File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
____________________________
DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________
Entergy Power, Inc. Entergy Corporation
900 South Shackleford Road 639 Loyola Avenue
Little Rock, AR 72211 New Orleans, LA 70113
(Names of companies filing this statement
and addresses of principal executive offices)
____________________________
Entergy Corporation
(Name of top registered holding company parent of
each applicant or declarant)
____________________________
Terry L. Ogletree Gerald D. McInvale
President Executive Vice President
Entergy Power, Inc. Chief Financial Officer
900 South Shackleford Road Entergy Corporation
Little Rock, AR 72211 639 Loyola Avenue
New Orleans, LA 70113
(Names and addresses of agents for service)
____________________________
The Commission is also requested to send copies
of any communications in connection with this matter to:
Frederick F. Nugent, Esq. Laurence M. Hamric, Esq.
General Counsel General Attorney
Entergy Enterprises, Inc. Entergy Services, Inc.
900 South Shackleford Road 639 Loyola Avenue
Little Rock, AR 72211 New Orleans, LA 70113
Thomas C. Havens, Esq.
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
<PAGE>
Item 1. Description of Proposed Transaction.
Entergy Power, Inc. ("EPI"), a Delaware corporation, is a
wholly-owned subsidiary of Entergy Corporation ("Entergy"), a
Delaware corporation which is a registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the
"Act"). EPI and Entergy (the "Declarants") hereby request the
approval of the Securities and Exchange Commission (the
"Commission") under Section 12(d) of the Act and Rule 44
promulgated by the Commission thereunder for EPI to sell to a non-
associate party, prior to December 31, 1997, a portion of its
interest in certain electric generating facilities and related
assets, as more fully described below. The Declarants further
request any requisite Commission approval under Section 12(c) of
the Act and Rule 46 thereunder for EPI to make dividend payments
to Entergy from time to time through December 31, 1998 out of the
unused proceeds from the sale of such assets.
A. Background.
1. Formation and Business of EPI.
Pursuant to Commission order dated August 27, 1990 (the
"1990 Order")<FN1>, EPI was formed to participate as a supplier of
electricity at wholesale to non-associate companies in bulk power
markets. In accordance with the 1990 Order, EPI acquired the
ownership interests of its associate company, Entergy Arkansas,
Inc. ("Entergy Arkansas" (formerly Arkansas Power & Light
Company)), in (1) Unit No. 2 of the Independence Steam Electric
Generating Station ("ISES 2"), and (2) Unit No. 2 of the Ritchie
Steam Electric Generating Station ("Ritchie 2"), representing an
aggregate of 809 megawatts ("MW") of generating capacity (the
"Transferred Capacity").<FN2> The purpose of the "spin off" of the
Transferred Capacity by Entergy Arkansas to EPI was to remove
excess generating capacity from the rate base of the Entergy
System,<FN3> and thereby relieve the System's ratepayers of the
costs associated with such excess capacity.<FN4>
As a result of these transactions, in addition to its 100%
ownership interest in Ritchie 2, EPI currently owns (1) a 31.5%
undivided ownership interest in ISES 2, (2) a 15.75% undivided
ownership interest in certain land and common facilities at the
Independence Station, and (3) a 15.75% undivided ownership
interest in the Certificate of Environmental Compatibility and
Public Need (the "Certificate") for the Independence Station
(collectively, the "ISES 2 Ownership Share"). In addition,
pursuant to the 1990 Order, EPI acquired from Entergy Arkansas a
15.75% undivided ownership interest in certain leases, mine
facilities and mine equipment located in Wyoming (the "Wyoming
Property") used to supply coal to the Independence Station. EPI
acquired the ISES 2 Ownership Share and the Wyoming Property
pursuant to an Agreement for the Purchase and Sale of
Independence Unit 2, dated as of August 28, 1990, between Entergy
Arkansas and EPI (the "Original Sale Agreement"). Under the
Original Sale Agreement, Entergy Arkansas also assigned to EPI
certain rights, duties and obligations, to the extent of the ISES
2 Ownership Share, under the Independence Steam Electric Station
Ownership Agreement (the "ISES 2 Ownership Agreement") and the
Independence Steam Electric Station Operating Agreement (the
"ISES 2 Operating Agreement"), each dated as of July 31, 1979.
EPI acquired the Transferred Capacity and related facilities
for a total purchase price equal to the depreciated book cost of
such assets, or $175,223,460.<FN5> Of such amount, approximately
$150,198,645 represented the purchase price for the ISES 2
Ownership Share and the Wyoming Property.
EPI is engaged in the business of marketing and selling the
Transferred Capacity and related energy, at wholesale, to non-
associate bulk power purchasers on negotiated (i.e., market
based) terms and conditions.<FN6> To facilitate its sales from the
Transferred Capacity, EPI receives electric transmission service
pursuant to the Entergy System's open access transmission tariff.
In addition, as discussed further below, Entergy Arkansas
manages, controls, operates and maintains ISES 2 and Ritchie 2
for the benefit of EPI and the other co-owners.
EPI's bulk power marketing business is subject to certain
conditions imposed by the Arkansas Public Service Commission
("APSC"). Specifically, the APSC order issued in 1990
authorizing the sale of the Transferred Capacity prohibited EPI
from, among other things, serving any retail or wholesale loads
within the state of Arkansas. Recently, however, EPI received a
partial waiver of such condition so that EPI is now permitted to
make wholesale sales to non-associate customers located in
Arkansas.<FN7>
2. Ownership and Operation of ISES 2.
EPI owns its 31.5% undivided interest in ISES 2 as tenant in
common with (1) Entergy Mississippi (25%), (2) the Arkansas
Electric Cooperative Corporation ("AECC") (35%), (3) City Water &
Light Plant of Jonesboro ("CWL") (5%), (4) the City of Conway,
Arkansas ("Conway") (2%), (5) the City of Osceola, Arkansas
("Osceola") (.5%), and (6) the City of West Memphis, Arkansas
("West Memphis") (1%) (EPI, Entergy Mississippi, AECC, CWL,
Conway, Osceola and West Memphis, collectively, the
"Participants"). AECC is an electric cooperative corporation
engaged in the business of generating and transmitting electric
power and energy for its member electric cooperative corporations
in the State of Arkansas. CWL is engaged in the business of
generating and acquiring electric power and energy and
distributing such power to its customers in the City of
Jonesboro, Arkansas. Conway is the owner of an electric
generating and distribution system leased to the Conway
Corporation, an Arkansas non-profit corporation, which
distributes electric power and energy in the City of Conway,
Arkansas. Osceola is the owner of an electric generating and
distribution system which distributes electric power and energy
in the City of Osceola, Arkansas. West Memphis is the owner of
an electric generating and distribution system operated by the
West Memphis Utility Commission, which distributes electric power
and energy in the City of West Memphis, Arkansas.
The rights and obligations of EPI and the other Participants
relating to their respective ownership interests in ISES 2 are
governed by the ISES 2 Ownership Agreement and the ISES 2
Operating Agreement. The ISES 2 Ownership Agreement sets out the
ownership rights and duties of the various Participants in
relation to their investment in ISES 2.<FN8> The ISES 2 Operating
Agreement provides for the Participants' respective entitlements
to the capacity and energy from ISES 2. The ISES 2 Operating
Agreement further provides for Entergy Arkansas to manage,
operate and maintain ISES 2 for the benefit of the Participants,
who share in the total operating costs of the plant in proportion
to their respective ownership interests in ISES 2. Under the
ISES 2 Operating Agreement, Participants generally are billed
monthly by Entergy Arkansas for their allocated share of
operations, maintenance, fuel, administrative and other costs
incurred by Entergy Arkansas in connection with ISES 2. For the
year ended December 31, 1995, EPI's allocated share of the costs
of operating and maintaining ISES 2 totalled $3,901,942.
Reference is hereby made to Exhibits B-1 and B-2 hereto for
further information with respect to the ISES 2 Ownership
Agreement and the ISES 2 Operating Agreement.
B. Proposed Transactions.
For various reasons, EPI until recently had experienced
difficulty in marketing all of the Transferred Capacity to third
parties. Due to adverse market conditions, the high debt service
requirements associated with EPI's leveraged capital structure,
the restrictions imposed by the APSC on EPI's business, as noted
above, and other factors, EPI incurred losses from operations for
each of the years 1990 through 1995. However, EPI has entered
into several additional intermediate- and long-term contracts for
the sale of capacity and energy from the Transferred Capacity,
all of which are now generating revenue. As a result of EPI's
increased revenues from these contracts and from numerous short-
term capacity and energy sales EPI is presently making in spot
markets, EPI projects that it will be profitable in 1996 and for
the foreseeable future.
EPI currently has approximately 500 MW of capacity under
contract for terms longer than one year, including the following:
(1) Alabama Municipal Electric Authority -- 30 MW through
June 1996, increasing to 50 MW through 2005.
(2) Associated Electric Cooperative, Inc. -- 200 MW from
January 1996, increasing to 300 MW in 2000 through May 2010.
(3) East Texas Electric Cooperative, Inc. -- 40 MW through
2009.
(4) Municipal Energy Agency of Mississippi -- 23 MW to May
2010.
(5) Northeast Texas Electric Cooperative, Inc. -- 36 MW
through 2017.
(6) Oglethorpe Power Cooperative -- 100 MW to June 30,
2002.
(7) Tallahassee Electric Department -- 25 MW from March 9,
1996 through March 2002.
Notwithstanding the foregoing, EPI has been unable to
market a significant portion of the Transferred Capacity
associated with its ISES 2 Ownership Share. Currently, EPI has
180 MW of capacity from ISES 2 that is not committed to
purchasers under long- or intermediate-term contracts (the
"Uncommitted Capacity"). As a result, EPI is incurring operating
expenses and other costs in connection with a portion of its ISES
2 Ownership Share for which there are no associated revenues. In
the interests of reducing EPI's ongoing operating expenses, and
thereby improving its earnings, EPI concluded that it would be
prudent to explore a possible sale of all or a portion of the
Uncommitted Capacity to third parties.
Beginning in early 1996, EPI extended offers to non-
associate third parties and to Entergy Arkansas<FN9> to purchase all
or a portion of the Uncommitted Capacity at a price of $450,000
per MW.<FN10> The proposed purchase price represented EPI's estimate
of the approximate depreciated book value of the assets relating
to the Uncommitted Capacity as of December 31, 1996. To date,
only CWL has formally agreed to proceed with negotiations to
purchase a portion of the Uncommitted Capacity. Specifically, as
discussed further below, CWL has indicated its intent to acquire
from EPI an additional 84 MW ownership interest in ISES 2 and an
additional proportionate share of the Wyoming Property and other
assets, for a total purchase price of approximately $37.8
million. CWL has stated publicly that it will need the increased
generating capacity to meet anticipated electric demand in the
City of Jonesboro through the year 2002. Filed herewith as
Exhibit I is a letter from CWL expressing its support of the
proposed transaction and requesting the Commission's expedited
consideration of this Declaration.
EPI and CWL have entered into a Letter of Intent whereby CWL
has agreed, subject to certain conditions, to acquire from EPI
(1) an additional 10% undivided ownership interest in ISES 2
(equivalent to 84 MW of capacity), (2) an additional 5% undivided
ownership interest in the Certificate, (3) an additional 5%
undivided ownership interest in the land and common facilities at
the Independence Station, and (4) an additional 5% undivided
ownership interest in the Wyoming Property. In addition, EPI
shall assign to CWL, and CWL shall assume from EPI, additional
proportionate rights and obligations under the ISES 2 Ownership
Agreement and the ISES 2 Operating Agreement. CWL also will
secure from Entergy Arkansas any necessary additional
transmission service for the delivery of electric energy
associated with the purchased capacity.
C. Authorizations Requested.
The Declarants hereby request, pursuant to Section 12(d) of
the Act and Rule 44 thereunder, that the Commission approve the
sale by EPI to CWL, prior to December 31, 1997, of a portion of
its ISES 2 Ownership Share on the terms and subject to the
conditions set forth herein.
EPI currently intends to apply the proceeds from the sale of
a portion of its ISES 2 Ownership Share and the Wyoming Property
to its general corporate purposes, including to reduce its
operating and maintenance expenses and to meet its other working
capital needs. However, to the extent EPI does not need such
proceeds for its corporate purposes, it may pay cash dividends
from such proceeds to Entergy. Insofar as such dividend payments
would be made from EPI's unearned surplus and not its current
earnings, the Declarants hereby request, pursuant to Section
12(c) of the Act and Rule 46 thereunder, that the Commission
approve the payment of such dividends by EPI to Entergy from time
to time through December 31, 1998.
Reference is hereby made to the Financial Statements filed
herewith, including the pro forma journal entries, for further
information with respect to the anticipated pro forma effects of
the proposed transactions.
D. Compliance With Rules 53 and 54.
The Declarants hereby represent that, pursuant to Rule 54
under the Act, all of the criteria of Rule 53(a) and (b) are
satisfied.
Item 2. Fees, Commissions and Expenses.
The estimated fees, commissions and expenses expected to be
paid or incurred, directly or indirectly, in connection with the
transactions described herein will be supplied by amendment.
Item 3. Applicable Statutory Provisions.
The proposed sale by EPI of utility assets is subject to
Section 12(d) of the Act and Rule 44 thereunder. The proposed
dividend payments by EPI to Entergy out of the unused proceeds of
such sale are subject to Section 12(c) of the Act and Rule 46
thereunder. In addition, Rules 53 and 54 under the Act are
applicable in respect of the proposed transactions.
To the extent that the proposed transactions are considered
by the Commission to require authorization, approval or exemption
under any Section of the Act or rule thereunder, other than those
specifically referred to above, request for such authorization,
approval or exemption is hereby made.
Item 4. Regulatory Approval.
The proposed arrangements between CWL and Entergy Arkansas
for the transmission of electric energy relating to CWL's
additional 84 MW ownership interest in ISES 2 are subject to the
jurisdiction of the FERC. No state or Federal commission, other
than the Commission, has jurisdiction over the transactions
proposed herein.
Item 5. Procedure.
The Declarants respectfully request that the Commission
issue its order permitting the Declaration to become effective as
soon as practicable, but in any event not later than July 9,
1996.
The Declarants hereby (i) waive a recommended decision by a
hearing officer or any other responsible officer of the
Commission, (ii) agree that the Division of Investment Management
may assist in the preparation of the decision of the Commission,
and (iii) request that there be no waiting period between the
issuance of the order of the Commission and the day on which such
order is to become effective.
Item 6. Exhibits and Financial Statements.
(a) Exhibits:<FN11>
B-1 - Independence Steam Electric Station
Ownership Agreement, dated as of July 31, 1979,
among Arkansas Power & Light Company, Arkansas
Electric Cooperative Corporation, City Water and
Light Plant of the City of Jonesboro, Arkansas,
and City of Conway, Arkansas (filed as Exhibit
5(r)-7 in 2-66235).
B-2 - Independence Steam Electric Station
Operating Agreement, dated as of July 31, 1979,
among Arkansas Power & Light Company, Arkansas
Electric Cooperative Corporation, City Water and
Light Plant of the City of Jonesboro, Arkansas,
and City of Conway, Arkansas (filed as Exhibit
5(r)-6 in 2-66235).
B-3 - Agreement for the Purchase and Sale of
Independence Unit 2, dated August 28, 1990,
between Entergy Power, Inc. and Arkansas Power &
Light Company (filed as Exhibit B-3(c) to Rule 24
Certificate in File No. 70-7684).
B-4 - Proposed Form of Ownership Interest
Purchase Agreement between Entergy Power, Inc. and
CWL.
E - Map showing interconnection relationship
of properties of EPI with properties of CWL (to be
filed under Form SE).
F - Opinion(s) of Counsel (to be filed by
amendment).
G - Financial Data Schedules.
H - Proposed Form of Notice.
I - Letter from CWL in support of Declaration.
(b) Financial Statements:
Financial Statements of Entergy Corporation and of Entergy
Corporation and subsidiaries, consolidated, as of March 31, 1996,
including pro forma journal entries (reference also is made to
Exhibit G hereto).
Financial Statements of Entergy Power, Inc. as of March 31,
1996, including pro forma journal entries (reference also is made
to Exhibit G hereto).
Except as reflected in the Financial Statements, no material
changes not in the ordinary course of business have taken place
since March 31, 1996.
Item 7. Information as to Environmental Effects.
The proposed transactions do not involve any major Federal
action significantly affecting the quality of the human
environment. No Federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed
transactions.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this statement to be signed on their behalf by the undersigned
thereunto duly authorized.
ENTERGY POWER, INC.
By: /s/ Michael G. Thompson
Michael G. Thompson
Vice President and Secretary
ENTERGY CORPORATION
By: /s/ Michael G. Thompson
Michael G. Thompson
Senior Vice President,
General Counsel and Secretary
Dated: May 29, 1996
_______________________________
<FN1>See Holding Company Act Release ("HCAR") No. 25136. The
1990 Order was reaffirmed by the Commission on remand from
the U.S. Court of Appeals for the District of Columbia
Circuit. See HCAR No. 26410 (dated November 17, 1995) (the
"Remand Order").
<FN2>Specifically, EPI acquired (1) Entergy Arkansas' 100%
ownership interest in Ritchie 2, an oil- and gas-fired plant
with an output of 544 MW, and (2) Entergy Arkansas' 31.5%
undivided ownership interest in Unit No. 2 of the
Independence Steam Electric Generating Station (the
"Independence Station"), a coal-fired electric generating
facility located near Newark, Arkansas. EPI's 31.5%
undivided interest in ISES 2 entitles it to 265 MW of
capacity and related energy.
<FN3>Entergy and its various direct and indirect subsidiary
companies comprise the Entergy System (the "Entergy System"
or "System"), which currently consists of (1) five regulated
retail electric utility companies - Entergy Arkansas,
Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy
Mississippi, Inc. ("Entergy Mississippi") and Entergy New
Orleans, Inc. (such companies, collectively, being
hereinafter referred to as the "System operating
companies"), (2) a wholesale generating company that sells
power to the System operating companies (other than Entergy
Gulf States, Inc.) - System Energy Resources, Inc., (3) a
service company subsidiary - Entergy Services, Inc., (4) a
nuclear management service company - Entergy Operations,
Inc., (5) a fuel supply subsidiary - System Fuels, Inc., (6)
EPI, (7) a company that develops energy and energy-related
projects on behalf of the Entergy System, and markets skills
and products developed by System companies - Entergy
Enterprises, Inc., (8) an energy management services company
- Entergy Integrated Solutions, Inc., and (9) various
companies formed to own Entergy's interests in domestic and
foreign energy and energy-related businesses.
<FN4>See Remand Order.
<FN5>Entergy originally financed EPI's acquisition of the
Transferred Capacity and related facilities and EPI's
ongoing capital requirements primarily through a series of
loans in an aggregate amount of approximately $237 million.
In order to eliminate the financial burdens of EPI's
resultant highly leveraged capital structure, EPI sought and
received an order from the Commission in April 1995
permitting EPI to change its capital structure from one
consisting predominantly of debt to one consisting entirely
of equity. See HCAR No. 26275 (dated April 18, 1995).
<FN6>EPI is presently authorized by the Federal Energy Regulatory
Commission ("FERC") to sell, at market based rates, up to an
aggregate of 1,500 MW of capacity and energy.
<FN7>See Order No. 17, APSC Docket No. 89-128-U, as modified by
Order No. 4, APSC Docket No. 95-396-U. EPI is still
precluded from serving retail loads in Arkansas or making
capacity sales to any affiliate without first obtaining a
waiver from the APSC.
<FN8>Among other things, the ISES 2 Ownership Agreement provides
that, with certain exceptions, no Participant may sell any
part of its ownership interest in ISES 2 to an entity which
would not be a "public utility" under Arkansas law without
the prior consent of the other Participants.
<FN9>Pursuant to Section 5.2.8 of the Original Sale Agreement, in
the event EPI proposes to sell an interest in its Ownership
Share in ISES 2, Entergy Arkansas has the right to
repurchase such interest on the same basis as it was
originally transferred to EPI (i.e., at the then depreciated
book value of such assets). On April 3, 1996, EPI notified
Entergy Arkansas of its interest in selling the Uncommitted
Capacity on the terms described above. Entergy Arkansas has
notified EPI that it does not wish to exercise its right of
first refusal under the Original Sale Agreement with respect
to any part of the Uncommitted Capacity.
<FN10>EPI explored a possible sale of Uncommitted Capacity
primarily with other Participants, based upon EPI's
experience with marketing the capacity from ISES 2, the
location of the generating facilities, and EPI's discussions
with other parties regarding a possible sale of the
Uncommitted Capacity.
<FN11>Certain exhibits are incorporated herein by reference as
indicated.
EXHIBIT B-4
INDEPENDENCE STEAM ELECTRIC
STATION UNIT NO. 2
OWNERSHIP INTEREST PURCHASE AGREEMENT,
dated as of __________, 1996
between
ENTERGY POWER, INC.
and
CITY WATER & LIGHT PLANT
OF
JONESBORO
<PAGE>
OWNERSHIP INTEREST PURCHASE AGREEMENT
THIS OWNERSHIP INTEREST PURCHASE AGREEMENT, dated as of
, 1996, is between CITY WATER & LIGHT PLANT OF JONESBORO, a
consolidated municipal improvement district organized and
existing under the laws of the State of Arkansas ("CWL"), and
ENTERGY POWER, INC., a corporation organized and existing under
the laws of the State of Delaware ("Entergy Power").
WHEREAS, Entergy Arkansas, Inc. (formerly Arkansas Power &
Light Company), an Arkansas corporation ("Entergy Arkansas"), has
constructed and operates a coal-fired electric generating plant
near Newark, Arkansas, known as the Independence Steam Electric
Station ("Independence SES"), in which Participants own undivided
ownership interests pursuant to the Ownership Agreement; and
WHEREAS, Entergy Power is a corporation primarily engaged in
the business of acquiring, producing and selling electric power
and energy to other parties for resale, and CWL is primarily
engaged in the business of generating and acquiring electric
power and energy and distributing such power to its customers in
the City of Jonesboro, Arkansas ("City"); and
WHEREAS, Entergy Power and CWL each own undivided interests
in the 842 megawatt ("MW") (nominal rating) Independence Steam
Electric Station Unit No. Two ("Independence Unit 2"), and in
certain common facilities and other related properties, as more
particularly described hereinafter; and
WHEREAS, Entergy Power desires to sell, and CWL desires to
purchase, an additional ownership interest in Independence Unit 2
and in such common facilities and related properties, as more
particularly described hereinafter.
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, CWL and Entergy Power hereby
agree as follows:
1. CERTAIN DEFINED TERMS. The following terms
(whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall,
except when the context otherwise requires, have the
following meanings:
"Additional Ownership Share" has the meaning set forth
in Section 2.1 hereof.
"Additional Wyoming Property" has the meaning set forth
in Section 2.1 hereof.
"Closing" or "Closing Date" means the date prescribed
in this Agreement on which Entergy Power transfers to CWL
the Additional Ownership Share and the Additional Wyoming
Property.
"Definitive Agreements" means this Agreement, together
with each other agreement or instrument executed in
connection herewith, whether or not mentioned herein.
"Environmental Certificate" means the Certificate of
Environmental Compatibility and Public Need for the
Independence Steam Electric Station.
"FERC" means the Federal Energy Regulatory Commission
established pursuant to the provisions of the Federal Power
Act.
"including" means including without limiting the
generality of any description preceding such term.
"Operating Agreement" means the Independence Operating
Agreement, originally dated July 31, 1979, as the same has
been and may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the term
thereof.
"Ownership Agreement" means the Independence Ownership
Agreement, originally dated July 31, 1979, among Entergy
Arkansas, Entergy Mississippi, Inc. (formerly Mississippi
Power & Light Company), Arkansas Electric Cooperative
Corporation ("AECC"), CWL, the City of Conway, Arkansas
("Conway"), the City of West Memphis, Arkansas ("West
Memphis"), and the City of Osceola, Arkansas ("Osceola"), as
the same has been and may be amended, restated, supplemented
or otherwise modified from time to time in accordance with
the terms thereof.
"Ownership Share" means, collectively, (i) the 31.5%
undivided ownership interest of Entergy Power in
Independence Unit 2, (ii) the 15.75% undivided ownership
interest of Entergy Power in the Environmental Certificate,
and (iii) the 15.75% undivided ownership interest of Entergy
Power in the Common Facilities.
"Participant" means each of the parties to the
Ownership Agreement or the Operating Agreement, as the case
may be.
"Purchased Capacity" means 84 MW of electric generating
capacity from Independence Unit 2.
"Resultant Ownership Share" means, collectively, (i)
the 15% undivided ownership interest of CWL in Independence
Unit 2, (ii) the 7.5% undivided ownership interest of CWL in
the Environmental Certificate, and (iii) the 7.5% undivided
ownership interest of CWL in the Common Facilities, in each
case from and after the Closing.
2. SALE AND TRANSFER OF ASSETS
2.1 Sale of Additional Ownership Share and Additional
Wyoming Property. Subject to the terms and conditions
hereof, at the Closing provided for herein, Entergy Power
will sell and convey to CWL, and CWL will purchase from
Entergy Power, (i) an additional ten percent (10%) undivided
ownership interest in Independence Unit 2, (ii) an
additional five percent (5%) undivided ownership interest in
the Environmental Certificate, (iii) an additional five
percent (5%) undivided ownership interest in certain land
and common facilities at Independence SES (as more
particularly described in the Ownership Agreement) (the
"Common Facilities") (items (i), (ii) and (iii),
collectively, the "Additional Ownership Interest"), and (iv)
an additional five percent (5%) undivided interest in
certain mine facilities and mine equipment located in
Wyoming (as more particularly described in the Ownership
Agreement) (the "Additional Wyoming Property"). The
Additional Ownership Share shall be conveyed by Special
Warranty Deed and Bill of Sale and by Assignment
substantially in the form of Exhibits A and B, respectively,
attached hereto and made a part hereof. The Additional
Wyoming Property shall be conveyed by Bill of Sale
substantially in the form of Exhibit C attached hereto and
made a part hereof.
2.2 Other Instruments. At the Closing, and from time
to time thereafter, CWL and Entergy Power shall execute such
other instruments of conveyance and transfer, and other
documents, as may be necessary or appropriate to carry out
the intent of this Agreement and to vest in CWL all right,
title and interest in the Additional Ownership Share and in
the Additional Wyoming Property.
2.3 Purchase at Closing. The parties hereto
acknowledge that at the Closing, CWL shall purchase from
Entergy Power (i) the Additional Ownership Share as provided
for under the Ownership Agreement and (ii) the Additional
Wyoming Property.
2.4 Closing. The Closing of the sale and transfer of
the Additional Ownership Interest and the Additional Wyoming
Property as provided for herein shall take place on [July 1,
1996], or such other date mutually agreed upon by the
parties, at Little Rock, Arkansas, or such other place
mutually agreed upon by the parties, provided, however, in
the event the parties have not received all necessary
governmental, regulatory or other required approvals of the
consummation of the transactions contemplated hereby by
[October 1, 1996], the Closing shall be postponed from day
to day until all such approvals have been received.
3. PAYMENTS BY CWL
3.1 At Closing. The purchase price of CWL's Ownership
Share shall be an amount equal to the product of (i) the
Purchased Capacity (expressed in MW) multiplied by (ii)
$450,000 (the "Purchase Price"). The Purchase Price shall
be payable by CWL to Entergy Power in cash in immediately
available funds on the Closing Date.
3.2. It is recognized and agreed by the parties that
prior to the Closing, Entergy Power may have expended, or
been billed for, on account of its Ownership Interest,
additional sums for operating and maintenance costs,
capitalized improvements to Independence Unit 2, fuel
inventory, material and supply inventory, or other charges
between the last day of the month prior to the Closing, and
the date of Closing. CWL shall pay to Entergy Power
additional sums in proportion to its Additional Ownership
Share within ten (10) days after Entergy Power furnishes to
CWL a written statement reflecting said sum. Entergy Power
will, on or before the Closing or, thereafter, on the first
day of the next succeeding month, notify CWL of the nature
and amount of such costs billed to or incurred by Entergy
Power during the preceding calendar month, plus any
adjustments for costs incurred in prior months, but not
previously charged or credited to Entergy Power. CWL will
make payment to Entergy Power of such costs as so adjusted
on or before the last day of the next succeeding month;
provided that such notification made by Entergy Power shall
be accompanied by a statement setting forth in reasonable
detail the nature of such costs.
3.3. It is further recognized and agreed by the
parties that all obligations hereunder of CWL involving
financial commitments shall be payable and enforceable
solely from revenues derived from CWL's electric system and
from the proceeds of electric revenue bonds or other
obligations to be issued by the City to finance the payment
of the Purchase Price, and CWL covenants and agrees to use
its best efforts to complete on a timely basis the issuance
and sale of such revenue bonds or other obligations.
4. ASSIGNMENT AND ASSUMPTION BY ENTERGY POWER TO CWL.
4.1 Rights of CWL Under the Ownership Agreement. As
of the Closing, Entergy Power hereby assigns to CWL certain
additional rights, duties and obligations under the
Ownership Agreement, to the extent of the Additional
Ownership Share and the Additional Wyoming Property, and CWL
hereby accepts such assignment and assumes such additional
rights, duties and obligations. From and after the Closing
Date, CWL will have the rights and duties of a Participant
under the Ownership Agreement to the extent of CWL's
Resultant Ownership Share [and interest in the Additional
Wyoming Property]. The parties to the Ownership Agreement
will execute an Addendum to the Ownership Agreement to
reflect CWL's Resultant Ownership Share [and interest in the
Additional Wyoming Property]. All terms and conditions of
the Ownership Agreement, including the definition of terms
contained therein, are incorporated by reference herein to
the extent not in conflict herewith.
4.2 Rights of CWL Under the Operating Agreement. As
of Closing, Entergy Power hereby assigns to CWL certain
additional rights, duties and obligations under the
Operating Agreement, to the extent of the Additional
Ownership Share and the Additional Wyoming Property, and CWL
hereby accepts such assignment and assumes such additional
rights, duties and obligations. From and after the Closing
Date, CWL will have the rights and duties of a Participant
under the Operating Agreement to the extent of CWL's
Resultant Ownership Share [and interest in the Additional
Wyoming Property]. The parties to the Operating Agreement
will execute an Addendum to the Operating Agreement to
reflect CWL's Resultant Ownership Share [and interest in the
Additional Wyoming Property.] All terms and conditions of
the Operating Agreement, including the definition of terms
contained therein, are incorporated by reference herein to
the extent not in conflict herewith.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties by Entergy Power.
Entergy Power hereby represents and warrants as follows:
5.1.1 Entergy Power is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware and has corporate
power to carry on its business as it is now being
conducted.
5.1.2 The execution, delivery and
performance of this Agreement by Entergy Power have
been duly and effectively authorized by all requisite
corporate action.
5.2 Representations and Warranties by CWL. CWL hereby
represents and warrants as follows:
5.2.1 CWL is a consolidated municipal
improvement district duly organized and validly
existing in good standing under the laws of the State
of Arkansas and has the requisite power to carry on its
business as it is now being conducted.
5.2.2 The execution, delivery and
performance of this Agreement by CWL have been duly and
effectively authorized by all requisite municipal
government action.
5.2.3. The execution, delivery and
performance of this Agreement by CWL does not require
the consent or approval of, or any filing with, the
Arkansas Public Service Commission or any other
governmental authority having jurisdiction over CWL.
6. CONDITIONS PRECEDENT
6.1 Conditions Precedent to Entergy Power's
Obligations Hereunder. All obligations of Entergy Power
under this Agreement are subject to the fulfillment, prior
to or at the Closing, of each of the following conditions
(or the waiver in writing of such conditions by Entergy
Power).
6.1.1 Entergy Power shall not have
discovered any material error, misstatement or omission
in the representations and warranties made by CWL in
this Agreement.
6.1.2 CWL's representations and warranties
contained in this Agreement shall be deemed to have
been made again, at and as of the time of the Closing,
and shall then be true in all material respects; CWL
shall have performed and complied with all agreements,
covenants and conditions required by this Agreement to
be performed or complied with by it prior to or at the
Closing; and Entergy Power shall have been furnished
with a certificate, dated the date of the Closing,
certifying in such detail as Entergy Power may request
to the fulfillment of the foregoing conditions.
6.2 Conditions Precedent to CWL's Obligations
Hereunder. All obligations of CWL under this Agreement are
subject to the fulfillment, prior to or at the closing, of
each of the following conditions (or the waiver in writing
of such conditions by CWL).
6.2.1 CWL shall not have discovered any
material error, misstatement or omission in the
representations and warranties made by Entergy Power in
this Agreement.
6.2.2 Entergy Power's representations and
warranties contained in this Agreement shall be deemed
to have been made again, at and as of the time of the
Closing, and shall then be true in all material
respects; Entergy Power shall have performed and
complied with all agreements, covenants and conditions
required by this Agreement to be performed or complied
with by it prior to or at the Closing; and CWL shall
have been furnished with a certificate, dated the date
of the Closing, certifying in such detail as CWL may
request to the fulfillment of the foregoing conditions.
6.3 Conditions Precedent to the Respective obligations
of Entergy Power and CWL. The respective obligations of
Entergy Power and CWL hereunder are, unless waived in
writing by Entergy Power and CWL prior to or at the Closing,
subject to the further conditions that:
6.3.1 CWL shall have secured from Entergy
Arkansas a commitment to supply power coordination,
interchange and transmission services with respect to
the delivery to CWL of the electric energy relating to
the Purchased Capacity, on terms reasonably
satisfactory to CWL.
6.3.2 An Addendum to each of the Ownership
Agreement and the Operating Agreement shall have been
executed in form reasonably acceptable to CWL and
Entergy Power.
6.3.3 CWL shall have completed a sale of
revenue bonds at rates reasonably acceptable to CWL,
the proceeds of which shall be used to pay the Purchase
Price.
6.3.4 Entergy Power shall have received a
written waiver from Entergy Arkansas of Entergy
Arkansas's rights of first refusal with respect to
Entergy Power's sale of the Additional Ownership
Interest.
6.3.5 The boards of directors of Entergy
Power and CWL shall each have approved the transactions
contemplated by this Agreement and each of the
Definitive Agreements.
6.3.6 All necessary or appropriate consents,
waivers, approvals or other authorizations from
Federal, state or local governmental or regulatory
agencies or other persons with respect to the
transactions contemplated by this Agreement shall have
been received by Entergy Power or CWL or both, as the
case may be.
7. MISCELLANEOUS
7.1 Indemnity. Entergy Power agrees to and does
hereby indemnify and hold CWL harmless from and against any
and all expense, liability or loss whatever, including, but
not limited to, reasonable legal fees and expenses, to any
third person, including to a Participant, relating to or in
any way arising out of the assumption by CWL under
Section 4.1 hereof of any obligations of Entergy Power under
the Ownership Agreement arising prior to the Closing Date.
CWL agrees to and does hereby indemnify and hold Entergy
Power harmless from and against any and all expense,
liability or loss whatever, including, but not limited to,
reasonable legal fees and expenses, to any third person,
including to a Participant, relating to or in any way
arising out of the assumption by Entergy Power under
Section 4.1 hereof of any obligations of CWL under the
Ownership Agreement arising after the Closing Date.
7.2 Waiver of Partition. CWL and Entergy Power
hereby expressly waive and renounce, until Independence
Unit 2 is retired from commercial service, for themselves,
their successors, transferees and assigns, all rights as
tenants in common in Independence Unit 2 to partition and
accounting.
7.3 No Partnership. Notwithstanding any provisions of
this Agreement, CWL and Entergy Power do not intend to
create hereby any joint venture, partnership, association
taxable as a corporation, or other entity for the conduct of
any business for profit. CWL and Entergy Power elect not to
be treated as a partnership for United States income tax
purposes.
7.4 Notice. Any notice, request, consent or other
communications permitted or required by this Agreement shall
be in writing and shall be deemed given when deposited in
the United States mail, first class postage paid, and if
given to CWL, shall be addressed to:
City Water & Light
400 East Monroe
P.O. Box 1289
Jonesboro, Arkansas 72403-1289
Attention: Ronald L. Bowen, Manager
and if given to Entergy Power, shall be addressed to:
Entergy Power, Inc.
Three Financial Center
900 South Shackleford Road, Suite 210
Little Rock, Arkansas 72211
Attention: Richard W. Jones
unless a different officer or address shall have been
designated by the respective party by notice in writing.
7.5 Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this
Agreement or any other Definitive Agreement, or consent to
any departure by either of the parties therefrom, shall in
any event be effective without a written instrument duly
executed by each of the parties hereto.
7.6 Severability. Any provision of this Agreement or
any other Definitive Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such
provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without
invalidating or impairing the remaining provisions of this
Agreement or any other Definitive Agreement or affecting the
validity or enforceability of such provision in any other
jurisdiction.
7.7 Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for
any other purpose or be given substantive effect.
7.8 Successors and Assigns. This Agreement and the
other Definitive Agreements shall be binding upon the
parties hereto and their respective successors and assigns
and shall inure to the benefit of the parties hereto and the
successors and assigns of each of the parties hereto.
7.9 Counterparts; Effectiveness. This Agreement and
any amendments, waivers, consents or supplements hereto or
in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered
shall be deemed an original.
7.10 Entire Agreement. This Agreement, together with
the other Definitive Agreements, is intended by the parties
as a final expression of their agreement and intended to be
a complete and exclusive statement of the agreement and
understanding, written or verbal, of the parties hereto in
respect of the subject matter contained herein and
supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
7.11 "As Is" Sale. The Additional Ownership Interest
and the Additional Wyoming Property are being sold and
conveyed by Entergy Power to CWL "as is" and "where is".
Entergy Power makes no representation or warranty whatsoever
in this Agreement, express, implied or statutory, including
any representation or warranty as to the value, quantity,
condition, saleability, obsolescence, merchantability,
fitness or suitability for use or working order of any part
of the Independence SES, nor does Entergy Power represent or
warrant that the use or operation of the Independence SES
will not violate patent, trademark or service mark rights of
any third parties. CWL is willing to purchase the
Additional Ownership Interest and the Additional Wyoming
Property "as is" and "where is" and in accordance with the
terms and conditions of this Agreement.
7.12 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ARKANSAS.
<PAGE>
IN WITNESS WHEREOF, the undersigned parties hereto have duly
executed this Agreement in the State of Arkansas, City of Little
Rock, on the date first above written.
ATTEST:
ENTERGY POWER, INC.
___________________________
By:__________________________
Title:_____________________ Title:_______________________
ATTEST: CITY WATER & LIGHT PLANT
___________________________
By:__________________________
Title:_____________________ Title:_______________________
<PAGE>
TABLE OF CONTENTS
1. CERTAIN DEFINED TERMS 2
2. SALE AND TRANSFER OF ASSETS 4
2.1 Sale of Additional Ownership Share and
Additional Wyoming Property 4
2.2 Other Instruments 4
2.3 Purchase at Closing 4
2.4 Closing 4
3. PAYMENTS BY CWL 5
3.1 At Closing 5
4. ASSIGNMENT AND ASSUMPTION BY ENTERGY POWER TO CWL. 5
4.1 Rights of CWL Under the Ownership Agreement 5
4.2 Rights of CWL Under the Operating Agreement 6
5. REPRESENTATIONS AND WARRANTIES 6
5.1 Representations and Warranties by Entergy
Power 6
5.2 Representations and Warranties by CWL. 6
6. CONDITIONS PRECEDENT 7
6.1 Conditions Precedent to Entergy Power's
Obligations Hereunder 7
6.2 Conditions Precedent to CWL's Obligations
Hereunder 7
6.3 Conditions Precedent to the Respective
Obligations of Entergy Power and CWL 8
7. MISCELLANEOUS 8
7.1 Indemnity 8
7.2 Waiver of Partition 9
7.3 No Partnership 9
7.4 Notice 9
7.5 Amendments and Waivers 9
7.6 Severability 10
7.7 Headings 10
7.8 Successors and Assigns 10
7.9 Counterparts; Effectiveness 10
7.10 Entire Agreement 10
7.11 "As Is" Sale 10
7.12 Governing Law 11
Exhibits
A - Form of Special Warranty Deed and Bill of Sale for
Additional Ownership Interest
B - Form of Assignment Agreement
C - Form of Bill of Sale for Additional Wyoming Property
EXHIBIT H
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. 35-_______/ File No. 70-________
___________________________________
In the Matter of :
:
ENTERGY POWER, INC. :
ENTERGY CORPORATION :
:
:
___________________________________:
NOTICE OF DECLARATION CONCERNING PROPOSED SALES OF UTILITY ASSETS
Entergy Corporation ("Entergy"), 639 Loyola Avenue, New
Orleans, Louisiana 70113, a registered holding company, and
Entergy Power, Inc. ("EPI"), 900 South Shackleford Road, Little
Rock, Arkansas 72211, a wholly-owned subsidiary of Entergy, have
filed a declaration pursuant to Sections 12(c) and 12(d) of the
Act and Rules 44, 46, 53 and 54 thereunder.
EPI proposes to sell to City Water & Light Plant of
Jonesboro, prior to December 31, 1997, a portion of EPI's
undivided ownership interest in Unit No. 2 of the Independence
Steam Electric Generating Station and certain related assets, for
a total purchase price of approximately $37.8 million. The
consideration to be received by EPI for such sale would be
approximately the depreciated book value of the assets at the
time of the sale. EPI further proposes to pay dividends to
Entergy out of the unused proceeds from such sale from time to
time during the period through December 31, 1998.
The declaration and any amendments thereto are available for
the public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a
hearing should submit their views in writing no later than
[___________, 1996], to the Secretary, Securities and Exchange
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and
serve a copy on the declarants at the addresses specified above.
Proof of service (by affidavit or, in case of an attorney at law,
by certificate) should be filed with the request. Any request
for a hearing shall identify specifically the issues of fact or
law that are disputed. A person who so requests will be notified
of any hearing, if ordered, and will receive a copy of any notice
or order issued in this matter. After said date, the
declaration, as filed or as it may be amended, may be permitted
to become effective.
For the Commission, by the Office of Public Utility
Regulation, pursuant to delegated authority.
[NAME OF SECRETARY]
[Secretary]
EXHIBIT I
[Letterhead of City Water & Light]
May 29, 1996
Ms. Bonnie Wilkinson
Assistant Director
Office of Public Utility Regulation
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Entergy Power, Inc.
Dear Ms. Wilkinson:
We are writing to express our support for the transaction
proposed by Entergy Power, Inc. ("EPI") in the Declaration on
Form U-1 filed with you today, whereby EPI will sell to City
Water and Light Plant of the City of Jonesboro, (Arkansas)
("CWL") an additional 10% ownership interest in Unit No. 2 of the
Independence Steam Electric Station ("ISES 2").
CWL needs the additional power from ISES 2 to meet projected
electric demand in the City of Jonesboro. Therefore, we
respectfully request that you take all action necessary to
expedite your approval of the subject filing. We appreciate your
prompt consideration of this matter.
Sincerely,
/s/ Ron Bowen
Ron Bowen
Manager
<TABLE>
<CAPTION>
ENTERGY CORPORATION
PRO FORMA BALANCE SHEET
MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transaction Filing Transaction
(In Thousands)
NOTE A.
<S> <C> <C>
Investment in Wholly-owned Subsidiaries $6,463,534 $6,463,534
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 23 23
Temporary cash investments - at cost,
which approximates market
Associated companies 18,821 18,821
Other 36,677 36,677
---------- ----------
Total cash and cash equivalents 55,521 55,521
Accounts receivable:
Associated companies 7,002 7,002
Other 356 356
Interest receivable 77,147 77,147
Other 9,329 9,329
---------- ----------
Total 149,355 149,355
---------- ----------
Deferred Debits 81,129 81,129
---------- ----------
TOTAL $6,694,018 $6,694,018
========== ==========
Note A: Proceeds of sale by EPI to be used as dividend distribution to
Entergy Corporation cannot reasonably be estimated at this time.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
PRO FORMA BALANCE SHEET
MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
CAPITALIZATION AND LIABILITIES Transaction Filing Transaction
(In Thousands)
NOTE A.
<S> <C> <C>
Capitalization:
Common stock, $.01par value, authorized
500,000,000 shares; issued 230,017,485
shares $2,300 $2,300
Paid-in capital 4,214,751 4,214,751
Retained earnings 2,042,902 2,042,902
Less - treasury stock (1,983,639 shares) 59,961 59,961
---------- ----------
Total common shareholders' equity 6,199,992 6,199,992
---------- ----------
Current Liabilities:
Notes payable 270,000 270,000
Accounts payable:
Associated companies 3,597 3,597
Other 1,578 1,578
Dividends declared 102,615 102,615
Other current liabilities 11,750 11,750
---------- ----------
Total 389,540 389,540
---------- ----------
Deferred Credits and Noncurrent Liabilities 104,486 104,486
---------- ----------
TOTAL $6,694,018 $6,694,018
========== ==========
Note A: Proceeds of sale by EPI to be used as dividend distribution to
Entergy Corporation cannot reasonably be estimated at this time.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
NOTE A.
<S> <C> <C>
Income:
Equity in income of subsidiaries $388,930 $388,930
Interest on temporary investments 13,517 13,517
Miscellaneous income (90) (90)
-------- --------
Total 402,357 402,357
-------- --------
Expenses and Other Deductions:
Administrative and general expenses 57,023 57,023
Income taxes (credit) (2,907) (2,907)
Taxes other than income taxes (credit) 1,188 1,188
Interest (credit) 4,537 4,537
-------- --------
Total 59,841 59,841
-------- --------
Net Income $342,516 $342,516
======== ========
Note A: Proceeds of sale by EPI to be used as dividend distribution to
Entergy Corporation cannot reasonably be estimated at this time.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
NOTE A.
<S> <C> <C>
Retained Earnings - April 1, 1995 $2,110,891 $2,110,891
Add
Net Income 342,516 342,516
---------- ----------
Total 2,453,407 2,453,407
---------- ----------
Deduct:
Dividends declared on common stock 410,095 410,095
Capital stock and other expenses 410 410
---------- ----------
Total 410,505 410,505
---------- ----------
Retained Earnings - March 31, 1996 $2,042,902 $2,042,902
========== ==========
Note A: Proceeds of sale by EPI to be used as dividend distribution to
Entergy Corporation cannot reasonably be estimated at this time.
</TABLE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transaction Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Utility Plant:
Electric $22,332,245 ($56,356) $22,275,889
Plant acquisition adjustment - GSU 467,623 467,623
Electric plant under leases 676,275 676,275
Property under capital leases - electric 140,400 140,400
Natural gas 167,919 167,919
Steam products 77,558 77,558
Construction work in progress 539,412 539,412
Nuclear fuel under capital leases 296,514 296,514
Nuclear fuel 67,500 67,500
----------- -------- -----------
Total 24,765,446 (56,356) 24,709,090
Less - accumulated depreciation
and amortization 8,413,266 (18,556) 8,394,710
----------- -------- -----------
Utility plant - net 16,352,180 (37,800) 16,314,380
----------- -------- -----------
Other Property and Investments:
Decommissioning trust funds 295,618 295,618
Other 454,572 454,572
----------- -------- -----------
Total 750,190 750,190
----------- -------- -----------
Current Assets:
Cash and cash equivalents:
Cash 38,979 38,979
Temporary cash investments - at cost,
which approximates market 392,248 37,800 430,048
Special deposits 177,170 177,170
----------- -------- -----------
Total cash and cash equivalents 608,397 37,800 646,197
Notes receivable 6,087 6,087
Accounts receivable:
Customer (less allowance for
doubtful accounts of $8.2 million) 353,939 353,939
Other 67,118 67,118
Accrued unbilled revenues 283,916 283,916
Deferrred fuel 70,099 70,099
Fuel inventory - at average cost 98,955 98,955
Materials and supplies - at average cost 355,712 355,712
Rate deferrals 422,760 422,760
Prepayments and other 160,297 160,297
----------- -------- -----------
Total 2,427,280 37,800 2,465,080
----------- -------- -----------
Deferred Debits and Other Assets:
Regulatory Assets:
Rate deferrals 733,902 733,902
SFAS 109 regulatory asset - net 1,199,525 1,199,525
Unamortized loss on reacquired debt 223,187 223,187
Other regulatory assets 376,162 376,162
Long-term receivables 225,130 225,130
Citipower license (net of $3.3 million of amortization) 616,947 616,947
Other 344,750 344,750
----------- -------- -----------
Total 3,719,603 3,719,603
----------- -------- -----------
TOTAL $23,249,253 $ - $23,249,253
=========== ======== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
CAPITALIZATION AND LIABILITIES Transaction Filing Transaction
(In Thousands)
NOTE A.
<S> <C> <C>
Capitalization:
Common stock, $.01par value, authorized
500,000,000 shares; issued 230,017,485
shares $2,300 $2,300
Paid-in capital 4,201,117 4,201,117
Retained earnings 2,042,902 2,042,902
Cumulative foreign currency translation adjustment 17,255 17,255
Less - treasury stock (1,983,639 shares) 59,961 59,961
----------- -----------
Total common shareholders' equity 6,203,613 6,203,613
Subsidiary's preference stock 150,000 150,000
Subsidiaries' preferred stock:
Without sinking fund 550,955 550,955
With sinking fund 233,755 233,755
Long-term debt 7,637,897 7,637,897
----------- -----------
Total 14,776,220 14,776,220
----------- -----------
Other Noncurrent Liabilities:
Obligations under capital leases 285,717 285,717
Other 348,071 348,071
----------- -----------
Total 633,788 633,788
----------- -----------
Current Liabilities:
Currently maturing long-term debt 715,568 715,568
Notes payable 322,667 322,667
Accounts payable 468,047 468,047
Customer deposits 146,481 146,481
Taxes accrued 273,117 273,117
Accumulated deferred income taxes 97,427 97,427
Interest accrued 130,321 130,321
Dividends declared 109,970 109,970
Obligations under capital leases 150,799 150,799
Other 210,889 210,889
----------- -----------
Total 2,625,286 2,625,286
----------- -----------
Deferred Credits:
Accumulated deferred income taxes 3,631,832 3,631,832
Accumulated deferred investment tax credits 605,796 605,796
Other 976,331 976,331
----------- -----------
Total 5,213,959 5,213,959
----------- -----------
TOTAL $23,249,253 $23,249,253
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $6,223,596 $6,223,596
Natural gas 120,795 120,795
Steam Products 54,241 54,241
Nonregulated and foreign energy-related businesses 150,166 150,166
---------- ----------
Total 6,548,798 6,548,798
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses
and gas purchased for resale 1,482,693 1,482,693
Purchased power 432,244 432,244
Nuclear refueling outage expenses 80,167 80,167
Other operation and maintenance 1,521,970 1,521,970
Depreciation, amortization and decommissioning 719,952 719,952
Taxes other than income taxes 312,456 312,456
Income taxes 361,698 361,698
Rate deferrals (19,802) (19,802)
Amortization of rate deferrals 417,830 417,830
---------- ----------
Total 5,309,208 5,309,208
---------- ----------
Operating Income 1,239,590 1,239,590
---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 9,693 9,693
Write-off of River Bend rate deferrals (194,498) (194,498)
Miscellaneous - net 24,215 24,215
Income taxes 14,076 14,076
---------- ----------
Total (146,514) (146,514)
---------- ----------
Interest Charges:
Interest on long-term debt 646,063 646,063
Other interest - net 36,606 36,606
Allowance for borrowed funds used
during construction (8,309) (8,309)
Preferred dividend requirements 76,200 76,200
---------- ----------
Total 750,560 750,560
---------- ----------
Net Income $342,516 $342,516
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Retained Earnings - April 1, 1995 $2,110,891 $2,110,891
Add
Net Income 342,516 342,516
---------- ----------
Total 2,453,407 2,453,407
---------- ----------
Deduct:
Dividends declared on common stock 410,095 410,095
Capital stock and other expenses 410 410
---------- ----------
Total 410,505 410,505
---------- ----------
Retained Earnings - March 31, 1996 $2,042,902 $2,042,902
========== ==========
</TABLE>
<TABLE>
<CAPTION>
ENTERGY POWER, INC.
PRO FORMA BALANCE SHEET
MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transactions
(In Thousands)
<S> <C> <C> <C>
UTILITY PLANT:
Electric $238,779 ($56,356) $182,423
Electric plant acquisition adjustment 787 787
Construction work in progress 4,433 4,433
-------- -------- --------
Total 243,999 (56,356) 187,643
Less - accum. depr. and amort. 99,956 (18,556) 81,400
-------- -------- --------
Utility Plant - net 144,043 (37,800) 106,243
-------- -------- --------
CURRENT ASSETS:
Cash 258 258
Temporary Cash Investments 63,783 37,800 101,583
Accounts receivable:
Associated companies 2,025 2,025
Other 8,202 8,202
Fuel inventory - at average cost 2,964 2,964
Materials and supplies -
at average cost 2,549 2,549
-------- -------- --------
Total 79,781 37,800 117,581
-------- -------- --------
DEFERRED DEBITS:
Other 2 2
-------- -------- --------
Total 2 2
-------- -------- --------
TOTAL $223,826 $ - $223,826
======== ======== ========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock, $5 par value, authorized
20,000 shares; issued and outstanding
1,000 shares $55 $55
Paid-in capital 249,950 249,950
Accumulated deficit (76,326) (76,326)
-------- -------- --------
Total common stockholder's equity 173,679 173,679
-------- -------- --------
CURRENT LIABILITIES:
Accounts Payable:
Associated companies 4,345 4,345
Other 837 837
Taxes accrued 5,593 5,593
Other 404 404
-------- -------- --------
Total 11,179 11,179
-------- -------- --------
DEFERRED CREDITS:
Accumulated deferred income taxes 37,567 37,567
Other 1,401 1,401
-------- -------- --------
Total 38,968 38,968
-------- -------- --------
TOTAL $223,826 $ - $223,826
======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY POWER, INC.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transactions Filing Transactions
(In Thousands)
<S> <C> <C>
REVENUES:
Associated companies $30,619 $30,619
Other 40,150 40,150
------- -------
Total 70,769 70,769
------- -------
OPERATING EXPENSES:
Operation:
Fuel 47,914 47,914
Other 12,544 12,544
Maintenance 10,211 10,211
Depreciation and amortization 5,748 5,748
Taxes other than income taxes 1,064 1,064
Income tax expense
Current (42,727) (42,727)
Deferred 40,505 40,505
------- -------
Total 75,259 75,259
------- -------
OPERATING LOSS (4,490) (4,490)
------- -------
OTHER INCOME:
Interest income 1,975 1,975
Miscellaneous income and deductions - net (54) (54)
------- -------
Total 1,921 1,921
------- -------
INTEREST CHARGES:
Interest on advances from stockholder 1,045 1,045
Other interest 66 66
Allowance for borrowed funds used
during construction (1) (1)
------- -------
1,110 1,110
------- -------
NET INCOME (LOSS) $(3,679) $(3,679)
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY POWER, INC.
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
RETAINED EARNINGS Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Balance at April 1, 1995 $(72,647) $(72,647)
Add - Net loss (3,679) (3,679)
-------- --------
Balance at March 31, 1996 $(76,326) $(76,326)
======== ========
</TABLE>
<PAGE>
ENTERGY POWER, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry No. 1
Temporary Cash Investments 37,800,000
Accumulated Depreciation 18,555,873
Utility Plant - Electric 56,355,873
To record sale by EPI (at net book value) of 84 MW of
Uncommitted Capacity generated by ISES 2, at a price of
$450,000 per MW to City Water & Light of Jonesboro,
Arkansas.
Note: Amount of proceeds from above sale to be used as
dividend distribution to Entergy Corporation cannot be
determined at this time.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 016
<NAME> ENTERGY CORPORATION
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1996 MAR-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 6,463,534 6,463,534
<TOTAL-CURRENT-ASSETS> 149,355 149,355
<TOTAL-DEFERRED-CHARGES> 81,129 81,129
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 6,694,018 6,694,018
<COMMON> 2,300 2,300
<CAPITAL-SURPLUS-PAID-IN> 4,214,751 4,214,751
<RETAINED-EARNINGS> 2,042,902 2,042,902
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6,199,992 6,199,992
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 270,000 270,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 224,026 224,026
<TOT-CAPITALIZATION-AND-LIAB> 6,694,018 6,694,018
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (2,907) (2,907)
<OTHER-OPERATING-EXPENSES> 58,211 58,211
<TOTAL-OPERATING-EXPENSES> 55,304 55,304
<OPERATING-INCOME-LOSS> (55,304) (55,304)
<OTHER-INCOME-NET> 402,357 402,357
<INCOME-BEFORE-INTEREST-EXPEN> 347,053 347,053
<TOTAL-INTEREST-EXPENSE> 4,537 4,537
<NET-INCOME> 342,516 342,516
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 342,516 342,516
<COMMON-STOCK-DIVIDENDS> 410,095 410,095
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 017
<NAME> ENTERGY CORPORATION AND SUBSIDARIES (CONSOLIDATED)
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1996 MAR-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 16,352,180 16,314,380
<OTHER-PROPERTY-AND-INVEST> 750,190 750,190
<TOTAL-CURRENT-ASSETS> 2,427,280 2,465,080
<TOTAL-DEFERRED-CHARGES> 3,719,603 3,719,603
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 23,249,253 23,249,253
<COMMON> 2,300 2,300
<CAPITAL-SURPLUS-PAID-IN> 4,201,117 4,201,117
<RETAINED-EARNINGS> 2,042,902 2,042,902
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6,203,613 6,203,613
233,755 233,755
550,955 550,955
<LONG-TERM-DEBT-NET> 7,637,897 7,637,897
<SHORT-TERM-NOTES> 322,667 322,667
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 715,568 715,568
0 0
<CAPITAL-LEASE-OBLIGATIONS> 285,717 285,717
<LEASES-CURRENT> 150,799 150,799
<OTHER-ITEMS-CAPITAL-AND-LIAB> 7,941,066 7,941,066
<TOT-CAPITALIZATION-AND-LIAB> 23,249,253 23,249,253
<GROSS-OPERATING-REVENUE> 6,548,798 6,548,798
<INCOME-TAX-EXPENSE> 361,698 361,698
<OTHER-OPERATING-EXPENSES> 4,947,510 4,947,510
<TOTAL-OPERATING-EXPENSES> 5,309,208 5,309,208
<OPERATING-INCOME-LOSS> 1,239,590 1,239,590
<OTHER-INCOME-NET> (146,514) (146,514)
<INCOME-BEFORE-INTEREST-EXPEN> 1,093,076 1,093,076
<TOTAL-INTEREST-EXPENSE> 674,360 674,360
<NET-INCOME> 418,716 418,716
76,200 76,200
<EARNINGS-AVAILABLE-FOR-COMM> 342,516 342,516
<COMMON-STOCK-DIVIDENDS> 410,095 410,095
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 023
<NAME> ENTERGY POWER, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-3-1996 MAR-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 144,043 106,243
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 79,781 117,581
<TOTAL-DEFERRED-CHARGES> 2 2
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 223,826 223,826
<COMMON> 55 55
<CAPITAL-SURPLUS-PAID-IN> 249,950 249,950
<RETAINED-EARNINGS> (79,326) (79,326)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 173,679 173,679
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 50,147 50,147
<TOT-CAPITALIZATION-AND-LIAB> 223,826 223,826
<GROSS-OPERATING-REVENUE> 70,769 70,769
<INCOME-TAX-EXPENSE> (2,222) (2,222)
<OTHER-OPERATING-EXPENSES> 77,481 77,481
<TOTAL-OPERATING-EXPENSES> 75,259 75,259
<OPERATING-INCOME-LOSS> (4,490) (4,490)
<OTHER-INCOME-NET> 1,921 1,921
<INCOME-BEFORE-INTEREST-EXPEN> (2,569) (2,569)
<TOTAL-INTEREST-EXPENSE> 1,110 1,110
<NET-INCOME> (3,679) (3,679)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 0 0
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
