No. 70-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_________________________________
Form U-1
__________________________________
APPLICATION - DECLARATION
Under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_________________________________
System Fuels, Inc. Entergy Corporation
639 Loyola Avenue P.O. Box 61000
New Orleans, Louisiana 70113 New Orleans, Louisiana
70161
Entergy Arkansas, Inc. Entergy Louisiana, Inc.
(formerly Arkansas Power & Light (formerly Louisiana Power
Company) & Light Company)
P.O. Box 551 639 Loyola Avenue
Little Rock, Arkansas 72203 New Orleans, Louisiana 70113
Entergy Mississippi, Inc. Entergy New Orleans, Inc.
(formerly Mississippi Power & (formerly New Orleans
Light Company) Public Service Inc.)
P.O. Box 1640 639 Loyola Avenue
Jackson, Mississippi 39205 New Orleans, Louisiana 70113
Entergy Gulf States, Inc. Entergy Services, Inc.
(formerly Gulf States 639 Loyola Avenue
Utilities, Inc.) New Orleans, Louisiana 70113
350 Pine Street
Beaumont, Texas 77701
System Energy Resources, Inc.
Echelon One
1340 Echelon Parkway
Jackson, MS 39201
(Names of companies filing this statement and addresses
of principal executive offices)
<PAGE>
__________________________________
ENTERGY CORPORATION
(Name of top registered holding company
parent of each applicant or declarant)
_________________________________
Gerald D. McInvale
Vice Chairman and
Chief Financial Officer
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
(Name and address of agent for service)
_____________________________________
The Commission is also requested to send copies
of communications in connection with this matter to:
Laurence M. Hamric, Esq. Louis E. Buck
Mark W. Hoffman, Esq. Vice President and
Entergy Services, Inc. Chief Accounting Officer
639 Loyola Avenue Entergy Corporation
New Orleans, Louisiana 70113 639 Loyola Avenue
(504) 576-2095 New Orleans, Louisiana 70113
(504) 576-4888
<PAGE>
Item 1. Description of Proposed Transactions.
I. Introduction
Entergy Corporation ("Entergy"), a registered holding
company under the Public Utility Holding Company Act of 1935, as
amended (the "Act"), its subsidiary electric utility operating
companies, consisting of Entergy Arkansas, Inc. ("Entergy
Arkansas"), Entergy Gulf States, Inc. ("Entergy Gulf States"),
Entergy Louisiana, Inc. ("Entergy Louisiana"), Entergy
Mississippi, Inc. ("Entergy Mississippi"), and Entergy New
Orleans, Inc. ("Entergy New Orleans") (such companies are
sometimes referred to herein, collectively, as the "System
operating companies"), Entergy Services, Inc. ("ESI"), Entergy's
subsidiary service company, System Energy Resources, Inc.
("SERI"), a domestic wholesale electric generating company that
sells power at wholesale to the System operating companies (other
than Entergy Gulf States), and System Fuels, Inc. ("SFI"), the
Entergy System's fuel procurement subsidiary, hereby request the
approval of the Securities and Exchange Commission (the
"Commission") under the Act (except as otherwise authorized by
applicable exemption) for (1) the System operating companies to
sell to SFI certain equipment and materials that are held for
future use by the operating companies in connection with their
transmission and distribution operations (the "T&D Materials")
and which are currently in inventory; (2) SFI to thereafter act
as the T&D Materials procurement organization for the System
operating companies; (3) ESI to provide central warehousing
services for such T&D Materials on behalf of the System operating
companies; (4) SFI to provide fuel procurement services (as well
as T&D Materials procurement services) to Entergy Gulf States to
the same extent as the other System operating companies; (5)
Entergy Gulf States to acquire an equity interest in SFI, and
assume a share of the debt financing for SFI, in proportion to
the other System operating companies' investments in SFI; and (6)
the System operating companies and SERI to issue guaranties and
provide other forms of credit support to or for the benefit of
SFI during the period through December 31, 2002 in an aggregate
amount not to exceed $95 million outstanding at any one time.
II. Background
Pursuant to Commission authorization (See HCAR No. 17400 in
File No. 70-5015, dated December 17, 1971), SFI was organized on
January 4, 1972 as the jointly-owned non-utility subsidiary of
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and
Entergy New Orleans, then constituting all of the electric
utility operating companies within the Entergy System
(collectively referred to herein as the "Original Operating
Companies"). The basic functions of SFI were to discover,
acquire and develop fuel reserves, as well as procure/produce,
process, store and transport fuel for the Original Operating
Companies, each of which became an owner of SFI and assumed a
proportionate share of the responsibility for financing SFI's
operations, as more fully described in the above referenced
December 17, 1971 order and the Application-Declaration, as
amended, relating thereto. Entergy's intent in forming SFI was
to enable the System to obtain (i) greater control over its fuel
sources by engaging in fuel exploration, production and delivery
programs as a supplement to fuel purchases, and (ii) more
economical fuel supply arrangements by having the responsibility
for fuel supplies shared by the operating companies through the
medium of a single centralized procurement entity.
By order of the Commission dated April 28, 1978 in File No.
70-5889 (HCAR No. 20525), SFI was authorized to extend its fuel
procurement programs from fossil to nuclear fuel in order to
accommodate the System's increased commitment to nuclear power.
Since that time, nuclear fuel procurement has become a major
component of SFI's overall fuel procurement activities. In
connection with its nuclear fuel procurement program, SFI
contracts for the acquisition, conversion and enrichment of those
nuclear materials that are required for the fabrication of
nuclear fuel used at the nuclear units of the Original Operating
Companies<FN1> and SERI. Specifically, SFI (i) procures U3O8
concentrates or "yellowcake" produced by the mining and milling
of uranium ore, (ii) contracts to have such U3O8 converted to
gaseous form as UF6, and then (iii) contracts to have the UF6
enriched (sometimes these steps may be combined in a single
procurement). The enriched UF6 is then shipped to a nuclear
fuel fabrication facility where it is changed into UO2, made into
pellets and inserted into rods for fuel assemblies which are
designed for use in specific nuclear units. SFI is responsible
for the procurement and maintenance of nuclear fuel related
supplies and inventories through the enriched UF6 stage. Entergy
Arkansas, Entergy Louisiana and SERI contract for the fabrication
of their own nuclear fuel and purchase from SFI the required
enriched UF6. SFI thereafter arranges for spent fuel disposal
services that are provided by the Department of Energy. All sales
of nuclear fuel related components and related services by SFI to
the operating companies are made at cost, in accordance with
Section 13(b) of the Act and applicable rules and regulations
issued thereunder.
Although the authorized functions of SFI include acquiring
and developing fuel reserves and acquiring or operating
facilities necessary to produce, process, receive, store and
transport fuels, as well as purchasing and reselling fuels
(including fuel oil, natural gas, coal and nuclear fuel) for the
benefit of the Original Operating Companies, certain of these
functions have either been curtailed or eliminated over the
years. For example, during the period from 1983 to 1985, SFI
phased out its oil and gas and uranium exploration programs when
it became apparent that these activities were not contributing to
the attainment of SFI's original stated objectives. On July 1,
1996, SFI's remaining interests in oil and gas production
properties were sold to a non-affiliated third party. In 1986,
SFI also discontinued its natural gas procurement and resale
program since natural gas purchases could be made on equally
attractive terms by the operating companies directly. Similarly,
the diminished importance of fuel oil as a generating fuel, and
the corresponding reduced need to move fuel oil among System
locations, led SFI to transfer its fuel oil transportation
facilities to a third party in April, 1989. Finally, in 1992, as
a result of management's decision not to implement an earlier
proposal to construct a number of standardized coal fired
generating facilities throughout the System, SFI's coal
operations and related transportation facilities were transferred
to Entergy Arkansas (see HCAR No. 25576, dated July 7, 1992, in
File No. 70-8001, and the Application-Declaration related
thereto). By reason of the foregoing, SFI is today engaged
only in sales of fuel oil and nuclear fuel related products and
services. In addition, SFI continues to lease certain facilities
used for the storage of fuel oil.
Pursuant to Commission order dated December 17, 1993 in
File No. 70-8059 (HCAR No. 25952), Entergy and Entergy Gulf
States were merged on December 31, 1993 and Entergy Gulf States
became a wholly owned subsidiary of Entergy. At the time of the
merger, Entergy Gulf States had ample supplies of fuel oil, as
well as nuclear fuel related products and services, in inventory
or under contract. Therefore, there was little incentive for
Entergy Gulf States to acquire an interest in SFI or become a
participant in SFI's remaining fuel procurement programs.
Although Entergy Gulf States continues to maintain adequate fuel
supplies to satisfy its immediate needs, Entergy Gulf States can
obtain benefits by participating, together with the other System
operating companies, in the centralized fuel oil and nuclear fuel
procurement programs offered by SFI at such time as Entergy Gulf
States' current commitments and obligations have expired. In
addition, Entergy believes that Entergy Gulf States, as well as
the other System operating companies, can achieve substantial
cost reductions and economies through implementation of an
expanded SFI procurement function that encompasses the purchase
and resale of T&D Materials on a System-wide basis.
III. Authorizations Requested
A. Implementation of Transmission and Distribution
Materials Procurement
Program
Authorization is hereby requested for SFI to expand its
procurement function to include the purchase of T&D Materials for
resale at cost to the System operating companies. Presently,
transmission and distribution materials requirements for the
System's five utility operating companies are largely satisfied
through the use of four large central warehousing facilities or
Material Distribution Centers ("MDCs") owned by Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy Gulf States,
and located in Little Rock, Arkansas; Gretna, Louisiana; Jackson,
Mississippi; and Beaumont, Texas, respectively.<FN2> The MDCs
provide equipment and materials to operating company local
storerooms/crew centers (the "crew centers") from which they are
trucked to specific job sites. The inventory located at each MDC
and crew center is owned by the operating company that owns or
leases the applicable facility, and facility operations are
conducted by that operating company's employees (with the
exception of certain management personnel who are provided by ESI
at cost).
Although each MDC is principally dedicated to serving the
T&D Materials needs of the operating company controlling that
facility, transfers of T&D Materials among the System's operating
companies have increased over the past several years. These
transfers have resulted in cost savings on a System-wide basis by
permitting some reduction in the level of T&D Materials
inventories that would otherwise be maintained by each of the
operating companies. Entergy has determined that substantial
additional operating efficiencies and cost reductions can be
achieved by implementing a System-wide consolidation of T&D
Materials inventories and centralization of related warehouse
operations. Accordingly, it is proposed that SFI assume the role
of the System's T&D Materials supplier and that ESI acquire and
operate the warehousing facilities that will be used to store
these materials prior to resale to the operating companies.
Specifically, T&D Materials will be provided to the System
operating companies by SFI and, pending delivery, will be stored
by ESI utilizing a configuration of two strategically located
MDCs, rather than the four MDCs currently being operated within
the Entergy System. Of the existing MDCs, only the Little Rock,
Arkansas MDC will be retained by ESI for use as a central
warehousing facility. The lease for the Little Rock facility, as
well as leases applicable to related warehousing equipment, which
are currently held by Entergy Arkansas, will be assigned to ESI.
The Little Rock MDC will be used to serve the northern region of
the Entergy System, including the entire service territory of
Entergy Arkansas and the northern portions of the service
territories of Entergy Louisiana and Entergy Mississippi. ESI
will also lease a new MDC to be located in or near Hammond,
Louisiana. This warehouse facility will serve the southern
region of the Entergy System, including the entire service
territories of Entergy Gulf States and Entergy New Orleans and
the southern portions of the service territories of Entergy
Louisiana and Entergy Mississippi. The MDCs located in Gretna,
Jackson and Beaumont will be converted to crew centers and these
facilities, as well as other existing crew centers, will remain
under the control of the System operating companies.
Given the strategic location of the new ESI operated MDCs,
use of these MDCs to supply the System's T&D Materials
requirements will permit more efficient restocking of the crew
centers and thereby allow crew center inventory levels to be
substantially reduced with resulting cost savings. However, the
System operating companies will maintain inventory levels at the
crew centers that are sufficient to handle "lights out"
emergencies. In addition to supplying the crew centers with
emergency stock inventory, the MDCs will also provide "kitted"
materials (i.e., prepackaged materials necessary to complete a
particular job) directly to the crew center or job site. Use of
"kitted" materials will simplify the materials distribution
process and generate cost savings by eliminating multiple
handling of materials and allowing further inventory reductions.
It is proposed that operation and management of the MDCs be
performed by ESI. Therefore, the existing Service Agreement
between ESI and each of the System operating companies will be
amended to provide for the performance of these services and the
allocation of related costs. SFI will acquire and own the T&D
Materials inventory that will be stored at the MDCs. T&D
Materials from this inventory will be resold by SFI to the System
operating companies at the time that such materials are delivered
to the applicable operating company crew centers or job sites
(see form of T&D Materials Supply Agreement attached as Exhibit B-
1 hereto)<FN3>. The use of SFI as the System's T&D Materials
distributor will enable the separate inventories of the System
operating companies to be effectively "pooled", thereby
materially reducing the overall level of T&D Materials
inventories<FN4> and eliminating the need for large scale transfer of
such materials among the operating companies. At the same time,
ESI's assumption of the role of warehouse service provider will
permit related warehousing services to be provided by a single
entity on a System-wide basis.
SFI will essentially become a wholesaler of T&D Materials
to be used by all the System operating companies. The operating
companies will pay for these materials on an "at cost" basis,
calculated at System average unit price, and will be charged only
for materials actually delivered from the MDCs to the crew
centers or job sites. Invoices for such materials will be
prepared and submitted to the operating companies by SFI on a
monthly basis for materials delivered during the preceding month.
In addition, consistent with past practice, the T&D Materials
inventory program will be allocated a share of SFI's general
expenses, based on the weighted average value of the T&D
Materials inventory relative to the weighted average value of
SFI's fuel oil and nuclear fuels inventories. These costs will
similarly be billed to the System operating companies on a
monthly basis, in proportion to the dollar value of T&D Materials
delivered to each operating company during the preceding twelve
month period ending September 30. Allocation ratios will be
recalculated annually, put in effect the next succeeding January
1st, and remain in place for a full calendar year<FN5>.
It is not currently contemplated that SFI will engage in
the sale of T&D Materials to persons other than the System
operating companies, except in cases of emergency or in those
instances when, due to unforeseen circumstances, inventory
becomes unusable by the System operating companies or inventory
levels are substantially in excess of System requirements. Any
transactions with non-affiliates will be made at current market
prices or at prices determined through arms length bargaining and
any profits resulting therefrom will be applied to the reduction
of the cost of T&D Materials sold by SFI to the System operating
companies.
The System operating companies will also be billed by ESI
on a monthly basis for costs incurred by ESI in connection with
the operation of the MDCs. Such costs will include facility
lease charges, labor costs, interest expense on borrowed funds
and other expenses directly attributable to the services that
will be provided by ESI. In addition, the System operating
companies will be billed for indirect departmental costs. New
billing methods, based on the weighted average value of materials
delivered to each operating company from each MDC facility during
the preceding twelve month period ending September 30, will be
used to allocate these costs (See Supplement to Exhibit II of
proposed form of ESI-System Operating Company Service Agreement,
as amended, which is attached as Exhibit B-2 hereto). As in the
case of SFI's general expenses, applicable allocation ratios will
be recalculated annually and will become effective the next
succeeding January 1st.<FN6>
Implementation of the proposed T&D Materials Program will
be "phased-in" over time. SFI will initially acquire all of
Entergy Arkansas' T&D Materials inventory located at the Little
Rock MDC. With respect to T&D Materials stored at the crew
centers (including the Gretna, Jackson and Beaumont MDCs that are
proposed to be converted to crew centers), to the extent
practicable, each operating company will first exhaust its
current materials inventory, exclusive of emergency stock
materials. Any inventory remaining at the crew centers will
then be purchased by SFI. All such purchases will be made at
book value (including any transaction based taxes and material
handling costs), and SFI's total cost associated with these
transactions will be approximately $32 million.
SFI proposes to obtain the necessary funding for this
program start-up expense through internal and/or external
borrowings. Pursuant to order of the Commission dated November
27, 1996 (the "Money Pool Order"), in File No. 70-8899 (HCAR No.
26617), SFI is authorized through November 30, 2001 to borrow
from the Entergy System Money Pool (the "Money Pool"), from
Entergy and/or from commercial banks up to an aggregate amount of
$95 million at any one time outstanding. As of June 30, 1997,
the total amount of borrowings outstanding under these
arrangements was $45.5 million. SFI anticipates at this time
that the borrowing authority remaining under the above referenced
Money Pool Order will be adequate to satisfy SFI's initial T&D
Materials inventory program expenses. Furthermore, as T&D
Materials are sold by SFI to the System operating companies, the
proceeds of such sales will provide SFI with the necessary funds
to permit the recovery of T&D Materials program expenses on an
ongoing basis.
ESI will also require funding to make necessary facility
improvements to the Hammond MDC, to purchase equipment required
for use at that facility, and to cover other start-up expenses
associated with the operation of both MDCs. These expenses are
expected in the aggregate to total approximately $1.1 million.
As in the case of SFI, the funding for these expenses will be
obtained by ESI through internal/external borrowings authorized
under the above referenced Money Pool Order<FN7> and will be
recovered from the System operating companies as a component of
ESI's cost of service billings.
In summary, the proposed T&D Materials procurement program
will generate substantial economies for all of the System
operating companies (including Entergy Gulf States).
Implementation of the proposal is expected to reduce System-wide
inventory levels from approximately $58 million at year end 1996
to approximately $41 million at year end 1999, when the program
is fully "phased in." Additional cost savings will be created as
a result of corresponding carrying cost reductions and lowered
manpower requirements attributable to the MDC consolidation and
the reduced role of the local crew centers (which, in the future,
will be used only for the storage of emergency stock). Attached
hereto as Exhibit I are two tables demonstrating the projected
System-wide impact, by operating company, that is expected to be
achieved by adoption of the T&D Materials procurement program.
B. Expansion of SFI's Fuel Procurement Programs to Include
Entergy Gulf States
As discussed above, at the time of SFI's organization
in 1972, the Entergy System operating companies consisted of
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and
Entergy New Orleans, each of which became a parent company of SFI
and participated as a customer in SFI's various fuel procurement
programs. Entergy Gulf States did not join the Entergy System
until December 31, 1993. Given the reduced scope of SFI's fuel
procurement programs by the time of the merger and the fact that
Entergy Gulf States had then already accumulated inventory or
contracted for sufficient quantities of fuel oil and nuclear fuel
related products and services to meet its near term requirements,
there was no immediate need for Entergy Gulf States to invest in
SFI or become involved in its operations. However, in light of
the benefits to Entergy Gulf States that would ultimately accrue
from its participation in SFI's fuel procurement functions, as
well as the substantial economies that each of the System
operating companies (including Entergy Gulf States) is expected
to derive through implementation of the new T&D Materials
inventory program, management believes it is now appropriate that
Entergy Gulf States participate in SFI's System-wide procurement
activities, and share in the economies arising therefrom, to the
same extent as the other System operating companies.<FN8>
Consistent with the foregoing, it is proposed that
Entergy Gulf States participate in SFI's fuel oil and nuclear
fuel programs, as well as the new T&D Materials inventory
program. With respect to the fuel oil program, however, it is
noted that Entergy Gulf States presently has under contract and
in inventory sufficient fuel oil to cover its anticipated
requirements through April, 1998. In addition, since consumption
of fuel oil is limited to emergency use situations when natural
gas becomes unavailable or to those rare situations when fuel oil
is more economical than gas to burn, it is not anticipated that
any fuel oil currently stored by Entergy Gulf States for use at
its generating facilities will have to be transferred to other
System operating companies. For these reasons, it is proposed
(a) that SFI defer purchase of any fuel oil supplies on behalf of
Entergy Gulf States until the second quarter of 1998 or such
time as Entergy Gulf States' current inventory and supply
commitments are exhausted, and (b) that Entergy Gulf States
retain ownership (or leasehold interests, where applicable) of
all storage, handling and other facilities that are used in
connection with its fuel oil operations, rather than transferring
such facilities to SFI. This is consistent with Entergy's
original expressed intent that SFI own only those physical
facilities which are more practical and economical for SFI to own
and operate on a System-wide basis. (See File No. 70-5015.)
Due to Entergy Gulf States' ownership of the River Bend
Steam Electric Generating Station ("River Bend"), Entergy Gulf
States is expected to realize significant benefits from SFI's
nuclear fuel procurement program. This program not only produces
cost savings for the System's nuclear operating companies through
increased market leverage, but also benefits these companies by
reducing inventory requirements and allowing the flexibility to
use inventory throughout the System on a "when and as needed"
basis. As in the case of the fuel oil program, however, Entergy
Gulf States currently has sufficient inventory and/or commitments
to meet its nuclear fuel cycle materials/services requirements
for the immediate future. Specifically, River Bend's current
uranium contracts and inventory will cover Entergy Gulf States'
U3O8 material needs until 1999 or 2000 (depending on whether new
commitments must be made before issuance of the order that is
requested in this File). Similarly, River Bend's existing
conversion and enrichment contracts and related inventories will
satisfy Entergy Gulf States' conversion and enrichment
requirements through approximately 2001-2002 and 1999-2000,
respectively. It is, therefore, anticipated that any
participation by Entergy Gulf States in SFI's nuclear fuel
procurement program will be deferred until at least 1999.
Because SFI will not begin supplying Entergy Gulf States'
fuel oil and nuclear fuel related needs until Entergy Gulf
States' current commitments and inventories are exhausted, SFI
will not have any immediate need to increase expenditures in
connection with Entergy Gulf States' proposed participation in
these programs. In fact, the addition of Entergy Gulf States to
SFI's fuel procurement programs is not expected to materially
increase SFI's financing requirements for at least 5 years, based
on current conditions and procurement plans.
C. Acquisition by Entergy Gulf States of SFI Common Stock
and Promissory
Note
SFI was organized in 1972 as the subsidiary of Entergy's
then existing operating companies, Entergy Arkansas, Entergy
Louisiana, Entergy Mississippi, and Entergy New Orleans. It was
intended that SFI would become the medium through which these
Original Operating Companies would share the financial
responsibility for fuel supplies on a System-wide basis (to the
extent that the cost of SFI's projects could not be financed
through external sources). By providing for the stock ownership
of SFI to be held by the Original Operating Companies, these
companies, and their respective regulators, were assured of the
ability (i) to maintain oversight over the nature and extent of
SFI's operations, as well as (ii) to share in any benefits which
might result from the operations of SFI.
Consistent with the foregoing, at the time of its
organization, SFI issued and sold a total of 200 shares of its
common stock to the Original Operating Companies for an aggregate
purchase price of $20,000. Each of the four operating companies
purchased shares of SFI's stock in accordance with its
Responsibility Ratio as determined under the System Agreement.<FN9>
Additionally, in accordance with the terms of the SEC's December
17, 1971 order (HCAR No. 17400) approving the creation of SFI,
the operating companies were authorized, from time to time
through 1973, to make loans to SFI for terms of not more than ten
(10) years, in an aggregate amount not to exceed $30 million at
any one time outstanding. Pursuant to the loan agreement between
SFI and the Original Operating Companies, each operating company
was required to provide that amount of each loan that would bear
the same proportion to the total amount of such loan as the
kilowatt-hour sales (exclusive of sales to other public
utilities) for the preceding calendar year of that operating
company would bear to the total kilowatt-hour sales of the
Entergy System during the same period.
Over the years, the Commission has, from time to time,
renewed and expanded the authority of the Original Operating
Companies to provide financing for SFI's operations. The
Commission's order dated December 23, 1982 (HCAR No. 22800) in
File No. 70-6097 is the last such order approving operating
company loans to SFI which are still outstanding. This order
authorized SFI to make additional borrowings from the Original
Operating Companies of up to $130,100,000 through December 31,
1983, and to convert existing borrowings outstanding in the
approximate amount of $101,000,000 into new loans under the
applicable loan agreement between SFI and the operating
companies<FN10>. Pursuant to the terms of the order and loan
agreement, all of these loans were required to be repaid on or
before December 31, 2008. As of the date of the filing of this
Application-Declaration, the aggregate amount of such loans
outstanding is $34 million.
As a result of the proposed SFI restructuring, it is
appropriate for Entergy Gulf States to assume a share of the
financial responsibility for SFI on the same proportionate basis
as the other System operating companies. Accordingly, it is
proposed that the System operating companies' existing ownership
interests in SFI be reapportioned in accordance with the
Responsibility Ratios of the operating companies as of December
31, 1996. Since the aggregate equity investment in SFI will be
maintained at the initial level of $20,000 and the number of
outstanding shares of SFI common stock will also remain fixed at
200 shares, this reallocation will be accomplished by (i) SFI
redeeming certain of its shares currently owned by each of the
Original Operating Companies, in conjunction with (ii) a
corresponding purchase by Entergy Gulf States of new SFI shares
(Attached hereto as Exhibit J is a table setting forth SFI's
current vs. proposed ownership structure). All such shares will
be redeemed or purchased at a price of $100 a share. Following
the implementation of the above referenced transactions, the
System operating companies proportionate ownership interests in
SFI (Entergy Arkansas - 35%, Entergy Louisiana - 33%, Entergy
Mississippi - 19%, and Entergy New Orleans - 13%) will be
reallocated as follows: Entergy Arkansas - 21%, Entergy Gulf
States - 33%, Entergy Louisiana - 28.%, Entergy Mississippi -
12%, and Entergy New Orleans 6%.
The outstanding amount of System operating company
loans to SFI (i.e., $34 million) will similarly be reapportioned
among the System operating companies (including Entergy Gulf
States) in accordance with past practice. Following this
reallocation, the outstanding amount of each operating company
loan will then bear the same proportion to the total amount of
all operating company loans as that company's kilowatt-hour sales
(exclusive of sales to public utilities) for the twelve months
ended December 31, 1996 bears to the total kilowatt-hour sales of
all of the operating companies for the same period. To
accomplish this reallocation, SFI will prepay a portion of the
outstanding loans of each of the Original Operating Companies and
Entergy Gulf States will concurrently loan funds to SFI as
necessary to satisfy its allocated share of the total financing
burden. The outstanding loan balances currently owed by SFI are
approximately: Entergy Arkansas - $11 million, Entergy Louisiana
- - $14.2 million, Entergy Mississippi - $5.5 million, and Entergy
New Orleans - $3.3 million. Following implementation of the
above described transactions, the outstanding loan balances will
be approximately as follows: Entergy Arkansas - $7.2 million,
Entergy Gulf States - $10.8 million, Entergy Louisiana - $10.3
million, Entergy Mississippi - $3.8 million, and Entergy New
Orleans -$1.9 million.
The terms and conditions applicable to Entergy Gulf
States' proposed loan to SFI will be identical to the other
outstanding operating company loans to SFI. Therefore, the 1983
Loan Agreement will be amended to include Entergy Gulf States as
a party (see Exhibit B-3 for a form of the amended Loan Agreement
(the "Loan Agreement")). In addition, Entergy Gulf States' loan
will be evidenced by a promissory note (see Exhibit B-4 for a
form of the note (the "Note")) which will be essentially
identical to the form of promissory note issued by SFI to each of
the other System operating companies and which will be payable by
SFI on or before the date by which the other operating company
loans are also required to be repaid. Except for the above
referenced Entergy Gulf States' loan, the Loan Agreement will not
provide for additional borrowings by SFI from any of the System
operating companies.
As is the case with respect to the other promissory
notes issued by SFI, the Note issued to Entergy Gulf States will
bear interest on the unpaid principal balance thereof, adjustable
monthly on the first day of each month at an annual rate for such
month equal to the annual rate of interest borne on the last day
of the preceding month by the short-term borrowings of the
lending company. If, on the last day of the month, Entergy Gulf
States, as the lending company, shall have short-term borrowings
bearing more than one rate of interest, the highest rate shall
apply. If, on the last day of any month, Entergy Gulf States
shall not have any short-term bank borrowings outstanding, the
prime commercial rate as reported in the Wall Street Journal on
such day shall apply. The Note will be prepayable in whole or in
part at any time without penalty. However, each prepayment of
the unpaid principal balance of the Note will be made by SFI on a
prorata basis in proportion to the prepayment of the outstanding
principal balance of the promissory notes issued to each of the
other System operating companies.
D. Financing of SFI's Fuel and T&D Materials Procurement
Programs; Issuance of Guaranties
As discussed in Section III B above, the addition of
Entergy Gulf States to SFI's fuel procurement programs is not
anticipated to increase SFI's financing requirements over the
near term. However, in connection with the implementation of
SFI's proposed T&D Materials inventory program, it will be
necessary for each of the System operating companies to sell a
portion of their existing T&D Materials central inventory
supplies to SFI. SFI's total cost of acquiring these inventories
is estimated at $31.8 million, consisting of Entergy Arkansas'
inventory valued at $11.5 million, Entergy Gulf States' inventory
valued at $5.9 million, Entergy Louisiana's inventory valued at
$8.3 million, Entergy Mississippi's inventory valued at
$6.0 million, and Entergy New Orleans' inventory valued at
$0.1 million. SFI intends to finance the acquisition of this
inventory, as well as other miscellaneous costs associated with
the implementation of the new T&D Materials procurement program,
through internal Entergy System loans and/or external bank
borrowings, consistent with existing Commission authorization.
In this connection, the Money Pool Order authorizes SFI
through November 30, 2001 to borrow and reborrow from Entergy,
from time to time, up to an aggregate amount of $95 million at
any one time outstanding, pursuant to (i) a Loan Agreement
between SFI and Entergy, dated as of March 21, 1994, as amended
by Amendment No. 1 to Loan Agreement dated as of November 30,
1996 ("ETR Loan Agreement"), (ii) a loan agreement or agreements
that SFI may enter with one or more banks, and (iii) unsecured
short-term borrowings through the Money Pool. In addition, SFI
currently has a $45 million Credit Agreement with the Yasuda
Trust & Banking Co., Ltd. that will expire on September 26, 1997,
and that is used exclusively to finance SFI's nuclear fuels
procurement program. Any borrowings that may be made under the
Yasuda Credit Agreement correspondingly reduce the amount of
borrowings that SFI is authorized to make under the ETR Loan
Agreement, the Money Pool and other external bank financings.
SFI believes that the $95 million aggregate borrowing
authorization incorporated in the Money Pool Order will be
sufficient to satisfy SFI's financing requirements through
November 30, 2001, despite the implementation of the T&D
Materials inventory program and the addition of Entergy Gulf
States as a participant in SFI's existing fuel procurement
programs.<FN11> However, it is anticipated that SFI may require
guaranties or other credit support arrangements in connection
with the conduct of its authorized business activities. Such
guaranties may be necessary (i) to satisfy the requirements of
banks or other lenders under financing documents or other
agreements to which SFI may become a participant, or (ii) to
provide assurances of payment or performance of other SFI
obligations to fuel or T&D Materials vendors or suppliers of
related services. Pursuant to the Money Pool Order, Entergy is
authorized through November 30, 2001 to guarantee bank loans for
SFI up to the $95 million aggregate authorized borrowing limit.
Nevertheless, this guaranty authority is expressly limited to
financing arrangements and does not apply to SFI's obligations in
connection with other authorized transactions. In addition, from
time to time, it may be preferable for SFI to obtain credit
support from its parent operating companies (and its affiliate
customer, SERI) as an inducement to banks or others to make
loans, rather than relying exclusively on Entergy guaranties.
For example, in connection with the above referenced
Yasuda agreement, SFI, the System nuclear operating companies
(other than Entergy Gulf States) and SERI sought and received
Commission authorization to extend credit support to SFI in order
to induce Yasuda to grant SFI a $45 million revolving line of
credit dedicated to the nuclear fuel procurement program.<FN12>
Specifically, Entergy Arkansas, Entergy Louisiana and SERI agreed
that in the event SFI failed to pay loans due and payable under
the Yasuda Credit Agreement, the operating companies and SERI
would collectively purchase the entire inventory of nuclear
materials from SFI and make payment directly to an account at
Yasuda pledged by SFI as security for the loans. The operating
companies and SERI would determine, at the time this purchase was
required, the percentage of the inventory that each of the
companies would be required to purchase. However, in the absence
of an agreement, Entergy Arkansas, Entergy Louisiana and SERI
would assume an equal share of the purchase obligation.
As indicated above, the Yasuda Credit Agreement will
expire on September 26, 1997. At this time, it is unclear
whether the agreement will be replaced with a new loan
arrangement offered by another bank or other financing entity or
whether any necessary funding for SFI's nuclear fuels procurement
program will be satisfied by borrowings under the ETR Loan
Agreement. However, in the event that external financing is
sought, it is likely that some form of credit support will be
required from the System nuclear operating companies and SERI.
Accordingly, authorization is requested for Entergy Arkansas,
Entergy Louisiana, Entergy Gulf States and SERI to provide
guaranties or enter into other credit support arrangements with
banks or financial institutions that may offer financing to SFI
in connection with SFI's nuclear fuel procurement program.<FN13>
Further, in the event that SFI otherwise requires guaranties or
credit support from the System operating companies (and SERI, if
applicable), whether in connection with its nuclear fuel
procurement program, its T&D Materials inventory program, its
fuel oil procurement program or any of its other authorized
activities, authorization is hereby requested for the operating
companies (and SERI, if applicable) which participate in and
benefit from such programs and activities to provide such
guaranties in accordance with their proportionate participation
in such programs, their respective ownership interests in SFI, or
other equitable allocation basis. Unless otherwise exempted, all
such guaranties shall be issued by the System operating companies
(and SERI) through December 31, 2002 and the aggregate amount
thereof at any one time outstanding (including any guaranties
issued by Entergy pursuant to the Money Pool Order) will not
exceed $95 million.
IV. Compliance with Rules 53 and 54
Entergy hereby represents 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
ESI will provide services in connection with the
preparation of this application and the consummation of the
transactions described herein. No other special and separable
fees, commissions or expenses are anticipated in connection with
the proposed transactions other than outside legal expenses of
SFI estimated not to exceed $5,000.
Item 3. Applicable Statutory Provisions
The Applicants believe that the proposed issuance by
SFI of shares of its common stock and the Note to Entergy Gulf
States, and the acquisition of such common stock and Note by
Entergy Gulf States, are subject to Sections 6(a), 7, 9(a), 10,
and 12(b) of the Act, and Rule 43 thereunder, except to the
extent such transactions may be exempt pursuant to Rule 52.
The Applicants believe that the proposed guaranty by
the System operating companies of indebtedness or other
obligations of SFI is subject to Sections 6(a), 7 and 12(b) of
the Act, and Rule 45 thereunder.
The Applicants believe that the proposed sales of T&D
Materials by the System operating companies to SFI are subject to
Section 13(b) of the Act and Rules 90 and 91 thereunder, and
exempt from Rule 86 by virtue of Rule 87(b)(1).
The Applicants believe that the proposed sales of fuel
oil, nuclear fuel related materials and services and T&D
Materials by SFI to Entergy Gulf States and the other System
operating companies, and the proposed rendering of warehousing
services by ESI to Entergy Gulf States and the other System
operating companies, are subject to Section 13(b) of the Act and
Rules 86, 87, 90 and 91 thereunder.
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 rules thereunder,
other than those specifically referred to above, request for such
authorization, approval or exemption is hereby made.
Item 4. Regulatory Approval
To the extent that state or local regulatory commission
approvals are required for any of the System Operating Companies
to guarantee indebtedness or other obligations of SFI, as
proposed herein, such authorization will be obtained prior to the
issuance of such guaranties. Except as provided above, no state
regulatory body or agency, other than the Commission, has
jurisdiction over the transactions proposed herein.
Item 5. Procedure
The Applicants request that the Commission issue its
order as soon as practicable, but in no event later than October
15, 1997. Applicants hereby (1) waive a recommended decision by
a hearing officer or any other responsible officer of the
Commission; (2) consent that the Division of Investment
Management may assist in the preparation of the Commission's
decision in this proceeding; and (3) request that there be no
waiting period between the date of issuance of the Commission's
Order and the date on which it is to become effective.
<PAGE>
Item 6. Exhibits and Financial Statements
(a)Exhibits
*A-1 Articles of Incorporation of SFI, as
executed January 3, 1972 (Filed as
Exhibit A-1 to Form U-1 in File No. 70- 5015)
*A-2 By-laws of SFI, as amended and restated
December 1, 1985 and currently in effect
(Filed as Exhibit to Form U5S for the
year ended December 31, 1985)
A-3 Form of Certificate of Common Stock of
SFI
**B-1 Proposed Form of T&D Materials Supply
Agreement between SFI and the System
operating companies.
**B-2 Proposed Form of Service Agreement, as
amended, between ESI and the System operating
companies.
**B-3 Proposed Form of Amended Loan
Agreement between SFI and the System
operating companies
**B-4 Proposed form of SFI Note to be issued
by SFI to Entergy Gulf States
**B-5 Proposed form of Amended Liquid Fuel
Purchase Contract between SFI and the
System operating companies
*B-6 Proposed form of Amended Nuclear Fuel
and Fuel Services Purchase Agreement between
SFI and the System operating companies
C. Not applicable
D. Not applicable
E. Not applicable
**F. Opinion(s) of Counsel
(a) Exhibits Continued
G. Financial Data Schedules
H. Proposed Form of Notice
I. T&D Materials Procurement Program Impact
- TABLES 1 and 2
J. System Fuels, Inc. - Current vs.
Proposed Ownership Structure
* Incorporated herein by reference as indicated.
** To be filed by amendment.
(b) Financial Statements
Financial Statements of Entergy and of
Entergy and subsidiaries, consolidated as of June 30,
1997, including pro forma journal entries.
Financial Statements of SFI, ESI, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana,
Entergy Mississippi, Entergy New Orleans and SERI as of
June 30, 1997, including pro forma journal entries.
Except as reflected in the Financial
Statements, no material changes not in the ordinary
course of business have taken place since June 30,
1997.
<PAGE>
Item 7. Information as to Environmental Effects
(a) The proposed transactions that are subject
to the jurisdiction of the Commission, as described in
Item 1, have no environmental effect in and of
themselves.
(b) Not applicable.
<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 CORPORATION
ENTERGY ARKANSAS, INC.
ENTERGY GULF STATES, INC.
ENTERGY LOUISIANA, INC.
ENTERGY MISSISSIPPI, INC.
ENTERGY NEW ORLEANS, INC. .
ENTERGY SERVICES, INC.
SYSTEM ENERGY RESOURCES, INC.
SYSTEM FUELS, INC.
By: /s/William J. Regan, Jr.
William J. Regan, Jr.
Vice President and Treasurer
Dated: September 2, 1997
_______________________________
<FN1> Among the Original Operating Companies, Entergy Arkansas and
Entergy Louisiana own nuclear generating units. Entergy Gulf
States also owns a nuclear generating unit. Entergy Arkansas,
Entergy Gulf States and Entergy Louisiana are collectively
referred to herein as the "System nuclear operating companies."
<FN2> The Entergy Louisiana MDC also supplies T&D Materials to
Entergy New Orleans. In addition, Entergy New Orleans maintains
3 separate warehouse facilities that are essentially operated as
local distribution centers or storerooms.
<FN3> As part of its MDC operation and management services, ESI
will arrange for delivery of the T&D Materials from the MDCs to
such crew centers or job sites.
<FN4> System-wide inventory levels are expected to be reduced from
approximately $58 million at year end 1996 to approximately $41
million at year end 1999.
<FN5> It is anticipated that the initial allocation of these costs
will be based on inventory usage for the twelve month period
ending September 30, 1997, as set forth in the accounting records
of the existing MDCs, and will apply from the date of program
implementation to the end of the first full calendar year of
operations.
<FN6> See footnote 5.
<FN7> Pursuant to the Money Pool Order, ESI is authorized through
November 30, 2001 to borrow from the Money Pool, from Entergy
and/or from commercial banks up to an aggregate amount of $150
million at any one time outstanding. Entergy notes, however,
that Rule 52 authorizes ESI (as well as SFI) to enter into
additional borrowing arrangements, provided that the proceeds of
such borrowings are used "solely for the purpose of financing"
the existing authorized business activities of the applicable
company and the other conditions of Rule 52 are satisfied. The
applicant's references herein to the Money Pool Order are,
therefore, not intended to waive the right of applicants to rely
on the financing exemptions set forth in Rule 52 (or other
applicable rule or regulation of the Commission, including Rule
45) to provide necessary funding to ESI or SFI in furtherance of
the authorized business activities of such companies.
<FN8> As indicated above, SFI is authorized by the Commission to
engage in the business of exploring for and developing fuel
reserves, as well as procuring, storing, and transporting fuel
for the System operating companies. Such fuels include natural
gas and coal, as well as fuel oil and nuclear fuel. While many
of these functions have, from time to time, been curtailed or
eliminated, SFI retains full authority to engage in any or all of
such activities in the future for all of the System operating
companies should a resumption of such activities be beneficial.
<FN9> Reference is made to the Agreement, dated April 23, 1982, among
Entergy Services, Inc. and the System operating companies,
relating to System planning and development and intra-System
transactions (filed as Exhibit 10(a)(1) to Entergy's Form 10-K
for the year ended December 31, 1982, in 1-3517).
<FN10>Amended Loan Agreement, dated as of January 1, 1983, among SFI
and the Original Operating Companies (the "1983 Loan Agreement").
<FN11>See footnote 7.
<FN12>Reference is made to File No. 70-7668 and the Commission's
orders with respect thereto, dated September 27, 1989 (HCAR No.
24957) and February 5, 1992 (HCAR No. 25467).
<FN13>Notwithstanding the above, Entergy Gulf States will not be
required to issue any such guaranties until such time as it
becomes an active participant in SFI's nuclear fuel procurement
program.
Exhibit A-3
Form of Certificate of Common Stock of SFI
Number Shares
SYSTEM FUELS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF LOUISIANA
COMMON STOCK, WITHOUT PAR VALUE
This Certifies That __________________________________________is the
owner of __________________________________________________shares
Fully-Paid and non-assessable shares of the common stock, without par value
of system fuels, inc. transferable or assignable on the books of the
Corporation in person or by duly authorized attorney only upon surrender
of this certificate properly endorsed. This certificate and the shares
represented hereby are issued subject to all provisions of the Articles
of Incorporation and By-Laws of the Corporation, as they hereafter may be
amended, and the resolutions of the Board of Directors, now or hereafter
adopted according to law.
witness the seal of this corporation and the signatures of its duly
authorized officers this ________day of _______________, 19___.
<PAGE>
Exhibit H
[Suggested Form of Notice]
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35 - _______________; 70-______________)
Entergy Corporation, et. al.
Notice of Proposal to Adopt Transmission & Distribution
Materials Procurement Program; to Enter into Certain
Affiliate Transactions, Including Issuance of Guaranties
Entergy Corporation, 639 Loyola Avenue, New Orleans,
Louisiana 70113 ("Entergy"), a registered holding company,
and its wholly-owned, subsidiary electric utility operating
companies, Entergy Arkansas, Inc. ("Entergy Arkansas"), 425
W. Capitol Avenue, Little Rock, Arkansas 72201, Entergy
Gulf States, Inc. ("Entergy Gulf States"), 350 Pine Street,
Beaumont, Texas 77701, Entergy Louisiana, Inc. ("Entergy
Louisiana"), 639 Loyola Avenue, New Orleans, Louisiana
70113, Entergy Mississippi, Inc. ("Entergy Mississippi"),
Electric Building, 308 East Pearl Street, Jackson,
Mississippi 39201, and Entergy New Orleans, Inc. ("Entergy
New Orleans"), 639 Loyola Avenue, New Orleans, Louisiana
70113, (collectively, the "System operating companies"), as
well as Entergy Services, Inc. ("ESI"), 639 Loyola Avenue,
New Orleans, Louisiana 70113, Entergy's subsidiary service
company, System Energy Resources, Inc. ("SERI"), Echelon
One, 1340 Echelon Parkway, Jackson, Mississippi 39213, a
domestic wholesale electric generating company subsidiary,
and System Fuels, Inc. ("SFI"), 639 Loyola Avenue, New
Orleans, Louisiana 70113, the System's fuel procurement
subsidiary, have filed an Application-Declaration under
Sections 6(a), 7, 9(a), 10, 12(b), 13(b) of the Act and
Rules 43, 45, 52, 86, 87, 90 and 91 thereunder.
Pursuant to Commission authorization (See HCAR No.
17400 in File No. 70-5015, dated December 17, 1971), SFI was
organized on January 4, 1972 as the jointly-owned non-
utility subsidiary of Entergy Arkansas, Entergy Louisiana,
Entergy Mississippi and Entergy New Orleans, then
constituting all of the electric utility operating companies
within the Entergy System (the "Original Operating
Companies"). The basic functions of SFI were to discover,
acquire and develop fuel reserves, as well as to
procure/produce, process, store and transport fuel for the
Original Operating Companies, each of which became an owner
of SFI and assumed a proportionate share of the
responsibility for financing SFI's operations. Entergy's
intent in forming SFI was to enable the System to obtain (i)
greater control over its fuel sources by engaging in fuel
exploration, production and delivery programs as a
supplement to purchases, and (ii) more economical fuel
supply arrangements by having the responsibility for fuel
supplies shared by the operating companies through the
medium of a single centralized procurement entity. By order
of the Commission dated April 28, 1978 in File No. 70-5889
(HCAR No. 20525), SFI was authorized to extend its fuel
procurement programs from fossil to nuclear fuel in order to
accommodate the System's increased commitment to nuclear
power.
Although the authorized functions of SFI include
acquiring and developing fuel reserves and acquiring or
operating facilities necessary to produce, process, receive,
store and transport fuels, as well as purchasing and
reselling fuels (including fuel oil, natural gas, coal and
nuclear fuel) for the benefit of the Original Operating
Companies, certain of these functions have either been
curtailed or eliminated over the years. By reason of the
foregoing, SFI is currently engaged only in sales of fuel
oil and nuclear fuel related products and services. In
addition, SFI continues to lease certain facilities used for
the storage of fuel oil.
Pursuant to Commission order dated December 17, 1993
in File No. 70-8059 (HCAR No. 25952), Entergy and Entergy
Gulf States were merged on December 31, 1993 and Entergy
Gulf States became a wholly owned subsidiary of Entergy. At
the time of the merger, Entergy Gulf States had ample
supplies of fuel oil, as well as nuclear fuel related
products and services, in inventory or under contract.
Therefore, there was little incentive for Entergy Gulf
States to acquire an interest in SFI or become a participant
in SFI's remaining fuel procurement programs. Although
Entergy Gulf States continues to maintain adequate fuel
supplies to satisfy its immediate needs, Entergy Gulf States
can obtain benefits by participating, together with the
other System operating companies, in the centralized fuel
oil and nuclear fuel procurement programs offered by SFI at
such time as Entergy Gulf States' current commitments and
obligations have expired. In addition, Entergy believes
that Entergy Gulf States, together with the other System
operating companies, can achieve substantial cost reductions
and economies through implementation of an expanded SFI
procurement function that encompasses the purchase and
resale, on a System-wide basis, of equipment and materials
for use by the System operating companies in connection with
their transmission and distribution operations (the "T&D
Materials").
Accordingly, Applicants now seek authorization for SFI
to expand its procurement function to include the purchase
of T&D Materials for resale at cost to the System operating
companies. Presently, transmission and distribution
materials requirements for the System's five utility
operating companies are largely satisfied through the use of
four large central warehousing facilities or Material
Distribution Centers ("MDCs") owned by Entergy Arkansas,
Entergy Louisiana, Entergy Mississippi and Entergy Gulf
States and located in Little Rock, Arkansas; Gretna,
Louisiana; Jackson, Mississippi; and Beaumont, Texas,
respectively.<FN1> The MDCs provide equipment and materials to
operating company local storerooms/crew centers (the "crew
centers") from which they are trucked to specific job sites.
Although each MDC is principally dedicated to serving the
T&D Materials needs of the operating company controlling
that facility, transfers of T&D Materials among the System's
operating companies have increased over the past several
years. These transfers have resulted in cost savings on a
System-wide basis by permitting some reduction in the level
of T&D Materials inventories that would otherwise be
maintained by each of the operating companies. Entergy has
determined that substantial additional operating
efficiencies and cost reductions can be achieved by
implementing a System-wide consolidation of T&D Materials
inventories and centralization of related warehouse
operations. It is, therefore, proposed that SFI assume the
role of the System's T&D Materials supplier and that ESI
acquire and operate the warehousing facilities that will be
used to store these materials prior to resale to the
operating companies.
Specifically, T&D Materials will be provided to the
System operating companies by SFI and, pending delivery,
will be stored by ESI utilizing a configuration of two
strategically located MDCs, rather than the four MDCs
currently being operated within the System. Of the existing
MDCs, only the Little Rock, Arkansas MDC will be retained by
ESI for use as a central warehousing facility. The lease for
the Little Rock facility, as well as leases pertaining to
related warehousing equipment, which are currently held by
Entergy Arkansas, will be assigned to ESI. The Little Rock
MDC will be used to serve the northern region of the Entergy
System, including the entire service territory of Entergy
Arkansas and the northern portions of the service
territories of Entergy Louisiana and Entergy Mississippi.
ESI will also lease a new MDC to be located in or near
Hammond, Louisiana. This warehouse facility will serve the
southern region of the Entergy System, including the entire
service territories of Entergy Gulf States and Entergy New
Orleans and the southern portions of the service territories
of Entergy Louisiana and Entergy Mississippi. The MDCs
located in Gretna, Jackson and Beaumont will be converted to
crew centers and these facilities, as well as other existing
crew centers, will remain under the control of the System
operating companies.
It is proposed that operation and management of the
MDCs be performed by ESI. Accordingly, the existing Service
Agreement between ESI and each of the System operating
companies will be amended to provide for the performance of
these services and the allocation of related costs. SFI
will acquire and own the T&D Materials inventory that will
be stored at the MDCs. T&D Materials from this inventory
will be resold by SFI to the System operating companies at
the time that such materials are delivered to the applicable
operating company crew centers or job sites. The use of
SFI as the System's T&D Materials distributor will enable
the separate inventories of the System operating companies
to be effectively "pooled", thereby materially reducing the
overall level of T&D Materials inventories<FN2> and eliminating
the need for large scale transfer of such materials among
the operating companies. At the same time, ESI's assumption
of the role of warehouse service provider will permit
related warehousing services to be provided by a single
entity on an System-wide basis.
SFI will essentially become a wholesaler of T&D
Materials to be used by all the System operating companies.
The operating companies will pay for these materials on an
"at cost" basis, calculated at System average unit price and
will be charged only for materials actually delivered from
the MDCs to the crew centers or job sites. Invoices for
such materials will be prepared and submitted to the
operating companies by SFI on a monthly basis for materials
delivered during the preceding month. In addition,
consistent with past practice, the T&D Materials inventory
program will be allocated a share of SFI's general expenses,
based on the weighted average value of the T&D Materials
inventory relative to the weighted average value of SFI's
fuel oil and nuclear fuels inventories. These costs will
similarly be billed at cost to the System operating
companies on a monthly basis, in proportion to the dollar
value of T&D Materials delivered to each operating company
during the preceding twelve month period ending September
30. Allocation ratios will be recalculated annually, put in
effect the next succeeding January 1st, and remain in place
for a full calendar year<FN3>.
It is not currently contemplated that SFI will engage
in the sale of T&D Materials to persons other than the
System operating companies, except in cases of emergency or
in those instances when, due to unforeseen circumstances,
inventory become unusable by the System operating companies
or inventory levels are substantially in excess of System
requirements. Any transactions with non-affiliates will be
made at current market prices or at prices determined
through arms' length bargaining and any profits resulting
therefrom will be applied to the reduction of the cost of
T&D Materials sold by SFI to the System operating companies.
The System operating companies will also be billed by
ESI on a monthly basis for costs incurred by ESI in
connection with the operation of the MDCs. Such costs will
include facility lease charges, labor costs, interest
expense on borrowed funds and other expenses directly
attributable to the services that will be provided by ESI.
In addition, the System operating companies will be billed
for indirect departmental costs. New billing methods, based
on the weighted average value of materials delivered to each
operating company from each MDC facility during the
preceding twelve months ending September 30, will be used to
allocate these costs. As in the case of SFI's general
expenses, applicable allocation ratios will be recalculated
annually and will become effective the next succeeding
January 1st.<FN4>
Implementation of the proposed T&D Materials Program
will be "phased-in" over time. SFI will initially acquire
all of Entergy Arkansas' T&D Materials inventory located at
the Little Rock MDC. With respect to T&D Materials stored
at the crew centers, to the extent practicable, each
operating company will first exhaust its current materials
inventory, exclusive of emergency stock materials. Any
inventory remaining at the crew centers will then be
purchased by SFI. All such purchases will be made at book
value (including any transaction based taxes and material
handling costs). SFI's total cost associated with these
transactions is estimated at $31.8 million, consisting of
Entergy Arkansas' inventory valued at $11.5 million, Entergy
Gulf States' inventory valued at $5.9 million, Entergy
Louisiana's inventory valued at $8.3 million, Entergy
Mississippi's inventory valued at $6.0 million, and Entergy
New Orleans' inventory valued at $0.1 million.
SFI proposes to obtain the necessary funding for this
program start-up expense through internal and/or external
borrowings. Pursuant to order of the Commission dated
November 27, 1996 (the "Money Pool Order"), in File No. 70-
8899 (HCAR No. 26617), SFI is authorized through November
30, 2001 to borrow from the Entergy System Money Pool (the
"Money Pool"), from Entergy and/or from commercial banks up
to an aggregate amount of $95 million at any one time
outstanding. As of June 30, 1997, the total amount of
borrowings outstanding under these arrangements was $45.5
million. SFI anticipates at this time that the borrowing
authority remaining under the above referenced Money Pool
Order will be adequate to satisfy SFI's initial T&D
Materials inventory program expenses. Furthermore, as T&D
Materials are sold by SFI to the System operating companies,
the proceeds of such sales will provide SFI with the
necessary funds to permit recovery of T&D Materials program
expenses on an ongoing basis.
ESI will also require funding to make facility
improvements to the Hammond MDC, to purchase equipment
required for use at that facility, and to cover other start-
up expenses associated with the operation of both MDCs.
These expenses are expected in the aggregate to total
approximately $1.1 million. As in the case of SFI, the
funding for these expenses will be obtained by ESI through
internal/external borrowings authorized under the above
referenced Money Pool Order<FN5> and will be recovered from the
System operating companies as a component of ESI's cost of
service billings.
Given the benefits to Entergy Gulf States that would
ultimately accrue from its participation in SFI's various
fuel procurement programs, it is also proposed that Entergy
Gulf States become a participant in SFI's fuel oil and
nuclear fuel procurement programs (as well as the new T&D
Materials inventory program) to the same extent as the other
System operating companies. With respect to the fuel oil
program, however, it is noted that Entergy Gulf States
presently has under contract and in inventory sufficient
fuel oil to cover its anticipated requirements through
April, 1998. In addition, since consumption of fuel oil is
limited to emergency use situations when natural gas becomes
unavailable or to those rare situations when fuel oil is
more economical than gas to burn, it is not anticipated that
any fuel oil currently stored by Entergy Gulf States for use
at its generating facilities will have to be transferred to
other System operating companies. For these reasons, it is
proposed (a) that SFI defer purchase of any fuel oil
supplies on behalf of Entergy Gulf States until the second
quarter of 1998 or such time as Entergy Gulf States' current
inventory and supply commitments are exhausted, and (b) that
Entergy Gulf States retain ownership (or leasehold
interests, where applicable) of storage, handling and other
facilities used in connection with its fuel oil operations,
rather than transferring such facilities to SFI. This is
consistent with Entergy's original expressed intent that SFI
own only those physical facilities which are more practical
and economical for SFI to own and operate on a System-wide
basis. (See File No. 70-5015.)
Due to Entergy Gulf States' ownership of the River Bend
Steam Electric Generating Station ("River Bend"), Entergy
Gulf States is expected to realize significant benefits from
SFI's nuclear fuel procurement program. As in the case of
the fuel oil program, however, Entergy Gulf States currently
has sufficient inventory and/or commitments to meet its
nuclear fuel cycle materials/services requirements for the
immediate future. Specifically, River Bend's current
uranium contracts and inventory will cover Entergy Gulf
States' U3O8 material needs until 1999 or 2000 (depending on
whether new commitments must be made before issuance of the
order that is requested in this File). Similarly, River
Bend's existing conversion and enrichment contracts and
related inventories will satisfy Entergy Gulf States'
conversion and enrichment requirements through approximately
2001-2002 and 1999-2000, respectively. It is, therefore,
anticipated that any participation by Entergy Gulf States in
SFI's nuclear fuel procurement program will be deferred
until at least 1999.
Because SFI will not begin supplying Entergy Gulf
States' fuel oil and nuclear fuel related needs until
Entergy Gulf States' current commitments and inventories are
exhausted, SFI will not have any immediate need to increase
expenditures in connection with Entergy Gulf States'
proposed participation in these programs. However, as a
result of the proposed SFI restructuring, it is appropriate
for Entergy Gulf States to assume a share of the financial
responsibility for SFI on the same proportionate basis as
the other System operating companies. Accordingly, it is
proposed that the System operating companies' existing
ownership interests in SFI be reapportioned in accordance
with the Responsibility Ratios of the operating companies as
of December 31, 1996 (i.e., the same basis that was used to
determine the initial equity investments of the Original
Operating Companies in SFI).<FN6> Since the aggregate equity
investment in SFI will be maintained at the initial level of
$20,000 and the number of outstanding shares of SFI common
stock will also remain fixed at 200 shares, this
reallocation will be accomplished by (i) SFI redeeming
certain of its shares currently owned by each of the
Original Operating Companies, in conjunction with (ii) a
corresponding purchase by Entergy Gulf States of new SFI
shares. All such shares will be redeemed or purchased at a
price of $100 a share. Following the implementation of the
above referenced transactions, the System operating
companies proportionate ownership interests in SFI (Entergy
Arkansas - 35%, Entergy Louisiana - 33%, Entergy Mississippi
- - 19%, and Entergy New Orleans - 13%) will be reallocated as
follows: Entergy Arkansas - 21%, Entergy Gulf States - 33%,
Entergy Louisiana - 28%, Entergy Mississippi - 12%, and
Entergy New Orleans 6%.
The outstanding amount of operating company loans to
SFI (i.e., $34 million) under a 1983 loan agreement between
SFI and the Original Operating Companies,<FN7> will similarly be
reapportioned among the System operating companies
(including Entergy Gulf States) in accordance with past
practice. Following this reallocation, the outstanding
amount of each operating company loan will bear the same
proportion to the total amount of all operating company
loans as that company's kilowatt-hour sales (exclusive of
sales to other public utilities) for the calendar year ended
December 31, 1996 bears to the total kilowatt-hour sales of
all of the operating companies for the same period (i.e.,
the same basis used to allocate the outstanding loans to SFI
by the Original Operating Companies). To accomplish this
reallocation, SFI will prepay a portion of the outstanding
loans of each of the Original Operating Companies and
Entergy Gulf States will concurrently loan funds to SFI as
necessary to satisfy its allocated share of the total
financing burden. The outstanding loan balances currently
owed by SFI are approximately: Entergy Arkansas - $11
million, Entergy Louisiana - $14.2 million, Entergy
Mississippi - $5.5 million, and Entergy New Orleans - $3.3
million. Following implementation of the above described
transactions, the outstanding loan balances will be as
follows: Entergy Arkansas - $7.2 million, Entergy Gulf
States - $10.8 million, Entergy Louisiana - $10.3 million,
Entergy Mississippi - $3.8 million, and Entergy New Orleans
- -$1.9 million.
The terms and conditions applicable to Entergy Gulf
States' proposed loan to SFI will be identical to the other
outstanding operating company loans to SFI. Therefore, the
1983 Loan Agreement will be amended to include Entergy Gulf
States as a party. In addition, Entergy Gulf States' loan
will be evidenced by a promissory note which will be
essentially identical to the form of promissory note issued
by SFI to each of the other System operating companies and
which will be payable by SFI on or before the date by which
the other operating company loans are also required to be
repaid. Except for the Entergy Gulf States' loan, the
amended Loan Agreement will not provide for any additional
borrowings by SFI from any of the System operating
companies.
SFI believes that the $95 million aggregate borrowing
authorization under the Money Pool Order will be adequate to
satisfy its financing requirements through November 30,
2001, despite the implementation of the T&D Materials
inventory program and the addition of Entergy Gulf States as
a participant in SFI's existing fuel procurement programs.<FN8>
However, it is anticipated that SFI may also require
guaranties or other credit support arrangements in
connection with the conduct of its authorized business
activities. Such guaranties may be necessary (i) to satisfy
the requirements of banks or other lenders under financing
documents or other agreements to which SFI may become a
participant, or (ii) to provide assurances of payment or
performance of other SFI obligations to fuel or T&D
Materials vendors or suppliers of related services. Pursuant
to the Money Pool Order, Entergy is authorized through
November 30, 2001 to guarantee bank loans for SFI up to the
$95 million aggregate authorized borrowing limit.
Nevertheless, this guaranty authority is expressly limited
to financing arrangements and does not apply to SFI's
obligations in connection with other authorized
transactions. In addition, from time to time, it may be
preferable for SFI to obtain credit support from its parent
operating companies (and its affiliate customer, SERI) as an
inducement to banks or others to make loans, rather than
relying exclusively on Entergy guaranties.
Accordingly, in the event that SFI requires guaranties
or other credit support from the System operating companies
(and SERI, if applicable), whether in connection with its
nuclear fuel procurement program, its T&D Materials
inventory program, its fuel oil procurement program or any
of its other authorized activities, Entergy requests
authorization for the operating companies (and SERI, if
applicable) which participate in and benefit from such
programs and activities to provide such guaranties in
accordance with their proportionate participation in such
programs, their respective ownership interests in SFI, or
other equitable allocation basis. Unless otherwise
exempted, all such guaranties shall be issued by the System
operating companies (and SERI) through December 31, 2002 and
the aggregate amount thereof at any one time outstanding
(including any guaranties issued by Entergy for SFI's
benefit pursuant to the Money Pool Order ) will not exceed
$95 million.
The application-declaration and any amendments thereto
are available for 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 by _____________________ to the Secretary,
Securities and Exchange Commission, Washington, D. C. 20549,
and serve a copy on the applicant-declarant at the address
specified above. Proof of service (by affidavit or, in case
of any 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 application-
declaration, as filed or as it may be amended, may be
granted and/or permitted to become effective.
Jonathan G. Katz
Secretary
_______________________________
<FN1> The Entergy Louisiana MDC also supplies T&D Materials to
Entergy New Orleans. In addition, Entergy New Orleans
maintains 3 separate warehouse facilities that are
essentially operated as local distribution centers or
storerooms.
<FN2> System-wide inventory levels are expected to be reduced
from approximately $58 million at year end 1996 to
approximately $41 million at year end 1999.
<FN3> It is anticipated that the initial allocation of costs
will be based on inventory usage for the twelve month period
ending September 30, 1997, as set forth in the accounting
records of the existing MDCs, and will apply from the date
of program implementation to the end of the first full
calendar year of operations.
<FN4> See footnote 3.
<FN5> Pursuant to the Money Pool Order, ESI is authorized
through November 30, 2001 to borrow from the Money Pool,
from Entergy and/or from commercial banks up to an aggregate
amount of $150 million at any one time outstanding. Entergy
notes, however, that Rule 52 authorizes ESI (as well as SFI)
to enter into additional borrowing arrangements, provided
that the proceeds of such borrowings are used "solely for
the purpose of financing" the existing authorized business
activities of the applicable company and the other
conditions of Rule 52 are satisfied. The applicant's
references herein to the Money Pool Order are, therefore,
not intended to waive the right of applicants to rely on
the financing exemptions set forth in Rule 52 (or other
applicable rule or regulation of the Commission, including
Rule 45) to provide necessary funding to ESI or SFI in
furtherance of the authorized business activities of such
companies.
<FN6> The Responsibility Ratio is defined in the Agreement dated
April 23, 1982, among Entergy Services, Inc. and the System
operating companies, relating to System planning and
development and intra-System transactions (filed as Exhibit
10(a)(1) to Entergy's Form 10-K for the year ended December
31, 1982, in 1-3517).
<FN7> Amended Loan Agreement, dated as of January 1, 1983,
among SFI and the Original Operating Companies (the "1983
Loan Agreement").
<FN8> See fn. 5.
Exhibit I
T&D Materials Procurement Program Impact
TABLE 1 - Impact of Inventory Reductions
Operating Company Warehouse Consolidation Impact - (000s)
<TABLE>
<CAPTION>
SFI ESI Entergy- Entergy- Entergy- Entergy-Entergy- Total
AR LA NO MS GS
<S> <C> <C> <C> <C> <C> <C> <C>
INVENTORY
- - $
Current
MDC $10,619 $9,318 $0 $5,745 $5,844 $31,526
Crew $4,824 $5,543 $7,607 $3,232 $5,229 $26,435
Center
-----------------------------------------------------------------
total $0 $15,443 $14,861 $7,607 $8,977 $11,073 $57,961
-----------------------------------------------------------------
Proposed
MDC $27,774 $27,774
Crew $3,452 $3,977 $2,263 $1,484 $2,308 $13,484
Center
---------------------------------------------------------------------
total $27,774 $3,452 $3,977 $2,263 $1,484 $2,308 $41,258
---------------------------------------------------------------------
Total (1) $27,774 ($11,991) ($10,884) ($5,344) ($7,493) ($8,765) ($16,703)
=====================================================================
CARRYING
CHARGES -
$
Current 0 $1,421 $1,367 $700 $826 $1,019 $5,332
Proposed $2,555 $318 $366 $208 $137 $212 $3,796
---------------------------------------------------------------------
Total (2) $2,555 ($1,103) ($1,001) ($492) ($689) ($806) ($1,537)
=====================================================================
NOTES:
(1) These are projected inventory cost reductions expected to be achieved no later
than year end 1999.
(2) Annual carrying charges reductions, estimated at 9.2% simple interest, to be
achieved subsequent to full implementation of inventory reductions.
</TABLE>
Exhibit I - Continued
T&D Materials Procurement Program Impact
TABLE 2 - Impact of Manpower Reductions
Operating Company Warehouse Consolidation Impact - (000's)
<TABLE>
<CAPTION>
SFI ESI Entergy-Entergy-Entergy- Entergy- Entergy- Total
AR LA NO MS GS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MANPOWER -
FTEs
Current
MDC 0 0 22 19 6 16 24 87
Crew 0 17 10 9 16 24 76
Center
HQ 0 61 61
------------------------------------------------------------
total 0 61 39 29 15 32 48 224
------------------------------------------------------------
Proposed
MDC 0 80 0 0 0 0 0 80
Crew 0 0 0 0 0 0 3 3
Center
HQ 0 56 0 0 0 0 0 56
------------------------------------------------------------
total 0 136 0 0 0 0 3 139
------------------------------------------------------------
Total 0 75 (39) (29) (15) (32) (45) (85)
============================================================
DOLLARS -
FTEs:
Current 0 3,806 2,434 1,810 936 1,997 2,995 13,978
Proposed 0 8,486 0 0 0 0 187 8,674
-------------------------------------------------------------
Costs (1) 0 4,680 4,680
Savings 0 0 (2,434) (1,810) (936) (1,997) (2,808) (9,984)
ESI's (4,680) 1,680 856 231 823 1,090 0
Costs
-------------------------------------------------------------
Billed (2)
Total (3) 0 0 (754) (954) (705) (1,174) (1,718) (5,304)
=============================================================
NOTES:
</TABLE>
(1) ESI's costs for the transmission and distribution warehousing operation
are based on projected labor and related costs through year end 1999.
Based on current inventory usage levels, these costs incurred are
expected to be billed to the System Companies as indicated in (2)
above.
(3) Total cost savings attributable to manpower reductions which are expected
to be achieved annually subsequent to full implementation of such
reductions.
Exhibit J
System Fuels, Inc.
Current vs. Proposed Ownership Structure
Owner Current Proposed
Ownership(1) Ownership(2) Shares
Company Shares % Shares % Bought/(Sold)
Entergy 70 35% 42 21% (28)
Arkansas
Entergy 66 33% 56 28% (10)
Louisiana
Entergy 38 19% 24 12% (14)
Mississippi
Entergy New 26 13% 12 6% (14)
Orleans
Entergy Gulf 0 0% 66 33% 66
States
-----------------------------------------------
200 100% 200 100% 0
===============================================
Notes:
(1) The initial ownership percentages are based on the
Responsibility Ratios in effect when SFI was formed.
(2) The proposed new ownership percentages are based on the
Responsibility Ratios as of 12/31/96.
ENTERGY ARKANSAS, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Cash $11,500
Cr. Materials and supplies $11,500
To sell transmission and distribution materials inventory to System
Fuels, Inc.
Entry no. 2:
(In Thousands)
Dr. Cash $3,805
Cr. Investment in subsidiary companies $3,805
To sell a portion of Entergy Arkansas' investment in System Fuels,
Inc. to Entergy Gulf States.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $11,772 $15,305 $27,077
Temporary cash investments - at cost,
which approximates market:
Associated companies 23,184 23,184
Other 57,157 57,157
---------- ------- ----------
Total cash and cash equivalents 92,113 15,305 107,418
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.3 million) 54,353 54,353
Associated companies 29,592 29,592
Other 1,215 1,215
Accrued unbilled revenues 111,974 111,974
Fuel inventory - at average cost 28,026 28,026
Materials and supplies - at average cost 82,927 (11,500) 71,427
Rate deferrals 120,706 120,706
Deferred excess capacity 4,424 4,424
Deferred nuclear refueling outage costs 37,977 37,977
Prepayments and other 7,000 7,000
---------- ------- ----------
Total 570,307 3,805 574,112
---------- ------- ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 11,211 (3,805) 7,406
Decommissioning trust fund 221,374 221,374
Other - at cost (less accumulated depreciation) 3,887 3,887
---------- ------- ----------
Total 236,472 (3,805) 232,667
---------- ------- ----------
Utility Plant:
Electric 4,610,523 4,610,523
Property under capital leases 56,613 56,613
Construction work in progress 116,834 116,834
Nuclear fuel under capital lease 95,040 95,040
---------- ------- ----------
Total 4,879,010 4,879,010
Less - accumulated depreciation and amortization 2,057,738 2,057,738
---------- ------- ----------
Utility plant - net 2,821,272 2,821,272
---------- ------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 31,114 31,114
SFAS 109 regulatory asset - net 250,225 250,225
Unamortized loss on reacquired debt 55,647 55,647
Other regulatory assets 94,432 94,432
Other 31,031 31,031
---------- ------- ----------
Total 462,449 462,449
---------- ------- ----------
TOTAL $4,090,500 $- $4,090,500
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Liabilities:
Currently maturing long-term debt $17,465 $17,465
Notes payable 667 667
Accounts payable:
Associated companies 47,583 47,583
Other 91,346 91,346
Customer deposits 23,917 23,917
Taxes accrued 65,807 65,807
Accumulated deferred income taxes 58,889 58,889
Interest accrued 28,247 28,247
Co-owner advances 18,819 18,819
Deferred fuel cost 12,995 12,995
Obligations under capital leases 53,086 53,086
Other 14,036 14,036
---------- ------- ----------
Total 432,857 432,857
---------- ------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 778,092 778,092
Accumulated deferred investment tax credits 106,103 106,103
Obligations under capital leases 98,567 98,567
Other 128,099 128,099
---------- ------- ----------
Total 1,110,861 1,110,861
---------- ------- ----------
Long-term debt 1,241,548 1,241,548
Preferred stock with sinking fund 36,027 36,027
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 60,000 60,000
Shareholders' Equity:
Preferred stock without sinking fund 116,350 116,350
Common stock, $0.01 par value, authorized
325,000,000 shares; issued and outstanding
46,980,196 shares 470 470
Paid-in capital 590,169 590,169
Retained earnings 502,218 502,218
---------- ------- ----------
Total 1,209,207 1,209,207
---------- ------- ----------
TOTAL $4,090,500 $4,090,500
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Before In Present After
Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Operating Revenues $1,690,712 $1,690,712
---------- ------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 254,680 254,680
Purchased power 416,423 416,423
Nuclear refueling outage expenses 26,548 26,548
Other operation and maintenance 361,454 361,454
Depreciation, amortization, and decommissioning 168,846 168,846
Taxes other than income taxes 36,774 36,774
Amortization of rate deferrals 151,265 151,265
---------- ------- ----------
Total 1,415,990 1,415,990
---------- ------- ----------
Operating Income 274,722 274,722
---------- ------- ----------
Other Income:
Allowance for equity funds used
during construction 4,623 4,623
Miscellaneous - net 26,875 26,875
---------- ------- ----------
Total 31,498 31,498
---------- ------- ----------
Interest Charges:
Interest on long-term debt 96,991 96,991
Other interest - net 5,870 5,870
Distributions on preferred securities of subsidiary 4,477 4,477
Allowance for borrowed funds used
during construction (2,768) (2,768)
---------- ------- ----------
Total 104,570 104,570
---------- ------- ----------
Income Before Income Taxes 201,650 201,650
Income Taxes 70,899 70,899
---------- ------- ----------
Net Income 130,751 130,751
Preferred Stock Dividend Requirements
and Other 12,856 12,856
---------- ------- ----------
Earnings Applicable to Common Stock $117,895 $117,895
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY ARKANSAS, INC.
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
RETAINED EARNINGS Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Retained Earnings - July 1, 1996 $543,182 $543,182
Add:
Net Income 130,751 130,751
Increase in investment in subsidiary 42 42
-------- --------
Total 673,975 673,975
-------- --------
Deduct:
Dividends declared
Preferred Stock 12,857 12,857
Common Stock 158,900 158,900
-------- --------
Total 171,757 171,757
-------- --------
Retained Earnings - June 30, 1997 $502,218 $502,218
======== ========
</TABLE>
ENTERGY GULF STATES, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Cash $5,900
Cr. Materials and supplies $5,900
To sell transmission and distribution materials inventory to System
Fuels, Inc.
Entry no. 2:
(In Thousands)
Dr. Investment in subsidiary companies $10,818
Cr. Cash $10,818
To record Entergy Gulf States' new investment in System Fuels, Inc.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $16,467 ($4,918) $11,549
Temporary cash investments - at cost,
which approximates market:
Associated companies 51,689 51,689
Other 143,334 143,334
---------- ------- ----------
Total cash and cash equivalents 211,490 (4,918) 206,572
Accounts receivable:
Customer (less allowance for doubtful accounts
of $2.0 million) 97,230 97,230
Associated companies 7,083 7,083
Other 40,834 40,834
Accrued unbilled revenues 86,883 86,883
Deferred fuel costs 99,708 99,708
Accumulated deferred income taxes 60,059 60,059
Fuel inventory - at average cost 41,120 41,120
Materials and supplies - at average cost 91,077 (5,900) 85,177
Rate deferrals 69,938 69,938
Prepayments and other 19,312 19,312
---------- ------- ----------
Total 824,734 (10,818) 813,916
---------- ------- ----------
Other Property and Investments:
Decommissioning trust fund 47,119 47,119
Investment in subsidiary companies - at equity - 10,818 10,818
Other - at cost (less accumulated depreciation) 38,652 38,652
---------- ------- ----------
Total 85,771 10,818 96,589
---------- ------- ----------
Utility Plant:
Electric 7,164,941 7,164,941
Natural Gas 47,005 47,005
Steam products 81,743 81,743
Property under capital leases 71,422 71,422
Construction work in progress 110,326 110,326
Nuclear fuel under capital lease 41,631 41,631
---------- ------- ----------
Total 7,517,068 7,517,068
Less - accumulated depreciation and amortization 2,940,806 2,940,806
---------- ------- ----------
Utility plant - net 4,576,262 4,576,262
---------- ------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 102,948 102,948
SFAS 109 regulatory asset - net 383,163 383,163
Unamortized loss on reacquired debt 51,380 51,380
Other regulatory assets 40,884 40,884
Long-term receivables 212,225 212,225
Other 197,970 197,970
---------- ------- ----------
Total 988,570 988,570
---------- ------- ----------
TOTAL $6,475,337 $- $6,475,337
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Liabilities:
Currently maturing long-term debt $150,865 $150,865
Accounts payable:
Associated companies 53,636 53,636
Other 105,208 105,208
Customer deposits 29,026 29,026
Taxes accrued 62,429 62,429
Interest accrued 48,433 48,433
Nuclear refueling reserve 19,488 19,488
Obligations under capital leases 39,639 39,639
Other 27,783 27,783
---------- ------- ----------
Total 536,507 536,507
---------- ------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,225,525 1,225,525
Accumulated deferred investment tax credits 217,667 217,667
Obligations under capital leases 69,225 69,225
Deferred River Bend finance charges 21,509 21,509
Other 526,800 526,800
---------- ------- ----------
Total 2,060,726 2,060,726
---------- ------- ----------
Long-term debt 1,878,048 1,878,048
Preferred stock with sinking fund 75,210 75,210
Preference stock 150,000 150,000
Company - obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 85,000 85,000
Shareholders' Equity:
Preferred stock without sinking fund 51,444 51,444
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares 114,055 114,055
Paid-in capital 1,152,575 1,152,575
Retained earnings 371,772 371,772
---------- ------- ----------
Total 1,689,846 1,689,846
---------- ------- ----------
TOTAL $6,475,337 $6,475,337
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Before In Present After
Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $1,902,198 $1,902,198
Natural gas 40,222 40,222
Steam products 52,312 52,312
---------- ------- ----------
Total 1,994,732 1,994,732
---------- ------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 536,683 536,683
Purchased power 287,135 287,135
Nuclear refueling outage expenses 8,946 8,946
Other operation and maintenance 383,692 383,692
Depreciation, amortization, and decommissioning 210,116 210,116
Taxes other than income taxes 106,641 106,641
Amortization of rate deferrals 76,442 76,442
---------- ------- ----------
Total 1,609,655 1,609,655
---------- ------- ----------
Operating Income 385,077 385,077
---------- ------- ----------
Other Income:
Allowance for equity funds used
during construction 2,837 2,837
Miscellaneous - net 67,800 67,800
---------- ------- ----------
Total 70,637 70,637
---------- ------- ----------
Interest Charges:
Interest on long-term debt 171,848 171,848
Other interest - net 14,626 14,626
Distributions on preferred securities of subsidiary 3,182 3,182
Allowance for borrowed funds used
during construction (2,418) (2,418)
---------- ------- ----------
Total 187,238 187,238
---------- ------- ----------
Income Before Income Taxes 268,476 268,476
Income Taxes 107,683 107,683
---------- ------- ----------
Net Income 160,793 160,793
Preferred and Preference Stock Dividend
Requirements and Other 28,158 28,158
---------- ------- ----------
Earnings Applicable to Common Stock $132,635 $132,635
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
RETAINED EARNINGS Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Retained Earnings, July 1, 1996 $238,301 $238,301
Add:
Net income 160,793 160,793
-------- ------ --------
Total 399,094 399,094
-------- ------ --------
Deduct:
Dividends declared:
Preferred and preference stock 26,074 26,074
Common stock - -
Preferred and preference stock
redemption and other 1,248 1,248
-------- ------ --------
Total 27,322 27,322
-------- ------ --------
Retained Earnings, June 30, 1997 $371,772 $371,772
======== ====== ========
</TABLE>
ENTERGY LOUISIANA, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Cash $8,300
Cr. Materials and supplies $8,300
To sell transmission and distribution materials inventory to System
Fuels, Inc.
Entry no. 2:
(In Thousands)
Dr. Cash $3,872
Cr. Investment in subsidiary companies $3,872
To sell a portion of Entergy Louisiana's investment in System Fuels,
Inc. to Entergy Gulf States.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $11,837 $12,172 $24,009
Temporary cash investments - at cost,
which approximates market 22,528 22,528
---------- ------- ----------
Total cash and cash equivalents 34,365 12,172 46,537
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.4 million) 76,314 76,314
Associated companies 14,415 14,415
Other 6,828 6,828
Accrued unbilled revenues 70,513 70,513
Deferred fuel costs 28,453 28,453
Materials and supplies - at average cost 82,119 (8,300) 73,819
Deferred nuclear refueling outage costs 34,006 34,006
Prepaid income tax 4,808 4,808
Prepayments and other 12,479 12,479
---------- ------- ----------
Total 364,300 3,872 368,172
---------- ------- ----------
Other Property and Investments:
Nonutility property 22,525 22,525
Decommissioning trust fund 58,855 58,855
Investment in subsidiary companies - at equity 14,230 (3,872) 10,358
---------- ------- ----------
Total 95,610 (3,872) 91,738
---------- ------- ----------
Utility Plant:
Electric 5,009,817 5,009,817
Property under capital leases 232,582 232,582
Construction work in progress 77,994 77,994
Nuclear fuel under capital lease 72,415 72,415
Nuclear fuel 3,067 3,067
---------- ------- ----------
Total 5,395,875 5,395,875
Less - accumulated depreciation and amortization 1,960,778 1,960,778
---------- ------- ----------
Utility plant - net 3,435,097 3,435,097
---------- ------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 287,009 287,009
Unamortized loss on reacquired debt 35,510 35,510
Other regulatory assets 24,087 24,087
Other 27,389 27,389
---------- ------- ----------
Total 373,995 373,995
---------- ------- ----------
TOTAL $4,269,002 $- $4,269,002
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $53,300 $53,300
Notes payable - associated companies 44,115 44,115
Accounts payable:
Associated companies 52,586 52,586
Other 66,561 66,561
Customer deposits 60,419 60,419
Taxes accrued 20,127 20,127
Accumulated deferred income taxes 8,045 8,045
Interest accrued 39,166 39,166
Dividends declared 3,252 3,252
Obligations under capital leases 28,000 28,000
Other 6,784 6,784
---------- ------- ----------
Total 382,355 382,355
---------- ------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 820,486 820,486
Accumulated deferred investment tax credits 137,088 137,088
Obligations under capital leases 44,415 44,415
Deferred interest - Waterford 3 lease obligation 17,302 17,302
Other 122,804 122,804
---------- ------- ----------
Total 1,142,095 1,142,095
---------- ------- ----------
Long-term debt 1,338,276 1,338,276
Preferred stock with sinking fund 85,000 85,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely junior subordinated deferrable debentures 70,000 70,000
Shareholders' Equity:
Preferred stock without sinking fund 100,500 100,500
Common stock, no par value, authorized
250,000,000 shares; issued and outstanding
165,173,180 shares 1,088,900 1,088,900
Capital stock expense and other (2,321) (2,321)
Retained earnings 64,197 64,197
---------- ------- ----------
Total 1,251,276 1,251,276
---------- ------- ----------
TOTAL $4,269,002 $4,269,002
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Before In Present After
Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues $1,799,499 $1,799,499
---------- ------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 401,968 401,968
Purchased power 413,138 413,138
Nuclear refueling outage expenses 13,251 13,251
Other operation and maintenance 317,376 317,376
Depreciation, amortization, and decommissioning 169,573 169,573
Taxes other than income taxes 70,169 70,169
Amortization of rate deferrals 26,689 26,689
---------- ------- ----------
Total 1,412,164 1,412,164
---------- ------- ----------
Operating Income 387,335 387,335
---------- ------- ----------
Other Income:
Allowance for equity funds used
during construction 773 773
Miscellaneous - net 1,288 1,288
---------- ------- ----------
Total 2,061 2,061
---------- ------- ----------
Interest Charges:
Interest on long-term debt 120,915 120,915
Other interest - net 5,650 5,650
Distributions on preferred securities of subsidiary 6,020 6,020
Allowance for borrowed funds used
during construction (1,418) (1,418)
---------- ------- ----------
Total 131,167 131,167
---------- ------- ----------
Income Before Income Taxes 258,229 258,229
Income Taxes 104,603 104,603
---------- ------- ----------
Net Income 153,626 153,626
Preferred Stock Dividend Requirements
and Other 16,625 16,625
---------- ------- ----------
Earnings Applicable to Common Stock $137,001 $137,001
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY LOUISIANA, INC.
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
RETAINED EARNINGS Transaction Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, July 1, 1996 $107,696 $107,696
Add:
Net income 153,626 153,626
-------- ------- --------
Total 261,322 261,322
-------- ------- --------
Deduct:
Dividends declared:
Preferred stock 14,090 14,090
Common stock 180,597 180,597
Capital stock expenses 2,438 2,438
-------- ------- --------
Total 197,125 197,125
-------- ------- --------
Retained Earnings, June 30, 1997 $64,197 $64,197
======== ======= ========
</TABLE>
ENTERGY MISSISSIPPI, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Cash $6,000
Cr. Materials and supplies $6,000
To sell transmission and distribution materials inventory to System Fuels,
Inc.
Entry no. 2:
(In Thousands)
Dr. Cash $1,707
Cr. Investment in subsidiary companies $1,707
To sell a portion of Entergy Mississippi's investment in System Fuels,
Inc. to Entergy Gulf States.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $6,699 $7,707 $14,406
Temporary cash investments - at cost,
which approximates market 51,385 51,385
---------- ------ ----------
Total cash and cash equivalents 58,084 7,707 65,791
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.4 million) 31,639 31,639
Associated companies 5,311 5,311
Other 1,769 1,769
Accrued unbilled revenues 54,977 54,977
Fuel inventory - at average cost 4,549 4,549
Materials and supplies - at average cost 20,445 (6,000) 14,445
Rate deferrals 140,807 140,807
Prepayments and other 8,647 8,647
---------- ------ ----------
Total 326,228 1,707 327,935
---------- ------ ----------
Other Property and Investments:
Investment in subsidiary companies - at equity 5,531 (1,707) 3,824
Other - at cost (less accumulated depreciation) 7,850 7,850
---------- ------ ----------
Total 13,381 (1,707) 11,674
---------- ------ ----------
Utility Plant:
Electric 1,650,394 1,650,394
Construction work in progress 52,410 52,410
---------- ------ ----------
Total 1,702,804 1,702,804
Less - accumulated depreciation and amortization 652,362 652,362
---------- ------ ----------
Utility plant - net 1,050,442 1,050,442
---------- ------ ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 34,863 34,863
SFAS 109 regulatory asset - net 16,781 16,781
Unamortized loss on reacquired debt 8,829 8,829
Other regulatory assets 85,315 85,315
Other 6,434 6,434
---------- ------ ----------
Total 152,222 152,222
---------- ------ ----------
TOTAL $1,542,273 $- $1,542,273
========== ====== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $96,000 $96,000
Accounts payable:
Associated companies 30,613 30,613
Other 23,233 23,233
Customer deposits 27,145 27,145
Taxes accrued 44,717 44,717
Accumulated deferred income taxes 57,985 57,985
Interest accrued 18,705 18,705
Other 3,259 3,259
---------- ------ ----------
Total 301,657 301,657
---------- ------ ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 244,588 244,588
Accumulated deferred investment tax credits 24,669 24,669
Other 18,333 18,333
---------- ------ ----------
Total 287,590 287,590
---------- ------ ----------
Long-term debt 464,075 464,075
Shareholders' Equity:
Preferred stock without sinking fund 57,881 57,881
Common stock, no par value, authorized
15,000,000 shares; issued and outstanding
8,666,357 shares 199,326 199,326
Capital stock expense and other (42) (42)
Retained earnings 231,786 231,786
---------- ------ ----------
Total 488,951 488,951
---------- ------ ----------
TOTAL $1,542,273 $1,542,273
========== ====== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
PRO FORMA CONSOLIDATED
STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues:
Total $920,269 $920,269
-------- ------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 185,839 185,839
Purchased power 283,342 283,342
Other operation and maintenance 129,628 129,628
Depreciation and amortization 41,615 41,615
Taxes other than income taxes 44,069 44,069
Rate deferrals (19,621) (19,621)
Amortization of rate deferrals 115,465 115,465
-------- ------- --------
Total 780,337 780,337
-------- ------- --------
Operating Income 139,932 139,932
-------- ------- --------
Other Income :
Allowance for equity funds used
during construction 1,072 1,072
Miscellaneous - net 1,144 1,144
-------- ------- --------
Total 2,216 2,216
-------- ------- --------
Interest Charges:
Interest on long-term debt 42,994 42,994
Other interest - net 4,319 4,319
Allowance for borrowed funds used
during construction (864) (864)
-------- ------- --------
Total 46,449 46,449
-------- ------- --------
Income Before Income Taxes 95,699 95,699
Income Taxes 31,480 31,480
-------- ------- --------
Net Income 64,219 64,219
Preferred Stock Dividend Requirements
and Other 4,499 4,499
-------- ------- --------
Earnings Applicable to Common Stock $59,720 $59,720
======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY MISSISSIPPI, INC.
PRO FORMA CONSOLIDATED
STATEMENT OF RETAINED EARNINGS
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Retained Earnings - July 1, 1996 $254,566 $254,566
Add
Net Income 64,219 64,219
-------- ------ --------
Total 318,785 318,785
-------- ------ --------
Deduct:
Dividends declared:
Preferred stock 4,398 4,398
Common stock 82,500 82,500
Preferred stock expenses 101 101
-------- ------ --------
Total 86,999 86,999
-------- ------ --------
Retained Earnings - June 30, 1997 $231,786 $231,786
======== ====== ========
</TABLE>
ENTERGY NEW ORLEANS, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Cash $100
Cr. Materials and supplies $100
To sell transmission and distribution materials to System Fuels,
Inc.
Entry no. 2:
(In Thousands)
Dr. Cash $1,434
Cr. Investment in subsidiary companies $1,434
To sell a portion of Entergy New Orleans' investment in System Fuels,
Inc. to Entergy Gulf States.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $2,082 $1,534 $3,616
Temporary cash investments - at cost,
which approximates market:
Associated companies 3,871 3,871
Other 9,543 9,543
-------- ------ --------
Total cash and cash equivalents 15,496 1,534 17,030
Accounts receivable:
Customer (less allowance for doubtful accounts
of $0.7 million) 22,049 22,049
Associated companies 1,223 1,223
Other 2,881 2,881
Accrued unbilled revenues 17,690 17,690
Deferred electric fuel and resale gas costs 5,486 5,486
Materials and supplies - at average cost 13,065 (100) 12,965
Rate deferrals 37,838 37,838
Prepayments and other 10,813 10,813
-------- ------ --------
Total 126,541 1,434 127,975
-------- ------ --------
Other Property and Investments:
Investment in subsidiary companies - at equity 3,259 (1,434) 1,825
-------- ------ --------
Utility Plant:
Electric 511,432 511,432
Natural gas 128,076 128,076
Construction work in progress 8,184 8,184
-------- ------ --------
Total 647,692 647,692
Less - accumulated depreciation and amortization 356,851 356,851
-------- ------ --------
Utility plant - net 290,841 290,841
-------- ------ --------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 82,513 82,513
SFAS 109 regulatory asset - net 4,242 4,242
Unamortized loss on reacquired debt 1,530 1,530
Other regulatory assets 18,313 18,313
Other 884 884
-------- ------ --------
Total 107,482 107,482
-------- ------ --------
TOTAL $528,123 $- $528,123
======== ====== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $- $-
Accounts payable:
Associated companies 12,780 12,780
Other 26,324 26,324
Customer deposits 19,169 19,169
Taxes accrued 6,675 6,675
Accumulated deferred income taxes 5,506 5,506
Interest accrued 4,694 4,694
Provision for rate refund 15,149 15,149
Other 1,390 1,390
-------- ------ --------
Total 91,687 91,687
-------- ------ --------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 67,227 67,227
Accumulated deferred investment tax credits 7,691 7,691
Accumulated provision for property insurance 15,666 15,666
Other 23,367 23,367
-------- ------ --------
Total 113,951 113,951
-------- ------ --------
Long-term debt 168,920 168,920
Shareholders' Equity:
Preferred stock without sinking fund 19,780 19,780
Common Shareholder's Equity:
Common stock, $4 par value, authorized
10,000,000 shares; issued and outstanding
8,435,900 shares 33,744 33,744
Paid-in capital 36,294 36,294
Retained earnings subsequent to the elimination of
the accumulated deficit on November 30, 1988 63,747 63,747
-------- ------ --------
Total 153,565 153,565
-------- ------ --------
TOTAL $528,123 $528,123
======== ====== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $395,019 $395,019
Natural gas 88,908 88,908
-------- ------ --------
Total 483,927 483,927
-------- ------ --------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses
and gas purchased for resale 124,479 124,479
Purchased power 169,373 169,373
Other operation and maintenance 68,614 68,614
Depreciation and amortization 20,616 20,616
Taxes other than income taxes 31,260 31,260
Rate deferrals (5,662) (5,662)
Amortization of rate deferrals 34,874 34,874
-------- ------ --------
Total 443,554 443,554
-------- ------ --------
Operating Income 40,373 40,373
-------- ------ --------
Other Income:
Allowance for equity funds used
during construction 326 326
Miscellaneous - net 104 104
-------- ------ --------
Total 430 430
-------- ------ --------
Interest Charges:
Interest on long-term debt 14,315 14,315
Other interest - net 1,013 1,013
Allowance for borrowed funds used
during construction (256) (256)
-------- ------ --------
Total 15,072 15,072
-------- ------ --------
Income Before Income Taxes 25,731 25,731
Income Taxes 11,494 11,494
-------- ------ --------
Net Income 14,237 14,237
Preferred Stock Dividend Requirements
and Other 965 965
-------- ------ --------
Earnings Applicable to Common Stock $13,272 $13,272
======== ====== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY NEW ORLEANS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Retained Earnings - July 1, 1996 $80,275 $80,275
Add
Net Income 14,237 14,237
------- ------ -------
Total 94,512 94,512
------- ------ -------
Deduct:
Dividends declared:
Preferred stock 965 965
Common stock 29,800 29,800
------- ------ -------
Total 30,765 30,765
------- ------ -------
Retained Earnings - June 30, 1997 $63,747 $63,747
======= ====== =======
</TABLE>
ENTERGY SERVICES, INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Leased Property $4,738
Cr. Obligation under capital lease - current $728
Cr. Obligation under capital lease - noncurrent $4,010
To record a capital lease entered into by Entergy Services for a warehouse
facility.
Entry no. 2:
(In Thousands)
Dr. Leasehold Improvements $1,100
Cr. Cash $1,100
To record capital purchases and improvements by Entergy Services, Inc. to a
leased facility.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY SERVICES, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash $17,320 ($1,100) $16,220
Temporary cash investments - at cost, which
approximates market 141 141
-------- ------- --------
Total cash and cash equivalents 17,461 (1,100) 16,361
Accounts receivable:
Associated companies 96,033 96,033
Other 9,794 9,794
Materials and supplies - at average cost 179 179
Prepayments and other 637 637
-------- ------- --------
Total 124,104 (1,100) 123,004
-------- ------- --------
Utility Plant
Electric 154,003 5,838 159,841
Construction work in progress 21,702 21,702
-------- ------- --------
Total 175,705 5,838 181,543
Less - Accumulated depreciation
and amortization 102,802 102,802
-------- ------- --------
Utility plant - net 72,903 5,838 78,741
-------- ------- --------
Other Assets:
Other 9,887 9,887
-------- ------- --------
Total 9,887 9,887
-------- ------- --------
TOTAL $206,894 $4,738 $211,632
======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY SERVICES, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDER'S EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Liabilities:
Notes payable - associated companies $33,958 $33,958
Accounts payable:
Associated Companies 60,406 60,406
Other 21,606 21,606
Accrued taxes 29,653 29,653
Obligations under capital leases - 728 728
Other 14,040 14,040
-------- ------ --------
Total 159,663 728 160,391
-------- ------ --------
Deferred Credits:
Accumulated deferred income taxes (19,296) (19,296)
Accumulated deferred investment tax credits 2,814 2,814
Obligations under capital leases - 4,010 4,010
Other 63,693 63,693
-------- ------ --------
Total 47,211 4,010 51,221
-------- ------ --------
Shareholder's Equity:
Common stock, $10 Par Value;
authorized 50,000 shares; issued
and outstanding 2,000 shares 20 20
-------- ------ --------
TOTAL $206,894 $4,738 $211,632
======== ====== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY SERVICES, INC.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Before In Present After
Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Income:
Service rendered at cost $493,587 $493,587
Miscellaneous income 402 402
-------- ------ --------
Total 493,989 493,989
-------- ------ --------
Expenses:
Salaries and wages 136,663 136,663
Rent and lease payments 28,661 28,661
Other general and administrative 282,414 282,414
Depreciation and amortization 23,585 23,585
Interest 2,656 2,656
Taxes other than income taxes 14,279 14,279
-------- ------ --------
Total 488,258 488,258
-------- ------ --------
Income Before Income Taxes 5,731 5,731
-------- ------ --------
Provision for (Benefit of) Income Taxes:
Income taxes 23,228 23,228
Deferred income taxes (17,335) (17,335)
Investment tax credits - net (162) (162)
-------- ------ --------
Total 5,731 5,731
-------- ------ --------
Net Income $- $-
======== ====== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY SERVICES, INC.
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
RETAINED EARNINGS Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Balance at July 1, 1996 $ 20 $ 20
Add - Net income - -
------- -------
Balance at June 30, 1997 $ 20 $ 20
======= =======
</TABLE>
ENTERGY CORPORATION AND SUBSIDIARIES
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
Entry no. 1:
(In Thousands)
Dr. Leased Property $4,738
Cr. Obligation under capital lease - current $728
Cr. Obligation under capital lease - noncurrent $4,010
To record a capital lease entered into by Entergy Services for a warehouse
facility.
Entry no. 2:
(In Thousands)
Dr. Leasehold Improvements $1,100
Cr. Cash $1,100
To record capital purchases and improvements by Entergy Services, Inc.
to a leased facility.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transaction Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $92,263 ($1,100) $91,163
Temporary cash investments - at cost,
which approximates market 595,257 595,257
----------- ------- -----------
Total cash and cash equivalents 687,520 (1,100) 686,420
Notes receivable 8,708 8,708
Accounts receivable:
Customer (less allowance for
doubtful accounts of $17.2 million) 534,148 534,148
Other 181,641 181,641
Accrued unbilled revenues 478,558 478,558
Deferrred fuel 123,720 123,720
Fuel inventory 101,638 101,638
Materials and supplies - at average cost 370,259 370,259
Rate deferrals 369,289 369,289
Prepayments and other 216,618 216,618
----------- ------- -----------
Total 3,072,099 (1,100) 3,070,999
----------- ------- -----------
Other Property and Investments:
Decommissioning trust funds 399,719 399,719
Non-regulated investments 489,608 489,608
Other 82,411 82,411
----------- ------- -----------
Total 971,738 971,738
----------- ------- -----------
Utility Plant:
Electric 25,189,766 5,838 25,195,604
Plant acquisition adjustment - Entergy Gulf States 447,293 447,293
Electric plant under leases 674,049 674,049
Property under capital leases - electric 142,109 142,109
Natural gas 175,081 175,081
Steam products 81,743 81,743
Construction work in progress 472,444 472,444
Nuclear fuel under capital leases 274,587 274,587
Nuclear fuel 60,719 60,719
----------- ------- -----------
Total 27,517,791 5,838 27,523,629
Less - accumulated depreciation and amortization 9,286,199 9,286,199
----------- ------- -----------
Utility plant - net 18,231,592 5,838 18,237,430
----------- ------- -----------
Deferred Debits and Other Assets:
Regulatory Assets:
Rate deferrals 251,437 251,437
SFAS 109 regulatory asset - net 1,195,931 1,195,931
Unamortized loss on reacquired debt 207,481 207,481
Other regulatory assets 460,742 460,742
Long-term receivables 212,224 212,224
CitiPower license (net of $23.3 million of amortization) 563,641 563,641
London Electricity license (net of $16.3 million of amortization) 1,552,542 1,552,542
Other 263,570 263,570
----------- ------- -----------
Total 4,707,568 4,707,568
----------- ------- -----------
TOTAL $26,982,997 $4,738 $26,987,735
=========== ======= ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transaction Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Current Liabilities:
Currently maturing long-term debt $387,630 $387,630
Notes payable 400,468 400,468
Accounts payable 746,602 746,602
Customer deposits 180,128 180,128
Taxes accrued 340,776 340,776
Accumulated deferred income taxes 54,276 54,276
Interest accrued 206,732 206,732
Dividends declared 8,259 8,259
Obligations under capital leases 152,206 728 152,934
Other 139,651 139,651
----------- ------- -----------
Total 2,616,728 728 2,617,456
----------- ------- -----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,733,064 4,733,064
Accumulated deferred investment tax credits 598,221 598,221
Obligations under capital leases 260,922 4,010 264,932
Other 1,502,279 1,502,279
----------- ------- -----------
Total 7,094,486 4,010 7,098,496
----------- ------- -----------
Long-term debt 9,524,296 9,524,296
Subsidiaries' preferred stock with sinking fund 196,237 196,237
Subsidiary's preference stock 150,000 150,000
Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts holding
solely junior subordinated deferrable debentures 215,000 215,000
Shareholders' Equity:
Subsidiaries' preferred stock without sinking fund 345,954 345,954
Common stock, $.01par value, authorized
500,000,000 shares; issued 240,664,720 shares 2,407 2,407
Paid-in capital 4,477,900 4,477,900
Retained earnings 2,384,923 2,384,923
Cumulative foreign currency translation adjustment 10,203 10,203
Less - treasury stock (1,123,923 shares) 35,137 35,137
----------- ------- -----------
Total 7,186,250 7,186,250
----------- ------- -----------
TOTAL $26,982,997 $4,738 $26,987,735
=========== ======= ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues:
Electric $6,317,929 $6,317,929
Natural gas 128,513 128,513
Steam Products 52,312 52,312
Competitive growth businesses 1,437,098 1,437,098
---------- ------- ----------
Total 7,935,852 7,935,852
---------- ------- ----------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses
and gas purchased for resale 1,593,092 1,593,092
Purchased power 1,248,122 1,248,122
Nuclear refueling outage expenses 57,608 57,608
Other operation and maintenance 1,783,003 1,783,003
Depreciation, amortization and decommissioning 870,596 870,596
Taxes other than income taxes 357,553 357,553
Rate deferrals (20,283) (20,283)
Amortization of rate deferrals 403,755 403,755
---------- ------- ----------
Total 6,293,446 6,293,446
---------- ------- ----------
Operating Income 1,642,406 1,642,406
---------- ------- ----------
Other Income:
Allowance for equity funds used
during construction 10,665 10,665
Miscellaneous - net 159,587 159,587
---------- ------- ----------
Total 170,252 170,252
---------- ------- ----------
Interest Charges:
Interest on long-term debt 717,785 717,785
Other interest - net 50,161 50,161
Distributions on preferred securities of subsidiaries 13,679 13,679
Allowance for borrowed funds used
during construction (8,757) (8,757)
---------- ------- ----------
Total 772,868 772,868
---------- ------- ----------
Income Before Income Taxes 1,039,790 1,039,790
Income Taxes 401,874 401,874
---------- ------- ----------
Net Income 637,916 637,916
Preferred and Preference Dividend Requirements of 63,103 63,103
Subsidiaries and Other
---------- ------- ----------
Earnings Applicable to Common Stock $574,813 $574,813
========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C> <C>
Retained Earnings - July 1, 1996 $2,231,591 $2,231,591
Add
Net Income 574,813 574,813
---------- ------- ----------
Total 2,806,404 2,806,404
---------- ------- ----------
Deduct:
Dividends declared on common stock 420,290 420,290
Capital stock and other expenses 1,191 1,191
---------- ------- ----------
Total 421,481 421,481
---------- ------- ----------
Retained Earnings - June 30, 1997 $2,384,923 $2,384,923
========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
Cash $134 $134
Temporary cash investments - at cost,
which approximates market:
Associated companies 45,351 45,351
Other 111,810 111,810
---------- ----------
Total cash and cash equivalents 157,295 157,295
Accounts receivable:
Associated companies 77,807 77,807
Other 3,342 3,342
Materials and supplies - at average cost 65,965 65,965
Deferred nuclear refueling outage costs 16,498 16,498
Prepayments and other 5,976 5,976
---------- ----------
Total 326,883 326,883
---------- ----------
Other Property and Investments:
Decommissioning trust fund 72,372 72,372
---------- ----------
Utility Plant:
Electric 3,010,761 3,010,761
Electric plant under leases 441,467 441,467
Construction work in progress 39,454 39,454
Nuclear fuel under capital lease 65,501 65,501
---------- ----------
Total 3,557,183 3,557,183
Less - accumulated depreciation and amortization 1,032,062 1,032,062
---------- ----------
Utility plant - net 2,525,121 2,525,121
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
SFAS 109 regulatory asset - net 254,511 254,511
Unamortized loss on reacquired debt 54,585 54,585
Other regulatory assets 197,711 197,711
Other 14,880 14,880
---------- ----------
Total 521,687 521,687
---------- ----------
TOTAL $3,446,063 $3,446,063
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDER'S EQUITY Transactions Filing Transaction
(In Thousands)
<S> <C> <C>
Current Liabilities:
Currently maturing long-term debt $70,000 $70,000
Accounts payable:
Associated companies 25,665 25,665
Other 16,713 16,713
Taxes accrued 76,197 76,197
Interest accrued 37,407 37,407
Obligations under capital leases 28,000 28,000
Other 1,862 1,862
---------- ----------
Total 255,844 255,844
---------- ----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 591,474 591,474
Accumulated deferred investment tax credits 101,909 101,909
Obligations under capital leases 37,501 37,501
FERC Settlement - refund obligation 50,640 50,640
Other 198,451 198,451
---------- ----------
Total 979,975 979,975
---------- ----------
Long-term debt 1,359,068 1,359,068
Common Shareholder's Equity:
Common stock, no par value, authorized
1,000,000 shares; issued and outstanding
789,350 shares 789,350 789,350
Retained earnings 61,826 61,826
---------- ----------
Total 851,176 851,176
---------- ----------
TOTAL $3,446,063 $3,446,063
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Operating Revenues $623,509 $623,509
-------- --------
Operating Expenses:
Operation and maintenance:
Fuel and fuel-related expenses 43,208 43,208
Nuclear refueling outage expenses 8,863 8,863
Other operation and maintenance 105,918 105,918
Depreciation, amortization, and decommissioning 139,174 139,174
Taxes other than income taxes 27,255 27,255
-------- --------
Total 324,418 324,418
-------- --------
Operating Income 299,091 299,091
-------- --------
Other Income:
Allowance for equity funds used
during construction 1,036 1,036
Miscellaneous - net 7,009 7,009
-------- --------
Total 8,045 8,045
-------- --------
Interest Charges:
Interest on long-term debt 122,263 122,263
Other interest - net 7,257 7,257
Allowance for borrowed funds used
during construction (1,034) (1,034)
-------- --------
Total 128,486 128,486
-------- --------
Income Before Income Taxes 178,650 178,650
Income Taxes 78,456 78,456
-------- --------
Net Income $100,194 $100,194
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM ENERGY RESOURCES, INC.
PRO FORMA CONSOLIDATED
STATEMENT OF RETAINED EARNINGS
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Retained Earnings, July 1, 1996 $86,532 $86,532
Add:
Net income 100,194 100,194
-------- --------
Total 186,726 186,726
-------- --------
Deduct:
Dividends declared 124,900 124,900
-------- --------
Retained Earnings - June 30, 1997 $61,826 $61,826
======== ========
</TABLE>
SYSTEM FUELS INC.
ENTRIES TO REFLECT PROPOSED TRANSACTIONS
COLUMN 2 OF FINANCIAL STATEMENTS
(In Thousands)
Entry no. 1:
Dr. Materials and supplies $31,800
Cr. Cash $31,800
To record the acquisition of transmission and distribution materials
from the various legal entities in order to implement a centralized
warehouse distribution system.
Entry no. 2:
Dr. Cash $32,000
Cr. Notes payable - associated companies $32,000
To give effect to the borrowing of funds from the Money Pool to facilitate
the acquisition of transmission and distribution materials from the various
legal entities.
Entry no. 3:
Dr. Other Interest Expense $1,760
Cr. Cash $1,760
To record the annual interest expense on notes payable under the proposed
borrowing based on an interest rate of 5.5%.
Entry no. 4:
Dr. Accounts Receivable - associated companies $1,760
Cr. Services rendered at cost $1,760
To record billings to associated companies in connection with the increased
interest expense under the proposed borrowing.
Entry no. 5:
Dr. Cash $1,760
Cr. Accounts Receivable - associated companies $1,760
To record receipt of cash from associated companies in connection with the
increased interest expense under the proposed borrowing.
<PAGE>
<TABLE>
<CAPTION>
SYSTEM FUELS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
ASSETS Transactions Filing Transactions
(In Thousands)
<S> <C> <C> <C>
Current Assets:
Cash and temporary cash investments $43 $200 $243
Accounts receivable:
Associated companies 3,197 3,197
Other 1,955 1,955
Fuel oil inventory 27,319 27,319
Materials and supplies - at average cost - 31,800 31,800
Nuclear fuel inventory 57,652 57,652
-------- ------- --------
Total 90,166 32,000 122,166
-------- ------- --------
Property and Operating Facilities - at cost
Storage and handling facilities and
other equipment 24,459 24,459
Less - Accumulated depreciation 23,776 23,776
-------- ------- --------
Total 683 683
-------- ------- --------
Capitalized leased property - at cost 13,426 13,426
-------- ------- --------
Deferred Debits
Other 157 157
-------- ------- --------
Total 157 157
-------- ------- --------
TOTAL $104,432 $32,000 $136,432
======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM FUELS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
LIABILITIES AND SHAREHOLDERS' EQUITY Transactions Filing Transactions
(In Thousands)
<S> <C> <C> <C>
Current Liabilities:
Notes payable - associated companies $48,510 $32,000 $80,510
Accounts payable:
Associated companies 491 491
Other 1,298 1,298
Obligation under capital leases 3,114 3,114
Accrued expenses 2,432 2,432
-------- ------- --------
Total 55,845 32,000 87,845
-------- ------- --------
Notes Payable - Shareholders 34,000 34,000
-------- ------- --------
Obligation under capital leases 10,311 10,311
-------- ------- --------
Deferred Credits:
Accumulated deferred income taxes 3,812 3,812
Accumulated deferred investment tax credits 281 281
Other 163 163
-------- ------- --------
Total 4,256 4,256
-------- ------- --------
Shareholder's Equity:
Common stock, no par value,
authorized 10,000 shares;
issued and outstanding 200 shares 20 20
-------- ------- --------
Total 20 20
-------- ------- --------
TOTAL $104,432 $32,000 $136,432
======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM FUELS, INC.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
Transactions Filing Transactions
(In Thousands)
<S> <C> <C> <C>
REVENUES:
Sales and services
Associated companies $160,983 $1,760 $162,743
Other 52,887 52,887
-------- ------- --------
Total 213,870 1,760 215,630
Billing variance - under billed 775 775
Miscellaneous income 12 12
-------- ------- --------
Total 214,657 1,760 216,417
-------- ------- --------
Cost of Goods Sold 201,675 201,675
-------- ------- --------
Operating Income 12,982 1,760 14,742
-------- ------- --------
Other Income
Gain on sale of properties 7,137 7,137
-------- ------- --------
Total 20,119 1,760 21,879
-------- ------- --------
Operating Expenses:
Operations, administrative and general 12,447 12,447
Interest expense 2,374 1,760 4,134
Taxes other than income taxes 746 746
-------- ------- --------
15,567 1,760 17,327
-------- ------- --------
Income Before Income Taxes 4,552 - 4,552
-------- ------- --------
Provision for (Benefit of) Income Taxes:
Current income taxes 4,602 4,602
Deferred income taxes 497 497
Investment taxes credits - net (547) (547)
-------- ------- --------
Total 4,552 4,552
-------- ------- --------
NET INCOME $- $- $-
======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SYSTEM FUELS, INC.
PRO FORMA STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1997
(Unaudited)
Adjustments to Reflect
Transactions Proposed
Before In Present After
RETAINED EARNINGS Transaction Filing Transaction
(In Thousands)
<S> <C> <C>
Balance at July 1, 1996 $ 20 $ 20
Add - Net income
- -
------- ------- -------
Balance at June 30, 1997 $ 20 $ 20
======= ======= =======
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000007323
<NAME> ENTERGY ARKANSAS INC.
<SUBSIDIARY>
<NUMBER> 001
<NAME> ENTERGY ARKANSAS INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,821,272 2,821,272
<OTHER-PROPERTY-AND-INVEST> 236,472 236,472
<TOTAL-CURRENT-ASSETS> 570,307 574,112
<TOTAL-DEFERRED-CHARGES> 462,449 462,449
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 4,090,500 4,090,500
<COMMON> 470 470
<CAPITAL-SURPLUS-PAID-IN> 590,169 590,169
<RETAINED-EARNINGS> 502,218 502,218
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,209,207 1,209,207
36,027 36,027
116,350 116,350
<LONG-TERM-DEBT-NET> 1,241,548 1,241,548
<SHORT-TERM-NOTES> 667 667
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 17,465 17,465
0 0
<CAPITAL-LEASE-OBLIGATIONS> 53,086 53,086
<LEASES-CURRENT> 98,567 98,567
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,433,933 1,433,933
<TOT-CAPITALIZATION-AND-LIAB> 4,090,500 4,090,500
<GROSS-OPERATING-REVENUE> 1,690,712 1,690,712
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 1,415,990 1,415,990
<TOTAL-OPERATING-EXPENSES> 1,415,990 1,415,990
<OPERATING-INCOME-LOSS> 274,722 274,722
<OTHER-INCOME-NET> 31,498 31,498
<INCOME-BEFORE-INTEREST-EXPEN> 306,220 306,220
<TOTAL-INTEREST-EXPENSE> 104,570 104,570
<NET-INCOME> 130,751 130,751
12,856 12,856
<EARNINGS-AVAILABLE-FOR-COMM> 117,895 117,895
<COMMON-STOCK-DIVIDENDS> 158,900 158,900
<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
<CIK> 0000044570
<NAME> ENTERGY GULF STATES INC.
<SUBSIDIARY>
<NUMBER> 006
<NAME> ENTERGY GULF STATES INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 4,576,262 4,576,262
<OTHER-PROPERTY-AND-INVEST> 85,771 96,589
<TOTAL-CURRENT-ASSETS> 824,734 813,916
<TOTAL-DEFERRED-CHARGES> 988,570 988,570
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 6,475,337 6,475,337
<COMMON> 114,055 114,055
<CAPITAL-SURPLUS-PAID-IN> 1,152,575 1,152,575
<RETAINED-EARNINGS> 371,772 371,772
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,689,846 1,689,846
75,210 75,210
51,444 51,444
<LONG-TERM-DEBT-NET> 1,878,048 1,878,048
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 150,865 150,865
0 0
<CAPITAL-LEASE-OBLIGATIONS> 39,639 39,639
<LEASES-CURRENT> 69,225 69,225
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,572,504 2,572,504
<TOT-CAPITALIZATION-AND-LIAB> 6,475,337 6,475,337
<GROSS-OPERATING-REVENUE> 1,994,732 1,994,732
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 1,609,655 1,609,655
<TOTAL-OPERATING-EXPENSES> 1,609,655 1,609,655
<OPERATING-INCOME-LOSS> 385,077 385,077
<OTHER-INCOME-NET> 70,637 70,637
<INCOME-BEFORE-INTEREST-EXPEN> 455,714 455,714
<TOTAL-INTEREST-EXPENSE> 187,238 187,238
<NET-INCOME> 160,793 160,793
28,158 28,158
<EARNINGS-AVAILABLE-FOR-COMM> 132,635 132,635
<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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000060527
<NAME> ENTERGY LOUISIANA INC.
<SUBSIDIARY>
<NUMBER> 012
<NAME> ENTERGY LOUISIANA INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 3,435,097 3,435,097
<OTHER-PROPERTY-AND-INVEST> 95,610 91,738
<TOTAL-CURRENT-ASSETS> 364,300 368,172
<TOTAL-DEFERRED-CHARGES> 373,995 373,995
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 4,269,002 4,269,002
<COMMON> 1,088,900 1,088,900
<CAPITAL-SURPLUS-PAID-IN> (2,321) (2,231)
<RETAINED-EARNINGS> 64,197 64,197
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,251,276 1,251,276
85,000 85,000
100,500 100,500
<LONG-TERM-DEBT-NET> 1,338,276 1,338,276
<SHORT-TERM-NOTES> 44,115 44,115
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 53,300 53,300
0 0
<CAPITAL-LEASE-OBLIGATIONS> 28,000 28,000
<LEASES-CURRENT> 44,415 44,415
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,424,620 1,424,620
<TOT-CAPITALIZATION-AND-LIAB> 4,269,002 4,269,002
<GROSS-OPERATING-REVENUE> 1,799,499 1,799,499
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 1,412,164 1,412,164
<TOTAL-OPERATING-EXPENSES> 1,412,164 1,412,164
<OPERATING-INCOME-LOSS> 387,335 387,335
<OTHER-INCOME-NET> 2,061 2,061
<INCOME-BEFORE-INTEREST-EXPEN> 389,396 389,396
<TOTAL-INTEREST-EXPENSE> 131,167 131,167
<NET-INCOME> 153,626 153,626
16,625 16,625
<EARNINGS-AVAILABLE-FOR-COMM> 137,001 137,001
<COMMON-STOCK-DIVIDENDS> 180,597 180,597
<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
<CIK> 0000066901
<NAME> ENTERGY MISSISSIPPI INC.
<SUBSIDIARY>
<NUMBER> 016
<NAME> ENTERGY MISSISSIPPI INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 1,050,442 1,050,442
<OTHER-PROPERTY-AND-INVEST> 13,381 11,674
<TOTAL-CURRENT-ASSETS> 326,228 327,935
<TOTAL-DEFERRED-CHARGES> 152,222 152,222
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 1,542,273 1,542,273
<COMMON> 199,326 199,326
<CAPITAL-SURPLUS-PAID-IN> (42) (42)
<RETAINED-EARNINGS> 231,786 231,786
<TOTAL-COMMON-STOCKHOLDERS-EQ> 488,951 488,951
0 0
57,881 57,881
<LONG-TERM-DEBT-NET> 464,075 464,075
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 96,000 96,000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 493,247 493,247
<TOT-CAPITALIZATION-AND-LIAB> 1,542,273 1,542,273
<GROSS-OPERATING-REVENUE> 920,269 920,269
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 780,337 780,337
<TOTAL-OPERATING-EXPENSES> 780,337 780,337
<OPERATING-INCOME-LOSS> 139,932 139,932
<OTHER-INCOME-NET> 2,216 2,216
<INCOME-BEFORE-INTEREST-EXPEN> 142,148 142,148
<TOTAL-INTEREST-EXPENSE> 46,449 46,449
<NET-INCOME> 64,219 64,219
4,499 4,499
<EARNINGS-AVAILABLE-FOR-COMM> 59,720 59,720
<COMMON-STOCK-DIVIDENDS> 82,500 82,500
<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
<CIK> 0000071508
<NAME> ENTERGY NEW ORLEANS INC.
<SUBSIDIARY>
<NUMBER> 017
<NAME> ENTERGY NEW ORLEANS INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 290,841 290,841
<OTHER-PROPERTY-AND-INVEST> 3,259 1,825
<TOTAL-CURRENT-ASSETS> 126,541 127,975
<TOTAL-DEFERRED-CHARGES> 107,482 107,482
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 528,123 528,123
<COMMON> 33,744 33,744
<CAPITAL-SURPLUS-PAID-IN> 36,294 36,294
<RETAINED-EARNINGS> 63,747 63,747
<TOTAL-COMMON-STOCKHOLDERS-EQ> 153,565 153,565
0 0
19,780 19,780
<LONG-TERM-DEBT-NET> 168,920 168,920
<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> 205,638 205,638
<TOT-CAPITALIZATION-AND-LIAB> 528,123 528,123
<GROSS-OPERATING-REVENUE> 483,927 483,927
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 443,554 443,554
<TOTAL-OPERATING-EXPENSES> 443,554 443,554
<OPERATING-INCOME-LOSS> 40,373 40,373
<OTHER-INCOME-NET> 430 430
<INCOME-BEFORE-INTEREST-EXPEN> 40,803 40,803
<TOTAL-INTEREST-EXPENSE> 15,072 15,072
<NET-INCOME> 14,237 14,237
965 965
<EARNINGS-AVAILABLE-FOR-COMM> 13,272 13,272
<COMMON-STOCK-DIVIDENDS> 29,800 29,800
<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
<CIK> 0000810347
<NAME> ENTERGY SERVICES, INC.
<SUBSIDIARY>
<NUMBER> 034
<NAME> ENTERGY SERVICES, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 72,903 78,741
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 124,104 123,004
<TOTAL-DEFERRED-CHARGES> 9,887 9,887
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 206,894 211,632
<COMMON> 20 20
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 0 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 20 20
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 33,958 33,958
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 4,010
<LEASES-CURRENT> 0 728
<OTHER-ITEMS-CAPITAL-AND-LIAB> 172,916 172,916
<TOT-CAPITALIZATION-AND-LIAB> 206,894 211,632
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 488,258 488,258
<TOTAL-OPERATING-EXPENSES> 488,258 488,258
<OPERATING-INCOME-LOSS> 0 0
<OTHER-INCOME-NET> 0 0
<INCOME-BEFORE-INTEREST-EXPEN> 5,731 5,731
<TOTAL-INTEREST-EXPENSE> 0 0
<NET-INCOME> 0 0
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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000065984
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<SUBSIDIARY>
<NUMBER> 023
<NAME> ENTERGY CORPORATION AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 18,231,592 18,237,430
<OTHER-PROPERTY-AND-INVEST> 971,738 971,738
<TOTAL-CURRENT-ASSETS> 3,072,099 3,070,999
<TOTAL-DEFERRED-CHARGES> 4,707,568 4,707,568
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 26,982,997 26,987,735
<COMMON> 2,407 2,407
<CAPITAL-SURPLUS-PAID-IN> 4,477,900 4,477,900
<RETAINED-EARNINGS> 2,384,923 2,384,923
<TOTAL-COMMON-STOCKHOLDERS-EQ> 7,186,250 7,186,250
196,237 196,237
345,954 345,954
<LONG-TERM-DEBT-NET> 9,524,296 9,524,296
<SHORT-TERM-NOTES> 400,468 400,468
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 387,630 387,630
0 0
<CAPITAL-LEASE-OBLIGATIONS> 260,922 264,932
<LEASES-CURRENT> 152,206 152,934
<OTHER-ITEMS-CAPITAL-AND-LIAB> 8,850,054 8,850,054
<TOT-CAPITALIZATION-AND-LIAB> 26,982,997 26,987,735
<GROSS-OPERATING-REVENUE> 7,935,852 7,935,852
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 6,293,446 6,293,446
<TOTAL-OPERATING-EXPENSES> 6,293,446 6,293,446
<OPERATING-INCOME-LOSS> 1,642,406 1,642,406
<OTHER-INCOME-NET> 170,252 170,252
<INCOME-BEFORE-INTEREST-EXPEN> 1,812,658 1,812,658
<TOTAL-INTEREST-EXPENSE> 772,868 772,868
<NET-INCOME> 637,916 637,916
63,103 63,103
<EARNINGS-AVAILABLE-FOR-COMM> 574,813 574,813
<COMMON-STOCK-DIVIDENDS> 420,290 420,290
<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
<CIK> 0000202584
<NAME> SYSTEM ENERGY RESOURCES, INC.
<SUBSIDIARY>
<NUMBER> 018
<NAME> SYSTEM ENERGY RESOURCES, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,525,121 2,525,121
<OTHER-PROPERTY-AND-INVEST> 72,372 72,372
<TOTAL-CURRENT-ASSETS> 326,883 326,883
<TOTAL-DEFERRED-CHARGES> 521,687 521,687
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 3,446,063 3,446,063
<COMMON> 789,350 789,350
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 61,826 61,826
<TOTAL-COMMON-STOCKHOLDERS-EQ> 851,176 851,176
0 0
0 0
<LONG-TERM-DEBT-NET> 1,359,068 1,359,068
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 70,000 70,000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 28,000 28,000
<LEASES-CURRENT> 37,501 37,501
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,100,318 1,100,318
<TOT-CAPITALIZATION-AND-LIAB> 3,446,063 3,446,063
<GROSS-OPERATING-REVENUE> 623,509 623,509
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 324,418 324,418
<TOTAL-OPERATING-EXPENSES> 324,418 324,418
<OPERATING-INCOME-LOSS> 299,091 299,091
<OTHER-INCOME-NET> 8,045 8,045
<INCOME-BEFORE-INTEREST-EXPEN> 307,136 307,136
<TOTAL-INTEREST-EXPENSE> 128,486 128,486
<NET-INCOME> 100,194 100,194
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 100,194 100,194
<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>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000096035
<NAME> SYSTEM FUELS, INC.
<SUBSIDIARY>
<NUMBER> 019
<NAME> SYSTEM FUELS, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 14,109 14,109
<TOTAL-CURRENT-ASSETS> 90,166 122,166
<TOTAL-DEFERRED-CHARGES> 157 157
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 104,432 136,432
<COMMON> 20 20
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 0 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 20 20
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 48,510 80,510
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 10,311 10,311
<LEASES-CURRENT> 3,114 3,114
<OTHER-ITEMS-CAPITAL-AND-LIAB> 42,477 42,477
<TOT-CAPITALIZATION-AND-LIAB> 104,432 136,432
<GROSS-OPERATING-REVENUE> 214,657 216,417
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 15,567 17,327
<TOTAL-OPERATING-EXPENSES> 15,567 17,327
<OPERATING-INCOME-LOSS> 12,982 14,742
<OTHER-INCOME-NET> 7,137 7,137
<INCOME-BEFORE-INTEREST-EXPEN> 20,119 21,879
<TOTAL-INTEREST-EXPENSE> 2,374 4,134
<NET-INCOME> 0 0
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>
