_____________________________________________________________________
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 June 30, 1999
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) 576-4000
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) 576-4000
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) 576-4000
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
_________________________________________________________________________
<PAGE>
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrants were required to file such reports), and (2)
have been subject to such filing requirements for the past 90 days.
Yes X No
Common Stock Outstanding Outstanding at July 31, 1999
Entergy Corporation ($0.01 par value) 246,833,959
This combined Quarterly Report on Form 10-Q is separately filed by
Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans,
Inc., and System Energy Resources, Inc. Information contained herein
relating to any individual company is filed by such company on its own
behalf. Each company 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, 1998, and the
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, filed
by the individual registrants with the SEC, and should be read in
conjunction therewith.
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., and System Energy
Resources, Inc. 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
ability to locate and correct computer codes relevant to Year 2000 issues
and related matters, and other factors.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
June 30, 1999
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 7
Results of Operations and Financial Statements:
Entergy Corporation and Subsidiaries:
Results of Operations 11
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
Income Statements 26
Statements of Cash Flows 27
Balance Sheets 28
Selected Operating Results 30
Entergy Gulf States, Inc.:
Results of Operations 31
Income Statements 35
Statements of Cash Flows 37
Balance Sheets 38
Selected Operating Results 40
Entergy Louisiana, Inc.:
Results of Operations 41
Income Statements 43
Statements of Cash Flows 45
Balance Sheets 46
Selected Operating Results 48
Entergy Mississippi, Inc.:
Results of Operations 49
Income Statements 51
Statements of Cash Flows 53
Balance Sheets 54
Selected Operating Results 56
Entergy New Orleans, Inc.:
Results of Operations 57
Income Statements 59
Statements of Cash Flows 61
Balance Sheets 62
Selected Operating Results 64
System Energy Resources, Inc.:
Results of Operations 65
Income Statements 67
Statements of Cash Flows 69
Balance Sheets 70
Notes to Financial Statements for Entergy Corporation
and Subsidiaries 72
Part II:
Item 1. Legal Proceedings 81
Item 4. Submission of Matters to a Vote of
Security Holders 83
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
AFUDC Allowance for Funds Used During Construction
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
Board Board of Directors of Entergy Corporation
Cajun Cajun Electric Power Cooperative, Inc.
Capital Funds Agreement Agreement, dated as of June 21, 1974, as
amended, between System Energy and Entergy
Corporation, and the assignments thereof
CitiPower CitiPower Pty., an electric distribution
company serving Melbourne, Australia and
surrounding suburbs, which was acquired by
Entergy effective January 5, 1996 and was
sold effective December 31, 1998.
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
ETHC Entergy Technology Holding Company
EWG Exempt wholesale generator under PUHCA
Entergy Entergy Corporation and its various direct
and indirect subsidiaries
Entergy Arkansas Entergy Arkansas, Inc., an Arkansas
corporation
Entergy Corporation Entergy Corporation, a Delaware corporation
Entergy Gulf States Entergy Gulf States, Inc., a Texas
corporation (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., a Louisiana
corporation
Entergy Mississippi Entergy Mississippi, Inc., a Mississippi
corporation
Entergy New Orleans Entergy New Orleans, Inc., a Louisiana
corporation
FERC Federal Energy Regulatory Commission
FUCO an exempt foreign utility company under
PUHCA
Form 10-K The combined Annual Report on Form 10-K for
the year ended December 31, 1998 of Entergy,
Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy
Grand Gulf 1 Unit No. 1 (nuclear) of the Grand Gulf Plant
Independence Independence Steam Electric Station (coal),
owned 16% by Entergy Arkansas, 25% by
Entergy Mississippi, and 11% by Entergy
Power, Inc.
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 and was sold effective December 4,
1998.
MPSC Mississippi Public Service Commission
MW Megawatt(s)
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 Energy System Energy Resources, Inc., an Arkansas
corporation
UK The United Kingdom of Great Britain and
Northern Ireland
Waterford 3 Unit No. 3 (nuclear) of the Waterford Plant
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Operations
Net cash flow from operations for Entergy Corporation, the
domestic utility companies, and System Energy for the six months
ended June 30, 1999 and 1998 was as follows:
Six Months Ended Six Months Ended
Company June 30, 1999 June 30, 1998
(In Millions)
Entergy Corporation $ 555.6 $653.3
Entergy Arkansas $ 102.6 $ 95.3
Entergy Gulf States $ 81.8 $161.7
Entergy Louisiana $ 139.0 $128.7
Entergy Mississippi $ 34.9 $ 73.3
Entergy New Orleans $ 19.8 $ 6.3
System Energy $ 201.8 $ 93.2
Entergy's consolidated cash flow from operations decreased
compared to 1998 principally due to the completion of rate phase-in
plans and adverse rate activity at certain of the domestic utility
companies, and an increase in cash used by competitive businesses.
Rate phase-in plans contributed to cash flow from operations in
1998. Under these plans, revenues collected exceed the cash cost of
expenses. These plans positively impacted cash flow from operations,
but had no net income effect because the higher revenues were offset
by the amortization of previously deferred costs. During 1998 the
following phase-in plans were completed:
o Entergy Gulf States' Louisiana retail phase-in plan for River
Bend in February;
o Entergy Mississippi's phase-in plan for Grand Gulf 1 in
September; and
o Entergy Arkansas' phase-in plan for Grand Gulf 1 in November.
The operating cash flow used by competitive businesses was $60.6
million for the six months ended June 30, 1999. For the six months
ended June 30, 1998, the competitive businesses provided $155.9
million to operating cash flow. This change was principally due to:
o the sales of London Electricity and CitiPower in December 1998,
which had provided positive operating cash flow in 1998 but
contributed no operating cash flow in 1999; and
o a net loss for the power marketing and trading business in 1999
compared to net income in 1998, which caused this business to use
operating cash flow in 1999 whereas it provided operating cash flow
in 1998.
The increase in operating cash flow used by the competitive
businesses was partially offset by:
o the sales of Efficient Solutions, Inc. in September 1998 and
Entergy Security, Inc. in January 1999, which had used operating cash
flow in 1998 and used none in 1999; and
o positive operating cash flow contributed by the global power
development business, which had used operating cash flow in 1998.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Investing Activities
Net cash used in investing activities decreased compared to the
six months ended June 30, 1998 principally due to the sales of
Entergy Security, Inc. in January 1999 and Entergy Power Edesur
Holding, LTD, TeleCorp Holding Corporation, Inc., Entergy Hyperion
Telecommunications of Mississippi, LLC, Entergy Hyperion
Telecommunications of Louisiana, LLC, and Entergy Hyperion
Telecommunications of Arkansas, LLC in June 1999.
Financing Activities
Net cash used in financing activities increased compared to 1998
principally due to:
o the redemption of preferred stock in 1999 at Entergy Gulf States
and Entergy Louisiana; and
o the repayment of a line of credit by Entergy Corporation and
ETHC with a portion of the proceeds from the sale of Entergy
Security, Inc.
These uses were partially offset by borrowings under the credit
facilities associated with the construction of the Saltend and
Damhead Creek power plants by Entergy's global power development
business and a reduction in the amount of debt retirements at Entergy
Arkansas.
Capital Resources
Entergy requires capital resources for:
o construction and other capital expenditures;
o debt and preferred stock maturities;
o capital investments;
o funding of subsidiaries; and
o dividend and interest payments.
Management provides more information on construction
expenditures and long-term debt and preferred stock maturities in
Note 9 to the financial statements in the Form 10-K.
Entergy's sources to meet its capital requirements include:
o internally generated funds;
o cash on hand;
o debt or preferred stock issuances;
o bank financing under new or existing facilities;
o short-term borrowings; and
o sales of businesses.
During the six months ended June 30, 1999, cash from operations
and cash on hand met substantially all investing and financing
requirements of the domestic utility companies and System Energy.
During this period Entergy Corporation received dividend payments
totaling $81.7 million from the domestic utility companies and System
Energy.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1999, Entergy had committed short-term credit
facilities in the amount of $550 million, of which $440 million was
unused. The status of Entergy's short-term credit facilities is as
follows:
o At June 30, 1999, Entergy Corporation had $60 million of
borrowings outstanding under a $250 million bank credit facility that
expires in September 1999.
o Entergy Corporation had no borrowings outstanding and ETHC had
$50 million of borrowings outstanding under a joint $50 million bank
line of credit at June 30, 1999. This line had been reduced from
$100 million in June 1999 and was terminated on July 6, 1999.
Proceeds from the June 1999 sales of TeleCorp Holding Corporation,
Inc., Entergy Hyperion Telecommunications of Mississippi, LLC,
Entergy Hyperion Telecommunications of Louisiana, LLC, and Entergy
Hyperion Telecommunications of Arkansas, LLC were used to repay the
borrowings outstanding under this line.
o The external credit lines of the domestic utility companies
expired on May 31, 1999 and were not renewed.
o Entergy's global power development business entered into a $250
million bank credit facility in March 1999 that will expire on August
25, 1999, but had no borrowings outstanding under this facility as of
June 30, 1999. The commitment fee for this facility is currently
.15% of the undrawn amount.
In November 1996, SEC authorization was received by the domestic
utility companies to increase their short-term borrowing limits to
amounts totaling $1.3 billion. This included a total short-term
borrowing limit for the domestic utility companies of $1.078 billion.
This authorization is effective through November 30, 2001. As of
June 30, 1999, only Entergy Mississippi had borrowings outstanding
from the money pool, in the amount of $21 million. The money pool is
an inter-company borrowing arrangement designed to reduce the
domestic utility companies' dependence on external short-term
borrowings.
All securities issuances by Entergy, the domestic utility
companies, and System Energy are subject to regulatory approval.
Preferred stock and debt issuances are subject to issuance tests set
forth in corporate charters, bond indentures, and other agreements.
The domestic utility companies may also establish special purpose
trusts or limited partnerships as financing subsidiaries for the
purpose of issuing quarterly income preferred securities.
Management expects that the domestic utility companies and
System Energy will continue to refinance or redeem higher cost debt
and preferred stock prior to maturity to the extent market conditions
and interest and dividend rates are favorable.
Entergy's global power development business is currently
constructing two combined cycle gas turbine merchant power plants in
the UK. The first is a 1200 MW plant known as Saltend. It is
expected to begin commercial operation in the first quarter of 2000.
The second is a 792 MW plant known as Damhead Creek. It is expected
to begin commercial operation in the fourth quarter of 2000. The
financing of the construction of these two power plants is discussed
in Note 7 to the financial statements in the Form 10-K.
On July 13, 1999, Entergy's non-utility nuclear power business
acquired from Boston Edison Company (BECO) the 670 MW Pilgrim Nuclear
Station located in Plymouth, Massachusetts. The acquisition included
the plant, real estate, materials and supplies, and nuclear fuel, for
a purchase price of $81 million. As part of the Pilgrim purchase,
BECO has funded a $471 million decommissioning trust fund. The
purchase price was funded with proceeds from the sales of non-
regulated businesses. Further discussion of this acquisition can be
found in "Part I, Item 1, Other Businesses" in the Form 10-K.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy's ability to invest in domestic and foreign generation
businesses is subject to the SEC's regulations under PUHCA. Absent
SEC approval, these regulations limit the aggregate amount that
Entergy, but not its non-regulated FUCO and EWG subsidiaries, may
invest in domestic and foreign utility businesses to an amount equal
to 50% of consolidated retained earnings at the time an investment is
made. Due to the sale of electric distribution businesses in the UK
and Australia in 1998, Entergy's FUCO and EWG subsidiaries have the
ability to make significant additional investments in domestic and
foreign generation businesses.
Entergy has also made investments in energy-related businesses,
including power marketing and trading. Under the SEC's regulations
pursuant to 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 approval. Entergy currently has
considerable capacity to make additional investments of this type
before such limits would be exceeded.
In the six months ended June 30, 1999, Entergy Corporation paid
$144.1 million in cash dividends on its common stock. Declarations
of dividends on Entergy's common stock are made at the discretion of
the Board. The Board evaluates the level of Entergy common stock
dividends based upon Entergy's earnings and financial strength.
Dividend restrictions are discussed in Note 8 to the financial
statements in the Form 10-K.
In October 1998, the Board approved a plan for the repurchase of
Entergy common stock through December 31, 2001 to fulfill the
requirements of various compensation and benefit plans. The stock
repurchase plan provides for purchases in the open market of up to 5
million shares for an aggregate consideration of up to $250 million.
In addition, on July 30, 1999, the Board approved the commitment of
up to $750 million in funds towards the repurchase of Entergy common
stock. These purchases will be made on a discretionary basis,
utilizing internal funds. See Note 3 to the financial statements for
stock repurchases and issuances made during the six months ended June
30, 1999.
See Note 4 to the financial statements in this report for a
discussion of Entergy's recent long-term debt activity. See Notes 4,
5, 6, 7, 9 and 10 to the financial statements in the Form 10-K for
additional information on Entergy's and its subsidiaries' capital and
refinancing requirements in 1999-2003.
Entergy Corporation and System Energy
Pursuant to the Capital Funds Agreement between Entergy
Corporation and System Energy, Entergy Corporation has agreed to
supply System Energy with sufficient capital to:
o maintain System Energy's equity capital at a minimum of 35% of
its total capitalization (excluding short-term debt);
o permit the continued commercial operation of Grand Gulf 1;
o pay in full all System Energy indebtedness for borrowed money
when due; and
o enable System Energy to make payments on specific debt under
supplements to the agreement assigning System Energy's rights in the
agreement as security for the specific debt.
The Capital Funds Agreement and other Grand Gulf 1 related
agreements are more thoroughly discussed in Note 9 to the financial
statements in the Form 10-K.
<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
"Domestic Competition - Regulatory and Legislative Activity -
Transition-to-Competition Filings", "Industrial and Commercial
Customers", and "Other Electric Utility Trends" for a discussion of
the increasing competitive pressures facing Entergy and the electric
utility industry. See also "Market Risks" in the Form 10-K for a
discussion of other significant issues affecting Entergy. Set forth
below are recent updates to the information contained in the Form 10-
K under the other headings contained therein.
Several significant events have affected and will continue to
affect Entergy's results of operations. During the past twelve
months, Entergy sold its interests in London Electricity, CitiPower,
Efficient Solutions, Inc., and most of its telecommunications
businesses, producing significant cash receipts which are non-
recurring. Entergy's power marketing and trading activities have
increased operating revenues and expenses during the three and six
months ended June 30, 1999. For more information see Note 6 to the
financial statements included in this report. In addition, on July
30, 1999, the Board approved the commitment of up to $750 million in
funds towards the repurchase of Entergy common stock. These
purchases will be made on a discretionary basis, utilizing internal
funds. Finally, the domestic operating companies have been and will
continue to be subject to regulatory proceedings relating to several
issues, including but not limited to their transition to competition,
rate recovery, and accounting matters, some or all of which impact
their results of operations negatively. All of these factors affect
Entergy's competitive businesses and domestic utility companies and
will affect Entergy's results of operations in the future.
Domestic Competition
Regulatory and Legislative Activity
Open Access
In April 1999, Entergy filed a proposal seeking guidance from
FERC regarding the formation of a separate, independent transmission
company (Transco), which would own, operate, control, and maintain
transmission assets. Transco member companies, which could include
companies other than Entergy or its subsidiaries, would receive
passive ownership, but no voting rights. The transmission assets and
related employees of the domestic utility companies would be
transferred to the Transco.
In 1999, FERC issued an order in response to Entergy's proposal.
FERC concluded that passive ownership of a Transco by a generating
company or other market participant could meet FERC's current
independence and governance requirements provided the Transco is
structured to address certain issues and concerns raised by FERC.
The issues and concerns identified by FERC relate to the Transco
board selection process, the Transco board's fiduciary obligations to
the member companies, the ability of Transco to raise additional
capital, and restrictions on transactions between the Transco and the
member companies. Management expects to make additional filings with
federal, state, and local regulatory authorities addressing these and
other issues and seeking necessary approvals for the formation of the
Transco. If approved, the Transco would likely not become
operational until 2001 or 2002, depending upon the timing of such
regulatory approvals.
Legislative Activity
In April 1999, the governor of Arkansas signed into law a
restructuring bill passed by the Arkansas Legislature. The law
provides for retail open access by electric utilities on January 1,
2002. The APSC may delay implementation of retail open access, but
not beyond June 30, 2003. The new law provides for the opportunity
for recovery of stranded costs pursuant to a review and approval by
the APSC, and for securitization of the allowed stranded costs. The
law also requires Entergy Arkansas and other utilities to make
filings separating (unbundling) their costs into generation,
transmission, and distribution functions. Entergy Arkansas' filing
must be made by January 1, 2000. Utilities that own transmission
facilities must subject them to operation by an independent
transmission organization.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In June 1999, the governor of Texas signed into law a
restructuring bill passed by the Texas Legislature. The law provides
for retail open access by most electric utilities on January 1, 2002,
market power mitigation measures, the opportunity for stranded cost
recovery, and securitization of regulatory assets and stranded costs.
The law also requires unbundling of the generation, transmission and
distribution, and retail provider functions, and requires filing of
the utilities' plans to unbundle functions by January 10, 2000. The
market power mitigation measures include a limit on the ownership of
generation assets by a power generation company within a specified
region. It is uncertain what the implications of this limit will be
for Entergy Gulf States or the Entergy system generally. However, it
is possible that the legislation could result in Entergy Gulf States
having to use mitigation measures including divesting some of its
generation assets, should it be determined that it has generation
market power. The law also requires affected utilities to sell at
auction, at least 60 days before January 1, 2002, entitlements to at
least 15% of their Texas jurisdictional installed generation
capacity. The obligation to auction capacity continues for up to 60
months after January 1, 2002. Pursuant to the law, utilities that
own transmission facilities must subject them to operational control
by an independent transmission organization. The PUCT and various
participants in the industry are currently in the process of
implementing the legislation through various rulemaking and other
proceedings.
Regulatory Activity
The LPSC has directed its staff to develop a Louisiana-specific
competition plan by January 1, 2001 for its consideration. Through
mid-2000, the LPSC staff will convene technical conferences and study
various potential effects of retail competition. No specific date
has been targeted for the start of competition, should it be decided
that competition in Louisiana is in the public interest.
See Note 2 to the financial statements in the Form 10-K for
information regarding the Revised Proposed Transition Plan (the Plan)
issued by the MPSC in June 1998. The MPSC continues to hold periodic
hearings and request informational filings regarding various
potential effects of retail competition. Enabling legislation
necessary to implement the Plan cannot be considered until the next
session of the Mississippi Legislature, which is scheduled to begin
in January 2000.
State and Local Regulation
As discussed in Note 2 to the financial statements in the Form
10-K, the PUCT had issued for comment proposed "Code of Conduct"
rules governing transactions between utilities and their affiliates.
In June 1999, the PUCT withdrew its proposed rules, and is expected
to propose new rules in August 1999. The new rules are expected to
implement the requirement of the new Texas retail open access law
that the PUCT adopt a code of conduct to ensure that, during the
transition to and after the introduction of retail competition,
utilities do not give an impermissible advantage to competitive
affiliates. The PUCT currently plans to adopt final rules by the
fall of 1999. Management cannot predict what form the adopted rules
will have and, therefore, what their impact will be.
Entergy Mississippi implemented a $13.3 million rate reduction
effective May 1999 based on its annual performance-based formula rate
plan filing for the 1998 test year. In June 1999, Entergy
Mississippi revised its filing resulting in an additional rate
reduction of approximately $1.5 million, effective July 1999.
Entergy Louisiana submitted its fourth annual performance-based
formula rate plan filing for the 1998 test year in April 1999, which
indicated that Entergy Louisiana would implement a $20.7 million base
rate reduction effective August 1999. Based on Entergy Louisiana's
filing and on subsequent comments filed by Entergy Louisiana, the
LPSC staff, and other parties, Entergy Louisiana expects to implement
a rate reduction of approximately $15.0 million, effective August 1,
1999. Entergy Louisiana's filing will then be subject to further
review by the LPSC, which may result in an additional change in
rates. No procedural schedule has been established by the LPSC.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Accounting Issues
Continued Application of SFAS 71
The domestic utility companies' and System Energy's financial
statements principally reflect assets and costs based on existing
cost-based ratemaking regulation in accordance with SFAS
71,"Accounting for the Effects of Certain Types of Regulation".
Continued applicability of SFAS 71 to the 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 electric utility industry's movement
toward a combination of competition and a modified regulatory
environment could result in rates that are not based on cost of
service. If a utility company is required to discontinue application
of SFAS 71 for a portion or all of its operations, it could be
required to remove regulatory assets and liabilities from its balance
sheet.
As discussed above, definitive outcomes have not yet been
determined regarding the transition to competition filings in
Entergy's jurisdictions; therefore, the regulated operations of the
domestic utility companies and System Energy continue to apply SFAS
71. Arkansas and Texas have enacted retail open access laws, but the
laws do not provide sufficient detail to determine definitively how
Entergy Arkansas' and Entergy Gulf States' regulated operations will
be affected. The laws provide for the recovery of stranded costs
subsequent to a process of review and approval by the APSC or PUCT.
Until such a review is concluded, it is anticipated that both Entergy
Arkansas and Entergy Gulf States will continue to apply SFAS 71.
Discontinuation of the application of SFAS 71 by the domestic utility
companies and System Energy could have a material adverse impact on
Entergy's financial statements. The application of SFAS 71 is
discussed more thoroughly in Note 1 to the financial statements in
the Form 10-K.
Year 2000 Issues
Management 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 actions required to prevent problems related to the Year
2000, and the resources required to take such actions. Unless
corrected, these problems may result in malfunctions in certain
software applications, databases, and computer equipment with respect
to dates on or after January 1, 2000. These malfunctions could
disrupt operations of nuclear or fossil generating plants, operation
of transmission and distribution systems, and access to
interconnections with neighboring utilities, and could cause other
operational problems. While it is not possible to anticipate all
future events, especially when third parties are involved, management
believes the most reasonably likely worst case scenario is isolated
disruptions of service, which should be rapidly restored.
Management has adopted a four-step approach to address Year 2000
issues including:
o an inventory of all IT and non-IT assets;
o an assessment to determine if the IT and non-IT assets are
critical to the business and, if so, whether Year 2000 has an impact
on them;
o remediation or replacement of critical systems determined to be
Year 2000 deficient; and
o certification of such critical systems to confirm Year 2000
compliance.
Management has completed its inventory of IT and non-IT assets,
identified systems and equipment that could be affected by the
millennium change, and assessed the risk of potential failure for its
assets. Management defines services or products as Year 2000
"compliant" when they 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 IT and non-IT assets that significantly affect service to
customers, and of IT and non-IT assets that do not significantly
affect service to customers, but are important to Entergy operations,
was complete by the end of the second quarter of 1999.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Management has completed an assessment of its vendors that
affect Entergy's operations with respect to Year 2000 issues. All
vendors have been contacted by letter, and vendors whose failure to
provide services would quickly downgrade or suspend Entergy's
operations have been interviewed and evaluated for Year 2000
readiness. Entergy's goal is to receive written confirmation of the
Year 2000 readiness of these critical vendors. Entergy's contingency
plans will include utilization of alternative suppliers and
stockpiling of fuel and other supplies. Management will implement
Year 2000 contingency plans for vendors throughout 1999.
Maintenance or modification costs associated with Year 2000
compliance are being expensed as incurred, while the costs of new
software are being capitalized and amortized over the software's
useful life. Management's current estimate of maintenance and
modification costs related to Year 2000 issues which have been or
will be incurred between 1998 and mid-2000 is approximately $54
million. Entergy has incurred approximately $44 million of this
total through June 1999. These expenses are being funded through
operating cash flows. Additionally, total capitalized costs for
projects accelerated due to Year 2000 issues are estimated to be $19
million. Entergy has incurred approximately $15 million of this
total through June 1999.
Based on the Year 2000 risk determinations of management, an
independent consultant's risk assessment, and the results of
certification activities, management has created and is implementing
contingency plans throughout 1999 to address Year 2000 issues.
Management completed its written contingency plans by the end of June
1999, using the guidelines issued by the Nuclear Energy Institute and
the guidelines issued by the North American Electric Reliability
Council. The contingency plans address various types of asset
failures that could cause disruptions in service, and create specific
mitigation strategies to rapidly restore service to customers. For
example, to mitigate the risk of loss of generation, Entergy intends
to carry more generation reserve than normal within its control area
during the hours surrounding midnight, December 31, 1999. Although
Entergy is taking steps that it believes will address the Year 2000
issue, this issue presents risks that may not be entirely foreseen
and eliminated and which could significantly affect utility
operations and financial performance.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the three months ended June 30, 1999
compared to the three months ended June 30, 1998, primarily due to a
decrease in operating revenues and an increase in income taxes,
partially offset by decreases in operating expenses and interest
charges, and an increase in other income.
Net income increased slightly for the six months ended June 30,
1999 compared to the six months ended June 30, 1998, primarily due to
decreases in operating expenses and interest charges and an increase
in other income, partially offset by a decrease in operating
revenues, and an increase in income taxes.
Note 6 to the financial statements provides a detailed breakdown
of financial information by business segment. Competitive businesses
are included in the following segments discussed in Note 6: power
marketing and trading, Entergy London, CitiPower, and other. Net
income for the three and six months ended June 30, 1998 reflected the
results of operations for Entergy London, CitiPower, Efficient
Solutions, Inc., Entergy Security, Inc., Entergy Power Edesur
Holdings, Entergy Hyperion Telecommunications, and TeleCorp Holding
Corporation, Inc. These businesses were sold between late 1998 and
mid-1999, and are therefore not included in some or all of 1999's
results of operations.
Revenues and Sales
Domestic Utility Companies and System Energy
The changes in electric operating revenues associated with the
domestic utility companies for the three and six months ended June
30, 1999 are as follows:
Three Months Ended Six Months Ended
Description Increase/Decrease) Increase/(Decrease)
(In Millions)
Base revenues $116.1 $82.2
Rate riders (43.5) (83.4)
Fuel cost recovery 51.3 24.6
Sales volume/weather 12.7 32.1
Other revenue (including unbilled) (3.1) 4.2
Sales for resale (22.7) (30.4)
------ -----
Total $110.8 $29.3
====== =====
Base revenues
Base revenues increased $116 million and $82 million for the
three and six months ended June 30, 1999, respectively, primarily due
to:
o a $93.6 million reversal of regulatory reserves associated with
the accelerated amortization of accounting order deferrals in
conjunction with the Texas rate settlement, the net income effect
of which is largely offset by the amortization of rate deferrals
discussed below; and
o reserves of $33 million recorded for actual and potential
refunds to Louisiana and Texas retail customers during the three and
six months ended June 30, 1999 compared to $101 million of reserves
recorded during the same periods in 1998 for the anticipated effects
of the rate proceedings in Texas.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
These increases were partially offset by annual base rate
reductions at Entergy Gulf States in the Louisiana jurisdiction of
$87 million and $18 million implemented in February and August 1998,
respectively, and by Texas retail annual base rate reductions of $69
million and $4.2 million implemented in December 1998 and March 1999,
respectively.
Rate rider
Rate rider revenues do not affect net income because they are
offset by specific incurred expenses.
Rate rider revenues decreased $44 million and $83 million for
the three and six months ended June 30, 1999, respectively, as a
result of a revised Grand Gulf rider. This new rider eliminated
revenues attributable to the Grand Gulf phase-in plan, which was
completed in November 1998 for Entergy Arkansas and September 1998
for Entergy Mississippi. These decreases were partially offset by
the implementation of the Grand Gulf Accelerated Recovery Tariffs at
Entergy Arkansas and Entergy Mississippi, which allows these
companies to accelerate a portion of the payments of their Grand Gulf
purchased power obligations. The tariffs became effective in January
1999 and October 1998, respectively.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that are offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased $51 million and $25
million for the three and six months ended June 30, 1999,
respectively, due to:
o a shift from lower priced nuclear fuel to higher priced gas at
Entergy Louisiana due to the nuclear refueling outage at Waterford 3;
o an increased fuel factor at Entergy Gulf States;
o a fuel surcharge implemented in Entergy Gulf States' Texas
jurisdiction in February 1999;
o an increase in the energy cost recovery rate effective April
1999 at Entergy Arkansas; and
o increased fuel expense resulting from increased generation due
to outages in 1998 at Entergy Arkansas.
Sales volume/weather
Sales volume increased $13 million and $32 million for the three
and six months ended June 30, 1999 due to:
o an increase in usage and the number of customers at Entergy Gulf
States, especially in the higher margin residential and commercial
sectors; and
o an increase in usage at Entergy Louisiana.
Such increases were partially offset by decreased usage in the
lower margin industrial customer class at Entergy Gulf States.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other revenue
Other revenue for the three and six months ended June 30, 1999
was affected by a change in estimated unbilled revenues of the
domestic utility companies. The changed estimate more closely aligns
the fuel component of unbilled revenues with regulatory treatment.
The net effect of this change was to increase other revenue, although
this increase was largely offset by milder weather in 1999. The
change in estimate is expected to affect comparisons of quarterly and
year-to-date revenue to applicable prior period amounts through the
first quarter of 2000. Comparative impacts are also affected by
seasonal variations in demand.
Sales for resale
Sales for resale decreased $23 million and $30 million for the
three and six months ended June 30, 1999, respectively, principally
due to decreased generation available for sale to non-affiliates
because of refueling outages at affiliate plants in 1999.
Competitive Businesses
Competitive business revenues decreased approximately $296
million and $875 million for the three and six months ended June 30,
1999, respectively. These decreases were primarily due to the sale
of Entergy London, CitiPower, and Efficient Solutions, Inc. in 1998.
These decreases were partially offset by increased sales
revenues in the power marketing and trading business. However, the
impact on net income from these revenues was more than offset by
increased power purchased and fuel and gas purchased for resale as
discussed in Expenses and other below, which resulted in a decline in
operating income for this business for the three and six months ended
June 30, 1999 compared to the three and six months ended June 30,
1998.
Expenses and other
Domestic Utility Companies and System Energy
Fuel and purchased power expenses
Fuel expenses increased for the three and six months ended June
30, 1999 principally due to:
o the 1998 completion of a customer refund obligation under the
1997 energy cost recovery agreement at Entergy Arkansas, which
lowered 1998 fuel cost recoveries;
o an increase in the energy cost recovery rate effective April
1999 at Entergy Arkansas; and
o a shift from lower priced nuclear fuel to higher priced gas due
to nuclear outages at Entergy Louisiana.
Fuel expenses also increased for the three months ended June 30,
1999 due to:
o an increase in deferred fuel cost recovery in 1999 at Entergy
Louisiana as a result of a settlement refund in 1998;
o a shift to higher cost gas generation due to reduced
availability at Nelson 6 and the extended River Bend nuclear
refueling outage at Entergy Gulf States; and
o reduced fuel cost deferrals at Entergy Gulf States as a result
of the higher fuel factor and fuel surcharge in the Texas
jurisdiction in 1999.
Fuel expenses also increased for the six months ended June 30,
1999 due to increased generation in 1999 as a result of maintenance
and refueling outages in 1998 at Entergy Arkansas.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Purchased power expenses decreased for the three and six months
ended June 30, 1999 principally due to a shift to lower priced
generation at Entergy Arkansas, Entergy Gulf States, and Entergy
Louisiana.
Other regulatory credits
Other regulatory credits decreased for the three and six months
ended June 30, 1999 primarily due to an increase in regulatory
charges at System Energy related to the implementation of the Grand
Gulf Accelerated Recovery Tariffs at Entergy Arkansas and Entergy
Mississippi. These tariffs allow System Energy to increase its
recovery of Grand Gulf 1 plant investment costs. The decrease was
also due to a lesser amount of under-recovery of Grand Gulf 1 costs
at Entergy Arkansas.
Amortization of rate deferrals
The amortization of rate deferrals increased for the three
months ended June 30, 1999 primarily due to an increase in the rate
of amortization of the Texas portion of River Bend accounting order
deferrals at Entergy Gulf States through December 2001 as a result of
the PUCT's approval of the settlement agreement in June 1999. See
Note 2 for the discussion of this settlement agreement. This
increase was partially offset by the expiration of the Grand Gulf 1
rate phase-in plans at Entergy Arkansas and Entergy Mississippi in
November and September 1998, respectively.
The amortization of rate deferrals decreased for the six months
ended June 30, 1999 primarily due to the expiration of the Grand Gulf
1 rate phase-in plans at Entergy Arkansas and Entergy Mississippi in
November and September 1998, respectively, and the completion of the
Louisiana retail rate phase-in plan for River Bend at Entergy Gulf
States in February 1998. These decreases were partially offset by
increased amortization at Entergy Gulf States due to the PUCT's
approval of the settlement agreement in June 1999.
Other income
Other income increased $10.7 million at the domestic utility
companies for the three months ended June 30, 1999 primarily due to:
o the reversal of the provision for the abeyed River Bend plant
costs at Entergy Gulf States, which exceeded the write-down of the
plant as the result of the June 1999 PUCT approval of the settlement
agreement; and
o an increase in allowance for equity funds used during
construction due to large nuclear projects at Entergy Arkansas and
Entergy Louisiana.
Interest charges
Interest charges increased for the three and six months ended
June 30, 1999 due to an adjustment to interest on the potential
refund of System Energy's proposed rate increase. See Note 2 for
further discussion. This increase was partially offset by a decrease
in interest due to the retirement, redemption, or refinancing of
certain long-term debt at Entergy Gulf States, Entergy Louisiana, and
System Energy for the three and six months ended June 30, 1999 and at
Entergy Arkansas for the six months ended June 30, 1999.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Competitive Businesses
Fuel and purchased power expenses
As compared to the comparable prior year periods, fuel and
purchased power expenses increased in the power marketing and trading
business by $313 million for the three months ended June 30, 1999 and
$405 million for the six months ended June 30, 1999 principally due
to increased gas trading volume.
Other operation and maintenance expenses
Other operation and maintenance expenses decreased for the three
and six months ended June 30, 1999 compared to the three and six
months ended June 30, 1998 principally due to the business sales
previously discussed. The decrease was partially offset by the
elimination of profits on intercompany power transactions and
an increase for the power marketing and trading business compared
to the three and six months ended June 30, 1998. Power marketing
and trading increases resulted from higher gas trading volumes and
staffing levels and increased risk management and back-office support.
Other income
Other income increased for the three and six months ended June
30, 1999 due principally to:
o a $26.7 million ($17 million net of tax) gain on the sale of
Entergy Power Edesur Holdings in June 1999;
o a $12.9 million ($8.0 million net of tax) gain on the sale of
Entergy Hyperion Telecommunications in June 1999; and
o interest income of $35.4 million in 1999 on the proceeds of the
sales of Entergy London and CitiPower.
Other income also increased for the six months ended June 30,
1999 due to:
o a $12.5 million ($.6 million net of tax) gain on the sale of
Entergy Security, Inc. in January 1999; and
o a $7.6 million ($4.9 million net of tax) adjustment to the final
sale price of CitiPower in January 1999.
These increases are partially offset by the following income
recorded in the first quarter of 1998 from an Entergy investment in
Asia:
o dividend income of $9.1 million; and
o a gain of $1.0 million on the partial sale of the investment.
Interest charges
Interest on long-term debt was decreased by $63 million and $125
million for the three and six months ended June 30, 1999,
respectively, by the retirement of debt associated with the Entergy
London and CitiPower businesses.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Income Taxes
The effective income tax rates for the three months ended June
30, 1999 and 1998 were 29.2% and 23.6%, respectively. The effective
income tax rates for the six months ended June 30, 1999 and 1998 were
31.8% and 29.4%, respectively. The effective income tax rate
increased primarily due to the recording of a deferred tax benefit in
June 1998 related to the expected utilization of capital loss
carryforwards, partially offset by the recording of deferred tax
benefits in June 1999 related to expected utilization of foreign tax
credits.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three and Six Months ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
OPERATING REVENUES (In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C>
Domestic electric $1,613,136 $1,502,357 $2,851,719 $2,822,409
Natural gas 22,149 24,188 59,880 74,613
Steam products 7,254 12,125 15,550 20,525
Competitive businesses 673,865 970,144 1,029,177 1,904,359
---------- ---------- ---------- ----------
TOTAL 2,316,404 2,508,814 3,956,326 4,821,906
---------- ---------- ---------- ----------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 490,871 327,854 893,844 676,817
Purchased power 676,827 808,264 1,050,626 1,586,938
Nuclear refueling outage expenses 17,135 21,015 36,820 43,689
Other operation and maintenance 400,706 500,505 768,338 984,193
Decommissioning 10,758 11,926 23,432 23,949
Taxes other than income taxes 83,053 90,318 166,121 186,112
Depreciation and amortization 177,181 233,163 361,549 473,598
Other regulatory credits, net (2,845) (25,017) (18,970) (59,783)
Amortization of rate deferrals 88,767 68,076 97,180 148,176
---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES 1,942,453 2,036,104 3,378,940 4,063,689
---------- ---------- ---------- ----------
OPERATING INCOME 373,951 472,710 577,386 758,217
---------- ---------- ---------- ----------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 7,348 3,274 12,759 5,623
Gain on sale of assets 40,718 3,586 61,301 13,121
Miscellaneous - net 30,064 14,622 50,016 36,660
---------- ---------- ---------- ----------
TOTAL 78,130 21,482 124,076 55,404
---------- ---------- ---------- ----------
INTEREST AND OTHER CHARGES
Interest on long-term debt 120,164 191,310 242,695 382,886
Other interest - net 36,942 14,053 45,483 24,155
Dividends on preferred securities of subsidiaries 4,710 8,950 9,419 20,128
Allowance for borrowed funds used during construction (5,926) (2,682) (10,405) (4,562)
---------- ---------- ---------- ----------
TOTAL 155,890 211,631 287,192 422,607
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 296,191 282,561 414,270 391,014
Income taxes 86,433 66,582 131,606 114,981
---------- ---------- ---------- ----------
CONSOLIDATED NET INCOME 209,758 215,979 282,664 276,033
Preferred dividend requirements of subsidiaries and others 9,981 11,704 20,706 23,480
---------- ---------- ---------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK 199,777 204,275 261,958 252,553
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment (1,337) (20,541) (958) (3,848)
---------- ---------- ---------- ----------
COMPREHENSIVE INCOME $198,440 $183,734 $261,000 $248,705
========== ========== ========== ==========
Earnings per average common share:
Basic and diluted $0.81 $0.83 $1.06 $1.03
Dividends declared per common share $0.30 $0.45 $0.60 $0.90
Average number of common shares outstanding:
Basic 246,795,710 246,452,120 246,688,052 246,187,736
Diluted 247,207,417 246,555,555 246,962,310 246,373,335
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Consolidated Net Income $282,664 $276,033
Noncash items included in net income:
Amortization of rate deferrals 97,180 148,176
Reserve for regulatory adjustments 13,344 138,902
Other regulatory charges (18,970) (59,783)
Depreciation, amortization, and decommissioning 384,981 497,547
Deferred income taxes and investment tax credits (180,410) (88,348)
Allowance for equity funds used during construction (12,759) (5,623)
Gain on sale of assets (61,301) (13,121)
Changes in working capital (Net of effects from dispositions):
Receivables (427,677) (54,452)
Fuel inventory (36,600) 3,868
Accounts payable 353,302 (38,423)
Taxes accrued 262,406 134,994
Interest accrued (35,306) 590
Deferred fuel (18,029) (81,916)
Other working capital accounts (86,458) (35,683)
Decommissioning trust contributions and realized change in trust assets (35,738) (37,674)
Provision for estimated losses and reserves (24,632) (118,290)
Changes in other regulatory assets (32,960) (36,546)
Other 132,513 23,084
--------- ---------
Net cash flow provided by operating activities 555,550 653,335
--------- ---------
INVESTING ACTIVITIES
Construction/capital expenditures (545,842) (454,309)
Allowance for equity funds used during construction 12,759 5,623
Nuclear fuel purchases (92,196) (41,126)
Proceeds from sale/leaseback of nuclear fuel 75,097 37,666
Proceeds from sale of businesses 351,082 2,511
Investment in other nonregulated/nonutility properties (14,406) (50,844)
Other 11,909 (7,360)
--------- ---------
Net cash flow used in investing activities (201,597) (507,839)
--------- ---------
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
FINANCING ACTIVITIES
Proceeds from the issuance of:
First mortgage bonds 74,691 112,556
G&R mortgage bonds 124,192 78,703
Other long-term debt 418,337 201,070
Common stock 11,664 15,228
Retirement of:
First mortgage bonds (245,887) (341,335)
G&R mortgage bonds (132,412) (80,000)
Other long-term debt (229,813) (125,389)
Repurchase of common stock (14,957) -
Redemption of preferred stock (76,758) (6,250)
Changes in short-term borrowings - net (215,500) 186,167
Dividends paid:
Preferred stock (21,671) (23,580)
Common stock (144,059) (221,772)
-------- --------
Net cash flow used in financing activities (452,173) (204,602)
-------- --------
Effect of exchange rates on cash and cash equivalents (541) 1,894
-------- --------
Net decrease in cash and cash equivalents (98,761) (57,212)
Cash and cash equivalents at beginning of period 1,184,495 830,547
---------- --------
Cash and cash equivalents at end of period $1,085,734 $773,335
========== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $319,456 $412,674
Income taxes $50,819 $78,761
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $24,544 $22,854
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents:
Cash $102,903 $386,764
Temporary cash investments - at cost,
which approximates market:
Other 837,831 797,731
Special deposits 145,000 -
----------- -----------
Total cash and cash equivalents 1,085,734 1,184,495
----------- -----------
Notes receivable 958,779 959,328
Accounts receivable:
Customer 278,570 280,648
Allowance for doubtful accounts (7,130) (10,300)
Other 500,440 197,362
Accrued unbilled revenues 365,652 245,350
----------- -----------
Total receivables 1,137,532 713,060
----------- -----------
Deferred fuel costs 187,617 169,589
Fuel inventory - at average cost 124,014 90,408
Materials and supplies - at average cost 368,576 374,674
Rate deferrals 33,727 37,507
Deferred nuclear refueling outage costs 49,399 37,138
Prepayments and other 137,954 77,749
----------- -----------
TOTAL 4,083,332 3,643,948
----------- -----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 214 214
Decommissioning trust funds 769,299 709,018
Non-utility property - at cost (less accumulated depreciation 205,650 205,660
Non-regulated investments 287,354 557,347
Other - at cost (less accumulated depreciation) 17,717 16,041
----------- -----------
TOTAL 1,280,234 1,488,280
----------- -----------
UTILITY PLANT
Electric 22,924,700 22,704,572
Plant acquisition adjustment 415,062 423,195
Property under capital lease 782,035 789,045
Natural gas 185,799 183,621
Steam products 81,549 80,537
Construction work in progress 1,159,065 911,278
Nuclear fuel under capital lease 322,783 282,595
Nuclear fuel 32,061 29,690
----------- -----------
TOTAL UTILITY PLANT 25,903,054 25,404,533
Less - accumulated depreciation and amortization (10,732,127) (10,075,951)
----------- -----------
UTILITY PLANT - NET 15,170,927 15,328,582
----------- -----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 31,696 125,095
SFAS 109 regulatory asset - net 1,111,175 1,141,318
Unamortized loss on reacquired debt 193,401 191,786
Other regulatory assets 598,142 528,179
Long-term receivables 33,474 34,617
Other 581,351 354,889
----------- -----------
TOTAL 2,549,239 2,375,884
----------- -----------
TOTAL ASSETS $23,083,732 $22,836,694
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
CURRENT LIABILITIES
<S> <C> <C>
Currently maturing long-term debt $411,297 $255,221
Notes payable 60,593 296,790
Accounts payable:
Other 867,987 522,072
Customer deposits 152,663 148,972
Taxes accrued 544,807 284,847
Accumulated deferred income taxes 64,081 31,976
Nuclear refueling outage costs 4,036 16,991
Interest accrued 150,022 185,688
Co-owner advances 15,268 4,073
Obligations under capital leases 176,247 176,270
Other 70,039 58,909
----------- -----------
TOTAL 2,517,040 1,981,809
----------- -----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 3,362,764 3,538,332
Accumulated deferred investment tax credits 529,981 565,744
Obligations under capital leases 252,717 220,209
FERC settlement - refund obligation 40,338 43,159
Other regulatory liabilities 194,961 153,163
Decommissioning 118,630 107,365
Transition to competition 94,554 90,623
Regulatory reserves 381,120 674,310
Accumulated provisions 252,532 252,321
Other 862,100 635,024
----------- -----------
TOTAL 6,089,697 6,280,250
----------- -----------
Long-term debt 6,458,758 6,596,617
Preferred stock with sinking fund 90,850 167,523
Preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 215,000 215,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 338,454 338,455
Common stock, $.01 par value, authorized 500,000,000
shares; issued 246,954,406 shares in 1999 and
246,829,076 shares in 1998 2,470 2,468
Paid-in capital 4,632,526 4,630,609
Retained earnings 2,640,373 2,526,888
Cumulative foreign currency translation adjustment (47,697) (46,739)
Less - treasury stock, at cost (129,009 shares in 1999 and
208,907 shares in 1998) 3,739 6,186
----------- -----------
TOTAL 7,562,387 7,445,495
----------- -----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $23,083,732 $22,836,694
=========== ===========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 497.8 $ 503.7 ($5.9) (1)
Commercial 358.8 360.8 (2.0) (1)
Industrial 449.5 439.5 10.0 2
Governmental 38.4 42.7 (4.3) (10)
-------------------------------
Total retail 1,344.5 1,346.7 (2.2) -
Sales for resale 88.9 107.3 (18.4) (17)
Other 179.7 48.3 131.4 272
-------------------------------
Total $1,613.1 $1,502.3 $ 110.8 7
===============================
Billed Electric Energy
Sales (GWH):
Residential 6,850 6,697 153 2
Commercial 5,741 5,496 245 4
Industrial 10,827 10,854 (27) -
Governmental 624 669 (45) (7)
-------------------------------
Total retail 24,042 23,716 326 1
Sales for resale 2,094 2,645 (551) (21)
-------------------------------
Total 26,136 26,361 (225) (1)
===============================
Six Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Domestic Electric Operating
Revenues:
Residential $ 929.8 $ 966.7 ($36.9) (4)
Commercial 675.0 693.5 (18.5) (3)
Industrial 856.2 884.2 (28.0) (3)
Governmental 74.4 84.2 (9.8) (12)
------------------------------
Total retail 2,535.4 2,628.6 (93.2) (4)
Sales for resale 163.9 190.4 (26.5) (14)
Other 152.4 3.4 149.0 4,382
------------------------------
Total $2,851.7 $2,822.4 $ 29.3 1
==============================
Billed Electric Energy
Sales (GWH):
Residential 13,267 12,937 330 3
Commercial 10,910 10,325 585 6
Industrial 21,043 21,266 (223) (1)
Governmental 1,213 1,297 (84) (6)
------------------------------
Total retail 46,433 45,825 608 1
Sales for resale 4,303 4,574 (271) (6)
------------------------------
Total 50,736 50,399 337 1
==============================
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the three months ended June 30, 1999
compared to the three months ended June 30, 1999 primarily due to
decreased electric operating revenues and increased operating
expenses, partially offset by decreased income taxes.
Net income decreased for the six months ended June 30, 1999
compared to the six months ended June 30, 1998 primarily due to
decreased electric operating revenues, partially offset by decreased
operating expenses and income taxes.
Revenues and Sales
The changes in electric operating revenues for the three and six
months ended June 30, 1999 are as follows:
Three Months Ended Six Months Ended
Description Increase/Decrease) Increase/(Decrease)
(In Millions)
Base revenues $0.3 $0.8
Rate riders (15.4) (29.6)
Fuel cost recovery 10.0 11.8
Sales volume/weather (0.4) 5.7
Other revenue (including unbilled) (29.4) (29.1)
Sales for resale 30.7 18.4
----- ------
Total ($4.2) ($22.0)
===== ======
Rate rider
Rate rider revenues do not affect net income because they are
offset by specific incurred expenses.
Rate rider revenues decreased for the three and six months
ended June 30, 1999 as a result of a revised Grand Gulf rider, which
includes consideration of the expiration of the Grand Gulf 1 phase-
in plan in November 1998, partially offset by the Grand Gulf
Accelerated Recovery Tariff (GGART). The tariff was designed to
allow Entergy Arkansas to pay down a portion of its Grand Gulf
purchased power obligation in advance of the implementation of
retail access in Arkansas. The rider and GGART became effective
with the first billing cycle in January 1999.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that are offset by specific
incurred fuel costs.
Fuel cost recovery revenues increased for the three and six
months ended June 30, 1999 due to:
o an increase in the energy cost recovery rate effective April
1999; and
o increased fuel expense resulting from increased generation in
1999 due to outages in 1998.
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other revenue
Other revenue for the three and six months ended June 30, 1999
decreased primarily due to a change in estimated unbilled revenues.
The changed estimate more closely aligns the fuel component of
unbilled revenues with regulatory treatment. Milder weather in 1999
also contributed to this decrease. The change in estimate is
expected to affect comparisons of quarterly and year-to-date revenue
to applicable prior period amounts through the first quarter of 2000.
Comparative impacts are also affected by seasonal variations in
demand.
Sales for resale
Sales for resale increased for the three and six months ended
June 30, 1999 due to increased generation availability in 1999 as a
result of maintenance outages in 1998. Refueling outages at
affiliate plants in 1999 resulted in a shift in sales to affiliated
companies.
Expenses
Fuel and fuel related expenses
Fuel expenses increased for the three and six months ended
June 30, 1999 due to the 1998 completion of a customer refund
obligation under the 1997 energy cost recovery agreement, which
lowered 1998 fuel cost recoveries, and an increase in the energy cost
recovery rate effective April 1999. The increase in the energy cost
recovery rate allows Entergy Arkansas to recover previously
under-recovered fuel expenses.
The increase in fuel expenses for the six months ended June 30,
1999 was also due to increased nuclear fuel and coal expense.
Nuclear fuel and coal expenses increased due to increased generation
in 1999 as a result of more maintenance and refueling outages
occurring in 1998 than in 1999.
Purchased power
Purchased power expenses decreased for the three and six months
ended June 30, 1999 due to a shift to lower priced nuclear and coal
generation resulting from increased generation availability in 1999
as a result of more refueling and maintenance outages occurring in
1998 than in 1999.
Other operation and maintenance
Other operation and maintenance expenses decreased for the three
and six months ended June 30, 1999 principally due to the
capitalization of costs associated with return to service projects
for certain fossil plants.
The decrease in other operation and maintenance expenses for the
six months ended June 30, 1999 was also due to:
o a mid-cycle outage in February and March 1998 at ANO 2; and
o increased insurance distributions in 1999 due to improved plant
insurance ratings.
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other regulatory credits
Other regulatory credits decreased for the three and six months
ended June 30, 1999 due to lower under-recovery of Grand Gulf 1
costs.
Amortization of rate deferrals
The amortization of Grand Gulf 1 rate deferrals decreased for
the three and six months ended June 30, 1999 due to the completion of
the Grand Gulf 1 rate phase-in plan in November 1998.
Income taxes
The effective income tax rates for the three months ended June
30, 1999 and 1998 were 32.4% and 38.3%, respectively. The effective
income tax rates for the six months ended June 30, 1999 and 1998 were
29.3% and 38.9%, respectively. The decreases in the effective tax
rates were due to lower pretax income and flow-through of tax
benefits related to accumulated provision for property insurance.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Domestic electric $387,191 $391,357 $699,160 $721,146
-------- -------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 84,855 29,142 133,647 75,365
Purchased power 102,800 114,997 197,743 210,312
Nuclear refueling outage expenses 7,464 7,728 15,530 15,819
Other operation and maintenance 83,255 90,498 165,464 176,296
Decommissioning 2,317 3,024 4,777 6,236
Taxes other than income taxes 9,259 9,840 18,516 20,200
Depreciation and amortization 40,929 41,748 82,598 83,797
Other regulatory credits (3,900) (11,524) (11,487) (22,105)
Amortization of rate deferrals - 22,067 - 44,135
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 326,979 307,520 606,788 610,055
-------- -------- -------- --------
OPERATING INCOME 60,212 83,837 92,372 111,091
-------- -------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 3,434 1,628 5,845 2,332
Gain/(loss) on sale of assets (1) (1) (2) 1,775
Miscellaneous - net (193) 1,679 744 6,773
-------- -------- -------- --------
TOTAL 3,240 3,306 6,587 10,880
-------- -------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 20,024 21,657 40,698 45,121
Other interest - net 1,565 604 3,090 1,360
Dividends on preferred securities of subsidiaries 1,275 1,275 2,550 2,550
Allowance for borrowed funds used during construction (2,221) (1,164) (3,878) (1,651)
-------- -------- -------- --------
TOTAL 20,643 22,372 42,460 47,380
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 42,809 64,771 56,499 74,591
Income taxes 13,880 24,804 16,559 29,001
-------- -------- -------- --------
NET INCOME 28,929 39,967 39,940 45,590
Preferred dividend requirements of subsidiaries and others 2,403 2,593 4,824 5,219
-------- -------- -------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $26,526 $37,374 $35,116 $40,371
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $39,940 $45,590
Noncash items included in net income:
Amortization of rate deferrals - 44,135
Other regulatory charges (11,487) (22,105)
Depreciation, amortization, and decommissioning 87,375 90,033
Deferred income taxes and investment tax credits (8,302) 2,886
Allowance for equity funds used during construction (5,845) (2,332)
Gain/loss on sale of assets 2 (1,775)
Changes in working capital:
Receivables (14,680) (34,717)
Fuel inventory (14,509) (4,465)
Accounts payable 3,009 69,394
Taxes accrued 12,283 9,714
Interest accrued (927) (4,013)
Deferred fuel costs 23,797 (43,643)
Other working capital accounts 8,018 (12,921)
Decommissioning trust contributions and realized
change in trust assets (10,111) (12,678)
Provision for estimated losses and reserves (13,954) (3,076)
Changes in other regulatory assets (29,612) (14,911)
Other 37,603 (9,858)
--------- --------
Net cash flow provided by operating activities 102,600 95,258
--------- --------
INVESTING ACTIVITIES
Construction expenditures (122,428) (81,803)
Allowance for equity funds used during construction 5,845 2,332
Nuclear fuel purchases (25,859) (6,997)
Proceeds from sale/leaseback of nuclear fuel 25,859 6,997
--------- --------
Net cash flow used in investing activities (116,583) (79,471)
--------- --------
FINANCING ACTIVITIES
Retirement of:
First mortgage bonds (38,287) (105,774)
Other long-term debt (980) (45,500)
Redemption of preferred stock (2,027) (4,000)
Dividends paid:
Common stock (8,200) (7,500)
Preferred stock (4,873) (5,318)
--------- --------
Net cash flow used in financing activities (54,367) (168,092)
--------- --------
Net decrease in cash and cash equivalents (68,350) (152,305)
Cash and cash equivalents at beginning of period 108,748 203,391
--------- --------
Cash and cash equivalents at end of period $40,398 $51,086
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $41,712 $48,855
Income taxes $12,250 $16,747
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $13,289 $15,048
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $8,394 $9,814
Temporary cash investments - at cost,
which approximates market:
Associated companies 7,342 15,643
Other 24,662 83,291
---------- ----------
Total cash and cash equivalents 40,398 108,748
---------- ----------
Accounts receivable:
Customer 69,664 72,234
Allowance for doubtful accounts (1,753) (1,753)
Associated companies 42,514 34,502
Other 3,989 4,510
Accrued unbilled revenues 82,843 73,083
---------- ----------
Total receivables 197,257 182,576
---------- ----------
Deferred fuel costs 17,394 41,191
Fuel inventory - at average cost 34,361 19,852
Materials and supplies - at average cost 90,362 89,033
Deferred nuclear refueling outage costs 24,455 17,787
Prepayments and other 6,927 5,557
---------- ----------
TOTAL 411,154 464,744
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 11,214 11,214
Decommissioning trust funds 326,684 303,285
Non-utility property - at cost (less accumulated depreciation) 1,466 1,468
Other - at cost (less accumulated depreciation) 4,401 3,602
---------- ----------
TOTAL 343,765 319,569
---------- ----------
UTILITY PLANT
Electric 4,784,412 4,731,699
Property under capital lease 47,937 49,415
Construction work in progress 245,188 201,853
Nuclear fuel under capital lease 100,053 95,589
Nuclear fuel 6,216 -
---------- ----------
TOTAL UTILITY PLANT 5,183,806 5,078,556
Less - accumulated depreciation and amortization (2,351,938) (2,275,170)
---------- ----------
UTILITY PLANT - NET 2,831,868 2,803,386
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 256,646 248,275
Unamortized loss on reacquired debt 50,129 51,747
Other regulatory assets 118,167 96,927
Other 13,976 22,003
---------- ----------
TOTAL 438,918 418,952
---------- ----------
TOTAL ASSETS $4,025,705 $4,006,651
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $340 $1,094
Notes payable 667 667
Accounts payable:
Associated companies 49,229 47,963
Other 81,712 79,969
Customer deposits 25,926 25,196
Taxes accrued 80,868 68,585
Accumulated deferred income taxes 22,825 24,162
Interest accrued 24,358 25,285
Co-owner advances 23,397 4,073
Obligations under capital leases 63,679 64,068
Other 13,466 16,183
---------- ----------
TOTAL 386,467 357,245
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 761,069 756,571
Accumulated deferred investment tax credits 96,215 98,768
Obligations under capital leases 84,410 80,936
Other regulatory liabilities 79,196 65,583
Transition to competition 94,554 90,623
Accumulated provisions 37,450 51,404
Other 57,255 56,400
---------- ----------
TOTAL 1,210,149 1,200,285
---------- ----------
Long-term debt 1,127,404 1,172,285
Preferred stock with sinking fund 20,000 22,027
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 60,000 60,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 116,350 116,350
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares 470 470
Additional paid-in capital 590,134 590,134
Retained earnings 514,731 487,855
---------- ----------
TOTAL 1,221,685 1,194,809
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,025,705 $4,006,651
========== ==========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY ARKANSAS, INC.
SELECTED OPERATING RESULTS
For the Three and Six Months Ended June 30, 1999
(Unaudited)
Three Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 110.9 $ 118.3 ($7.4) (6)
Commercial 68.5 68.9 (0.4) (1)
Industrial 80.7 78.4 2.3 3
Governmental 3.6 3.6 - -
-----------------------------
Total retail 263.7 269.2 (5.5) (2)
Sales for resale
Associated companies 60.8 25.4 35.4 139
Non-associated companies 49.3 54.0 (4.7) (9)
Other 13.4 42.8 (29.4) (69)
-----------------------------
Total $ 387.2 $ 391.4 ($4.2) (1)
=============================
Billed Electric Energy
Sales (GWH):
Residential 1,310 1,358 (48) (4)
Commercial 1,128 1,116 12 1
Industrial 1,694 1,641 53 3
Governmental 57 56 1 2
-----------------------------
Total retail 4,189 4,171 18 -
Sales for resale
Associated companies 2,734 863 1,871 217
Non-associated companies 1,295 1,236 59 5
-----------------------------
Total 8,218 6,270 1,948 31
=============================
Six Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 227.6 $ 239.2 ($11.6) (5)
Commercial 128.1 128.3 (0.2) -
Industrial 151.4 150.8 0.6 -
Governmental 6.9 7.0 (0.1) (1)
-----------------------------
Total retail 514.0 525.3 (11.3) (2)
Sales for resale
Associated companies 90.3 59.6 30.7 52
Non-associated companies 85.8 98.1 (12.3) (13)
Other 9.1 38.2 (29.1) (76)
-----------------------------
Total $ 699.2 $ 721.2 ($22.0) (3)
=============================
Billed Electric Energy
Sales (GWH):
Residential 2,865 2,861 4 -
Commercial 2,187 2,119 68 3
Industrial 3,300 3,208 92 3
Governmental 112 111 1 1
-----------------------------
Total retail 8,464 8,299 165 2
Sales for resale
Associated companies 4,270 2,500 1,770 71
Non-associated companies 2,116 2,409 (293) (12)
-----------------------------
Total 14,850 13,208 1,642 12
=============================
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three and six months ended June 30,
1999 compared to the three and six months ended June 30, 1998
primarily due to increased operating revenues and other income and
decreased interest expense, partially offset by increased operating
expenses and income taxes.
Revenues and Sales
Electric operating revenues
The changes in electric operating revenues for the three and six
months ended June 30, 1999 are as follows:
Three Months Ended Six Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Base revenues $127.1 $94.1
Fuel cost recovery 12.7 4.3
Sales volume/weather 2.5 10.0
Other revenue (including unbilled) 5.6 10.3
Sales for resale (19.4) (18.2)
------ ------
Total $128.5 $100.5
====== ======
Base revenues
Base revenues increased for the three and six months ended June
30, 1999 primarily due to:
o a $93.6 million reversal of regulatory reserves associated with
the accelerated amortization of accounting order deferrals in
conjunction with the Texas rate settlement, the net income effect
of which is largely offset by the amortization of rate deferrals
discussed below; and
o reserves of $33 million recorded for actual and potential
refunds to Louisiana and Texas retail customers during the three and
six months ended June 30, 1999 compared to $101 million of reserves
recorded during the same periods in 1998 for the anticipated effects
of the rate proceedings in Texas.
Partially offsetting these increases were:
o annual base rate reductions in the Louisiana jurisdiction of $87
million and $18 million that were implemented in February and August
1998, respectively; and
o Texas retail annual base rate reductions of $69 million and $4.2
million in December 1998 and March 1999, respectively.
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that are offset by specific incurred
fuel costs.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Fuel cost recovery revenues increased for the three and six
months ended June 30, 1999 due to:
o a higher fuel factor in 1999; and
o a fuel surcharge implemented in the Texas jurisdiction in
February 1999.
The increase was partially offset by reduced fuel recovery in the
Louisiana jurisdiction due to lower fuel prices and decreased
generation for the period included in fuel cost recovery revenues.
Sales volume/weather
Sales volume increased for the three and six months ended June
30, 1999 due to an increase in usage and the number of customers in
the higher margin residential and commercial customer classes,
partially offset by decreased usage in the lower margin industrial
customer class.
Other revenue
Other revenue for the three and six months ended June 30, 1999
increased primarily due to a change in estimated unbilled revenues.
The changed estimate more closely aligns the fuel component of
unbilled revenues with regulatory treatment. This increase was
partially offset by milder weather in 1999. The change in estimate
is expected to affect comparisons of quarterly and year-to-date
revenue to applicable prior period amounts through the first quarter
of 2000. Comparative impacts are also affected by seasonal
variations in demand.
Sales for resale
Sales for resale revenues decreased for the three and six months
ended June 30, 1999 due to less generation available for sale because
of the extended refueling outage at River Bend which began in early
April 1999. River Bend was brought back on-line at full power on
July 14, 1999.
Gas operating revenues
Gas operating revenues decreased for the six months ended June
30, 1999 primarily due to lower prices of gas purchased for resale as
well as decreased usage as a result of warmer winter weather,
especially in the residential and commercial sectors.
Steam operating revenues
Steam operating revenues decreased for the three and six months
ended June 30, 1999 due to a new lease arrangement for Louisiana
Station 1 that began in June 1999. Less revenue will be realized
under the new lease arrangement compared to the previous arrangement
with the steam customer.
Expenses
Fuel and purchased power
Fuel and purchased power expenses increased for the three months
ended June 30, 1999 primarily due to a shift to gas generation and
purchased power from associated companies because of the reduced
availability of Nelson 6 and the extended River Bend nuclear
refueling outage. Fuel and purchased power expenses also increased
due to reduced fuel cost deferrals as a result of the higher fuel
factor and fuel surcharge in the Texas jurisdiction in 1999.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other operation and maintenance
Other operation and maintenance expenses increased for the three
and six months ended June 30, 1999 principally due to increases in
employee benefit expense, casualty reserve accruals, and maintenance
of general plant.
Taxes other than income taxes
Taxes other than income taxes decreased for the three and six
months ended June 30, 1999 principally due to reduced local franchise
taxes as a result of less revenue being subject to the tax in 1999.
Depreciation and amortization
Depreciation and amortization decreased for the three and six
months ended June 30, 1999 due to:
o reduced transmission and distribution depreciation rates as a
result of compliance with PUCT and LPSC rate orders; and
o reduced amortization of the River Bend 2 cancellation loss as a
result of the completion of amortization for the Louisiana portion of
the loss and the reduction in amortization of the Texas portion in
accordance with a PUCT rate order.
These factors were partially offset by an increase in the River
Bend depreciation rate as a result of compliance with PUCT and LPSC
rate orders.
Amortization of rate deferrals
The amortization of rate deferrals increased for the three and
six months ended June 30, 1999 primarily due to the PUCT's approval
in June 1999 of the settlement agreement in Entergy Gulf States'
November 1998 rate filing. This agreement calls for an increased
rate of amortization of the Texas portion of the River Bend
accounting order deferrals over a period ending December 31, 2001.
The previous amortization period for these deferrals was scheduled to
run through late 2009. Partially offsetting this increase for the
six month period was a reduction in the amortization of rate
deferrals due to the completion of the Louisiana retail rate phase-in
plan for River Bend in February 1998.
Other
Other income
Other income increased for the three and six months ended June
30, 1999 primarily due to income recognized as the result of the
previously estimated regulatory reserve for the abeyed River Bend
plant costs being greater than the actual required writedown.
Interest charges
Interest charges decreased for the three months and six months
ended June 30, 1999 primarily due to the retirement, redemption, or
refinancing of certain long-term debt in 1998 and the first quarter
of 1999.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Income taxes
The effective income tax rates for the three months ended June
30, 1999 and 1998 were 48.6% and 16.1%, respectively. The increase
in 1999 was primarily due to a net loss in 1998 compared to net
income in 1999.
The effective income tax rates for the six months ended June 30,
1999 and 1998 were 49.0% and 55.7%, respectively. The decrease in
1999 was primarily due to increased pre-tax income reducing the
impact of permanent differences and flow-through items.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Domestic electric $534,022 $405,476 $937,828 $837,339
Natural gas 5,267 6,055 16,984 23,300
Steam products 7,254 12,125 15,550 20,525
-------- -------- -------- --------
TOTAL 546,543 423,656 970,362 881,164
-------- -------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 132,690 128,968 271,265 247,254
Purchased power 86,937 80,972 132,529 159,632
Nuclear refueling outage expenses 2,678 3,675 5,357 8,224
Other operation and maintenance 106,500 98,160 206,055 196,700
Decommissioning 1,510 1,969 4,790 3,848
Taxes other than income taxes 26,085 28,057 55,810 58,968
Depreciation and amortization 49,325 51,257 99,832 104,120
Other regulatory credits (2,892) (3,201) (12,287) (9,983)
Amortization of rate deferrals 82,124 2,269 84,393 17,210
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 484,957 392,126 847,744 785,973
-------- -------- -------- --------
OPERATING INCOME 61,586 31,530 122,618 95,191
-------- -------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 1,091 688 2,317 1,300
Gain/(loss) on sale of assets 462 394 909 774
Miscellaneous - net 5,957 2,143 6,554 5,723
-------- -------- -------- --------
TOTAL 7,510 3,225 9,780 7,797
-------- -------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 34,288 38,717 69,528 77,088
Other interest - net 888 971 1,572 1,715
Dividends on preferred securities of subsidiaries 1,859 1,859 3,719 3,719
Allowance for borrowed funds used during construction (1,026) (547) (2,135) (1,014)
-------- -------- -------- --------
TOTAL 36,009 41,000 72,684 81,508
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 33,087 (6,245) 59,714 21,480
Income taxes 16,065 (1,004) 29,255 11,965
-------- -------- -------- --------
CONSOLIDATED NET INCOME (LOSS) 17,022 (5,241) 30,459 9,515
Preferred dividend requirements of subsidiaries and others 4,115 4,774 8,666 9,588
-------- -------- -------- --------
EARNINGS (LOSS) APPLICABLE TO
COMMON STOCK $12,907 ($10,015) $21,793 ($73)
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $30,459 $9,515
Noncash items included in net income:
Amortization of rate deferrals 84,393 17,210
Reserve for regulatory adjustments (53,479) 101,255
Other regulatory credits (12,287) (9,983)
Depreciation, amortization, and decommissioning 104,622 107,968
Deferred income taxes and investment tax credits 367 (29,286)
Allowance for equity funds used during construction (2,317) (1,300)
Gain/loss on sale of assets (909) (774)
Changes in working capital:
Receivables (36,193) (14,082)
Fuel inventory (13,939) 2,910
Accounts payable (2,652) (10,274)
Taxes accrued 26,997 28,932
Interest accrued (754) (209)
Deferred fuel costs (10,501) (23,103)
Other working capital accounts (15,889) (7,269)
Decommissioning trust contributions and realized
change in trust assets (5,866) (7,466)
Provision for estimated losses and reserves 2,694 (3,443)
Changes in other regulatory assets 13,228 2,299
Other (26,190) (1,245)
-------- --------
Net cash flow provided by operating activities 81,784 161,655
-------- --------
INVESTING ACTIVITIES:
Construction expenditures (77,340) (52,288)
Allowance for equity funds used during construction 2,317 1,300
Nuclear fuel purchases (37,930) (200)
Proceeds from sale/leaseback of nuclear fuel 37,930 193
-------- --------
Net cash flow used in investing activities (75,023) (50,995)
-------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of:
Other long-term debt 21,775 21,600
Retirement of:
First mortgage bonds (25,000) (25,000)
Other long-term debt (22,095) (25)
Redemption of preferred and preference stock (24,731) (2,250)
Dividends paid:
Common stock - (80,315)
Preferred stock (8,758) (9,588)
-------- --------
Net cash flow used in financing activities (58,809) (95,578)
-------- --------
Net increase (decrease) in cash and cash equivalents (52,048) 15,082
Cash and cash equivalents at beginning of period 131,432 165,164
-------- --------
Cash and cash equivalents at end of period $79,384 $180,246
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $72,247 $79,147
Income taxes $10,934 $22,532
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $9,658 $3,154
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $7,756 $11,629
Temporary cash investments - at cost,
which approximates market:
Associated companies 11,601 15,696
Other 60,027 104,107
---------- ----------
Total cash and cash equivalents 79,384 131,432
---------- ----------
Accounts receivable:
Customer 74,226 78,961
Allowance for doubtful accounts (1,735) (1,735)
Associated companies 8,682 7,554
Other 25,129 28,265
Accrued unbilled revenues 102,505 59,569
---------- ----------
Total receivables 208,807 172,614
---------- ----------
Deferred fuel costs 143,397 132,896
Fuel inventory - at average cost 44,140 30,201
Materials and supplies - at average cost 108,004 108,345
Rate deferrals 5,607 9,077
Prepayments and other 23,123 20,495
---------- ----------
TOTAL 612,462 605,060
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 225,294 209,770
Non-utility property - at cost (less accumulated depreciation) 175,991 165,272
Other - at cost (less accumulated depreciation) 13,315 12,427
---------- ----------
TOTAL 414,600 387,469
---------- ----------
UTILITY PLANT
Electric 7,307,565 7,250,789
Property under capital lease 50,794 54,427
Natural gas 51,553 51,053
Steam products 81,549 80,537
Construction work in progress 106,382 105,121
Nuclear fuel under capital lease 86,345 46,572
---------- ----------
TOTAL UTILITY PLANT 7,684,188 7,588,499
Less - accumulated depreciation and amortization (3,543,569) (3,141,518)
---------- ----------
UTILITY PLANT - NET 4,140,619 4,446,981
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 8,410 89,333
SFAS 109 regulatory asset - net 364,048 376,406
Unamortized loss on reacquired debt 40,379 42,879
Other regulatory assets 89,044 89,914
Long-term receivables 33,474 34,617
Other 21,904 221,085
---------- ----------
TOTAL 557,259 854,234
---------- ----------
TOTAL ASSETS $5,724,940 $6,293,744
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $46,025 $71,515
Accounts payable
Associated companies 57,303 60,932
Other 92,079 91,102
Customer deposits 32,191 31,462
Taxes accrued 82,777 55,780
Accumulated deferred income taxes 30,827 21,260
Nuclear refueling outage costs 4,036 16,991
Interest accrued 41,878 42,631
Obligations under capital leases 34,859 34,343
Other 15,149 16,325
---------- ----------
TOTAL 437,124 442,341
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 1,072,541 1,081,598
Accumulated deferred investment tax credits 181,679 193,509
Obligations under capital leases 102,280 66,656
Other regulatory liabilities 23,647 30,287
Regulatory reserves 139,341 515,023
Accumulated provisions 63,594 60,899
Other 259,606 455,996
---------- ----------
TOTAL 1,842,688 2,403,968
---------- ----------
Long-term debt 1,632,264 1,631,658
Preferred stock with sinking fund 35,850 60,497
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 223,940 202,206
---------- ----------
TOTAL 1,542,014 1,520,280
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,724,940 $6,293,744
========== ==========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY GULF STATES, INC.
SELECTED OPERATING RESULTS
For the Three and Six Months Ended June 30, 1999
(Unaudited)
Three Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 137.2 $ 139.5 ($2.3) (2)
Commercial 103.0 103.2 (0.2) -
Industrial 170.4 174.6 (4.2) (2)
Governmental 6.8 10.6 (3.8) (36)
------------------------------
Total retail 417.4 427.9 (10.5) (2)
Sales for resale
Associated companies 0.9 8.3 (7.4) (89)
Non-associated companies 15.3 27.3 (12.0) (44)
Other 100.4 (58.0) 158.4 273
------------------------------
Total $ 534.0 $ 405.5 $ 128.5 32
==============================
Billed Electric Energy
Sales (GWH):
Residential 2,039 1,947 92 5
Commercial 1,784 1,646 138 8
Industrial 4,442 4,615 (173) (4)
Governmental 102 166 (64) (39)
------------------------------
Total retail 8,367 8,374 (7) -
Sales for resale
Associated companies 17 205 (188) (92)
Non-associated companies 428 946 (518) (55)
------------------------------
Total 8,812 9,525 (713) (7)
==============================
Six Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 253.4 $ 267.8 ($14.4) (5)
Commercial 194.5 203.5 (9.0) (4)
Industrial 326.6 350.2 (23.6) (7)
Governmental 13.3 21.3 (8.0) (38)
------------------------------
Total retail 787.8 842.8 (55.0) (7)
Sales for resale
Associated companies 4.7 10.1 (5.4) (53)
Non-associated companies 36.0 48.8 (12.8) (26)
Other 109.3 (64.4) 173.7 270
------------------------------
Total $ 937.8 $ 837.3 $ 100.5 12
==============================
Billed Electric Energy
Sales (GWH):
Residential 3,842 3,668 174 5
Commercial 3,384 3,088 296 10
Industrial 8,556 8,962 (406) (5)
Governmental 202 319 (117) (37)
------------------------------
Total retail 15,984 16,037 (53) -
Sales for resale
Associated companies 170 262 (92) (35)
Non-associated companies 1,413 1,447 (34) (2)
------------------------------
Total 17,567 17,746 (179) (1)
==============================
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three and six months ended June 30,
1999 compared to the three and six months ended June 30, 1998
primarily due to an increase in operating revenue and a decrease in
interest charges, partially offset by an increase in operating
expenses and higher income taxes.
Revenues and Sales
The changes in electric operating revenues for the three and six
months ended June 30, 1999 are as follows:
Three Months Ended Six Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Base revenues ($7.8) ($6.3)
Fuel cost recovery 37.0 21.9
Sales volume/weather 5.8 7.4
Other revenue (including unbilled) 53.1 59.4
Sales for resale (6.6) (4.9)
----- -----
Total $81.5 $77.5
===== =====
Fuel cost recovery
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that are offset by specific incurred
fuel costs.
Fuel cost recovery revenues increased for the three and six
months ended June 30, 1999 primarily due to a shift from lower priced
nuclear fuel to higher priced gas due to the nuclear refueling outage
at Waterford 3.
Other revenue
Other revenue for the three and six months ended June 30, 1999
increased primarily due to a change in estimated unbilled revenues.
The changed estimate more closely aligns the fuel component of
unbilled revenues with regulatory treatment. This increase was
partially offset by milder weather in 1999. The change in estimate
is expected to affect comparisons of quarterly and year-to-date
revenue to applicable prior period amounts through the first quarter
of 2000. Comparative impacts are also affected by seasonal
variations in demand.
Expenses
Fuel and purchased power
Fuel and purchased power expenses increased for the three and
six months ended June 30, 1999 due to a shift from lower priced
nuclear fuel to higher priced gas due to nuclear outages at
Waterford 3.
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Fuel and purchased power expenses also increased for the three
months ended June 30, 1999 due to increased deferred fuel cost
recovery in 1999 as a result of a settlement refund in 1998.
These increases were partially offset by a decrease in
purchased power expenses as a result of lower unit prices of
purchased power from affiliated companies.
Other operation and maintenance
Other operation and maintenance expenses decreased for the
three and six months ended June 30, 1999 primarily due insurance
settlement proceeds and the capitalization of costs associated with
return to service projects.
Other
Interest charges
Interest on long-term debt decreased for the three and six
months ended June 30, 1999 primarily due to the redemption,
retirement, or refinancing of certain long-term debt during 1999.
Income taxes
The effective income tax rates for the three months ended June
30, 1999 and 1998 were 39.4% and 40.1%, respectively. The effective
income tax rates for the six months ended June 30, 1999 and 1998 were
40.0% and 42.2%, respectively. These decreases were due to increases
in pretax income reducing the impact of permanent differences and
flow through items.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Domestic electric $505,601 $424,115 $857,736 $780,153
-------- -------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 104,399 71,008 162,623 145,710
Purchased power 92,119 101,358 184,582 189,355
Nuclear refueling outage expenses 3,487 5,435 8,923 10,870
Other operation and maintenance 65,511 72,486 133,315 143,510
Decommissioning 2,197 2,197 4,393 4,393
Taxes other than income taxes 18,426 17,013 36,670 35,471
Depreciation and amortization 40,184 40,955 81,963 82,837
Other regulatory charges (credits) - (877) - (1,755)
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 326,323 309,575 612,469 610,391
-------- -------- -------- --------
OPERATING INCOME 179,278 114,540 245,267 169,762
-------- -------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 1,732 459 2,493 820
Gain/(loss) on sale of assets - - - 2,340
Miscellaneous - net 621 229 579 29
-------- -------- -------- --------
TOTAL 2,353 688 3,072 3,189
-------- -------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 26,691 28,848 53,744 57,610
Other interest - net 1,041 1,511 2,212 3,017
Dividends on preferred securities of subsidiaries 1,575 1,575 3,150 3,150
Allowance for borrowed funds used during construction (1,716) (417) (2,367) (750)
-------- -------- -------- --------
TOTAL 27,591 31,517 56,739 63,027
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 154,040 83,711 191,600 109,924
Income taxes 60,669 34,165 76,742 46,461
-------- -------- -------- --------
NET INCOME 93,371 49,546 114,858 63,463
Preferred dividend requirements of subsidiaries and others 2,378 3,254 5,048 6,507
-------- -------- -------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $90,993 $46,292 $109,810 $56,956
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $114,858 $63,463
Noncash items included in net income:
Other regulatory charges - (1,755)
Depreciation, amortization, and decommissioning 86,356 87,230
Deferred income taxes and investment tax credits 8,042 1,866
Allowance for equity funds used during construction (2,493) (820)
Gain/loss on sale of assets - (2,340)
Changes in working capital:
Receivables (67,181) (22,000)
Fuel inventory (489) -
Accounts payable (16,718) (8,329)
Taxes accrued 79,628 39,707
Interest accrued (23,195) (1,036)
Deferred fuel costs (17,934) (5,491)
Other working capital accounts (11,062) (221)
Decommissioning trust contributions and realized
change in trust assets (8,497) (6,001)
Provision for estimated losses and reserves 112 2,962
Changes in other regulatory assets 13,901 10,169
Other (16,283) (28,716)
-------- --------
Net cash flow provided by operating activities 139,045 128,688
-------- --------
INVESTING ACTIVITIES
Construction expenditures (55,932) (42,204)
Allowance for equity funds used during construction 2,493 820
Nuclear fuel purchases (11,308) -
Proceeds from sale/leaseback of nuclear fuel 11,308 -
-------- --------
Net cash flow used in investing activities (53,439) (41,384)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
First mortgage bonds 74,691 112,556
Other long-term debt 113,535 -
Retirement of:
First mortgage bonds (122,600) (150,561)
Other long-term debt (6,547) (115)
Redemption of preferred stock (50,000) -
Dividends paid:
Common stock (31,900) (24,300)
Preferred stock (5,632) (6,507)
-------- --------
Net cash flow used in financing activities (28,453) (68,927)
-------- --------
Net increase in cash and cash equivalents 57,153 18,377
Cash and cash equivalents at beginning of period 96,710 49,749
-------- --------
Cash and cash equivalents at end of period $153,863 $68,126
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $76,443 $59,040
Income taxes $12,270 $25,657
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $2,389 $2,991
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $10,298 $10,187
Temporary cash investments - at cost,
which approximates market:
Associated companies 6,552 13,680
Other 22,013 72,843
Special deposits 115,000 -
---------- ----------
Total cash and cash equivalents 153,863 96,710
---------- ----------
Accounts receivable:
Customer 80,198 65,262
Allowance for doubtful accounts (1,164) (1,164)
Associated companies 15,444 20,095
Other 8,641 19,305
Accrued unbilled revenues 118,100 50,540
---------- ----------
Total receivables 221,219 154,038
---------- ----------
Deferred fuel costs 10,136 -
Accumulated deferred income taxes 1,781 13,331
Fuel inventory - at average cost 489 -
Materials and supplies - at average cost 80,745 82,220
Deferred nuclear refueling outage costs 18,538 6,498
Prepayments and other 12,731 11,566
---------- ----------
TOTAL 499,502 364,363
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 14,230 14,230
Decommissioning trust funds 93,567 82,680
Non-utility property - at cost (less accumulated depreciation) 21,475 21,460
---------- ----------
TOTAL 129,272 118,370
---------- ----------
UTILITY PLANT
Electric 5,146,329 5,095,278
Property under capital lease 234,339 234,339
Construction work in progress 97,373 85,565
Nuclear fuel under capital lease 65,083 75,814
---------- ----------
TOTAL UTILITY PLANT 5,543,124 5,490,996
Less - accumulated depreciation and amortization (2,241,337) (2,158,800)
---------- ----------
UTILITY PLANT - NET 3,301,787 3,332,196
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 259,018 270,068
Unamortized loss on reacquired debt 28,885 30,629
Other regulatory assets 46,748 49,599
Other 17,641 15,816
---------- ----------
TOTAL 352,292 366,112
---------- ----------
TOTAL ASSETS $4,282,853 $4,181,041
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Currently maturing long-term debt $231,985 $6,772
Accounts payable:
Associated companies 36,582 43,051
Other 80,216 90,465
Customer deposits 55,663 55,966
Taxes accrued 97,831 18,203
Interest accrued 30,107 53,302
Deferred fuel cost - 7,798
Obligations under capital leases 32,539 32,539
Other 9,607 7,644
---------- ----------
TOTAL 574,530 315,740
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 829,724 840,931
Accumulated deferred investment tax credits 125,922 128,689
Obligations under capital leases 32,545 43,275
Other regulatory liabilities 13,225 10,836
Accumulated provisions 52,757 52,645
Other 41,012 39,791
---------- ----------
TOTAL 1,095,185 1,116,167
---------- ----------
Long-term debt 1,168,410 1,332,315
Preferred stock with sinking fund 35,000 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) (2,320)
Retained earnings 152,649 74,739
---------- ----------
TOTAL 1,339,728 1,261,819
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,282,853 $4,181,041
========== ==========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY LOUISIANA, INC.
SELECTED OPERATING RESULTS
For the Three and Six Months Ended June 30, 1999
(Unaudited)
Three Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 145.2 $ 126.9 $ 18.3 14
Commercial 94.0 83.8 10.2 12
Industrial 156.3 136.4 19.9 15
Governmental 8.2 7.4 0.8 11
-------------------------------
Total retail 403.7 354.5 49.2 14
Sales for resale
Associated companies 5.4 9.3 (3.9) (42)
Non-associated companies 13.1 15.8 (2.7) (17)
Other 83.4 44.5 38.9 87
-------------------------------
Total $ 505.6 $ 424.1 $ 81.5 19
===============================
Billed Electric Energy
Sales (GWH):
Residential 1,971 1,905 66 3
Commercial 1,287 1,275 12 1
Industrial 3,777 3,674 103 3
Governmental 115 114 1 1
-------------------------------
Total retail 7,150 6,968 182 3
Sales for resale
Associated companies 142 207 (65) (31)
Non-associated companies 233 260 (27) (10)
-------------------------------
Total 7,525 7,435 90 1
===============================
Six Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 257.4 $ 241.0 $ 16.4 7
Commercial 173.2 162.5 10.7 7
Industrial 294.6 286.0 8.6 3
Governmental 16.0 15.8 0.2 1
-------------------------------
Total retail 741.2 705.3 35.9 5
Sales for resale
Associated companies 7.9 10.3 (2.4) (23)
Non-associated companies 24.3 26.8 (2.5) (9)
Other 84.3 37.8 46.5 123
-------------------------------
Total $ 857.7 $ 780.2 $ 77.5 10
===============================
Billed Electric Energy
Sales (GWH):
Residential 3,661 3,562 99 3
Commercial 2,418 2,364 54 2
Industrial 7,403 7,315 88 1
Governmental 230 238 (8) (3)
-------------------------------
Total retail 13,712 13,479 233 2
Sales for resale
Associated companies 240 235 5 2
Non-associated companies 477 412 65 16
-------------------------------
Total 14,429 14,126 303 2
==============================
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased for the three and six months ended June 30,
1999 compared to the three and six months ended June 30, 1998
primarily due to a decrease in electric operating revenues, partially
offset by a decrease in operating expenses and lower income taxes.
Revenues and Sales
The changes in electric operating revenues for the three and six
months ended June 30, 1999 are as follows:
Three Months Ended Six Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Base revenues ($1.8) ($2.5)
Grand Gulf rate rider (28.2) (53.8)
Fuel cost recovery (2.2) (4.1)
Sales volume/weather 2.0 3.9
Other revenue (including unbilled) (25.3) (26.6)
Sales for resale (18.8) (13.7)
------ ------
Total ($74.3) ($96.8)
====== ======
Grand Gulf rate rider revenues
Rate rider revenues do not affect net income because they are
offset by specific incurred expenses.
Grand Gulf rate rider revenue decreased for the three and six
months ended June 30, 1999 as a result of a new rider which became
effective October 1, 1998. This new rider eliminated revenues
attributable to the Grand Gulf phase-in plan, which was completed in
September 1998. However, this decrease was partially offset by the
Grand Gulf Accelerated Recovery Tariff, which became effective
October 1, 1998. This tariff provides for accelerated recovery of a
portion of Entergy Mississippi's Grand Gulf purchased power
obligation.
Other revenue
Other revenue for the three and six months ended June 30, 1999
decreased primarily due to a change in estimated unbilled revenues.
The changed estimate more closely aligns the fuel component of
unbilled revenues with regulatory treatment. Milder weather in 1999
also contributed to this decrease. The change in estimate is
expected to affect comparisons of quarterly and year-to-date revenue
to applicable prior period amounts through the first quarter of 2000.
Comparative impacts are also affected by seasonal variations in
demand.
Sales for resale
Sales for resale decreased for the three and six months ended
June 30, 1999 primarily due to a decrease in sales to associated
companies due to changes in generation requirements and availability
among the domestic utility companies.
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses decreased for the three and
six months ended June 30, 1999 due to a decrease in total generation
requirements. The decrease for the three months ended June 30, 1999
was partially offset by a shift from lower priced fuel to higher
priced purchased power from affiliates as a result of plant outages
in 1999.
Other operation and maintenance
Other operation and maintenance expenses increased for the three
and six months ended June 30, 1999 principally due to plant outages
in 1999, adjustments to compensation accruals, and an increase in
casualty reserves.
Amortization of rate deferrals
Amortization of rate deferrals decreased for the three and six
months ended June 30, 1999 due to the completion of the Grand Gulf 1
rate phase-in plan in September 1998.
Other
Income taxes
The effective income tax rates for the three months ended June
30, 1999 and 1998 remained relatively unchanged at 35.1% and 35.9%,
respectively. The effective income tax rates for the six months
ended June 30, 1999 and 1998 also remained relatively unchanged at
33.7% and 34.1%, respectively.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Domestic electric $194,637 $268,908 $377,080 $473,925
-------- -------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 37,341 59,089 96,775 110,401
Purchased power 79,804 72,031 148,269 138,626
Other operation and maintenance 41,795 32,407 72,913 61,253
Taxes other than income taxes 11,042 11,043 21,744 22,198
Depreciation and amortization 10,984 11,078 22,500 22,394
Other regulatory credits (6,958) (7,451) (17,971) (22,029)
Amortization of rate deferrals - 34,990 - 69,979
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 174,008 213,187 344,230 402,822
-------- -------- -------- --------
OPERATING INCOME 20,629 55,721 32,850 71,103
-------- -------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 225 (20) 368 -
Gain on sale of assets - - - 1,024
Miscellaneous - net 1,872 1,004 3,490 2,031
-------- -------- -------- --------
TOTAL 2,097 984 3,858 3,055
-------- -------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 9,800 9,885 19,022 19,461
Other interest - net 601 865 1,444 2,159
Allowance for borrowed funds used during construction (341) (92) (696) (132)
-------- -------- -------- --------
TOTAL 10,060 10,658 19,770 21,488
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 12,666 46,047 16,938 52,670
Income taxes 4,444 16,534 5,701 17,962
-------- -------- -------- --------
NET INCOME 8,222 29,513 11,237 34,708
Preferred dividend requirements of subsidiaries and others 842 842 1,685 1,685
-------- -------- -------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $7,380 $28,671 $9,552 $33,023
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $11,237 $34,708
Noncash items included in net income:
Amortization of rate deferrals - 69,979
Other regulatory charges (17,971) (22,029)
Depreciation, amortization, and decommissioning 22,500 22,394
Deferred income taxes and investment tax credits 16,220 (15,721)
Allowance for equity funds used during construction (368) -
Gain/loss on sale of assets - (1,024)
Changes in working capital:
Receivables 20,306 (29,623)
Fuel inventory (2,837) (532)
Accounts payable 1,060 15,398
Taxes accrued 149 20,395
Interest accrued (3,108) (244)
Deferred fuel costs (1,341) (1,618)
Other working capital accounts 5,988 (254)
Provision for estimated losses and reserves 848 (3,299)
Changes in other regulatory assets (34,867) (40,825)
Other 17,079 25,642
-------- --------
Net cash flow provided by operating activities 34,895 73,347
-------- --------
INVESTING ACTIVITIES
Construction expenditures (34,622) (18,641)
Allowance for equity funds used during construction 368 -
-------- --------
Net cash flow used in investing activities (34,254) (18,641)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
G&R mortgage bonds 124,192 78,703
Other long-term debt 29,570 -
Retirement of:
G&R mortgage bonds (132,412) (80,000)
Other long-term debt (865) (20)
Changes in short-term borrowing, net 20,576 (35,521)
Dividends paid:
Common stock (9,100) (16,900)
Preferred stock (1,685) (1,685)
-------- --------
Net cash flow provided (used) in financing activities 30,276 (55,423)
-------- --------
Net increase (decrease) in cash and cash equivalents 30,917 (717)
Cash and cash equivalents at beginning of period 2,640 6,816
-------- --------
Cash and cash equivalents at end of period $33,557 $6,099
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $22,648 $21,100
Income taxes $23,711 $1,054
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $3,557 $2,640
Special deposits 30,000 -
---------- ----------
Total cash and cash equivalents 33,557 2,640
---------- ----------
Accounts receivable:
Customer 32,409 39,701
Allowance for doubtful accounts (1,217) (1,217)
Associated companies 1,428 5,703
Other 531 1,267
Accrued unbilled revenues 37,900 45,904
---------- ----------
Total receivables 71,051 91,358
---------- ----------
Deferred fuel costs 3,449 2,108
Accumulated deferred income taxes 651 665
Fuel inventory - at average cost 5,840 3,002
Materials and supplies - at average cost 16,301 17,149
Prepayments and other 10,011 12,256
---------- ----------
TOTAL 140,860 129,178
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 5,531 5,531
Non-utility property - at cost (less accumulated depreciation) 7,029 7,056
Other - at cost (less accumulated depreciation) - 13
---------- ----------
TOTAL 12,560 12,600
---------- ----------
UTILITY PLANT
Electric 1,747,498 1,718,426
Property under capital lease 430 477
Construction work in progress 38,765 35,317
---------- ----------
TOTAL UTILITY PLANT 1,786,693 1,754,220
Less - accumulated depreciation and amortization (705,150) (685,214)
---------- ----------
UTILITY PLANT - NET 1,081,543 1,069,006
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 25,449 25,515
Unamortized loss on reacquired debt 14,945 7,981
Other regulatory assets 135,533 100,601
Other 6,914 6,048
---------- ----------
TOTAL 182,841 140,145
---------- ----------
TOTAL ASSETS $1,417,804 $1,350,929
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $30,000 $20
Notes payable 21,027 451
Accounts payable:
Associated companies 38,919 43,640
Other 24,225 18,444
Customer deposits 20,907 18,265
Taxes accrued 6,161 6,013
Interest accrued 11,524 14,632
Obligations under capital leases 92 92
Other 2,572 2,319
---------- ----------
TOTAL 155,427 103,876
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 298,181 281,017
Accumulated deferred investment tax credits 21,658 22,408
Obligations under capital leases 338 384
Accumulated provisions 4,049 3,200
Other 2,823 4,331
---------- ----------
TOTAL 327,049 311,340
---------- ----------
Long-term debt 462,778 463,616
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 222,902 222,449
---------- ----------
TOTAL 472,550 472,097
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,417,804 $1,350,929
========== ==========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY MISSISSIPPI, INC.
SELECTED OPERATING RESULTS
For the Three and Six Months Ended June 30, 1999
(Unaudited)
Three Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 70.1 $ 83.0 ($12.9) (16)
Commercial 60.1 69.7 (9.6) (14)
Industrial 36.7 43.5 (6.8) (16)
Governmental 5.9 6.8 (0.9) (13)
-----------------------------
Total retail 172.8 203.0 (30.2) (15)
Sales for resale
Associated companies 8.4 24.7 (16.3) (66)
Non-associated companies 6.6 9.1 (2.5) (27)
Other 6.8 32.1 (25.3) (79)
-----------------------------
Total $ 194.6 $ 268.9 ($74.3) (28)
=============================
Billed Electric Energy
Sales (GWH):
Residential 1,028 1,005 23 2
Commercial 986 938 48 5
Industrial 787 790 (3) -
Governmental 88 83 5 6
-----------------------------
Total retail 2,889 2,816 73 3
Sales for resale
Associated companies 188 693 (505) (73)
Non-associated companies 89 146 (57) (39)
-----------------------------
Total 3,166 3,655 (489) (13)
=============================
Six Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 132.4 $ 157.9 ($25.5) (16)
Commercial 115.2 132.5 (17.3) (13)
Industrial 72.9 84.9 (12.0) (14)
Governmental 11.6 13.2 (1.6) (12)
-----------------------------
Total retail 332.1 388.5 (56.4) (15)
Sales for resale
Associated companies 30.3 42.0 (11.7) (28)
Non-associated companies 13.3 15.3 (2.0) (13)
Other 1.4 28.1 (26.7) (95)
-----------------------------
Total $ 377.1 $ 473.9 ($96.8) (20)
=============================
Billed Electric Energy
Sales (GWH):
Residential 2,032 2,010 22 1
Commercial 1,875 1,774 101 6
Industrial 1,542 1,529 13 1
Governmental 170 159 11 7
-----------------------------
Total retail 5,619 5,472 147 3
Sales for resale
Associated companies 1,165 1,233 (68) (6)
Non-associated companies 201 211 (10) (5)
-----------------------------
Total 6,985 6,916 69 1
=============================
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three and six months ended June 30,
1999 compared to the three and six months ended June 30, 1998
primarily due to a decrease in operating expenses and an increase in
other income, partially offset by a decrease in operating revenues
and an increase in income taxes.
Revenues and Sales
Electric operating revenues
The changes in electric operating revenues for the three and six
months ended June 30, 1999 are as follows:
Three Months Ended Six Months Ended
Description Increase/(Decrease) Increase/(Decrease)
(In Millions)
Base revenues ($1.7) ($3.9)
Fuel cost recovery (6.2) (9.3)
Sales volume/weather 2.8 5.1
Other revenue (including unbilled) 3.4 4.4
Sales for resale (0.9) 0.7
----- -----
Total ($2.6) ($3.0)
===== =====
Fuel cost recovery revenues
Fuel cost recovery revenues do not affect net income because
they are an increase to revenues that are offset by specific incurred
fuel costs.
Fuel cost recovery revenues decreased for the three and six
months ended June 30, 1999 primarily due to a shift in generation mix
to lower priced fossil fuel.
Sales volume/weather
Sales volume/weather increased for the six months ended June 30,
1999 primarily due to increased sales to commercial and governmental
customers.
Other revenue
Other revenue for the three and six months ended June 30, 1999
increased primarily due to a change in estimated unbilled revenues.
The changed estimate more closely aligns the fuel component of
unbilled revenues with regulatory treatment. This increase was
partially offset by milder weather in 1999. The change in estimate
is expected to affect comparisons of quarterly and year-to-date
revenue to applicable prior period amounts through the first quarter
of 2000. Comparative impacts are also affected by seasonal
variations in demand.
Gas Operating Revenues
Gas operating revenues decreased for the three and six months
ended June 30, 1999 primarily due to lower fuel prices and milder
weather.
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Fuel and purchased power
Fuel and purchased power expenses decreased for the three and
six months ended June 30, 1999 due to a shift from purchased power
and oil to gas because of lower gas unit prices, and due to a plant
outage in April 1999.
The decrease in fuel and purchased power expenses for the three
months ended June 30, 1999 was partially offset by increased recovery
of deferred fuel expenses as a result of the shift in generation mix.
Fuel and purchased power expenses also decreased for the six
months ended June 30, 1999 due to an under recovery of deferred fuel
expenses in the gas operation resulting from decreased gas revenue
coupled with increased fuel cost.
Other operation and maintenance
Other operation and maintenance expenses decreased for the three
months ended June 30, 1999 primarily due to the capitalization of
costs associated with return to service projects for certain fossil
plants.
Other operation and maintenance expense increased for the six
months ended June 30, 1999 due to an increase in environmental
reserve provisions and adjustments to compensation accruals.
Amortization of rate deferrals
Amortization of rate deferrals decreased for the three and six
months ended June 30, 1999 primarily due to a schedule rate change in
the amortization of Grand Gulf 1 phase-in expenses.
Other
Income taxes
For the three months ended June 30, 1999 and 1998, the effective
income tax rates were 39.6% and 41.0%, respectively. For the six
months ended June 30, 1999 and 1998, the effective income tax rates
were 41.1% and 44.9%, respectively. The decrease in tax rates for
the three and six months ended June 30, 1999 was primarily due to the
increase in allowance for equity funds used during construction.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Domestic electric $104,404 $106,975 $184,446 $187,457
Natural gas 16,882 18,132 42,897 51,312
-------- -------- -------- --------
TOTAL 121,286 125,107 227,343 238,769
-------- -------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 20,140 16,793 51,076 55,684
Purchased power 41,464 52,067 77,916 86,829
Other operation and maintenance 17,293 19,944 40,272 37,086
Taxes other than income taxes 10,519 9,237 18,137 18,725
Depreciation and amortization 5,300 5,298 10,928 11,079
Other regulatory credits (2,162) (2,449) (6,610) (4,845)
Amortization of rate deferrals 6,643 8,750 12,786 16,852
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 99,197 109,640 204,505 221,410
-------- -------- -------- --------
OPERATING INCOME 22,089 15,467 22,838 17,359
-------- -------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 217 (9) 423 89
Gain/(loss) on sale of assets - - - 458
Miscellaneous - net 559 (644) 972 (336)
-------- -------- -------- --------
TOTAL 776 (653) 1,395 211
-------- -------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 3,319 3,430 6,638 6,859
Other interest - net 333 234 654 477
Allowance for borrowed funds used during construction (156) 8 (311) (68)
-------- -------- -------- --------
TOTAL 3,496 3,672 6,981 7,268
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 19,369 11,142 17,252 10,302
Income taxes 7,675 4,565 7,092 4,627
-------- -------- -------- --------
NET INCOME 11,694 6,577 10,160 5,675
Preferred dividend requirements of subsidiaries and others 241 241 482 482
-------- -------- -------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $11,453 $6,336 $9,678 $5,193
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $10,160 $5,675
Noncash items included in net income:
Amortization of rate deferrals 12,786 16,852
Other regulatory credits (6,610) (4,845)
Depreciation, amortization, and decommissioning 10,928 11,079
Deferred income taxes and investment tax credits 1,819 (2,745)
Allowance for equity funds used during construction (423) (89)
Gain/loss on sale of assets - (458)
Changes in working capital:
Receivables (6,185) (7,563)
Fuel inventory 1,229 2,611
Accounts payable 5,798 (885)
Taxes accrued 6,587 2,825
Interest accrued (412) (384)
Deferred fuel costs (12,050) (8,061)
Other working capital accounts (718) (6,420)
Provision for estimated losses and reserves (1,568) (2,247)
Changes in other regulatory assets (7,499) (3,577)
Other 5,956 4,538
------- ------
Net cash flow provided by operating activities 19,798 6,306
------- ------
INVESTING ACTIVITIES
Construction expenditures (25,718) (7,688)
Allowance for equity funds used during construction 423 89
------- ------
Net cash flow used in investing activities (25,295) (7,599)
------- ------
FINANCING ACTIVITIES
Preferred stock dividends paid (723) (482)
------- ------
Net cash flow used in financing activities (723) (482)
------- ------
Net decrease in cash and cash equivalents (6,220) (1,775)
Cash and cash equivalents at beginning of period 19,667 11,376
------- ------
Cash and cash equivalents at end of period $13,447 $9,601
======= ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $7,524 $7,568
Income taxes - net ($4,644) $4,802
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $3,116 $3,769
Temporary cash investments - at cost,
which approximates market:
Associated companies 2,370 2,514
Other 7,961 13,384
-------- --------
Total cash and cash equivalents 13,447 19,667
-------- --------
Accounts receivable:
Customer 21,987 24,355
Allowance for doubtful accounts (761) (761)
Associated companies 660 806
Other 4,484 3,835
Accrued unbilled revenues 24,304 16,254
-------- --------
Total receivables 50,674 44,489
-------- --------
Deferred fuel costs 13,241 1,191
Fuel inventory - at average cost 2,243 3,472
Materials and supplies - at average cost 8,735 8,845
Rate deferrals 28,120 28,430
Prepayments and other 7,990 6,686
-------- --------
TOTAL 124,450 112,780
-------- --------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
UTILITY PLANT
Electric 527,837 514,685
Natural gas 134,246 132,568
Construction work in progress 29,952 20,184
-------- --------
TOTAL UTILITY PLANT 692,035 667,437
Less - accumulated depreciation and amortization (380,567) (371,558)
-------- --------
UTILITY PLANT - NET 311,468 295,879
-------- --------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 23,286 35,762
Unamortized loss on reacquired debt 1,293 1,399
Other regulatory assets 29,056 21,558
Other 1,269 1,267
-------- --------
TOTAL 54,904 59,986
-------- --------
TOTAL ASSETS $494,081 $471,904
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable:
Associated companies $17,902 $18,283
Other 17,187 11,008
Customer deposits 17,975 18,083
Taxes accrued 6,587 -
Accumulated deferred income taxes 10,320 6,284
Interest accrued 4,507 4,919
Other 2,126 1,782
-------- --------
TOTAL 76,604 60,359
-------- --------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 53,608 57,214
Accumulated deferred investment tax credits 6,635 6,894
SFAS 109 regulatory liability - net 2,781 942
Other regulatory liabilities 2,520 3,146
Accumulated provisions 7,799 9,367
Other 8,559 8,116
-------- --------
TOTAL 81,902 85,679
-------- --------
Long-term debt 169,051 169,018
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 36,293 36,294
Retained earnings 76,707 67,030
-------- --------
TOTAL 166,524 156,848
-------- --------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $494,081 $471,904
======== ========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY NEW ORLEANS, INC.
SELECTED OPERATING RESULTS
For the Three and Six Months Ended June 30, 1999
(Unaudited)
Three Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 34.4 $ 36.0 ($1.6) (4)
Commercial 33.3 35.4 (2.1) (6)
Industrial 5.5 6.4 (0.9) (14)
Governmental 13.8 14.3 (0.5) (3)
-----------------------------
Total retail 87.0 92.1 (5.1) (6)
Sales for resale
Associated companies 1.6 1.8 (0.2) (11)
Non-associated companies 2.5 3.2 (0.7) (22)
Other 13.3 9.9 3.4 34
-----------------------------
Total $ 104.4 $ 107.0 ($2.6) (2)
=============================
Billed Electric Energy
Sales (GWH):
Residential 502 481 21 4
Commercial 556 521 35 7
Industrial 127 133 (6) (5)
Governmental 263 250 13 5
-----------------------------
Total retail 1,448 1,385 63 5
Sales for resale
Associated companies 56 57 (1) (2)
Non-associated companies 49 57 (8) (14)
-----------------------------
Total 1,553 1,499 54 4
=============================
Six Months Ended Increase/
Description 1999 1998 (Decrease) %
(In Millions)
Electric Operating Revenues:
Residential $ 59.0 $ 60.9 ($1.9) (3)
Commercial 64.1 66.7 (2.6) (4)
Industrial 10.8 12.3 (1.5) (12)
Governmental 26.6 26.9 (0.3) (1)
-----------------------------
Total retail 160.5 166.8 (6.3) (4)
Sales for resale
Associated companies 6.7 5.2 1.5 29
Non-associated companies 4.5 5.3 (0.8) (15)
Other 12.7 10.1 2.6 26
-----------------------------
Total $ 184.4 $ 187.4 ($3.0) (2)
=============================
Billed Electric Energy
Sales (GWH):
Residential 866 836 30 4
Commercial 1,046 980 66 7
Industrial 242 251 (9) (4)
Governmental 498 469 29 6
-----------------------------
Total retail 2,652 2,536 116 5
Sales for resale
Associated companies 288 180 108 60
Non-associated companies 96 95 1 1
-----------------------------
Total 3,036 2,811 225 8
=============================
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased for the three months ended June 30, 1999
primarily due to lower income taxes.
Net income decreased for the six months ended June 30, 1999
primarily as a result of the additional reserves recorded for the
potential refund of System Energy's proposed rate increase, partially
offset by lower income taxes.
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.
Operating revenues increased for the three and six months ended June
30, 1999 due to the implementation of the Grand Gulf Accelerated
Recovery Tariff (GGART) at Entergy Arkansas and Entergy Mississippi.
The tariff was designed to allow Entergy Arkansas and Entergy
Mississippi to pay down a portion of their Grand Gulf purchased power
obligation in advance of the implementation of retail access. It
became effective on January 1, 1999 and October 1, 1998 for Entergy
Arkansas and Entergy Mississippi, respectively. The GGART is
discussed in Note 2 to the financial statements in the Form 10K.
Expenses
Fuel expenses
Fuel expenses do not affect net income because they are an
increase to revenues that are offset by specific incurred fuel costs.
Fuel expenses increased for the three and six months ended June
30, 1999 as a result of greater nuclear fuel generation due to a
scheduled nuclear refueling outage in April and May 1998.
Other regulatory charges
The GGART does not affect net income because it is an increase
to revenues that is offset by specific incurred expenses.
The increase in other regulatory charges for the three and six
months ended June 30, 1999 reflects the implementation of the GGART
at Entergy Arkansas and Entergy Mississippi, as discussed above.
Other
Other income
Other income increased for the three and six months ended June
30, 1999 due to additional interest income earned on larger short-
term cash equivalent investments.
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Interest charges
Interest on long-term debt decreased for the three and six
months ended June 30, 1999 as a result of the refinancing of
pollution control revenue bonds in November 1998, the redemption of a
series of first mortgage bonds in April 1999, and the refinancing of
pollution control revenue bonds in May and June 1999. Other interest
increased for the three and six months ended June 30, 1999 due to an
adjustment to interest on the potential refund of System Energy's
proposed rate increase.
Income taxes
The effective income tax rates for the three months ended June
30, 1999 and 1998 were 31.1% and 45.2%, respectively. The effective
tax rates for the six months ended June 30, 1999 were 38.8% and
45.2%. The decrease in 1999 was primarily due to the amortization of
investment tax credits related to Grand Gulf Unit 2.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Domestic electric $159,505 $144,336 $300,122 $292,942
-------- -------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel related expenses, and
gas purchased for resale 12,157 6,183 20,793 17,030
Nuclear refueling outage expenses 3,505 4,177 7,011 8,776
Other operation and maintenance 22,547 22,491 40,992 43,772
Decommissioning 4,736 4,736 9,472 9,472
Taxes other than income taxes 6,767 6,876 13,518 13,638
Depreciation and amortization 27,559 27,696 56,419 56,118
Other regulatory charges 13,540 - 29,385 -
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 90,811 72,159 177,590 148,806
-------- -------- -------- --------
OPERATING INCOME 68,694 72,177 122,532 144,136
-------- -------- -------- --------
OTHER INCOME
Allowance for equity funds used during construction 648 528 1,313 1,081
Miscellaneous - net 4,145 2,507 8,204 5,612
-------- -------- -------- --------
TOTAL 4,793 3,035 9,517 6,693
-------- -------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 25,270 28,875 51,099 58,451
Other interest - net 5,891 1,614 32,642 3,267
Allowance for borrowed funds used during construction (466) (470) (1,017) (946)
-------- -------- -------- --------
TOTAL 30,695 30,019 82,724 60,772
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 42,792 45,193 49,325 90,057
Income taxes 13,309 20,414 19,142 40,691
-------- -------- -------- --------
NET INCOME $29,483 $24,779 $30,183 $49,366
======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
1999 1998
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $30,183 $49,366
Noncash items included in net income:
Reserve for regulatory adjustments 82,492 37,647
Other regulatory charges 29,385 -
Depreciation, amortization, and decommissioning 65,891 65,590
Deferred income taxes and investment tax credits (62,462) (16,796)
Allowance for equity funds used during construction (1,313) (1,081)
Changes in working capital:
Receivables (21,918) 195
Accounts payable 25,103 (9,692)
Taxes accrued 45,944 (7,374)
Interest accrued (7,686) (7,559)
Other working capital accounts 3,149 (9,376)
Decommissioning trust contributions and realized
change in trust assets (11,264) (11,528)
Provision for estimated losses and reserves (228) (501)
Changes in other regulatory assets 11,889 10,299
Other 12,630 (6,019)
--------- --------
Net cash flow provided by operating activities 201,795 93,171
--------- --------
INVESTING ACTIVITIES
Construction expenditures (11,200) (19,472)
Allowance for equity funds used during construction 1,313 1,081
Nuclear fuel purchases - (30,476)
Proceeds from sale/leaseback of nuclear fuel - 30,476
--------- --------
Net cash flow used in investing activities (9,887) (18,391)
--------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Other long-term debt 101,862 -
Retirement of:
First mortgage bonds (60,000) (60,000)
Other long-term debt (122,884) -
Common stock dividends paid (32,500) (47,800)
--------- --------
Net cash flow used in financing activities (113,522) (107,800)
--------- --------
Net increase (decrease) in cash and cash equivalents 78,386 (33,020)
Cash and cash equivalents at beginning of period 281,299 206,410
--------- --------
Cash and cash equivalents at end of period $359,685 $173,390
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $70,231 $65,226
Income taxes $19,744 $54,956
Noncash investing and financing activities
Change in unrealized appreciation ($792) $1,662
(depreciation) of trust assets
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
ASSETS (In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $63 $120
Temporary cash investments - at cost,
which approximates market:
Associated companies 82,496 44,458
Other 277,126 236,721
---------- ----------
Total cash and cash equivalents 359,685 281,299
---------- ----------
Accounts receivable:
Associated companies 79,861 80,713
Other 27,202 4,431
---------- ----------
Total receivables 107,063 85,144
---------- ----------
Materials and supplies - at average cost 62,844 62,203
Deferred nuclear refueling outage costs 6,406 12,853
Prepayments and other 5,292 2,592
---------- ----------
TOTAL 541,290 444,091
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 123,754 113,282
---------- ----------
UTILITY PLANT
Electric 3,034,167 3,031,340
Property under capital lease 441,614 440,394
Construction work in progress 60,360 57,076
Nuclear fuel under capital lease 71,302 64,621
---------- ----------
TOTAL UTILITY PLANT 3,607,443 3,593,431
Less - accumulated depreciation and amortization (1,252,532) (1,198,266)
---------- ----------
UTILITY PLANT - NET 2,354,911 2,395,165
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 208,795 221,996
Unamortized loss on reacquired debt 57,770 57,150
Other regulatory assets 189,567 188,256
Other 12,737 11,265
---------- ----------
TOTAL 468,869 478,667
---------- ----------
TOTAL ASSETS $3,488,824 $3,431,205
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Unaudited)
1999 1998
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $102,947 $175,820
Accounts payable:
Associated companies 47,186 25,975
Other 23,311 19,420
Taxes accrued 122,750 76,806
Accumulated deferred income taxes 2,542 5,022
Interest accrued 34,337 42,022
Obligations under capital leases 41,835 41,835
Other 1,585 1,543
---------- ----------
TOTAL 376,493 388,443
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 452,016 506,727
Accumulated deferred investment tax credits 94,957 96,695
Obligations under capital leases 29,466 22,786
FERC settlement - refund obligation 40,338 43,159
Other regulatory liabilities 76,373 43,309
Decommissioning 118,630 107,365
Regulatory reserves 241,779 159,287
Accumulated provisions 1,744 1,971
Other 18,273 17,524
---------- ----------
TOTAL 1,073,576 998,823
---------- ----------
Long-term debt 1,156,963 1,159,830
SHAREHOLDERS' EQUITY
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares 789,350 789,350
Retained earnings 92,442 94,759
---------- ----------
TOTAL 881,792 884,109
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,488,824 $3,431,205
========== ==========
See Notes To Financial Statements.
</TABLE>
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
See "Cajun - Coal Contracts" in Note 9 of the Form 10-K for
information relating to the declaratory judgment actions filed by
Entergy Gulf States in the U.S. Bankruptcy Court in which the Cajun
bankruptcy case is pending. The appeals of the bankruptcy judge's
rulings in the declaratory judgment actions have been stayed pending
a resolution of the plan of reorganization confirmation process in
the bankruptcy case.
Capital Requirements and Financing (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 Entergy's
estimated construction expenditures (excluding nuclear fuel) for the
years 1999, 2000, and 2001 and long-term debt and preferred stock
maturities and cash sinking fund requirements for the period 1999-
2001.
Sales Warranties and Indemnities (Entergy Corporation)
See Note 9 in the Form 10-K for information on certain
warranties made by Entergy or its subsidiaries in the Entergy London
and CitiPower sales transactions.
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.
In July 1999, Entergy's non-utility nuclear power business
purchased the 670 MW Pilgrim Nuclear Station (Pilgrim) from Boston
Edison (BECO). As discussed in the Form 10-K, the Price-Anderson Act
assessment exposure for Pilgrim is $88.1 million per nuclear
incident. With the addition of Pilgrim, the private insurance
program providing coverage for worker tort claims discussed in the
Form 10-K provides for a maximum assessment of approximately $18.6
million for Entergy's six nuclear units. Pilgrim is insured for
$1.15 billion in property damages under the insurance programs
discussed in the Form 10-K. Pilgrim's assessment maximum under the
property damage and replacement power/business interruption insurance
programs discussed in the Form 10-K is $7.3 million. The spent fuel
storage facility at Pilgrim is expected to provide storage capacity
until approximately 2003. The facility will be modified to provide
sufficient capacity through approximately 2012. As part of the
Pilgrim purchase, BECO has funded a $471 million decommissioning
trust fund, which based on Entergy's estimate is adequate to cover
future decomissioning costs.
ANO Matters (Entergy Corporation and Entergy Arkansas)
See Note 9 to the financial statements 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, and
the replacement of the steam generators scheduled in 2000. Further
inspections and repairs were conducted at subsequent refueling and
mid-cycle outages, including the most recent outage in February 1999.
Environmental Issues
(Entergy Gulf States)
Entergy Gulf States has been designated as a potentially
responsible party (PRP) for the cleanup 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 June 30, 1999, a remaining recorded liability of
approximately $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 Entergy Gulf States environmental
clean-up activity and related litigation.
(Entergy Louisiana and Entergy New Orleans)
During 1993, the Louisiana Department of Environmental Quality
(LDEQ) issued new rules for solid waste regulation, including
regulation of wastewater impoundments. Entergy Louisiana and Entergy
New Orleans have determined that certain of their 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 June 30, 1999. At June 30, 1999, remaining recorded liabilities
in the amount of $5.4 million and $0.5 million existed for wastewater
upgrades and closures for Entergy Louisiana and Entergy New Orleans,
respectively. 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. Entergy Louisiana may be obligated to pay
amounts sufficient to permit the Owner Participants to withdraw from
these lease transactions. Additionally, Entergy Louisiana may be
required to assume the outstanding bonds issued by the Owner Trustee
under these leases to finance, in part, its acquisition of the
undivided interests in Waterford 3. See Note 10 to the Form 10-K for
further information.
Employment Litigation (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans)
Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and Entergy New Orleans are defendants in numerous
lawsuits filed by former employees asserting that they were
wrongfully terminated and/or discriminated against due to age, race,
and/or sex. Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, and Entergy New Orleans are vigorously
defending these suits and deny any liability to the plaintiffs.
However, no assurance can be given as to the outcome of these cases.
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 June 30, 1999. See Note 9 to
the Form 10-K for further information.
Litigation (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans)
In addition to those discussed above, Entergy and the domestic
utility companies are involved in a number of legal proceedings and
claims in the ordinary course of their business. While management is
unable to predict the outcome of such litigation, it is not expected
that the ultimate resolution of these matters will have a material
adverse effect on results of operations, cash flows, or financial
condition of these entities.
NOTE 2. RATE AND REGULATORY MATTERS
Retail Rate Proceedings
Filings with the APSC (Entergy Corporation and Entergy Arkansas)
Entergy Arkansas' rate schedules include an Energy Cost Recovery
Rider to recover the costs of fuel and purchased energy costs. The
rider utilizes projected energy costs for the twelve-month period
commencing on April 1 of each year to develop an energy cost rate,
which is redetermined annually and includes a true-up adjustment
reflecting the over-recovery or under-recovery of the energy cost for
the prior calendar year.
In March 1999, Entergy Arkansas filed its annually redetermined
energy cost rate with the APSC in accordance with the Energy Cost
Recovery Rider formula and special circumstance agreement. The
filing reflected that an increase was warranted to offset an under-
recovery of the energy costs for 1998. The increased energy cost
rate is effective April 1999 through March 2000.
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 transition cost account
reserve recorded for Entergy Arkansas in 1998 was adjusted in June
1999 as a result of the final 1998 APSC order on the transition cost
account for a negative net income impact of $.9 million. The results
of operations reflect these charges in operating expenses. As of
June 30, 1999, the transition cost account balance was $94.6 million.
Filings with the PUCT (Entergy Corporation and Entergy Gulf States)
Previous developments and information related to Entergy Gulf
States' retail rate proceedings are presented in Note 2 to the Form
10-K.
In June 1999, the PUCT issued its final order approving the
settlement agreement that Entergy Gulf States had entered into
in February 1999. On July 20, 1999, intervenor Office of Public
Utility Counsel (OPC) filed a motion for rehearing, addressing
limited portions of the discussion included in the final order.
On August 5, 1999, the PUCT voted not to hear the OPC's motion for
rehearing. The OPC then filed a notice to withdraw from the
settlement alleging that the PUCT order was not materially consistent
with the settlement agreement and that the withdrawal rendered the
agreement null and void. The PUCT is expected to consider the
matter in mid-August. Entergy Gulf States cannot predict the
impact of OPC's notice to withdraw on this proceeding. The
settlement agreement resolves the pending appeal of Entergy Gulf
States' 1996 rate proceedings as well as its 1998 rate proceedings
and all of the settling parties' pending appeals in other
matters, except for the appeal in the River Bend abeyed cost
recovery proceeding. The settlement agreement provides for the
following:
o an annual $4.2 million base rate reduction, effective March 1,
1999, which is in addition to the annual $69 million base rate
reduction (net of River Bend accounting order deferrals) in the
PUCT's second order on rehearing in October 1998;
o a methodology for semi-annual revisions of the fixed fuel factor
based on the market price of natural gas;
o a base rate freeze through June 1, 2000;
o amortization of the remaining River Bend accounting order
deferrals as of January 1, 1999, over three years on a straight-line
basis, provided that such accounting order deferrals shall not be
recognized in any subsequent base rate case or stranded cost
calculation;
o the dismissal of all pending appeals of the settling parties
relating to Entergy Gulf States' proceedings with the PUCT, except
the River Bend appeal discussed in Note 2 to the Form 10-K; and
o the potential recovery in the River Bend appeal is limited to
$115 million net plant in service as of January 1, 2002, less
depreciation over the remaining life of the plant beginning January
1, 2002 through the date the plant costs are included in rate base,
provided that any such recovery shall not be used to increase rates
above the level agreed to in the settlement agreement.
As a result of the settlement agreement, in June 1999, Entergy
Gulf States
o removed a $207.3 million deferred debit and the associated
provision recorded for unrecovered purchased power costs and deferred
revenue from Nelson Industrial Steam Company from its balance sheet,
which had no net income impact on Entergy Gulf States;
o removed the reserve for River Bend plant costs held in abeyance
and reduced the plant asset, resulting in other income of $4.8
million; and
o removed the $93.9 million reserve for the amortization of River
Bend accounting order deferrals to reflect the three year
amortization schedule detailed in the agreement. The income impact
of this removal was largely offset by an increase in the rate of
amortization of the accounting order deferrals.
In December 1998, the PUCT issued an order approving the
implementation of a revised fixed fuel factor and fuel and purchased
power surcharge that would result in increased revenues of $42.4
million annually and recovery of $112.1 million of under-recovered
fuel costs, inclusive of interest, over a 24-month period. These
increases were implemented in the first billing cycle in February
1999. In March 1999, North Star Steel Texas, Inc. and certain cities
served by Entergy Gulf States appealed the PUCT's order to the State
District Court in Travis County, Texas. Entergy Gulf States cannot
predict the outcome of such appeals, although these cities have
agreed to dismiss their appeal upon approval of the settlement
agreement described above.
Based on the settlement agreement discussed above, Entergy Gulf
States has adopted a methodology for calculating its fixed fuel
factor based on the market price of natural gas. This calculation
and any necessary adjustments to the fuel factor will be made semi-
annually effective March 1, 1999. The calculation for March 1, 1999
showed that the fuel factor adopted in the December 1998 PUCT order
discussed above should be reduced. This fuel factor reduction was
approved by the PUCT in February 1999. The amounts at issue in this
proceeding will be the subject of fuel reconciliation proceedings
before the PUCT, including a fuel reconciliation case filed by
Entergy Gulf States on July 15, 1999, in which the PUCT will consider
the reasonableness of Entergy Gulf States' fuel and purchased power
expenses incurred between July 1, 1996 and February 28, 1999.
Management cannot predict the ultimate outcome of the fuel
reconciliation proceedings.
In June 1999, the PUCT instituted a proceeding to consider the
final adjustment of the rate refunds that were ordered in the PUCT's
October 1998 second order on rehearing described in Note 2 to the
Form 10-K. These refunds were required to occur over the fourteen-
month period of August 1998 through September 1999. The PUCT issued
an order on July 16, 1999 adopting a methodology which requires
Entergy Gulf States to refund approximately an additional $24
million. This refund was recorded in the second quarter of 1999 and
is reflected as a reduction in operating revenues. Further
proceedings before the PUCT will be required to determine the precise
amount of the refund.
Filings with the LPSC (Entergy Corporation, Entergy Gulf States and
Entergy Louisiana)
In September 1996, the LPSC completed the second phase of its
review of Entergy Gulf States' fuel costs, which covered the period
October 1991 through December 1994. In October 1996, the LPSC issued
an order requiring a $34.2 million refund. The refund includes a
disallowance of $14.3 million of capital costs (including interest)
related to certain gas transportation and storage facilities, which
were recovered through the fuel clause, and which have been refunded
pursuant to the October 1996 LPSC Settlement. Entergy Gulf States
will be permitted to recover these costs in the future through base
rates. Subsequently, Entergy Gulf States appealed and received an
injunction to stay this order, except insofar as the order required
the $14.3 million refund. In January 1999, the Louisiana Supreme
Court affirmed the LPSC's October 1996 order. Pursuant to this
decision, Entergy Gulf States expects to refund $26.2 million,
including interest, in the third quarter of 1999. Management
reserved for this refund in 1998 in connection with estimates of the
probable outcome of this proceeding and the annual earnings reviews
discussed in Note 2 to the Form 10-K.
In March 1999, the LPSC deferred making a decision on whether
electric industry restructuring is in the public interest.
Anticipating that retail competition will be in the public interest
at some future date, the LPSC approved the development of a Louisiana
specific plan for possible future implementation. The LPSC staff,
outside consultants, and counsel were directed to work together to
analyze and resolve outstanding issues and recommend a plan for the
implementation of retail competition for consideration by the LPSC on
or before January 1, 2001. Once the Louisiana specific plan is
presented to the LPSC, and if it is determined that retail
competition is in the public interest, the LPSC staff, outside
consultants, counsel, and industry members will work together to
refine the submitted plan in order that it can be implemented at a
future date.
In April 1999, Entergy Louisiana submitted its fourth annual
performance-based formula rate plan filing for the 1998 test year.
The filing indicated that a $20.7 million base rate reduction might
be appropriate, for implementation on August 2, 1999. Based on
Entergy Louisiana's filing and on subsequent comments filed by
Entergy Louisiana, the LPSC staff, and other parties, Entergy
Louisiana implemented an interim rate reduction of approximately
$15.0 million, effective August 1, 1999. Entergy Louisiana's
filing will then be subject to further review by the LPSC, which
may result in an additional change in rates. No procedural
schedule has been established by the LPSC.
Also in April 1999, the Louisiana Supreme Court rendered a
decision in the second post-Merger earnings review of Entergy Gulf
States. Previous developments and information related to Entergy
Gulf States' post-Merger earnings reviews are presented in Note 2 to
the financial statements to the Form 10-K. In this most recent
decision, the Louisiana Supreme Court decided in favor of Entergy
Gulf States on two of the issues raised in its appeal, one of which
will reduce the refund that Entergy Gulf States will be required to
make from $9.6 million to $6.0 million. The case has been remanded
to the LPSC, and management is continuing to evaluate the
implications of this decision.
In May 1999, Entergy Gulf States filed its sixth required post-
Merger earnings analysis with the LPSC. This filing will be subject
to review by the LPSC, which may result in a change in rates.
In June 1999, Entergy Gulf States recorded an additional $8.8
million reserve for management's updated estimates of the outcomes of
the annual earnings reviews and fuel cost review in Louisiana. This
reserve is reflected as a reduction of Entergy Gulf States' operating
revenues.
Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
In March 1999, Entergy Mississippi submitted its annual
performance-based formula rate plan filing for the 1998 test year.
In April 1999, the MPSC issued an order approving a prospective rate
reduction of $13.3 million. This rate reduction went into effect May
1, 1999. In June 1999, Entergy Mississippi revised its March 1999
filing to include a portion of refinanced long-term debt not included
in the original filing. This revision resulted in an additional rate
reduction of approximately $1.5 million, effective July 1999.
Filings with the Council (Entergy Corporation and Entergy New
Orleans)
In April 1999, Entergy New Orleans filed, in compliance with
directives of the Council, a plan that would allow for gas retail
open access in New Orleans. The plan outlines the conditions under
which Entergy New Orleans could support retail open access should the
Council find it in the public interest. It is anticipated that a
hearing process on the public interest issue will be completed by
December 1999.
Proposed Rate Increase (System Energy)
As reported in the Form 10-K, System Energy filed an application
with FERC in 1995 requesting a rate increase of $65.5 million. The
rate increase was put into effect, subject to refund, in December
1995. After holding hearings in 1996, a FERC ALJ found that portions
of System Energy's request should be rejected, including a proposed
increase in return on common equity from 11% to 13% and a requested
change in decommissioning cost methodology. The ALJ recommended a
decrease in the return on common equity from 11% to 10.86%. Other
portions of System Energy's request for a rate increase were approved
by the ALJ. All of the ALJ's findings are advisory, and may be
accepted, modified or rejected by FERC in a final order. No such
order has been forthcoming.
If the FERC were to approve the ALJ's findings, System Energy
would be required to make a refund of money collected under its
proposed tariff in the amount of $212 million as of June 30, 1999,
together with interest in the amount of $29.8 million. As of June
30, 1999, System Energy has provided reserves for such refund and
interest thereon in the aggregate amount of $241.8 million. It is
not certain when FERC may issue a final order in this rate proceeding
or whether FERC will accept, modify, or reject the ALJ's findings.
Although management believes that the reserves discussed above are
adequate to reflect the probable outcome of this proceeding,
additional reserves or write-offs could be required in the future.
NOTE 3. COMMON STOCK (Entergy Corporation)
During the six months ended June 30, 1999, Entergy Corporation
repurchased 505,550 shares of common stock in the open market. These
shares will be used to fulfill the requirements of various
compensation and benefit plans. Entergy Corporation issued 585,398
shares of its previously repurchased common stock to satisfy stock
options exercised and employee stock purchases. In addition, Entergy
Corporation received proceeds of $3.8 million from the issuance of
125,330 shares of common stock under its dividend reinvestment and
stock purchase plan.
In addition, on July 30, 1999, the Board approved the commitment
of up to $750 million in funds towards the repurchase of Entergy
common stock. These purchases will be made on a discretionary basis,
utilizing internal funds.
NOTE 4. LONG-TERM DEBT
(Entergy Mississippi)
On July 1, 1999 Entergy Mississippi redeemed, prior to maturity,
Pollution Control Revenue Bonds totaling $30 million with rates and
maturity dates of 7.625% due 2012, 9.0% and 9.5% due 2013, and 9.5%
due 2014. Proceeds from the issuance on May 28, 1999 of $30 million
of Pollution Control Revenue Refunding Bonds, accruing interest at a
variable rate, initially 3.25%, due 2022, were used for these
redemptions.
(Entergy Louisiana)
On July 6, 1999, Entergy Louisiana redeemed, prior to maturity,
$115 million of 8.25% Pollution Control Revenue Bonds due 2014.
Proceeds from the issuance on June 25, 1999 of $55 million of
Pollution Control Revenue Refunding Bonds, accruing interest at a
rate of 4.85% per annum for the first three years, due 2030 and $60
million of Pollution Control Revenue Refunding Bonds, accruing
interest at a variable rate, initially 3.75%, due 2030 were used for
this redemption.
NOTE 5. RETAINED EARNINGS (Entergy Corporation)
On July 30, 1999, Entergy Corporation's Board of Directors
declared a common stock dividend of $.30 per share, payable on
September 1, 1999, to holders of record on August 11, 1999.
NOTE 6. BUSINESS SEGMENT INFORMATION (Entergy Corporation)
See Note 14 to the financial statements in the Form 10-K for
information regarding Entergy's adoption of SFAS 131 and its
operating segments. Entergy's segment financial information for the
three months ended June 30, 1999 and 1998 is as follows (in
thousands):
<TABLE>
<CAPTION>
Domestic Power Entergy CitiPower* All Other* Eliminations Consolidated
Utility and Marketing London*
System and
Energy Trading*
1999
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues $1,646,026 $669,027 $ - $ - $9,638 ($8,287) $2,316,404
-------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 391,581 101,630 - - (2,340) - 490,871
Purchased power 134,380 547,921 - - (273) (5,201) 676,827
Nuclear refueling outages 17,135 - - - - - 17,135
Other operation & maint. 333,614 17,776 - - 52,847 (3,531) 400,706
Deprec, amort. & decomm. 185,514 1,205 - - 1,220 - 187,939
Taxes other than income 82,097 215 - - 741 - 83,053
Other regulatory credits (2,845) - - - - - (2,845)
Amort. of rate deferrals 88,767 - - - - - 88,767
-------------------------------------------------------------------------------------
Total oper. expenses 1,230,243 668,747 - - 52,195 (8,732) 1,942,453
-------------------------------------------------------------------------------------
Operating Income 415,783 280 - - (42,557) 445 373,951
Other Income (Deductions) 18,562 716 - - 59,442 (590) 78,130
Interest Charges 151,574 (49) - - 4,510 (145) 155,890
-------------------------------------------------------------------------------------
Income Before Income Taxes 282,771 1,045 - - 12,375 - 296,191
Income Taxes 107,903 1,187 - - (22,657) - 86,433
-------------------------------------------------------------------------------------
Net Income (Loss) $174,868 ($142) $ - $ - $35,032 $ - $209,758
=====================================================================================
1998
Operating Revenues $1,542,426 $389,142 $479,001 $85,771 $23,837 ($11,363) $2,508,814
-------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 311,216 18,632 - - (1,994) - 327,854
Purchased power 189,401 318,229 296,339 27,623 (14,498) (8,830) 808,264
Nuclear refueling outages 21,015 - - - - - 21,015
Other operation & maint. 331,690 14,410 73,179 23,921 60,283 (2,978) 500,505
Deprec, amort. & decomm. 189,473 1,290 35,275 7,031 12,020 - 245,089
Taxes other than income 82,005 305 - 7,341 667 - 90,318
Other regulatory credits (25,017) - - - - - (25,017)
Amort. of rate deferrals 68,076 - - - - - 68,076
-------------------------------------------------------------------------------------
Total oper. expenses 1,167,859 352,866 404,793 65,916 56,478 (11,808) 2,036,104
-------------------------------------------------------------------------------------
Operating Income 374,567 36,276 74,208 19,855 (32,641) 445 472,710
Other Income (Deductions) 7,850 2,080 8,818 136 3,282 (684) 21,482
Interest Charges 136,566 94 49,568 13,758 11,884 (239) 211,631
-------------------------------------------------------------------------------------
Income Before Income Taxes 245,851 38,262 33,458 6,233 (41,243) - 282,561
Income Taxes 99,988 14,972 10,409 1,916 (60,703) - 66,582
-------------------------------------------------------------------------------------
Net Income (Loss) $145,863 $23,290 $23,049 $4,317 $19,460 $ - $215,979
=====================================================================================
Entergy's segment financial information for the six months ended
June 30, 1999 is as follows:
Domestic Power Entergy CitiPower* All Other* Eliminations Consolidated
Utility Marketing London*
and System and
Energy Trading*
1999
Operating Revenues $2,932,729 $1,013,465 $ - $ - $21,734 ($11,602) $3,956,326
------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 736,178 160,006 - - (2,340) - 893,844
Purchased power 215,728 842,234 - - (273) (7,063) 1,050,626
Nuclear refueling outages 36,820 - - - - - 36,820
Other operation & maint. 651,640 31,785 - - 90,609 (5,696) 768,338
Deprec, amort. & decomm. 377,672 2,328 - - 4,981 - 384,981
Taxes other than income 164,393 399 - - 1,329 - 166,121
Other regulatory credits (18,970) - - - - - (18,970)
Amort. of rate deferrals 97,180 - - - - - 97,180
------------------------------------------------------------------------------------
Total oper. expenses 2,260,641 1,036,752 - - 94,306 (12,759) 3,378,940
------------------------------------------------------------------------------------
Operating Income 672,088 (23,287) - - (72,572) 1,157 577,386
Other Income (Deductions) 29,675 1,983 - - 93,887 (1,469) 124,076
Interest Charges 276,822 (113) - - 10,795 (312) 287,192
------------------------------------------------------------------------------------
Income Before Income Taxes 424,941 (21,191) - - 10,520 - 414,270
Income Taxes 167,497 (7,036) - - (28,855) - 131,606
------------------------------------------------------------------------------------
Net Income (Loss) $257,444 ($14,155) $ - $ - $39,375 $ - $282,664
====================================================================================
1998
Operating Revenues $2,923,472 $657,558 $1,029,791 $157,501 $69,169 ($15,585) $4,821,906
------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 651,477 27,334 - - (1,994) - 676,817
Purchased power 326,750 569,475 663,235 54,010 (14,498) (12,034) 1,586,938
Nuclear refueling outages 43,689 - - - - - 43,689
Other operation & maint. 649,340 21,485 167,365 33,071 117,373 (4,441) 984,193
Deprec, amort. & decomm. 383,362 2,540 69,020 14,442 28,183 - 497,547
Taxes other than income 169,103 510 - 15,121 1,378 - 186,112
Other regulatory credits (59,783) - - - - - (59,783)
Amort. of rate deferrals 148,176 - - - - - 148,176
------------------------------------------------------------------------------------
Total oper. expenses 2,312,114 621,344 899,620 116,644 130,442 (16,475) 4,063,689
------------------------------------------------------------------------------------
Operating Income 611,358 36,214 130,171 40,857 (61,273) 890 758,217
Other Income (Deductions) 25,887 4,224 17,557 145 8,921 (1,330) 55,404
Interest Charges 275,603 94 97,142 28,339 21,869 (440) 422,607
------------------------------------------------------------------------------------
Income Before Income Taxes 361,642 40,344 50,586 12,663 (74,221) - 391,014
Income Taxes 151,776 15,827 15,660 2,491 (70,773) - 114,981
------------------------------------------------------------------------------------
Net Income (Loss) $209,866 $24,517 $34,926 $10,172 ($3,448) $ - $276,033
====================================================================================
</TABLE>
Businesses marked with * are referred to as the "competitive
businesses," with the exception of the parent company, Entergy
Corporation, which is also included in the "All Other" column.
Reconciling items are principally intersegment activity.
__________________________________
In the opinion of Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New
Orleans, and System Energy, the accompanying unaudited condensed
financial statements contain all adjustments (consisting primarily of
normal recurring accruals and reclassification of 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 and System Energy is
subject to seasonal fluctuations with the peak periods occurring
during the third quarter. The results for the interim periods
presented should not be used as a basis for estimating results of
operations for a full year.
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See "PART I, Item 1, Other Regulation and Litigation" in the
Form 10-K for a discussion of legal proceedings affecting Entergy.
Set forth below are updates to the information contained in 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 actions 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. This proceeding was dismissed in March 1999 in
accordance with the settlement agreement discussed in the Form 10-K.
Ratepayer Lawsuits (Entergy Corporation, Entergy Louisiana, and
Entergy New Orleans)
See "Ratepayer Lawsuits" in Item 1 of Part I of the Form 10-K
and in Item 1 of Part II of the 1999 first quarter Form 10-Q for a
discussion of the lawsuits filed by ratepayers with the LPSC and in
Louisiana state courts in Orleans and East Baton Rouge Parishes.
The plaintiffs in the fuel adjustment clause proceeding before
the LPSC have filed testimony in which they purport to quantify many
of their claims in an amount totaling $488 million, plus interest.
Entergy Louisiana believes that this case is without merit and is
vigorously defending itself in the lawsuit.
The plaintiffs in the fuel adjustment clause case against
Entergy New Orleans, Entergy Corporation, Entergy Services, Inc. and
Entergy Power, Inc. pending in state court in Orleans Parish have
filed a similar complaint with the New Orleans City Council against
the same defendants named in the state court case. Entergy New
Orleans believes that this case is without merit and is vigorously
defending itself in the lawsuit.
Fiber Optic Cable Litigation (Entergy Corporation, Entergy
Gulf States)
See "Fiber Optic Cable Litigation" in Item 1 of Part II of the
1999 first quarter Form 10-Q for information relating to the lawsuit
filed by a group of property owners against Entergy Corporation,
Entergy Gulf States, Entergy Services, and ETHC.
Franchise Service Area Litigation (Entergy Gulf States)
See "Franchise Service Area Litigation" in Item 1 of Part 1 of
the Form 10-K for information relating to the request filed by
Beaumont Power and Light Company (BP&L) with the PUCT to obtain a
certificate of convenience and necessity for those portions of
Jefferson County outside the boundaries of any municipality for which
Entergy Gulf States provides retail electric service. In March 1999
in a similar proceeding involving Corpus Christi Power & Light
Company (CCP&L), the ALJ issued an interim order finding that CCP&L
has not demonstrated that it is a public utility. The PUCT's General
Counsel and CCP&L have filed appeals of the interim order, and the
appeal was heard by the PUCT in April 1999. CCP&L has filed, at the
request of the PUCT, a list of assets it intends to own and operate
as an electric utility. The BP&L proceeding is abated pending
resolution of this phase of the CCP&L proceeding.
Litigation Environment (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy)
The four states in which Entergy and the domestic utility
companies operate, and in particular Louisiana and Texas, have proven
to be unusually litigious environments. Judges and juries in
Louisiana and Texas have demonstrated a willingness to grant large
verdicts, including punitive damages, to plaintiffs in personal
injury, property damage, and business tort cases. Entergy uses all
means appropriate to contest litigation threatened or filed against
it, but the litigation environment in the states referred to poses a
significant business risk.
Environmental Matters (Entergy Louisiana and Entergy New Orleans)
Entergy New Orleans is currently involved in the stabilization
and abatement of asbestos containing material at the A. B. Paterson
Generating Plant, located in New Orleans, Louisiana. Entergy has
notified the Louisiana Department of Environmental Quality of its
intent to repair and remove insulation and machinery gaskets. On-
site abatement of gaskets and insulating material is scheduled to be
completed during the third quarter of 1999. The cost incurred
through June 30, 1999 is approximately $1.1 million, and future costs
are not expected to exceed the existing provision of approximately
$1.1 million.
During 1993, the LDEQ issued new rules for solid waste
regulation, including regulation of wastewater impoundments. Entergy
Louisiana and Entergy New Orleans have determined that certain of
their power plant wastewater impoundments were affected by these
regulations and have chosen to upgrade or close them. As a result, a
remaining recorded liability in the amount of $5.4 million for
Entergy Louisiana and $500,000 for Entergy New Orleans existed at
June 30, 1999 for wastewater upgrades and closures. Completion of
this work is awaiting the LDEQ's approval.
Ice Storm Litigation (Entergy Corporation and Entergy Gulf States)
In January 1997, a group of Entergy Gulf States customers in
Texas filed a lawsuit against Entergy Corporation, Entergy Gulf
States, and other Entergy subsidiaries in state court in Jefferson
County, Texas purportedly on behalf of all Entergy Gulf States
customers in Texas who sustained outages in a January 1997 ice storm.
The lawsuit alleges that Entergy failed to properly maintain its
electrical distribution system and respond to the ice storm. The
district court certified the class in April 1999. Entergy has
appealed the class certification, and is vigorously defending itself
in the lawsuit. Entergy believes that the lawsuit is without merit.
A similar lawsuit was filed in Louisiana in 1997, in which class
certification was denied.
Item 4. Submission of Matters to a Vote of Security Holders
Election of Board of Directors
Entergy Corporation
The annual meeting of stockholders of Entergy Corporation was
held on May 14, 1999. The following matters were voted on and
received the specified number of votes for, abstentions, votes
withheld (against), and broker non-votes:
1. Election of Directors:
Broker Non-
Name of Nominee Votes For Abstentions Votes Withheld Votes
W. Frank Blount 211,606,931 N/A 3,033,455 N/A
John A. Cooper, Jr. 211,627,403 N/A 3,012,983 N/A
George W. Davis 211,505,984 N/A 3,134,402 N/A
Norman C. Francis 211,519,801 N/A 3,120,585 N/A
J. Wayne Leonard 208,600,306 N/A 6,040,080 N/A
Robert v.d. Luft 211,596,589 N/A 3,043,797 N/A
Kinnaird R. McKee 211,522,279 N/A 3,118,107 N/A
Thomas F. McLarty, III 208,060,960 N/A 6,579,426 N/A
Paul W. Murrill 211,467,129 N/A 3,173,257 N/A
James R. Nichols 211,597,601 N/A 3,042,785 N/A
Eugene H. Owen 211,583,650 N/A 3,056,736 N/A
John N. Palmer, Sr. 211,677,291 N/A 2,963,095 N/A
D. H. Reilley 208,580,920 N/A 6,059,466 N/A
Wm. Clifford Smith 211,642,696 N/A 2,997,690 N/A
Bismark A. Steinhagen 211,653,251 N/A 2,987,135 N/A
2. Stockholder proposal that Entergy discontinue bonuses
immediately and discontinue the use of options, rights, stock
appreciation rights, etc., after termination of any existing
programs for top management: 186,828,055 votes against; 15,234,036
broker non-votes; 10,314,168 votes for; and 2,264,127 abstentions.
3. Stockholder proposal that beginning with fiscal year 2000,
Entergy policy shall be to tie at least half of Executive
Management's compensation to the amount of common stockholder's
dividend paid out each year: 185,955,883 votes against; 15,224,046
broker non-votes; 11,468,143 votes for; and 1,992,314 abstentions.
4. Stockholder proposal that Entergy be compelled to resume
issuing Quarterly Stockholders Reports: 189,041,197 votes against;
15,175,042 broker non-votes; 7,661,850 votes for; and 2,762,297
abstentions.
5. Ratify the appointment of independent public accountants,
PricewaterhouseCoopers LLP for the year 1999: 212,809,750 votes for;
916,286 votes against; 914,350 abstentions; and broker non-votes are
not applicable.
(Entergy Arkansas)
A consent in lieu of the annual meeting of common stockholders
was executed on July 7, 1999. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of common stock. The common stockholder, by such consent, elected
the following individuals to serve as directors constituting the
Board of Directors of Entergy Arkansas: Thomas J. Wright, Donald C.
Hintz, and C. John Wilder.
(Entergy Gulf States)
A consent in lieu of the annual meeting of common stockholders
was executed on July 7, 1999. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of common stock. The common stockholder, by such consent, elected
the following individuals to serve as directors constituting the
Board of Directors of Entergy Gulf States: Jerry D. Jackson, Joseph
F. Domino, Donald C. Hintz, and C. John Wilder.
(Entergy Louisiana)
A consent in lieu of the annual meeting of common stockholders
was executed on July 7, 1999. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of common stock. The common stockholder, by such consent, elected
the following individuals to serve as directors constituting the
Board of Directors of Entergy Louisiana: Jerry D. Jackson, Donald C.
Hintz, and C. John Wilder.
(Entergy Mississippi)
A consent in lieu of the annual meeting of common stockholders
was executed on July 7, 1999. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of common stock. The common stockholder, by such consent, elected
the following individuals to serve as directors constituting the
Board of Directors of Entergy Mississippi: Carolyn C. Shanks, Donald
C. Hintz, and C. John Wilder.
(Entergy New Orleans)
A consent in lieu of the annual meeting of common stockholders
was executed on July 7, 1999. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of common stock. The common stockholder, by such consent, elected
the following individuals to serve as directors constituting the
Board of Directors of Entergy New Orleans: Daniel F. Packer, Donald
C. Hintz, and C. John Wilder.
(System Energy)
A consent in lieu of the annual meeting of common stockholders
was executed on July 30, 1999. The consent was signed on behalf of
Entergy Corporation, the holder of all issued and outstanding shares
of common stock. The common stockholder, by such consent, elected
the following individuals to serve as directors constituting the
Board of Directors of System Energy: Jerry W. Yelverton, Donald C.
Hintz, and C. John Wilder.
Item 5. Other Information
Earnings Ratios (Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy)
The domestic utility companies and System Energy have calculated
ratios of earnings to fixed charges and ratios of earnings to
combined fixed charges and preferred dividends pursuant to Item 503
of Regulation S-K of the SEC as follows:
Ratios of Earnings to Fixed Charges
Twelve Months Ended
December 31, June 30,
1994 1995 1996 1997 1998 1999
Entergy Arkansas 2.32 2.56 2.93 2.54 2.63 2.49
Entergy Gulf States (b)- 1.86 1.47 1.42 1.40 1.62
Entergy Louisiana 2.91 3.18 3.16 2.74 3.18 3.91
Entergy Mississippi 2.12 2.92 3.40 2.98 3.04 2.23
Entergy New Orleans 1.91 3.93 3.51 2.70 2.59 3.02
System Energy 1.23 2.07 2.21 2.31 2.52 2.00
Ratios of Earnings to Combined Fixed Charges
and Preferred Dividends
Twelve Months Ended
December 31, June 30,
1994 1995 1996 1997 1998 1999
Entergy Arkansas 1.97 2.12 2.44 2.24 2.28 2.19
Entergy Gulf States (a) (b)- 1.54 1.19 1.23 1.20 1.41
Entergy Louisiana 2.43 2.60 2.64 2.36 2.75 3.43
Entergy Mississippi 1.81 2.51 2.95 2.69 2.73 2.00
Entergy New Orleans 1.73 3.56 3.22 2.44 2.36 2.75
(a) "Preferred Dividends" in the case of Entergy Gulf States
also include dividends on preference stock.
(b) Earnings for the year ended December 31, 1994, for Entergy
Gulf States were not adequate to cover fixed charges and
combined fixed charges and preferred dividends by $144.8
million and $197.1 million, respectively.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits*
** 4(a) - Thirteenth Supplemental Indenture, dated as of May 1,
1999, to Entergy Mississippi's Mortgage and Deed of
Trust, dated as of February 1, 1988 (filed as Exhibit A-
2(c) to Rule 24 Certificate dated May 12, 1999 in File
No. 70-8719).
** 4(b) - Fourteenth Supplemental Indenture, dated as of May 1,
1999, to Entergy Mississippi's Mortgage and Deed of
Trust, dated as of February 1, 1988 (filed as Exhibit A-
3(a) to Rule 24 Certificate dated June 8, 1999 in File
No. 70-8719).
** 4(c) Fifty-fourth Supplemental Indenture, dated as of June 1,
1999, to Entergy Louisiana's Mortgage and Deed of Trust,
dated as of April 1, 1944 (filed as Exhibit A-3(a) to
Rule 24 Certificate dated July 6, 1999 in File No. 70-
9141).
27(a) - Financial Data Schedule for Entergy Corporation and
Subsidiaries as of June 30, 1999.
27(b) - Financial Data Schedule for Entergy Arkansas as of June
30, 1999.
27(c) - Financial Data Schedule for Entergy Gulf States as of
June 30, 1999.
27(d) - Financial Data Schedule for Entergy Louisiana as of June
30, 1999.
27(e) - Financial Data Schedule for Entergy Mississippi as of
June 30, 1999.
27(f) - Financial Data Schedule for Entergy New Orleans as of
June 30, 1999.
27(g) - Financial Data Schedule for System Energy as of June 30,
1999.
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) - Annual Reports on Form 10-K of Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System
Energy for the fiscal year ended December 31, 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, and 1-9067, respectively).
** 99(h) - Quarterly Reports on Form 10-Q of Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System
Energy for the quarter ended March 31, 1999, portions of
which are incorporated herein by reference as described
elsewhere in this document (filed with the SEC in File
Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-320, 0-5807, and
1-9067, respectively).
___________________________
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy
Corporation agrees to furnish to the Commission upon request any
instrument with respect to long-term debt that is not registered or
listed herein as an Exhibit because the total amount of securities
authorized under such agreement does not exceed ten percent of
Entergy Corporation and its subsidiaries on a consolidated basis.
* Reference is made to a duplicate list of exhibits being
filed as a part of this report on Form 10-Q for the quarter
ended June 30, 1999, 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 June 30, 1999.
** 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 April 27, 1999,
was filed with the SEC on April 27, 1999, reporting
information under Item 5. "Other Events".
A Current Report on Form 8-K, dated July 23, 1999,
was filed with the SEC on July 23, 1999, 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)
Date: August 13, 1999
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation and Subsidiaries financial statements for the quarter ended June
30, 1999 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 15,170,927
<OTHER-PROPERTY-AND-INVEST> 1,280,234
<TOTAL-CURRENT-ASSETS> 4,083,332
<TOTAL-DEFERRED-CHARGES> 2,549,239
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 23,083,732
<COMMON> 2,470
<CAPITAL-SURPLUS-PAID-IN> 4,632,526
<RETAINED-EARNINGS> 2,640,373
<TOTAL-COMMON-STOCKHOLDERS-EQ> 7,223,933
305,850
488,454
<LONG-TERM-DEBT-NET> 6,458,758
<SHORT-TERM-NOTES> 60,593
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 411,297
0
<CAPITAL-LEASE-OBLIGATIONS> 252,717
<LEASES-CURRENT> 176,247
<OTHER-ITEMS-CAPITAL-AND-LIAB> 7,705,883
<TOT-CAPITALIZATION-AND-LIAB> 23,083,732
<GROSS-OPERATING-REVENUE> 3,956,326
<INCOME-TAX-EXPENSE> 131,606
<OTHER-OPERATING-EXPENSES> 3,378,940
<TOTAL-OPERATING-EXPENSES> 3,378,940
<OPERATING-INCOME-LOSS> 577,386
<OTHER-INCOME-NET> 124,076
<INCOME-BEFORE-INTEREST-EXPEN> 701,462
<TOTAL-INTEREST-EXPENSE> 287,192
<NET-INCOME> 282,664
20,706
<EARNINGS-AVAILABLE-FOR-COMM> 261,958
<COMMON-STOCK-DIVIDENDS> 144,059
<TOTAL-INTEREST-ON-BONDS> 319,456
<CASH-FLOW-OPERATIONS> 555,550
<EPS-BASIC> 1.06
<EPS-DILUTED> 1.06
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Arkansas, Inc. financial statements for the quarter ended June 30, 1999
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,831,868
<OTHER-PROPERTY-AND-INVEST> 343,765
<TOTAL-CURRENT-ASSETS> 411,154
<TOTAL-DEFERRED-CHARGES> 438,918
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,025,705
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 590,134
<RETAINED-EARNINGS> 514,731
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,105,335
80,000
116,350
<LONG-TERM-DEBT-NET> 1,127,404
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 340
0
<CAPITAL-LEASE-OBLIGATIONS> 84,410
<LEASES-CURRENT> 63,679
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,447,520
<TOT-CAPITALIZATION-AND-LIAB> 4,025,705
<GROSS-OPERATING-REVENUE> 699,160
<INCOME-TAX-EXPENSE> 16,559
<OTHER-OPERATING-EXPENSES> 606,788
<TOTAL-OPERATING-EXPENSES> 606,788
<OPERATING-INCOME-LOSS> 92,372
<OTHER-INCOME-NET> 6,587
<INCOME-BEFORE-INTEREST-EXPEN> 98,959
<TOTAL-INTEREST-EXPENSE> 42,460
<NET-INCOME> 39,940
4,824
<EARNINGS-AVAILABLE-FOR-COMM> 35,116
<COMMON-STOCK-DIVIDENDS> 8,200
<TOTAL-INTEREST-ON-BONDS> 41,712
<CASH-FLOW-OPERATIONS> 102,600
<EPS-BASIC> 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 June 30, 1999
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,140,619
<OTHER-PROPERTY-AND-INVEST> 414,600
<TOTAL-CURRENT-ASSETS> 612,462
<TOTAL-DEFERRED-CHARGES> 557,259
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,724,940
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,575
<RETAINED-EARNINGS> 223,940
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,490,570
120,850
201,444
<LONG-TERM-DEBT-NET> 1,632,264
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 46,025
0
<CAPITAL-LEASE-OBLIGATIONS> 102,280
<LEASES-CURRENT> 34,859
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,096,648
<TOT-CAPITALIZATION-AND-LIAB> 5,724,940
<GROSS-OPERATING-REVENUE> 970,362
<INCOME-TAX-EXPENSE> 30,459
<OTHER-OPERATING-EXPENSES> 847,744
<TOTAL-OPERATING-EXPENSES> 847,744
<OPERATING-INCOME-LOSS> 122,618
<OTHER-INCOME-NET> 9,780
<INCOME-BEFORE-INTEREST-EXPEN> 132,398
<TOTAL-INTEREST-EXPENSE> 72,684
<NET-INCOME> 30,459
8,666
<EARNINGS-AVAILABLE-FOR-COMM> 21,793
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 72,247
<CASH-FLOW-OPERATIONS> 81,784
<EPS-BASIC> 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 June 30, 1999
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,301,787
<OTHER-PROPERTY-AND-INVEST> 129,272
<TOTAL-CURRENT-ASSETS> 499,502
<TOTAL-DEFERRED-CHARGES> 352,292
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,282,853
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 152,649
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,239,228
105,000
100,500
<LONG-TERM-DEBT-NET> 1,168,410
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 231,985
0
<CAPITAL-LEASE-OBLIGATIONS> 32,545
<LEASES-CURRENT> 32,539
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,372,646
<TOT-CAPITALIZATION-AND-LIAB> 4,282,853
<GROSS-OPERATING-REVENUE> 857,736
<INCOME-TAX-EXPENSE> 76,742
<OTHER-OPERATING-EXPENSES> 612,469
<TOTAL-OPERATING-EXPENSES> 612,469
<OPERATING-INCOME-LOSS> 245,267
<OTHER-INCOME-NET> 3,072
<INCOME-BEFORE-INTEREST-EXPEN> 248,339
<TOTAL-INTEREST-EXPENSE> 56,739
<NET-INCOME> 114,858
5,048
<EARNINGS-AVAILABLE-FOR-COMM> 109,810
<COMMON-STOCK-DIVIDENDS> 31,900
<TOTAL-INTEREST-ON-BONDS> 76,443
<CASH-FLOW-OPERATIONS> 139,045
<EPS-BASIC> 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 June 30, 1999
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,081,543
<OTHER-PROPERTY-AND-INVEST> 12,560
<TOTAL-CURRENT-ASSETS> 140,860
<TOTAL-DEFERRED-CHARGES> 182,841
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,417,804
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 222,902
<TOTAL-COMMON-STOCKHOLDERS-EQ> 422,169
0
50,381
<LONG-TERM-DEBT-NET> 462,778
<SHORT-TERM-NOTES> 21,027
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 30,000
0
<CAPITAL-LEASE-OBLIGATIONS> 338
<LEASES-CURRENT> 92
<OTHER-ITEMS-CAPITAL-AND-LIAB> 431,019
<TOT-CAPITALIZATION-AND-LIAB> 1,417,804
<GROSS-OPERATING-REVENUE> 377,080
<INCOME-TAX-EXPENSE> 5,701
<OTHER-OPERATING-EXPENSES> 344,230
<TOTAL-OPERATING-EXPENSES> 344,230
<OPERATING-INCOME-LOSS> 32,850
<OTHER-INCOME-NET> 3,858
<INCOME-BEFORE-INTEREST-EXPEN> 36,708
<TOTAL-INTEREST-EXPENSE> 19,770
<NET-INCOME> 11,237
1,685
<EARNINGS-AVAILABLE-FOR-COMM> 9,552
<COMMON-STOCK-DIVIDENDS> 9,100
<TOTAL-INTEREST-ON-BONDS> 22,648
<CASH-FLOW-OPERATIONS> 34,895
<EPS-BASIC> 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 June 30, 1999
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 311,468
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 124,450
<TOTAL-DEFERRED-CHARGES> 54,904
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 494,081
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,293
<RETAINED-EARNINGS> 76,707
<TOTAL-COMMON-STOCKHOLDERS-EQ> 146,744
0
19,780
<LONG-TERM-DEBT-NET> 169,051
<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> 158,506
<TOT-CAPITALIZATION-AND-LIAB> 494,081
<GROSS-OPERATING-REVENUE> 227,343
<INCOME-TAX-EXPENSE> 7,092
<OTHER-OPERATING-EXPENSES> 204,505
<TOTAL-OPERATING-EXPENSES> 204,505
<OPERATING-INCOME-LOSS> 22,838
<OTHER-INCOME-NET> 1,395
<INCOME-BEFORE-INTEREST-EXPEN> 24,233
<TOTAL-INTEREST-EXPENSE> 6,981
<NET-INCOME> 10,160
482
<EARNINGS-AVAILABLE-FOR-COMM> 9,678
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 7,524
<CASH-FLOW-OPERATIONS> 19,798
<EPS-BASIC> 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 June 30,
1999 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,354,911
<OTHER-PROPERTY-AND-INVEST> 123,754
<TOTAL-CURRENT-ASSETS> 541,290
<TOTAL-DEFERRED-CHARGES> 468,869
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,488,824
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 92,442
<TOTAL-COMMON-STOCKHOLDERS-EQ> 881,792
0
0
<LONG-TERM-DEBT-NET> 1,156,963
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 102,947
0
<CAPITAL-LEASE-OBLIGATIONS> 29,466
<LEASES-CURRENT> 41,835
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,275,821
<TOT-CAPITALIZATION-AND-LIAB> 3,488,824
<GROSS-OPERATING-REVENUE> 300,122
<INCOME-TAX-EXPENSE> 19,142
<OTHER-OPERATING-EXPENSES> 177,590
<TOTAL-OPERATING-EXPENSES> 177,590
<OPERATING-INCOME-LOSS> 122,532
<OTHER-INCOME-NET> 9,517
<INCOME-BEFORE-INTEREST-EXPEN> 132,049
<TOTAL-INTEREST-EXPENSE> 82,724
<NET-INCOME> 30,183
0
<EARNINGS-AVAILABLE-FOR-COMM> 30,183
<COMMON-STOCK-DIVIDENDS> 32,500
<TOTAL-INTEREST-ON-BONDS> 70,231
<CASH-FLOW-OPERATIONS> 201,795
<EPS-BASIC> 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
12 months
1994 1995 1996 1997 1998 June-99
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest Charges $110,814 $115,337 $106,716 $104,165 $96,685 $93,992
Interest applicable to rentals 19,140 18,158 19,121 17,529 15,511 16,159
------------------------------------------------------
Total fixed charges, as defined 129,954 133,495 125,837 121,694 112,196 110,151
Preferred dividends, as defined (a) 23,234 27,636 24,731 16,073 16,763 15,048
------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $153,188 $161,131 $150,568 $137,767 $128,959 $125,199
======================================================
Earnings as defined:
Net Income $142,263 $136,666 $157,798 $127,977 $110,951 $105,301
Add:
Provision for income taxes:
Total 29,220 72,081 84,445 59,220 71,374 58,932
Fixed charges as above 129,954 133,495 125,837 121,694 112,196 110,151
------------------------------------------------------
Total earnings, as defined $301,437 $342,242 $368,080 $308,891 $294,521 $274,384
======================================================
Ratio of earnings to fixed charges, as defined 2.32 2.56 2.93 2.54 2.63 2.49
======================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.97 2.12 2.44 2.24 2.28 2.19
======================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed
by dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
</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
12 months
1994 1995 1996 1997 1998 June 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest charges $204,134 $200,224 $193,890 $180,073 $178,220 $170,517
Interest applicable to rentals 21,539 16,648 14,887 15,747 16,927 17,041
----------------------------------------------------------
Total fixed charges, as defined 225,673 216,872 208,777 195,820 195,147 187,558
Preferred dividends, as defined (a) 52,210 44,651 48,690 30,028 32,031 27,376
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $277,883 $261,523 $257,467 $225,848 $227,178 $214,934
==========================================================
Earnings as defined:
Income (loss) from continuing operations before extraordinary items and
the cumulative effect of accounting changes ($82,755) $122,919 ($3,887) $59,976 $46,393 $67,336
Add:
Income Taxes (62,086) 63,244 102,091 22,402 31,773 49,064
Fixed charges as above 225,673 216,872 208,777 195,820 195,147 187,558
----------------------------------------------------------
Total earnings, as defined (b) $80,832 $403,035 $306,981 $278,198 $273,313 $303,958
==========================================================
Ratio of earnings to fixed charges, as defined 0.36 1.86 1.47 1.42 1.40 1.62
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 0.29 1.54 1.19 1.23 1.20 1.41
==========================================================
(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
12 months
1994 1995 1996 1997 1998 June 99
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $136,444 $136,901 $132,412 $128,900 $122,890 $118,219
Interest applicable to rentals 8,332 9,332 10,601 9,203 9,564 8,877
----------------------------------------------------------
Total fixed charges, as defined 144,776 146,233 143,013 138,103 132,454 127,096
Preferred dividends, as defined (a) 29,171 32,847 28,234 22,103 20,925 18,075
----------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $173,947 $179,080 $171,247 $160,206 $153,379 $145,171
==========================================================
Earnings as defined:
Net Income $213,839 $201,537 $190,762 $141,757 $179,487 $230,882
Add:
Provision for income taxes:
Total Taxes 63,288 117,114 118,559 98,965 109,104 139,385
Fixed charges as above 144,776 146,233 143,013 138,103 132,454 127,096
----------------------------------------------------------
Total earnings, as defined $421,903 $464,884 $452,334 $378,825 $421,045 $497,363
==========================================================
Ratio of earnings to fixed charges, as defined 2.91 3.18 3.16 2.74 3.18 3.91
==========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.43 2.60 2.64 2.36 2.75 3.43
==========================================================
- ------------------------
(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
12 months
1994 1995 1996 1997 1998 June 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $52,764 $51,635 $48,007 $45,274 $40,927 $39,773
Interest applicable to rentals 1,716 2,173 2,165 1,947 1,864 2,145
--------------------------------------------------------
Total fixed charges, as defined 54,480 53,808 50,172 47,221 42,791 41,918
Preferred dividends, as defined (a) 9,447 9,004 7,610 5,123 4,878 4,861
--------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $63,927 $62,812 $57,782 $52,344 $47,669 $46,779
========================================================
Earnings as defined:
Net Income $48,779 $68,667 $79,210 $66,661 $59,268 $35,797
Add:
Provision for income taxes:
Total income taxes 12,476 34,877 41,107 26,744 28,031 15,770
Fixed charges as above 54,480 53,808 50,172 47,221 42,791 41,918
--------------------------------------------------------
Total earnings, as defined $115,735 $157,352 $170,489 $140,626 $130,090 $93,485
========================================================
Ratio of earnings to fixed charges, as defined 2.12 2.92 3.40 2.98 3.04 2.23
========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.81 2.51 2.95 2.69 2.73 2.00
========================================================
- ------------------------
(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
12 months
1994 1995 1996 1997 1998 June 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $18,272 $17,802 $16,304 $15,287 $14,792 $14,748
Interest applicable to rentals 1,245 916 831 911 1,045 1,173
---------------------------------------------------------
Total fixed charges, as defined 19,517 18,718 17,135 16,198 15,837 15,921
Preferred dividends, as defined (a) 2,071 1,964 1,549 1,723 1,566 1,592
---------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $21,588 $20,682 $18,684 $17,921 $17,403 $17,513
=========================================================
Earnings as defined:
Net Income $13,211 $34,386 $26,776 $15,451 $15,172 $19,657
Add:
Provision for income taxes:
Total 4,600 20,467 16,216 12,142 10,042 12,507
Fixed charges as above 19,517 18,718 17,135 16,198 15,837 15,921
---------------------------------------------------------
Total earnings, as defined $37,328 $73,571 $60,127 $43,791 $41,051 $48,085
=========================================================
Ratio of earnings to fixed charges, as defined 1.91 3.93 3.51 2.70 2.59 3.02
=========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.73 3.56 3.22 2.44 2.36 2.75
=========================================================
- ------------------------
(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
12 months
1994 1995 1996 1997 1998 June 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $176,504 $151,512 $143,720 $128,653 $116,060 $138,083
Interest applicable to rentals 7,546 6,475 6,223 6,065 5,189 5,539
----------------------------------------------------------
Total fixed charges, as defined $184,050 $157,987 $149,943 $134,718 $121,249 $143,622
==========================================================
Earnings as defined:
Net Income $5,407 $93,039 $98,668 $102,295 $106,476 $87,293
Add:
Provision for income taxes:
Total 36,838 75,493 82,121 74,654 77,263 55,714
Fixed charges as above 184,050 157,987 149,943 134,718 121,249 143,622
----------------------------------------------------------
Total earnings, as defined $226,295 $326,519 $330,732 $311,667 $304,988 $286,629
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Ratio of earnings to fixed charges, as defined 1.23 2.07 2.21 2.31 2.52 2.00
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</TABLE>
