-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C8EQzFOn2RolCnmm5I6uYXeBuAUkNj4D8Ahr/d7nk6HR6MennWWEr3rKxrYxy6bb JbIA+sV1hUnXQnxVDCQMXQ== 0000065984-96-000049.txt : 19960320 0000065984-96-000049.hdr.sgml : 19960320 ACCESSION NUMBER: 0000065984-96-000049 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960319 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOUISIANA POWER & LIGHT CO /LA/ CENTRAL INDEX KEY: 0000060527 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720245590 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-00105 FILM NUMBER: 96536271 BUSINESS ADDRESS: STREET 1: 639 LOYOLA AVE CITY: NEW ORLEANS STATE: LA ZIP: 70113 BUSINESS PHONE: 5045953100 424B2 1 Information contained herein is subject to completion and amendment. A registration statement relating to these securities has been declared effective by the Securities and Exchange Commission pursuant to Rule 415 under the Securities Act of 1933. This preliminary prospectus supplement and the accompanying prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS SUPPLEMENT DATED MARCH 15, 1996 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED NOVEMBER 15, 1993) $115,000,000 LOUISIANA POWER & LIGHT COMPANY FIRST MORTGAGE BONDS, % SERIES DUE MARCH 1, 2026 --------------------------- Interest on the Company's First Mortgage Bonds, % Series due March 1, 2026 (the 'New Bonds') is payable on March 1 and September 1 of each year, commencing September 1, 1996. The New Bonds will not be redeemable prior to March 1, 2001. Thereafter, the New Bonds will be redeemable at the option of the Company, in whole or in part, at any time, upon not less than 30 days' notice, at the general redemption prices as described herein and, under certain circumstances, at the special redemption price of 100% of the principal amount thereof plus accrued interest to the date fixed for redemption. See 'Description of the New Bonds -- Redemption and Purchase of New Bonds' herein. --------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3) - ---------------------------------------------------------------------------------------------------------------- Per New Bond......................... % % % - ---------------------------------------------------------------------------------------------------------------- Total................................ $ $ $ - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
(1) Plus accrued interest from March 1, 1996. (2) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. (3) Before deduction of expenses payable by the Company, estimated at $135,000. --------------------------- The New Bonds are offered subject to prior sale, when, as and if delivered to and accepted by the Underwriters and subject to certain other conditions. The Underwriters reserve the right to withdraw, cancel or modify such offer and to reject orders in whole or in part. It is expected that the New Bonds will be ready for delivery through the book-entry facilities of The Depository Trust Company, New York, New York, on or about March , 1996, against payment therefor in immediately available funds. --------------------------- BEAR, STEARNS & CO. INC. GOLDMAN, SACHS & CO. SALOMON BROTHERS INC --------------------------- THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH , 1996. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Reference is made to 'Incorporation of Certain Documents by Reference' in the accompanying Prospectus. At the date of this Prospectus Supplement, the Incorporated Documents (as defined in the accompanying Prospectus) include the Company's Annual Report on Form 10-K for the year ended December 31, 1995. SELECTED FINANCIAL INFORMATION (DOLLARS IN THOUSANDS) The selected financial information of the Company set forth below should be read in conjunction with the financial statements and other financial information contained in the Incorporated Documents.
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------------------------------------------- 1995 1994 1993 1992 1991 ------------- ------------- ------------- ------------- ------------- Income Statement Data: Operating Revenues.............. $ 1,674,875 $ 1,710,415 $ 1,731,541 $ 1,553,745 $ 1,528,934 Operating Income................ 332,269 343,120 321,612 318,280 332,496 Interest Expense (net).......... 134,885 133,977 135,209 140,628 167,291 Net Income...................... 201,537 213,839 188,808 182,989 166,572 Ratio of Earnings to Fixed Charges(1)................... 3.18 2.91 3.06 2.79 2.40
AS OF DECEMBER 31, 1995(2) ------------------------- AMOUNT PERCENT ------------- ------- Balance Sheet Data: Capitalization: Common Stock and Paid-in Capital................. $ 1,084,064 38.7 Retained Earnings......... 72,150 2.6 ------------- ------- Total Common Shareholder's Equity............ 1,156,214 41.3 Preferred Stock (without sinking fund)........... 160,500 5.7 Preferred Stock (with sinking fund)........... 100,009 3.6 First Mortgage Bonds(3)... 610,790 21.8 Other Long-Term Debt(3)... 774,381 27.6 ------------- ------- Total Capitalization... $ 2,801,894 100.0 ------------- ------- ------------- ------- (1) 'Earnings', as defined by Securities and Exchange Commission ('SEC') Regulation S-K, represent the aggregate of (a) net income, (b) taxes based on income, (c) investment tax credit adjustments -- net and (d) fixed charges. 'Fixed Charges' include interest (whether expensed or capitalized), related amortization and interest applicable to rentals charged to operating expenses. (2) The proceeds from the sale of the New Bonds are expected to be used primarily to refund outstanding First Mortgage Bonds and as a result the Company's capitalization will not be materially affected. See 'Use of Proceeds'. (3) Excludes current maturities of First Mortgage Bonds and Other Long-Term Debt of $35 million and $260,400, respectively. S-2 USE OF PROCEEDS Approximately $95 million of the net proceeds to be received from the issuance and sale of the New Bonds are expected to be used to satisfy a portion of the Company's annual replacement fund requirement under the Mortgage and the remainder will be used for general corporate purposes. The Company expects to use the cash deposited to satisfy the annual replacement fund requirement to redeem all of the Company's First Mortgage Bonds, 10 1/8% Series due April 1, 2020 (at a price equal to 100% of the principal amount thereof, plus accrued interest to the date of redemption). DESCRIPTION OF THE NEW BONDS The following description of the particular terms of the New Bonds offered hereby supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the New Bonds set forth in the accompanying Prospectus under the heading 'Description of New Bonds', to which description reference is hereby made. As used in this Prospectus Supplement, the terms 'Bonds', 'Corporate Trustee', 'Mortgage', 'Participants' and 'DTC' shall have the same meanings as the same terms used under the headings 'Description of New Bonds' and 'Book Entry Securities' in the accompanying Prospectus. INTEREST, MATURITY AND PAYMENT. The New Bonds will mature on March 1, 2026. The New Bonds will bear interest from March 1, 1996 at the rate shown in their title, payable on March 1 and September 1 of each year, commencing September 1, 1996. Interest is payable to holders of record on the interest payment date. Principal and interest are payable at the office or agency of the Company in New York City. For so long as the New Bonds are registered in the name of DTC, or its nominee, the principal and interest due on the New Bonds will be payable by the Company or its agent to DTC for payment to its Participants for subsequent disbursement to the beneficial owners. The Company has covenanted to pay interest on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest on the Bonds of all series at the rate of 6% per annum. REDEMPTION AND PURCHASE OF NEW BONDS. The New Bonds will not be redeemable for any purpose prior to March 1, 2001. Thereafter, the New Bonds will be redeemable at the option of the Company, in whole or in part, at any time, upon not less than 30 days' notice (a) at the special redemption price set forth below with cash deposited under the replacement fund or with certain deposited cash or proceeds of released property, and (b) at the general redemption prices set forth below for all other redemptions: S-3
GENERAL SPECIAL GENERAL SPECIAL REDEMPTION REDEMPTION REDEMPTION REDEMPTION YEAR PRICE(%) PRICE(%) YEAR PRICE(%) PRICE(%) - ------------------------------------- ---------- ---------- ----------------------------- ---------- ---------- If redeemed during the 12-month period ending the last day of February, 2002................................. 100.00 2003................................. 100.00 2004................................. 100.00 2005................................. 100.00 2006................................. 100.00 2007................................. 100.00 2008................................. 100.00 2009................................. 100.00 2010................................. 100.00 2011................................. 100.00 2012................................. 100.00 2013................................. 100.00 2014................................. 100.00 2015................................. 100.00 2016................................. 100.00 2017................................. 100.00 2018................................. 100.00 2019................................. 100.00 2020................................. 100.00 2021................................. 100.00 2022................................. 100.00 2023................................. 100.00 2024................................. 100.00 2025................................. 100.00 2026................................. 100.00
in each case together with accrued interest to the date fixed for redemption. If, at the time notice of redemption is given, the redemption monies are not held by the Corporate Trustee, the redemption may be made subject to receipt of such monies before the date fixed for redemption, and such notice shall be of no effect unless such monies are so received. Cash deposited under any provision of the Mortgage (with certain exceptions) may be applied to the redemption or purchase (including purchase from the Company) of Bonds of any series. DIVIDEND COVENANT. The Company will covenant in substance that, so long as any New Bonds remain outstanding, it will not pay any cash dividends on common stock after February 29, 1996 (other than certain dividends declared by the Company on or before February 29, 1996) except from credits to retained earnings after February 29, 1996 plus $345,000,000 and plus such additional amounts as shall be approved by the SEC. SINKING OR IMPROVEMENT FUND. The New Bonds will not be entitled to any sinking or improvement fund. RESERVATION OF RIGHTS TO AMEND THE MORTGAGE. REPLACEMENT FUND. The Company has reserved the right without any consent or other action by the holders of the New Bonds or any subsequently created series to amend the Mortgage to eliminate the requirements of the Replacement Fund. ISSUANCE OF ADDITIONAL BONDS. The Company has reserved the right without any consent or other action by the holders of the New Bonds or any subsequently created series to amend the Mortgage (1) to provide that Bonds may be issued upon the basis of 80% of the cost or fair value (whichever is less) of unfunded property additions after adjustments to offset retirements (in addition to the other bases of issuance) and (2) to modify the net earnings test (a) to provide that the period over which net earnings is computed shall be 12 consecutive months out of the immediately preceding 18 months (instead of the immediately preceding 15 months), (b) to specifically permit the inclusion in net earnings of revenues collected subject to possible refund and allowances for funds used during construction and (c) to provide for no deduction for non- recurring charges. RELEASE AND SUBSTITUTION OF PROPERTY. The Company has reserved the right without any consent or other action by the holders of the New Bonds or any subsequently created series to amend the Mortgage (1) to permit the release of mortgaged property from the lien of the Mortgage in an amount equal to the aggregate principal amount of retired bonds that the Company elects to use as the basis for such release times the reciprocal of the bonding ratio in effect at the time such S-4 retired bonds were originally issued; (2) to permit the release of unfunded property so long as the Company has at least $1 in unfunded property additions remaining; (3) to remove the existing limitations on the amount of obligations secured by purchase money mortgages upon any property being released that can be used as the basis for such release; (4) to specifically provide that if the Company transfers as an entirety all or substantially all property subject to the Mortgage to a successor corporation, the Company would be released of all obligations under the Mortgage; and (5) to change the definition of 'Funded Property' to mean only property specified by the Company with a fair value, to be determined by an independent expert, of not less than 10/8 of the sum of the amount of outstanding Bonds and retired bond credits. MODIFICATION. The Company has reserved the right without any consent or other action by the holders of the New Bonds or any subsequently created series to amend the Mortgage (1) to reduce the percentage vote required to modify certain bondholders' rights from 70% or 66 2/3%, as the case may be, to a majority of Bonds outstanding; (2) to provide that, if less than all series of Bonds outstanding are to be affected by a proposed change in the Mortgage, that only the consent of a majority of the Bonds of each affected series is required to make such change; and (3) to permit the Company to amend the Mortgage without the consent of the holders of Bonds to make changes which do not adversely affect the interests of such bondholders in any material respect. UNDERWRITING Under the terms and conditions set forth in the Underwriting Agreement dated the date hereof, the Company has agreed to sell to each of the Underwriters named below, and each of the Underwriters has severally agreed to purchase, the respective principal amount of the New Bonds set forth opposite its name below: UNDERWRITER PRINCIPAL AMOUNT - ------------------------------------- ---------------- Bear, Stearns & Co. Inc.............. $ Goldman, Sachs & Co.................. $ Salomon Brothers Inc................. $ ---------------- Total....................... $115,000,000 ---------------- ---------------- The Underwriting Agreement provides that the several obligations of the Underwriters to pay for and accept delivery of the New Bonds are subject to approval of certain legal matters by their counsel and to certain other conditions. The Underwriters' obligations are such that they are committed to take and pay for all of the New Bonds offered hereby if any are taken, provided, that under certain circumstances involving a default of an Underwriter, less than all of the New Bonds may be purchased. Default by one Underwriter would not relieve the non-defaulting Underwriters from their several obligations, and in the event of such a default, the non-defaulting Underwriters may be required by the Company to purchase the principal amount of the New Bonds that they have severally agreed to purchase and, in addition, to purchase the principal amount of the New Bonds that the defaulting Underwriter, or Underwriters, shall have failed to purchase, severally and not jointly, up to a principal amount equal to one-ninth of the principal amount of the New Bonds that such non-defaulting Underwriters have otherwise agreed to purchase. The Underwriters have advised the Company that they propose to offer all or part of the New Bonds directly to purchasers at the initial public offering price set forth on the cover page of this Prospectus Supplement, and to certain securities dealers at such price less a concession not in excess of % of the principal amount of the New Bonds. The Underwriters may allow, and such dealers may reallow to certain brokers and dealers, a concession not in excess of % of the principal amount of the New Bonds. After the New Bonds are released for sale to the public, the offering price and other selling terms may from time to time be varied. S-5 The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. There is presently no trading market for the New Bonds and there is no assurance that a market will develop. Although they are under no obligation to do so, the Underwriters presently intend to act as market makers for the New Bonds in the secondary trading market, but may discontinue such market-making at any time without notice. EXPERTS AND LEGALITY The Company's balance sheets as of December 31, 1995 and 1994 and the statements of income, retained earnings, and cash flows and the related financial statement schedule for each of the two years ended December 31, 1995, incorporated by reference in this Prospectus, have been incorporated by reference herein in reliance on the reports of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing. The statements of income, retained earnings, and cash flows and the related financial statement schedule for the year ended December 31, 1993, incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1995, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports dated February 11, 1994, also incorporated by reference herein and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The legality of the New Bonds will be passed upon for the Company by Denise C. Redmann, Senior Attorney -- Corporate and Securities of Entergy Services, Inc. and Reid & Priest LLP, New York, New York. Certain legal matters will be passed upon for the Underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York. Matters pertaining to New York law will be passed upon by Reid & Priest LLP, New York counsel to the Company, and matters pertaining to Louisiana law will be passed upon by Denise C. Redmann, Senior Attorney -- Corporate and Securities of Entergy Services, Inc., Louisiana counsel to the Company. The statements as to matters of law and legal conclusions made under 'Description of the New Bonds' in this Prospectus Supplement and 'Description of New Bonds' in the accompanying Prospectus have been reviewed by Denise C. Redmann, Senior Attorney -- Corporate and Securities of Entergy Services, Inc. and, except as to 'Security' therein, by Reid & Priest LLP, New York, New York, and are set forth herein in reliance upon the opinions of said counsel, respectively, and upon their authority as experts. S-6 PROSPECTUS $369,000,000 LOUISIANA POWER & LIGHT COMPANY FIRST MORTGAGE BONDS PREFERRED STOCK, CUMULATIVE, $25 PAR VALUE PREFERRED STOCK, CUMULATIVE, $100 PAR VALUE LOUISIANA POWER & LIGHT COMPANY (THE 'COMPANY') MAY OFFER FROM TIME TO TIME ITS FIRST MORTGAGE BONDS (THE 'NEW BONDS') AND/OR ITS PREFERRED STOCK, CUMULATIVE, $25 PAR VALUE AND/OR PREFERRED STOCK, CUMULATIVE, $100 PAR VALUE (COLLECTIVELY, THE 'NEW PREFERRED STOCK'), PROVIDED, HOWEVER, THAT THE AGGREGATE PRINCIPAL AMOUNT AND/OR PAR VALUE, AS THE CASE MAY BE, SHALL NOT EXCEED $369 MILLION. THE NEW BONDS AND NEW PREFERRED STOCK WILL EACH BE OFFERED IN ONE OR MORE SERIES AT PRICES AND ON TERMS TO BE DETERMINED AT THE TIME OF SALE. THIS PROSPECTUS WILL BE SUPPLEMENTED BY A PROSPECTUS SUPPLEMENT OR SUPPLEMENTS (THE 'PROSPECTUS SUPPLEMENT') WHICH WILL SET FORTH, AS APPLICABLE, (1) THE AGGREGATE PRINCIPAL AMOUNT, RATE AND TIME OF PAYMENT OF INTEREST, MATURITY, PURCHASE PRICE, INITIAL PUBLIC OFFERING PRICE, IF ANY, ANY REDEMPTION PROVISIONS AND OTHER SPECIFIC TERMS OF THE SERIES OF THE NEW BONDS IN RESPECT OF WHICH THIS PROSPECTUS IS BEING DELIVERED AND/OR (2) THE NUMBER OF SHARES, THE PAR VALUE PER SHARE, PURCHASE PRICE, INITIAL PUBLIC OFFERING PRICE, IF ANY, DIVIDEND RATE, ANY REDEMPTION OR SINKING FUND TERMS AND OTHER SPECIFIC TERMS OF THE SERIES OF THE NEW PREFERRED STOCK IN RESPECT OF WHICH THIS PROSPECTUS IS BEING DELIVERED. THE SALE OF ONE SERIES OF ANY SECURITY WILL NOT BE CONTINGENT UPON THE SALE OF ANY OTHER SERIES OF ANY SECURITY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE- SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE COMPANY MAY SELL ONE OR MORE SERIES OF THE NEW BONDS AND/OR THE NEW PREFERRED STOCK THROUGH UNDERWRITERS, DEALERS OR AGENTS, OR DIRECTLY TO ONE OR MORE PURCHASERS. THE PROSPECTUS SUPPLEMENT WILL SET FORTH THE NAMES OF UNDERWRITERS, DEALERS OR AGENTS, IF ANY, ANY APPLICABLE COMMISSIONS OR DISCOUNTS AND THE NET PROCEEDS TO THE COMPANY FROM ANY SUCH SALE. SEE 'PLAN OF DISTRIBUTION' FOR POSSIBLE INDEMNIFICATION ARRANGEMENTS FOR UNDERWRITERS, DEALERS, AGENTS AND PURCHASERS. THE DATE OF THIS PROSPECTUS IS NOVEMBER 15, 1993. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY OR ANY OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. AVAILABLE INFORMATION THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 ('EXCHANGE ACT') AND IN ACCORDANCE THEREWITH FILES REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION ('SEC'). SUCH REPORTS INCLUDE INFORMATION, AS OF PARTICULAR DATES, CONCERNING THE COMPANY'S DIRECTORS AND OFFICERS, THEIR REMUNERATION, THE PRINCIPAL HOLDERS OF THE COMPANY'S SECURITIES AND ANY MATERIAL INTEREST OF SUCH PERSONS IN TRANSACTIONS WITH THE COMPANY. SUCH REPORTS AND OTHER INFORMATION CAN BE INSPECTED AND COPIED AT THE PUBLIC REFERENCE FACILITIES MAINTAINED BY THE SEC AT 450 FIFTH STREET, N.W., ROOM 1024, WASHINGTON, D.C. 20549; 500 WEST MADISON STREET, 14TH FLOOR, CHICAGO, ILLINOIS 60661; AND SEVEN WORLD TRADE CENTER, 13TH FLOOR, NEW YORK, NEW YORK 10048. COPIES OF THIS MATERIAL CAN ALSO BE OBTAINED AT PRESCRIBED RATES FROM THE PUBLIC REFERENCE SECTION OF THE SEC AT ITS PRINCIPAL OFFICE AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549. THE COMPANY'S SERIES OF 12.64% PREFERRED STOCK AND 9.68% PREFERRED STOCK ARE LISTED ON THE NEW YORK STOCK EXCHANGE. REPORTS AND OTHER INFORMATION CONCERNING THE COMPANY CAN BE INSPECTED AND COPIED AT THE OFFICE OF SUCH EXCHANGE AT 20 BROAD STREET, NEW YORK, NEW YORK. SHAREHOLDERS OF THE COMPANY ARE FURNISHED COPIES OF FINANCIAL STATEMENTS AS OF THE END OF THE MOST RECENT FISCAL YEAR AUDITED AND REPORTED UPON (WITH AN OPINION EXPRESSED) BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE THE FOLLOWING DOCUMENTS FILED WITH THE SEC PURSUANT TO THE EXCHANGE ACT ARE INCORPORATED IN THIS PROSPECTUS BY REFERENCE: 1. THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1992. 2. THE COMPANY'S QUARTERLY REPORTS ON FORM 10-Q FOR THE QUARTERS ENDED MARCH 31, 1993 AND JUNE 30, 1993. IN ADDITION, ALL DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY PURSUANT TO SECTION 13, 14 OR 15(D) OF THE EXCHANGE ACT PRIOR TO THE TERMINATION OF THIS OFFERING SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND TO BE A PART HEREOF FROM THE DATE OF FILING OF SUCH DOCUMENTS (SUCH DOCUMENTS, AND THE DOCUMENTS ENUMERATED ABOVE, BEING HEREIN REFERRED TO AS 'INCORPORATED DOCUMENTS'). ANY STATEMENT CONTAINED HEREIN OR IN AN INCORPORATED DOCUMENT SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS PROSPECTUS TO THE EXTENT THAT A STATEMENT CONTAINED IN ANY OTHER SUBSEQUENTLY FILED INCORPORATED DOCUMENT OR IN AN ACCOMPANYING PROSPECTUS SUPPLEMENT MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY SUCH STATEMENT SO MODIFIED OR SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART OF THIS PROSPECTUS. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO MR. GARY L. FLORREICH, ASSISTANT SECRETARY AND ASSISTANT TREASURER, LOUISIANA POWER & LIGHT COMPANY, 639 LOYOLA AVENUE, NEW ORLEANS, LOUISIANA 70113, TELEPHONE NUMBER: 504-569-4000. THE INFORMATION RELATING TO THE COMPANY CONTAINED IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT DOES NOT PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE INCORPORATED DOCUMENTS. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR, WITH RESPECT TO ANY SERIES OF THE NEW BONDS OR THE NEW PREFERRED 2 STOCK, THE PROSPECTUS SUPPLEMENT RELATING THERETO, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND A PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THAT PROSPECTUS SUPPLEMENT. THE COMPANY THE COMPANY WAS INCORPORATED UNDER THE LAWS OF THE STATE OF LOUISIANA ON OCTOBER 15, 1974 AND IS SUCCESSOR BY MERGER TO A PREDECESSOR LOUISIANA POWER & LIGHT COMPANY, WHICH WAS INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA IN 1927. THE MERGER OF SUCH PREDECESSOR CORPORATION INTO THE COMPANY BECAME EFFECTIVE ON FEBRUARY 28, 1975. THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE IS LOCATED AT 639 LOYOLA AVENUE, NEW ORLEANS, LOUISIANA 70113. ITS TELEPHONE NUMBER, INCLUDING AREA CODE, IS (504) 569-4000. THE COMPANY IS AN ELECTRIC PUBLIC UTILITY COMPANY WITH ALL OF ITS OPERATIONS IN THE STATE OF LOUISIANA. ENTERGY CORPORATION, WHICH IS A REGISTERED PUBLIC UTILITY HOLDING COMPANY UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ('HOLDING COMPANY ACT'), OWNS ALL OF THE OUTSTANDING COMMON STOCK OF THE COMPANY. THE COMPANY, ARKANSAS POWER & LIGHT COMPANY ('AP&L'), MISSISSIPPI POWER & LIGHT COMPANY ('MP&L') AND NEW ORLEANS PUBLIC SERVICE INC. ('NOPSI') ARE THE PRINCIPAL OPERATING ELECTRIC UTILITY SUBSIDIARIES OF ENTERGY CORPORATION. ENTERGY CORPORATION ALSO OWNS ALL OF THE COMMON STOCK OF SYSTEM ENERGY RESOURCES, INC., A GENERATING COMPANY, ENTERGY SERVICES, INC., A SERVICE COMPANY, ENTERGY ENTERPRISES, INC., A NON-UTILITY COMPANY, ENTERGY OPERATIONS, INC., A NUCLEAR MANAGEMENT SERVICES COMPANY, AND ENTERGY POWER, INC., A SUBSIDIARY FORMED TO MARKET CAPACITY AND ENERGY FROM CERTAIN GENERATING UNITS TO WHOLESALE MARKETS. ENTERGY CORPORATION ALSO HAS SEVERAL SUBSIDIARIES FORMED TO PARTICIPATE IN UTILITY PROJECTS LOCATED OUTSIDE THE ENTERGY SYSTEM'S AREAS OF RETAIL SERVICE, BOTH DOMESTICALLY AND IN FOREIGN COUNTRIES. THE COMPANY, AP&L, MP&L AND NOPSI OWN ALL OF THE CAPITAL STOCK OF SYSTEM FUELS, INC., A SPECIAL PURPOSE COMPANY WHICH IMPLEMENTS AND/OR MAINTAINS CERTAIN PROGRAMS FOR THE PROCUREMENT, DELIVERY AND STORAGE OF FUEL SUPPLIES FOR CERTAIN ENTERGY CORPORATION SUBSIDIARIES. USE OF PROCEEDS THE NET PROCEEDS TO BE RECEIVED FROM THE ISSUANCE AND SALE OF THE NEW BONDS AND/OR THE NEW PREFERRED STOCK WILL BE USED FOR GENERAL CORPORATE PURPOSES, INCLUDING, WITHOUT LIMITATION, THE POSSIBLE REDEMPTION OR OTHER ACQUISITION, IN WHOLE OR IN PART, OF CERTAIN OF THE COMPANY'S OUTSTANDING SECURITIES. ANY SPECIFIC SECURITIES TO BE REDEEMED OR ACQUIRED WITH THE PROCEEDS OF A SALE OF A SERIES OF NEW BONDS OR NEW PREFERRED STOCK WILL BE SET FORTH IN THE PROSPECTUS SUPPLEMENT RELATING TO THAT SERIES. REFERENCE IS MADE TO THE INCORPORATED DOCUMENTS WITH RESPECT TO THE COMPANY'S MOST SIGNIFICANT CONTINGENCIES, ITS GENERAL CAPITAL REQUIREMENTS AND ITS GENERAL FINANCING PLANS AND CAPABILITIES, INCLUDING ITS SHORT-TERM BORROWING CAPACITY, AND EARNINGS COVERAGE REQUIREMENTS UNDER THE COMPANY'S RESTATED ARTICLES OF INCORPORATION, AS AMENDED ('ARTICLES OF INCORPORATION'), WHICH LIMIT THE AMOUNT OF ADDITIONAL PREFERRED STOCK THE COMPANY MAY ISSUE, AND EARNINGS COVERAGE AND OTHER REQUIREMENTS UNDER THE COMPANY'S MORTGAGE (AS HEREIN DEFINED) WHICH LIMIT THE AMOUNT OF ADDITIONAL FIRST MORTGAGE BONDS THE COMPANY MAY ISSUE. DESCRIPTION OF NEW BONDS GENERAL.THE NEW BONDS ARE TO BE ISSUED UNDER THE COMPANY'S MORTGAGE AND DEED OF TRUST, DATED AS OF APRIL 1, 1944, WITH THE CHASE NATIONAL BANK OF THE CITY OF NEW YORK (BANK OF MONTREAL TRUST COMPANY, SUCCESSOR) ('CORPORATE TRUSTEE') AND CARL E. BUCKLEY (MARK F. MCLAUGHLIN, SUCCESSOR), ('CO-TRUSTEE', AND TOGETHER WITH THE CORPORATE TRUSTEE, THE 'TRUSTEES'), AS SUPPLEMENTED BY VARIOUS SUPPLEMENTAL INDENTURES THERETO AND AS TO BE FURTHER SUPPLEMENTED TO PROVIDE SPECIFICALLY FOR THE NEW BONDS (COLLECTIVELY REFERRED TO AS THE 'MORTGAGE'). 3 ALL FIRST MORTGAGE BONDS ISSUED OR TO BE ISSUED UNDER THE MORTGAGE ARE REFERRED TO HEREIN AS 'BONDS'. THE STATEMENTS HEREIN CONCERNING THE BONDS, THE NEW BONDS AND THE MORTGAGE ARE SUMMARY IN NATURE AND DO NOT PURPORT TO BE COMPLETE. THEY ARE SUBJECT TO THE DETAILED PROVISIONS OF THE MORTGAGE. THE MORTGAGE AND A FORM OF SUPPLEMENTAL INDENTURE ARE FILED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART. TERMS OF SPECIFIC SERIES OF THE NEW BONDS.A PROSPECTUS SUPPLEMENT WILL DESCRIBE THE FOLLOWING TERMS OF, OR APPLICABLE TO, EACH SERIES OF THE NEW BONDS TO BE ISSUED: (1) THE DESIGNATION OF SUCH SERIES OF THE NEW BONDS; (2) THE AGGREGATE PRINCIPAL AMOUNT OF SUCH SERIES; (3) THE DATE ON WHICH SUCH SERIES WILL MATURE; (4) THE RATE AT WHICH SUCH SERIES WILL BEAR INTEREST AND THE DATE FROM WHICH SUCH INTEREST ACCRUES; (5) THE DATES ON WHICH INTEREST WILL BE PAYABLE; (6) THE PRICES, INCLUDING THE 'GENERAL REDEMPTION PRICES' AND THE 'SPECIAL REDEMPTION PRICES' REFERRED TO BELOW, AND THE OTHER TERMS AND CONDITIONS UPON WHICH THE PARTICULAR SERIES MAY BE REDEEMED BY THE COMPANY PRIOR TO MATURITY; (7) WHETHER THE DIVIDEND COVENANT DESCRIBED BELOW WILL BE APPLICABLE TO ANY SUCH SERIES; (8) IF AN INSURANCE POLICY WILL BE PROVIDED FOR THE PAYMENT OF THE PRINCIPAL OF AND/OR INTEREST ON THE NEW BONDS OF SUCH SERIES, THE TERMS THEREOF; AND (9) ANY OTHER TERMS OF SUCH SERIES OF THE NEW BONDS, NOT INCONSISTENT WITH THE PROVISIONS OF THE MORTGAGE. FORM AND EXCHANGE.SEE 'BOOK ENTRY SECURITIES' BELOW. REPLACEMENT FUND.IN ADDITION TO ACTUAL EXPENDITURES FOR MAINTENANCE AND REPAIRS, THE COMPANY IS REQUIRED TO EXPEND OR DEPOSIT FOR EACH YEAR, FOR REPLACEMENTS AND IMPROVEMENTS IN RESPECT OF THE MORTGAGED ELECTRIC, GAS, STEAM AND/OR HOT WATER UTILITY PROPERTY AND CERTAIN AUTOMOTIVE EQUIPMENT, AN AMOUNT EQUAL TO $800,000 PLUS 2 1/4% OF NET ADDITIONS TO THE MORTGAGED ELECTRIC, GAS, STEAM AND/OR HOT WATER UTILITY PROPERTY MADE AFTER DECEMBER 31, 1943 AND PRIOR TO THE BEGINNING OF SUCH YEAR. SUCH REQUIREMENT MAY BE MET BY DEPOSITING CASH OR CERTIFYING GROSS PROPERTY ADDITIONS OR EXPENDITURES FOR CERTAIN AUTOMOTIVE EQUIPMENT OR BY TAKING CREDIT FOR BONDS AND QUALIFIED LIEN BONDS RETIRED. SUCH CASH MAY BE WITHDRAWN AGAINST GROSS PROPERTY ADDITIONS OR WAIVER OF THE RIGHT TO ISSUE BONDS. SINKING OR IMPROVEMENT FUND.THE COMPANY IS REQUIRED TO MAKE ANNUAL SINKING OR IMPROVEMENT FUND PAYMENTS FOR EACH OUTSTANDING SERIES OF BONDS (OTHER THAN THE FORTY-THIRD, FORTY-FIFTH, FORTY-SIXTH, FORTY-NINTH AND FIFTY-FIRST SERIES), STATED AS 1% PER YEAR OF THE GREATEST AMOUNT FOR EACH SUCH SERIES OUTSTANDING PRIOR TO THE BEGINNING OF THE YEAR, LESS CERTAIN BONDS RETIRED, AND WILL HAVE SUCH REQUIREMENTS FOR EACH SERIES OF THE NEW BONDS (BEGINNING NOT LATER THAN 23 MONTHS FROM THE DATE OF EACH SERIES OF THE NEW BONDS). THE COMPANY MAY ALSO TAKE AS A CREDIT AGAINST THE SINKING OR IMPROVEMENT FUND REQUIREMENT IN RESPECT OF EACH SERIES OF THE NEW BONDS AN AMOUNT, NOT EXCEEDING THE SINKING OR IMPROVEMENT FUND REQUIREMENT IN ANY ONE YEAR, BASED UPON SINKING FUND CREDITS FOR CERTAIN BONDS RETIRED PRIOR TO OR AT MATURITY. THE RESULTING REQUIREMENT WITH RESPECT TO EACH SERIES OF THE NEW BONDS MAY BE SATISFIED IN CASH OR PRINCIPAL AMOUNT OF SUCH SERIES OF NEW BONDS OR WITH PROPERTY ADDITIONS AT 60% OF THE COST OR FAIR VALUE THEREOF, WHICHEVER IS LESS. THE SINKING OR IMPROVEMENT FUND REQUIREMENT IN RESPECT OF EACH SERIES OF THE NEW BONDS MAY BE ANTICIPATED AT ANY TIME. IF THE DATE FIXED FOR ANY RESULTING REDEMPTION SHALL BE IN THE CALENDAR YEAR IN WHICH SUCH SINKING FUND PAYMENT IS DUE, REDEMPTION SHALL BE AT THE SPECIAL REDEMPTION PRICE, BUT IF THE DATE FIXED FOR ANY RESULTING REDEMPTION SHALL BE PRIOR TO THE CALENDAR YEAR IN WHICH SUCH SINKING FUND PAYMENT IS DUE, REDEMPTION SHALL BE AT THE GENERAL REDEMPTION PRICE AND SUBJECT TO THE LIMITATION ON SUCH REDEMPTIONS AS SET FORTH UNDER 'REDEMPTION AND PURCHASE OF NEW BONDS' IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT. SIMILAR BUT NOT IDENTICAL PROVISIONS ARE IN EFFECT WITH RESPECT TO THE BONDS OF OTHER SERIES NOW OUTSTANDING. SPECIAL PROVISIONS FOR RETIREMENT OF BONDS.IF, DURING ANY 12 MONTHS' PERIOD, MORTGAGED PROPERTY IS DISPOSED OF BY ORDER OF OR TO ANY GOVERNMENTAL AUTHORITY, RESULTING IN THE RECEIPT OF $5,000,000 OR MORE AS PROCEEDS, THE COMPANY (SUBJECT TO CERTAIN CONDITIONS) MUST APPLY SUCH PROCEEDS, LESS CERTAIN DEDUCTIONS, TO THE RETIREMENT OF BONDS. THE NEW BONDS ARE REDEEMABLE FOR THIS PURPOSE AT THE SPECIAL REDEMPTION PRICES SET FORTH UNDER 'REDEMPTION AND PURCHASE OF NEW BONDS' IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT. 4 SECURITY.THE NEW BONDS, TOGETHER WITH ALL OTHER BONDS, WILL BE SECURED BY THE MORTGAGE, WHICH CONSTITUTES, IN THE OPINION OF THE GENERAL COUNSEL FOR THE COMPANY, A FIRST MORTGAGE LIEN ON ALL OF THE PRESENT PROPERTIES OF THE COMPANY (EXCEPT AS STATED BELOW), SUBJECT TO (A) LEASES OF MINOR PORTIONS OF THE COMPANY'S PROPERTY TO OTHERS FOR USES WHICH, IN THE OPINION OF SUCH COUNSEL, DO NOT INTERFERE WITH THE COMPANY'S BUSINESS, (B) LEASES OF CERTAIN PROPERTY OF THE COMPANY NOT USED IN ITS BUSINESS, AND (C) EXCEPTED ENCUMBRANCES. THERE ARE EXCEPTED FROM THE LIEN OF THE MORTGAGE ALL CASH AND SECURITIES; CERTAIN EQUIPMENT, MATERIALS AND SUPPLIES; AUTOMOBILES AND OTHER VEHICLES AND AIRCRAFT; TIMBER, MINERAL RIGHTS AND ROYALTIES; AND RECEIVABLES, CONTRACTS, LEASES AND OPERATING AGREEMENTS. THE MORTGAGE CONTAINS PROVISIONS SUBJECTING AFTER-ACQUIRED PROPERTY (SUBJECT TO PRE-EXISTING LIENS) TO THE LIEN THEREOF, SUBJECT TO LIMITATIONS IN THE CASE OF CONSOLIDATION, MERGER OR SALE OF SUBSTANTIALLY ALL OF THE COMPANY'S ASSETS. THE MORTGAGE PROVIDES THAT THE TRUSTEES SHALL HAVE A LIEN ON THE MORTGAGED PROPERTY, PRIOR TO THE BONDS, FOR THE PAYMENT OF THEIR REASONABLE COMPENSATION AND EXPENSES AND FOR INDEMNITY AGAINST CERTAIN LIABILITIES. THE MORTGAGE CONTAINS RESTRICTIONS, SOME OF WHICH APPLY ONLY SO LONG AS CERTAIN PRIOR SERIES ARE OUTSTANDING, ON THE ACQUISITION OF PROPERTY SUBJECT TO LIENS AND ON THE ISSUANCE OF BONDS UNDER DIVISIONAL OR PRIOR LIEN MORTGAGES. ISSUANCE OF ADDITIONAL BONDS.THE MAXIMUM PRINCIPAL AMOUNT OF BONDS THAT MAY BE ISSUED UNDER THE MORTGAGE IS LIMITED TO ONE HUNDRED BILLION DOLLARS AT ANY TIME OUTSTANDING, SUBJECT TO PROPERTY ADDITIONS, EARNINGS AND OTHER LIMITATIONS OF THE MORTGAGE. BONDS OF ANY SERIES MAY BE ISSUED FROM TIME TO TIME UPON THE BASES OF (1) 60% OF PROPERTY ADDITIONS AFTER ADJUSTMENTS TO OFFSET RETIREMENTS, (2) RETIREMENT OF BONDS OR QUALIFIED LIEN BONDS, AND (3) DEPOSIT OF CASH. PROPERTY ADDITIONS GENERALLY INCLUDE ELECTRIC, GAS, STEAM AND/OR HOT WATER PROPERTY ACQUIRED AFTER DECEMBER 31, 1943, BUT MAY NOT INCLUDE SECURITIES, AUTOMOBILES OR OTHER VEHICLES OR AIRCRAFT OR PROPERTY USED PRINCIPALLY FOR THE PRODUCTION OR GATHERING OF NATURAL GAS. THE COMPANY ESTIMATES THAT, AS OF SEPTEMBER 30, 1993, THERE WERE APPROXIMATELY $89.6 MILLION OF UNFUNDED PROPERTY ADDITIONS AVAILABLE FOR THE ISSUANCE OF ADDITIONAL BONDS. WITH CERTAIN EXCEPTIONS IN THE CASE OF (2) ABOVE, THE ISSUANCE OF ADDITIONAL BONDS IS SUBJECT TO ADJUSTED NET EARNINGS (BEFORE INTEREST AND INCOME TAXES) FOR 12 CONSECUTIVE MONTHS OUT OF THE 15 MONTHS IMMEDIATELY PRECEDING THE ISSUANCE OF SUCH BONDS BEING AT LEAST TWICE THE ANNUAL INTEREST REQUIREMENTS ON ALL BONDS AT THE TIME OUTSTANDING, INCLUDING THE ADDITIONAL BONDS BEING ISSUED, AND ALL INDEBTEDNESS OF PRIOR RANK. SUCH ADJUSTED NET EARNINGS ARE COMPUTED AFTER PROVISIONS FOR RETIREMENT AND DEPRECIATION OF PROPERTY AT LEAST EQUAL TO THE REPLACEMENT FUND REQUIREMENTS FOR SUCH PERIOD. THE COMPANY EXPECTS TO ISSUE THE NEW BONDS ON THE BASIS OF UNFUNDED NET PROPERTY ADDITIONS AND/OR ON THE BASIS OF THE RETIREMENT OF BONDS. THE COMPANY HAS RESERVED THE RIGHT (WITHOUT ANY CONSENT OR OTHER ACTION BY HOLDERS OF THE 1999 SERIES BONDS OR ANY SUBSEQUENTLY CREATED SERIES, INCLUDING THE NEW BONDS) TO INCLUDE NUCLEAR FUEL (AND SIMILAR OR ANALOGOUS DEVICES OR SUBSTANCES) AS PROPERTY ADDITIONS. THE COMPANY HAS ALSO RESERVED THE RIGHT TO AMEND THE MORTGAGE, WITHOUT ANY CONSENT OR OTHER ACTION OF THE HOLDERS OF THE 2008 SERIES BONDS OR ANY SUBSEQUENTLY CREATED SERIES (INCLUDING THE NEW BONDS), TO MAKE AVAILABLE AS PROPERTY ADDITIONS ANY FORM OF SPACE SATELLITES (INCLUDING SOLAR POWER SATELLITES), SPACE STATIONS AND OTHER ANALOGOUS FACILITIES. NO BONDS MAY BE ISSUED ON THE BASIS OF PROPERTY ADDITIONS SUBJECT TO QUALIFIED LIENS IF THE QUALIFIED LIEN BONDS SECURED THEREBY EXCEED 50% OF SUCH PROPERTY ADDITIONS, OR IF THE QUALIFIED LIEN BONDS AND BONDS THEN OUTSTANDING WHICH HAVE BEEN ISSUED AGAINST PROPERTY ADDITIONS SUBJECT TO CONTINUING QUALIFIED LIENS AND CERTAIN OTHER ITEMS WOULD IN THE AGGREGATE EXCEED 15% OF THE BONDS AND QUALIFIED LIEN BONDS OUTSTANDING. 5 RELEASE AND SUBSTITUTION OF PROPERTY.PROPERTY MAY BE RELEASED FROM THE LIEN OF THE MORTGAGE UPON THE BASES OF (1) DEPOSIT OF CASH OR, TO A LIMITED EXTENT, PURCHASE MONEY MORTGAGES, (2) PROPERTY ADDITIONS, AFTER ADJUSTMENTS IN CERTAIN CASES TO OFFSET RETIREMENTS AND AFTER MAKING ADJUSTMENTS FOR QUALIFIED LIEN BONDS OUTSTANDING AGAINST PROPERTY ADDITIONS, AND (3) WAIVER OF THE RIGHT TO ISSUE BONDS WITHOUT APPLYING ANY EARNINGS TEST. CASH MAY BE WITHDRAWN UPON THE BASES STATED IN (2) AND (3) ABOVE WITHOUT MEETING AN EARNINGS TEST. WHEN PROPERTY RELEASED IS NOT FUNDED PROPERTY, PROPERTY ADDITIONS USED TO EFFECT THE RELEASE MAY AGAIN, IN CERTAIN CASES, BECOME AVAILABLE AS CREDITS UNDER THE MORTGAGE, AND THE WAIVER OF THE RIGHT TO ISSUE BONDS TO EFFECT THE RELEASE MAY, IN CERTAIN CASES, CEASE TO BE EFFECTIVE AS SUCH A WAIVER. SIMILAR PROVISIONS ARE IN EFFECT AS TO CASH PROCEEDS OF SUCH PROPERTY. THE MORTGAGE CONTAINS SPECIAL PROVISIONS WITH RESPECT TO QUALIFIED LIEN BONDS PLEDGED AND DISPOSITION OF MONEYS RECEIVED ON PLEDGED PRIOR LIEN BONDS. DIVIDEND COVENANT.THE COMPANY MAY COVENANT IN SUBSTANCE THAT, SO LONG AS ANY NEW BONDS OF A PARTICULAR SERIES REMAIN OUTSTANDING, IT WILL NOT PAY ANY CASH DIVIDENDS ON COMMON STOCK AFTER A SELECTED DATE CLOSE TO THE DATE OF THE ORIGINAL ISSUANCE OF SUCH SERIES OF NEW BONDS (OTHER THAN CERTAIN DIVIDENDS THAT MAY BE DECLARED BY THE COMPANY PRIOR TO SUCH SELECTED DATE) EXCEPT FROM CREDITS TO EARNED SURPLUS AFTER SUCH SELECTED DATE PLUS AN AMOUNT UP TO $345 MILLION AND PLUS SUCH ADDITIONAL AMOUNTS AS SHALL BE APPROVED BY THE SEC. THE PROSPECTUS SUPPLEMENT RELATING TO A PARTICULAR SERIES OF NEW BONDS WILL STATE WHETHER THIS COVENANT WILL APPLY TO SUCH SERIES. MODIFICATION OF THE MORTGAGE.THE RIGHTS OF THE BONDHOLDERS MAY BE MODIFIED WITH THE CONSENT OF THE HOLDERS OF 70% OF THE BONDS, AND, IF LESS THAN ALL SERIES OF BONDS ARE AFFECTED, THE CONSENT ALSO OF THE HOLDERS OF 70% OF THE BONDS OF EACH SERIES AFFECTED. THE COMPANY HAS RESERVED THE RIGHT (WITHOUT ANY CONSENT OR OTHER ACTION BY HOLDERS OF THE 2000 SERIES BONDS OR ANY SUBSEQUENTLY CREATED SERIES, INCLUDING THE NEW BONDS) TO SUBSTITUTE FOR THE FOREGOING PROVISION A PROVISION TO THE EFFECT THAT THE RIGHTS OF THE BONDHOLDERS MAY BE MODIFIED WITH THE CONSENT OF HOLDERS OF 66 2/3% OF THE BONDS, AND, IF LESS THAN ALL SERIES OF BONDS ARE AFFECTED, THE CONSENT ALSO OF HOLDERS OF 66 2/3% OF THE BONDS OF EACH SERIES AFFECTED. IN GENERAL, NO MODIFICATION OF THE TERMS OF PAYMENT OF PRINCIPAL OR INTEREST, NO MODIFICATION OF THE OBLIGATIONS OF THE COMPANY UNDER SECTION 64 OF THE MORTGAGE (UNTIL THE FOREGOING SUBSTITUTION IS MADE), AND NO MODIFICATION AFFECTING THE LIEN OF THE MORTGAGE OR REDUCING THE PERCENTAGE REQUIRED FOR MODIFICATION, IS EFFECTIVE AGAINST ANY BONDHOLDER WITHOUT HIS CONSENT. DEFAULTS AND NOTICE THEREOF.DEFAULTS ARE DEFINED IN THE MORTGAGE AS: DEFAULT IN PAYMENT OF PRINCIPAL; DEFAULT FOR 60 DAYS IN PAYMENT OF INTEREST OR INSTALLMENTS OF FUNDS FOR RETIREMENT OF BONDS; CERTAIN EVENTS IN BANKRUPTCY, INSOLVENCY OR REORGANIZATION; DEFAULTS WITH RESPECT TO QUALIFIED LIEN BONDS; AND DEFAULT FOR 90 DAYS AFTER NOTICE IN OTHER COVENANTS. THE TRUSTEES MAY WITHHOLD NOTICE OF DEFAULT (EXCEPT IN PAYMENT OF PRINCIPAL, INTEREST OR FUNDS FOR RETIREMENT OF BONDS) IF THEY DETERMINE IT IS IN THE INTERESTS OF THE BONDHOLDERS. THE CORPORATE TRUSTEE OR THE HOLDERS OF 25% OF THE BONDS MAY DECLARE THE PRINCIPAL AND INTEREST DUE ON DEFAULT, BUT A MAJORITY MAY ANNUL SUCH DECLARATION IF SUCH DEFAULT HAS BEEN CURED. NO HOLDER OF BONDS MAY ENFORCE THE LIEN OF THE MORTGAGE WITHOUT GIVING THE TRUSTEES WRITTEN NOTICE OF A DEFAULT AND UNLESS THE HOLDERS OF 25% OF THE BONDS HAVE REQUESTED THE TRUSTEES IN WRITING TO ACT AND OFFERED THEM REASONABLE OPPORTUNITY TO ACT AND INDEMNITY SATISFACTORY TO THE TRUSTEES AGAINST THE COSTS, EXPENSES AND LIABILITIES TO BE INCURRED THEREBY AND THE TRUSTEES SHALL HAVE FAILED TO ACT. HOLDERS OF A MAJORITY OF THE BONDS MAY DIRECT THE TIME, METHOD AND PLACE OF CONDUCTING ANY PROCEEDINGS FOR ANY REMEDY AVAILABLE TO THE TRUSTEES, OR EXERCISING ANY TRUST OR POWER CONFERRED UPON THE TRUSTEES. THE COMPANY MUST FILE AN ANNUAL CERTIFICATE WITH THE CORPORATE TRUSTEE AS TO COMPLIANCE WITH THE PROVISIONS OF THE MORTGAGE AND AS TO THE ABSENCE OF DEFAULT WITH RESPECT TO ANY OF THE COVENANTS CONTAINED IN THE MORTGAGE. DESCRIPTION OF NEW PREFERRED STOCK GENERAL.THE ARTICLES OF INCORPORATION PROVIDE FOR TWO CLASSES OF SERIAL PREFERRED STOCK OF THE COMPANY, THE PREFERRED STOCK, $100 PAR VALUE ('$100 PREFERRED STOCK'), AND THE PREFERRED STOCK, $25 PAR VALUE ('$25 PREFERRED STOCK') (THE $100 PREFERRED STOCK AND THE $25 PREFERRED STOCK BEING HEREIN COLLECTIVELY REFERRED TO AS THE 'PREFERRED 6 STOCK'). THE $100 PREFERRED STOCK AND THE $25 PREFERRED STOCK HAVE THE SAME RANK AND, EXCEPT AS TO THOSE CHARACTERISTICS RELATING TO PAR VALUE, VOTING RIGHTS (INCLUDING MATTERS RELATING TO QUORUMS AND ADJOURNMENTS) AND IN CERTAIN OTHER RESPECTS AS TO WHICH THERE MAY BE VARIATIONS AMONG SERIES, THE SHARES OF EACH SERIES OF PREFERRED STOCK CONFER EQUAL RIGHTS UPON THE HOLDERS. THE RESPECTS IN WHICH THERE MAY BE VARIATIONS AS AMONG SERIES CONSIST OF (A) THE NUMBER OF SHARES CONSTITUTING EACH SERIES AND THE DISTINCTIVE SERIAL DESIGNATION THEREOF, (B) THE ANNUAL DIVIDEND RATE, THE INITIAL DIVIDEND PAYMENT DATE AND THE DATE FROM WHICH DIVIDENDS SHALL BE CUMULATIVE, (C) THE AMOUNTS PAYABLE UPON REDEMPTION, AND (D) THE TERMS AND AMOUNT OF SINKING FUND REQUIREMENTS (IF ANY) FOR THE PURCHASE OR REDEMPTION OF SHARES OF EACH SERIES OF PREFERRED STOCK OTHER THAN THE FIRST THROUGH TENTH SERIES OF THE $100 PREFERRED STOCK HERETOFORE ISSUED BY THE COMPANY. WHEN A NEW SERIES OF PREFERRED STOCK IS CREATED, THE NUMBER OF SHARES CONSTITUTING SUCH SERIES, ITS DISTINCTIVE SERIAL DESIGNATION AND ITS DISTINCTIVE CHARACTERISTICS (IN THOSE LIMITED RESPECTS AS TO WHICH THERE MAY BE VARIATIONS) ARE SET BY AN AMENDMENT TO THE ARTICLES OF INCORPORATION. THE STATEMENTS HEREIN CONCERNING THE PREFERRED STOCK AND THE NEW PREFERRED STOCK ARE SUMMARY IN NATURE AND DO NOT PURPORT TO BE COMPLETE. SUCH STATEMENTS DO NOT ATTEMPT TO RELATE OR TO GIVE EFFECT TO THE APPLICABLE PROVISIONS OF LOUISIANA STATUTORY OR DECISIONAL LAW AND ARE SUBJECT IN ALL RESPECTS TO THE DETAILED PROVISIONS OF THE ARTICLES OF INCORPORATION AND TO THE ARTICLES OF AMENDMENT TO BE ADOPTED FOR EACH SERIES OF NEW PREFERRED STOCK. THE ARTICLES OF INCORPORATION AND THE FORM OF ARTICLES OF AMENDMENT ARE FILED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART. FORM AND EXCHANGE.SEE 'BOOK ENTRY SECURITIES' BELOW. TERMS OF SPECIFIC SERIES OF THE NEW PREFERRED STOCK.A PROSPECTUS SUPPLEMENT WILL DESCRIBE THE FOLLOWING TERMS OF EACH SERIES OF NEW PREFERRED STOCK TO BE ISSUED: (1) THE DESIGNATION OF SUCH SERIES OF NEW PREFERRED STOCK; (2) THE PAR VALUE OF EACH SHARE; (3) THE NUMBER OF SHARES OF NEW PREFERRED STOCK IN SUCH SERIES; (4) THE PURCHASE PRICE AND INITIAL PUBLIC OFFERING PRICE, IF ANY, OF THE SHARES OF SUCH SERIES; (5) THE DIVIDEND RATE; (6) THE INITIAL DIVIDEND PAYMENT DATE AND THE DATE FROM WHICH DIVIDENDS WILL BE CUMULATIVE; (7) THE TERMS AND CONDITIONS PURSUANT TO WHICH, AND THE PRICES AT WHICH, THE COMPANY MAY REDEEM SHARES OF SUCH SERIES; (8) THE TERMS AND AMOUNT OF ANY SINKING FUND REQUIREMENTS APPLICABLE TO SUCH SERIES; AND (9) ANY OTHER TERMS OF SUCH SERIES OF THE NEW PREFERRED STOCK, NOT INCONSISTENT WITH THE ARTICLES OF INCORPORATION. DIVIDEND RIGHTS.EACH SERIES OF THE NEW PREFERRED STOCK, PARI PASSU with each other series of the Preferred Stock, shall be entitled, when and as declared by the Board of Directors, in preference to the common stock, to dividends at the rate stated in the title thereof, payable quarterly on February 1, May 1, August 1 and November 1 of each year. Voting Rights.Except for that purpose only for which the right to vote is expressly conferred upon the holders of the Preferred Stock by the Articles of Incorporation, the holders of the Preferred Stock shall have no power to vote and shall be entitled to no notice of any meeting of stockholders of the Company. If and when dividends payable on Preferred Stock of the Company shall be in default in an amount equal to four full quarterly payments or more per share, and thereafter until all dividends on any such Preferred Stock in default shall have been paid, the holders of all Preferred Stock, voting separately as a class in such manner that the holders of the $100 Preferred Stock shall have one vote per share and the holders of the $25 Preferred Stock shall have one-quarter vote per share, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors of the Company, and the holders of the common stock, voting separately as a class, shall be entitled to elect the remaining directors of the Company. Restrictions on Issuance of Stock, Restrictions on Altering Terms of Preferred Stock.So long as any shares of the Preferred Stock are outstanding, the Company shall not, without the consent (given by vote at a meeting called for that purpose) of at least two-thirds of the total number of shares of the Preferred Stock then outstanding (for purposes of this computation each share of the $100 Preferred Stock shall count as one share, and each share of the $25 Preferred Stock shall count as one-quarter share): 7 (1) Issue any new stock which would rank prior to the Preferred Stock or issue any security convertible into shares of any such stock except for the purpose of providing funds for the redemption of all of the Preferred Stock then outstanding; or (2) Amend or alter any of the express terms of the Preferred Stock then outstanding in a manner prejudicial to the holders thereof; the increase or decrease in the authorized amount of the Preferred Stock or the creation, or increase or decrease in the authorized amount, of any new class of stock ranking on a parity with the Preferred Stock shall not, for the purposes of this paragraph, be deemed to be prejudicial to the holders of the Preferred Stock. Restrictions on Merger, Sale of Assets, Issue of Unsecured Debt, Sale of Additional Preferred Stock.So long as any shares of the Preferred Stock are outstanding, the Company shall not, without the consent (given by vote in a meeting called for that purpose) of the holders of a majority of the total number of shares of the Preferred Stock then outstanding (for purposes of this computation each share of the $100 Preferred Stock shall count as one share, and each share of the $25 Preferred Stock shall count as one-quarter share): (1) Merge or consolidate with or into any other corporation, or sell or otherwise dispose of all or substantially all of the assets of the Company, without obtaining the prior approval of regulatory authority of the United States under the provisions of the Holding Company Act; or (2) Issue or assume any unsecured indebtedness for purposes other than (i) the refunding of outstanding unsecured indebtedness theretofore issued or assumed by the Company, (ii) the reacquisition, redemption or other retirement of any indebtedness which has been authorized by regulatory authority of the United States under the provisions of the Holding Company Act, or (iii) the reacquisition, redemption or other retirement of all outstanding shares of the Preferred Stock, or preferred stock ranking prior to, or PARI PASSU with, the Preferred Stock, if immediately after such issue or assumption, the total principal amount of all unsecured indebtedness issued or assumed by the Company, including unsecured indebtedness then to be issued or assumed (but excluding the principal amount then outstanding of any unsecured indebtedness having a maturity in excess of ten years and in amount not exceeding 10% of the aggregate of (a) and (b) below) would exceed 10% of the aggregate of (a) the total principal amount of all bonds or other securities representing secured indebtedness issued or assumed by the Company and then to be outstanding, and (b) the capital and surplus of the Company as then to be stated on the books of account of the Company. When unsecured debt of a maturity in excess of ten years shall become of a maturity of ten years or less, it shall then be regarded as unsecured debt of a maturity of less than ten years and shall be computed with such debt for the purpose of determining the percentage ratio to the sum of (a) and (b) above of unsecured debt of a maturity of less than ten years, and when provision shall have been made, whether through a sinking fund or otherwise, for the retirement, prior to its maturity, of unsecured debt of a maturity in excess of ten years, the amount of any such security so required to be retired in less than ten years shall be regarded as unsecured debt of a maturity of less than ten years (and not as unsecured debt of a maturity in excess of ten years) and shall be computed with such debt for the purpose of determining the percentage ratio to the sum of (a) and (b) above of unsecured debt of a maturity of less than ten years, provided, however, that the payment due upon the maturity of unsecured debt having an original single maturity in excess of ten years or the payment due upon the latest maturity of any serial debt which had original maturities in excess of ten years shall not, for purposes of this provision, be regarded as unsecured debt of a maturity of less than ten years until such payment or payments shall be required to be made within five years (provided that the words 'five years' shall read 'three years' when none of the 4.96% Preferred Stock remains outstanding); furthermore, when unsecured debt of a maturity of less than ten years shall exceed 10% of the sum of (a) and (b) above, no additional unsecured debt shall be issued or assumed (except for the purposes set forth in (i), (ii) and (iii) above) until such ratio is reduced to 10% of the sum of (a) and (b) above; or (3) Issue, sell or otherwise dispose of any shares of the Preferred Stock, or of any other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, (a) so long as any of the 4.96% Preferred Stock remains outstanding, unless the net income of the Company available for dividends for a period of 12 consecutive calendar months within the 15 calendar months immediately preceding the issuance, sale or disposition of such stock, is at least equal to twice the 8 annual dividend requirements on all outstanding shares of the Preferred Stock and of all other classes of stock ranking prior to or on a parity with the Preferred Stock, including the shares proposed to be issued, and (b) so long as any Preferred Stock remains outstanding, unless the gross income of the Company for such period available for the payment of interest shall have been at least 1 times the sum of the annual interest charges on all interest bearing indebtedness of the Company and the annual dividend requirements on all outstanding Preferred Stock and of all other classes of stock ranking prior to, or on a parity with, the Preferred Stock including the shares proposed to be issued, and (c) unless the aggregate of the capital of the Company applicable to the common stock and the surplus of the Company shall be not less than the aggregate amount payable on the involuntary dissolution, liquidation or winding up of the Company in respect of all shares of the Preferred Stock and all shares of stock, if any, ranking prior thereto, or on a parity therewith, as to dividends or distributions, which will be outstanding after the issue of the shares proposed to be issued. Liquidation Rights.In the event of any voluntary liquidation, dissolution or winding up of the Company, the Preferred Stock shall have a preference over the common stock until an amount equal to the then current redemption price shall have been paid. In the event of any involuntary liquidation, dissolution or winding up of the Company, the Preferred Stock shall also have a preference over the common stock until the par value thereof plus accumulated and unpaid dividends thereon shall have been paid. Pre-emptive or Other Subscription Rights.No holder of any stock of the Company shall be entitled as of right to purchase or subscribe for any part of any stock of the Company or of any additional stock of any class to be issued by reason of any increase of the authorized capital stock of the Company. Liability to Further Calls and to Assessment.All of the New Preferred Stock will be validly issued and fully paid and non-assessable upon receipt by the Company of the purchase price thereof. Limitations on Payment of Common Stock Dividends.The Articles of Incorporation in effect restrict the payment of dividends on common stock to 75% of net income available for common stock dividends if the percentage of common stock equity to total capitalization, as defined, is between 20% and 25%, and to 50% of such net income if such percentage is less than 20%. At any time when common stock equity is 25% or more of total capitalization, the Company may not declare dividends on the common stock which would reduce common stock equity below 25% of total capitalization, except as hereinbefore provided. Certain other limitations on payment of common stock dividends also exist in the Articles of Incorporation. Certain Terms Applicable to Redemption.In general, at any time when dividends payable on any Preferred Stock are in default, the Company may not (1) make any payment, or set aside funds for payment, into any sinking fund for the purchase or redemption of any shares of the Preferred Stock, or (2) redeem, purchase or otherwise acquire less than all of the shares of the Preferred Stock, in either case unless approval is obtained under the Holding Company Act. Any shares of the Preferred Stock that are redeemed, purchased or acquired shall be retired and cancelled. Transfer Agent and Registrar.The transfer agent and registrar for the New Preferred Stock is Mellon Securities Trust Company, New York, New York. RATIOS OF EARNINGS TO FIXED CHARGES AND RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS The Company has calculated ratios of earnings to fixed charges and ratios of earnings to fixed charges and preferred dividends pursuant to Item 503 of SEC Regulation S-K as follows:
TWELVE MONTHS ENDED ----------------------------------------------------- DECEMBER 31, ---------------------------------------- JUNE 30, 1988 1989 1990 1991 1992 1993 Ratios of Earnings to Fixed Charges(a)...................... 1.71 1.79 2.32 2.40 2.79 2.85 Ratios of Earnings to Fixed Charges and Preferred Dividends(a)(b)........................................... 1.32 1.39 1.87 1.95 2.18 2.24
(a)'Earnings', as defined by SEC Regulation S-K, represent the aggregate of (1) net income, (2) taxes based on income, (3) investment tax credit adjustments -- net and (4) fixed charges. 'Fixed Charges' include interest (whether expensed or capitalized), related amortization and interest applicable to rentals charged to operating expenses. 9 (b)'Preferred Dividends', as defined by SEC Regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the effective income tax rate. EXPERTS AND LEGALITY The financial statements and the related financial statement schedules incorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche, independent auditors, as stated in their reports, which are incorporated by reference herein, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in auditing and accounting. With respect to the unaudited interim financial information incorporated herein by reference, Deloitte & Touche have applied limited procedures in accordance with professional standards for a review of such information. However, as stated in their reports included in the Company's Quarterly Reports on Form 10-Q, and incorporated by reference herein, they did not audit and do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim financial information because those reports are not 'reports' or 'parts' of the Registration Statement prepared or certified by an accountant within the meaning of Sections 7 and 11 thereof. The statements at the date of this Prospectus as to matters of law and legal conclusions made under 'Description of New Bonds' and 'Description of New Preferred Stock' have been reviewed by Monroe & Lemann (A Professional Corporation), General Counsel for the Company, and, except as to 'Security' under 'Description of New Bonds', by Reid & Priest, and are set forth herein in reliance upon the opinions of said firms, respectively, and upon their authority as experts. The statements made in the Incorporated Documents at the date of this Prospectus as to matters of law and legal conclusions, based on the belief or opinion of the Company or otherwise, pertaining to titles to properties, franchises and other operating rights of the Company, regulations to which the Company is subject and any legal proceedings to which the Company is a party, are made on the authority of Monroe & Lemann (A Professional Corporation), and such statements are included in such documents and herein in reliance upon their authority as experts. The legality of the New Bonds and the New Preferred Stock will be passed upon for the Company by Monroe & Lemann (A Professional Corporation), 201 St. Charles Avenue, Suite 3300, New Orleans, Louisiana, and Reid & Priest, 40 West 57th Street, New York, New York, and for the underwriter(s), dealer(s), agent(s) or purchaser(s) by Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York. However, all legal matters pertaining to the organization of the Company, titles to property, franchises and the lien of the Mortgage and all matters of Louisiana law will be passed upon only by Monroe & Lemann (A Professional Corporation). PLAN OF DISTRIBUTION The Company may sell the New Bonds and the New Preferred Stock in one or more sales in any of three ways: (i) through one or more underwriters or dealers; (ii) directly to a limited number of purchasers or to a single purchaser; or (iii) through one or more agents. The Prospectus Supplement relating to a series of the New Bonds ('Offered Bonds') or to a series of the New Preferred Stock ('Offered Stock') will set forth the terms of the offering, as applicable, of the Offered Bonds or the Offered Stock, including the name or names of any underwriters, dealers or agents, the purchase price of such Offered Bonds or Offered Stock and the proceeds to the Company from such sale, any underwriting discounts and other items constituting underwriters' compensation, any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. If underwriters are used in the sale, the Offered Bonds or Offered Stock will be purchased by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of the sale. The underwriter or underwriters with respect to a particular underwritten offering of Offered Bonds or Offered Stock will be named in the Prospectus Supplement relating to such offering and, if an underwriting syndicate is used, the managing underwriter or underwriters will be set forth on the cover page of such Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase the Offered Bonds or Offered Stock will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such Offered Bonds or Offered Stock if any are purchased; provided that the agreement between the Company and the underwriter or underwriters providing for the sale of the Offered Bonds or Offered Stock may provide that under certain circumstances involving a default of underwriters, less than all of the Offered Bonds or Offered Stock may be purchased. Offered Bonds or Offered Stock may be sold directly by the Company or through agents designated by the Company from time to time. The Prospectus Supplement will set forth the name of any agent involved in the offer or sale of the Offered Bonds or Offered Stock in respect of which the Prospectus Supplement is delivered as well as any commissions payable by the Company to such agent. Unless otherwise indicated in 10 the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. If so indicated in the Prospectus Supplement, the Company will authorize agents, underwriters or dealers to solicit offers by certain specified institutions to purchase Offered Bonds or Offered Stock from the Company at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject to those conditions set forth in the Prospectus Supplement, and the Prospectus Supplement will set forth the commission payable for solicitation of such contracts. Each Prospectus Supplement relating to a particular offering of Offered Bonds or Offered Stock will contain a statement (i) as to whether or not the Company is able to predict the existence of a secondary market for such securities and, if such existence is predicted, as to the extent of such secondary market, and (ii) if such securities are to be purchased by an underwriter or underwriters, as to whether or not such underwriter or underwriters intend to make a market in such securities. Subject to certain conditions, the Company may agree to indemnify any underwriters, dealers, agents or purchasers, and any insurer providing an insurance policy for the payment of principal of and/or interest on New Bonds, and their controlling persons against certain civil liabilities, including liabilities under the Securities Act of 1933. BOOK ENTRY SECURITIES Unless otherwise indicated in a Prospectus Supplement, the New Preferred Stock and the New Bonds will be issued in the form of one or more fully registered stock certificates or bonds, as the case may be, that will be deposited with, or on behalf of, The Depository Trust Company, New York, New York ('DTC'), or such other depository as may be subsequently designated, and registered in the name of Cede & Co., as nominee for DTC. So long as DTC, or its nominee, is the owner of the New Preferred Stock or the New Bonds, DTC or such nominee, as the case may be, will be considered the sole registered holder of the New Preferred Stock or the New Bonds for all purposes under the Articles of Incorporation or Mortgage. Payments of redemption price and dividends on the New Preferred Stock and payments of principal of and premium, if any, and interest on the New Bonds will be made to DTC, or its nominee, as the case may be, as the holder of the New Preferred Stock or the New Bonds. Except as set forth below, owners of beneficial interests in the New Preferred Stock or the New Bonds will not be entitled to have any of the individual New Preferred Stock or New Bonds registered in their names, will not receive or be entitled to receive physical delivery of any such New Preferred Stock or New Bonds and will not be considered the holders thereof under the Articles of Incorporation or Mortgage. If DTC is at any time unwilling or unable to continue as depository and a successor depository is not appointed, the Company will issue certificates for New Preferred Stock or individual registered New Bonds in exchange for the New Preferred Stock or New Bonds held by DTC. In addition, the Company may at any time and in its sole discretion determine not to have the New Preferred Stock or New Bonds held by DTC and, in such event, will issue New Preferred Stock certificates or individual registered New Bonds in exchange for the New Preferred Stock or New Bonds held by DTC. In any such instance, an owner of a beneficial interest in the New Preferred Stock or the New Bonds will be entitled to physical delivery of New Preferred Stock certificates or individual New Bonds equal in par value or principal amount to its beneficial interest and to have such New Preferred Stock or New Bonds registered in its name. Individual New Bonds so issued will be issued as registered New Bonds in denominations of $1,000 or any multiple thereof. Upon the issuance of the New Preferred Stock or the New Bonds, DTC will credit, on its book-entry registration and transfer system, the respective par values or principal amounts of beneficial interests to the accounts of institutions that have accounts with DTC ('Participants'). The accounts to be credited will initially be designated by any Underwriter or the Company. Ownership of beneficial interests in the New Preferred Stock or the New Bonds will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in the New Preferred Stock or the New Bonds will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC (with respect to the Participants' interests) or by Participants or persons that hold through Participants (with respect to persons other than Participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities. Such limits and such laws may impair the ability to transfer beneficial interests in the New Preferred Stock or the New Bonds. Upon receipt of any payment of the redemption price or dividends in respect to the New Preferred Stock or any payment of principal, premium or interest in respect of the New Bonds, DTC's current practice is to credit immediately Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the par value of such New Preferred Stock or the principal amount of such New Bonds as shown on the records of DTC. Payments by Participants to owners of beneficial interests in the New Preferred Stock or the New Bonds will be governed by standing instructions and customary practices, as is 11 now the case with securities held for the accounts of customers in bearer form or registered in 'street name,' and will be the responsibility of such Participants, subject to any statutory or regulatory requirements that may be in effect from time to time. Conveyance of notices and other communications by DTC to Participants and by Participants to other beneficial owners will be governed by arrangements among them, subject to any statutory and regulatory requirements as may be in effect from time to time. Each purchaser of New Preferred Stock or New Bonds must rely on (1) the procedures of DTC, and, if such purchaser is not a Participant, the procedures of the Participant through which such purchaser holds its beneficial interest, to receive payments and notices, and (2) the records of DTC and, if such purchaser is not a Participant, the records of the Participant through which such purchaser holds its beneficial interest, to evidence its beneficial ownership of New Preferred Stock or New Bonds. DTC is a limited-purpose trust company organized under the New York Banking Law, a 'banking organization' within the meaning of the New York Banking Law, a member of the Federal Reserve System, a 'clearing corporation' within the meaning of the New York Uniform Commerical Code, and a 'clearing agency' registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities of its Participants and facilitates the clearance and settlement of securities transactions among its Participants in such securities through electronic book-entry changes in accounts of the Participants, thereby eliminating the need for physical movement of securities certificates. DTC's Participants include securities brokers and dealers (including any Underwriter of the New Preferred Stock or New Bonds), banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources (including DTC) that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. Neither the Company, the Transfer Agent and Registrar, the Trustees, any Underwriter nor any agent for payment on or registration of transfer or exchange of such New Preferred Stock or New Bonds will have any responsibility or liability for any of the records relating to or payments made on account of beneficial interests in any of the New Preferred Stock or the New Bonds or for maintaining, supervising or reviewing any records relating to such beneficial interests. 12 -----END PRIVACY-ENHANCED MESSAGE-----