___________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission Registrant, State of Incorporation, IRS Employer
File Number Address of Principal Executive Identification No.
Offices and Telephone Number
1-11299 ENTERGY CORPORATION 72-1229752
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504) 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)
4809 Jefferson Highway
Jefferson, Louisiana 70121
Telephone (504) 840-2734
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)
1600 Perdido Building
New Orleans, Louisiana 70112
Telephone (504) 670-3674
1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777
(an Arkansas corporation)
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
Telephone (601) 368-5000
___________________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Registrant Title of Class on Which Registered
<S> <C> <C>
Entergy Corporation Common Stock, $0.01 Par Value - 236,145,752 New York Stock Exchange, Inc.
shares outstanding at February 29, 2000 Chicago Stock Exchange Inc.
Pacific Exchange Inc.
Entergy Arkansas Capital I 8-1/2% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
Securities, Series A
Entergy Gulf States, Inc. Preferred Stock, Cumulative, $100 Par Value:
$4.40 Dividend Series New York Stock Exchange, Inc.
$4.52 Dividend Series New York Stock Exchange, Inc.
$5.08 Dividend Series New York Stock Exchange, Inc.
Adjustable Rate Series B (Depository Receipts) New York Stock Exchange, Inc.
Preference Stock, Cumulative, without Par Value New York Stock Exchange, Inc.
$1.75 Dividend Series
Entergy Gulf States Capital I 8.75% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
Securities, Series A
Entergy Louisiana Capital I 9% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
Securities, Series A
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Registrant Title of Class
Entergy Arkansas, Inc. Preferred Stock, Cumulative, $100 Par Value
Preferred Stock, Cumulative, $0.01 Par Value
Entergy Gulf States, Inc. Preferred Stock, Cumulative, $100 Par Value
Entergy Louisiana, Inc. Preferred Stock, Cumulative, $100 Par Value
Preferred Stock, Cumulative, $25 Par Value
Entergy Mississippi, Inc. Preferred Stock, Cumulative, $100 Par Value
Entergy New Orleans, Inc. Preferred Stock, Cumulative, $100 Par Value
<PAGE>
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrants were required to file such reports), and (2)
have been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrants' knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of Entergy Corporation Common Stock, $0.01
Par Value, held by non-affiliates, was $4.8 billion based on the reported
last sale price of such stock on the New York Stock Exchange on February
29, 2000. Entergy Corporation is directly or indirectly the sole holder of
the common stock of Entergy Arkansas, Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans,
Inc., and System Energy Resources, Inc.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of Entergy Corporation to be filed in
connection with its Annual Meeting of Stockholders, to be held May 12,
2000, are incorporated by reference into Parts I and III hereof.
<PAGE>
TABLE OF CONTENTS
Page
Number
Definitions i
Part I
Item 1. Business 1
Item 2. Properties 35
Item 3. Legal Proceedings 35
Item 4. Submission of Matters to a Vote of Security Holders 35
Directors and Executive Officers of Entergy Corporation 35
Part II
Item 5. Market for Registrants' Common Equity and Related
Stockholder Matters 38
Item 6. Selected Financial Data 39
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 39
Item 7A.Quantitative and Qualitative Disclosures
About Market Risk 39
Item 8. Financial Statements and Supplementary Data 40
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 195
Part III
Item 10. Directors and Executive Officers of the Registrants 195
Item 11. Executive Compensation 198
Item 12. Security Ownership of Certain Beneficial Owners and
Management 207
Item 13. Certain Relationships and Related Transactions 210
Part IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 211
Signatures 212
Report of Independent Accountants on Financial Statement Schedules 220
Index to Financial Statement Schedules S-1
Exhibit Index E-1
This combined Form 10-K is separately filed by Entergy Corporation,
Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc.,
Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy
Resources, Inc. Information contained herein relating to any individual
company is filed by such company on its own behalf. Each company makes
representations only as to itself and makes no other representations
whatsoever as to any other company.
This report should be read in its entirety. No one section of the
report deals with all aspects of the subject matter.
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, the risk of owning and operating nuclear
plants, fuel prices and availability, regulatory decisions and the effects
of changes in law, litigation results, capital spending requirements, the
evolution of competition, changes in technology, changes in accounting
standards, changes in capital structure and ownership of assets, risks
associated with the electricity and other energy commodity markets,
interest rate changes and changes in financial markets generally, changes
in foreign currency exchange rates, and other factors.
<PAGE>
DEFINITIONS
Certain abbreviations or acronyms used in the text and notes are
defined below:
Abbreviation or Acronym Term
AFUDC Allowance for Funds Used During Construction
Algiers 15th Ward of the City of New Orleans, Louisiana
ALJ Administrative Law Judge
ANO 1 and 2 Units 1 and 2 of Arkansas Nuclear One Steam Electric
Generating Station (nuclear), owned by Entergy Arkansas
APB Accounting Principles Board
APSC Arkansas Public Service Commission
Availability
Agreement Agreement, dated as of June 21, 1974, as amended, among
System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans, and the
assignments thereof
Board Board of Directors of Entergy Corporation
Boston Edison Boston Edison Company
BPS British pounds sterling
Cajun Cajun Electric Power Cooperative, Inc. (currently in
Chapter 11 bankruptcy reorganization)
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 by Entergy effective December 31,
1998
Council Council of the City of New Orleans, Louisiana
D.C. Circuit United States Court of Appeals for the District of
Columbia Circuit
DOE United States Department of Energy
domestic utility
companies Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New
Orleans, collectively
EITF Emerging Issues Task Force
EMF Electromagnetic fields
ENHC Entergy Nuclear Holding Company
EPA Environmental Protection Agency
EPAct Energy Policy Act of 1992
EPDC Entergy Power Development Corporation
EPMC Entergy Power Marketing Corporation
ET&M Entergy Trading and Marketing, Ltd.
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.
Entergy Corporation Entergy Corporation, a Delaware corporation
Entergy Gulf States Entergy Gulf States, Inc., including its wholly owned
subsidiaries - Varibus Corporation, GSG&T, Inc.,
Prudential Oil & Gas, Inc., and Southern Gulf Railway
Company
<PAGE>
DEFINITIONS (Continued)
Abbreviation or Acronym Term
Entergy London Entergy London Investments plc, formerly Entergy Power
UK plc (including its wholly owned subsidiary, London
Electricity plc), which was sold by Entergy effective
December 4, 1998
Entergy Louisiana Entergy Louisiana, Inc.
Entergy Mississippi Entergy Mississippi, Inc.
Entergy New Orleans Entergy New Orleans, Inc.
Entergy Nuclear Entergy Nuclear, Inc.
Entergy Operations Entergy Operations, Inc.
Entergy Power Entergy Power, Inc.
Entergy Services Entergy Services, Inc.
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
FUCO an exempt foreign utility company under PUHCA
Grand Gulf 1 and 2 Units 1 and 2 of Grand Gulf Steam Electric Generating
Station (nuclear), 90% owned or leased by System Energy
GWH one million kilowatt-hours
Independence Independence Steam Electric Station (coal), owned 16%
by Entergy Arkansas, 25% by Entergy Mississippi, and 7%
by Entergy Power
IRS Internal Revenue Service
KV kilovolt
KW kilowatt
KWH kilowatt-hour(s)
London Electricity London Electricity plc - a regional electric company
serving London, England, which was acquired by Entergy
London effective February 1, 1997, and was sold by
Entergy effective December 4, 1998
LDEQ Louisiana Department of Environmental Quality
LPSC Louisiana Public Service Commission
MCF 1,000 cubic feet of gas
Merger The combination transaction, consummated on
December 31, 1993, by which Entergy Gulf States became
a subsidiary of Entergy Corporation
MPSC Mississippi Public Service Commission
MW Megawatt(s)
N/A Not applicable
Nelson Unit 6 Unit No. 6 (coal) of the Nelson Steam Electric
Generating Station, owned 70% by Entergy Gulf States
NISCO Nelson Industrial Steam Company
NRC Nuclear Regulatory Commission
Pilgrim Pilgrim Nuclear Station, 670 MW facility located in
Plymouth, Massachusetts purchased in July 1999 from
Boston Edison by Entergy's non-utility nuclear power
business
PRP Potentially Responsible Party (a person or entity that
may be responsible for remediation of environmental
contamination)
PUCT Public Utility Commission of Texas
PUHCA Public Utility Holding Company Act of 1935, as amended
<PAGE>
DEFINITIONS (Concluded)
Abbreviation or Acronym Term
PURPA Public Utility Regulatory Policies Act of 1978
Reallocation
Agreement 1981 Agreement, superseded in part by a June 13, 1985
decision of FERC, among Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy relating to the sale of capacity and
energy from Grand Gulf
Ritchie 2 Unit 2 of the R. E. Ritchie Steam Electric Generating
Station (gas/oil)
River Bend River Bend Steam Electric Generating Station (nuclear)
SEC Securities and Exchange Commission
SFAS Statement of Financial Accounting Standards,
promulgated by the FASB
SMEPA South Mississippi Electric Power Agency, which owns the
remaining 10% interest in Grand Gulf 1
System Agreement Agreement, effective January 1, 1983, as modified,
among the domestic utility companies relating to the
sharing of generating capacity and other power
resources
System Energy System Energy Resources, Inc.
System Fuels System Fuels, Inc.
UK The United Kingdom of Great Britain and Northern
Ireland
Unit Power Sales
Agreement Agreement, dated as of June 10, 1982, as amended and
approved by FERC, among Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy, relating to the sale of capacity and
energy from System Energy's share of Grand Gulf 1
Waterford 3 Unit No. 3 (nuclear) of the Waterford Steam Electric
Generating Station, 100% owned or leased by Entergy
Louisiana
White Bluff White Bluff Steam Electric Generating Station, 57%
owned by Entergy Arkansas
<PAGE>
PART I
Item 1. Business
BUSINESS OF ENTERGY
General
Entergy Corporation is a Delaware corporation which, through its
subsidiaries, engages principally in the following businesses: domestic
utility operations, power marketing and trading, global power development,
and domestic non-utility nuclear operations. It has no significant assets
other than the stock of its subsidiaries. Entergy Corporation is a
registered public utility holding company under PUHCA. As such, Entergy
Corporation and its subsidiaries generally are subject to the broad
regulatory provisions of PUHCA. PUHCA generally limits registered public
utility holding company activity to domestic integrated utility businesses,
domestic and foreign electric generation ventures, foreign utility
ownership, telecommunications and information service businesses, and
certain other domestic energy related businesses. Financial information
regarding Entergy Corporation's operating segments is contained in Note 14
to the financial statements.
Domestic Utility Operations
Entergy Corporation has five wholly-owned domestic retail electric
utility subsidiaries: Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans. As of December
31, 1999, these utility companies provided retail electric service to
approximately 2.5 million customers primarily in portions of the states of
Arkansas, Louisiana, Mississippi, and Texas. In addition, Entergy Gulf
States furnishes natural gas utility service in and around Baton Rouge,
Louisiana, and Entergy New Orleans furnishes natural gas utility service in
New Orleans, Louisiana. The business of the domestic utility companies is
subject to seasonal fluctuations, with the peak sales period normally
occurring during the third quarter of each year. During 1999, the domestic
utility companies' combined retail electric sales as a percentage of total
electric sales were: residential - 27.8%; commercial - 21.6%; and
industrial - 39.5%. Retail electric revenues from these sectors as a
percentage of total electric revenues were: residential - 35.6%; commercial
- - 24.0%; and industrial - 30.0%. Sales to governmental and municipal
sectors and to nonaffiliated utilities accounted for the balance of energy
sales. The major industrial customers of the domestic utility companies
are in the chemical, petroleum refining, paper, and food products
industries. The retail rates and services of Entergy's domestic retail
utility subsidiaries are regulated by state and/or local regulatory
authorities.
Entergy Corporation also owns 100% of the voting stock of System
Energy, an Arkansas corporation that owns and leases an aggregate 90%
undivided interest in Grand Gulf. System Energy sells all of the capacity
and energy from its interest in Grand Gulf 1 at wholesale to its only
customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans. Management discusses sales from Grand Gulf 1 more
thoroughly in "CAPITAL REQUIREMENTS AND FUTURE FINANCING - Certain System
Financial and Support Agreements - Unit Power Sales Agreement" below.
System Energy's wholesale power sales are subject to the jurisdiction of
FERC.
Entergy Services, a Delaware corporation wholly-owned by Entergy
Corporation, provides management, administrative, accounting, legal,
engineering, and other services primarily to the domestic utility
subsidiaries of Entergy Corporation. Entergy Operations, a Delaware
corporation, is also wholly-owned by Entergy Corporation and provides
nuclear management, operations and maintenance services under contract for
ANO, River Bend, Waterford 3, and Grand Gulf 1, subject to the owner
oversight of Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and
System Energy, respectively. Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans own 35%, 33%, 19%, and 13%,
respectively, of the common stock of System Fuels, a Louisiana corporation
that implements and manages certain programs to procure, deliver, and store
fuel supplies for those companies. Entergy Services, Entergy Operations,
and System Fuels provide their services to the domestic utility companies
and System Energy on an "at cost" basis, pursuant to service agreements
approved by the SEC under PUHCA. Information regarding affiliate
transactions is contained in Note 13 to the financial statements.
Entergy Gulf States has wholly-owned subsidiaries that (i) own and
operate intrastate gas pipelines in Louisiana used primarily to transport
fuel to two of Entergy Gulf States' generating stations; (ii) own the Lewis
Creek Station, a gas-fired generating plant, which is leased to and
operated by Entergy Gulf States; and (iii) own several miles of railroad
track constructed in Louisiana primarily for the purpose of transporting
coal for use as boiler fuel at Entergy Gulf States' Nelson Unit 6
generating facility.
Power Marketing and Trading
Entergy conducts its power marketing and trading business primarily
through three subsidiaries, Entergy Power, EPMC, and ET&M. Entergy Power
is a domestic power producer that owns 665 MW of fossil-fueled generation
assets located in Arkansas. Entergy Power's capacity and energy is sold at
wholesale principally to EPMC and Entergy Arkansas. Entergy Power's
wholesale power sales are subject to the jurisdiction of FERC. EPMC
engages in the marketing and trading of physical and financial energy
commodity products, industrial energy management, and risk management
services. It has authority from the SEC to deal in a wide range of energy
commodities and related financial products. ET&M is engaged in the
marketing and trading of physical and financial energy commodity products
in the UK. Entergy has announced its intent to combine the power marketing
and trading business with the global power development business beginning
in 2000, and the combined businesses will be called Entergy Wholesale
Operations.
Global Power Development
Entergy's global power development business is focused on acquiring or
developing power generation projects in North America and Western Europe
and will evaluate potential opportunities in Latin America. This business
owns interests in the following foreign electric generation assets:
Investment Percent Ownership Status
Argentina - Costanera, 1,260 MW 6% operational
Argentina - Costanera expansion, 220 MW 10% operational
Chile - San Isidro, 375 MW 25% operational
Pakistan - Hub River, 1,200 MW 5% operational
Peru - Edegel - 833 MW 24% operational
United Kingdom - Saltend, 1,200 MW 100% under construction
United Kingdom - Damhead Creek, 800 MW 100% under construction
Entergy's global power development business has several other development
projects in the planning stages, including projects in Texas, Louisiana,
Mississippi, Spain, and Bulgaria. Fairfield is a planned 1,000 MW combined
cycle gas turbine merchant power plant to be constructed in Fairfield,
Texas, adjacent to Entergy Gulf States' service territory. Riverside is a
planned 425 MW combined cycle gas turbine cogeneration plant to be
constructed in Lake Charles, Louisiana. Riverside is expected to be owned
50% by Entergy's global power development business and 50% by PPG
Industries, an industrial customer of Entergy Gulf States. A 300 MW
combined-cycle gas turbine merchant power plant is in the planning stages
for construction in Vicksburg, Mississippi. An 800 MW combined cycle gas
turbine merchant power plant is in the planning stages for construction
near Castelnou, Spain. Entergy plans to work with the National Electric
Company of Bulgaria to modernize and upgrade Maritza East III, an 840 MW
coal-fired power plant located in Bulgaria. In preparation for its
development plans, Entergy has obtained an option to acquire turbines from
GE Power Systems. See "CAPITAL REQUIREMENTS AND FUTURE FINANCING" below
for further information on the turbines.
Entergy divested the 24 MW Nantong project in China in 1999 and does
not intend to pursue further developments in Asia. In June 1999, Entergy
sold its 5% interest in Edesur, S.A., which is the retail electric
distribution company for the southern part of Buenos Aires, Argentina.
Domestic Non-Utility Nuclear Operations
Entergy's domestic non-utility nuclear power business is focused on
acquiring nuclear power plants and providing operations and management
services to nuclear power plants owned by other utilities in the United
States. Plant acquisitions are made through Entergy's wholly-owned
subsidiary, ENHC, and operations and management services, including
decommissioning services, are provided by Entergy's wholly-owned
subsidiary, Entergy Nuclear. In July 1999, Entergy acquired the 670 MW
Pilgrim Nuclear Station located in Plymouth, Massachusetts from Boston
Edison. The facility has firm total output power purchase agreements
(PPAs) with Boston Edison and other utilities that expire at the end of
2004. One hundred percent of the plant output is committed through 2001,
which decreases to 50% by 2003.
Entergy's nuclear business has an outstanding offer to the New York
Power Authority (NYPA) for the acquisition of NYPA's 825 MW James A.
FitzPatrick nuclear power plant located near Oswego, New York and NYPA's
980 MW Indian Point 3 nuclear power plant located in Westchester County,
New York. On February 24, 2000, NYPA received a competing offer for the
purchase of these plants. It is anticipated that the NYPA Board of
Trustees will meet in mid to late March to consider the offers. If Entergy's
offer is accepted, management expects to close the acquisition by the
fourth quarter of 2000.
In December 1999, Entergy signed an agreement with Rochester Gas and
Electric (RG&E) to lease and operate the Nine Mile Point 1 and 2 nuclear
power plants, totaling 1,754 MW, located in Scriba, New York. Nine Mile
Point 1 is owned by Niagara Mohawk Power Corporation (Niagara), and Nine
Mile Point 2 is co-owned by RG&E, Niagara, New York State Electric & Gas
Corporation (NYSEG), Long Island Lighting Company (doing business as LIPA),
and Central Hudson Gas & Electric Corporation. The lease and operating
agreement is subject to RG&E's ability to close on its exercise of its
right of first refusal to acquire Niagara's and NYSEG's ownership interests
in the plants and is subject to approval by the New York Public Service
Commission (NYPSC). Niagara and NYSEG filed a proceeding with the NYPSC
for the sale of their ownership interests to a third party. Entergy's non-
utility nuclear business intervened as a party to the NYPSC proceeding. In
that proceeding, the staff of the NYPSC has stated that it will explore
various alternatives for the future ownership and operation of the Nine
Mile plants.
Entergy Nuclear provides services to plants owned by other utilities,
including engineering, operations and maintenance, fuel procurement,
management and supervision, technical support and training, administrative
support, and other managerial or technical services required to operate,
maintain, and decommission nuclear electric power facilities. Currently
Entergy is providing decommissioning services for the Maine Yankee and
Millstone Unit 1 nuclear power plants. The cost of decommissioning and
insuring the plants that Entergy provides decommissioning services for are
the responsibility of the plant owners.
Business Sales
In January 1999, Entergy disposed of its security monitoring business
which operated primarily in North and South Carolina, Alabama, Florida,
Georgia, Mississippi, Louisiana, and Texas. In June 1999, Entergy disposed
of its interest in the Hyperion Telecommunications joint ventures, which
operate three Competitive Local Exchange Carriers (CLECs) in Little Rock,
Arkansas; Jackson, Mississippi; and Baton Rouge, Louisiana. These CLECs
provide long distance carrier access and local exchange services.
Domestic and Foreign Generation Investment Restrictions and Risks
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 Entergy Corporation's aggregate
investment in domestic and foreign generation businesses to an amount equal
to 50% of consolidated retained earnings at the time an investment is made.
Using the proceeds from the sale of electric distribution businesses in the
UK and Australia in 1998, Entergy has the ability to make significant
additional investments in domestic and foreign generation businesses
without the need of further investment by Entergy Corporation.
International operations are subject to the risks inherent in
conducting business abroad, including possible nationalization or
expropriation, price and currency exchange controls, inflation, limitations
on foreign participation in local enterprises, and other restrictions.
Changes in the relative value of currencies may favorably or unfavorably
affect the financial condition and results of operations of Entergy's non-
U.S. businesses. In addition, exchange control restrictions in certain
countries may limit or prevent the repatriation of earnings.
Selected Data
Selected domestic utility customers and sales data for 1999 are
summarized in the following tables:
Customers as of
December 31, 1999
Area Served Electric Gas
(In Thousands)
Entergy Arkansas Portions of Arkansas and Tennessee 638 -
Entergy Gulf States Portions of Texas and Louisiana 669 89
Entergy Louisiana Portions of Louisiana 635 -
Entergy Mississippi Portions of Mississippi 395 -
Entergy New Orleans City of New Orleans, except Algiers,
which is provided electric service
by Entergy Louisiana 185 146
----- ----
Total customers 2,522 235
===== ====
<TABLE>
<CAPTION>
1999 - Selected Domestic Utility Electric Energy Sales Data
Entergy Entergy Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Mississippi New Orleans Energy Entergy (a)
(In GWH)
<S> <C> <C> <C> <C> <C> <C> <C>
Electric Department:
Sales to retail
customers 18,664 34,348 29,095 12,518 5,895 - 100,519
Sales for resale:
Affiliates 7,592 677 415 1,774 441 7,567 -
Others 4,868 3,408 831 426 180 - 9,714
----------------------------------------------------------------------------
Total 31,124 38,433 30,341 14,718 6,516 7,567 110,233
Steam Department:
Sales to steam
products customer - 464 - - - - 464
----------------------------------------------------------------------------
Total 31,124 38,897 30,341 14,718 6,516 7,567 110,697
============================================================================
Average use per
residential customer
(KWH) 11,955 15,322 15,033 14,180 12,674 - 14,034
============================================================================
</TABLE>
(a) Includes the effect of intercompany eliminations.
1999 - Selected Natural Gas Sales Data
Entergy New Orleans and Entergy Gulf States sold 15,106,716 and
6,064,879 MCF, respectively, of natural gas to retail customers in 1999.
For the periods ended December 31, 1999, 1998, and 1997, revenues from
natural gas operations were not material for Entergy Gulf States. Entergy
New Orleans' products and services are discussed below in "BUSINESS
SEGMENTS."
Refer to "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY
CORPORATION AND SUBSIDIARIES, ENTERGY ARKANSAS, ENTERGY GULF STATES,
ENTERGY LOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, and SYSTEM
ENERGY" which follow each company's financial statements in this report,
for further information with respect to operating statistics.
Employees
As of December 31, 1999, Entergy had 12,375 employees as follows:
Full-time:
Entergy Corporation -
Entergy Arkansas 1,490
Entergy Gulf States 1,595
Entergy Louisiana 833
Entergy Mississippi 811
Entergy New Orleans 362
System Energy -
Entergy Operations 3,249
Entergy Services 2,772
Other subsidiaries 1,102
------
Total Full-time 12,214
Part-time 161
------
Total Entergy 12,375
======
Competition
As a result of the actions of federal legislative and regulatory
bodies over the period of approximately the past twenty years, wholesale
markets have developed in which electricity, gas, and other energy related
products and services are purchased and sold at market-based (rather than
traditional cost-based) rates. These wholesale markets are continuing to
grow and evolve. This has resulted in changes in the ways in which public
utilities conduct their business and in the nature of the participants in
these wholesale markets, which now include not only public utilities but
also power marketers and traders, other energy commodity marketers and
traders, wholesale generators of electricity, and a wide range of wholesale
customers.
Major changes in the retail utility business are now occurring in some
parts of the United States, including states in which Entergy's domestic
utility companies operate. Both Texas and Arkansas adopted legislation in
1999 aimed at separating ("unbundling") traditional integrated public
utilities into distinct distribution, transmission, generation, and various
types of retail marketing businesses and introducing competition into the
generation component of utility service. Other jurisdictions in which the
Entergy domestic utility businesses operate have yet to decide whether to
embrace retail competition and utility unbundling, but each of these other
jurisdictions is studying the matter.
It is anticipated that changes in the retail electricity markets in
the Entergy system will take place over a number of years, and it is not
necessarily the case that regulators or legislators in different
jurisdictions will coordinate their changes. In some cases, actions by one
jurisdiction may even come into conflict with actions by another, creating
mutually incompatible obligations for public utilities and holding
companies, including the Entergy system. It is too early to accurately
predict all of the effects of the changes that are beginning to take place
in the retail energy market. However, it is anticipated that these changes
will result in fundamental alterations in the way traditional integrated
utilities and holding company systems, like Entergy and its domestic
utility companies, conduct their business. Some of these alterations will
be positive for Entergy and its affiliates, while others will not be.
These changes will likely result in increased costs associated with
utility unbundling and transitioning to new organizational structures and
ways of conducting business. It is possible that the new organizational
structures that will be required will result in lost economies of scale,
less beneficial cost sharing arrangements within utility holding company
systems, and, in some cases, greater difficulty and cost in accessing
capital.
Utilities, including the domestic utility companies, may be required
or encouraged to sell generating plants or interests therein, or the output
from such plants. They also may be required or encouraged to sell or turn
over operating and management responsibility for some or all of their
transmission systems to independent parties. In the case of the domestic
utility companies, this would cause a fundamental shift away from the
operation of their electric generation and transmission assets as an
integrated system supporting utility service throughout their combined
service territories.
As a result of restructuring, Entergy's domestic utility companies may
no longer be able to apply regulated utility accounting principles to some
or all of their operations, and they may be required to write off certain
regulatory assets or recognize asset impairments.
There are a number of other changes that may result from retail
competition and unbundling, including but not limited to changes in labor
relations, management and staffing, environmental compliance
responsibility, and other aspects of the utility business.
"MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - SIGNIFICANT FACTORS
AND KNOWN TRENDS" and Note 2 to the financial statements contain detailed
discussions of competitive challenges Entergy faces in the utility
industry, including the status of the transition to a more competitive
utility business environment for the domestic utility companies.
CAPITAL REQUIREMENTS AND FUTURE FINANCING
For the years 2000 through 2004, Entergy plans to spend $9.8 billion
in a capital investment plan focused on improving service at the domestic
utility companies and growing its global power development and nuclear
operations businesses. The estimated allocation in the plan is $4.2
billion to the domestic utility companies, $3.9 billion to the global power
development business, and $1.7 billion to the nuclear operations business.
The capital investment plan is subject to modification based on the ongoing
effects of transition to competition planning and the ability to recover
the regulated utility costs in rates. Additionally, the plan is contingent
upon Entergy's ability to access the capital necessary to finance the
planned expenditures, and significant borrowings may be necessary for
Entergy to implement these capital spending plans. Construction
expenditures (including environmental expenditures and AFUDC, but excluding
nuclear fuel) for Entergy are estimated at $1.5 billion in 2000, $1.7
billion in 2001, and $1.8 billion in 2002. Included in these totals are
estimated construction expenditures for the domestic utility companies and
System Energy as follows:
2000 2001 2002 Total
(In Millions)
Entergy Arkansas $350 $248 $188 $786
Entergy Gulf States 298 269 204 771
Entergy Louisiana 202 188 162 552
Entergy Mississippi 115 122 123 360
Entergy New Orleans 50 46 45 141
System Energy 39 20 12 71
The domestic utility companies' anticipated spending is focused mainly
on (i) distribution and transmission projects that will support continued
reliability improvements; (ii) return to service of generation stations
that have been held in reserve shutdown status; and (iii) transitioning to
a more competitive environment. Projected construction expenditures for
the replacement of ANO 2's steam generators, which is scheduled for the
third quarter of 2000, are included in Entergy Arkansas' estimated figures
above. The replacement of ANO 2's steam generators is discussed in Note 9
to the financial statements. Entergy, in addition to meeting construction
expenditure requirements, must meet scheduled long-term debt and preferred
stock maturities and cash sinking fund requirements. Entergy's capital and
financing requirements and available lines of credit are discussed in Notes
4, 5, 6, 7, 9, and 10 to the financial statements. Actual construction
costs may vary from these estimates for a number of reasons, including
changes in load growth estimates; environmental regulations; labor,
equipment, materials, and capital costs; modifications to generating units
to meet regulatory requirements; and the transition to competition.
Entergy's global power development business is currently constructing
two combined-cycle gas turbine merchant power plants in the UK. Saltend, a
1,200 MW plant, will provide steam and electricity to BP Chemicals' nearby
complex with the remaining electricity to be sold into the UK national
power pool. Approximately 75 MW of the capacity will be sold to BP
Chemicals under a PPA with a term of 15 years. Originally scheduled for
commercial operation in January 2000, Saltend's completion has been delayed
due to construction problems at the site. The construction contractor has
submitted a revised construction schedule after substantial analysis, and
currently estimates a phased-in completion of the three-unit plant with the
full plant in service by June 30, 2000. The total cost of this project is
currently estimated to be approximately $824 million. The second plant is
an 800 MW facility known as Damhead Creek. It is expected to begin
commercial operation in the fourth quarter of 2000. Management estimates
the total cost of this project at approximately $582 million. The
financing of the construction of these two power plants is discussed in
Note 7 to the financial statements.
In October 1999, Entergy's global power development business obtained
an option to acquire twenty-four GE7FA advanced technology gas turbines,
four steam turbines, and eight GE7EA advanced technology gas turbines.
Delivery of the turbines is scheduled for 2001 through 2004. The total
cost of the turbines, including long-term service agreements with GE Power
Systems, is approximately $2.0 billion. The turbines are expected to be
used in future generation projects. Management anticipates that the
acquisition of these turbines will be funded by a combination of cash on
hand, project financing, and other external financing. Payments scheduled
for the acquisition of these turbines are $273 million in 2000, $415
million in 2001, and $311 million in 2002.
Entergy Corporation's primary capital requirements are to invest
periodically in, or make loans to, its subsidiaries and to invest in new
enterprises. Management discusses Entergy Corporation's current and future
planned investments in its subsidiaries and the financial sources for such
investments in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY
AND CAPITAL RESOURCES." The principal sources of funds for Entergy
Corporation are dividend distributions from its subsidiaries, funds
available under its bank credit facilities, funds received from its
dividend reinvestment and stock purchase plan, and funds received from the
sale of assets.
Certain System Financial and Support Agreements
Unit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
The Unit Power Sales Agreement allocates capacity, energy, and the
related costs from System Energy's 90% ownership and leasehold interests in
Grand Gulf 1 to Entergy Arkansas (36%), Entergy Louisiana (14%), Entergy
Mississippi (33%), and Entergy New Orleans (17%). Each of these companies
is obligated to make payments to System Energy for its entitlement of
capacity and energy on a full cost-of-service basis regardless of the
quantity of energy delivered, so long as Grand Gulf 1 remains in commercial
operation. Payments under the Unit Power Sales Agreement are System
Energy's only source of operating revenues. The financial condition of
System Energy depends upon the continued commercial operation of Grand Gulf
1 and the receipt of such payments. Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans generally recover payments
made under the Unit Power Sales Agreement through the rates charged to
their customers. In the case of Entergy Arkansas and Entergy Louisiana,
payments are also recovered through sales of electricity from their
respective retained shares of Grand Gulf 1. The retained shares are
discussed in Note 2 to the financial statements under the heading "Grand
Gulf 1 Deferrals and Retained Shares."
Availability Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
The Availability Agreement among System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans was entered
into in 1974 in connection with the financing by System Energy of Grand
Gulf. The Availability Agreement provided that System Energy would join in
the System Agreement on or before the date on which Grand Gulf 1 was placed
in commercial operation and would make available to Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans all
capacity and energy available from System Energy's share of Grand Gulf.
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans also agreed severally to pay System Energy monthly for the
right to receive capacity and energy from Grand Gulf in amounts that (when
added to any amounts received by System Energy under the Unit Power Sales
Agreement, or otherwise) would at least equal System Energy's total
operating expenses for Grand Gulf (including depreciation at a specified
rate) and interest charges. The September 1989 write-off of System
Energy's investment in Grand Gulf 2, amounting to approximately $900
million, is being amortized for Availability Agreement purposes over 27
years.
The allocation percentages under the Availability Agreement are fixed
as follows: Entergy Arkansas - 17.1%; Entergy Louisiana - 26.9%; Entergy
Mississippi - 31.3%; and Entergy New Orleans - 24.7%. The allocation
percentages under the Availability Agreement would remain in effect and
would govern payments made under such agreement in the event of a shortfall
of funds available to System Energy from other sources, including payments
under the Unit Power Sales Agreement.
System Energy has assigned its rights to payments and advances from
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans under the Availability Agreement as security for its first mortgage
bonds and reimbursement obligations to certain banks providing the letters
of credit in connection with the equity funding of the sale and leaseback
transactions described in Note 10 to the financial statements under "Sale
and Leaseback Transactions - Grand Gulf 1 Lease Obligations." In these
assignments, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans further agreed that, in the event they were prohibited
by governmental action from making payments under the Availability
Agreement (for example, if FERC reduced or disallowed such payments as
constituting excessive rates), they would then make subordinated advances
to System Energy in the same amounts and at the same times as the
prohibited payments. System Energy would not be allowed to repay these
subordinated advances so long as it remained in default under the related
indebtedness or in other similar circumstances.
Each of the assignment agreements relating to the Availability
Agreement provides that Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans will make payments directly to System
Energy. However, if there is an event of default, those payments must be
made directly to the holders of indebtedness that are the beneficiaries of
such assignment agreements. The payments must be made pro rata according
to the amount of the respective obligations secured.
The obligations of Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans to make payments under the
Availability Agreement are subject to the receipt and continued
effectiveness of all necessary regulatory approvals. Sales of capacity and
energy under the Availability Agreement would require that the Availability
Agreement be submitted to FERC for approval with respect to the terms of
such sale. No such filing with FERC has been made because sales of
capacity and energy from Grand Gulf are being made pursuant to the Unit
Power Sales Agreement. If, for any reason, sales of capacity and energy
are made in the future pursuant to the Availability Agreement, the
jurisdictional portions of the Availability Agreement would be submitted to
FERC for approval. Other aspects of the Availability Agreement are subject
to the jurisdiction of the SEC, whose approval has been obtained, under
PUHCA.
Since commercial operation of Grand Gulf 1 began, payments under the
Unit Power Sales Agreement to System Energy have exceeded the amounts
payable under the Availability Agreement. Therefore, no payments under the
Availability Agreement have ever been required. If Entergy Arkansas or
Entergy Mississippi fails to make its Unit Power Sales Agreement payments,
and System Energy is unable to obtain funds from other sources, Entergy
Louisiana and Entergy New Orleans could become subject to claims or demands
by System Energy or its creditors for payments or advances under the
Availability Agreement (or the assignments thereof) equal to the difference
between their required Unit Power Sales Agreement payments and their
required Availability Agreement payments.
The Availability Agreement may be terminated, amended, or modified by
mutual agreement of the parties thereto, without further consent of any
assignees or other creditors.
Capital Funds Agreement (Entergy Corporation and System Energy)
System Energy and Entergy Corporation have entered into the Capital
Funds Agreement, whereby Entergy Corporation has agreed to supply System
Energy with sufficient capital to (i) maintain System Energy's equity
capital at an amount equal to a minimum of 35% of its total capitalization
(excluding short-term debt) and (ii) permit the continued commercial
operation of Grand Gulf 1 and pay in full all indebtedness for borrowed
money of System Energy when due.
Entergy Corporation has entered into various supplements to the
Capital Funds Agreement. System Energy has assigned its rights under such
supplements as security for its first mortgage bonds and for reimbursement
obligations to certain banks providing letters of credit in connection with
the equity funding of the sale and leaseback transactions described in Note
10 under "Sale and Leaseback Transactions - Grand Gulf 1 Lease
Obligations." Each such supplement provides that permitted indebtedness
for borrowed money incurred by System Energy in connection with the
financing of Grand Gulf may be secured by System Energy's rights under the
Capital Funds Agreement on a pro rata basis (except for the Specific
Payments, as defined below). In addition, in the supplements to the
Capital Funds Agreement relating to the specific indebtedness being
secured, Entergy Corporation has agreed to make cash capital contributions
directly to System Energy sufficient to enable System Energy to make
payments when due on such indebtedness (Specific Payments). However, if
there is an event of default, Entergy Corporation must make those payments
directly to the holders of indebtedness benefiting from the supplemental
agreements. The payments (other than the Specific Payments) must be made
pro rata according to the amount of the respective obligations benefiting
from the supplemental agreements.
The Capital Funds Agreement may be terminated, amended, or modified by
mutual agreement of the parties thereto, upon obtaining the consent, if
required, of those holders of System Energy's indebtedness then outstanding
who have received the assignments of the Capital Funds Agreement.
RATE MATTERS AND REGULATION
Rate Matters
The retail rates of Entergy's domestic utility companies are regulated
by state or local regulatory authorities, as described below. FERC
regulates their wholesale rates (including intrasystem sales pursuant to
the System Agreement) and interstate transmission of electricity, as well
as rates for System Energy's sales of capacity and energy from Grand Gulf 1
to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans pursuant to the Unit Power Sales Agreement.
Wholesale Rate Matters
System Energy
As described above under "CAPITAL REQUIREMENTS AND FUTURE FINANCING -
Certain System Financial and Support Agreements," System Energy recovers
costs related to its interest in Grand Gulf 1 through rates charged to
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans for capacity and energy under the Unit Power Sales Agreement.
In December 1995, System Energy implemented a $65.5 million rate
increase, subject to refund. In 1998, FERC approved requests by Entergy
Arkansas and Entergy Mississippi to accelerate a portion of their Grand
Gulf purchased power obligations. The rate increase request filed by
System Energy with FERC and the Grand Gulf accelerated recovery tariffs are
discussed in Note 2 to the financial statements.
System Agreement (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy)
The domestic utility companies have historically engaged in the
coordinated planning, construction, and operation of generation and
transmission facilities pursuant to the terms of the System Agreement, as
described under "PROPERTY - Generating Stations," below. Restructuring in
the electric utility industry will affect these coordinated activities in
the future.
In connection with the Merger in 1993, FERC approved certain rate
schedule changes to integrate Entergy Gulf States into the System
Agreement. In approving the Merger, FERC also initiated a new proceeding
to consider whether the System Agreement permits certain out-of-service
generating units to be included in reserve equalization calculations under
Service Schedule MSS-1 of that agreement. The LPSC and the MPSC submitted
testimony in this proceeding seeking retroactive refunds for Entergy
Louisiana and Entergy Mississippi estimated at $22.6 million and $13.2
million plus related interest charges, respectively. In August 1997, the
FERC decided that retroactive refunds should not be ordered and that the
System Agreement should be amended to allow out-of-service units to be
included in reserve equalization. Appeals made by the LPSC and the MPSC
were denied in 1999.
In March 1995, the LPSC filed a complaint with FERC alleging that the
System Agreement results in unjust and unreasonable rates. The LPSC
requested that FERC modify the System Agreement to exclude curtailable load
from the cost allocation determination and to permit Entergy's domestic
utility companies that engage in real-time pricing at the retail level to
be assessed only the marginal cost for energy sold among the domestic
utility companies. In August 1996, FERC found that the LPSC's claim that
the System Agreement is unjust and unreasonable was without merit and
dismissed the LPSC's complaint. The FERC confirmed this finding in a
September 1997 order denying the LPSC's request for rehearing. On appeal,
the D.C. Circuit remanded the matter to FERC for further consideration,
including the taking of evidence. A procedural schedule has not been set
by FERC, and no assurance can be given as to the timing or outcome of this
proceeding.
Open Access Transmission (Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans)
In October 1994, Entergy's domestic utility companies filed revised
transmission tariffs. In January 1995, FERC made the transmission tariffs
effective, subject to refund, and ordered an investigation of Entergy
Power's market pricing authority, thereby making Entergy Power's market
price rate schedules subject to refund.
In 1996 FERC issued two orders designed to implement open access
transmission for wholesale customers by allowing third party suppliers to
transmit energy to customers over transmission facilities owned by other
companies. Order No. 888 requires all public utilities regulated by FERC
to provide wholesale transmission access to third parties and specifically
addresses issues related to nondiscriminatory transmission and stranded
costs. Order No. 889 addresses codes of conduct and requires the
implementation and maintenance of an open access same-time information
system by each public utility. Order Nos. 888 and 889 led to open access
transmission and an increase in marketing and trading activities by
utilities and power marketers, which intensified competition within the
wholesale power market.
In July 1996, in order to comply with FERC Order No. 888, the domestic
utility companies filed an open access transmission tariff which superseded
the October 1994 tariffs. In January 1997, FERC accepted the non-rate
terms and conditions of the July 1996 tariff, subject to limited
modifications. In March 1997 FERC issued Order No. 888-A addressing
rehearing requests from Order No. 888 and directing public utilities to
file revised tariffs to reflect the new requirements established in Order
No. 888-A. In July 1997, Entergy Services filed with the FERC its
wholesale transmission access compliance tariff incorporating the non-rate
terms and conditions of FERC Order No. 888-A.
In October 1998, FERC issued an order addressing the outstanding
tariff rate and market power issues. The order stipulated that Entergy's
open access transmission tariff mitigated any transmission market power and
determined that no further action is needed in the investigation of Entergy
Power's market pricing authority. The order also affirmed that
transmission service should be priced at a rolled-in, system-wide rate
rather than the bifurcated bulk and local transmission pricing proposed by
Entergy. The FERC also rejected customers' requests to receive credits for
customer-owned facilities, finding that the facilities were not integrated
with and did not support Entergy's transmission system. Requests for
rehearing or clarification of the October 1998 order are pending before
FERC.
FERC policy strongly favors independent control over transmission
operations as a means of enhancing competitive wholesale power markets. In
response to this policy, Entergy proposed to FERC the formation of a
regional transmission company (Transco). The proposed Transco would be:
o a separate legal entity regulated by FERC;
o composed of the transmission system transferred to it by the
domestic utility companies and other transmission owners in
Entergy's region;
o operated and maintained by employees who would work exclusively
for the Transco and would not be employed by Entergy or the
domestic utility companies; and
o passively owned by the domestic utility companies and other members
who transfer assets, which will not control or otherwise direct its
operation and management.
In July 1999, FERC responded 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:
o the selection process for the Transco's board of directors;
o the Transco board's fiduciary obligations to the member companies;
o the ability of the Transco to raise additional capital; and
o 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 become operational in 2001.
In a rulemaking that will affect the Transco, FERC issued Order 2000
in December 1999. Order 2000 calls for owners and operators of
transmission lines in the United States to join regional transmission
organizations ("RTOs") on a voluntary basis. Order 2000 requires public
utilities that own, operate, or control interstate transmission facilities
to file by October 15, 2000 a proposal for how they intend to participate
in an RTO or, alternatively, to describe the steps they have taken to do so
or the reasons why it is not feasible to participate in an RTO. FERC's
Order 2000 requires that RTOs be effective no later than December 15, 2001.
FERC is maintaining flexibility as to the structure of RTOs. For
example, it appears that RTOs may be for-profit or not-for-profit and may
be organized as joint ventures or legal entities of various types.
However, RTOs will be required, among other things, to be independent
market participants, to have sufficient regional scope to maintain
reliability and efficiency, to be non-discriminatory in granting service,
and to maintain operational control over their regional transmission
systems.
The Transco, an independent, for-profit transmission company which has
already been proposed to FERC by the domestic utility companies, is
Entergy's preferred approach for complying with FERC's Order 2000.
However, Entergy is also exploring other means for complying with Order
2000.
Retail Rate Matters
General (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans)
Certain costs related to Grand Gulf 1, Waterford 3, and River Bend
were phased into retail rates over a period of years in order to avoid the
"rate shock" associated with increasing rates to reflect all such costs at
once. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and the
portion of Entergy Gulf States regulated by the LPSC have fully recovered
such deferred costs associated with one or more of the plants. Entergy New
Orleans' phase-in plan expires in 2001.
The retail regulatory philosophy has shifted in some jurisdictions
from traditional, exclusively cost-of-service regulation to include
performance-based rate elements. Performance-based formula rate plans are
designed to encourage efficiencies and productivity while permitting
utilities and their customers to share in the benefits. Entergy
Mississippi and Entergy Louisiana have implemented performance-based
formula rate plans.
The domestic utility companies have initiated proceedings with state
and local regulators regarding transition to a more competitive market for
electricity. In addition, retail open access laws have been enacted in
Arkansas and Texas. These matters are discussed more thoroughly in Note 2
to the financial statements.
Entergy Arkansas
Retail Rate Proceedings
Entergy Arkansas' material retail rate proceedings that were resolved
during the past year, are currently pending, or affect current year results
are discussed in Note 2 to the financial statements.
Recovery of Grand Gulf 1 Costs
Under the settlement agreement entered into with the APSC in 1985 and
amended in 1988, Entergy Arkansas retains 22% of its share of Grand Gulf 1
costs and recovers the remaining 78% of its share through rates. Under the
Unit Power Sales Agreement, Entergy Arkansas' share of Grand Gulf 1 costs
is 36%. In the event Entergy Arkansas is not able to sell its retained
share to third parties, it may sell such energy to its retail customers at
a price equal to its avoided energy cost, which is currently less than
Entergy Arkansas' cost of energy from the retained share.
Fuel Recovery
Entergy Arkansas' rate schedules include an energy cost recovery rider
to recover 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.
Rate Freeze
In December 1997, the APSC approved a settlement agreement resolving
Entergy Arkansas' transition to competition case. One provision in that
settlement was that base rates would remain at the level resulting from
that case until July 1, 2001. The terms of the settlement agreement are
discussed in Note 2 to the financial statements.
Entergy Gulf States
Retail Rate Proceedings
Entergy Gulf States' material retail rate proceedings that were
resolved during the past year, are currently pending, or affect current
year results are discussed in Note 2 to the financial statements. In
addition, the 1999 agreement that settled Entergy Gulf States' 1996 and
1998 rate proceedings, which is currently under appeal, and various other
matters is discussed in Note 2 to the financial statements.
Texas Jurisdiction - River Bend
In March 1998, the PUCT issued an order disallowing recovery of $1.4
billion of company-wide abeyed River Bend plant costs which have been held
in abeyance since 1988. Entergy Gulf States has appealed the PUCT's
decision on this matter to a Texas District Court. The settlement
agreement mentioned above addresses the treatment of abeyed plant costs,
and, as a result, Entergy Gulf States removed the reserve for these costs
and reduced the plant asset in 1999. Based on advice of counsel,
management believes that it is probable that the matter will be remanded
again to the PUCT for a further ruling on the prudence of the abeyed plant
costs and it is reasonably possible that some portion of these costs will
be included in rate base. The abeyed plant costs are discussed in more
detail in Note 2 to the financial statements.
Fuel Recovery
Entergy Gulf States' Texas rate schedules include a fixed fuel factor
to recover fuel and purchased power costs not recovered in base rates. The
settlement agreement mentioned above established a methodology for semi-
annual revisions of the fixed fuel factor in March and September based on
the market price of natural gas. This agreement is effective through
December 2001 or until otherwise ordered by the PUCT. To the extent actual
costs vary from the fixed fuel factor, refunds or surcharges are required
or permitted. Fuel costs are also subject to reconciliation proceedings at
least every three years.
Entergy Gulf States' Louisiana electric rate schedules include a fuel
adjustment clause designed to recover the cost of fuel and purchased power
costs in the second prior month, adjusted by a surcharge or credit for
deferred fuel expense arising from the monthly reconciliation of actual
fuel costs incurred with fuel revenues billed to customers. The LPSC and
the PUCT fuel cost reviews that were resolved during the past year or are
currently pending are discussed in Note 2 to the financial statements.
Entergy Gulf States' Louisiana gas rates include a purchased gas
adjustment based on estimated gas costs for the billing month adjusted by a
surcharge or credit for deferred fuel expense arising from the monthly
reconciliation of actual fuel costs incurred with fuel cost revenues billed
to customers.
Entergy Louisiana
Retail Rate Proceedings
Entergy Louisiana's material retail rate proceedings that were
resolved during the past year, are currently pending, or affect current
year results are discussed in Note 2 to the financial statements.
Recovery of Grand Gulf 1 Costs
In a series of LPSC orders, court decisions, and agreements from late
1985 to mid-1988, Entergy Louisiana was granted rate relief with respect to
costs associated with Entergy Louisiana's share of capacity and energy from
Grand Gulf 1, subject to certain terms and conditions. In November 1988,
Entergy Louisiana agreed to retain, and not recover from retail ratepayers,
18% of its 14% share of the costs of Grand Gulf 1's capacity and energy.
Non-fuel operation and maintenance costs for Grand Gulf 1 are recovered
through Entergy Louisiana's base rates. Additionally, Entergy Louisiana is
allowed to recover, through the fuel adjustment clause, 4.6 cents per KWH
for the energy related to its retained portion of these costs.
Alternatively, Entergy Louisiana may sell such energy to nonaffiliated
parties at prices above the fuel adjustment clause recovery amount, subject
to the LPSC's approval.
Performance-Based Formula Rate Plan
Entergy Louisiana's performance-based formula rate plan filings are
discussed in Note 2 to the financial statements.
Fuel Recovery
Entergy Louisiana's rate schedules include a fuel adjustment clause
designed to recover the cost of fuel in the second prior month, adjusted by
a surcharge or credit for deferred fuel expense arising from the monthly
reconciliation of actual fuel costs incurred with fuel cost revenues billed
to customers. In May 1999, the LPSC issued an order requiring Entergy
Louisiana to realign approximately $15.9 million of certain fuel costs from
the fuel adjustment clause to base rates.
Entergy Mississippi
Retail Rate Proceedings
Entergy Mississippi's material retail rate proceedings that were
resolved during the past year, are currently pending, or affect current
year results are discussed in Note 2 to the financial statements.
Performance-Based Formula Rate Plan
Under its performance-based formula rate plan, Entergy Mississippi's
earned rate of return is calculated automatically every 12 months and
compared to and adjusted against a benchmark rate of return. The benchmark
is calculated under a separate formula within the formula rate plan. The
formula rate plan allows for periodic small adjustments in rates based on a
comparison of actual earned returns to benchmark returns and upon certain
performance factors. The formula rate plan filing for the 1998 test year
is discussed in Note 2 to the financial statements. The formula rate plan
filing for the 1999 test year will be submitted in March 2000.
Fuel Recovery
Entergy Mississippi's rate schedules include an energy cost recovery
rider to recover fuel and purchased energy costs. The rider utilizes
projected energy costs for the coming calendar 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 as of
September 30 immediately preceding the annual redetermination.
Entergy New Orleans
Retail Rate Proceedings
Entergy New Orleans' material retail rate proceedings that were
resolved during the past year, are currently pending, or affect current
year results are discussed in Note 2 to the financial statements.
Recovery of Grand Gulf 1 Costs
Under Entergy New Orleans' various rate settlements with the Council
in 1986, 1988, and 1991, Entergy New Orleans agreed to absorb and not
recover from ratepayers a total of $96.2 million of its Grand Gulf 1 costs.
Entergy New Orleans was permitted to implement annual rate increases in
decreasing amounts each year through 1995, and to defer certain costs and
related carrying charges for recovery on a schedule extending from 1991
through 2001. As of December 31, 1999, the uncollected balance of Entergy
New Orleans' deferred costs was $35.7 million.
Fuel Recovery
Entergy New Orleans' electric rate schedules include a fuel adjustment
clause designed to recover the cost of fuel in the second prior month,
adjusted by a surcharge or credit for deferred fuel expense arising from
the monthly reconciliation of actual fuel costs incurred with fuel cost
revenues billed to customers. The adjustment also includes the difference
between non-fuel Grand Gulf 1 costs paid by Entergy New Orleans and the
estimate of such costs, which are included in base rates, as provided in
Entergy New Orleans' Grand Gulf 1 rate settlements. Entergy New Orleans'
gas rate schedules include an adjustment to reflect estimated gas costs for
the billing month, adjusted by a surcharge or credit similar to that
included in the electric fuel adjustment clause.
Regulation
Federal Regulation (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy)
PUHCA
Entergy Corporation and its various direct and indirect subsidiaries
(with the exception of its EWG and FUCO subsidiaries) are subject to the
broad regulatory provisions of PUHCA. Except with respect to investments
in certain domestic power projects and foreign utility company projects,
the principal regulatory provisions of PUHCA:
o limit the operations of a registered holding company system to a
single, integrated public utility system, plus certain ancillary
and related systems and businesses;
o regulate certain transactions among affiliates within a holding
company system;
o govern the issuance, acquisition and disposition of securities
and assets by registered holding companies and their subsidiaries;
o limit the entry by registered holding companies and their
subsidiaries into businesses other than electric and/or gas
utility businesses; and
o require SEC approval for certain utility mergers and acquisitions.
Entergy Corporation and other electric utility holding companies have
supported legislation in the United States Congress to repeal PUHCA and
transfer certain aspects of the oversight of public utility holding
companies from the SEC to FERC. Entergy believes that PUHCA inhibits its
ability to compete in the evolving electric energy marketplace and largely
duplicates the oversight activities otherwise performed by FERC and other
federal regulators and by state and local regulators. In June 1995, the
SEC adopted a report proposing options for the repeal or significant
modification of PUHCA.
Federal Power Act
The domestic utility companies, System Energy, Entergy Power, and EPMC
are subject to the Federal Power Act as administered by FERC and the DOE.
The Federal Power Act provides for regulatory jurisdiction over the
transmission and wholesale sale of electric energy in interstate commerce,
licensing of certain hydroelectric projects and certain other activities,
including accounting policies and practices. Such regulation includes
jurisdiction over the rates charged by System Energy for Grand Gulf 1
capacity and energy provided to Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans.
Entergy Arkansas holds a FERC license for two hydroelectric projects
(70 MW), which was renewed on July 2, 1980 and expires in February 2003.
In February 1998, Entergy Arkansas filed notice of its intent to relicense
these hydroelectric projects.
Regulation of the Nuclear Power Industry (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy)
Regulation of Nuclear Power
Under the Atomic Energy Act of 1954 and the Energy Reorganization Act
of 1974, the operation of nuclear plants is heavily regulated by the NRC,
which has broad power to impose licensing and safety-related requirements.
In the event of non-compliance, the NRC has the authority to impose fines
or shut down a unit, or both, depending upon its assessment of the severity
of the situation, until compliance is achieved. Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, and System Energy, as owners of all or
portions of ANO, River Bend, Waterford 3, and Grand Gulf 1, respectively,
and Entergy Operations, as the licensee and operator of these units, are
subject to the jurisdiction of the NRC. Additionally, Entergy's non-
utility nuclear power business is subject to the NRC's jurisdiction as the
owner and operator of Pilgrim. Revised safety requirements promulgated by
the NRC have, in the past, necessitated substantial capital expenditures at
these nuclear plants, and additional expenditures could be required in the
future.
The nuclear power industry faces uncertainties with respect to the
cost and long-term availability of sites for disposal of spent nuclear fuel
and other radioactive waste, nuclear plant operations, the technological
and financial aspects of decommissioning plants at the end of their
licensed lives, and requirements relating to nuclear insurance. These
matters are briefly discussed below.
Regulation of Spent Fuel and Other High-Level Radioactive Waste
Under the Nuclear Waste Policy Act of 1982, the DOE is required, for a
specified fee, to construct storage facilities for, and to dispose of, all
spent nuclear fuel and other high-level radioactive waste generated by
domestic nuclear power reactors. However, the DOE has not yet identified a
permanent storage repository and, as a result, future expenditures may be
required to increase spent fuel storage capacity at Entergy's nuclear plant
sites. Information concerning spent fuel disposal contracts with the DOE,
current on-site storage capacity, and costs of providing additional on-site
storage is presented in Note 9 to the financial statements.
Regulation of Low-Level Radioactive Waste
The availability and cost of disposal facilities for low-level
radioactive waste resulting from normal nuclear plant operations are
subject to a number of uncertainties. Under the Low-Level Radioactive
Waste Policy Act of 1980, as amended, each state is responsible for
disposal of waste originating in that state, but states may participate in
regional compacts to fulfill their responsibilities jointly. The States of
Arkansas and Louisiana participate in the Central Interstate Low-Level
Radioactive Waste Compact (Central States Compact), and the State of
Mississippi participates in the Southeast Low-Level Radioactive Waste
Compact (Southeast Compact). Both the Central States Compact and the
Southeast Compact have experienced significant delays in the development of
waste storage facilities. Massachusetts, where Pilgrim is located, does
not participate in any regional compact and has been slow to fulfill its
responsibility. Two disposal sites are currently operating in the United
States, but only one site, the Barnwell Disposal Facility (Barnwell)
located in South Carolina, is open to out-of-region generators. The
availability of Barnwell provides only a temporary solution for Entergy's
low-level radioactive waste storage, and does not alleviate the need to
develop new disposal capacity.
The Southeast Compact process is currently on hold pending resolution
of future funding. In December 1998, the host state for the Central States
Compact, Nebraska, denied the license application. In December 1998,
Entergy and two other utilities in the Central States Compact filed a
lawsuit against the state of Nebraska seeking damages resulting from delays
and a faulty license review process. Entergy Arkansas, Entergy Louisiana,
and Entergy Gulf States, along with other waste generators, fund the
development costs for new disposal facilities relating to the Central
States Compact. Development costs to be incurred in the future are
difficult to predict. The current schedules for the site development in
both the Central States Compact and the Southeast Compact are undetermined
at this time. Until long-term disposal facilities are established, Entergy
will seek continued access to existing facilities. If such access is
unavailable, Entergy will store low-level waste at its nuclear plant sites.
Regulation of Nuclear Plant Decommissioning
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System
Energy are recovering through electric rates the estimated decommissioning
costs for ANO, River Bend, Waterford 3, and Grand Gulf 1, respectively.
These amounts are deposited in trust funds which, together with the related
earnings, can only be used for future decommissioning costs. Estimated
decommissioning costs are periodically reviewed and updated to reflect
inflation and changes in regulatory requirements and technology.
Applications are periodically made to appropriate regulatory authorities to
reflect, in rates, the changes in projected decommissioning costs. In
conjunction with the Pilgrim acquisition, Entergy received Pilgrim's
decommissioning trust fund. Based on cost estimates provided by an outside
consultant, Entergy believes that Pilgrim's decommissioning fund will be
adequate to cover future decommissioning costs for the plant without any
additional deposits to the trust. Additional information with respect to
decommissioning costs for ANO, River Bend, Waterford 3, Grand Gulf 1, and
Pilgrim is found in Note 9 to the financial statements.
The EPAct requires all electric utilities (including Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and System Energy) that purchased
uranium enrichment services from the DOE to contribute up to a total of
$150 million annually over approximately 15 years (adjusted for inflation,
up to a total of $2.25 billion) for decontamination and decommissioning of
enrichment facilities. In accordance with the EPAct, contributions to
decontamination and decommissioning funds are recovered through rates in
the same manner as other fuel costs. The estimated annual contributions by
Entergy for decontamination and decommissioning fees are discussed in Note
9 to the financial statements.
Nuclear Insurance
The Price-Anderson Act limits public liability for a single nuclear
incident to approximately $9.5 billion. Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, System Energy, and Entergy's non-utility nuclear
power business have protection with respect to this liability through a
combination of private insurance and an industry assessment program, as
well as insurance for property damage, costs of replacement power, and
other risks relating to nuclear generating units. Insurance applicable to
the nuclear programs of Entergy is discussed in Note 9 to the financial
statements.
Nuclear Operations
General (Entergy Corporation, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and System Energy)
Entergy Operations operates ANO, River Bend, Waterford 3, and Grand
Gulf 1, subject to the owner oversight of Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, and System Energy, respectively. Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy pay
directly or reimburse Entergy Operations at cost for its operation of the
nuclear units. Entergy's non-utility nuclear power business is the operator
of Pilgrim.
ANO Matters (Entergy Corporation and Entergy Arkansas)
The replacement of steam generators at ANO 2 is discussed in Note 9 to
the financial statements.
In February 2000, Entergy Arkansas applied to the NRC for an extension
of ANO 1's operating license. The current license expires in 2014, and, if
granted, the extension would provide the authority to continue operating
the plant until 2034. Management expects the NRC consideration process to
take two years.
State Regulation (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans)
General
Entergy Arkansas is subject to regulation by the APSC, which includes
the authority to:
o oversee utility service;
o set rates;
o determine reasonable and adequate service;
o require proper accounting;
o control leasing;
o control the acquisition or sale of any public utility plant or
property constituting an operating unit or system;
o set rates of depreciation;
o issue certificates of convenience and necessity and certificates of
environmental compatibility and public need; and
o regulate the issuance and sale of certain securities.
Entergy Gulf States is subject to the jurisdiction of the municipal
authorities of a number of incorporated cities in Texas as to retail rates
and service within their boundaries, with appellate jurisdiction over such
matters residing in the PUCT. Entergy Gulf States' Texas business is also
subject to regulation by the PUCT as to:
o retail rates and service in rural areas;
o certification of new generating plants; and
o extensions of service into new areas.
Entergy Gulf States' Louisiana electric and gas business and Entergy
Louisiana are subject to regulation by the LPSC as to:
o utility service;
o rates and charges;
o certification of generating facilities;
o power or capacity purchase contracts; and
o depreciation, accounting, and other matters.
Entergy Louisiana is also subject to the jurisdiction of the Council
with respect to such matters within Algiers in Orleans Parish.
Entergy Mississippi is subject to regulation by the MPSC as to the
following:
o utility service;
o service areas;
o facilities; and
o retail rates.
Entergy Mississippi is also subject to regulation by the APSC as to
the certificate of environmental compatibility and public need for the
Independence Station, which is located in Arkansas.
Entergy New Orleans is subject to regulation by the Council as to the
following:
o utility service;
o rates and charges;
o standards of service;
o depreciation, accounting, and issuance of certain securities; and
o other matters.
Franchises
Entergy Arkansas holds exclusive franchises to provide electric
service in approximately 303 incorporated cities and towns in Arkansas.
These franchises are unlimited in duration and continue unless the
municipalities purchase the utility property. In Arkansas, franchises are
considered to be contracts and, therefore, are terminable upon breach of
the terms of the franchise.
Entergy Gulf States holds non-exclusive franchises, permits, or
certificates of convenience and necessity to provide electric and gas
service in approximately 55 incorporated municipalities in Louisiana and
approximately 63 incorporated municipalities in Texas. Entergy Gulf States
typically is granted 50-year franchises in Texas and 60-year franchises in
Louisiana. Entergy Gulf States' current electric franchises will expire
during 2007 - 2036 in Texas and during 2015 - 2046 in Louisiana. The
natural gas franchise in the City of Baton Rouge will expire in 2015. In
addition, Entergy Gulf States holds a certificate of convenience and
necessity from the PUCT to provide electric service to areas within 21
counties in eastern Texas.
Entergy Louisiana holds non-exclusive franchises to provide electric
service in approximately 116 incorporated Louisiana municipalities. Most
of these franchises have 25-year terms, although six of these
municipalities have granted 60-year franchises. Entergy Louisiana also
supplies electric service in approximately 353 unincorporated communities,
all of which are located in Louisiana parishes in which it holds non-
exclusive franchises.
Entergy Mississippi has received from the MPSC certificates of public
convenience and necessity to provide electric service to areas within 45
counties, including a number of municipalities, in western Mississippi.
Under Mississippi statutory law, such certificates are exclusive. Entergy
Mississippi may continue to serve in such municipalities upon payment of a
statutory franchise fee, regardless of whether an original municipal
franchise is still in existence.
Entergy New Orleans provides electric and gas service in the City of
New Orleans pursuant to city ordinances (except for in Algiers, which is
served by Entergy Louisiana). These ordinances contain a continuing option
for the City of New Orleans to purchase Entergy New Orleans' electric and
gas utility properties.
The business of System Energy is limited to wholesale power sales. It
has no distribution franchises.
Environmental Regulation
General
Entergy's facilities and operations are subject to regulation by
various domestic and foreign governmental authorities having jurisdiction
over air quality, water quality, control of toxic substances and hazardous
and solid wastes, and other environmental matters. Management believes
that its affected subsidiaries are in substantial compliance with
environmental regulations currently applicable to their facilities and
operations. Because environmental regulations are subject to change,
future compliance costs cannot be precisely estimated. However, management
estimates that future capital expenditures for environmental compliance
will not be material for Entergy or any of its reporting subsidiaries.
Clean Air Legislation
The Clean Air Act Amendments of 1990 (the Act) established the
following three programs that currently or in the future may affect
Entergy's fossil-fueled generation:
o an acid rain program for control of sulfur dioxide (SO2) and
nitrogen oxides (NOx);
o an ozone nonattainment area program for control of NOx and volatile
organic compounds; and
o an operating permits program for administration and enforcement of
these and other Act programs.
Under the acid rain program, Entergy's subsidiaries do not anticipate
that they will require additional equipment to control SO2 The Act
provides allowances to most of the affected Entergy generating units for
emissions based upon past emission levels and operating characteristics.
Each allowance is an entitlement to emit one ton of SO2 per year. Under
the Act, utilities are or will be required to possess allowances for SO2
emissions from affected generating units. All Entergy fossil-fueled
generating units are classified as "Phase II" units under the Act and are
subject to SO2 allowance requirements beginning in the year 2000.
Management believes that it will be able to operate the domestic utility
companies' generating units efficiently without installing scrubbers or
experiencing other significant expenditures.
Additional control equipment was recently installed at certain Entergy
Gulf States generating units to achieve NOx reductions due to the ozone
nonattainment status of areas served in and around Beaumont and Houston,
Texas. Texas environmental authorities imposed NOx controls on power
plants that had to be in place by November 1999. Entergy Gulf States
believes the cost of additional control equipment necessary to maintain
this compliance is immaterial. In December 1999, Texas authorities
proposed future control strategies for public comment. Depending on the
final strategies adopted, additional costs will likely be incurred between
2000 and 2007. Entergy Gulf States has studies underway to estimate the
costs that would be incurred based on the proposed strategies. These
estimates will be refined during 2000 based on the final adopted strategies
approved by the EPA.
As part of legislation passed in Texas in June 1999 to restructure the
electric power industry in the state, certain generating units of Entergy
Gulf States will be required to obtain operating permits and meet new,
lower emission limits for NOx. It is expected that Entergy Gulf States
will incur costs of approximately $6 million between 2000 and 2003 to meet
these new standards. These costs may or may not be recoverable in the
restructured electric utility environment.
Other Environmental Matters
The Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (CERCLA), authorizes the EPA and, indirectly, the
states, to mandate cleanup, or reimbursement of clean-up costs, by parties
that generate or transport hazardous substances released from or at a site.
Owners and operators of such sites also are deemed liable by CERCLA.
CERCLA has been interpreted to impose joint and several liability on
responsible parties. The domestic utility companies have sent waste
materials to various disposal sites over the years. In addition,
environmental laws now regulate certain of the domestic utility companies'
operating procedures and maintenance practices which historically were not
subject to regulation. Some of Entergy's disposal sites have been the
subject of governmental action under CERCLA, resulting in site clean-up
activities. The domestic utility companies have participated to various
degrees in accordance with their respective potential liabilities in such
site cleanups and have developed experience with clean-up costs. The
affected domestic utility companies have established reserves for such
environmental clean-up and restoration activities.
Entergy Arkansas
Entergy Arkansas has received notices from the EPA and the Arkansas
Department of Environmental Quality (ADEQ) alleging that Entergy Arkansas,
along with others, may be a PRP for clean-up costs associated with various
sites in Arkansas. Contaminants at the sites include polychlorinated
biphenyls (PCBs), lead, and other hazardous substances.
Entergy Arkansas identified PCB contamination at the Little Rock Radio
Tower site (formerly Pulaski Heights Substation) during the fall of 1998.
Entergy Arkansas performed extensive sampling to determine the extent of
contamination and received approval from the EPA on its work plan for
remediation. Cleanup of the site was completed in November 1999 at a cost
of approximately $320,000. Entergy Arkansas does not believe that any
further liability, if any, with respect to this site will be material.
Entergy Arkansas entered into a Consent Administrative Order with the
ADEQ in 1991 that named Entergy Arkansas as a PRP for the initial
stabilization associated with contamination at the Utilities Services, Inc.
state Superfund site located near Rison, Arkansas. This site is neither
owned nor operated by any Entergy-affiliated company. This site was found
to have soil contaminated by PCBs and pentachlorophenol (a wood
preservative). Containers and drums that contained PCBs and other
hazardous substances were found at the site. Entergy Arkansas worked with
the ADEQ to identify and notify other PRPs with respect to this site.
Approximately twenty PRPs have been identified to date. In December 1999,
Entergy Arkansas, along with several other PRPs, met with ADEQ
representatives to discuss the cleanup of the site. The PRPs are being
encouraged to undertake a voluntary cleanup and have begun discussions
regarding the sharing of costs. Entergy Arkansas' share of total
remediation costs at this site is estimated at $2.7 million. As of
December 31, 1999, Entergy Arkansas had incurred approximately $400,000 of
these costs.
Entergy Gulf States
Entergy Gulf States has been designated by the EPA as a PRP for the
cleanup of certain hazardous waste disposal sites. Entergy Gulf States is
negotiating with the EPA and state authorities regarding the cleanup of
these sites. Several class action and other suits have been filed in state
and federal courts seeking relief from Entergy Gulf States and others for
damages caused by the disposal of hazardous waste and for asbestos-related
disease allegedly resulting from exposure on Entergy Gulf States' premises
(see "Other Regulation and Litigation" below).
In August 1999, Entergy Gulf States received notice from the Texas
Natural Resource Conservation Commission (TNRCC) that it is considered to
be a PRP for the Spector Salvage Yard in Orange, Texas. The Spector
Salvage site operated from approximately 1944 until ceasing operations in
1971. In addition to general salvage, the facility functioned as a
repository for military surplus equipment and supplies purchased from
military, industrial, and chemical facilities. Soil samples from the site
indicate the release of heavy metals and various organics, including PCBs.
The TNRCC requested of all PRPs a submission of a good faith offer to fully
fund or conduct a remedial investigation. Entergy Gulf States is still
developing its submission and has yet to determine the extent of its
participation as a PRP. Based on the size of the site, future expenditures
for investigation and clean-up are estimated at $400,000.
Entergy Gulf States is currently involved in a remedial investigation
of the Lake Charles Service Center site, located in Lake Charles,
Louisiana. A manufactured gas plant (MGP) is believed to have operated at
this site from approximately 1916 to 1931. Coal tar, a by-product of the
distillation process employed at MGPs, was apparently routed to a portion
of the property for disposal. The same area has also been used as a
landfill. In 1999, Entergy Gulf States signed a second Administrative
Consent Order with the EPA to perform removal action at the site. Entergy
Gulf States believes that its ultimate responsibility for this site will
not materially exceed its existing clean-up provision of $19 million.
Entergy Gulf States is currently involved in the second phase of an
investigation of contamination of an MGP site, known as the Old Jennings
Ice Plant, located in Jennings, Louisiana. The MGP is believed to have
operated from approximately 1909 to 1926. The site is currently used for
an electrical substation and storage of transmission and distribution
equipment. In July 1996, a petroleum-like substance was discovered on the
surface soil, and notification was made to the LDEQ. The LDEQ was aware of
this site based upon a survey performed by an environmental consultant for
the EPA. Entergy Gulf States obtained the services of an environmental
consultant to collect core samples and to perform a search of historical
records to determine what activities occurred at Jennings. Results of the
core sampling, which found limited amounts of contamination on-site, were
submitted to the LDEQ. A plan to determine a cost-effective remediation
strategy will be developed upon completion of a review of the sampling
report by the LDEQ. Entergy does not expect that its ultimate financial
responsibility with respect to this site will be material. The amount of
its existing provision for cleanup is $500,000.
In 1994, Entergy Gulf States performed a site assessment in
conjunction with a construction project at the Louisiana Station Generating
Plant (Louisiana Station). In 1995, a further assessment confirmed
subsurface soil and groundwater impact to three areas on the plant site.
After further evaluation, a notification was made to the LDEQ. Remediation
of Louisiana Station is expected to continue through 2001. The remediation
cost incurred through December 31, 1999 for this site was $5.6 million.
Future costs are not expected to exceed the existing provision of $1.9
million.
Entergy New Orleans
Entergy New Orleans has completed the stabilization and abatement of
asbestos containing material at the A. B. Paterson Generating Plant located
in New Orleans, Louisiana. Entergy notified the LDEQ of its intent to
repair and remove insulation and machinery gaskets. On-site abatement of
gaskets and insulating material was completed during the third quarter of
1999. The cost incurred through December 31, 1999 was approximately
$1.9 million. Future costs are not expected to be material.
Entergy New Orleans is planning a new substation on a parcel of land
located adjacent to an existing substation which is in close proximity to
the Market Street power plant. During pre-construction activities in
January 2000, significant levels of lead were discovered in both soil and
groundwater at this site. Entergy New Orleans has notified the LDEQ of the
contamination. In addition to soil removal and disposal, installation of
groundwater monitoring wells and a long-term monitoring program may be
required. Entergy New Orleans believes remediation costs will not exceed
$2 million.
Entergy Louisiana and Entergy New Orleans
Entergy Louisiana and Entergy New Orleans have received notices from
the EPA and/or the states of Louisiana and Mississippi that one or more of
them may be a PRP for the following disposal sites, which are neither owned
nor operated by any Entergy subsidiary:
o In October 1997, the Mississippi Department of Environmental Quality
(MDEQ) ordered Entergy Louisiana to implement a remedial action work
plan prepared by a PRP committee for Disposal Systems, Inc. sites
at Fifth Street (Clay Point) and Lee Street in Biloxi, Mississippi, and
at Woolmarket, Mississippi. The MDEQ issued a similar order on the
same date to Entergy Louisiana's contractor, Ebasco Services, Inc.
(Ebasco), which Entergy Louisiana has agreed to defend and indemnify.
A settlement was negotiated for Entergy Louisiana, including Ebasco,
for $289,000. This settlement relieved Entergy Louisiana of future
liabilities associated with these sites.
o From 1992 to 1994, Entergy Louisiana performed a site assessment and
remedial activities at a retired power plant known as the Thibodaux
municipal site, previously owned and operated by a Louisiana
municipality. Entergy Louisiana purchased the power plant at this
site as part of the acquisition of municipal electric systems. The
site assessment indicated some subsurface contamination from fuel
oil. Remediation of the Thibodaux site is expected to continue
through 2001. The cost incurred through December 31, 1999 for the
Thibodaux site was $502,000. Future costs are not expected to
exceed the existing provision of $318,000.
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 $5.9 million for Entergy Louisiana and $0.5 million for
Entergy New Orleans existed at December 31, 1999 for wastewater upgrades
and closures. Completion of this work is pending LDEQ approval.
Other Regulation and Litigation
Merger (Entergy Corporation and Entergy Gulf States)
Several parties, including Entergy Services, appealed FERC's approval
of the Merger to the D.C. Circuit. Entergy Services sought review of
FERC's deletion of a 40% cap on the amount of fuel savings Entergy Gulf
States may be required to transfer to other domestic utility companies
under a tracking mechanism designed to protect the other companies from
certain unexpected increases in fuel costs. The other parties sought to
overturn FERC's decisions on various grounds, including issues as to
whether FERC appropriately conditioned the Merger to protect various
interested parties from alleged harm and FERC's reliance on Entergy's
transmission tariff to mitigate any potential anticompetitive impacts of
the Merger. The D.C. Circuit has ordered that the cases be held in
abeyance pending FERC's issuance of a final order on remand in the
proceedings on Entergy's transmission tariff (see discussion of tariff case
in "RATE MATTERS AND REGULATION - Rate Matters - Wholesale Rate Matters -
Open Access Transmission" above).
Employment Litigation (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans)
Entergy Corporation and the domestic utility companies are defendants
in numerous lawsuits that have been filed by former employees alleging that
they were wrongfully terminated and/or discriminated against on the basis
of age, race, and/or sex. Entergy Corporation and the domestic utility
companies 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.
Asbestos and Hazardous Waste Suits (Entergy Gulf States)
Several lawsuits have been filed on behalf of plaintiffs in state and
federal courts in Texas and Louisiana that seek relief from Entergy Gulf
States as well as numerous other defendants for damages caused to the
plaintiffs or others by the alleged exposure to hazardous waste and
asbestos on the defendants' premises. The plaintiffs in some suits are
also suing Entergy Gulf States and all other defendants on a conspiracy
claim. It will not be known until discovery is complete how many of the
plaintiffs in any of the foregoing cases actually worked on Entergy Gulf
States' premises. Entergy Gulf States believes that the ultimate
resolution of these matters will not be material, in the aggregate, to its
financial position or results of operations.
Union Pacific Railroad (Entergy Corporation and Entergy Arkansas)
In October 1997, Entergy Arkansas and Entergy Services filed a civil
suit against Union Pacific Railroad Company (Union Pacific) in the United
States District Court for the Middle District of Louisiana. This suit
seeks damages and the termination of coal shipping contracts with Union
Pacific because of Union Pacific's failure to meet its contractual
obligations to ship coal to Entergy Arkansas' two coal-fired plants. The
lawsuit also alleges that such failure has impaired Entergy Arkansas'
ability to generate and sell electricity from these plants. The case has
been transferred to the United States District Court for the District of
Nebraska. In January 1999, on cross motions for summary judgment, the
court ruled that Union Pacific has breached obligations under the
contracts. Under the court's ruling, if the breaches of the contracts by
Union Pacific are proven at trial to be material, rescission of the
contracts is available to Entergy as a remedy, in addition to the monetary
damages to be awarded.
Aquila Power Corporation (Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans)
In March 1998, Aquila Power Corporation ("Aquila") filed a complaint
with FERC against Entergy Services, as agent for the domestic utility
companies, alleging that the domestic utility companies improperly
reserved transmission capacity on Entergy's transmission system, resulting
in the denial of Aquila's request for transmission service. Aquila's
complaint seeks compensation for lost profits, an order prohibiting
Entergy and/or its affiliates from engaging in similar conduct, and
suspension of the domestic utility companies' and EPMC's market-rate
authority. In May 1998, Entergy filed its response denying the Aquila
allegations. Subsequently, Aquila amended and restated its complaint,
alleging additional instances of improper activities by Entergy. In
addition to its requests in its original complaint, Aquila's amended
complaint seeks a finding by FERC that Entergy is in violation of FERC
Orders No. 888 and 889, and an order that Entergy should be required to
join or agree to the formation of an independent system operator. Entergy
filed its response to the amended and restated complaint in July 1998,
denying the alleged improper conduct, and also moved to dismiss Aquila's
complaint in September 1998. Aquila has responded, and no hearing date
has been set by FERC.
Ratepayer Lawsuits (Entergy Corporation, Entergy Gulf States, Entergy
Louisiana, and Entergy New Orleans)
In May 1998, a group of ratepayers filed a complaint against Entergy
Corporation, Entergy Power, and Entergy Louisiana in state court in Orleans
Parish purportedly on behalf of all Entergy Louisiana ratepayers. The
plaintiffs seek treble damages for alleged injuries arising from the
defendants' alleged violations of Louisiana's antitrust laws in connection
with the costs included in fuel filings with the LPSC and passed through to
ratepayers. Among other things, plaintiffs allege that Entergy Louisiana
improperly introduced certain costs into the calculation of the fuel
charges, including imprudently purchased high-cost electricity from its
affiliates and imprudently purchased high-cost gas. Plaintiffs allege that
these practices violated Louisiana's antitrust laws. In addition,
plaintiffs seek to recover interest and attorney fees. Exceptions have
been filed by Entergy, asserting that this dispute should be litigated
before the LPSC and FERC. At the appropriate time, if necessary, Entergy
will raise its defenses to the antitrust claims. At present, the suit in
state court is stayed by stipulation of the parties.
Plaintiffs also filed this complaint with the LPSC to initiate a
review by the LPSC of Entergy Louisiana's monthly fuel adjustment charge
filings and to force restitution to ratepayers of all costs that the
plaintiffs allege were improperly included in those fuel adjustment
filings. Marathon Oil Company and Louisiana Energy Users Group have also
intervened in the LPSC proceeding. Discovery at the LPSC has been
conducted and is expected to continue. Direct testimony was filed with the
LPSC by plaintiffs and the intervenors in July 1999. In their testimony
for the period 1989 through 1998, plaintiffs purport to quantify many of
their claims in an amount totaling $544 million, plus interest. The
plaintiffs will likely assert additional damages for the period 1974
through 1988. The Entergy companies filed responsive and rebuttal
testimony in September 1999. Rebuttal testimony by the plaintiffs and
intervenors was filed in November 1999. Direct testimony of the LPSC staff
will be filed in April 2000, to which Entergy will be permitted to respond.
Hearings before the LPSC are scheduled to begin in September 2000.
Entergy intends to defend this matter vigorously, both in court and at
the LPSC. The outcome of the lawsuit and the LPSC proceeding cannot be
predicted at this time. Management has provided reserves for this, other
litigation, and Entergy Louisiana's formula rate plan proceedings based on
its estimate of the outcome of these proceedings. Information on formula
rate plan proceedings is given in Note 2 to the financial statements.
In April 1999, a group of ratepayers filed a complaint against Entergy
New Orleans, Entergy Corporation, Entergy Services, and Entergy Power in
state court in Orleans Parish purportedly on behalf of all Entergy New
Orleans ratepayers. The plaintiffs seek treble damages for alleged
injuries arising from the defendants' alleged violations of Louisiana's
antitrust laws in connection with certain costs passed on to ratepayers in
Entergy New Orleans's fuel adjustment filings with the Council. In
particular, plaintiffs allege that Entergy New Orleans improperly included
certain costs in the calculation of fuel charges and that Entergy New
Orleans imprudently purchased high-cost fuel from other Entergy affiliates.
Plaintiffs allege that Entergy New Orleans and the other defendant Entergy
companies conspired to make these purchases to the detriment of Entergy New
Orleans' ratepayers and to the benefit of Entergy's shareholders, in
violation of Louisiana's antitrust laws. Plaintiffs also seek to recover
interest and attorney fees. Exceptions to the plaintiffs' allegations were
filed by Entergy, asserting, among other things, that jurisdiction over
these issues rests with the Council and FERC. If necessary, at the
appropriate time, Entergy will also raise its defenses to the antitrust
claims. At present, the suit in state court is stayed by stipulation of
the parties.
Plaintiffs also filed this complaint with the Council in order to
initiate a review by the Council of their allegations and to force
restitution to ratepayers of all costs they allege were improperly and
imprudently included in the fuel adjustment filings. Discovery has begun
in the proceedings before the Council. The plaintiffs have not yet stated
the amount of damages they claim. Entergy intends to defend this matter
vigorously, both in court and before the Council. The ultimate outcome of
the lawsuit and the Council proceeding cannot be predicted at this time.
In April 1998, a group of residential and business ratepayers filed a
complaint against Entergy New Orleans in state court in Orleans Parish
purportedly on behalf of all ratepayers in New Orleans. The plaintiffs
allege that Entergy New Orleans has overcharged ratepayers by at least $300
million since 1975 in violation of limits on Entergy New Orleans' rate of
return that the plaintiffs allege were established by ordinances passed by
the Council in 1922. The plaintiffs seek, among other things, (i) a
declaratory judgment that such franchise ordinances have been violated; and
(ii) a remand to the Council for the establishment of the amount of
overcharges plus interest. Entergy New Orleans believes the lawsuit is
without merit. Entergy New Orleans has charged only those rates authorized
by the Council in accordance with applicable law. Entergy New Orleans is
vigorously defending itself in the lawsuit.
In May 1998, a group of ratepayers filed a complaint against Entergy
Louisiana in state court in East Baton Rouge Parish purportedly on behalf
of all Entergy Louisiana ratepayers. The plaintiffs allege that the
formula ratemaking plan authorized by the LPSC has allowed Entergy
Louisiana to earn amounts in excess of a fair return. The plaintiffs seek,
among other things, (i) a declaratory judgment that the formula ratemaking
plan is an improper ratemaking practice; and (ii) a refund of the amounts
allegedly charged in excess of proper ratemaking practices. Entergy
Louisiana believes the lawsuit is without merit and is vigorously defending
itself.
On February 28, 2000, a lawsuit was commenced in the Civil District
Court for the Parish of Orleans, Louisiana, against Entergy, Entergy Gulf
States, Entergy Louisiana, and Entergy New Orleans relating to power
outages that occurred in July 1999. The plaintiff, who purports to
represent a class of similarly situated persons, claims unspecified damages
as a result of these outages, which the plaintiff claims were the result of
negligence on the part of the Entergy defendants. Entergy, Entergy Gulf
States, Entergy Louisiana, and Entergy New Orleans have not yet filed
responsive pleadings in the case. However, they will vigorously contest
the plaintiff's allegations, which they believe do not support any
liability to the plaintiff for damages.
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
A discussion of this litigation is included under the caption "Cajun-
Coal Contracts" in Note 9 to the financial statements.
Franchise Fee Litigation (Entergy Corporation and Entergy Gulf States)
In September 1998, the City of Nederland filed a petition against
Entergy Gulf States and Entergy Services in state court in Jefferson
County, Texas, purportedly on behalf of all Texas municipalities that have
ordinances or agreements with Entergy Gulf States. The lawsuit alleges
that Entergy Gulf States has been underpaying its franchise fees due to
failure to properly calculate its gross receipts. The plaintiff seeks a
judgment for the allegedly underpaid fees and punitive damages. Entergy
Gulf States believes the lawsuit is without merit and is vigorously
defending itself.
Fiber Optic Cable Litigation (Entergy Corporation, Entergy Gulf
States)
In May 1998, a group of property owners filed a petition against
Entergy Corporation, Entergy Gulf States, Entergy Services, and ETHC in
state court in Jefferson County, Texas purportedly on behalf of all
property owners throughout the Entergy service area who have conveyed
easements to the defendants. The lawsuit alleged that Entergy installed
fiber optic cable across their property without obtaining appropriate
easements. The plaintiffs sought actual damages for the use of the land
and a share of the profits made through use of the fiber optic cables and
punitive damages. The defendants have dismissed the petition in state
court, and the plaintiffs have commenced an identical lawsuit in the
United States District Court in Beaumont, Texas. Entergy is vigorously
defending itself in the lawsuit and believes that any damages suffered by
the plaintiff landowners are negligible and that there is no basis for the
claim seeking a share of profits.
Franchise Service Area Litigation (Entergy Gulf States)
In early 1998, Beaumont Power and Light Company (BP&L) unsuccessfully
sought a franchise to provide electric service in the City of Beaumont,
Texas, where Entergy Gulf States already holds a franchise. In November
1998, BP&L filed a request before the PUCT to obtain a certificate of
convenience and necessity (CCN) for those portions of Jefferson County
outside the boundaries of any municipality for which Entergy Gulf States
provides retail electric service. BP&L's application contemplates using
Entergy Gulf States' facilities in their provision of service. In Texas,
utilities are required to obtain a CCN prior to providing retail electric
service. Jefferson County is currently singly certificated to Entergy Gulf
States. If BP&L's application is granted, BP&L would be able to provide
retail service to Entergy Gulf States' customers in the area for which the
certificate would apply. BP&L has amended its application to add a request
for a CCN to provide retail electric service within the City of Beaumont.
The amended application acknowledges that the Texas electric utility
restructuring law requires BP&L to use its own facilities to connect to its
customers if it is granted a CCN. A hearing on the merits was conducted in
December 1999, and the ALJ is expected to issue a recommendation in for
consideration by the PUCT.
Hindusthan Development Corporation, Ltd. (Entergy Corporation)
In January 1999, Hindusthan Development Corporation (HDC) commenced an
arbitration proceeding in India against Entergy Power Asia Ltd. (EPAL), an
indirect, wholly owned subsidiary of Entergy Corporation. HDC alleges that
EPAL did not fulfill its obligations under a Joint Development Agreement
(JDA) to develop a 350 MW cogeneration plant to be built in Bina, India.
HDC also alleges that EPAL wrongfully withdrew as lead developer.
Entergy's management believes that HDC's allegations are without merit, and
that each party to the JDA had an absolute right of withdrawal. HDC is
seeking unspecified damages of $1.1 billion. EPAL is vigorously defending
itself in the arbitration proceeding.
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 arguments on the appeal
were heard in February 2000. Entergy believes that the lawsuit is without
merit and is vigorously defending itself. A similar lawsuit was filed in
Louisiana in 1997, in which class certification was denied.
Litigation Environment (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy)
The four states in which the domestic utility companies operate, in
particular Louisiana, Mississippi, and Texas, have proven to be unusually
litigious environments. Judges and juries in Louisiana, Mississippi, 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 legal and appropriate means to contest
litigation threatened or filed against it, but the litigation environment
in these states poses a significant business risk.
<PAGE>
EARNINGS RATIOS OF DOMESTIC UTILITY COMPANIES AND SYSTEM ENERGY
The domestic utility companies' and System Energy's ratios of earnings
to fixed charges and ratios of earnings to combined fixed charges and
preferred dividends pursuant to Item 503 of SEC Regulation S-K are as
follows:
Ratios of Earnings to Fixed Charges
Years Ended December 31,
1999 1998 1997 1996 1995
Entergy Arkansas 2.08 2.63 2.54 2.93 2.56
Entergy Gulf States 2.18 1.40 1.42 1.47 1.86
Entergy Louisiana 3.48 3.18 2.74 3.16 3.18
Entergy Mississippi 2.44 3.04 2.98 3.40 2.92
Entergy New Orleans 3.00 2.59 2.70 3.51 3.93
System Energy 1.90 2.52 2.31 2.21 2.07
Ratios of Earnings to Combined Fixed
Charges and Preferred Dividends
Years Ended December 31,
1999 1998 1997 1996 1995
Entergy Arkansas 1.80 2.28 2.24 2.44 2.12
Entergy Gulf States(a) 1.86 1.20 1.23 1.19 1.54
Entergy Louisiana 3.09 2.75 2.36 2.64 2.60
Entergy Mississippi 2.18 2.73 2.69 2.95 2.51
Entergy New Orleans 2.74 2.36 2.44 3.22 3.56
(a) "Preferred Dividends" in the case of Entergy Gulf States also include
dividends on preference stock.
BUSINESS SEGMENTS
Entergy Corporation
Entergy's business segments are discussed in Note 14 to the financial
statements.
Entergy New Orleans
As of December 31, 1999, Entergy New Orleans operating revenues and
customer data was as follows:
Electric Operating Natural Gas
Revenue Revenue
Residential 40% 53%
Commercial 37% 20%
Industrial 7% 10%
Governmental/Municipal 16% 17%
Number of Customers 185,000 146,000
Entergy Gulf States
For the year ended December 31, 1999, 98% of Entergy Gulf States'
operating revenue was derived from the electric utility business. Of the
remaining operating revenues, one percent was derived from the steam
business and one percent from the natural gas business.
Financial Information Relating to Products and Services
Financial information relating to Entergy New Orleans' and Entergy
Gulf States' products and services is presented in their respective
financial statements.
PROPERTY
Generating Stations
Domestic Utility Companies and System Energy
The total capability of the generating stations owned and leased by
the domestic utility companies and System Energy as of December 31, 1999,
by company and by fuel type, is indicated below:
Owned and Leased Capability MW (1)
---------------------------------------------------
Gas
Turbine and
Internal
Company Total Fossil Nuclear Combustion Hydro
Entergy Arkansas 4,487 (2) 2,681 1,694 42 70
Entergy Gulf States 6,689 (2) 5,753 936 - -
Entergy Louisiana 5,561 (2) 4,467 1,075 19 -
Entergy Mississippi 3,063 (2) 3,052 - 11 -
Entergy New Orleans 1,077 1,061 - 16 -
System Energy 1,084 - 1,084 - -
---------------------------------------------------
Total 21,961 17,014 4,789 88 70
===================================================
(1) "Owned and Leased Capability" is the dependable load carrying
capability as demonstrated under actual operating conditions based on
the primary fuel (assuming no curtailments) that each station was
designed to utilize.
(2) Excludes the capacity of fossil-fueled generating stations placed on
extended reserve shutdown as follows: Entergy Arkansas - 204 MW;
Entergy Gulf States - 405 MW; Entergy Louisiana - 19 MW; and Entergy
Mississippi - 73 MW. Generating stations that are not expected to be
utilized in the near-term to meet load requirements are placed in
extended reserve shutdown in order to minimize operating expenses.
Entergy's load and capacity projections are reviewed periodically to
assess the need and timing for additional generating capacity and
interconnections in light of the availability of power, the location of new
loads, and maximum economy to Entergy. When the domestic utility companies
require new generation resources based on load and capability projections
and bulk power availability, they do not expect to construct new base load
generating capacity. Instead, they expect to meet future capacity needs
by, among other things, purchasing power in the wholesale power market
and/or removing generating stations from extended reserve shutdown.
Currently, plans are being implemented to reactivate several units that are
in extended reserve shutdown. The units, once back on line, will provide
an additional 417 MW of capacity to serve customers during peak demand.
Under the terms of the System Agreement, generating capacity and other
power resources are shared among the domestic utility companies. The
System Agreement provides, among other things, that parties having
generating reserves greater than their load requirements (long companies)
shall receive payments from those parties having deficiencies in generating
reserves (short companies). Such payments are at amounts sufficient to
cover certain of the long companies' costs, including operating expenses,
fixed charges on debt, dividend requirements on preferred and preference
stock, and a fair rate of return on common equity investment. Under the
System Agreement, these charges are based on costs associated with the long
companies' steam electric generating units fueled by oil or gas. In
addition, for all energy exchanged among the domestic utility companies
under the System Agreement, the short companies are required to pay the
cost of fuel consumed in generating such energy plus a charge to cover
other associated costs. FERC proceedings relating to the System Agreement
are discussed more thoroughly in "RATE MATTERS AND REGULATION - Rate
Matters - Wholesale Rate Matters - System Agreement," above.
Entergy's domestic utility business is subject to seasonal
fluctuations, with the peak period occurring in the summer months. The
1999 (and all-time) peak demand of 20,664 MW occurred on August 18, 1999.
Competitive Businesses
Entergy Power owns 665 MW of fossil-fueled capacity at the Ritchie 2
and Independence plants.
In July 1999, Entergy's non-utility nuclear power business purchased
from Boston Edison the 670 MW Pilgrim Nuclear Station in Plymouth,
Massachusetts. The sale included the Pilgrim generating plant and
facilities (including nuclear fuel) and a 1,600-acre site on Cape Cod Bay.
Entergy's global power development business is constructing two
combined-cycle gas turbine merchant power plants in the UK. Saltend, a
1,200 MW plant located in northeast England, will provide steam and
electricity to BP Chemical's nearby complex with the remaining electricity
to be sold into the UK national power pool. Originally scheduled for
commercial operation in January 2000, Saltend's completion has been delayed
due to construction problems at the site. The construction contractor has
submitted a revised construction schedule after substantial analysis, and
currently estimates a phased-in completion of the three-unit plant with the
full plant in service by June 30, 2000. The second plant, an 800 MW
facility known as Damhead Creek, is located in southeast England. It is
expected to begin commercial operation in the fourth quarter of 2000.
Interconnections
The electric generating facilities of the domestic utility companies
consist principally of steam-electric production facilities. These
generating units are interconnected by a transmission system operating at
various voltages up to 500 KV. With the exception of a small portion of
Entergy Mississippi's capacity, operating facilities or interests therein
generally are owned or leased by the domestic utility company serving the
area in which the generating facilities are located. All of these
generating facilities are centrally dispatched and operated.
The electric generating facilities of Entergy's non-utility nuclear
power business consist of the Pilgrim nuclear production facility. The
facility has firm total output power purchase agreements with Boston Edison
and other utilities that expire at the end of 2004. The Pilgrim plant is
dispatched as a part of the New England Power Pool (NEPP). The primary
purpose of NEPP is to direct the operations of the major generating and
transmission facilities in the New England region.
Entergy's domestic utility companies are interconnected with many
neighboring utilities. In addition, the domestic utility companies are
members of the Southeastern Electric Reliability Council (SERC). The
primary purpose of SERC is to ensure the reliability and adequacy of the
electric bulk power supply in the southeast region of the United States.
SERC is a member of the North American Electric Reliability Council.
Gas Property
As of December 31, 1999, Entergy New Orleans distributed and
transported natural gas for distribution solely within the limits of the
City of New Orleans through a total of 1,453 miles of gas distribution
mains and 41 miles of gas transmission pipelines.
As of December 31, 1999, the gas properties of Entergy Gulf States,
which are located in and around Baton Rouge, Louisiana, were not material
to Entergy Gulf States.
Titles
The generating stations and major transmission substations of
Entergy's public utility companies are generally located on properties
owned in fee simple. The greater portion of the transmission and
distribution lines of the domestic utility companies have been constructed
on property of private owners pursuant to easements or on public highways
and streets pursuant to appropriate franchises. The rights of each company
in the property on which its utility facilities are located are considered
by such company to be adequate for use in the conduct of its business.
Minor defects and irregularities customarily found in properties of like
size and character may exist, but such defects and irregularities do not,
in the opinion of management, materially impair the use of the properties
affected thereby. The domestic utility companies generally have the right
of eminent domain, whereby they may, if necessary, perfect or secure titles
to, or easements or servitudes on, privately held lands used in or
reasonably necessary for their utility operations.
Substantially all of the physical properties and assets owned by
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy
are subject to the liens of mortgages securing the first mortgage bonds of
such company. The Lewis Creek generating station is owned by GSG&T, Inc.,
a subsidiary of Entergy Gulf States, and is not subject to the lien of the
Entergy Gulf States mortgage securing the first mortgage bonds of Entergy
Gulf States, but is leased to and operated by Entergy Gulf States. All of
the debt outstanding under the original first mortgages of Entergy
Mississippi and Entergy New Orleans has been retired and the original first
mortgages were cancelled in 1999 and 1997, respectively. As a result, the
general and refunding mortgages of Entergy Mississippi and Entergy New
Orleans now also constitute a first mortgage lien on substantially all of
the respective physical properties and assets of the respective companies.
FUEL SUPPLY
The sources of generation and average fuel cost per KWH for the
domestic utility companies and System Energy for the years 1997-1999 were:
Natural Gas Fuel Oil Nuclear Fuel Coal
% Cents % Cents % Cents % Cents
of per of Per of Per of Per
Year Gen KWH Gen KWH Gen KWH Gen KWH
1999 45 2.75 4 2.06 35 .54 16 1.59
1998 40 2.50 6 2.37 40 .53 14 1.67
1997 39 2.97 4 3.11 41 .54 16 1.73
Actual 1999 and projected 2000 sources of generation for the domestic
utility companies and System Energy are:
Natural Gas Fuel Oil Nuclear Coal
1999 2000 1999 2000 1999 2000 1999 2000
Entergy Arkansas (a) 10% 7% - - 56% 40% 33% 52%
Entergy Gulf States 66% 68% - - 19% 18% 15% 14%
Entergy Louisiana 64% 62% 1% - 35% 38% - -
Entergy Mississippi 44% 53% 30% 23% - - 26% 24%
Entergy New Orleans 91% 100% 9% - - - - -
System Energy - - - - 100%(b) 100%(b) - -
Total (a) 45% 42% 4% 2% 35% 33% 16% 22%
(a)Hydroelectric power provided an immaterial amount of generation at
Entergy Arkansas in 1999 and is expected to provide an immaterial
amount of generation in 2000.
(b)In addition to the nuclear capacity given above for the following
companies, the Unit Power Sales Agreement allocates capacity and energy
from System Energy's interest in Grand Gulf 1 as follows: Entergy
Arkansas - 36%; Entergy Louisiana - 14%; Entergy Mississippi - 33%; and
Entergy New Orleans - 17%.
Natural Gas
The domestic utility companies have long-term firm and short-term
interruptible gas contracts. Long-term firm contracts comprise less than
26% of the domestic utility companies' total requirements but can be called
upon, if necessary, to satisfy a significant percentage of the domestic
utility companies' needs. Short-term contracts and spot-market purchases
satisfy additional gas requirements. Entergy Gulf States has a
transportation service agreement with a gas supplier that provides flexible
natural gas service to certain generating stations by using such supplier's
pipeline and gas storage facility.
Many factors, including wellhead deliverability, storage and pipeline
capacity, and demand requirements of end users, influence the availability
and price of natural gas supplies for power plants. Demand is tied to
weather conditions as well as to the prices of other energy sources.
Supplies of natural gas are expected to be adequate in 2000. However,
pursuant to federal and state regulations, gas supplies to power plants may
be interrupted during periods of shortage. To the extent natural gas
supplies may be disrupted, the domestic utility companies will use
alternate fuels, such as oil, or rely to a larger extent on coal and
nuclear generation.
Coal
Entergy Arkansas has long-term contracts for low-sulfur Wyoming coal
for White Bluff and Independence. These contracts, which expire in 2002
and 2011, respectively, provide for approximately 85% of Entergy Arkansas'
expected annual coal requirements. Additional requirements are satisfied
by spot market purchases. Entergy Gulf States has a contract for the
supply of low-sulfur Wyoming coal for Nelson Unit 6, which should be
sufficient to satisfy its fuel requirements for that unit through 2010 if
all price reopeners are accepted. If both parties cannot agree upon a
price, then the contract terminates. Effective April 1, 2000, Louisiana
Generating LLC will assume Cajun's 58% ownership interest in the Big Cajun
generating facilities and will operate the plant. The management of
Louisiana Generating LLC has advised Entergy Gulf States that it has
executed coal supply and transportation contracts that should provide an
adequate supply of coal for the operation of Big Cajun 2, Unit 3 for the
foreseeable future.
Entergy Arkansas has a long-term railroad transportation contract for
the delivery of at least 90% of the coal requirements of both White Bluff
and Independence. This contract will expire in the year 2014. However,
Entergy Arkansas has filed a lawsuit against the railroad claiming breach
of contract by the railroad and requesting termination of the contract (see
discussion of lawsuit in "RATE MATTERS AND REGULATION - Regulation - Other
Regulation and Litigation - Union Pacific Railroad" above).
Entergy Gulf States has a transportation requirements contract with a
railroad to deliver coal to Nelson Unit 6 through December 31, 2004. This
contract specifies a minimum annual tonnage amounting to approximately one-
half of the plant's requirements and provides flexibility for shipping up
to all of the plant's requirements.
Nuclear Fuel
The nuclear fuel cycle involves the following:
o mining and milling of uranium ore to produce a concentrate;
o conversion of the concentrate to uranium hexafluoride gas;
o enrichment of the hexafluoride gas;
o fabrication of nuclear fuel assemblies for use in fueling nuclear
reactors; and
o disposal of spent fuel.
System Fuels is responsible for contracts to acquire nuclear material
to be used in fueling Entergy Arkansas', Entergy Louisiana's, and System
Energy's nuclear units. System Fuels also maintains inventories of such
materials during the various stages of processing. Each of these companies
purchases enriched uranium hexafluoride from System Fuels, but contracts
separately for the fabrication of its own nuclear fuel. The requirements
for River Bend are pursuant to contracts made by Entergy Gulf States. The
requirements for Pilgrim are pursuant to contracts made by Entergy's non-
utility nuclear power business.
Based upon currently planned fuel cycles, Entergy's nuclear units
currently have contracts and inventory that provide adequate materials and
services. Existing contracts for uranium concentrate, conversion of the
concentrate to uranium hexafluoride, and enrichment of the uranium
hexafluoride will provide a significant percentage of these materials and
services over the next several years. Additional materials and services
required beyond the coverage of these contracts are expected to be
available at a reasonable cost for the foreseeable future.
Current fabrication contracts will provide a significant percentage of
these materials and services over the next several years. The Nuclear
Waste Policy Act of 1982 provides for the disposal of spent nuclear fuel or
high level waste by the DOE. There is a discussion of spent nuclear fuel
disposal in Note 9 to the financial statements.
It will be necessary for Entergy to enter into additional arrangements
to acquire nuclear fuel in the future. It is not possible to predict the
ultimate cost of such arrangements.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System
Energy each have made arrangements to lease nuclear fuel and related
equipment and services. The lessors finance the acquisition and ownership
of nuclear fuel through credit agreements and the issuance of notes. These
arrangements are subject to periodic renewal. There is a discussion of
nuclear fuel leases in Note 10 to the financial statements.
Natural Gas Purchased for Resale
Entergy New Orleans has several suppliers of natural gas. Its system
is interconnected with three interstate and three intrastate pipelines.
Entergy New Orleans' primary suppliers currently are Columbia Energy
Services, Inc. (CES), an interstate gas marketer, Bridgeline Gas
Distributors, and Pontchartrain Natural Gas via Louisiana Gas Services.
Entergy New Orleans has a "no-notice" service gas purchase contract with
CES which guarantees Entergy New Orleans gas delivery at any point after
the agreed gas volume has been met. The CES gas supply is transported to
Entergy New Orleans pursuant to a transportation service agreement with
Koch Gateway Pipeline Company (KGPC). This service is subject to FERC-
approved rates. Entergy New Orleans has firm contracts with its two
intrastate suppliers and also makes interruptible spot market purchases.
In recent years, natural gas deliveries to Entergy New Orleans have been
subject primarily to weather-related curtailments. However, Entergy New
Orleans experienced no such curtailments in 1999.
As a result of the implementation of FERC-mandated interstate pipeline
restructuring in 1993, curtailments of interstate gas supply could occur if
Entergy New Orleans' suppliers failed to perform their obligations to
deliver gas under their supply agreements. KGPC could curtail
transportation capacity only in the event of pipeline system constraints.
Based on the current supply of natural gas, and absent extreme weather-
related curtailments, Entergy New Orleans does not anticipate any
interruptions in natural gas deliveries to its customers.
Entergy Gulf States purchases natural gas for resale under an
agreement with Mid Louisiana Gas Company. Mid Louisiana Gas Company is not
allowed to discontinue providing gas to Entergy Gulf States without
obtaining FERC approval.
Research
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans are members of the Electric Power
Research Institute (EPRI). EPRI conducts a broad range of research in
major technical fields related to the electric utility industry. Entergy
participates in various EPRI projects based on Entergy's needs and
available resources. Entergy and its subsidiaries contributed
approximately $6 million in 1999, $8 million in 1998, and $9 million in
1997 to EPRI and other research programs.
Item 2. Properties
Information regarding the properties of the registrants is included in
Item 1. "Business - PROPERTY," in this report.
Item 3. Legal Proceedings
Details of the registrants' material rate proceedings, environmental
regulation and proceedings, and other regulatory proceedings and litigation
that are pending or that terminated in the fourth quarter of 1999 are
discussed in Item 1. "Business - RATE MATTERS AND REGULATION," in this
report.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of 1999, no matters were submitted to a vote
of the security holders of Entergy Corporation, Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
or System Energy.
DIRECTORS AND EXECUTIVE OFFICERS OF ENTERGY CORPORATION
Directors
Information required by this item concerning directors of Entergy
Corporation is set forth under the heading "Proposal 1--Election of
Directors" contained in the Proxy Statement of Entergy Corporation, (the
"Proxy Statement"), to be filed in connection with its Annual Meeting of
Stockholders to be held May 12, 2000, ("Annual Meeting"), and is
incorporated herein by reference. Information required by this item
concerning officers and directors of the remaining registrants is reported
in Part III of this document.
<TABLE>
<CAPTION>
Executive Officers
Name Age Position Period
<S> <C> <C> <C>
J. Wayne Leonard (a) 49 Chief Executive Officer and Director 1999-Present
of Entergy Corporation
Director of Entergy Arkansas, Entergy 1998-1999
Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New
Orleans, and System Energy
President and Chief Operating Officer 1998
of Entergy Corporation
Chief Operating Officer of Entergy 1998
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Vice Chairman of Entergy New Orleans 1998
President of Energy Commodities 1996-1998
Strategic Business Unit
President of Cinergy Capital & 1996-1998
Trading
Group Vice President and Chief 1994-1996
Financial Officer of Cinergy
Corporation
Jerry L. Maulden (a) (b) 63 Vice Chairman of Entergy Corporation 1995-1999
Vice Chairman of Entergy Arkansas, 1993-1999
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and
Entergy New Orleans
Chief Operating Officer of Entergy 1993-1998
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New
Orleans
President and Chief Operating Officer 1993-1995
of Entergy Corporation
Director of Entergy Gulf States 1993-1999
Director of Entergy Louisiana 1991-1999
Director of Entergy New Orleans 1991-1998
Director of Entergy Mississippi 1988-1999
Director of System Energy 1987-1998
Director of Entergy Arkansas 1979-1999
Donald C. Hintz (a) 57 President of Entergy Corporation 1999-Present
Executive Vice President and Chief 1998
Nuclear Officer of Entergy Arkansas,
Entergy Gulf States, and Entergy
Louisiana
Group President and Chief Nuclear 1997-1998
Operating Officer of Entergy
Corporation, Entergy Arkansas,
Entergy Gulf States, and Entergy
Louisiana
Executive Vice President and Chief 1994-1997
Nuclear Officer of Entergy
Corporation
Executive Vice President - Nuclear of 1994-1997
Entergy Arkansas, Entergy Gulf
States, and Entergy Louisiana
Chief Executive Officer and President 1992-1998
of System Energy
Director of Entergy Gulf States 1993-Present
Director of Entergy Arkansas, Entergy 1992-Present
Louisiana, Entergy Mississippi, and
System Energy
Director of Entergy New Orleans 1999-Present
1992-1994
Jerry D. Jackson (a) 55 Executive Vice President of Entergy 1999-Present
Corporation
President and Chief Executive Officer 1999-Present
- Louisiana of Entergy Gulf States
President and Chief Executive Officer 1999-Present
of Entergy Louisiana
Chief Administrative Officer of 1997-1998
Entergy Corporation, Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Executive Vice President - External 1995-1998
Affairs of Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana,
Entergy Mississippi, and Entergy New
Orleans
Executive Vice President - Marketing 1995
of Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Executive Vice President - External 1994-1998
Affairs of Entergy Corporation
Director of Entergy Gulf States 1994-Present
Executive Vice President of Marketing 1994-1995
of Entergy Corporation
Director of Entergy Louisiana 1992-Present
Director of Entergy Arkansas, Entergy 1992-1999
Mississippi and Entergy New Orleans
Secretary of Entergy Gulf States 1994-1995
Director of System Energy 1993-1995
C. John Wilder (a) 41 Executive Vice President and Chief 1998-Present
Financial Officer of Entergy
Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi,
Entergy New Orleans, and System
Energy
Director of Entergy Arkansas, Entergy 1999-Present
Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and
System Energy
Chief Executive Officer of Shell 1998
Capital Company
Assistant Treasurer of the Royal 1996-1998
Dutch/Shell Group
Director of Economics and Finance of 1995-1996
Shell Exploration and Production
Assistant Treasurer of Shell Oil 1992-1995
Company
Frank F. Gallaher (a) 54 Senior Vice President, Generation, 1999-Present
Transmission and Energy Management
of Entergy Corporation, Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans,
and System Energy
Executive Vice President and Chief 1998-1999
Utility Operating Officer for
Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Group President and Chief Utility 1997-1999
Operating Officer of Entergy
Corporation
Group President and Chief Utility 1997-1998
Operating Officer of Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Director of Entergy Arkansas, Entergy 1997-1999
Louisiana, and Entergy Mississippi
Executive Vice President of 1996-1997
Operations of Entergy Corporation
President of Entergy Gulf States 1994-1996
Director of Entergy Gulf States 1993-1999
Executive Vice President of 1993-1997
Operations of Entergy Arkansas,
Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Michael G. Thompson (a) 59 Senior Vice President and General 1992-Present
Counsel of Entergy Corporation
Senior Vice President, General 1995-Present
Counsel, and Secretary of Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Secretary of Entergy Corporation 1994-Present
Joseph T. Henderson (a) 42 Vice President and General Tax 1999-Present
Counsel of Entergy Corporation,
Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans and
System Energy
Associate General Tax Counsel 1998-1999
Senior Tax Counsel of Shell Oil 1995-1998
Company
Senior Tax Attorney of Shell Oil 1994-1995
Company
Nathan E. Langston (a) 51 Vice President and Chief Accounting 1998-Present
Officer of Entergy Corporation,
Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans,
and System Energy
Director of Tax Services of Entergy 1993-1998
Services
Steven C. McNeal (a) 43 Vice President and Treasurer of 1998-Present
Entergy Corporation, Entergy
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans,
and System Energy
Assistant Treasurer of Entergy 1994-1998
Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans,
and System Energy
Director of Corporate Finance of 1994-1998
Entergy Services
</TABLE>
(a) In addition, this officer is an executive officer and/or director of
various other wholly owned subsidiaries of Entergy Corporation and its
operating companies.
(b) Mr. Maulden retired effective December 31, 1999.
Each officer of Entergy Corporation is elected yearly by the Board of
Directors.
PART II
Item 5. Market for Registrants' Common Equity and Related Stockholder
Matters
Entergy Corporation
The shares of Entergy Corporation's common stock are listed on the New
York Stock, Chicago Stock, and Pacific Exchanges.
The high and low prices of Entergy Corporation's common stock for each
quarterly period in 1999 and 1998 were as follows:
1999 1998
High Low High Low
(In Dollars)
First 31 1/8 27 1/2 30 1/8 27 5/16
Second 33 1/8 27 3/4 29 5/8 23 1/4
Third 31 9/16 28 3/16 30 13/16 26 3/16
Fourth 30 23 7/8 32 7/16 28 1/16
Consecutive quarterly cash dividends on common stock were paid to
stockholders of Entergy Corporation in 1999 and 1998. Quarterly dividends
of 30 cents per share were paid in 1999. In 1998, dividends of 45 cents
per share were paid in the first and second quarters, and dividends of 30
cents per share were paid in the third and fourth quarters.
As of February 29, 2000, there were 73,619 stockholders of record of
Entergy Corporation.
Entergy Corporation's future ability to pay dividends is discussed in
Note 8 to the financial statements. In addition to the restrictions
described in Note 8, PUHCA provides that, without approval of the SEC, the
unrestricted, undistributed retained earnings of any Entergy Corporation
subsidiary are not available for distribution to Entergy Corporation's
common stockholders until such earnings are made available to Entergy
Corporation through the declaration of dividends by such subsidiaries.
Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy
There is no market for the common stock of Entergy Corporation's
wholly owned subsidiaries. Cash dividends on common stock paid by the
subsidiaries to Entergy Corporation during 1999 and 1998, were as follows:
1999 1998
(In Millions)
Entergy Arkansas $ 82.7 $ 92.6
Entergy Gulf States $107.0 $109.4
Entergy Louisiana $197.0 $138.5
Entergy Mississippi $ 34.1 $ 66.0
Entergy New Orleans $ 26.5 $ 9.7
System Energy $ 75.0 $ 72.3
ETHC $ 10.0 -
Information with respect to restrictions that limit the ability of
System Energy and the domestic utility companies to pay dividends is
presented in Note 8 to the financial statements.
Item 6. Selected Financial Data
Refer to "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY
CORPORATION AND SUBSIDIARIES, ENTERGY ARKANSAS, ENTERGY GULF STATES,
ENTERGY LOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, and SYSTEM
ENERGY" which follow each company's financial statements in this report,
for information with respect to operating statistics.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY
AND CAPITAL RESOURCES," " - SIGNIFICANT FACTORS AND KNOWN TRENDS," and "-
RESULTS OF OPERATIONS OF ENTERGY CORPORATION AND SUBSIDIARIES, ENTERGY
ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, ENTERGY MISSISSIPPI,
ENTERGY NEW ORLEANS, and SYSTEM ENERGY."
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Entergy Corporation and Subsidiaries. Refer to information under the
heading "ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL
DISCUSSION AND ANALYSIS - SIGNIFICANT FACTORS AND KNOWN TRENDS."
Item 8. Financial Statements and Supplementary Data.
INDEX TO FINANCIAL STATEMENTS
Entergy Corporation and Subsidiaries:
Report of Management 42
Management's Financial Discussion and Analysis 43
Report of Independent Accountants 56
Management's Financial Discussion and Analysis 57
Consolidated Statements of Income For the Years Ended December 31, 65
1999, 1998, and 1997
Consolidated Statements of Cash Flows For the Years Ended December 66
31, 1999, 1998, and 1997
Consolidated Balance Sheets, December 31, 1999 and 1998 68
Consolidated Statements of Retained Earnings, Comprehensive Income, 70
and Paid-In Capital for the Years Ended December 31, 1999, 1998,
and 1997
Selected Financial Data - Five-Year Comparison 71
Entergy Arkansas, Inc.:
Report of Independent Accountants 72
Management's Financial Discussion and Analysis 73
Income Statements For the Years Ended December 31, 1999, 1998, and 76
1997
Statements of Cash Flows For the Years Ended December 31, 1999, 77
1998, and 1997
Balance Sheets, December 31, 1999 and 1998 78
Statements of Retained Earnings for the Years Ended December 31, 80
1999, 1998, and 1997
Selected Financial Data - Five-Year Comparison 81
Entergy Gulf States, Inc.:
Report of Independent Accountants 82
Management's Financial Discussion and Analysis 83
Income Statements For the Years Ended December 31, 1999, 1998, and 87
1997
Statements of Cash Flows For the Years Ended December 31, 1999, 89
1998, and 1997
Balance Sheets, December 31, 1999 and 1998 90
Statements of Retained Earnings for the Years Ended December 31, 92
1999, 1998, and 1997
Selected Financial Data - Five-Year Comparison 93
Entergy Louisiana, Inc.:
Report of Independent Accountants 94
Management's Financial Discussion and Analysis 95
Income Statements For the Years Ended December 31, 1999, 1998, and 98
1997
Statements of Cash Flows For the Years Ended December 31, 1999, 99
1998, and 1997
Balance Sheets, December 31, 1999 and 1998 100
Statements of Retained Earnings for the Years Ended December 31, 102
1999, 1998, and 1997
Selected Financial Data - Five-Year Comparison 103
Entergy Mississippi, Inc.:
Report of Independent Accountants 104
Management's Financial Discussion and Analysis 105
Income Statements For the Years Ended December 31, 1999, 1998, and 108
1997
Statements of Cash Flows For the Years Ended December 31, 1999, 109
1998, and 1997
Balance Sheets, December 31, 1999 and 1998 110
Statements of Retained Earnings for the Years Ended December 31, 112
1999, 1998, and 1997
Selected Financial Data - Five-Year Comparison 113
Entergy New Orleans, Inc.:
Report of Independent Accountants 114
Management's Financial Discussion and Analysis 115
Income Statements For the Years Ended December 31, 1999, 1998, and 118
1997
Statements of Cash Flows For the Years Ended December 31, 1999, 119
1998, and 1997
Balance Sheets, December 31, 1999 and 1998 120
Statements of Retained Earnings for the Years Ended December 31, 122
1999, 1998, and 1997
Selected Financial Data - Five-Year Comparison 123
System Energy Resources, Inc.:
Report of Independent Accountants 124
Management's Financial Discussion and Analysis 125
Income Statements For the Years Ended December 31, 1999, 1998, and 127
1997
Statements of Cash Flows For the Years Ended December 31, 1999, 129
1998, and 1997
Balance Sheets, December 31, 1999 and 1998 130
Statements of Retained Earnings for the Years Ended December 31, 132
1999, 1998, and 1997
Selected Financial Data - Five-Year Comparison 133
Notes to Financial Statements for Entergy Corporation and 134
Subsidiaries
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
REPORT OF MANAGEMENT
Management of Entergy Corporation and its subsidiaries has prepared
and is responsible for the financial statements and related financial
information included herein. The financial statements are based on
generally accepted accounting principles in the United States. Financial
information included elsewhere in this report is consistent with the
financial statements.
To meet their responsibilities with respect to financial information,
management maintains and enforces a system of internal accounting controls
designed to provide reasonable assurance, on a cost-effective basis, as to
the integrity, objectivity, and reliability of the financial records, and
as to the protection of assets. This system includes communication through
written policies and procedures, an employee Code of Entegrity, and an
organizational structure that provides for appropriate division of
responsibility and the training of personnel. This system is also tested
by a comprehensive internal audit program.
The Audit Committee of our Board of Directors, composed solely of
Directors who are not employees of our company, meets with the independent
auditors, management, and internal accountants periodically to discuss
internal accounting controls and auditing and financial reporting matters.
The Audit Committee appoints the independent accountants, subject to
ratification by the shareholders. The Committee reviews with the
independent auditors the scope and results of the audit effort. The
Committee also meets periodically with the independent auditors and the
chief internal auditor without management, providing free access to the
Committee.
Independent public accountants provide an objective assessment of the
degree to which management meets its responsibility for fairness of
financial reporting. They regularly evaluate the system of internal
accounting controls and perform such tests and other procedures as they
deem necessary to reach and express an opinion on the fairness of the
financial statements.
Management believes that these policies and procedures provide
reasonable assurance that its operations are carried out with a high
standard of business conduct.
J. WAYNE LEONARD C. JOHN WILDER
Chief Executive Officer Executive Vice President and Chief
of Entergy Corporation Financial Officer
THOMAS J. WRIGHT JERRY D. JACKSON
Chairman, President, and Chief Chairman of Entergy Gulf States,
Executive Officer of Entergy Inc. and Entergy Louisiana, Inc.,
Arkansas, Inc. President and Chief Executive
Officer of Entergy Gulf States,
Inc. - Louisiana and Entergy
Louisiana, Inc.
JOSEPH F. DOMINO CAROLYN C. SHANKS
President and Chief Executive Officer Chairman, President, and Chief
of Entergy Gulf States, Inc. - Texas Executive Officer of Entergy
Mississippi, Inc.
DANIEL F. PACKER JERRY W. YELVERTON
Chairman, President, and Chief Chairman, President, and Chief
Executive Officer of Entergy Executive Officer of System Energy
New Orleans, Inc. Resources, Inc.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
Operations
Net cash flow from operations for Entergy, the domestic utility
companies, and System Energy for the years ended December 31, 1999, 1998,
and 1997 was:
1999 1998 1997
(In Millions)
Entergy $1,307 $1,753 $1,793
Entergy Arkansas $ 313 $ 409 $ 435
Entergy Gulf States $ 345 $ 448 $ 484
Entergy Louisiana $ 410 $ 342 $ 315
Entergy Mississippi $ 142 $ 125 $ 156
Entergy New Orleans $ 60 $ 40 $ 54
System Energy $ 103 $ 299 $ 286
Entergy's consolidated cash flow from operations decreased as compared
to 1998 primarily due to less cash provided by competitive businesses. The
decrease was also due to the completion of rate phase-in plans for some of
the domestic utility companies during 1998.
In 1999, competitive businesses used $9.3 million of operating cash
flow from operations compared with $151.7 million they contributed in
1998. This change was primarily due to the sales of London Electricity
and CitiPower in December 1998. Both businesses contributed operating
cash flow in 1998 but did not contribute at all in 1999. Offsetting the
decrease in operating cash flow in 1999 are the sales of Efficient
Solutions, Inc. in September 1998 and Entergy Security, Inc. in January
1999. These businesses used operating cash flow in 1998 and used none in
1999. Also, the power marketing and trading business used less operating
cash flow in 1999 than in 1998.
In prior years, rate phase-in plans for some of the domestic utility
companies contributed to cash flow from operations. But Entergy Gulf
States' Louisiana retail phase-in plan for River Bend was completed in
February 1998, Entergy Mississippi's phase-in plan for Grand Gulf 1 was
completed in September 1998, and Entergy Arkansas' phase-in plan for Grand
Gulf 1 was completed in November 1998. Therefore, these phase-in plans did
not contribute to operating cash flow in 1999. Entergy New Orleans' phase-
in plan for Grand Gulf 1 will be completed in 2001.
System Energy's operating cash flow decreased in 1999 primarily due to
an increase in receivables from associated companies. The increase in
receivables is primarily due to an increase in money pool borrowings for
several Entergy affiliates as of December 31, 1999. The money pool is an
inter-company borrowing arrangement designed to reduce the domestic utility
companies' dependence on external short-term borrowings.
Investing Activities
Net cash provided by investing activities decreased in 1999 due to the
sales in 1998 of London Electricity and CitiPower, and higher construction
expenditures in 1999. The increased construction expenditures were
primarily due to construction of the Saltend and Damhead Creek power plants
by Entergy's global power development business, spending on customer
service and reliability improvements by the domestic utility companies, and
the return to service of generation plants at Entergy Arkansas, Entergy
Louisiana, and Entergy New Orleans.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
The following items partially offset the overall decrease:
o $947.4 million of the proceeds from the sale of London Electricity in
1998 was used to purchase notes receivable which matured in August 1999.
Upon maturity, $321.4 million of the proceeds was reinvested in other
temporary investments consisting of U.S. dollar denominated commercial
paper and bank deposits; and
o the sales of Entergy Security, Inc. in January 1999 and Entergy Power
Edesur Holding, LTD and several telecommunications businesses in June
1999.
Financing Activities
Net cash used in financing activities decreased in 1999 primarily due
to:
o the retirement in 1998 of debt associated with the acquisition of
London Electricity and CitiPower;
o increased borrowings in 1999 under the credit facilities for the
construction of the Saltend and Damhead Creek power plants by Entergy's
global power development business; and
o a reduction in dividend payments made by Entergy Corporation in 1999
compared to 1998.
Partially offsetting the overall decrease were the following uses:
o the 1999 repayment of bank borrowings by Entergy Corporation and ETHC
with a portion of the proceeds from the sale of Entergy Security, Inc.;
o the redemption of preferred stock in 1999 at Entergy Arkansas, Entergy
Gulf States, and Entergy Louisiana; and
o the repurchase of Entergy Corporation common stock.
Capital Resources and Outlays
Entergy requires capital resources for:
o construction/capital expenditures;
o debt and preferred stock maturities;
o capital investments;
o funding of subsidiaries; and
o dividend and interest payments.
For the years 2000 through 2004, Entergy plans to spend $9.8 billion in a
capital investment plan focused on improving service at the domestic
utility companies and growing its global power development and nuclear
operations businesses. The estimated allocation in the plan is $4.2
billion to the domestic utility companies, $3.9 billion to the global power
development business, and $1.7 billion to the nuclear operations business.
Management provides more information on construction expenditures and long-
term debt and preferred stock maturities in Notes 5, 6, 7, and 9 to the
financial statements.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy's sources to meet the above 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 assets.
The capital investment plan discussed above is subject to modification
based on the ongoing effects of transition to competition planning and the
ability to recover the regulated utility costs in rates. Additionally, the
plan is contingent upon Entergy's ability to access the capital necessary
to finance the planned expenditures, and significant borrowings may be
necessary for Entergy to implement these capital spending plans.
The domestic utility companies have plans to issue debt in 2000, the
proceeds of which will be used for general corporate purposes, including
capital expenditures, the retirement of short-term indebtedness, and, in
the case of Entergy Gulf States, the mandatory redemption of preference
stock. On February 15, 2000, Entergy Mississippi issued $120 million of
7.75% Series First Mortgage Bonds due February 15, 2003. On March 9, 2000,
Entergy Arkansas issued $100 million of 7.72% Series First Mortgage Bonds
due March 1, 2003. Proceeds of both issuances will be used, in part, for
the retirement of short-term indebtedness that was incurred for working
capital needs and capital expenditures.
On February 25, 2000, Entergy Corporation obtained a 364-day term loan
in the amount of $120 million, accruing interest at a rate of 6.7%. The
proceeds are being used to make an open-account advance to Entergy
Louisiana in order to repay maturing debt. Entergy Corporation will use
any remaining proceeds for general corporate purposes and working capital
needs.
During 1999, cash from operations, the sale of businesses, and cash on
hand met substantially all investing and financing requirements of the
domestic utility companies and System Energy. Entergy Corporation received
$532.3 million in dividend payments from its subsidiaries in 1999.
All debt and common and preferred stock issuances 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 have sufficient capacity under
these issuance tests to consummate the financings planned for 2000. 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 the domestic utility companies and System Energy to
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 ability to invest in domestic and foreign generation
businesses is subject to the SEC's regulations under PUHCA. These
regulations limit to 50% of consolidated retained earnings the total amount
that Entergy may invest in domestic and foreign generation businesses at
the time an investment is made. Using the proceeds from the sales of
London Electricity and CitiPower, Entergy's FUCO and EWG subsidiaries have
the ability to make significant additional investments in domestic and
foreign generation businesses without the need of further investment by
Entergy Corporation.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
Entergy's global power development business is currently constructing
two combined-cycle gas turbine merchant power plants in the UK. Saltend, a
1,200 MW plant in northeast England, will provide steam and electricity to
BP Chemicals' nearby industrial complex, with the remaining electricity to
be sold into the UK national power pool. Approximately 75 MW of the
capacity will be sold to BP Chemicals under a PPA with a term of 15 years.
Originally scheduled for commercial operation in January 2000, Saltend's
completion has been delayed due to construction problems at the site. The
construction contractor has submitted a revised construction schedule after
substantial analysis, and currently estimates a phased-in completion of the
three-unit plant with the full plant in service by June 30, 2000. The
total cost of Saltend is currently estimated to be approximately $824
million. The second plant, an 800 MW facility known as Damhead Creek, is
located in southeast England. It is expected to begin commercial operation
in the fourth quarter of 2000. Management estimates the total cost of
Damhead Creek at approximately $582 million. The financing of the
construction of these two power plants is discussed in Note 7 to the
financial statements.
In October 1999, Entergy's global power development business obtained
an option to acquire twenty-four GE7FA advanced technology gas turbines,
four steam turbines, and eight GE7EA advanced technology gas turbines.
Delivery of the turbines is scheduled for 2001 through 2004. The total
cost of the turbines, including long-term service agreements with GE Power
Systems, is approximately $2.0 billion. Management plans to use the
turbines in future generation projects of the global power development
business, and anticipates that the acquisition of the turbines will be
funded by a combination of cash on hand, project financing, and other
external financing. Payments scheduled for the acquisition of these
turbines are $273 million in 2000, $415 million in 2001, and $311 million
in 2002.
On July 13, 1999, Entergy's non-utility nuclear power business bought
the 670 MW Pilgrim Nuclear Station located in Plymouth, Massachusetts from
Boston Edison. The acquisition included the plant, real estate, materials
and supplies, and nuclear fuel for a purchase price of $81 million. The
purchase price was funded with a portion of the proceeds from the sales of
non-regulated businesses. As part of the Pilgrim purchase, Boston Edison
transferred a $471 million decommissioning trust fund to Entergy's non-
utility nuclear power business. After a favorable tax determination
regarding the trust fund, Entergy returned $43 million of the trust fund to
Boston Edison. Based on cost estimates provided by an outside consultant,
Entergy believes that Pilgrim's decommissioning fund will be adequate to
cover future decommissioning costs for the Pilgrim plant without any
additional deposits to the trust.
Entergy's nuclear business has an outstanding offer to NYPA for the
acquisition of NYPA's 825 MW James A. FitzPatrick nuclear power plant
located near Oswego, New York and NYPA's 980 MW Indian Point 3 nuclear
power plant located in Westchester County, New York. On February 24, 2000,
NYPA received a competing offer for the purchase of these plants. It is
anticipated that the NYPA Board of Trustees will meet in mid to late March
to consider the offers. If Entergy's offer is accepted, management expects
to close the acquisition by the fourth quarter of 2000. Entergy would pay
$50 million in cash at the closing of the purchase, plus seven annual
installments of approximately $108 million each commencing one year from
the date of the closing. Entergy projects that these installments will be
paid from the proceeds of the sale of power from the plants and that
Entergy will invest an additional $100 million in the plants.
Entergy has also made investments in energy-related businesses,
including power marketing and trading. Under PUHCA, the SEC imposes a limit
equal to 15% of consolidated capitalization on the amount that may be
invested in such businesses without specific SEC approval. Entergy's
capacity to make additional investments at December 31, 1999 was
approximately $2.2 billion.
In 1999, Entergy Corporation paid $291.5 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.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
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 July 1999, the Board
approved the commitment of up to an additional $750 million toward the
repurchase of Entergy common stock through December 31, 2001. Shares are
being purchased on a discretionary basis. See Note 5 to the financial
statements for stock repurchases and issuances made during 1999.
Entergy's capital and refinancing requirements and available lines of
credit are more thoroughly discussed in Notes 4, 5, 6, 7, 9, and 10 to the
financial statements.
Entergy Corporation and System Energy
Pursuant to an agreement with certain creditors, 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 System Energy 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.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Domestic Transition to Competition
The electric utility industry for years has been preparing for the
advent of competition in its business, particularly in generation
operations. For most electric utilities, the transition from a regulated
monopoly to a competitive business is challenging and complex. The new
electric utility environment presents opportunities to compete for new
customers and creates the risk of loss of existing customers. It presents
opportunities to enter into new businesses and to restructure existing
businesses.
For Entergy, it is a formidable undertaking, made uniquely difficult
because the domestic utility companies operate in five retail regulatory
jurisdictions and are subject to the System Agreement, which contemplates
the integrated operation of Entergy's electric generation and transmission
assets throughout the retail service territories. Entergy is striving to
achieve consistent paths to competition in all five retail regulatory
jurisdictions. Progress was made in 1999 when the Arkansas and Texas
legislatures enacted laws to bring about electric utility competition.
More progress is expected in 2000 as Entergy continues to work with
regulatory and legislative officials in all jurisdictions in designing the
rules surrounding a competitive electricity industry.
State Regulatory and Legislative Activity
Arkansas
In April 1999, the Arkansas legislature enacted a law providing for
competition in the electric utility industry through retail open access on
January 1, 2002. With retail open access, generation operations will
become a competitive business, but transmission and distribution operations
will continue to be regulated. The APSC may delay implementation of retail
open access, but not beyond June 30, 2003. The provisions of the new law:
o require utilities to separate (unbundle) their costs into generation,
transmission, distribution, and customer service functions;
o require operation of transmission facilities by an organization
independent from the generation, distribution, and retail operations;
o provide for the determination of and mitigation measures for
generation market power, which could require generation asset
divestitures;
o allow for recovery of stranded and transition costs if the costs are
approved by the APSC;
o allow for the securitization of approved stranded costs; and
o freeze residential and small business customer rates for three years
by utilities that will recover stranded costs.
Entergy Arkansas filed separate generation, transmission,
distribution, and customer service rates with the APSC in December 1999.
The rates were based on the cost-of-service study that formed the basis of
the rates included in the 1997 settlement agreement discussed in Note 2 to
the financial statements. Hearings on the rate filing are scheduled for
September 2000. If approved, these rates will become effective July 1,
2001. Entergy Arkansas also filed notice with the APSC in December 1999 of
its intent to recover stranded costs. The APSC and various participants in
the industry, including Entergy Arkansas, are currently in the process of
implementing the legislation through various rulemaking and other
proceedings.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Texas
In June 1999, the Texas legislature enacted a law providing for
competition in the electric utility industry through retail open access.
The law provides for retail open access by most electric utilities,
including Entergy Gulf States, on January 1, 2002. With retail open
access, generation and a new retail provider operation will be competitive
businesses, but transmission and distribution operations will continue to
be regulated. The new retail provider function will be the primary point
of contact with the customers for most services beyond initiation of
electric service and restoration of service following an outage. The
provisions of the new law:
o require a rate freeze through January 1, 2002 with frozen rates beyond
that for residential and small commercial customers of incumbent
utilities;
o require utilities to separate (unbundle) their generation,
transmission and distribution, and retail electric provider functions.
Entergy Gulf States filed its plan in January 2000 with the PUCT to
separate its functions. The plan included separate transmission and
distribution companies;
o require operation in a non-discriminatory manner of transmission and
distribution facilities by an organization independent from the
generation and retail operations by the time competition is implemented;
o allow for recovery of stranded costs incurred in purchasing power and
providing electric generation service if the costs are approved by the
PUCT;
o allow securitization of regulatory assets and stranded costs;
o provide for the determination of and mitigation measures for
generation market power; and
o require utilities to file separated data and proposed transmission,
distribution, and competition tariffs by April 1, 2000.
The market power measures include a limit on the ownership of
generation assets by a power generation company within a specified region.
The implications of this limit are uncertain for Entergy Gulf States and
the Entergy system. However, it is possible that Entergy Gulf States could
be required to divest some of its generation assets if Entergy Gulf States
is found to have generation market power. The legislation also requires
affected utilities to sell at auction, at least 60 days before January 1,
2002, entitlements to at least 15% of their installed generation capacity
in Texas. The obligation to auction capacity entitlements continues for up
to 60 months after January 1, 2002, or until 40% of customers in the
jurisdiction have chosen an alternative supplier, whichever comes first.
The PUCT and various participants in the industry are currently in the
process of implementing the legislation through various rulemaking and
other proceedings. Two significant rules have been issued by the PUCT:
o A code of conduct was approved by the PUCT in December 1999 to ensure
that utilities do not allow affiliates to have a business advantage over
competitors. The rules allow the continuation of shared services
affiliates, such as Entergy Operations and Entergy Services. Entergy
adopted an internal code of conduct to ensure compliance with the new
rules.
o Rules governing the separated costs filing have been issued. Included
is a provision establishing, as an alternative to a market-based return
on equity, a presumptively reasonable return on equity for a distribution
utility at 200 basis points over its cost of debt. The provision allows
the utility to provide evidence that the return should be higher. The
rules also provide that the utility may propose a performance-based
enhancement to the authorized rate of return, based on distribution and
transmission company independence. Management does not agree with the
arbitrary level set in the rule, and will seek a higher return in its
separated costs filing. A workshop has been held by the PUCT to discuss
opportunities to seek a performance-based return.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Louisiana
In March 1999, the LPSC deferred making a decision on whether
competition in the electric industry is in the public interest. However,
the LPSC staff, outside consultants, and counsel were directed to work
together to analyze and resolve issues related to competition and then
recommend a plan for its implementation to be considered by the LPSC by
January 1, 2001. The LPSC staff, outside consultants, counsel, and
industry members are working together to develop a plan to be submitted to
the LPSC.
Mississippi
The MPSC issued a proposed transition plan in June 1998 and continues
to hold periodic hearings and request informational filings regarding
various potential effects of retail competition. In February 2000,
legislation was introduced in Mississippi to establish a study committee to
consider competition and provide a report to the legislature by December 1,
2000. Management does not expect deregulation in Mississippi to occur prior
to 2003. See Note 2 to the financial statements for additional
information.
New Orleans
In 1997, Entergy New Orleans filed an electric business restructuring
plan with the Council. The Council has not established a procedural
schedule to consider electricity restructuring or Entergy's plan. The
Council is conducting hearings regarding retail gas competition. Entergy
New Orleans has filed a plan in that proceeding outlining the conditions
under which it could support retail gas competition. The outcome of this
proceeding is uncertain.
Federal Regulatory and Legislative Activity
Open Access Transmission and Entergy's Transco Proposal
Competition within the wholesale electric energy market increased with
the implementation of open access transmission. Open access allows any
supplier to transmit electricity to its customers over transmission
facilities owned by a different company. In 1996, FERC required all public
utilities that it regulates to provide wholesale transmission access to
third parties. FERC also required utilities to implement and maintain an
open access same-time information system. Entergy's domestic utility
companies made filings with FERC to comply with the FERC requirements.
FERC policy strongly favors independent control of transmission
operations to enhance competitive wholesale power markets. In response to
this policy, Entergy proposed the formation of a regional transmission
company (Transco) and sought guidance from FERC on the proposal. The
proposed Transco would be:
o a separate, independent, incentive-driven transmission company
regulated by FERC;
o governed by an independent board of directors with no ties to Entergy
or to any power market participant;
o composed of the transmission system assets transferred to it by the
domestic utility companies and other transmission owners;
o operated and maintained by employees who would work exclusively for
the Transco and would not be employed by Entergy or the domestic
utility companies; and
o passively owned with no voting rights by the domestic utility
companies and other members who transfer assets.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
In July 1999, FERC responded to Entergy's proposal and stated that passive
ownership of a Transco by a generating company or other market participant
could meet FERC's current independence and governance requirements under
certain circumstances. However, FERC raised concerns about the following
issues regarding Entergy's proposal:
o the selection process for the Transco's board of directors;
o the Transco board's fiduciary obligations to the member companies;
o the ability of the Transco to raise additional capital; and
o restrictions on transactions between the Transco and the member
companies.
Management expects to make additional filings during 2000 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 could become operational in 2001.
In a rulemaking that will affect the Transco, FERC issued Order 2000
in December 1999. Order 2000 calls for owners and operators of
transmission lines in the United States to join regional transmission
organizations ("RTOs") on a voluntary basis. Order 2000 requires public
utilities that own, operate, or control interstate transmission facilities
to file by October 15, 2000 a proposal for how they intend to participate
in an RTO or, alternatively, to describe the steps they have taken to do so
or the reasons why it is not feasible to participate in an RTO. FERC's
Order 2000 requires that RTOs be effective no later than December 15, 2001.
FERC is maintaining flexibility as to the structure of RTOs. For
example, it appears that RTOs may be for-profit or not-for-profit and may
be organized as joint ventures or legal entities of various types.
However, RTOs will be required, among other things, to be independent
market participants, to have sufficient regional scope to maintain
reliability and efficiency, to be non-discriminatory in granting service,
and to maintain operational control over their regional transmission
systems.
The Transco, an independent, for-profit transmission company which has
already been proposed to FERC by the domestic utility companies, is
Entergy's preferred approach for complying with FERC's Order 2000.
However, Entergy is also exploring other means for complying with Order
2000.
Deregulation legislation
Over the past several years, a number of bills have been introduced in
the United States Congress to deregulate the generation function of the
electric power industry. The bills generally have provisions that would
give retail consumers the ability to choose their own electric service
provider. Entergy Corporation has supported some deregulation legislation
in Congress that would lead to an orderly transition to competition and
would also repeal PUHCA and PURPA. Congressional sentiment appears to be
against mandating retail competition by a certain date and in favor of
clarifying state authority to order retail choice for consumers. Congress
adjourned in 1999 without final action on a deregulation bill by a
committee of the House or Senate.
Industrial and Commercial Customers
The domestic utility companies face the risk of losing customers due
to competition. Some of their large industrial and commercial customers
are exploring ways to reduce their energy costs. In particular,
cogeneration is an option available to a significant portion of the
domestic utility companies' industrial customer base. The domestic utility
companies have responded by working with some industrial and commercial
customers and negotiating electric service contracts that provide service
at rates lower than would otherwise be charged. Despite these actions,
Entergy Gulf States and Entergy Louisiana have lost revenue in recent years
from large industrial customers who have completed cogeneration projects.
However, material losses to cogeneration are not expected in 2000.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
State and Local Rate Regulation
The retail regulatory basis for setting rates for electric service is
shifting in some jurisdictions from traditional, exclusively cost-of-
service regulation to include performance-based elements. Performance-
based formula rate plans are designed to reward increased efficiency and
productivity, with utility shareholders and customers sharing in the
benefits. Entergy Mississippi and Entergy Louisiana have implemented
performance-based rate plans. These companies made the following filings
resulting in rate reductions in 1999:
o Entergy Louisiana submitted its formula rate plan filing for the 1998
test year and implemented a rate reduction of approximately $15.0
million, effective August 1, 1999. Entergy Louisiana's filing is
subject to further review by the LPSC, which may result in an
additional change in rates.
o Entergy Mississippi implemented a $13.3 million rate reduction,
effective May 1999, based on its 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.
All of the domestic utility companies have recently been ordered to grant
base rate reductions and have refunded or credited customers for previous
overcollections of rates. The continuing pattern of rate reductions
reflects completion of rate phase-in plans, lower costs of service ordered
by regulators, and lower authorized returns on common equity. The domestic
utility companies' retail and wholesale rate matters and proceedings are
discussed more thoroughly in Note 2 to the financial statements.
Other Electric Utility Trends
Utility mergers and joint ventures involving domestic and overseas
companies are another continuing trend in the industry. In some areas of
the country, utilities have either sold or are attempting to sell all or a
substantial portion of their generation assets in order to focus their
businesses on transmission and/or distribution services. Entergy, through
its global power development and non-utility nuclear power businesses,
intends to expand its generation business. While the global power
development business is focused on building new power plants or modifying
existing plants, the nuclear business expansion plan focuses on acquiring
generation assets of other utilities.
In some areas of the United States, municipalities are exploring the
possibility of establishing their own electric distribution systems, which
would result in both residential and large industrial customers leaving
some investor-owned utilities. If the efforts of a municipality are
successful, the investor-owned utility may be unable to recover some costs
incurred for the purpose of serving those customers.
Continued Application of SFAS 71 and Stranded Cost Exposure
The domestic utility companies' and System Energy's financial
statements primarily 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." Under traditional ratemaking
practice, regulated electric utilities are granted exclusive geographic
franchises to sell electricity. In return, the utilities are obligated to
make investments and incur obligations to serve customers. Prudently
incurred costs are recovered from customers along with a return on
investment. Regulators may require utilities to defer collecting from
customers some operating costs until a future date. These deferred costs
are recorded as regulatory assets in the financial statements. In order to
continue applying SFAS 71 to its financial statements, a utility's rates
must be set by an independent regulator on a cost-of-service basis and the
rates must be charged to and collected from customers.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
As the generation portion of the utility industry moves toward
competition, it is likely that generation rates will no longer be set on a
cost-of-service basis. When that occurs, the generation portion of the
business could be required to discontinue application of SFAS 71. The
result of discontinuing application of SFAS 71 could be the recording of
asset impairments and the removal of regulatory assets and liabilities from
the balance sheet. Management believes that definitive outcomes have not
yet been determined regarding the transition to competition in each of
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 as described above,
but Entergy believes that significant issues remain to be addressed by
Arkansas and Texas regulators, and the enacted laws do not provide
sufficient detail to determine definitively the impact on Entergy Arkansas'
and Entergy Gulf States' regulated operations.
As Entergy's domestic utility companies move toward competition, there
are costs or commitments that have been incurred under a regulated pricing
system that might be impaired or not recovered in a competitive market.
These costs are referred to as stranded costs. The restructuring laws
enacted in Arkansas and Texas provide an opportunity for the recovery of
stranded costs following review and approval by the APSC or the PUCT.
Nearly all of Entergy's exposure to stranded costs involves commitments
that were approved by regulators. These exposures include the following:
o the allowed cost of constructing its nuclear generating plants (the
domestic utility companies' net investment in nuclear generation is
provided in Note 1 to the financial statements);
o long-term contracts to purchase power under the Unit Power Sales
Agreement and associated with the Vidalia project, which may require
paying above-market prices in a competitive environment (detail
concerning these obligations is provided in Note 9 to the financial
statements);
o nuclear power plant decommissioning costs (detail concerning these
costs is provided in Note 9 to the financial statements);
o the construction cost of some fossil-fueled generating plants and
related contracts to buy fuel that may be above-market price in a
competitive market (detail concerning the domestic utility companies'
net investment in generation other than nuclear, which is primarily
fossil fueled, is provided in Note 1 to the financial statements,
and detail concerning certain fuel contracts is provided in Note 9
to the financial statements); and
o regulatory assets reflected in the balance sheets.
As of December 31, 1999, the amount of these potentially strandable
costs for Entergy reflected in the financial statements is approximately
$1.8 billion at Entergy Arkansas, $3.3 billion at Entergy Gulf States,
$2.5 billion at Entergy Louisiana, and $0.3 billion at Entergy Mississippi.
The estimated net present value of the obligations described above that are
not reflected in the balance sheets for Entergy is approximately $0.9
billion at Entergy Arkansas, $0.4 billion at Entergy Gulf States, $1.5
billion at Entergy Louisiana, $0.6 billion at Entergy Mississippi, and
$0.3 billion at Entergy New Orleans. In the normal course of business,
depreciation, amortization, and payments under the contractual obligations
will continue to reduce these amounts. The actual amount of these costs
and obligations that will be identified as stranded will be determined in
regulatory proceedings. These proceedings will commence in Arkansas and
Texas in 2000. The outcome of the proceedings cannot be predicted and will
depend upon a number of variables, including the timing of stranded cost
determination, the values attributable to certain strandable assets,
assumptions concerning future market prices for electricity, and other
factors. In addition, because transition legislation or regulation is not
in place in Louisiana, Mississippi, or New Orleans, Entergy cannot predict
how those jurisdictions will treat stranded costs and whether Entergy will
be able to recover all or a part of the costs in those jurisdictions.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Until the proceedings in Arkansas and Texas provide a greater level of
certainty, it is anticipated that both Entergy Arkansas and Entergy Gulf
States will continue to apply SFAS 71 to their regulated operations. SFAS
71 will continue to be applied in the Louisiana, Mississippi, and New
Orleans jurisdictions pending legislative or regulatory developments
relating to transition to competition. If SFAS 71 is no longer applied by
the respective domestic utility companies and System Energy, and regulation
or legislation does not allow for recovery of all or a portion of its
stranded costs, there could be a material adverse impact on the respective
domestic utility companies' and Entergy's financial statements. However,
Entergy believes that the amount of costs that will be stranded without a
means of recovery or mitigation for the domestic utility companies will be
significantly less than the amounts referred to above. The application of
SFAS 71 is discussed more thoroughly in Note 1 to the financial statements.
Year 2000 Issues
Entergy did not experience any significant problems in operations due
to the rollover to year 2000, and there were no power outages caused by the
rollover. Entergy will continue to monitor additional dates during 2000
that could be affected by the rollover to year 2000, but does not expect
material problems based on its testing and the results of the January 1,
2000 rollover.
Management expects to spend approximately $54 million for maintenance
and modification costs related to year 2000 issues between 1998 and mid-
2000. Entergy has incurred approximately $51 million of this total through
December 1999. The maintenance or modification costs associated with year
2000 compliance are expensed as incurred, while the costs of new software
are capitalized and amortized over the software's useful life. The costs
are being funded through operating cash flows. In certain of Entergy's
jurisdictions, the expenses have been deferred and will be recovered from
ratepayers into 2002. Total capitalized costs for projects accelerated due
to year 2000 were estimated to be $20 million, which is the amount Entergy
has incurred through December 1999.
Market Risks Disclosure
Entergy is exposed to the following market risks:
o the commodity price risk associated with its power marketing and
trading business;
o the interest rate risk associated with certain of its variable rate
credit facilities; and
o the interest rate and equity price risk associated with its
investments in decommissioning trust funds.
Entergy's power marketing and trading business enters into sales and
purchases of electricity and natural gas for delivery in the future.
Because the market prices of electricity and natural gas can be volatile,
Entergy's power marketing and trading business is exposed to risk arising
from differences between the fixed prices in its commitments and
fluctuating market prices. To mitigate its exposure, Entergy's power
marketing and trading business enters into electricity and natural gas
futures, swaps, option contracts, and electricity forward agreements. The
business also manages its exposure with policies limiting its exposure to
market risk and daily monitoring of its potential financial exposure.
Entergy's power marketing and trading business uses a value-at-risk
model (VAR) as one measure of market risk for the traded portfolio. VAR
acts in conjunction with stress testing, position reporting, and profit and
loss reporting in order to measure and control the risk inherent in the
traded portfolio. The primary use of VAR is to provide a benchmark for
market risk contained in the trading portfolio. VAR does not function as a
comprehensive measure of all risks in a portfolio. Furthermore, VAR is
only an appropriate risk measure for products traded in relatively liquid
markets.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
SIGNIFICANT FACTORS AND KNOWN TRENDS
Management's VAR methodology uses a variance/covariance approach to
the measurement of market risk. The variance/covariance approach assumes
that prices follow a "random-walk" process in which prices are lognormally
distributed. This approach requires the following inputs:
o a one-tailed test with a 95% confidence interval that measures the
probability of loss;
o a 20-day window for measuring volatility;
o cross-product correlation matrix that measures the tendency of
different basis products to move together; and
o inter-temporal correlation matrix that measures the tendency of
commodities with different delivery periods to move together.
Based on these assumptions, this business' VAR was approximately $3.3
million as of December 31, 1999 and $6.1 million as of December 31, 1998.
During 1999, the average month-end VAR was $3.7 million, with a high month-
end VAR of $7.1 million and a low month-end VAR of $2.0 million.
Management's calculation of value-at-risk exposure represents an
estimate of reasonably possible net losses that would be recognized on its
portfolio of derivative financial instruments, assuming hypothetical
movements in prices. It does not represent the maximum possible loss or an
expected loss that may occur, because actual future gains and losses will
differ from those estimated based upon actual fluctuations in market rates,
operating exposures, and the timing thereof, and changes in the portfolio
of derivative financial instruments during the year.
Entergy uses interest rate swaps to reduce the impact of interest rate
changes on certain variable-rate credit facilities associated with its
global power development business. Under the interest rate swap
agreements, Entergy receives floating-rate interest payments and pays fixed-
rate interest rate payments over the life of the agreements. The floating-
rate interest that Entergy receives is approximately equal to the interest
it must pay on the variable-rate credit facilities. Therefore, through the
use of the swap agreements, Entergy effectively achieves a fixed rate of
interest on the credit facilities. These swaps are discussed more
thoroughly in Note 7 to the financial statements.
Entergy is exposed to fluctuations in equity prices and interest rates
through its nuclear decommissioning trust funds. The NRC requires Entergy
to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River
Bend, Waterford 3, Grand Gulf, and Pilgrim. The funds are invested
primarily in equity securities; fixed-rate, fixed-income securities; and
cash and cash equivalents. Management believes that its exposure to market
fluctuations will not affect results of operations for the ANO, River Bend,
Grand Gulf, and Waterford 3 trust funds because of the application of
regulatory accounting principles. The Pilgrim trust fund holds
approximately $341 million of fixed-rate, fixed-income securities as of
December 31, 1999. These securities have an average coupon rate of 6.67%,
an average duration of 6.2 years, and an average maturity of 9.5 years.
The Pilgrim trust fund also holds equity securities worth approximately $81
million as of December 31, 1999. These securities are held in a fund which
is designed to approximate the Standard & Poor's 500 Index. The
decommissioning trust funds are discussed more thoroughly in Notes 1 and 9
to the financial statements.
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
Entergy Corporation:
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of retained earnings,
comprehensive income and paid-in-capital and of cash flows present fairly,
in all material respects, the financial position of Entergy Corporation and
its subsidiaries at December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States, which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Entergy's results of operations are discussed in two business
categories, "Domestic Utility Companies and System Energy" and "Competitive
Businesses." Domestic Utility Companies and System Energy is Entergy's
predominant business segment, contributing 73% of Entergy's operating
revenue and 93% of its net income in 1999. Competitive Businesses include
the following segments detailed in Note 14 to the financial statements:
power marketing and trading, Entergy London, CitiPower, and all other.
"All other" principally includes global power development, non-utility
nuclear power, and the parent company, Entergy Corporation. The
elimination of power marketing and trading mark-to-market profits on
intercompany power transactions is also included in all other. Note 14 to
the financial statements provides a detailed breakdown of financial
information by business segment.
Net income for the year ended December 31, 1998 reflected the results
of operations for Entergy London, CitiPower, Efficient Solutions, Inc.,
Entergy Security, Inc., Entergy Power Edesur Holdings, and several
telecommunications businesses. 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.
Net Income
Entergy Corporation's consolidated net income in 1999 decreased
compared to 1998 primarily due to:
o the absence of London Electricity's results of operations in 1999
because of the sale of the business in December 1998; and
o the gains on the sales of London Electricity and CitiPower reflected
in 1998 results.
The decrease is partially offset by gains on the sales of other businesses
in 1999, the loss on Efficient Solutions reflected in 1998 results, a 5%
increase in domestic utility net income, and a reduction in the net loss
for the power marketing and trading business.
Entergy Corporation's consolidated net income in 1998 increased
compared to 1997 primarily due to the gains on the sales of London
Electricity and CitiPower and the UK windfall profits tax reflected in 1997
results.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Domestic Utility Companies and System Energy
Revenues and Sales
The changes in electric operating revenues for Entergy's domestic
utility companies and System Energy for 1999 and 1998 are as follows:
Increase/(Decrease)
Description 1999 1998
(In Millions)
Base revenues $81.2 ($290.3)
Rate riders (164.1) (108.6)
Fuel cost recovery 188.7 (80.6)
Sales volume/weather 5.3 187.3
Other revenue (including unbilled) 74.3 (191.0)
Sales for resale (50.3) 80.7
------ -------
Total $135.1 ($402.5)
====== =======
Base revenues
In 1999, base revenues increased $81.2 million primarily due to:
o a $93.6 million reversal in June 1999 of regulatory reserves
associated with the accelerated amortization of accounting order
deferrals in conjunction with the settlement agreement in Entergy
Gulf States' Texas November 1996 and 1998 rate filings. The
settlement agreement was approved by the PUCT in June 1999. The
net income effect of this reversal is largely offset by the
amortization of rate deferrals discussed below; and
o a reduction in the amount of reserves recorded in 1999 at Entergy Gulf
States compared to 1998 for the anticipated effects of rate proceedings
in Texas.
Partially offsetting these increases were:
o annual base rate reductions implemented for Entergy Gulf States'
Louisiana and Texas retail customers in 1998 and 1999 and Entergy
Mississippi customers in 1999; and
o reserves recorded by Entergy Gulf States' Louisiana jurisdiction,
Entergy Louisiana, and Entergy New Orleans in 1999 for potential rate
actions or rate refunds.
In 1998, base revenues decreased primarily due to base rate
reductions, reserves for refunds, and other regulatory adjustments totaling
$216.5 million ($129.0 million net of tax) at Entergy Gulf States.
These rate reductions and other pending rate proceedings are discussed
in Note 2 to the financial statements.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Rate rider revenues
Rate rider revenues do not affect net income because specific incurred
expenses offset them.
In 1999, rate rider revenues decreased $164.1 million due to a revised
Grand Gulf rider implemented at Entergy Arkansas and Entergy Mississippi.
The revised rider eliminated revenues attributable to the Grand Gulf phase-
in plans, which were completed in 1998, and implemented the Grand Gulf
Accelerated Recovery Tariff (GGART), allowing accelerated recovery and
payment of a portion of the two companies' Grand Gulf purchased power
obligations. The tariffs became effective in January 1999 and October
1998, respectively.
In 1998, rate rider revenues decreased $108.6 million due to the
decline in the Grand Gulf 1 cost recovery rate rider revenues at Entergy
Arkansas, reflecting scheduled reductions in the phase-in plan that was
completed in November 1998. Rate rider revenues also decreased due to
reductions required by the settlement agreement between the APSC and
Entergy Arkansas. The settlement agreement with the APSC is discussed in
Note 2 to the financial statements.
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.
In 1999, fuel cost recovery revenues increased $188.7 million
primarily due to:
o an increased fuel factor and a new fuel surcharge implemented in
Entergy Gulf States' Texas jurisdiction in 1999;
o recovery of higher-priced fuel and purchased power costs at Entergy
Louisiana due to nuclear outages at Waterford 3 in 1999; and
o an increase in the energy cost recovery rate effective April 1999 and
the completion of a customer refund obligation in 1998 which lowered
1998 fuel cost recovery at Entergy Arkansas.
In 1998, fuel cost recovery revenues decreased $80.6 million primarily
due to lower pricing at Entergy Louisiana resulting from a change in
generation mix.
Sales volume
In 1998, sales volume increased $187.3 million as a result of
significantly warmer weather at all of the domestic utility companies.
Other revenue
In 1999, other revenue increased $74.3 million primarily due to a
change in estimated unbilled revenues for the domestic utility companies.
The changed estimate more closely aligns the fuel component of unbilled
revenues with regulatory treatment. This change is expected to affect
comparisons to applicable prior period amounts through the first quarter of
2000. Comparative impacts are also affected by seasonal variations in
demand.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
In 1998, other revenue decreased $191 million primarily due to the
revenue portion of the gain recognized in December 1997 on the settlement
by Entergy Gulf States of litigation with Cajun, the effect of which was
partially offset by regulatory reserves recorded at Entergy Gulf States in
1997. Other revenue also decreased due to unfavorable pricing of unbilled
revenues resulting from rate reductions at Entergy Gulf States.
Sales for resale
In 1999, sales for resale decreased $50.3 million primarily due to the
loss of certain municipal and co-op customer contracts at Entergy Arkansas.
In 1998, sales for resale increased due to increased sales to non-
associated companies, particularly at Entergy Arkansas, and increased
demand at Entergy Gulf States.
Expenses
Fuel and purchased power expenses
In 1999, fuel and purchased power expenses increased due to:
o higher gas and purchased power prices as well as increased gas usage
at Entergy Arkansas and Entergy Louisiana;
o higher fuel recovery due to an increased fuel factor and fuel
surcharge in Entergy Gulf States' Texas jurisdiction; and
o an increased energy cost recovery rate in 1999 and the completion of a
customer refund obligation in 1998 which lowered 1998 fuel cost
recovery at Entergy Arkansas.
These increases were partially offset by decreased fuel expenses at
Entergy Mississippi as a result of lower total generation.
Other operation and maintenance expenses
In 1999, other operation and maintenance expenses increased primarily
due to increased customer service and reliability improvements throughout
the system, increases in storm damage accruals and loss reserves across the
system, and increases in maintenance work at Entergy Arkansas and Entergy
Mississippi.
In 1998, other operation and maintenance expenses increased primarily
due to the 1997 settlement of litigation with Cajun, which resulted in the
transfer of the 30% interest in River Bend owned by Cajun to Entergy Gulf
States. Entergy Gulf States' operating expenses in 1998 included 100% of
River Bend's operation and maintenance expenses, as compared to 70% of such
expenses for the year ended December 31, 1997.
This increase was partially offset by decreased non-refueling outage
related contract work and maintenance performed at Entergy Louisiana and
lower contract labor, materials and supplies expense, and insurance and
materials and supplies refunds at System Energy.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Depreciation and amortization expenses
In 1999, depreciation and amortization expenses decreased due to:
o lower depreciation at Entergy Gulf States as a result of the write-
down of the River Bend abeyed plant as required by the Texas rate
settlement and a review of plant in-service dates; and
o reduction in principal payments associated with the sale and leaseback
in 1989 of a portion of Grand Gulf 1 at System Energy.
Other regulatory charges
In 1999, other regulatory charges decreased due to:
o lower accruals for transition costs in 1999 at Entergy Arkansas;
o a change in the amortization period for deferred River Bend finance
charges in the Entergy Gulf States' Texas retail jurisdiction; and
o deferral of Year 2000 costs at Entergy Gulf States and Entergy
Louisiana in accordance with an LPSC order.
These decreases were partially offset by increased charges at System
Energy as a result of the implementation of the GGART at Entergy Arkansas
and Entergy Mississippi.
In 1998, other regulatory charges increased primarily due to:
o additional accruals of $74.0 million ($45.0 million net of tax) for
the transition cost account at Entergy Arkansas; and
o the decrease in the under-recovery of Grand Gulf 1-related costs at
Entergy Mississippi.
The increase was partially offset by the $15.3 million ($9.3 million
net of tax) reversal of 1997 reserves at Entergy Arkansas for previously
deferred radioactive waste facility costs in December 1998.
Entergy Arkansas' settlement agreement with the APSC established the
transition cost account to collect earnings in excess of an allowed return
on equity for offset against potential stranded costs when retail access is
implemented.
Amortization of rate deferrals
In 1999, amortization of rate deferrals decreased due to the
completion of Grand Gulf 1 rate phase-in plans at Entergy Arkansas and
Entergy Mississippi in 1998. These decreases were partially offset by
increased amortization at Entergy Gulf States due to a reduction of
accounting order deferrals in June 1999 in accordance with the Texas
settlement agreement.
In 1998, amortization of rate deferrals decreased because of the
completion of rate phase-in plans at Entergy Arkansas, Entergy Gulf States
(Louisiana jurisdiction), and Entergy Mississippi.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other
Other income
In 1999, other income increased primarily due to an increase in AFUDC
resulting from an adjustment recorded in the third quarter of 1999 on
certain capital projects.
In 1998, other income increased primarily due to lower reserves for
regulatory adjustments recorded in 1998 than in 1997 at Entergy Gulf
States.
This increase was partially offset by interest income related to the
settlement by Entergy Gulf States of litigation with Cajun recorded in
December 1997.
Interest charges
In 1999, interest on long-term debt decreased due to retirement and
refinancing of long-term debt at the domestic utility companies and System
Energy.
Other interest increased in 1999 primarily due to interest on the
potential refund of System Energy's proposed rate increase.
In 1998, interest charges decreased due to the retirement of certain
long-term debt at the domestic utility companies and System Energy.
Competitive Businesses
Revenues and Sales
Competitive business revenues decreased approximately $2.8 billion for
the year ended December 31, 1999. The decrease was primarily due to the
sales of Entergy London and CitiPower in 1998 and decreased sales revenues
in the power marketing and trading business. The decreased sales revenues
in the power marketing and trading business resulted from decreased
electricity trading volume in the peak summer months in 1999 compared to
1998. However, the impact on net income from these decreased revenues was
more than offset by decreased fuel and purchased power expenses as
discussed below, resulting in a reduction in operating loss for this
business for the year ended December 31, 1999. The decrease in revenues
was partially offset by an increase for the non-utility nuclear business
resulting primarily from acquisition and operation of the Pilgrim plant in
1999.
Competitive business revenues increased $2.4 billion in 1998 primarily
due to increased sales volume in the power marketing and trading business.
This business' volume increased dramatically in 1998 due to increased
marketing efforts and significantly warmer weather. The impact on net
income from these revenues is offset by increased power purchased for
resale as discussed below.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Expenses
Fuel and purchased power expenses
Fuel and purchased power expenses decreased for the year ended
December 31, 1999, primarily due to:
o the business sales previously discussed;
o decreased electricity trading volume in the power marketing and
trading business; and
o a $44 million ($27 million net of tax) counterparty default incurred
in 1998 by the power marketing and trading business.
These decreases are partially offset by increased gas trading volume in the
power marketing and trading business.
In 1998, purchased power expenses increased primarily due to
significantly increased power trading by the power marketing and trading
business. The power marketing and trading business also incurred a $44
million ($27 million net of tax) counterparty default in 1998.
Other operation and maintenance expenses
Other operation and maintenance expenses decreased for the year ended
December 31, 1999 primarily due to the business sales previously discussed.
The decrease was partially offset by:
o an increase for the power marketing and trading business resulting
primarily from increased risk management and back-office support; and
o an increase for the non-utility nuclear power business resulting
primarily from acquisition and operation of the Pilgrim plant in 1999.
In 1998, other operation and maintenance expenses increased primarily
due to:
o acquisition of security companies whose operation and maintenance
expenses were included in 1998 but not in 1997; and
o higher transmission expenses for the power marketing and trading
business due to significantly increased power trading sales volume.
Other
Other income
Other income decreased for the year ended December 31, 1999, due
primarily to the gains recorded in 1998 on the sales of Entergy London of
$327.3 million ($246.8 million net of tax) and CitiPower of $29.8 million
($19.3 million net of tax). The decrease was partially offset by the
following:
o interest income of $58.5 million in 1999 on the proceeds of the sales
of Entergy London and CitiPower;
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;
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
o a $22.0 million ($6.4 million net of tax) gain on the sale of Entergy
Security, Inc. in January 1999, including a true-up recognized in
December 1999;
o a $7.6 million ($4.9 million net of tax) favorable adjustment to the
final sale price of CitiPower in January 1999;
o a $68.6 million ($35.9 million net of tax) loss on the sale of
Efficient Solutions, Inc. (formerly Entergy Integrated Solutions,
Inc.) in September 1998;
o $32.8 million ($21.3 million net of tax) of write-downs of Entergy's
investments in two Asian projects in 1998; and
o favorable experience on warranty reserves for the businesses sold
during 1998.
In 1998, other income increased primarily due to the gains recorded on
the sales of Entergy London of $327.3 million ($246.8 million net of tax)
and CitiPower of $29.8 million ($19.3 million net of tax).
This increase in 1998 was partially offset by:
o the $68.6 million ($35.9 million net of tax) loss on the sale of
Efficient Solutions, Inc. in September 1998; and
o $32.8 million ($21.3 million net of tax) of write-downs of Entergy's
investments in electric generation projects in Asia, one of which
was sold.
Income taxes
The effective income tax rates for 1999, 1998, and 1997 were 37.5%,
25.3%, and 61.0%, respectively. The effective income tax rate increased in
1999 primarily due to the items discussed below that occurred in 1998. The
increase was partially offset by the recording of deferred tax benefits in
1999 related to expected utilization of foreign tax credits.
The effective income tax rate decreased in 1998 principally due to:
o the UK windfall profits tax of $234.1 million at Entergy London
recognized in 1997;
o the tax effects of the settlement by Entergy Gulf States of litigation
with Cajun in 1997;
o recognition of $44 million of deferred tax benefits in 1998 related to
expected utilization of Entergy's capital loss carryforwards; and
o a $31.7 million reduction in taxes because of reductions in the UK
corporation tax rate from 31% to 30% in the third quarter of 1998.
These decreases were partially offset by a reduction in the UK
corporation tax rate from 33% to 31% in 1997, which lowered taxes in 1997
by $64.7 million.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31,
1999 1998 1997
(In Thousands, Except Share Data)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $6,271,414 $6,136,322 $6,538,831
Natural gas 110,355 115,355 137,345
Steam products 15,852 43,167 43,664
Competitive businesses 2,375,607 5,199,928 2,819,086
---------- ----------- ----------
TOTAL 8,773,228 11,494,772 9,538,926
---------- ----------- ----------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 2,082,875 1,706,028 1,677,041
Purchased power 2,442,484 4,585,444 2,318,811
Nuclear refueling outage expenses 76,057 83,885 73,857
Other operation and maintenance 1,705,545 1,988,040 1,886,149
Decommissioning 45,988 46,750 52,552
Taxes other than income taxes 339,284 362,153 365,439
Depreciation and amortization 698,881 938,179 927,456
Other regulatory charges (credits) - net 8,113 35,136 (18,545)
Amortization of rate deferrals 122,347 237,302 421,803
---------- ----------- ----------
TOTAL 7,521,574 9,982,917 7,704,563
---------- ----------- ----------
OPERATING INCOME 1,251,654 1,511,855 1,834,363
---------- ----------- ----------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 29,291 12,465 10,057
Gain on sale of assets - net 71,926 274,941 26,432
Miscellaneous - net 154,423 85,618 (236,340)
---------- ----------- ----------
TOTAL 255,640 373,024 (199,851)
---------- ----------- ----------
INTEREST AND OTHER CHARGES
Interest on long-term debt 476,877 735,601 797,266
Other interest - net 82,471 65,047 51,624
Distributions on preferred securities of 18,838 42,628 21,319
subsidiaries
Allowance for borrowed funds used during construction (22,585) (10,761) (7,937)
---------- ----------- ----------
TOTAL 555,601 832,515 862,272
---------- ----------- ----------
INCOME BEFORE INCOME TAXES 951,693 1,052,364 772,240
Income taxes 356,667 266,735 471,341
---------- ----------- ----------
CONSOLIDATED NET INCOME 595,026 785,629 300,899
Preferred dividend requirements and other 42,567 46,560 53,216
---------- ----------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK $552,459 $739,069 $247,683
========== =========== ==========
Earnings per average common share:
Basic and diluted $2.25 $3.00 $1.03
Dividends declared per common share $1.20 $1.50 $1.80
Average number of common shares outstanding:
Basic 245,127,460 246,396,469 240,207,539
Diluted 245,326,883 246,572,328 240,347,697
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Consolidated net income $595,026 $785,629 $300,899
Noncash items included in net income:
Gain on Cajun Settlement - - (246,022)
Amortization of rate deferrals 122,347 237,302 421,803
Reserve for regulatory adjustments 10,531 130,603 381,285
Other regulatory charges (credits) - net 8,113 35,136 (18,545)
Depreciation, amortization, and decommissioning 744,869 984,929 980,008
Deferred income taxes and investment tax credits (204,644) (64,563) (252,955)
Allowance for equity funds used during construction (29,291) (12,465) (10,057)
Gain on sale of assets - net (71,926) (274,941) (26,432)
Changes in working capital (net of effects from acquisitions and dispositions):
Receivables 9,246 24,176 (99,411)
Fuel inventory (1,359) 28,439 20,272
Accounts payable 35,233 31,229 181,243
Taxes accrued 158,733 58,505 143,151
Interest accrued (56,552) (37,937) (9,849)
Deferred fuel (71,072) (18,993) (28,412)
Other working capital accounts 45,285 43,209 (102,303)
Provision for estimated losses and reserves (59,464) (133,880) (22,423)
Changes in other regulatory assets (36,379) (13,684) 28,016
Proceeds from settlement of Cajun litigation - - 102,299
Other 108,673 (49,996) 50,204
---------- ---------- ----------
Net cash flow provided by operating activities 1,307,369 1,752,698 1,792,771
---------- ---------- ----------
INVESTING ACTIVITIES
Construction/capital expenditures (1,195,750) (1,143,612) (847,223)
Allowance for equity funds used during construction 29,291 12,465 10,057
Nuclear fuel purchases (137,649) (102,747) (89,237)
Proceeds from sale/leaseback of nuclear fuel 137,093 128,210 144,442
Proceeds from sale of businesses 351,082 2,275,014 54,153
Investment in other nonregulated/nonutility properties (81,273) (85,014) (2,039,370)
Proceeds from notes receivable 956,356 - -
Purchase of other temporary investments (321,351) (947,444) -
Decommissioning trust contributions and realized change in trust assets (61,766) (73,641) (68,139)
Other (42,258) - (15,966)
---------- ---------- ----------
Net cash flow provided by (used in) investing activities (366,225) 63,231 (2,851,283)
---------- ---------- ----------
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt 1,113,370 1,904,074 2,047,282
Preferred securities of subsidiary trusts and partnerships - - 382,323
Common stock 15,320 19,341 305,379
Retirement of:
Long-term debt (1,195,451) (3,151,680) (751,669)
Repurchase of common stock (245,004) (2,964) -
Redemption of preferred stock (98,597) (17,481) (124,367)
Changes in short-term borrowings - net (165,506) 205,412 142,025
Dividends paid:
Common stock (291,483) (373,441) (438,183)
Preferred stock (43,621) (46,809) (51,270)
---------- ---------- ----------
Net cash flow provided by (used in) financing activities (910,972) (1,463,548) 1,511,520
---------- ---------- ----------
Effect of exchange rates on cash and cash equivalents (948) 1,567 (11,164)
---------- ---------- ----------
Net increase in cash and cash equivalents 29,224 353,948 441,844
Cash and cash equivalents at beginning of period 1,184,495 830,547 388,703
---------- ---------- ----------
Cash and cash equivalents at end of period $1,213,719 $1,184,495 $830,547
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $601,739 $833,728 $831,307
Income taxes $373,537 $273,935 $390,238
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $41,582 $46,325 $30,951
Treasury shares issued to acquire security business - - $21,464
Net assets acquired from Cajun settlement - - $319,056
Decommissioning trust fund acquired from Pilgrim acquisition $471,284 - -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $108,198 $386,764
Temporary cash investments - at cost,
which approximates market 1,105,521 797,731
----------- -----------
Total cash and cash equivalents 1,213,719 1,184,495
----------- -----------
Other temporary investments - at cost,
which approximates market 321,351 -
Notes receivable 2,161 959,328
Accounts receivable:
Customer 290,331 280,648
Allowance for doubtful accounts (9,507) (10,300)
Other 207,898 197,362
Accrued unbilled revenues 298,616 245,350
----------- -----------
Total receivables 787,338 713,060
----------- -----------
Deferred fuel costs 240,661 169,589
Fuel inventory - at average cost 94,419 90,408
Materials and supplies - at average cost 392,403 374,674
Rate deferrals 30,394 37,507
Deferred nuclear refueling outage costs 58,119 37,138
Prepayments and other 78,567 77,749
----------- -----------
TOTAL 3,219,132 3,643,948
----------- -----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 214 214
Decommissioning trust funds 1,246,023 709,018
Non-utility property - at cost (less accumulated depreciation 317,165 275,421
Non-regulated investments 198,003 487,586
Other - at cost (less accumulated depreciation) 16,714 16,041
----------- -----------
TOTAL 1,778,119 1,488,280
----------- -----------
UTILITY PLANT
Electric 23,163,161 22,704,572
Plant acquisition adjustment 406,929 423,195
Property under capital lease 768,500 789,045
Natural gas 186,041 183,621
Steam products - 80,537
Construction work in progress 1,500,617 911,278
Nuclear fuel under capital lease 286,476 282,595
Nuclear fuel 87,693 29,690
----------- -----------
TOTAL UTILITY PLANT 26,399,417 25,404,533
Less - accumulated depreciation and amortization 10,898,661 10,075,951
----------- -----------
UTILITY PLANT - NET 15,500,756 15,328,582
----------- -----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 16,581 125,095
SFAS 109 regulatory asset - net 1,068,006 1,141,318
Unamortized loss on reacquired debt 198,631 191,786
Other regulatory assets 637,870 528,179
Long-term receivables 32,260 34,617
Other 533,732 354,889
----------- -----------
TOTAL 2,487,080 2,375,884
----------- -----------
TOTAL ASSETS $22,985,087 $22,836,694
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $194,555 $255,221
Notes payable 120,715 296,790
Accounts payable 707,678 522,072
Customer deposits 161,909 148,972
Taxes accrued 445,677 284,847
Accumulated deferred income taxes 72,640 31,976
Nuclear refueling outage costs 11,216 16,991
Interest accrued 129,028 185,688
Co-owner advances 7,018 4,073
Obligations under capital leases 178,247 176,270
Other 125,749 58,909
----------- -----------
TOTAL 2,154,432 1,981,809
----------- -----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 3,310,340 3,538,332
Accumulated deferred investment tax credits 519,910 565,744
Obligations under capital leases 205,464 220,209
FERC settlement - refund obligation 37,337 43,159
Other regulatory liabilities 199,139 153,163
Decommissioning 703,453 243,400
Transition to competition 157,034 90,623
Regulatory reserves 378,307 674,310
Accumulated provisions 279,425 252,321
Other 535,156 498,989
----------- -----------
TOTAL 6,325,565 6,280,250
----------- -----------
Long-term debt 6,612,583 6,596,617
Preferred stock with sinking fund 69,650 167,523
Preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts holding
solely junior subordinated deferrable debentures 215,000 215,000
SHAREHOLDERS' EQUITY
Preferred stock without sinking fund 338,455 338,455
Common stock, $.01 par value, authorized 500,000,000
shares; issued 247,082,345 shares in 1999 and
246,829,076 shares in 1998 2,471 2,468
Paid-in capital 4,636,163 4,630,609
Retained earnings 2,786,467 2,526,888
Accumulated other comprehensive loss:
Cumulative foreign currency translation adjustment (68,782) (46,739)
Net unrealized investment losses (5,023) -
Less - treasury stock, at cost (8,045,434 shares in 1999 and
208,907 shares in 1998) 231,894 6,186
----------- -----------
TOTAL 7,457,857 7,445,495
----------- -----------
Commitments and Contingencies (Notes 2, 9, 10, and 11)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $22,985,087 $22,836,694
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS, COMPREHENSIVE INCOME, AND PAID-IN CAPITAL
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
RETAINED EARNINGS
Retained Earnings - Beginning of period $2,526,888 $2,157,912 $2,341,703
Add - Earnings applicable to common stock 552,459 $552,459 739,069 $739,069 247,683 $247,683
Deduct:
Dividends declared on common stock 294,352 369,498 432,268
Capital stock and other expenses (1,472) 595 (794)
---------- ---------- ----------
Total 292,880 370,093 431,474
---------- ---------- ----------
Retained Earnings - End of period $2,786,467 $2,526,888 $2,157,912
========== ========== ==========
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Balance at beginning of period ($46,739) ($69,817) $21,725
Foreign currency translation adjustments (22,043) (22,043) 23,078 23,078 (91,542) (91,542)
Net unrealized investment losses (5,023) (5,023) - - - -
-------- -------- --------
Balance at end of period ($73,805) ($46,739) ($69,817)
======== -------- ======== -------- ======== --------
Comprehensive Income $525,393 $762,147 $156,141
======== ======== ========
PAID-IN CAPITAL
Paid-in Capital - Beginning of period $4,630,609 $4,613,572 $4,320,591
Add:
Gain on reacquisition of subsidiaries' - - 273
preferred stock
Common stock issuances related to stock plans 5,554 17,037 292,870
---------- ---------- ----------
Total 5,554 17,037 293,143
---------- ---------- ----------
Deduct:
Capital stock discount and other expenses - - 162
---------- ---------- ----------
Total - - 162
---------- ---------- ----------
Paid-in Capital - End of period $4,636,163 $4,630,609 $4,613,572
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 (1) 1997 (2) 1996 (3) 1995
(In Thousands, Except Percentages and Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 8,773,228 $11,494,772 $ 9,538,926 $ 7,163,526 $ 6,273,072
Consolidated net income $ 595,026 $ 785,629 $ 300,899 $ 490,563 $ 562,534 (5)
Earnings per share
Basic and Diluted $ 2.25 $ 3.00 $ 1.03 $ 1.83 $ 2.13 (5)
Dividends declared per share $ 1.20 $ 1.50 $ 1.80 $ 1.80 $ 1.80
Return on average common equity 7.77% 10.71% 3.71% 6.41% 8.11%
Book value per share, year-end $ 29.78 $ 28.82 $ 27.23 $ 28.51 $ 28.41
Total assets $22,985,087 $22,836,694 $27,000,700 $22,956,025 $22,265,930
Long-term obligations (4) $ 7,252,697 $ 7,349,349 $10,154,330 $ 8,335,150 $ 7,484,248
</TABLE>
(1) Includes the effects of the sale of London Electricity and CitiPower
in December 1998.
(2) Includes the effects of the London Electricity acquisition in February
1997.
(3) Includes the effects of the CitiPower acquisition in January 1996.
(4) Includes long-term debt (excluding currently maturing debt), preferred
stock with sinking fund, preference stock, preferred securities of
subsidiary trusts and partnership, and noncurrent capital lease
obligations.
(5) Represents income before cumulative effect of accounting changes.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Domestic Utility Electric
Operating Revenues:
Residential $2,231,091 $2,299,317 $2,271,363 $2,277,647 $2,177,348
Commercial 1,502,267 1,513,050 1,581,878 1,573,251 1,491,818
Industrial 1,878,363 1,829,085 2,018,625 1,987,640 1,810,045
Governmental 163,403 172,368 171,773 169,287 154,032
---------- ---------- ---------- ---------- ----------
Total retail 5,775,124 5,813,820 6,043,639 6,007,825 5,633,243
Sales for resale 397,844 448,842 359,881 376,011 334,874
Other (1) 98,446 (126,340) 135,311 67,104 119,901
---------- ---------- ---------- ---------- ----------
Total $6,271,414 $6,136,322 $6,538,831 $6,450,940 $6,088,018
========== ========== ========== ========== ==========
Billed Electric Energy
Sales (GWH):
Residential 30,631 30,935 28,286 28,303 27,704
Commercial 23,775 23,177 21,671 21,234 20,719
Industrial 43,549 43,453 44,649 44,340 42,260
Governmental 2,564 2,659 2,507 2,449 2,311
---------- ---------- ---------- ---------- ----------
Total retail 100,519 100,224 97,113 96,326 92,994
Sales for resale 9,714 11,187 9,707 10,583 10,471
---------- ---------- ---------- ---------- ----------
Total 110,233 111,411 106,820 106,909 103,465
========== ========== ========== ========== ==========
(1)1998 includes the effect of a reserve for rate refund at Entergy Gulf
States.
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
Entergy Arkansas, Inc.:
In our opinion, the accompanying balance sheets and the related statements
of income, of retained earnings and of cash flows present fairly, in all
material respects, the financial position of Entergy Arkansas, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1999 primarily due to decreased electric
operating revenues and increased operation and maintenance expenses,
partially offset by lower regulatory charges.
Net income decreased in 1998 primarily due to decreased electric
operating revenues which were partially offset by lower operation and
maintenance expenses and lower interest charges.
Revenues and Sales
The changes in electric operating revenues for the twelve months ended
December 31, 1999 and 1998 are as follows:
Increase/(Decrease)
Description 1999 1998
(In Millions)
Base revenues $4.5 ($7.0)
Rate riders (68.2) (106.0)
Fuel cost recovery 36.4 (21.8)
Sales volume/weather 3.8 55.8
Other revenue (including unbilled) (25.2) 11.4
Sales for resale (18.1) (39.4)
------ -------
Total ($66.8) ($107.0)
====== =======
Rate riders
Rate rider revenues have no material effect on net income because
specific incurred expenses offset them.
In 1999, rate rider revenues decreased as a result of a revised Grand
Gulf rider, which includes the completion of the Grand Gulf 1 phase-in plan
in November 1998, partially offset by the Grand Gulf Accelerated Recovery
Tariff (GGART). The GGART is 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. The GGART
is discussed further in Note 2 to the financial statements.
In 1998, rate rider revenues decreased primarily due to a decline in
the Grand Gulf 1 cost recovery rate rider revenues. This decline reflects
scheduled reductions in the phase-in plan, which was completed in November
1998, and reductions required by the settlement agreement with the APSC.
This agreement is discussed in more detail in Note 2 to the financial
statements.
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 in 1999 due to an increase in
the energy cost recovery factor, effective in April 1999, and the
completion of a customer refund obligation in 1998, which lowered 1998 fuel
cost recovery.
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
In 1998, fuel cost recovery revenues decreased due to unfavorable
pricing resulting from a change to a fixed fuel factor in January 1998,
partially offset by an increase in generation.
Other revenue
In 1999, other revenue decreased primarily as a result of a change in
estimated unbilled revenues and, to a lesser extent, less favorable weather
for the unbilled period of 1999. The changed estimate more closely aligns
the fuel component of unbilled revenue with its regulatory treatment. The
change in estimate is expected to affect comparisons of revenue applicable
to prior period amounts through the first quarter of 2000. Comparative
impacts are also affected by seasonal impacts on demand.
In 1998, other revenue, primarily unbilled, increased as a result of
significantly warmer weather as compared to 1997.
Sales for resale
In 1999, sales for resale decreased due to the loss of certain
municipal and co-op customer contracts.
In 1998, sales for resale decreased primarily due to a decrease in
sales to associated companies. The decrease resulted from reduced
generation due to outages at both ANO1 and ANO2 and restricted generation
due to disruption in coal deliveries during the second quarter of 1998.
This decrease was partially offset by an increase in sales revenue from non-
associated companies as a result of short-term contracts with certain
wholesale customers.
Expenses
Fuel and purchased power expenses
In 1999, fuel expenses increased primarily due to:
o higher-priced gas generation as a result of refueling outages at ANO1
and ANO2, a mid-cycle maintenance outage at ANO2, limited coal
capability at White Bluff during parts of the year, and displacement
of higher priced purchased power;
o increased purchased power costs due to higher market prices in July
and August 1999; and
o an increase in the energy cost recovery rate in April 1999 and the
completion of a customer refund obligation in 1998 which lowered
1998 fuel cost recovery.
The increase in the energy cost recovery rate allows Entergy Arkansas to
recover previously under-recovered fuel expenses.
In 1998, fuel expenses decreased primarily due to the impact of the
under-recovered deferred fuel cost in excess of the fixed fuel factor
implemented in January 1998, billed to retail customers.
Other operation and maintenance
Other operation and maintenance expenses increased for 1999 primarily
due to increased customer service costs related to tree trimming around
power lines, increased employee pension and benefits costs, and increased
plant maintenance costs.
<PAGE>
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other regulatory charges
In 1999, other regulatory charges decreased primarily as a result of
lower accruals for transition costs in 1999, partially offset by the 1998
reversal of the 1997 reserve recorded for the low-level radioactive waste
facility.
In 1998, other regulatory charges increased as a result of additional
accruals for the transition cost account, partially offset by a small over-
recovery of Grand Gulf 1 related costs and the reversal of the 1997 reserve
for previously deferred radioactive waste facility costs.
The transition cost account is discussed in more detail in Note 2 to
the financial statements.
Amortization of rate deferrals
In 1999, amortization of rate deferrals decreased due to the November
1998 completion of the Grand Gulf 1 rate phase-in plan. These phase-ins
had no material effect on net income.
In 1998, the amortization of Grand Gulf 1 rate deferrals decreased due
to a decrease in the amortization prescribed in the Grand Gulf 1 rate phase-
in plan, which was completed in November 1998.
Other
Other income
Other income decreased in 1999 due to reduced miscellaneous non-
operating income, reduced other interest income, and the completion in 1998
of the amortization of Grand Gulf 1 carrying charges, which was partially
offset by accruals for equity funds used during construction. Other
interest income includes income from intercompany loans. The allowance for
equity funds used during construction increased due to capital charges on
projects in 1999.
Other income decreased in 1998 due to reduced Grand Gulf 1 carrying
charges as a result of a decline in the deferral balance, which does not
impact net income.
Interest charges
Interest charges decreased in 1999 due to the retirement of certain
long-term debt and decreased borrowings for funds used during construction.
These decreases were partially offset by an adjustment for interest expense
on an income tax settlement from prior years.
Interest charges decreased in 1998 due to the retirement of certain
long-term debt.
Income taxes
The effective income tax rates for 1999, 1998, and 1997 were 43.8 %,
39.1% and 31.6%, respectively.
The effective income tax rate increased in 1999 primarily is due to
accelerated tax depreciation deductions, for which deferred taxes have not
been normalized, reflecting a shorter tax life on certain assets.
The effective income tax rate increased in 1998 primarily due to the
reversal of previously recorded AFUDC amounts included in depreciation.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
INCOME STATEMENTS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $1,541,894 $1,608,698 $1,715,714
---------- ---------- ----------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 257,946 204,318 254,703
Purchased power 455,425 419,947 419,128
Nuclear refueling outage expenses 29,857 32,046 27,969
Other operation and maintenance 389,462 358,006 360,860
Decommissioning 10,670 15,583 17,306
Taxes other than income taxes 36,669 37,223 36,700
Depreciation and amortization 161,234 165,853 149,346
Other regulatory charges - net 5,230 45,658 29,686
Amortization of rate deferrals - 75,249 153,141
---------- ---------- ----------
TOTAL 1,346,493 1,353,883 1,448,839
---------- ---------- ----------
OPERATING INCOME 195,401 254,815 266,875
---------- ---------- ----------
OTHER INCOME
Allowance for equity funds used during construction 12,866 5,921 3,563
Gain on sale of assets - 1,777 113
Miscellaneous - net 3,622 12,292 18,550
---------- ---------- ----------
TOTAL 16,488 19,990 22,226
---------- ---------- ----------
INTEREST AND OTHER CHARGES
Interest on long-term debt 80,800 86,772 95,122
Other interest - net 11,123 4,813 3,943
Distributions on preferred securities of subsidiary 5,100 5,100 5,100
Allowance for borrowed funds used during construction (8,459) (4,205) (2,261)
---------- ---------- ----------
TOTAL 88,564 92,480 101,904
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 123,325 182,325 187,197
Income taxes 54,012 71,374 59,220
---------- ---------- ----------
NET INCOME 69,313 110,951 127,977
Preferred dividend requirements and other 10,854 10,201 10,988
---------- ---------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK $58,459 $100,750 $116,989
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $69,313 $110,951 $127,977
Noncash items included in net income:
Amortization of rate deferrals - 75,249 153,141
Other regulatory charges - net 5,230 45,658 29,686
Depreciation, amortization, and decommissioning 171,904 181,436 166,652
Deferred income taxes and investment tax credits 22,421 (12,293) (77,814)
Allowance for equity funds used during construction (12,866) (5,921) (3,563)
Gain on sale of assets - (1,777) (113)
Changes in working capital:
Receivables 40,375 61,143 (14,828)
Fuel inventory (4,633) 8,317 29,150
Accounts payable 56,985 (7,911) (25,451)
Taxes accrued (30,054) (8,742) 23,133
Interest accrued (2,908) (3,541) 1,201
Deferred fuel costs (429) (57,435) (9,289)
Other working capital accounts 2,444 (6,845) (931)
Provision for estimated losses and reserves (8,116) 2,032 9,594
Changes in other regulatory assets 45,898 (13,029) (7,150)
Other (42,249) 41,499 33,374
-------- -------- --------
Net cash flow provided by operating activities 313,315 408,791 434,769
-------- -------- --------
INVESTING ACTIVITIES
Construction expenditures (238,009) (190,459) (140,913)
Allowance for equity funds used during construction 12,866 5,921 3,563
Nuclear fuel purchases (32,517) (45,845) (59,104)
Proceeds from sale/leaseback of nuclear fuel 32,517 42,055 59,065
Decommissioning trust contributions and realized
change in trust assets (17,746) (25,929) (24,956)
-------- -------- --------
Net cash flow used in investing activities (242,889) (214,257) (162,345)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long-term debt - - 129,564
Retirement of:
Long-term debt (39,607) (151,424) (117,587)
Redemption of preferred stock (22,666) (9,000) (9,000)
Dividends paid:
Common stock (82,700) (92,600) (128,600)
Preferred stock (11,696) (10,407) (11,194)
-------- -------- --------
Net cash flow used in financing activities (156,669) (263,431) (136,817)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (86,243) (68,897) 135,607
Cash and cash equivalents at beginning of period 93,105 162,002 26,395
-------- -------- --------
Cash and cash equivalents at end of period $6,862 $93,105 $162,002
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $94,872 $95,050 $98,013
Income taxes $61,273 $91,407 $111,394
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $22,980 $26,782 $22,343
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $6,862 $9,814
Temporary cash investments - at cost,
which approximates market - 83,291
---------- ----------
Total cash and cash equivalents 6,862 93,105
---------- ----------
Accounts receivable:
Customer 73,357 72,234
Allowance for doubtful accounts (1,768) (1,753)
Associated companies 27,073 50,145
Other 5,583 4,510
Accrued unbilled revenues 53,600 73,083
---------- ----------
Total receivables 157,845 198,219
---------- ----------
Deferred fuel costs 41,620 41,191
Fuel inventory - at average cost 24,485 19,852
Materials and supplies - at average cost 85,612 89,033
Deferred nuclear refueling outage costs 28,119 17,787
Prepayments and other 6,480 5,557
---------- ----------
TOTAL 351,023 464,744
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 11,215 11,213
Decommissioning trust funds 344,011 303,286
Non-utility property - at cost (less accumulated depreciation) 1,463 1,468
Other - at cost (less accumulated depreciation) 3,033 3,602
---------- ----------
TOTAL 359,722 319,569
---------- ----------
UTILITY PLANT
Electric 4,854,433 4,731,699
Property under capital lease 44,471 49,415
Construction work in progress 267,091 201,853
Nuclear fuel under capital lease 85,725 95,589
Nuclear fuel 9,449 -
---------- ----------
TOTAL UTILITY PLANT 5,261,169 5,078,556
Less - accumulated depreciation and amortization 2,401,021 2,275,170
---------- ----------
UTILITY PLANT - NET 2,860,148 2,803,386
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 192,344 248,275
Unamortized loss on reacquired debt 48,193 51,747
Other regulatory assets 106,959 96,927
Other 14,125 22,003
---------- ----------
TOTAL 361,621 418,952
---------- ----------
TOTAL ASSETS $3,932,514 $4,006,651
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $220 $1,094
Notes payable 667 667
Accounts payable:
Associated companies 81,958 47,963
Other 102,959 79,969
Customer deposits 26,320 25,196
Taxes accrued 38,532 68,585
Accumulated deferred income taxes 38,649 24,162
Interest accrued 22,378 25,285
Co-owner advances 15,338 4,073
Obligations under capital leases 55,150 64,068
Other 11,598 16,183
---------- ----------
TOTAL 393,769 357,245
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 713,622 756,571
Accumulated deferred investment tax credits 94,852 98,768
Obligations under capital leases 75,045 80,936
Other regulatory liabilities 88,563 65,583
Transition to competition 109,933 90,623
Accumulated provisions 43,288 51,404
Other 51,080 56,400
---------- ----------
TOTAL 1,176,383 1,200,285
---------- ----------
Long-term debt 1,130,801 1,172,285
Preferred stock with sinking fund - 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 in 1999
and 1998 470 470
Paid-in capital 591,127 590,134
Retained earnings 463,614 487,855
---------- ----------
TOTAL 1,171,561 1,194,809
---------- ----------
Commitments and Contingencies (Notes 2, 9, and 10)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,932,514 $4,006,651
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $487,855 $479,705 $491,316
Add:
Net income 69,313 110,951 127,977
Deduct:
Dividends declared:
Preferred stock 9,223 10,201 10,988
Common stock 82,700 92,600 128,600
Capital stock expenses and other 1,631 - -
-------- -------- --------
Total 93,554 102,801 139,588
-------- -------- --------
Retained Earnings, December 31 (Note 8) $463,614 $487,855 $479,705
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 1997 1996 1995
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $1,541,894 $1,608,698 $1,715,714 $1,743,433 $1,648,233
Net income $ 69,313 $ 110,951 $ 127,977 $ 157,798 $ 136,665 (2)
Total assets $3,932,514 $4,006,651 $4,106,877 $4,153,817 $4,204,415
Long-term obligations (1) $1,265,846 $1,335,248 $1,419,728 $1,439,355 $1,423,804
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt), preferred
stock with sinking fund, preferred securities of subsidiary trust, and
noncurrent capital lease obligations.
(2) Represents income before cumulative effect of accounting changes.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $533,245 $562,325 $551,821 $546,100 $542,862
Commercial 288,677 288,816 332,715 323,328 318,475
Industrial 335,824 330,016 372,083 364,943 362,854
Governmental 14,606 14,640 18,200 16,989 17,084
---------- ---------- ---------- ---------- ----------
Total retail 1,172,352 1,195,797 1,274,819 1,251,360 1,241,275
Sales for resale:
Associated companies 178,150 149,603 213,845 248,211 178,885
Non-associated companies 193,449 240,090 215,249 207,887 195,844
Other (2,057) 23,208 11,801 35,975 32,229
---------- ---------- ---------- ---------- ----------
Total $1,541,894 $1,608,698 $1,715,714 $1,743,433 $1,648,233
========== ========== ========== ========== ==========
Billed Electric Energy
Sales (GWH):
Residential 6,493 6,613 5,988 6,023 5,868
Commercial 4,880 4,773 4,445 4,390 4,267
Industrial 7,054 6,837 6,647 6,487 6,314
Governmental 237 233 239 234 243
---------- ---------- ---------- ---------- ----------
Total retail 18,664 18,456 17,319 17,134 16,692
Sales for resale:
Associated companies 7,592 6,500 9,557 10,471 8,386
Non-associated companies 4,868 5,948 6,828 6,720 5,066
---------- ---------- ---------- ---------- ----------
Total 31,124 30,904 33,704 34,325 30,144
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
Entergy Gulf States, Inc.:
In our opinion, the accompanying balance sheets and the related statements
of income, of retained earnings and of cash flows present fairly, in all
material respects, the financial position of Entergy Gulf States, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased in 1999 primarily due to increased unbilled
revenues, decreased provisions for rate refunds in 1999, decreased
depreciation and amortization expenses, and decreased interest expense,
partially offset by increased operation and maintenance expenses.
Net income in 1998 would have increased approximately 19% compared to
1997, excluding the following net-of-tax items: rate reserves of $129.0
million recorded in 1998; rate reserves of $227.0 million recorded in 1997;
the write-off of radioactive waste facilities of $7.4 million recorded in
1997; and the 1997 recording of $146.6 million to income relating to the
settlement of litigation with Cajun. The increase in 1998, excluding these
items, was due to decreased operating expenses, partially offset by
increased income taxes.
Revenues and Sales
Electric operating revenues
The changes in electric operating revenues for the twelve months ended
December 31, 1999 and 1998 are as follows:
Increase/(Decrease)
Description 1999 1998
(In Millions)
Base revenues $146.4 ($228.3)
Fuel cost recovery 104.9 1.6
Sales volume/weather 1.0 61.2
Other revenue (including unbilled) 31.3 (171.5)
Sales for resale 21.2 53.1
------ -------
Total $304.8 ($283.9)
====== =======
Base revenues
In 1999, base revenues increased due to:
o a $93.6 million reversal in June 1999 of regulatory reserves
associated with the accelerated amortization of accounting order
deferrals in conjunction with the settlement agreement in Entergy
Gulf States' Texas November 1996 and 1998 rate filings. The
settlement agreement was approved by the PUCT in June 1999. The
net income effect of this reversal is largely offset by the
amortization of rate deferrals discussed below; and
o a reduction in the amount of reserves recorded in 1999 compared to
1998 for the anticipated effects of rate proceedings in Texas.
Partially offsetting these increases were:
o annual base rate reductions of $87 million and $18 million that were
implemented for Louisiana retail customers in February and August 1998,
respectively;
o annual base rate reductions of $69 million and $4.2 million that were
implemented for Texas retail customers in December 1998 and March 1999,
respectively; and
o reserves recorded in the Louisiana jurisdiction in 1999 for the
estimated outcomes of annual earnings reviews.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
In 1998, base revenues decreased due to base rate reductions and
reserves for refunds to Louisiana and Texas retail customers totaling
$216.5 million ($129.0 million net of tax).
The LPSC and PUCT rate issues are discussed in Note 2 to the financial
statements.
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.
In 1999, fuel cost recovery revenues increased due to a higher fuel
factor in 1999 and a fuel surcharge implemented in February 1999 in the
Texas jurisdiction. This increase was partially offset by reduced fuel
recovery in the Louisiana jurisdiction primarily due to lower fuel and
purchased power costs in 1999.
Sales volume
In 1998, sales volume increased due to significantly warmer weather
and an increase in customer base.
Other revenue
In 1999, other revenue increased primarily due to a change in
estimated unbilled revenues. The estimate more closely aligns the fuel
component of unbilled revenues with regulatory treatment. This change is
expected to affect comparisons of revenue to applicable prior period
amounts through the first quarter of 2000. Comparative impacts are also
affected by seasonal variations in demand.
In 1998, other revenue decreased primarily due to the revenue
recognized on the gain on the settlement of litigation with Cajun in
December 1997 for the transfer of Cajun's 30% of River Bend, the effect of
which was partially offset by regulatory reserves recorded in 1997. Other
revenue also decreased due to unfavorable pricing of unbilled revenues due
to rate reductions.
Sales for resale
In 1999, sales for resale increased primarily due to increased sales
to associated companies due to higher market prices and outages at
affiliate plants in 1999.
In 1998, sales for resale increased primarily due to additional
revenues related to the sale of energy from the 30% interest in River Bend
transferred by the Cajun bankruptcy trustee to Entergy Gulf States in
December 1997. Sales for resale also increased due to increased sales to
non-associated utilities as a result of increased demand.
Gas and steam operating revenues
In 1999, gas operating revenues decreased primarily due to lower
prices of gas purchased for resale as well as decreased usage as a result
of warmer winter weather, particularly in the residential and commercial
sectors.
Steam operating revenues decreased in 1999 due to a new lease
arrangement for the Louisiana Station 1 generating facility that began in
June 1999. Under the terms of this new lease, revenues are now classified
as other income rather than steam operating revenues.
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
It is expected that less revenue will be realized under the new lease
arrangement compared to the previous arrangement with the steam customer.
In 1998, gas operating revenues decreased due to a lower unit price
for gas purchased for resale.
Expenses
Fuel and purchased power
In 1999, fuel and purchased power expenses increased due to:
o increased gas expenses resulting from a shift to gas generation during
the first six months of 1999 because of the reduced availability of
Nelson 6 and an extended refueling outage at River Bend;
o increased purchased power expenses due to higher market prices; and
o a higher fuel factor and fuel surcharge in the Texas jurisdiction in
1999.
In 1998, fuel and purchased power expenses decreased primarily due to
favorable gas and nuclear fuel prices and a shift in the generation mix as
a result of these prices. Continued under-recovery of deferred expenses
also contributed to the decrease in fuel expenses.
Other operation and maintenance expenses
In 1999, other operation and maintenance expenses increased due to
increased employee benefit expense, casualty reserve accruals, and customer
service expenses, such as tree trimming.
In 1998, other operation and maintenance expenses increased as a
result of the settlement of litigation with Cajun in December 1997,
pursuant to which the 30% interest in River Bend owned by Cajun was
transferred by the Cajun bankruptcy trustee to Entergy Gulf States.
Entergy Gulf States now includes 100% of River Bend's operation and
maintenance expenses in its operating expenses, as compared to 70% of such
expenses for the year ended December 31, 1997.
Depreciation and amortization
In 1999, depreciation and amortization decreased due to:
o lower depreciation as a result of the write-down of the River Bend
abeyed plant as required by the Texas rate settlement;
o reduced amortization of the River Bend Unit 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; and
o lower depreciation due to a review of plant in-service dates for
consistency with regulatory treatment.
Other regulatory credits
In 1999, other regulatory credits increased due to:
o change in the amortization period for deferred River Bend finance
charges for the Texas retail jurisdiction in accordance with the Texas
settlement agreement; and
<PAGE>
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
o deferral of Year 2000 costs in accordance with an LPSC order. These
costs are to be amortized over a five-year period.
Amortization of rate deferrals
In 1999, the amortization of rate deferrals increased due to the
reduction of accounting order deferrals in accordance with the June 1999
Texas settlement agreement. This settlement substantially reduced the
unamortized balance of rate deferrals, while decreasing the amortization
period for the remaining deferrals from a ten-year period to a three-year
period.
In 1998, the amortization of rate deferrals decreased due to the
completion in February of the Louisiana retail rate phase-in plan for River
Bend.
Other
Other income
In 1998, other income increased primarily due to the 1997 reserve for
regulatory adjustments of $311 million ($185.4 million net of tax). This
increase was partially offset by interest income of $19.6 million ($11.6
million net of tax) related to the settlement of litigation with Cajun
recorded in December 1997.
Interest charges
In 1999, interest charges decreased as a result of the retirement,
redemption, and refinancing of certain long-term debt in 1998 and 1999, as
well as lower accruals of interest on certain Louisiana fuel and earnings
reviews in 1998.
Interest charges remained relatively unchanged in 1998. Total
interest expense decreased as a result of the retirement, redemption, and
refinancing of certain long-term debt in 1997 and 1998. This decrease was
offset by an increase in other interest due to the interest component of
the provisions recorded for anticipated rate refunds in Louisiana.
Income taxes
The effective income tax rates for 1999, 1998, and 1997 are 37.6%,
40.6%, and 27.2%, respectively.
The decrease in the effective income tax rate in 1999 is due to
accelerated tax depreciation deductions, for which deferred taxes have not
been normalized, reflecting a shorter tax life on certain assets.
The increase in the effective income tax rate in 1998 is due to a
decrease in the flow-through of tax benefits related to operating reserves
and the increased reversal of previously recorded AFUDC amounts included in
depreciation.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
INCOME STATEMENTS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $2,082,358 $1,777,584 $2,061,511
Natural gas 28,998 33,058 42,654
Steam products 15,852 43,167 43,664
---------- ---------- ----------
TOTAL 2,127,208 1,853,809 2,147,829
---------- ---------- ----------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 634,726 538,388 560,104
Purchased power 365,245 317,684 327,037
Nuclear refueling outage expenses 16,307 14,293 10,829
Other operation and maintenance 419,713 411,372 316,253
Decommissioning 7,588 3,437 8,855
Taxes other than income taxes 111,872 120,782 109,572
Depreciation and amortization 185,254 195,935 205,789
Other regulatory credits - net (24,092) (5,485) (26,611)
Amortization of rate deferrals 89,597 21,749 105,455
---------- ---------- ----------
TOTAL 1,806,210 1,618,155 1,617,283
---------- ---------- ----------
OPERATING INCOME 320,998 235,654 530,546
---------- ---------- ----------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 6,306 2,143 2,211
Gain on sale of assets 2,046 1,816 -
Miscellaneous - net 18,073 14,903 (272,135)
---------- ---------- ----------
TOTAL 26,425 18,862 (269,924)
---------- ---------- ----------
INTEREST AND OTHER CHARGES
Interest on long-term debt 138,602 149,767 163,146
Other interest - net 6,994 21,016 10,026
Distributions on preferred securities of subsidiary 7,438 7,437 6,901
Allowance for borrowed funds used during construction (5,776) (1,870) (1,829)
---------- ---------- ----------
TOTAL 147,258 176,350 178,244
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 200,165 78,166 82,378
Income taxes 75,165 31,773 22,402
---------- ---------- ----------
NET INCOME 125,000 46,393 59,976
Preferred dividend requirements and other 17,423 19,011 23,865
---------- ---------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK $107,577 $27,382 $36,111
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $125,000 $46,393 $59,976
Noncash items included in net income:
Gain on Cajun Settlement - - (246,022)
Amortization of rate deferrals 89,597 21,749 105,455
Reserve for regulatory adjustments (97,953) 130,603 381,285
Other regulatory credits - net (24,092) (5,485) (26,611)
Depreciation, amortization, and decommissioning 192,842 199,372 214,644
Deferred income taxes and investment tax credits (1,495) (29,174) (52,486)
Allowance for equity funds used during construction (6,306) (2,143) (2,211)
Gain on sale of assets (2,046) (1,816) (1,399)
Changes in working capital:
Receivables 9,791 65,527 (11,834)
Fuel inventory (8,070) 7,426 7,382
Accounts payable 42,370 (6,135) 16,999
Taxes accrued 46,018 7,462 12,171
Interest accrued (14,061) (2,523) (4,497)
Deferred fuel costs (1,561) 12,861 (46,254)
Other working capital accounts (10,954) 11,006 (11,765)
Provision for estimated losses and reserves 8,496 (4,207) (5,852)
Changes in other regulatory assets (59,242) (3,226) 44,883
Proceeds from settlement of Cajun litigation - - 102,299
Other 56,817 458 (52,454)
--------- --------- ---------
Net cash flow provided by operating activities 345,151 448,148 483,709
--------- --------- ---------
INVESTING ACTIVITIES
Construction expenditures (199,076) (136,960) (132,566)
Allowance for equity funds used during construction 6,306 2,143 2,211
Nuclear fuel purchases (53,293) (1,977) (25,522)
Proceeds from sale/leaseback of nuclear fuel 53,293 15,932 25,522
Decommissioning trust contributions and realized
change in trust assets (10,853) (11,899) (9,540)
--------- --------- ---------
Net cash flow used in investing activities (203,623) (132,761) (139,895)
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long-term debt 122,906 21,600 -
Preferred securities of subsidiary trust - - 82,323
Retirement of:
Long-term debt (197,960) (212,090) (183,105)
Redemption of preferred stock (25,931) (8,481) (93,367)
Dividends paid:
Common stock (107,000) (109,400) (77,200)
Preferred stock (16,967) (19,055) (21,862)
--------- --------- ---------
Net cash flow used in financing activities (224,952) (327,426) (293,211)
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents (83,424) (12,039) 50,603
Cash and cash equivalents at beginning of period 115,736 127,775 77,172
--------- --------- ---------
Cash and cash equivalents at end of period $32,312 $115,736 $127,775
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $161,326 $173,599 $171,874
Income taxes $28,410 $46,620 $50,477
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $14,054 $10,410 $3,939
Net assets acquired from Cajun settlement - - $319,056
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $8,607 $11,629
Temporary cash investments - at cost,
which approximates market 23,705 104,107
---------- ----------
Total cash and cash equivalents 32,312 115,736
---------- ----------
Accounts receivable:
Customer 73,215 78,961
Allowance for doubtful accounts (1,828) (1,735)
Associated companies 1,706 23,250
Other 15,030 28,265
Accrued unbilled revenues 90,396 59,569
---------- ----------
Total receivables 178,519 188,310
---------- ----------
Deferred fuel costs 134,458 132,896
Fuel inventory - at average cost 38,271 30,201
Materials and supplies - at average cost 112,585 108,346
Rate deferrals 5,606 9,077
Prepayments and other 21,750 20,495
---------- ----------
TOTAL 523,501 605,061
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 234,677 209,770
Non-utility property - at cost (less accumulated depreciation) 187,759 165,272
Other - at cost (less accumulated depreciation) 13,681 12,426
---------- ----------
TOTAL 436,117 387,468
---------- ----------
UTILITY PLANT
Electric 7,365,407 7,250,789
Property under capital lease 46,210 54,427
Natural gas 52,473 51,053
Steam products - 80,537
Construction work in progress 145,492 105,121
Nuclear fuel under capital lease 70,801 46,572
---------- ----------
TOTAL UTILITY PLANT 7,680,383 7,588,499
Less - accumulated depreciation and amortization 3,534,473 3,141,518
---------- ----------
UTILITY PLANT - NET 4,145,910 4,446,981
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 5,606 89,333
SFAS 109 regulatory asset - net 385,405 376,406
Unamortized loss on reacquired debt 40,576 42,879
Other regulatory assets 140,157 89,914
Long-term receivables 32,260 34,617
Other 23,490 221,085
---------- ----------
TOTAL 627,494 854,234
---------- ----------
TOTAL ASSETS $5,733,022 $6,293,744
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $- $71,515
Accounts payable:
Associated companies 79,962 60,932
Other 114,444 91,102
Customer deposits 33,360 31,462
Taxes accrued 101,798 55,780
Accumulated deferred income taxes 27,960 21,260
Nuclear refueling outage costs 11,216 16,991
Interest accrued 28,570 42,631
Obligations under capital leases 51,973 34,343
Other 14,557 16,325
---------- ----------
TOTAL 463,840 442,341
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 1,098,882 1,081,598
Accumulated deferred investment tax credits 178,500 193,509
Obligations under capital leases 65,038 66,656
Other regulatory liabilities 20,089 30,287
Decommissioning 139,194 136,035
Transition to competition 47,101 -
Regulatory reserves 110,536 515,023
Accumulated provisions 69,395 60,899
Other 117,804 319,962
---------- ----------
TOTAL 1,846,539 2,403,969
---------- ----------
Long-term debt 1,631,581 1,631,658
Preferred stock with sinking fund 34,650 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 in 1999 and 1998 114,055 114,055
Paid-in capital 1,153,131 1,152,575
Retained earnings 202,782 202,205
---------- ----------
TOTAL 1,521,412 1,520,279
---------- ----------
Commitments and Contingencies (Notes 2, 9, and 10)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,733,022 $6,293,744
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $202,205 $284,165 $325,312
Add:
Net income 125,000 46,393 59,976
Deduct:
Dividends declared:
Preferred and preference stock 16,784 19,011 21,862
Common stock 107,000 109,400 77,200
Preferred and preference stock
redemption and other 639 (58) 2,061
-------- -------- --------
Total 124,423 128,353 101,123
-------- -------- --------
Retained Earnings, December 31 (Note 8) $202,782 $202,205 $284,165
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 1997 1996 1995
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $2,127,208 $1,853,809 $2,147,829 $2,019,181 $1,861,974
Net income (loss) $ 125,000 $ 46,393 $ 59,976 $ (3,887) $ 122,919
Total assets $5,733,022 $6,293,744 $6,488,637 $6,421,179 $6,861,058
Long-term obligations (1) $1,966,269 $1,993,811 $2,098,752 $2,226,329 $2,521,203
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt), preferred
and preference stock with sinking fund, preferred securities of
subsidiary trust, and noncurrent capital lease obligations.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $607,875 $605,759 $624,862 $612,398 $573,566
Commercial 430,291 422,944 452,724 444,133 412,601
Industrial 718,779 704,393 740,418 685,178 604,688
Governmental 28,475 35,930 33,774 31,023 25,042
---------- ---------- ---------- ---------- ----------
Total retail 1,785,420 1,769,026 1,851,778 1,772,732 1,615,897
Sales for resale:
Associated companies 38,416 14,172 14,260 20,783 62,431
Non-associated companies 109,132 112,182 59,015 76,173 67,103
Other (1) 149,390 (117,796) 136,458 56,300 43,533
---------- ---------- ---------- ---------- ----------
Total $2,082,358 $1,777,584 $2,061,511 $1,925,988 $1,788,964
========== ========== ========== ========== ==========
Billed Electric Energy
Sales (GWH):
Residential 8,929 8,903 8,178 8,035 7,699
Commercial 7,310 6,975 6,575 6,417 6,219
Industrial 17,684 18,158 18,038 16,661 15,393
Governmental 425 560 481 438 311
---------- ---------- ---------- ---------- ----------
Total retail 34,348 34,596 33,272 31,551 29,622
Sales for resale:
Associated companies 677 380 414 656 2,935
Non-associated companies 3,408 3,701 1,503 2,148 2,212
---------- ---------- ---------- ---------- ----------
Total Electric Department 38,433 38,677 35,189 34,355 34,769
========== ========== ========== ========== ==========
</TABLE>
(1) 1998 includes the effects of an Entergy Gulf States reserve for rate
refund.
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
Entergy Louisiana, Inc.:
In our opinion, the accompanying balance sheets and the related statements
of income, of retained earnings and of cash flows present fairly, in all
material respects, the financial position of Entergy Louisiana, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased in 1999 primarily due to increases in unbilled
revenue and other regulatory credits, and decreases in nuclear refueling
outage expenses and interest charges, partially offset by increased
provisions for rate refunds.
Net income increased in 1998 primarily due to a decrease in operating
expenses, partially offset by a decrease in electric operating revenues and
higher income taxes.
Revenues and Sales
The changes in electric operating revenues for the twelve months ended
December 31, 1999 and 1998 are as follows:
Increase/(Decrease)
Description 1999 1998
(In Millions)
Base revenues ($48.7) ($35.0)
Fuel cost recovery 63.6 (95.4)
Sales volume/weather (5.3) 30.8
Other revenue (including unbilled) 74.5 (3.2)
Sales for resale 11.6 10.4
----- ------
Total $95.7 ($92.4)
===== ======
Base revenues
In 1999, base revenues decreased primarily due to accruals for
potential rate refunds.
In 1998, base revenues decreased due to base rate reductions that
became effective in early 1998.
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.
In 1999, fuel cost recovery revenues increased due to a shift from
lower priced nuclear fuel to higher priced gas and purchased power due to
nuclear outages at Waterford 3 in 1999.
In 1998, fuel cost recovery revenues decreased due to lower pricing
resulting from a change in generation mix.
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Sales volume/weather
In 1999, sales volume decreased primarily due to less favorable
weather, partially offset by increased usage by residential and industrial
customers.
In 1998, sales volume increased primarily due to significantly warmer
weather. The increase in sales volume was partially offset by the loss of
a large industrial customer as well as substantially lower sales to two
other large industrial customers.
Other revenue
In 1999, other revenue 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. The change
in estimate is expected to affect comparisons to applicable prior period
amounts through the first quarter of 2000. Comparative impacts are also
affected by seasonal variations in demand.
Sales for resale
In 1999, sales for resale increased as a result of increased sales to
affiliates due to outages at affiliate plants, in addition to favorable
unit prices.
In 1998, sales for resale increased as a result of an increase in
sales to associated companies, primarily due to changes in generation
requirements and availability among the domestic utility companies.
Expenses
Fuel and purchased power expenses
In 1999, fuel and purchased power expenses increased due to:
o higher gas prices;
o higher purchased power market prices; and
o a shift in generation from lower priced nuclear fuel to higher priced
gas as a result of refueling and other outages at Waterford 3.
In 1998, fuel and purchased power expenses decreased due to:
o lower gas prices;
o a shift in mix to nuclear fuel; and
o shifting generation requirements in 1997 as a result of the extended
refueling outage at Waterford 3.
Other operation and maintenance expenses
Other operation and maintenance expenses decreased in 1998 primarily
due to:
o non-refueling outage related contract work at Waterford 3 during 1997;
o maintenance performed at Waterford 3 in 1997;
o the write-off of previously deferred radioactive waste facility costs
in 1997; and
o expenses related to fire damage sustained at the Little Gypsy fossil
plant in September 1997.
<PAGE>
ENTERGY LOUISIANA, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Nuclear refueling outage expenses
In 1999, nuclear refueling outage expenses decreased as a result of
the amortization of higher outage expenses in 1998 due to the extended
nuclear refueling outage in 1997.
Other regulatory credits
In 1999, other regulatory credits increased due to the deferral of
Year 2000 costs incurred as required by the LPSC. The deferred costs will
be recovered over a five-year period.
Other
Interest charges
In 1999, interest on long-term debt decreased primarily due to the
redemption and refinancing of certain long-term debt in 1999.
Income taxes
The effective income tax rates for 1999, 1998, and 1997 were 38.9%,
37.8%, and 41.1%, respectively.
The effective income tax rate decreased in 1998 primarily due to
accelerated tax depreciation deductions, for which deferred taxes have not
been normalized, reflecting a shorter tax life on certain assets.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
INCOME STATEMENTS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $1,806,594 $1,710,908 $1,803,272
---------- ---------- ----------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 421,763 383,413 429,823
Purchased power 418,878 372,763 413,532
Nuclear refueling outage expenses 15,756 21,740 18,634
Other operation and maintenance 289,348 289,522 318,856
Decommissioning 8,786 8,786 8,786
Taxes other than income taxes 75,447 70,621 71,558
Depreciation and amortization 161,754 162,937 163,249
Other regulatory charges (credits) - net (5,280) (1,755) 5,505
Amortization of rate deferrals - - 5,749
---------- ---------- ----------
TOTAL 1,386,452 1,308,027 1,435,692
---------- ---------- ----------
OPERATING INCOME 420,142 402,881 367,580
---------- ---------- ----------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 4,925 1,887 1,149
Gain on sale of assets - 2,340 -
Miscellaneous - net 2,206 2,644 (517)
---------- ---------- ----------
TOTAL 7,131 6,871 632
---------- ---------- ----------
INTEREST AND OTHER CHARGES
Interest on long-term debt 103,937 109,463 116,715
Other interest - net 7,010 7,127 5,885
Distributions on preferred securities of 6,300 6,300 6,300
subsidiary
Allowance for borrowed funds used during construction(4,112) (1,729) (1,410)
---------- ---------- ----------
TOTAL 113,135 121,161 127,490
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 314,138 288,591 240,722
Income taxes 122,368 109,104 98,965
---------- ---------- ----------
NET INCOME 191,770 179,487 141,757
Preferred dividend requirements and other 9,955 13,014 13,355
---------- ---------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK $181,815 $166,473 $128,402
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $191,770 $179,487 $141,757
Noncash items included in net income:
Amortization of rate deferrals - - 5,749
Other regulatory charges (credits) - net (5,280) (1,754) 5,505
Depreciation, amortization, and decommissioning 170,540 171,723 172,035
Deferred income taxes and investment tax credits (15,487) 26,910 (15,456)
Allowance for equity funds used during construction (4,925) (1,887) (1,149)
Gain on sale of assets - (2,340) -
Changes in working capital:
Receivables (41,565) (7,972) (3,385)
Accounts payable 95,120 (5,878) (21,926)
Taxes accrued 7,659 (7,040) 17,853
Interest accrued (33,066) 18,731 (14,678)
Deferred fuel costs (9,959) 4,530 21,615
Other working capital accounts 56,714 16,983 (2,286)
Provision for estimated losses and reserves 5,442 6,410 3,986
Changes in other regulatory assets 38,577 (11,443) 17,932
Other (45,146) (44,099) (12,130)
-------- -------- --------
Net cash flow provided by operating activities 410,394 342,361 315,422
-------- -------- --------
INVESTING ACTIVITIES
Construction expenditures (130,933) (105,306) (84,767)
Allowance for equity funds used during construction 4,925 1,887 1,149
Nuclear fuel purchases (11,308) (38,141) (43,332)
Proceeds from sale/leaseback of nuclear fuel 11,308 39,701 43,332
Decommissioning trust contributions and realized
change in trust assets (13,678) (11,648) (11,191)
-------- -------- --------
Net cash flow used in investing activities (139,686) (113,507) (94,809)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long-term debt 298,092 112,556 -
Retirement of:
Long-term debt (386,707) (150,786) (34,288)
Redemption of preferred stock (50,000) - (7,500)
Dividends paid:
Common stock (197,000) (138,500) (145,400)
Preferred stock (10,389) (13,014) (13,251)
-------- -------- --------
Net cash flow used in financing activities (346,004) (189,744) (200,439)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (75,296) 39,110 20,174
Cash and cash equivalents at beginning of period 83,030 43,920 23,746
-------- -------- --------
Cash and cash equivalents at end of period $7,734 $83,030 $43,920
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $144,731 $98,801 $138,530
Income taxes $132,924 $86,830 $68,323
Noncash investing and financing activities:
Change in unrealized appreciation of
decommissioning trust assets $4,585 $5,928 $3,432
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $7,734 $10,187
Temporary cash investments - at cost,
which approximates market - 72,843
---------- ----------
Total cash and cash equivalents 7,734 83,030
---------- ----------
Accounts receivable:
Customer 79,335 65,262
Allowance for doubtful accounts (1,615) (1,164)
Associated companies 14,601 33,775
Other 10,762 19,305
Accrued unbilled revenues 106,200 50,540
---------- ----------
Total receivables 209,283 167,718
---------- ----------
Deferred fuel costs 2,161 -
Accumulated deferred income taxes 12,520 13,332
Materials and supplies - at average cost 84,027 82,220
Deferred nuclear refueling outage costs 11,336 6,498
Prepayments and other 6,014 11,565
---------- ----------
TOTAL 333,075 364,363
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 14,230 14,230
Decommissioning trust funds 100,943 82,681
Non-utility property - at cost (less accumulated depreciation) 21,433 21,459
---------- ----------
TOTAL 136,606 118,370
---------- ----------
UTILITY PLANT
Electric 5,178,808 5,095,278
Property under capital lease 236,271 234,339
Construction work in progress 108,106 85,565
Nuclear fuel under capital lease 51,930 75,814
---------- ----------
TOTAL UTILITY PLANT 5,575,115 5,490,996
Less - accumulated depreciation and amortization 2,294,394 2,158,800
---------- ----------
UTILITY PLANT - NET 3,280,721 3,332,196
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 230,899 270,068
Unamortized loss on reacquired debt 35,856 30,629
Other regulatory assets 50,191 49,599
Other 17,302 15,816
---------- ----------
TOTAL 334,248 366,112
---------- ----------
TOTAL ASSETS $4,084,650 $4,181,041
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $116,388 $6,772
Accounts payable:
Associated companies 137,869 43,051
Other 90,768 90,465
Customer deposits 61,096 55,966
Taxes accrued 25,863 18,203
Interest accrued 20,236 53,302
Deferred fuel cost - 7,798
Obligations under capital leases 28,387 32,539
Other 59,737 7,644
---------- ----------
TOTAL 540,344 315,740
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 792,290 840,931
Accumulated deferred investment tax credits 123,155 128,689
Obligations under capital leases 23,543 43,275
Other regulatory liabilities 15,421 10,836
Accumulated provisions 58,087 52,645
Other 34,564 39,791
---------- ----------
TOTAL 1,047,060 1,116,167
---------- ----------
Long-term debt 1,145,463 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 in 1999
and 1998 1,088,900 1,088,900
Capital stock expense and other (2,171) (2,320)
Retained earnings 59,554 74,739
---------- ----------
TOTAL 1,246,783 1,261,819
---------- ----------
Commitments and Contingencies (Notes 2, 9, and 10)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,084,650 $4,181,041
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $74,739 $46,766 $63,764
Add:
Net income 191,770 179,487 141,757
Deduct:
Dividends declared:
Preferred stock 9,805 13,014 13,016
Common stock 197,000 138,500 145,400
Capital stock expenses 150 - 339
------- ------- -------
Total 206,955 151,514 158,755
------- ------- -------
Retained Earnings, December 31 (Note 8) $59,554 $74,739 $46,766
======= ======= =======
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 1997 1996 1995
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $1,806,594 $1,710,908 $1,803,272 $1,828,867 $1,674,875
Net income $ 191,770 $ 179,487 $ 141,757 $ 190,762 $ 201,537
Total assets $4,084,650 $4,181,041 $4,175,400 $4,279,278 $4,331,523
Long-term obligations (1) $1,274,006 $1,530,590 $1,522,043 $1,545,889 $1,528,542
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt), preferred
stock with sinking fund, preferred securities of subsidiary trust, and
noncurrent capital lease obligations.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $620,146 $598,573 $606,173 $609,308 $583,373
Commercial 386,042 367,151 379,131 374,515 353,582
Industrial 646,517 597,536 708,356 727,505 641,196
Governmental 33,738 32,795 34,171 33,621 31,616
---------- ---------- ---------- ---------- ----------
Total retail 1,686,443 1,596,055 1,727,831 1,744,949 1,609,767
Sales for resale:
Associated companies 27,253 16,002 3,817 5,065 1,178
Non-associated companies 53,923 53,538 55,345 58,685 48,987
Other 38,975 45,313 16,279 20,168 14,943
---------- ---------- ---------- ---------- ----------
Total $1,806,594 $1,710,908 $1,803,272 $1,828,867 $1,674,875
========== ========== ========== ========== ==========
Billed Electric Energy
Sales (GWH):
Residential 8,354 8,477 7,826 7,893 7,855
Commercial 5,221 5,265 4,906 4,846 4,786
Industrial 15,052 14,781 16,390 17,647 16,971
Governmental 468 481 460 457 439
---------- ---------- ---------- ---------- ----------
Total retail 29,095 29,004 29,582 30,843 30,051
Sales for resale:
Associated companies 415 386 104 143 44
Non-associated companies 831 855 805 982 1,293
---------- ---------- ---------- ---------- ----------
Total 30,341 30,245 30,491 31,968 31,388
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
Entergy Mississippi, Inc.:
In our opinion, the accompanying balance sheets and the related statements
of income, of retained earnings and of cash flows present fairly, in all
material respects, the financial position of Entergy Mississippi, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1999 primarily due to a decrease in unbilled
revenues and an increase in other operation and maintenance expenses.
Net income decreased in 1998 primarily due to an increase in operating
expenses, partially offset by an increase in electric operating revenues.
Revenues and Sales
The changes in electric operating revenues for the twelve months ended
December 31, 1999 and 1998 are as follows:
Increase/(Decrease)
Description 1999 1998
(In Millions)
Base revenues ($9.7) ($10.2)
Grand Gulf rate rider (95.9) (2.6)
Fuel cost recovery (11.6) 20.5
Sales volume/weather 4.1 25.6
Other revenue (including unbilled) (12.1) 0.6
Sales for resale (18.3) 5.0
------- -----
Total ($143.5) $38.9
======= =====
Base revenues
In 1999 and 1998, base revenues decreased due to the formula rate plan
reduction that became effective in 1998. The formula rate plan reduction
is discussed in more detail in Note 2 to the financial statements.
Rate riders
Rate rider revenues have no material effect on net income because
specific incurred expenses offset them.
In 1999, Grand Gulf rate rider revenue decreased 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 (GGART), which also became effective
October 1, 1998. This tariff provides for accelerated recovery of a
portion of Entergy Mississippi's Grand Gulf purchased power obligation.
The GGART is discussed in more detail in Note 2 to the financial
statements.
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
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.
In 1999, fuel cost recovery revenues decreased due to the MPSC's
review and subsequent decrease of Entergy Mississippi's energy cost
recovery rider.
In 1998, fuel cost recovery revenues increased primarily due to an
increase in sales volume.
Sales volume/weather
In 1999, sales volume increased as a result of sales growth in the
residential and commercial sectors, partially offset by unfavorable
weather.
In 1998, sales volume increased as a result of significantly warmer
weather.
Other revenue
In 1999, other revenue 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. The change
in estimate is expected to affect comparisons to applicable prior period
amounts through the first quarter of 2000. Comparative impacts are also
affected by seasonal variations in demand.
Sales for resale
In 1999, sales for resale decreased as a result of decreased oil
generation due to plant outages at Entergy Mississippi. The decrease is
also due to higher sales to associated companies in 1998 as a result of an
outage at Entergy Arkansas.
Expenses
Fuel and purchased power expenses
In 1999, fuel and purchased power expenses decreased primarily due to:
o a decrease in total energy consumption requirements; and
o planned and unplanned plant outages during the year.
The decrease in fuel and purchased power expenses was partially offset
by:
o a shift from lower priced oil generation to higher priced gas
generation as a result of plant outages in 1999;
o an increase in the market price of purchased power; and
o the GGART implemented by System Energy in October 1998 resulting in an
increase in the price of System Energy purchased power.
<PAGE>
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
In 1998, fuel and purchased power expenses increased primarily due to:
o the increased usage as a result of significantly warmer weather; and
o the impact of the under-recovery of deferred fuel costs in excess of
the fixed fuel factor applied in 1997. In January 1998, Entergy
Mississippi increased its fixed fuel factor to recover actual fuel
expenses more timely.
Other operation and maintenance
In 1999, other operation and maintenance expenses increased primarily
due to:
o planned and unplanned plant outages in 1999;
o an increase in customer service and reliability improvement spending;
o an increase in employee benefit expense; and
o an increase in casualty reserves.
Other regulatory credits
In 1999, other regulatory credits increased due to greater under-
recovery of Grand Gulf 1 related costs as a result of the new rider
implemented in October 1998.
In 1998, other regulatory credits decreased primarily due to less
under-recovery of Grand Gulf related expenses in 1998 as compared to 1997.
Amortization of rate deferrals
In 1999, amortization of rate deferrals decreased due to the
completion of the Grand Gulf 1 rate phase-in plan in September 1998. These
phase-ins had no material effect on net income.
In 1998, amortization of rate deferrals decreased due to a decrease in
the amortization prescribed in the Grand Gulf 1 rate phase-in plan, which
was completed in September 1998. These phase-ins had no material effect on
net income.
Other
Interest and other charges
Interest on long-term debt decreased in 1999 and 1998 primarily due to
the refinancing of certain long-term debt.
Income taxes
The effective income tax rates for 1999, 1998, and 1997 were 29.7%,
30.9%, and 28.6%, respectively.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
INCOME STATEMENTS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $832,819 $976,300 $937,395
-------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 185,063 241,415 199,880
Purchased power 332,015 286,769 285,447
Other operation and maintenance 152,817 131,752 129,810
Taxes other than income taxes 44,013 44,888 43,142
Depreciation and amortization 42,870 45,133 43,300
Other regulatory credits - net (12,044) (3,186) (20,731)
Amortization of rate deferrals - 104,969 119,797
-------- -------- --------
TOTAL 744,734 851,740 800,645
-------- -------- --------
OPERATING INCOME 88,085 124,560 136,750
-------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 1,569 188 543
Gain (loss) on sale of assets - 1,025 (2)
Miscellaneous - net 6,781 4,891 919
-------- -------- --------
TOTAL 8,350 6,104 1,460
-------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 35,265 37,756 40,791
Other interest - net 3,574 3,171 4,483
Allowance for borrowed funds used during construction (1,529) (932) (469)
-------- -------- --------
TOTAL 37,310 39,995 44,805
-------- -------- --------
INCOME BEFORE INCOME TAXES 59,125 90,669 93,405
Income taxes 17,537 28,031 26,744
-------- -------- --------
NET INCOME 41,588 62,638 66,661
Preferred dividend requirements and other 3,370 3,370 4,044
-------- -------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $38,218 $59,268 $62,617
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $41,588 $62,638 $66,661
Noncash items included in net income:
Amortization of rate deferrals - 104,969 119,797
Other regulatory credits - net (12,044) (3,186) (20,731)
Depreciation and amortization 42,870 45,133 43,300
Deferred income taxes and investment tax credits 18,066 (12,494) (32,204)
Allowance for equity funds used during construction (1,569) (188) (543)
(Gain) loss on sale of assets - (1,025) 2
Changes in working capital:
Receivables 24,208 6,253 2,978
Fuel inventory (771) 384 3,275
Accounts payable 54,317 (31,967) (12,338)
Taxes accrued 29,955 (26,301) 5,832
Interest accrued (4,595) 323 (6,600)
Deferred fuel costs (45,830) 12,858 (10,967)
Other working capital accounts 10,072 8,652 (12,245)
Provision for estimated losses and reserves 4,173 (6,915) 1,173
Changes in other regulatory assets (30,179) (38,295) (29,699)
Other 12,152 4,202 38,304
-------- -------- --------
Net cash flow provided by operating activities 142,413 125,041 155,995
-------- -------- --------
INVESTING ACTIVITIES
Construction expenditures (94,717) (58,705) (50,334)
Allowance for equity funds used during construction 1,569 188 543
-------- -------- --------
Net cash flow used in investing activities (93,148) (58,517) (49,791)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long-term debt 153,629 78,703 64,827
Retirement of:
Long-term debt (163,278) (80,020) (96,015)
Redemption of preferred stock - - (14,500)
Changes in short-term borrowing, net (6) (13) -
Dividends paid:
Common stock (34,100) (66,000) (59,200)
Preferred stock (3,363) (3,370) (3,998)
-------- -------- --------
Net cash flow used in financing activities (47,118) (70,700) (108,886)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents 2,147 (4,176) (2,682)
Cash and cash equivalents at beginning of period 2,640 6,816 9,498
-------- -------- --------
Cash and cash equivalents at end of period $4,787 $2,640 $6,816
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $41,567 $39,291 $50,662
Income taxes ($29,850) $64,204 $51,598
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $4,787 $2,640
Accounts receivable:
Customer 35,675 39,701
Allowance for doubtful accounts (886) (1,217)
Associated companies 1,370 5,703
Other 2,391 1,267
Accrued unbilled revenues 28,600 45,904
---------- ----------
Total receivables 67,150 91,358
---------- ----------
Deferred fuel costs 47,939 2,108
Accumulated deferred income taxes - 665
Fuel inventory - at average cost 3,774 3,002
Materials and supplies - at average cost 17,068 17,149
Prepayments and other 7,114 12,256
---------- ----------
TOTAL 147,832 129,178
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 5,531 5,531
Non-utility property - at cost (less accumulated depreciation) 6,965 7,056
Other - at cost (less accumulated depreciation) - 13
---------- ----------
TOTAL 12,496 12,600
---------- ----------
UTILITY PLANT
Electric 1,763,636 1,718,426
Property under capital lease 384 477
Construction work in progress 66,789 35,317
---------- ----------
TOTAL UTILITY PLANT 1,830,809 1,754,220
Less - accumulated depreciation and amortization 709,543 685,214
---------- ----------
UTILITY PLANT - NET 1,121,266 1,069,006
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 24,051 25,515
Unamortized loss on reacquired debt 16,345 7,981
Other regulatory assets 132,243 100,601
Other 5,784 6,048
---------- ----------
TOTAL 178,423 140,145
---------- ----------
TOTAL ASSETS $1,460,017 $1,350,929
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $ - $20
Accounts payable:
Associated companies 84,382 44,091
Other 32,470 18,444
Customer deposits 23,303 18,265
Taxes accrued 35,968 6,013
Accumulated deferred income taxes 526 -
Interest accrued 10,038 14,632
Obligations under capital leases 95 92
Other 2,137 2,319
---------- ----------
TOTAL 188,919 103,876
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 298,477 281,017
Accumulated deferred investment tax credits 20,908 22,408
Obligations under capital leases 290 384
Accumulated provisions 7,374 3,200
Other 3,368 4,331
---------- ----------
TOTAL 330,417 311,340
---------- ----------
Long-term debt 464,466 463,616
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 in 1999 and 1998 199,326 199,326
Capital stock expense and other (59) (59)
Retained earnings 226,567 222,449
---------- ----------
TOTAL 476,215 472,097
---------- ----------
Commitments and Contingencies (Notes 2, 8, and 9)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,460,017 $1,350,929
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $222,449 $229,181 $225,764
Add:
Net income 41,588 62,638 66,661
Deduct:
Dividends declared:
Preferred stock 3,370 3,370 3,656
Common stock 34,100 66,000 59,200
Preferred stock expenses - - 388
-------- -------- --------
Total 37,470 69,370 63,244
-------- -------- --------
Retained Earnings, December 31 (Note 8) $226,567 $222,449 $229,181
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 1997 1996 1995
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 832,819 $ 976,300 $ 937,395 $ 958,430 $ 889,843
Net Income $ 41,588 $ 62,638 $ 66,661 $ 79,211 $ 68,667
Total assets $1,460,017 $1,350,929 $1,439,561 $1,521,466 $1,581,983
Long-term obligations (1) $ 464,756 $ 464,000 $ 464,156 $ 406,054 $ 511,613
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt) and
noncurrent capital lease obligations.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $311,003 $367,895 $342,818 $358,264 $336,194
Commercial 250,929 284,787 274,195 281,626 262,786
Industrial 151,659 170,910 173,152 185,351 178,466
Governmental 23,528 26,670 26,882 29,093 27,410
-------- -------- -------- -------- --------
Total retail 737,119 850,262 817,047 854,334 804,856
Sales for resale:
Associated companies 63,004 80,357 78,233 58,749 35,928
Non-associated companies 31,546 32,442 21,276 22,814 21,906
Other 1,150 13,239 20,839 22,533 27,153
-------- -------- -------- -------- --------
Total $832,819 $976,300 $937,395 $958,430 $889,843
======== ======== ======== ======== ========
Billed Electric Energy
Sales (GWH):
Residential 4,753 4,800 4,323 4,355 4,233
Commercial 4,156 4,015 3,673 3,508 3,368
Industrial 3,246 3,163 3,089 3,063 3,044
Governmental 363 347 333 346 336
-------- -------- -------- -------- --------
Total retail 12,518 12,325 11,418 11,272 10,981
Sales for resale:
Associated companies 1,774 2,424 1,918 1,368 959
Non-associated companies 426 484 412 521 692
-------- -------- -------- -------- --------
Total 14,718 15,233 13,748 13,161 12,632
======== ======== ======== ======== ========
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
Entergy New Orleans, Inc.:
In our opinion, the accompanying balance sheets and the related statements
of income, of retained earnings and of cash flows present fairly, in all
material respects, the financial position of Entergy New Orleans, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income increased slightly in 1999 primarily due to an increase in
unbilled revenues and sales volume, partially offset by an increase in
other operation and maintenance expenses.
Net income increased in 1998 primarily due to an increase in operating
revenues and other income and a decrease in income taxes, partially offset
by increased operating expenses.
Revenues and Sales
Electric operating revenues
The changes in electric operating revenues for the twelve months
ended December 31, 1999 and 1998 are as follows:
Increase/(Decrease)
Description 1999 1998
(In Millions)
Base revenues ($11.3) ($9.8)
Fuel cost recovery (4.6) 14.5
Sales volume/weather 1.7 13.9
Other revenue (including unbilled) 5.5 1.0
Sales for resale 3.7 1.7
----- -----
Total ($5.0) $21.3
===== =====
Base revenues
In 1999, base revenues decreased primarily due to base rate reductions
effective January 1999 and rate refund provisions accrued for potential
rate matters.
In 1998, base revenues decreased primarily due to reductions in
residential and commercial rates that went into effect in August 1997.
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.
In 1999, fuel cost recovery revenues decreased due to an under-
recovery of fuel expenses resulting from higher market prices in 1999
compared to the prior year.
In 1998, fuel cost recovery revenues increased due to higher fuel
prices and increased generation.
Sales volume/weather
In 1998, sales volume increased primarily due to significantly warmer
weather.
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other revenue
In 1999, other revenue increased due to a change in estimated unbilled
revenues. The changed estimate more closely aligns the fuel component of
unbilled revenues with regulatory treatment. The increase was partially
offset by less favorable weather in 1999. The change in estimate is
expected to affect comparisons of revenue to applicable time period amounts
through the first quarter of 2000. Comparative impacts are also affected
by seasonal variations in demand.
Sales for resale
In 1999, sales for resale increased due to favorable unit prices
resulting from increased purchased power and gas market prices, coupled
with an increase in affiliated sales volume.
Gas operating revenues
In 1998, gas operating revenues decreased due to lower gas prices.
Expenses
Fuel and purchased power expenses
In 1998, fuel and purchased power expenses increased primarily due to:
o an increase in purchased power primarily due to increased generation
requirements as a result of significantly warmer weather and an
increase in the price of purchased power; and
o an over-recovery of gas and electric fuel cost in 1998 due to market
price fluctuations.
This increase was partially offset by a decrease in the price of gas
purchased for resale.
Other operation and maintenance expenses
In 1999 and 1998, other operation and maintenance expenses increased
primarily due to:
o increased environmental provisions;
o employee benefit expense; and
o increased spending for customer service and reliability improvements.
Amortization of rate deferrals
In 1999, amortization of rate deferrals decreased due to a scheduled
rate change in the amortization of Grand Gulf 1 phase-in expenses.
Other regulatory credits
In 1999, other regulatory credits increased due to a greater under-
recovery of Grand Gulf 1 costs in 1999.
<PAGE>
ENTERGY NEW ORLEANS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other
Other income
Other income increased in 1999 primarily due to:
o an increase in AFUDC resulting from increased capital charges on
projects in 1999; and
o increased interest related to the Grand Gulf 1 rate deferral plan.
Miscellaneous income increased in 1998 primarily due to Entergy New
Orleans' portion of System Fuel's gain on the sale of oil and gas
properties and an increase in interest related to the Grand Gulf 1 rate
deferral plan.
The Grand Gulf 1 rate deferral plan is discussed in more detail in
Note 2 to the financial statements.
Income taxes
The effective income tax rates for 1999, 1998, and 1997 were 40.7%,
38.4%, and 44.0%, respectively.
The increase in the effective income tax rate for 1999 was primarily
due to the increase in pre-tax income reducing the impact of permanent
differences and flow through items.
The decrease in the effective income tax rate for 1998 was primarily
due to a tax benefit recorded in 1998 related to a depreciation adjustment.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
INCOME STATEMENTS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $426,431 $431,453 $410,131
Natural gas 81,357 82,297 94,691
-------- -------- --------
TOTAL 507,788 513,750 504,822
-------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 135,242 138,142 141,902
Purchased power 166,579 164,435 156,542
Other operation and maintenance 83,197 79,023 72,748
Taxes other than income taxes 39,621 40,417 21,107
Depreciation and amortization 21,219 21,878 38,964
Other regulatory credits - net (9,036) (4,540) (6,394)
Amortization of rate deferrals 28,430 35,336 37,662
-------- -------- --------
TOTAL 465,252 474,691 462,531
-------- -------- --------
OPERATING INCOME 42,536 39,059 42,291
-------- -------- --------
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 1,084 284 380
Gain on sale of assets - 458 -
Miscellaneous - net 2,263 951 (77)
-------- -------- --------
TOTAL 3,347 1,693 303
-------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 13,277 13,717 13,918
Other interest - net 1,403 1,075 1,369
Allowance for borrowed funds used during construction (788) (219) (286)
-------- -------- --------
TOTAL 13,892 14,573 15,001
-------- -------- --------
INCOME BEFORE INCOME TAXES 31,991 26,179 27,593
Income taxes 13,030 10,042 12,142
-------- -------- --------
NET INCOME 18,961 16,137 15,451
Preferred dividend requirements and other 965 965 965
-------- -------- --------
EARNINGS APPLICABLE TO
COMMON STOCK $17,996 $15,172 $14,486
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $18,961 $16,137 $15,451
Noncash items included in net income:
Amortization of rate deferrals 28,430 35,336 37,662
Other regulatory credits - net (9,036) (4,540) (6,394)
Depreciation and amortization 21,219 21,878 21,107
Deferred income taxes and investment tax credits (3,131) (7,498) (1,957)
Allowance for equity funds used during construction (1,084) (284) (380)
Gain on sale of assets - (458) -
Changes in working capital:
Receivables (7,258) 3,148 4,257
Fuel inventory 179 (861) (145)
Accounts payable 23,319 (4,136) 540
Taxes accrued 429 (5,270) 4,065
Interest accrued 37 (130) (276)
Deferred fuel costs (13,293) 8,193 (2,094)
Other working capital accounts 6,607 (5,122) (15,908)
Provision for estimated losses and reserves (531) (6,295) (247)
Changes in other regulatory assets (11,482) (6,964) 7,365
Other 6,796 (2,805) (8,941)
-------- -------- --------
Net cash flow provided by operating activities 60,162 40,329 54,105
-------- -------- --------
INVESTING ACTIVITIES
Construction expenditures (46,239) (21,691) (16,137)
Allowance for equity funds used during construction 1,084 284 380
-------- -------- --------
Net cash flow used in investing activities (45,155) (21,407) (15,757)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long-term debt - 29,438 -
Retirement of:
Long-term debt - (30,000) (12,000)
Dividends paid:
Common stock (26,500) (9,700) (26,000)
Preferred stock (1,206) (965) (965)
-------- -------- --------
Net cash flow used in financing activities (27,706) (11,227) (38,965)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (12,699) 7,695 (617)
Cash and cash equivalents at beginning of period 17,153 9,458 10,075
-------- -------- --------
Cash and cash equivalents at end of period $4,454 $17,153 $9,458
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $14,281 $14,592 $15,237
Income taxes - net $12,476 $26,197 $10,981
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $4,454 $3,769
Temporary cash investments - at cost,
which approximates market - 13,384
-------- --------
Total cash and cash equivalents 4,454 17,153
-------- --------
Accounts receivable:
Customer 28,658 24,355
Allowance for doubtful accounts (846) (761)
Associated companies 404 3,320
Other 6,225 3,835
Accrued unbilled revenues 19,820 16,254
-------- --------
Total receivables 54,261 47,003
-------- --------
Deferred fuel costs 14,483 1,191
Fuel inventory - at average cost 3,293 3,472
Materials and supplies - at average cost 10,127 8,845
Rate deferrals 24,788 28,430
Prepayments and other 2,528 6,686
-------- --------
TOTAL 113,934 112,780
-------- --------
OTHER PROPERTY AND INVESTMENTS
Investment in subsidiary companies - at equity 3,259 3,259
-------- --------
UTILITY PLANT
Electric 541,525 514,685
Natural gas 133,568 132,568
Construction work in progress 29,780 20,184
-------- --------
TOTAL UTILITY PLANT 704,873 667,437
Less - accumulated depreciation and amortization 382,797 371,558
-------- --------
UTILITY PLANT - NET 322,076 295,879
-------- --------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Rate deferrals 10,974 35,762
Unamortized loss on reacquired debt 1,187 1,399
Other regulatory assets 33,039 21,558
Other 1,277 1,267
-------- --------
TOTAL 46,477 59,986
-------- --------
TOTAL ASSETS $485,746 $471,904
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable:
Associated companies $24,350 $18,283
Other 28,261 11,008
Customer deposits 17,830 18,082
Taxes accrued 429 -
Accumulated deferred income taxes 10,863 6,284
Interest accrued 4,956 4,919
Other 5,524 1,783
-------- --------
TOTAL 92,213 60,359
-------- --------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 43,878 57,214
Accumulated deferred investment tax credits 6,378 6,894
SFAS 109 regulatory liability - net 7,528 942
Other regulatory liabilities 1,753 3,146
Accumulated provisions 8,836 9,367
Other 7,733 8,116
-------- --------
TOTAL 76,106 85,679
-------- --------
Long-term debt 169,083 169,018
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 in 1999
and 1998 33,744 33,744
Paid-in capital 36,294 36,294
Retained earnings 58,526 67,030
-------- --------
TOTAL 148,344 156,848
-------- --------
Commitments and Contingencies (Notes 2 and 9)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $485,746 $471,904
======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $67,030 $61,558 $73,072
Add:
Net income 18,961 16,137 15,451
Deduct:
Dividends declared:
Preferred stock 965 965 965
Common stock 26,500 9,700 26,000
------- ------- -------
Total 27,465 10,665 26,965
------- ------- -------
Retained Earnings, December 31 (Note 8) $58,526 $67,030 $61,558
======= ======= =======
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 1997 1996 1995
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 507,788 $513,750 $504,822 $504,277 $470,278
Net Income $ 18,961 $ 16,137 $ 15,451 $ 26,776 $ 34,386
Total assets $ 485,746 $471,904 $498,150 $549,996 $596,206
Long-term obligations (1) $ 169,083 $169,018 $168,953 $168,888 $155,958
</TABLE>
(1) Includes long-term debt (excluding currently maturing debt).
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Electric Operating Revenues:
Residential $158,822 $164,765 $145,688 $151,577 $141,353
Commercial 146,328 149,353 143,113 149,649 144,374
Industrial 25,584 26,229 24,616 24,663 22,842
Governmental 63,056 62,332 58,746 58,561 52,880
-------- -------- -------- -------- --------
Total retail 393,790 402,679 372,163 384,450 361,449
Sales for resale:
Associated companies 14,207 10,451 10,342 2,649 3,217
Non-associated companies 10,545 10,590 8,996 9,882 9,864
Other 7,889 7,733 18,630 6,273 15,472
-------- -------- -------- -------- --------
Total $426,431 $431,453 $410,131 $403,254 $390,002
======== ======== ======== ======== ========
Billed Electric Energy
Sales (GWH):
Residential 2,102 2,141 1,971 1,998 2,049
Commercial 2,208 2,149 2,072 2,073 2,079
Industrial 514 514 484 481 537
Governmental 1,071 1,037 994 974 983
-------- -------- -------- -------- --------
Total retail 5,895 5,841 5,521 5,526 5,648
Sales for resale:
Associated companies 441 370 316 66 149
Non-associated companies 180 199 160 212 297
-------- -------- -------- -------- --------
Total 6,516 6,410 5,997 5,804 6,094
======== ======== ======== ======== ========
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholder of
System Energy Resources, Inc.:
In our opinion, the accompanying balance sheets and the related statements
of income, of retained earnings and of cash flows present fairly, in all
material respects, the financial position of System Energy Resources, Inc.
at December 31, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31,
1999 in conformity with accounting principles generally accepted in the
United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Income
Net income decreased in 1999 due to the additional reserves and
interest recorded for the potential refund of System Energy's proposed rate
increase, as well as downtime for unplanned outages.
Net income increased slightly in 1998 primarily due to an increase in
other income.
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 in 1999 primarily due to the
implementation of the Grand Gulf Accelerated Recovery Tariff (GGART) at
Entergy Arkansas and Entergy Mississippi. This increase in revenues is
offset by related regulatory charges and does not affect net income. The
tariff was designed to allow Entergy Arkansas and Entergy Mississippi to
accelerate the payment of 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 and System Energy's proposed
rate increase, which is subject to refund, are discussed in Note 2 to the
financial statements.
Expenses
Fuel expenses
In 1999, fuel expenses decreased primarily due to an extended nuclear
refueling outage at Grand Gulf 1 in addition to unplanned outages. Grand
Gulf 1 was on-line for 17 fewer days in 1999 compared to 1998.
In 1998, fuel expenses decreased because of lower generation due to a
scheduled nuclear refueling outage in April and May. Grand Gulf 1 was on-
line for 47 fewer days in 1998 compared to 1997.
Depreciation and amortization
In 1999, depreciation and amortization expenses decreased as a result
of the reduction in principal payment associated with the sale and
leaseback of a portion of Grand Gulf 1. The depreciation schedule matches
the collection of lease principal and revenues with the depreciation of the
asset.
Other regulatory charges
In both 1999 and 1998, other regulatory charges increased due to the
implementation of the GGART at Entergy Arkansas and Entergy Mississippi, as
discussed above.
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Other
Other income
Other income increased in both 1999 and 1998 as a result of the
interest earned on System Energy's advances to the money pool, an inter-
company funding arrangement. The money pool is discussed in Note 4 to the
financial statements.
Interest charges
Other interest increased in 1999 due to interest on the potential
refund of System Energy's proposed rate increase.
Interest on long-term debt decreased in 1999 and 1998 as a result of
the retirement and refinancing of higher-cost long-term debt.
Income taxes
The effective income tax rates in 1999, 1998, and 1997 were 39.5%,
42.1%, and 42.2%, respectively.
The effective income tax rate for 1999 decreased due to decreased pre-
tax income partially offset by the amortization of investment tax credits
related to Grand Gulf 2.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Domestic electric $620,032 $602,373 $633,698
-------- -------- --------
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 37,336 41,740 48,475
Nuclear refueling outage expenses 14,136 15,737 16,425
Other operation and maintenance 87,450 86,696 101,269
Decommissioning 18,944 18,944 18,944
Taxes other than income taxes 27,212 26,839 26,477
Depreciation and amortization 113,862 125,331 128,915
Other regulatory charges - net 57,656 4,443 -
-------- -------- --------
TOTAL 356,596 319,730 340,505
-------- -------- --------
OPERATING INCOME 263,436 282,643 293,193
-------- -------- --------
OTHER INCOME
Allowance for equity funds used
during construction 2,540 2,042 2,209
Miscellaneous - net 16,309 13,309 8,517
-------- -------- --------
TOTAL 18,849 15,351 10,726
-------- -------- --------
INTEREST AND OTHER CHARGES
Interest on long-term debt 102,764 109,735 121,633
Other interest - net 45,218 6,325 7,020
Allowance for borrowed funds used
during construction (1,920) (1,805) (1,683)
-------- -------- --------
TOTAL 146,062 114,255 126,970
-------- -------- --------
INCOME BEFORE INCOME TAXES 136,223 183,739 176,949
Income taxes 53,851 77,263 74,654
-------- -------- --------
NET INCOME $82,372 $106,476 $102,295
======== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $82,372 $106,476 $102,295
Noncash items included in net income:
Reserve for regulatory adjustments 108,484 68,236 43,123
Other regulatory charges - net 57,656 4,443 -
Depreciation, amortization, and decommissioning 132,806 144,275 147,859
Deferred income taxes and investment tax credits (86,860) (28,222) (39,370)
Allowance for equity funds used during construction (2,540) (2,042) (2,209)
Changes in working capital:
Receivables (172,354) 9,690 (23,833)
Accounts payable (11,688) (2,859) 11,172
Taxes accrued (21,424) 1,131 7,852
Interest accrued (2,022) (300) 8,127
Other working capital accounts (4,425) (2,228) 19,054
Provision for estimated losses and reserves 45 (1,704) (1,025)
Changes in other regulatory assets (18,492) 25,066 36,654
Other 41,250 (23,159) (23,392)
--------- --------- ---------
Net cash flow provided by operating activities 102,808 298,803 286,307
--------- --------- ---------
INVESTING ACTIVITIES
Construction expenditures (28,848) (30,692) (35,141)
Allowance for equity funds used during construction 2,540 2,042 2,209
Nuclear fuel purchases (39,975) (30,523) (16,524)
Proceeds from sale/leaseback of nuclear fuel 39,975 30,523 16,524
Decommissioning trust contributions and realized
change in trust assets (22,139) (24,166) (22,452)
--------- --------- ---------
Net cash flow used in investing activities (48,447) (52,816) (55,384)
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of:
Long-term debt 101,835 212,976 -
Retirement of:
Long-term debt (282,885) (300,341) (17,319)
Dividends paid:
Common stock (75,000) (72,300) (113,800)
--------- --------- ---------
Net cash flow used in financing activities (256,050) (159,665) (131,119)
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents (201,689) 86,322 99,804
Cash and cash equivalents at beginning of period 236,841 150,519 50,715
--------- --------- ---------
Cash and cash equivalents at end of period $35,152 $236,841 $150,519
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $102,867 $107,923 $112,387
Income taxes $154,336 $104,987 $105,621
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets ($37) $3,205 $1,237
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC
BALANCE SHEETS
ASSETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents:
Cash $136 $120
Temporary cash investments - at cost,
which approximates market 35,016 236,721
---------- ----------
Total cash and cash equivalents 35,152 236,841
---------- ----------
Accounts receivable:
Associated companies 301,287 125,171
Other 670 4,431
---------- ----------
Total receivables 301,957 129,602
---------- ----------
Materials and supplies - at average cost 61,264 62,203
Deferred nuclear refueling outage cost 18,665 12,853
Prepayments and other 2,251 2,592
---------- ----------
TOTAL 419,289 444,091
---------- ----------
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 135,384 113,282
---------- ----------
UTILITY PLANT
Electric 3,060,324 3,030,636
Property under capital lease 434,993 441,098
Construction work in progress 58,510 57,076
Nuclear fuel under capital lease 78,020 64,621
---------- ----------
TOTAL UTILITY PLANT 3,631,847 3,593,431
Less - accumulated depreciation 1,312,559 1,198,266
and amortization
---------- ----------
UTILITY PLANT - NET 2,319,288 2,395,165
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
SFAS 109 regulatory asset - net 242,834 221,996
Unamortized loss on reacquired debt 56,474 57,150
Other regulatory assets 185,910 188,256
Other 9,869 11,265
---------- ----------
TOTAL 495,087 478,667
---------- ----------
TOTAL ASSETS $3,369,048 $3,431,205
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC
BALANCE SHEETS
LIABILITIES AND SHAREHOLDER'S EQUITY
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
CURRENT LIABILITIES
Currently maturing long-term debt $77,947 $175,820
Accounts payable:
Associated companies 15,237 25,975
Other 18,470 19,420
Taxes accrued 55,383 76,806
Accumulated deferred income taxes 7,162 5,022
Interest accrued 40,000 42,022
Obligations under capital leases 38,421 41,835
Other 1,651 1,543
---------- ----------
TOTAL 254,271 388,443
---------- ----------
DEFERRED CREDITS AND OTHER
LIABILITIES
Accumulated deferred income taxes 481,945 506,727
Accumulated deferred investment 93,219 96,695
tax credits
Obligations under capital leases 39,599 22,786
FERC settlement - refund 37,337 43,159
obligation
Other regulatory liabilities 73,313 43,309
Decommissioning 129,503 107,365
Regulatory reserves 267,771 159,287
Accumulated provisions 2,016 1,971
Other 16,014 17,524
---------- ----------
TOTAL 1,140,717 998,823
---------- ----------
Long-term debt 1,082,579 1,159,830
SHAREHOLDER'S EQUITY
Common stock, no par value, authorized
1,000,000 shares; issued and
outstanding 789,350 shares in 1999 and
1998 789,350 789,350
Retained earnings 102,131 94,759
---------- ----------
TOTAL 891,481 884,109
---------- ----------
Commitments and Contingencies
(Notes 2, 9, and 10)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,369,048 $3,431,205
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
Retained Earnings, January 1 $94,759 $60,583 $72,088
Add:
Net income 82,372 106,476 102,295
Deduct:
Dividends declared 75,000 72,300 113,800
-------- ------- -------
Retained Earnings, December 31 (Note 8) $102,131 $94,759 $60,583
======== ======= =======
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON
1999 1998 1997 1996 1995
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues $ 620,032 $ 602,373 $ 633,698 $ 623,620 $ 605,639
Net income $ 82,372 $ 106,476 $ 102,295 $ 98,668 $ 93,039
Total assets $3,369,048 $3,431,205 $3,432,031 $3,461,293 $3,431,012
Long-term obligations (1) $1,122,178 $1,182,616 $1,364,161 $1,474,427 $1,264,024
Electric energy sales (GWH) 7,567 8,259 9,735 8,302 7,212
</TABLE>
(1) Includes long-term debt (excluding current maturities) and noncurrent
capital lease obligations.
<PAGE>
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
The accompanying consolidated financial statements include the
accounts of Entergy Corporation and its direct and indirect subsidiaries,
including the domestic utility companies and System Energy, whose separate
financial statements are included in this document. The financial
statements presented herein result from these companies having registered
securities with the SEC.
As required by generally accepted accounting principles, all
significant intercompany transactions have been eliminated in the
consolidated financial statements. The domestic utility companies and
System Energy maintain accounts in accordance with FERC and other
regulatory guidelines. Certain previously reported amounts have been
reclassified to conform to current classifications, with no effect on net
income or shareholders' equity.
Entergy Corporation sold its investments in Entergy London and
CitiPower in December 1998. Accordingly, the consolidated balance sheet
does not include amounts for these entities as of December 31, 1998. The
consolidated statements of income and cash flows for 1998 include amounts
for Entergy London and CitiPower through the dates of their respective
sales.
Use of Estimates in the Preparation of Financial Statements
The preparation of Entergy Corporation's and its subsidiaries'
financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities, and the reported amounts of revenues and
expenses. Adjustments to the reported amounts of assets and liabilities
may be necessary in the future to the extent that future estimates or
actual results are different from the estimates used.
Revenues and Fuel Costs
Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi generate,
transmit, and distribute electricity primarily to retail customers in
Arkansas, Louisiana, and Mississippi, respectively. Entergy Gulf States
generates, transmits, and distributes electricity primarily to retail
customers in Texas and Louisiana. Entergy Gulf States also distributes gas
to retail customers in and around Baton Rouge, Louisiana. Entergy New
Orleans sells both electricity and gas to retail customers in the City of
New Orleans, except for Algiers, where Entergy Louisiana is the electricity
supplier.
System Energy's operating revenues are intended to recover operating
expenses and capital costs attributable to Grand Gulf 1 from Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans.
Capital costs are computed by allowing a return on System Energy's common
equity funds allocable to its net investment in Grand Gulf 1, plus System
Energy's effective interest cost for its debt allocable to its investment
in Grand Gulf 1. System Energy's proposed rate increase is discussed in
Note 2 to the financial statements.
The domestic utility companies accrue estimated revenues for energy
delivered since the latest billings. The domestic utility companies' rate
schedules include either fuel adjustment clauses or fixed fuel factors,
both of which allow either current recovery or deferral of fuel costs until
such costs are reflected in the related revenues. Fixed fuel factors
remain in effect until changed as part of a general rate case, fuel
reconciliation, or fixed fuel factor filing.
Utility Plant
Utility plant is stated at original cost. The original cost of
utility plant retired or removed, plus the applicable removal costs, less
salvage, is charged to accumulated depreciation. Maintenance, repairs, and
minor replacement costs are charged to operating expenses. Substantially
all of the utility plant is subject to liens from mortgage bond indentures.
Utility plant includes the portions of Grand Gulf 1 and Waterford 3
that have been sold and leased back. For financial reporting purposes,
these sale and leaseback arrangements are reflected as financing
transactions.
Net utility plant by company and functional category, as of December
31, 1999, is shown below (in millions):
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Production
Nuclear $6,766 $ 913 $1,853 $1,832 $ - $ - $ 2,157
Other 1,396 338 585 201 199 15 -
Transmission 1,597 455 495 311 300 27 9
Distribution 3,225 964 889 742 463 167 -
Other 567 99 152 118 92 17 16
Plant acquisition adjustment -
Entergy Gulf States 407 - - - - - -
Other 86 - 20 - - 66 -
Construction work in progress 1,590 267 145 108 67 30 59
Nuclear fuel 374 95 71 52 - - 78
(leased and owned)
Accumulated provision for
Decommissioning (1) (418) (271) (64) (83) - - -
--------------------------------------------------------------------------------------
Utility plant - net $ 15,590 $ 2,860 $ 4,146 $ 3,281 $ 1,121 $ 322 $ 2,319
======================================================================================
</TABLE>
(1) The decommissioning liabilities related to Grand Gulf 1, Pilgrim, and
the 30% of River Bend previously owned by Cajun are recorded in the
applicable Balance Sheets in "Deferred Credits and Other Liabilities -
Decommissioning."
Depreciation is computed on the straight-line basis at rates based on
the estimated service lives and costs of removal of the various classes of
property. Depreciation rates on average depreciable property are shown
below:
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
1999 2.9% 3.2% 2.4% 2.9% 2.4% 3.0% 3.3%
1998 3.0% 3.3% 2.6% 3.0% 2.5% 3.1% 3.3%
1997 3.2% 3.1% 2.8% 3.0% 2.5% 3.1% 3.4%
</TABLE>
AFUDC represents the approximate net composite interest cost of
borrowed funds and a reasonable return on the equity funds used for
construction. Although AFUDC increases both utility plant and earnings, it
is realized in cash through depreciation provisions included in rates.
Jointly-Owned Generating Stations
Certain Entergy subsidiaries jointly own electric generating
facilities with third parties. The investments and expenses associated
with these generating stations are recorded by the Entergy subsidiaries to
the extent of their respective undivided ownership interests. As of
December 31, 1999, the subsidiaries' investment and accumulated
depreciation in each of these generating stations were as follows:
<TABLE>
<CAPTION>
Total
Megawatt Accumulated
Generating Stations Fuel-Type Capability Ownership Investment Depreciation
(In Millions)
<S> <C> <C> <C> <C> <C>
Entergy Arkansas
Independence Unit 1 Coal 836 31.50% $ 118 $ 55
Common Coal 15.75% 30 13
Facilities
White Bluff Units 1 and 2 Coal 1,659 57.00% 404 205
Entergy Gulf States
Roy S. Nelson Unit 6 Coal 550 70.00% 403 199
Big Cajun 2 Unit 3 Coal 540 42.00% 227 106
Entergy Mississippi -
Independence Units 1 and 2 Coal 1,678 25.00% 227 95
System Energy -
Grand Gulf Unit 1 Nuclear 1,200 90.00%(1) 3,483 1,313
Entergy Power -
Independence Unit 2 Coal 842 14.37% 81 32
</TABLE>
(1)Includes an 11.5% leasehold interest held by System Energy. System
Energy's Grand Gulf 1 lease obligations are discussed in Note 10 to the
financial statements.
Income Taxes
Entergy Corporation and its subsidiaries file a U.S. consolidated
federal income tax return. Income taxes are allocated to the subsidiaries
in proportion to their contribution to consolidated taxable income. SEC
regulations require that no Entergy subsidiary pay more taxes than it would
have paid if a separate income tax return had been filed. In accordance
with SFAS 109, "Accounting for Income Taxes," deferred income taxes are
recorded for all temporary differences between the book and tax basis of
assets and liabilities, and for certain credits available for carryforward.
Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion of the
deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
Investment tax credits are deferred and amortized based upon the
average useful life of the related property, in accordance with ratemaking
treatment.
Reacquired Debt
The premiums and costs associated with reacquired debt of the domestic
utility companies and System Energy (except that allocable to the
deregulated operations of Entergy Gulf States) are being amortized over the
life of the related new issuances, in accordance with ratemaking treatment.
Cash and Cash Equivalents
Entergy considers all unrestricted highly liquid debt instruments
purchased with an original maturity of three months or less to be cash
equivalents.
Investments
Entergy applies the provisions of SFAS 115, "Accounting for
Investments for Certain Debt and Equity Securities," in accounting for
investments in decommissioning trust funds. As a result, Entergy has
recorded on the consolidated balance sheet $136 million of additional value
in its decommissioning trust funds. This increase represents the amount by
which the fair value of the securities held in such funds exceeds the
amounts deposited plus the earnings on the deposits. In accordance with
the regulatory treatment for decommissioning trust funds, the domestic
utility companies and System Energy have recorded an offsetting amount in
unrealized gains on investment securities as a regulatory liability in
other deferred credits.
Decommissioning trust funds for Pilgrim do not receive regulatory
treatment. Accordingly, unrealized gains recorded on the assets in
Pilgrim's trust funds are recognized as a separate component of
shareholders' equity because these assets are classified as available for
sale.
Foreign Currency Translation
All assets and liabilities of Entergy's foreign subsidiaries are
translated into U.S. dollars at the exchange rate in effect at the end of
the period. Revenues and expenses are translated at average exchange rates
prevailing during the period. The resulting translation adjustments are
reflected in a separate component of shareholders' equity. Current
exchange rates are used for U.S. dollar disclosures of future obligations
denominated in foreign currencies.
Earnings per Share
The average number of common shares outstanding for the presentation
of diluted earnings per share were greater by approximately 199,000 shares
in 1999, 176,000 shares in 1998, and 140,000 shares in 1997, than the
number of such shares for the presentation of basic earnings per share due
to Entergy's stock option and other stock compensation plans discussed more
thoroughly in Note 5 to the financial statements.
Options to purchase approximately 5,205,000, 149,000, and 225,000
shares of common stock at various prices were outstanding at the end of
1999, 1998, and 1997, respectively, but were not included in the
computation of diluted earnings per share because the exercise prices were
greater than the average market price of the common shares at the end of
each of the years presented.
Application of SFAS 71
The domestic utility companies and System Energy currently account for
the effects of regulation pursuant to SFAS 71, "Accounting for the Effects
of Certain Types of Regulation." This statement applies to the financial
statements of a rate-regulated enterprise that meet three criteria. The
enterprise must have rates that (i) are approved by the regulator; (ii) are
cost-based; and (iii) can be charged to and collected from customers.
These criteria may also be applied to separable portions of a utility's
business, such as the generation or transmission functions, or to specific
classes of customers. If an enterprise meets these criteria, it may
capitalize costs that would otherwise be charged to expense if the rate
actions of its regulator make it probable that those costs will be
recovered in future revenue. Such capitalized costs are reflected as
regulatory assets in the accompanying financial statements. SFAS 71
requires that rate-regulated enterprises assess the probability of
recovering their regulatory assets at each balance sheet date. When an
enterprise concludes that recovery of a regulatory asset is no longer
probable, the regulatory asset must be removed from the entity's balance
sheet.
SFAS 101, "Accounting for the Discontinuation of Application of FASB
Statement No. 71," specifies how an enterprise that ceases to meet the
criteria for application of SFAS 71 for all or part of its operations
should report that event in its financial statements. In general, SFAS 101
requires that the enterprise report the discontinuation of the application
of SFAS 71 by eliminating from its balance sheet all regulatory assets and
liabilities related to the applicable segment. Additionally, if it is
determined that a regulated enterprise is no longer recovering all of its
costs and therefore no longer qualifies for SFAS 71 accounting, it is
possible that an impairment may exist that could require further write-offs
of plant assets.
EITF 97-4: "Deregulation of the Pricing of Electricity - Issues
Related to the Application of FASB Statements No. 71 and 101" specifies
that SFAS 71 should be discontinued at a date no later than when the
effects of a transition to competition plan for all or a portion of the
entity subject to such plan are reasonably determinable. Additionally, EITF
97-4 promulgates that regulatory assets to be recovered through cash flows
derived from another portion of the entity that continues to apply SFAS 71
should not be written off; rather, they should be considered regulatory
assets of the segment that will continue to apply SFAS 71.
As described in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -
SIGNIFICANT FACTORS AND KNOWN TRENDS," management believes that definitive
outcomes have not yet been determined regarding transition to competition
in any of 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 Entergy
believes that significant issues remain to be addressed by Arkansas and
Texas regulators, and the enacted laws do not provide sufficient detail to
reasonably determine the impact on Entergy Arkansas' and Entergy Gulf
States' regulated operations.
Transition to Competition Liabilities
In conjunction with the transition to competition of the electric
utility industry in certain jurisdictions in which the domestic utility
companies operate, regulatory mechanisms have been established to mitigate
potential stranded costs. These mechanisms include the transition cost
account at Entergy Arkansas, which is discussed further in Note 2 to the
financial statements. Also included is a provision in the Texas transition
legislation that allows depreciation on transmission and distribution
assets to be directed toward generation assets. The liabilities recorded
as a result of these mechanisms are classified as "transition to
competiton" deferred credits.
Domestic Operating Company Deregulated Operations
Entergy Gulf States does not apply regulatory accounting principles to
its wholesale jurisdiction, steam department, Louisiana retail deregulated
portion of River Bend, and the 30% interest in River Bend formerly owned by
Cajun. The Louisiana retail deregulated portion of River Bend is operated
under a deregulated asset plan representing a portion (approximately 24%)
of River Bend plant costs, generation, revenues, and expenses established
under a 1992 LPSC order. The plan allows Entergy Gulf States to sell the
electricity from the deregulated assets to Louisiana retail customers at
4.6 cents per KWH or off-system at higher prices, with certain provisions
for sharing such incremental revenue above 4.6 cents per KWH between
ratepayers and shareholders.
The results of these deregulated operations before interest charges for
the years ended December 31, 1999, 1998, and 1997 are as follows (in
thousands):
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Operating revenues $ 166,509 $ 178,303 $ 155,471
Operating expenses
Fuel, operating, and maintenance 126,917 137,579 89,987
Depreciation 35,141 39,497 36,351
--------- --------- ---------
Total operating expense 162,058 177,076 126,338
Income tax expense 628 1,154 9,416
--------- --------- ---------
Net income from deregulated utility operations $ 3,823 $ 73 $ 19,717
========= ========= =========
</TABLE>
The net investment associated with these deregulated operations as of
December 31, 1999 and 1998 was approximately $835 million and $864 million,
respectively.
Impairment of Long-Lived Assets
Entergy periodically reviews long-lived assets whenever events or
changes in circumstances indicate that recoverability of these assets is
uncertain. Generally, the determination of recoverability is based on the
net cash flows expected to result from such operations and assets.
Projected net cash flows depend on the future operating costs associated
with the assets, the efficiency and availability of the assets and
generating units, and the future market and price for energy over the
remaining life of the assets.
Assets regulated under traditional cost-of-service ratemaking, and
thereby subject to SFAS 71 accounting, are generally not subject to
impairment because this form of regulation assures that all allowed costs
are subject to recovery. However, certain deregulated assets and other
operations of the domestic utility companies totaling approximately $1.2
billion (pre-tax) could be affected in the future. Those assets include
Entergy Arkansas' and Entergy Louisiana's retained shares of Grand Gulf 1,
Entergy Gulf States' Louisiana deregulated asset plan, the Texas
jurisdictional abeyed portion of the River Bend plant and the portion of
River Bend transferred from Cajun, and wholesale operations. Additionally,
as noted above, the discontinuation of SFAS 71 regulatory accounting
principles would require that Entergy review the affected assets for
impairment.
Derivative Financial Instruments and Commodity Derivatives
As a part of its overall risk management strategy, Entergy uses a
variety of derivative financial instruments and commodity derivatives,
including interest rate swaps and natural gas and electricity futures,
forwards, and options.
Entergy accounts for derivative financial instruments used to mitigate
interest rate risk in accordance with hedge accounting. Gains or losses
from rate swaps used for such purposes that are sold or terminated are
deferred and amortized over the remaining life of the debt instrument being
hedged by the interest rate swap. If the debt instrument being hedged by
the interest rate swaps is extinguished, any gain or loss attributable to
the swap would be recognized in the period of the transaction. Additional
information concerning Entergy's interest rate swaps outstanding as of
December 31, 1999 is included in Note 7 to the financial statements.
Entergy's power marketing and trading business engages in price risk
management activities for trading purposes. To conduct these activities,
the business uses futures, forwards, swaps, and options, and uses the mark-
to-market method of accounting. Under the mark-to-market method of
accounting, forwards, futures, swaps, options, and other financial
instruments with third parties are reflected at market value in the balance
sheets. Changes in the assets and liabilities from these instruments
(resulting primarily from newly originated transactions and the impact of
price movements) are recognized currently in the statements of income. The
market prices used to value these transactions reflect management's best
estimate considering various factors including closing exchange and over-
the-counter quotations, time value, and volatility factors underlying the
commitments.
New Accounting Pronouncements
In June 1998, the FASB issued SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities," which will be effective for Entergy in
2001. This statement requires that all derivatives be recognized in the
balance sheet, either as assets or liabilities, and measured at fair value.
The statement also requires the designation and reassessment of all hedging
relationships. The changes in fair value of derivatives will be recognized
in earnings or in comprehensive income, depending on the type of hedge
relationship involved. Entergy has not completed its analysis of the
effect that the adoption of SFAS 133 will have on its financial position,
results of operations, or cash flows.
In February 2000, the FASB issued an SFAS exposure draft which would
be effective for fiscal years beginning after June 15, 2001. The proposed
SFAS would require initial measurement and recognition of the liability for
closure and removal of long-lived assets, including decommissioning, at
fair value at the time the SFAS is adopted. Determination of fair value
will likely require the estimation and discounting of future cash flows
using an expected present value technique. An asset partially offsetting
the liability would be determined by further discounting the liability to
the time it was first incurred, which is initial contamination of a nuclear
plant. This asset and the related accumulated depreciation would be
presented with other plant costs on the balance sheet because the cost of
decommissioning/closing the plant would be recognized as part of the total
cost of the plant asset. Any difference between the liability recognized
and the related net asset recognized at the time the proposed SFAS is
adopted would be treated as a cumulative effective adjustment in the
statement of income, unless it is probable that the difference will
ultimately be recoverable from or refundable to customers. In that case, a
regulatory asset or liability would be recorded. Decommissioning expense
following the effective date of the proposed SFAS would be determined
independently of the regulatory treatment of such expense and could be
higher than the current level of expense being recognized. Amortization
of any regulatory asset or liability recorded at the time of adoption of
the SFAS would mitigate any impact on net income.
NOTE 2. RATE AND REGULATORY MATTERS
Electric Industry Restructuring
Arkansas
(Entergy Corporation and Entergy Arkansas)
In April 1999, the Arkansas legislature enacted a law providing for
competition in the electric utility industry through retail open access on
January 1, 2002. With retail open access, generation operations will
become a competitive business, but transmission and distribution operations
will continue to be regulated. The APSC may delay implementation of retail
open access, but not beyond June 30, 2003. The provisions of the new law:
o require utilities to separate (unbundle) their costs into generation,
transmission, distribution, and customer service functions;
o require operation of transmission facilities by an organization
independent from the generation, distribution, and retail operations;
o provide for the determination of and mitigation measures for
generation market power, which could require generation asset
divestitures;
o allow for recovery of stranded and transition costs if the costs are
approved by the APSC;
o allow for the securitization of approved stranded costs; and
o freeze residential and small business customer rates for three years
by utilities that will recover stranded costs.
Entergy Arkansas filed separate generation, transmission,
distribution, and customer service rates with the APSC in December 1999.
The rates were based on the cost-of-service study that formed the basis of
the rates included in the 1997 settlement agreement. Hearings on the rate
filing are scheduled for September 2000. If approved, these rates will
become effective July 1, 2001. Entergy Arkansas also filed notice with the
APSC in December 1999 of its intent to recover stranded costs. The APSC
and various participants in the industry, including Entergy Arkansas, are
currently in the process of implementing the legislation through various
rulemaking and other proceedings.
Texas
(Entergy Corporation and Entergy Gulf States)
In June 1999, the Texas legislature enacted a law providing for
competition in the electric utility industry through retail open access.
The law provides for retail open access by most electric utilities,
including Entergy Gulf States, on January 1, 2002. With retail open
access, generation and a new retail provider operation will be competitive
businesses, but transmission and distribution operations will continue to
be regulated. The new retail provider function will be the primary point
of contact with the customers for most services beyond initiation of
electric service and restoration of service following an outage. The
provisions of the new law:
o require a rate freeze through January 1, 2002 with frozen rates beyond
that for residential and small commercial customers of incumbent
utilities;
o require utilities to separate (unbundle) their generation,
transmission and distribution, and retail electric provider functions.
Entergy Gulf States filed its plan in January 2000 with the PUCT to
separate its functions. The plan included separate transmission and
distribution companies;
o require operation in a non-discriminatory manner of transmission and
distribution facilities by an organization independent from the
generation and retail operations by the time competition is implemented;
o allow for recovery of stranded costs incurred in purchasing power and
providing electric generation service if the costs are approved by the
PUCT;
o allow securitization of regulatory assets and stranded costs;
o provide for the determination of and mitigation measures for
generation market power; and
o require utilities to file separated data and proposed transmission,
distribution, and competition tariffs by April 1, 2000.
The market power measures include a limit on the ownership of
generation assets by a power generation company within a specified region.
The implications of this limit are uncertain for Entergy Gulf States and
the Entergy system. However, it is possible that Entergy Gulf States could
be required to divest some of its generation assets if Entergy Gulf States
is found to have generation market power. The legislation also requires
affected utilities to sell at auction, at least 60 days before January 1,
2002, entitlements to at least 15% of their installed generation capacity
in Texas. The obligation to auction capacity entitlements continues for up
to 60 months after January 1, 2002, or until 40% of customers in the
jurisdiction have chosen an alternative supplier, whichever comes first.
The PUCT and various participants in the industry are currently in the
process of implementing the legislation through various rulemaking and
other proceedings. Two significant rules have been issued by the PUCT:
o A code of conduct was approved by the PUCT in December 1999 to ensure
that utilities do not allow affiliates to have a business advantage over
competitors. The rules allow the continuation of shared services
affiliates, such as Entergy Operations and Entergy Services. Entergy
adopted an internal code of conduct to ensure compliance with the new
rules.
o Rules governing the separated costs filing have been issued. Included
is a provision establishing, as an alternative to a market-based return
on equity, a presumptively reasonable return on equity for a distribution
utility at 200 basis points over its cost of debt. The provision allows
the utility to provide evidence that the return should be higher. The
rules also provide that the utility may propose a performance-based
enhancement to the authorized rate of return, based on distribution and
transmission company independence. Management does not agree with the
arbitrary level set in the rule and will seek a higher return in its
separated costs filing. A workshop has been held by the PUCT to discuss
opportunities to seek a performance-based return.
Louisiana
(Entergy Corporation, Entergy Gulf States, and Entergy Louisiana)
In September 1996, Entergy Gulf States and Entergy Louisiana filed
proposals with the LPSC designed to achieve an orderly transition to retail
electric competition in Louisiana, while protecting certain classes of
ratepayers from bearing the burden of cost shifting. In 1997 and 1998, the
LPSC identified areas and issues for consideration in the generic
rulemaking docket on competition in the electric utility industry. In
March 1999, the LPSC deferred making a decision on whether electric
restructuring in Louisiana is in the public interest, but 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 by January 1, 2001. The LPSC staff, outside
consultants, counsel, and industry members are working together to develop
a plan to be submitted to the LPSC.
Mississippi
(Entergy Corporation and Entergy Mississippi)
Since 1996, Entergy Mississippi and the MPSC have been addressing
issues regarding an orderly transition to a more competitive retail market
for electricity. As a result, the MPSC issued, for informational purposes
and to spur discussion, a proposed transition plan in June 1998. The plan
provided for retail competition in Mississippi to begin January 1, 2001 and
for recovery of allowable stranded costs through a non-bypassable charge
during a transition period between January 2001 and the end of 2004. In
preparing for competition, the MPSC has conducted hearings on:
o market power and reliability studies filed by the two investor-owned
utilities in Mississippi;
o certification requirements and load dispatch and control rules;
o cost of service issues;
o holding company issues;
o rules and regulations that possibly could be promulgated, after
appropriate state legislation, to implement retail electric
competition;
o stranded costs; and
o rate caps and performance-based rates.
In February 2000, legislation was introduced in Mississippi to establish a
study committee to consider retail competition and provide a report to the
legislature by December 1, 2000. If this legislation passes, the
transition plan discussed above would be put on hold until this report has
been reviewed. Management does not expect deregulation in Mississippi to
occur prior to 2003.
New Orleans
(Entergy Corporation and Entergy New Orleans)
Entergy New Orleans filed an electric transition to competition plan
in September 1997. This plan is similar to those filed for the other
domestic utility companies. No procedural schedule has been established
for consideration of that plan by the Council.
In October 1998, the Council established a procedural schedule to
determine if natural gas retail competition is in the public interest. In
April 1999, Entergy New Orleans filed 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 gas retail open access should the
Council find it in the public interest. Hearings on retail competition for
gas service were held in November 1999. No further action has been taken
by the Council.
Retail Rate Proceedings
Filings with the APSC (Entergy Corporation and Entergy Arkansas)
Entergy Arkansas is operating under the terms of a settlement
agreement approved by the APSC in December 1997 that provides for the
following:
o accelerated payment of Entergy Arkansas' Grand Gulf purchased power
obligation in an amount totaling $165.3 million over the period from
January 1999 to June 2004;
o collecting earnings in excess of an 11% return on equity in a
transition cost account to offset stranded costs when retail access is
implemented;
o a rate freeze until at least July 1, 2001; and
o rate decreases totaling $200 million over the two-year period 1998-
1999. The net income effect from the rate reductions was approximately
$22 million.
During 1999, Entergy Arkansas' operating expenses reflected reserves of
$15.4 million ($9.5 million net of taxes) to record the 1999 accrual of
excess earnings and an adjustment of the 1998 accrual. As of December 31,
1999, the transition cost account balance was $109.9 million. Additional
reserves may also be required in 2000 based on earnings reviews.
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 circumstances 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.
Filings with the PUCT and Texas Cities
Rate Proceedings (Entergy Corporation and Entergy Gulf States)
In June 1999, the PUCT approved the settlement agreement that Entergy
Gulf States entered into in February 1999. The settlement agreement
resolved Entergy Gulf States' 1996 and 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 discussed below. The
Office of Public Utility Counsel, an intervenor in the proceeding, has
appealed certain aspects of this settlement to Travis County District
Court. Entergy Gulf States cannot predict the impact of the appeal.
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. The Texas restructuring law
extends the base rate freeze through December 2001;
o amortization of the remaining River Bend accounting order deferrals as
of January 1, 1999, over three years on a straight-line basis, and the
accounting order deferrals will 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
abeyed plant costs appeal discussed below; 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, and any such
recovery will 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 from its balance sheet a $207.3 million deferred asset and the
associated provision recorded for unrecovered purchased power costs and
deferred revenue from NISCO, which had no net income impact on Entergy
Gulf States;
o removed the reserve recorded in December 1997 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 recorded in 1998 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 June 1999, the PUCT instituted a proceeding to consider the final
adjustment of the rate refunds ordered as a result of Entergy Gulf States'
November 1996 rate case. These refunds were required to occur over the
fourteen-month period from August 1998 through September 1999. The PUCT
issued an order in July 1999 adopting a calculation methodology which
required Entergy Gulf States to refund an additional $25 million. This
refund was recorded as a reduction in operating revenues.
In September and October 1999, seven cities in Entergy Gulf States'
Texas service territory enacted ordinances purporting to require Entergy
Gulf States to "book and hold in a suspense account all revenues from the
sale of River Bend power attributable to the 30% share acquired from Cajun
pending regulatory determination of the appropriate regulatory treatment of
such power." The ordinances had an effective date of December 1997.
Entergy Gulf States filed for a review of the ordinances at the PUCT in
October 1999. In November 1999, Entergy Gulf States and the cities entered
into a settlement agreement under which the parties agreed that the
ordinances only required Entergy Gulf States to provide monthly
informational reports concerning certain expenses, revenues, and operations
associated with the 30% share. Entergy Gulf States treats the 30% share as
a non-regulated operation.
Recovery of River Bend Costs (Entergy Corporation and Entergy Gulf States)
In March 1998, the PUCT disallowed recovery of $1.4 billion of company-
wide abeyed River Bend plant costs which have been held in abeyance since
1988. Entergy Gulf States appealed the PUCT's decision on this matter to
the Travis County District Court in Texas. In June 1999, subsequent to the
settlement agreement discussed above, Entergy Gulf States removed the
reserve for River Bend plant costs held in abeyance and reduced the value
of the plant asset. The settlement agreement limits potential recovery of
the remaining plant asset, less depreciation, to $115 million, beginning
January 1, 2002 through the date the plant costs are included in rate base,
and any such recovery will not be used to increase rates above the level as
agreed to in the settlement agreement. The settlement agreement also
prohibits Entergy Gulf States from acting on its appeal until January 1,
2002. Based on advice of counsel, management believes that it is probable
that the matter will be remanded again to the PUCT for a further ruling on
the prudence of the abeyed plant costs and it is reasonably possible that
some portion of these costs will be included in rate base. However, no
assurance can be given that additional reserves or write-offs will not be
required in the future.
PUCT Fuel Cost Review (Entergy Corporation and Entergy Gulf States)
In September 1998, Entergy Gulf States filed an application with the
PUCT for an increase in its fixed fuel factor and for a surcharge to Texas
retail customers for the cumulative under-recovery of fuel and purchased
power costs. The PUCT issued an order in December 1998 approving the
implementation of a revised fuel factor and fuel and purchased power
surcharge that would result in 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.
North Star Steel Texas, Inc. has appealed the PUCT's order to the State
District Court in Travis County, Texas. Entergy Gulf States cannot predict
the outcome of this appeal.
Based on the settlement agreement discussed above, Entergy Gulf States
adopted a methodology for calculating its fixed fuel factor based on the
market price of natural gas. This calculation and any necessary
adjustments began semi-annually as of March 1, 1999 and are scheduled to
continue until December 2001. The calculation for the factor to be
implemented March 1, 1999 showed that the fuel factor adopted in the
December 1998 PUCT order should be reduced. This fuel factor reduction was
approved by the PUCT in February 1999. The calculation for the factor to
be implemented September 1, 1999 showed, and the PUCT approved on an
interim basis, an increase in the fuel factor.
The amounts collected under Entergy Gulf States' fixed fuel factor
are, and will continue to be, the subject of fuel reconciliation
proceedings before the PUCT, including a fuel reconciliation case filed by
Entergy Gulf States in July 1999. In February 2000, Entergy Gulf States
reached a unanimous settlement with all parties to the proceeding. Entergy
Gulf States is reconciling approximately $731 million (after excluding
approximately $14 million related to Cajun issues to be handled in a
subsequent proceeding) of fuel and purchased power costs. The settlement
reduces Entergy Gulf States' requested surcharge in the reconciliation
filing from $14.7 million to $2.2 million. Although the settlement terms
are still being finalized, the parties will ask the PUCT to allow the
remaining $2.2 million surcharge to be recovered beginning with the April
2000 billing cycle and continue until January 2001. In addition, Entergy
Gulf States agreed to file a fuel reconciliation case by January 12, 2001
covering the period from March 1, 1999 through August 31, 2000.
In September 1999, Entergy Gulf States filed an application with the
PUCT requesting an interim fuel surcharge to collect under-recovered fuel
and purchased power expenses incurred from March 1999 through July 1999.
In December 1999, the PUCT approved the collection of $33.9 million over a
five-month period beginning January 2000. The fuel and purchased power
expenses contained in this surcharge will be subject to future fuel
reconciliation proceedings.
Filings with the LPSC
Annual Earnings Reviews (Entergy Corporation and Entergy Gulf States)
In May 1995, Entergy Gulf States filed its second required post-Merger
earnings analysis with the LPSC. Hearings on this review were held in
December 1995. In October 1996, the LPSC ordered a $33.3 million annual
base rate reduction and a $9.6 million refund. One component of the rate
reduction removes from base rates approximately $13.4 million annually of
costs that will be recovered in the future through the fuel adjustment
clause. Subsequently, Entergy Gulf States appealed the LPSC's order and
obtained an injunction to stay the order, except insofar as it requires the
$13.4 million reduction, which Entergy Gulf States implemented in November
1996. In addition, pursuant to an October 1996 settlement with the LPSC,
Entergy Gulf States will be allowed to recover $8.1 million annually
related to certain gas transportation and storage facilities costs. This
amount will be applied as an offset to any refunds required. In April
1999, a Louisiana Supreme Court decision reduced the refund that Entergy
Gulf States is 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 1996, Entergy Gulf States filed its third required post-Merger
earnings analysis with the LPSC. Based on this filing, Entergy Gulf States
implemented a $5.3 million annual rate reduction in June 1996. In
September 1998, the LPSC issued an order in the third required post-Merger
earnings analysis that required a refund of $44.8 million for the period
June 1996 through May 1997, and a prospective rate reduction of $54.6
million effective September 20, 1998. The decision is on appeal to the
Louisiana Supreme Court.
In May 1997, Entergy Gulf States filed its fourth post-Merger earnings
analysis with the LPSC. Hearings were concluded in 1998 and a final
decision by the LPSC is expected during the second or third quarter of
2000.
In May 1998, Entergy Gulf States filed its fifth required post-Merger
earnings analysis with the LPSC. This filing will be subject to review by
the LPSC and may result in a change in rates. Hearings were held in May
1999 and a decision by the LPSC is expected in the fourth quarter of 2000
or the first quarter of 2001. In a bifurcated proceeding, the LPSC
investigated transactions between Entergy Gulf States and other Entergy
affiliates. Hearings were held in December 1999.
In May 1999, Entergy Gulf States filed its sixth required post-Merger
earnings analysis with the LPSC. Hearings were held in February 2000. The
timing of a final decision in the proceeding is not certain.
Entergy Gulf States' operating revenues during the fourth quarter of
1998 reflected reserves of $102.2 million ($60.9 million net of taxes)
based on management's estimates of the probable outcome of the annual
earnings reviews as well as the effects of the LPSC fuel cost review
discussed below. Additional reserves of $36.1 million ($22.2 million net
of taxes), including interest, are reflected in operating revenues in 1999.
Proceedings on issues in the second, third, fourth, fifth, and sixth post-
Merger earnings analyses will continue.
LPSC Fuel Cost Review (Entergy Corporation and Entergy Gulf States)
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 ordered 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 an October 1996 settlement with the LPSC.
Entergy Gulf States will be permitted to recover these costs in the future
through base rates. In January 1999, the Louisiana Supreme Court affirmed
the LPSC's October 1996 order. In accordance with this decision, Entergy
Gulf States refunded $26.2 million, including interest, in August 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 above.
Formula Rate Plan Filings (Entergy Corporation and Entergy Louisiana)
In May 1997, Entergy Louisiana made its second annual performance-
based formula rate plan filing with the LPSC for the 1996 test year. This
filing resulted in a total rate reduction of approximately $54.5 million,
which was implemented in July 1997. At the same time, rates were reduced
by an additional $0.7 million and by an additional $2.9 million effective
March 1998. Upon completion of the hearing process in December 1998, the
LPSC issued an order requiring an additional rate reduction and refund,
although the resulting amounts were not quantified. Entergy Louisiana has
appealed this order and obtained a preliminary injunction pending a final
decision on appeal.
In September 1998, Entergy Louisiana made its third annual performance-
based formula rate plan filing with the LPSC for the 1997 test year.
Entergy Louisiana settled this filing with the LPSC in the third quarter of
1999. The settlement required no further change in Entergy Louisiana's
base rates. Entergy Louisiana will recover a $4.3 million excess credit as
an offset to future rate reductions.
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. An interim rate reduction of $15.0 million was implemented
effective August 1, 1999. Entergy Louisiana's filing will be subject to
further review by the LPSC, which may result in an additional change in
rates. Entergy Louisiana has provided reserves for the potential of
further rate reductions. Hearings are scheduled with the LPSC in May 2000.
Fuel Adjustment Clause Litigation (Entergy Corporation and Entergy
Louisiana)
In May 1998, a group of ratepayers filed a complaint against Entergy
Corporation, Entergy Power, and Entergy Louisiana in state court in Orleans
Parish purportedly on behalf of all Entergy Louisiana ratepayers. The
plaintiffs seek treble damages for alleged injuries arising from the
defendants' alleged violations of Louisiana's antitrust laws in connection
with the costs included in fuel filings with the LPSC and passed through to
ratepayers. Among other things, plaintiffs allege that Entergy Louisiana
improperly introduced certain costs into the calculation of the fuel
charges, including imprudently purchased high-cost electricity from its
affiliates and imprudently purchased high-cost gas. Plaintiffs allege that
these practices violated Louisiana's antitrust laws. In addition,
plaintiffs seek to recover interest and attorney fees. Exceptions have
been filed by Entergy, asserting that this dispute should be litigated
before the LPSC and FERC. At the appropriate time, if necessary, Entergy
will raise its defenses to the antitrust claims. At present, the suit in
state court is stayed by stipulation of the parties.
Plaintiffs also filed this complaint with the LPSC to initiate a
review by the LPSC of Entergy Louisiana's monthly fuel adjustment charge
filings and to force restitution to ratepayers of all costs that the
plaintiffs allege were improperly included in those fuel adjustment
filings. Marathon Oil Company and Louisiana Energy Users Group have also
intervened in the LPSC proceeding. Discovery at the LPSC has been
conducted and is expected to continue. Direct testimony was filed with the
LPSC by plaintiffs and the intervenors in July 1999. In their testimony
for the period 1989 through 1998, plaintiffs purport to quantify many of
their claims in an amount totaling $544 million, plus interest. The
plaintiffs will likely assert additional damages for the period 1974
through 1988. The Entergy companies filed responsive and rebuttal
testimony in September 1999. Rebuttal testimony by the plaintiffs and
intervenors was filed in November 1999. Direct testimony of the LPSC staff
will be filed in April 2000, to which Entergy will be permitted to respond.
Hearings before the LPSC are scheduled to begin in September 2000. Entergy
intends to defend this matter vigorously, both in court and at the LPSC.
The outcome of the lawsuit and the LPSC proceeding cannot be predicted at
this time. Management has provided reserves for this, other litigation,
and Entergy Louisiana's formula rate plan proceedings based on its estimate
of the outcome of these proceedings.
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 approved 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
1997 Settlement (Entergy Corporation and Entergy New Orleans)
Entergy New Orleans submitted its cost of service and revenue
requirement filing in September 1997 to the Council. In connection with
this filing, Entergy New Orleans filed a settlement agreement with the
Council, which was approved in November 1998. The settlement agreement
required the following:
o base rate reductions for Entergy New Orleans' electric customers of
$7.1 million effective January 1, 1999, $3.2 million effective
October 1, 1999, and $16.1 million effective October 1, 2000;
o a base rate reduction for Entergy New Orleans' gas customers of $1.9
million effective January 1999; and
o no base rate increases prior to October 1, 2001.
Natural Gas (Entergy Corporation and Entergy New Orleans)
The Council held hearings in May 1999 regarding the prudence of
Entergy New Orleans' natural gas purchasing practices.
Fuel Adjustment Clause Litigation (Entergy Corporation and Entergy New
Orleans)
In April 1999, a group of ratepayers filed a complaint against Entergy
New Orleans, Entergy Corporation, Entergy Services, and Entergy Power in
state court in Orleans Parish purportedly on behalf of all Entergy New
Orleans ratepayers. The plaintiffs seek treble damages for alleged
injuries arising from the defendants' alleged violations of Louisiana's
antitrust laws in connection with certain costs passed on to ratepayers in
Entergy New Orleans' fuel adjustment filings with the Council. In
particular, plaintiffs allege that Entergy New Orleans improperly included
certain costs in the calculation of fuel charges and that Entergy New
Orleans imprudently purchased high-cost fuel from other Entergy affiliates.
Plaintiffs allege that Entergy New Orleans and the other defendant Entergy
companies conspired to make these purchases to the detriment of Entergy New
Orleans' ratepayers and to the benefit of Entergy's shareholders, in
violation of Louisiana's antitrust laws. Plaintiffs also seek to recover
interest and attorney fees. Exceptions to the plaintiffs' allegations were
filed by Entergy, asserting, among other things, that jurisdiction over
these issues rests with the Council and FERC. If necessary, at the
appropriate time, Entergy will also raise its defenses to the antitrust
claims. At present, the suit in state court is stayed by stipulation of
the parties.
Plaintiffs also filed this complaint with the Council in order to
initiate a review by the Council of their allegations and to force
restitution to ratepayers of all costs they allege were improperly and
imprudently included in the fuel adjustment filings. Discovery has begun
in the proceedings before the Council. The plaintiffs have not yet stated
the amount of damages they claim. Entergy intends to defend this matter
vigorously, both in court and before the Council. The ultimate outcome of
the lawsuit and the Council proceeding cannot be predicted at this time.
River Bend Cost Deferrals (Entergy Corporation and Entergy Gulf States)
Entergy Gulf States was amortizing $182 million of River Bend
operating and purchased power costs, depreciation, and accrued carrying
charges over a 20-year period; however the PUCT recently accelerated the
recovery of these deferrals to a three-year recovery period ending May
1999. The settlement agreement discussed above dismissed Entergy Gulf
States' appeal regarding these deferrals and allowed Entergy Gulf States to
amortize the remainder of the accelerated balance as of January 1, 1999,
over three years on a straight-line basis ending December 31, 2001.
Grand Gulf 1 Deferrals and Retained Shares
(Entergy Corporation and Entergy Arkansas)
Under the settlement agreement entered into with the APSC in 1985 and
amended in 1988, Entergy Arkansas retains 22% of its 36% share of Grand
Gulf 1-related costs and recovers the remaining 78% of its share in rates.
In the event that Entergy Arkansas is not able to sell its retained share
to third parties, it may sell such energy to its retail customers at a
price equal to its avoided energy cost, which is currently less than
Entergy Arkansas' cost of energy from its retained share.
(Entergy Corporation and Entergy Louisiana)
In a series of LPSC orders, court decisions, and agreements from late
1985 to mid-1988, Entergy Louisiana was granted rate relief with respect to
costs associated with Entergy Louisiana's share of capacity and energy from
Grand Gulf 1, subject to certain terms and conditions. Entergy Louisiana
retains and does not recover from retail ratepayers, 18% of its 14% share
of the costs of Grand Gulf 1 capacity and energy and recovers the remaining
82% of its share in rates. Entergy Louisiana is allowed to recover through
the fuel adjustment clause 4.6 cents per KWH for the energy related to its
retained portion of these costs. Non-fuel operation and maintenance costs
for Grand Gulf 1 are recovered through Entergy Louisiana's base rates.
Alternatively, Entergy Louisiana may sell such energy to nonaffiliated
parties at prices above the fuel adjustment clause recovery amount, subject
to the LPSC's approval.
(Entergy Corporation and Entergy New Orleans)
Under various rate settlements with the Council in 1986, 1988, and
1991, Entergy New Orleans agreed to absorb and not recover from ratepayers
a total of $96.2 million of its Grand Gulf 1 costs. Entergy New Orleans
was permitted to implement annual rate increases in decreasing amounts each
year through 1995, and to defer certain costs and related carrying charges
for recovery on a schedule extending from 1991 through 2001. As of
December 31, 1999, the uncollected balance of Entergy New Orleans' deferred
costs was $35.8 million.
FERC Settlement (Entergy Corporation and System Energy)
In November 1994, FERC approved an agreement settling a long-standing
dispute involving income tax allocation procedures of System Energy. In
accordance with the agreement, System Energy will refund a total of
approximately $62 million, plus interest, to Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans through June 2004.
System Energy also reclassified from utility plant to other deferred debits
approximately $81 million of other Grand Gulf 1 costs. Although such costs
are excluded from rate base, System Energy is amortizing and recovering
these costs over a 10-year period. Interest on the $62 million refund and
the loss of the return on the $81 million of other Grand Gulf 1 costs will
reduce Entergy's and System Energy's net income by approximately $10
million annually until 2004.
Proposed Rate Increase
(System Energy)
System Energy applied to FERC in May 1995 for a $65.5 million rate
increase. The request seeks changes to System Energy's rate schedule,
including increases in the revenue requirement associated with
decommissioning costs, the depreciation rate, and the rate of return on
common equity. The request also includes a proposed change in the
accounting recognition of nuclear refueling outage costs from that of
expensing those costs as incurred to the deferral and amortization method
described in Note 1 to the financial statements. In December 1995, System
Energy implemented the $65.5 million rate increase, subject to refund, for
which a portion has been reserved. 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.
If 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 $228.2 million as of December 31, 1999, together with
interest in the amount of $39.6 million. As of December 31, 1999, System
Energy has fully provided reserves for this potential refund. 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 recorded reserves are adequate to reflect the
probable outcome of this proceeding, additional reserves or write-offs
could be required in the future.
(Entergy Mississippi)
Entergy Mississippi's allocation of the proposed System Energy
wholesale rate increase is $21.6 million annually. In July 1995, Entergy
Mississippi filed a schedule with the MPSC that defers the retail recovery
of the System Energy rate increase. The deferral plan, which was approved
by the MPSC, began in December 1995, the effective date of the System
Energy rate increase, and will end after the issuance of a final order by
FERC. Under this plan, the deferral period was anticipated to have ended
by September 1998, and the deferred amount would have been amortized over
48 months beginning in October 1998. Although the deferral period under
the plan has ended, FERC has not yet issued an order. For that reason,
Entergy Mississippi filed a revised deferral plan with the MPSC in August
1998 that provides for recovery, effective with October 1998 billings, of
$11.8 million of the System Energy rate increase that was approved by the
FERC ALJ's initial decision in July 1996. The $11.8 million is being
amortized over the original 48-month period, which began in October 1998.
The amount of System Energy's proposed increase in excess of the $11.8
million will continue to be deferred until the issuance of a final order by
FERC, or October 2000, whichever occurs first. These deferred amounts,
plus carrying charges, will be amortized over a 45-month period beginning
in October 2000.
(Entergy New Orleans)
Entergy New Orleans' allocation of the proposed System Energy
wholesale rate increase is $11.1 million annually. In February 1996,
Entergy New Orleans filed a plan with the Council to defer 50% of the
amount of the System Energy rate increase. The deferral began in February
1996 and will end after the issuance of a final order by FERC.
Grand Gulf Accelerated Recovery Tariff
(Entergy Arkansas)
In April 1998, FERC approved the GGART that Entergy Arkansas filed as
part of the settlement agreement that the APSC approved in December 1997.
The GGART 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 GGART provides for the acceleration of
$165.3 million of its obligation over the period January 1, 1999 through
June 30, 2004. The settlement agreement with the APSC is discussed above
in "Filings with the APSC."
(Entergy Mississippi)
In September 1998, FERC approved the GGART for Entergy Mississippi's
allocable portion of Grand Gulf, which was filed with FERC in August 1998.
The GGART provides for the acceleration of Entergy Mississippi's Grand Gulf
purchased power obligation in an amount totaling $221.3 million over the
period October 1, 1998 through June 30, 2004.
NOTE 3. INCOME TAXES
Income tax expenses for 1999, 1998, and 1997 consist of the following
(in thousands):
<TABLE>
<CAPTION>
1999 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Current:
Federal $452,568 $ 25,812 $ 64,991 $115,179 $ (660) $ 13,238 $121,733
Foreign 27,730 - - - - - -
State 65,834 5,781 11,669 22,675 131 2,923 18,979
---------------------------------------------------------------------------
Total 546,132 31,593 76,660 137,854 (529) 16,161 140,712
Deferred -- net (153,304) 26,334 13,513 (9,953) 19,566 (2,615) (77,173)
Investment tax credit
adjustments -- net (36,161) (3,915) (15,008) (5,533) (1,500) (516) (9,688)
---------------------------------------------------------------------------
Recorded income tax expense $356,667 $54,012 $ 75,165 $122,368 $ 17,537 $ 13,030 $ 53,851
===========================================================================
</TABLE>
<TABLE>
<CAPTION>
1998 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Current:
Federal $235,979 $ 68,814 $ 43,729 $ 69,551 $ 34,984 $ 15,010 $ 91,107
Foreign 28,156 - - - - - -
State 67,163 14,853 17,218 12,643 5,541 2,530 14,378
----------------------------------------------------------------------------
Total 331,298 83,667 60,947 82,194 40,525 17,540 105,485
Deferred -- net (109,474) (7,153) (90,314) 32,506 (10,983) (6,993) (24,745)
Investment tax credit
adjustments -- net 44,911 (5,140) 61,140 (5,596) (1,511) (505) (3,477)
----------------------------------------------------------------------------
Recorded income tax expense $266,735 $71,374 $ 31,773 $109,104 $ 28,031 $ 10,042 $ 77,263
============================================================================
</TABLE>
<TABLE>
<CAPTION>
1997 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Current:
Federal $433,444 $ 113,278 $ 68,881 $ 94,448 $ 49,472 $ 12,003 $98,428
Foreign 237,337 - - - - - -
State 76,905 23,756 6,007 19,974 9,476 2,096 15,596
---------------------------------------------------------------------------------
Total 747,686 137,034 74,888 114,422 58,948 14,099 114,024
Deferred -- net (312,691) (73,406) (104,435) (9,833) (30,697) (1,369) (35,894)
Investment tax credit
adjustments -- net 36,346 (4,408) 51,949 (5,624) (1,507) (588) (3,476)
---------------------------------------------------------------------------------
Recorded income tax expense $471,341 $ 59,220 $ 22,402 $ 98,965 $ 26,744 $ 12,142 $ 74,654
=================================================================================
</TABLE>
Total income taxes differ from the amounts computed by applying the
statutory income tax rate to income before taxes. The reasons for the
differences for the years 1999, 1998, and 1997 are (amounts in thousands):
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
1999 Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Computed at statutory rate (35%) $ 333,093 $ 43,164 $ 70,058 $ 109,948 $ 20,693 $ 11,196 $ 47,678
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 49,487 6,949 18,805 13,741 1,982 1,930 6,080
Depreciation 49,460 18,429 4,718 9,577 (1,093) 2,232 15,597
Rate deferrals - net (254) - (90) 67 (24) (207) -
Amortization of investment
tax credits (29,015) (5,132) (6,642) (5,532) (1,500) (518) (9,691)
Flow-through/permanent
differences (8,042) (5,250) (2,795) 532 (284) (272) 27
US tax benefit on foreign income (9,584) - - - - - -
Benefit of Entergy Corporation
expenses - (3,341) (4,046) (4,053) (1,936) (754) (4,552)
Change in valuation allowance (46,315)
Other -- net 17,837 (807) (4,843) (1,912) (301) (577) (1,288)
-------------------------------------------------------------------------------
Total income taxes $356,667 $ 54,012 $ 75,165 $122,368 $ 17,537 $ 13,030 $ 53,851
===============================================================================
Effective Income Tax Rate 37.5% 43.8% 37.6% 39.0% 29.7% 40.7% 39.5%
</TABLE>
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
1998 Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Computed at statutory rate (35%) $ 368,327 $ 63,814 $ 27,358 $ 101,007 $ 31,734 $ 9,162 $ 64,309
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 37,494 9,289 7,744 9,156 3,053 831 7,421
Depreciation 40,578 6,497 11,099 8,147 (686) 888 14,633
Rate deferrals - net (511) 701 659 372 (2,535) 292 -
Amortization of investment
tax credits (21,285) (5,136) (5,061) (5,592) (1,512) (504) (3,480)
Flow-through/permanent
Differences (3,570) 1,078 (4,404) (188) 149 (187) (18)
US tax on foreign income 108,194 - - - - - -
Non-taxable gain on sale
of foreign assets (20,283) - - - - - -
Change in UK statutory rate (31,703) - - - - - -
Foreign subsidiary basis difference (58,235) - - - - - -
Reduced rate on gain on sale
of foreign assets (56,712) - - - - - -
Non-deductible franchise fees 7,315 - - - - - -
Interest on perpetual instruments (5,467) - - - - - -
Benefit of Entergy Corporation
Expenses - (5,212) (4,948) (3,947) (2,386) (629) (4,999)
Change in valuation allowance (106,636)
Other -- net 9,229 343 (674) 149 214 189 (603)
----------------------------------------------------------------------------------
Total income taxes $266,735 $ 71,374 $ 31,773 $ 109,104 $ 28,031 $ 10,042 $ 77,263
==================================================================================
Effective Income Tax Rate 25.3% 39.1% 40.6% 37.8% 30.9% 38.4% 42.1%
</TABLE>
<TABLE>
<CAPTION>
Entergy Entergy Entergy Entergy Entergy System
1997 Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Computed at statutory rate (35%) $ 270,284 $ 64,470 $ 28,833 $ 84,253 $ 32,691 $ 9,658 $ 61,932
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 33,272 8,382 1,274 12,106 3,110 1,191 7,209
Depreciation 25,471 (2,784) (3,670) 13,162 964 2,236 15,563
Rate deferrals - net 3,484 1,543 5,575 (526) (3,504) 396 -
Amortization of investment
tax credits (19,592) (4,404) (3,981) (5,627) (1,512) (589) (3,479)
Flow-through/permanent
Differences (6,537) (1,558) (14,658) 47 (78) (187) -
UK windfall profits tax 234,080 - - - - - -
Change in UK statutory rate (64,670) - - - - - -
Non-deductible franchise fees 17,234 - - - - - -
Interest on perpetual instruments (9,094) - - - - - -
Benefit of Entergy Corporation
Expenses - (4,920) - (4,788) (2,704) (831) (4,037)
Other - net (12,591) (1,509) 9,029 338 (2,223) 268 (2,534)
---------------------------------------------------------------------------------
Total income taxes $ 471,341 $ 59,220 $ 22,402 $ 98,965 $ 26,744 $ 12,142 $ 74,654
=================================================================================
Effective Income Tax Rate 61.0% 31.6% 27.2% 41.1% 28.6% 44.0% 42.2%
</TABLE>
Significant components of net deferred tax liabilities as of December
31, 1999 and 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
1999 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Deferred Tax Liabilities:
Net regulatory assets/(liabilities) $(1,268,257) $ (229,555) $ (432,256) $ (278,289) $ (32,048) $ 4,480 $ (300,589)
Plant-related basis differences (3,041,135) (533,375) (1,013,110) (749,257) (220,827) (62,104) (452,083)
Rate deferrals (77,652) (6,168) (3,128) - (44,214) (24,142) -
Other (201,958) (77,812) (15,157) (24,741) (9,214) (7,718) (22,412)
-----------------------------------------------------------------------------------------
Total $(4,589,002) $ (846,910) $(1,463,651) $(1,052,287) $ (306,303) $ (89,484) $ (775,084)
=========================================================================================
Deferred Tax Assets:
Accumulated deferred investment
tax credit 178,153 37,211 46,851 47,390 7,997 3,048 35,656
Net operating loss carryforwards 2,137 - 2,137 - - - -
Capital loss carryforwards 62,754 - - - - - -
Foreign tax credits 116,701 - - - - - -
Alternative minimum tax credit 40,658 - 40,658 - - - -
Sale and leaseback 230,690 - - 107,184 - - 123,506
Removal cost 108,572 943 26,848 66,786 1,994 12,001 -
Unbilled revenues 40,761 - 21,161 17,618 (1,183) 3,165 -
Pension-related items 32,734 - 10,810 9,509 (1,508) 8,064 2,883
Rate refund 142,984 - 45,781 20,270 - 1,347 102,422
Reserve for regulatory adjustments 124,078 - 124,078 - - - -
Transition cost accrual 43,127 43,127 - - - - -
FERC Settlement 12,638 - - - - - 12,638
Other 161,074 13,358 18,485 3,760 - 7,118 8,872
Valuation allowance (91,039) - - - - - -
-----------------------------------------------------------------------------------------
Total $ 1,206,022 $ 94,639 $ 336,809 $ 272,517 $ 7,300 $ 34,743 $ 285,977
=========================================================================================
Net deferred tax liability $(3,382,980) $ (752,271) $(1,126,842) $ (779,770) $ (299,003) $ (54,741) $ (489,107)
=========================================================================================
</TABLE>
<TABLE>
<CAPTION>
1998 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Deferred Tax Liabilities:
Net regulatory $(1,334,014) $ (286,983) $ (432,070) $ (319,588) $ (34,086) $ (2,305) $ (258,982)
assets/(liabilities)
Plant-related basis differences (3,053,837) (505,851) (1,027,463) (739,298) (214,461) (57,778) (489,501)
Rate deferrals (97,071) (1,350) (26,986) - (36,064) (32,671) -
Gain on sale of assets (80,500) - - - - - -
Other (55,700) (63,663) (8,923) (23,912) (6,531) (5,372) (20,517)
------------------------------------------------------------------------------------------
Total $(4,621,122) $(857,847) $(1,495,442) $(1,082,798) $ (291,142) $ (98,126) $ (769,000)
==========================================================================================
Deferred Tax Assets:
Accumulated deferred investment
tax credit 192,696 38,708 55,664 49,520 8,571 3,247 36,986
Investment tax credit carryforwards 8,979 - 8,979 - - - -
Net operating loss carryforwards 2,137 - 2,137 - - - -
Capital loss carryforwards 65,939 - - - - - -
Foreign tax credits 135,727 - - - - - -
Alternative minimum tax credit 40,658 - 40,658 - - - -
Sale and leaseback 240,067 - - 108,125 - - 131,942
Removal cost 108,858 1,127 27,015 66,012 2,945 11,759 -
Unbilled revenues 36,802 - 20,365 12,660 (726) 4,503 -
Pension-related items 30,911 - 11,565 9,664 - 5,849 3,833
Rate refund 110,312 - 49,385 - - - 60,927
Reserve for regulatory adjustments 158,839 - 158,839 - - - -
Transition cost accrual 35,374 35,374 - - - - -
FERC Settlement 15,057 - - - - - 15,057
Other 10,719 1,905 33,944 9,218 - 9,270 8,506
Valuation allowance (142,261) - - - - - -
------------------------------------------------------------------------------------------
Total $ 1,050,814 $ 77,114 $ 408,551 $ 255,199 $ 10,790 $ 34,628 $ 257,251
==========================================================================================
Net deferred tax liability $ (3,570,308)$ (780,733)$ (1,086,891)$ (827,599) $ (280,352) $ (63,498) $ (511,749)
==========================================================================================
</TABLE>
As of December 31, 1999, Entergy had net operating loss carryforwards
of $24.5 million for state income tax purposes, all related to Entergy Gulf
States. If the state net operating loss carryforwards are not utilized
against income from its subsidiaries, they will expire between 2000 and
2004. The alternative minimum tax (AMT) credit carryforwards as of
December 31, 1999 were $40.7 million, all related to Entergy Gulf States.
This AMT credit can be carried forward indefinitely and may be applied
solely against the federal income tax liability of Entergy Gulf States.
The valuation allowance is provided primarily against foreign tax
credit carryforwards, which can be utilized against future United States
taxes on foreign source income. If these carryforwards are not utilized,
they will expire between 2000 and 2004.
At December 31, 1999, unremitted earnings of foreign subsidiaries were
approximately $29.5 million. Since it is Entergy's intention to
indefinitely reinvest these earnings, no U.S. taxes have been provided.
Upon distribution of these earnings in the form of dividends or otherwise,
Entergy could be subject to U.S. income taxes (subject to foreign tax
credits) and withholding taxes payable to various foreign countries.
NOTE 4. LINES OF CREDIT AND RELATED SHORT-TERM BORROWINGS (Entergy
Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
The short-term borrowings of the domestic utility companies and System
Energy are limited to amounts authorized by the SEC. The current limits
authorized are effective through November 30, 2001. In addition to
borrowing from commercial banks, Entergy companies are authorized to borrow
from the Entergy System Money Pool (money pool). The money pool is an
inter-company borrowing arrangement designed to reduce the domestic utility
companies' dependence on external short-term borrowings. Borrowings from
the money pool and external borrowings combined may not exceed the SEC
authorized limits. The following are the SEC-authorized limits and
borrowings from the money pool for the domestic utility companies and
System Energy as of December 31, 1999 (there were no borrowings outstanding
from external sources):
Outstanding
Authorized Borrowings
(In Millions)
Entergy Arkansas $ 235 $40.6
Entergy Gulf States 340 36.1
Entergy Louisiana 225 91.5
Entergy Mississippi 103 50.0
Entergy New Orleans 35 9.7
System Energy 140 -
------ ------
Total $1,078 $227.9
====== ======
Other Entergy companies have SEC authorization to borrow from Entergy
Corporation through the money pool and from external sources in an
aggregate principal amount up to $265 million. These Entergy companies had
$116.6 million outstanding as of December 31, 1999 borrowed from the money
pool. Some of these borrowings are restricted as to use and are
collateralized by certain assets.
In September 1999, Entergy Corporation amended its $250 million, 364-
day bank credit facility. As of December 31, 1999, $120 million was
outstanding under this facility. The weighted-average interest rate on
Entergy's outstanding borrowings as of December 31, 1999 and 1998 was 7.48%
and 5.97%, respectively. The commitment fee for this facility is currently
.15% of the line amount. Commitment fees and interest rates on loans under
the credit facility can fluctuate depending on the senior debt ratings of
the domestic utility companies. There is further discussion of commitments
for long-term financing arrangements in Note 7 to the financial statements.
On February 25, 2000, Entergy Corporation obtained a 364-day term loan
in the amount of $120 million, accruing interest at a rate of 6.7%. The
proceeds are being used to make an open-account advance to Entergy
Louisiana in order to repay maturing debt. Entergy Corporation will use
any remaining proceeds for general corporate purposes and working capital
needs.
NOTE 5. PREFERRED, PREFERENCE, AND COMMON STOCK (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans)
The number of shares authorized and outstanding, and dollar value of
preferred and preference stock for Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy
New Orleans as of December 31, 1999, and 1998 were:
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Share as of
and Outstanding December 31,
1999 1998 1999 1998 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Arkansas Preferred Stock
Without sinking fund:
Cumulative, $100 par value
4.32% Series 70,000 70,000 $ 7,000 $ 7,000 $103.65
4.72% Series 93,500 93,500 9,350 9,350 $107.00
4.56% Series 75,000 75,000 7,500 7,500 $102.83
4.56% 1965 Series 75,000 75,000 7,500 7,500 $102.50
6.08% Series 100,000 100,000 10,000 10,000 $102.83
7.32% Series 100,000 100,000 10,000 10,000 $103.17
7.80% Series 150,000 150,000 15,000 15,000 $103.25
7.40% Series 200,000 200,000 20,000 20,000 $102.80
7.88% Series 150,000 150,000 15,000 15,000 $103.00
Cumulative, $0.01 par value:
$1.96 Series (a) 600,000 600,000 15,000 15,000 $25.00
--------- --------- -------- --------
Total without sinking fund 1,613,500 1,613,500 $116,350 $116,350
========= ========= ======== ========
With sinking fund:
Cumulative, $100 par value
8.52% Series - 200,000 $ - $ 20,000 -
Cumulative, $25 par value
9.92% Series - 81,085 - 2,027 -
--------- --------- -------- --------
Total with sinking fund - 281,085 $ - $ 22,027
========= ========= ======== ========
Fair Value of Preferred Stock with sinking fund (e) $ - $ 22,986
======== ========
</TABLE>
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Share as of
and Outstanding December 31,
1999 1998 1999 1998 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Gulf States Preferred and Preference Stock
Preference Stock
Cumulative, without par value
7% Series (a)(b) 6,000,000 6,000,000 $150,000 $150,000 -
========= ========= ======== ========
Preferred Stock
Authorized 6,000,000, $100 par
value, cumulative
Without sinking fund:
4.40% Series 51,173 51,173 $ 5,117 $ 5,117 $108.00
4.50% Series 5,830 5,830 583 583 $105.00
4.40%-1949 Series 1,655 1,655 166 166 $103.00
4.20% Series 9,745 9,745 975 975 $102.82
4.44% Series 14,804 14,804 1,480 1,480 $103.75
5.00% Series 10,993 10,993 1,099 1,099 $104.25
5.08% Series 26,845 26,845 2,685 2,685 $104.63
4.52% Series 10,564 10,564 1,056 1,056 $103.57
6.08% Series 32,829 32,829 3,283 3,283 $103.34
7.56% Series 350,000 350,000 35,000 35,000 $101.80
--------- --------- -------- --------
Total without sinking fund 514,438 514,438 $ 51,444 $ 51,444
========= ========= ======== ========
With sinking fund:
8.80% Series - 139,971 - $ 13,997 -
8.64% Series - 84,000 - 8,400 -
Adjustable Rate - A, 7.02%(c) 144,000 156,000 $ 14,400 15,600 $100.00
Adjustable Rate - B, 7.03%(c) 202,500 225,000 20,250 22,500 $100.00
--------- --------- -------- --------
Total with sinking fund 346,500 604,971 $ 34,650 $ 60,497
========= ========= ======== ========
Fair Value of Preference Stock and
Preferred Stock with sinking fund (e) $183,357 $203,456
======== ========
</TABLE>
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Share as of
and Outstanding December 31,
1999 1998 1999 1998 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Louisiana Preferred Stock
Without sinking fund:
Cumulative, $100 par value
4.96% Series 60,000 60,000 $ 6,000 $ 6,000 $104.25
4.16% Series 70,000 70,000 7,000 7,000 $104.21
4.44% Series 70,000 70,000 7,000 7,000 $104.06
5.16% Series 75,000 75,000 7,500 7,500 $104.18
5.40% Series 80,000 80,000 8,000 8,000 $103.00
6.44% Series 80,000 80,000 8,000 8,000 $102.92
7.84% Series 100,000 100,000 10,000 10,000 $103.78
7.36% Series 100,000 100,000 10,000 10,000 $103.36
Cumulative, $25 par value:
8.00% Series 1,480,000 1,480,000 37,000 37,000 $25.00
--------- --------- -------- --------
Total without sinking fund 2,115,000 2,115,000 $100,500 $100,500
========= ========= ======== ========
With sinking fund:
7.00% Series - 500,000 $ - $ 50,000 -
8.00% Series (d) 350,000 350,000 35,000 35,000 -
--------- --------- -------- --------
Total with sinking fund 350,000 850,000 $ 35,000 $ 85,000
========= ========= ======== ========
Fair Value of Preferred Stock with sinking fund (e) $ 35,364 $ 87,813
======== ========
</TABLE>
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Share as of
and Outstanding December 31,
1999 1998 1999 1998 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Mississippi Preferred Stock
Without sinking fund:
Cumulative, $100 par value
4.36% Series 59,920 59,920 $ 5,992 $ 5,992 $103.86
4.56% Series 43,888 43,888 4,389 4,389 $107.00
4.92% Series 100,000 100,000 10,000 10,000 $102.88
7.44% Series 100,000 100,000 10,000 10,000 $102.81
8.36% Series 200,000 200,000 20,000 20,000 $100.00
--------- --------- -------- --------
Total without sinking fund 503,808 503,808 $ 50,381 $ 50,381
========= ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Share as of
and Outstanding December 31,
1999 1998 1999 1998 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy New Orleans Preferred Stock
Without sinking fund:
Cumulative, $100 par value
4.75% Series 77,798 77,798 $ 7,780 $ 7,780 $105.00
4.36% Series 60,000 60,000 6,000 6,000 $104.57
5.56% Series 60,000 60,000 6,000 6,000 $102.59
--------- --------- -------- --------
Total without sinking fund 197,798 197,798 $ 19,780 $ 19,780
========= ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Share as of
and Outstanding December 31,
1999 1998 1999 1998 1999
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Entergy Corporation
Subsidiary's Preference Stock
(a)(b) 6,000,000 6,000,000 $150,000 $150,000 -
========= ========= ======== ========
Subsidiaries' Preferred Stock
Without sinking fund 4,944,544 4,944,544 $338,455 $338,455
========= ========= ======== ========
With sinking fund 696,500 1,736,056 $ 69,650 $167,523
========= ========= ======== ========
Fair Value of Preference Stock
and Preferred Stock with
sinking fund (e) $218,721 $314,255
======== ========
</TABLE>
(a) The total dollar value represents the liquidation value of $25 per
share.
(b) These series are not redeemable as of December 31, 1999, but become
mandatorily redeemable on July 15, 2000.
(c) Represents weighted-average annualized rates for 1999.
(d) This series is not redeemable as of December 31, 1999, but becomes
mandatorily redeemable on November 1, 2001.
(e) Fair values were determined using bid prices reported by dealer
markets and by nationally recognized investment banking firms. There
is additional disclosure of fair value of financial instruments in
Note 15 to the financial statements.
Changes in the preferred stock, with and without sinking fund, of
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and Entergy
Mississippi during the last three years were:
Number of Shares
1999 1998 1997
Preferred stock retirements
Entergy Arkansas
$100 par value (200,000) (50,000) (50,000)
$25 par value (81,085) (160,000) (160,000)
Entergy Gulf States
$100 par value (258,471) (84,812) (934,812)
Entergy Louisiana
$100 par value (500,000) - -
$25 par value - - (300,000)
Entergy Mississippi
$100 par value - - (145,000)
Cash sinking fund requirements and mandatory redemptions for the next
five years for preferred and preference stock, outstanding as of December
31, 1999, are as follows:
Entergy Entergy
Entergy Gulf States Louisiana
(In Thousands)
2000 $153,450 $153,450 -
2001 38,450 3,450 $35,000
2002 3,450 3,450 -
2003 3,450 3,450 -
2004 3,450 3,450 -
Entergy Gulf States has the annual non-cumulative option to redeem, at
par, additional amounts of certain series of its outstanding preferred
stock.
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 five million shares of
Entergy common stock, for an aggregate consideration of up to $250 million.
In July 1999, the Board approved the commitment of up to an additional $750
million toward the repurchase of Entergy common stock through December 31,
2001. In 1999, Entergy Corporation repurchased 8,484,000 shares of its
common stock for an aggregate purchase price of approximately $245 million.
Shares are purchased on a discretionary basis.
Entergy Corporation reissues treasury shares to meet the requirements
of the Stock Plan for Outside Directors (Directors' Plan), the Equity
Ownership Plan of Entergy Corporation and Subsidiaries (Equity Ownership
Plan), and certain other stock benefit plans. The Directors' Plan awards
to nonemployee directors a portion of their compensation in the form of a
fixed number of shares of Entergy Corporation previously repurchased common
stock. Shares awarded under the Directors' Plan were 11,400 during 1999;
5,100 during 1998; and 9,104 during 1997.
During 1999, Entergy Corporation issued 350,568 shares of its
previously repurchased common stock to satisfy stock options exercised and
stock purchases under the Equity Plan. In addition, Entergy Corporation
received proceeds of $7.5 million from the issuance of 253,269 shares of
common stock under its dividend reinvestment and stock purchase plan during
1999.
The Equity Ownership Plan grants stock options, equity awards, and
incentive awards to key employees of the domestic utility companies. The
costs of equity and incentive awards are charged to income over the period
of the grant or restricted period, as appropriate. Amounts charged to
compensation expense in 1999 were immaterial. Stock options, which
comprise 50% of the shares targeted for distribution under the Equity
Ownership Plan, are granted at exercise prices not less than market value
on the date of grant. The options granted prior to 1999 were generally
exercisable six months from the date of grant, with the exception of 40,000
options granted on December 1, 1998, which became exercisable on January 1,
2000. The majority of options granted in 1999 will become exercisable
equally over a three-year period. Options are not exercisable beyond ten
years from the date of the grant.
Entergy does not recognize compensation expense for stock options
issued with exercise prices at market value on the date of grant. The
impact on Entergy's net income for each of the years 1999, 1998, and 1997
would have been $15.5 million, $278,000, and $296,000, respectively, had
compensation cost for the stock options been recognized based on the fair
value of options at the grant date for awards under the option plan.
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following stock
option weighted-average assumptions:
1999 1998 1997
Stock price volatility 20.3% 20.9% 19.3%
Expected term in years 5 5 5
Risk-free interest rate 4.7% 5.1% 6.3%
Dividend yield 4.0% 5.4% 6.8%
Dividend payment $1.20 $1.58 $1.80
Nonstatutory stock option transactions are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
Average Average Average
Number Option Number Option Number Option
of Options Price of Options Price of Options Price
<S> <C> <C> <C> <C> <C> <C>
Beginning-of-year balance 901,639 $ 26.21 1,176,308 $ 25.12 1,053,308 $ 24.94
Options granted 5,354,189 29.88 125,000 29.46 255,000 25.84
Options exercised (213,084) 23.69 (350,169) 23.37 (2,500) 23.38
Options forfeited (411,638) 30.34 (49,500) 28.56 (129,500) 25.10
---------- --------- ----------
End-of-year balance 5,631,106 $ 29.50 901,639 $ 26.21 1,176,308 $ 25.12
========== ========= ==========
Options exercisable at year-end 612,531 861,639 421,909
Weighted average fair value of
options granted $ 4.72 $ 4.11 $ 3.10
</TABLE>
The following table summarizes information about stock options outstanding
as of December 31, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
Weighted- Avg
Remaining Weighted- Number Weighted-
Range of As of Contractual Avg. Exercise Exercisable Avg. Exercise
Exercise Prices 12/31/99 Life-Yrs. Price at 12/31/99 Price
<S> <C> <C> <C> <C> <C>
$20 - $30 5,173,076 8.8 $29.29 533,312 $ 24.83
$30 - $40 458,030 8.3 $31.81 79,219 $ 35.99
$20 - $40 5,631,106 8.7 $29.50 612,531 $ 26.27
</TABLE>
To meet the requirements of the Employee Stock Investment Plan (ESIP),
the SEC authorized Entergy Corporation to issue or acquire, through March
31, 2000, up to 2,000,000 shares of its common stock to be held as treasury
shares. The ESIP is authorized through the 1999 plan year ending March 31,
2000. Entergy Corporation may issue either treasury shares or previously
authorized but unissued shares to satisfy ESIP requirements. Under the
terms of the ESIP, employees can choose each year to have up to 10% of
their regular annual salary (not to exceed $25,000) withheld to purchase
the Company's common stock at a purchase price equal to 85% of the lower of
the market value on the first or last business day of the plan year ending
March 31. Under the plan, the number of subscribed shares was 285,505 in
1999; 294,108 in 1998; and 319,457 in 1997.
The fair value of ESIP shares granted was estimated on the date of the
grant using the Black-Scholes option-pricing model with expected ESIP
weighted-average assumptions:
1999 1998 1997
Stock price volatility 20.9% 24.1% 19.3%
Expected term in years 1 1 1
Risk-free interest rate 4.6% 5.1% 6.1%
Dividend yield 4.3% 6.1% 7.4%
Dividend payment $1.20 $1.80 $1.80
The weighted-average fair value of those purchase rights granted was $5.90,
$6.32, and $4.75 in 1999, 1998, and 1997, respectively. The impact on
Entergy's net income would have been ($3,086), ($256,000), and $98,000 in
1999, 1998, and 1997, respectively, had compensation cost for the ESIP been
determined based on the fair value at the grant date for awards under the
ESIP.
Entergy sponsors the Savings Plan of Entergy Corporation and
Subsidiaries (Savings Plan). The Savings Plan is a defined contribution
plan covering eligible employees of Entergy and its subsidiaries who have
completed certain service requirements. The Savings Plan provides that the
employing Entergy subsidiary may make matching contributions to the plan in
an amount equal to 50% of the participant's basic contribution, up to 6% of
their salary, in shares of Entergy Corporation common stock. Entergy's
subsidiaries' contributions to the Savings Plan, and any income thereon,
are invested in shares of Entergy Corporation common stock. Entergy's
subsidiaries contributed $14.5 million in 1999, $13.6 million in 1998, and
$13.2 million in 1997 to the Savings Plan.
NOTE 6. COMPANY-OBLIGATED REDEEMABLE PREFERRED SECURITIES
(Entergy Arkansas, Entergy Louisiana, Entergy Gulf States)
Entergy Arkansas Capital I, Entergy Louisiana Capital I, and
Entergy Gulf States Capital I (Trusts) were established as financing
subsidiaries of Entergy Arkansas, Entergy Louisiana, and Entergy Gulf
States, respectively, for the purpose of issuing common and preferred
securities. The Trusts issue Cumulative Quarterly Income Preferred
Securities (Preferred Securities) to the public and issue common
securities to their parent companies. Proceeds from such issues are
used to purchase junior subordinated deferrable interest debentures
(Debentures) from the parent company. The Debentures held by each
Trust are its only assets. Each Trust uses interest payments received
on the Debentures owned by it to make cash distributions on the
Preferred Securities.
<TABLE>
<CAPTION>
Fair Market
Value of
Preferred Common Interest Rate Trust's Preferred
Date Securities Securities Securities/ Investment in Securities at
Trusts Of Issue Issued Issued Debentures Debentures 12-31-99
(In Millions) (In Millions)
<S> <C> <C> <C> <C> <C> <C>
Arkansas Capital I 8-14-96 $60.0 $1.9 8.50% $61.9 $60.3
Louisiana Capital I 7-16-96 $70.0 $2.2 9.00% $72.2 $70.0
Gulf States Capital I 1-28-97 $85.0 $2.6 8.75% $87.6 $77.4
</TABLE>
The Preferred Securities of the Trusts mature in the years 2045
and 2046. The Preferred Securities are redeemable at 100% of their
principal amount at the option of Entergy Arkansas, Entergy Louisiana,
and Entergy Gulf States beginning in 2001 and 2002, or earlier under
certain limited circumstances, including the loss of the tax deduction
arising out of the interest paid on the Debentures. Entergy Arkansas,
Entergy Louisiana, and Entergy Gulf States have, pursuant to certain
agreements, fully and unconditionally guaranteed payment of
distributions on the Preferred Securities issued by their respective
trusts. Entergy Arkansas, Entergy Louisiana, and Entergy Gulf States
are the owners of all of the common securities of their individual
Trusts, which constitute 3% of each Trust's total capital.
NOTE 7. LONG - TERM DEBT (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, and System Energy)
Long-term debt as of December 31, 1999 was:
<TABLE>
<CAPTION>
Maturities Interest Rates Entergy Entergy Entergy Entergy Entergy System
From To From To Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Mortgage Bonds
2000 2004 5.800% 8.250% $1,337,109 $240,000 $603,750 $288,359 $205,000
2005 2010 6.500% 7.500% 428,000 215,000 98,000 115,000
2020 2026 7.000% 8.940% 819,950 260,000 444,950 115,000
G&R Bonds
2002 2012 6.200% 8.250% 415,000 $360,000 $55,000
2013 2026 7.550% 8.000% 175,000 60,000 115,000
Governmental Obligations (a)
2000 2010 5.450% 8.250% 22,315 220 22,095
2011 2020 5.600% 9.000% 569,535 214,200 355,335
2021 2030 4.850% 8.000% 1,051,750 72,000 102,000 415,120 46,030 416,600
Debentures
2000 2000 7.380% 7.800% 75,000 75,000
Saltend Project Senior Credit
Facility, avg rate 6.93% due 2014 578,681
Damhead Creek Project Senior Credit
Facility, avg rate 5.98% due 2016 342,929
EP Edegel, Inc. Note Payable, 7.7%,
due 2000 67,000
Long-Term DOE Obligation (Note 9) 136,088 136,088
Waterford 3 Lease Obligation
8.76% (Note 10) 330,306 330,306
Grand Gulf Lease Obligation
7.02% (Note 10) 465,480 465,480
Other Long-Term Debt 10,391 620 9,771
Unamortized Premium and Discount - Net (17,396) (7,107) (4,320) (1,934) (1,564) (917) (1,554)
-------------------------------------------------------------------------------------
Total Long-Term Debt 6,807,138 1,131,021 1,631,581 1,261,851 464,466 169,083 1,160,526
Less Amount Due Within One Year 194,555 220 - 116,388 - - 77,947
-------------------------------------------------------------------------------------
Long-Term Debt Excluding Amount Due
Within One Year $6,612,583 $1,130,801 $1,631,581 $1,145,463 $464,466 $169,083 $1,082,579
=====================================================================================
Fair Value of Long-Term Debt (b) $5,815,189 $966,559 $1,651,415 $934,404 $446,168 $163,131 $664,902
=====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Long-term debt as of December 31, 1998 was:
Maturities Interest Rates Entergy Entergy Entergy Entergy Entergy System
From To From To Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Mortgage Bonds
1999 2004 6.000% 8.250% $1,640,709 $265,000 $674,750 $335,959 $365,000
2005 2010 6.500% 7.500% 428,000 215,000 98,000 115,000
2020 2026 7.000% 8.940% 833,237 273,287 444,950 115,000
G&R Bonds
2002 2026 6.625% 8.750% 590,000 $420,000 $170,000
Governmental Obligations (a)
1999 2008 5.900% 8.500% 36,537 1,540 22,920 11,212 865
2009 2026 5.600% 9.500% 1,618,335 286,200 457,335 412,170 46,030 416,600
Debentures
1999 2000 7.380% 7.800% 75,000 75,000
Saltend Project Senior Credit Facility,
avg rate 7.13% due 2014 320,485
Damhead Creek Project Senior Credit
Facility, avg rate 6.88% due 2016 166,482
EP Edegel, Inc. Note Payable, 7.7%, due 2000 67,000
Long-Term DOE Obligation (Note 9) 129,891 129,891
Waterford 3 Lease Obligation 8.09% (Note 10) 353,600 353,600
Grand Gulf Lease Obligation 7.02% (Note 10) 481,301 481,301
Other Long-Term Debt 134,313 10,614 9,771
Unamortized Premium and Discount - Net (23,052) (8,153) (4,553) (3,854) (3,259) (982) (2,251)
----------------------------------------------------------------------------------------
Total Long-Term Debt 6,851,838 1,173,379 1,703,173 1,339,087 463,636 169,018 1,335,650
Less Amount Due Within One Year 255,221 1,094 71,515 6,772 20 - 175,820
----------------------------------------------------------------------------------------
Long-Term Debt Excluding Amount Due
Within One Year $6,596,617 $1,172,285 $1,631,658 $1,332,315 $463,616 $169,018 $1,159,830
========================================================================================
Fair Value of Long-Term Debt (b) $6,244,711 $1,081,502 $1,871,739 $1,059,893 $481,520 $207,538 $878,446
========================================================================================
</TABLE>
(a) Consists of pollution control bonds, certain series of which are
secured by non-interest bearing first mortgage bonds.
(b) The fair value excludes lease obligations, long-term DOE
obligations, and other long-term debt and includes debt due within
one year. It is determined using bid prices reported by dealer
markets and by nationally recognized investment banking firms.
The annual long-term debt maturities (excluding lease obligations)
and annual cash sinking fund requirements for debt outstanding as of
December 31, 1999, for the next five years are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Entergy Entergy Entergy Entergy Entergy System
Entergy(a) Arkansas(b) Gulf States(c) Louisiana(d) Mississippi New Orleans Energy
(In Thousands)
2000 $ 181,170 $ 220 - $ 105,950 - - $ 75,000
2001 276,450 - $ 122,750 18,700 - - 135,000
2002 379,745 85 150,000 94,660 $ 65,000 - 70,000
2003 129,155 155 39,000 - 65,000 $ 25,000 -
2004 442,000 - 292,000 - 150,000 - -
</TABLE>
(a) Not included are other sinking fund requirements of approximately
$49.6 million annually, which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
(b) Not included are other sinking fund requirements of approximately
$1.8 million annually, which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
(c) Not included are other sinking fund requirements of approximately
$45.7 million annually, which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
(d) Not included are other sinking fund requirements of approximately
$2.1 million annually, which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
On February 15, 2000, Entergy Mississippi issued $120 million of
7.75% Series First Mortgage Bonds due February 15, 2003. On March 9,
2000, Entergy Arkansas issued $100 million of 7.72% Series First
Mortgage Bonds due March 1, 2003. The proceeds of both issuances will
be used for general corporate purposes, including the retirement of
short-term indebtedness that was incurred for working capital needs and
capital expenditures.
EPDC maintains a credit facility of BPS100 million ($161.5
million) to finance the acquisition of the Damhead Creek Project,
assist in the financing of the Saltend project, and for general
corporate purposes in connection with the acquisition and development
of power generation, distribution or transmission facilities. As of
December 31, 1999, there were no cash advances outstanding under this
facility. Approximately BPS6.8 million ($10.5 million) was outstanding
as of December 31, 1998. The interest rate on the outstanding cash
advances was 5.88% and 6.97% as of December 31, 1999 and 1998,
respectively. The commitment fee is .17% of the undrawn amount. In
addition, EPDC has BPS89.7 million ($144.9 million) of letters of
credit under the credit facility to support project commitments on the
Saltend and Damhead Creek projects.
Saltend Cogeneration Company Limited (SCCL), an indirect wholly-
owned subsidiary of EPDC, maintains a BPS586 million ($946.4 million)
non-recourse senior credit facility providing bridge and term loan
facilities, cost overrun and working capital facilities, and contingent
letter of credit and guarantee facilities (the Senior Credit Facility)
to finance the construction and operation of a 1,200 MW gas-fired power
plant in northeast England. Borrowings under the Senior Credit
Facility are repayable over a 15-year period beginning December 31,
2000. In addition, SCCL has also entered into a BPS72 million ($116.3
million) subordinated credit facility (the Subordinated Credit
Facility) which is to be drawn down by the earlier of completion of
construction or August 31, 2000. The proceeds of borrowings under the
Subordinated Credit Facility will be used to repay a portion of the
Senior Credit Facility. The Subordinated Credit Facility is repayable
over a 10-year period beginning December 31, 2000. All of the assets
of SCCL are pledged as collateral under the Senior Credit Facility and
the Subordinated Credit Facility.
In February 1998, SCCL entered into 15-year interest rate swap
agreements for 85% of the debt outstanding under the bridge and term
loan portion of the Senior Credit Facility on an average fixed-rate
basis of 6.44%. SCCL is exposed to market risks from movements in
interest rates in the unlikely event that the counterparties to the
interest rate swap agreements were to default on contractual payments.
At December 31, 1999, SCCL had outstanding interest rate swap
agreements totalling a notional amount of $603.2 million. The
estimated fair value of the interest rate swap agreements, which
represent the estimated amount SCCL would have received to terminate
the swaps at December 31, 1999, was a net asset of $3.4 million. Under
the Senior Credit Facility and the Subordinated Credit Facility, SCCL's
ability to make distributions of dividends, loans, or advances to EPDC
is restricted by, among other things, the requirement to pay permitted
project costs, make debt repayments, and maintain cash reserves.
In December 1998, Damhead Creek Finance Limited (DCFL), an
indirect wholly-owned subsidiary of EPDC, entered into a BPS463.4
million ($748.4 million) non-recourse senior credit facility providing
(among other things) bridge and term loan facilities, cost overrun and
working capital facilities, and contingent letter of credit and
guarantee facilities (the Senior Credit Facility) to finance the
construction and operation of an 800 MW gas-fired power plant in
southeast England. Borrowings under the Senior Credit Facility are
repayable after completion of construction over a fifteen-year period
beginning December 31, 2001. DCFL also entered into a BPS36.1 million
($58.3 million) subordinated credit facility (the Subordinated Credit
Facility) which is to be drawn down by the earlier of commercial
operation or July 22, 2001. Borrowings under the Subordinated Credit
Facility will be used to repay a portion of the Senior Credit Facility.
The Subordinated Credit Facility is payable over a ten-year period
beginning December 31, 2001. Pursuant to a corporate restructuring in
April 1999, Damhead Finance LDC (DFLDC), an indirect wholly-owned
subsidiary of EPDC, replaced DCFL as borrower under the Senior Credit
Facility and the Subordinated Credit Facility. All of the assets of
DFLDC are pledged as collateral under the Senior Credit Facility and
the Subordinated Credit Facility. Furthermore, the Senior Credit
Facility requires DFLDC to enter into interest rate hedge agreements
for a majority of the project debt from the earlier of commercial
operation or the date the long term interest rate for the agreed
interest rate hedging strategy exceeds 8%. Under the Senior Credit
Facility and the Subordinated Credit Facility, DFLDC's ability to make
distributions of dividends, loans, or advances to EPDC is restricted
by, among other things, the requirement to pay permitted project costs,
make debt repayments, and maintain cash reserves.
NOTE 8. DIVIDEND RESTRICTIONS (Entergy Corporation, Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
New Orleans, System Energy)
Provisions within the Articles of Incorporation or pertinent
indentures and various other agreements relating to the long-term debt
and preferred stock of certain of Entergy Corporation's subsidiaries
restrict the payment of cash dividends or other distributions on their
common and preferred stock. Additionally, PUHCA prohibits Entergy
Corporation's subsidiaries from making loans or advances to Entergy
Corporation. As of December 31, 1999, Entergy Arkansas and Entergy
Mississippi had restricted retained earnings unavailable for
distribution to Entergy Corporation of $199.3 million and $15.8
million, respectively. During 1999, cash dividends paid to Entergy
Corporation by its subsidiaries totaled $532.3 million.
NOTE 9. COMMITMENTS AND CONTINGENCIES
Capital Requirements and Financing (Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy)
For the years 2000 through 2004, Entergy plans to spend $9.8
billion in a capital investment plan focused on improving service at
the domestic utility companies and growing its global power development
and nuclear operations businesses. The estimated allocation in the
plan is $4.2 billion to the domestic utility companies, $3.9 billion to
the global power development business, and $1.7 billion to the nuclear
operations business. This plan is contingent upon Entergy's ability to
access the capital necessary to finance the planned expenditures.
Construction expenditures (including environmental expenditures and
AFUDC, but excluding nuclear fuel) for Entergy are estimated at
$1.5 billion in 2000, $1.7 billion in 2001, and $1.8 billion in 2002.
Included in these totals are estimated construction expenditures for
the domestic utility companies and System Energy as follows:
2000 2001 2002 Total
(In Millions)
Entergy Arkansas $350 $248 $188 $786
Entergy Gulf States 298 269 204 771
Entergy Louisiana 202 188 162 552
Entergy Mississippi 115 122 123 360
Entergy New Orleans 50 46 45 141
System Energy 39 20 12 71
The domestic utility companies' anticipated spending is focused
mainly on (i) distribution and transmission projects that will support
continued reliability improvements; (ii) return to service of
generation stations that have been held in reserve shutdown status; and
(iii) transitioning to a more competitive environment. Projected
construction expenditures for the replacement of ANO 2's steam
generators, which is scheduled for the third quarter of 2000, are
included in Entergy Arkansas' estimated figures above. Entergy will
also require $1.0 billion during the period 2000-2002 to meet long-term
debt and preferred stock maturities and cash sinking fund requirements.
Entergy plans to meet these requirements primarily with internally
generated funds and cash on hand, supplemented by proceeds from the
issuance of debt, outstanding credit facilities, and project financing.
Certain domestic utility companies and System Energy may also continue
the reacquisition or refinancing of all or a portion of certain
outstanding series of preferred stock and long-term debt. See
"MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND CAPITAL
RESOURCES" for additional discussion of Entergy's capital spending
plans.
Sales Warranties and Indemnities (Entergy Corporation)
In the Entergy London and CitiPower sales transactions, Entergy or
its subsidiaries made certain warranties to the purchasers. These
warranties include representations regarding litigation, accuracy of
financial accounts, and the adequacy of existing tax provisions.
Notice of a claim on the CitiPower warranties must be given by December
2000, and Entergy's potential liability is limited to A$100 million
($66 million). Notice of a claim on the Entergy London warranties had
to be given for certain items by December 1999, and for the tax
warranties, must be given by June 30, 2001. Entergy's liability is
limited to BPS1.4 billion ($2.3 billion) on certain tax warranties and
BPS140 million ($226 million) on the remaining warranties. No such
notices have been received. Entergy has also agreed to maintain the
net asset value of the subsidiary that sold Entergy London at $700
million through June 30, 2001. Management periodically reviews reserve
levels for these warranties and believes it has adequately provided for
the ultimate resolution of such matters as of December 31, 1999.
Fuel Purchase Agreements
(Entergy Arkansas and Entergy Mississippi)
Entergy Arkansas has long-term contracts for the supply of low-
sulfur coal to White Bluff and Independence (which is also 25% owned by
Entergy Mississippi). These contracts, which expire in 2002 and 2011,
provide for approximately 85% of Entergy Arkansas' expected annual coal
requirements. Additional requirements are satisfied by spot market
purchases.
(Entergy Gulf States)
Entergy Gulf States has a contract for a supply of low-sulfur coal
for Nelson Unit 6, which should be sufficient to satisfy the fuel
requirements at Nelson Unit 6 through 2010. Effective April 1, 2000,
Louisiana Generating LLC will assume ownership of the Cajun portion of
the Big Cajun generating facilities. The management of Louisiana
Generating LLC has advised Entergy Gulf States that it has executed
coal supply and transportation contracts that should provide an
adequate supply of coal for the operation of Big Cajun 2, Unit 3 for
the foreseeable future.
(Entergy Louisiana)
In June 1992, Entergy Louisiana agreed to a 20-year natural gas
supply contract. Entergy Louisiana agreed to purchase natural gas in
annual amounts equal to approximately one-third of its projected annual
fuel requirements for certain generating units. Annual demand charges
associated with this contract are estimated to be $7.6 million. Such
charges aggregate $99 million for the years 2000 through 2012.
(Entergy Corporation)
Entergy's global power development business has entered into gas
supply contracts at the project level to supply up to 100% of the gas
requirements for the Saltend and Damhead Creek power plants located in
the UK. Both contracts have 15-year terms and include a take-or-pay
obligation for approximately 75% of the gas requirement for each plant.
Under the terms of Saltend's contract and based on its current
construction schedule, Entergy's global power development business may
incur certain liabilities with regard to this gas prior to the project
reaching commercial operation. The disposition of the gas will be
managed under the terms of the contract, and the financial effect on
the Saltend project is expected to be minimal.
Sales Agreements/Power Purchases
(Entergy Gulf States)
In 1988, Entergy Gulf States entered into a joint venture with a
primary term of 20 years with Conoco, Inc., Citgo Petroleum
Corporation, and Vista Chemical Company (collectively the Industrial
Participants), whereby Entergy Gulf States' Nelson Units 1 and 2 were
sold to NISCO, a partnership consisting of the Industrial Participants
and Entergy Gulf States. The Industrial Participants supply the fuel
for the units, while Entergy Gulf States operates the units at the
discretion of the Industrial Participants and purchases the electricity
produced by the units. Entergy Gulf States purchased electricity from
the joint venture totaling $51.4 million in 1999, $57.5 million in
1998, and $70.7 million in 1997.
(Entergy Louisiana)
Entergy Louisiana has an agreement extending through the year 2031
to purchase energy generated by a hydroelectric facility known as the
Vidalia project. Entergy Louisiana made payments under the contract of
approximately $70.3 million in 1999, $77.8 million in 1998, and
$64.6 million in 1997. If the maximum percentage (94%) of the energy
is made available to Entergy Louisiana, current production projections
would require estimated payments of approximately $85.2 million in
2000, and a total of $3.5 billion for the years 2001 through 2031.
Entergy Louisiana currently recovers the costs of the purchased energy
through its fuel adjustment clause.
System Fuels (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
The domestic utility companies that are owners of System Fuels
have agreed to make loans to System Fuels to finance its fuel
procurement, delivery, and storage activities. The following loans
outstanding to System Fuels as of December 31, 1999 mature in 2008:
Owner Ownership Loan Outstanding at December 31, 1999
Percentage
Entergy Arkansas 35% $11.0 million
Entergy Louisiana 33% $14.2 million
Entergy Mississippi 19% $ 5.5 million
Entergy New Orleans 13% $ 3.3 million
Nuclear Insurance (Entergy Corporation, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
The Price-Anderson Act limits public liability of a nuclear plant
owner for a single nuclear incident to approximately $9.5 billion.
Protection for this liability is provided through a combination of
private insurance (currently $200 million each for Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, System Energy, and Entergy's
non-utility nuclear power business) and an industry assessment program.
Under the assessment program, the maximum payment requirement for each
nuclear incident would be $88.1 million per reactor, payable at a rate
of $10 million per licensed reactor per incident per year. Entergy has
six licensed reactors, including Pilgrim. As a co-licensee of Grand
Gulf 1 with System Energy, SMEPA would share 10% of this obligation.
In addition, each owner/licensee of Entergy's six nuclear units
participates in a private insurance program that provides coverage for
worker tort claims filed for bodily injury caused by radiation
exposure. The program provides for a maximum assessment of
approximately $18.6 million for the six nuclear units in the event that
losses exceed accumulated reserve funds.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, System
Energy, and Entergy's non-utility nuclear power business are also
members of certain insurance programs that provide coverage for
property damage, including decontamination and premature
decommissioning expense, to members' nuclear generating plants. As of
December 31, 1999, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, and System Energy were each insured against such losses up
to $2.3 billion. Entergy's non-utility nuclear power business is
insured for $1.115 billion in property damages for Pilgrim under these
insurance programs. In addition, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and Entergy's non-utility nuclear power business are members of an
insurance program that covers certain replacement power and business
interruption costs incurred due to prolonged nuclear unit outages.
Under the property damage and replacement power/business interruption
insurance programs, these Entergy subsidiaries could be subject to
assessments if losses exceed the accumulated funds available to the
insurers. As of December 31, 1999, the maximum amounts of such
possible assessments were: Entergy Arkansas - $16.6 million; Entergy
Gulf States - $14.1 million; Entergy Louisiana - $15.3 million; Entergy
Mississippi - $0.5 million; Entergy New Orleans - $0.3 million; System
Energy - $12.7 million, and Entergy's non-utility nuclear power
business - $7.3 million. Under its agreement with System Energy, SMEPA
would share in System Energy's obligation.
The amount of property insurance maintained for each Entergy
nuclear unit exceeds the NRC's minimum requirement for nuclear power
plant licensees of $1.06 billion per site. NRC regulations provide
that the proceeds of this insurance must be used, first, to render the
reactor safe and stable, and second, to complete decontamination
operations. Only after proceeds are dedicated for such use and
regulatory approval is secured would any remaining proceeds be made
available for the benefit of plant owners or their creditors.
Spent Nuclear Fuel and Decommissioning Costs (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System
Energy)
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, System
Energy, and Entergy's non-utility nuclear power business provide for
estimated future disposal costs for spent nuclear fuel in accordance
with the Nuclear Waste Policy Act of 1982. The affected Entergy
companies entered into contracts with the DOE, whereby the DOE will
furnish disposal service at a cost of one mill per net KWH generated
and sold after April 7, 1983, plus a one-time fee for generation prior
to that date. Entergy Arkansas is the only Entergy company that
generated electricity with nuclear fuel prior to that date and has
recorded a liability as of December 31, 1999 of approximately $136
million for the one-time fee. The fees payable to the DOE may be
adjusted in the future to assure full recovery. Entergy's non-utility
nuclear power business has accepted assignment of the Pilgrim spent
fuel disposal contract with the DOE previously held by Boston Edison.
Boston Edison has paid to the DOE the fees for all generation prior to
the July 1999 purchase date. Entergy considers all costs incurred for
the disposal of spent nuclear fuel, except accrued interest, to be
proper components of nuclear fuel expense. Provisions to recover such
costs have been or will be made by the domestic utility companies in
applications to regulatory authorities.
Delays have occurred in the DOE's program for the acceptance and
disposal of spent nuclear fuel at a permanent repository. Considerable
uncertainty exists regarding the time frame under which the DOE will
begin to accept spent fuel from Entergy facilities for storage or
disposal.
Pending DOE acceptance and disposal of spent nuclear fuel, the
owners of nuclear plants are responsible for their own spent fuel
storage. Current on-site spent fuel storage capacity at Grand Gulf 1
and River Bend is estimated to be sufficient until approximately 2005
and 2003, respectively. The spent fuel pool at Waterford 3 was
recently expanded through the replacement of the existing storage racks
with higher density storage racks. This expansion should provide
sufficient storage for Waterford 3 until after 2010. An ANO storage
facility using dry casks began operation in 1996 and is being expanded
in 2000. Current on-site spent fuel storage capacity at ANO, including
the current expansion, is estimated to be sufficient until
approximately 2002. This facility may be further expanded as required.
The spent fuel storage facility at Pilgrim is expected to provide
storage capacity until approximately 2003. Entergy plans to modify the
facility to provide sufficient spent fuel storage capacity through
approximately 2012.
The cost of adding additional spent fuel storage capacity as
needed at each site will be reassessed in 2000. In December 1999,
Entergy Arkansas, System Energy, and Entergy Gulf States issued
requests for proposals for additional dry storage capacity at ANO,
Grand Gulf 1, and River Bend, respectively.
Total approved decommissioning costs for rate recovery purposes as
of December 31, 1999, for the domestic utility companies' nuclear power
plants, excluding the co-owner share of Grand Gulf 1, have been
estimated as follows:
<TABLE>
<CAPTION>
Total Estimated Approved
Decommissioning Costs
(In Millions)
<S> <C>
ANO 1 and ANO 2 (based on a 1998 cost study reflecting 1997 dollars) $ 813.1
River Bend (based on a 1996 cost study reflecting 1996 dollars) 419.0
Waterford 3 (based on a 1994 updated study in 1993 dollars) 320.1
Grand Gulf 1 (based on a 1994 cost study using 1993 dollars) 365.9
--------
$1,918.1
========
</TABLE>
Decommissioning cost updates were prepared for Waterford 3 and
Grand Gulf in 1999 and produced revised decommissioning cost updates
of $481.5 million and $540.8 million, respectively. The cost update
for Waterford 3 will be included in a filing with the LPSC in the
second quarter of 2000. The cost update for Grand Gulf has not yet
been filed with FERC.
Entergy Arkansas and Entergy Louisiana are authorized to recover
in rates amounts that, when added to estimated investment income,
should be sufficient to meet the above approved decommissioning costs
for ANO and Waterford 3, respectively.
As part of the Pilgrim purchase, Boston Edison funded a $471.3
million decommissioning trust fund, which was transferred to Entergy's
non-utility nuclear power business. After a favorable tax
determination regarding the trust fund, Entergy returned $43 million of
the trust fund to Boston Edison. Based on cost estimates provided by
an outside consultant, Entergy believes that Pilgrim's decommissioning
fund will be adequate to cover future decommissioning costs for the
Pilgrim plant without any additional deposits to the trust.
In the Texas retail jurisdiction, Entergy Gulf States is
recovering in rates River Bend decommissioning costs that total $385.2
million, based on a 1996 cost study. Entergy Gulf States included
decommissioning costs of $513.3 million based on a 1998 cost update
amount of $562.7 million in the PUCT rate review filed in November
1998. The PUCT ordered that Entergy Gulf States continue funding at
the level based on the 1996 study. In the Louisiana retail
jurisdiction, Entergy Gulf States included decommissioning costs, based
on the 1996 study, in the LPSC rate reviews filed in May 1996, 1997,
and 1998. In June 1996, a rate change was implemented that included
decommissioning revenue requirements based on the 1996 study. In
September 1998, the LPSC issued an order accepting the 1996 cost study
amount of $419 million. In the May 1999 rate review, Entergy Gulf
States included decommissioning costs based on the 1998 update of
$562.7 million.
System Energy was previously recovering in rates amounts
sufficient to fund $198 million (in 1989 dollars) of its Grand Gulf 1
decommissioning costs. System Energy included updated decommissioning
costs (based on the 1994 study) in its pending rate increase filing
with FERC. Rates requested in this proceeding were placed into effect
in December 1995, subject to refund. FERC has not yet issued an order
in the rate case.
Entergy periodically reviews and updates estimated decommissioning
costs. Although Entergy is presently under-recovering for Grand Gulf,
Waterford 3, and River Bend based on the above estimates, applications
have been and will continue to be made to the appropriate regulatory
authorities to reflect projected decommissioning costs in rates. The
amounts recovered in rates are deposited in trust funds and reported at
market value based upon market quotes or as determined by widely used
pricing services. These trust fund assets largely offset the
accumulated decommissioning liability that is recorded as accumulated
depreciation for Entergy Arkansas, Entergy Gulf States, and Entergy
Louisiana, and are recorded as deferred credits for System Energy and
Entergy's non-utility nuclear power business. The liability associated
with the trust funds received from Cajun with the transfer of Cajun's
30% share of River Bend is also recorded as a deferred credit by
Entergy Gulf States.
The cumulative liabilities and actual decommissioning expenses
recorded in 1999 by Entergy were as follows:
<TABLE>
<CAPTION>
Cumulative 1999 Cumulative
Liabilities as of 1999 Trust Decommissioning Liabilities as of
December 31, 1998 Earnings Expenses Other December 31,
(In Millions)
<S> <C> <C> <C> <C> <C>
ANO 1 and ANO 2 $ 253.4 $ 7.6 $ 10.7 $ - $ 271.7
River Bend 190.3 5.6 7.6 - 203.5
Waterford 3 71.9 2.3 8.8 - 83.0
Grand Gulf 1 107.3 3.2 18.9 - 129.4
Pilgrim (1) - - 6.8 428.0 434.8
--------------------------------------------------------------------------
$ 622.9 $ 18.7 $ 52.8 $428.0 $ 1,122.4
==========================================================================
</TABLE>
(1) The $428 million reflected above for Pilgrim represents
Entergy's estimate of the present value of Pilgrim's
decommissioning liability at the time of Entergy's purchase of
Pilgrim. Pilgrim's trust earnings are not shown as an increase
to its decommissioning liability because it is not subject to
regulatory treatment.
In 1998 and 1997, ANO's decommissioning expense was $15.6 million
and $17.3 million, respectively; River Bend's decommissioning expense
was $3.4 million and $8.9 million, respectively; Waterford 3's
decommissioning expense was $8.8 million in both years, and Grand Gulf
1's decommissioning expense was $18.9 million in both years. The
actual decommissioning costs may vary from the estimates because of
regulatory requirements, changes in technology, and increased costs of
labor, materials, and equipment.
The EPAct contains a provision that assesses domestic nuclear
utilities with fees for the decontamination and decommissioning of the
DOE's past uranium enrichment operations. The decontamination and
decommissioning assessments are being used to set up a fund into which
contributions from utilities and the federal government will be placed.
Annual assessments (in 1999 dollars), which will be adjusted annually
for inflation, are for 15 years and are approximately $3.9 million for
Entergy Arkansas, $1.0 million for Entergy Gulf States, $1.5 million
for Entergy Louisiana, and $1.6 million for System Energy. DOE fees
are included in other current liabilities and other noncurrent
liabilities and, as of December 31, 1999, recorded liabilities were
$27.0 million for Entergy Arkansas, $4.7 million for Entergy Gulf
States, $10.3 million for Entergy Louisiana, and $10.0 million for
System Energy. These liabilities were offset in the consolidated
financial statements by regulatory assets. FERC requires that
utilities treat these assessments as costs of fuel as they are
amortized and recover these costs through rates in the same manner as
other fuel costs.
ANO Matters (Entergy Corporation and Entergy Arkansas)
Cracks in steam generator tubes at ANO 2 were discovered and
repaired during an outage in March 1992. Further inspections and
repairs were conducted during subsequent refueling and mid-cycle
outages, including the most recent mid-cycle outage in November 1999.
Turbine modifications were installed in May 1997 to restore most of the
output lost due to steam generator fouling and tube plugging. In
October 1996, the Board authorized Entergy Arkansas and Entergy
Operations to fabricate and install replacement steam generators at ANO
2. Entergy Operations thereafter entered into contracts for the
design, fabrication, and installation of replacement steam generators.
In December 1998, the APSC issued an order finding replacement of the
ANO 2 steam generators is in the public interest. It is anticipated
that the steam generators will be installed during a planned refueling
outage in September 2000. Entergy estimates the cost of fabrication
and replacement of the steam generators to be approximately $150
million.
Environmental Issues
(Entergy Gulf States)
Entergy Gulf States has been designated as a PRP for the clean-up
of certain hazardous waste disposal sites. Entergy Gulf States is
currently negotiating with the EPA and state authorities regarding the
clean-up of these sites. Several class action and other suits have
been filed in state and federal courts seeking relief from Entergy Gulf
States and others for damages caused by the disposal of hazardous waste
and for asbestos-related disease allegedly resulting from exposure on
Entergy Gulf States' premises. While the amounts at issue in the clean-
up efforts and suits may be substantial, Entergy Gulf States believes
that its results of operations and financial condition will not be
materially adversely affected by the outcome of the suits. As of
December 31, 1999, a remaining provision of $19.1 million existed
relating to the clean-up of the remaining sites at which Entergy Gulf
States has been designated as a PRP.
(Entergy Louisiana and Entergy New Orleans)
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 $5.9 million for Entergy Louisiana and $0.5
million for Entergy New Orleans existed at December 31, 1999 for
wastewater upgrades and closures. Completion of this work is pending
LDEQ approval.
City Franchise Ordinances (Entergy New Orleans)
Entergy New Orleans provides electric and gas service in the City
of New Orleans pursuant to franchise ordinances. These ordinances
contain a continuing option for the city to purchase Entergy New
Orleans' electric and gas utility properties.
Waterford 3 Lease Obligations (Entergy Louisiana)
On September 28, 1989, Entergy Louisiana entered into three
identical transactions for the sale and leaseback of undivided
interests (aggregating approximately 9.3%) in Waterford 3. In July
1997, Entergy Louisiana caused the lessors to issue $307.6 million
aggregate principal amount of Waterford 3 Secured Lease Obligation
Bonds, 8.76% Series due 2017, to refinance the outstanding bonds
originally issued to finance the purchase of the undivided interests by
the lessors. The lease payments were reduced to reflect the lower
interest costs. Upon the occurrence of certain events, Entergy
Louisiana may be obligated to pay amounts sufficient to permit the
termination of the lease transactions and may be required to assume the
outstanding bonds issued to finance, in part, the lessors' acquisition
of the undivided interests in Waterford 3.
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 on the basis of 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.
Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
Entergy Gulf States filed declaratory judgment actions in the U.S.
Bankruptcy Court in which the Cajun bankruptcy case is pending. These
actions were filed to seek rulings declaring that Entergy Gulf States
is not liable for damages to certain coal suppliers and the rail and
barge companies that transport coal to Big Cajun 2, Unit 3 if their
contracts were rejected in the bankruptcy proceeding. Collectively,
the coal suppliers and transporters asserted claims in the Cajun
bankruptcy case that exceeded $1.6 billion. In October 1999, the
bankruptcy court confirmed a plan of reorganization in the bankruptcy
case pursuant to a settlement agreement among the parties. The
settlement agreement and plan of reorganization effectively release
Entergy Gulf States from any claims asserted by the coal suppliers and
transporters for Big Cajun 2. The settlement agreement is subject to
regulatory approvals.
Grand Gulf 1-Related Agreements
Capital Funds Agreement (Entergy Corporation and System Energy)
Entergy Corporation has agreed to supply System Energy with
sufficient capital to (i) maintain System Energy's equity capital at an
amount equal to a minimum of 35% of its total capitalization (excluding
short-term debt), and (ii) permit the continued commercial operation of
Grand Gulf 1 and pay in full all indebtedness for borrowed money of
System Energy when due. In addition, under supplements to the Capital
Funds Agreement assigning System Energy's rights as security for
specific debt of System Energy, Entergy Corporation has agreed to make
cash capital contributions to enable System Energy to make payments on
such debt when due.
System Energy has entered into agreements with Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans whereby
they are obligated to purchase their respective entitlements of
capacity and energy from System Energy's 90% ownership and leasehold
interest in Grand Gulf 1, and to make payments that, together with
other available funds, are adequate to cover System Energy's operating
expenses. System Energy would have to secure funds from other sources,
including Entergy Corporation's obligations under the Capital Funds
Agreement, to cover any shortfalls from payments received from Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New
Orleans under these agreements.
Unit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
System Energy has agreed to sell all of its 90% owned and leased
share of capacity and energy from Grand Gulf 1 to Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans in
accordance with specified percentages (Entergy Arkansas-36%, Entergy
Louisiana-14%, Entergy Mississippi-33%, and Entergy New Orleans-17%) as
ordered by FERC. Charges under this agreement are paid in
consideration for the purchasing companies' respective entitlement to
receive capacity and energy and are payable irrespective of the
quantity of energy delivered so long as the unit remains in commercial
operation. The agreement will remain in effect until terminated by the
parties and the termination is approved by FERC, most likely upon Grand
Gulf 1's retirement from service. Monthly obligations for payments
under the agreement are approximately $21 million for Entergy Arkansas,
$8 million for Entergy Louisiana, $19 million for Entergy Mississippi,
and $10 million for Entergy New Orleans.
Availability Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans are individually obligated to make payments or
subordinated advances to System Energy in accordance with stated
percentages (Entergy Arkansas-17.1%, Entergy Louisiana-26.9%, Entergy
Mississippi-31.3%, and Entergy New Orleans-24.7%) in amounts that, when
added to amounts received under the Unit Power Sales Agreement or
otherwise, are adequate to cover all of System Energy's operating
expenses as defined, including an amount sufficient to amortize the
cost of Grand Gulf 2 over 27 years. (See Reallocation Agreement terms
below.) System Energy has assigned its rights to payments and advances
to certain creditors as security for certain obligations. Since
commercial operation of Grand Gulf 1, payments under the Unit Power
Sales Agreement have exceeded the amounts payable under the
Availability Agreement. Accordingly, no payments under the
Availability Agreement have ever been required. If Entergy Arkansas or
Entergy Mississippi fails to make its Unit Power Sales Agreement
payments, and System Energy is unable to obtain funds from other
sources, Entergy Louisiana and Entergy New Orleans could become subject
to claims or demands by System Energy or its creditors for payments or
advances under the Availability Agreement (or the assignments thereof)
equal to the difference between their required Unit Power Sales
Agreement payments and their required Availability Agreement payments.
Reallocation Agreement (Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
System Energy, Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans entered into the Reallocation
Agreement relating to the sale of capacity and energy from Grand Gulf
and the related costs, in which Entergy Louisiana, Entergy Mississippi,
and Entergy New Orleans agreed to assume all of Entergy Arkansas'
responsibilities and obligations with respect to Grand Gulf under the
Availability Agreement. FERC's decision allocating a portion of Grand
Gulf 1 capacity and energy to Entergy Arkansas supersedes the
Reallocation Agreement as it relates to Grand Gulf 1. Responsibility
for any Grand Gulf 2 amortization amounts has been individually
allocated (Entergy Louisiana-26.23%, Entergy Mississippi-43.97%, and
Entergy New Orleans-29.80%) under the terms of the Reallocation
Agreement. However, the Reallocation Agreement does not affect Entergy
Arkansas' obligation to System Energy's lenders under the assignments
referred to in the preceding paragraph. Entergy Arkansas would be
liable for its share of such amounts if Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans were unable to meet their
contractual obligations. No payments of any amortization amounts will
be required so long as amounts paid to System Energy under the Unit
Power Sales Agreement, including other funds available to System
Energy, exceed amounts required under the Availability Agreement, which
is expected to be the case for the foreseeable future.
Reimbursement Agreement (System Energy)
In December 1988, System Energy entered into two separate, but
identical, arrangements for the sale and leaseback of an approximate
aggregate 11.5% ownership interest in Grand Gulf 1. In connection with
the equity funding of the sale and leaseback arrangements, letters of
credit are required to be maintained to secure certain amounts payable
for the benefit of the equity investors by System Energy under the
leases. The current letters of credit are effective until March 20,
2003.
Under the provisions of a bank letter of credit reimbursement
agreement, System Energy has agreed to a number of covenants relating
to the maintenance of certain capitalization and fixed charge coverage
ratios. System Energy agreed, during the term of the reimbursement
agreement, to maintain its equity at not less than 33% of its adjusted
capitalization (defined in the reimbursement agreement to include
certain amounts not included in capitalization for financial statement
purposes). In addition, System Energy must maintain, with respect to
each fiscal quarter during the term of the reimbursement agreement, a
ratio of adjusted net income to interest expense (calculated, in each
case, as specified in the reimbursement agreement) of at least 1.60
times earnings. As of December 31, 1999, System Energy's equity
approximated 40.57% of its adjusted capitalization, and its fixed
charge coverage ratio for 1999 was 1.92.
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 10. LEASES
General
As of December 31, 1999, Entergy had capital leases and non-
cancelable operating leases for equipment, buildings, vehicles, and
fuel storage facilities (excluding nuclear fuel leases and the sale and
leaseback transactions) with minimum lease payments as follows:
Capital Leases
Entergy Entergy
Year Entergy Arkansas Gulf States
(In Thousands)
2000 $25,379 $9,645 $11,829
2001 23,676 9,645 11,853
2002 19,414 9,645 9,720
2003 19,414 9,645 9,720
2004 19,414 9,645 9,720
Years thereafter 39,882 23,034 16,746
--------------------------------
Minimum lease payments 147,179 71,259 69,588
Less: Amount
Representing interest 48,570 26,067 21,852
--------------------------------
Present value of net
minimum lease payments $98,609 $45,192 $47,736
================================
Operating Leases
Entergy Entergy Entergy
Year Entergy Arkansas Gulf States Louisiana
(In Thousands)
2000 $88,978 $30,228 $23,322 $8,727
2001 77,761 29,203 20,453 4,742
2002 60,338 24,545 16,804 4,160
2003 43,422 13,082 14,435 2,570
2004 40,173 12,004 14,031 1,653
Years thereafter 127,346 33,618 40,073 1,973
-------------------------------------------------
Minimum lease payments $438,018 $142,680 $129,118 $23,825
=================================================
Rental expense for Entergy's leases (excluding nuclear fuel leases
and the Grand Gulf 1 and Waterford 3 sale and leaseback transactions)
amounted to approximately $65.2 million, $69.4 million, and $70.7
million, in 1999, 1998, and 1997, respectively. These amounts include
$23.9 million, $19.4 million, and $19.7 million, respectively, for
Entergy Arkansas; $19.2 million, $18.1 million, and $17.6 million,
respectively, for Entergy Gulf States; and $13.1 million, $13.3
million, and $12.8 million, respectively, for Entergy Louisiana. In
addition to the above rental expense, Entergy Arkansas and Entergy Gulf
States railcar operating lease payments, which are recorded in fuel
expense, amounted to approximately $13.7 million and $2.7 million,
respectively, in 1999, 1998, and 1997. The railcar lease payments are
recorded as fuel expense in accordance with regulatory treatment.
Nuclear Fuel Leases (Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, System Energy)
As of December 31, 1999, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, and System Energy each had arrangements to lease
nuclear fuel in an aggregate amount up to $135 million, $85 million,
$90 million, and $100 million, respectively. As of December 31, 1999,
the unrecovered cost base of Entergy Arkansas', Entergy Gulf States',
Entergy Louisiana's, and System Energy's nuclear fuel leases amounted
to approximately $85.7 million, $70.8 million, $51.9 million, and $78
million, respectively. The lessors finance the acquisition and
ownership of nuclear fuel through credit agreements and the issuance of
intermediate-term notes. The credit agreements for Entergy Arkansas,
Entergy Gulf States, Entergy Louisiana, and System Energy have
termination dates of December 2000, December 2000, January 2002, and
February 2001, respectively. Such termination dates may be extended
from time to time with the consent of the lenders. The intermediate-
term notes issued pursuant to these fuel lease arrangements have
varying maturities through March 15, 2002. It is expected that
additional financing under the leases will be arranged as needed to
acquire additional fuel, to pay interest, and to pay maturing debt.
However, if such additional financing cannot be arranged, the lessee in
each case must repurchase sufficient nuclear fuel to allow the lessor
to meet its obligations.
Lease payments are based on nuclear fuel use. The table below
represents the total nuclear fuel lease payments (principal and
interest) as well as the separate interest component charged to
operations by the domestic utility companies and System Energy in 1999,
1998, and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
Lease Lease Lease
Payments Interest Payments Interest Payments Interest
(In Millions)
<S> <C> <C> <C> <C> <C> <C>
Entergy Arkansas $48.6 $5.6 $50.5 $4.9 $53.7 $6.4
Entergy Gulf States 31.4 1.8 36.1 3.1 25.7 3.2
Entergy Louisiana 29.7 3.7 36.8 3.9 29.4 3.7
System Energy 28.1 3.4 35.4 4.7 41.1 5.4
-----------------------------------------------------------
Total $137.8 $14.5 $158.8 $16.6 $149.9 $18.7
===========================================================
</TABLE>
Sale and Leaseback Transactions
Waterford 3 Lease Obligations (Entergy Louisiana)
In 1989, Entergy Louisiana sold and leased back 9.3% of its
interest in Waterford 3 for the aggregate sum of $353.6 million. The
lease has an approximate term of 28 years. The lessors financed the
sale-leaseback through the issuance of Waterford 3 Secured Lease
Obligation Bonds. The lease payments made by Entergy Louisiana are
sufficient to service the debt.
In 1994, Entergy Louisiana did not exercise its option to
repurchase the 9.3% interest in Waterford 3. As a result, Entergy
Louisiana issued $208.2 million of non-interest bearing first mortgage
bonds as collateral for the equity portion of certain amounts payable
under the lease.
In 1997, the lessors refinanced the outstanding bonds used to
finance the purchase of Waterford 3 at lower interest rates which
reduced the annual lease payments.
Upon the occurrence of certain events, Entergy Louisiana may be
obligated to assume the outstanding bonds used to finance the purchase
of the unit and to pay an amount sufficient to withdraw from the lease
transaction. Such events include lease events of default, events of
loss, deemed loss events, or certain adverse "Financial Events."
"Financial Events" include, among other things, failure by Entergy
Louisiana, following the expiration of any applicable grace or cure
period, to maintain (i) total equity capital (including preferred
stock) at least equal to 30% of adjusted capitalization, or (ii) a
fixed charge coverage ratio of at least 1.50 computed on a rolling 12
month basis.
As of December 31, 1999, Entergy Louisiana's total equity capital
(including preferred stock) was 48.1% of adjusted capitalization and
its fixed charge coverage ratio for 1999 was 3.49.
As of December 31, 1999, Entergy Louisiana had future minimum
lease payments (reflecting an overall implicit rate of 7.45%) in
connection with the Waterford 3 sale and leaseback transactions, which
are recorded as long-term debt, as follows (in thousands):
2000 $ 42,573
2001 40,909
2002 39,246
2003 59,709
2004 31,739
Years thereafter 440,690
----------
Total 654,866
Less: Amount representing interest 324,560
----------
Present value of net minimum lease payments $ 330,306
==========
Grand Gulf 1 Lease Obligations (System Energy)
In December 1988, System Energy sold and leased back 11.5% of its
undivided ownership interest in Grand Gulf 1 for the aggregate sum of
$500 million. Subsequently, System Energy leased back its interest in
the unit for a term of 26 1/2 years. System Energy has the option of
terminating the lease and repurchasing the 11.5% interest in the unit
at certain intervals during the lease. Furthermore, at the end of the
lease term, System Energy has the option of renewing the lease or
repurchasing the 11.5% interest in Grand Gulf 1.
System Energy is required to report the sale-leaseback as a
financing transaction in its financial statements. For financial
reporting purposes, System Energy expenses the interest portion of the
lease obligation and the plant depreciation. However, operating
revenues include the recovery of the lease payments because the
transactions are accounted for as a sale and leaseback for ratemaking
purposes. Until 2004, the total of interest and depreciation expense
exceeds the corresponding revenues realized. Consistent with a
recommendation contained in a FERC audit report, System Energy recorded
as a net deferred asset the difference between the recovery of the
lease payments and the amounts expensed for interest and depreciation
and is recording this difference as a deferred asset on an ongoing
basis. The amount of this deferred asset was $104.5 million and $85.9
million as of December 31, 1999 and 1998, respectively.
As of December 31, 1999, System Energy had future minimum lease
payments (reflecting an implicit rate of 7.02%), which are recorded as
long-term debt as follows (in thousands):
2000 $ 42,753
2001 46,803
2002 53,827
2003 48,524
2004 36,133
Years thereafter 574,782
----------
Total 802,822
Less: Amount representing interest 337,342
----------
Present value of net minimum lease payments $ 465,480
==========
NOTE 11. RETIREMENT AND OTHER POSTRETIREMENT BENEFITS (Entergy
Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy)
Pension Plans
Entergy has two postretirement benefit plans, "Entergy Corporation
Retirement Plan for Non-Bargaining Employees" and "Entergy Corporation
Retirement Plan for Bargaining Employees," covering substantially all
of its domestic employees. The pension plans are noncontributory and
provide pension benefits that are based on employees' credited service
and compensation during the final years before retirement. Entergy
Corporation and its subsidiaries fund pension costs in accordance with
contribution guidelines established by the Employee Retirement Income
Security Act of 1974, as amended, and the Internal Revenue Code of
1986, as amended. The assets of the plans include common and preferred
stocks, fixed-income securities, interest in a money market fund, and
insurance contracts.
Total 1999, 1998, and 1997 pension cost of Entergy Corporation and
its subsidiaries, including amounts capitalized, included the following
components (in thousands):
1999 Entergy Entergy
Entergy Arkansas Gulf States
Service cost - benefits earned
during the period $39,327 $8,723 $6,531
Interest cost on projected
benefit obligation 104,591 29,457 24,757
Expected return on assets (130,535) (34,784) (37,170)
Amortization of transition asset (9,740) (2,336) (2,387)
Amortization of prior service cost 11,362 1,227 1,434
--------------------------------
Net pension cost (income) $15,005 $2,287 ($6,835)
================================
1999 Entergy Entergy Entergy System
Louisiana Mississippi New Orleans Energy
Service cost - benefits earned
during the period $4,948 $2,278 $997 $2,334
Interest cost on projected
benefit obligation 17,950 10,810 3,296 3,017
Expected return on assets (25,629) (13,815) (2,601) (3,738)
Amortization of transition
asset (2,808) (1,250) (195) (482)
Amortization of prior service
cost 558 480 165 64
-------------------------------------------
Net pension cost (income) ($4,981) ($1,497) $1,662 $1,195
===========================================
<PAGE>
<TABLE>
<CAPTION>
1998 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $45,470 $7,428 $5,448 $4,148 $1,913 $818 $2,494
Interest cost on projected
benefit obligation 192,132 27,919 24,564 16,845 10,362 3,020 3,265
Expected return on assets (233,058) (31,119) (32,506) (22,526) (12,335) (2,083) (3,979)
Amortization of transition asset (9,740) (2,336) (2,387) (2,808) (1,250) (195) (597)
Amortization of prior service cost 11,459 1,227 1,434 558 480 259 80
-------------------------------------------------------------------------------
Net pension cost (income) $6,263 $3,119 ($3,447) ($3,783) ($830) $1,819 $1,263
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
1997 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $47,703 $6,937 $5,365 $3,762 $1,893 $763 $2,389
Interest cost on projected
benefit obligation 193,665 26,472 23,684 15,778 10,011 2,783 2,942
Expected return on assets (220,641) (28,050) (29,119) (19,988) (11,258) (1,915) (3,480)
Amortization of transition asset (2,546) (2,336) (2,387) (2,808) (1,250) (195) (597)
Amortization of prior service cost 4,266 1,227 1,434 558 480 259 80
----------------------------------------------------------------------------------
Net pension cost (income) $22,447 $4,250 ($1,023) ($2,698) ($124) $1,695 $1,334
==================================================================================
</TABLE>
<TABLE>
<CAPTION>
The funded status of Entergy's various pension plans as of
December 31, 1999 and 1998 was (in thousands):
1999 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Change in Projected Benefit
Obligation (PBO)
Balance at 1/1/99 $1,553,251 $435,638 $377,288 $261,858 $158,778 $47,881 $44,876
Service cost 39,327 8,723 6,531 4,948 2,277 997 2,334
Interest cost 104,591 29,457 24,757 17,950 10,810 3,296 3,017
Actuarial (gain)/loss (126,715) (25,915) (35,000) (11,638) (9,038) (4,663) (6,294)
Benefits paid (80,580) (23,349) (25,359) (16,169) (9,565) (1,469) (671)
Acquisition of subsidiary 9,727 - - - - - -
--------------------------------------------------------------------------------
Balance at 12/31/99 $1,499,601 $424,554 $348,217 $256,949 $153,262 $46,042 $43,262
--------------------------------------------------------------------------------
Change in Plan Assets
Fair value of assets at 1/1/99 $1,791,192 $473,353 $513,365 $356,663 $192,438 $28,927 $48,910
Actual return on plan assets 241,460 68,258 74,249 49,260 24,602 2,668 8,203
Employer contributions 13,106 - 1,343 - - 1,244 -
Benefits paid (80,580) (23,349) (25,360) (16,168) (9,565) (1,469) (671)
--------------------------------------------------------------------------------
Fair value of assets at 12/31/99 $1,965,178 $518,262 $563,597 $389,755 $207,475 $31,370 $56,442
--------------------------------------------------------------------------------
Funded status $465,577 $93,708 $215,380 $132,806 $54,213 ($14,672) $13,180
Unrecognized transition asset (17,446) (4,671) (2,387) (5,615) (2,501) (180) (2,829)
Unrecognized prior service cost 30,092 11,203 9,780 4,238 3,455 1,282 696
Unrecognized net (gain)/loss (483,741) (122,663) (250,266) (122,806) (53,747) 7,776 (16,495)
--------------------------------------------------------------------------------
Prepaid/(accrued) pension cost ($5,518) ($22,423) ($27,493) $8,623 $1,420 ($5,794) ($5,448)
================================================================================
</TABLE>
<TABLE>
<CAPTION>
1998 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Change in Projected Benefit
Obligation (PBO)
Balance at 1/1/98 $2,495,107 $381,581 $327,842 $226,254 $140,317 $40,568 $35,770
Service cost 45,470 7,428 5,448 4,148 1,913 818 2,494
Interest cost 192,132 27,919 24,564 16,845 10,362 3,020 3,265
Actuarial loss 142,217 41,742 45,302 29,769 15,544 5,319 4,005
Benefits paid (161,999) (23,032) (25,868) (15,158) (9,358) (1,844) (658)
Disposition of subsidiaries* (1,159,676) - - - - - -
-----------------------------------------------------------------------------------
Balance at 12/31/98 $1,553,251 $435,638 $377,288 $261,858 $158,778 $47,881 $44,876
-----------------------------------------------------------------------------------
Change in Plan Assets
Fair value of assets at 1/1/98 $3,133,232 $427,175 $454,912 $317,650 $174,434 $23,145 $40,917
Actual return on plan assets 472,181 67,058 76,254 54,171 27,318 2,000 8,440
Employer contributions 72,596 2,152 8,067 - 44 5,626 211
Benefits paid (161,999) (23,032) (25,868) (15,158) (9,358) (1,844) (658)
Disposition of subsidiaries* (1,724,818) - - - - - -
-----------------------------------------------------------------------------------
Fair value of assets at 12/31/98 $1,791,192 $473,353 $513,365 $356,663 $192,438 $28,927 $48,910
-----------------------------------------------------------------------------------
Funded status $237,941 $37,715 $136,077 $94,805 $33,660 ($18,954) $4,034
Unrecognized transition asset (24,798) (7,007) (4,775) (8,423) (3,751) (376) (4,097)
Unrecognized prior service cost 32,748 12,429 11,215 4,796 3,935 1,447 941
Unrecognized net (gain)/loss (239,781) (63,274) (178,188) (87,536) (33,921) 12,507 (6,141)
-----------------------------------------------------------------------------------
Prepaid/(accrued) pension cost $6,110 ($20,137) ($35,671) $3,642 ($77) ($5,376) ($5,263)
===================================================================================
</TABLE>
* Reflects the disposition of London Electricity and Citpower effective
in December 1998.
Other Postretirement Benefits
Entergy also provides health care and life insurance benefits for
retired employees. Substantially all domestic employees may become
eligible for these benefits if they reach retirement age while still
working for Entergy.
Effective January 1, 1993, Entergy adopted SFAS 106, which
required a change from a cash method to an accrual method of accounting
for postretirement benefits other than pensions. At January 1, 1993,
the actuarially determined accumulated postretirement benefit
obligation (APBO) earned by retirees and active employees was estimated
to be approximately $241.4 million and $128 million for Entergy (other
than Entergy Gulf States) and for Entergy Gulf States, respectively.
Such obligations are being amortized over a 20-year period which began
in 1993.
Entergy Arkansas, the portion of Entergy Gulf States regulated by
the PUCT, Entergy Mississippi, and Entergy New Orleans have received
regulatory approval to recover SFAS 106 costs through rates. Entergy
Arkansas began recovery in 1998, pursuant to an APSC order. This order
also allowed Entergy Arkansas to amortize a regulatory asset
(representing the difference between SFAS 106 costs and cash
expenditures for other postretirement benefits incurred for a five-year
period that began January 1, 1993) over a period of 15 years beginning
in January 1998.
The LPSC ordered the portion of Entergy Gulf States regulated by
the LPSC and Entergy Louisiana to continue the use of the pay-as-you-go
method for ratemaking purposes for postretirement benefits other than
pensions. However, the LPSC retains the flexibility to examine
individual companies' accounting for postretirement benefits to
determine if special exceptions to this order are warranted.
Pursuant to regulatory directives, Entergy Arkansas, Entergy
Mississippi, Entergy New Orleans, the portion of Entergy Gulf States
regulated by the PUCT, and System Energy fund postretirement benefit
obligations collected in rates. System Energy is funding on behalf of
Entergy Operations postretirement benefits associated with Grand Gulf
1. Entergy Louisiana and Entergy Gulf States continue to recover a
portion of these benefits regulated by the LPSC and FERC on a pay-as-
you-go basis. The assets of the various postretirement benefit plans
other than pensions include common stocks, fixed-income securities, and
a money market fund.
Total 1999, 1998, and 1997 postretirement benefit costs of Entergy
Corporation and its subsidiaries, including amounts capitalized and
deferred, included the following components (in thousands):
<TABLE>
<CAPTION>
1999 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $16,950 $3,952 $3,227 $2,140 $1,009 $512 $982
Interest cost on APBO 29,467 6,596 8,206 4,234 2,167 2,699 631
Expected return on assets (8,208) (1,309) (2,980) - (1,634) (1,425) (522)
Amortization of transition obligation 17,874 3,954 5,803 2,971 1,502 2,678 222
Amortization of prior service cost 44 - 44 - - - -
Recognized net (gain) (1,452) - (393) (227) (69) (616) (8)
----------------------------------------------------------------------------------
Net postretirement benefit cost $54,675 $13,193 $13,907 $9,118 $2,975 $3,848 $1,305
==================================================================================
</TABLE>
<TABLE>
<CAPTION>
1998 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $13,878 $3,325 $2,553 $1,776 $862 $432 $871
Interest cost on APBO 28,443 6,519 8,103 4,089 2,085 2,714 652
Expected return on assets (5,260) (215) (2,385) - (1,059) (1,155) (446)
Amortization of transition obligation 17,874 3,954 5,803 2,971 1,502 2,678 262
Amortization of prior service cost 44 - 44 - - - -
Recognized net (gain) (3,501) - (1,216) (686) (264) (1,024) (79)
--------------------------------------------------------------------------------
Net postretirement benefit cost $51,478 $13,583 $12,902 $8,150 $3,126 $3,645 $1,260
================================================================================
</TABLE>
<TABLE>
<CAPTION>
1997 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the period $13,991 $3,204 $3,227 $2,081 $1,092 $618 $939
Interest cost on APBO 29,317 6,232 9,466 4,490 2,278 3,106 648
Expected return on assets (3,386) - (1,637) - (695) (840) (214)
Amortization of transistion obligation 15,686 3,954 5,803 2,971 1,502 2,678 262
Amortization of prior service cost 44 - 44 - - - -
Recognized net (gain)/loss 134 (238) 672 (348) (103) (742) -
--------------------------------------------------------------------------------
Net postretirement benefit cost $55,786 $13,152 $17,575 $9,194 $4,074 $4,820 $1,635
================================================================================
</TABLE>
The funded status of Entergy's postretirement plans as of December
31, 1999 and 1998 was (in thousands):
<TABLE>
<CAPTION>
1999 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Change in APBO
Balance at 1/1/99 $444,509 $101,856 $124,431 $63,449 $32,404 $40,838 $9,087
Service cost 16,950 3,952 3,227 2,140 1,009 512 982
Interest cost 29,467 6,596 8,206 4,234 2,167 2,699 631
Actuarial (gain) (40,202) (10,375) (10,287) (4,924) (2,131) (2,098) (882)
Benefits paid (25,881) (6,373) (7,282) (3,743) (2,316) (3,588) (272)
Acquisition of subsidiary 4,929 - - - - - -
-----------------------------------------------------------------------------------
Balance at 12/31/99 $429,772 $95,656 $118,295 $61,156 $31,133 $38,363 $9,546
-----------------------------------------------------------------------------------
Change in Plan Assets
Fair value of assets at 1/1/99 $89,579 $11,774 $31,510 $ - $18,759 $20,380 $7,156
Actual return on plan assets 7,134 1,278 3,403 - 150 1,476 548
Employer contributions 43,576 15,526 11,414 3,743 3,021 5,448 2,117
Benefits paid (25,881) (6,373) (7,282) (3,743) (2,316) (3,588) (272)
Acquisition of subsidiary 5,800 - - - - - -
-----------------------------------------------------------------------------------
Fair value of assets at 12/31/99 $120,208 $22,205 $39,045 $ - $19,614 $23,716 $9,549
-----------------------------------------------------------------------------------
Funded status ($309,564) ($73,451) ($79,250) ($61,156) ($11,519) ($14,647) $3
Unrecognized transition obligation 149,141 51,390 75,444 38,633 19,525 34,827 2,893
Unrecognized prior service cost 335 - 335 - - - -
Unrecognized net (gain) (19,374) (6,941) (24,503) (12,048) (5,117) (13,870) (3,653)
-----------------------------------------------------------------------------------
Prepaid/(accrued) postretirement benefit
asset/(liability) ($179,462) ($29,002) ($27,974) ($34,571) $2,889 $6,310 ($757)
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
1998 Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
<S> <C> <C> <C> <C> <C> <C> <C>
Change in APBO
Balance at 1/1/98 $427,962 $91,097 $136,228 $65,385 $33,273 $43,833 $8,483
Service cost 13,878 3,325 2,553 1,776 862 432 871
Interest cost 28,443 6,519 8,103 4,089 2,085 2,714 652
Actuarial (gain)/loss 1,322 8,005 (15,007) (3,698) (1,545) (2,589) (573)
Benefits paid (27,096) (7,090) (7,446) (4,103) (2,271) (3,552) (346)
------------------------------------------------------------------------------------
Balance at 12/31/98 $444,509 $101,856 $124,431 $63,449 $32,404 $40,838 $9,087
------------------------------------------------------------------------------------
Change in Plan Assets
Fair value of assets at 1/1/98 $59,688 $ - $25,696 $ - $11,807 $17,350 $4,835
Actual return on plan assets 4,616 713 1,165 - 1,612 405 721
Employer contributions 52,372 18,151 12,095 4,103 7,611 6,177 1,947
Benefits paid (27,097) (7,090) (7,446) (4,103) (2,271) (3,552) (347)
------------------------------------------------------------------------------------
Fair value of assets at 12/31/98 $89,579 $11,774 $31,510 $ - $18,759 $20,380 $7,156
------------------------------------------------------------------------------------
Funded status ($354,930) ($90,082) ($92,921) ($63,449) ($13,645) ($20,458) ($1,931)
Unrecognized transition obligation 160,613 55,344 81,247 41,604 21,027 37,505 3,670
Unrecognized prior service cost 379 - 379 - - - -
Unrecognized net (gain)/loss 24,704 3,403 (14,186) (7,351) (4,539) (12,337) (3,308)
------------------------------------------------------------------------------------
Prepaid/(accrued) postretirement benefit
asset/(liability) ($169,234) ($31,335) ($25,481) ($29,196) $2,843 $4,710 ($1,569)
====================================================================================
</TABLE>
The assumed health care cost trend rate used in measuring the APBO
of Entergy was 5.5% for 2000, gradually decreasing each successive year
until it reaches 5.0% in 2005 and beyond. A one percentage-point
change in the assumed health care cost trend rate for 1999 would have
the following effects (in thousands):
<TABLE>
<CAPTION>
1 Percentage Point Increase 1 Percentage Point Decrease
Increase in the sum Decrease in the sum
Increase in the of service cost Decrease in the of service cost
1999 APBO and interest cost APBO and interest cost
<S> <C> <C> <C> <C>
Entergy $34,514 $5,284 ($29,203) ($4,356)
Entergy Arkansas $7,379 $1,156 ($6,261) ($955)
Entergy Gulf States $10,041 $1,281 ($8,520) ($1,064)
Entergy Louisiana $4,450 $657 ($3,782) ($544)
Entergy Mississippi $2,284 $319 ($1,940) ($263)
Entergy New Orleans $2,329 $249 ($2,012) ($211)
System Energy $1,021 $233 ($845) ($189)
</TABLE>
The significant actuarial assumptions used in determining the pension
PBO and the SFAS 106 APBO for 1999, 1998, and 1997 were as follows:
1999 1998 1997
Weighted-average discount rate 7.5% 6.75% 7.25%
Weighted-average rate of increase in
future compensation levels 4.6% 4.6% 4.6%
Expected long-term rate of return on
plan assets 9.0% 9.0% 9.0%
Entergy's pension transition assets are being amortized over the
greater of the remaining service period of active participants or 15
years and its SFAS 106 transition obligations are being amortized over
20 years.
NOTE 12. DISPOSITIONS AND ACQUISITIONS (Entergy Corporation)
Business Dispositions
As part of the new strategic plan adopted by Entergy in August
1998, Entergy sold several businesses during 1998, including the
following:
Business Pre-tax Gain (Loss)
on Sale
(In Millions)
London Electricity $327
CitiPower (a) 38
Efficient Solutions, Inc. (69)
(a) The gain on the CitiPower sale reflects a $7.6 million favorable
adjustment to the final sale price in January 1999.
In keeping with this plan, in January 1999, Entergy disposed of
its security monitoring subsidiary, Entergy Security, Inc. at a minimal
gain. Several telecommunication businesses were sold in June, also at
small gains.
The results of operations of these businesses are included in
Entergy's Consolidated Statements of Income through their respective
dates of sale. Gains and losses arising from sales of businesses are
included in "Other Income (Deductions), Gain on sale of assets - net"
in that statement.
Asset Acquisition
On July 13, 1999, Entergy's non-utility nuclear power business
acquired the 670 MW Pilgrim Nuclear Station located in Plymouth,
Massachusetts from Boston Edison. The acquisition included the plant,
real estate, materials and supplies, and nuclear fuel, for a total
purchase price of $81 million. The purchase price was funded with a
portion of the proceeds from the sales of non-regulated businesses. As
part of the Pilgrim purchase, Boston Edison funded a $471 million
decommissioning trust fund, which was transferred to an Entergy
subsidiary. Based on a favorable tax determination regarding the trust
fund, Entergy returned $43 million of the trust fund to Boston Edison.
NOTE 13. TRANSACTIONS WITH AFFILIATES (Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy)
The domestic utility companies purchase electricity from and/or
sell electricity to the other domestic utility companies, System
Energy, and Entergy Power (in the case of Entergy Arkansas) under rate
schedules filed with FERC. In addition, the domestic utility companies
and System Energy purchase fuel from System Fuels; receive management,
technical, advisory, operating, and administrative services from
Entergy Services; and receive management, technical, and operating
services from Entergy Operations. Pursuant to SEC rules under PUHCA,
these transactions normally are on an "at cost" basis.
As described in Note 1 to the financial statements, all of System
Energy's operating revenues consist of billings to Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans.
The tables below contain the various affiliate transactions among
the domestic utility companies and System Entergy (in millions).
Intercompany Revenues
Entergy Entergy Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Mississippi New Orleans Energy
1999 $189.2 $38.4 $27.3 $68.3 $14.2 $620.0
1998 $162.0 $16.7 $16.7 $88.3 $11.0 $602.4
1997 $230.8 $15.9 $ 3.4 $85.5 $11.1 $633.7
Intercompany Operating Expenses
Entergy Entergy Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(1)
1999 $357.5 $436.7 $294.3 $315.6 $182.5 $36.2
1998 $353.7 $419.7 $269.0 $338.1 $194.9 $39.6
1997 $335.0 $416.4 $326.7 $316.1 $177.1 $36.5
(1)Includes $15.8 million in 1999, $18.8 million in 1998, and $16.5
million in 1997 for power purchased from Entergy Power.
Operating Expenses Paid or Reimbursed to Entergy Operations
Entergy Entergy Entergy System
Arkansas Gulf States Louisiana Energy
1999 $179.2 $110.9 $113.8 $64.9
1998 $167.5 $114.2 $125.0 $62.8
1997 $162.1 $ 63.5 $133.3 $64.7
NOTE 14. BUSINESS SEGMENT INFORMATION (Entergy Corporation and
Entergy New Orleans)
In 1998, Entergy adopted SFAS 131, "Disclosures about Segments of
an Enterprise and Related Information." Entergy's reportable segments
as of December 31, 1999 are domestic utility and power marketing and
trading. Entergy's international electric distribution businesses,
Entergy London and CitiPower, were sold in December 1998. These
businesses would have been a reportable segment had they been held as
of December 31, 1998, and financial information regarding them is also
provided below.
Domestic utility provides retail electric service in portions of
Arkansas, Louisiana, Mississippi, and Texas, and provides natural gas
utility service in portions of Louisiana. Entergy's power marketing
and trading segment markets wholesale electricity, gas, other
generating fuels, and electric capacity, and markets financial
instruments to third parties. Entergy's operating segments are
strategic business units managed separately due to their different
operating and regulatory environments.
Entergy's segment financial information is as follows (in
thousands):
<TABLE>
<CAPTION>
Domestic Power
Utility and Marketing
System and Entergy
Energy Trading* London* CitiPower* All Other* Eliminations Consolidated
1999
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues $6,414,623 $2,249,274 $ - $ - $143,146 ($33,815) $8,773,228
----------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 1,672,075 411,519 - - - (719) 2,082,875
Purchased power 693,202 1,771,128 - - - (21,846) 2,442,484
Nuclear refueling outages 76,057 - - - - - 76,057
Other operation & maint. 1,405,208 66,383 - - 247,250 (13,296) 1,705,545
Deprec, amort. & decomm. 732,182 5,212 - - 7,475 - 744,869
Taxes other than income 334,834 682 - - 3,768 - 339,284
Other regulatory charges 8,113 - - - - - 8,113
Amort. of rate deferrals 122,347 - - - - - 122,347
----------------------------------------------------------------------------------------
Total operating expenses 5,044,018 2,254,924 - - 258,493 (35,861) 7,521,574
----------------------------------------------------------------------------------------
Operating Income (Loss) 1,370,605 (5,650) - - (115,347) 2,046 1,251,654
Other Income 70,911 3,937 - - 186,378 (5,586) 255,640
Interest Charges 536,543 2,006 - - 20,592 (3,540) 555,601
----------------------------------------------------------------------------------------
Income Before Income Taxes 904,973 (3,719) - - 50,439 - 951,693
Income Taxes 351,448 (3,228) - - 8,447 - 356,667
----------------------------------------------------------------------------------------
Net Income (Loss) $553,525 ($491) $ - $ - $41,992 $ - $595,026
========================================================================================
Total assets $18,956,750 $460,063 $ - $ - $3,762,115 $ (193,841) $22,985,087
1998
Operating Revenues $6,310,543 $2,854,980 $1,911,875 $303,245 $150,297 ($36,168) $11,494,772
----------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 1,547,413 160,135 - - - (1,520) 1,706,028
Purchased power 614,964 2,674,807 1,218,534 101,407 - (24,268) 4,585,444
Nuclear refueling outages 83,885 - - - - - 83,885
Other operation & maint. 1,336,881 45,247 298,748 71,603 247,720 (12,159) 1,988,040
Deprec, amort. & decomm. 763,818 5,058 126,586 28,444 61,023 - 984,929
Taxes other than income 340,612 997 - 18,226 2,318 - 362,153
Other regulatory charges 35,136 - - - - - 35,136
Amort. of rate deferrals 237,302 - - - - - 237,302
----------------------------------------------------------------------------------------
Total operating expenses 4,960,011 2,886,244 1,643,868 219,680 311,061 (37,947) 9,982,917
----------------------------------------------------------------------------------------
Operating Income (Loss) 1,350,532 (31,264) 268,007 83,565 (160,764) 1,779 1,511,855
Other Income 58,196 7,630 36,810 124 272,865 (2,601) 373,024
Interest Charges 548,299 122 182,479 80,586 21,851 (822) 832,515
----------------------------------------------------------------------------------------
Income Before Income Taxes 860,429 (23,756) 122,338 3,103 90,250 - 1,052,364
Income Taxes 331,931 (8,216) 4,589 - (61,569) - 266,735
----------------------------------------------------------------------------------------
Net Income (Loss) $528,498 ($15,540) $117,749 $3,103 $151,819 $ - $785,629
========================================================================================
Total assets $19,727,666 $359,626 $ - $ - $2,783,732 $ (34,330) $22,836,694
Domestic Power
Utility and Marketing
System and Entergy
Energy Trading* London* CitiPower* All Other* Eliminations Consolidated
1997
Operating Revenues $6,731,872 $493,102 $1,847,042 $342,959 $180,360 ($56,409) $9,538,926
--------------------------------------------------------------------------------------
Operating Expenses:
Fuel & gas purch. for resale 1,634,887 42,154 - - - - 1,677,041
Purchased power 605,634 390,125 1,222,034 129,744 - (28,726) 2,318,811
Nuclear refueling outages 73,857 - - - - - 73,857
Other operation & maint. 1,279,112 35,003 316,833 54,516 207,342 (6,657) 1,886,149
Deprec, amort. & decomm. 765,597 4,789 121,365 32,702 55,555 - 980,008
Taxes other than income 326,352 938 - 35,653 2,496 - 365,439
Other regulatory credits (18,545) - - - - - (18,545)
Amort. of rate deferrals 421,803 - - - - - 421,803
--------------------------------------------------------------------------------------
Total operating expenses 5,088,697 473,009 1,660,232 252,615 265,393 (35,383) 7,704,563
--------------------------------------------------------------------------------------
Operating Income (Loss) 1,643,175 20,093 186,810 90,344 (85,033) (21,026) 1,834,363
Other Income (Deductions) (245,439) 2,476 21,525 45 2,517 19,025 (199,851)
Interest Charges 583,613 91 178,647 69,011 32,911 (2,001) 862,272
--------------------------------------------------------------------------------------
Income Before Income Taxes 814,123 22,478 29,688 21,378 (115,427) - 772,240
Income Taxes 296,432 8,318 177,023 22,924 (33,356) - 471,341
--------------------------------------------------------------------------------------
Net Income (Loss) $517,691 $14,160 ($147,335) ($1,546) ($82,071) $ - $300,899
======================================================================================
Total assets $20,114,594 $354,694 $4,403,625 $1,068,564 $1,093,783 $ (34,560) $27,000,700
</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. The All
Other category includes the parent Entergy Corporation, segments below
the quantitative threshold for separate disclosure, and other business
activities. Other segments principally include global power
development and non-utility nuclear power operations and management.
Other business activities principally include the gains on the sales of
businesses. Reconciling items are principally intersegment activity.
Products and Services
In addition to retail electric service, Entergy New Orleans
supplies natural gas services in the City of New Orleans. Revenue from
these two services is disclosed in Entergy New Orleans' Income
Statements.
Geographic areas
For the years ended December 31, 1999, 1998, and 1997, Entergy did
not derive material revenues from outside of the United States, other
than from Entergy London and CitiPower, which are noted above.
Long-lived assets as of December 31 were as follows (in
thousands):
1999 1998 1997
Domestic $14,590,346 $14,863,488 $15,228,107
Foreign 910,408 465,094 2,904,721
----------- ----------- -----------
Consolidated $15,500,754 $15,328,582 $18,132,828
=========== =========== ===========
NOTE 15. RISK MANAGEMENT AND FAIR VALUES (Entergy Corporation)
Commodity Derivatives
Entergy uses a variety of commodity derivatives, including natural
gas and electricity futures, forwards, and options, as a part of its
overall risk management strategy.
The power marketing and trading business engages in the trading of
commodity instruments and, therefore, experiences net open positions.
The business manages open positions with policies that limit its
exposure to market risk and require daily reporting to management of
potential financial exposure. These policies include statistical risk
tolerance limits using historical price movements to calculate a value
at risk measurement. The weighted-average life of the business'
commodity risk portfolio was less than 18 months at December 31, 1999
and less than 12 months at December 31, 1998.
At December 31, 1999 and 1998, the power marketing and trading
business had outstanding absolute notional contract quantities as
follows (power volumes in thousands of megawatt hours, natural gas
volumes in thousands of British thermal units):
1999 1998
Energy Commodities:
Power 9,627 33,682
Natural gas 728,560 1,209,791
Market risk is the potential loss that Entergy may incur as a
result of changes in the market or fair value of a particular instrument
or commodity. All financial and commodity-related instruments,
including derivatives, are subject to market risk. Entergy's exposure
to market risk is determined by a number of factors, including the size,
duration, composition, and diversification of positions held, as well as
market volatility and liquidity. For instruments such as options, the
time period during which the option may be exercised and the
relationship between the current market price of the underlying
instrument and the option's contractual strike or exercise price also
affect the level of market risk. The most significant factor
influencing the overall level of market risk to which Entergy is exposed
is its use of hedging techniques to mitigate such risk. Entergy manages
market risk by actively monitoring compliance with stated risk
management policies as well as monitoring the effectiveness of its
hedging policies and strategies. Entergy's risk management policies
limit the amount of total net exposure and rolling net exposure during
the stated periods. These policies, including related risk limits, are
regularly assessed to ensure their appropriateness given Entergy's
objectives.
The New York Mercantile Exchange (Exchange) guarantees futures and
option contracts traded on the Exchange and there is nominal credit
risk. On all other transactions described above, Entergy is exposed to
credit risk in the event of nonperformance by the counterparties. For
each counterparty, Entergy analyzes the financial condition prior to
entering into an agreement, establishes credit limits, and monitors the
appropriateness of these limits on an ongoing basis. In some
circumstances, Entergy requires letters of credit or parental
guarantees. Entergy also uses netting arrangements whenever possible to
mitigate Entergy's exposure to counterparty risk. Netting arrangements
enable Entergy to net certain assets and liabilities by counterparty.
The change in market value of Exchange-traded futures and options
contracts requires daily cash settlement in margin accounts with
brokers. Swap contracts and most other over-the-counter instruments are
generally settled at the expiration of the contract term and may be
subject to margin requirements with the counterparty.
Entergy's principal markets for power and natural gas marketing
services are utilities and industrial end-users located throughout the
United States and the UK. The power marketing and trading business has
a concentration of receivables due from those customers. These industry
concentrations may affect the power marketing and trading business'
overall credit risk, either positively or negatively, in that changes in
economic, industry, regulatory, or other conditions may similarly affect
certain customers. Trade receivables are generally not collateralized.
However, Entergy analyzes customers' credit positions prior to extending
credit, establishes credit limits, and monitors the appropriateness of
these limits on an ongoing basis.
Fair Values
Commodity Instruments
Fair value estimates of the power marketing and trading business'
commodity instruments are made at discrete points in time based on
relevant market information. These estimates may be subjective in
nature and involve uncertainties and matters of significant judgment;
therefore, actual results may differ from these estimates. At December
31, 1999 and 1998, the fair values of the power marketing and trading
business' energy-related commodity contracts used for trading purposes
were as follows:
1999 1998
Assets Liabilities Assets Liabilities
(In Thousands)
Commodity Instruments:
Natural Gas $43,542 $39,361 $150,130 $150,311
Electricity $185,575 $130,209 $147,363 $119,891
Financial Instruments
The estimated fair value of Entergy's financial instruments is
determined using bid prices reported by dealer markets and by
nationally recognized investment banking firms. The estimated fair
value of derivative financial instruments is based on market quotes of
the applicable interest rates. Considerable judgment is required in
developing the estimates of fair value. Therefore, estimates are not
necessarily indicative of the amounts that Entergy could realize in a
current market exchange. In addition, gains or losses realized on
financial instruments held by regulated businesses may be reflected in
future rates and therefore do not accrue to the benefit or detriment of
stockholders.
Entergy considers the carrying amounts of financial instruments
classified as current assets and liabilities to be a reasonable
estimate of their fair value because of the short maturity of these
instruments. In addition, Entergy does not expect that performance of
its obligations will be required in connection with certain off-balance
sheet commitments and guarantees considered financial instruments. For
these reasons, and because of the related-party nature of these
commitments and guarantees, determination of fair value is not
considered practicable. Additional information regarding financial
instruments and their fair values is included in Notes 4, 5, 6, and 7
to the financial statements.
NOTE 16. QUARTERLY FINANCIAL DATA (UNAUDITED) (Entergy Corporation,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy)
The business of the domestic utility companies and System Energy
is subject to seasonal fluctuations with the peak periods occurring
during the third quarter. Operating results for the four quarters of
1999 and 1998 were:
<TABLE>
<CAPTION>
Operating Revenue
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
1999:
First Quarter $1,639,922 $311,969 $423,819 $352,135 $182,443 $106,056 $140,617
Second Quarter 2,316,404 387,191 546,543 505,601 194,637 121,287 159,505
Third Quarter 3,064,535 488,801 676,076 576,956 267,159 163,140 163,801
Fourth Quarter 1,752,367 353,933 480,770 371,902 188,580 117,305 156,109
1998:
First Quarter $2,313,092 $329,789 $457,509 $356,038 $205,017 $113,663 $148,606
Second Quarter 2,508,814 391,357 423,655 424,115 268,908 125,106 144,336
Third Quarter 4,587,447 527,059 609,362 537,632 324,784 165,808 152,083
Fourth Quarter 2,085,419 360,493 363,283 393,123 177,591 109,173 157,348
Operating Income
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
1999:
First Quarter $203,435 $ 32,160 $61,032 $65,989 $12,220 $ 749 $53,837
Second Quarter 363,951 60,212 61,586 179,278 20,630 22,089 68,695
Third Quarter 597,595 113,570 160,784 172,052 42,519 28,622 71,199
Fourth Quarter 86,673 (10,541) 37,596 2,823 12,716 (8,924) 69,705
1998:
First Quarter $285,507 $ 27,254 $63,661 $55,222 $15,382 $ 1,891 $71,959
Second Quarter 472,710 83,837 31,530 114,540 55,721 15,468 72,177
Third Quarter 590,673 140,837 166,403 164,393 54,028 20,210 68,772
Fourth Quarter 162,965 2,887 (25,940) 68,726 (571) 1,490 69,735
Net Income (Loss)
Entergy Entergy Entergy Entergy Entergy System
Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy
(In Thousands)
1999:
First Quarter $ 72,906 $ 11,011 $ 13,437 $ 21,487 $3,015 $(1,535) $ 700
Second Quarter 209,758 28,929 17,022 93,371 8,222 11,695 29,483
Third Quarter 296,158 58,021 80,921 88,680 23,212 15,581 24,042
Fourth Quarter 16,204 (28,648) 13,620 (11,768) 7,139 (6,780) 28,147
1998:
First Quarter $ 60,054 $ 5,623 $ 14,756 $ 13,917 $5,194 $ (902) $24,587
Second Quarter 215,979 39,967 (5,241) 49,546 29,514 6,577 24,779
Third Quarter 262,596 73,731 78,313 81,470 29,319 10,258 25,139
Fourth Quarter 247,000 (8,370) (41,435) 34,554 (1,389) 204 31,971
</TABLE>
Earnings per Average Common Share (Entergy Corporation)
1999 1998
Basic and Diluted Basic and Diluted
First Quarter $0.25 $ 0.20
Second Quarter $0.81 $ 0.83
Third Quarter $1.16 $ 1.01
Fourth Quarter $0.03 $ 0.96
<PAGE>
Item 9. Changes In and Disagreements With Accountants On Accounting and
Financial Disclosure.
No event that would be described in response to this item has occurred
with respect to Entergy, System Energy, Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, or Entergy New Orleans.
PART III
Item 10. Directors and Executive Officers of the Registrants (Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy)
All officers and directors listed below held the specified positions
with their respective companies as of the date of filing this report.
<TABLE>
<CAPTION>
Name Age Position Period
ENTERGY ARKANSAS, INC.
Directors
<S> <C> <C> <C>
Thomas J. Wright 53 President and Chief Executive Officer 1999-Present
of Entergy Arkansas
Director of Entergy Arkansas 1999-Present
Managing Director of London 1998-1999
Electricity England
Chairman, CEO and Director of 1996-1998
CitiPower Pty. Australia
Vice President Transmission and 1994-1996
Distribution System of Entergy
Services
Donald C. Hintz See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Officers
Cecil L. Alexander 64 Vice President - State Governmental 1991-Present
Affairs of Entergy Arkansas
C. Gary Clary 55 Senior Vice President - Human 1998-Present
Resources and Administration of
Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy
Mississippi, and Entergy New Orleans
Vice President - Human Resources and 1997-1998
Administration of Entergy Arkansas,
Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and
Entergy New Orleans
Director-System Human Resources of 1993-1996
Entergy Services
Frank F. Gallaher See information under the Entergy
Corporation Officers Section in Part
I.
Joseph T. Henderson See information under the Entergy
Corporation Officers Section in Part
I.
Nathan E. Langston See information under the Entergy
Corporation Officers Section in Part
I.
Steven C. McNeal See information under the Entergy
Corporation Officers Section in Part
I.
Michael G. Thompson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Thomas J. Wright See information under the Entergy
Arkansas Directors above.
ENTERGY GULF STATES, INC.
Directors
Joseph F. Domino 51 Director of Entergy Gulf States 1999-Present
President and Chief Executive Officer 1998-Present
-Texas
Director - Southwest Franchise of 1997-1998
Entergy Gulf States
Director - Eastern Region of Entergy 1995-1997
Services
Director - Southern Region of Entergy 1994-1995
Services
Donald C. Hintz See information under the Entergy
Corporation Officers Section in Part
I.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Officers
James D. Bruno 60 Vice President - Region of Entergy 1999-Present
Louisiana and Entergy Gulf States
Vice President of Customer Service of 1998-1999
Entergy Louisiana and Entergy Gulf
States
Vice President of Customer Service of 1994-1998
Entergy Louisiana and Entergy New
Orleans
Vice President - Metro Region of 1993-1994
Entergy Services
Murphy A. Dreher 47 Vice President - State Governmental 1999-Present
Affairs of Entergy Gulf States -LA
and Entergy Louisiana
Legislative Executive - Governmental 1995-1998
Affairs of Entergy Gulf States
Director of Governmental Affairs of 1993-1995
Entergy Gulf States
Randall W. Helmick 45 Vice President of Operations - 1998-Present
Louisiana
Director of Special Projects of 1997-1998
London Electricity
Director of Reliability of Entergy 1997
Services
Director of Operations and 1994-1997
Engineering of Entergy Services
J. Parker McCollough 48 Vice President - State Governmental 1996-Present
Affairs of Entergy Gulf States - TX
Vice President - Governmental 1993-1996
Affairs, Texas Association of
Realtors (trade association)
C. Gary Clary See information under the Entergy
Arkansas Officers Section above.
Joseph F. Domino See information under the Entergy
Gulf States Directors Section above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section in Part
I.
Joseph T. Henderson See information under the Entergy
Corporation Officers Section in Part
I.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section in Part
I.
Nathan E. Langston See information under the Entergy
Corporation Officers Section in Part
I.
Steven C. McNeal See information under the Entergy
Corporation Officers Section in Part
I.
Michael G. Thompson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
ENTERGY LOUISIANA, INC.
Directors
Donald C. Hintz See information under the Entergy
Corporation Officers Section in Part
I.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Officers
James D. Bruno See information under the Entergy
Gulf States Officers Section above.
C. Gary Clary See information under the Entergy
Arkansas Officers Section above.
Murphy A. Dreher See information under the Entergy
Gulf States Officers Section above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section in Part
I.
Randall W. Helmick See information under the Entergy
Gulf States Officers Section above.
Joseph T. Henderson See information under the Entergy
Corporation Officers Section in Part
I.
Jerry D. Jackson See information under the Entergy
Corporation Officers Section in Part
I.
Nathan E. Langston See information under the Entergy
Corporation Officers Section in Part
I.
Steven C. McNeal See information under the Entergy
Corporation Officers Section in Part
I.
Michael G. Thompson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
ENTERGY MISSISSIPPI, INC.
Directors
Carolyn C. Shanks 38 President and Chief Executive Officer 1999-Present
of Entergy Mississippi
Director of Entergy Mississippi 1999-Present
Vice President of Finance and 1997-1999
Administration of Entergy
Mississippi
Director of Business Services of 1994-1997
Entergy Operations
Donald C. Hintz See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Officers
Bill F. Cossar 61 Vice President - State Governmental 1987-Present
Affairs of Entergy Mississippi
C. Gary Clary See information under the Entergy
Arkansas Officers Section above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section in Part
I.
Joseph T. Henderson See information under the Entergy
Corporation Officers Section in Part
I.
Nathan E. Langston See information under the Entergy
Corporation Officers Section in Part
I.
Steven C. McNeal See information under the Entergy
Corporation Officers Section in Part
I.
Carolyn C. Shanks See information under the Entergy
Mississippi Directors above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
ENTERGY NEW ORLEANS, INC.
Directors
Daniel F. Packer 52 Chief Executive Officer of Entergy 1998-Present
New Orleans - LA
President and Director of Entergy New 1997-Present
Orleans
State President - City of New Orleans 1996-1997
Vice President - Regulatory and 1994-1996
Governmental Affairs of Entergy New
Orleans
General Manager - Plant Operations at 1991-1994
Waterford 3
Donald C. Hintz See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Officers
Elaine Coleman 50 Vice President External Affairs of 1998-Present
Entergy New Orleans - LA
Director of Customer Service of 1998
Entergy Services
Lead Customer Service Manager of 1995-1998
Entergy Services
Manager of Employee Communication of 1993-1995
Entergy Services
C. Gary Clary See information under the Entergy
Arkansas Officers Section above.
Frank F. Gallaher See information under the Entergy
Corporation Officers Section in Part
I.
Joseph T. Henderson See information under the Entergy
Corporation Officers Section in Part
I.
Nathan E. Langston See information under the Entergy
Corporation Officers Section in Part
I.
Steven C. McNeal See information under the Entergy
Corporation Officers Section in Part
I.
Daniel F. Packer See information under the Entergy New
Orleans Directors Section above.
Michael G. Thompson See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
SYSTEM ENERGY RESOURCES, INC.
Directors
Jerry W. Yelverton 55 Director, President and Chief 1999-Present
Executive Officer of System Energy
Senior Vice President of Nuclear of 1997-1998
Entergy Services
Executive Vice President and Chief 1996-1998
Operating Officer of Entergy
Operations
Vice President of Operations of ANO 1992-1996
In addition, Mr. Yelverton is an executive
officer and/or director of various other
wholly owned subsidiaries of Entergy
Corporation and its operating companies.
Donald C. Hintz See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Officers
Joseph L. Blount 53 Secretary of System Energy and 1991-Present
Entergy Operations
Vice President Legal and External 1990-1993
Affairs of Entergy Operations
Joseph T. Henderson See information under the Entergy
Corporation Officers Section in Part
I.
Nathan E. Langston See information under the Entergy
Corporation Officers Section in Part
I.
Steven C. McNeal See information under the Entergy
Corporation Officers Section in Part
I.
C. John Wilder See information under the Entergy
Corporation Officers Section in Part
I.
Jerry W. Yelverton See information under the System
Energy Directors section above.
</TABLE>
Each director and officer of the applicable Entergy company is elected
yearly to serve by the unanimous consent of the sole stockholder, Entergy
Corporation, at its annual meeting.
Section 16(a) Beneficial Ownership Reporting Compliance
Information called for by this item concerning the directors and
officers of Entergy Corporation is set forth in the Proxy Statement of
Entergy Corporation to be filed in connection with its Annual Meeting of
Stockholders to be held on May 12, 2000, under the heading "Section 16(a)
Beneficial Ownership Reporting Compliance", which information is
incorporated herein by reference.
Item 11. Executive Compensation
ENTERGY CORPORATION
Information called for by this item concerning the directors and
officers of Entergy Corporation is set forth in the Proxy Statement under
the headings "Executive Compensation Tables", "General Information About
Nominees", and "Director Compensation", which information is incorporated
herein by reference.
ENTERGY ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, ENTERGY
MISSISSIPPI, ENTERGY NEW ORLEANS, AND SYSTEM ENERGY
Summary Compensation Table
The following table includes the Chief Executive Officer and the four
other most highly compensated executive officers in office as of December
31, 1999 at Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy (collectively,
the "Named Executive Officers"). This determination was based on total
annual base salary and bonuses from all Entergy sources earned by each
officer for the year 1999. See Item 10, "Directors and Executive Officers
of the Registrants," for information on the principal positions of the
Named Executive Officers in the table below.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy
As shown in Item 10, most Named Executive Officers are employed by
several Entergy companies. Because it would be impracticable to allocate
such officers' salaries among the various companies, the table below
includes the aggregate compensation paid by all Entergy companies.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Restricted Securities (a)
Other Annual Stock Underlying All Other
Name Year Salary Bonus Compensation Awards Options Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
C. Gary Clary 1999 $ 254,080 $193,423 $ 0 (b) 28,025 shares $ 8,012
1998 226,662 168,089 9,959 (b) 1,250 5,017
1997 170,731 36,086 23,072 (b) 2,500 5,122
John J. Cordaro (d) 1999 $ 53,506 $ 11,815 $ 2,698 (b) 0 shares $1,305,083
1998 227,556 67,211 45,209 (b) 1,250 5,833
1997 206,410 0 37,986 (b) 2,500 6,192
Joseph F. Domino 1999 $ 223,569 $200,210 $ 7,072 (b) 13,487 shares $ 6,838
CEO-Entergy Gulf States-TX 1998 164,011 39,492 4,558 (b) 0 5,409
1997 138,374 0 16,205 (b) 0 0
Frank F. Gallaher 1999 $ 401,161 $303,855 $38,496 (b) 39,500 shares $ 13,545
1998 382,829 280,747 89,137 (b) 2,500 12,396
1997 327,385 0 11,132 (b) 5,000 9,822
Joseph T. Henderson 1999 $ 222,115 $201,100 $36,004 (b) 7,500 shares $ 21,983
Jerry D. Jackson 1999 $ 442,809 $403,554 $39,670 (b) 94,000 shares $ 15,497
CEO-Entergy Louisiana 1998 408,456 348,156 59,630 (b) 2,500 13,849
CEO-Entergy Gulf States-LA 1997 342,077 0 56,359 (b) 5,000 10,262
R. Drake Keith (d) 1999 $ 144,017 $ 85,544 $ 3,785 (b) 16,750 shares $ 144,801
1998 289,145 165,582 67,239 (b) 1,250 10,259
1997 276,728 0 41,230 (b) 2,500 8,292
Nathan E. Langston 1999 $ 193,462 $178,400 $23,613 (b) 15,400 shares $ 4,800
1998 158,563 111,125 21,953 (b) 0 5,243
1997 131,660 10,504 17,462 (b) 0 0
Steven C. McNeal 1999 $ 171,077 $ 78,100 $ 0 (b) 5,925 shares $ 4,800
1998 154,721 94,400 4,432 (b) 0 5,145
1997 122,474 9,818 14,237 (b) 0 0
Donald E. Meiners (d) 1999 $ 180,342 $ 84,552 $27,682 (b) 16,750 shares $1,198,504
1998 268,345 148,734 60,353 (b) 1,250 9,388
1997 255,410 0 33,748 (b) 2,500 7,662
Daniel F. Packer 1999 $ 211,055 $127,920 $10,517 (b) 16,750 shares $ 6,583
CEO-Entergy New Orleans 1998 170,326 123,513 54,208(e) (b) 0 4,018
1997 147,077 0 96,097(e) (b) 0 3,028
Carolyn C. Shanks 1999 $ 208,931 $133,950 $ 2,549 (b) 11,050 shares $ 4,800
CEO-Entergy Mississippi 1998 144,798 41,394 3,901 (b) 0 4,340
1997 118,124 1,110 14,841 (b) 0 3,267
Michael G. Thompson 1999 $ 336,378 $254,910 $53,407 (b) 28,700 shares $ 11,280
1998 309,958 283,935 25,200 $60,874(b)(c) 2,500 10,091
1997 259,315 0 12,856 (b) 5,000 7,729
C. John Wilder 1999 $ 445,191 $406,693 $119,878 (b) 52,500 shares $ 20,035
1998 201,413 513,106 7,255 $758,560(b)(c) 0 3,300
Thomas J. Wright 1999 $ 263,120 $225,458 $159,653(e) (b) 18,999 shares $ 32,356
CEO-Entergy Arkansas 1998 234,361 757,045(f) 519,610(e) (b) 0 20,833
1997 210,070 89,232 279,188(e) (b) 0 6,102
Jerry W. Yelverton 1999 $ 363,997 $328,500 $8,036 (b) 49,400 shares $ 11,286
CEO-System Energy 1998 282,410 184,959 22,068 (b) 1,250 8,886
1997 227,928 0 19,143 (b) 2,500 6,954
</TABLE>
(a) Includes the following:
(1) 1999 benefit accruals under the Defined Contribution Restoration
Plan as follows: Mr. Clary $3,212; Mr. Cordaro $638; Mr. Domino
$2,038; Mr. Gallaher $8,745; Mr. Henderson $1,866; Mr. Jackson
$10,697; Mr. Keith $273; Mr. Meiners $457; Mr. Packer $1,783; Mr.
Thompson $6,480; Mr. Wilder $8,832; Mr. Wright $164; and Mr.
Yelverton $6,486.
(2) 1999 employer contributions to the System Savings Plan as
follows: Mr. Clary $4,800; Mr. Cordaro $1,471; Mr. Domino
$4,800; Mr. Gallaher $4,800; Mr. Henderson $40; Mr. Jackson
$4,800; Mr. Keith $3,187; Mr. Langston $4,800; Mr. McNeal $4,800;
Mr. Meiners $4,263; Mr. Packer $4,800; Ms. Shanks $4,800; Mr.
Thompson $4,800; Mr. Wilder $4,400; Mr. Wright $5,810; and Mr.
Yelverton $4,800.
(3) 1999 reimbursements for moving expenses as follows: Mr. Henderson
$20,077, Mr. Wilder $6,803, and Mr. Wright $26,382.
(4) 1999 payments to retired Named Executive Officers under the executive
pension plans were as follows: Mr. Cordaro and Mr. Meiners received
lump sum payments under the Post Retirement Plan and Pension
Equalization Plan totaling $1,302,974 and $1,169,071, respectively.
Mr. Meiners also received $24,713 from the Defined Contribution
Restoration Plan. Mr. Keith received payments under the Post
Retirement Plan and the Pension Equalization Plan of $141,341.
(b) There were no restricted stock awards in 1999 under the Equity
Ownership Plan. At December 31, 1999, the number and value of the
aggregate restricted stock holdings were as follows: Mr. Clary 12,945
shares, $333,334; Mr. Cordaro 1,626 shares, $41,870; Mr. Domino 3,002
shares, $77,302; Mr. Gallaher 7,497 shares, $193,048; Mr. Henderson
3,948 shares, $101,661; Mr. Jackson 27,000 shares, $695,250; Mr. Keith
1,992 shares, $51,294; Mr. Langston 3,380 shares, $87,035; Mr. Meiners
2,243 shares, $57,757; Mr. Packer 4,500 shares, $115,875; Ms. Shanks
2,382 shares, $61,337; Mr. Thompson 14,834 shares, $381,976; Mr.
Wilder 39,111 shares, $1,007,108; Mr. Wright 4,500 shares, $115,875;
and Mr. Yelverton 11,505 shares, $296,254. Accumulated dividends are
paid on restricted stock when vested. No restrictions were lifted in
1999, 1998, and 1997 under the Equity Ownership Plan. The value of
restricted stock holdings as of December 31, 1999 is determined by
multiplying the total number of shares held by the closing market
price of Entergy Corporation common stock on the New York Stock
Exchange Composite Transactions on December 31, 1999 ($25.75 per
share).
(c) In addition to the restricted shares granted under the Long Term
Incentive Plan Mr. Wilder and Mr. Thompson were granted 26,000 and
2,000 additional restricted shares, respectively. Restricted shares
awarded will vest incrementally over a three-year period, beginning in
1999, based on continued service with Entergy Corporation.
Restrictions will be lifted annually. The value Mr. Wilder and Mr.
Thompson may realize is dependent upon both the number of shares that
vest and the future market price of Entergy Corporation common stock.
Accumulated dividends will not be paid on 21,000 shares of Mr.
Wilder's restricted stock when vested. Accumulated dividends will be
paid on 5,000 shares of Mr. Wilder's restricted stock and all of Mr.
Thompson's restricted stock when vested.
(d) Mr. Cordaro is the former Chief Executive Officer of Entergy Gulf
States, LA and Entergy Louisiana. Mr. Keith is the former Chief Executive
Officer of Entergy Arkansas. Mr. Meiners is the former Chief Executive
Officer of Entergy Mississippi.
(e) Includes Mr. Packer's living expenses of approximately $24,000 in 1998
and $68,000 in 1997, including taxes and housing. Includes approximately
$30,000 in 1999, $465,000 in 1998, and $236,000 in 1997 related to various
overseas living expenses associated with Mr. Wright's assignments in London
and Australia.
(f) Includes approximately $596,000 of performance bonus for service years
1996-1998. A portion of the bonus was paid during 1999 with the remaining
amount to be paid in 2000.
Option Grants in 1999
The following table summarizes option grants during 1999 to the Named
Executive Officers. The absence, in the table below, of any Named
Executive Officer indicates that no options were granted to such officer.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
% of Total Value
Number of Options at Assumed Annual
Securities Granted to Exercise Rates of Stock
Underlying Employees Price Price Appreciation
Options in (per Expiration for Option Term (c)
Name Granted (a) 1999 share) (a) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
C. Gary Clary 28,025 (a) 0.5% $ 29.9375 1/28/09 $ 527,642 $1,337,147
Joseph F. Domino 13,487 (a) 0.3% 29.9375 1/28/09 253,928 643,503
Frank F. Gallaher 39,500 (a) 0.7% 29.9375 1/28/09 743,688 1,884,650
Joseph T. Henderson 7,500 (b) 0.1% 28.8750 3/08/09 136,195 345,145
Jerry D. Jackson 94,000 (a) 1.8% 29.9375 1/28/09 1,769,788 4,484,991
R. Drake Keith 16,750 (a) 0.3% 29.9375 1/28/09 315,361 799,187
Nathan E. Langston 15,400 (a) 0.3% 29.9375 1/28/09 289,944 734,775
Steven C. McNeal 5,925 (a) 0.1% 29.9375 1/28/09 111,562 282,719
Donald E. Meiners 16,750 (a) 0.3% 29.9375 1/28/09 315,361 799,187
Daniel F. Packer 16,750 (a) 0.3% 29.9375 1/28/09 315,361 799,187
Carolyn C. Shanks 11,050 (a) 0.2% 29.9375 1/28/09 208,044 527,225
Michael G. Thompson 28,700 (a) 0.5% 29.9375 1/28/09 540,350 1,369,353
C. John Wilder 52,500 (a) 1.0% 29.9375 1/28/09 988,454 2,504,936
Thomas J. Wright 18,999 (a) 0.4% 29.9375 1/28/09 357,706 906,498
Jerry W. Yelverton 49,400 (a) 0.9% 29.9375 1/28/09 930,089 2,357,027
</TABLE>
(a) Options were granted on January 28, 1999, pursuant to the Equity
Ownership Plan. All options granted on this date have an exercise price
equal to the closing price of Entergy Corporation common stock on the New
York Stock Exchange Composite Transactions on January 28, 1999. These
options will vest incrementally over a three-year period beginning in 2000.
(b) Options were granted on March 8, 1999 and will vest incrementally over
a three-year period beginning in 2000.
(c) Calculation based on the market price of the underlying securities
assuming the market price increases over a ten-year option period and
assuming annual compounding. The column presents estimates of
potential values based on simple mathematical assumptions. The actual
value, if any, a Named Executive Officer may realize is dependent upon
the market price on the date of option exercise.
Aggregated Option Exercises in 1999 and December 31, 1999 Option Values
The following table summarizes the number and value of all unexercised
options held by the Named Executive Officers. The absence, in the table
below, of any Named Executive Officer indicates that no options are held by
such officer. No Named Executive Officer exercised options during 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
as of December 31, 1999 as of December 31, 1999 (a)
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
C. Gary Clary 3,750 28,025 $ - $ -
Joseph F. Domino 1,500 13,487 3,375 -
Frank F. Gallaher 45,000 39,500 127,813 -
Joseph T. Henderson - 7,500 - -
Jerry D. Jackson 51,911 94,000 121,875 -
Nathan E. Langston 1,500 15,400 3,375 -
Steven C. McNeal 1,500 5,925 3,375 -
Donald E. Meiners 11,250 16,750 - -
Daniel F. Packer - 16,750 - -
Carolyn C. Shanks - 11,050 - -
Michael G. Thompson 20,000 28,700 5,938 -
C. John Wilder - 52,500 - -
Thomas J. Wright - 18,999 - -
Jerry W. Yelverton 8,250 49,400 4,500 -
</TABLE>
(a) Based on the difference between the closing price of Entergy
Corporation's common stock on the New York Stock Exchange Composite
Transactions on December 31, 1999, and the option exercise price.
Pension Plan Tables
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy
Retirement Income Plan Table
Annual
Covered Years of Service
Compensation 15 20 25 30 35
$100,000 $22,500 $30,000 $ 37,500 $45,000 $52,500
200,000 45,000 60,000 75,000 90,000 105,000
300,000 67,500 90,000 112,500 135,000 157,500
400,000 90,000 120,000 150,000 180,000 210,000
500,000 112,500 150,000 187,500 225,000 262,500
650,000 146,250 195,000 243,750 292,500 341,250
950,000 213,750 285,000 356,250 427,500 498,750
All of the Named Executive Officers participate in a Retirement Income
Plan, a defined benefit plan, that provides a benefit for employees at
retirement from Entergy based upon (1) generally all years of service
beginning at age 21 through termination, with a forty-year maximum,
multiplied by (2) 1.5%, multiplied by (3) the final average compensation.
Final average compensation is based on the highest consecutive 60 months of
covered compensation in the last 120 months of service. The normal form of
benefit for a single employee is a lifetime annuity and for a married
employee is a 50% joint and survivor annuity. Other actuarially equivalent
options are available to each retiree. Retirement benefits are not subject
to any deduction for Social Security or other offset amounts. The amount of
the Named Executive Officers' annual compensation covered by the plan as of
December 31, 1999, is represented by the salary column in the Summary
Compensation Table above.
The credited years of service under the Retirement Income Plan, as of
December 31, 1999, for the following Named Executive Officers is as
follows: Mr. Domino 29; Mr. Gallaher 30; Mr. Langston 28; Mr. McNeal 17;
Mr. Packer 17; Ms. Shanks 16; Mr. Wright 30; and Mr. Yelverton 20. The
credited years of service under the Retirement Income Plan, as of
December 31, 1999 for the following Named Executive Officers, as a result
of entering into supplemental retirement agreements, is as follows: Mr.
Clary 26; Mr. Henderson 16; Mr. Jackson 20; Mr. Thompson 23; and Mr. Wilder
16. Mr. Cordaro, Mr. Keith and Mr. Meiners retired during 1999 with 40,
33, and 39 credited years of service, respectively.
The maximum benefit under the Retirement Income Plan is limited by
Sections 401 and 415 of the Internal Revenue Code of 1986, as amended;
however, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy have elected to
participate in the Pension Equalization Plan sponsored by Entergy
Corporation. Under this plan, certain executives, including the Named
Executive Officers, would receive an additional amount equal to the benefit
that would have been payable under the Retirement Income Plan, except for
the Sections 401 and 415 limitations discussed above.
In addition to the Retirement Income Plan discussed above, Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy participate in the Supplemental Retirement Plan of Entergy
Corporation and Subsidiaries and the Post-Retirement Plan of Entergy
Corporation and Subsidiaries. Participation is limited to one of these two
plans and is at the invitation of Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy. The
participant may receive from the appropriate Entergy company a monthly
benefit payment not in excess of .025 (under the Supplemental Retirement
Plan) or .0333 (under the Post-Retirement Plan) times the participant's
average basic annual salary (as defined in the plans) for a maximum of 120
months. Mr. Packer and Mr. Yelverton have entered into a Supplemental
Retirement Plan participation contract, and Mr. Cordaro, Mr. Gallaher,
Mr. Jackson, Mr. Keith, Mr. Meiners and Mr. Wright have entered into Post-
Retirement Plan participation contracts. Current estimates indicate that
the annual payments to each Named Executive Officer under the above plans
would be less than the payments to that officer under the System Executive
Retirement Plan discussed below.
System Executive Retirement Plan Table (1)
Annual
Covered Years of Service
Compensation 10 15 20 25 30+
$ 200,000 $60,000 $ 90,000 $100,000 $110,000 $120,000
300,000 90,000 135,000 150,000 165,000 180,000
400,000 120,000 180,000 200,000 220,000 240,000
500,000 150,000 225,000 250,000 275,000 300,000
600,000 180,000 270,000 300,000 330,000 360,000
700,000 210,000 315,000 350,000 385,000 420,000
1,000,000 300,000 450,000 500,000 550,000 600,000
(1)Covered pay includes the average of the highest three years of annual
base pay and incentive awards earned by the executive during the ten
years immediately preceding his retirement. Benefits shown are based
on a target replacement ratio of 50% based on the years of service and
covered compensation shown. The benefits for 10, 15, and 20 or more
years of service at the 45% and 55% replacement levels would decrease
(in the case of 45%) or increase (in the case of 55%) by the following
percentages: 3.0%, 4.5%, and 5.0%, respectively.
In 1993, Entergy Corporation adopted the System Executive Retirement
Plan (SERP). This plan was amended in 1998. Entergy Arkansas, Entergy
Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy are participating employers in the SERP. The SERP is an
unfunded defined benefit plan offered at retirement to certain senior
executives, which would currently include all the Named Executive Officers
(except for Mr. McNeal). Participating executives choose, at retirement,
between the retirement benefits paid under provisions of the SERP or those
payable under the Supplemental Retirement Plan or the Post-Retirement Plan
discussed above. The plan was amended in 1998 to provide that covered pay
is the average of the highest three years annual base pay and incentive
awards earned by the executive during the ten years immediately preceding
his retirement. Benefits paid under the SERP are calculated by multiplying
the covered pay times target pay replacement ratios (45%, 50%, or 55%,
dependent on job rating at retirement) that are attained, according to plan
design, at 20 years of credited service. The target ratios are increased
by 1% for each year of service over 20 years, up to a maximum of 30 years
of service. In accordance with the SERP formula, the target ratios are
reduced for each year of service below 20 years. The credited years of
service under this plan are identical to the years of service for Named
Executive Officers (other than Mr. Henderson, Mr. Jackson, Mr. Keith, Mr.
Thompson, Mr. Wilder, and Mr. Yelverton) disclosed above in the section
entitled "Pension Plan Tables-Retirement Income Plan Table". Mr.
Henderson, Mr. Jackson, Mr. Thompson, Mr. Wilder and Mr. Yelverton have 8
months, 26 years, 18 years, 1 year, and 30 years, respectively, of credited
service under this plan. Mr. Keith had 16 years of credited service under
this plan when he retired.
The amended plan provides that a single employee receives a lifetime
annuity and a married employee receives the reduced benefit with a 50%
surviving spouse annuity. Other actuarially equivalent options are
available to each retiree. SERP benefits are offset by any and all defined
benefit plan payments from Entergy. SERP benefits are not subject to
Social Security offsets.
Eligibility for and receipt of benefits under any of the executive
plans described above are contingent upon several factors. The participant
must agree, without the specific consent of the Entergy company for which
such participant was last employed, not to take employment after retirement
with any entity that is in competition with, or similar in nature to,
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy or any affiliate
thereof. Eligibility for benefits is forfeitable for various reasons,
including violation of an agreement with Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and
System Energy, certain resignations of employment, or certain terminations
of employment without Company permission.
In addition to the Retirement Income Plan discussed above, Entergy
Gulf States provides, among other benefits to officers, an Executive Income
Security Plan for key managerial personnel. The plan provides participants
with certain retirement, disability, termination, and survivors' benefits.
To the extent that such benefits are not funded by the employee benefit
plans of Entergy Gulf States or by vested benefits payable by the
participants' former employers, Entergy Gulf States is obligated to make
supplemental payments to participants or their survivors. The plan
provides that upon the death or disability of a participant during his
employment, he or his designated survivors will receive (i) during the
first year following his death or disability an amount not to exceed his
annual base salary, and (ii) thereafter for a number of years until the
participant attains or would have attained age 65, but not less than nine
years, an amount equal to one-half of the participant's annual base salary.
The plan also provides supplemental retirement benefits for life for
participants retiring after reaching age 65 equal to one-half of the
participant's average final compensation rate, with one-half of such
benefit upon the death of the participant being payable to a surviving
spouse for life.
Entergy Gulf States amended and restated the plan effective March 1,
1991, to provide such benefits for life upon termination of employment of a
participating officer or key managerial employee without cause (as defined
in the plan) or if the participant separates from employment for good
reason (as defined in the plan), with 1/2 of such benefits to be payable to
a surviving spouse for life. Further, the plan was amended to provide
medical benefits for a participant and his family when the participant
separates from service. These medical benefits generally continue until
the participant is eligible to receive medical benefits from a subsequent
employer; but in the case of a participant who is over 50 at the time of
separation and was participating in the plan on March 1, 1991, medical
benefits continue for life. By virtue of the 1991 amendment and
restatement, benefits for a participant under such plan cannot be modified
once he becomes eligible to participate in the plan. Mr. Domino is a
participant in this plan.
Compensation of Directors
For information regarding compensation of the directors of Entergy
Corporation, see the Proxy Statement under the heading "Director
Compensation", which information is incorporated herein by reference.
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi, Entergy New Orleans, and System Energy currently have no
non-employee directors, and none of the current directors of Entergy
Corporation are compensated for their responsibilities as director.
Retired non-employee directors of Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans with a minimum of five years
of service on the respective Boards of Directors are paid $200 a month for
a term of years corresponding to the number of years of active service as
directors. Retired non-employee directors with over ten years of service
receive a lifetime benefit of $200 a month. Years of service as an
advisory director are included in calculating this benefit. System Energy
has no retired non-employee directors.
Retired non-employee directors of Entergy Gulf States receive
retirement benefits under a plan in which all directors who served
continuously for a period of years will receive a percentage of their
retainer fee in effect at the time of their retirement for life. The
retirement benefit is 30 percent of the retainer fee for service of not
less than five nor more than nine years, 40 percent for service of not less
than ten nor more than fourteen years, and 50 percent for fifteen or more
years of service. For those directors who retired prior to the retirement
age, their benefits are reduced. The plan also provides disability
retirement and optional hospital and medical coverage if the director has
served at least five years prior to the disability. The retired director
pays one-third of the premium for such optional hospital and medical
coverage and Entergy Gulf States pays the remaining two-thirds. Years of
service as an advisory director are included in calculating this benefit.
Employment Contracts, Termination of Employment Agreements, Retirement
Agreements and Change-in-Control Arrangements
Entergy Gulf States
As a result of the Merger, Entergy Gulf States is obligated to pay
benefits under the Executive Income Security Plan to those persons who were
participants at the time of the Merger and who later terminated their
employment under circumstances described in the plan. For additional
description of the benefits under the Executive Income Security Plan, see
the "Pension Plan Tables-System Executive Retirement Plan Table" section
noted above.
Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy
For information regarding employment contracts' of the Named Executive
Officers of Entergy Corporation, see the Proxy Statement under the heading
"Executive Employment Contracts and Retirement Contracts", which
information is incorporated herein by reference.
Upon his employment on July 6, 1998, Mr. Wilder entered into an
employment agreement with the Corporation pursuant to which he receives an
annual salary of $400,000 and the potential maximum annual incentive payout
of 90%. Mr. Wilder is eligible for a pro-rata share of the performance
award for the period 1998-2000. The Corporation granted Mr. Wilder a
signing bonus of $300,000, and 21,000 shares of restricted stock, upon
which restrictions have been or will be lifted on 7,000 shares each year
beginning on his first employment anniversary. On December 4, 1998 Mr.
Wilder was granted 5,000 restricted shares of Entergy stock. Restrictions
were lifted on one-third of these 5,000 shares on December 4, 1999 and will
be lifted on one-third of these shares on the second and third anniversary
dates of this grant. Mr. Wilder was offered participation in the System
Executive Retirement Plan and was credited with 15 years of service. If
Entergy terminates Mr. Wilder's employment within two years other than for
just cause, he will receive his annual base salary and continuation of his
health benefits for two years; all remaining earned but unvested stock
options and performance shares would immediately vest. Upon a change of
control, if Mr. Wilder resigns for "good reason" his executive pension
benefits will immediately vest and he will receive a lump sum payment of
2.99 times his average three years base pay.
Personnel Committee Interlocks and Insider Participation
The compensation of Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy
executive officers was set by the Personnel Committee of Entergy
Corporation's Board of Directors, composed solely of Directors of Entergy
Corporation. Dr. Murrill is the retired Chairman of the Board and Chief
Executive Officer of Entergy Gulf States, Inc. and served on the Personnel
Committee of Entergy Corporation during 1999.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
Entergy Corporation owns 100% of the outstanding common stock of
registrants Entergy Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans, and System Energy. The
information with respect to persons known by Entergy Corporation to be
beneficial owners of more than 5% of Entergy Corporation's outstanding
common stock is included under the heading "Stockholders Who Own at Least
Five Percent" in the Proxy Statement, which information is incorporated
herein by reference. The registrants know of no contractual arrangements
that may, at a subsequent date, result in a change in control of any of the
registrants.
As of December 31, 1999, the directors, the Named Executive Officers,
and the directors and officers as a group for Entergy Corporation, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi,
Entergy New Orleans, and System Energy, respectively, beneficially owned
directly or indirectly common stock of Entergy Corporation as indicated:
Entergy Corporation
Common Stock
Amount and Nature of
Beneficial Ownership(a)
Sole Voting
and Other
Investment Beneficial
Name Power Ownership(b)
Entergy Corporation
W. Frank Blount* 6,234 -
George W. Davis* 900 -
Norman C. Francis* 2,100 -
Frank F. Gallaher** 5,706 45,000
Donald C. Hintz** 2,095 55,000
Jerry D. Jackson** 20,998 51,911
J. Wayne Leonard*** 5,594 -
Robert v.d. Luft* 14,522 40,000
Jerry L. Maulden** 16,587 32,500
Thomas F. McLarty, III* 300 -
Paul W. Murrill* 2,682 -
James R. Nichols* 15,614 -
William A. Percy, III* - -
Dennis H. Reilley* 300
Wm. Clifford Smith* 8,520 -
Bismark A. Steinhagen* 9,047 -
C. John Wilder** 8,666 -
All directors and executive
officers 136,086 247,411
<PAGE>
Entergy Corporation
Common Stock
Amount and Nature of
Beneficial Ownership(a)
Sole Voting
and Other
Investment Beneficial
Name Power Ownership(b)
Entergy Arkansas
C. Gary Clary** 15,705 3,750
Frank F. Gallaher** 5,706 45,000
Donald C Hintz* 2,095 55,000
R. Drake Keith**(c) 16,984 -
Michael G. Thompson** 9,319 20,000
C. John Wilder*** 8,666 -
Thomas J. Wright*** 12,432 -
All directors and executive
officers 82,553 128,750
Entergy Gulf States
C. Gary Clary** 15,705 3,750
John J. Cordaro**(c) 346 -
Joseph F. Domino*** 5,616 1,500
Frank F. Gallaher** 5,706 45,000
Donald C. Hintz* 2,095 55,000
Jerry D. Jackson*** 20,998 51,911
Michael G. Thompson** 9,319 20,000
C. John Wilder*** 8,666 -
All directors and executive
officers 81,871 186,411
Entergy Louisiana
C. Gary Clary** 15,705 3,750
John J. Cordaro**(c) 346 -
Frank F. Gallaher** 5,706 45,000
Donald C. Hintz* 2,095 55,000
Jerry D. Jackson*** 20,998 51,911
Michael G. Thompson** 9,319 20,000
C. John Wilder*** 8,666 -
All directors and executive
officers 75,779 184,911
<PAGE>
Entergy Corporation
Common Stock
Amount and Nature of
Beneficial Ownership(a)
Sole Voting
and Other
Investment Beneficial
Name Power Ownership(b)
Entergy Mississippi
C. Gary Clary** 15,705 3,750
Frank F. Gallaher** 5,706 45,000
Donald C. Hintz* 2,095 55,000
Donald E. Meiners**(c) 21,109 11,250
Carolyn C. Shanks*** 2,528 -
Michael G. Thompson** 9,319 20,000
C. John Wilder*** 8,666 -
All directors and executive
officers 74,978 138,000
Entergy New Orleans
C. Gary Clary** 15,705 3,750
Frank F. Gallaher** 5,706 45,000
Donald C. Hintz* 2,095 55,000
Daniel F. Packer*** 2,253 -
Michael G. Thompson** 9,319 20,000
C. John Wilder*** 8,666 -
All directors and executive
officers 52,401 126,750
System Energy
Joseph T. Henderson** - -
Donald C. Hintz* 2,095 55,000
Nathan E. Langston** 5,134 1,500
Steven C. McNeal** 1,768 1,500
C. John Wilder*** 8,666 -
Jerry W. Yelverton*** 7,110 8,250
All directors and executive
officers 27,713 66,250
* Director of the respective Company
** Named Executive Officer of the respective Company
*** Director and Named Executive Officer of the respective Company
(a) Based on information furnished by the respective individuals. Except
as noted, each individual has sole voting and investment power. The
number of shares of Entergy Corporation common stock owned by each
individual and by all directors and executive officers as a group does
not exceed one percent of the outstanding Entergy Corporation common
stock.
(b) Includes, for the Named Executive Officers, shares of Entergy
Corporation common stock in the form of unexercised stock options awarded
pursuant to the Equity Ownership Plan as follows: C. Gary Clary, 3,750
shares; Joseph F. Domino, 1,500 shares; Frank F. Gallaher, 45,000 shares;
Donald C. Hintz, 55,000 shares; Jerry D. Jackson, 51,911 shares; Nathan E.
Langston, 1,500 shares; Robert v.d. Luft, 40,000 shares; Jerry L. Maulden,
32,500 shares; Steven C. McNeal, 1,500 shares; Donald E. Meiners, 11,250
shares; Michael G. Thompson, 20,000 shares; and Jerry W. Yelverton, 8,250
shares.
(c) Mr. Cordaro is the former Chief Executive Officer and a former
director of Entergy Gulf States, LA and Entergy Louisiana. Mr. Keith is
the former Chief Executive Officer and a former director of Entergy
Arkansas. Mr. Meiners is the former Chief Executive Officer and a former
director of Entergy Mississippi.
Item 13. Certain Relationships and Related Transactions
During 1999, T. Baker Smith & Son, Inc. performed land-surveying
services for, and received payments of approximately $202,996 from Entergy
companies. Mr. Wm. Clifford Smith, a director of Entergy Corporation, is
President of T. Baker Smith & Son, Inc. Mr. Smith's children own 100% of
the voting stock of T. Baker Smith & Son, Inc.
See Item 10, "Directors and Executive Officers of the Registrants,"
for information on certain relationships and transactions required to be
reported under this item.
Other than as provided under applicable corporate laws, Entergy does
not have policies whereby transactions involving executive officers and
directors are approved by a majority of disinterested directors. However,
pursuant to the Entergy Corporation Code of Conduct, transactions involving
an Entergy company and its executive officers must have prior approval by
the next higher reporting level of that individual, and transactions
involving an Entergy company and its directors must be reported to the
secretary of the appropriate Entergy company.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a)1. Financial Statements and Independent Auditors' Reports for
Entergy, Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, Entergy New Orleans, and System
Energy are listed in the Index to Financial Statements (see
pages 36 and 37)
(a)2. Financial Statement Schedules
Reports of Independent Accountants on Financial Statement
Schedules (see page 199)
Financial Statement Schedules are listed in the Index to
Financial Statement Schedules (see page S-1)
(a)3. Exhibits
Exhibits for Entergy, Entergy Arkansas, Entergy Gulf States,
Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,
and System Energy are listed in the Exhibit Index (see page E-
1). Each management contract or compensatory plan or
arrangement required to be filed as an exhibit hereto is
identified as such by footnote in the Exhibit Index.
(b) Reports on Form 8-K
None
<PAGE>
ENTERGY CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY CORPORATION
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
J. Wayne Leonard (Chief Executive Officer and Director;
Principal Executive Officer); Robert v.d. Luft (Chairman
of the Board and Director); C. John Wilder (Executive
Vice President and Chief Financial Officer;
Principal Financial Officer); W. Frank Blount,
George W. Davis, Norman C. Francis, Kinnaird R. McKee,
Thomas F. McLarty, III, Paul W. Murrill, James R.
Nichols, Eugene H. Owen, William A. Percy, II, Dennis
H. Reilley, Wm. Clifford Smith, and Bismark A.
Steinhagen (Directors).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
ENTERGY ARKANSAS, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY ARKANSAS, INC.
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
Thomas J. Wright (Chairman of the Board, President, Chief
Executive Officer, and Director; Principal Executive
Officer); C. John Wilder (Executive Vice President, Chief
Financial Officer, and Director; Principal Financial
Officer); and Donald C. Hintz (Director).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
ENTERGY GULF STATES, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY GULF STATES, INC.
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
Jerry D. Jackson (Chairman of the Board, President, Chief
Executive Officer-Louisiana, and Director; Principal
Executive Officer); Joseph F. Domino (President, Chief
Executive Officer-Texas, and Director; Principal
Executive Officer); C. John Wilder (Executive Vice
President, Chief Financial Officer, and Director;
Principal Financial Officer); and Donald C. Hintz
(Director).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
ENTERGY LOUISIANA, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY LOUISIANA, INC.
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
Jerry D. Jackson (Chairman of the Board, President, Chief
Executive Officer, and Director; Principal Executive
Officer); C. John Wilder (Executive Vice President, Chief
Financial Officer, and Director; Principal Financial
Officer); and Donald C. Hintz (Director).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
ENTERGY MISSISSIPPI, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY MISSISSIPPI, INC.
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
Carolyn C. Shanks (Chairman of the Board, President,
Chief Executive Officer, and Director; Principal
Executive Officer); C. John Wilder (Executive Vice
President, Chief Financial Officer, and Director;
Principal Financial Officer); and Donald C. Hintz
(Director).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
ENTERGY NEW ORLEANS, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
ENTERGY NEW ORLEANS, INC.
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
Daniel F. Packer (Chairman of the Board, President, Chief
Executive Officer, and Director; Principal Executive
Officer); C. John Wilder (Executive Vice President, Chief
Financial Officer, and Director; Principal Financial
Officer); and Donald C. Hintz (Director).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized. The signature of the undersigned company shall be deemed
to relate only to matters having reference to such company and any
subsidiaries thereof.
SYSTEM ENERGY RESOURCES, INC.
By /s/ Nathan E. Langston
Nathan E. Langston, Vice President and
Chief Accounting Officer
Date: March 14, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated. The signature of each of the undersigned shall be deemed
to relate only to matters having reference to the above-named company
and any subsidiaries thereof.
Signature Title Date
/s/ Nathan E. Langston
Nathan E. Langston Vice President and Chief March 14, 2000
Accounting Officer
(Principal Accounting Officer)
Jerry W. Yelverton (Chairman of the Board, President,
Chief Executive Officer, and Director; Principal
Executive Officer); C. John Wilder (Executive Vice
President, Chief Financial Officer, and Director;
Principal Financial Officer); and Donald C. Hintz
(Director).
By: /s/ Nathan E. Langston March 14, 2000
(Nathan E. Langston, Attorney-in-fact)
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in Post-Effective
Amendment Nos. 2, 3, 4A, and 5A on Form S-8 and their related prospectuses
to the registration statement on Form S-4 (No. 33-54298) and the
registration statements and related prospectuses on Form S-3 (Nos. 333-
02503 and 333-22007) of Entergy Corporation of our reports dated February
17, 2000, relating to the financial statements and financial statement
schedules, which appear in this Form 10-K.
We hereby consent to the incorporation by reference in the registration
statements and the related prospectuses on Form S-3 (Nos. 33-50289, 333-
00103 and 333-05045) of Entergy Arkansas, Inc. of our reports dated
February 17, 2000, relating to the financial statements and financial
statement schedule, which appear in this Form 10-K.
We hereby consent to the incorporation by reference in the registration
statements and the related prospectuses on Form S-3 (Nos. 33-49739, 33-
51181 and 333-60957), on Form S-8 (Nos. 2-76551 and 2-98011) and on Form S-
2 (No. 333-17911), of Entergy Gulf States, Inc. of our reports dated
February 17, 2000, relating to the financial statements and financial
statement schedule, which appear in this Form 10-K.
We hereby consent to the incorporation by reference in the registration
statements and the related prospectuses on Form S-3 (Nos. 33-46085, 33-
39221, 33-50937, 333-00105, 333-01329, 333-03567 and 333-93683) of Entergy
Louisiana, Inc. of our reports dated February 17, 2000, relating to the
financial statements and financial statement schedule, which appear in this
Form 10-K.
We hereby consent to the incorporation by reference in the registration
statements and the related prospectuses on Form S-3 (Nos. 33-53004, 33-
55826, 33-50507 and 333-64023) of Entergy Mississippi, Inc. of our reports
dated February 17, 2000, relating to the financial statements and financial
statement schedule, which appear in this Form 10-K.
We hereby consent to the incorporation by reference in the registration
statements and the related prospectuses on Form S-3 (Nos. 33-57926, 333-
00255 and 333-95599) of Entergy New Orleans, Inc. of our reports dated
February 17, 2000, relating to the financial statements and financial
statement schedule, which appear in this Form 10-K.
We hereby consent to the incorporation by reference in the registration
statements and the related prospectuses on Form S-3 (Nos. 33-47662, 33-
61189 and 333-06717) of System Energy Resources, Inc. of our report dated
February 17, 2000, relating to the financial statements, which appears in
this Form 10-K.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
March 14, 2000
<PAGE>
Report of Independent Accountants on Financial Statement Schedules
To the Board of Directors and Shareholders
of Entergy Corporation:
Our audits of the consolidated financial statements of Entergy Corporation
and the financial statements of Entergy Arkansas, Inc., Entergy Gulf
States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc. and
Entergy New Orleans, Inc. (which reports and financial statements are
included in this Annual Report on Form 10-K) also included an audit of the
financial statement schedules listed in Item 14(a)(2) of this Form 10-K.
In our opinion, these financial statement schedules present fairly, in all
material respects, the information set forth therein when read in
conjunction with the related financial statements.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
February 17, 2000
<PAGE>
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule Page
I Financial Statements of Entergy Corporation:
Statements of Income - For the Years Ended December 31, 1999,
1998, and 1997 S-2
Statements of Cash Flows - For the Years Ended December 31, 1999,
1998, and 1997 S-3
Balance Sheets, December 31, 1999 and 1998 S-4
Statements of Retained Earnings and Paid-In Capital - For
the Years Ended December 31, 1999, 1998, and 1997 S-5
II Valuation and Qualifying Accounts
1999, 1998 and 1997:
Entergy Corporation and Subsidiaries S-6
Entergy Arkansas, Inc. S-7
Entergy Gulf States, Inc. S-8
Entergy Louisiana, Inc. S-9
Entergy Mississippi, Inc. S-10
Entergy New Orleans, Inc. S-11
Schedules other than those listed above are omitted because they are
not required, not applicable, or the required information is shown in the
financial statements or notes thereto.
Columns have been omitted from schedules filed because the information
is not applicable.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
STATEMENTS OF INCOME
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Income:
Equity in income of subsidiaries $651,977 $822,758 $325,419
Interest on temporary investments 5,703 2,536 5,086
-------- -------- --------
Total 657,680 825,294 330,505
-------- -------- --------
Expenses and Other Deductions:
Administrative and general expenses 85,815 77,296 62,250
Income taxes (credit) 12,524 (6,847) 3,438
Taxes other than income 739 1,325 1,226
Interest 6,143 14,451 15,908
-------- -------- --------
Total 105,221 86,225 82,822
-------- -------- --------
Net Income $552,459 $739,069 $247,683
======== ======== ========
See Entergy Corporation and Subsidiaries Notes to Financial
Statements in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
STATEMENTS OF CASH FLOWS
Year to Date December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income $552,459 $739,069 $247,683
Noncash items included in net income:
Equity in earnings of subsidiaries (651,977) (822,758) (325,419)
Deferred income taxes (15,237) (1,997) 898
Depreciation 1,438 2,069 1,442
Changes in working capital:
Receivables 198 (21,033) (8,683)
Payables 17,256 357 (3,690)
Other working capital accounts (83,711) 26,683 68,089
Common stock dividends received from subsidiaries 532,300 488,500 550,200
Other 68,276 36,948 43,479
--------- --------- ---------
Net cash flow provided by operating activities 421,002 447,838 573,999
--------- --------- ---------
Investing Activities:
Investment in subsidiaries 237,121 (96,383) (633,449)
Capital expenditures (604) (212) (23,079)
Other 9,327 - -
--------- --------- ---------
Net cash flow provided by (used in) investing activities 245,844 (96,595) (656,528)
--------- --------- ---------
Financing Activities:
Changes in short-term borrowings (165,500) 99,500 166,000
Advances to subsidiaries (32,261) (33,000) (13,450)
Common stock dividends paid (291,483) (373,441) (438,183)
Repurchase of common stock (245,004) (2,964) -
Issuance of common stock 15,320 19,340 305,379
--------- --------- ---------
Net cash flow provided by (used in) financing activities (718,927) (290,565) 19,746
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents (52,081) 60,678 (62,783)
Cash and cash equivalents at beginning of period 68,574 7,896 70,679
--------- --------- ---------
Cash and cash equivalents at end of period $16,493 $68,574 $7,896
========= ========= =========
See Entergy Corporation and Subsidiaries Notes to Financial Statements
in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
BALANCE SHEETS
December 31,
1999 1998
(In Thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents:
Temporary cash investments - at cost,
which approximates market $16,493 $68,574
---------- ----------
Total cash and cash equivalents 16,493 68,574
Accounts receivable:
Associated companies 177,501 48,660
Interest receivable
93 253
Other 1,937 9,380
---------- ----------
Total 196,024 126,867
---------- ----------
Investment in Wholly-owned Subsidiaries 7,114,525 7,268,768
---------- ----------
Deferred Debits and Other Assets 50,357 71,543
---------- ----------
Total $7,360,906 $7,467,178
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $120,000 $285,500
Accounts payable:
Associated companies 2,165 6,041
Other 17,786 531
Taxes accrued 9,142 -
Other current liabilities 6,399 3,394
---------- ----------
Total 155,492 295,466
---------- ----------
Deferred Credits and Noncurrent Liabilities 80,989 64,672
---------- ----------
Shareholders' Equity:
Common stock, $.01 par value, authorized
500,000,000 shares; issued 247,082,345 shares
in 1999 and 246,829,076 shares in 1998 2,471 2,468
Paid-in capital 4,636,163 4,630,609
Retained earnings 2,786,467 2,526,888
Cumulative foreign currency translation adjustment (68,782) (46,739)
Less cost of treasury stock (8,045,434 shares in
1999 and 208,907 shares in 1998) 231,894 6,186
---------- ----------
Total common shareholders' equity 7,124,425 7,107,040
---------- ----------
Total $7,360,906 $7,467,178
========== ==========
See Entergy Corporation and Subsidiaries Notes to Financial Statements
in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION
STATEMENTS OF RETAINED EARNINGS AND PAID-IN CAPITAL
For the Years Ended December 31,
1999 1998 1997
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $2,526,888 $2,157,912 $2,341,703
Add:
Net income 552,459 739,069 247,683
Deduct:
Dividends declared on common stock 294,352 369,498 432,268
Capital stock and other expenses (1,472) 595 (794)
---------- ---------- ----------
Total 292,880 370,093 431,474
---------- ---------- ----------
Retained Earnings, December 31 $2,786,467 $2,526,888 $2,157,912
========== ========== ==========
Paid-in Capital, January 1 $4,630,609 $4,613,572 $4,320,591
Add:
Gain on reacquisition of
subsidiaries' preferred stock - - 273
Common stock issuances related to stock plans 5,554 17,037 292,870
---------- ---------- ----------
Total 5,554 17,037 293,143
---------- ---------- ----------
Deduct:
Capital stock discounts and other expenses - - 162
---------- ---------- ----------
Paid-in Capital, December 31 $4,636,163 $4,630,609 $4,613,572
========== ========== ==========
See Entergy Corporation and Subsidiaries Notes to Financial Statements
in Part II, Item 8.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998, and 1997
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $10,300 $19,349 $20,142 $9,507
===========================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $(14,846) $35,208 $53,629 $(33,267)
Injuries and damages (Note 2) 28,162 25,162 19,015 34,309
Environmental 35,857 11,344 9,408 37,793
-------------------------------------------
Total $49,173 $71,714 $82,052 $38,835
===========================================
Year ended December 31, 1998
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $9,800 $16,451 $15,951 $10,300
===========================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $23,422 $28,838 $67,106 $(14,846)
Injuries and damages (Note 2) 26,484 17,960 16,282 28,162
Environmental 36,368 7,596 8,107 35,857
-------------------------------------------
Total $86,274 $54,394 $91,495 $49,173
===========================================
Year ended December 31, 1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $9,189 $17,106 $16,495 $9,800
===========================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $35,026 $24,128 $35,732 $23,422
Injuries and damages (Note 2) 26,145 20,294 19,955 26,484
Environmental 37,719 5,993 7,344 36,368
-------------------------------------------
Total $98,890 $50,415 $63,031 $86,274
===========================================
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses
as appropriate and for the estimated cost of settling claims for
injuries and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998, and 1997
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,753 $4,175 $4,160 $1,768
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $7,600 $18,306 $25,048 $858
Injuries and damages (Note 2) 4,618 2,502 3,867 3,253
Environmental 4,894 3,132 3,092 4,934
--------------------------------------------
Total $17,112 $23,940 $32,007 $9,045
============================================
Year ended December 31, 1998
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,799 $3,848 $3,894 $1,753
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $858 $18,805 $12,063 $7,600
Injuries and damages (Note 2) 4,798 3,144 3,324 4,618
Environmental 4,753 1,470 1,329 4,894
--------------------------------------------
Total $10,409 $23,419 $16,716 $17,112
============================================
Year ended December 31, 1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $2,326 $3,140 $3,667 $1,799
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $14 $11,613 $10,769 $858
Injuries and damages (Note 2) 2,810 3,538 1,550 4,798
Environmental 5,163 1,320 1,730 4,753
--------------------------------------------
Total $7,987 $16,471 $14,049 $10,409
============================================
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses
as appropriate and for the estimated cost of settling claims for injuries
and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998, and 1997
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,735 $4,271 $4,178 $1,828
============================================
Accumulated Provisions
Not Deducted from Assets--
Property insurance ($4,184) $4,486 $3,754 $(3,452)
Injuries and damages (Note 2) 4,759 9,810 5,885 8,684
Environmental 22,309 4,187 2,051 24,445
--------------------------------------------
Total $22,884 $18,483 $11,690 $29,677
============================================
Year ended December 31, 1998
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,791 $3,169 $3,225 $1,735
============================================
Accumulated Provisions
Not Deducted from Assets--
Property insurance $4,317 $5,583 $14,084 $(4,184)
Injuries and damages (Note 2) 5,339 4,634 5,214 4,759
Environmental 23,789 3,058 4,538 22,309
--------------------------------------------
Total $33,445 $13,275 $23,836 $22,884
============================================
Year ended December 31, 1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,997 $3,695 $3,901 $1,791
============================================
Accumulated Provisions
Not Deducted from Assets--
Property insurance $17,003 $5,584 $18,270 $4,317
Injuries and damages (Note 2) 9,594 5,479 9,734 5,339
Environmental 21,829 3,746 1,786 23,789
--------------------------------------------
Total $48,426 $14,809 $29,790 $33,445
============================================
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses
as appropriate and for the estimated cost of settling claims for injuries
and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998, and 1997
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,164 $4,797 $4,346 $1,615
===========================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $(17,825) $6,680 $12,944 $(24,089)
Injuries and damages (Note 2) 13,124 7,038 7,710 12,452
Environmental 7,236 1,059 1,273 7,022
-------------------------------------------
Total $2,535 $14,777 $21,927 $(4,615)
===========================================
Year ended December 31, 1998
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,157 $1,919 $1,912 $1,164
===========================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $581 $2,930 $21,336 $(17,825)
Injuries and damages (Note 2) 9,944 9,263 6,083 13,124
Environmental 7,599 668 1,031 7,236
-------------------------------------------
Total $18,124 $12,861 $28,450 $2,535
===========================================
Year ended December 31, 1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,429 $2,542 $2,814 $1,157
===========================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $261 $5,411 $5,091 $581
Injuries and damages (Note 2) 9,443 5,080 4,579 9,944
Environmental 9,979 495 2,875 7,599
-------------------------------------------
Total $19,683 $10,986 $12,545 $18,124
===========================================
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of
amounts previously written off.
(2) Injuries and damages provision is provided to absorb all current
expenses as appropriate and for the estimated cost of settling claims
for injuries and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998, and 1997
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,217 $2,106 $2,437 $886
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $(11,543) $5,736 $10,549 $(16,356)
Injuries and damages (Note 2) 3,796 2,950 (103) 6,849
Environmental 704 895 1,005 594
--------------------------------------------
Total $(7,043) $9,581 $11,451 $(8,913)
============================================
Year ended December 31, 1998
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $931 $2,747 $2,461 $1,217
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $2,179 $1,520 $15,242 $(11,543)
Injuries and damages (Note 2) 4,662 (437) 429 3,796
Environmental 227 900 423 704
--------------------------------------------
Total $7,068 $1,983 $16,094 $(7,043)
============================================
Year ended December 31, 1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $1,374 $1,950 $2,393 $931
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $2,082 $1,520 $1,423 $2,179
Injuries and damages (Note 2) 2,905 4,055 2,298 4,662
Environmental 693 330 796 227
--------------------------------------------
Total $5,680 $5,905 $4,517 $7,068
============================================
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses
as appropriate and for the estimated cost of settling claims for injuries
and damages.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998, and 1997
(In Thousands)
Column A Column B Column C Column D Column E
Other
Additions Changes
Deductions
Balance at from Balance
Beginning Charged to Provisions at End
Description of Period Income (Note 1) of Period
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $761 $1,936 $1,851 $846
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $11,106 - $1,334 $9,772
Injuries and damages (Note 2) 1,865 2,862 1,656 3,071
Environmental 714 2,071 1,987 798
--------------------------------------------
Total $13,685 $4,933 $4,977 $13,641
============================================
Year ended December 31, 1998
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $711 - $ (50) $761
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $15,487 - $4,381 $11,106
Injuries and damages (Note 2) 1,741 1,356 1,232 1,865
Environmental - 1,500 786 714
--------------------------------------------
Total $17,228 $2,856 $6,399 $13,685
============================================
Year ended December 31, 1997
Accumulated Provisions
Deducted from Assets--
Doubtful Accounts $696 $1,599 $1,584 $711
============================================
Accumulated Provisions Not
Deducted from Assets:
Property insurance $15,666 - $179 $15,487
Injuries and damages (Note 2) 1,393 2,142 1,794 1,741
Environmental 55 102 157 0
--------------------------------------------
Total $17,114 $2,244 $2,130 $17,228
============================================
___________
Notes:
(1) Deductions from provisions represent losses or expenses for which the
respective provisions were created. In the case of the provision for
doubtful accounts, such deductions are reduced by recoveries of amounts
previously written off.
(2) Injuries and damages provision is provided to absorb all current expenses
as appropriate and for the estimated cost of settling claims for injuries
and damages.
</TABLE>
<PAGE>
EXHIBIT INDEX
The following exhibits indicated by an asterisk preceding the exhibit
number are filed herewith. The balance of the exhibits have heretofore
been filed with the SEC, respectively, as the exhibits and in the file
numbers indicated and are incorporated herein by reference. The exhibits
marked with a (+) are management contracts or compensatory plans or
arrangements required to be filed herewith and required to be identified as
such by Item 14 of Form 10-K. Reference is made to a duplicate list of
exhibits being filed as a part of this Form 10-K, which list, prepared in
accordance with Item 102 of Regulation S-T of the SEC, immediately precedes
the exhibits being physically filed with this Form 10-K.
(3) (i) Articles of Incorporation
Entergy Corporation
(a) 1 -- Certificate of Incorporation of Entergy Corporation dated
December 31, 1993 (A-1(a) to Rule 24 Certificate in 70-8059).
System Energy
(b) 1 -- Amended and Restated Articles of Incorporation of System
Energy and amendments thereto through April 28, 1989 (A-1(a) to
Form U-1 in 70-5399).
Entergy Arkansas
*(c) 1 -- Amended and Restated Articles of Incorporation of Entergy
Arkansas effective November 12, 1999.
Entergy Gulf States
*(d) 1 -- Restated Articles of Incorporation of Entergy Gulf States
effective November 17, 1999.
Entergy Louisiana
(e) 1 -- Amended and Restated Articles of Incorporation of Entergy
Louisiana effective November 15, 1999 (3(a) to Form S-3 in 333-
93683).
Entergy Mississippi
*(f) 1 -- Amended and Restated Articles of Incorporation of Entergy
Mississippi effective November 12, 1999,
Entergy New Orleans
(g) 1 -- Amended and Restated Articles of Incorporation of Entergy
New Orleans effective November 15, 1999 (3(a) to Form S-3 in 333-
95599).
(3) (ii) By-Laws
(a) -- By-Laws of Entergy Corporation as amended January 29, 1999,
and as presently in effect (4.2 to Form S-8 in File No. 333-75097).
(b) -- By-Laws of System Energy effective July 6, 1998, and as
presently in effect (3(f) to Form 10-Q for the quarter ended June
30, 1998).
*(c) -- By-Laws of Entergy Arkansas effective November 26, 1999, and
as presently in effect.
*(d) -- By-Laws of Entergy Gulf States effective November 26, 1999,
and as presently in effect.
(e) -- By-Laws of Entergy Louisiana effective November 26, 1999,
and as presently in effect (3(b) to Form S-3 in File No. 333-
93683).
*(f) -- By-Laws of Entergy Mississippi effective November 26, 1999,
and as presently in effect.
(g) -- By-Laws of Entergy New Orleans effective November 30, 1999,
and as presently in effect (3(b) to Form S-3 in File No. 333-
95599).
(4) Instruments Defining Rights of Security Holders, Including
Indentures
Entergy Corporation
(a) 1 -- See (4)(b) through (4)(g) below for instruments defining the
rights of holders of long-term debt of System Energy, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy
Mississippi and Entergy New Orleans.
(a) 2 -- Credit Agreement, dated as of September 13, 1996, among
Entergy Corporation, Entergy Technology Holding Company, the Banks
(The Bank of New York, Bank of America NT & SA, The Bank of Nova
Scotia, Banque Nationale de Paris (Houston Agency), The First
National Bank of Chicago, The Fuji Bank Ltd., Societe Generale
Southwest Agency, and CIBC Inc.) and The Bank of New York, as Agent
(the "Entergy-ETHC Credit Agreement") (filed as Exhibit 4(a)12 to
Form 10-K for the year ended December 31, 1996 in 1-11299).
(a) 3 -- Amendment No. 1, dated as of October 22, 1996 to Credit
Agreement Entergy-ETHC Credit Agreement (filed as Exhibit 4(a)13 to
Form 10-K for the year ended December 31, 1996 in 1-11299).
(a) 4 -- Guaranty and Acknowledgment Agreement, dated as of October
3, 1996, by Entergy Corporation to The Bank of New York of certain
promissory notes issued by ETHC in connection with acquisition of
280 Equity Holdings, Ltd (filed as Exhibit 4(a)14 to Form 10-K for
the year ended December 31, 1996 in 1-11299).
(a) 5 -- Amendment, dated as of November 21, 1996, to Guaranty and
Acknowledgment Agreement by Entergy Corporation to The Bank of New
York of certain promissory notes issued by ETHC in connection with
acquisition of 280 Equity Holdings, Ltd (filed as Exhibit 4(a)15 to
Form 10-K for the year ended December 31, 1996 in 1-11299).
(a) 6 -- Guaranty and Acknowledgment Agreement, dated as of November
21, 1996, by Entergy Corporation to The Bank of New York of certain
promissory notes issued by ETHC in connection with acquisition of
Sentry (filed as Exhibit 4(a)16 to Form 10-K for the year ended
December 31, 1996 in 1-11299).
(a) 7 -- Amended and Restated Credit Agreement, dated as of December
12, 1996, among Entergy, the Banks (Bank of America National Trust
& Savings Association, The Bank of New York, The Chase Manhattan
Bank, Citibank, N.A., Union Bank of Switzerland, ABN Amro Bank
N.V., The Bank of Nova Scotia, Canadian Imperial Bank of Commerce,
Mellon Bank, N.A., First National Bank of Commerce and Whitney
National Bank) and Citibank, N.A., as Agent (filed as Exhibit
4(a)17 to Form 10-K for the year ended December 31, 1996 in 1-
11299).
System Energy
(b) 1 -- Mortgage and Deed of Trust, dated as of June 15, 1977, as
amended by twenty-one Supplemental Indentures (A-1 in 70-5890
(Mortgage); B and C to Rule 24 Certificate in 70-5890 (First); B to
Rule 24 Certificate in 70-6259 (Second); 20(a)-5 to Form 10-Q for
the quarter ended June 30, 1981, in 1-3517 (Third); A-1(e)-1 to
Rule 24 Certificate in 70-6985 (Fourth); B to Rule 24 Certificate
in 70-7021 (Fifth); B to Rule 24 Certificate in 70-7021 (Sixth);
A-3(b) to Rule 24 Certificate in 70-7026 (Seventh); A-3(b) to
Rule 24 Certificate in 70-7158 (Eighth); B to Rule 24 Certificate
in 70-7123 (Ninth); B-1 to Rule 24 Certificate in 70-7272 (Tenth);
B-2 to Rule 24 Certificate in 70-7272 (Eleventh); B-3 to Rule 24
Certificate in 70-7272 (Twelfth); B-1 to Rule 24 Certificate in
70-7382 (Thirteenth); B-2 to Rule 24 Certificate in 70-7382
(Fourteenth); A-2(c) to Rule 24 Certificate in 70-7946 (Fifteenth);
A-2(c) to Rule 24 Certificate in 70-7946 (Sixteenth); A-2(d) to
Rule 24 Certificate in 70-7946 (Seventeenth); A-2(e) to Rule 24
Certificate dated May 4, 1993 in 70-7946 (Eighteenth); A-2(g) to
Rule 24 Certificate dated May 6, 1994, in 70-7946 (Nineteenth); A-
2(a)(1) to Rule 24 Certificate dated August 8, 1996 in File No. 70-
8511 (Twentieth); and A-2(a)(2) to Rule 24 Certificate dated August
8, 1996 in File No. 70-8511 (Twenty-first)).
(b) 2 -- Facility Lease No. 1, dated as of December 1, 1988, between
Meridian Trust Company and Stephen M. Carta (Steven Kaba,
successor), as Owner Trustees, and System Energy (B-2(c)(1) to
Rule 24 Certificate dated January 9, 1989 in 70-7561), as
supplemented by Lease Supplement No. 1 dated as of April 1, 1989 (B-
22(b) (1) to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994 (B-3(d) to
Rule 24 Certificate dated January 31, 1994 in 70-8215).
(b) 3 -- Facility Lease No. 2, dated as of December 1, 1988 between
Meridian Trust Company and Stephen M. Carta (Steven Kaba,
successor), as Owner Trustees, and System Energy (B-2(c)(2) to
Rule 24 Certificate dated January 9, 1989 in 70-7561), as
supplemented by Lease Supplement No. 1 dated as of April 1, 1989 (B-
22(b) (2) to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994 (B-4(d) Rule
24 Certificate dated January 31, 1994 in 70-8215).
(b) 4 -- Indenture (for Unsecured Debt Securities), dated as of
September 1, 1995, between System Energy Resources, Inc., and
Chemical Bank (B-10(a) to Rule 24 Certificate in 70-8511).
Entergy Arkansas
(c) 1 -- Mortgage and Deed of Trust, dated as of October 1,
1944, as amended by fifty-fourth Supplemental Indentures (7(d) in
2-5463 (Mortgage); 7(b) in 2-7121 (First); 7(c) in 2-7605 (Second);
7(d) in 2-8100 (Third); 7(a)-4 in 2-8482 (Fourth); 7(a)-5 in 2-9149
(Fifth); 4(a)-6 in 2-9789 (Sixth); 4(a)-7 in 2-10261 (Seventh);
4(a)-8 in 2-11043 (Eighth); 2(b)-9 in 2-11468 (Ninth); 2(b)-10 in
2-15767 (Tenth); D in 70-3952 (Eleventh); D in 70-4099 (Twelfth);
4(d) in 2-23185 (Thirteenth); 2(c) in 2-24414 (Fourteenth); 2(c) in
2-25913 (Fifteenth); 2(c) in 2-28869 (Sixteenth); 2(d) in 2-28869
(Seventeenth); 2(c) in 2-35107 (Eighteenth); 2(d) in 2-36646
(Nineteenth); 2(c) in 2-39253 (Twentieth); 2(c) in 2-41080
(Twenty-first); C-1 to Rule 24 Certificate in 70-5151
(Twenty-second); C-1 to Rule 24 Certificate in 70-5257
(Twenty-third); C to Rule 24 Certificate in 70-5343
(Twenty-fourth); C-1 to Rule 24 Certificate in 70-5404
(Twenty-fifth); C to Rule 24 Certificate in 70-5502 (Twenty-sixth);
C-1 to Rule 24 Certificate in 70-5556 (Twenty-seventh); C-1 to
Rule 24 Certificate in 70-5693 (Twenty-eighth); C-1 to Rule 24
Certificate in 70-6078 (Twenty-ninth); C-1 to Rule 24 Certificate
in 70-6174 (Thirtieth); C-1 to Rule 24 Certificate in 70-6246
(Thirty-first); C-1 to Rule 24 Certificate in 70-6498
(Thirty-second); A-4b-2 to Rule 24 Certificate in 70-6326
(Thirty-third); C-1 to Rule 24 Certificate in 70-6607
(Thirty-fourth); C-1 to Rule 24 Certificate in 70-6650
(Thirty-fifth); C-1 to Rule 24 Certificate, dated December 1, 1982,
in 70-6774 (Thirty-sixth); C-1 to Rule 24 Certificate, dated
February 17, 1983, in 70-6774 (Thirty-seventh); A-2(a) to Rule 24
Certificate, dated December 5, 1984, in 70-6858 (Thirty-eighth);
A-3(a) to Rule 24 Certificate in 70-7127 (Thirty-ninth); A-7 to
Rule 24 Certificate in 70-7068 (Fortieth); A-8(b) to Rule 24
Certificate dated July 6, 1989 in 70-7346 (Forty-first); A-8(c) to
Rule 24 Certificate, dated February 1, 1990 in 70-7346
(Forty-second); 4 to Form 10-Q for the quarter ended September 30,
1990 in 1-10764 (Forty-third); A-2(a) to Rule 24 Certificate, dated
November 30, 1990, in 70-7802 (Forty-fourth); A-2(b) to Rule 24
Certificate, dated January 24, 1991, in 70-7802 (Forty-fifth);
4(d)(2) in 33-54298 (Forty-sixth); 4(c)(2) to Form 10-K for the
year ended December 31, 1992 in 1-10764 (Forty-seventh); 4(b) to
Form 10-Q for the quarter ended June 30, 1993 in 1-10764 (Forty-
eighth); 4(c) to Form 10-Q for the quarter ended June 30, 1993 in 1-
10764 (Forty-ninth); 4(b) to Form 10-Q for the quarter ended
September 30, 1993 in 1-10764 (Fiftieth); 4(c) to Form 10-Q for the
quarter ended September 30, 1993 in 1-10764 (Fifty-first); 4(a) to
Form 10-Q for the quarter ended June 30, 1994 (Fifty-second); C-2
to Form U5S for the year ended December 31, 1995 (Fifty-third); and
C-2(a) to Form U5S for the year ended December 31, 1996 (Fifty-
fourth)).
(c) 2 -- Indenture for Unsecured Subordinated Debt Securities
relating to Trust Securities between Entergy Arkansas and Bank of
New York (as Trustee), dated as of August 1, 1996 (filed as Exhibit
A-1(a) to Rule 24 Certificate dated August 26, 1996 in File No. 70-
8723).
(c) 3 -- Amended and Restated Trust Agreement of Entergy
Arkansas Capital I, dated as of August 14, 1996 (filed as Exhibit A-
3(a) to Rule 24 Certificate dated August 26, 1996 in File No. 70-
8723).
(c) 4 -- Guarantee Agreement between Entergy Arkansas (as
Guarantor) and The Bank of New York (as Trustee), dated as of
August 14, 1996, with respect to Entergy Arkansas Capital I's
obligations on its 8 1/2% Cumulative Quarterly Income Preferred
Securities, Series A (filed as Exhibit A-4(a) to Rule 24
Certificate dated August 26, 1996 in File No. 70-8723).
Entergy Gulf States
(d) 1 -- Indenture of Mortgage, dated September 1, 1926, as amended
by certain Supplemental Indentures (B-a-I-1 in Registration No. 2-
2449 (Mortgage); 7-A-9 in Registration No. 2-6893 (Seventh); B to
Form 8-K dated September 1, 1959 (Eighteenth); B to Form 8-K dated
February 1, 1966 (Twenty-second); B to Form 8-K dated March 1, 1967
(Twenty-third); C to Form 8-K dated March 1, 1968 (Twenty-fourth);
B to Form 8-K dated November 1, 1968 (Twenty-fifth); B to Form 8-K
dated April 1, 1969 (Twenty-sixth); 2-A-8 in Registration No. 2-
66612 (Thirty-eighth); 4-2 to Form 10-K for the year ended December
31, 1984 in 1-2703 (Forty-eighth); 4-2 to Form 10-K for the year
ended December 31, 1988 in 1-2703 (Fifty-second); 4 to Form 10-K
for the year ended December 31, 1991 in 1-2703 (Fifty-third); 4 to
Form 8-K dated July 29, 1992 in 1-2703 (Fifth-fourth); 4 to Form 10-
K dated December 31, 1992 in 1-2703 (Fifty-fifth); 4 to Form 10-Q
for the quarter ended March 31, 1993 in 1-2703 (Fifty-sixth); 4-2
to Amendment No. 9 to Registration No. 2-76551 (Fifty-seventh); and
4(b) to Form 10-Q for the quarter ended March 31,1999 in 1-2703
(Fifty-eighth)).
(d) 2 -- Indenture, dated March 21, 1939, accepting resignation of
The Chase National Bank of the City of New York as trustee and
appointing Central Hanover Bank and Trust Company as successor
trustee (B-a-1-6 in Registration No. 2-4076).
(d) 3 -- Trust Indenture for 9.72% Debentures due July 1, 1998 (4 in
Registration No. 33-40113).
(d) 4 -- Indenture for Unsecured Subordinated Debt Securities
relating to Trust Securities, dated as of January 15, 1997 (filed
as Exhibit A-11(a) to Rule 24 Certificate dated February 6, 1997 in
File No. 70-8721).
(d) 5 -- Amended and Restated Trust Agreement of Entergy Gulf States
Capital I dated January 28, 1997 of Series A Preferred Securities
(filed as Exhibit A-13(a) to Rule 24 Certificate dated February 6,
1997 in File No. 70-8721).
(d) 6 -- Guarantee Agreement between Entergy Gulf States, Inc. (as
Guarantor) and The Bank of New York (as Trustee) dated as of
January 28, 1997 with respect to Entergy Gulf States Capital I's
obligation on its 8.75% Cumulative Quarterly Income Preferred
Securities, Series A (filed as Exhibit A-14(a) to Rule 24
Certificate dated February 6, 1997 in File No. 70-8721).
Entergy Louisiana
(e) 1 -- Mortgage and Deed of Trust, dated as of April 1, 1944, as
amended by fifty-four Supplemental Indentures (7(d) in 2-5317
(Mortgage); 7(b) in 2-7408 (First); 7(c) in 2-8636 (Second); 4(b)-3
in 2-10412 (Third); 4(b)-4 in 2-12264 (Fourth); 2(b)-5 in 2-12936
(Fifth); D in 70-3862 (Sixth); 2(b)-7 in 2-22340 (Seventh); 2(c) in
2-24429 (Eighth); 4(c)-9 in 2-25801 (Ninth); 4(c)-10 in 2-26911
(Tenth); 2(c) in 2-28123 (Eleventh); 2(c) in 2-34659 (Twelfth);
C to Rule 24 Certificate in 70-4793 (Thirteenth); 2(b)-2 in 2-38378
(Fourteenth); 2(b)-2 in 2-39437 (Fifteenth); 2(b)-2 in 2-42523
(Sixteenth); C to Rule 24 Certificate in 70-5242 (Seventeenth);
C to Rule 24 Certificate in 70-5330 (Eighteenth); C-1 to Rule 24
Certificate in 70-5449 (Nineteenth); C-1 to Rule 24 Certificate in
70-5550 (Twentieth); A-6(a) to Rule 24 Certificate in 70-5598
(Twenty-first); C-1 to Rule 24 Certificate in 70-5711
(Twenty-second); C-1 to Rule 24 Certificate in 70-5919
(Twenty-third); C-1 to Rule 24 Certificate in 70-6102
(Twenty-fourth); C-1 to Rule 24 Certificate in 70-6169
(Twenty-fifth); C-1 to Rule 24 Certificate in 70-6278
(Twenty-sixth); C-1 to Rule 24 Certificate in 70-6355
(Twenty-seventh); C-1 to Rule 24 Certificate in 70-6508
(Twenty-eighth); C-1 to Rule 24 Certificate in 70-6556
(Twenty-ninth); C-1 to Rule 24 Certificate in 70-6635 (Thirtieth);
C-1 to Rule 24 Certificate in 70-6834 (Thirty-first); C-1 to
Rule 24 Certificate in 70-6886 (Thirty-second); C-1 to Rule 24
Certificate in 70-6993 (Thirty-third); C-2 to Rule 24 Certificate
in 70-6993 (Thirty-fourth); C-3 to Rule 24 Certificate in 70-6993
(Thirty-fifth); A-2(a) to Rule 24 Certificate in 70-7166
(Thirty-sixth); A-2(a) in 70-7226 (Thirty-seventh); C-1 to Rule 24
Certificate in 70-7270 (Thirty-eighth); 4(a) to Quarterly Report on
Form 10-Q for the quarter ended June 30, 1988, in 1-8474
(Thirty-ninth); A-2(b) to Rule 24 Certificate in 70-7553
(Fortieth); A-2(d) to Rule 24 Certificate in 70-7553 (Forty-first);
A-3(a) to Rule 24 Certificate in 70-7822 (Forty-second); A-3(b) to
Rule 24 Certificate in 70-7822 (Forty-third); A-2(b) to Rule 24
Certificate in File No. 70-7822 (Forty-fourth); A-3(c) to Rule 24
Certificate in 70-7822 (Forty-fifth); A-2(c) to Rule 24 Certificate
dated April 7, 1993 in 70-7822 (Forty-sixth); A-3(d) to Rule 24
Certificate dated June 4, 1993 in 70-7822 (Forth-seventh); A-3(e)
to Rule 24 Certificate dated December 21, 1993 in 70-7822 (Forty-
eighth); A-3(f) to Rule 24 Certificate dated August 1, 1994 in 70-
7822 (Forty-ninth); A-4(c) to Rule 24 Certificate dated September
28, 1994 in 70-7653 (Fiftieth); A-2(a) to Rule 24 Certificate dated
April 4, 1996 in File No. 70-8487 (Fifty-first); A-2(a) to Rule 24
Certificate dated April 3, 1998 in File No. 70-9141 (Fifty-second);
A-2(b) to Rule 24 Certificate dated April 9, 1999 in File No. 70-
9141 (Fifty-third); and A-3(a) to Rule 24 Certificate dated July 6,
1999 in File No. 70-9141 (Fifty-fourth)).
(e) 2 -- Facility Lease No. 1, dated as of September 1, 1989, between
First National Bank of Commerce, as Owner Trustee, and Entergy
Louisiana (4(c)-1 in Registration No. 33-30660).
(e) 3 -- Facility Lease No. 2, dated as of September 1, 1989, between
First National Bank of Commerce, as Owner Trustee, and Entergy
Louisiana (4(c)-2 in Registration No. 33-30660).
(e) 4 -- Facility Lease No. 3, dated as of September 1, 1989, between
First National Bank of Commerce, as Owner Trustee, and Entergy
Louisiana (4(c)-3 in Registration No. 33-30660).
(e) 5 -- Indenture for Unsecured Subordinated Debt Securities
relating to Trust Securities, dated as of July 1, 1996 (filed as
Exhibit A-14(a) to Rule 24 Certificate dated July 25, 1996 in File
No. 70-8487).
(e) 6 -- Amended and Restated Trust Agreement of Entergy Louisiana
Capital I dated July 16, 1996 of Series A Preferred Securities
(filed as Exhibit A-16(a) to Rule 24 Certificate dated July 25,
1996 in File No. 70-8487).
(e) 7 -- Guarantee Agreement between Entergy Louisiana, Inc. (as
Guarantor) and The Bank of New York (as Trustee) dated as of July
16, 1996 with respect to Entergy Louisiana Capital I's obligation
on its 9% Cumulative Quarterly Income Preferred Securities,
Series A (filed as Exhibit A-19(a) to Rule 24 Certificate dated
July 25, 1996 in File No. 70-8487).
Entergy Mississippi
(f) 1 -- Mortgage and Deed of Trust, dated as of February 1, 1988, as
amended by fourteen Supplemental Indentures (A-2(a)-2 to Rule 24
Certificate in 70-7461 (Mortgage); A-2(b)-2 in 70-7461 (First);
A-5(b) to Rule 24 Certificate in 70-7419 (Second); A-4(b) to
Rule 24 Certificate in 70-7554 (Third); A-1(b)-1 to Rule 24
Certificate in 70-7737 (Fourth); A-2(b) to Rule 24 Certificate
dated November 24, 1992 in 70-7914 (Fifth); A-2(e) to Rule 24
Certificate dated January 22, 1993 in 70-7914 (Sixth); A-2(g) to
Form U-1 in 70-7914 (Seventh); A-2(i) to Rule 24 Certificate dated
November 10, 1993 in 70-7914 (Eighth); A-2(j) to Rule 24
Certificate dated July 22, 1994 in 70-7914 (Ninth); (A-2(l) to Rule
24 Certificate dated April 21, 1995 in File 70-7914 (Tenth); A-2(a)
to Rule 24 Certificate dated June 27, 1997 in File 70-8719
(Eleventh); A-2(b) to Rule 24 Certificate dated April 16, 1998 in
File 70-8719 (Twelfth); A-2(c) to Rule 24 Certificate dated May 12,
1999 in File No. 70-8719 (Thirteenth); A-3(a) to Rule 24
Certificate dated June 8, 1999 in File No. 70-8719 (Fourteenth);
and A-2(d) to Rule 24 Certificate dated February 24, 2000 in File
No. 70-8719 (Fifteenth)).
Entergy New Orleans
(g) 1 -- Mortgage and Deed of Trust, dated as of May 1, 1987, as
amended by seven Supplemental Indentures (A-2(c) to Rule 24
Certificate in 70-7350 (Mortgage); A-5(b) to Rule 24 Certificate in
70-7350 (First); A-4(b) to Rule 24 Certificate in 70-7448 (Second);
4(f)4 to Form 10-K for the year ended December 31, 1992 in 0-5807
(Third); 4(a) to Form 10-Q for the quarter ended September 30, 1993
in 0-5807 (Fourth); 4(a) to Form 8-K dated April 26, 1995 in File
No. 0-5807 (Fifth); 4(a) to Form 8-K dated March 22, 1996 in File
No. 0-5807 (Sixth); and 4(b) to Form 10-Q for the quarter ended
June 30, 1998 in 0-5807 (Seventh)).
(10) Material Contracts
Entergy Corporation
(a) 1 -- Agreement, dated April 23, 1982, among certain System
companies, relating to System Planning and Development and
Intra-System Transactions (10(a)1 to Form 10-K for the year ended
December 31, 1982, in 1-3517).
(a) 2 -- Middle South Utilities (now Entergy Corporation) System
Agency Agreement, dated December 11, 1970 (5(a)-2 in 2-41080).
(a) 3 -- Amendment, dated February 10, 1971, to Middle South
Utilities System Agency Agreement, dated December 11, 1970 (5(a)-4
in 2-41080).
(a) 4 -- Amendment, dated May 12, 1988, to Middle South Utilities
System Agency Agreement, dated December 11, 1970 (5(a)-4 in 2-
41080).
(a) 5 -- Middle South Utilities System Agency Coordination Agreement,
dated December 11, 1970 (5(a)-3 in 2-41080).
(a) 6 -- Service Agreement with Entergy Services, dated as of
April 1, 1963 (5(a)-5 in 2-41080).
(a) 7 -- Amendment, dated January 1, 1972, to Service Agreement with
Entergy Services (5(a)-6 in 2-43175).
(a) 8 -- Amendment, dated April 27, 1984, to Service Agreement with
Entergy Services (10(a)-7 to Form 10-K for the year ended
December 31, 1984, in 1-3517).
(a) 9 -- Amendment, dated August 1, 1988, to Service Agreement with
Entergy Services (10(a)-8 to Form 10-K for the year ended
December 31, 1988, in 1-3517).
(a) 10-- Amendment, dated January 1, 1991, to Service Agreement with
Entergy Services (10(a)-9 to Form 10-K for the year ended December
31, 1990, in 1-3517).
(a) 11-- Amendment, dated January 1, 1992, to Service Agreement with
Entergy Services (10(a)-11 for the year ended December 31, 1994 in
1-3517).
(a) 12-- Availability Agreement, dated June 21, 1974, among System
Energy and certain other System companies (B to Rule 24
Certificate, dated June 24, 1974, in 70-5399).
(a) 13-- First Amendment to Availability Agreement, dated as of
June 30, 1977 (B to Rule 24 Certificate, dated June 24, 1977, in
70-5399).
(a) 14-- Second Amendment to Availability Agreement, dated as of
June 15, 1981 (E to Rule 24 Certificate, dated July 1, 1981, in
70-6592).
(a) 15-- Third Amendment to Availability Agreement, dated as of
June 28, 1984 (B-13(a) to Rule 24 Certificate, dated July 6, 1984,
in 70-6985).
(a) 16-- Fourth Amendment to Availability Agreement, dated as of
June 1, 1989 (A to Rule 24 Certificate, dated June 8, 1989, in
70-5399).
(a) 17-- Eighteenth Assignment of Availability Agreement, Consent and
Agreement, dated as of September 1, 1986, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (C-2 to
Rule 24 Certificate, dated October 1, 1986, in 70-7272).
(a) 18-- Nineteenth Assignment of Availability Agreement, Consent and
Agreement, dated as of September 1, 1986, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (C-3 to
Rule 24 Certificate, dated October 1, 1986, in 70-7272).
(a) 19-- Twenty-sixth Assignment of Availability Agreement, Consent
and Agreement, dated as of October 1, 1992, with United States
Trust Company of New York and Gerard F. Ganey, as Trustees (B-2(c)
to Rule 24 Certificate, dated November 2, 1992, in 70-7946).
(a) 20-- Twenty-seventh Assignment of Availability Agreement, Consent
and Agreement, dated as of April 1, 1993, with United States Trust
Company of New York and Gerard F. Ganey as Trustees (B-2(d) to Rule
24 Certificate dated May 4, 1993 in 70-7946).
(a) 21-- Twenty-ninth Assignment of Availability Agreement, Consent
and Agreement, dated as of April 1, 1994, with United States Trust
Company of New York and Gerard F. Ganey as Trustees (B-2(f) to Rule
24 Certificate dated May 6, 1994, in 70-7946).
(a) 22-- Thirtieth Assignment of Availability Agreement, Consent and
Agreement, dated as of August 1, 1996, among System Energy, Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy New
Orleans, and United States Trust Company of New York and Gerard F.
Ganey, as Trustees (filed as Exhibit B-2(a) to Rule 24 Certificate
dated August 8, 1996 in File No. 70-8511).
(a) 23-- Thirty-first Assignment of Availability Agreement, Consent
and Agreement, dated as of August 1, 1996, among System Energy,
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, and United States Trust Company of New York
and Gerard F. Ganey, as Trustees (filed as Exhibit B-2(b) to Rule
24 Certificate dated August 8, 1996 in File No. 70-8511).
(a) 24-- Thirty-second Assignment of Availability Agreement, Consent
and Agreement, dated as of December 27, 1996, among System Energy,
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, and The Chase Manhattan Bank (filed as Exhibit
B-2(a) to Rule 24 Certificate dated January 13, 1997 in File No. 70-
7561).
(a) 25-- Thirty-third Assignment of Availability Agreement, Consent
and Agreement, dated as of December 20, 1999, among System Energy,
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, and The Chase Manhattan Bank (filed as Exhibit
B-2(b) to Rule 24 Certificate dated March 3, 2000 in File No. 70-
7561).
(a) 26-- Capital Funds Agreement, dated June 21, 1974, between
Entergy Corporation and System Energy (C to Rule 24 Certificate,
dated June 24, 1974, in 70-5399).
(a) 27-- First Amendment to Capital Funds Agreement, dated as of
June 1, 1989 (B to Rule 24 Certificate, dated June 8, 1989, in
70-5399).
(a) 28-- Eighteenth Supplementary Capital Funds Agreement and
Assignment, dated as of September 1, 1986, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (D-2 to
Rule 24 Certificate, dated October 1, 1986, in 70-7272).
(a) 29-- Nineteenth Supplementary Capital Funds Agreement and
Assignment, dated as of September 1, 1986, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (D-3 to Rule
24 Certificate, dated October 1, 1986, in 70-7272).
(a) 30-- Twenty-sixth Supplementary Capital Funds Agreement and
Assignment, dated as of October 1, 1992, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (B-3(c) to
Rule 24 Certificate dated November 2, 1992 in 70-7946).
(a) 31-- Twenty-seventh Supplementary Capital Funds Agreement and
Assignment, dated as of April 1, 1993, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (B-3(d) to
Rule 24 Certificate dated May 4, 1993 in 70-7946).
(a) 32-- Twenty-ninth Supplementary Capital Funds Agreement and
Assignment, dated as of April 1, 1994, with United States Trust
Company of New York and Gerard F. Ganey, as Trustees (B-3(f) to
Rule 24 Certificate dated May 6, 1994, in 70-7946).
(a) 33-- Thirtieth Supplementary Capital Funds Agreement and
Assignment, dated as of August 1, 1996, among Entergy Corporation,
System Energy and United States Trust Company of New York and
Gerard F. Ganey, as Trustees (filed as Exhibit B-3(a) to Rule 24
Certificate dated August 8, 1996 in File No. 70-8511).
(a) 34-- Thirty-first Supplementary Capital Funds Agreement and
Assignment, dated as of August 1, 1996, among Entergy Corporation,
System Energy and United States Trust Company of New York and
Gerard F. Ganey, as Trustees (filed as Exhibit B-3(b) to Rule 24
Certificate dated August 8, 1996 in File No. 70-8511).
(a) 35-- Thirty-second Supplementary Capital Funds Agreement and
Assignment, dated as of December 27, 1996, among Entergy
Corporation, System Energy and The Chase Manhattan Bank (filed as
Exhibit B-1(a) to Rule 24 Certificate dated January 13, 1997 in
File No. 70-7561).
(a) 36-- Thirty-third Supplementary Capital Funds Agreement and
Assignment, dated as of December 20, 1999, among Entergy
Corporation, System Energy and The Chase Manhattan Bank (filed as
Exhibit B-3(b) to Rule 24 Certificate dated March 3, 2000 in File
No. 70-7561).
(a) 37-- First Amendment to Supplementary Capital Funds Agreements
and Assignments, dated as of June 1, 1989, by and between Entergy
Corporation, System Energy, Deposit Guaranty National Bank, United
States Trust Company of New York and Gerard F. Ganey (C to Rule 24
Certificate, dated June 8, 1989, in 70-7026).
(a) 38-- First Amendment to Supplementary Capital Funds Agreements
and Assignments, dated as of June 1, 1989, by and between Entergy
Corporation, System Energy, United States Trust Company of New York
and Gerard F. Ganey (C to Rule 24 Certificate, dated June 8, 1989,
in 70-7123).
(a) 39-- First Amendment to Supplementary Capital Funds Agreement and
Assignment, dated as of June 1, 1989, by and between Entergy
Corporation, System Energy and Chemical Bank (C to Rule 24
Certificate, dated June 8, 1989, in 70-7561).
(a) 40-- Reallocation Agreement, dated as of July 28, 1981, among
System Energy and certain other System companies (B-1(a) in
70-6624).
(a) 41-- Joint Construction, Acquisition and Ownership Agreement,
dated as of May 1, 1980, between System Energy and SMEPA (B-1(a) in
70-6337), as amended by Amendment No. 1, dated as of May 1, 1980
(B-1(c) in 70-6337) and Amendment No. 2, dated as of October 31,
1980 (1 to Rule 24 Certificate, dated October 30, 1981, in
70-6337).
(a) 42-- Operating Agreement dated as of May 1, 1980, between System
Energy and SMEPA (B(2)(a) in 70-6337).
(a) 43-- Assignment, Assumption and Further Agreement No. 1, dated as
of December 1, 1988, among System Energy, Meridian Trust Company
and Stephen M. Carta, and SMEPA (B-7(c)(1) to Rule 24 Certificate,
dated January 9, 1989, in 70-7561).
(a) 44-- Assignment, Assumption and Further Agreement No. 2, dated as
of December 1, 1988, among System Energy, Meridian Trust Company
and Stephen M. Carta, and SMEPA (B-7(c)(2) to Rule 24 Certificate,
dated January 9, 1989, in 70-7561).
(a) 45-- Substitute Power Agreement, dated as of May 1, 1980, among
Entergy Mississippi, System Energy and SMEPA (B(3)(a) in 70-6337).
(a) 46-- Grand Gulf Unit No. 2 Supplementary Agreement, dated as of
February 7, 1986, between System Energy and SMEPA (10(aaa) in
33-4033).
(a) 47-- Compromise and Settlement Agreement, dated June 4, 1982,
between Texaco, Inc. and Entergy Louisiana (28(a) to Form 8-K,
dated June 4, 1982, in 1-3517).
+(a) 48-- Post-Retirement Plan (10(a)37 to Form 10-K for the year
ended December 31, 1983, in 1-3517).
(a) 49-- Unit Power Sales Agreement, dated as of June 10, 1982,
between System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi and Entergy New Orleans (10(a)-39 to Form 10-K
for the year ended December 31, 1982, in 1-3517).
(a) 50-- First Amendment to Unit Power Sales Agreement, dated as of
June 28, 1984, between System Energy and Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi and Entergy New Orleans (19 to Form
10-Q for the quarter ended September 30, 1984, in 1-3517).
(a) 51-- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
(a) 52-- Middle South Utilities Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement, dated April 28, 1988
(Exhibit D-1 to Form U5S for the year ended December 31, 1987).
(a) 53-- First Amendment, dated January 1, 1990, to the Middle South
Utilities Inc. and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-2 to Form U5S for the year ended December
31, 1989).
(a) 54-- Second Amendment dated January 1, 1992, to the Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3 to Form U5S for the year ended December
31, 1992).
(a) 55-- Third Amendment dated January 1, 1994 to Entergy Corporation
and Subsidiary Companies Intercompany Income Tax Allocation
Agreement (D-3(a) to Form U5S for the year ended December 31,
1993).
(a) 56-- Fourth Amendment dated April 1, 1997 to Entergy Corporation
and Subsidiary Companies Intercompany Income Tax Allocation
Agreement (D-5 to Form U5S for the year ended December 31, 1996).
(a) 57-- Guaranty Agreement between Entergy Corporation and Entergy
Arkansas, dated as of September 20, 1990 (B-1(a) to Rule 24
Certificate, dated September 27, 1990, in 70-7757).
(a) 58-- Guarantee Agreement between Entergy Corporation and Entergy
Louisiana, dated as of September 20, 1990 (B-2(a) to Rule 24
Certificate, dated September 27, 1990, in 70-7757).
(a) 59-- Guarantee Agreement between Entergy Corporation and System
Energy, dated as of September 20, 1990 (B-3(a) to Rule 24
Certificate, dated September 27, 1990, in 70- 7757).
(a) 60-- Loan Agreement between Entergy Operations and Entergy
Corporation, dated as of September 20, 1990 (B-12(b) to Rule 24
Certificate, dated June 15, 1990, in 70-7679).
(a) 61-- Loan Agreement between Entergy Power and Entergy
Corporation, dated as of August 28, 1990 (A-4(b) to Rule 24
Certificate, dated September 6, 1990, in 70-7684).
(a) 62-- Loan Agreement between Entergy Corporation and Entergy
Systems and Service, Inc., dated as of December 29, 1992 (A-4(b) to
Rule 24 Certificate in 70-7947).
+(a) 63-- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a) 52 to Form 10-K for the year
ended December 31, 1989, in 1-3517).
+(a) 64-- Entergy Corporation Annual Incentive Plan (10(a) 54 to Form
10-K for the year ended December 31, 1989, in 1-3517).
+(a) 65-- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated May 24, 1991, in
70-7831).
+(a) 66-- Amendment No. 1 to the Equity Ownership Plan of Entergy
Corporation and Subsidiaries (10(a) 71 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(a) 67-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
+(a) 68-- Retired Outside Director Benefit Plan (10(a)63 to Form 10-K
for the year ended December 31, 1991, in 1-3517).
+(a) 69-- Agreement between Entergy Corporation and Jerry D. Jackson.
(10(a) 67 to Form 10-K for the year ended December 31, 1992 in 1-
3517).
+(a) 70-- Supplemental Retirement Plan (10(a) 69 to Form 10-K for the
year ended December 31, 1992 in 1-3517).
+(a) 71-- Defined Contribution Restoration Plan of Entergy Corporation
and Subsidiaries (10(a)53 to Form 10-K for the year ended
December 31, 1989 in 1-3517).
+(a) 72-- Executive Disability Plan of Entergy Corporation and
Subsidiaries (10(a) 72 to Form 10-K for the year ended December 31,
1992 in 1-3517).
+(a) 73-- Stock Plan for Outside Directors of Entergy Corporation and
Subsidiaries, as amended (10(a) 74 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
(a) 74-- Agreement and Plan of Reorganization Between Entergy
Corporation and Gulf States Utilities Company, dated June 5, 1992
(1 to Current Report on Form 8-K dated June 5, 1992 in 1-3517).
+(a) 75-- Amendment to Defined Contribution Restoration Plan of
Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K for the
year ended December 31, 1993 in 1-11299).
+(a) 76-- System Executive Retirement Plan (10(a) 82 to Form 10-K for
the year ended December 31, 1993 in 1-11299).
+(a) 77-- Jerry L. Maulden's Retirement Letter Agreement (10(a)77 to
Form 10-K for the year ended December 31, 1998 in 1-11299).
+(a) 78-- Letter of Intent regarding the Employment of Wayne Leonard
(10-(a)78 to Form 10-K for the year ended December 31, 1998 in 1-
11299).
+(a) 79-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
*+(a)80--Agreement between Entergy Corporation and Donald C. Hintz
effective July 29, 1999
System Energy
(b) 1 through
(b) 14-- See 10(a)-12 through 10(a)-25 above.
(b) 15 through
(b) 28-- See 10(a)-26 through 10(a)-39 above.
(b) 29-- Reallocation Agreement, dated as of July 28, 1981, among
System Energy and certain other System companies (B-1(a) in
70-6624).
(b) 30-- Joint Construction, Acquisition and Ownership Agreement,
dated as of May 1, 1980, between System Energy and SMEPA (B-1(a) in
70-6337), as amended by Amendment No. 1, dated as of May 1, 1980
(B-1(c) in 70-6337) and Amendment No. 2, dated as of October 31,
1980 (1 to Rule 24 Certificate, dated October 30, 1981, in
70-6337).
(b) 31-- Operating Agreement, dated as of May 1, 1980, between System
Energy and SMEPA (B(2)(a) in 70-6337).
(b) 32- Amended
and Restated Installment Sale Agreement, dated as of February 15,
1996, between System Energy and Claiborne County, Mississippi
(filed as Exhibit B-6(a) to Rule 24 Certificate dated March 4, 1996
in 70-8511).
(b) 33-- Loan Agreement, dated as of October 15, 1998, between System
Energy and Mississippi Business Finance Corporation (B-6(b) to
Rule 24 Certificate dated November 12, 1998 in 70-8511).
(b) 34-- Loan Agreement, dated as of May 15, 1999, between System
Energy and Mississippi Business Finance Corporation (B-6(c) to Rule
24 Certificate dated June 8, 1999 in 70-8511).
(b) 35-- Facility Lease No. 1, dated as of December 1, 1988, between
Meridian Trust Company and Stephen M. Carta (Stephen J. Kaba,
successor), as Owner Trustees, and System Energy (B-2(c)(1) to
Rule 24 Certificate dated January 9, 1989 in 70-7561), as
supplemented by Lease Supplement No. 1 dated as of April 1, 1989 (B-
22(b) (1) to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994 (B-3(d) to
Rule 24 Certificate dated January 31, 1994 in 70-8215).
(b) 36-- Facility Lease No. 2, dated as of December 1, 1988 between
Meridian Trust Company and Stephen M. Carta (Stephen J. Kaba,
successor), as Owner Trustees, and System Energy (B-2(c)(2) to
Rule 24 Certificate dated January 9, 1989 in 70-7561), as
supplemented by Lease Supplement No. 1 dated as of April 1, 1989 (B-
22(b) (2) to Rule 24 Certificate dated April 21, 1989 in 70-7561)
and Lease Supplement No. 2 dated as of January 1, 1994 (B-4(d) Rule
24 Certificate dated January 31, 1994 in 70-8215).
(b) 37-- Assignment, Assumption and Further Agreement No. 1, dated as
of December 1, 1988, among System Energy, Meridian Trust Company
and Stephen M. Carta, and SMEPA (B-7(c)(1) to Rule 24 Certificate,
dated January 9, 1989, in 70-7561).
(b) 38-- Assignment, Assumption and Further Agreement No. 2, dated as
of December 1, 1988, among System Energy, Meridian Trust Company
and Stephen M. Carta, and SMEPA (B-7(c)(2) to Rule 24 Certificate,
dated January 9, 1989, in 70-7561).
(b) 39-- Collateral Trust Indenture, dated as of January 1, 1994,
among System Energy, GG1B Funding Corporation and Bankers Trust
Company, as Trustee (A-3(e) to Rule 24 Certificate dated January
31, 1994, in 70-8215), as supplemented by Supplemental Indenture
No. 1 dated January 1, 1994, (A-3(f) to Rule 24 Certificate dated
January 31, 1994, in 70-8215).
(b) 40-- Substitute Power Agreement, dated as of May 1, 1980, among
Entergy Mississippi, System Energy and SMEPA (B(3)(a) in 70-6337).
(b) 41-- Grand Gulf Unit No. 2 Supplementary Agreement, dated as of
February 7, 1986, between System Energy and SMEPA (10(aaa) in
33-4033).
(b) 42-- Unit Power Sales Agreement, dated as of June 10, 1982,
between System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi and Entergy New Orleans (10(a)-39 to Form 10-K
for the year ended December 31, 1982, in 1-3517).
(b) 43-- First Amendment to the Unit Power Sales Agreement, dated as
of June 28, 1984, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New Orleans (19
to Form 10-Q for the quarter ended September 30, 1984, in 1-3517).
(b) 44-- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
(b) 45-- Fuel Lease, dated as of February 24, 1989, between River
Fuel Funding Company #3, Inc. and System Energy (B-1(b) to Rule 24
Certificate, dated March 3, 1989, in 70-7604).
(b) 46-- System Energy's Consent, dated January 31, 1995, pursuant to
Fuel Lease, dated as of February 24, 1989, between River Fuel
Funding Company #3, Inc. and System Energy (B-1(c) to Rule 24
Certificate, dated February 13, 1995 in 70-7604).
(b) 47-- Sales Agreement, dated as of June 21, 1974, between System
Energy and Entergy Mississippi (D to Rule 24 Certificate, dated
June 26, 1974, in 70-5399).
(b) 48-- Service Agreement, dated as of June 21, 1974, between System
Energy and Entergy Mississippi (E to Rule 24 Certificate, dated
June 26, 1974, in 70-5399).
(b) 49-- Partial Termination Agreement, dated as of December 1, 1986,
between System Energy and Entergy Mississippi (A-2 to Rule 24
Certificate, dated January 8, 1987, in 70-5399).
(b) 50-- Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement, dated April 28, 1988
(D-1 to Form U5S for the year ended December 31, 1987).
(b) 51-- First Amendment, dated January 1, 1990 to the Middle South
Utilities Inc. and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-2 to Form U5S for the year ended
December 31, 1989).
(b) 52-- Second Amendment dated January 1, 1992, to the Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3 to Form U5S for the year ended December
31, 1992).
(b) 53-- Third Amendment dated January 1, 1994 to Entergy Corporation
and Subsidiary Companies Intercompany Income Tax Allocation
Agreement (D-3(a) to Form U5S for the year ended December 31,
1993).
(b) 54-- Service Agreement with Entergy Services, dated as of July
16, 1974, as amended (10(b)-43 to Form 10-K for the year ended
December 31, 1988, in 1-9067).
(b) 55-- Amendment, dated January 1, 1991, to Service Agreement with
Entergy Services (10(b)-45 to Form 10-K for the year ended
December 31, 1990, in 1-9067).
(b) 56-- Amendment, dated January 1, 1992, to Service Agreement with
Entergy Services (10(a) -11 to Form 10-K for the year ended
December 31, 1994 in 1-3517).
(b) 57-- Operating Agreement between Entergy Operations and System
Energy, dated as of June 6, 1990 (B-3(b) to Rule 24 Certificate,
dated June 15, 1990, in 70-7679).
(b) 58-- Guarantee Agreement between Entergy Corporation and System
Energy, dated as of September 20, 1990 (B-3(a) to Rule 24
Certificate, dated September 27, 1990, in 70-7757).
(b) 59-- Amended and Restated Reimbursement Agreement, dated as of
December 1, 1988 as amended and restated as of December 20, 1999,
among System Energy Resources, Inc., The Bank of Tokyo-Mitsubishi,
Ltd., as Funding Bank and The Chase Manhattan Bank, as
administrating bank, Union Bank of California, N.A., as
documentation agent, and the Banks named therein, as Participating
Banks (B-1(b) to Rule 24 Certificate dated March 3, 2000 in 70-
7561).
+(b) 60-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
+(b) 61-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
Entergy Arkansas
(c) 1 -- Agreement, dated April 23, 1982, among Entergy Arkansas and
certain other System companies, relating to System Planning and
Development and Intra-System Transactions (10(a) 1 to Form 10-K for
the year ended December 31, 1982, in 1-3517).
(c) 2 -- Middle South Utilities System Agency Agreement, dated
December 11, 1970 (5(a)2 in 2-41080).
(c) 3 -- Amendment, dated February 10, 1971, to Middle South
Utilities System Agency Agreement, dated December 11, 1970 (5(a)-4
in 2-41080).
(c) 4 -- Amendment, dated May 12, 1988, to Middle South Utilities
System Agency Agreement, dated December 11, 1970 (5(a) 4 in 2-
41080).
(c) 5 -- Middle South Utilities System Agency Coordination Agreement,
dated December 11, 1970 (5(a)-3 in 2-41080).
(c) 6 -- Service Agreement with Entergy Services, dated as of April
1, 1963 (5(a)-5 in 2-41080).
(c) 7 -- Amendment, dated January 1, 1972, to Service Agreement with
Entergy Services (5(a)- 6 in 2-43175).
(c) 8 -- Amendment, dated April 27, 1984, to Service Agreement, with
Entergy Services (10(a)- 7 to Form 10-K for the year ended December
31, 1984, in 1-3517).
(c) 9 -- Amendment, dated August 1, 1988, to Service Agreement with
Entergy Services (10(c)- 8 to Form 10-K for the year ended December
31, 1988, in 1-10764).
(c) 10-- Amendment, dated January 1, 1991, to Service Agreement with
Entergy Services (10(c)-9 to Form 10-K for the year ended
December 31, 1990, in 1-10764).
(c) 11-- Amendment, dated January 1, 1992, to Service Agreement with
Entergy Services (10(a)-11 to Form 10-K for the year ended December
31, 1994 in 1-3517).
(c) 12 through
(c) 25-- See 10(a)-12 through 10(a)-25 above.
(c) 26-- Agreement, dated August 20, 1954, between Entergy Arkansas
and the United States of America (SPA)(13(h) in 2-11467).
(c) 27-- Amendment, dated April 19, 1955, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-2 in 2-41080).
(c) 28-- Amendment, dated January 3, 1964, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-3 in 2-41080).
(c) 29-- Amendment, dated September 5, 1968, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-4 in 2-41080).
(c) 30-- Amendment, dated November 19, 1970, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-5 in 2-41080).
(c) 31-- Amendment, dated July 18, 1961, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-6 in 2-41080).
(c) 32-- Amendment, dated December 27, 1961, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-7 in 2-41080).
(c) 33-- Amendment, dated January 25, 1968, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-8 in 2-41080).
(c) 34-- Amendment, dated October 14, 1971, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-9 in 2-43175).
(c) 35-- Amendment, dated January 10, 1977, to the United States of
America (SPA) Contract, dated August 20, 1954 (5(d)-10 in 2-60233).
(c) 36-- Agreement, dated May 14, 1971, between Entergy Arkansas and
the United States of America (SPA) (5(e) in 2-41080).
(c) 37-- Amendment, dated January 10, 1977, to the United States of
America (SPA) Contract, dated May 14, 1971 (5(e)-1 in 2-60233).
(c) 38-- Contract, dated May 28, 1943, Amendment to Contract, dated
July 21, 1949, and Supplement to Amendment to Contract, dated
December 30, 1949, between Entergy Arkansas and McKamie Gas
Cleaning Company; Agreements, dated as of September 30, 1965,
between Entergy Arkansas and former stockholders of McKamie Gas
Cleaning Company; and Letter Agreement, dated June 22, 1966, by
Humble Oil & Refining Company accepted by Entergy Arkansas on June
24, 1966 (5(k)-7 in 2-41080).
(c) 39-- Agreement, dated April 3, 1972, between Entergy Services and
Gulf United Nuclear Fuels Corporation (5(l)-3 in 2-46152).
(c) 40-- Fuel Lease, dated as of December 22, 1988, between River
Fuel Trust #1 and Entergy Arkansas (B-1(b) to Rule 24 Certificate
in 70-7571).
(c) 41-- White Bluff Operating Agreement, dated June 27, 1977, among
Entergy Arkansas and Arkansas Electric Cooperative Corporation and
City Water and Light Plant of the City of Jonesboro, Arkansas
(B-2(a) to Rule 24 Certificate, dated June 30, 1977, in 70-6009).
(c) 42-- White Bluff Ownership Agreement, dated June 27, 1977, among
Entergy Arkansas and Arkansas Electric Cooperative Corporation and
City Water and Light Plant of the City of Jonesboro, Arkansas
(B-1(a) to Rule 24 Certificate, dated June 30, 1977, in 70-6009).
(c) 43-- Agreement, dated June 29, 1979, between Entergy Arkansas and
City of Conway, Arkansas (5(r)-3 in 2-66235).
(c) 44-- Transmission Agreement, dated August 2, 1977, between
Entergy Arkansas and City Water and Light Plant of the City of
Jonesboro, Arkansas (5(r)-3 in 2-60233).
(c) 45-- Power Coordination, Interchange and Transmission Service
Agreement, dated as of June 27, 1977, between Arkansas Electric
Cooperative Corporation and Entergy Arkansas (5(r)-4 in 2-60233).
(c) 46-- Independence Steam Electric Station Operating Agreement,
dated July 31, 1979, among Entergy Arkansas and Arkansas Electric
Cooperative Corporation and City Water and Light Plant of the City
of Jonesboro, Arkansas and City of Conway, Arkansas (5(r)-6 in
2-66235).
(c) 47-- Amendment, dated December 4, 1984, to the Independence Steam
Electric Station Operating Agreement (10(c) 51 to Form 10-K for the
year ended December 31, 1984, in 1-10764).
(c) 48-- Independence Steam Electric Station Ownership Agreement,
dated July 31, 1979, among Entergy Arkansas and Arkansas Electric
Cooperative Corporation and City Water and Light Plant of the City
of Jonesboro, Arkansas and City of Conway, Arkansas (5(r)-7 in
2-66235).
(c) 49-- Amendment, dated December 28, 1979, to the Independence
Steam Electric Station Ownership Agreement (5(r)-7(a) in 2-66235).
(c) 50-- Amendment, dated December 4, 1984, to the Independence Steam
Electric Station Ownership Agreement (10(c) 54 to Form 10-K for the
year ended December 31, 1984, in 1-10764).
(c) 51-- Owner's Agreement, dated November 28, 1984, among Entergy
Arkansas, Entergy Mississippi, other co-owners of the Independence
Station (10(c) 55 to Form 10-K for the year ended December 31,
1984, in 1-10764).
(c) 52-- Consent, Agreement and Assumption, dated December 4, 1984,
among Entergy Arkansas, Entergy Mississippi, other co-owners of the
Independence Station and United States Trust Company of New York,
as Trustee (10(c) 56 to Form 10-K for the year ended December 31,
1984, in 1-10764).
(c) 53-- Power Coordination, Interchange and Transmission Service
Agreement, dated as of July 31, 1979, between Entergy Arkansas and
City Water and Light Plant of the City of Jonesboro, Arkansas
(5(r)-8 in 2-66235).
(c) 54-- Power Coordination, Interchange and Transmission Agreement,
dated as of June 29, 1979, between City of Conway, Arkansas and
Entergy Arkansas (5(r)-9 in 2-66235).
(c) 55-- Agreement, dated June 21, 1979, between Entergy Arkansas and
Reeves E. Ritchie ((10)(b)-90 to Form 10-K for the year ended
December 31, 1980, in 1-10764).
(c) 56-- Reallocation Agreement, dated as of July 28, 1981, among
System Energy and certain other System companies (B-1(a) in
70-6624).
+(c) 57-- Post-Retirement Plan (10(b) 55 to Form 10-K for the year
ended December 31, 1983, in 1-10764).
(c) 58-- Unit Power Sales Agreement, dated as of June 10, 1982,
between System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans (10(a) 39 to Form 10-K
for the year ended December 31, 1982, in 1-3517).
(c) 59-- First Amendment to Unit Power Sales Agreement, dated as of
June 28, 1984, between System Energy, Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans (19 to Form
10-Q for the quarter ended September 30, 1984, in 1-3517).
(c) 60-- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
(c) 61-- Contract For Disposal of Spent Nuclear Fuel and/or
High-Level Radioactive Waste, dated June 30, 1983, among the DOE,
System Fuels and Entergy Arkansas (10(b)-57 to Form 10-K for the
year ended December 31, 1983, in 1-10764).
(c) 62-- Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement, dated April 28, 1988
(D-1 to Form U5S for the year ended December 31, 1987).
(c) 63-- First Amendment, dated January 1, 1990, to the Middle South
Utilities, Inc. and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-2 to Form U5S for the year ended
December 31, 1989).
(c) 64-- Second Amendment dated January 1, 1992, to the Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3 to Form U5S for the year ended December
31, 1992).
(c) 65-- Third Amendment dated January 1, 1994, to Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3(a) to Form U5S for the year ended
December 31, 1993).
(c) 66-- Assignment of Coal Supply Agreement, dated December 1, 1987,
between System Fuels and Entergy Arkansas (B to Rule 24 letter
filing, dated November 10, 1987, in 70-5964).
(c) 67-- Coal Supply Agreement, dated December 22, 1976, between
System Fuels and Antelope Coal Company (B-1 in 70-5964), as amended
by First Amendment (A to Rule 24 Certificate in 70-5964); Second
Amendment (A to Rule 24 letter filing, dated December 16, 1983, in
70-5964); and Third Amendment (A to Rule 24 letter filing, dated
November 10, 1987 in 70-5964).
(c) 68-- Operating Agreement between Entergy Operations and Entergy
Arkansas, dated as of June 6, 1990 (B-1(b) to Rule 24 Certificate,
dated June 15, 1990, in 70-7679).
(c) 69-- Guaranty Agreement between Entergy Corporation and Entergy
Arkansas, dated as of September 20, 1990 (B-1(a) to Rule 24
Certificate, dated September 27, 1990, in 70-7757).
(c) 70-- Agreement for Purchase and Sale of Independence Unit 2
between Entergy Arkansas and Entergy Power, dated as of August 28,
1990 (B-3(c) to Rule 24 Certificate, dated September 6, 1990, in
70-7684).
(c) 71-- Agreement for Purchase and Sale of Ritchie Unit 2 between
Entergy Arkansas and Entergy Power, dated as of August 28, 1990
(B-4(d) to Rule 24 Certificate, dated September 6, 1990, in
70-7684).
(c) 72-- Ritchie Steam Electric Station Unit No. 2 Operating
Agreement between Entergy Arkansas and Entergy Power, dated as of
August 28, 1990 (B-5(a) to Rule 24 Certificate, dated September 6,
1990, in 70-7684).
(c) 73-- Ritchie Steam Electric Station Unit No. 2 Ownership
Agreement between Entergy Arkansas and Entergy Power, dated as of
August 28, 1990 (B-6(a) to Rule 24 Certificate, dated September 6,
1990, in 70-7684).
(c) 74-- Power Coordination, Interchange and Transmission Service
Agreement between Entergy Power and Entergy Arkansas, dated as of
August 28, 1990 (10(c)-71 to Form 10-K for the year ended
December 31, 1990, in 1-10764).
+(c) 75-- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a)52 to Form 10-K for the year
ended December 31, 1989, in 1-3517).
+(c) 76-- Entergy Corporation Annual Incentive Plan (10(a)54 to Form
10-K for the year ended December 31, 1989, in 1-3517).
+(c) 77-- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated May 24, 1991, in
70-7831).
+(c) 78-- Amendment No. 1 to the Equity Ownership Plan of Entergy
Corporation and Subsidiaries (10(a)71 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(c) 79-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
+(c) 80-- Agreement between Arkansas Power & Light Company and R.
Drake Keith. (10(c) 78 to Form 10-K for the year ended December 31,
1992 in 1-10764).
+(c) 81-- Supplemental Retirement Plan (10(a)69 to Form 10-K for the
year ended December 31, 1992 in 1-3517).
+(c) 82-- Defined Contribution Restoration Plan of Entergy Corporation
and Subsidiaries (10(a)53 to Form 10-K for the year ended
December 31, 1989 in 1-3517).
+(c) 83-- Executive Disability Plan of Entergy Corporation and
Subsidiaries (10(a)72 to Form 10-K for the year ended December 31,
1992 in 1-3517).
+(c) 84-- Stock Plan for Outside Directors of Entergy Corporation and
Subsidiaries, as amended (10(a)74 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(c) 85-- Agreement between Entergy Corporation and Jerry D. Jackson
(10(a)-67 to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(c) 86-- Summary Description of Retired Outside Director Benefit
Plan. (10(c) 90 to Form 10-K for the year ended December 31, 1992
in 1-10764).
+(c) 87-- Amendment to Defined Contribution Restoration Plan of
Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K for the
year ended December 31, 1993 in 1-11299).
+(c) 88-- System Executive Retirement Plan (10(a) 82 to Form 10-K for
the year ended December 31, 1993 in 1-11299).
(c) 89-- Loan Agreement dated June 15, 1993, between Entergy Arkansas
and Independence Country, Arkansas (B-1 (a) to Rule 24 Certificate
dated July 9, 1993 in 70-8171).
(c) 90-- Installment Sale Agreement dated January 1, 1991, between
Entergy Arkansas and Pope Country, Arkansas (B-1 (b) to Rule 24
Certificate dated January 24, 1991 in 70-7802).
(c) 91-- Installment Sale Agreement dated November 1, 1990, between
Entergy Arkansas and Pope Country, Arkansas (B-1 (a) to Rule 24
Certificate dated November 30, 1990 in 70-7802).
(c) 92-- Loan Agreement dated June 15, 1994, between Entergy
Arkansas and Jefferson County, Arkansas (B-1(a) to Rule 24
Certificate dated June 30, 1994 in 70-8405).
(c) 93-- Loan Agreement dated June 15, 1994, between Entergy
Arkansas and Pope County, Arkansas (B-1(b) to Rule 24 Certificate
in 70-8405).
(c) 94-- Loan Agreement dated November 15, 1995, between Entergy
Arkansas and Pope County, Arkansas (10(c) 96 to Form 10-K for the
year ended December 31, 1995 in 1-10764).
(c) 95-- Agreement as to Expenses and Liabilities between
Entergy Arkansas and Entergy Arkansas Capital I, dated as of August
14, 1996 (4(j) to Form 10-Q for the quarter ended September 30,
1996 in 1-10764).
(c) 96-- Loan Agreement dated December 1, 1997, between Entergy
Arkansas and Jefferson County, Arkansas (10(c)100 to Form 10-K for
the year ended December 31, 1997 in 1-10764).
+(c) 97-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
Entergy Gulf States
(d) 1 -- Guaranty Agreement, dated July 1, 1976, between Entergy Gulf
States and American Bank and Trust Company (C and D to Form 8-K,
dated August 6, 1976 in 1-2703).
(d) 2 -- Lease of Railroad Equipment, dated as of December 1, 1981,
between The Connecticut Bank and Trust Company as Lessor and
Entergy Gulf States as Lessee and First Supplement, dated as of
December 31, 1981, relating to 605 One Hundred-Ton Unit Train Steel
Coal Porter Cars (4-12 to Form 10-K for the year ended December 31,
1981 in 1-2703).
(d) 3 -- Guaranty Agreement, dated August 1, 1992, between Entergy
Gulf States and Hibernia National Bank, relating to Pollution
Control Revenue Refunding Bonds of the Industrial Development Board
of the Parish of Calcasieu, Inc. (Louisiana) (10-1 to Form 10-K for
the year ended December 31, 1992 in 1-2703).
(d) 4 -- Guaranty Agreement, dated January 1, 1993, between Entergy
Gulf States and Hancock Bank of Louisiana, relating to Pollution
Control Revenue Refunding Bonds of the Parish of Pointe Coupee
(Louisiana) (10-2 to Form 10-K for the year ended December 31, 1992
in 1-2703).
(d) 5 -- Deposit Agreement, dated as of December 1, 1983 between
Entergy Gulf States, Morgan Guaranty Trust Co. as Depositary and
the Holders of Depository Receipts, relating to the Issue of
900,000 Depositary Preferred Shares, each representing 1/2 share of
Adjustable Rate Cumulative Preferred Stock, Series E-$100 Par Value
(4-17 to Form 10-K for the year ended December 31, 1983 in 1-2703).
(d) 6 -- Agreement effective February 1, 1964, between Sabine River
Authority, State of Louisiana, and Sabine River Authority of Texas,
and Entergy Gulf States, Central Louisiana Electric Company, Inc.,
and Louisiana Power & Light Company, as supplemented (B to Form 8-
K, dated May 6, 1964, A to Form 8-K, dated October 5, 1967, A to
Form 8-K, dated May 5, 1969, and A to Form 8-K, dated December 1,
1969, in 1-2708).
(d) 7 -- Joint Ownership Participation and Operating Agreement
regarding River Bend Unit 1 Nuclear Plant, dated August 20, 1979,
between Entergy Gulf States, Cajun, and SRG&T; Power
Interconnection Agreement with Cajun, dated June 26, 1978, and
approved by the REA on August 16, 1979, between Entergy Gulf States
and Cajun; and Letter Agreement regarding CEPCO buybacks, dated
August 28, 1979, between Entergy Gulf States and Cajun (2, 3, and
4, respectively, to Form 8-K, dated September 7, 1979, in 1-2703).
(d) 8 -- Ground Lease, dated August 15, 1980, between Statmont
Associates Limited Partnership (Statmont) and Entergy Gulf States,
as amended (3 to Form 8-K, dated August 19, 1980, and A-3-b to Form
10-Q for the quarter ended September 30, 1983 in 1-2703).
(d) 9 -- Lease and Sublease Agreement, dated August 15, 1980, between
Statmont and Entergy Gulf States, as amended (4 to Form 8-K, dated
August 19, 1980, and A-3-c to Form 10-Q for the quarter ended
September 30, 1983 in 1-2703).
(d) 10-- Lease Agreement, dated September 18, 1980, between BLC
Corporation and Entergy Gulf States (1 to Form 8-K, dated October
6, 1980 in 1-2703).
(d) 11-- Joint Ownership Participation and Operating Agreement for
Big Cajun, between Entergy Gulf States, Cajun Electric Power
Cooperative, Inc., and Sam Rayburn G&T, Inc, dated November 14,
1980 (6 to Form 8-K, dated January 29, 1981 in 1-2703); Amendment
No. 1, dated December 12, 1980 (7 to Form 8-K, dated January 29,
1981 in 1-2703); Amendment No. 2, dated December 29, 1980 (8 to
Form 8-K, dated January 29, 1981 in 1-2703).
(d) 12-- Agreement of Joint Ownership Participation between SRMPA,
SRG&T and Entergy Gulf States, dated June 6, 1980, for Nelson
Station, Coal Unit #6, as amended (8 to Form 8-K, dated June 11,
1980, A-2-b to Form 10-Q For the quarter ended June 30, 1982; and
10-1 to Form 8-K, dated February 19, 1988 in 1-2703).
(d) 13-- Agreements between Southern Company and Entergy Gulf States,
dated February 25, 1982, which cover the construction of a 140-mile
transmission line to connect the two systems, purchase of power and
use of transmission facilities (10-31 to Form 10-K, for the year
ended December 31, 1981 in 1-2703).
+(d) 14-- Executive Income Security Plan, effective October 1, 1980,
as amended, continued and completely restated effective as of March
1, 1991 (10-2 to Form 10-K for the year ended December 31, 1991 in
1-2703).
(d) 15-- Transmission Facilities Agreement between Entergy Gulf
States and Mississippi Power Company, dated February 28, 1982, and
Amendment, dated May 12, 1982 (A-2-c to Form 10-Q for the quarter
ended March 31, 1982 in 1-2703) and Amendment, dated December 6,
1983 (10-43 to Form 10-K, for the year ended December 31, 1983 in 1-
2703).
(d) 16-- Lease Agreement dated as of June 29, 1983, between Entergy
Gulf States and City National Bank of Baton Rouge, as Owner
Trustee, in connection with the leasing of a Simulator and Training
Center for River Bend Unit 1 (A-2-a to Form 10-Q for the quarter
ended June 30, 1983 in 1-2703) and Amendment, dated December 14,
1984 (10-55 to Form 10-K, for the year ended December 31, 1984 in 1-
2703).
(d) 17-- Participation Agreement, dated as of June 29, 1983, among
Entergy Gulf States, City National Bank of Baton Rouge, PruFunding,
Inc. Bank of the Southwest National Association, Houston and
Bankers Life Company, in connection with the leasing of a Simulator
and Training Center of River Bend Unit 1 (A-2-b to Form 10-Q for
the quarter ended June 30, 1983 in 1-2703).
(d) 18-- Tax Indemnity Agreement, dated as of June 29, 1983, between
Entergy Gulf States and PruFunding, Inc., in connection with the
leasing of a Simulator and Training Center for River Bend Unit I (A-
2-c to Form 10-Q for the quarter ended June 30, 1993 in 1-2703).
(d) 19-- Agreement to Lease, dated as of August 28, 1985, among
Entergy Gulf States, City National Bank of Baton Rouge, as Owner
Trustee, and Prudential Interfunding Corp., as Trustor, in
connection with the leasing of improvement to a Simulator and
Training Facility for River Bend Unit I (10-69 to Form 10-K, for
the year ended December 31, 1985 in 1-2703).
(d) 20-- First Amended Power Sales Agreement, dated December 1, 1985
between Sabine River Authority, State of Louisiana, and Sabine
River Authority, State of Texas, and Entergy Gulf States, Central
Louisiana Electric Co., Inc., and Louisiana Power and Light Company
(10-72 to Form 10-K for the year ended December 31, 1985 in 1-
2703).
+(d) 21-- Deferred Compensation Plan for Directors of Entergy Gulf
States and Varibus Corporation, as amended January 8, 1987, and
effective January 1, 1987 (10-77 to Form 10-K for the year ended
December 31, 1986 in 1-2703). Amendment dated December 4, 1991 (10-
3 to Amendment No. 8 in Registration No. 2-76551).
+(d) 22-- Trust Agreement for Deferred Payments to be made by Entergy
Gulf States pursuant to the Executive Income Security Plan, by and
between Entergy Gulf States and Bankers Trust Company, effective
November 1, 1986 (10-78 to Form 10-K for the year ended December
31, 1986 in 1-2703).
+(d) 23-- Trust Agreement for Deferred Installments under Entergy Gulf
States' Management Incentive Compensation Plan and Administrative
Guidelines by and between Entergy Gulf States and Bankers Trust
Company, effective June 1, 1986 (10-79 to Form 10-K for the year
ended December 31, 1986 in 1-2703).
+(d) 24-- Nonqualified Deferred Compensation Plan for Officers,
Nonemployee Directors and Designated Key Employees, effective
December 1, 1985, as amended, continued and completely restated
effective as of March 1, 1991 (10-3 to Amendment No. 8 in
Registration No. 2-76551).
+(d) 25-- Trust Agreement for Entergy Gulf States' Nonqualified
Directors and Designated Key Employees by and between Entergy Gulf
States and First City Bank, Texas-Beaumont, N.A. (now Texas
Commerce Bank), effective July 1, 1991 (10-4 to Form 10-K for the
year ended December 31, 1992 in 1-2703).
(d) 26-- Lease Agreement, dated as of June 29, 1987, among GSG&T,
Inc., and Entergy Gulf States related to the leaseback of the Lewis
Creek generating station (10-83 to Form 10-K for the year ended
December 31, 1988 in 1-2703).
(d) 27-- Nuclear Fuel Lease Agreement between Entergy Gulf States and
River Bend Fuel Services, Inc. to lease the fuel for River Bend
Unit 1, dated February 7, 1989 (10-64 to Form 10-K for the year
ended December 31, 1988 in 1-2703).
(d) 28-- Trust and Investment Management Agreement between Entergy
Gulf States and Morgan Guaranty and Trust Company of New York (the
"Decommissioning Trust Agreement) with respect to decommissioning
funds authorized to be collected by Entergy Gulf States, dated
March 15, 1989 (10-66 to Form 10-K for the year ended December 31,
1988 in 1-2703).
(d) 29-- Amendment No. 2 dated November 1, 1995 between Entergy Gulf
States and Mellon Bank to Decommissioning Trust Agreement (10(d) 31
to Form 10-K for the year ended December 31, 1995).
(d) 30-- Credit Agreement, dated as of December 29, 1993, among River
Bend Fuel Services, Inc. and Certain Commercial Lending
Institutions and CIBC Inc. as Agent for the Lenders (10(d) 34 to
Form 10-K for year ended December 31, 1994).
(d) 31-- Amendment No. 1 dated as of January 31, to Credit Agreement,
dated as of December 31, 1993, among River Bend Fuel Services, Inc.
and certain commercial lending institutions and CIBC Inc. as agent
for Lenders (10(d) 33 to Form 10-K for the year ended December 31,
1995).
(d) 32-- Partnership Agreement by and among Conoco Inc., and Entergy
Gulf States, CITGO Petroleum Corporation and Vista Chemical
Company, dated April 28, 1988 (10-67 to Form 10-K for the year
ended December 31, 1988 in 1-2703).
+(d) 33-- Gulf States Utilities Company Executive Continuity Plan,
dated January 18, 1991 (10-6 to Form 10-K for the year ended
December 31, 1990 in 1-2703).
+(d) 34-- Trust Agreement for Entergy Gulf States' Executive
Continuity Plan, by and between Entergy Gulf States and First City
Bank, Texas-Beaumont, N.A. (now Texas Commerce Bank), effective May
20, 1991 (10-5 to Form 10-K for the year ended December 31, 1992 in
1-2703).
+(d) 35-- Gulf States Utilities Board of Directors' Retirement Plan,
dated February 15, 1991 (10-8 to Form 10-K for the year ended
December 31, 1990 in 1-2703).
+(d) 36-- Gulf States Utilities Company Employees' Trustee Retirement
Plan effective July 1, 1955 as amended, continued and completely
restated effective January 1, 1989; and Amendment No.1 effective
January 1, 1993 (10-6 to Form 10-K for the year ended December 31,
1992 in 1-2703).
(d) 37-- Agreement and Plan of Reorganization, dated June 5, 1992,
between Entergy Gulf States and Entergy Corporation (2 to Form 8-K,
dated June 8, 1992 in 1-2703).
+(d) 38-- Gulf States Utilities Company Employee Stock Ownership Plan,
as amended, continued, and completely restated effective January 1,
1984, and January 1, 1985 (A to Form 11-K, dated December 31, 1985
in 1-2703).
+(d) 39-- Trust Agreement under the Gulf States Utilities Company
Employee Stock Ownership Plan, dated December 30, 1976, between
Entergy Gulf States and the Louisiana National Bank, as Trustee (2-
A to Registration No. 2-62395).
+(d) 40-- Letter Agreement dated September 7, 1977 between Entergy
Gulf States and the Trustee, delegating certain of the Trustee's
functions to the ESOP Committee (2-B to Registration Statement No.
2-62395).
+(d) 41-- Gulf States Utilities Company Employees Thrift Plan as
amended, continued and completely restated effective as of January
1, 1992 (28-1 to Amendment No. 8 to Registration No. 2-76551).
+(d) 42-- Restatement of Trust Agreement under the Gulf States
Utilities Company Employees Thrift Plan, reflecting changes made
through January 1, 1989, between Entergy Gulf States and First City
Bank, Texas-Beaumont, N.A., (now Texas Commerce Bank ), as Trustee
(2-A to Form 8-K dated October 20, 1989 in 1-2703).
(d) 43-- Operating Agreement between Entergy Operations and Entergy
Gulf States, dated as of December 31, 1993 (B-2(f) to Rule 24
Certificate in 70-8059).
(d) 44-- Guarantee Agreement between Entergy Corporation and Entergy
Gulf States, dated as of December 31, 1993 (B-5(a) to Rule 24
Certificate in 70-8059).
(d) 45-- Service Agreement with Entergy Services, dated as of
December 31, 1993 (B-6(c) to Rule 24 Certificate in 70-8059).
+(d) 46-- Amendment to Employment Agreement between J. L. Donnelly and
Entergy Gulf States, dated December 22, 1993 (10(d) 57 to Form 10-K
for the year ended December 31, 1993 in 1-2703).
(d) 47-- Assignment, Assumption and Amendment Agreement to Letter of
Credit and Reimbursement Agreement between Entergy Gulf States,
Canadian Imperial Bank of Commerce and Westpac Banking Corporation
(10(d) 58 to Form 10-K for the year ended December 31, 1993 in 1-
2703).
(d) 48-- Third Amendment, dated January 1, 1994, to Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3(a) to Form U5S for the year ended
December 31, 1993).
(d) 49-- Agreement as to Expenses and Liabilities between
Entergy Gulf States and Entergy Gulf States Capital I, dated as of
January 28, 1997 (10(d)52 to Form 10-K for the year ended
December 31, 1996 in 1-2703).
(d) 50-- Refunding Agreement dated as of May 1, 1998 between Entergy
Gulf States and Parish of Iberville, State of Louisiana (B-3(a) to
Rule 24 Certificate dated May 29, 1998 in 70-8721).
(d) 51-- Refunding Agreement dated as of May 1, 1998 between Entergy
Gulf States and Industrial Development Board of the Parish of
Calcasieu, Inc. (B-3(b) to Rule 24 Certificate dated January 29,
1999 in 70-8721).
(d) 52-- Refunding Agreement (Series 1999-A) dated as of September 1,
1999 between Entergy Gulf States and Parish of West Feliciana,
State of Louisiana (B-3(c) to Rule 24 Certificate dated October 8,
1999 in 70-8721).
(d) 53-- Refunding Agreement (Series 1999-B) dated as of September 1,
1999 between Entergy Gulf States and Parish of West Feliciana,
State of Louisiana (B-3(d) to Rule 24 Certificate dated October 8,
1999 in 70-8721).
+(d) 56-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
+(d) 57-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
Entergy Louisiana
(e) 1 -- Agreement, dated April 23, 1982, among Entergy Louisiana and
certain other System companies, relating to System Planning and
Development and Intra-System Transactions (10(a) 1 to Form 10-K for
the year ended December 31, 1982, in 1-3517).
(e) 2 -- Middle South Utilities System Agency Agreement, dated
December 11, 1970 (5(a)-2 in 2-41080).
(e) 3 -- Amendment, dated as of February 10, 1971, to Middle South
Utilities System Agency Agreement, dated December 11, 1970 (5(a)-4
in 2-41080).
(e) 4 -- Amendment, dated May 12, 1988, to Middle South Utilities
System Agency Agreement, dated December 11, 1970 (5(a) 4 in 2-
41080).
(e) 5 -- Middle South Utilities System Agency Coordination Agreement,
dated December 11, 1970 (5(a)-3 in 2-41080).
(e) 6 -- Service Agreement with Entergy Services, dated as of April
1, 1963 (5(a)-5 in 2-42523).
(e) 7 -- Amendment, dated as of January 1, 1972, to Service Agreement
with Entergy Services (4(a)-6 in 2-45916).
(e) 8 -- Amendment, dated as of April 27, 1984, to Service Agreement
with Entergy Services (10(a) 7 to Form 10-K for the year ended
December 31, 1984, in 1-3517).
(e) 9 -- Amendment, dated as of August 1, 1988, to Service Agreement
with Entergy Services (10(d)-8 to Form 10-K for the year ended
December 31, 1988, in 1-8474).
(e) 10-- Amendment, dated January 1, 1991, to Service Agreement with
Entergy Services (10(d)-9 to Form 10-K for the year ended
December 31, 1990, in 1-8474).
(e) 11-- Amendment, dated January 1, 1992, to Service Agreement with
Entergy Services (10(a)-11 to Form 10-K for the year ended December
31, 1994 in 1-3517).
(e) 12 through
(e) 25-- See 10(a)-12 through 10(a)-25 above.
(e) 26-- Fuel Lease, dated as of January 31, 1989, between River Fuel
Company #2, Inc., and Entergy Louisiana (B-1(b) to Rule 24
Certificate in 70-7580).
(e) 27-- Reallocation Agreement, dated as of July 28, 1981, among
System Energy and certain other System companies (B-1(a) in
70-6624).
(e) 28-- Compromise and Settlement Agreement, dated June 4, 1982,
between Texaco, Inc. and Entergy Louisiana (28(a) to Form 8-K,
dated June 4, 1982, in 1-8474).
+(e) 29-- Post-Retirement Plan (10(c)23 to Form 10-K for the year
ended December 31, 1983, in 1-8474).
(e) 30-- Unit Power Sales Agreement, dated as of June 10, 1982,
between System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi and Entergy New Orleans (10(a) 39 to Form 10-K
for the year ended December 31, 1982, in 1-3517).
(e) 31-- First Amendment to the Unit Power Sales Agreement, dated as
of June 28, 1984, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New Orleans (19
to Form 10-Q for the quarter ended September 30, 1984, in 1-3517).
(e) 32-- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
(e) 33-- Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Tax Allocation Agreement, dated April 28, 1988 (D-1 to
Form U5S for the year ended December 31, 1987).
(e) 34-- First Amendment, dated January 1, 1990, to the Middle South
Utilities, Inc. and Subsidiary Companies Intercompany Income Tax
Allocation Agreement, dated January 1, 1990 (D-2 to Form U5S for
the year ended December 31, 1989).
(e) 35-- Second Amendment dated January 1, 1992, to the Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3 to Form U5S for the year ended December
31, 1992).
(e) 36-- Third Amendment dated January 1, 1994 to Entergy Corporation
and Subsidiary Companies Intercompany Income Tax Allocation
Agreement (D-3(a) to Form U5S for the year ended December 31,
1993).
(e) 37-- Contract for Disposal of Spent Nuclear Fuel and/or
High-Level Radioactive Waste, dated February 2, 1984, among DOE,
System Fuels and Entergy Louisiana (10(d)33 to Form 10-K for the
year ended December 31, 1984, in 1-8474).
(e) 38-- Operating Agreement between Entergy Operations and Entergy
Louisiana, dated as of June 6, 1990 (B-2(c) to Rule 24 Certificate,
dated June 15, 1990, in 70-7679).
(e) 39-- Guarantee Agreement between Entergy Corporation and Entergy
Louisiana, dated as of September 20, 1990 (B-2(a), to Rule 24
Certificate, dated September 27, 1990, in 70-7757).
+(e) 40-- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a) 52 to Form 10-K for the year
ended December 31, 1989, in 1-3517).
+(e) 41-- Entergy Corporation Annual Incentive Plan (10(a) 54 to Form
10-K for the year ended December 31, 1989, in 1-3517).
+(e) 42-- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated May 24, 1991, in
70-7831).
+(e) 43-- Amendment No. 1 to the Equity Ownership Plan of Entergy
Corporation and Subsidiaries (10(a) 71 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(e) 44-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
+(e) 45-- Supplemental Retirement Plan (10(a) 69 to Form 10-K for the
year ended December 31, 1992 in 1-3517).
+(e) 46-- Defined Contribution Restoration Plan of Entergy Corporation
and Subsidiaries (10(a) 53 to Form 10-K for the year ended
December 31, 1989 in 1-3517).
+(e) 47-- Executive Disability Plan of Entergy Corporation and
Subsidiaries (10(a) 72 to Form 10-K for the year ended December 31,
1992 in 1-3517).
+(e) 48-- Stock Plan for Outside Directors of Entergy Corporation and
Subsidiaries (10(a) 74 to Form 10-K for the year ended December 31,
1992 in 1-3517).
+(e) 49-- Agreement between Entergy Corporation and Jerry D. Jackson
(10(a) 67 to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(e) 50-- Summary Description of Retired Outside Director Benefit Plan
(10(c)90 to Form 10-K for the year ended December 31, 1992 in
1-10764).
+(e) 51-- Amendment to Defined Contribution Restoration Plan of
Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K for the
year ended December 31, 1993 in 1-11299).
+(e) 52-- System Executive Retirement Plan (10(a) 82 to Form 10-K for
the year ended December 31, 1993 in 1-11299).
(e) 53-- Installment Sale Agreement, dated July 20, 1994, between
Entergy Louisiana and St. Charles Parish, Louisiana (B-6(e) to Rule
24 Certificate dated August 1, 1994 in 70-7822).
(e) 54-- Installment Sale Agreement, dated November 1, 1995, between
Entergy Louisiana and St. Charles Parish, Louisiana (B-6(a) to Rule
24 Certificate dated December 19, 1995 in 70-8487).
(e) 55-- Refunding Agreement (Series 1999-A), dated as of June 1,
1999, between Entergy Louisiana and Parish of St. Charles, State of
Louisiana (B-6(a) to Rule 24 Certificate dated July 6, 1999 in 70-
9141).
(e) 56-- Refunding Agreement (Series 1999-B), dated as of June 1,
1999, between Entergy Louisiana and Parish of St. Charles, State of
Louisiana (B-6(b) to Rule 24 Certificate dated July 6, 1999 in 70-
9141).
(e) 57-- Refunding Agreement (Series 1999-C), dated as of October 1,
1999, between Entergy Louisiana and Parish of St. Charles, State of
Louisiana (B-11(a) to Rule 24 Certificate dated October 15, 1999 in
70-9141).
(e) 58-- Agreement as to Expenses and Liabilities between Entergy
Louisiana, Inc. and Entergy Louisiana Capital I dated July 16, 1996
(4(d) to Form 10-Q for the quarter ended June 30, 1996 in 1-8474).
+(e) 59-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
Entergy Mississippi
(f) 1 -- Agreement dated April 23, 1982, among Entergy Mississippi
and certain other System companies, relating to System Planning and
Development and Intra-System Transactions (10(a) 1 to Form 10-K for
the year ended December 31, 1982, in 1-3517).
(f) 2 -- Middle South Utilities System Agency Agreement, dated
December 11, 1970 (5(a)-2 in 2-41080).
(f) 3 -- Amendment, dated February 10, 1971, to Middle South
Utilities System Agency Agreement, dated December 11, 1970 (5(a) 4
in 2-41080).
(f) 4 -- Amendment, dated May 12, 1988, to Middle South Utilities
System Agency Agreement, dated December 11, 1970 (5(a) 4 in 2-
41080).
(f) 5 -- Middle South Utilities System Agency Coordination Agreement,
dated December 11, 1970 (5(a)-3 in 2-41080).
(f) 6 -- Service Agreement with Entergy Services, dated as of April
1, 1963 (D in 37-63).
(f) 7 -- Amendment, dated January 1, 1972, to Service Agreement with
Entergy Services (A to Notice, dated October 14, 1971, in 37-63).
(f) 8 -- Amendment, dated April 27, 1984, to Service Agreement with
Entergy Services (10(a) 7 to Form 10-K for the year ended December
31, 1984, in 1-3517).
(f) 9 -- Amendment, dated as of August 1, 1988, to Service Agreement
with Entergy Services (10(e) 8 to Form 10-K for the year ended
December 31, 1988, in 0-320).
(f) 10-- Amendment, dated January 1, 1991, to Service Agreement with
Entergy Services (10(e) 9 to Form 10-K for the year ended
December 31, 1990, in 0-320).
(f) 11-- Amendment, dated January 1, 1992, to Service Agreement with
Entergy Services (10(a)-11 to Form 10-K for the year ended December
31, 1994 in 1-3517).
(f) 12 though
(f) 25-- See 10(a)-12 - 10(a)-25above.
(f) 26-- Installment Sale Agreement, dated as of June 1, 1974,
between Entergy Mississippi and Washington County, Mississippi (B-
2(a) to Rule 24 Certificate, dated August 1, 1974, in 70-5504).
(f) 27-- Amended and Restated Installment Sale Agreement, dated as of
April 1, 1994, between Entergy Mississippi and Warren County,
Mississippi (B-6(a) to Rule 24 Certificate dated May 4, 1994, in 70-
7914).
(f) 28-- Amended and Restated Installment Sale Agreement, dated as of
April 1, 1994, between Entergy Mississippi and Washington County,
Mississippi, (B-6(b) to Rule 24 Certificate dated May 4, 1994, in
70-7914).
(f) 29-- Refunding Agreement, dated as of May 1, 1999, between
Entergy Mississippi and Independence County, Arkansas (B-6(a) to
Rule 24 Certificate dated June 8, 1999 in 70-8719).
(f) 30-- Substitute Power Agreement, dated as of May 1, 1980, among
Entergy Mississippi, System Energy and SMEPA (B-3(a) in 70-6337).
(f) 31-- Amendment, dated December 4, 1984, to the Independence Steam
Electric Station Operating Agreement (10(c) 51 to Form 10-K for the
year ended December 31, 1984, in 0-375).
(f) 32-- Amendment, dated December 4, 1984, to the Independence Steam
Electric Station Ownership Agreement (10(c) 54 to Form 10-K for the
year ended December 31, 1984, in 0-375).
(f) 33-- Owners Agreement, dated November 28, 1984, among Entergy
Arkansas, Entergy Mississippi and other co-owners of the
Independence Station (10(c) 55 to Form 10-K for the year ended
December 31, 1984, in 0-375).
(f) 34-- Consent, Agreement and Assumption, dated December 4, 1984,
among Entergy Arkansas, Entergy Mississippi, other co-owners of the
Independence Station and United States Trust Company of New York,
as Trustee (10(c) 56 to Form 10-K for the year ended December 31,
1984, in 0-375).
(f) 35-- Reallocation Agreement, dated as of July 28, 1981, among
System Energy and certain other System companies (B-1(a) in
70-6624).
+(f) 36-- Post-Retirement Plan (10(d) 24 to Form 10-K for the year
ended December 31, 1983, in 0-320).
(f) 37-- Unit Power Sales Agreement, dated as of June 10, 1982,
between System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi, and Entergy New Orleans (10(a) 39 to Form 10-K
for the year ended December 31, 1982, in 1-3517).
(f) 38-- First Amendment to the Unit Power Sales Agreement, dated as
of June 28, 1984, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans (19
to Form 10-Q for the quarter ended September 30, 1984, in 1-3517).
(f) 39-- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
(f) 40-- Sales Agreement, dated as of June 21, 1974, between System
Energy and Entergy Mississippi (D to Rule 24 Certificate, dated
June 26, 1974, in 70-5399).
(f) 41-- Service Agreement, dated as of June 21, 1974, between System
Energy and Entergy Mississippi (E to Rule 24 Certificate, dated
June 26, 1974, in 70-5399).
(f) 42-- Partial Termination Agreement, dated as of December 1, 1986,
between System Energy and Entergy Mississippi (A-2 to Rule 24
Certificate dated January 8, 1987, in 70-5399).
(f) 43-- Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement, dated April 28, 1988
(D-1 to Form U5S for the year ended December 31, 1987).
(f) 44-- First Amendment dated January 1, 1990 to the Middle South
Utilities Inc. and Subsidiary Companies Intercompany Tax Allocation
Agreement (D-2 to Form U5S for the year ended December 31, 1989).
(f) 45-- Second Amendment dated January 1, 1992, to the Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3 to Form U5S for the year ended December
31, 1992).
(f) 46-- Third Amendment dated January 1, 1994 to Entergy Corporation
and Subsidiary Companies Intercompany Income Tax Allocation
Agreement (D-3(a) to Form U5S for the year ended December 31,
1993).
+(f) 47-- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a) 52 to Form 10-K for the year
ended December 31, 1989, in 1-3517).
+(f) 48-- Entergy Corporation Annual Incentive Plan (10(a) 54 to Form
10-K for the year ended December 31, 1989, in 1-3517).
+(f) 49-- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated May 24, 1991, in
70-7831).
+(f) 50-- Amendment No. 1 to the Equity Ownership Plan of Entergy
Corporation and Subsidiaries (10(a)71 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(f) 51-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
+(f) 52-- Supplemental Retirement Plan (10(a)69 to Form 10-K for the
year ended December 31, 1992 in 1-3517).
+(f) 53-- Defined Contribution Restoration Plan of Entergy Corporation
and Subsidiaries (10(a)53 to Form 10-K for the year ended
December 31, 1989 in 1-3517).
+(f) 54-- Executive Disability Plan of Entergy Corporation and
Subsidiaries (10(a)72 to Form 10-K for the year ended December 31,
1992 in 1-3517).
+(f) 55-- Stock Plan for Outside Directors of Entergy Corporation and
Subsidiaries, as amended (10(a)74 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(f) 56-- Agreement between Entergy Corporation and Jerry D. Jackson
(10(a)-67 to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(f) 57-- Summary Description of Retired Outside Director Benefit Plan
(10(c)-90 to Form 10-K for the year ended December 31, 1992 in
1-10764).
+(f) 58-- Amendment to Defined Contribution Restoration Plan of
Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K for the
year ended December 31, 1993 in 1-11299).
+(f) 59-- System Executive Retirement Plan (10(a) 82 to Form 10-K for
the year ended December 31, 1993 in 1-11299).
+(f) 60-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
Entergy New Orleans
(g) 1 -- Agreement, dated April 23, 1982, among Entergy New Orleans
and certain other System companies, relating to System Planning and
Development and Intra-System Transactions (10(a)-1 to Form 10-K for
the year ended December 31, 1982, in 1-3517).
(g) 2 -- Middle South Utilities System Agency Agreement, dated
December 11, 1970 (5(a)-2 in 2-41080).
(g) 3 -- Amendment dated as of February 10, 1971, to Middle South
Utilities System Agency Agreement, dated December 11, 1970 (5(a)-4
in 2-41080).
(g) 4 -- Amendment, dated May 12, 1988, to Middle South Utilities
System Agency Agreement, dated December 11, 1970 (5(a) 4 in 2-
41080).
(g) 5 -- Middle South Utilities System Agency Coordination Agreement,
dated December 11, 1970 (5(a)-3 in 2-41080).
(g) 6 -- Service Agreement with Entergy Services dated as of April 1,
1963 (5(a)-5 in 2-42523).
(g) 7 -- Amendment, dated as of January 1, 1972, to Service Agreement
with Entergy Services (4(a)-6 in 2-45916).
(g) 8 -- Amendment, dated as of April 27, 1984, to Service Agreement
with Entergy Services (10(a)7 to Form 10-K for the year ended
December 31, 1984, in 1-3517).
(g) 9 -- Amendment, dated as of August 1, 1988, to Service Agreement
with Entergy Services (10(f)-8 to Form 10-K for the year ended
December 31, 1988, in 0-5807).
(g) 10-- Amendment, dated January 1, 1991, to Service Agreement with
Entergy Services (10(f)-9 to Form 10-K for the year ended
December 31, 1990, in 0-5807).
(g) 11-- Amendment, dated January 1, 1992, to Service Agreement with
Entergy Services (10(a)-11 to Form 10-K for year ended December 31,
1994 in 1-3517).
(g) 12 through
(g) 25-- See 10(a)-12 - 10(a)-25 above.
(g) 26-- Reallocation Agreement, dated as of July 28, 1981, among
System Energy and certain other System companies (B-1(a) in
70-6624).
+(g) 27-- Post-Retirement Plan (10(e) 22 to Form 10-K for the year
ended December 31, 1983, in 1-1319).
(g) 28-- Unit Power Sales Agreement, dated as of June 10, 1982,
between System Energy and Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi and Entergy New Orleans (10(a) 39 to Form 10-K
for the year ended December 31, 1982, in 1-3517).
(g) 29-- First Amendment to the Unit Power Sales Agreement, dated as
of June 28, 1984, between System Energy and Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy New Orleans (19
to Form 10-Q for the quarter ended September 30, 1984, in 1-3517).
(g) 30-- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
(g) 31-- Transfer Agreement, dated as of June 28, 1983, among the
City of New Orleans, Entergy New Orleans and Regional Transit
Authority (2(a) to Form 8-K, dated June 24, 1983, in 1-1319).
(g) 32-- Middle South Utilities, Inc. and Subsidiary Companies
Intercompany Income Tax Allocation Agreement, dated April 28, 1988
(D-1 to Form U5S for the year ended December 31, 1987).
(g) 33-- First Amendment, dated January 1, 1990, to the Middle South
Utilities, Inc. and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-2 to Form U5S for the year ended
December 31, 1989).
(g) 34-- Second Amendment dated January 1, 1992, to the Entergy
Corporation and Subsidiary Companies Intercompany Income Tax
Allocation Agreement (D-3 to Form U5S for the year ended December
31, 1992).
(g) 35-- Third Amendment dated January 1, 1994 to Entergy Corporation
and Subsidiary Companies Intercompany Income Tax Allocation
Agreement (D-3(a) to Form U5S for the year ended December 31,
1993).
+(g) 36-- Executive Financial Counseling Program of Entergy
Corporation and Subsidiaries (10(a)52 to Form 10-K for the year
ended December 31, 1989, in 1-3517).
+(g) 37-- Entergy Corporation Annual Incentive Plan (10(a)54 to Form
10-K for the year ended December 31, 1989, in 1-3517).
+(g) 38-- Equity Ownership Plan of Entergy Corporation and
Subsidiaries (A-4(a) to Rule 24 Certificate, dated May 24, 1991, in
70-7831).
+(g) 39-- Amendment No. 1 to the Equity Ownership Plan of Entergy
Corporation and Subsidiaries (10(a)71 to Form 10-K for the year
ended December 31, 1992 in 1-3517).
+(g) 40-- 1998 Equity Ownership Plan of Entergy Corporation and
Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
+(g) 41-- Supplemental Retirement Plan (10(a)69 to Form 10-K for the
year ended December 31, 1992 in 1-3517).
+(g) 42-- Defined Contribution Restoration Plan of Entergy Corporation
and Subsidiaries (10(a)53 to Form 10-K for the year ended
December 31, 1989 in 1-3517).
+(g) 43-- Executive Disability Plan of Entergy Corporation and
Subsidiaries (10(a)72 to Form 10-K for the year ended December 31,
1992 in 1-3517).
+(g) 44-- Stock Plan for Outside Directors of Entergy Corporation and
Subsidiaries, as amended (10(a)74 to Form 10-K for the year ended
December 31, 1992 in 1-3517).
+(g) 45-- Agreement between Entergy Corporation and Jerry D. Jackson
(10(a)-67 to Form 10-K for the year ended December 31, 1992 in
1-3517).
+(g) 46-- Summary Description of Retired Outside Director Benefit Plan
(10(c)-90 to Form 10-K for the year ended December 31, 1992 in
1-10764).
+(g) 47-- Amendment to Defined Contribution Restoration Plan of
Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K for the
year ended December 31, 1993 in 1-11299).
+(g) 48-- System Executive Retirement Plan (10(a) 82 to Form 10-K for
the year ended December 31, 1993 in 1-11299).
+(g) 49-- Letter to John Wilder offering Employment (10(b)62 to Form
10-K for the year ended December 31, 1998 in 1-9067).
(12) Statement Re Computation of Ratios
*(a) Entergy Arkansas's Computation of Ratios of Earnings to Fixed Charges
and of Earnings to Fixed Charges and Preferred Dividends, as defined.
*(b) Entergy Gulf States' Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Fixed Charges and Preferred Dividends, as
defined.
*(c) Entergy Louisiana's Computation of Ratios of Earnings to Fixed Charges
and of Earnings to Fixed Charges and Preferred Dividends, as defined.
*(d) Entergy Mississippi's Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Fixed Charges and Preferred Dividends, as
defined.
*(e) Entergy New Orleans' Computation of Ratios of Earnings to Fixed
Charges and of Earnings to Fixed Charges and Preferred Dividends, as
defined.
*(f) System Energy's Computation of Ratios of Earnings to Fixed Charges, as
defined.
*(21) Subsidiaries of the Registrants
(23) Consents of Experts and Counsel
*(a) The consent of PricewaterhouseCoopers LLP is contained herein at
page 198.
*(24) Powers of Attorney
(27) Financial Data Schedule
*(a) Financial Data Schedule for Entergy Corporation and Subsidiaries as
of December 31, 1999.
*(b) Financial Data Schedule for Entergy Arkansas as of December 31,
1999.
*(c) Financial Data Schedule for Entergy Gulf States as of December 31,
1999.
*(d) Financial Data Schedule for Entergy Louisiana as of December 31,
1999.
*(e) Financial Data Schedule for Entergy Mississippi as of December 31,
1999.
*(f) Financial Data Schedule for Entergy New Orleans as of December 31,
1999.
*(g) Financial Data Schedule for System Energy as of December 31, 1999.
_________________
* Filed herewith.
+ Management contracts or compensatory plans or arrangements.
Effective November 12, 1999
Exhibit 3(i)(c)1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ENTERGY ARKANSAS, INC.
These Amended and Restated Articles of Incorporation, duly
adopted pursuant to the authority and provisions of Title 4,
Chapter 27 of the Arkansas Code of 1987 Annotated, amend,
restate, integrate and supersede the existing Amended and
Restated Articles of Incorporation and all amendments thereto.
FIRST: Name. The name of the Corporation is Entergy
Arkansas, Inc.
SECOND: Adoption of Arkansas Business Corporation Act. The
provisions of Title 4, Chapter 27 of the Arkansas Code of 1987
Annotated, as may be amended or otherwise modified (the "Arkansas
Business Corporation Act"), shall apply to the Corporation and to
these Amended and Restated Articles of Incorporation.
THIRD: Purposes. The purpose of the Corporation is to
engage in any lawful act or activity for which corporations may
be organized under the Arkansas Business Corporation Act. The
primary purpose for which the Corporation is organized, which is
provided for informational purposes-only and shall not limit the
purposes provided in the Arkansas Business Corporation Act, is to
engage in the business of constructing, holding, operating, and
maintaining (i) telephone, telegraph, radio, wireless and other
systems, facilities, structures and devices for the receipt and
transmission of sounds and signals, (ii) inter-urban, city and
street railways, railroads, and bus lines, and (iii) systems,
facilities, structures and devices for the manufacture,
production, transmission, distribution, control, storage,
purchase, sale, supply and application of electricity, gas,
water, steam, ice, refrigeration, and power.
FOURTH: Powers. The Corporation shall have and exercise all
of the powers conferred upon corporations by virtue of their
existence under, and as authorized by, the Arkansas Business
Corporation Act, as may be amended or otherwise modified.
FIFTH: Authorized Shares and Rights of Shareholders.
(a) The total number of shares of capital stock which the
Corporation shall have authority to issue is 352,730,000, which
shall consist of one class of 325,000,000 shares of common stock
of the par value of $0.01 per share ("Common Stock") and three
classes of preferred stock consisting of 15,000,000 shares of
preferred stock of the par value of $0.01 per share ("Class A
Preferred Stock"), 3,730,000 shares, of preferred stock of the
par value of $100 per share ("$100 Preferred Stock"), and
9,000,000 shares of preferred stock of the par value of $25 per
share ("$25 Preferred Stock"), which three classes of preferred
stock may be collectively referred to as "Preferred Stock."
(b) The Board of Directors of the Corporation is
authorized, subject to the limitations prescribed by the Arkansas
Business Corporation Act and the provisions of this Article
FIFTH, to provide for the issuance of the shares of Preferred
Stock in series, and, by filing articles of amendment pursuant to
the Arkansas Business Corporation Act, to establish from time to
time the number of shares to be included in each such series and
to fix the designation, powers, preferences and rights of the
shares of each such series and. the qualifications, limitations
or restrictions thereof. The authority of the Board of Directors
with respect to each such series shall include determination of
only the following:
(1) The number of shares constituting that series and
the distinctive designation of that series;
(2) The dividend rate, or the method of calculation
thereof, on the shares of that series, the dates on which
dividends shall be paid in each year or the method of
determination thereof, and the date from which such dividends
shall commence to accumulate:
(3) Whether that series shall have conversion
privileges, and, if so, the terms and conditions of such
conversion, including provision for adjustment of the conversion
rate in such events as the Board of Directors shall determine;
(4) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and
at different redemption dates;
(5) Whether that series shall have a sinking fund for
the redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund; and
(6) The amount payable on the shares of that series in
the event of voluntary or, in the case of the Class A Preferred
stock, involuntary liquidation, dissolution or winding up of the
Corporation.
The Class A Preferred Stock, the $100 Preferred Stock and
the $25 Preferred Stock shall have the same rank and shall be
identical with each other, except as to matters relating to the
par values thereof, the variations between the respective series
thereof, and the voting entitlement of the respective shares
thereof in cases when the shares of two or more classes of
Preferred Stock are required to vote together as a voting group
or one or more classes of Preferred Stock are required to vote
together with the Common Stock as a voting group. The shares of
all series within a class of Preferred Stock shall have the same
rank, shall be identical with each other, and shall have the same
relative rights, except as to those characteristics described in
clauses l through 6 above.
(c) Subject to the foregoing, the distinguishing
characteristics of the Preferred Stock shall be:
(1) Each series of the Preferred Stock, pari passu
with all shares of Preferred Stock of any class or series then
outstanding, shall be entitled, but only when and as declared by
the Board of Directors out of funds legally available for the
payment of dividends, in preference to the Common Stock, to
dividends at the rate stated and expressed with respect to such
series by these Amended and Restated Articles of Incorporation or
by the articles of amendment creating such series; such dividends
to be cumulative from such date and payable on such dates in each
year as may be stated and expressed in these Amended and Restated
Articles of Incorporation or such articles of amendment to
stockholders of record as of a date not to exceed forty (40) days
and not less than ten (10) days preceding the dividend payment
dates so fixed.
(2) (A) When dividends payable on any shares of the
Preferred Stock at any time outstanding shall be in arrears in an
amount equal to or greater than the aggregate dividends
accumulated on the outstanding Preferred Stock in any period of
twelve (12) months, and thereafter until all dividends on any
such Preferred Stock in arrears shall have been paid or declared
and set apart for payment, the holders of Preferred Stock, voting
together as a voting group, to the exclusion of the holders of
Common Stock, shall be entitled to elect the smallest number of
directors necessary to constitute a majority of the full Board of
Directors (the "Preferred Directors"), and except as provided in
subparagraph (B) below, the holders of Common Stock, voting
together as a voting group, to the exclusion of the holders of
Preferred Stock, shall be entitled to elect the remaining
directors of the Corporation (the "Remaining Directors"). The
terms of office, as directors, of all persons who may be
directors of the Corporation at the time shall terminate upon the
election of the Preferred Directors, except that if the holders
of Common Stock shall not have elected the Remaining Directors
then, and only in that event, the directors of the Corporation in
office just prior to the election of the Preferred Directors
shall elect the Remaining Directors. Thereafter, while such
arrearage continues, the Remaining Directors, whether elected by
directors, as aforesaid, or whether originally or later elected
by holders of the Common Stock, shall continue in office until
their successors are elected by holders of the Common Stock and
shall qualify.
(B) Accumulations of dividends on any shares of
the Preferred Stock shall not bear interest. If and when all
dividends in arrears on the Preferred Stock shall be paid in
full, or declared and set apart for payment (such dividends to be
declared and paid out of any funds legally available therefor as
soon as reasonably practicable), the holders of the Preferred
Stock shall be divested of any special right with respect to the
election of directors, and the voting power of the holders of the
Preferred Stock and the holders of the Common Stock shall revert
to the status existing before the vesting of such special voting
right in the holders of the Preferred Stock, but always subject
to the same provisions for vesting such special rights in the
holders of the Preferred Stock in case of further like arrearage
or arrearages in the payment of dividends thereon as described in
subparagraph (A) above. When all dividends in arrears on the
Preferred Stock shall have been paid in full, or declared and set
apart for payment, the terms of office of all Preferred Directors
shall forthwith terminate, and the resulting vacancies shall be
filled by the vote of a majority of the Remaining Directors.
(C) Except as provided in Article SEVENTH hereof,
in case of any vacancy in the office of a director occurring
among the Preferred Directors the remaining Preferred Directors
by affirmative vote of a majority thereof, or the remaining
Preferred Director, if there be but one, may elect a successor or
successors to hold office for the unexpired term or terms of the
Preferred Director or Directors whose place or places shall be
vacant. Likewise, except as provided in Article SEVENTH hereof,
in case of any vacancy in the office of a director occurring
among the Remaining Directors the holders of the Common Stock, by
affirmative vote of a majority thereof, shall elect a successor
or successors to hold office for the unexpired term or terms of
the Remaining Director or Director whose place or places shall be
vacant.
(D) Whenever the right shall have accrued to the
holders of the Preferred Stock to elect directors it shall be the
duty of the President, a Vice-President or the Secretary of the
Corporation to call and cause notice to be given to the
stockholders entitled to vote at a meeting to be held at such
time as the Corporation's officers may fix, not less than forty-
five (45) nor more than ninety (90) days after the accrual of
such right, for the purpose of electing directors. The notice so
given shall be mailed to each holder of record of Preferred Stock
at his last known address appearing on the books of the
Corporation and shall set forth, among other things, (i) that by
reason of the fact that dividends payable on any shares of
Preferred Stock are in arrears in an amount equal to or greater
than the aggregate dividends accumulated on the outstanding
Preferred Stock in any period of twelve (12) months, the holders
of Preferred Stock, voting together as a voting group, to the
exclusion of holders of Common Stock, have the right to elect the
smallest number of directors necessary to constitute a majority
of the full Bard of Directors of the Corporation, (ii) that any
holder of the Preferred Stock has the right, at any reasonable
time, to inspect, and make copies of, the list or lists of
holders of Preferred Stock maintained at the principal office of
the Corporation or at the office of any Transfer Agent of the
Preferred Stock, and (iii) either the entirety of this paragraph
(2) or the substance thereof with respect to the number of shares
of the Preferred Stock required to be represented at any meeting,
or adjournment thereof, called for the election of directors of
the Corporation. At the first meeting of stockholders held for
the purpose of electing directors during such time as the holders
of the Preferred Stock shall have the special right to elect
directors ("First Meeting"), the presence in person or by proxy
of the holders of a majority of the votes entitled to be cast by
the Common Stock shall be required to constitute a quorum of such
voting group for the election of directors, and the presence in
person or by proxy of the holders of a majority of the votes
entitled to be cast by the Preferred Stock shall be required to
constitute a quorum of such voting group for the election of
directors; provided, however, that in the absence of a quorum of
the holders of the Preferred Stock, no election of directors
shall be held, but the holders of a majority of the votes
entitled to be cast by the Preferred Stock which are represented
at the meeting shall have power to adjourn the election of the
directors to a date not less than fifteen (15) nor more than
fifty (50) days from the giving of the notice of such adjourned
meeting hereinafter provided for ("Adjourned Meeting"); and
provided, further, that at such Adjourned Meeting the presence in
person or by proxy of the holders of thirty-five percent (35%) of
the votes entitled to be cast by the Preferred Stock shall be
required to constitute a quorum of such voting group far the
election of directors. In the event such First Meeting of
stockholders shall be so adjourned, it shall be the duty of the
President, a Vice President or the Secretary of the Corporation,
within ten (10) days from the date on which such First Meeting
shall have been adjourned, to cause notice of such Adjourned
Meeting to be given to the stockholders entitled to vote thereat,
such Adjourned Meeting to be held not less than fifteen (15) days
nor more than fifty (50) days from the giving of such second
notice. Such second notice shall be given in the form and manner
hereinabove provided for with respect to the notice required to
be given of such First Meeting of stockholders, and shall further
set forth that a quorum was not present at such First Meeting and
that the holders of thirty-five percent (35%) of the votes
entitled to be cast by the Preferred Stock shall be required to
constitute a quorum of such voting group for the election of
directors at such Adjourned Meeting. If the requisite quorum of
holders of the Preferred Stock shall not be present at such
Adjourned Meeting, then the directors of the Corporation then in
office shall remain in office until the next Annual Meeting of
the Corporation, or special meeting in lieu thereof, and until
their successors shall have been, elected and shall qualify.
Neither such First Meeting nor such Adjourned Meeting shall be
held on a date within ninety (90) days before the date of the
next Annual Meeting of the Corporation or special meeting in lieu
thereof. At each Annual Meeting of the Corporation, or special
meeting in lieu thereof, held during such time as the holders of
the Preferred Stock shall have the right to elect Preferred
Directors, the foregoing provisions of this paragraph (2) shall
govern each Annual Meeting, or special meeting in lieu thereof,
as if such Annual Meeting or special meeting were the First
Meeting; provided that if at any adjourned annual meeting, or
special meeting in lieu thereof, the holders of at least thirty-
five percent (35%) of the votes entitled to be cast by the
Preferred Stock shall not be represented at the meeting, all the
directors shall be elected by a vote of the holders of the Common
Stock of the Corporation represented at the meeting.
(3) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of the
holders of at least two-thirds (2/3) of the votes entitled to be
cast by the Preferred Stock, voting together as a voting group:
(A) create, authorize or issue any new stock
which after issuance would rank prior to the Preferred Stock as
to dividends or distributions or in liquidation, dissolution, or
winding up, or create, authorize or issue any security
convertible into shares of any such stock except for the purpose
of providing funds for the redemption of all of the Preferred
Stock then outstanding, such new stock or security not to be
issued until such redemption shall have been authorized and
notice of such redemption given and the aggregate redemption
price deposited as provided in paragraph (7) below; provided,
however, that any such new stock or security shall be issued
within twelve (12) months after the vote of the Preferred Stock
herein provided for authorizing the issuance of such new Stock or
security; or
(B) amend, alter or repeal any of the rights,
preferences or powers of the holders of the Preferred Stock so as
to affect adversely any such rights, preferences or powers;
provided, however, that if such amendment, alteration or repeal
affects adversely the rights, preferences or powers of one or
more, but not all, series of Preferred Stock at the time
outstanding, only the consent of the holders of at least two-
thirds (2/3) of votes entitled to be cast by the shares of all
series so affected, voting together as a voting group, shall be
required; and provided, further, that an amendment to increase or
decrease the authorized amount of Preferred Stock or to create or
authorize or increase or decrease the amount of any class of
stock ranking on a parity with the outstanding shares of the
Preferred Stock as to dividends or assets shall not be deemed to
affect adversely the rights, preferences or powers of the holders
of the Preferred Stock or any series thereof.
(4) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of the
holders of a majority of the votes entitled to be cast by the
Preferred Stock, voting together as a voting group:
(A) merge or consolidate with or into any other
corporation or sell or otherwise dispose of all or substantially
all of its assets unless such merger, consolidation, sale or
other disposition or the issuance or assumption of securities in
the effectuation thereof shall have been ordered or approved
under the Public Utility Holding Company Act of 1935, as amended,
or as may be amended ("Public Utility Holding Company Act"):
(B) issue or assume any unsecured notes,
debentures or other securities representing unsecured debt (other
than for the purpose of refunding or renewing outstanding
unsecured securities issued or assumed by the Corporation
resulting in equal or longer maturities or redeeming or otherwise
retiring all outstanding shares of the Preferred Stock) if
immediately after such issue or assumption (i) the total
outstanding principal amount of all unsecured notes, debentures
or other securities representing unsecured debt of the
Corporation will thereby exceed twenty percent (20%) of the
aggregate of all existing secured debt of the Corporation and the
capital stock, premiums thereon, and surplus of the Corporation,
as stated on its books, or (ii) the total outstanding principal
amount of all unsecured notes, debentures, or other securities
representing unsecured debt of the Corporation of maturities of
less than ten (10) years will thereby exceed ten percent (10%) of
such aggregate. For the purposes of this subparagraph (B), the
payment due upon the maturity of unsecured debt having an
original single maturity in excess of ten (10) years or the
payment due upon the final maturity of any unsecured serial debt
which had original maturities in excess of ten (10) years shall
not be regarded as unsecured debt of a maturity of less than ten
(10) years until such payment shall be required to be made within
three (3) years;
(C) issue, sell, or otherwise dispose of any
shares of the Preferred Stock or of any other class of stock
ranking on a parity with the Preferred Stock as to dividends or
distributions or in liquidation, dissolution, or winding up
(other than for the purpose of refinancing an equal par amount of
the $100 or $25 Preferred Stock or an equal liquidation value
amount of the Class A Preferred Stock or of stock ranking prior
to or on a parity with the Preferred Stock as to dividends or
distributions or in liquidation, dissolution, or winding up)
unless the gross income of the Corporation for a period of twelve
(12) consecutive calendar months within a period of fifteen (15)
calendar months immediately preceding the calendar month of the
issuance, sale or disposition of such stock, determined in
accordance with generally accepted accounting principles (but in
any event after deducting all taxes and the greater of (i) the
amount for said period charged by the Corporation on its books to
depreciation expense or (ii) the largest amount then required to
be provided therefor by any mortgage indenture of the
Corporation), shall have been at least one and one-half times the
sum of (a) the annual interest charges on all bonds, debentures,
notes and other securities representing indebtedness of the
Corporation and (b) the annual dividend requirements on all
outstanding shares of the Preferred Stock and of all other
classes of stock ranking prior to, or on a parity with, the
Preferred Stock as to dividends or distributions, including the
shares proposed to be issued computed at the initial rate
applicable at the time of issuance; provided, that there shall be
excluded from the foregoing computation interest charges on all
indebtedness and dividends on all shares of stock which are to be
retired in connection with the issue of such additional shares of
the Preferred Stock or other class of stock ranking prior to, or
on a parity with, the Preferred Stock as to dividends or
distributions; and provided, further, that if any such
indebtedness or stock bears interest or provides for dividends at
a variable rate, then the interest or dividends on such
indebtedness or stock shall be computed at the average annual
rate in effect for such indebtedness or stock during the period
of twelve (12) consecutive calendar months (or any portion
thereof in which such indebtedness or stock is outstanding) being
used for the calculation of gross income, and if such
indebtedness or stock has been issued after the end of such
twelve (12) consecutive calendar months, then computed at the
initial rate applicable at the time of issuance; and provided,
further, that in any case where such additional shares of the
Preferred Stock, or other class of stock ranking prior to, or on
a parity with, the Preferred Stock as to dividends or
distributions, are to be issued in connection with the
acquisition of additional property, the gross income of the
property to be so acquired, computed on the same basis as the
gross income of the Corporation, may be included on a pro forma
basis in making the foregoing computation; or
(D) issue, sell, or otherwise dispose of any
shares of the Preferred Stock, or of any other class of stock
ranking on a parity with the Preferred Stock as to dividends or
distributions, unless the aggregate of the capital of the
Corporation applicable to the Common Stock and the surplus of the
Corporation shall be not less than the aggregate amount payable
on the involuntary liquidation, dissolution or winding up of the
Corporation in respect of all shares of the Preferred Stock and
all shares of stock, if any, ranking prior thereto, or on a
parity therewith, as to dividends or distributions, which will be
outstanding after the issue of the shares proposed to be issued;
provided, that if, for the purposes of meeting the requirements
of this subparagraph (D), it becomes necessary to take into
consideration any earned surplus of the Corporation, the
Corporation shall not thereafter pay any dividends on shares of
the Common Stock which would result in reducing the Corporation's
Common Stock Equity (as in paragraph (8) hereinafter defined) to
an amount less than the aggregate amount payable, on involuntary
liquidation, dissolution or winding' up of the Corporation, on
all shares of the Preferred Stock and of any stock ranking prior
to, or on a parity with, the Preferred Stock, as to dividends or
other distributions, at the time outstanding.
(5) Each holder of Common Stock of the Corporation
shall be entitled to one vote for each share of such stock
standing in his name on the books of the Corporation. Except as
hereinbefore expressly provided in this Article FIFTH and as may
otherwise be required by law, the holders of Preferred Stock
shall have no power to vote and shall be entitled to no notice of
any meeting of the stockholders of the Corporation. As to those
matters upon which holders of Common Stock, the Class A Preferred
Stock, the $100 Preferred Stock and the $25. Preferred Stock are
entitled to vote as separate voting groups, each holder of such
stock shall be entitled to one vote for each share of such stock
standing in his name on the books of the Corporation. As to those
matters upon which holders of the Class A Preferred Stock, the
$100 Preferred Stock, and the $25 Preferred Stock shall be
required to vote as a single voting group, each holder of Class A
Preferred Stock shall be entitled to the number of votes per
share produced by dividing the liquidation value of such share by
$100, each holder of $100 Preferred Stock shall be entitled to
one vote for each share of such stock standing in his name on the
books of the Corporation, and each holder of $25 Preferred Stock
shall be entitled to one-quarter (l/4) vote for each share of
such stock standing in his name on the books of the Corporation.
As to those matters upon which the holders of Common Stock and
the holders of Preferred Stock shall be required to vote together
as a single voting group, each holder of Common Stock shall be
entitled to one vote for each share of such stock standing in his
name on the books of the Corporation, each holder of Class A
Preferred Stock shall be entitled to the number of votes per
share produced by dividing the liquidation value of such share by
$100, each holder of $100 Preferred Stock shall be entitled to
one vote for each share of such stock standing in his name on the
books of the Corporation, and each holder of $25 Preferred Stock
shall be entitled to one-quarter (l/4) vote for each share of
such stock standing in his name on the books of the Corporation.
(6) In the event of any voluntary liquidation,
dissolution or winding up of the Corporation, the Preferred
Stock, all shares of which then outstanding being treated pari
passu, shall have a preference over the Common Stock until an
amount equal to the then current redemption price shall have been
paid. In the event of any involuntary liquidation, dissolution
or winding up of the Corporation, which shall include any such
liquidation, dissolution or winding up that may arise out of or
result from the condemnation or purchase of all or a major
portion of the properties of the Corporation by (i) the United
States Government or any authority, agency or instrumentality
thereof, (ii) a state of the United States or any political
subdivision, authority, agency, or instrumentality thereof, or
(iii) a district, cooperative or other association or entity not
organized for profit, the Preferred Stock, all shares of which
then outstanding being treated pari passu, shall also have a
preference over the Common Stock until the full par value
thereof, in the case of the $100 Preferred Stock and the $25
Preferred Stock, and the full liquidation value thereof, in the
case of the Class A Preferred Stock, and an amount equal to all
accumulated and unpaid dividends thereon shall have been paid by
dividends or distribution.
(7) (A) The Corporation may at any time (except to
the extent redemption is restricted herein or in the Articles of
Amendment creating a series of the Preferred Stock) redeem all of
any series of the Preferred Stock or may from time to time
(except to the extent so restricted) redeem any part thereof, by
paying in cash the redemption price then applicable thereto as
stated and expressed with respect to such series herein or in the
articles of amendment providing for the issue of such shares,
plus, in each case, an amount equivalent to the accumulated and
unpaid dividends, if any, to the date of redemption. Notice of
the intention of the Corporation to redeem all or any part of the
Preferred Stock shall be mailed not less than thirty (30) days
nor more than sixty (60) days before the date of redemption to
each holder of record of Preferred Stock to be redeemed, at his
last known address as shown by the Corporation's records, and not
less than thirty (30) days' nor more than sixty (60) days' notice
of such redemption may be published in such manner as may be
prescribed by resolution of the Board of Directors of the
Corporation; and, in the event of such publication, no defect in
the mailing of such notice shall affect the validity of the
proceedings for the redemption of any shares of Preferred Stock
so to be redeemed. Contemporaneously with the mailing or the
publication of such notice as aforesaid or at any time thereafter
prior to the date of redemption, the Corporation. may deposit the
aggregate redemption price (or the portion thereof not already
paid in the redemption of such Preferred Stock so to be redeemed)
with any bank or trust company in the City of New York, New York,
or in the City of Little Rock, Arkansas, or in the City of Pine
Bluff, Arkansas, named in such notice, payable to the order of
the record holders of the Preferred Stock so to be redeemed, as
the case may be, on the endorsement and surrender of their
certificates, and thereupon said holders shall cease to be
stockholders with respect to such shares; and from and after the
making of such deposit such holders shall have no interest in or
claim against the Corporation with respect to such shares, but
shall be entitled only to receive such moneys from such bank or
trust company deposited as in this paragraph (7) provided, on
endorsement and surrender of their certificates, as aforesaid.
Such moneys may be invested in such securities as are then legal
investments for such bank or trust company and the earnings, if
any, thereon shall be paid to or at the direction of the
Corporation. Any moneys so deposited, plus interest thereon, if
any, remaining unclaimed at the end of four (4) years from the
date fixed for redemption, if thereafter requested by resolution
of the Board of Directors, shall be repaid to the Corporation,
and in the event of such repayment to the Corporation, such
holders of record of the shares so redeemed as shall not have
made claim against such moneys prior to such repayment to the
Corporation, shall be deemed to be unsecured creditors of the
Corporation for an amount, without interest, equivalent to the
amount deposited, as above stated, for the redemption of such
shares and so paid to the Corporation. The Corporation shall not
be obligated to keep such moneys repaid to the Corporation
separate and apart from other funds of the Corporation. Shares of
the Preferred Stock which have been redeemed shall not be
reissued as part of the same series as originally issued, but
shall revert to the status of authorized but unissued shares of
Preferred Stock of the same class, which may thereafter be
reissued as part of a new series of preferred stock of the same
class in accordance with the terms of these Amended and Restated
Articles of Incorporation. If less than all of the shares of a
series of the Preferred Stock are to be redeemed, the shares
thereof to be redeemed, unless otherwise provided in these
Amended and Restated Articles of Incorporation or the articles of
amendment creating such series, shall be selected by lot, in such
manner as the Board of Directors of the Corporation shall
determine, by an independent bank or trust company selected for
that purpose by the Board of Directors of the Corporation.
(B) Nothing herein contained shall limit any
legal right of the Corporation to purchase or otherwise acquire
any shares of the Preferred Stock; provided, however, that if at
any time it shall have failed to pay dividends in full on any
outstanding shares of the Preferred Stock, thereafter and until
dividends in full on all shares of the Preferred Stock
outstanding shall have been paid, or declared and set aside for
payment, for all past quarter-yearly dividend periods, it shall
not (i) acquire any shares of the Preferred Stock (except by
redemption of all shares of the Preferred Stock) unless approval
is obtained under the Public Utility Holding Company Act, or (ii)
make any payment or set aside any funds for payment into any
sinking fund for the purchase or redemption of any shares of the
Preferred Stock unless approval is obtained under the Public
Utility Holding Company Act. Any shares of the Preferred Stock so
redeemed, purchased or acquired shall not be reissued as part of
the same series as originally issue, but shall revert to the
status of authorized but unissued shares of Preferred Stock of
the same class, which shares may thereafter be reissued as part
of a new series of Preferred Stock of the same class in
accordance with the terms of these Amended and Restated Articles
of Incorporation.
(8) For the purposes of this paragraph (8) and
subparagraph (D) of paragraph (4) the term "Common Stock Equity"
shall mean the aggregate of (i) the par value of, or stated
capital represented by, the outstanding shares (other than shares
owned by the Corporation) of stock ranking junior to the
Preferred Stock as to dividends and assets, (ii) the premium on
such junior stock and (iii) the surplus (including earned
surplus, capital surplus and surplus invested in plant) of the
Corporation less (unless the amounts or items are being amortized
or are being provided for by reserves) (a) any amounts recorded
on the books of the Corporation for utility plant and other plant
in excess of the original cost thereof, (b) unamortized debt
discount and expense, capital stock discount and expense and any
other intangible items set forth on the asset side of the balance
sheet as a result of accounting convention, (c) the excess, if
any, of the aggregate amount payable on involuntary liquidation,
dissolution or winding up of the affairs of the Corporation upon
all outstanding Preferred Stock of the Corporation over the
aggregate par or stated value thereof and any premiums thereon,
and (d) the excess, if any for the period beginning with January
1, 1954 to the end of a month within ninety (90) days preceding
the date as of which Common Stock Equity is determined, of the
cumulative amount computed under requirements contained in the
Corporation's mortgage indentures relating to minimum
depreciation provisions (this cumulative amount being the
aggregate of the largest amounts separately computed for entire
periods of differing coexisting mortgage indenture requirements),
over the amount charged by the Corporation on its books for
depreciation during such period, including the final fraction of
a year. For the purpose of this paragraph (8): (i) the term
"Total Capitalization" shall mean the sum of the Common Stock
Equity plus item (c) in this paragraph (8) plus the stated
capital applicable to, and any premium on, outstanding stock of
the Corporation not included in Common Stock Equity, plus the
principal amount of all outstanding bonds, debentures, notes and
other securities representing indebtedness of the Corporation
maturing more than twelve months after the date of the
determination of the Total Capitalization; and (ii) the term
"dividends on Common Stock" shall include dividends on Common
Stock (other than dividends payable only in shares of Common
Stock), distributions on, and purchases or other acquisitions for
value of, any Common Stock of the Corporation or other stock, if
any, subordinate to Preferred Stock as to dividends or other
distributions. So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not declare or pay any
dividends on the Common Stock, except as follows:
(A) If and so long as the Common Stock Equity at
the end of the calendar month immediately preceding the date on
which a dividend on Common Stock is declared is, or as a result
of such dividend would become, less than twenty percent (20%) of
Total Capitalization, the Corporation shall not declare such
dividend in an amount which, together with all other dividends on
Common Stock paid within the year ending with and including the
date on which such dividend is payable, exceeds fifty percent
(50%) of the net income of the Corporation available for
dividends on the Common Stock for the twelve (12) full calendar
months immediately preceding the month in which such dividend is
declared, except that the Corporation may at any time declare a
dividend in an amount not exceeding the aggregate of dividends on
Common Stock which under the restrictions set forth above in this
subparagraph (A) could have been, and have not been, declared;
and
(B) If and so long as the Common Stock Equity at
the end of the calendar month immediately preceding the date on
which a dividend on Common Stock is declared is, or as a result
of such dividend would become, less than twenty-five percent
(25%) but not less than twenty percent (20%) of Total
Capitalization, the Corporation shall not declare such dividend
on the Common Stock in an amount which, together with all other
dividends on Common Stock paid within the year ending with and
including the date on which such dividend is payable, exceeds
seventy-five percent (75%) of the net income of the Corporation
available for dividends on the Common Stock for the twelve (12)
full calendar months immediately preceding the month in which
such dividend is, declared, except that the Corporation may at
any time declare dividends in an amount not exceeding the
aggregate of dividends on Common Stock which under the
restrictions set forth above in subparagraph (A) and in this
subparagraph (B) could have been, and have not been, declared;
and
(C) At any time when the Common Stock Equity is
twenty-five percent (25%) or more of Total Capitalization, the
Corporation may not declare dividends on shares of the Common
Stock which would reduce the Common Stock Equity below twenty-
five percent (25%) of Total Capitalization, except to the extent
provided in subparagraphs (A) and (B) above.
At any time when the aggregate of all amounts credited
subsequent to January 1, 1954 to the depreciation reserve account
of the Corporation through charges to operating revenue
deductions or otherwise on the books of the Corporation (other
than transfers out of the balance of surplus as of December 31,
1953) shall be less than the amount computed as provided in
clause (i) below, under requirements contained in the
Corporation's mortgage indentures, then for the purposes of
subparagraphs (A) and (B) above, in determining the earnings
available for Common Stock dividends during any twelve-month
period, the amount to be provided for depreciation in that period
shall be (i) the greater of the cumulative amount charged to
depreciation expense on the books of the Corporation or the
cumulative amount computed under requirements contained in the
Corporation's mortgage indentures relating to minimum
depreciation provisions (the latter cumulative amount being the
aggregate of the largest amounts separately computed for entire
periods of differing coexisting mortgage indenture requirements)
for the period from January l, 1954 to and including any such
twelve-month period, less (ii) the greater of the cumulative
amount charged to depreciation expense on the books of the
Corporation or the cumulative amount computed under requirements
contained in the Corporation's mortgage indentures relating to
minimum depreciation provisions (the latter cumulative amount
being the aggregate of the largest amounts separately computed
for entire periods of differing coexisting mortgage indenture
requirements) from January l, 1954 up to but excluding any such
twelve-month period; provided that in the event any company is
merged into the Corporation the "cumulative amount computed under
requirements contained in the Corporation's mortgage indentures
relating to minimum depreciation provisions" referred to above
shall be computed without regard, for the period prior to the
merger, of property acquired in the merger, and the "cumulative
amount charged to depreciation expense on the books of the
Corporation" shall be exclusive of amounts provided for such
property prior to the merger.
(9) Dividends may be paid upon the Common Stock only
when (i) dividends have been paid or declared and funds set apart
for the payment of dividends as aforesaid on the Preferred Stock
from the date(s) after which dividends thereon became cumulative,
to the beginning of the period then current, with respect to
which such dividends on the Preferred Stock are usually declared,
and (ii) all payments have been made or funds have been set aside
for payments then or theretofore due under the terms of sinking
fund requirements (if any) for the purchase or redemption of
shares of any series of the Preferred Stock, but whenever (a)
there shall have been paid or declared and funds shall have been
set apart for the payment of all such dividends upon the
Preferred Stock as aforesaid and (b) all payments shall have been
made or funds shall have been set aside for payments then or
theretofore due under the terms of sinking fund requirements (if
any) for the purchase or redemption of shares of any series of
the Preferred Stock, then, subject to the limitations above set
forth, dividends upon the Common Stock may be declared payable
then or thereafter, out of funds legally available for payment of
dividends. After the payment of the limited dividends and/or
shares in distribution of assets to which the Preferred Stock is
expressly entitled in preference to the Common Stock, the Common
Stock (subject to the rights of any class of stock hereafter
authorized) shall receive all further dividends and shares in
distribution.
(10) Subject to the limitations hereinabove set forth,
the Corporation, from time to time, may resell any of its own
stock, purchased or otherwise acquired by it as hereinafter
provided for, at such price as may be fixed by its Board of
Directors.
(11) Subject to the limitations hereinabove set forth,
the Corporation, in order to acquire funds with which to redeem
any outstanding Preferred Stock of any class, may issue and sell
stock of any class then authorized but unissued, bonds, notes,
evidences of indebtedness, or other securities.
(12) Subject to the limitations hereinabove set forth,
and except to the extent that conversions, participations or
other special rights are established with respect to any series
of Preferred Stock by the Board of Directors as hereinabove
provided, the Board of Directors of the Corporation may at any
time authorize the conversion or exchange of the whole or any
particular part of the outstanding Preferred Stock of any class,
with the consent of the holders thereof, into or for stock of any
other class at the time of such consent authorized but unissued
and may fix the terms and conditions upon which such conversion
or exchange may be made; provided that without the consent of the
holders of record of two-thirds (2/3) of the votes represented by
shares of Common Stock outstanding given at a meeting of the
holders of the Common Stock called and held as provided by the
Bylaws or given in writing without a meeting, the Board of
Directors shall not authorize the conversion or exchange of any
Preferred Stock of any class into or for Common Stock or
authorize the conversion or. exchange of any Preferred Stock of
any class into or for Preferred Stock of any other class if by
such conversion or exchange the amount which the holders of the
shares of stock so converted or exchanged would be entitled to
receive either as dividends or shares in distribution of assets
in preference to the Common Stock would be increased.
(13) A consolidation, merger or amalgamation of the
Corporation with or into any other corporation or corporations
shall not be deemed a distribution of assets of the Corporation
within the meaning of any provisions of these Amended and
Restated Articles of Incorporation.
(14) If any provision in this Article FIFTH shall be
in conflict or inconsistent with any other provision of these
Amended and Restated Articles of Incorporation, the provisions of
this Article FIFTH shall prevail and govern.
(15) No holder of any stock of the Corporation shall
be entitled as of right to purchase or subscribe for any part of
any stock of the Corporation authorized by these Amended and
Restated Articles of Incorporation or of any additional stock of
any class to be issued by reason of any increase of the
authorized capital stock of the Corporation or of any bonds,
certificates of indebtedness, debentures or other securities
convertible into stock of the Corporation.
(16) 70,000 shares of the Corporation's $100 Preferred
Stock authorized in paragraph (a) of this Article FIFTH shall
consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) be designated "4.32% Preferred Stock,
Cumulative, $100 Par Value";
(B) have a dividend rate of $4.32 per share per
annum payable quarterly on January 1, April 1, July 1, and
October 1 of each year, the first dividend date to be July 1,
1954 and such dividend date to be July 1, 1954 and such dividends
to be cumulative from April 1, 1954; and
(C) be subject to redemption in the manner
provided with respect to the Corporation's Preferred Stock,
Cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $106.147 per share if
redeemed on or before April 1, 1959 and on or before April 1,
1964, and of $103.647 per share if redeemed after April 1, 1964,
in each case plus an amount equivalent to the accumulated and
unpaid dividends thereon, if any, to the date fixed for
redemption.
(17) 93,500 shares of the Corporation's $100 Preferred
Stock authorized in paragraph (a) of this Article FIFTH shall
consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) be designated "4.72% Preferred Stock,
Cumulative, $100 par value";
(B) have a dividend rate of $4.72 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be July 1, 1955 and
such dividends to be cumulative from April 1, 1955;
(C) be subject to redemption in the manner
provided with respect to the Corporation's Preferred Stock,
Cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $109.50 per share if redeemed
on or before April 1, 1960, of $108.50 per share if redeemed
after April 1, 1960 and on or before April 1, 1965, in each case
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; and
(D) be issued for cash or on a share for share
basis for shares of the $7 Preferred Stock and $6 Preferred Stock
of the Corporation which may be converted into or exchanged for
such shares of 4.72% Preferred Stock, Cumulative, $100 par value,
with a cash adjustment of $5.36 per share to be given to the
holders of the $7 Preferred Stock and a cash adjustment of $5.20
per share to be given to the holders of $6 Preferred Stock so
converting or exchanging.
(18) 75,000 shares of the Corporation's $100 Preferred
Stock authorized in paragraph (a) of this Article FIFTH shall
consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) be designated "4.56% Preferred Stock,
Cumulative, $100 par value";
(B) have a dividend rate of $4.56 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be January 1, 1965 and
such dividends to be cumulative from October 1, 1964; and
(C) be subject to redemption in the manner
provided with respect to the Corporation's Preferred Stock,
Cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $105.89 per share if redeemed
on or before October 1, 1969, or $104.33 per share if redeemed
after October 1, 1969 and on or before October 1, 1974, and of
$102.83 per share if redeemed after October 1, 1974, in each case
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption;
(19) 75,000 shares of the Corporation's $100 Preferred
Stock authorized in paragraph (a) of this Article FIFTH shall
consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) consist of 75,000 shares to be designated
"4.56% Preferred Stock, Cumulative, $100 par value (1965
Series)":
(B) have a dividend rate of $4.56 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be July 1, 1965, and
such dividends to be cumulative from April 1, 1965; and
(C) be subject to redemption in the manner
provided with respect to the Company's Preferred Stock,
cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $105.56 per share if redeemed
on or before April 1, 1970, of $104.00 per share if redeemed
after April 1, 1970 and on or before April 1, 1975, and of
$102.50 per share if redeemed after April 1, 1975, in each case
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption;
(20) 100,000 shares of the Corporation's $100
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) be designated "6.08% Preferred Stock,
cumulative, $100 par value";
(B) have a dividend rate of $6.08 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be January 1, 1967 and
such dividends to be cumulative from October 1, 1966; and
(C) be subject to redemption in the manner provided with respect
to the Company's Preferred Stock, cumulative $100 par value, in
said Agreement of Consolidation or Merger, as amended, at the
price of $107.41 per share if redeemed on or before October 1,
1971, of $104.33 per share if redeemed after October 1, 1971 and
on or before October 1, 1976, and of $102.83 per share if
redeemed after October 1, 1976 in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon, if
any, to the date fixed for redemption;
(21) 100,000 shares of the Corporation's $100
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) be designated "7.32% Preferred Stock,
cumulative, $100 par value";
(B) have a dividend rate of $7.32 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be April 1, 1969 and
such dividends to be cumulative from January 1, 1969; and
(C) be subject to redemption in the manner provided with respect
to the Company's Preferred Stock, cumulative, $100 par value, in
said Agreement of Consolidation or Merger, as amended, at the
price of $108.99 per share if redeemed on or before January 1,
1974, of $104.67 per share if redeemed after January 1, 1974 and
on or before January 1, 1979, and of $103.17 per share if
redeemed after January 1, 1979, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon, if
any, to the date fixed for redemption;
(22) 150,000 shares of the Corporation's $100
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) be designated "7.80% Preferred Stock,
cumulative, $100 par value";
(B) have a dividend rate of $7.80 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be July 1, 1972 and
such dividends to be cumulative from April 13, 1972; and
(C) be subject to redemption in the manner provided with respect
to the Company's Preferred Stock, cumulative, $100 par value, in
said Agreement of Consolidation or Merger, as amended, at the
price of $109.10 per share if redeemed on or before April 1, 1977
(except that no share of the 7.80% Preferred Stock shall be
redeemed before April 1, 1977 if such redemption is for the
purpose or in anticipation of refunding such share through the
use, directly or indirectly, of funds borrowed by the Company or
through the use, directly or indirectly, of funds derived through
the issuance by the Company of stock ranking prior to or on a
parity with the 7.80%A Preferred Stock as to dividends or assets,
if such borrowed funds have an effective interest cost to the
Company (computed in accordance with generally accepted financial
practice) or such stock has an effective dividend cost to the
Company (so computed) of less than 7.785% per annum, of $107.15
per share if redeemed after April 1, 1977, and on or before April
1, 1982, of $105.20 per share if redeemed after April 1, 1982,
and on or before April 1, 1987, and of $103.25 per share if
redeemed after April 1, 1987, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon, if
any, to the date fixed for redemption;
(23) 200,000 shares of the Corporation's $100
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) consist of 200,000 shares to be designated
"7.40% Preferred Stock, cumulative, $100 par value";
(B) have a dividend rate of $7.40 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be April 1, 1973, for
the period commencing December 14, 1972, to and including March
31, 1973, and such dividends to be cumulative from December 14,
1972; and
(C) be subject to redemption in the manner
provided with respect to the Company's Preferred Stock,
cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $108.35 per share if redeemed
on or before December 1, 1977 (except that no share of the 7.40%
Preferred Stock shall be redeemed before December 1, 1977, if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Company or through the use, directly or
indirectly, of funds derived through the issuance by the Company
of stock ranking prior to or on a parity with the 7.40% Preferred
Stock as to dividends or assets, if such borrowed funds have an
effective interest cost to the Company (computed in accordance
with generally accepted financial practice) or such stock has an
effective dividend cost to the Company (so computed) of less than
7.3795% per annum, of $106.50 per share if redeemed after
December 1, 1977 and on or before December 1, 1982 of $104.65 per
share if redeemed after December 1, 1982, and on or before
December 1, 1987, in each case plus an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the date
fixed for redemption;
(24) 150,000 shares of the Corporation's $100
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) consist of 150,000 shares to be designated
"7.88% Preferred Stock, cumulative, $100 par value";
(B) have a dividend rate of $7.88 per share per
annum payable quarterly on January 1, April 1, July 1, and
October 1 of each year, the first dividend date to be April 1,
1974, for the period commencing December 6, 1973, to and
including March 31, 1974, and such dividends to be cumulative
from December 6, 1973; and
(C) be subject to redemption in the manner
provided with respect to the Company's Preferred Stock,
cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $108.91 per share if redeemed
on or before December 1, 1978 (except that no share of the 7.88%
Preferred Stock shall be redeemed before December 1, 1978, if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Company or through the use, directly or
indirectly, of funds derived through the issuance by the Company
of stock ranking prior to or on a parity with the 7.88% Preferred
Stock as to dividends or assets, if such borrowed funds have an
effective interest cost to the Company (computed in accordance
with generally accepted financial practice) or such stock has an
effective dividend cost to the Company (so computed) of less than
7.853% per annum, of $106.94 per share if redeemed after December
1, 1978 and on or before December 1, 1983 of $104.97 per share if
redeemed after December 1, 1983, and on or before December 1,
1988, in each case plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed for
redemption;
(25) 1,600,000 shares of the Corporation's $25
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $25 Preferred Stock of the
Corporation which shall:
(A) consist of 1,600,000 shares to be designated
"9.92% Preferred Stock, cumulative, $25 par value" and
hereinafter be referred to as "2nd 1979 Series Preferred Stock";
(B) have a dividend rate of $2.48 per share per
annum payable quarterly on January 1, April 1, July 1, and
October 1 of each year, the first dividend date to be October 1,
1979, and such dividends to be cumulative from June 28, 1979;
(C) be subject to redemption in the manner
provided with respect to the Company's Preferred Stock,
cumulative, $25 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $28.18 per share if redeemed
on or before June 1, 1984 (except that no share of the 2nd 1979
Series Preferred Stock shall be redeemed before June 1, 1984, if
such redemption is for the purpose of or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Company or through the use, directly or
indirectly, of funds derived through the issuance by the Company
of stock ranking prior to or on a parity with the Preferred Stock
as to dividends or assets, if such borrowed funds have an
effective interest cost to the Company (computed in accordance
with generally accepted financial practice ) or such stock has an
effective dividend cost to the Company (so computed) of less than
9.8086 per annum), of $27.56 per share if redeemed after June 1,
1984, and on or before June 1, 1989, of $26.94 per share if
redeemed after June 1, 1989, and on or before June 1, 1994, and
of $26.32 per share if redeemed after June 1, 1994, in each case
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; and
(D) be subject to redemption as and for a sinking
fund as follows:
On June 1, 1984 and on each June 1 thereafter (each
such date being hereinafter referred to as a "2nd 1979 Series
Sinking Fund Redemption Date"), for so long as any shares of the
2nd 1979 Series Preferred Stock shall remain outstanding, the
Company shall redeem, out of funds legally available therefor and
otherwise in the manner provided with respect to the Company's
Preferred Stock, cumulative, $25 par value, in said Agreement of
Consolidation or Merger, as amended, 80,000 shares of the 2nd
1979 Series Preferred Stock (or the number of shares then
outstanding if less than 80,000) at the sinking fund redemption
price of $25 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Company so to redeem the shares of the 2nd 1979 Series Preferred
Stock being hereinafter referred to as the "2nd 1979 Series
Sinking Fund Obligation") . The 2nd 1979 Series Sinking Fund
Obligation shall be cumulative. If on any 2nd 1979 Series
Sinking Fund Redemption Date, the Company shall not have funds
legally available therefor sufficient to redeem the full number
of shares required to be redeemed on that date, the 2nd 1979
Series Sinking Fund Obligation with respect to the shares not
redeemed shall carry forward to each successive 2nd 1979 Series
Sinking Fund Redemption Date until such shares shall have been
redeemed. Whenever on any 2nd 1 97g Series Sinking Fund
Redemption Date, the funds of the Company legally available for
the satisfaction of the 2nd 1979 Series Sinking Fund Obligation
and all other sinking fund and similar obligations then existing
with respect to any other class or series of its stock ranking on
a parity as to dividends or assets with the 2nd 1979 Series
Preferred Stock (such Obligation and obligations collectively
being hereinafter referred to as the "Total Sinking Fund
Obligation") are insufficient to permit the Company to satisfy
fully its Total Sinking Fund Obligation on that date, the Company
shall apply to the satisfaction of its 2nd 1979 Series Sinking
Fund Obligation on that date that proportion of such legally
available funds which is equal to the ratio of such 2nd 1979
Series Sinking Fund Obligation to such Total Sinking Fund
Obligation. In addition to the 2nd 1979 Series Sinking Fund
Obligation, the Company shall have the option, which shall be non-
cumulative, to redeem, upon authorization of the Board of
Directors and otherwise in the manner provided with respect to
the Company's Preferred Stock, cumulative, $25 par value, in said
Agreement of Consolidation or Merger, as amended, on each 2nd
1979 Series Sinking Fund Redemption Date, at the aforesaid
sinking fund redemption price, up to 80,000 additional shares of
the 2nd 1979 Series Preferred Stock. The Company shall be
entitled, at its election, to credit against its 2nd 1979 Series
Sinking Fund Obligation on any 2nd 1979 Series Sinking Fund
Redemption Date any shares of the 2nd 1979 Series Preferred Stock
(including shares of the 2nd 1979 Series Preferred Stock
optionally redeemed pursuant to this paragraph (d)) theretofore
redeemed, other than shares of 2nd 1979 Series Preferred Stock
redeemed pursuant to the 2nd 1979 Series Sinking Fund Obligation,
purchased or otherwise acquired and not previously credited
against the 2nd 1979 Series Sinking Fund Obligation;
(26) 500,000 shares of the Corporation's $100
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the $100 Preferred Stock of the
Corporation which shall:
(A) consist of 500,000 shares to be designated
"8.52% Preferred Stock, cumulative, $100 par value" and
hereinafter to be referred to as the "1986 Series Preferred
Stock";
(B) have a dividend rate of $8.52 per share per
annum payable quarterly on January 1, April 1, July 1, and
October 1, of each year, the first dividend date to be January 1,
1987, and such dividends to be cumulative from the date of
issuance;
(C) be subject to redemption in the manner
provided with respect to the Company's Preferred Stock,
cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, at the price of $108.52 per share if redeemed
on or before November 1, 1991 (except that no share of the 1986
Series Preferred Stock shall be redeemed before November 1, 1991,
if such redemption is for the purpose of or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Company or through the use, directly or
indirectly, of funds derived through the issuance by the Company
of stock ranking prior to or on a parity with the 1986 Series
Preferred Stock as to dividends or assets, if such borrowed funds
have an effective interest cost to the Company (computed in
accordance with generally accepted financial practice) or such
stock has an effective dividend cost to the Company (so computed)
of less than 8.780% per annum), of $106.39 per share if redeemed
after November 1, 1991, and on or before November 1, 1996, of
$104.26 per share if redeemed after November 1, 1996, and on or
before November 1, 2001, and of $102.13 per share if redeemed
after November 1, 2001, in each case plus an amount equivalent to
the accumulated and unpaid dividends thereon, if any, to the date
fixed for redemptions and
(D) be subject to redemption as and for a sinking
fund as follows: on November 1, 1991 and on each November 1
thereafter (each such date bring hereinafter referred to as a
1986 Series Sinking Fund Redemption Date"), for so long as any
shares of the 1986 Series Preferred Stock shall remain
outstanding,; the Company shall redeem, out of funds legally
available therefor and otherwise in the manner provided with
respect to the Company's Preferred Stock, cumulative, $100 par
value, in said Agreement of Consolidation or Merger, as amended,
25,000 shares of the 1986 Series Preferred Stock (or the number
of shares then outstanding if less than 25,000) at the sinking
fund redemption price of $100 per share plus, as to each share so
redeemed, an amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date of redemption (the
obligation of the Company so to redeem such shares of the 1986
Series Preferred Stock being hereinafter referred to as the "1986
Series Sinking Fund Obligation"); the 1986 Series Sinking Fund
Obligation shall be cumulative; if on any 1986 Series Sinking
Fund Redemption Date, the Company shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 1986 Series Sinking
Fund Obligation with respect to the shares not redeemed shall
carry forward to each successive l986 Series Sinking Fund
Redemption Date until such shares shall have been redeemed;
whenever on any 1986 Series Sinking Fund Redemption Date, the
funds of the Company legally available for the satisfaction of
the 1986 Series Sinking Fund Obligation and all other sinking
fund and similar obligations then existing with respect to any
other class or series of its stock ranking on a parity as to
dividends or assets with the 1986 Series Preferred Stock (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligation") are
insufficient to permit the Company to satisfy fully its Total
Sinking Fund Obligation on that date, the Company shall apply to
the satisfaction of its 1986 Series Sinking Fund Obligation on
that date that proportion of such legally available funds which
is equal to the ratio of such 1986 Series Sinking Fund Obligation
to such Total Sinking Fund Obligation; in addition to the 1986
Series Sinking Fund Obligation, the Company shall have the
option, which shall be non-cumulative, to redeem, upon
authorization of the Board of Directors and otherwise in the
manner provided with respect to the Company's Preferred Stock,
cumulative, $100 par value, in said Agreement of Consolidation or
Merger, as amended, on each 1986 Series Sinking Fund Redemption
Date, at the aforesaid sinking fund redemption price, up to
25,000 additional shares of the 1986 Series Preferred Stock; the
Company shall be entitled, at its election, to credit against its
1986 Series Sinking Fund Obligation on any 1986 Series Sinking
Fund Redemption Date any shares of the 1986 Series Preferred
Stock, (including shares of the 1986 Series Preferred Stock
optionally redeemed pursuant to this paragraph (d)), theretofore
redeemed (other than shares of the 1986 Series Preferred Stock
redeemed pursuant to the 1986 Series Sinking Fund Obligation)
purchased or otherwise acquired and not previously credited
against the 1986 Series Sinking Fund Obligation; and further
(27) 600,000 shares of the Corporation's Class A
Preferred Stock authorized in paragraph (a) of this Article FIFTH
shall consist of a series of the Class A Preferred Stock of the
Corporation which shall:
(A) be designated "$l.96 Preferred Stock,
Cumulative, $0.01 Par Value (Involuntary Liquidation Value $25)"
and hereinafter be referred to as the "1992 Series Preferred
Stock";
(B) have a price payable on involuntary
liquidation, dissolution or winding up of the Corporation of $25
per share;
(C) have a dividend rate of $1.96 per share per
annum payable quarterly on January 1, April 1, July 1 and October
1 of each year, the first dividend date to be July 1, 1992, and
such dividends to be cumulative from June 3, 1992; and
(D) be subject to redemption in the manner
provided with respect to the Corporation's Preferred Stock in the
Corporation's Amended and Restated Articles Or Incorporation at
the price of $25 per share plus an amount equivalent to the
accumulated and unpaid dividends thereon, if any, to the date
fixed for redemption (except that no share of the 1992 Series
Preferred Stock shall be redeemed on or before July 1, 1997;
however, such price of $25 per share is established
notwithstanding such limitation on redemption as the current
redemption price for the period on or before July 1, 1997 for
purposes of subparagraph (6) of paragraph (c) of Article FIFTH).
SIXTH: Director Conflict of Interest.
(a) A conflict of interest transaction is a transaction
with the Corporation in which a director of the Corporation has a
direct or indirect interest. A conflict of interest transaction
is not voidable by the Corporation solely because of the
director's interest in the transaction if any one of the
following is true:
(1) The material facts of the transaction and the
director's interest were disclosed or known to the Board of
Directors or a committee of the Board of Directors and the Board
of Directors or committee authorized, approved, or ratified the
transaction
(2) The material facts of the transaction and the
director's interest were disclosed or known to the holders of
Common Stock and the transaction was authorized, approved, or
ratified by the vote of the holders of a majority of the votes
entitled to be cast by the Common Stock; or
(3) The transaction was fair to the Corporation.
(b) For purposes of this Article SIXTH, a director of the
Corporation has an indirect interest in a transaction and the
transaction should be considered by the Board of Directors of the
Corporation if:
(1) Another entity in which the director has a
material financial interest or in which the director is a general
partner is a party to the transaction; or
(2) Another entity of which the director is a
director, officer, or trustee is a party to the transaction.
SEVENTH: Board of Directors.
(a) The affairs and business of the Corporation shall be
conducted and controlled by a Board of Directors, and the number
of directors which shall constitute the whole Board shall be such
as from time to time shall be fixed by resolution adopted by the
holders of Common Stock or by the Board of Directors, but in no
case shall the number of directors be less than three (3) nor
more than fifteen (15). Directors shall be elected by the
holders of Common Stock except as provided in Article FIFTH (c)
(2) at each annual meeting of the stockholders and each director
so elected shall hold office until the next annual meeting of the
stockholders or until his successor is elected and qualified,
except as herein provided. All stockholders entitled to vote for
the election of directors may cumulate their votes for directors.
Any or all directors elected by the holders of Common Stock may
at any time be removed without cause by the vote of the holders
of a majority of the votes entitled to be cast by the Common
Stock given at a meeting called for the purpose of considering
such action, and the successor of any director so removed shall
be elected by the holders of Common Stock at such meeting or at a
later meeting. Any or all directors elected by the holders of
Preferred Stock may at any time be removed without cause by the
vote of the holders of a majority of the votes entitled to be
cast by the Preferred Stock given at a meeting called for the
purpose of considering such action, and the successor of any
director so removed shall be elected by the holders of Preferred
Stock at such meeting or at a later meeting; provided, however, a
director may not be removed without cause if the number of votes
sufficient to elect him under cumulative voting is voted against
his removal. Except as provided in Article FIFTH (c) (2),
vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled as
provided in the By-Laws. If the vacant office was held by a
director elected by a voting group of shareholders, only the
holders of shares of that voting group shall be entitled to
participate in the filling of such vacancy. If the number of
directors is decreased then to the extent that the decrease does
not exceed the number of vacancies in the Board then existing,
such resolution may provide that it shall become effective
forthwith, and to the extent that the decrease does exceed such
number of vacancies, such resolution shall provide that it shall
not become effective until the next election of directors by the
stockholders. The Board of Directors shall have power to hold
their meetings, to have one or more offices and to keep the
corporate books (except such books as are required by law to be
kept within the state of Arkansas) outside of the State of
Arkansas at such places as may from time to time be designated by
them. The Board of Directors shall elect individuals to occupy
executive offices as provided in the By-Laws.
(b) The Board of Directors shall have power to authorize
and cause to be executed mortgages or deeds of trust which shall
cover and create a lien upon, or otherwise encumber, all or any
part of the property of the Corporation of whatsoever kind and
wheresoever situated whether then owned or thereafter acquired
and to provide in any such mortgage or deed of trust that the
amount of bonds or other evidences of indebtedness to be issued
thereunder and to be secured thereby shall be limited to a
definite amount or limited only by the conditions therein
specified and to issue or cause to be issued by the Corporation
the bonds or other evidences of indebtedness to be secured
thereby.
EIGHTH: Limitation of Director Liability.
(a) To the fullest extent permitted by the Arkansas
Business Corporation Act, as currently in effect or as hereafter
may be amended or modified, or any other applicable law presently
or hereafter in effect, no director of the Corporation shall be
personally liable to the Corporation or its shareholders for
monetary damages for or with respect to any acts or omissions in
the performance of his duties.
(b) Any repeal or modification of the foregoing
subparagraph by the shareholders of the Corporation shall not
adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
NINTH: Indemnification.
(a) Every person who is or was an officer, director or
employee of the Corporation and who also is or was a party or is
threatened to be made a party to or is involved in any
threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative, or investigative or by
or in the right of the Corporation, by reason of the fact that he
is or was a director, officer or employee of the Corporation or
is or was serving at the request of the Corporation as a director
or officer of another corporation, or as its representative in a
partnership, joint venture, trust, or other enterprise, shall be
indemnified and. held harmless to the fullest extent legally
permissible under and pursuant to the Arkansas Business
Corporation Act, as currently in effect or as hereafter may be
amended or modified, but in the case of any such amendment, only
to the extent that such amendment permits the Corporation to give
broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment. Such right of
indemnification shall be a contract right that may be enforced in
any lawful manner by such person. Such right of indemnification
shall not be exclusive of any other right which such director,
officer or employee may have or hereafter acquire and, without
limiting the generality of such statement, he shall be entitled
to his rights of indemnification under any agreement, vote of
shareholders, provision of law, or otherwise, as well as his
rights under this Article NINTH.
(b) Expenses incurred by any person who is or was an
officer, director or employee of the Corporation in defending a
civil, criminal, administrative, or investigative action, suit or
proceeding by reason of the fact that he is or was a director,
officer or employee of the Corporation or was serving at the
Corporation's request as a director or officer of another
corporation or as its representative in a partnership, joint
venture, trust or other enterprise shall be paid by the
Corporation in advance of the final disposition of such action,
suit or proceeding to the fullest extent legally permissible
under and pursuant to the Arkansas Business Corporation Act, as
currently in effect or as hereafter may be amended or modified,
but in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader rights
to payment of expenses than said law permitted the Corporation to
provide prior to such amendment. Such right to payment of
expenses shall be a contract right that may be enforced in any
lawful manner by such person.
(c) If any provision of this Article NINTH or the
application thereof to any person or circumstance is adjudicated
invalid, such invalidity shall not affect other provisions or
applications of this Article NINTH which lawfully can be given
without the invalid provision or application.
TENTH: Bylaws. The present by-laws of the Corporation
shall continue to be the by-laws of the Corporation until changed
or amended as therein or herein or by law provided.
ELEVENTH: Incorporators. The names of the incorporators of
the Corporation, as set forth in the Agreement of Consolidation
or Merger dated October 13, 1926, which information is provided
herein for informational purposes only, are as follows:
C. D. Cherry
W. H. Holmes
Ray Gibson
DATED: November 11, 1999
Entergy Arkansas, Inc.
/s/ Steven C. McNeal
Steven C. McNeal
Vice President and
Treasurer
/s/ Christopher T. Screen
Christopher T. Screen
Assistant Secretary
Effective November 17, 1999
Exhibit 3(i)(d)1
RESTATED ARTICLES OF INCORPORATION
of
ENTERGY GULF STATES, INC.
ARTICLE I.
The name of the Corporation is "ENTERGY GULF STATES, INC.".
ARTICLE II.
The purposes for which the Corporation is formed are the
generation, manufacture, transportation, distribution, supply and sale
of electric current, light and power to the public; the production,
manufacture and purchase of gas and the transportation, distribution,
sale and supply of gas to the public; the purchase, generation,
manufacture, transportation, distribution and sale of steam; the doing
of all such things as may be necessary or convenient in carrying out
any and all of the foregoing purposes.
The foregoing shall be construed as objects, purposes and powers,
and it is hereby expressly provided that neither the foregoing specific
enumeration nor anything in these Articles of Incorporation contained
shall be deemed to limit or exclude any power, right or privilege not
permitted by the laws of the State of Texas, for the purposes for which
the Corporation is organized.
ARTICLE III.
The places where the business of the Corporation is to be
transacted are in Jefferson County, Texas, and elsewhere within or
without the State of Texas and its principal office is to be located in
the City of Beaumont, Jefferson County, State of Texas.
The post office address of the registered office of the Corporation
is 350 Pine Street, Beaumont, Texas, 77701 and the name of its
registered agent at such address is Jerry Wright.
ARTICLE IV.
The period of duration of the Corporation is perpetual.
ARTICLE V.
The number of Directors of the Corporation shall not be less than
three (3) and not more than the number fixed from time to time by the
Bylaws of the Corporation. The names and addresses of the persons who
initially served as Directors from the date of filing of the original
Articles of Incorporation on August 25, 1925 until their successors
were elected and qualified were: J. G. Holtzclaw and Y. D. Carroll of
Beaumont, Jefferson County, Texas, and Palmer Hutcheson of Houston,
Harris County, Texas.
ARTICLE VI.
A. The total number of authorized shares of the capital stock of the
Corporation shall be as follows:
Class Par Value Authorized
Shares
Preferred Stock -- $100 par value $100 6,000,000
Preferred Stock - without par value Without par value 10,000,000
Preference Stock Without par value 20,000,000
Common Stock Without par value 200,000,000
References in these Articles of Incorporation to "Preferred Stock"
shall refer to both classes of Preferred Stock except where otherwise
indicated.
B. The Corporation has received for shares issued consideration in
excess of $1,000 consisting of money paid, labor done, or property
actually received.
C. Subject to limitations in the Articles of Incorporation, any
shares of stock of the Corporation now and hereafter authorized may be
issued and disposed of by the Board of Directors of the Corporation at
any time or from time to time for such consideration in the form of
money paid, labor done, or property actually received as may be fixed
at any time or from time to time by the Board of Directors, provided,
that as to any of such shares with par value the consideration so to
be received shall not be less than the par value thereof; and
authority so to fix such consideration is hereby granted by the
stockholders to the Board of Directors; and any and all shares so
issued and disposed of shall be fully paid and nonassessable.
D. The aggregate number of shares which the Corporation shall have
authority to issue may be increased or decreased at any time or times
in any manner then prescribed or permitted by existing laws of Texas,
subject, however, to the provisions of these Articles of
Incorporation.
E. The descriptions of the different classes of capital stock of
the Corporation and the preferences, designations, relative rights,
privileges and powers of, and the restrictions, limitations or
qualifications on, said classes of stock are as follows:
PREFERRED STOCK.
1. Series and Limits of Variations Between Series of the Preferred
Stock. Subject to the provisions of this Article VI setting forth the
provisions of the established series of Preferred Stock--$100 Par
Value (which said provisions, however, shall not continue effective as
to any shares which are redeemed or repurchased and restored to the
status of authorized but unissued shares of such class), each class of
Preferred Stock may be issued in one series or divided into and issued
in more than one series from time to time as herein provided. Series
shall be established by the Board of Directors. The authorized number
of shares of any such series, the designation of such series, the
relative rights and preferences thereof and the terms and
characteristics thereof (in those respects in which the shares of one
series may vary from the shares of other series as herein provided)
shall be fixed and determined at any time prior to the issuance
thereof by resolution or resolutions of the Board of Directors of the
Corporation. All shares of each series shall be alike in every
particular. Preferred Stock of all series within each class shall be
of equal rank and shall be identical in all respects, except in the
following particulars:
(a) The designation of such series, which may be by
distinguishing number, letter or title;
(b) The rate at which dividends are to accrue on the shares
of such series, hereinafter referred to as the "fixed dividend
rate";
(c) The terms and conditions on which the shares of such
series may be redeemed and the amount payable in respect of the
shares of such series in case of the redemption thereof at the
option of the Corporation, the amount so fixed being hereinafter
referred to as the "fixed redemption price", and the amount
payable in respect of the shares of such series in case of the
redemption thereof for any sinking fund for such series, which
amounts in respect of any series may, but need not, vary
according to the time or circumstances of such action;
(d) The amount payable in respect of the shares of such
series in case of liquidation, dissolution, or winding up of the
Corporation, or reduction or decrease of its capital stock
resulting in any distribution of its assets to its Common
Stockholders, the amount so fixed being hereinafter referred to
as the "fixed liquidation price", and the amount payable, if any,
in addition to the fixed liquidation price for each series in
case such liquidation, dissolution, winding up, reduction or
decrease be voluntary, the amount so fixed being hereinafter
referred to as the "fixed liquidation premium", which amounts in
respect of any series may, but need not, vary according to the
time or circumstances of such action;
(e) Any requirement as to any sinking fund or purchase fund
for, or the redemption, purchase or other retirement by the
Corporation of, the shares of such series;
(f) The right, if any, to convert the shares of such series
into shares of any other series of such class of Preferred Stock or
into shares of any other class of stock of the Corporation and the
rate or basis, time, manner, terms and conditions of conversion or
the method by which the same shall be determined; and
(g) With respect to series of Preferred Stock--without par
value, and only such class, the voting rights of the shares of such
series; provided that the vote per share fixed for the shares of
any series of such class on such issues as to which it is given
voting rights by these Articles of Incorporation or by law may not
exceed one one-hundredth of a vote per dollar of consideration per
share fixed by the Board of Directors for such shares upon original
issuance of such series which shall constitute the stated capital
value of such share. Each share of Preferred Stock--$100 Par Value
shall have one vote per share on such issues as to which it is
given voting rights by these Articles of Incorporation or by law.
2. Dividends on the Preferred Stock. Out of the assets of the
Corporation available for dividends, the holders of each series of
Preferred Stock at the time outstanding shall be entitled to receive,
if and when declared payable by the Board of Directors, dividends in
lawful money of the United States of America at, but not exceeding, the
fixed dividend rate for the particular series, payable quarterly on
March 15, June 15, September 15 and December 15 in each year, before
any dividends (other than a dividend payable in Common Stock of the
Corporation) shall be paid upon or set apart for the Common Stock; and
such dividends on each series of Preferred Stock shall be cumulative,
so that, if in any past dividend period or periods full dividends upon
each series of outstanding Preferred Stock at the fixed dividend rate
or rates therefor shall not have been paid, the deficiency (without
interest) shall be paid or declared and set apart for payment before
any dividends shall be paid upon or set apart for the Common Stock.
Dividends on all shares of Preferred Stock of each series of both
classes, other than the shares of the $4.40 Dividend Preferred Stock--
$100 Par Value (issued in 1944) and $4.50 Dividend Preferred Stock--
$100 Par Value (issued in 1947), shall commence to accrue and be
cumulative from the dividend date for such series next preceding the
date of issue of the initial shares of such series, or from said date
of issue, if that be a dividend date; but in the event of the issue of
additional shares of Preferred Stock of any series, subsequent to the
date of the initial issue of shares of such series, all dividends paid
on Preferred Stock of such series prior to the issue of such additional
shares, and all dividends declared payable to the holders of record of
Preferred Stock of such series at a date prior to such issue, shall be
deemed to have been paid in respect of the additional shares so issued,
and in the event any shares of Preferred Stock of any series are issued
on any date other than a dividend date, any dividends accrued and
cumulated from the dividend date next preceding the date of issue to
the date of issue shall be deemed for all purposes to have been paid in
respect of all such shares so issued and the dividend payable thereon
on the next dividend date shall be reduced by the amount so deemed to
have been paid. Any dividends declared or paid on Preferred Stock in an
amount less than full cumulative dividends accrued or in arrears upon
all Preferred Stock outstanding shall, if more than one series be
outstanding, be divided among the different series in both classes then
outstanding in proportion to the aggregate amounts which would be
distributable to Preferred Stock of each series if full cumulative
dividends were declared and paid thereon.
3. Preference of Preferred Stock on Liquidation, etc. In the event
of any liquidation, dissolution, or winding up of the Corporation, or
reduction or decrease of its capital stock resulting in a distribution
of assets to its Common Stockholders other than by way of dividends out
of the net profits or out of the surplus of the Corporation, the
holders of Preferred Stock of each series in both classes then
outstanding shall be entitled to receive, for each share thereof, the
fixed liquidation price for such series, plus, in case such
liquidation, dissolution, winding up, reduction or decrease shall have
been voluntary, the fixed liquidation premium for such series, if any,
together in all cases with all dividends accrued or in arrears thereon,
before any distribution of the assets shall be made to the holders of
the Common Stock; but the holders of Preferred Stock shall be entitled
to no further participation in such distribution. If upon any such
liquidation, dissolution, winding up, reduction or decrease, the assets
distributable among the holders of Preferred Stock shall be
insufficient to permit the payment of the full preferential amounts
aforesaid, then the entire assets of the Corporation to be distributed
shall be distributed among the holders of each series in both classes
of Preferred Stock then outstanding, ratably in proportion to the full
preferential amounts to which they are respectively entitled. As used
in this Article the expression "dividends accrued or in arrears" means,
in respect of each share of Preferred Stock of any series, that amount
which shall be equal to simple interest upon the par or stated value at
an annual rate equal to the percentage that the fixed dividend rate for
such series is of the par or stated value, from the date from which
cumulative dividends thereon commence to accrue to the date as of which
the computation is to be made, less the aggregate amount (without
interest thereon) of all dividends theretofore paid (or deemed to have
been paid) or declared and set aside for payment in respect thereof. A
consolidation or merger of the Corporation, a sale or transfer of
substantially all of its assets as an entirety, or the repurchase or
redemption of Preferred Stock in accordance with the provisions of
Paragraph 4 below, or the purchase of Common Stock in accordance with
the provisions of Paragraph 14 below, whether or not the Preferred or
Common Stock so redeemed or repurchased shall be retired, shall not be
regarded as a "liquidation, dissolution, or winding up of the
Corporation, or reduction or decrease of its capital stock resulting in
a distribution of assets to its Common Stockholders other than by way
of dividends out of the net profits or out of the surplus of the
Corporation" within the meaning of this Paragraph 3.
4. Redemption and Repurchase of Preferred Stock. The Corporation
may, at its option expressed by vote of its Board of Directors, at any
time or from time to time, redeem the whole or any part of either or
both classes of Preferred Stock or of any series thereof at the fixed
redemption price for such series, together with the amount of any
dividends accrued or in arrears thereon to the date of such redemption.
Notice of any proposed redemption of any series of Preferred Stock
shall be given by publication at least once in a newspaper printed in
the English language and customarily published on each business day and
of general circulation in each of the City of Beaumont, State of Texas,
and the Borough of Manhattan, City and State of New York, the
publication in each such newspaper to be at least 30 days, and not more
than 60 days, prior to the date fixed for such redemption. As a matter
of courtesy, but not a matter of right, the Corporation may mail a copy
of such notice to the holders of record of each series of Preferred
Stock to be redeemed, at their respective addresses then appearing on
the books of the Corporation, to the extent that they may lawfully do
so; but neither failure to mail such copy nor any defect therein or in
the mailing thereof shall affect the validity of the proceedings for
the redemption of any shares of each series of Preferred Stock so to be
redeemed. Any such redemption of any series of Preferred Stock shall be
in such amount, at such places and by such method, whether by lot or
pro rata, as shall from time to time be determined by vote of its Board
of Directors. From and after the date fixed in any such notice as the
date of redemption, unless default shall be made by the Corporation in
providing funds sufficient for such redemption at or before the time
and at the place specified for the payment thereof pursuant to said
notice, all dividends on the shares called for redemption shall cease
to accrue; and from and after the date so fixed, unless default be made
as aforesaid, or from and after the date of the earlier deposit by the
Corporation in trust, with a bank or trust company having an aggregate
capital and surplus of at least $5,000,000 and doing business in the
Borough of Manhattan, City and State of New York, or in the City of
Boston, Commonwealth of Massachusetts, of funds sufficient for such
redemption (a statement of the intention so to deposit having been
included in said notice) all rights of the holders of the shares so
called for redemption as stockholders of the Corporation, except only
the right to receive, without interest, when due the redemption funds
to which they are entitled, shall cease and determine. Any funds so
deposited which shall remain unclaimed by the holders of such Preferred
Stock at the end of six (6) years after the redemption date, together
with any interest thereon that shall have been allowed by the bank or
trust company with which the deposit shall have been made, shall be
paid by it to the Corporation to be held by the Corporation for such
holders. The Corporation may also from time to time repurchase shares
of its Preferred Stock at not exceeding the price at which the same may
be redeemed. Shares of Preferred Stock of either class redeemed or
repurchased by the Corporation shall be restored to the status of
authorized but unissued shares of such class of Preferred Stock without
designation thereof and may from time to time be reissued as provided
in Paragraph 1 of this Article VI.
5. Restrictions on Certain Corporation Action. So long as any
shares of any series of such class of Preferred Stock shall remain
outstanding, the Corporation shall not, without the affirmative vote of
the holders of two-thirds of the total number of shares of such class
of Preferred Stock then outstanding, at a meeting of such class of
Preferred Stockholders called for the purposes of approving such action
(but upon such vote, and any requisite vote at a meeting of the holders
of all classes of stock then outstanding having the privilege to vote
to authorize the Board of Directors to take such action, may):
(a) Authorize or issue any stock ranking prior to such class
of Preferred Stock in respect of dividends or assets (such stock
being hereinafter in this Paragraph 5 referred to as "Senior
Stock") or authorize or issue any stock ranking on a parity with
such class of Preferred Stock (but not including any series or
stock of Preferred Stock--$100 Par Value or Preferred Stock--
without par value) in respect of dividends or assets (such stock
ranking on a parity with but excluding Preferred Stock--$100 Par
Value and Preferred Stock-- without par value being hereinafter in
this Paragraph 5 referred to as "Parity Stock"), except (i) the
issue of Senior Stock or Parity Stock upon conversion of
obligations or securities convertible into, or upon exercise of
warrants, rights or options to purchase or subscribe to, Senior
Stock or Parity Stock which has been authorized pursuant to (b)
below, and (ii) the issue of any stock of any series of either
class of Preferred Stock up to the number of shares of such class
then authorized hereunder, which issuance may be done by the Board
of Directors as provided in these Articles of Incorporation,
without any vote by holders of shares of either class of Preferred
Stock except as may be required by the provisions of clause (f)
below;
(b) Authorize or issue any obligation or security convertible
into, or any warrants, rights or options to purchase or subscribe
to, shares of Senior Stock or Parity Stock;
(c) Reduce the amount of capital represented by the
outstanding Preferred Stock of such class; or reduce below
$11,101,124 the aggregate amount of capital represented by Common
Stock, except in a case where any State or Federal regulatory body
having jurisdiction shall have required or permitted the
Corporation to reduce the book value of any of its assets and, in
connection therewith, the amount of capital represented by Common
Stock shall be reduced by an amount or amounts not exceeding in
the aggregate the amount of such reduction in book value of
assets; provided, however, that nothing herein shall require any
such vote of the holders of either class of Preferred Stock if the
reduction of capital shall be in connection with the retirement of
shares of either class of Preferred Stock repurchased or redeemed
in accordance with the provisions of this Article VI and shall not
be in excess of the capital represented by the repurchased or
redeemed shares; references to "capital" in this clause (c) being
references to stated capital as defined by law; or
(d) Alter, amend, or repeal the provisions relating to such
class of Preferred Stock so as to affect adversely any of the
preferences or other rights of such class of Preferred Stock.
So long as any shares of any series of either class of Preferred
Stock shall remain outstanding, the Corporation shall not:
(e) Authorize or issue any obligation or security convertible
into, or any warrants, rights or options to purchase or subscribe
to shares of any series of Preferred Stock or authorize any shares
of Preferred Stock in excess of such amount as shall have been
permitted from time to time by the affirmative vote, at a meeting
called for such purpose, of the holders of shares of each class of
Preferred Stock then outstanding having a majority of the votes
entitled to be cast, at which meeting the holders of shares of
each such class of Preferred Stock then outstanding having one-
third or more of the votes entitled to be cast shall not have
voted against such permission; or
(f) Issue any shares of Preferred Stock, including any
shares which have been redeemed or repurchased and thereby
restored to the status of authorized but unissued shares, within
the number of shares permitted by action of the holders of
Preferred Stock pursuant to clause (e) above (except upon
conversion of obligations or securities convertible into, or upon
exercise of warrants, rights or options to purchase or subscribe
to, Preferred Stock), unless one of the two following conditions
shall have been satisfied, namely, that:
(i) The specific issue, sale or disposition proposed
shall have been approved by the affirmative vote, at a
meeting called for such purpose, of the holders of each class
of Preferred Stock then outstanding having a majority of the
votes entitled to be cast, at which meeting the holders of
shares of each such class of Preferred Stock then outstanding
having one-third or more of the votes entitled to be cast
shall not have voted against such action; or
(ii) For a period of 12 consecutive calendar months
within the 15 calendar months immediately preceding the
issuance of such additional shares or the contracting for
the issuance and sale thereof, (1) the net income of the
Corporation available for dividends as determined in
accordance with sound accounting practice is at least 2-1/2
times the annual dividend requirements on all Preferred
Stock of all series in both classes, all Parity Stock and
all Senior Stock to be outstanding immediately after the
issuance of such additional shares; and (2) the balance of
earnings of the Corporation available (after taxes and
depreciation) for interest, amortization and dividends as
determined in accordance with sound accounting practice is
at least 1-1/2 times the aggregate of the annual interest
requirements on its indebtedness to be outstanding
immediately after the proposed issue of such additional
shares and the annual dividend requirements on all Senior
Stock, all Parity Stock and Preferred Stock of all series in
both classes to be outstanding immediately after the
proposed issue of such additional shares. Where the
Corporation shall have acquired any property during the
period of the computation of such earnings or where the
proceeds of the sale of the shares to be issued are proposed
to be applied to the purchase of any property, the net
income or losses from such property for the whole period of
the computation shall be included or reflected therein.
So long as any shares of any series of either class of Preferred
Stock shall remain outstanding, the Corporation shall not, without the
affirmative vote, at a meeting called for such purpose, of the holders
of shares of each class of Preferred Stock then outstanding having a
majority of the votes entitled to be cast (but, upon such vote and any
requisite vote of the holders of the shares of the Common Stock then
outstanding, may):
(g) Merge or consolidate the Corporation with or into any other
corporation, or sell substantially all of the assets of the
Corporation, unless such merger or consolidation or sale, or the
issuance and assumption of all securities to be issued or assumed in
connection with any such merger or consolidation or sale, shall have
been ordered, approved, or permitted by the Securities and Exchange
Commission under the Public Utility Holding Company Act of 1935, or by
any successor commission or other regulatory authority of the United
States or of any State or governmental subdivision thereof having
jurisdiction in the premises, after specific application or other
formal presentation; but the provisions of this Clause (g) shall not
apply to an acquisition by the Corporate or franchises or assets in
any manner which does not involve a merger or consolidation.
Notwithstanding anything elsewhere in this Article VI, if in
connection with the accomplishment of any matter whatever provision is
to be made for the redemption or retirement of all of Preferred Stock
of any series of either class at the time outstanding, nothing in this
Article VI shall be construed to confer on the holders of Preferred
Stock of such series any power or right to vote in respect of any such
matter, and the holders of Preferred Stock of such series shall not
have any power or right to vote in respect of any such matter except
where, and to the extent that, a right to vote which cannot be waived
by the terms hereof is conferred by the then existing laws of the
State of Texas.
6. Voting Rights. The holders of shares of Preferred Stock shall
not possess voting power for any purpose other than those for which
voting power is conferred by Paragraph 5 of this Article VI and by this
Paragraph 6. In addition to the voting powers expressly conferred upon
Preferred Stock by the provisions of Paragraph 5 of this Article VI and
in addition to voting rights granted to Preferred Stock in statutory
proceedings as to which their vote may be mandatorily required by the
then existing laws of the State of Texas, in case at any time the
Corporation shall fail to declare and pay or set aside for payment in
full any quarterly dividend on any series of either class of Preferred
Stock and shall not on or before the fourth succeeding quarterly
dividend payment date declare and pay or set aside for payment in full
said dividend in arrears and also all dividends which shall in the
meantime have become due and payable on all of the outstanding
Preferred Stock of both classes, such holders of all series of both
classes of Preferred Stock shall thereupon have and continue to have
the right, voting together as a combined class for such purpose by
plurality vote, with each share of Preferred Stock--$100 Par Value
having for purposes of the combined class votes provided for in this
Paragraph 6 one vote per share and each share of Preferred Stock--
without par value having for such purpose the vote per share fixed for
such share pursuant to Paragraph l(g) above, to elect the smallest
number of Directors of the Corporation necessary to constitute a
majority of the members of the Board of Directors, until all dividends
accrued and payable on both classes of Preferred Stock shall have been
fully paid; and, during the continuance of such right of the holders of
all series of both classes of Preferred Stock to elect such majority of
the Board of Directors, the holders of the Common Stock shall have the
right, voting as a class, by plurality vote, to elect the remaining
members of the Board of Directors. The terms of office of all persons
who may be Directors of the Corporation at any time when such right to
elect such majority of the Board of Directors shall accrue to the
holders of both classes of Preferred Stock shall terminate upon the
election of their successors; and such election may be held at a
special meeting of all stockholders of the Corporation which shall be
convened at any time after the accrual of such right upon notice
similar to that provided in the Bylaws of the Corporation for calling
the annual meeting of the stockholders, at the request in writing of
the holders of record of at least 2% of the number of shares of both
classes of Preferred Stock then outstanding. In default of the calling
of said meeting by a proper officer of the Corporation within five days
after the making of such request, such meeting may be called on like
notice by any holder of record of either class of Preferred Stock, for
which purpose any such holder of Preferred Stock shall have the right
to have access to the stock books of the Corporation. If such special
meeting be not called prior to the next annual meeting, the holders of
both classes of Preferred Stock as one combined class for such purpose,
and the holders of the Common Stock as a second class, shall,
respectively, elect such majority and such minority of the members of
the Board of Directors as aforesaid, at such annual meeting, unless
previously thereto all such dividend defaults shall have been made
good. At all meetings of stockholders held, for the purpose of electing
Directors, during the period Preferred Stockholders shall have the
right to elect a majority of the members of the Board of Directors, the
holders of shares having a majority of the votes entitled to be cast by
the then issued and outstanding Preferred Stock as a combined class and
of the Common Stock as a class shall constitute a quorum of those
classes, respectively, for the purposes of such meetings and lack of a
quorum as to either of such classes at any such meeting shall not
interfere with the holding of such meeting and the election of
Directors by the class having a quorum present; provided that in such
election the specific Directors to be succeeded shall be designated.
Upon the termination at any time of such right of the holders of both
classes of Preferred Stock to elect such majority of the Board of
Directors, the term of office of all Directors elected by vote of the
holders of both classes of Preferred Stock as a combined class (or
elected to fill a vacancy which might have been so filled) shall end
upon the election and qualification of their successors; and such
election may be held at a special meeting of holders of Common Stock,
convened on like notice at the request in writing of the holders of
record of at least 2% of the total number of shares of Common Stock
then outstanding, or, if such special meeting is not called prior to
the next annual meeting, at such annual meeting. In default of the
calling of said meeting by a proper officer of the Corporation within
five days after the making of such request, such meeting may be called
on like notice by any holder of record of the Common Stock of the
Corporation, for which purpose any such holder of Common Stock shall
have the right to have access to the stock books of the Corporation.
Whenever, by reason of the resignation, death or removal of any
Director or Directors or any increase in the number of Directors, at
any time while the holders of Preferred Stock are entitled to elect
such majority of the Board of Directors as aforesaid, the number of
Directors in office who have been elected by either the holders of both
classes of Preferred Stock as a combined class or the holders of the
Common Stock as a class shall become less than the total number subject
to election by such respective classes, the vacancy or vacancies so
resulting may be filled by plurality vote of such respective classes of
stockholders at a meeting thereof called for the purpose, or, pending
such action, by the affirmative vote of a majority of the Directors at
the time in office who were elected by the vote of such class of
stockholders, although such Directors shall be less than a quorum of
the Board of Directors, at a meeting called by any such Director in the
manner provided in the Bylaws for the calling of special meetings of
the Board of Directors. During the continuance of such voting rights, a
Director elected by holders of both classes of Preferred Stock as a
combined class or the Common Stock as a class (or elected to fill a
vacancy which might have been so filled) shall be subject to removal by
majority vote of both classes of Preferred Stock or of the Common Stock
at the time outstanding, as appropriate, at a special meeting called
for the purpose, but not otherwise. A special meeting of stockholders
to fill a vacancy or to remove a Director as last above provided may be
called at any time by the holder or holders of record of shares
entitled to cast at least 5% of the votes of the class or combined
classes of stock entitled to vote thereat or in such other manner as
may be provided for in the Bylaws. The term of office of any officer of
the Corporation shall terminate upon the election and qualification of
his successor; and such election may be held at any meeting of the
Board of Directors following any special meeting of stockholders held
upon the accrual or termination of the voting rights of the holders of
the Preferred Stock to elect such majority of the Board of Directors so
that new Directors elected at any such meeting of stockholders shall be
empowered to choose new officers of the Corporation or any thereof in
their discretion.
DIFFERENT SERIES OF PREFERRED STOCK.
7. $4.40 Dividend Preferred Stock -- $100 Par Value. 120,000 shares
of the authorized stock classified as Preferred Stock--$100 Par Value
as provided in Paragraph A of this Article VI shall constitute the
first series of Preferred Stock--$100 Par Value and are designated as
"$4.40 Dividend Preferred Stock--$100 Par Value"; the fixed dividend
rate on the shares of such series is $4.40 per share per annum and such
dividends are cumulative from the date of the initial issuance of any
shares of such series, with the first dividend payable December 15,
1944 in respect of the period from the date of the initial issuance of
any shares of such series to said December 15, 1944; the fixed
redemption price on the shares of such series is $111 per share prior
to October 1, 1949, $109.50 per share on October 1, 1949 and thereafter
prior to October 1, 1954, and $108 per share on October 1, 1954 and
thereafter; the fixed liquidation price on the shares of such series is
$100 per share; and the fixed liquidation premium on the shares of such
series is $11 per share prior to October 1, 1949, $9.50 per share on
October 1, 1949 and thereafter prior to October 1, 1954, and $8 per
share on October 1, 1954 and thereafter. The $4.40 Dividend Preferred
Stock--$100 Par Value has no exchange or conversion rights.
7a. $4.50 Dividend Preferred Stock -- $100 Par Value. 50,000 shares
of the authorized stock classified as Preferred Stock--$100 Par Value
as provided in Paragraph A of this Article VI shall constitute the
second series of Preferred Stock--$100 Par Value and are designated as
"$4.50 Dividend Preferred Stock--$100 Par Value"; the fixed dividend
rate on the shares of such series is $4.50 per share per annum and such
dividends are cumulative from the date of the original issuance of such
series, with the first dividend payable in respect to the period from
the date of the original issuance of such series to March 15, 1948; the
fixed redemption price on the shares of such series is $105 per share;
the fixed liquidation price on the shares of such series is $100 per
share; and the fixed liquidation premium on the shares of such series
is $5 per share. The $4.50 Dividend Preferred Stock--$100 Par Value has
no exchange or conversion rights.
7b. $4.40 Dividend Preferred Stock, 1949 Series -- $100 Par Value.
60,000 shares of the authorized stock classified as Preferred Stock--
$100 Par Value as provided in Paragraph A of this Article VI shall
constitute the third series of Preferred Stock--$100 Par Value and are
designated as "$4.40 Dividend Preferred Stock, 1949 Series--$100 Par
Value"; the fixed dividend rate on the shares of such series is $4.40
per share per annum and such dividends are cumulative from September
15, 1949, with the first dividend payable December 15, 1949; the fixed
redemption price on the shares of such series is $105 per share prior
to September 15, 1954, $104 per share on September 15, 1954 and
thereafter prior to September 15, 1959, and $103 per share on September
15, 1959 and thereafter; the fixed liquidation price on the shares of
such series is $100 per share; and the fixed liquidation premium on the
shares of such series is $5 per share prior to September 15, 1954, $4
per share on September 15, 1954 and thereafter prior to September 15,
1959, and $3 per share on September 15, 1959 and thereafter. The $4.40
Dividend Preferred Stock, 1949 Series--$100 Par Value has no exchange
or conversion rights.
7c. $4.20 Dividend Preferred Stock -- $100 Par Value. 70,000 shares
of the authorized stock classified, as Preferred Stock--$100 Par Value
as provided in Paragraph A of this Article VI shall constitute the
fourth series of Preferred Stock--$100 Par Value and are designated as
"$4.20 Dividend Preferred Stock--$100 Par Value"; the fixed dividend
rate on the shares of such series is $4.20 per share per annum and such
dividends are cumulative from September 15, 1950, with the first
dividend payable December 15, 1950; the fixed redemption price on the
shares of such series is $104.818 per share prior to October 1, 1955,
$103.818 per share on October 1, 1955 and thereafter prior to October
1, 1960, and $102.818 per share on October 1, 1960 and thereafter; the
fixed liquidation price on the shares of such series is $100 per share;
and the fixed liquidation premium on the shares of such series is
$4.818 per share prior to October 1, 1955, $3.818 per share on October
1, 1955 and thereafter prior to October 1, 1960, and $2.818 per share
on October 1, 1960 and thereafter. The $4.20 Dividend Preferred Stock--
S100 Par Value has no exchange or conversion rights.
7d. $4.44 Dividend Preferred Stock -- $100 Par Value. 50,000 shares
of the authorized stock classified as Preferred Stock--$100 Par Value
as provided in Paragraph A of this Article VI shall constitute the
fifth series of Preferred Stock--$100 Par Value and are designated as
"$4.44 Dividend Preferred Stock--$100 Par Value"; the fixed dividend
rate on the shares of such series is $4.44 per share per annum and such
dividends are cumulative from June 15, 1952, with the first dividend
payable September 15, 1952; the fixed redemption price on the shares of
such series is $105.75 per share prior to July 1, 1957, $104.75 per
share on July 1, 1957, and thereafter prior to July 1, 1962, and
$103.75 per share on July 1, 1962 and thereafter; the fixed liquidation
price on the shares of such series is $100 per share; and the fixed
liquidation premium on the shares of such series is $5.75 per share
prior to July 1, 1957, $4.75 per share on July 1, 1957 and thereafter
prior to July 1, 1962, and $3.75 per share on July 1, 1962 and
thereafter. The $4.44 Dividend Preferred Stock--$100 Par Value has no
exchange or conversion rights.
7e. $5.00 Dividend Preferred Stock -- $100 Par Value. 75,000 shares
of the authorized stock classified as Preferred Stock--$100 Par Value
as provided in Paragraph A of this Article VI shall constitute the
sixth series of Preferred Stock--$100 Par Value declared designated:
"$500 Dividend Preferred Stock--$100 Par Value"; the fixed dividend
rate on the shares of such series is $5.00 per share per annum and such
dividends are cumulative from December 15, 1957, with the first
dividend payable March 15, 1958; the fixed redemption price on the
shares of such series is $108.25 per share prior to February 1, 1963,
$106.25 per share on February 1, 1963 and thereafter prior to February
1, 1968, and $104.25 per share on February 1, 1968 and thereafter; the
fixed liquidation price on the shares of such series is $100 per share;
and the fixed liquidation premium on the shares of such series is $8.25
per share prior to February 1, 1963, $6.25 per share on February 1,
1963 and thereafter prior to February 1, 1968, and $4.25 per share on
February 1, 1968 and thereafter. The $5.00 Dividend Preferred Stock--
$100 Par Value has no exchange or conversion rights.
7f. $5.08 Dividend Preferred Stock -- $100 Par Value. 100,000
shares of the authorized stock classified as Preferred Stock--$100 Par
Value as provided in Paragraph A of this Article VI shall constitute
the seventh series of Preferred Stock--$100 Par Value and are
designated as "$5.08 Dividend Preferred Stock--$100 Par Value"; the
fixed dividend rate on the shares of such series is $5.08 per share per
annum and such dividends are cumulative from December 15, 1958, with
the first dividend payable March 15, 1959; the fixed redemption price
on the shares of such series is $108.63 per share if redeemed prior to
January 1, 1964; $106.63 per share if redeemed on January 1, 1964 or
thereafter and prior to January 1, 1969; $104.63 per share if redeemed
on January 1, 1969 or thereafter. The fixed liquidation price for the
shares of such series is $100 per share; and the fixed liquidation
premium on the shares of such series is $8.63 per share prior to
January 1, 1964, $6.63 per share on January 1, 1984 and thereafter
prior to January 1, 1969, and $4.63 per share on January 1, 1969 and
thereafter. The $5.08 Dividend Preferred Stock--$100 Par Value has no
exchange or conversion rights.
7g. $4.52 Dividend Preferred Sock -- $100 Par Value. 100,000 shares
of authorized stock classified as Preferred Stock--$100 Par Value as
provided in Paragraph A of Article VI of the Articles of Incorporation
shall constitute the eighth series of Preferred Stock--$100 Par Value
and are designated as "$4.52 Dividend Preferred Stock--$100 Par Value";
the fixed dividend rate on the shares of such series is $4.52 per share
per annum and such dividends are cumulative from September 15, 1963,
with the first dividend payable December 15, 1963; the fixed redemption
price on the shares of such series is $106.57 per share if redeemed
prior to October 1, 1968; $105.57 per share if redeemed on October 1,
1968 or thereafter and prior to October 1, 1973; $103.57 per share if
redeemed on October 1, 1973 or thereafter. The fixed liquidation price
for the shares of such series is $100 per share; and the fixed
liquidation premium on the shares of such series is $6.57 per share
prior to October 1, 1968, $5.57 per share on October 1, 1968 and
thereafter prior to October 1, 1973, and S3.57 per share on October 1,
1973 and thereafter. The $4.52 Dividend Preferred Stock--$100 Par Value
has no exchange or conversion rights.
7h. $6.08 Dividend Preferred Stock -- $100 Par Value. 200,000
shares of authorized stock classified as Preferred Stock--$100 Par
Value as provided in Paragraph A of Article VI of the Articles of
Incorporation shall constitute the ninth series of Preferred Stock--
$100 Par Value and are designated as "$6.08 Dividend Preferred Stock--
$100 Par Value"; the fixed dividend rate on the shares of such series
is $6.08 per share per annum and such dividends are cumulative from
June 15, 1967, with the first dividend payable September 15, 1967; the
fixed redemption price on the shares of such series is $107.42 per
share if redeemed prior to July 1, 1972; $105.34 per share if redeemed
on July 1, 1972 or thereafter and prior to July 1, 1977; $103.34 per
share if redeemed on July 1, 1977 or thereafter. The fixed liquidation
price for the shares of such series is $100 per share; and the fixed
liquidation premium on the shares of such series is $7.42 per share
prior to July 1, 1972, $5.34 per share on July 1, 1972 and thereafter
prior to July 1, 1977, and $3.34 per share on July 1, 1977 and
thereafter. The $6.08 Dividend Preferred Stock--$100 Par Value has no
exchange or conversion rights.
7i. $7.56 Dividend Preferred Stock -- $100 Par Value. 350,000
shares of authorized stock classified as Preferred Stock--$100 Par
Value as provided in Paragraph A of Article VI of the Articles of
Incorporation shall constitute the tenth series of Preferred Stock--
$100 Par Value and are designated as "$7.56 Dividend Preferred Stock--
$100 Par Value"; the fixed dividend rate on the shares of such series
is $7.56 per share per annum and such dividends are cumulative from
September 15, 1972, with the first dividend payable December 15, 1972;
the fixed redemption price on the shares of such series is $108.36 per
share if redeemed prior to September 1, 1977; $106.80 per share if
redeemed on September 1, 1977 or thereafter and prior to September 1,
1982; $103.80 per share if redeemed on September 1, 1982 or thereafter
and prior to September 1, 1987; and $101.80 per share if redeemed on
September 1, 1987 or thereafter; provided, however, that unless all
shares of Preferred Stock of each series then outstanding are redeemed
or otherwise retired, no shares of the $7.56 Dividend Preferred Stock--
$100 Par Value shall be redeemed at the option of the Company prior to
September 1, 1977, directly or indirectly out of the proceeds of or in
anticipation of any refunding involving the incurring of indebtedness
or the issuance of additional shares of Preferred Stock having an
effective interest cost or dividend rate (calculated in accordance with
generally accepted financial principles) of less than 7.50% per annum.
The fixed liquidation price for the shares of such series is $100 per
share; and the fixed liquidation premium on the shares of such series
is $8.36 per share prior to September 1, 1977, $6.80 per share on
September 1, 1977 and thereafter prior to September 1, 1982, $3.80 per
share on September 1, 1982 and thereafter prior to September 1, 1987,
and $1.80 per share on September 1, 1987 and thereafter. The $7.56
Dividend Preferred Stock--$100 Par Value has no exchange or conversion
rights.
7j. Adjustable Rate Cumulative Preferred Stock, Series A -- $100
Par Value. 300,000 shares of authorized stock classified as Preferred
Stock--$100 par value as provided in Paragraph A of Article VI of the
Restated Articles of Incorporation, as amended, shall constitute the
eighteenth series of Preferred Stock--$100 par value and are designated
as "Adjustable Rate Cumulative Preferred Stock, Series A--$100 par
value"; the fixed dividend rate on the shares of such series for each
dividend period shall be the rate determined in accordance with the
provisions of these resolutions and such dividends are cumulative from
March 15, 1983, (subject to the provision in Article VI E.2 regarding
deemed payment prior to the date of issue) with the first and second
dividends payable September 15, 1983 and December 15, 1983, at the rate
per share (based on par value) of 11-1/2% per annum for the initial
dividend period ending September 14, 1983 and second dividend period
ending December 14, 1983, and at 0.65 of 1% above the Applicable Rate
(as hereinafter defined) from time to time in effect for each
subsequent dividend period; however, the dividend rate for any dividend
period will in no event be less than 7% per annum or greater than 13%
per annum.
Except as provided below in this paragraph, the "Applicable Rate''
for any dividend period will be the highest of the Treasury Bill Rate,
the Ten Year Constant Maturity Rate and the Twenty Year Constant
Maturity Rate (each as hereinafter defined) for such dividend period.
In the event the Corporation determines in good faith that for any
reason one or more of such rates cannot be determined for any dividend
period, then the Applicable Rate for such dividend will be the higher
of whichever of such rates can be so determined. In the event the
Corporation determines in good faith that none of such rates can be
determined for any dividend period, then the Applicable Rate in effect
for the preceding dividend period will be continued for such dividend
period.
Except as provided below in this paragraph, the "Treasury Bill
Rate" for each dividend period will be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period (as defined below)) for
three-month U.S. Treasury bills, as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to the ten
calendar days immediately preceding the March 15, June 15, September
15, or December 15, as the case may be, prior to the dividend period
for which the dividend rate on the eighteenth series of Preferred Stock
is being determined. In the event that the Federal Reserve Board does
not publish such a weekly per annum market discount rate during any
such Calendar Period, then the Treasury Bill Rate for the related
dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during the
relevant Calendar Period) for three-month U.S. Treasury bills, as
published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that a per annum market discount rate for
three-month U. S. Treasury bills is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Treasury
Bill Rate for such dividend period will be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period) for all of the U.S.
Treasury bills, then having maturities of not less than 80 nor more
than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such
rates, by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event the Corporation
determines in good faith that for any reason no such U.S. Treasury bill
rates are published as provided above during such Calendar Period, then
the Treasury Bill Rate for such dividend period will be the arithmetic
average of the per annum market discount rates based upon the closing
bids during such Calendar Period for each of the issues of marketable
non-interest bearing U.S. Treasury securities with a maturity of not
less than 80 nor more than 100 days from the date of each such
quotation, as quoted daily for each business day in New York City (or
less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized U.S. Government securities
dealers selected by the Corporation. In the event the Corporation
determines in good faith that for any reason the Corporation cannot
determine the Treasury Bill Rate for any dividend period as provided
above in this paragraph, the Treasury Bill Rate for such dividend
period will be the arithmetic average of the per annum market discount
rates based upon the closing bids during the related Calendar Period
for each of the issues of marketable interest bearing U.S. Treasury
securities with a maturity of not less than 80 nor more than 100 days
from the date of each such quotation, as quoted daily for each business
day in New York City (or less frequently if daily quotations are not
generally available) to the Corporation by at least three recognized
U.S. Government securities dealers selected by the Corporation.
Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each dividend period will be the arithmetic average
of the two most recent weekly per annum Ten Year Average Yields (or the
one weekly per annum Ten Year Average Yield, if only one such Yield is
published during the relevant Calendar Period), as published weekly by
the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the March 15, June 15,
September 15 or December 15, as the case may be, prior to the dividend
period for which the dividend rate on the eighteenth series of
Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Ten Year Average
Yield during such Calendar Period, then the Ten Year Constant Maturity
Rate for such dividend period will be the arithmetic average of the two
most recent weekly per annum Ten Year Average Yields (or the one weekly
per annum Ten Year Average Yield, if only one such Yield is published
during the relevant Calendar Period), as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that a
per annum Ten Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten Year
Constant Maturity Rate for such dividend period will be the arithmetic
average of the two most recent weekly per annum average yields to
maturity (or the one weekly average yield to maturity, if only one such
yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities (as defined below)) then having
maturities of not less than eight nor more than twelve years, as
published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board does not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event the Corporation determines in
good faith that for any reason the Corporation cannot determine the Ten
Year Constant Maturity Rate for any dividend period as provided above
in this paragraph, then the Ten Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the per annum average
yields to maturity based upon, the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eight nor more than twelve
years from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations
are not generally available) to the Corporation by at least three
recognized U.S. Government securities dealers selected by the
Corporation.
Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each dividend period will be the arithmetic
average of the two most recent weekly per annum Twenty Year Average
Yields (or the one weekly per annum Twenty Year Average Yield, if only
one such Yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar
Period immediately prior to the ten calendar days immediately preceding
the March 15, June 15, September 15 or December 15, as the case may be,
prior to the dividend period for which the dividend rate on the
eighteenth series of Preferred Stock is being determined. In the event
the Federal Reserve Board does not publish such a weekly per annum
Twenty Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such dividend period will be the
arithmetic average of the two most recent weekly per annum Twenty Year
Average Yields (or the one weekly per annum Twenty Year Average Yield,
if only one such Yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that a per annum Twenty Year Average
Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such
Calendar Period, then the Twenty Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one weekly average
yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special
Securities) then having maturities of not less than eighteen nor more
then twenty-two years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board does not publish
such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Twenty Year Constant Maturity Rate for
any dividend period as provided above in this paragraph, then the
Twenty Year Constant Maturity Rate for such dividend period will be the
arithmetic average of the per annum average yields to maturity based
upon the closing bids during such Calendar Period for each of the
issues of actively traded marketable U. S. Treasury fixed interest rate
securities (other than Special Securities) with a final maturity date
not less than eighteen nor more than twenty-two years from the date of
each quotation, as quoted daily for each business day in New York City
(or less frequently if daily quotations are not generally available) to
the Corporation by at least three recognized U.S. Government securities
dealers selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate will each be rounded to the nearest
five hundredths of a percentage point.
The fixed dividend rate per share payable for each dividend period
will be computed by dividing the dividend rate for such dividend period
(determined in accordance with these resolutions) by four and applying
such rate against the par value per share of the eighteenth series of
Preferred Stock. The dividend payable for the initial dividend period
or any period longer or shorter than a full quarterly dividend period
will be computed on the basis of a 360-day year consisting of 30-day
months.
The dividend rate with respect to each dividend period will be
calculated as promptly as practicable by the Corporation according to
the appropriate method described herein. The mathematical accuracy of
each such calculation will be confirmed in writing by independent
certified public accountants of recognized standing. The Corporation
will cause each dividend rate to be published in a newspaper of general
circulation in New York City prior to the commencement of the new
dividend period to which it applies and will cause notice of such
dividend rate to be enclosed with the dividend payment checks next
mailed to the holders of the eighteenth series of Preferred Stock.
As used herein, the term "Calendar Period" means a period of
fourteen calendar days the term "Special Securities" means securities
which can, at the option of the holder, be surrendered at face value in
payment of any Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which were
originally issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of ten years); and the term "Twenty Year Average
Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of twenty years).
The fixed redemption price on the shares of the eighteenth series
is $111.50 per share if redeemed prior to May 15, 1984; $109.80 per
share if redeemed from May 15, 1984 through May 14, 1985; $108.10 per
share if redeemed from May 15, 1985 through May 14, 1986; $106.40 per
share if redeemed from May 15, 1986 through May 14, 1987; $104.70 per
share if redeemed from May 15, 1987 through May 14, 1988; $103.00 per
share if redeemed from May 15, 1988 through May 14, 1993; and $100.00
per share if redeemed on May 15, 1993, or thereafter; provided,
however, that unless all shares of Preferred Stock of each series then
outstanding are redeemed or otherwise retired, no shares of the
eighteenth series of Preferred Stock shall be redeemed at the option of
the Corporation prior to May 15, 1988, directly or indirectly out of
the proceeds of or in anticipation of any refunding involving the
incurring of indebtedness or the issuance of additional shares of
Preferred Stock having an effective interest cost or dividend rate
(calculated in accordance with generally accepted financial practice)
of less than 11-1/2% per annum. The fixed redemption price on the
shares of such series is $100 per share plus any accrued and unpaid
dividends, if redeemed in satisfaction of the Corporation's Sinking
Fund obligation or pursuant to optional redemption right provided
below.
Subject to the provision of Article VI of the Restate Articles of
Incorporation, as amended, so long as any of this eighteenth series of
Preferred Stock shall remain outstanding, on September 15, 1989, and on
September 15 in each year thereafter, the Corporation shall redeem as a
Sinking Fund obligation, 4% of the number of shares of such eighteenth
series of Preferred Stock originally issued and, in addition, the
Corporation may, at its option, redeem on each such September 15
additional shares of this eighteenth series of Preferred Stock in a
number not exceeding such percentage, but the right to make such
optional redemption shall not be cumulative and shall not be applied in
reduction of any subsequent mandatory Sinking Fund redemption provided
for above; provided that the Corporation shall not declare or pay or
set apart for, or make or order any dividend or other distribution in
respect of, or purchase or otherwise acquire for value any shares of,
the Common Stock of the Corporation, or any class of stock as to which
the Preferred Stock of the Corporation has priority as to payments of
dividends, unless all redemptions required to be made in satisfaction
of the Sinking Fund obligation provided above have been made. The
Corporation may elect to reduce its obligation in respect of the
redemption of shares so required to be redeemed as a Sinking Fund
obligation by making direct purchases in the open market or otherwise
of shares of this eighteenth series of Preferred Stock (other than
shares previously applied as a credit against the Sinking Fund
obligation) and designating such shares to be applied as a credit, in
whole or in part, in an amount equal to the aggregate par value of the
shares so applied, against the aggregate par value of the shares
required to be redeemed in such year pursuant to the Sinking Fund
obligation.
In all cases in which redemptions of less than all outstanding
shares of this eighteenth series are to be made by the Corporation, the
shares to be redeemed shall be selected by lot in accordance with such
procedures as may be approved by the Board of Directors of this
Corporation.
The fixed liquidation price for the shares of such series is $100
per share; and the fixed liquidation premium per share on the shares of
eighteenth series is the excess over $100 of the redemption price at
the time in effect.
The Adjustable Rate Cumulative Preferred Stock, Series A--$100 par
value has no exchange or conversion rights.
7k. Adjustable Rate Cumulative Preferred Stock, Series B -- $100
Par Value. 450,000 shares of authorized stock classified as Preferred
Stock--$100 par value as provided in Paragraph A of Article VI of the
Restated Articles of Incorporation, as amended, shall constitute the
nineteenth series of Preferred Stock--$100 par value and are designated
as "Adjustable Rate Cumulative Preferred Stock, Series B--$100 par
value"; the fixed dividend rate on the shares of such series for each
dividend period shall be the rate determined in accordance with the
provisions of these resolutions and such dividends are cumulative from
December 15, 1983, (subject to the provision in Article VI E.2
regarding deemed payment prior to the date of issue) with the first and
second dividends payable March 15, 1984 and June 15, 1984, at the rate
per share (based on par value) of 12.50% per annum for the initial
dividend period ending March 14, 1984 and second dividend period ending
June 14, 1984, and at the rate per share of .70 of 1% above the
Applicable Rate per annum (as hereinafter defined) from time to time in
effect for each subsequent dividend period; however, the dividend rate
for any dividend period will in no event be less than 7.0% per annum or
greater than 13.5% per annum.
Except as provided below in this paragraph, the "Applicable Rate"
for any dividend period will be the highest of the Treasury Bill Rate,
the Ten Year Constant Maturity Rate and the Twenty Year Constant
Maturity Rate (each as hereinafter defined) for such dividend period.
In the event the Corporation determines in good faith that for any
reason one or more of such rates cannot be determined for any dividend
period, then the Applicable Rate for such dividend will be the higher
of whichever of such rates can be so determined. In the event the
Corporation determines in good faith that none of such rates can be
determined for any dividend period, then the Applicable Rate in effect
for the preceding dividend period will be continued for such dividend
period.
Except as provided below in this paragraph, the "Treasury Bill
Rate" for each dividend period will be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period (as defined below)) for
three-month U.S. Treasury bills, as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to the ten
calendar days immediately preceding the March 15, June 15, September
15, or December 15, as the case may be, prior to the dividend period
for which the dividend rate on the nineteenth series of Preferred Stock
is being determined. In the event that the Federal Reserve Board does
not publish such a weekly per annum market discount rate during any
such Calendar Period, then the Treasury Bill Rate for the related
dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during the
relevant Calendar Period) for three-month U.S. Treasury Bills, as
published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Corporation. In .the event that a per annum market discount rate for
three-month U.S. Treasury bills is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Treasury
Bill Rate for such dividend period will be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period) for all of the U.S.
Treasury bills, then having maturities of not less than 80 nor more
than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such
rates, by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event the Corporation
determines in good faith that for any reason no such U.S. Treasury bill
rates are published as provided above during such Calendar Period, then
the Treasury Bill Rate for such dividend period will be the arithmetic
average of the per annum market discount rates based upon the closing
bids during such Calendar Period for each of the issues of marketable
non-interest bearing U.S. Treasury securities with a maturity of not
less than 80 nor more than 100 days from the date of each such
quotation, as quoted daily for each business day in New York City (or
less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized U. S. Government securities
dealers selected by the Corporation. In the event the Corporation
determines in good faith that for any reason the Corporation cannot
determine the Treasury Bill Rate for any dividend period as provided
above in this paragraph, the Treasury Bill Rate for such dividend
period will be the arithmetic average of the per annum market discount
rates based upon the closing bids during the related Calendar Period
for each of the issues of marketable interest bearing U.S. Treasury
securities with a maturity of not less than 80 nor more than 100 days
from the date of each such quotation, as quoted daily for each business
day in New York City (or less frequently if daily quotations are not
generally available) to the Corporation by at least three recognized
U.S. Government securities dealers selected by the Corporation.
Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each dividend period will be the arithmetic average
of the two most recent weekly per annum Ten Year Average Yields for the
one weekly per annum Ten Year Average Yield, if only one such Yield is
published during the relevant Calendar Period), as published weekly by
the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the March 15, June 15,
September 15 or December 15, as the case may be, prior to the dividend
period for which the dividend rate on the nineteenth series of
Preferred Stock is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Ten Year Average
Yield during such Calendar Period, then the Ten Year Constant Maturity
Rate for such dividend period will be the arithmetic average of the two
most recent weekly per annum Ten Year Average Yields (or the one weekly
per annum Ten Year Average Yield, if only one such Yield is published
during the relevant Calendar Period), as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that a
per annum Ten Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Ten Year
Constant Maturity Rate for such dividend period will be the arithmetic
average of the two most recent weekly per annum average yields to
maturity (or the one weekly average yield to maturity, if only one such
yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities (as defined below)) then having
maturities of not less than eight nor more than twelve years, as
published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board does not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event the Corporation determines in
good faith that for any reason the Corporation cannot determine the Ten
Year Constant Maturity Rate for any dividend period as provided above
in this paragraph, then the Ten Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eight nor more than twelve
years from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations
are not generally available) to the Corporation by at least three
recognized U.S. Government securities dealers selected by the
Corporation.
Except as provided below in this paragraph, the "Twenty Year
Constant Maturity Rate" for each dividend period will be the arithmetic
average of the two most recent weekly per annum Twenty Year Average
Yields (or the one weekly per annum Twenty Year Average Yield, if only
one such Yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar
Period immediately prior to the ten calendar days immediately preceding
the March 15, June 15, September 15 or December 15, as the case may be,
prior to the dividend period for which the dividend rate on the
nineteenth series of Preferred Stock is being determined. In the event
the Federal Reserve Board does not publish such a weekly per annum
Twenty Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such dividend period will be the
arithmetic average of the two most recent weekly per annum Twenty Year
Average Yields (or the one weekly per annum Twenty Year Average Yield,
if only one such Yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by
the Corporation. In the event that a per annum Twenty Year Average
Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such
Calendar Period, then the Twenty Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one weekly average
yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special
Securities) then having maturities of not less than eighteen nor more
then twenty-two years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board does not publish
such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the
Corporation cannot determine the Twenty Year Constant Maturity Rate for
any dividend period as provided above in this paragraph, then the
Twenty Year Constant Maturity Rate for such dividend period will be the
arithmetic average of the per annum average yields to maturity based
upon the closing bids during such Calendar Period for each of the
issues of actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final maturity date
not less than eighteen nor more than twenty-two years from the date of
each quotation, as quoted daily for each business day in New York City
(or less frequently if daily quotations are not generally available) to
the Corporation by at least three recognized U.S. Government securities
dealers selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate will each be rounded to the nearest
five hundredths of a percentage point.
The fixed dividend rate per share payable for each dividend period
will be computed by dividing the dividend rate for such dividend period
(determined in accordance with these resolutions) by four and applying
such rate against the par value per share of the nineteenth series of
Preferred Stock. The dividend payable for the initial dividend period
or any period longer or shorter than a full quarterly dividend period
will be computed on the basis of a 360 day year consisting of 30-day
months.
The dividend rate with respect to each dividend period will be
calculated as promptly as practicable by the Corporation according to
the appropriate method described herein. The mathematical accuracy of
each such calculation will be confirmed in writing by independent
certified public accountants of recognized standing. The Corporation
will cause each dividend rate to be published in a newspaper of general
circulation in New York City prior to the commencement of the new
dividend period to which it applies and will cause notice of such
dividend rate to be enclosed with the dividend payment checks next
mailed to the holders of the nineteenth series of Preferred Stock.
As used herein, the term "Calendar Period" means a period of
fourteen calendar days the term "Special Securities" means securities
which can, at the option of the holder, be surrendered at face value in
payment of any Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which were
originally issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of ten years); and the term "Twenty Year Average
Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of twenty years).
The fixed redemption price on the shares of the nineteenth series
is $112.50 per share if redeemed prior to March 14, 1985; $110.60 per
share if redeemed from March 15, 1985 through March 14, 1986; $108.70
per share if redeemed from March 15, 1986 through March 14, 1987;
$106.80 per share if redeemed from March 15, 1987 through March 14,
1988; $104.90 per share if redeemed from March 15, 1988 through March
14, 1989; $103.00 per share if redeemed from March 15, 1989 through
March 14, 1994; and $100.00) per share if redeemed on March 15, 1994,
or thereafter; provided, however, that unless all shares of Preferred
Stock of each series then outstanding are redeemed or otherwise
retired, no shares of the nineteenth series of Preferred Stock shall be
redeemed at the option of the Corporation prior to March 15, 1989,
directly or indirectly out of the proceeds of or in anticipation of any
refunding involving the incurring of indebtedness or the issuance of
additional shares of Preferred Stock having an effective interest cost
or dividend rate (calculated in accordance with generally accepted
financial practice) of less than 12.50% per annum. The fixed redemption
price on the shares of such series is $100 per share plus any accrued
and unpaid dividends, if redeemed in satisfaction of the Corporation's
Sinking Fund obligation or pursuant to optional redemption right
provided below.
Subject to the provisions of Article VI of the Restated Articles of
Incorporation, as amended, so long as any of this nineteenth series of
Preferred Stock shall remain outstanding, on March 15, 1990, and on
March 15 in each year thereafter, the Corporation shall redeem as a
Sinking Fund obligation, 5% of the number of shares of such nineteenth
series of Preferred Stock originally issued and, in addition, the
Corporation may, at its option, redeem on each such March 15 additional
shares of this nineteenth series of Preferred Stock in a number not
exceeding such percentage but the right to make such optional
redemption shall not be cumulative and shall not be applied in
reduction of any subsequent mandatory Sinking Fund redemption provided
for above; provided that the Corporation shall not declare or pay or
set apart for, or make or order any dividend or other distribution in
respect of, or purchase or otherwise acquire for value any shares of,
the Common Stock of the Corporation, or any class of stock as to which
the Preferred Stock of the Corporation has priority as to payments of
dividends, unless all redemptions required to be made in satisfaction
of the Sinking Fund obligation provided above have been made. The
Corporation may elect to reduce its obligation in respect of the
redemption of shares so required to be redeemed as a Sinking Fund
obligation by making direct purchases in the open market or otherwise
of shares of this nineteenth series of Preferred Stock (other than
shares previously applied as a credit against the Sinking Fund
obligation) and designating such shares to be applied as a credit, in
whole or in part, in an amount equal to the aggregate par value of the
shares so applied, against the aggregate par value of the shares
required to be redeemed in such year pursuant to the Sinking Fund
obligation.
In all cases in which redemptions of less than all outstanding
shares of this nineteenth series are to be made by the Corporation, the
shares to be redeemed shall be selected by lot in accordance with such
procedures as may be approved by the Board of Directors of this
Corporation.
The fixed liquidation price for the shares of such series is $100
per share; and the fixed liquidation premium per share on the shares of
nineteenth series is the excess over $100 of the redemption price at
the time in effect.
The Adjustable Rate Cumulative Preferred Stock, Series B--$100 par
value has no exchange or conversion rights.
PREFERENCE STOCK.
8. Series and Limits of Variations Between Series of Preference
Stock. Subject to the provisions of this Article VI setting forth the
provisions of the established series of Preference Stock (which said
provisions, however, shall not continue effective as to any shares
which are redeemed or repurchased and restored to the status of
authorized but unissued shares of such class), the Preference Stock may
be issued in one series or divided into and issued in more than one
series from time to time as herein provided. Series shall be
established by the Board of Directors. Subject to the prior rights of
holders of Preferred Stock as set forth in this Article VI or in any
resolution of the Board of Directors providing for the issuance of any
series of Preferred Stock, the authorized number of shares of any such
series of Preference Stock, the designation of such series, the
relative rights and preferences thereof and the terms and
characteristics thereof (in those respects in which the shares of one
series may vary from the shares of other series as herein provided)
shall be fixed and determined at any time prior to the issuance thereof
by resolution or resolutions of the Board of Directors of the
Corporation. All shares of each series shall be alike in every
particular. Preference Stock of all series shall be of equal rank and
shall be identical in all respects, except in the following
particulars:
(a) The designation of such series, which may be by distinguishing
number, letter or title;
(b) The rate at which dividends are to accrue on the shares of such
series, hereinafter referred to as the "fixed dividend rate";
(c) The terms and conditions on which the shares of such series may
be redeemed and the amount payable in respect of the shares of such
series in case of the redemption thereof at the option of the
Corporation, the amount so fixed being hereinafter referred to as the
"fixed redemption price"', and the amount payable in respect of the
shares of such series in case of the redemption thereof for any sinking
fund for such series, which amounts in respect of any series may, but
need not, vary according to the time or circumstances of such action;
(d) The amount payable in respect of the shares of such series in
case of liquidation, dissolution, or winding up of the Corporation, or
reduction or decrease of its capital stock resulting in any
distribution of its assets to its Common Stockholders, the amount so
fixed being hereinafter referred to as the "fixed liquidation price",
and the amount payable, if any, in addition to the fixed liquidation
price for each series in case such liquidation, dissolution, winding
up, reduction or decrease be voluntary, the amount so fixed being
hereinafter referred to as the "fixed liquidation premium", which
amounts in respect of any series may, but need not, vary according to
the time or circumstances of such action;
(e) Any requirement as to any sinking fund or purchase fund for, or
the redemption, purchase or other retirement by the Corporation of, the
shares of such series;
(f) The right, if any, to convert the shares of such series into
shares of any other series of Preference Stock or into shares of Common
Stock of the Corporation and the rate or basis, time, manner, terms and
conditions of conversion or the method by which the same shall be
determined; and
(g) The voting rights, if any, of the shares of such series;
provided that the vote per share fixed for the shares of any series of
such class on such issues as to which it is given voting rights by
these Articles of Incorporation, by the resolution establishing such
series or by law may not exceed one one-hundredth of a vote per dollar
of consideration per share fixed by the Board of Directors for such
shares upon original issuance of such series which shall constitute the
stated capital value of such share.
9. Dividends on the Preference Stock. Out of the assets of the
Corporation available for dividends, subject to the prior rights of
holders of Preferred Stock as set forth in this Article VI or in any
resolution of the Board of Directors providing for the issuance of any
series of Preferred Stock, the holders of each series of Preference
Stock at the time outstanding shall be entitled to receive, if and when
declared payable by the Board of Directors, dividends in lawful money
of the United States of America at, but not exceeding, the fixed
dividend rate for the particular series, payable quarterly on March 15,
June 15, September 15 and December 15 in each year, before any
dividends (other than a dividend payable in Common Stock of the
Corporation) shall be paid upon or set apart for the Common Stock; and
such dividends on each series of Preference Stock shall be cumulative,
so that, if in any past dividend period or periods full dividends upon
each series of outstanding Preference Stock at the fixed dividend rate
or rates therefor shall not have been paid, the deficiency (without
interest) shall be paid or declared and set apart for payment before
any dividends shall be paid upon or set apart for the Common Stock.
Dividends on all shares of Preference Stock of each series shall
commence to accrue and be cumulative from the date of issue. Any
dividends declared or paid on Preference Stock in an amount less than
full cumulative dividends accrued or in arrears upon all Preference
Stock outstanding shall, if more than one series be outstanding, be
divided among the different series then outstanding in proportion to
the aggregate amounts which would be distributable to Preference Stock
of each series if full cumulative dividends were declared and paid
thereon.
10. Preference of Preference Stock on Liquidation, etc. In the
event of any liquidation, dissolution, or winding up of the
Corporation, or reduction or decrease of its capital stock resulting in
a distribution of assets to its Common Stockholders other than by way
of dividends out of the net profit or out of the surplus of the
Corporation, subject to the prior rights of holders of Preferred Stock
as set forth in this Article VI or in any resolution of the Board of
Directors providing for the issuance of any series of Preferred Stock,
the holders of Preference Stock of each series then outstanding shall
be entitled to receive, for each share thereof, the fixed liquidation
price for such series, plus in case such liquidation, dissolution,
winding up, reduction or decrease shall have been voluntary, the fixed
liquidation premium for such series, if any, together in all cases with
all dividends accrued or in arrears thereon, before any distribution of
the assets shall be made to the holders of the Common Stock; but the
holders of Preference Stock shall be entitled to no further
participation in such distribution. If upon any such liquidation,
dissolution, winding up, reduction or decrease, the assets
distributable among the holders of Preference Stock shall be
insufficient to permit the payment of the full preferential amounts
aforesaid, then the assets of the Corporation remaining after payment
of the full preferential amounts then due to holders of Preferred Stock
shall be distributed among the holders of each series of Preference
Stock then outstanding, ratably in pro portion to the full preferential
amounts to which they are respectively entitled. As used in this
Article the expression "dividends accrued or in arrears" means, in
respect of each share of Preference Stock of any series, that amount
which shall be equal to simple interest upon the stated value at an
annual rate equal to the percentage that the fixed dividend rate for
such series is of the stated value, from the date from which cumulative
dividends thereon commence to accrue to the date as of which the
computation is to be made, less the aggregate amount (without interest
thereon) of all dividends theretofore paid or declared and set aside
for payment in respect thereof. A consolidation or merger of the
Corporation, a sale or transfer of substantially all of its assets as
an entirety, or the repurchase or redemption of Preferred Stock in
accordance with the provisions of Paragraph 4 above, or the repurchase
or redemption of Preference Stock in accordance with the provisions of
Paragraph 11 below or the purchase of Common Stock in accordance with
the provisions of Paragraph 14 below, whether or not the Preferred,
Preference or Common Stock so redeemed or repurchased shall be retired,
shall not be regarded as a "liquidation, dissolution, or winding up of
the Corporation, or reduction or decrease of its capital stock
resulting in a distribution of assets to its Common Stockholders other
than by way of dividends out of the net profits or out of the surplus
of the Corporation" within the meaning of this Paragraph 10.
11. Redemption and Repurchase of Preference Stock. The Corporation
may, at its option expressed by vote of its Board of Directors, at any
time or from time to time, redeem the whole or any part of the
Preference Stock or of any series thereof at the fixed redemption price
for such series, together with the amount of any dividends accrued or
in arrears thereon to the date of such redemption. Notice of any
proposed redemption of any series of Preference Stock shall be given by
publication at least once in a newspaper printed in the English
language and customarily published on each business day and of general
circulation in each of the City of Beaumont, State of Texas, and the
Borough of Manhattan, City and State of New York, the publication in
each such newspaper to be at least 30 days, and not more than 60 days,
prior to the date fixed for such redemption. As a matter of courtesy,
but not a matter of right, the Corporation may mail a copy of such
notice to the holders of record of each series of Preference Stock to
be redeemed, at their respective addresses then appearing on the books
of the Corporation, to the extent that they may lawfully do so; but
neither failure to mail such copy nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of each series of Preference Stock so to be
redeemed. Any such redemption of any series of Preference Stock shall
be in such amount, at such places and by such method, whether by lot or
pro rata, as shall from time to time be determined by vote of its Board
of Directors. From and after the date fixed in any such notice as the
date of redemption, unless default shall be made by the Corporation in
providing funds sufficient for such redemption at or before the time
and at the place specified for the payment thereof pursuant to said
notice, all dividends on the shares called for redemption shall cease
to accrue; and from and after the date so fixed, unless default be made
as aforesaid, or from and after the date of the earlier deposit by the
Corporation in trust, with a bank or trust company having an aggregate
capital and surplus of at least $5,000,000 and doing business in the
Borough of Manhattan, City and State of New York, or in the City of
Boston, Commonwealth of Massachusetts, of funds sufficient for such
redemption (a statement of the intention so to deposit having been
included in said notice) all rights of the holders of the shares so
called for redemption as stockholders of the Corporation, except only
the right to receive, without interest, when due the redemption funds
to which they are entitled, shall cease and determine. Any funds so
deposited which shall remain unclaimed by the holders of such
Preference Stock at the end of six (6) years after the redemption date,
together with any interest thereon that shall have been allowed by the
bank or trust company with which the deposit shall have been made,
shall be paid by it to the Corporation to be held by the Corporation
for such holders. The Corporation may also from time to time repurchase
shares of its Preference Stock at not exceeding the price at which the
same may be redeemed. Shares of Preference Stock redeemed or
repurchased by the Corporation shall be restored to the status of
authorized but unissued shares of Preference Stock and may from time to
time be reissued as provided in Paragraph 8 of this Article VI.
12. Restrictions on Certain Corporate Action. So long as any shares
of any series of Preference Stock shall remain outstanding, the
Corporation shall not, without the affirmative vote of the holders of
shares of Preference Stock then outstanding having two-thirds of the
votes entitled to be cast by such class, at a meeting of Preference
Stockholders called for the purpose of approving such action (but upon
such vote, and any requisite vote at a meeting of the holders of all
classes of stock then outstanding having the privilege to vote to
authorize the Board of Directors to take such action, may):
(a) Create or authorize any additional class of stock (other
than the Preferred Stock) ranking prior to the Preference Stock in
respect to dividends or liquidation rights (other than stock
issuable upon conversion of obligations or securities, or upon the
exercise of warrants, rights or options to purchase, authorized
pursuant to (b) below);
(b) Create or authorize any obligation or security convertible
into, or any warrants, rights or options to purchase or subscribe
to, any stock referred to in (a) above ranking prior to the
Preference Stock in respect to dividends or liquidation rights; or
(c) Alter, amend or repeal the provisions hereof relative to
the Preference Stock, or any series thereof, which would change
the express terms and provisions of such stock in any manner
prejudicial to the holders thereof, including any change in the
provisions of Sections 12 and 13 of this Paragraph E of Article
VI; provided, however, that if such prejudicial change appertains
to outstanding shares of one or more, but not all, of such series,
then for the purposes of this Section 12 such change shall be
deemed to be authorized if holders of two-thirds of the shares
prejudicially affected shall vote favorably with respect thereto.
Notwithstanding anything elsewhere in this Article VI, if in
connection with the accomplishment of any matter whatever, provision is
to be made for the redemption or retirement of all of the Preference
Stock of any series at the time outstanding, nothing in this Article VI
shall be construed to confer on the holders of the Preference Stock of
such series any power or right to vote in respect of any such matter
except where, and to the extent that, a right to vote which cannot be
waived by the terms hereof is conferred by the then existing laws of
the State of Texas.
13. Voting Rights. The holders of shares of Preference Stock shall
not possess voting power for any purposes other than those for which
voting power is conferred by Paragraph 12 of this Paragraph E of
Article VI, by this Paragraph 13 or on a series thereof by the
resolution of the Board of Directors establishing such series. In
addition to the voting powers so expressly conferred upon Preference
Stock and in addition to voting rights granted to Preference Stock in
statutory proceedings as to which their vote may be mandatorily
required by the then existing laws of the State of Texas, in case at
any time the Corporation shall fail to declare and pay or set aside for
payment in full any quarterly dividend on any series of Preference
Stock and shall not on or before the sixth succeeding quarterly
dividend payment date declare and pay or set aside for payment in full
said dividend in arrears and also all dividends which shall in the
meantime have become due and payable on all of the outstanding
Preference Stock, such holders of all series of Preference Stock shall
thereupon have and continue to have, subject to the rights of the
holders of Preferred Stock, the right, voting together as a class for
such purpose by plurality vote, with each share of Preference Stock
having for purposes of the class votes provided for in this Paragraph
13, the vote per share fixed for such share pursuant to Paragraph 8(g)
above, to elect two Directors of the Corporation until all dividends
accrued and payable on the Preference Stock shall have been fully paid;
and, during the continuance of such right of the holders of all series
of Preference Stock to elect such Directors, the holders of the Common
Stock shall have, subject to the rights of the holders of Preferred
Stock, the right, voting as a class, by plurality vote, to elect the
remaining members of the Board of Directors which the holders of the
Preferred Stock and Preference Stock are not entitled to elect. The
terms of office of all persons who may be Directors of the Corporation
at any time when such right to elect such Directors shall accrue to the
holders of Preference Stock shall terminate upon the election of their
successors; and such election may be held at a special meeting of all
stockholders of the Corporation which shall be convened at any time
after the accrual of such right upon notice similar to that provided in
the Bylaws of the Corporation for calling the annual meeting of the
stockholders, at the request in writing of the holders of record of at
least 2% of the number of shares of Preference Stock then outstanding.
In default of the calling of said meeting by a proper officer of the
Corporation within five days after the making of such request, such
meeting may be called on like notice by any holder of record of
Preference Stock, for which purpose any such holder of Preference Stock
shall have the right to have access to the stock books of the
Corporation. If such special meeting be not called prior to the next
annual meeting, the holders of Preference Stock as one class for such
purpose, and the holders of the Common Stock as a second class, subject
to the rights of holders of Preferred Stock, shall elect members of the
Board of Directors as aforesaid, at such annual meeting, unless
previously thereto all such dividend defaults shall have been made
good. At all meetings of stockholders held, for the purpose of electing
Directors, during the period Preference Stockholders shall have the
right to elect two members of the Board of Directors, the holders of
shares having a majority of the votes entitled to be cast by the then
issued and outstanding Preference Stock as a class and of the Common
Stock as a class shall constitute a quorum of those classes,
respectively, for the purposes of such meetings and lack of a quorum as
to either of such classes at any such meeting shall not interfere with
the holding of such meeting and the election of Directors by the class
having a quorum present; provided that in such election the specific
Directors to be succeeded shall be designated. Upon the termination at
any time of such right of the holders of Preference Stock to elect two
members of the Board of Directors, the term of office of all Directors
elected by vote of the holders of Preference Stock as a class (or
elected to fill a vacancy which might have been so filled) shall end
upon the election and qualification of their successors; and such
election may be held at a special meeting of holders of the Common
Stock, convened on like notice at the request in writing of the holders
of record of at least 2% of the total number of shares of the Common
Stock then outstanding, or, if such special meeting is not called prior
to the next annual meeting, at such annual meeting. In default of the
calling of said meeting by a proper officer of the Corporation within
five days after the making of such request, such meeting may be called
on like notice by any holder of record of the Common Stock of the
Corporation, for which purpose any such holder of the Common Stock
Shall have the right to have access to the stock books of the
Corporation. Whenever, by reason of the resignation, death or removal
of any Director or Directors or any increase in the number of
Directors, at any time while the holders of Preference Stock are
entitled to elect two members of the Board of Directors as aforesaid,
the number of Directors in office who have been elected by either the
holders of the Preference Stock as a class or the holders of the Common
Stock as a class shall become less than the total number subject to
election by such respective classes, the vacancy or vacancies so
resulting may be filled by plurality vote of such respective classes of
stockholders at a meeting thereof called for the purpose, or pending
such action, by the affirmative vote of a majority of the Directors at
the time in office who were elected by the vote of such class of
stockholders, although such Directors shall be less than a quorum of
the Board of Directors, at a meeting called by any such Director in the
manner provided in the Bylaws for the calling of special meetings of
the Board of Directors. During the continuance of such voting rights, a
Director elected by holders of the Preference Stock as a class or the
Common Stock as a class (or elected to fill a vacancy which might have
been so filled) shall be subject to removal by majority vote of the
Preference Stock or of the Common Stock at the time outstanding as
appropriate, at a special meeting called for the purpose, but not
otherwise. A special meeting of stockholders to fill a vacancy or to
remove a Director as last above provided may be called at any time by
the holder or holders of record of shares entitled to cast at least 5%
of the votes of the class of stock entitled to vote thereat or in such
other manner as may be provided for in the Bylaws. The term of office
of any officer of the Corporation shall terminate upon the election and
qualification of his successor; and such election may be held at any
meeting of the Board of Directors following any special meeting of
stockholders held upon the accrual or termination of the voting rights
of the holders of the Preference Stock to elect two members of the
Board of Directors so that new Directors elected at any such special
meeting of stockholders shall be empowered to choose new officers of
the Corporation or any thereof in their discretion.
On all matters as to which no voting power is conferred on the
Preference Stock by this Article VI or by the resolution of the Board
of Directors establishing such series as to which a vote of the
Preference Stock is mandatorily required by the laws of the State of
Texas, the authorization of such matter by the Preference Stock may be
granted by the vote of the holders of shares of the Preference Stock
then outstanding having a majority of the votes (as fixed pursuant to
Paragraph 8(g) above) entitled to be cast by the Preference Stock.
DIFFERENT SERIES OF PREFERENCE STOCK.
13a. $1.75 Dividend Preference Stock, without par value. 6,000,000
shares of authorized stock classified as Preference Stock, without par
value, as provided in Paragraph A of Article VI of the Restated
Articles of Incorporation shall constitute a series of Preference
Stock, without par value, and are designated as "$1.75 Dividend
Preference Stock, without par value"; the fixed dividend rate on the
shares of such series is $1.75 per share per annum and such dividends
are cumulative from the date of original issue with the first dividend
payable September 15, 1993; such shares are subject to mandatory
redemption in full on June 15, 2000 and the fixed redemption price on
the shares of such series for such mandatory redemption, is $25.00 per
share. No shares of the $1.75 Dividend Preference Stock, without par
value, may be redeemed in whole or in part prior to the date for
mandatory redemption.
The fixed liquidation-price for the shares of such series is $25
per share.
The $1.75 Dividend Preference Stock, without par value, has no
exchange or conversion rights.
The amount of consideration received by the Corporation for
issuance of the $1.75 Dividend Preference Stock, without par value,
that exceeds $25.00 per share, if any, shall be allocated to capital
surplus, the balance to constitute stated capital. A vote of 25/100ths
per share is hereby fixed for each share of $1.75 Dividend Preference
Stock, without par value on such matters, and only such matters as to
which the shares of such series are entitled to vote under the Restated
Articles of Incorporation.
THE COMMON STOCK.
14. Dividends on Common Stock. Dividends may be paid on the Common
Stock to the exclusion of both classes of the Preferred Stock and the
class of Preference Stock out of any assets of the Corporation
available for dividends on the Common Stock; provided, however, that so
long as any shares of either class of Preferred Stock or any shares of
the class of Preference Stock shall be outstanding, the Corporation
shall not declare or pay any dividend or make any distribution to the
holders of the Common Stock (other than a dividend payable in Common
Stock of the Corporation), or purchase or acquire or otherwise retire
for a consideration (otherwise than from the proceeds of new financing
from the issuance and sale of any shares of any class of stock of the
Corporation ranking junior to both classes of Preferred Stock and the
class of Preference Stock) any shares of its Common Stock (such a
dividend, distribution, purchase, acquisition, or retirement being
hereinafter referred to as "Common Stock Dividend"), if the aggregate
amount of all Common Stock Dividends so paid, distributed and/or
applied after May 31, 1958, would exceed in the aggregate either
(a) the net income of the Corporation available for dividends
on its Common Stock, or
(b) 75% of the net income of the Corporation available for
dividends on its Common Stock if, after giving effect thereto, the
aggregate of the following: (1) Common Capital Stock Account, (2)
Earned Surplus Account, and (3) Capital Surplus Account, is less
than 25% of the aggregate of (a) the principal amount of then
outstanding debt, (b) Preferred Capital Stock Account (excluding
Premiums and Assessments on Capital Stock Accounts), (c)
Preference Capital Stock Account (excluding Premiums and
Assessments on Capital Stock Accounts), (d) Common Capital Stock
Account, (e) Earned Surplus Account, and (f) Capital Surplus
Account, as such Accounts were defined or prescribed by the
Federal Power Act or Regulations thereunder in effect on June 30,
1944.
Net income of the Corporation available for dividends on its Common
Stock for the purpose of this Paragraph 14 Shall mean the aggregate of
$28,262,987.53 and the sum of operating revenues and nonoperating
income--net of the Corporation from May 31, 1958 to and including the
second calendar month preceding the date (hereinafter referred to as
the "Declaration Date") on which the Directors of the Corporation
consider the declaration or making of a Common Stock Dividend, less:
(1) All proper deductions for such period for operating
expenses (including maintenance), depreciation (which shall not be
less than 15% of the total operating revenues of the Corporation
after deducting from such operating revenues the cost of purchased
power of the Corporation, less the aggregate of all expenditures
made by the Corporation for maintenance and repairs), taxes,
interest charges, and other income deductions (including amounts
charged against income for amortization of utility plant
acquisition adjustments) and such other deductions, if any, as
shall be determined in accordance with such system of accounts as
may be prescribed by governmental authorities having jurisdiction
in the premises or in the absence thereof in accordance with
recognized accounting practice applicable to companies engaged in
a business similar to that of the Corporation; and
(2) An amount equal to dividends accrued on all Preferred
Stock of the Corporation from March 15, 1958 through the current
quarterly dividend period during which the Declaration Date
occurs; and
(3) An amount equal to dividends accrued on all Preference
Stock of the Corporation from June 15, 1980 through the current
quarterly dividend period during which the Declaration Date
occurs;
provided that in computing the amount of such net income available for
dividends no adjustment or deduction shall be made for or on account of
(i) any profits realized or losses sustained in the sale of any
investment securities, property or other capital assets, or taxes on or
in respect of any such profits, (ii) any change in the book value of or
any appreciation or depreciation in the value of any assets owned by
the Corporation for any reason whatsoever (other than depreciation on
the books or on the basis stated above, whichever is greater), or (iii)
dividends aggregating $2,511,824.66 paid on Preferred and Common Stocks
in June, 1958.
15. Distribution of Assets to the Common Stock. In the event of any
liquidation, dissolution or winding up of the Corporation, or any
reduction or decrease of its capital stock resulting in a distribution
of assets to its Common Stockholders other than by way of dividends out
of the net profits or out of the surplus of the Corporation, after
there shall have been paid to or set aside for the holders of both
classes of Preferred Stock and the holders of the class of Preference
Stock the full preferential amounts to which they are respectively
entitled under the provisions of Paragraphs 3 and 10 of Section E of
this Article VI, the holders of the Common Stock shall be entitled to
receive, pro rata, all of the remaining assets of the Corporation
available for distribution to its stockholders. The Board of Directors,
by vote of a majority of the members thereof, may distribute in kind to
the holders of the Common Stock such remaining assets of the
Corporation or may sell, transfer or otherwise dispose of all or any of
the remaining property and assets of the Corporation to any other
corporation and receive payment therefor wholly or partly in cash
and/or in stock and/or in obligations of such corporation and may sell
all or any part of the consideration received therefor and distribute
the balance thereof in kind to the holders of the Common Stock.
16. Voting Rights of the Common Stock. Subject to the voting rights
expressly conferred upon (i) Preferred Stock by the provisions of
Paragraphs 5 and 6 of this Article VI, (ii) Preference Stock by
provisions of Paragraphs 12 and 13 of this Article VI, and (iii)
Preferred Stock--without par value pursuant to Paragraph l(g) and
Preference Stock pursuant to Paragraph 8(g), holders of the Common
Stock shall exclusively possess voting power for the election of
directors and for all other purposes. Such holders are prohibited from
cumulative voting for the election of directors so that no holder of
Common Stock shall be permitted to cumulate his votes by giving one
candidate as many votes as the number of such directors multiplied by
his shares shall equal, or by distributing such votes on the same
principle among any number of candidates.
PROVISIONS APPLICABLE TO ALL CLASSES OF STOCK.
17. Reserves. The Board of Directors shall have authority from time
to time to set apart out of any assets of the Corporation otherwise
available for dividends a reserve or reserves as working capital or for
any other proper purpose or purposes, and to reduce, abolish or add to
any such reserve or reserves from time to time as said Board may deem
to be in the interests of the Corporation; and, subject to the
provisions hereof, said Board shall likewise have power to determine in
its discretion what part of the assets of the Corporation available for
dividends in excess of such reserve or reserves shall be declared as
dividends and paid to the stockholders of the Corporation.
18. Pre-emptive Rights. No holder of any stock of the Corporation
shall be entitled as of right to purchase or subscribe for any part of
any unissued or treasury stock of the Corporation, or of any additional
stock of any class to be issued by reason of any increase of the
authorized capital stock of the Corporation or of bonds, certificates
of indebtedness, debentures or other securities convertible into stock
of the Corporation or carrying a right to subscribe to or acquire any
such stock, but any such unissued or treasury stock or any such
additional authorized issue of new stock or of securities convertible
into stock or carrying a right to subscribe to or acquire any such
stock, may be issued and disposed of by the Board of Directors to such
persons, firms, corporation or associations, and upon such terms as the
Board of Directors may, in its discretion, determine, without offering
to the stockholders then of record, or any class of stockholders, any
thereof, on the same terms or on any terms.
19. Votes Per Share, etc. Each holder of record of shares of any
class of stock entitled to vote at any meeting of stockholders, or of
holders of any class of stock or of one or more series thereof, shall,
as to all matters in respect of which such stock has voting power, be
entitled to one vote per share, or the vote otherwise fixed therefor
pursuant to Paragraph l(g) or 8(g) above, for each of the shares of
such stock standing in his name on the books of the Corporation at the
time of the meeting, or if a record of the stockholders shall be taken
for the purposes of such meeting, as of the time of the taking of such
record; and may cast such vote in person or by written proxy. Except as
herein otherwise expressly provided, or as may be mandatorily provided
by the laws of Texas, a quorum of any class of stock or of one or more
series thereof entitled to vote as a class at any meeting shall consist
of shares of such class or such one or more series, as the case may be,
entitled to cast a majority of the votes entitled to be cast by such
class or series, and a plurality vote of such quorum shall govern.
ARTICLE VII.
The Corporation may sell, lease or exchange all of its property and
franchises upon the consent of, and for such consideration and upon
such terms as may be approved by, two-thirds of the Board of Directors
and the holders of a majority in number of the outstanding shares
entitled to vote (or if the consent of and approval by a larger number
of such shares shall at the time be required by the laws of the State
of Texas or if other consent or approval shall at the time be required,
notwithstanding the above agreement of the stockholders of the
Corporation to the contrary, then upon such consent and approval so
required), expressed in writing or by vote of the stockholders at any
annual or special meeting called for that purpose in the manner
provided by the Bylaws of the Corporation for such meetings of
stockholders.
Upon like vote, that is, the vote specified and defined in the
next preceding paragraph of this Article VII, all, or substantially
all, the property, franchises, rights and assets of the Corporation may
be sold, conveyed, assigned and transferred as an entirety to a new
company to be organized under the laws of the United States, the State
of Texas or of any other State of the United States for the purpose of
so taking over such property, franchises, rights and assets of the
Corporation, with the same or a different authorized number of shares
of stock, and with substantially the same preferences, voting powers,
restrictions and qualifications thereof as may then attach to the
classes and series of stock of the Corporation then outstanding so far
as the same shall be consistent with such laws of the United States or
of Texas or of such other State provided that the whole or any part of
such stock or of any class thereof may be stock with a nominal or par
value), the consideration for such sale and conveyance to be the
assumption by such new company of all of the then outstanding
liabilities of the Corporation and the issuance and delivery by the new
company of shares of stock (any or all thereof either with or without
nominal or par value) of such new company of the several classes and
series into which the stock of the Corporation is then divided equal in
number to the number of shares of stock of the Corporation of said
several classes and series then outstanding. In the event of such sale
each holder of stock of the Corporation agrees, so far as he may be so
permitted by the laws of Texas, forthwith to surrender for cancellation
his certificate or certificates for shares of stock of the Corporation,
properly endorsed, and to receive and accept in exchange therefor, as
his full and final distributive share of the proceeds of such sale and
conveyance and of the assets of the Corporation, a number of shares of
stock of the new company or the class and series corresponding to the
class and series of the shares surrendered equal in number to the
shares of stock of the Corporation so surrendered, and in such event no
holder of any of the stock of the Corporation shall have any rights or
interest in or against the Corporation except the right upon surrender
of his certificates as aforesaid, properly endorsed, to receive from
the Corporation certificates for such shares of said new company as
herein provided. Such new company may have all or any of the powers of
the Corporation, and the charter and bylaws of such new company may
contain all or any of the provisions contained in the Articles of
Incorporation and Bylaws of the Corporation.
Upon the like vote, the Corporation shall have power, as the
attorney and agent of the holders of all of its outstanding stock, to
sell, assign and transfer all such stock to a new company organized
under the laws of the United States, the State of Texas, or any other
State, and to receive as the consideration therefor shares of stock of
such new company of the several classes and series into which the stock
of the Corporation is then divided equal in number to the number of
shares of stock of the Corporation of said several classes and series
then outstanding, such shares of said new company to have substantially
the same preferences, voting powers, restrictions and qualifications
thereof as may then attach to the classes and series of stock of the
Corporation then outstanding so far as the same shall be consistent
with such laws of the United States or of Texas, or of such other
State, except that the whole or any part of such stock or any class
thereof may be stock with or without par value.
In order to make effective such a sale, assignment and transfer,
the Corporation shall have the right to transfer all its outstanding
stock on its books and to issue and deliver new certificates therefor
in such names and amounts as such new company may direct, whether or
not it receives for cancellation the certificates for such stock
previously issued and then outstanding.
Upon completion of such sale, assignment and transfer, the holders
of the stock of the Corporation shall have no rights or interests in or
against the Corporation, except the right, upon surrender of
certificates for stock of the Corporation, properly endorsed, to
receive from the Corporation certificates for shares of stock of such
new company of the class and series substantially corresponding to the
class and series of the surrendered shares equal in number to the
number of shares of stock of the Corporation so surrendered.
ARTICLE VIII
Upon the written consent or the votes of the holders of shares of
stock then outstanding which are entitled to cast a majority of the
votes entitled to be voted, notwithstanding any contrary provision
which may at the time be contained in these Articles of Incorporation,
except as otherwise expressly provided in, or by resolution pursuant
to, Article VI in respect of Preferred Stock and in respect of
Preference Stock, (1) any or every statute of the State of Texas
hereafter enacted, whereby the rights, powers or privileges of the
stockholders of corporations organized under the general laws of said
State are increased, diminished, or in any way affected or whereby
effect is given to the action taken by any part less than all of the
stockholders of any such corporation, shall apply to the Corporation,
and shall be binding not only upon the Corporation but upon every
stockholder thereof to the same extent as if such statute had been in
force at the date of the making and filing of the Articles of
Incorporation, and/or (2) amendments to said Articles of
Incorporation, authorized by the then existing laws of Texas, may be
made.
ARTICLE IX.
The Corporation shall indemnify Directors, officers, employees, agents,
nominees and designees of the Corporation and purchase and maintain
liability insurance for them as, and to the extent permitted or
required by law and provided for by the Bylaws of the Corporation,
general or specific action of the Board of Directors, or contract.
ARTICLE X.
A Director of the Corporation shall not be liable to the
Corporation or its shareholders for monetary damages for an act or
omission in the Director's capacity as a Director, except for:
1. a breach of a Director's duty of loyalty to the Corporation or
its shareholders;
2. an act or omission not in good faith or that involves
intentional misconduct or a knowing violation of the law;
3. a transaction from which a Director received an improper
benefit, whether or not the benefit resulted from an action taken
within the scope of the Director's office;
4. an act or omission for which the liability of a Director is
expressly provided for by statute; or
5. an act related to an unlawful stock repurchase or payment of a
dividend.
This Article shall apply with respect to any act or omission
occurring on or after August 31, 1987. Any repeal or modification of
this Article by the shareholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on
the personal liability of a Director of the Corporation existing at
the time of such repeal or repeal or modification.
If the law of the State of Texas is amended hereafter to
authorize the further elimination or limitation of the liability of
Directors, then the liability of a Director of the Corporation shall
automatically be eliminated or limited to the fullest extent
authorized by the law of the State of Texas, as so amended.
***********************
Effective November 12, 1999
Exhibit 3(i)(f)1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ENTERGY MISSISSIPPI, INC.
Pursuant to the provisions of Mississippi Code of 1972
Annotated, Section 79-4-10.07, the undersigned Corporation
adopts the following Amended and Restated Articles of
Incorporation:
FIRST: The name of the Corporation is ENTERGY
MISSISSIPPI, INC.
SECOND: The period of its duration is perpetual.
THIRD: The purpose or purposes which the Corporation is
authorized to pursue are:
To acquire, buy, hold, own, sell, lease, exchange,
dispose of, finance, deal in, construct, build, equip,
improve, use, operate, maintain and work upon:
(a) Any and all kinds of plants and systems for the
manufacture, production, storage, utilization, purchase,
sale, supply, transmission, distribution or disposition
of electricity, natural or artificial gas, water or
steam, or power produced thereby, or of ice and
refrigeration of any and every kind;
(b) Any and all kinds of telephone, telegraph,
radio, wireless and other systems, facilities and
devices for the receipt and transmission of sounds and
signals, any and all kinds of interurban, city and
street railways and railroads and bus lines for the
transportation of passengers and/or freight,
transmission lines, systems, appliances, equipment and
devices and tracks, stations, buildings and other
structures and facilities;
(c) Any and all kinds of works, power plants,
manufactories, structures, substations, systems, tracks,
machinery, generators, motors, lamps, poles, pipes,
wires, cables, conduits, apparatus, devices, equipment,
supplies, articles and merchandise of every kind
pertaining to or in anywise connected with the
construction, operation or maintenance of telephone,
telegraph, radio, wireless and other systems, facilities
and devices for the receipt and transmission of sounds
and signals, or of interurban, city and street railways
and railroads and bus lines, or in anywise connected
with or pertaining to the manufacture, production,
purchase, use, sale, supply, transmission, distribution,
regulation, control or application of electricity,
natural or artificial gas, water, steam, ice,
refrigeration and power or any other purposes;
To acquire, buy, hold, own, sell, lease, exchange,
dispose of, transmit, distribute, deal in, use, manufacture,
produce, furnish and supply street and interurban railway and
bus service, electricity, natural or artificial gas, light,
heat, ice, refrigeration, water and steam in any form and for
any purposes whatsoever, and any power or force or energy in
any form and for any purposes whatsoever;
To buy, sell, manufacture, produce and generally deal in
milk, cream and any articles or substances used or usable in
or in connection with the manufacture and production of ice
cream, ices, beverages and soda fountain supplies; to buy,
sell, manufacture, produce and generally deal in ice cream
and ices;
To acquire, organize, assemble, develop, build up and
operate constructing and operating and other organizations
and systems, and to hire, sell, lease, exchange, turn over,
deliver and dispose of such organizations and systems in
whole or in part and as going organizations and systems and
otherwise, and to enter into and perform contracts,
agreements and undertakings of any kind in connection with
any or all the foregoing powers;
To do a general contracting business;
To purchase, acquire, develop, mine, explore, drill,
hold, own and dispose of lands, interests in and rights with
respect to lands and waters and fixed and movable property;
To borrow money and contract debts when necessary for
the transaction of the business of the Corporation or for the
exercise of its corporate rights, privileges or franchises or
for any other lawful purpose of its incorporation; to issue
bonds, promissory notes, bills of exchange, debentures and
other obligations and evidences of indebtedness payable at a
specified time or times or payable upon the happening of a
specified event or events, whether secured by mortgage,
pledge or otherwise or unsecured, for money borrowed or in
payment for property purchased or acquired or any other
lawful objects;
To guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of
indebtedness created by, any other corporation or
corporations of the State of Mississippi or any other state
or government and, while the owner of such stock, to exercise
all the rights, powers and privileges of individual ownership
with respect thereto including the right to vote thereon, and
to consent and otherwise act with respect thereto;
To aid in any manner any corporation or association,
domestic or foreign, or any firm or individual, any shares of
stock in which or any bonds, debentures, notes, securities,
evidences of indebtedness, contracts or obligations of which
are held by or for the Corporation or in which or in the
welfare of which the Corporation shall have any interest, and
to do any acts designed to protect, preserve, improve or
enhance the value of any property at any time held or
controlled by the Corporation, or in which it may be at any
time interested; and to organize or promote or facilitate the
organization of subsidiary companies;
To purchase, hold, sell and transfer shares of its own
capital stock, provided that the Corporation shall not
purchase its own shares of capital stock except frorn surplus
of its assets over its liabilities including capital; and
provided, further, that the shares of its own capital stock
owned by the Corporation shall not be voted upon directly or
indirectly nor counted as outstanding for the purposes of any
stockholders' quorum or vote;
In any manner to acquire, enjoy, utilize and to dispose
of patents, copyrights and trade-marks and any licenses or
other rights or interests therein and thereunder:
To purchase, acquire, hold, own or dispose of franchises,
concessions, consents, privileges and licenses necessary for
and in its opinion useful or desirable for or in connection
with the foregoing powers;
To do all and everything necessary and proper for the
accomplishment of the objects enumerated in these Amended and
Restated Articles of Incorporation or any amendment thereof
or necessary or incidental to the protection and benefits of
the Corporation, and in general to carry on any lawful
business necessary or not incidental to the attainment of the
objects of the Corporation whether or not such business is
similar in nature to the objects set forth in these Amended
and Restated Articles of Incorporation or any amendment
thereof.
To do any or all things herein set forth, to the same
extent and as fully as natural persons might or could do, and
in any part of the world, and as principal, agent, contractor
or otherwise, and either alone or in conjunction with any
other persons, firms, associations or corporations;
To conduct its business in all its branches in the State
of Mississippi, other states, the District of Columbia, the
territories and colonies of the United States, and any
foreign countries, and to have one or more offices out of the
State of Mississippi and to hold, purchase, mortgage and
convey real and personal property both within and without the
State of Mississippi; provided, however, that the Corporation
shall not exercise any of the powers set forth herein for the
purpose of engaging in business as a street railway,
telegraph or telephone company unless prior thereto this
Article THIRD shall have been amended to set forth a
description of the line and the points it will traverse.
FOURTH: The aggregate number of shares which the
Corporation shall have authority to issue is 17,178,808
shares, divided into 2,178,808 shares of Preferred Stock of
the par value of $100 per share and 15,000,000 shares of
Common Stock without par value.
The preferences, limitations and relative rights in
respect of the shares of each class and the variations in the
relative rights and preferences as between series of any
preferred or special class in series are as follows:
The Preferred Stock shall be issuable in one or more
series from time to time and the shares of each series shall
have the same rank and be identical with each other and shall
have the same relative rights except with respect to the
following:
(a) The number of shares to constitute each such
series and the distinctive designation thereof;
(b) The annual rate or rates of dividends payable on
shares of such series, the dates on which dividends
shall be paid in each year and the date from which such
dividends shall commence to accumulate;
(c) The amount or amounts payable upon redemption
thereof; and
(d) The sinking fund provisions, if any, for the
redemption or purchase of shares;
which different characterics of clauses (a), (b), (c) and (d)
above may be stated and expressed with respect to each series
in the resolution or resolutions providing for the issue of
such series adopted by the Board of Directors or in these
Amended and Restated Articles of Incorporation or any
amendment thereof.
A series of 60,000 shares of Preferred Stock shall:
(a) be designated "4.36% Preferred Stock Cumulative,
$100 Par Value";
(b) have a dividend rate of $4.36 per share per
annum payable quarterly on February 1, May 1, August 1
and November 1 of each year, the first dividend date to
be February 1, 1963, and such dividends to be cumulative
from the last date to which dividends upon the 4.36%
Preferred Stock Cumulative, $100 Par Value, of
Mississippi Power & Light Company, a Florida
corporation, are paid;
(c) be subject to redemption in the manner provided
herein with respect to the Preferred Stock at the price
of $105.36 per share if redeemed on or before February
1, 1964, and of $103.88 per share if redeemed after
February 1, 1964, in each case plus an amount equivalent
to the accumulated and unpaid dividends thereon, if any,
to the date fixed for redemption.
A series of 44,476 shares of the Preferred Stock shall:
(a) be designated "4.56% Preferred Stock,
Cumulative, $100 Par Value";
(b) have a dividend rate of $4.56 per share per
annum payable quarterly on February 1, May 1, August 1
and November 1 of each year, the first dividend date to
be February 1, 1963, and such dividends to be cumulative
from the last date to which dividends upon the 4.56%
Preferred Stock, Cumulative, $100 Par Value, of
Mississippi Power & Light Company, a Florida
corporation, are paid; and
(c) be subject to redemption in the manner provided
herein with respect to the Preferred Stock at the price
of $108.50 per share if redeemed on or before November
1, l964, and of $107.00 per share if redeemed after
November 1, 1964, in each case plus an amount equivalent
to the accumulated and unpaid dividends thereon, if any,
to the date fixed for redemption.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "4.92% Preferred Stock,
Cumulative, $100 Par Value";
(b) have a dividend rate of $4.92 per share per
annum payable quarterly on February 1, May 1, August 1
and November 1 of each year, the first dividend date to
be February 1, 1966, and such dividends to be cumulative
from the date of issue of said series; and
(c) be subject to redemption at the price of $106.30
per share if redeemed on or before January 1, 1971, of
$104.38 per share if redeemed after January 1, 1971 and
on or before January 1, 1976, and of $102.88 per share
if redeemed after January 1, 1976, in each case plus an
amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date fixed for
redemption.
A series of 100,000 shares of the Preferred Stock shall:
(a) be designated "7.44% Preferred Stock,
Cumulative, $100 Par Value";
(b) have a dividend rate of $7.44 per share per
annum payable quarterly on February 1, May 1, August 1
and November 1 of each year, the first dividend date to
be May 1, 1973, and such dividends to be cumulative from
February 14, 1973; and
(c) be subject to redemption at the price of $108.39
per share if redeemed on or before February 1, 1978, of
$106.53 per share if redeemed after February 1, 1978 and
on or before February 1, 1983, of $104.67 per share if
redeemed after February 1, 1983 and on or before
February 1, 1988, and of $102.81 per share if redeemed
after February 1, 1988, in each case plus an amount
equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption;
provided, however, that no share of the 7.44% Preferred
Stock, Cumulative, $100 Par Value, shall be redeemed
prior to February 1, 1978 if such redemption is for the
purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds
borrowed by the Corporation, or through the use,
directly or indirectly, of funds derived through the
issuance by the Corporation of stock ranking prior to or
on a parity with the 7.44% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such
borrowed funds have an effective interest cost to the
Corporation (computed in accordance with generally
accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed)
of less than the effective dividend cost to the
Corporation of the 7.44% Preferred Stock, Cumulative,
$100 Par Value.
A series of 200,000 shares of the Preferred Stock shall:
(a) be designated as the "8.36% Preferred Stock,
Cumulative, $100 Par Value";
(b) have a dividend rate of $8.36 per share per
annum payable quarterly on February 1, May 1, August 1,
and November 1 of each year, the first dividend date to
be February 1, 1993, and such dividends to be cumulative
from the date of issuance; and
(c) be subject to redemption at the price of $100
par share plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date fixed
for redemption (except that no share of the 8.36%
Preferred Stock shall be redeemed on or before October
1, 1997).
Subject to the foregoing, the distinguishing
characteristics of the Preferred Stock shall be:
(A) Each series of the Preferred Stock, pari passu with
all shares of preferred stock of any class or series then
outstanding, shall be entitled but only when and as declared
by the Board of Directors, out of funds legally available for
the payment of dividends in preference to the Common Stock,
to dividends at tbe rate stated and expressed with respect to
such series herein or by the resolution or resolutions
providing for the issue of such series adopted by tbe Board
of Directors; such dividends to be cumulative from such date
and payable on such dates in each year as may be stated and
expressed in said resolution, to stockholders of record as of
a date not to exceed forty (40) days and not less than ten
(10) days preceding the dividend payment dates so fixed.
(B) If and when dividends payable on any of the
Preferred Stock of the Corporation at any time outstanding
shall be in defauIt in an amount equal to four full quarterly
payments or more per share, and thereafter until all
dividends on any such preferred stock in default shall have
been paid, the holders of the Preferred Stock pari passu with
the holders of other preferred stock then outstanding, voting
separately as a class, shall be entitled to elect the
smallest number of directors necessary to constitute a
majority of the full Board of Directors, and, except as
provided in the following paragraph, the holders of the
Common Stock, voting separately as a class, shall be entitled
to elect the remaining directors of the Corporation. The
terms of office, as directors, of all persons who may be
directors of the Corporation at the time shall terminate upon
the election of a majority of the Board of Directors by the
holders of the Preferred Stock except that if the holders of
the Common Stock shall not have elected the remaining
directors of the Corporation, then, and only in that event,
the directors of the Corporation in office just prior to the
election of a majority of the Board of Directors by the
holders of the Preferred Stock shall elect the remaining
directors of the Corporation. Thereafter, while such default
continues and the majority of the Board of Directors is being
elected by the holders of the Preferred Stock, the remaining
directors, whether elected by directors, as aforesaid, or
whether originally or later elected by holders of the Common
Stock shall continue in office until their successors are
elected by holders of the Common Stock and shall qualify.
If and when all dividends then in default on the
Preferred Stock; then outstanding shall be paid (such
dividends to be declared and paid out of any funds legally
available therefor as soon as reasonably practicable), the
holders of the Preferred Stock shall be divested of any
special right with respect to the election of directors, and
the voting power of the holders of the Preferred Stock and
the holders of the Common Stock shall revert to the status
existing before the first dividend payment date on which
dividends on the Preferred Stock were not paid in full, but
always subject to the same provisions for vesting such
special rights in the holders of the Preferred Stock in case
of further like defaults in the payment of dividends thereon
as described in the immediately foregoing paragraph. Upon
termination of any such special voting right upon payment of
all accumulated and unpaid dividends on the Preferred Stock,
the terms of office of all persons who may have been elected
directors of the Corporation by vote of the holders of the
Preferred Stock as a class, pursuant to such special voting
right shall forthwith terminate, and the resulting vacancies
shall be filled by the vote of a majority of the remaining
directors.
In case of any vacancy in the office of a director
occurring among the directors elected by the holders of the
Preferred Stock, voting separately as a class, the remaining
directors elected by the holders of the Preferred Stock, by
affirmative vote of a majority thereof, or the remaining
director so elected if there be but one, may elect a
successor or successors to hold office for the unexpired term
or terms of the director or directors whose place or places
shall be vacant. Likewise, in case of any vacancy in the
office of a director occurring among the directors not
elected by the holders of the Preferred Stock, the remaining
directors not elected by the holders of the Preferred Stock,
by affirmative vote of a majority thereof, or the remaining
director so elected if there be but one, may elect a
successor or successors to hold office for the unexpired term
or terms of the director or directors whose place or places
shall be vacant.
Whenever the right shall have accrued to the holders of
the Preferred Stock to elect directors, voting separately as
a class, it shall be the duty of the President, a Vice-
President or the Secretary of the Corporation forthwith to
call and cause notice to be given to the shareholders
entitled to vote of a meeting to be held at such time as the
Corporation's officers may fix, not less than forty-five (45)
nor more than sixty (60) days after the accrual of such
right, for the purpose of electing directors. The notice so
given shall be mailed to each holder of record of preferred
stock at his last known address appearing on the books of the
Corporation and shall set forth, among other things, (i) that
by reason of the fact that dividends payable on preferred
stock are in default in an amount equal to four full
quarterly payments or more per share, the holders of the
Preferred Stock, voting separately as a class, have the right
to elect the smallest number of directors necessary to
constitute a majority of the full Board of Directors of the
Corporation, (ii) that any holder of the Preferred Stock has
the right, at any reasonable time, to inspect, and make
copies of, the list or lists of holders of the Preferred
Stock maintained at the principal office of the Corporation
or at the office of any Transfer Agent of the Preferred
Stock, and (iii) either the entirety of this paragraph or the
substance thereof with respect to the number of shares of the
Preferred Stock required to be represented at any meeting, or
adjournment thereof, called for the election of directors of
the Corporation. At the first meeting of stockholders held
for the purpose of electing directors during such time as the
holders of the Preferred Stock shall have the special right,
voting separately as a class, to elect directors, the
presence in person or by proxy of the holders of a majority
of the outstanding Common Stock shall be required to
constitute a quorum of such class for the election of
directors, and the presence in person or by proxy of the
holders of a majority of the outstanding Preferred Stock
shall be required to constitute a quorum of such class for
the election of directors; provided, however, that in the
absence of a quorum of the holders of the Preferred Stock, no
election of directors shall be held, but a majority of the
holders of the Preferred Stock who are present in person or
by proxy shall have power to adjourn the election of the
directors to a date not less than fifteen (15) nor more than
fifty (50) days from the giving of the notice of such
adjourned meeting hereinafter provided for; and provided,
further, that at such adjourned meeting, the presence in
person or by proxy of the holders of 35% of the outstanding
Preferred Stock shall be required to constitute a quorum of
such class for the election of directors. In the event such
first meeting of stockholders shall be so adjourned, it shall
be the duty of the President, a Vice-President or the
Secretary of the Corporation, within ten (10) days from the
date on which such first meeting shall have been adjourned,
to cause notice of such adjourned meeting to be given to the
shareholders entitled to vote thereat, such adjourned meeting
to be held not less than fifteen (15) days nor more than
fifty (50) days from the giving of such second notice. Such
second notice shall be given in the form and manner
hereinabove provided for with respect to the notice required
to be given of such first meeting of stockholders, and shall
further set forth that a quorum was not present at such first
meeting and that the holders of 35% of the outstanding
Preferred Stock shall be required to constitute a quorum of
such class for the election of directors at such adjourned
meeting. If the requisite quorum of holders of the Preferred
Stock shall not be present at said adjourned meeting, then
the directors of the Corporation then in office shall remain
in office until the next Annual Meeting of the Corporation,
or special meeting in lieu thereof and until their successors
shall have been elected and shall qualify. Neither such first
meeting nor such adjourned meeting shall be held on a date
within sixty (60) days of the date of the next Annual Meeting
of the Corporation, or special meeting in lieu thereof. At
each Annual Meeting of the Corporation, or special meeting in
lieu thereof, held during such time as the holders of the
Preferred Stock, voting separately as a class. shall have the
right to elect a majority of the Board of Directors, the
foregoing provisions of this paragraph shall govern each
Annual Meeting, or special meeting in lieu thereof, as if
said Annual Meeting or special meeting were the first meeting
of stockholders held for the purpose of electing directors
after the right of the holders of the Preferred Stock, voting
separately as a class, to elect a majority of the Board of
Directors, should have accrued the exception, that if, at any
adjourned annual meeting, or special meeting in lieu thereof,
the holders of 35% of the outstanding Preferred Stock are not
present in person or by proxy, all the directors shall be
elected by a vote of the holders of a majority of the Common
Stock of the Corporation present or represented at the
meeting.
(C) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of at
least two-thirds of the total number of shares of the
Preferred Stock then outstanding:
(1) create, authorize or issue any new stock which,
after issuance would rank prior to the Preferred Stock
as to dividends, in liquidation, dissolution, winding up
or distribution, or create, authorize or issue any
security convertible into shares of any such stock
except for the purpose of providing funds for the
redemption of all of the Preferred Stock then
outstanding, such new stock or security not to be issued
until such redemption shall have been authorized and
notice of such redemption given and the aggregate
redemption price deposited as provided in paragraph (G)
below; provided, however, that any such new stock or
security shall be issued within twelve months after the
vote of the Preferred Stock herein provided for
authorizing the issuance of such new stock or security;
or
(2) amend, alter, or repeal any of the rights,
preferences or powers of the holders of the Preferred
Stock so as to affect adversely any such rights,
preferences or powers; provided, however, that if such
amendment, alteration or repeal affects adversely the
rights, preferences or powers of one or more, but not
all, series of Preferred Stock at the time outstanding,
only the consent of the holders of at least two-thirds
of the total number of outstanding shares of all series
so affected shall be required; and provided, further,
that an amendment to increase or decrease the authorized
amount of Preferred Stock or to create or authorize, or
increase or decrease the amount of, any class of stock;
ranking on a parity with the outstanding shares of the
Preferred Stock as to dividends or assets shall not be
deemed to affect adversely the rights, preferences or
powers of the holders of the Preferred Stock or any
series thereof.
(D) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of the
holders of a majority of the total number of shares of the
Preferred Stock then outstanding:
(1) merge or consolidate with or into any other
corporation or corporations or sell or otherwise dispose
of all or substantially all of the assets of the
Corporation, unless such merger or consolidation or sale
or other disposition, or the exchange, issuance or
assumption of all securities to be issued or assumed in
connection with any such merger or consolidation or sale
or other disposition, shall have been ordered, approved
or permitted under the Public Utility Holding Company
Act of 1935; or
(2) issue or assume any unsecured notes, debentures
or other securities representing unsecured indebtedness
for purposes other than (i) the refunding of outstanding
unsecured indebtedness theretofore issued or assumed by
the Corporation resulting in equal or longer maturities,
or (ii) the reacquisition, redemption or other
retirement of all outstanding shares of the Preferred
Stock, if immediately after such issue or assumption,
the total principal amount of all unsecured notes,
debentures or other securities representing unsecured
indebtedness issued or assumed by the Corporation,
including unsecured indebtedness then to be issued or
assumed (but excluding the principal amount then
outstanding of any unsecured notes, debentures, or other
securities representing unsecured indebtedness having a
maturity in excess of ten (10) years and in amount not
exceeding 10% of the aggregate of (a) and (b) of this
section below) would exceed ten per centum (10%) of the
aggregate of (a) the total principal amount of all bonds
or other securities representing secured indebtedness
issued or assumed by the Corporation and then to be
outstanding, and (b) the capital and surplus of the
Corporation as then to be stated on the books of account
of the Corporation. When unsecured notes, debentures or
other securities representing unsecured debt of a
maturity in excess of ten (10) years shall become of a
maturity of ten (10) years or less, it shall then be
regarded as unsecured debt of a maturity of less than
ten (10) years and shall be computed with such debt for
the purpose of determining the percentage ratio to the
sum of (a) and (b) above of unsecured debt of a maturity
of less than ten (10) years, and when provision shall
have been made, whether through a sinking fund or
otherwise, for the retirement, prior to their maturity,
of unsecured notes, debentures, or other securities
representing unsecured debt of a maturity in excess of
ten (10) years, the amount of any such security so
required to be retired in less than ten (10) years shall
be regarded as unsecured debt of a maturity of less than
ten (10) years (and not as unsecured debt of a maturity
in excess of ten (10) years) and shall be computed with
such debt for the purpose of determining the percentage
ratio to the sum of (a) and (b) above of unsecured debt
of a maturity of less than ten (10) years, provided,
however, that the payment due upon the maturity of
unsecured debt having an original single maturity in
excess of ten (10) years or the payment due upon the
latest maturity of any serial debt which had original
maturities in excess of ten (10) years shall not, for
purposes of this provision, be regarded as unsecured
debt of a maturity of less than ten (10) years until
such payment or payments shall be required to be made
within three (3) years; furthermore, when unsecured
notes, debentures or other securities representing
unsecured debt of a maturity of less than ten (10) years
shall exceed 10% of the sum of (a) and (b) above, no
additional unsecured notes, debentures or other
securities representing unsecured debt shall be issued
or assumed (except for the purpose set forth in (i) or
(ii) above) until such ratio is reduced to 10% of the
sum of (a) and (b) above; or
(3) issue, sell or otherwise dispose of any shares
of the Preferred Stock in addition to the 104,476 shares
of the Preferred Stock originally authorized, or of any
other class of stock ranking on a parity with the
Preferred Stock as to dividends or in liquidation,
dissolution, winding up or distribution, unless the
gross income of the Corporation and Mississippi Power &
Light Company, a Florida corporation, for a period of
twelve (12) consecutive calendar months within the
fifteen (15) calendar months immediately preceding the
issuance, sale or disposition of such stock, determined
in accordance with generally acccepted accounting
practices (but in any event after deducting all taxes
and the greater of (a) the amount for said period
charged by the Corporation and Mississippi Power & Light
Company, a Florida corporation, on their books to
depreciation expense or (b) the largest amount required
to be provided therefor by any mortgage indenture of the
Corporation) to be available for the payment of
interest, shall have been at least one and one-half
times the sum of (i) the annual interest charges on all
interest bearing indebtedness of the Corporation and
(ii) the annual dividend requirements on all outstanding
shares of the Preferred Stock and of all other classes
of stock ranking prior to, or on a parity with, the
Preferred Stock as to dividends or distributions,
including the shares proposed to be issued; provided,
that there shall be excluded from the foregoing
computation interest charges on all indebtedness and
dividends on all shares of stock which are to be retired
in connection with the issue of such additional shares
of the Preferred Stock or other class of stocks ranking
prior to, or on a parity with, the Preferred Stock as to
dividends or distributions; and provided, further, that
in any case where such additional shares of the
Preferred Stock, or other class of stock ranking on a
parity with the Preferred Stock as to dividends or
distributions, are to be issued in connection with the
acquisition of additional property, the gross income of
the property to be so acquired, computed on the same
basis as the gross income of the Corporation, may be
included on a pro forma basis in making the foregoing
computation; or
(4) issue, sell, or otherwise dispose of any shares
of the Preferred Stock, in addition to the 104,476
shares of the Preferred Stock originally authorized, or
of any other class of stock ranking on a parity with the
Preferred Stock as to dividends or distributions, unless
the aggregate of the capital of the Corporation
applicable to the Common Stock and the surplus of the
Corporation shall be not less than the aggregate amount
payable on the involuntary liquidation, dissolution, or
winding up of the Corporation, in respect of all shares
of the Preferred Stock and all shares of stock, if any,
ranking prior thereto, or on a parity therewith, as to
dividends or distributions, which will be outstanding
after the issue of the shares proposed to be issued;
provided, that if, for the purposes of meeting the
requirements of this subparagraph (4), it becomes
necessary to take into consideration any earned surplus
of the Corporation, the Corporation shall not thereafter
pay any dividends on shares of the Common Stock which
would result in reducing the Corporation's Common Stock
equity (as in paragraph (H) hereinafter defined) to an
amount less than the aggregate amount payable, on
involuntary liquidation, dissolution or winding up the
Corporation, on all shares of the Preferred Stock and of
any stock ranking prior to, or on a parity with, the
Preferred Stock, as to dividends or other distributions,
at the time outstanding.
(E) Each holder of Common Stock of the Corporation shall
be entitled to one vote, in person or by proxy, for each
share of such stock standing in his name on the books of the
Corporation. Except as hereinbefore expressly provided in
this Section FOURTH, the holders of the Preferred Stock shall
have no power to vote and shall be entitled to no notice of
any meeting of the stockholders of the Corporation. As to
matters upon which holders of the Preferred Stock are
entitled to vote as hereinbefore expressly provided, each
holder of such Preferred Stock shall be entitled to one vote,
in person or by proxy, for each share of such Preferred Stock
standing in his name on the books of the Corporation.
(F) In the event of any voluntary liquidation,
dissolution or winding up of the Corporation, the Preferred
Stock, pari passu with all shares of preferred stock of any
class or series then outstanding, shall have a preference
over the Common Stock until an amount equal to the then
current redemption price shall have been paid. In the event
of any involuntary liquidation, dissolution or winding up of
the Corporation, which shall include any such liquidation,
dissolution or winding up which may arise out of or result
from the condemnation or purchase of all or a major portion
of the properties of the Corporation, by (i) the United
States Government or any authority, agency or instrumentality
thereof, (ii) a state of the United States or any polltical
subdivision, authority, agency, or instrumentality thereof,
or (iii) a disrict, cooperative or other association or
entity not organized for profit, the Preferred Stock, pari
passu with all shares of preferred stock of any class or
series then outstanding, shall also have a preference over
the Common Stock until the full par value thereof and an
amount equal to all accumulated and unpaid dividends thereon
shall have been paid by dividends or distribution.
(G) Upon the affirmative vote of a majority of the
shares of the issued and outstanding Common Stock at any
annual meeting, or any special meeting called for that
purpose, the Corporation may at any time redeem all of any
series of said Preferred Stock or may from time to time
redeem any part thereof, by paying in cash the redemption
price then applicable thereto as stated and expressed with
respect to such series in the resolution providing for the
issue of such shares adopted by the Board of Directors of the
Corporation, or in these Amended and Restated Articles of
Incorporation or any amendment thereof, plus, in each case,
an amount equivalent to the accumulated and unpaid dividends,
if any, to the date of redemption. Notice of the intention
of the Corporation to redeem all or any part of the Preferred
Stock shall be mailed not less than thirty (30) days nor more
than sixty (60) days before the date of redemption to each
holder of record of Preferred Stock to be redeemed, at his
post office address as shown by the Corporation's records,
and not less than thirty (30) days' nor more than sixty (60)
days' notioe of such redemption may be published in such
manner as may be prescribed by resolution of the Board of
Directors of the Corporation; and, in the event of such
publication, no defect in the mailing of such notice shall
affect the validity of the proceedings for the redemption of
any shares of Preferred Stock so to be redeemed.
Contemporaneously with the mailing or the publication of such
notice as aforesaid or at any time thereafter prior to the
date of redemption, the Corporation may deposit the aggregate
redemption price (or the portion thereof not already paid in
the redemption of such Preferred Stock so to be redeemed)
with any bank or trust company in the City of New York, New
York, or in the City of Jackson, Mississippi, named in such
notice, payable to the order of the record holders of the
Preferred Stock so to be redeemed, as the case may be, on the
endorsement and surrender of their certificates, and
thereupon said holders shall cease to be stockholders wlth
respect to such shares; and from and after the making of such
deposit such holders shall have no interest in or claim
against the Corporation with respect to said shares, but
shall be enlitled only to receive such moneys from said bank
or trust company, with interest, if any, allowed by such bank
or trust company on such moneys deposited as in this
paragraph provided, on endorsement and surrender of their
certificates, as aforesaid. Any moneys so deposited, plus
interest thereon, if any, remaining unclaimed at the end of
six (6) years from the date fixed for redemption, if
thereafter requested by resolution of the Board of Directors,
shall be repaid to the Corporation, and in the event of such
repayment to the Corporation, such holders of record of the
shares so redeemed as shall not have made claim against such
moneys prior to such repayment to the Corporation, shall be
deemed to be unsecured creditors of the Corporation for an
amount, without interest, equivalent to the amount deposited,
plus interest thereon, if any, allowed by such bank or trust
company, as above stated, for the redemption of such shares
and so paid to the Corporation. Shares of the Preferred Stock
which have been redeemed shall not be reissued. If less than
all of the shares of the Preferred Stock are to be redeemed,
the shares thereof to be redeemed shall be selected by lot,
in such manner as the Board of Directors of the Corporation
shall determine, by an independent bank or trust company
selected for that purpose by the Board of Directors of the
Corporation. Nothing herein contained shall limit any legal
right of the Corporation to purchase or otherwise acquire any
shares of the Preferred Stock; provided, however, that, so
long as any shares of the Preferred Stock are outstanding,
the Corporation shall not redeem, purchase or otherwise
acquire less than all of the shares of the Preferred Stock,
if, at the time of such redemption, purchase or other
acquisition, dividends payable on the Preferred Stock shall
be in default in whole or in part, unless, prior to or
concurrently with such redemption, purchase or other
acquisition, all such defaults shall be cured or unless such
redemption, purchase or other acquisition shall have been
ordered, approved or permitted under the Public Utility
Holding Company Act of 1935; and provided further that, so
long as any shares of the Preferred Stock are outstanding,
the Corporation shall not make any payment or set aside any
funds for payment into any sinking fund for the purchase or
redemption of any shares of the Preferred Stock, if, at the
time of such payment, or the setting apart of funds for such
payment, dividends payable on the Preferred Stock shall be in
default in whole or in part, unless, prior to or concurrently
with such payment or the setting apart of funds for such
payment, all such defaults shall be cured or unless such
payment, or the setting apart of funds for such payment,
shall bave been ordered, approved or permitted under the
Public Utility Holding Company Act of 1935. Any shares of
the Preferred Stock so redeemed, purchased or acquired shall
be retired and cancelled.
(H) For the purposes of this paragraph (H) and
subparagraph (4) of paragraph (D) the term "Common Stock
Equity" shall mean the aggregate of the par value of, or
stated capital represented by, the outstanding shares (other
than shares owned by the Corporation) of stock ranking junior
to the Preferred Stock as to dividends and assets, of the
premium on such junior stock and of the surplus (including
earned surplus, capital surplus and surplus invested in
plant) of the Corporation less (1) any amounts recorded on
the books of the Corporation for utility plant and other
plant in excess of the original cost thereof, (2) unamortized
debt discount and expense, capital stock discount and expense
and any other intangible items set forth on the asset side of
the balance sheet as a result of accounting convention, (3)
the excess, if any, of the aggregate amount payable on
involuntary liquidation, dissolution or winding up of the
affairs of the Corporation upon all outstanding preferred
stock of the Corporation over the aggregate par or stated
value thereof and any premiums thereon and (4) the excess, if
any, for the period beginning with January 1, 1954, to the
end of the month within ninety (90) days preceding the date
as of which Common Stock Equity is determined, of the
cumulative amount computed under requirements contained in
the Corporation's mortgage indentures relating to minimum
depreciation provisions (this cumulative amount being the
aggregate of the largest amounts separately computed for
entire periods of differing coexisting mortgage indenture
requirements), over the amount charged by the Corporation and
Mississippi Power & Light Company, a Florida corporation, on
their books for depreciation during such period, including
the final fraction of a year; provided, however, that no
deductions shall be required to be made in respect of items
referred to in subdivisions (1) and (2) of this paragraph (H)
in cases in which such items are being amortized or are
provided for, or are being provided for, by reserves. For
the purpose of this paragraph (H): (i) the term "total
capitalization" shall mean the sum of the Common Stock Equity
plus item three (3) in this paragraph (H) and the stated
capital applicable to, and any premium on, outstanding stock
of the Corporation not included in Common Stock Equity, and
the principal amount of all outstanding debt of the
Corporation maturing more than twelve (12) months after the
date of issue thereof; and (ii) the term "dividends on Common
Stock" shall embrace dividends on Common Stock (other than
dividends payable only in shares of Common Stock),
distributions on, and purchases or other acquisitions for
value of, any Common Stock of the Corporation or other stock
if any, subordinate to its Preferred Stock. So long as any
shares of the Preferred Stock are outstanding, the
Corporation shall not declare or pay any dividends on the
Common Stock, except as follows:
(a) If and so long as the Common Stock Equity at
the end of the calendar month immediately preceding the
date on which a dividend on Common Stock is declared is,
or as a result of such dividend would become, less than
20% of total capitalization, the Corporation shall not
declare such dividends in an amount which, together with
all other dividends on Common Stock paid within the year
ending with and including the date on which such
dividend is payable, exceeds 50% of the net income of
the Corporation available for dividends on the Common
Stock for the twelve full calendar months immediately
preceding the month in which such dividends are
declared, except in an amount not exceeding the
aggregate of dividends on Common Stock which under the
restrictions set forth above in this subparagraph (a)
could have been, and have not been, declared; and
(b) If and so long as the Common Stock Equity at
the end of the calendar month immediately preceding the
date on which a dividend on Common Stock is declared is,
or as a result of such dividend would become, less than
25% but not less than 20% of total capitalization, the
Corporation shall not declare dividends on the Common
Stock in an amount which, together with all other
dividends on Comrnon Stock paid within the year ending
with and including the date on which such dividend is
payable, exceeds 75% of the net income of the
Corporation and Mississippi Power & Light Company, a
Florida corporation, available for dividends on the
Common Stock for the twelve full calendar months
immediately preceding the month in which such dividends
are declared, except in an amount not exceeding the
aggregate of dividends on Common Stock which under the
restrictions set forth above in subparagraph (a) and in
this subparagraph (b) could have been and have not been
declared; and
(c) If any time when the Common Stock Equity is 25%
or more of total capitalization, the Corporation may not
declare dividends on shares of the Common Stock which
would reduce the Common Stock Equity below 25% of total
capitalization, except to the extent provided in
subparagraphs (a) and (b) above.
At anytime when the aggregate of all amounts credited
subsequent to January 1, 1954, to the depreciation reserve
account of the Corporation and Mississippi Power & Light
Company, a Florida corporation, through charges to operating
revenue deductions or otherwise on the books of the
Corporation and Mississippi Power & Light Company, a Florida
corporation, shall be less than the amount computed as
provided in clause (aa) below, under requirements contained
in the Corporation's mortgage indentures, then for the
purposes of subparagraphs (a) and (b) above, in determining
the earnings available for common stock dividends during any
twelve-month period, the amount to be provided for
depreciation in that period shall be (aa) the greater of the
cumulative amount charged to depreciation expense on the
books of the Corporation and Mississippi Power & Light
Company, a Florida corporation, or the cumulative amount
computer under requirements contained in the Corporation's
mortgage indentures relating to minimum depreciation
provisions (the latter cumulative amount being the aggregate
of the largest amounts separately computed for entire periods
of differing co-existing mortgage indenture requirements) for
the period from January 1, 1954, to and including said twelve-
month period, less (bb) the greater of the cumulative amount
charged to depreciation expense on the books of the
Corporation and Mississippi Power & Light Company, a Florida
corporation, or the cumulative amount computed under
requirements contained in the Corporation's mortgage
indentures relating to minimum depreciation provisions (the
latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing
coexisting mortgage indenture requirements) from January 1,
1954, up to but excluding said twelve-month period; provided
that in the event any company other than Mississippi Power &
Light Company, a Florida corporation, is merged into the
Corporation the "cumulative amount computed under
requirements contained in the Corporation's mortgage
indentures relating to minimum depreciation provisions"
referred to above shall be computed without regard, for the
period perior to the merger, of property acquired in the
merger, and the "cumulative amount charged to depreciation
expense on the books of the Corporation" shall be exclusive
of amounts provided for such property prior to the merger.
(I) The Board of Directors are hereby expressly
authorized by resolution or resolutions to state and express
the series and distinctive serial designation of any
authorized and unissued shares of Preferred Stock proposed to
be issued, the number of shares to constitute each such
series, the annnal rate or rates of dividends payable on
shares of each series together with the dates on which such
dividends shall be paid in each year, the date from which
such dividends shall commence to accumulate, the amount or
amounts payable upon redemption and the sinking fund
provisions, if any, for the redemption or purchase of shares.
(J) Dividends may be paid upon the Common Stock only when
(i) dividends have been paid or declared and funds set apart
for the payment of dividends as aforesaid on the Preferred
Stock from thc date(s) after which dividends thereon became
cumulative, to the beginning of the period then current, with
respect to which such dividends on the Preferred Stock are
usually declared, and (ii) all payments have been made or
funds have been set aside for payments then or theretofore
due under sinking fund provisions, if any, for the redemption
or purchase of shares of any series of the Preferred Stock,
but whenever (x) there shall have been paid or declared and
funds shall have been set apart for the payment of all such
dividends upon the Preferred Stock as aforesaid, and (y) all
payments shall have been made or funds shall have been set
aside for payments then or theretofore due under sinking fund
provisions, if any, for the redemption or purchase of shares
of any series of the Preferred Stock, then, subject to the
limitations above set forth, dividends upon the Common Stock
may be declared payable then or thereafter, out of any net
earnings or surplus of assets over liabilities, including
capital, then remaining. After the payment of the limited
dividends and/or shares in distribution of assets to which
the Preferred Stock is expressly entitled in preference to
the Common Stock, in accordancc with the provisions
hereinabove set forth, the Common Stock alone (subject to the
rights of any class of stock hereafter authorized) shall
receive all further dividends and shares in distribution.
(K) Subject to the limitations hereinabove set forth the
Corporation from time to time may resell any of its own
stock, purchased or otherwise acquired by it as hereinafter
provided for, at such price as may be fixed by its Board of
Directors or Executive Committee.
(L) Subject to the limitations hereinabove set forth the
Corporation in order to acquire funds with which to redeem
any outstanding Preferred Stock of any class, may issue and
sell stock of any class then authorized but unissued, bonds,
notes, evidences of indebtedness, or other securities.
(M) Subject to the limitations hereinabove set forth the
Board of Directors of the Corporation may at any time
authorize the conversion or exchange of the whole or any
particular share of the outstanding preferred stock of any
class with the consent of the holder thereof, into or for
stock of any other class at the time of such consent
authorized but unissued and may fix the terms and conditions
upon which such conversion or exchange may be made; provided
that without the consent of the holders of record of two-
thirds of the shares of Common Stock outstanding given at a
meeting of the holders of the Common Stock called and held as
provided by the By-Laws or given in writing without a
meeting, the Board of Directors shall not authorize the
conversion or exchange of any preferred stock of any class
into or for Common Stock or authorize the conversion or
exchange of any preferred stock; of any class into or for
preferred stock of any other class, if by such conversion or
exchange the amount which the holders of the shares of stock
so converted or exchanged would be entitled to receive either
as dividends or shares in distribution of assets in
preference to the Common Stock would be increased.
(N) A consolidation, merger or amalgamation of the
Corporation with or into any other corporation or
corporations shall not be deemed a distribution of assets of
the Corporation within the meaning of any provisions of these
Amended and Restated Articles of Incorporation.
(O) The consideration received by the Corporation from
the sale of any additional stock without nominal or par value
shall be entered in the Corporation's capital stock account.
(P) Subject to the limitations hereinabove set forth
upon the vote of a majority of all the Directors of the
Corporation and of a majority of the total number of shares
of stock then issued and outstanding and entitled to vote,
irrespective of class (or if the vote of a larger number or
different proportion of shares is required by the laws of the
State of Mississippi notwithstanding the above agreement of
the stockholders of the Corporation to the contrary, then
upon the vote of the larger number or different proportion of
shares so required), the Corporation may from time to time
create or authorize one or more other classes of stock with
such preferences, designations, rights, privileges, powers,
restrictions, limitations and qualifications as may be
determined by said vote, which may be the same as or
different from the preferences, designations, rights,
privileges, powers, restrictions, limitations and
qualifications of the classes of stock of the Corporation
then authorized. Any such vote authorizing the creation of a
new class of stock may provide that all moneys payable by the
Corporation with respect to any class of stock thereby
authorized shall be paid in the money of any foreign country
named therein or designated by the Board of Directors,
pursuant to authority therein granted, at a fixed rate of
exchange with the money of the United States of America
therein stated or provided for and all such payments shall be
made accordingly. Any such vote may authorize any shares of
any class then authorized but unissued to be issued as shares
of such new class or classes
(Q) Subject to the limitations hereinabove set forth,
either the Preferred Stock or the Common Stock or both of
said classes of stock, may be increased at any time upon vote
of the holders of a majority of the total number of shares of
the Corporation then issued and outstanding and entitled to
vote thereon, irrespective of class.
(R) If any provisions in this Section FOURTH shall be in
conflict or inconsistent with any other provisions of these
Amended and Restated Articles of Incorporation of the
Corporation the provisions of this Section FOURTH shall
prevail and govern.
FIFTH: The Corporation will not commence business until
at least $1,000 has been received by it as consideration for
the issuance of shares.
SIXTH: Existing provisions limiting or denying to
shareholders the preemptive right to acquire additional or
treasury shares of the Corporation are:
No holder of any stock of the Corporation shall be
entitled as of right to purchase or subscribe for any part of
any unissued stock of the Corporation, or any additional
stock of any class to be issued by reason of any increase of
the authorized capital stock of the Corporation or of bonds,
certificates of indebtedness, debentures, or other securities
convertible into stock of the Corporation, but any such
unissued stock or any such additional authorized issue of new
stock, or of securities convertible into stock, may be issued
and disposed of by the Board of Directors without offering to
the stockholders then of record, or to any class of
stockholders, any thereof on any terms.
SEVENTH: Existing provisions of the Amended and Restated
Articles of Incorporation for the regulation of the internal
affairs of the Corporation are:
(a) General authority is hereby conferred upon the
Board of Directors to fix the consideration for which
shares of stock of the Corporation without nominal or
par value may be issued and disposed of, and the shares
of stock of the Corporation without nominal or par
value, whether authorized by these Amended and Restated
Articles of Incorporation or by subsequent increase of
the authorized number of shares of stock or by amendment
of these Amended and Restated Articles of Incorporation
by consolidation or merger or otherwise, and/or any
securities convertible into stock of the Corporation
without nominal or par value may be issued and disposed
of for such consideration and on such terms and in such
manner as may be fixed from time to time by the Board of
Directors.
(b) The issue of the whole, or any part determined
by the Board of Directors, of the shares of stock of the
Corporation as partly paid, and subject to calls thereon
until the whole thereof shall have been paid, is hereby
authorized.
(c) The Board of Directors shall have power to
authorize the payment of compensation to the directors
for services to the Corporation, including fees for
attendance at meetings of the Board of Directors or the
Executive Committee and all other committees and to
determine the amount of such compensation and fees.
(d) The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued
by it, alleged to have been lost or destroyed and the
Board of Directors may, in their discretion, require the
owner of the lost or destroyed certificate, or his legal
representative, to give bond in such sum as they may
direct as indemnity against any claim that may be made
against the Corporation, its officers, employees or
agents by reason thereof; a new certificate may be
issued without requiring any bond when, in the judgment
of the directors, it is proper so to do.
If the Corporation shall neglect or refuse to issue
such a new certificate and it shall appear that the
owner thereof has applied to the Corporation for a new
certificate in place thereof and has made due proof of
the loss or destruction thereof and has given such
notice of his application for such new certificate on
such newspaper of general circulation, published in the
State of Mississippi as reasonably should be approved by
the Board of Directors, and in such other newspaper as
may be required by the Board of Directors, and has
tendered to the Corporation adequate security to
indemnify the Corporation, its officers employees, or
agents, and any person other than such applicant who
shall thereafter appear to be the lawful owner of such
alleged lost or destroyed certificate against damage,
loss or expense because of the issuance of such new
certificate, and the effect thereof as herein provided,
then, unless there is adequate cause why such new
certificate shall not be issued, the Corporation, upon
the receipt of said indemnity, shall issue a new
certificate of stock in place of such lost or destroyed
certificate. In the event that the Corporation shall
nevertheless refuse to issue a new certificate as
aforesaid, the applicant may then petition any court of
competent jurisdiction for relief against the failure of
the Corporation to perform its obligations hereunder.
In the event that the Corporation shall issue such new
certificate, any person who shall thereafter claim any
rights under the certificate in place of which such new
certificate is issued, whether such new certificate is
issued pursuant to the judgment or decree of such court
or voluntarily by the Corporation after the publication
of notice and the receipt of proof and indemnity as
aforesaid, shall have recourse to such indemnity and the
Corporation shall be discharged from all liability to
such person by reason of such certificate and the shares
represented thereby.
(e) No stockholder shall have any right to inspect
any account, book or document of the Corporation, except
as conferred by statute or authorized by the directors.
(f) A director of the Corporation shall not be
disqualified by his office from dealing or contracting
with the Corporation either as a vendor, purchaser or
otherwise, nor shall any transaction or contract of the
Corporation be void or voidable by reason of the fact
that any director or any firm of which any director is a
member or any corporation of which any director is a
shareholder, officer or director, is in any way
interested in such transaction or contract, provided
that such transaction or contract is or shall be
authorized, ratified or approved either (1) by a vote of
a majority of a quorum of the Board of Directors or the
Executive Committee, without counting in such majority
or quorum any directors so interested or members of a
firm so interested or a shareholder, officer or director
of a corporation so interested, or (2) by the written
consent, or by vote at a stockholders' meeting of the
holders of record of a majority in number of all the
outstanding shares of stock of the Corporation entitled
to vote; nor shall any director be liable to account to
the Corporation for any profits realized by or from or
through any such transaction or contract of the
Corporation, authorized, ratified or approved as
aforesaid by reason of the fact that he or any firm of
which he is a member or any corporation of which he is a
shareholder, officer or director was interested in such
transaction or contract. Nothing herein contained shall
create any liability in the events above described or
prevent the authorization, ratification or approval of
such contract in any other manner provided by law.
(g) Any director may be removed, whether cause
shall be assigned for his removal or not, and his place
filled at any meeting of the stockholders by the vote of
a majority of the outstanding stock of the Corporation
entitled to vote. Vacancies and newly created
directorsjips resulting from any increase in the
authorized number of directors may be filled as provided
in the By-Laws.
(h) Any property of the Corporation not essential
to the conduct of its corporate business and purposes
may be sold, leased, exchanged or otherwise disposed of
by authority of its Board of Directors and the
Corporation may sell, lease or exchange all of its
property and franchises or any of its property,
franchises, corporate rights or privileges essential to
the conduct of its corporate business and purposes upon
the consent of and for such considerations and upon such
terms as may be authorized by a majority of the Board of
Directors and the holders of a majority of the
outstanding shares of stock entitled to vote, expressed
in writing or by vote at a meeting called for that
purpose in the manner provided by the By-Laws of the
Corporation for special meetings of stockholders; and at
no time shall any of the plants, properties, easements,
franchises (other than corporate franchises) or
securities then owned by the Corporation be deemed to be
property, franchises, corporate rights or privileges
essential to the conduct of the corporate business and
purposes of the Corporation.
Upon the vote or consent of the stockholders
required to dissolve the Corporation, the Corporation
shall have power, as the attorney and agent of the
holders of all of its outstanding stock, to sell, assign
and transfer all such stock to a new corporation
organized under the laws of the United States, the State
of Mississippi or any other state, and to receive as the
consideration therefor shares of stock of such new
corporation of the several classes into which the stock
of the Corporation is then divided, equal in number to
the number of shares of stock of the Corporation of said
several classes then outstanding, such shares of said
new corporation to have the same preferences, voting
powers, restrictions and qualifications thereof as may
then attach to the classes of stock of the Corporation
then outstanding so far as the same shall be consistent
with such laws of the United States or of the State of
Mississippi or of such other state, except that the
whole or any part of such stock or any class thereof may
be stock with or without nominal or par value. In order
to make effective such a sale, assignment and transfer,
the Corporation shall have the right to transfer all its
outstanding stock on its books and to issue and deliver
new certificates therefor in such names and amounts as
such new corporation may direct without receiving for
cancellation the certificates for such stock previously
issued and then outstanding. Upon completion of such
sale, assignment and transfer, the holders of the stock
of the Corporation shall have no rights or interests in
or against the Corporation except the right, upon
surrender of certificates for stock of the Corporation
properly endorsed, if required, to receive from the
Corporation certificates for shares of stock of such new
corporation of the class corresponding to the class of
the shares surrendered, equal in number to the number of
shares of the stock of the Corporation so surrendered.
(i) Upon the written assent or pursuant to the
affirmative vote in person or by proxy of the holders of
a majority in number of the shares then outstanding and
entitled to vote, irrespective of class, (1) any or
every statute of the State of Mississippi hereafter
enacted, whereby the rights, powers or privileges of the
Corporation are or may be increased, diminished or in
any way affected or whereby the rights, powers or
privileges of the stockholders of corporations organized
under the law under which the Corporation is organized,
are increased, diminished or in any way affected or
whereby effect is given to the action taken by any part,
less than all, of the stockholders of any such
corporation, shall, notwithstanding any provisions which
may at the time be contained in these Amended and
Restated Articles of Incorporation or any law, apply to
the Corporation, and shall be binding not only upon the
Corporation, but upon every stockholder thereof, to the
same extent as if such statute had been in force at the
date of the making and filing of these Amended and
Restated Articles of Incorporation and/or (2) amendments
of these Amended and Restated Articles of Incorporation
authorized at the time of the making of such amendments
by the laws of the State of Mississippi may be made.
EIGHTH: The Amended and Restated Articles of
Incorporation amend, restate, and supersede the original
Articles of Incorporation, and all amendments thereto, and
any prior Restated Articles of Incorporation and all
amendments thereto.
DATED: November 11, 1999
Entergy Mississipppi, Inc.
/s/ Steven C. McNeal
Steven C. McNeal
Vice President and
Treasurer
/s/ Christopher T. Screen
Christopher T. Screen
Assistant Secretary
Effective November 26, 1999
Exhibit 3(ii)(c)
BY-LAWS
OF
ENTERGY ARKANSAS, INC.
ARTICLE I.
OFFICES
The principal business office of the Corporation shall be
in Little Rock, Arkansas, or in such other location as designated
by the Board of Directors. The Corporation may also have offices
at such other places as the Board of Directors may from time to
time designate or the business of the Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders,
whether annual or special, shall be held at a location fixed by
the Board of Directors or by the stockholders.
SECTION 2. Annual Meeting. The annual meeting of
stockholders for the election of Directors and the transaction of
such other business as may properly come before the meeting shall
be held on such date and at such time of day as shall have been
fixed by the Board of Directors or by the stockholders.
SECTION 3. Special Meetings. Special meetings of the
stockholders may be held at any time upon the call of (i) a
majority of the entire Board of Directors, (ii) the Chairman of
the Board, (iii) the person, if any, designated by the Board of
Directors as the Chief Executive Officer, or (iv) the holders of
not less than a majority of the outstanding stock entitled to
vote at the special meeting.
SECTION 4. Organization. The Chief Executive Officer or,
in his absence, a person appointed by him or, in default of such
appointment, the officer next in seniority of position (as
determined by the Secretary or, in the Secretary's absence, the
Assistant Secretary), shall call meetings of the stockholders to
order and shall act as chairman thereof. The Secretary of the
Corporation, if present, shall act as secretary of all meetings
of stockholders, and, in his absence, the presiding officer may
appoint a secretary.
SECTION 5. Action by Consent. Any action required or
permitted to be taken at any meeting of the stockholders, whether
annual or special, may be taken without a meeting, if prior to
such action a written consent thereto is signed by a sufficient
percentage of shareholders to satisfy the minimum requirements of
state law.
ARTICLE III.
DIRECTORS
SECTION 1. General Powers. The property, affairs and
business of the Corporation shall be managed by the Board of
Directors.
SECTION 2. Term of Office. The term of office of each
Director shall be until the next annual meeting of stockholders
and until his or her successor is duly elected and qualified or
until the earlier death, resignation or removal of such Director.
SECTION 3. Number of Directors. The number of Directors
which shall constitute the whole Board of Directors shall be not
more than fifteen (15) nor less than three (3), with the exact
number at any given time to be fixed by a resolution of the Board
of Directors or by the stockholders.
SECTION 4. Meetings; Notice. Meetings of the Board of
Directors shall be held at such place as may from time to time be
fixed by resolution of the Board or by the Chairman of the Board,
the Vice Chairman, the President or a Vice President and as may
be specified in the notice or waiver of notice of any meeting.
Notice may be written, electronic or oral and may be given at any
time prior to the meeting. Notice may be waived by a Director
either prior to or following a meeting. Directors present at a
meeting shall be deemed to have waived notice thereof. Meetings
of the Board of Directors, or any committee thereof, may be held
by means of a video conference, a telephone conference or similar
communications equipment.
SECTION 5. Quorum. A majority of the Board of Directors
shall be necessary to constitute a quorum for the transaction of
business, and the act of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the
Board of Directors. If a quorum is present when the meeting is
convened, the Directors present may continue to conduct the
business of the meeting, taking action by vote of a majority of a
quorum as fixed above, until adjournment, notwithstanding the
withdrawal of enough Directors to leave less than a quorum as
fixed above, or the refusal of any Director present to vote.
SECTION 6. Action By Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if, prior
to such action, a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the
case may be, and such written consent is filed with the minutes
of proceedings of the Board of Directors or such committee, as
the case may be.
SECTION 7. Advisory Directors. The stockholders or the
Board of Directors may elect one or more Advisory Directors of
the Corporation. Advisory Directors may be called upon
individually or as a group by the Board of Directors or Officers
of the Corporation to give advice and counsel to the Corporation.
Advisory Directors shall receive from the Corporation such
remuneration as shall be fixed by the Board of Directors. Terms
of Advisory Directors shall expire on the day of the Annual
Meeting of the Corporation, provided, however, that Advisory
Directors shall serve at the pleasure of the Board of Directors
and may be removed at any time with or without cause by a vote of
the Board of Directors. For the purpose of Article IX
(Indemnification) of these By-Laws, Advisory Directors of the
Corporation shall enjoy the same rights and privileges as
Directors of the Corporation.
SECTION 8. Vacancies; Removal. Vacancies and newly
created directorships resulting from any increase in the
authorized number of Directors may be filled by the stockholders
or by the Board of Directors, and the Directors so chosen shall
hold office until the next annual election. The stockholders may
by majority vote remove any Director from his directorship,
whether cause shall be assigned for such removal or not.
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. Executive Committee. The Board of Directors
may, by resolution passed by a majority of the whole Board of
Directors, establish an Executive Committee of not less than two
or more than five members, to serve at the pleasure of the Board
of Directors, which Executive Committee shall consist of such
directors as the Board of Directors may from time to time
designate.
SECTION 2. Procedure. The Executive Committee shall meet
at the call of any of the members of the Executive Committee. A
majority of the members shall be necessary to constitute a quorum
and action shall be taken by a majority vote of those present.
SECTION 3. Powers and Reports. During the intervals
between the meetings of the Board of Directors, the Executive
Committee shall possess and may exercise, to the full extent
authorized by law, all the powers of the Board of Directors in
the management and direction of the business and affairs of the
Corporation. The taking of an action by the Executive Committee
shall be conclusive evidence that the Board of Directors was not
in session when such action was taken. The Executive Committee
shall keep regular minutes of its proceedings and all action by
the Executive Committee shall be reported to the Board of
Directors at its meeting next following the meeting of the
Executive Committee and shall be subject to revision or
alteration by the Board of Directors; provided, that no rights of
third parties shall be affected by such revision or alteration.
SECTION 4. Other Committees. From time to time the Board
of Directors, by the affirmative vote of a majority of the whole
Board of Directors, may appoint other committees for any purpose
or purposes, and such committees shall have such powers as shall
be conferred by the resolution of appointment; provided, however,
that no such committee shall be authorized to exercise the powers
of the Board of Directors. The quorum of any such committee so
appointed shall be a majority of the membership of that
committee.
ARTICLE V.
OFFICERS
SECTION 1. Required and Discretionary Officers. The Board
of Directors shall elect individuals to occupy at least three
executive offices: President, Secretary and Treasurer. In its
discretion, the Board of Directors may elect individuals to
occupy other executive offices, including Chief Executive
Officer, Chief Operating Officer, Vice President and such other
executive offices as the Board shall designate. Officers shall be
elected annually and shall hold office until their respective
successors shall have been duly elected and qualified, or until
such officer shall have died or resigned or shall have been
removed by majority vote of the whole Board of Directors. To the
extent permitted by law, individuals may occupy more than one
office.
SECTION 2. President. The President shall perform duties
incident to the office of the president of a corporation and such
other duties as from time to time may be assigned to him or her
by the Board of Directors, by the Executive Committee or, if the
Board has elected a Chief Executive Officer and if the Chief
Executive Officer is not the President, by the Chief Executive
Officer.
SECTION 3. Vice Presidents. Each Vice President shall have
such powers and shall perform such duties as from time to time
may be conferred upon or assigned to him or her by the Board of
Directors, the Executive Committee, the President or the Chief
Executive Officer.
SECTION 4. Secretary. The Secretary shall keep the minutes
of all meetings of the stockholders and of the Board of Directors
in books provided for the purpose; shall see that all notices are
duly given in accordance with the provisions of law and these By-
Laws; shall be custodian of the records and of the corporate seal
of the Corporation; shall see that the corporate seal is affixed
to all documents the execution of which under the seal is duly
authorized, and, when the seal is so affixed, he may attest the
same; and, in general, shall perform all duties incident to the
office of the secretary of a corporation, and such other duties
as from time to time may be assigned to the Secretary by the
Chief Executive Officer, the Chairman of the Board, the Vice
Chairman, the President, the Board of Directors or the Executive
Committee. The Secretary shall also keep, or cause to be kept, a
stock book, containing the names, alphabetically arranged, of all
persons who are stockholders of the Corporation, showing their
addresses of record, the number of shares held by them
respectively, and the date when they respectively became the
owners of stock of the Corporation.
SECTION 5. Treasurer. The Treasurer shall have charge of
and be responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause to
be deposited, in the name of the Corporation, all moneys or other
valuable effects in such banks, trust companies or other
depositories as shall, from time to time, be selected by the
Treasurer, by an assistant Treasurer or by any other individual
designated by the Board of Directors. The Treasurer may endorse
for collection on behalf of the Corporation, checks, notes and
other obligations; may sign receipts and vouchers for payments
made to the Corporation singly or jointly with another person as
the Board of Directors may authorize; may sign checks of the
Corporation and pay out and dispose of the proceeds as the Board
of Directors may authorize; shall render or cause to be rendered
to the Chairman of the Board, the President and the Board of
Directors, whenever requested, an account of the financial
condition of the Corporation; and, in general, shall perform all
the duties incident to the office of a treasurer of a
corporation, and such other duties as from time to time may be
assigned to him by the Chairman of the Board, the Vice Chairman,
the President, the Board of Directors or the Executive Committee.
SECTION 6. Subordinate Officers. The Board of Directors may
appoint such assistant secretaries, assistant treasurers and
other officers as it may deem desirable. Each such officer shall
hold office for such period, have such authority and perform such
duties as the Board of Directors may prescribe. The Board of
Directors may, from time to time, authorize any officer to
appoint and remove such officers and to prescribe the powers and
duties thereof.
SECTION 7. Vacancies; Absences. Any vacancy in any of the
above offices may be filled by the Board of Directors at any
regular or special meeting. Except when the law requires the act
of a particular officer, the Board of Directors or the Executive
Committee, whenever necessary, may, in the absence of any
officer, designate any other officer or properly qualified
employee, to perform the duties of the absent officer for the
time being, and such designated officer or employee shall have,
when so acting, all the powers herein given to such absent
officer.
SECTION 8. Resignations. Any officer may resign at any time
by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the Vice Chairman, the
President or the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon written receipt thereof
by the Board of Directors or by such officer.
ARTICLE VI.
CAPITAL STOCK
SECTION 1. Stock Certificates. Every stockholder shall be
entitled to have a certificate certifying the number of shares
owned by him in the Corporation. Stock certificates shall be
signed by the Chairman of the Board, the Vice Chairman of the
Board, the President or a Vice President and by the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant
Secretary, and shall be sealed with the seal of the Corporation.
Such seal may be facsimile, engraved or printed. Where such
certificate is signed (1) by a transfer agent or an assistant
transfer agent, other than the Corporation itself, or (2) by a
transfer clerk acting on behalf of the Corporation and a
registrar, the signature of the Chairman of the Board, the Vice
Chairman of the Board, the President, Vice President, Treasurer,
Secretary, Assistant Treasurer or Assistant Secretary may be
facsimile. In case any officer or officers who shall have signed,
or whose facsimile signature or signatures shall have been used
on any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and
be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile
signature or signatures shall have been used thereon had not
ceased to be such officer or officers of the Corporation.
SECTION 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferred on the books of the Corporation
by the holder thereof in person or by his attorney lawfully
constituted, upon surrender for cancellation of certificates for
the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed,
with such proof or guaranty of the authenticity of the signature
as the Corporation or its agents may reasonably require. The
Board of Directors may appoint one or more transfer agents and
registrars of the stock of the Corporation. The Corporation shall
be entitled to treat the holder of record of any share or shares
of stock as the holder in fact and legal owner thereof and
accordingly shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by law.
SECTION 3. Lost Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, mutilated or destroyed,
and may require the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.
When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his legal
representative, to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged
to have been lost, mutilated or destroyed.
ARTICLE VII.
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All checks and
drafts on the Corporation's bank accounts and all bills of
exchange, promissory notes, acceptances, obligations and other
instruments for the payment of money, shall be signed by such
officer or officers, person or persons, as shall be thereunto
authorized by the Board of Directors or as may be designated in a
manner authorized by the Board of Directors.
SECTION 2. Execution of Contracts, Assignments, etc.
All contracts, agreements,
endorsements, assignments, transfers, stock powers, and other
instruments shall be signed by such officer or officers, person
or persons, as shall be thereunto authorized by the Board of
Directors or as may be designated in a manner authorized by the
Board of Directors.
SECTION 3. Voting of Stock and Execution of Proxies. The
Chairman of the Board, the Vice Chairman, the President or any
Vice President or any other officer of the Corporation designated
by the Board of Directors, the Chairman of the Board, or the
President shall be authorized to attend any meeting of the
stockholders of any other corporation in which the Corporation is
an owner of stock and to vote such stock upon all matters coming
before such meeting. The Chairman of the Board, the Vice
Chairman, the President or any Vice President may sign and issue
proxies to vote shares of stock of other corporations owned by
the Corporation.
ARTICLE VIII.
SEAL
The seal of the Corporation shall show the year of its
incorporation and shall be in such form as the Board of Directors
shall prescribe. The seal on any corporate obligation for the
payment of money may be a facsimile, engraved or printed.
ARTICLE IX.
INDEMNIFICATION
SECTION 1. Mandatory Indemnification - Third Party Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding ("Action"), whether civil,
criminal, administrative or investigative (other than an Action
by or in the right of the Corporation) by reason of the fact that
such person is or was a director, officer or employee of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such Action if such
person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal Action, had no
reasonable cause to believe the conduct was unlawful. The
termination of any Action by judgement, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal Action or
proceeding, had reasonable cause to believe that the conduct was
unlawful.
SECTION 2. Mandatory Indemnification - Derivative Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any Action by or in the
right of the Corporation to procure a judgement in its favor by
reason of the fact that such person is or was a director,
officer, or employee of the Corporation or is or was serving at
the request of the Corporation as a director, officer or employee
of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees and
amounts paid in settlement not exceeding the estimated expense of
litigating the Action to a conclusion) actually and reasonably
incurred by such person in connection with the defense or
settlement of such Action if such person acted in good faith and
in a manner such person reasonably believed to be in or not
opposed to the best interest of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such
person's duty to the Corporation unless and only to the extent
that the court in which such Action was brought shall determine
upon application that, despite the adjudication of liability but
in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
SECTION 3. Mandatory Indemnification - Successful Party. To
the extent that a director, officer, employee or agent of the
Corporation, or any person who is or was serving at the request
of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, has been successful on the merits or otherwise in the
defense of any such Action, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
SECTION 4. Permissive Indemnification. Notwithstanding any
limitations of the indemnification provided by Sections 1 and 2,
the Corporation may, to the fullest extent authorized by law,
indemnify any person who is or was a party or is threatened to be
made a party to any Action by reason of the fact that such person
is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against all or part of any expenses (including
attorneys' fees), judgements, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such Action, if it shall be determined in
accordance with the applicable procedures set forth in Section 5
that such person is fairly and reasonably entitled to such
indemnification.
SECTION 5. Procedure. Any indemnification under Sections 1,
2 or 4 (unless ordered by a court) shall be made by the
Corporation only as authorized by the Board of Directors (which
may so act whether or not there is a sufficient number of
disinterested directors to constitute a quorum) in the specific
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because
such person has met the applicable standards of conduct set forth
in Sections 1 and 2 or is entitled to indemnification under
Section 4. Such determination, in the case of indemnification
made pursuant to Section 1 or Section 2 shall be made (1) by the
Board of Directors by a majority vote of a quorum, as defined in
the Certificate of Incorporation or the By-Laws, consisting of
directors who are not or were not parties to any pending or
completed Action giving rise to the proposed indemnification, or
(2) if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs, by independent
legal counsel (who may be, but need not be, outside counsel to
the Corporation) in a written opinion, or (3) by the
shareholder(s) of the Corporation. Such determination, in the
case of indemnification made pursuant to Section 4, shall be made
by the Board of Directors by a majority vote of a quorum, as
defined in the Certificate of Incorporation or the By-Laws,
consisting of directors who are not or were not parties to any
pending or completed Action giving rise to the proposed
indemnification or by the shareholders.
SECTION 6. Advance Payments. Expenses (including attorneys'
fees) incurred or reasonably expected to be incurred by a
director, officer or employee of the Corporation in defending
against any claim asserted or threatened against such person in
such capacity or arising out of such person's status as such
shall be paid by the Corporation in advance of the final
determination thereof, if authorized by the Board of Directors
(which may so act whether or not there is a sufficient number of
disinterested directors to constitute a quorum) upon receipt by
the Corporation of his written request therefor and such person's
written promise to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the Corporation as authorized or required in this article.
SECTION 7. Provisions Not Exclusive. The indemnification
provided by this Article shall not be deemed exclusive of any
other rights to which any person seeking indemnification may be
entitled under any law, Bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, and shall continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 8. Miscellaneous. For purposes of this Article, and
without any limitation whatsoever upon the generality thereof,
the term "fines" as used herein shall be deemed to include (i)
penalties imposed by the Nuclear Regulatory Commission (the
"NRC") pursuant to Section 206 of the Energy Reorganization Act
of 1974 and Part 21 of NRC regulations thereunder, as they may be
amended from time to time, and any other penalties, whether
similar or dissimilar, imposed by the NRC, and (ii) excise taxes
assessed with respect to an employee benefit plan pursuant to the
Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, ("ERISA"). For purposes of determining
the entitlement of a director, officer or employee of the
Corporation to indemnification under this Article, the term
"other enterprise" shall be deemed to include an employee benefit
plan governed by ERISA. The Corporation shall be deemed to have
requested such person to serve as a director, officer or employee
of such a plan where such person is a trustee of the plan or
where the performance by such person of his duties to the
Corporation also imposes duties on, or otherwise involves
services by, such person to such plan or its participants or
beneficiaries, and action taken or permitted by such person in
the performance of his duties with respect to such employee
benefit plan for which is a purpose reasonably believed by him to
be in the interest of the participants and beneficiaries of the
plan, shall be deemed to meet the standard of conduct required
for indemnification hereunder. Any act, omission, step or conduct
taken or had in good faith which is required, authorized or
approved by any order or orders issued pursuant to the Public
Utility Holding Company Act of 1935 or any other federal statute
or any state statute or municipal ordinance shall be deemed to
meet the standard of conduct required for indemnification
hereunder.
ARTICLE X.
CONFLICTS
In the event that any provisions of these By-Laws conflict
with the Articles of Incorporation or with state or federal
statutes, the Articles of Incorporation or such statutes shall
take precedence over such provisions of these By-Laws.
ARTICLE XI.
AMENDMENTS
Subject to the provisions of applicable law and of the
Articles of Incorporation, these By-Laws may be altered, amended
or repealed and new By-Laws adopted either by the stockholders or
by the Board of Directors.
Effective November 26, 1999
Exhibit 3(ii)d
BY-LAWS
OF
ENTERGY GULF STATES, INC.
ARTICLE I.
OFFICES
The principal business office of the Corporation shall be
in Beaumont, Texas, or in such other location as designated by
the Board of Directors. The Corporation may also have offices at
such other places as the Board of Directors may from time to time
designate or the business of the Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders,
whether annual or special, shall be held at a location fixed by
the Board of Directors or by the stockholders.
SECTION 2. Annual Meeting. The annual meeting of
stockholders for the election of Directors and the transaction of
such other business as may properly come before the meeting shall
be held on such date and at such time of day as shall have been
fixed by the Board of Directors or by the stockholders.
SECTION 3. Special Meetings. Special meetings of the
stockholders may be held at any time upon the call of (i) a
majority of the entire Board of Directors, (ii) the Chairman of
the Board, (iii) the person, if any, designated by the Board of
Directors as the Chief Executive Officer, or (iv) the holders of
not less than a majority of the outstanding stock entitled to
vote at the special meeting.
SECTION 4. Organization. The Chief Executive Officer or,
in his absence, a person appointed by him or, in default of such
appointment, the officer next in seniority of position (as
determined by the Secretary or, in the Secretary's absence, the
Assistant Secretary), shall call meetings of the stockholders to
order and shall act as chairman thereof. The Secretary of the
Corporation, if present, shall act as secretary of all meetings
of stockholders, and, in his absence, the presiding officer may
appoint a secretary.
SECTION 5. Action by Consent. Any action required or
permitted to be taken at any meeting of the stockholders, whether
annual or special, may be taken without a meeting, if prior to
such action a written consent thereto is signed by a sufficient
percentage of shareholders to satisfy the minimum requirements of
state law.
ARTICLE III.
DIRECTORS
SECTION 1. General Powers. The property, affairs and
business of the Corporation shall be managed by the Board of
Directors.
SECTION 2. Term of Office. The term of office of each
Director shall be until the next annual meeting of stockholders
and until his or her successor is duly elected and qualified or
until the earlier death, resignation or removal of such Director.
SECTION 3. Number of Directors. The number of Directors
which shall constitute the whole Board of Directors shall be not
more than fifteen (15) nor less than three (3), with the exact
number at any given time to be fixed by a resolution of the Board
of Directors or by the stockholders.
SECTION 4. Meetings; Notice. Meetings of the Board of
Directors shall be held at such place as may from time to time be
fixed by resolution of the Board or by the Chairman of the Board,
the Vice Chairman, the President or a Vice President and as may
be specified in the notice or waiver of notice of any meeting.
Notice may be written, electronic or oral and may be given at any
time prior to the meeting. Notice may be waived by a Director
either prior to or following a meeting. Directors present at a
meeting shall be deemed to have waived notice thereof. Meetings
of the Board of Directors, or any committee thereof, may be held
by means of a video conference, a telephone conference or similar
communications equipment.
SECTION 5. Quorum. A majority of the Board of Directors
shall be necessary to constitute a quorum for the transaction of
business, and the act of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the
Board of Directors. If a quorum is present when the meeting is
convened, the Directors present may continue to conduct the
business of the meeting, taking action by vote of a majority of a
quorum as fixed above, until adjournment, notwithstanding the
withdrawal of enough Directors to leave less than a quorum as
fixed above, or the refusal of any Director present to vote.
SECTION 6. Action By Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if, prior
to such action, a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the
case may be, and such written consent is filed with the minutes
of proceedings of the Board of Directors or such committee, as
the case may be.
SECTION 7. Advisory Directors. The stockholders or the
Board of Directors may elect one or more Advisory Directors of
the Corporation. Advisory Directors may be called upon
individually or as a group by the Board of Directors or Officers
of the Corporation to give advice and counsel to the Corporation.
Advisory Directors shall receive from the Corporation such
remuneration as shall be fixed by the Board of Directors. Terms
of Advisory Directors shall expire on the day of the Annual
Meeting of the Corporation, provided, however, that Advisory
Directors shall serve at the pleasure of the Board of Directors
and may be removed at any time with or without cause by a vote of
the Board of Directors. For the purpose of Article IX
(Indemnification) of these By-Laws, Advisory Directors of the
Corporation shall enjoy the same rights and privileges as
Directors of the Corporation.
SECTION 8. Vacancies; Removal. To the extent allowed
under Texas law, vacancies and newly created directorships
resulting from any increase in the authorized number of Directors
may be filled by the stockholders or by the Board of Directors,
and the Directors so chosen shall hold office until the next
annual election. The stockholders may by majority vote remove any
Director from his directorship, whether cause shall be assigned
for such removal or not.
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. Executive Committee. The Board of Directors
may, by resolution passed by a majority of the whole Board of
Directors, establish an Executive Committee of not less than two
or more than five members, to serve at the pleasure of the Board
of Directors, which Executive Committee shall consist of such
directors as the Board of Directors may from time to time
designate.
SECTION 2. Procedure. The Executive Committee shall meet
at the call of any of the members of the Executive Committee. A
majority of the members shall be necessary to constitute a quorum
and action shall be taken by a majority vote of those present.
SECTION 3. Powers and Reports. During the intervals
between the meetings of the Board of Directors, the Executive
Committee shall possess and may exercise, to the full extent
authorized by law, all the powers of the Board of Directors in
the management and direction of the business and affairs of the
Corporation. The taking of an action by the Executive Committee
shall be conclusive evidence that the Board of Directors was not
in session when such action was taken. The Executive Committee
shall keep regular minutes of its proceedings and all action by
the Executive Committee shall be reported to the Board of
Directors at its meeting next following the meeting of the
Executive Committee and shall be subject to revision or
alteration by the Board of Directors; provided, that no rights of
third parties shall be affected by such revision or alteration.
SECTION 4. Other Committees. From time to time the Board
of Directors, by the affirmative vote of a majority of the whole
Board of Directors, may appoint other committees for any purpose
or purposes, and such committees shall have such powers as shall
be conferred by the resolution of appointment; provided, however,
that no such committee shall be authorized to exercise the powers
of the Board of Directors. The quorum of any such committee so
appointed shall be a majority of the membership of that
committee.
ARTICLE V.
OFFICERS
SECTION 1. Required and Discretionary Officers. The Board
of Directors shall elect individuals to occupy at least three
executive offices: President, Secretary and Treasurer. In its
discretion, the Board of Directors may elect individuals to
occupy other executive offices, including Chief Executive
Officer, Chief Operating Officer, Vice President and such other
executive offices as the Board shall designate. Officers shall be
elected annually and shall hold office until their respective
successors shall have been duly elected and qualified, or until
such officer shall have died or resigned or shall have been
removed by majority vote of the whole Board of Directors. To the
extent permitted by law, individuals may occupy more than one
office.
SECTION 2. President. The President shall perform duties
incident to the office of the president of a corporation and such
other duties as from time to time may be assigned to him or her
by the Board of Directors, by the Executive Committee or, if the
Board has elected a Chief Executive Officer and if the Chief
Executive Officer is not the President, by the Chief Executive
Officer.
SECTION 3. Vice Presidents. Each Vice President shall have
such powers and shall perform such duties as from time to time
may be conferred upon or assigned to him or her by the Board of
Directors, the Executive Committee, the President or the Chief
Executive Officer.
SECTION 4. Secretary. The Secretary shall keep the minutes
of all meetings of the stockholders and of the Board of Directors
in books provided for the purpose; shall see that all notices are
duly given in accordance with the provisions of law and these By-
Laws; shall be custodian of the records and of the corporate seal
of the Corporation; shall see that the corporate seal is affixed
to all documents the execution of which under the seal is duly
authorized, and, when the seal is so affixed, he may attest the
same; and, in general, shall perform all duties incident to the
office of the secretary of a corporation, and such other duties
as from time to time may be assigned to the Secretary by the
Chief Executive Officer, the Chairman of the Board, the Vice
Chairman, the President, the Board of Directors or the Executive
Committee. The Secretary shall also keep, or cause to be kept, a
stock book, containing the names, alphabetically arranged, of all
persons who are stockholders of the Corporation, showing their
addresses of record, the number of shares held by them
respectively, and the date when they respectively became the
owners of stock of the Corporation.
SECTION 5. Treasurer. The Treasurer shall have charge of
and be responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause to
be deposited, in the name of the Corporation, all moneys or other
valuable effects in such banks, trust companies or other
depositories as shall, from time to time, be selected by the
Treasurer, by an assistant Treasurer or by any other individual
designated by the Board of Directors. The Treasurer may endorse
for collection on behalf of the Corporation, checks, notes and
other obligations; may sign receipts and vouchers for payments
made to the Corporation singly or jointly with another person as
the Board of Directors may authorize; may sign checks of the
Corporation and pay out and dispose of the proceeds as the Board
of Directors may authorize; shall render or cause to be rendered
to the Chairman of the Board, the President and the Board of
Directors, whenever requested, an account of the financial
condition of the Corporation; and, in general, shall perform all
the duties incident to the office of a treasurer of a
corporation, and such other duties as from time to time may be
assigned to him by the Chairman of the Board, the Vice Chairman,
the President, the Board of Directors or the Executive Committee.
SECTION 6. Subordinate Officers. The Board of Directors may
appoint such assistant secretaries, assistant treasurers and
other officers as it may deem desirable. Each such officer shall
hold office for such period, have such authority and perform such
duties as the Board of Directors may prescribe. The Board of
Directors may, from time to time, authorize any officer to
appoint and remove such officers and to prescribe the powers and
duties thereof.
SECTION 7. Vacancies; Absences. Any vacancy in any of the
above offices may be filled by the Board of Directors at any
regular or special meeting. Except when the law requires the act
of a particular officer, the Board of Directors or the Executive
Committee, whenever necessary, may, in the absence of any
officer, designate any other officer or properly qualified
employee, to perform the duties of the absent officer for the
time being, and such designated officer or employee shall have,
when so acting, all the powers herein given to such absent
officer.
SECTION 8. Resignations. Any officer may resign at any time
by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the Vice Chairman, the
President or the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon written receipt thereof
by the Board of Directors or by such officer.
ARTICLE VI.
CAPITAL STOCK
SECTION 1. Stock Certificates. Every stockholder shall be
entitled to have a certificate certifying the number of shares
owned by him in the Corporation. Stock certificates shall be
signed by the Chairman of the Board, the Vice Chairman of the
Board, the President or a Vice President and by the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant
Secretary, and shall be sealed with the seal of the Corporation.
Such seal may be facsimile, engraved or printed. Where such
certificate is signed (1) by a transfer agent or an assistant
transfer agent, other than the Corporation itself, or (2) by a
transfer clerk acting on behalf of the Corporation and a
registrar, the signature of the Chairman of the Board, the Vice
Chairman of the Board, the President, Vice President, Treasurer,
Secretary, Assistant Treasurer or Assistant Secretary may be
facsimile. In case any officer or officers who shall have signed,
or whose facsimile signature or signatures shall have been used
on any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and
be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile
signature or signatures shall have been used thereon had not
ceased to be such officer or officers of the Corporation.
SECTION 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferred on the books of the Corporation
by the holder thereof in person or by his attorney lawfully
constituted, upon surrender for cancellation of certificates for
the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed,
with such proof or guaranty of the authenticity of the signature
as the Corporation or its agents may reasonably require. The
Board of Directors may appoint one or more transfer agents and
registrars of the stock of the Corporation. The Corporation shall
be entitled to treat the holder of record of any share or shares
of stock as the holder in fact and legal owner thereof and
accordingly shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by law.
SECTION 3. Lost Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, mutilated or destroyed,
and may require the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.
When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his legal
representative, to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged
to have been lost, mutilated or destroyed.
ARTICLE VII.
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All checks and
drafts on the Corporation's bank accounts and all bills of
exchange, promissory notes, acceptances, obligations and other
instruments for the payment of money, shall be signed by such
officer or officers, person or persons, as shall be thereunto
authorized by the Board of Directors or as may be designated in a
manner authorized by the Board of Directors.
SECTION 2. Execution of Contracts, Assignments, etc.
All contracts, agreements,
endorsements, assignments, transfers, stock powers, and other
instruments shall be signed by such officer or officers, person
or persons, as shall be thereunto authorized by the Board of
Directors or as may be designated in a manner authorized by the
Board of Directors.
SECTION 3. Voting of Stock and Execution of Proxies. The
Chairman of the Board, the Vice Chairman, the President or any
Vice President or any other officer of the Corporation designated
by the Board of Directors, the Chairman of the Board, or the
President shall be authorized to attend any meeting of the
stockholders of any other corporation in which the Corporation is
an owner of stock and to vote such stock upon all matters coming
before such meeting. The Chairman of the Board, the Vice
Chairman, the President or any Vice President may sign and issue
proxies to vote shares of stock of other corporations owned by
the Corporation.
ARTICLE VIII.
SEAL
The seal of the Corporation shall show the year of its
incorporation and shall be in such form as the Board of Directors
shall prescribe. The seal on any corporate obligation for the
payment of money may be a facsimile, engraved or printed.
ARTICLE IX.
INDEMNIFICATION
SECTION 1. Mandatory Indemnification - Third Party Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding ("Action"), whether civil,
criminal, administrative or investigative (other than an Action
by or in the right of the Corporation) by reason of the fact that
such person is or was a director, officer or employee of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such Action if such
person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal Action, had no
reasonable cause to believe the conduct was unlawful. The
termination of any Action by judgement, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal Action or
proceeding, had reasonable cause to believe that the conduct was
unlawful.
SECTION 2. Mandatory Indemnification - Derivative Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any Action by or in the
right of the Corporation to procure a judgement in its favor by
reason of the fact that such person is or was a director,
officer, or employee of the Corporation or is or was serving at
the request of the Corporation as a director, officer or employee
of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees and
amounts paid in settlement not exceeding the estimated expense of
litigating the Action to a conclusion) actually and reasonably
incurred by such person in connection with the defense or
settlement of such Action if such person acted in good faith and
in a manner such person reasonably believed to be in or not
opposed to the best interest of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such
person's duty to the Corporation unless and only to the extent
that the court in which such Action was brought shall determine
upon application that, despite the adjudication of liability but
in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
SECTION 3. Mandatory Indemnification - Successful Party. To
the extent that a director, officer, employee or agent of the
Corporation, or any person who is or was serving at the request
of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, has been successful on the merits or otherwise in the
defense of any such Action, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
SECTION 4. Permissive Indemnification. Notwithstanding any
limitations of the indemnification provided by Sections 1 and 2,
the Corporation may, to the fullest extent authorized by law,
indemnify any person who is or was a party or is threatened to be
made a party to any Action by reason of the fact that such person
is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against all or part of any expenses (including
attorneys' fees), judgements, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such Action, if it shall be determined in
accordance with the applicable procedures set forth in Section 5
that such person is fairly and reasonably entitled to such
indemnification.
SECTION 5. Procedure. Any indemnification under Sections 1,
2 or 4 (unless ordered by a court) shall be made by the
Corporation only as authorized by the Board of Directors (which
may so act whether or not there is a sufficient number of
disinterested directors to constitute a quorum) in the specific
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because
such person has met the applicable standards of conduct set forth
in Sections 1 and 2 or is entitled to indemnification under
Section 4. Such determination, in the case of indemnification
made pursuant to Section 1 or Section 2 shall be made (1) by the
Board of Directors by a majority vote of a quorum, as defined in
the Certificate of Incorporation or the By-Laws, consisting of
directors who are not or were not parties to any pending or
completed Action giving rise to the proposed indemnification, or
(2) if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs, by independent
legal counsel (who may be, but need not be, outside counsel to
the Corporation) in a written opinion, or (3) by the
shareholder(s) of the Corporation. Such determination, in the
case of indemnification made pursuant to Section 4, shall be made
by the Board of Directors by a majority vote of a quorum, as
defined in the Certificate of Incorporation or the By-Laws,
consisting of directors who are not or were not parties to any
pending or completed Action giving rise to the proposed
indemnification or by the shareholders.
SECTION 6. Advance Payments. Expenses (including attorneys'
fees) incurred or reasonably expected to be incurred by a
director, officer or employee of the Corporation in defending
against any claim asserted or threatened against such person in
such capacity or arising out of such person's status as such
shall be paid by the Corporation in advance of the final
determination thereof, if authorized by the Board of Directors
(which may so act whether or not there is a sufficient number of
disinterested directors to constitute a quorum) upon receipt by
the Corporation of his written request therefor and such person's
written promise to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the Corporation as authorized or required in this article.
SECTION 7. Provisions Not Exclusive. The indemnification
provided by this Article shall not be deemed exclusive of any
other rights to which any person seeking indemnification may be
entitled under any law, Bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, and shall continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 8. Miscellaneous. For purposes of this Article, and
without any limitation whatsoever upon the generality thereof,
the term "fines" as used herein shall be deemed to include (i)
penalties imposed by the Nuclear Regulatory Commission (the
"NRC") pursuant to Section 206 of the Energy Reorganization Act
of 1974 and Part 21 of NRC regulations thereunder, as they may be
amended from time to time, and any other penalties, whether
similar or dissimilar, imposed by the NRC, and (ii) excise taxes
assessed with respect to an employee benefit plan pursuant to the
Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, ("ERISA"). For purposes of determining
the entitlement of a director, officer or employee of the
Corporation to indemnification under this Article, the term
"other enterprise" shall be deemed to include an employee benefit
plan governed by ERISA. The Corporation shall be deemed to have
requested such person to serve as a director, officer or employee
of such a plan where such person is a trustee of the plan or
where the performance by such person of his duties to the
Corporation also imposes duties on, or otherwise involves
services by, such person to such plan or its participants or
beneficiaries, and action taken or permitted by such person in
the performance of his duties with respect to such employee
benefit plan for which is a purpose reasonably believed by him to
be in the interest of the participants and beneficiaries of the
plan, shall be deemed to meet the standard of conduct required
for indemnification hereunder. Any act, omission, step or conduct
taken or had in good faith which is required, authorized or
approved by any order or orders issued pursuant to the Public
Utility Holding Company Act of 1935 or any other federal statute
or any state statute or municipal ordinance shall be deemed to
meet the standard of conduct required for indemnification
hereunder.
ARTICLE X.
CONFLICTS
In the event that any provisions of these By-Laws conflict
with the Articles of Incorporation or with state or federal
statutes, the Articles of Incorporation or such statutes shall
take precedence over such provisions of these By-Laws.
ARTICLE XI.
AMENDMENTS
Subject to the provisions of applicable law and of the
Articles of Incorporation, these By-Laws may be altered, amended
or repealed and new By-Laws adopted either by the stockholders or
by the Board of Directors.
Effective November 26, 1999
Exhibit 3(ii)f
BY-LAWS
OF
ENTERGY MISSISSIPPI, INC.
ARTICLE I.
OFFICES
The principal business office of the Corporation shall be
in Jackson, Mississippi, or in such other location as designated
by the Board of Directors. The Corporation may also have offices
at such other places as the Board of Directors may from time to
time designate or the business of the Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders,
whether annual or special, shall be held at a location fixed by
the Board of Directors or by the stockholders.
SECTION 2. Annual Meeting. The annual meeting of
stockholders for the election of Directors and the transaction of
such other business as may properly come before the meeting shall
be held on such date and at such time of day as shall have been
fixed by the Board of Directors or by the stockholders.
SECTION 3. Special Meetings. Special meetings of the
stockholders may be held at any time upon the call of (i) a
majority of the entire Board of Directors, (ii) the Chairman of
the Board, (iii) the person, if any, designated by the Board of
Directors as the Chief Executive Officer, or (iv) the holders of
not less than a majority of the outstanding stock entitled to
vote at the special meeting.
SECTION 4. Organization. The Chief Executive Officer or,
in his absence, a person appointed by him or, in default of such
appointment, the officer next in seniority of position (as
determined by the Secretary or, in the Secretary's absence, the
Assistant Secretary), shall call meetings of the stockholders to
order and shall act as chairman thereof. The Secretary of the
Corporation, if present, shall act as secretary of all meetings
of stockholders, and, in his absence, the presiding officer may
appoint a secretary.
SECTION 5. Action by Consent. Any action required or
permitted to be taken at any meeting of the stockholders, whether
annual or special, may be taken without a meeting, if prior to
such action a written consent thereto is signed by a sufficient
percentage of shareholders to satisfy the minimum requirements of
state law.
ARTICLE III.
DIRECTORS
SECTION 1. General Powers. The property, affairs and
business of the Corporation shall be managed by the Board of
Directors.
SECTION 2. Term of Office. The term of office of each
Director shall be until the next annual meeting of stockholders
and until his or her successor is duly elected and qualified or
until the earlier death, resignation or removal of such Director.
SECTION 3. Number of Directors. The number of Directors
which shall constitute the whole Board of Directors shall be not
more than fifteen (15) nor less than three (3), with the exact
number at any given time to be fixed by a resolution of the Board
of Directors or by the stockholders.
SECTION 4. Meetings; Notice. Meetings of the Board of
Directors shall be held at such place as may from time to time be
fixed by resolution of the Board or by the Chairman of the Board,
the Vice Chairman, the President or a Vice President and as may
be specified in the notice or waiver of notice of any meeting.
Notice may be written, electronic or oral and may be given at any
time prior to the meeting. Notice may be waived by a Director
either prior to or following a meeting. Directors present at a
meeting shall be deemed to have waived notice thereof. Meetings
of the Board of Directors, or any committee thereof, may be held
by means of a video conference, a telephone conference or similar
communications equipment.
SECTION 5. Quorum. A majority of the Board of Directors
shall be necessary to constitute a quorum for the transaction of
business, and the act of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the
Board of Directors. If a quorum is present when the meeting is
convened, the Directors present may continue to conduct the
business of the meeting, taking action by vote of a majority of a
quorum as fixed above, until adjournment, notwithstanding the
withdrawal of enough Directors to leave less than a quorum as
fixed above, or the refusal of any Director present to vote.
SECTION 6. Action By Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if, prior
to such action, a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the
case may be, and such written consent is filed with the minutes
of proceedings of the Board of Directors or such committee, as
the case may be.
SECTION 7. Advisory Directors. The stockholders or the
Board of Directors may elect one or more Advisory Directors of
the Corporation. Advisory Directors may be called upon
individually or as a group by the Board of Directors or Officers
of the Corporation to give advice and counsel to the Corporation.
Advisory Directors shall receive from the Corporation such
remuneration as shall be fixed by the Board of Directors. Terms
of Advisory Directors shall expire on the day of the Annual
Meeting of the Corporation, provided, however, that Advisory
Directors shall serve at the pleasure of the Board of Directors
and may be removed at any time with or without cause by a vote of
the Board of Directors. For the purpose of Article IX
(Indemnification) of these By-Laws, Advisory Directors of the
Corporation shall enjoy the same rights and privileges as
Directors of the Corporation.
SECTION 8. Vacancies; Removal. Vacancies and newly
created directorships resulting from any increase in the
authorized number of Directors may be filled by the stockholders
or by the Board of Directors, and the Directors so chosen shall
hold office until the next annual election. The stockholders may
by majority vote remove any Director from his directorship,
whether cause shall be assigned for such removal or not.
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. Executive Committee. The Board of Directors
may, by resolution passed by a majority of the whole Board of
Directors, establish an Executive Committee of not less than two
or more than five members, to serve at the pleasure of the Board
of Directors, which Executive Committee shall consist of such
directors as the Board of Directors may from time to time
designate.
SECTION 2. Procedure. The Executive Committee shall meet
at the call of any of the members of the Executive Committee. A
majority of the members shall be necessary to constitute a quorum
and action shall be taken by a majority vote of those present.
SECTION 3. Powers and Reports. During the intervals
between the meetings of the Board of Directors, the Executive
Committee shall possess and may exercise, to the full extent
authorized by law, all the powers of the Board of Directors in
the management and direction of the business and affairs of the
Corporation. The taking of an action by the Executive Committee
shall be conclusive evidence that the Board of Directors was not
in session when such action was taken. The Executive Committee
shall keep regular minutes of its proceedings and all action by
the Executive Committee shall be reported to the Board of
Directors at its meeting next following the meeting of the
Executive Committee and shall be subject to revision or
alteration by the Board of Directors; provided, that no rights of
third parties shall be affected by such revision or alteration.
SECTION 4. Other Committees. From time to time the Board
of Directors, by the affirmative vote of a majority of the whole
Board of Directors, may appoint other committees for any purpose
or purposes, and such committees shall have such powers as shall
be conferred by the resolution of appointment; provided, however,
that no such committee shall be authorized to exercise the powers
of the Board of Directors. The quorum of any such committee so
appointed shall be a majority of the membership of that
committee.
ARTICLE V.
OFFICERS
SECTION 1. Required and Discretionary Officers. The Board
of Directors shall elect individuals to occupy at least three
executive offices: President, Secretary and Treasurer. In its
discretion, the Board of Directors may elect individuals to
occupy other executive offices, including Chief Executive
Officer, Chief Operating Officer, Vice President and such other
executive offices as the Board shall designate. Officers shall be
elected annually and shall hold office until their respective
successors shall have been duly elected and qualified, or until
such officer shall have died or resigned or shall have been
removed by majority vote of the whole Board of Directors. To the
extent permitted by law, individuals may occupy more than one
office.
SECTION 2. President. The President shall perform duties
incident to the office of the president of a corporation and such
other duties as from time to time may be assigned to him or her
by the Board of Directors, by the Executive Committee or, if the
Board has elected a Chief Executive Officer and if the Chief
Executive Officer is not the President, by the Chief Executive
Officer.
SECTION 3. Vice Presidents. Each Vice President shall have
such powers and shall perform such duties as from time to time
may be conferred upon or assigned to him or her by the Board of
Directors, the Executive Committee, the President or the Chief
Executive Officer.
SECTION 4. Secretary. The Secretary shall keep the minutes
of all meetings of the stockholders and of the Board of Directors
in books provided for the purpose; shall see that all notices are
duly given in accordance with the provisions of law and these By-
Laws; shall be custodian of the records and of the corporate seal
of the Corporation; shall see that the corporate seal is affixed
to all documents the execution of which under the seal is duly
authorized, and, when the seal is so affixed, he may attest the
same; and, in general, shall perform all duties incident to the
office of the secretary of a corporation, and such other duties
as from time to time may be assigned to the Secretary by the
Chief Executive Officer, the Chairman of the Board, the Vice
Chairman, the President, the Board of Directors or the Executive
Committee. The Secretary shall also keep, or cause to be kept, a
stock book, containing the names, alphabetically arranged, of all
persons who are stockholders of the Corporation, showing their
addresses of record, the number of shares held by them
respectively, and the date when they respectively became the
owners of stock of the Corporation.
SECTION 5. Treasurer. The Treasurer shall have charge of
and be responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause to
be deposited, in the name of the Corporation, all moneys or other
valuable effects in such banks, trust companies or other
depositories as shall, from time to time, be selected by the
Treasurer, by an assistant Treasurer or by any other individual
designated by the Board of Directors. The Treasurer may endorse
for collection on behalf of the Corporation, checks, notes and
other obligations; may sign receipts and vouchers for payments
made to the Corporation singly or jointly with another person as
the Board of Directors may authorize; may sign checks of the
Corporation and pay out and dispose of the proceeds as the Board
of Directors may authorize; shall render or cause to be rendered
to the Chairman of the Board, the President and the Board of
Directors, whenever requested, an account of the financial
condition of the Corporation; and, in general, shall perform all
the duties incident to the office of a treasurer of a
corporation, and such other duties as from time to time may be
assigned to him by the Chairman of the Board, the Vice Chairman,
the President, the Board of Directors or the Executive Committee.
SECTION 6. Subordinate Officers. The Board of Directors may
appoint such assistant secretaries, assistant treasurers and
other officers as it may deem desirable. Each such officer shall
hold office for such period, have such authority and perform such
duties as the Board of Directors may prescribe. The Board of
Directors may, from time to time, authorize any officer to
appoint and remove such officers and to prescribe the powers and
duties thereof.
SECTION 7. Vacancies; Absences. Any vacancy in any of the
above offices may be filled by the Board of Directors at any
regular or special meeting. Except when the law requires the act
of a particular officer, the Board of Directors or the Executive
Committee, whenever necessary, may, in the absence of any
officer, designate any other officer or properly qualified
employee, to perform the duties of the absent officer for the
time being, and such designated officer or employee shall have,
when so acting, all the powers herein given to such absent
officer.
SECTION 8. Resignations. Any officer may resign at any time
by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the Vice Chairman, the
President or the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon written receipt thereof
by the Board of Directors or by such officer.
ARTICLE VI.
CAPITAL STOCK
SECTION 1. Stock Certificates. Every stockholder shall be
entitled to have a certificate certifying the number of shares
owned by him in the Corporation. Stock certificates shall be
signed by the Chairman of the Board, the Vice Chairman of the
Board, the President or a Vice President and by the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant
Secretary, and shall be sealed with the seal of the Corporation.
Such seal may be facsimile, engraved or printed. Where such
certificate is signed (1) by a transfer agent or an assistant
transfer agent, other than the Corporation itself, or (2) by a
transfer clerk acting on behalf of the Corporation and a
registrar, the signature of the Chairman of the Board, the Vice
Chairman of the Board, the President, Vice President, Treasurer,
Secretary, Assistant Treasurer or Assistant Secretary may be
facsimile. In case any officer or officers who shall have signed,
or whose facsimile signature or signatures shall have been used
on any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and
be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile
signature or signatures shall have been used thereon had not
ceased to be such officer or officers of the Corporation.
SECTION 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferred on the books of the Corporation
by the holder thereof in person or by his attorney lawfully
constituted, upon surrender for cancellation of certificates for
the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed,
with such proof or guaranty of the authenticity of the signature
as the Corporation or its agents may reasonably require. The
Board of Directors may appoint one or more transfer agents and
registrars of the stock of the Corporation. The Corporation shall
be entitled to treat the holder of record of any share or shares
of stock as the holder in fact and legal owner thereof and
accordingly shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by law.
SECTION 3. Lost Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, mutilated or destroyed,
and may require the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.
When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his legal
representative, to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged
to have been lost, mutilated or destroyed.
ARTICLE VII.
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All checks and
drafts on the Corporation's bank accounts and all bills of
exchange, promissory notes, acceptances, obligations and other
instruments for the payment of money, shall be signed by such
officer or officers, person or persons, as shall be thereunto
authorized by the Board of Directors or as may be designated in a
manner authorized by the Board of Directors.
SECTION 2. Execution of Contracts, Assignments, etc.
All contracts, agreements,
endorsements, assignments, transfers, stock powers, and other
instruments shall be signed by such officer or officers, person
or persons, as shall be thereunto authorized by the Board of
Directors or as may be designated in a manner authorized by the
Board of Directors.
SECTION 3. Voting of Stock and Execution of Proxies. The
Chairman of the Board, the Vice Chairman, the President or any
Vice President or any other officer of the Corporation designated
by the Board of Directors, the Chairman of the Board, or the
President shall be authorized to attend any meeting of the
stockholders of any other corporation in which the Corporation is
an owner of stock and to vote such stock upon all matters coming
before such meeting. The Chairman of the Board, the Vice
Chairman, the President or any Vice President may sign and issue
proxies to vote shares of stock of other corporations owned by
the Corporation.
ARTICLE VIII.
SEAL
The seal of the Corporation shall show the year of its
incorporation and shall be in such form as the Board of Directors
shall prescribe. The seal on any corporate obligation for the
payment of money may be a facsimile, engraved or printed.
ARTICLE IX.
INDEMNIFICATION
SECTION 1. Mandatory Indemnification - Third Party Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding ("Action"), whether civil,
criminal, administrative or investigative (other than an Action
by or in the right of the Corporation) by reason of the fact that
such person is or was a director, officer or employee of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such Action if such
person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal Action, had no
reasonable cause to believe the conduct was unlawful. The
termination of any Action by judgement, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal Action or
proceeding, had reasonable cause to believe that the conduct was
unlawful.
SECTION 2. Mandatory Indemnification - Derivative Actions.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any Action by or in the
right of the Corporation to procure a judgement in its favor by
reason of the fact that such person is or was a director,
officer, or employee of the Corporation or is or was serving at
the request of the Corporation as a director, officer or employee
of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees and
amounts paid in settlement not exceeding the estimated expense of
litigating the Action to a conclusion) actually and reasonably
incurred by such person in connection with the defense or
settlement of such Action if such person acted in good faith and
in a manner such person reasonably believed to be in or not
opposed to the best interest of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such
person's duty to the Corporation unless and only to the extent
that the court in which such Action was brought shall determine
upon application that, despite the adjudication of liability but
in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
SECTION 3. Mandatory Indemnification - Successful Party. To
the extent that a director, officer, employee or agent of the
Corporation, or any person who is or was serving at the request
of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, has been successful on the merits or otherwise in the
defense of any such Action, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
SECTION 4. Permissive Indemnification. Notwithstanding any
limitations of the indemnification provided by Sections 1 and 2,
the Corporation may, to the fullest extent authorized by law,
indemnify any person who is or was a party or is threatened to be
made a party to any Action by reason of the fact that such person
is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against all or part of any expenses (including
attorneys' fees), judgements, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such Action, if it shall be determined in
accordance with the applicable procedures set forth in Section 5
that such person is fairly and reasonably entitled to such
indemnification.
SECTION 5. Procedure. Any indemnification under Sections 1,
2 or 4 (unless ordered by a court) shall be made by the
Corporation only as authorized by the Board of Directors (which
may so act whether or not there is a sufficient number of
disinterested directors to constitute a quorum) in the specific
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because
such person has met the applicable standards of conduct set forth
in Sections 1 and 2 or is entitled to indemnification under
Section 4. Such determination, in the case of indemnification
made pursuant to Section 1 or Section 2 shall be made (1) by the
Board of Directors by a majority vote of a quorum, as defined in
the Certificate of Incorporation or the By-Laws, consisting of
directors who are not or were not parties to any pending or
completed Action giving rise to the proposed indemnification, or
(2) if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs, by independent
legal counsel (who may be, but need not be, outside counsel to
the Corporation) in a written opinion, or (3) by the
shareholder(s) of the Corporation. Such determination, in the
case of indemnification made pursuant to Section 4, shall be made
by the Board of Directors by a majority vote of a quorum, as
defined in the Certificate of Incorporation or the By-Laws,
consisting of directors who are not or were not parties to any
pending or completed Action giving rise to the proposed
indemnification or by the shareholders.
SECTION 6. Advance Payments. Expenses (including attorneys'
fees) incurred or reasonably expected to be incurred by a
director, officer or employee of the Corporation in defending
against any claim asserted or threatened against such person in
such capacity or arising out of such person's status as such
shall be paid by the Corporation in advance of the final
determination thereof, if authorized by the Board of Directors
(which may so act whether or not there is a sufficient number of
disinterested directors to constitute a quorum) upon receipt by
the Corporation of his written request therefor and such person's
written promise to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the Corporation as authorized or required in this article.
SECTION 7. Provisions Not Exclusive. The indemnification
provided by this Article shall not be deemed exclusive of any
other rights to which any person seeking indemnification may be
entitled under any law, Bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, and shall continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 8. Miscellaneous. For purposes of this Article, and
without any limitation whatsoever upon the generality thereof,
the term "fines" as used herein shall be deemed to include (i)
penalties imposed by the Nuclear Regulatory Commission (the
"NRC") pursuant to Section 206 of the Energy Reorganization Act
of 1974 and Part 21 of NRC regulations thereunder, as they may be
amended from time to time, and any other penalties, whether
similar or dissimilar, imposed by the NRC, and (ii) excise taxes
assessed with respect to an employee benefit plan pursuant to the
Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, ("ERISA"). For purposes of determining
the entitlement of a director, officer or employee of the
Corporation to indemnification under this Article, the term
"other enterprise" shall be deemed to include an employee benefit
plan governed by ERISA. The Corporation shall be deemed to have
requested such person to serve as a director, officer or employee
of such a plan where such person is a trustee of the plan or
where the performance by such person of his duties to the
Corporation also imposes duties on, or otherwise involves
services by, such person to such plan or its participants or
beneficiaries, and action taken or permitted by such person in
the performance of his duties with respect to such employee
benefit plan for which is a purpose reasonably believed by him to
be in the interest of the participants and beneficiaries of the
plan, shall be deemed to meet the standard of conduct required
for indemnification hereunder. Any act, omission, step or conduct
taken or had in good faith which is required, authorized or
approved by any order or orders issued pursuant to the Public
Utility Holding Company Act of 1935 or any other federal statute
or any state statute or municipal ordinance shall be deemed to
meet the standard of conduct required for indemnification
hereunder.
ARTICLE X.
CONFLICTS
In the event that any provisions of these By-Laws conflict
with the Articles of Incorporation or with state or federal
statutes, the Articles of Incorporation or such statutes shall
take precedence over such provisions of these By-Laws.
ARTICLE XI.
AMENDMENTS
Subject to the provisions of applicable law and of the
Articles of Incorporation, these By-Laws may be altered, amended
or repealed and new By-Laws adopted either by the stockholders or
by the Board of Directors.
Exhibit 10(a)80
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of the
29th day of July, 1999, is entered into by and between Entergy
Corporation ("Company"), a Delaware corporation, and Donald C.
Hintz ("Employee"). This Agreement supersedes any prior
agreements between Employee and Company, or any companies
affiliated or related to Company, except as otherwise provided in
this Agreement.
WHEREAS, Company is a "System Company," which for purposes
of this Agreement shall mean Company and any other corporation
80% or more of whose stock (based on voting power or value) is
owned directly or indirectly by Company and any partnership or
trade or business which is 80% or more controlled, directly or
indirectly, by Company; and
WHEREAS, Employee is currently employed by Entergy Services,
Inc. and serves in the position of President of Company.
NOW THEREFORE, in consideration of the service Employee
provides to Company, the employment of Employee by Entergy
Services, Inc. or by any other System Company, the intended
benefits to the System Companies and Employee as a result
thereof, and the mutual covenants and agreements herein
contained, Company and Employee agree as follows:
1.Service. Company and Employee agree that the employment
contemplated by this Agreement refers to employment by Entergy
Services, Inc. or by any other System Company. During the term
of employment under this Agreement, Employee will serve in his
current position of President of Company or in any other position
in which he may be required to serve by the Board of Directors of
Company ("Board") and will be responsible for performing all
services associated with such position and performing other
reasonable services assigned by the Board. Employee agrees to
devote substantially all of his full working time, attention, and
energy to the services required under this Agreement. Employee
shall faithfully render his best efforts with respect to his
services under this Agreement and to the promotion, advancement,
and conduct of the business of the System Companies.
2.Term. Subject to Section 6 (Termination) of this Agreement,
the term of Employee's employment under this Agreement begins on
July 29, 1999 and ends on February 1, 2004.
3.Base Salary. Employee shall be paid a base salary of FORTY-
FIVE THOUSAND EIGHT HUNDRED THIRTY-THREE AND NO/100 ($45,833.00)
DOLLARS per calendar month, or such greater monthly base salary
amount as may be approved from time to time by the System Company
then employing Employee, in its sole discretion, while Employee
is employed by such System Company in accordance with and during
the term of this Agreement (subject to all appropriate
withholdings or other deductions required by law or by the System
Company's established policies), such salary to be payable in
accordance with the System Company's established payroll
practices. If Employee should die during the term of this
Agreement, the amount of any monthly base salary that was earned
by Employee prior to his death but not yet paid to Employee shall
be paid to Employee's estate.
4.Supplemental Benefits.
(a) Non-Statutory Stock Options. Subject to the terms and
conditions of this Agreement, including but not limited to the
forfeiture provisions set forth in Sections 6 and 7 of this
Agreement, Employee is granted, under the Equity Ownership Plan
of Entergy Corporation and Subsidiaries ("EOP") and as of the
effective date of this Agreement, the right ("Options") to
purchase TWO HUNDRED THOUSAND (200,000) shares of common stock of
Entergy Corporation, $0.01 par value per share ("Common Stock"),
at an exercise price of $30.4375 per share ("Exercise Price").
Notwithstanding any vesting provisions applicable with respect to
other option grants under the EOP, as may be amended from time to
time, the Options described under this Section 4(a) that are
granted to Employee under the EOP shall vest at the rate of 20%
on each Vesting Anniversary Date set forth below and shall not be
accelerated in the event of Employee's termination of employment
or retirement prior to February 1, 2004, except as the EOP may
otherwise allow on account of Employee's permanent disability
under a Company-sponsored long term disability plan. Except as
otherwise provided in Section 7 (in the event of a Change of
Control), if Employee's employment with all System Companies is
terminated prior to February 1, 2004, for any reason (including,
but not limited to, voluntary or involuntary termination, death,
or retirement) or if for any other reason set forth in Section 6
or 7 of this Agreement a forfeiture of benefits occurs, any
Options in which Employee has not yet vested at the time of such
termination or breach shall be forfeited by Employee.
Number of Options Vested on Vesting Anniversary Date
40,000 February 1, 2000
40,000 February 1, 2001
40,000 February 1, 2002
40,000 February 1, 2003
40,000 February 1, 2004
The Options granted under the EOP and in accordance with
the terms of this Section 4(a) shall have an exercise
period that ends 10 years from the date of grant (i.e.,
July 29, 2009). An Option may not be exercised,
however, before the Vesting Anniversary Date on which the
Option vests. If Employee should die prior to exercising
some or all of the Options in which he became vested
prior to his death, such Options shall be exercisable by
Employee's legatees or heirs in accordance with the terms
and conditions of the EOP.
(b) Supplemental SERP Benefit. If Employee satisfies all of the
provisions of the System Executive Retirement Plan of Entergy
Corporation and Subsidiaries, as amended and restated effective
December 4, 1998 ("SERP") necessary for SERP benefits to be
payable to, or on behalf of Employee, then Employee shall be
entitled to have his SERP benefits supplemented by this Agreement
and this paragraph of this Subsection 4(b) of this Agreement
shall govern the calculation of the Supplemental SERP Benefit.
The supplemental benefits provided for by this Agreement
("Supplemental SERP Benefit") in combination with (i) the
benefits provided under the SERP and (ii) the benefits provided
Employee pursuant to the Retirement Agreement entered into
between Employee and Entergy Operations, Inc. on May 23, 1997,
but effective July 26, 1996, shall provide the benefits (i.e.,
retirement benefits, survivor benefits, or pre-retirement death
benefits) that would have been payable to Employee (or Employee's
Joint Annuitant or Beneficiary in the event of Employee's death)
from (i) and (ii) above if the terms of the System Executive
Retirement Plan of Entergy Corporation and Subsidiaries as in
effect immediately prior to March 25, 1998 ("Prior SERP") had
remained in effect.
Notwithstanding any other Section or Subsection of this
Agreement to the contrary, and unless otherwise
specifically set forth in this paragraph 4(b) of this
Agreement, the terms of the SERP shall govern all other
aspects of the Supplemental SERP Benefit provided under
this Agreement, including the forms of Supplemental SERP
Benefit payments available to Employee and the forfeiture
of such Supplemental SERP Benefits.
The Change of Control provisions set forth in Section 7
of this Agreement, rather than those set forth in the
SERP, shall govern the Supplemental SERP Benefit provided
under this Agreement.
Employee's Beneficiary for purposes of any Supplemental
SERP Benefit payable to a Beneficiary in accordance with
the terms of this Agreement shall be Employee's
"Beneficiary" under the SERP.
Employee expressly agrees that neither he nor any other
person nor entity shall look to any other person nor
entity (including the employee benefit plans of Entergy
Corporation and its subsidiaries) other than the System
Company with which Employee is last employed on or before
his retirement, death, disability, or other termination
of employment ("Employer") for payment of the
Supplemental SERP Benefit. Employee or any other person
or entity having or claiming a right to payments
hereunder shall rely solely on the unsecured obligation
of the Employer set forth herein. Nothing in this
Agreement shall be construed to give Employee or any such
person or entity a right, title, interest, or claim in or
to any specific assets, fund, reserve, account or
property of any kind whatsoever, owned by the Employer or
in which the Employer may have any right, title or
interest now or in the future, or in any contract, asset,
reserve, account, property or fund created or maintained
to support the employee benefit plans of Entergy
Corporation and its subsidiaries. However, Employee or
any such person or entity shall have the right to enforce
his claim against the Employer in the same manner as any
other unsecured creditor of the Employer.
Nothing stated herein shall prohibit Company or the
Employer from adopting or establishing a trust or other
means as a source for paying any obligations created
hereunder provided, however, any and all rights that
Employee shall have with respect to any such trust or
other fund shall be governed by the terms thereof.
Notwithstanding any provisions of this Section 4(b) to
the contrary, within thirty (30) days following the date
of a Change of Control, as defined in Section 7 of this
Agreement, the Employer shall make a single irrevocable
lump sum contribution to the Trust for Deferred Payments
of Entergy Corporation and Subsidiaries ("Trust")
pursuant to the terms and conditions described in such
Trust. Such contribution shall be in an amount equal to
the present value of the Employee's Supplemental SERP
Benefit calculated in accordance with Section 4(b) of
this Agreement as of the date of any such Change of
Control, which calculation shall assume that Employee
satisfied the employment service requirement of such
Section. The present value of Employee's Supplemental
SERP Benefit shall be determined using the interest and
mortality factors set forth in the Entergy Corporation
Retirement Plan for Non-Bargaining Employees.
Notwithstanding the foregoing provisions of this Section
4(b) to the contrary, the Employer may make contributions
to the Trust prior to a Change of Control in such amounts
as it shall determine in its complete discretion. The
Trust is intended as a "grantor" trust under the Internal
Revenue Code and the establishment and funding of such
Trust is not intended to cause Employee to realize
current income on amounts contributed thereto, and the
Trust shall be so interpreted.
(c) Change of Control Benefit. In the event a Change of
Control Period (as described in Section 7) commences
during the term of Employee's employment under this
Agreement, and during such Change of Control Period
Employee either (1) is involuntarily terminated from
employment other than for Cause, (2) voluntarily
terminates from employment for Good Reason, or (3) loses
his status as a full officer of Entergy Corporation or is
demoted from the position he held with a System Company
immediately prior to the Change of Control Period,
Employee shall be entitled to a single-sum payment equal
to the lesser of (i) the product of 2.99 times the sum of
the Employee's final annual base salary from his Employer
plus the Employee's target annual bonus under the
Executive Annual Incentive Plan of Entergy Corporation
and Subsidiaries (including the amount, if any, Employee
defers under any non-qualified deferred compensation
arrangement, cash or deferred arrangement qualified under
Section 401(k) of the Code, and under any cafeteria plan
under Section 125 of the Code) for the year immediately
preceding the year in which the Change in Control occurs,
or (ii) the maximum single-sum payment that may be made
by the Employer to Employee without triggering the
nondeductibility provisions and excise tax provisions of
Sections 280G and 4999, respectively, of the Code (after
taking into account any other amounts in connection with
this Agreement that are required to be considered for
purposes of Section 280G of the Code). Notwithstanding
anything contained in this Agreement to the contrary, to
the extent that any payment pursuant to this Section 4(c)
would be subject to the excise tax imposed by Section
4999 of the Code, the payment shall be reduced (but not
below zero) if and to the extent necessary so that no
payment to be made to Employee under this Agreement shall
be subject to the excise tax.
(d) Remaining Benefits. The benefits provided under
this Agreement shall in no way alter or affect the terms
and conditions of any Company or System Company sponsored
employee benefit plans in which Employee may already
participate (including any supplemental credited service
agreements associated with such plans and to which
Employee may already be a party), and Employee's
eligibility to participate in any such qualified employee
benefit plans, non-qualified employee benefit plans, and
welfare benefit plans, shall continue to be determined in
accordance with the terms and conditions of such plans,
as may be amended from time to time.
5.Withholding. A System Company shall have the right to
require Employee to remit to it, or to withhold from other
amounts payable to Employee, as compensation or otherwise, an
amount sufficient to satisfy all federal, state and local
withholding tax requirements.
6.Termination. Employee shall forfeit all remaining
compensation and all benefits otherwise payable to Employee
under this Agreement, except for Employee's right to exercise
any Options under Section 4(a) which have already vested and
except as otherwise provided under Section 4(b) with respect
to the Supplemental SERP Benefit, if Employee:
(a) voluntarily resigns his employment with Entergy
Services, Inc. or other current System Company employer
(other than for the purpose of transferring to another
System Company) prior to February 1, 2004;
(b) is terminated by a System Company for Cause, which
termination shall be immediately effective upon the
giving of written notice thereof to Employee, or at
such later time as the notice may specify. Termination
for Cause shall include, but not be limited to:
(1) a material violation by Employee of any agreement between
Employee and any System Company;
(2) a material violation of the employer-employee
relationship existing between Employee and a System
Company, including without limitation, a violation
of Section 8 (Covenant Not to Compete) or Section 9
(Confidentiality), moral turpitude, theft or
defalcation; or
(3) a material failure by Employee to perform the
services required of him by any agreement between
Employee and any System Company, or, if there is no
such agreement, a material failure by Employee to
perform the reasonable, customary services of an
employee holding the type of position he holds prior
to any Change of Control Period as defined in
Section 7 of this Agreement;
7.Change of Control. Notwithstanding any provision in this
Agreement to the contrary, this Section shall apply in the
event of a Change of Control, as defined herein:
(a) For purposes of this Agreement, the term "Change of Control"
shall mean:
(1) the purchase or other acquisition by any person, entity or
group of persons, within the meaning of Sections 13(d) or 14(d)
of the Securities Exchange Act of 1934 ("Act"), or any comparable
successor provisions, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Act) of 50 percent or more of
either the outstanding shares of common stock or the combined
voting power of Entergy Corporation's then outstanding voting
securities entitled to vote generally;
(2) the approval by the stockholders of Entergy Corporation of a
reorganization, merger, or consolidation, in each case, with
respect to which persons who were stockholders of Entergy
Corporation immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50
percent of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or
consolidated company's then outstanding securities;
(3) a liquidation or dissolution of Entergy Corporation or of
the sale of all or substantially all of its assets; or
(4) any change in the composition of the Board of Directors of
Entergy Corporation resulting in a majority of the directors at
any given point in time not constituting a majority two years'
hence provided, that in making such determination, directors who
were elected by or on the recommendation of such present majority
shall be excluded.
(b) If there should occur a Change of Control and if, within
the period commencing ninety (90) days prior to and
ending twenty-four (24) calendar months following such
Change of Control ("Change of Control Period"), Employee
(1) is involuntarily terminated from employment other
than for Cause as defined in Section 6 of this Agreement,
(2) voluntarily terminates from employment for Good
Reason, as defined in Section 7(c) below, or (3) loses
his status as a full officer of Entergy Corporation or is
demoted from the position he held with a System Company
immediately prior to the Change of Control Period
("Demotion"), Employee shall be entitled to immediate
payment of the single-sum amount determined under Section
4(c) of this Agreement, and shall also, subject only to
the risk of forfeiture set forth below, fully vest in the
Options granted under Section 4(a) of this Agreement and
the Supplemental SERP Benefit granted under Section 4(b)
as of the date of any such termination or Demotion, which
calculations shall assume that Employee satisfied the
full employment service requirement of this Agreement,
and no amendment or termination of this Agreement shall
reduce such vested benefit. In the event of any such
termination of employment during the Change of Control
Period or a termination of employment, including
termination as a result of death, after a Demotion during
the Change of Control Period, Employee's benefits under
Section 4 (b) shall commence as of the first day of the
month in which the Employee's SERP benefit commences.
(c) For purposes of this Agreement, the term "Good Reason"
means the occurrence, without Employee's express written
consent, of any of the following events during the Change
of Control Period:
(1) The assignment of Employee to duties materially
inconsistent with Employee's authorities, duties,
responsibilities, and status (including offices,
titles, and reporting requirements) as an officer of
Entergy Corporation, or a reduction or alteration in
the nature or status of Employee's authorities,
duties, or responsibilities from those in effect as
of ninety (90) days prior to a Change of Control,
other than an insubstantial and inadvertent act that
is remedied by Company or any System Company
promptly after receipt of notice thereof
given by Employee and other than any such alteration
primarily attributable to the fact that Entergy
Corporation may no longer be a public company;
(2) Requiring Employee to be based at a location
outside of the continental United States and other
than his primary work location as it existed on the
date ninety (90) days prior to a Change of Control,
except for required travel on business of Company
or any System Company to an extent substantially
consistent with Employee's present business
obligations;
(3) A reduction in Employee's annual base salary (i.e.,
Employee's regular annual cash earnings from all
System Companies, exclusive of any bonuses,
overtime, or other special payments, but including
the amount, if any, the Employee elects to defer
under: (i) a cash or deferred arrangement qualified
under Code Section 401(k); (ii) a cafeteria plan
under Code Section 125; (iii) the Executive Deferred
Compensation Plan of Entergy Corporation and
Subsidiaries, or any successor or replacement plan;
and (iv) any other nonqualified deferred
compensation plan, agreement, or arrangement in
which the Employee may hereafter participate or be a
party thereto) from the Employee's annual base
salary for the calendar year immediately preceding
the calendar year in which occurs the Change of
Control;
(4) The failure of Company or any System Company to
continue in effect any of their short- and/or long-term
incentive compensation plans, or employee benefit or
retirement plans, policies, practices, or arrangements
in which Employee participates, or the failure by
Company or any System Company to continue the Employee's
participation therein on substantially the same
basis, both in terms of the amount of benefits
provided and the level of the Employee's parti
cipation relative to other Employees, as existed
immediately prior to a Change of Control;
(5) The failure of Company or any System Company to obtain a
satisfactory agreement from any successor to Company to assume
and agree to perform this Agreement; and
(6) Any purported involuntary termination of Employee's
employment that is not affected pursuant to a written notice of
termination which acknowledges Employee's rights under this
Agreement and reasonable detail setting forth the facts and
circumstances claimed to provide the basis upon which Employee's
employment is being terminated. Absent such notice, for purposes
of this Agreement, no such purported termination shall be
effective.
Employee's right to terminate employment for Good Reason
shall not be affected by Employee's incapacity due to
physical or mental illness. Employee's continued
employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting
Good Reason herein.
(d) The benefits that become payable or in which Employee
vest solely upon a Change of Control shall nonetheless be
subject to forfeiture upon the occurrence of any of the
following events:
(1) if Employee engages in any employment (without the
prior written consent of the System Company
employing him) either individually or with any
person, corporation, governmental agency or body, or
other entity in competition with, or similar in
nature to, any business conducted by any System
Company at any time within the ten year period
commencing upon termination of employment; or
(2) if Employee shall divulge, communicate or use to
the detriment of any System Company, or use for the
benefit of any other person or entity, or misuse in
any way, any confidential or proprietary information
or trade secrets of any System Company, or engage in
any activities that are contrary to the best
interests of any System Company.
(e) Notwithstanding anything stated above to the contrary,
an amendment to, or termination of, this Agreement
following a Change of Control shall not reduce the level
of benefits accrued under this Agreement through the date
of any such amendment or termination. In no event shall
Employee's benefit accrued under this Agreement following
a Change of Control be less than the benefit accrued by
Employee under this Agreement immediately prior to the
Change of Control Period.
8.Covenant Not to Compete. During the 2-year period following
Employee's retirement or other termination of employment with
his Employer, Employee agrees that, without the specific
written consent of the Chief Executive Officer of Entergy
Corporation, he will not take employment nor engage in any
business with any person, corporation, governmental agency or
body or other entity in competition with, or similar in nature
to, any System Company ("Competing Employer"). This
restriction shall extend to any Competing Employer located in,
or servicing in any way customers located in, those parishes
and counties in which any System Company services customers
during such 2-year period. The Employee recognizes that
irreparable injury will result to the System Companies in the
event of any breach by the Employee of this covenant not to
compete.
9.Confidentiality. During his employment and for 5 years
thereafter, other than as authorized by a System Company or as
required by law or as necessary for him to perform his duties,
Employee shall not disclose to any person or entity any non-
public data or information concerning any System Company.
Disclosure of information pursuant to subpoena, judicial process,
or request of a governmental authority shall not be deemed a
violation of this provision, provided that Employee gives the
System Company immediate notice of any such subpoena or request
and fully cooperates with any action by System Company to object
to, quash, or limit such request.
10.Injunctive Relief. In the event of any breach or threatened
breach of Sections 8 or 9 of this Agreement by Employee,
Employee shall forfeit all benefits otherwise payable to
Employee under this Agreement, and any System Company shall be
entitled to an injunction, without bond, restraining Employee
from violating the provisions of such Sections, in addition to
any other relief to which the System Company may be entitled.
11.Proprietary Rights. Employee agrees to and hereby does
assign to any System Company employing him all his rights in and
to all inventions, business plans, work models or procedures,
whether patentable or not, which are made or conceived solely or
jointly by him at any time during his employment or with the use
of any System Company time and materials. Employee will disclose
to such System Company all facts known to him concerning such
matters and, at the System Company's expense, do everything
reasonably practicable to aid it in obtaining and enforcing
proper legal protection for, and vesting System Company in title
to, such matters.
12.Representations and Warranties. Employee represents and
warrants that he is under no restriction or obligation
inconsistent with the execution of this Agreement or the
performance of his obligations hereunder and knows of no
reason why his performance under this Agreement should be
hindered in any way.
13.Notices. Any notice required under this Agreement shall be
in writing and deemed received (a) on the date delivered if hand-
delivered, or (b) on the third business day after being deposited
in the United States mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and shall
be addressed as follows, unless changed otherwise by any party in
accordance with the notice provisions of this Section:
If to a System Company, addressed in care of: with copy to:
Michael G. Thompson, Esq. Gary C. Clary
General Counsel Senior Vice-President, Human
639 Loyola Avenue, 26th Floor Resources and Administration
New Orleans, LA 70113 639 Loyola Avenue, 14th Floor
New Orleans, LA 70113
If to Employee, addressed as follows:
Donald C. Hintz
112 Suncrest Place
Brandon, Mississippi 39047
14.Binding Agreement. This Agreement is binding upon Employee,
Company, and his and its successors, agents, heirs or assigns.
15.Nonassignability. This Agreement or the right to receive
benefits hereunder may not be assigned, encumbered or alienated
by the Employee in any manner. Any attempt to so assign,
encumber or alienate shall constitute a material violation of
this Agreement within the meaning of Section 6 of the Agreement,
and will be immediate grounds for terminating Employee's
employment for Cause.
16.Applicable Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Louisiana
and the United States of America.
17.Headings. Section headings contained in this Agreement are
for reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
18.Modifications and Waivers. This Agreement contains the
entire understanding between Company and Employee relating to
Employee's employment, unless otherwise specifically provided.
No provision of this Agreement may be modified, amended or waived
except in a writing signed by both parties. The waiver by either
party of a breach of any provision of this Agreement shall not
operate to waive any subsequent breach of the Agreement.
19.Severability. Should any part of this Agreement be found to
be invalid or in violation of law, such part shall be of no force
and effect and the rest of this Agreement shall survive as valid
and enforceable to the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement in the presence of the undersigned witnesses.
WITNESSES: EMPLOYEE:
_______________________________
DONALD C. HINTZ
WITNESSES: ENTERGY CORPORATION,
BY ITS DULY AUTHORIZED AGENT:
___________________________________
J. WAYNE LEONARD
Chief Executive Officer,
______________________________ Entergy Corporation
<TABLE>
<CAPTION>
Exhibit 12(a)
Entergy Arkansas, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest Charges $110,814 $115,337 $106,716 $104,165 $96,685 $97,023
Interest applicable to rentals 19,140 18,158 19,121 17,529 15,511 17,289
------------------------------------------------------
Total fixed charges, as defined 129,954 133,495 125,837 121,694 112,196 114,312
Preferred dividends, as defined (a) 23,234 27,636 24,731 16,073 16,763 17,836
------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $153,188 $161,131 $150,568 $137,767 $128,959 $132,148
======================================================
Earnings as defined:
Net Income $142,263 $136,666 $157,798 $127,977 $110,951 $69,313
Add:
Provision for income taxes:
Total 29,220 72,081 84,445 59,220 71,374 54,012
Fixed charges as above 129,954 133,495 125,837 121,694 112,196 114,312
------------------------------------------------------
Total earnings, as defined $301,437 $342,242 $368,080 $308,891 $294,521 $237,637
======================================================
Ratio of earnings to fixed charges, as defined 2.32 2.56 2.93 2.54 2.63 2.08
======================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.97 2.12 2.44 2.24 2.28 1.80
======================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(b)
Entergy Gulf States, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
1994 1995 1996 1997 1998 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 $153,034
Interest applicable to rentals 21,539 16,648 14,887 15,747 16,927 16,451
------------------------------------------------------
Total fixed charges, as defined 225,673 216,872 208,777 195,820 195,147 169,485
Preferred dividends, as defined (a) 52,210 44,651 48,690 30,028 32,031 29,355
------------------------------------------------------
Combined fixed charges and preferred $277,883 $261,523 $257,467 $225,848 $227,178 $198,840
dividends, as defined ======================================================
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 $125,000
Add:
Income Taxes (62,086) 63,244 102,091 22,402 31,773 75,165
Fixed charges as above 225,673 216,872 208,777 195,820 195,147 169,485
------------------------------------------------------
Total earnings, as defined (b) $80,832 $403,035 $306,981 $278,198 $273,313 $369,650
======================================================
Ratio of earnings to fixed charges, as defined 0.36 1.86 1.47 1.42 1.40 2.18
======================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 0.29 1.54 1.19 1.23 1.20 1.86
======================================================
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed
by dividing the preferred dividend requirement by one hundred percent
(100%) minus the income tax rate.
(b) Earnings for the year ended December 31, 1994, for GSU were not
adequate to cover fixed charges combined fixed charges and preferred
dividends by $144.8 million and $197.1 million, respectively.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(c)
Entergy Louisiana, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $136,444 $136,901 $132,412 $128,900 $122,890 $117,247
Interest applicable to rentals 8,332 9,332 10,601 9,203 9,564 9,221
-------------------------------------------------------
Total fixed charges, as defined 144,776 146,233 143,013 138,103 132,454 126,468
Preferred dividends, as defined (a) 29,171 32,847 28,234 22,103 20,925 16,006
-------------------------------------------------------
Combined fixed charges and preferred dividends, $173,947 $179,080 $171,247 $160,206 $153,379 $142,474
as defined =======================================================
Earnings as defined:
Net Income $213,839 $201,537 $190,762 $141,757 $179,487 $191,770
Add:
Provision for income taxes:
Total Taxes 63,288 117,114 118,559 98,965 109,104 122,368
Fixed charges as above 144,776 146,233 143,013 138,103 132,454 126,468
-------------------------------------------------------
Total earnings, as defined $421,903 $464,884 $452,334 $378,825 $421,045 $440,606
=======================================================
Ratio of earnings to fixed charges, as defined 2.91 3.18 3.16 2.74 3.18 3.48
=======================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 2.43 2.60 2.64 2.36 2.75 3.09
=======================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(d)
Entergy Mississippi, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $52,764 $51,635 $48,007 $45,274 $40,927 $38,840
Interest applicable to rentals 1,716 2,173 2,165 1,947 1,864 2,261
---------------------------------------------------------
Total fixed charges, as defined 54,480 53,808 50,172 47,221 42,791 41,101
Preferred dividends, as defined (a) 9,447 9,004 7,610 5,123 4,878 4,878
---------------------------------------------------------
Combined fixed charges and preferred dividends, as defined $63,927 $62,812 $57,782 $52,344 $47,669 $45,979
=========================================================
Earnings as defined:
Net Income $48,779 $68,667 $79,210 $66,661 $59,268 $41,588
Add:
Provision for income taxes:
Total income taxes 12,476 34,877 41,107 26,744 28,031 17,537
Fixed charges as above 54,480 53,808 50,172 47,221 42,791 41,101
---------------------------------------------------------
Total earnings, as defined $115,735 $157,352 $170,489 $140,626 $130,090 $100,226
=========================================================
Ratio of earnings to fixed charges, as defined 2.12 2.92 3.40 2.98 3.04 2.44
=========================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.81 2.51 2.95 2.69 2.73 2.18
=========================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(e)
Entergy New Orleans, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $18,272 $17,802 $16,304 $15,287 $14,792 $14,680
Interest applicable to rentals 1,245 916 831 911 1,045 1,281
----------------------------------------------------
Total fixed charges, as defined 19,517 18,718 17,135 16,198 15,837 15,961
Preferred dividends, as defined (a) 2,071 1,964 1,549 1,723 1,566 1,566
----------------------------------------------------
Combined fixed charges and preferred dividends, as defined $21,588 $20,682 $18,684 $17,921 $17,403 $17,527
====================================================
Earnings as defined:
Net Income $13,211 $34,386 $26,776 $15,451 $15,172 $18,961
Add:
Provision for income taxes:
Total 4,600 20,467 16,216 12,142 10,042 13,030
Fixed charges as above 19,517 18,718 17,135 16,198 15,837 15,961
----------------------------------------------------
Total earnings, as defined $37,328 $73,571 $60,127 $43,791 $41,051 $47,952
====================================================
Ratio of earnings to fixed charges, as defined 1.91 3.93 3.51 2.70 2.59 3.00
====================================================
Ratio of earnings to combined fixed charges and
preferred dividends, as defined 1.73 3.56 3.22 2.44 2.36 2.74
====================================================
- ------------------------
(a) "Preferred dividends," as defined by SEC regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the income tax rate.
(b) Earnings for the twelve months ended December 31, 1991 include the $90
million effect of the 1991 NOPSI Settlement.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12(f)
System Energy Resources, Inc.
Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Total Interest $176,504 $151,512 $143,720 $128,653 $116,060 $147,982
Interest applicable to rentals 7,546 6,475 6,223 6,065 5,189 3,871
---------------------------------------------------------
Total fixed charges, as defined $184,050 $157,987 $149,943 $134,718 $121,249 $151,853
=========================================================
Earnings as defined:
Net Income $5,407 $93,039 $98,668 $102,295 $106,476 $82,375
Add:
Provision for income taxes:
Total 36,838 75,493 82,121 74,654 77,263 53,851
Fixed charges as above 184,050 157,987 149,943 134,718 121,249 151,853
---------------------------------------------------------
Total earnings, as defined $226,295 $326,519 $330,732 $311,667 $304,988 $288,079
=========================================================
Ratio of earnings to fixed charges, as defined 1.23 2.07 2.21 2.31 2.52 1.90
=========================================================
</TABLE>
Exhibit 21
The seven registrants, Entergy Corporation, System Energy Resources,
Inc., Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana,
Inc., Entergy Mississippi, Inc., and Entergy New Orleans, Inc., are listed
below:
State or Other
Jurisdiction of
Incorporation
Entergy Corporation Delaware
System Energy Resources, Inc. (a) Arkansas
Entergy Arkansas, Inc. (a) Arkansas
Entergy Gulf States, Inc. (a) Texas
Entergy Louisiana, Inc. (a) Louisiana
Entergy Mississippi, Inc. (a) Mississippi
Entergy New Orleans, Inc. (a) Louisiana
_______________________
(a)Entergy Corporation owns all of the Common Stock of System Energy
Resources, Inc., Entergy Arkansas Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc..
Exhibit 24
March 10, 2000
TO: Nathan E. Langston
Laurence M. Hamric
Re: Power of Attorney; 1999 Form 10-K
Entergy Corporation, referred to herein as the Company, will file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the
year ended December 31, 1999 pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
The Company and the undersigned persons, in their respective capacities as
directors and/or officers of the Company, as specified in Attachment I, do
each hereby make, constitute and appoint Nathan Langston and Laurence M.
Hamric, and each of them, their true and lawful Attorneys (with full power
of substitution) for each of the undersigned and in his or her name, place
and stead to sign and cause to be filed with the Securities and Exchange
Commission the aforementioned Annual Report on Form 10-K and any amendments
thereto.
Yours very truly,
ENTERGY CORPORATION
By:/s/ J. Wayne Leonard
J. Wayne Leonard
Chief Executive Officer
and Director
<PAGE>
________________________ /s/ George W. Davis
W. Frank Blount, Jr. George W. Davis
Director Director
/s/ Norman C. Francis /s/ Robert v.d. Luft
Norman C. Francis Robert v.d. Luft
Director Chairman of the Board
Director
/s/ J. Wayne Leonard /s/ Kinnaird R. McKee
J. Wayne Leonard Kinnaird R. McKee
Chief Executive Officer Director
Director
___________________ ___________________
Thomas F. McLarty, III Paul W. Murrill
Director Director
/s/ James R. Nichols /s/ Eugene H. Owen
James R. Nichols Eugene H. Owen
Director Director
/s/ William A. Percy, II /s/ Dennis H. Reilley
William A. Percy, II Dennis H. Reilley
Director Director
_____________________ /s/ Bismark A. Steinhagen
Wm. Clifford Smith Bismark A. Steinhagen
Director Director
/s/ C. John Wilder
C. John Wilder
Executive Vice President and
Chief Financial Officer
<PAGE>
ATTACHMENT I
Entergy Corporation
Chief Executive Officer and Director - J. Wayne Leonard (principal
executive officer)
Executive Vice President and Chief Financial Officer - C. John Wilder
(principal financial officer)
Directors - W. Frank Blount, George W. Davis, Norman C. Francis, J. Wayne
Leonard, Robert v.d. Luft, Kinnaird R. McKee, Thomas F. McLarty, III, Paul
W. Murrill, James R. Nichols, Eugene H. Owen, William A. Percy, II, Dennis
H. Reilley, Wm. Clifford Smith, Bismark A. Steinhagen.
<PAGE>
March 10, 2000
TO: Nathan E. Langston
Laurence M. Hamric
Re: Power of Attorney; 1999 Form 10-K
Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc.,
Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy
Resources, Inc. (collectively referred to herein as the Companies) will
each file with the Securities and Exchange Commission its Annual Report on
Form 10-K for the year ended December 31, 1999 pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.
The Companies and the undersigned person, in their respective capacities as
directors and/or officers of the Companies, as specified in Attachment I,
do each hereby make, constitute and appoint Nathan Langston and Laurence M.
Hamric, and each of them, their true and lawful Attorneys (with full power
of substitution) for each of the undersigned and in his or her name, place
and stead to sign and cause to be filed with the Securities and Exchange
Commission the aforementioned Annual Report on Form 10-K and any amendments
thereto.
Yours very truly,
ENTERGY ARKANSAS, INC. (hereinafter "EAI")
ENTERGY GULF STATES, INC. (hereinafter "EGSI")
ENTERGY LOUISIANA, INC. (hereinafter "ELI")
ENTERGY MISSISSIPPI, INC. (hereinafter "EMI")
ENTERGY NEW ORLEANS, INC. (hereinafter "ENOI")
SYSTEM ENERGY RESOURCES, INC. (hereinafter "SERI")
/s/ Thomas J. Wright /s/ Jerry D. Jackson
THOMAS J. WRIGHT JERRY D. JACKSON
Chairman, President, and Chief Chairman of Entergy Gulf States, Inc.
Executive Officer of Entergy and Entergy Louisiana, Inc., President
Arkansas, Inc. and Chief Executive Officer -
Louisiana of Entergy Gulf States, Inc.
and President and Chief Executive
Officer of Entergy Louisiana, Inc.
/s/ Joseph F. Domino /s/ Carolyn C. Shanks
JOSEPH F. DOMINO CAROLYN C. SHANKS
President and Chief Executive Officer Chairman, President, and Chief
of Entergy Gulf States, Inc. - Texas Executive Officer of Entergy
Mississippi, Inc.
/s/ Daniel F. Packer /s/ Jerry W. Yelverton
DANIEL F. PACKER JERRY W. YELVERTON
Chairman, President, and Chief Chairman, President, and Chief
Executive Officer of Entergy Executive Officer of System
New Orleans, Inc. Energy Resources, Inc.
<PAGE>
/s/ Joseph F. Domino /s/ Carolyn C. Shanks
Joseph F. Domino Carolyn C. Shanks
Director, President and Director, Chairman of the
Chief Executive Officer- Board, President and
Texas of EGSI Chief Executive Officer
of EMI
/s/ Donald C. Hintz /s/ Thomas J. Wright
Donald C. Hintz Thomas J. Wright
Director of EAI, EGSI, Director, Chairman of the
ELI, EMI, ENOI and SERI Board, President and
Chief Executive Officer
of EAI
/s/ Jerry D. Jackson /s/ Jerry W. Yelverton
Jerry D. Jackson Jerry W. Yelverton
Director, Chairman of the Director, Chairman of the
Board of EGSI & ELI Board, President and
President and Chief Chief Executive Officer
Executive Officer- of SERI
Louisiana of EGSI and
President and Chief
Executive Officer of ELI
/s/ Daniel F. Packer /s/ C. John Wilder
Daniel F. Packer C. John Wilder
Director, Chairman of the Director, Executive Vice
Board, President and President and Chief
Chief Executive Officer Financial Officer of EAI,
of ENOI EGSI, ELI, EMI, ENOI and
SERI
<PAGE>
ATTACHMENT I
Entergy Arkansas, Inc.
Chairman of the Board, President and Chief Executive Officer - Thomas J.
Wright (principal executive officer); Executive Vice President and Chief
Financial Officer - C. John Wilder (principal financial officer).
Directors - Thomas J. Wright, Donald C. Hintz and C. John Wilder
Entergy Gulf States, Inc.
Chairman of the Board, President and Chief Executive Officer-Louisiana -
Jerry D. Jackson (principal executive officer); President and Chief
Executive Officer-Texas - Joseph F. Domino (principal executive officer),
Executive Vice President and Chief Financial Officer - C. John Wilder
(principal financial officer).
Directors - Jerry D. Jackson, Joseph F. Domino, Donald C. Hintz and C. John
Wilder
Entergy Louisiana, Inc.
Chairman of the Board, President and Chief Executive Officer - Jerry D.
Jackson (principal executive officer); Executive Vice President and Chief
Financial Officer - C. John Wilder (principal financial officer).
Directors - Donald C. Hintz, Jerry D. Jackson and C. John Wilder
Entergy Mississippi, Inc.
Chairman of the Board, President and Chief Executive Officer - Carolyn C.
Shanks (principal executive officer); Executive Vice President and Chief
Financial Officer - C. John Wilder (principal financial officer).
Directors - Donald C. Hintz, Carolyn C. Shanks and C. John Wilder
Entergy New Orleans, Inc.
Chairman of the Board, President and Chief Executive Officer - Daniel F.
Packer (principal executive officer); Executive Vice President and Chief
Financial Officer - C. John Wilder (principal financial officer).
Directors - Donald C. Hintz, Daniel F. Packer and C. John Wilder
System Energy Resources, Inc.
Chairman of the Board, President and Chief Executive Officer - Jerry W.
Yelverton (principal executive officer); Executive Vice President and Chief
Financial Officer - C. John Wilder (principal financial officer).
Directors - Donald C. Hintz, C. John Wilder and Jerry W. Yelverton
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Corporation financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 15,500,756
<OTHER-PROPERTY-AND-INVEST> 1,778,119
<TOTAL-CURRENT-ASSETS> 3,219,132
<TOTAL-DEFERRED-CHARGES> 2,487,080
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 22,985,087
<COMMON> 2,471
<CAPITAL-SURPLUS-PAID-IN> 4,636,163
<RETAINED-EARNINGS> 2,786,467
<TOTAL-COMMON-STOCKHOLDERS-EQ> 7,425,101
284,650
488,455
<LONG-TERM-DEBT-NET> 6,612,583
<SHORT-TERM-NOTES> 120,715
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 194,555
0
<CAPITAL-LEASE-OBLIGATIONS> 205,464
<LEASES-CURRENT> 178,247
<OTHER-ITEMS-CAPITAL-AND-LIAB> 7,475,317
<TOT-CAPITALIZATION-AND-LIAB> 22,985,087
<GROSS-OPERATING-REVENUE> 8,773,228
<INCOME-TAX-EXPENSE> 356,667
<OTHER-OPERATING-EXPENSES> 7,521,574
<TOTAL-OPERATING-EXPENSES> 7,521,574
<OPERATING-INCOME-LOSS> 1,251,654
<OTHER-INCOME-NET> 255,640
<INCOME-BEFORE-INTEREST-EXPEN> 1,507,294
<TOTAL-INTEREST-EXPENSE> 555,601
<NET-INCOME> 595,026
42,567
<EARNINGS-AVAILABLE-FOR-COMM> 552,459
<COMMON-STOCK-DIVIDENDS> 291,483
<TOTAL-INTEREST-ON-BONDS> 601,739
<CASH-FLOW-OPERATIONS> 1,307,369
<EPS-BASIC> $2.25
<EPS-DILUTED> $2.25
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Arkansas' financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,860,148
<OTHER-PROPERTY-AND-INVEST> 359,722
<TOTAL-CURRENT-ASSETS> 351,023
<TOTAL-DEFERRED-CHARGES> 361,621
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,932,514
<COMMON> 470
<CAPITAL-SURPLUS-PAID-IN> 591,127
<RETAINED-EARNINGS> 463,614
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,055,211
60,000
116,350
<LONG-TERM-DEBT-NET> 1,130,801
<SHORT-TERM-NOTES> 667
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 220
0
<CAPITAL-LEASE-OBLIGATIONS> 75,045
<LEASES-CURRENT> 55,150
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,439,070
<TOT-CAPITALIZATION-AND-LIAB> 3,932,514
<GROSS-OPERATING-REVENUE> 1,541,894
<INCOME-TAX-EXPENSE> 54,012
<OTHER-OPERATING-EXPENSES> 1,346,493
<TOTAL-OPERATING-EXPENSES> 1,346,493
<OPERATING-INCOME-LOSS> 195,401
<OTHER-INCOME-NET> 16,488
<INCOME-BEFORE-INTEREST-EXPEN> 211,889
<TOTAL-INTEREST-EXPENSE> 88,564
<NET-INCOME> 69,313
10,854
<EARNINGS-AVAILABLE-FOR-COMM> 58,459
<COMMON-STOCK-DIVIDENDS> 82,700
<TOTAL-INTEREST-ON-BONDS> 94,872
<CASH-FLOW-OPERATIONS> 313,315
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Gulf States' financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,145,910
<OTHER-PROPERTY-AND-INVEST> 436,117
<TOTAL-CURRENT-ASSETS> 523,501
<TOTAL-DEFERRED-CHARGES> 627,494
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,733,022
<COMMON> 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,153,131
<RETAINED-EARNINGS> 202,782
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,469,968
119,650
201,444
<LONG-TERM-DEBT-NET> 1,631,581
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 65,038
<LEASES-CURRENT> 51,973
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,193,368
<TOT-CAPITALIZATION-AND-LIAB> 5,733,022
<GROSS-OPERATING-REVENUE> 2,127,208
<INCOME-TAX-EXPENSE> 75,165
<OTHER-OPERATING-EXPENSES> 1,806,210
<TOTAL-OPERATING-EXPENSES> 1,806,210
<OPERATING-INCOME-LOSS> 320,998
<OTHER-INCOME-NET> 26,425
<INCOME-BEFORE-INTEREST-EXPEN> 347,423
<TOTAL-INTEREST-EXPENSE> 147,258
<NET-INCOME> 125,000
17,423
<EARNINGS-AVAILABLE-FOR-COMM> 107,577
<COMMON-STOCK-DIVIDENDS> 107,000
<TOTAL-INTEREST-ON-BONDS> 161,326
<CASH-FLOW-OPERATIONS> 345,151
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Louisiana's financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,280,721
<OTHER-PROPERTY-AND-INVEST> 136,606
<TOTAL-CURRENT-ASSETS> 333,075
<TOTAL-DEFERRED-CHARGES> 334,248
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,084,650
<COMMON> 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (2,171)
<RETAINED-EARNINGS> 59,554
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,146,283
105,000
100,500
<LONG-TERM-DEBT-NET> 1,145,463
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 116,388
0
<CAPITAL-LEASE-OBLIGATIONS> 23,543
<LEASES-CURRENT> 28,387
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,419,086
<TOT-CAPITALIZATION-AND-LIAB> 4,084,650
<GROSS-OPERATING-REVENUE> 1,806,594
<INCOME-TAX-EXPENSE> 122,368
<OTHER-OPERATING-EXPENSES> 1,386,452
<TOTAL-OPERATING-EXPENSES> 1,386,452
<OPERATING-INCOME-LOSS> 420,142
<OTHER-INCOME-NET> 7,131
<INCOME-BEFORE-INTEREST-EXPEN> 427,273
<TOTAL-INTEREST-EXPENSE> 113,135
<NET-INCOME> 191,770
9,955
<EARNINGS-AVAILABLE-FOR-COMM> 181,815
<COMMON-STOCK-DIVIDENDS> 197,000
<TOTAL-INTEREST-ON-BONDS> 144,731
<CASH-FLOW-OPERATIONS> 410,394
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
Mississippi's financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,121,266
<OTHER-PROPERTY-AND-INVEST> 12,496
<TOTAL-CURRENT-ASSETS> 147,832
<TOTAL-DEFERRED-CHARGES> 178,423
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,460,017
<COMMON> 199,326
<CAPITAL-SURPLUS-PAID-IN> (59)
<RETAINED-EARNINGS> 226,567
<TOTAL-COMMON-STOCKHOLDERS-EQ> 425,834
0
50,381
<LONG-TERM-DEBT-NET> 464,466
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 290
<LEASES-CURRENT> 95
<OTHER-ITEMS-CAPITAL-AND-LIAB> 518,951
<TOT-CAPITALIZATION-AND-LIAB> 1,460,017
<GROSS-OPERATING-REVENUE> 832,819
<INCOME-TAX-EXPENSE> 17,537
<OTHER-OPERATING-EXPENSES> 744,734
<TOTAL-OPERATING-EXPENSES> 744,734
<OPERATING-INCOME-LOSS> 88,085
<OTHER-INCOME-NET> 8,350
<INCOME-BEFORE-INTEREST-EXPEN> 96,435
<TOTAL-INTEREST-EXPENSE> 37,310
<NET-INCOME> 41,588
3,370
<EARNINGS-AVAILABLE-FOR-COMM> 38,218
<COMMON-STOCK-DIVIDENDS> 34,100
<TOTAL-INTEREST-ON-BONDS> 41,567
<CASH-FLOW-OPERATIONS> 142,413
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Entergy
New Orleans' financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 322,076
<OTHER-PROPERTY-AND-INVEST> 3,259
<TOTAL-CURRENT-ASSETS> 113,934
<TOTAL-DEFERRED-CHARGES> 46,477
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 485,746
<COMMON> 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,294
<RETAINED-EARNINGS> 58,526
<TOTAL-COMMON-STOCKHOLDERS-EQ> 128,564
0
19,780
<LONG-TERM-DEBT-NET> 169,083
<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> 168,319
<TOT-CAPITALIZATION-AND-LIAB> 485,746
<GROSS-OPERATING-REVENUE> 507,788
<INCOME-TAX-EXPENSE> 13,030
<OTHER-OPERATING-EXPENSES> 465,252
<TOTAL-OPERATING-EXPENSES> 465,252
<OPERATING-INCOME-LOSS> 42,536
<OTHER-INCOME-NET> 3,347
<INCOME-BEFORE-INTEREST-EXPEN> 45,883
<TOTAL-INTEREST-EXPENSE> 13,892
<NET-INCOME> 18,961
965
<EARNINGS-AVAILABLE-FOR-COMM> 17,996
<COMMON-STOCK-DIVIDENDS> 26,500
<TOTAL-INTEREST-ON-BONDS> 14,281
<CASH-FLOW-OPERATIONS> 60,162
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from System
Energy's financial statements for the year ended December 31, 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> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,319,288
<OTHER-PROPERTY-AND-INVEST> 135,384
<TOTAL-CURRENT-ASSETS> 419,289
<TOTAL-DEFERRED-CHARGES> 495,087
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,369,048
<COMMON> 789,350
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 102,131
<TOTAL-COMMON-STOCKHOLDERS-EQ> 891,481
0
0
<LONG-TERM-DEBT-NET> 1,082,579
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 77,947
0
<CAPITAL-LEASE-OBLIGATIONS> 39,599
<LEASES-CURRENT> 38,421
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,239,021
<TOT-CAPITALIZATION-AND-LIAB> 3,369,048
<GROSS-OPERATING-REVENUE> 620,032
<INCOME-TAX-EXPENSE> 53,851
<OTHER-OPERATING-EXPENSES> 356,596
<TOTAL-OPERATING-EXPENSES> 356,596
<OPERATING-INCOME-LOSS> 263,436
<OTHER-INCOME-NET> 18,849
<INCOME-BEFORE-INTEREST-EXPEN> 282,285
<TOTAL-INTEREST-EXPENSE> 146,062
<NET-INCOME> 82,372
0
<EARNINGS-AVAILABLE-FOR-COMM> 82,372
<COMMON-STOCK-DIVIDENDS> 75,000
<TOTAL-INTEREST-ON-BONDS> 102,867
<CASH-FLOW-OPERATIONS> 102,808
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
