Article IX of the Restated Articles of Incorporation,
shall constitute authorization of indemnification in the
manner required Determinations as to reasonableness of
expenses under Section A shall be made in the same manner as
the determination that indemnification is permissible, except
that if the determination that indemnification is permissible
is made by special legal counsel, determination as to
reasonableness of expenses shall be made in the manner
specified in subsection (3) of the first paragraph of this
Section C for the selection of special legal counsel.
Determinations as to the reasonableness of expenses under
Sections B and F shall be made in any manner which may be
used to determine if indemnification is permissible under
Section A.
Action taken or omitted by a person with respect to an
employee benefit plan in the performance of his or her duties
for a purpose reasonably believed by him or her to be in the
interest of the participants and beneficiaries of the plan is
deemed to be for a purpose which is not opposed to the best
interests of the Corporation
D. Notwithstanding the provisions of Section A, except
to the extent permitted by the next sentence, a person shall
not be indemnified by the Corporation in respect of a
proceeding in which the person is found liable on the basis
that personal benefit was improperly received by the person,
whether or not the benefit resulted from an action taken in
the person's official capacity, or in which the person is
found liable to the Corporation. If a person is found liable
to the Corporation or is found liable on the basis that
personal benefit was improperly received by the person, the
indemnification (i) is limited to reasonable expenses
actually incurred by the person in connection with the
proceeding and (ii) shall not be made in respect of any
proceeding in which the person shall have been found liable
for willful or intentional misconduct in the performance of
his duty to the Corporation.
E. Reasonable expenses incurred by a director, officer,
or employee, or such a nominee or designee or person serving
in capacities described above at the request of the
Corporation who was, is, or is threatened to b~ made a named
defendant or respondent in a proceeding, may be paid or
reimbursed by the Corporation in advance of the final
disposition of the proceeding and without any of the
determinations specified in Section C after (1) the
Corporation receives a written affirmation by the person of
his or her good faith belief that he or she has met the
standard of conduct that is necessary for indemnification
under this Article XXXIII and a written undertaking by or on
behalf of the person to repay the amount paid or reimbursed
if it is ultimately determined that he or she has not met
those requirements. The written undertaking required by this
Section E must be an unlimited general obligation of the
person but need not be secured, and may be accepted without
reference to financial ability to make repayment.
F. Notwithstanding any other provision of this Article
XXXIII, the Corporation shall pay or reimburse reasonable
expenses incurred by a director, officer, or employee, or
such a nominee or designee in person who, at the request of
the Corporation, is serving in capacities described above in
connection with his appearance as a witness or other
participation in a proceeding at a time when he is not a
named defendant or respondent in the proceeding.
G. The indemnification provided by this Article XXXIII
shall not be deemed to limit the powers of the Corporation to
indemnify or to advance expenses to any person who is or was
a director, officer, employee, agent, nominee, or designee of
the Corporation conferred on the Corporation by the Texas
Business Corporation Act (as now in effect or as same may be
amended) or other applicable law and shall not be deemed
exclusive of any rights to which those indemnified may be
entitled under any agreement, contract, insurance,
arrangement, vote of shareholders or disinterested directors,
statute, court order, or otherwise, both as to action in his
or her official capacity and as to action in another capacity
while holding such office (including but not limited to
service as plan fiduciary), and shall continue as to a person
who has ceased to be a director, officer, employee, agent,
nominee, or designee or person serving in a named capacity at
the request of the Corporation and shall inure to the benefit
of the heirs, executors and administrators of such person.
This Article XXXIII is intended to be consistent with the
powers granted by the Texas Business Corporation Act, as
heretofore and hereafter amended, and terms used herein shall
be defiled and the provisions of this Article XXXIII shall be
interpreted and applied consistently with such law. The
provisions of this Article XXXIII shall be deemed several,
and if and to the extent any provision of this Article XXXIII
is determined not to be consistent with the provisions of
such Act, as heretofore and hereafter amended, then the other
provisions to the extent consistent shall remain valid and in
full force and effect.
H. The Corporation may purchase and maintain insurance
or another arrangement on behalf of any person who is or was
a director, officer, employee or agent of the Corporation, or
who is or was serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another domestic or
foreign corporation, partnership, joint venture, sole
proprietorship, trust, or other enterprise, or employee
benefit plan against any liability asserted against him or
her and incurred by him or her in such capacity or arising
out of his or her status as such a person, whether or not the
Corporation would have the power to indemnify him or her
against that liability under the provisions of the Restated
Articles of Incorporation as amended, this Article XXXIII,
the Texas Business Corporation Act, as heretofore and
hereafter amended, or otherwise. Nothing in this Article
XXXIII is intended to authorize a double payment to a person
entitled to indemnification or reimbursement by the
Corporation pursuant to this Article XXXIII of an amount
actually paid to such person or expended for such person's
benefit under any such insurance or other arrangement. If the
insurance or other arrangement is with a person or entity
that is not regularly engaged in the business of providing
insurance coverage, the insurance or arrangement may provide
for payment of a liability with respect to which the
Corporation would not have the power to indemnify the person
only if including coverage for the additional liability has
been approved by the shareholders of the Corporation. Without
limiting the power of the Corporation to procure or maintain
any kind of insurance or other arrangement the Corporation
may, for the benefit of persons indemnified by the
Corporation, (1) create a trust fund; (2) establish any form
of self-insurance; (3) secure its indemnity obligation by
grant of a security interest or other lien on the assets of
the Corporation; or (4) establish a letter of credit,
guaranty, or surely arrangement. The insurance or other
arrangement may be procured, maintained, or established
within the Corporation or with any insurer or other person
deemed appropriate by the board of directors regardless of
whether all or part of the stock or other securities of the
insurer or other person are owned in whole or part by the
Corporation In the absence of fraud, the judgment of the
board of directors as to the terms and conditions of the
insurance or other arrangement and the identity of the
insurer or other person participating in an arrangement shall
be conclusive and the insurance or arrangement shall not be
voidable and shall not subject the directors approving the
insurance or arrangement to liability, on any ground,
regardless of whether directors participating in the approval
are beneficiaries of the insurance or arrangement.
I. Any indemnification of or advance of expenses to any
person in accordance with this Article XXXIII or otherwise
shall be reported in writing to the shareholders with or
before the notice or waiver of notice of the next
shareholders' meeting or with or before the next submission
to shareholders of a consent to action without a meeting,
and, in any case, within the twelve (12) month period
immediately following the date of the indemnification or
advance. Failure to make or delay in making any such report
shall not affect the Corporation's obligation to make any
such indemnification or advance
J. The indemnification provided hereunder to any person
who is or was serving as an employee benefit plan fiduciary
shall not operate to relieve any such person who acts as a
plan fiduciary from any responsibility or liability under
applicable laws, and the indemnification provided hereunder
to a plan fiduciary is limited to satisfaction of liabilities
incurred by such person as a plan fiduciary, subject to the
terms and conditions stated in this Article XXXIII. For
purposes of this Article XXXIII, the Corporation shall be
deemed to have requested a director or officer to serve an
employee benefit plan whenever the performance by him or her
of his or her duties to the Corporation also imposes duties
on or otherwise involves services by him or her to the plan
or participants or beneficiaries of the plan. Excise taxes
assessed on a director or officer with respect to
an employee benefit plan pursuant to applicable law shall be
deemed fines.
K. These indemnities shall apply with respect to acts,
omissions, and occurrences before or after September 3, 1987;
provided that (i) if the indemnities in effect prior to such
date should operate in any respect to provide greater
indemnification for the person affected or (ii) if it should
be determined that these indemnities may not lawfully be
applied retroactively from date of adoption, then the
indemnities in effect prior to such date shall continue to
apply and shall be effective and enforceable with respect
thereto.
Exhibit 3(d)
BY-LAWS
OF
ENTERGY LOUISIANA, INC.
AS OF OCTOBER 5, 1998
Section 1. The annual meeting of the stockholders of the
Corporation for the election of directors and such other business
as shall properly come before such meeting shall be held in May
of each year on a date and at a time and place to be fixed by the
Board of Directors of the Company at least thirty (30) days
before the date of such meeting so fixed.
Section 2. Special meetings of the stockholders may be held
at the registered office of the Corporation in the City of New
Orleans, Louisiana, or at such other place or places as the Board
of Directors may from time to time determine.
Section 3. Special meetings of the stockholders of the
Corporation may be held upon the order of the chief executive
officer (whether the Chairman of the Board or the President), the
Board of Directors, the Executive Committee or of stockholders of
record holding one-fourth of the outstanding stock entitled to
vote at such meetings.
Section 4. Notice of every meeting of the stockholders shall
be given in the manner provided by law to each stockholder
entitled thereto unless waived by such stockholder.
Section 5. The holders of a majority of the outstanding
stock of the Corporation entitled to vote upon any matter to be
acted upon present in person or by proxy shall constitute a
quorum for the transaction of business at any meeting of
stockholders but less than a quorum shall have power to adjourn.
Section 6. Certificates of stock shall be signed by the
President or a Vice President and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary and sealed
with the seal of the Corporation. If certificates of stock of
this Corporation are countersigned by a transfer agent or by a
registrar, other than the Corporation itself, the signatures
thereon of the Corporation's officers may be facsimiles. In case
any officer or officers who shall have signed, or whose facsimile
signature or signatures shall have been used on any such
certificate or certificates, shall cease to be such officer or
officers of this Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates
shall have been delivered by this Corporation, such certificate
or certificates may, nevertheless, be adopted by the Board of
Directors of this Corporation and be issued and delivered as
though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or
officers of this Corporation. Any stock certificates bearing
facsimile signatures of officers of this Corporation, as above
provided, may also bear a facsimile of the seal of this
Corporation.
Section 7. The stock of the Corporation shall be
transferable or assignable only on the books of the Corporation
by the holders in person or by attorney on the surrender of the
certificates therefor duly endorsed for transfer.
Section 8. Meetings of the Board of Directors may be held
within or without the State of Louisiana, at the times fixed by
resolution of the Board or upon the order of the Chairman of the
Board or the President or a Vice President or any two directors.
Meetings of the Board of Directors may be held by means of
telephone conference calls, in which connection (a) the directors
may participate in and hold such a meeting by means of conference
telephone or similar communications equipment provided that all
persons participating in the meeting can hear and communicate
with each other, and (b) participation in such a meeting shall
constitute presence in person at such meeting except where such
participation is for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not
lawfully called or convened. The Secretary or other officer
performing his duties shall give at least two days' notice of all
meetings of directors, provided, however, that a meeting may be
held immediately after the annual election of directors without
notice, and that a meeting may be held at any other time without
notice if all the directors are present or those not present
waive notice either before, at or after the meeting. Notice by
mail or telegraph to the usual business or residence address of
the director at least two days before the meeting shall be
sufficient.
The Board of Directors shall designate one of its members as
Chairman of the Board. The position of Chairman of the Board is
not an officer position; therefore, the Chairman of the Board
need not be an officer of the Corporation.
The Board of Directors may, by resolution passed by a
majority of the whole Board of Directors, appoint an Executive
Committee of not less than two or more than four members, to
serve at the pleasure of the Board of Directors. Such Committee
shall have and may exercise all the powers of the Board of
Directors during the intervals between its meetings, which may be
lawfully delegated, subject to such limitations which may be
provided by resolution of the Board of Directors.
Section 9. The Board of Directors shall elect individuals to
occupy at least three executive offices: President, Secretary and
Treasurer. In its discretion, the Board of Directors may elect
individuals to occupy other executive offices, including Chief
Executive Officer, Vice Chairman, Chief Operating Officer, Vice
President and such other executive offices as the Board shall
designate. Officers shall be elected annually and shall hold
office until their respective successors shall have been duly
elected and qualified, or until such officer shall have died or
resigned or shall have been removed by majority vote of the whole
Board. To the extent permitted by the laws of the State of
Louisiana, individuals may occupy more than one office.
President. The President shall perform duties incident to
the office of a president of a corporation and such other duties
as from time to time may be assigned to him by the Board of
Directors, by the Executive Committee or, if the Board has
elected a Chief Executive Officer and if the Chief Executive
Officer is not the President, by the Chief Executive Officer.
Vice Presidents. Each Vice President shall have such powers
and shall perform such duties as from time to time may be
conferred upon or assigned to him by the Board of Directors or
the Executive Committee, or as may be delegated to him by the
President or the Chief Executive Officer.
Secretary. The Secretary shall keep the minutes of all
meetings of the stockholders and of the Board of Directors in
books provided for the purpose; shall see that all notices are
duly given in accordance with the provisions of law and these
bylaws; shall be custodian of the records and of the corporate
seal of the Corporation; shall see that the corporate seal is
affixed to all documents the execution of which under the seal is
duly authorized, and when the seal is so affixed he may attest
the same; may sign, with the Chairman of the Board, a Vice
Chairman, the President or a Vice President, certificates of
stock of the Corporation; and, in general, shall perform all
duties incident to the office of a secretary of a corporation,
and such other duties as from time to time may be assigned to the
Secretary by the Chief Executive Officer, the Chairman of the
Board, a Vice Chairman, the President, the Board of Directors or
the Executive Committee.
The Secretary shall also keep, or cause to be kept, a stock
book, containing the name, alphabetically arranged, of all
persons who are stockholders of the Corporation, showing their
places of residence, the number of shares held by them
respectively, and the time when they respectively became the
owners thereof.
Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements
of the Corporation, and shall deposit, or cause to be deposited,
in the name of the Corporation, all moneys or other valuable
effects in such banks, trust companies or other depositories as
shall, from time to time, be selected by the Board of Directors.
The Treasurer may endorse for collection on behalf of the
Corporation, checks, notes and other obligations; may sign
receipts and vouchers for payments made to the Corporation singly
or jointly with another person as the Board of Directors may
authorize; may sign checks of the Corporation and pay out and
dispose of the proceeds under the direction of the Board; shall
render or cause to be rendered to the Chairman of the Board, the
President and the Board of Directors, whenever requested, an
account of the financial condition of the Corporation; may sign,
with the Chairman of the Board, a Vice Chairman, the President or
a Vice President, certificates of stock of the Corporation; and,
in general, shall perform all the duties incident to the office
of a treasurer of a corporation, and such other duties as from
time to time may be assigned to him by the Chairman of the Board,
a Vice Chairman, the President, the Board of Directors or the
Executive Committee.
Subordinate Officers. The Board of Directors may appoint
such assistant secretaries, assistant treasurers and other
officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such
duties as the Board of Directors may prescribe. The Board of
Directors may, from time to time, authorize any officer to
appoint and remove such officers and to prescribe the powers and
duties thereof.
Vacancies; Absences. Any vacancy in any of the above offices
may be filled for the unexpired portion of the term by the Board
of Directors at any regular or special meeting. Except when the
law requires the act of a particular officer, the Board of
Directors or the Executive Committee, whenever necessary, may, in
the absence of any officer, designate any other officer or
properly qualified employee, to perform the duties of the one
absent for the time being, and such designated officer or
employee shall have, when so acting, all the powers herein given
to such absent officer.
Resignations. Any officer may resign at any time by giving
written notice of such resignation to the Board of Directors, the
Chairman of the Board, a Vice Chairman, the President or the
Secretary. Unless otherwise specified therein, such resignation
shall take effect upon written receipt thereof by the Board of
Directors or by such officer.
Section 10. The officers of the Corporation shall have such
duties as usually pertain to their offices, except as modified by
the Board of Directors, and shall also have such powers and
duties as may from time to time be conferred upon them by the
Board of Directors.
Section 11. No person shall be eligible to be or shall be
elected or appointed or re-elected or re-appointed as a director
of the Corporation after such person shall have attained the age
of seventy (70) years.
Section 12. The Board of Directors may alter or amend these
By-Laws at any meeting duly held as herein provided.
Exhibit 3(e)
BY-LAWS
OF
ENTERGY MISSISSIPPI, INC.
AS OF OCTOBER 5, 1998
SECTION 1 - The Annual Meeting of the Stockholders of
the Corporation for the election of Directors and such other
business as shall properly come before such meeting shall be
held at the office of the Corporation in the City of Jackson,
Mississippi, on the fourth Thursday in May in each year, at
ten o'clock in the morning, unless such day is a legal
holiday in the State of Mississippi, in which case such
meeting shall be held on the first day thereafter which is
not a legal holiday, or at such other place within or without
the State of Mississippi and at such other time as the Board
of Directors may by resolution designate.
SECTION 2 - Special Meetings of the Stockholders may be
held at the principal office of the Corporation in the City
of Jackson, Mississippi, or at such other place or places as
the Board of Directors may from time to time determine.
SECTION 3 - Special Meetings of the Stockholders of the
Corporation may be held upon the order of the Chairman of the
Board, the Board of Directors, the Executive Committee, or of
Stockholders of record holding one-tenth of the outstanding
stock entitled to vote at such meetings.
SECTION 4 - Notice of every meeting of Stockholders
shall be given in the manner provided by law to each
Stockholder entitled thereto unless waived by such
Stockholder.
SECTION 5 - The holders of a majority of the outstanding
stock of the Corporation entitled to vote upon any matter to
be acted upon present in person or by proxy shall constitute
a quorum for the transaction of business at any meeting of
Stockholders but less than a quorum shall have power to
adjourn.
SECTION 6 - Certificates of stock shall be signed by the
President or a Vice President and the Secretary or an
Assistant Secretary, but where any such certificate is signed
by a Transfer Agent and by a Registrar, the signature of any
such officer or officers and the seal of the Company upon
such certificates may be facsimile, engraved or printed.
SECTION 7 - The stock of the Corporation shall be
transferable or assignable only on the books of the
Corporation by the holders in person or by attorney on the
surrender of the certificates therefor duly endorsed for
transfer.
SECTION 8 - Notwithstanding any other provision in these
bylaws of the Corporation to the contrary, the stockholders
or the Board of Directors shall have the power from time to
time to fix the number of directors of the Company, provided
that the number so fixed shall not be less than three (3) or
more than fifteen (15). Each director shall hold office
until the next annual Meeting of Stockholders of the
Corporation and until his successor shall have been elected
and qualified. Directors need not be residents of the State
of Mississippi.
Meetings of the Board of Directors may be held within or
without the State of Mississippi, at the time fixed by
Resolution of the Board or upon the order of the Chairman of
the Board, the President, a Vice President, or any two
Directors. The Secretary or any other Officer performing his
duties shall give at least two days' notice of all meetings
of the Board of Directors in the manner provided by law,
provided however, a director may waive such notice in the
manner provided by law.
The Board of Directors shall designate one of its
members as Chairman of the Board. The position of Chairman
of the Board is not an officer position; therefore, the
Chairman of the Board need not be an officer of the
Corporation.
SECTION 9 - a) The Board of Directors shall elect
individuals to occupy at least three executive offices:
President, Secretary and Treasurer. In its discretion, the
Board of Directors may elect individuals to occupy other
executive offices, including Chief Executive Officer, Vice
Chairman, Chief Operating Officer, Vice President and such
other executive offices as the Board shall designate.
Officers shall be elected annually and shall hold office
until their respective successors shall have been duly
elected and qualified, or until such officer shall have died
or resigned or shall have been removed by majority vote of
the whole Board. To the extent permitted by the laws of the
State of Mississippi, individuals may occupy more than one
office.
b) President. The President shall perform duties
incident to the office of a president of a corporation and
such other duties as from time to time may be assigned to him
by the Board of Directors, by the Executive Committee or, if
the Board has elected a Chief Executive Officer and if the
Chief Executive Officer is not the President, by the Chief
Executive Officer.
c) Vice Presidents. Each Vice President shall have such
powers and shall perform such duties as from time to time may
be conferred upon or assigned to him by the Board of
Directors or the Executive Committee, or as may be delegated
to him by the President or the Chief Executive Officer.
d) Secretary. The Secretary shall keep the minutes of
all meetings of the stockholders and of the Board of
Directors in books provided for the purpose; shall see that
all notices are duly given in accordance with the provisions
of law and these bylaws; shall be custodian of the records
and of the corporate seal of the Corporation; shall see that
the corporate seal is affixed to all documents the execution
of which under the seal is duly authorized, and when the seal
is so affixed he may attest the same; may sign, with the
Chairman of the Board, a Vice Chairman, the President or a
Vice President, certificates of stock of the Corporation;
and, in general, shall perform all duties incident to the
office of a secretary of a corporation, and such other duties
as from time to time may be assigned to the Secretary by the
Chief Executive Officer, the Chairman of the Board, a Vice
Chairman, the President, the Board of Directors or the
Executive Committee. The Secretary shall also keep, or cause
to be kept, a stock book, containing the name, alphabetically
arranged, of all persons who are stockholders of the
Corporation, showing their places of residence, the number of
shares held by them respectively, and the time when they
respectively became the owners thereof.
e) Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause
to be deposited, in the name of the Corporation, all moneys
or other valuable effects in such banks, trust companies or
other depositories as shall, from time to time, be selected
by the Board of Directors. The Treasurer may endorse for
collection on behalf of the Corporation, checks, notes and
other obligations; may sign receipts and vouchers for
payments made to the Corporation singly or jointly with
another person as the Board of Directors may authorize; may
sign checks of the Corporation and pay out and dispose of the
proceeds under the direction of the Board; shall render or
cause to be rendered to the Chairman of the Board, the
President and the Board of Directors, whenever requested, an
account of the financial condition of the Corporation; may
sign, with the Chairman of the Board, a Vice Chairman, the
President or a Vice President, certificates of stock of the
Corporation; and, in general, shall perform all the duties
incident to the office of a treasurer of a corporation, and
such other duties as from time to time may be assigned to him
by the Chairman of the Board, a Vice Chairman, the President,
the Board of Directors or the Executive Committee.
f) Subordinate Officers. The Board of Directors may
appoint such assistant secretaries, assistant treasurers and
other officers as it may deem desirable. Each such officer
shall hold office for such period, have such authority and
perform such duties as the Board of Directors may prescribe.
The Board of Directors may, from time to time, authorize any
officer to appoint and remove such officers and to prescribe
the powers and duties thereof.
g) Vacancies; Absences. Any vacancy in any of the above
offices may be filled for the unexpired portion of the term
by the Board of Directors at any regular or special meeting.
Except when the law requires the act of a particular officer,
the Board of Directors or the Executive Committee, whenever
necessary, may, in the absence of any officer, designate any
other officer or properly qualified employee, to perform the
duties of the one absent for the time being, and such
designated officer or employee shall have, when so acting,
all the powers herein given to such absent officer.
SECTION 10 - Any officer may resign at any time by
giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, a Vice Chairman, the
President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon written
receipt thereof by the Board of Directors or by such officer.
SECTION 11 - EXECUTIVE COMMITTEE - The Board of
Directors may, by resolution passed by a majority of the
whole Board of Directors, appoint an Executive Committee of
not less than two or more than four members, to serve at the
pleasure of the Board of Directors. Such Committee shall
have and may exercise all the powers of the Board of
Directors during the intervals between its meetings, which
may be lawfully delegated, subject to such limitations which
may be provided by resolution of the Board of Directors.
SECTION 12 - OTHER COMMITTEES - From time to time the
Board of Directors, by the affirmative vote of a majority of
the whole Board may appoint other committees for any purpose
or purposes, and such committees shall have such powers as
shall be conferred by the Resolution of appointment.
SECTION 13 - INDEMNIFICATION
13.1 Definitions - In this by-law:
(1) "Director" means an individual who is or was a
director of the Corporation or, unless the context requires
otherwise, an individual who, while a director of the
Corporation, is or was serving at the Corporation's request
as a director, officer, partner, trustee, employee or agent
of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise, including charitable, non-profit or civic
organizations. A director is considered to be serving an
employee benefit plan at the Corporation's request if his
duties to the Corporation also impose duties on, or otherwise
involve services by, him to the plan or to participants in or
beneficiaries of the plan. "Director" includes unless the
context requires otherwise, the estate or personal
representative of a director.
(2) "Employee" means an individual who is or was an
employee of the Corporation, or, unless the context requires
otherwise, an individual who, while an employee of the
Corporation, is or was serving at the Corporation's request
as a director, officer, partner, trustee, employee or agent
of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise, including charitable, non-profit or civic
organizations. An employee is considered to be serving an
employee benefit plan at the Corporation's request if his
duties to the Corporation also impose duties on, or otherwise
involve services by, him to the plan or to participants in or
beneficiaries of the plan. "Employee" includes, unless the
context requires otherwise, the estate or personal
representative of an employee.
(3) "Expenses" include counsel fees.
(4) "Liability" means the obligation to pay a judgment,
settlement, penalty, fine, or reasonable expenses incurred
with respect to a proceeding. Without any limitation
whatsoever upon the generality thereof, the term "fine" as
used in this Section shall include (1) any penalty imposed by
the Nuclear Regulatory Commission (the "NRC"), including
penalties pursuant to NRC regulations, 10 CFR Part 21, (2)
penalties or assessments (including any excise tax
assessment) with respect to any employee benefit plan
pursuant to the Employee Retirement Income Security Act of
1974, as amended, or otherwise, and (3) penalties pursuant to
any Federal, state or local environmental laws or
regulations.
(5) "Officer" means an individual who is or was an
officer of the Corporation, or, unless the context requires
otherwise, an individual who, while an officer of the
Corporation, is or was serving at the Corporation's request
as a director, officer, partner, trustee, employee or agent
of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise, including charitable, non-profit or civic
organizations. An officer is considered to be serving an
employee benefit plan at the Corporation's request if his
duties to the Corporation also impose duties on, or otherwise
involve services by, him to the plan or to participants in or
beneficiaries of the plan. "Officer" includes, unless the
context requires otherwise, the estate or personal
representative of an officer.
(6) "Official capacity" means: (i) when used with
respect to a director, the office of director in the
Corporation; and (ii) when used with respect to an individual
other than a director as contemplated in Section 13.7, the
office in the Corporation held by the officer or the
employment undertaken by the employee on behalf of the
Corporation. "Official capacity" does not include service
for any other foreign or domestic corporation or any
partnership, joint venture, trust, employee benefit plan or
other enterprise, including charitable, non-profit or civic
organizations.
(7) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding.
(8) "Proceeding" means any threatened, pending, or
completed action suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or
informal.
13.2 Authority to Indemnify
(a) Except as provided in subsection (d), the
Corporation shall indemnify an individual made a party to a
proceeding because he is or was a director against liability
incurred in the proceeding if:
(1) He conducted himself in good faith; and
(2) He reasonably believed:
(i) In the case of conduct in his official capacity
with the Corporation, that his conduct was in its best
interests; and
(ii) In all other cases, that his conduct was at least
not opposed to its best interests, and
(3) In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee
benefit plan for a purpose he reasonably believed to be in
the interest of the participants in and beneficiaries of the
plan is conduct that satisfies the requirement of subsection
(a)(2)(ii).
(c) The termination of a proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or
its equivalent is not, of itself, determinative that the
director did not meet the standard of conduct described in
this section.
(d) The corporation shall not indemnify a director
under this section:
(1) In connection with a proceeding by or in the right
of the Corporation in which the director was adjudged liable
to the Corporation; or
(2) In connection with any other proceeding charging
improper personal benefit to him, whether or not involving
action in his official capacity, in which he was adjudged
liable on the basis that personal benefit was improperly
received by him.
(e) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
Corporation is limited to reasonable expenses incurred in
connection with the proceeding.
(f) The Corporation shall have power to make any
further indemnity, including advance of expenses, to and to
enter contracts of indemnity with any director that may be
authorized by the articles of incorporation or any bylaw made
by the shareholders or any resolution adopted, before or
after the event, by the shareholders, except an indemnity
against his gross negligence or willful misconduct. Unless
the articles of incorporation, or any such bylaw or
resolution provide otherwise, any determination as to any
further indemnity shall be made in accordance with subsection
(b) of Section 13.6. Each such indemnity may continue as to
a person who has ceased to have the capacity referred to
above and may inure to the benefit of the heirs, executors
and administrators of such person.
13.3 Mandatory Indemnification
The Corporation shall indemnify a director who was
wholly successful, on the merits or otherwise, in the defense
of any proceeding to which he was a party because he is or
was a director of the Corporation against reasonable expenses
incurred by him in connection with the proceeding.
13.4 Advance for Expenses
(a) The Corporation shall pay for or reimburse the
reasonable expenses incurred by a director who is a party to
a proceeding in advance of final disposition of the
proceeding if:
(1) The director furnishes the Corporation a written
affirmation of his good faith belief that he has met the
standard of conduct described in Section 13.2;
(2) The director furnishes the Corporation a written
undertaking, executed personally or on his behalf, to repay
the advance if it is ultimately determined that he did not
meet the standard of conduct; and
(3) A determination is made that the facts then known
to those making the determination would not preclude
indemnification under these By-Laws.
(b) The undertaking required by subsection (a)(2) must
be an unlimited general obligation of the director but need
not be secured and may be accepted without reference to
financial ability to make repayment.
(c) Determinations and authorizations of payments under
this section shall be made in the manner specified in Section
13.6.
13.5 Court-Ordered Indemnification
A director of the Corporation who is a party to a
proceeding may apply for indemnification to the court
conducting the proceeding or to another court of competent
jurisdiction as provided by law.
13.6 Determination and Authorization of Indemnification
(a) The Corporation may not indemnify a director under
Section 13.2 unless authorized in the specific case after a
determination has been made that indemnification of the
director is permissible in the circumstances because he has
met the standard of conduct set forth in Section 13.2.
(b) The determination shall be made:
(1) By the Board of Directors by majority vote of a
quorum consisting of directors not at the time parties to the
proceeding;
(2) If a quorum cannot be obtained under subsection (b)
(1), by majority vote of a committee duly designated by the
Board of Directors (in which designation directors who are
parties may participate), consisting solely of two (2) or
more directors not at the time parties to the proceeding;
(3) By special legal counsel:
(i) Selected by the Board of Directors or its committee
in the manner prescribed in subsection (b) (1) or (b) (2); or
(ii) If a quorum of the Board of Directors cannot be
obtained under subsection (b) (1) and a committee cannot be
designated under subsection (b) (2), selected by a majority
vote of the full Board of Directors (in which selection
directors who are parties may participate); or
(4) By the shareholders, but shares owned by or voted
under the control of directors who are at the time parties to
the proceeding may not be voted on the determination.
(c) Authorization of indemnification and evaluation as
to reasonableness of expenses shall be made in the same
manner as the determination that indemnification is
permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and
evaluation as to reasonableness of expenses shall be made by
those entitled under subsection (b) (3) to select counsel.
13.7 Indemnification of Officers, Employees and Agents
(1) An officer of the Corporation who is not a director
is entitled to mandatory indemnification under Section 13.3,
and is entitled to apply for court-ordered indemnification
under Section 13.5, in each case to the same extent as a
director; and
(2) The Corporation shall indemnify and advance
expenses under these By-Laws to an officer or employee of the
Corporation who is not a director to the same extent as to a
director as provided under Sections 13.2, 13.4 and 13.6.
13.8 Insurance
If authorized by the Board of Directors, the Board of
Directors of Middle South Utilities. Inc. and/or otherwise
properly authorized, the Corporation shall purchase and
maintain insurance on behalf of an individual who is or was a
director, officer, or employee of the Corporation against
liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer or
employee, whether or not the Corporation would have power to
indemnify him against the same liability under Sections 13.2
or 13.3. If further authorized as provided in this
subsection, the Corporation shall purchase and maintain such
insurance on behalf of an individual who is or was a
director, officer or employee who, while a director, officer
or employee of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner,
trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, including charitable,
non-profit or civic organizations, whether or not the
Corporation would have power to indemnify him against the
same liability under Sections 13.2 or 13.3.
13.9 Application of By-Law
(a) This By-Law does not limit the Corporation's power
to pay or reimburse expenses incurred by a director, officer
or employee in connection with his appearance as a witness in
a proceeding at a time when he has not been made a named
defendant or respondent to the proceeding.
(b) The foregoing rights shall not be exclusive of other
rights to which any director, officer or employee may
otherwise be entitled.
(c) The foregoing shall not limit any right or power of
the Corporation to provide indemnification as allowed by
statute or otherwise.
13.10 Rights Deemed Contract Rights
All rights to indemnification and to advancement of
expenses under these By-Laws shall be deemed to be provided
by a contract between the Corporation and the director,
officer or employee who serves in such capacity at any time
while these By-Laws are in effect. Any repeal or modification
of this By-Law shall not affect any rights or obligations
then existing.
SECTION 14 - The Board of Directors may alter or amend
these by-laws at any meeting duly held as herein provided.
Exhibit 3(f)
By-Laws
of
Entergy New Orleans, Inc.
As of October 5, 1998
Section 1. The annual meeting of the stockholders of the
Corporation for the election of directors and such other
business as shall properly come before such meeting shall be
held in May of each year on a date and at a time and place to
be fixed by the Board of Directors of the Company at least
thirty (30) days before the date of such meeting so fixed.
Section 2. Special meetings of the stockholders of the
Corporation may be held upon the call of the President, the
Board of Directors or of the stockholders holding one-fifth
of the outstanding Common Stock, at the office of the Company
in the State of Louisiana. Such call shall state the
purpose, place and time of the meeting.
Section 3. Notice of the time, place and purpose of
every meeting of stockholders shall be mailed by the
Secretary or the officer performing his duties, at least
fifteen (15) days before the meeting, to each stockholder
entitled to vote in accordance with Section 5 hereof, at his
last known post office address, provided, however, that if
the stockholder be present at a meeting, or in writing waive
notice thereof before or after the meeting, notice of the
meeting to such stockholder is unnecessary.
Section 4. The holders of forty per centum (40%) of the
stock of the Corporation entitled to vote, present in person
or by proxy, shall constitute a quorum, but less than a
quorum shall have power to adjourn.
Section 5. At all meetings of stockholders each common
stockholder shall be entitled to one vote for each share of
stock held by him and may vote and otherwise act in person or
by proxy, but no proxy shall be voted more than eleven (11)
months after its date.
Section 6. At least two (2) days before each election by
the stockholders a full list of stockholders entitled to vote
at the election, arranged in alphabetical order with the
residence of each and the number of shares held by each,
shall be prepared by the Secretary or officer designated by
the Board of Directors and filed in the principal office of
the Corporation, which shall at all times during the usual
hours of business, for said two (2) days and during the
election, be open to the examination of any stockholder.
Section 7. Certificates of stock shall be of such form
and device as the Board of Directors may elect, and shall be
signed by, or bear the facsimile signatures of, the President
or Vice-President, and either the Secretary or Assistant
Secretary, or the Treasurer or Assistant Treasurer.
Section 8. The stock of the Corporation shall be
transferable or assignable on the books of the Corporation by
the holders in person or by attorney on the surrender of the
certificates therefor. The Board of Directors may appoint one
or more transfer agents and registrars of the stock. The
books for the transfer of the stock may be closed for such
periods before and during the payment of dividends and the
holdings of meetings of stockholders, not to exceed thirty
(30) days at any one time, as the Board of Directors may from
time to time determine; and the Corporation shall make no
transfer of stock on its books during such period.
Section 9. The affairs of the Corporation shall be
managed by a Board consisting of not less than three (3) nor
more than fifteen (15) directors, who shall be elected
annually by the stockholders by ballot, to hold office until
their successors are elected and qualified. The number of
persons, within the foregoing limits, to compose the Board of
Directors at any given time shall be fixed by either the
stockholders or by the Board of Directors. The stockholders
at any meeting, by a majority vote of all the outstanding
Common Stock, may remove any director and fill the vacancy.
Vacancies in the Board of Directors or in the offices, except
vacancies in the Board of Directors caused by an increase in
the number of directors, may be filled by the Board at any
meeting. Vacancies in the Board of Directors arising from an
increase in the number of directors shall be filled at the
annual meeting or at a special meeting of stockholders called
for that purpose. The Board of Directors shall have power and
authority to authorize the payment of compensation to the
directors for services to the Corporation, including fees for
attendance at meetings of the Board of Directors, of the
Executive Committee and all other committees, and to
determine the amount of such compensation or fees.
.
The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any action,
suit or proceeding whether civil, criminal, administrative or
investigative (including any action by or in the right of the
Corporation) by reason of the fact that such person is or was
a director, officer or employee of the Corporation, or is or
was serving at the request of the Corporation as a director,
officer or employee of another business, foreign or nonprofit
Corporation, partnership, joint venture or other enterprise,
against expenses (including attorneys' fees), judgments,
fines, settlements, and any other penalty regardless of
statutory characterization, actually and reasonably incurred
by such person in connection with such suit or proceeding if
such person acted in good faith, not contrary to Corporation
instructions or rules, in a manner such person reasonably
believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct
was unlawful; provided that in case of actions by or in the
right of the Corporation, the indemnity shall be limited to
expenses (including attorneys' fees and amounts paid in
settlement not exceeding, in the judgment of the Board of
Directors, the estimated expense of litigating the action to
conclusion) actually and reasonably incurred in connection
with the defense or settlement of such action; and provided,
further, that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in
the performance of his duty to the Corporation unless and
only to the extent that the court and the Board of Directors
by a majority vote of a quorum of disinterested directors
shall determine, upon application, that despite the
adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the
court and the Board of Directors by a majority vote of a
quorum of disinterested directors shall deem proper.
Any indemnification under this Section shall be made by
the Corporation only as authorized in a specific case upon a
determination that the applicable standards of conduct set
out above have been met. Such determination can be made (1)
by the Board of Directors by a majority vote of a quorum of
disinterested directors, or (2) if such a quorum is not
obtainable or a quorum of disinterested directors so directs,
by independent legal counsel. The body or person making the
determination may waive the requirement concerning conformity
to Corporation instructions or rules. The other standards may
not be waived. However, any act or omission undertaken in
good faith in response to an order or other enforcement
mechanism of a federal, state or local authority, shall be
construed to be in the best interest of the Corporation in
conformity to corporate instructions and rules. The
termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in
a manner which such person reasonably believed to be in or
not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had
reasonable cause to believe that the conduct was unlawful.
Expenses incurred in defending such an action, suit or
proceeding, may be paid by the Corporation in advance of the
final disposition thereof if authorized by the Board of
Directors in the manner provided immediately above, upon
receipt of an undertaking by or on behalf of the director,
officer or employee to repay such amount, unless it shall
ultimately be determined that such person is entitled to be
indemnified by the Corporation as authorized in this Section.
The indemnification provided above shall not be deemed
exclusive of any other rights to which the person indemnified
may be entitled under any by-law, agreement, authorization of
shareholders or disinterested directors, or otherwise, and
shall continue as to a person who has ceased to be a
director, officer or employee, and shall inure to the benefit
of such person's legal representatives.
Section 10. Meetings of the Board of Directors shall be
held at the time fixed by resolution of the Board or upon
call of the President or a Vice President or any two
directors. Meetings of the Board of Directors may be held by
means of telephone conference calls, in which connection (a)
the directors may participate in and hold such a meeting by
means of conference telephone or similar communications
equipment provided that all persons participating in the
meeting can hear and communicate with each other, and (b)
participation in such a meeting shall constitute presence in
person at such meeting except where such participation is for
the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully
called or convened. The Secretary or officer performing his
duties shall give reasonable notice (which need not exceed
two (2) days) of all meetings of directors, provided that a
meeting may be held without notice immediately after the
annual election, and notice need not be given of regular
meetings held at times fixed by resolutions of the Board.
Meetings may be held at any time without notice if all
directors are present or if those not present waive notice
either before or after the meeting. Notice by mailing or
telegraph to the usual business or residence address of the
director shall be sufficient. Five (5) members of the Board
shall constitute a quorum.
Section 11. The Board of Directors shall designate one
of its members as Chairman of the Board. The position of
Chairman of the Board is not an officer position; therefore,
the Chairman of the Board need not be an officer of the
Corporation.
Section 12 a) The Board of Directors shall elect
individuals to occupy at least three executive offices:
President, Secretary and Treasurer. In its discretion, the
Board of Directors may elect individuals to occupy other
executive offices, including Chief Executive Officer, Vice
Chairman, Chief Operating Officer, Vice President and such
other executive offices as the Board shall designate.
Officers shall be elected annually and shall hold office
until their respective successors shall have been duly
elected and qualified, or until such officer shall have died
or resigned or shall have been removed by majority vote of
the whole Board. To the extent permitted by the laws of the
State of Louisiana, individuals may occupy more than one
office.
b) President. The President shall perform duties
incident to the office of a president of a corporation and
such other duties as from time to time may be assigned to him
by the Board of Directors, by the Executive Committee or, if
the Board has elected a Chief Executive Officer and if the
Chief Executive Officer is not the President, by the Chief
Executive Officer.
c) Vice Presidents. Each Vice President shall have such
powers and shall perform such duties as from time to time may
be conferred upon or assigned to him by the Board of
Directors or the Executive Committee, or as may be delegated
to him by the President or the Chief Executive Officer.
d) Secretary. The Secretary shall keep the minutes of
all meetings of the stockholders and of the Board of
Directors in books provided for the purpose; shall see that
all notices are duly given in accordance with the provisions
of law and these bylaws; shall be custodian of the records
and of the corporate seal of the Corporation; shall see that
the corporate seal is affixed to all documents the execution
of which under the seal is duly authorized, and when the seal
is so affixed he may attest the same; may sign, with the
Chairman of the Board, a Vice Chairman, the President or a
Vice President, certificates of stock of the Corporation;
and, in general, shall perform all duties incident to the
office of a secretary of a corporation, and such other duties
as from time to time may be assigned to the Secretary by the
Chief Executive Officer, the Chairman of the Board, a Vice
Chairman, the President, the Board of Directors or the
Executive Committee. The Secretary shall also keep, or cause
to be kept, a stock book, containing the name, alphabetically
arranged, of all persons who are stockholders of the
Corporation, showing their places of residence, the number of
shares held by them respectively, and the time when they
respectively became the owners thereof.
e) Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause
to be deposited, in the name of the Corporation, all moneys
or other valuable effects in such banks, trust companies or
other depositories as shall, from time to time, be selected
by the Board of Directors. The Treasurer may endorse for
collection on behalf of the Corporation, checks, notes and
other obligations; may sign receipts and vouchers for
payments made to the Corporation singly or jointly with
another person as the Board of Directors may authorize; may
sign checks of the Corporation and pay out and dispose of the
proceeds under the direction of the Board; shall render or
cause to be rendered to the Chairman of the Board, the
President and the Board of Directors, whenever requested, an
account of the financial condition of the Corporation; may
sign, with the Chairman of the Board, a Vice Chairman, the
President or a Vice President, certificates of stock of the
Corporation; and, in general, shall perform all the duties
incident to the office of a treasurer of a corporation, and
such other duties as from time to time may be assigned to him
by the Chairman of the Board, a Vice Chairman, the President,
the Board of Directors or the Executive Committee.
f) Subordinate Officers. The Board of Directors may
appoint such assistant secretaries, assistant treasurers and
other officers as it may deem desirable. Each such officer
shall hold office for such period, have such authority and
perform such duties as the Board of Directors may prescribe.
The Board of Directors may, from time to time, authorize any
officer to appoint and remove such officers and to prescribe
the powers and duties thereof.
g) Vacancies; Absences. Any vacancy in any of the above
offices may be filled for the unexpired portion of the term
by the Board of Directors at any regular or special meeting.
Except when the law requires the act of a particular officer,
the Board of Directors or the Executive Committee, whenever
necessary, may, in the absence of any officer, designate any
other officer or properly qualified employee, to perform the
duties of the one absent for the time being, and such
designated officer or employee shall have, when so acting,
all the powers herein given to such absent officer.
Section 13. Any officer may resign at any time by
giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, a Vice Chairman, the
President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon written
receipt thereof by the Board of Directors or by such officer.
Section 14. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, appoint
an Executive Committee of not less than two or more than four
members, to serve at the pleasure of the Board of Directors.
Such Committee shall have and may exercise all the powers of
the Board of Directors during the intervals between its
meetings, which may be lawfully delegated, subject to such
limitations which may be provided by resolution of the Board
of Directors.
Section 15. The Board of Directors is authorized to
select such depositaries as they shall deem proper for the
funds of the Corporation. All checks and drafts against such
deposited funds shall be signed and countersigned by officers
or persons to be specified by the Board of Directors or the
Executive Committee.
Section 16. The corporate seal of the Corporation shall
be in such form as the Board of Directors shall prescribe.
Section 17. Either the Board of Directors or the
stockholders may alter or amend these By-Laws at any meeting
duly held as above provided, the notice of which includes
notice of the proposed amendment.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation and Subsidiaries financial statements for the quarter ended
September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 18,181,705
<OTHER-PROPERTY-AND-INVEST> 1,392,819
<TOTAL-CURRENT-ASSETS> 3,474,092
<TOTAL-DEFERRED-CHARGES> 4,321,643
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 27,370,259
<COMMON> 2,468
<CAPITAL-SURPLUS-PAID-IN> 4,629,098
<RETAINED-EARNINGS> 2,365,285
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6,902,290
393,755
784,455
<LONG-TERM-DEBT-NET> 8,942,186
<SHORT-TERM-NOTES> 414,052
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 323,992
0
<CAPITAL-LEASE-OBLIGATIONS> 233,482
<LEASES-CURRENT> 138,526
<OTHER-ITEMS-CAPITAL-AND-LIAB> 9,237,521
<TOT-CAPITALIZATION-AND-LIAB> 27,370,259
<GROSS-OPERATING-REVENUE> 9,409,353
<INCOME-TAX-EXPENSE> 192,820
<OTHER-OPERATING-EXPENSES> 8,060,463
<TOTAL-OPERATING-EXPENSES> 8,060,463
<OPERATING-INCOME-LOSS> 1,348,890
<OTHER-INCOME-NET> 9,500
<INCOME-BEFORE-INTEREST-EXPEN> 1,358,390
<TOTAL-INTEREST-EXPENSE> 626,941
<NET-INCOME> 538,629
35,091
<EARNINGS-AVAILABLE-FOR-COMM> 503,538
<COMMON-STOCK-DIVIDENDS> 296,022
<TOTAL-INTEREST-ON-BONDS> 654,846
<CASH-FLOW-OPERATIONS> 1,272,554
<EPS-PRIMARY> 2.04
<EPS-DILUTED> 2.04
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Arkansas, Inc. financial statements for the quarter ended September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,798,796
<OTHER-PROPERTY-AND-INVEST> 284,581
<TOTAL-CURRENT-ASSETS> 608,078
<TOTAL-DEFERRED-CHARGES> 430,222
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,121,677
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,134
<RETAINED-EARNINGS> 498,696
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,089,300
91,027
112,350
<LONG-TERM-DEBT-NET> 1,170,266
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 865
0
<CAPITAL-LEASE-OBLIGATIONS> 103,621
<LEASES-CURRENT> 47,788
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,505,793
<TOT-CAPITALIZATION-AND-LIAB> 4,121,677
<GROSS-OPERATING-REVENUE> 1,248,205
<INCOME-TAX-EXPENSE> 76,960
<OTHER-OPERATING-EXPENSES> 996,277
<TOTAL-OPERATING-EXPENSES> 996,277
<OPERATING-INCOME-LOSS> 251,928
<OTHER-INCOME-NET> 14,906
<INCOME-BEFORE-INTEREST-EXPEN> 266,834
<TOTAL-INTEREST-EXPENSE> 70,553
<NET-INCOME> 119,321
7,745
<EARNINGS-AVAILABLE-FOR-COMM> 111,576
<COMMON-STOCK-DIVIDENDS> 92,600
<TOTAL-INTEREST-ON-BONDS> 64,367
<CASH-FLOW-OPERATIONS> 272,407
<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 September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,435,119
<OTHER-PROPERTY-AND-INVEST> 368,588
<TOTAL-CURRENT-ASSETS> 833,284
<TOTAL-DEFERRED-CHARGES> 851,869
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,488,860
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,575
<RETAINED-EARNINGS> 248,258
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,514,888
147,729
201,444
<LONG-TERM-DEBT-NET> 1,677,768
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 140,515
0
<CAPITAL-LEASE-OBLIGATIONS> 59,904
<LEASES-CURRENT> 34,153
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,712,459
<TOT-CAPITALIZATION-AND-LIAB> 6,488,860
<GROSS-OPERATING-REVENUE> 1,490,526
<INCOME-TAX-EXPENSE> 68,686
<OTHER-OPERATING-EXPENSES> 1,228,932
<TOTAL-OPERATING-EXPENSES> 1,228,932
<OPERATING-INCOME-LOSS> 261,594
<OTHER-INCOME-NET> 15,912
<INCOME-BEFORE-INTEREST-EXPEN> 277,506
<TOTAL-INTEREST-EXPENSE> 120,992
<NET-INCOME> 87,828
14,335
<EARNINGS-AVAILABLE-FOR-COMM> 73,493
<COMMON-STOCK-DIVIDENDS> 109,400
<TOTAL-INTEREST-ON-BONDS> 101,855
<CASH-FLOW-OPERATIONS> 322,178
<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 September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,324,000
<OTHER-PROPERTY-AND-INVEST> 112,783
<TOTAL-CURRENT-ASSETS> 393,169
<TOTAL-DEFERRED-CHARGES> 339,219
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,169,171
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 43,454
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,130,033
155,000
100,500
<LONG-TERM-DEBT-NET> 1,338,758
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 294
0
<CAPITAL-LEASE-OBLIGATIONS> 25,682
<LEASES-CURRENT> 16,932
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,401,972
<TOT-CAPITALIZATION-AND-LIAB> 4,169,171
<GROSS-OPERATING-REVENUE> 1,317,785
<INCOME-TAX-EXPENSE> 100,424
<OTHER-OPERATING-EXPENSES> 983,630
<TOTAL-OPERATING-EXPENSES> 983,630
<OPERATING-INCOME-LOSS> 334,155
<OTHER-INCOME-NET> 4,114
<INCOME-BEFORE-INTEREST-EXPEN> 338,269
<TOTAL-INTEREST-EXPENSE> 92,912
<NET-INCOME> 144,933
9,760
<EARNINGS-AVAILABLE-FOR-COMM> 135,173
<COMMON-STOCK-DIVIDENDS> 138,500
<TOTAL-INTEREST-ON-BONDS> 86,292
<CASH-FLOW-OPERATIONS> 261,238
<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 September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000066901
<NAME> ENTERGY MISSISSIPPI, INC.
<SUBSIDIARY>
<NUMBER> 016
<NAME> ENTERGY MISSISSIPPI, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,056,697
<OTHER-PROPERTY-AND-INVEST> 13,164
<TOTAL-CURRENT-ASSETS> 196,866
<TOTAL-DEFERRED-CHARGES> 130,767
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,397,494
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 224,681
<TOTAL-COMMON-STOCKHOLDERS-EQ> 423,948
0
50,381
<LONG-TERM-DEBT-NET> 463,547
<SHORT-TERM-NOTES> 0
<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> 459,598
<TOT-CAPITALIZATION-AND-LIAB> 1,397,494
<GROSS-OPERATING-REVENUE> 798,709
<INCOME-TAX-EXPENSE> 34,215
<OTHER-OPERATING-EXPENSES> 672,555
<TOTAL-OPERATING-EXPENSES> 672,555
<OPERATING-INCOME-LOSS> 126,154
<OTHER-INCOME-NET> 3,019
<INCOME-BEFORE-INTEREST-EXPEN> 129,173
<TOTAL-INTEREST-EXPENSE> 30,931
<NET-INCOME> 64,027
2,527
<EARNINGS-AVAILABLE-FOR-COMM> 61,500
<COMMON-STOCK-DIVIDENDS> 66,000
<TOTAL-INTEREST-ON-BONDS> 31,165
<CASH-FLOW-OPERATIONS> 151,484
<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 September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 292,824
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 142,804
<TOTAL-DEFERRED-CHARGES> 63,913
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 502,800
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,294
<RETAINED-EARNINGS> 67,067
<TOTAL-COMMON-STOCKHOLDERS-EQ> 137,105
0
19,780
<LONG-TERM-DEBT-NET> 169,002
<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> 176,913
<TOT-CAPITALIZATION-AND-LIAB> 502,800
<GROSS-OPERATING-REVENUE> 404,577
<INCOME-TAX-EXPENSE> 11,336
<OTHER-OPERATING-EXPENSES> 367,008
<TOTAL-OPERATING-EXPENSES> 367,008
<OPERATING-INCOME-LOSS> 37,569
<OTHER-INCOME-NET> 712
<INCOME-BEFORE-INTEREST-EXPEN> 38,281
<TOTAL-INTEREST-EXPENSE> 11,012
<NET-INCOME> 15,933
724
<EARNINGS-AVAILABLE-FOR-COMM> 15,209
<COMMON-STOCK-DIVIDENDS> 9,700
<TOTAL-INTEREST-ON-BONDS> 13,259
<CASH-FLOW-OPERATIONS> 34,904
<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 September 30,
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,429,099
<OTHER-PROPERTY-AND-INVEST> 104,279
<TOTAL-CURRENT-ASSETS> 386,995
<TOTAL-DEFERRED-CHARGES> 480,987
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,401,360
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 62,802
<TOTAL-COMMON-STOCKHOLDERS-EQ> 852,152
0
0
<LONG-TERM-DEBT-NET> 1,174,350
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 160,000
0
<CAPITAL-LEASE-OBLIGATIONS> 37,683
<LEASES-CURRENT> 36,156
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,141,019
<TOT-CAPITALIZATION-AND-LIAB> 3,401,360
<GROSS-OPERATING-REVENUE> 445,025
<INCOME-TAX-EXPENSE> 61,355
<OTHER-OPERATING-EXPENSES> 232,117
<TOTAL-OPERATING-EXPENSES> 232,117
<OPERATING-INCOME-LOSS> 212,908
<OTHER-INCOME-NET> 10,359
<INCOME-BEFORE-INTEREST-EXPEN> 223,267
<TOTAL-INTEREST-EXPENSE> 87,407
<NET-INCOME> 74,505
0
<EARNINGS-AVAILABLE-FOR-COMM> 74,505
<COMMON-STOCK-DIVIDENDS> 72,300
<TOTAL-INTEREST-ON-BONDS> 87,298
<CASH-FLOW-OPERATIONS> 184,922
<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 September 30,
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,411,695
<OTHER-PROPERTY-AND-INVEST> 1,672,486
<TOTAL-CURRENT-ASSETS> 488,648
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,572,829
<COMMON> 114,000
<CAPITAL-SURPLUS-PAID-IN> 391,981
<RETAINED-EARNINGS> (56,919)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 466,277
0
300,000
<LONG-TERM-DEBT-NET> 1,729,691
<SHORT-TERM-NOTES> 235,241
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 22,299
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,819,321
<TOT-CAPITALIZATION-AND-LIAB> 4,572,829
<GROSS-OPERATING-REVENUE> 1,494,552
<INCOME-TAX-EXPENSE> 102,553
<OTHER-OPERATING-EXPENSES> 1,269,380
<TOTAL-OPERATING-EXPENSES> 1,269,380
<OPERATING-INCOME-LOSS> 225,172
<OTHER-INCOME-NET> 24,970
<INCOME-BEFORE-INTEREST-EXPEN> 250,142
<TOTAL-INTEREST-EXPENSE> 147,589
<NET-INCOME> 102,531
0
<EARNINGS-AVAILABLE-FOR-COMM> 102,531
<COMMON-STOCK-DIVIDENDS> 110,688
<TOTAL-INTEREST-ON-BONDS> 142,233
<CASH-FLOW-OPERATIONS> 326,479
<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
Sept
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 99,482
Interest applicable to rentals 16,860 19,140 18,158 19,121 17,529 16,289
----------------------------------------------------------------
Total fixed charges, as defined 136,451 129,954 133,495 125,837 121,694 115,771
Preferred dividends, as defined (a) 30,334 23,234 27,636 24,731 16,073 15,467
----------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $166,785 $153,188 $161,131 $150,568 $137,767 $131,238
================================================================
Earnings as defined:
Net Income $205,297 $142,263 $136,666 $157,798 $127,977 121,114
Add:
Provision for income taxes:
Total 82,337 29,220 72,081 84,445 59,220 60,991
Fixed charges as above 136,451 129,954 133,495 125,837 121,694 115,771
----------------------------------------------------------------
Total earnings, as defined $424,085 $301,437 $342,242 $368,080 $308,891 $297,876
================================================================
Ratio of earnings to fixed charges, as defined 3.11 2.32 2.56 2.93 2.54 2.57
================================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.54 1.97 2.12 2.44 2.24 2.27
================================================================
- - - - - - - - - ------------------------
(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
Sept
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest charges 210,599 204,134 200,224 193,890 180,073 164,972
Interest applicable to rentals 23,455 21,539 16,648 14,887 15,747 16,593
-----------------------------------------------------------
Total fixed charges, as defined 234,054 225,673 216,872 208,777 195,820 181,565
Preferred dividends, as defined (a) 65,299 52,210 44,651 48,690 30,028 28,501
-----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $299,353 $277,883 $261,523 $257,467 $225,848 $210,066
===========================================================
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 17,501
Add:
Income Taxes 58,016 (62,086) 63,244 102,091 22,402 13,388
Fixed charges as above 234,054 225,673 216,872 208,777 195,820 181,565
-----------------------------------------------------------
Total earnings, as defined (b) $361,532 $80,832 $403,035 $306,981 $278,198 $212,454
===========================================================
Ratio of earnings to fixed charges, as defined 1.54 0.36 1.86 1.47 1.42 1.17
===========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.21 0.29 1.54 1.19 1.23 1.01
===========================================================
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
(b) Earnings for the 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
Sept
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest 136,957 136,444 136,901 132,412 128,900 125,515
Interest applicable to rentals 8,519 8,332 9,332 10,601 9,203 10,547
-------------------------------------------------------------
Total fixed charges, as defined 145,476 144,776 146,233 143,013 138,103 136,062
Preferred dividends, as defined (a) 40,779 29,171 32,847 28,234 22,103 22,283
-------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $186,255 $173,947 $179,080 $171,247 $160,206 $158,345
=============================================================
Earnings as defined:
Net Income $188,808 $213,839 $201,537 $190,762 $141,757 157,230
Add:
Provision for income taxes:
Total Taxes 110,813 63,288 117,114 118,559 98,965 112,021
Fixed charges as above 145,476 144,776 146,233 143,013 138,103 136,062
-------------------------------------------------------------
Total earnings, as defined $445,097 $421,903 $464,884 $452,334 $378,825 $405,313
=============================================================
Ratio of earnings to fixed charges, as defined 3.06 2.91 3.18 3.16 2.74 2.98
=============================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.39 2.43 2.60 2.64 2.36 2.56
=============================================================
- - - - - - - - - ------------------------
(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
Sept
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 41,937
Interest applicable to rentals 1,264 1,716 2,173 2,165 1,947 1,979
-------------------------------------------------------------
Total fixed charges, as defined 56,623 54,480 53,808 50,172 47,221 43,916
Preferred dividends, as defined (a) 12,990 9,447 9,004 7,610 5,123 4,677
-------------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $69,613 $63,927 $62,812 $57,782 $52,344 $48,593
============================================================
Earnings as defined:
Net Income $101,743 $48,779 $68,667 $79,210 66,661 75,602
Add:
Provision for income taxes:
Total income taxes 55,993 12,476 34,877 41,107 26,744 33,108
Fixed charges as above 56,623 54,480 53,808 50,172 47,221 43,916
-------------------------------------------------------------
Total earnings, as defined $214,359 $115,735 $157,352 $170,489 $140,626 $152,626
=============================================================
Ratio of earnings to fixed charges, as defined 3.79 2.12 2.92 3.40 2.98 3.48
=============================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 3.08 1.81 2.51 2.95 2.69 3.14
=============================================================
- - - - - - - - - ------------------------
(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.
</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
Sept
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 14,912
Interest applicable to rentals 544 1,245 916 831 911 992
----------------------------------------------------------
Total fixed charges, as defined 21,636 19,517 18,718 17,135 16,198 15,904
Preferred dividends, as defined (a) 2,952 2,071 1,964 1,549 1,723 1,702
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $24,588 $21,588 $20,682 $18,684 $17,921 $17,606
==========================================================
Earnings as defined:
Net Income $47,709 $13,211 $34,386 $26,776 $15,451 $16,938
Add:
Provision for income taxes:
Total 31,938 4,600 20,467 16,216 12,142 12,779
Fixed charges as above 21,636 19,517 18,718 17,135 16,198 15,904
-----------------------------------------------------------
Total earnings, as defined $101,283 $37,328 $73,571 $60,127 $43,791 $45,621
===========================================================
Ratio of earnings to fixed charges, as defined 4.68 1.91 3.93 3.51 2.70 2.87
===========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 4.12 1.73 3.56 3.22 2.44 2.59
===========================================================
- - - - - - - - - ------------------------
(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
Sept
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest 190,938 176,504 151,512 143,720 128,653 120,277
Interest applicable to rentals 6,790 7,546 6,475 6,223 6,065 4,817
---------------------------------------------------------------
Total fixed charges, as defined $197,728 $184,050 $157,987 $149,943 $134,718 $125,094
===============================================================
Earnings as defined:
Net Income $93,927 $5,407 $93,039 $98,668 $102,295 $103,913
Add:
Provision for income taxes:
Total 78,552 36,838 75,493 82,121 74,654 76,858
Fixed charges as above 197,728 184,050 157,987 149,943 134,718 125,094
---------------------------------------------------------------
Total earnings, as defined $370,207 $226,295 $326,519 $330,732 $311,667 $305,865
===============================================================
Ratio of earnings to fixed charges, as defined 1.87 1.23 2.07 2.21 2.31 2.45
===============================================================
</TABLE>
Exhibit 99(g)
Entergy London Investments
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
December 31, Sept 30,
1997 1998
Fixed charges, as defined:
Total Interest 178,647 207,253
Interest applicable to rentals 3,766 4,108
---------------------
Total fixed charges, as defined $182,413 $211,361
=====================
Earnings as defined:
Net Income ($147,335) $102,504
Add:
Provision for income taxes:
Total 177,023 (3,425)
Fixed charges as above 182,413 211,361
---------------------
Total earnings, as defined $212,101 $310,440
=====================
Ratio of earnings to fixed charges, as defined 1.16 1.47
=====================
