0000065984-95-000042.txt : 19950809 0000065984-95-000042.hdr.sgml : 19950809 ACCESSION NUMBER: 0000065984-95-000042 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 23 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950808 SROS: CSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENTERGY CORP /DE/ CENTRAL INDEX KEY: 0000065984 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 135550175 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11299 FILM NUMBER: 95559493 BUSINESS ADDRESS: STREET 1: PO BOX 61000 CITY: NEW ORLEANS STATE: LA ZIP: 70161 BUSINESS PHONE: 5045295262 FORMER COMPANY: FORMER CONFORMED NAME: ENTERGY GSU HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19940329 FORMER COMPANY: FORMER CONFORMED NAME: ENTERGY CORP /FL/ DATE OF NAME CHANGE: 19940329 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLE SOUTH UTILITIES INC DATE OF NAME CHANGE: 19890521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARKANSAS POWER & LIGHT CO CENTRAL INDEX KEY: 0000007323 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 710005900 STATE OF INCORPORATION: AR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10764 FILM NUMBER: 95559494 BUSINESS ADDRESS: STREET 1: PO BOX 551 STREET 2: 40TH FLOOR CITY: LITTLE ROCK STATE: AR ZIP: 72203 BUSINESS PHONE: 5013774000 MAIL ADDRESS: STREET 1: P O BOX 551 CITY: LITTLE ROCK STATE: AR ZIP: 72203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GULF STATES UTILITIES CO CENTRAL INDEX KEY: 0000044570 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 740662730 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20371 FILM NUMBER: 95559495 BUSINESS ADDRESS: STREET 1: 350 PINE ST CITY: BEAUMONT STATE: TX ZIP: 77701 BUSINESS PHONE: 4098386631 MAIL ADDRESS: STREET 1: 350 PINE ST CITY: BEAUMONT STATE: TX ZIP: 77701 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08474 FILM NUMBER: 95559496 BUSINESS ADDRESS: STREET 1: PO BOX 61000 CITY: NEW ORLEANS STATE: LA ZIP: 70161 BUSINESS PHONE: 5045953100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI POWER & LIGHT CO CENTRAL INDEX KEY: 0000066901 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 640205830 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00320 FILM NUMBER: 95559497 BUSINESS ADDRESS: STREET 1: PO BOX 1640 CITY: JACKSON STATE: MS ZIP: 39215-1640 BUSINESS PHONE: 6019692311 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ORLEANS PUBLIC SERVICE INC CENTRAL INDEX KEY: 0000071508 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 720273040 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05807 FILM NUMBER: 95559498 BUSINESS ADDRESS: STREET 1: PO BOX 61000 CITY: NEW ORLEANS STATE: LA ZIP: 70161 BUSINESS PHONE: 5045953100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYSTEM ENERGY RESOURCES INC CENTRAL INDEX KEY: 0000202584 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720752777 STATE OF INCORPORATION: AR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09067 FILM NUMBER: 95559499 BUSINESS ADDRESS: STREET 1: ECHELON ONE STREET 2: 1340 ECHELON PKWY CITY: JACKSON STATE: MS ZIP: 39213 BUSINESS PHONE: 6019849000 MAIL ADDRESS: STREET 1: PO BOX 31995 CITY: JACKSON STATE: MS ZIP: 39286-1995 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLE SOUTH ENERGY INC DATE OF NAME CHANGE: 19860803 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1995 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission Registrant, State of Incorporation, I.R.S. Employer File Number Address of Principal Executive Identification No. Offices and Telephone Number 1-11299 ENTERGY CORPORATION 13-5550175 (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 529-5262 1-10764 ARKANSAS POWER & LIGHT COMPANY 71-0005900 (an Arkansas corporation) 425 West Capitol Avenue, 40th Floor Little Rock, Arkansas 72201 Telephone (501) 377-4000 1-2703 GULF STATES UTILITIES COMPANY 74-0662730 (a Texas corporation) 350 Pine Street Beaumont, Texas 77701 Telephone (409) 838-6631 1-8474 LOUISIANA POWER & LIGHT COMPANY 72-0245590 (a Louisiana corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 529-5262 0-320 MISSISSIPPI POWER & LIGHT COMPANY 64-0205830 (a Mississippi corporation) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 969-2311 0-5807 NEW ORLEANS PUBLIC SERVICE INC. 72-0273040 (a Louisiana corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 569-4000 1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777 (an Arkansas corporation) Echelon One 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000 Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes X No Common Stock Outstanding Outstanding at July 31, 1995 Entergy Corporation ($0.01 par value) 227,749,167 ENTERGY CORPORATION AND SUBSIDIARIES INDEX TO QUARTERLY REPORT ON FORM 10-Q June 30, 1995 Page Number Definitions 1 Financial Statements: Entergy Corporation and Subsidiaries: Statements of Consolidated Income 3 Statements of Consolidated Cash Flows 4 Consolidated Balance Sheets 6 Arkansas Power & Light Company: Statements of Income 8 Statements of Cash Flows 9 Balance Sheets 10 Gulf States Utilities Company: Statements of Income 12 Statements of Cash Flows 13 Balance Sheets 14 Louisiana Power & Light Company: Statements of Income 16 Statements of Cash Flows 17 Balance Sheets 18 Mississippi Power & Light Company: Statements of Income 20 Statements of Cash Flows 21 Balance Sheets 22 New Orleans Public Service Inc.: Statements of Income 24 Statements of Cash Flows 25 Balance Sheets 26 System Energy Resources, Inc.: Statements of Income 28 Statements of Cash Flows 29 Balance Sheets 30 Notes to Financial Statements 32 Management's Financial Discussion and Analysis 45 Part II: Item 1. Legal Proceedings 69 Item 4. Submission of Matters to a Vote of Security Holders 70 Item 5. Other Information 71 Item 6. Exhibits and Reports on Form 8-K 75 Experts 77 Signature 78 This combined Form 10-Q is separately filed by Entergy Corporation, Arkansas Power & Light Company, Gulf States Utilities Company, Louisiana Power & Light Company, Mississippi Power & Light Company, New Orleans Public Service Inc., and System Energy Resources, Inc. Information contained herein relating to any individual company is filed by such company on its own behalf, and no company makes any representation as to information relating to the other companies. This combined Form 10-Q supplements and updates the Form 10-K for the calendar year ended December 31, 1994, and the Form 10-Q for the quarter ended March 31, 1995, filed by the individual registrants with the SEC and should be read in conjunction therewith. DEFINITIONS Certain abbreviations or acronyms used in the text are defined below: Abbreviation or Acronym Term ALJ Administrative Law Judge ANO Arkansas Nuclear One Steam Electric Generating Station ANO 1 Unit No. 1 of ANO ANO 2 Unit No. 2 of ANO AP&L Arkansas Power & Light Company APSC Arkansas Public Service Commission Availability Agreement Agreement, dated as of June 21, 1974, as amended, among System Energy and AP&L, LP&L, MP&L, and NOPSI, and the assignments thereof Capital Funds Agreement Agreement, dated as of June 21, 1974, as amended, between System Energy and Entergy Corporation, and the assignments thereof City of New Orleans or City New Orleans, Louisiana Council Council of the City of New Orleans, Louisiana D.C. Circuit United States Court of Appeals for the District of Columbia Circuit Entergy Corporation Entergy Corporation, a Delaware corporation, successor to Entergy Corporation, a Florida Corporation Entergy Operations Entergy Operations, Inc., a subsidiary of Entergy Corporation that has operating responsibility for ANO, Grand Gulf 1, River Bend, and Waterford 3 Entergy or System Entergy Corporation and its various direct and indirect subsidiaries Entergy Power Entergy Power, Inc., a subsidiary of Entergy Corporation that markets capacity and energy from certain generating facilities to other parties, principally non-affiliates, for resale Entergy Services Entergy Services, Inc. FERC Federal Energy Regulatory Commission First Quarter Form 10-Q The combined Quarterly Report on Form 10- Q for the quarter ended March 31, 1995, of Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy Form 10-K The combined Annual Report on Form 10-K for the year ended December 31, 1994, of Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy G&R Bonds General and Refunding Mortgage Bonds issued and issuable by MP&L and NOPSI Grand Gulf Station Grand Gulf Steam Electric Generating Station (nuclear) Grand Gulf 1 Unit No. 1 of the Grand Gulf Station (nuclear) GSU Gulf States Utilities Company (including wholly owned subsidiaries - Varibus Corporation, GSG&T, Inc., Prudential Oil & Gas, Inc., and Southern Gulf Railway Company) KWH Kilowatt-Hour(s) Least Cost Plan Least Cost Integrated Resource Plan (combination of demand- and supply-side resources to be used by Entergy to satisfy electricity demand) LP&L Louisiana Power & Light Company LPSC Louisiana Public Service Commission Merger The combination transaction, consummated on December 31, 1993, by which GSU became a subsidiary of Entergy Corporation and Entergy Corporation became a Delaware Corporation Money Pool System Money Pool, which allows certain System companies to borrow from, or lend to, certain other System companies MP&L Mississippi Power & Light Company MPSC Mississippi Public Service Commission NOPSI New Orleans Public Service Inc. NRC Nuclear Regulatory Commission Owner Participant A corporation that, in connection with the Waterford 3 sale and leaseback transactions, has acquired a beneficial interest in a trust, the Owner Trustee of which is the owner and lessor of undivided interests in Waterford 3 Owner Trustee Each institution and/or individual acting as Owner Trustee under a trust agreement with an Owner Participant in connection with the Waterford 3 sale and leaseback transactions PCB Polychlorinated biphenyls PUCT Public Utility Commission of Texas Rate Cap The level of GSU's retail electric base rates in effect at December 31, 1993 for the Louisiana retail jurisdiction, and the level in effect prior to the Texas Cities Rate Settlement for the Texas retail jurisdiction, which may not be exceeded for the five years following December 31, 1993 Revised Plan MP&L's Grand Gulf 1-related rate phase-in plan, originally approved by the MPSC in the Final Order on Rehearing, as modified by the MPSC order issued September 29, 1988, to bring such plan into compliance with the requirements of SFAS 92 River Bend River Bend Steam Electric Generating Station (nuclear), owned 70% by GSU RUS Rural Utility Services (formerly the Rural Electrification Administration or "REA") SEC Securities and Exchange Commission SFAS Statement of Financial Accounting Standards as promulgated by the Financial Accounting Standards Board System Agreement Agreement, effective January 1, 1983, as modified, among the System operating companies relating to the sharing of generating capacity and other power resources System Energy System Energy Resources, Inc. System Fuels System Fuels, Inc. System operating companies AP&L, GSU, LP&L, MP&L, and NOPSI, collectively System or Entergy Entergy Corporation and its various direct and indirect subsidiaries Waterford 3 Unit No. 3 of the Waterford Steam Electric Generating Station (nuclear)
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands, Except Share Data) Operating Revenues: Electric $1,539,160 $1,551,673 $2,833,926 $2,891,925 Natural gas 20,118 22,766 60,788 76,845 Steam products 12,791 11,859 23,423 23,567 ---------- ---------- ---------- ---------- Total 1,572,069 1,586,298 2,918,137 2,992,337 ---------- ---------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 312,803 357,711 601,507 672,439 Purchased power 92,433 109,833 177,992 234,629 Nuclear refueling outage expenses 34,167 15,474 50,963 31,219 Other operation and maintenance 353,860 367,993 696,895 704,005 Depreciation, amortization, and decommissioning 169,557 160,856 339,101 321,665 Taxes other than income taxes 73,872 70,067 150,468 142,919 Income taxes 111,967 89,753 147,104 123,306 Amortization of rate deferrals 89,585 88,676 184,374 182,350 ---------- ---------- ---------- ---------- Total 1,238,244 1,260,363 2,348,404 2,412,532 ---------- ---------- ---------- ---------- Operating Income 333,825 325,935 569,733 579,805 ---------- ---------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 2,353 3,135 4,847 6,670 Miscellaneous - net 9,108 6,659 16,278 17,892 Income taxes 1,164 (3,183) (809) (11,380) ---------- ---------- ---------- ---------- Total 12,625 6,611 20,316 13,182 ---------- ---------- ---------- ---------- Interest Charges: Interest on long-term debt 161,042 165,816 321,673 333,519 Other interest - net 5,662 4,494 14,652 8,197 Allowance for borrowed funds used during construction (2,007) (2,527) (4,204) (5,169) Preferred and preference dividend requirements of subsidiaries and other 19,050 20,426 38,900 41,368 ---------- ---------- ---------- ---------- Total 183,747 188,209 371,021 377,915 ---------- ---------- ---------- ---------- Net Income $162,703 $144,337 $219,028 $215,072 ========== ========== ========== ========== Earnings per average common share $0.71 $0.63 $0.96 $0.94 Dividends declared per common share - - $0.90 $0.90 Average number of common shares outstanding 227,747,609 229,440,707 227,582,228 230,010,476 See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $219,028 $215,072 Noncash items included in net income: Change in rate deferrals/excess capacity-net 162,963 164,750 Depreciation, amortization, and decommissioning 339,101 321,665 Deferred income taxes and investment tax credits (1,221) 13,690 Allowance for equity funds used during construction (4,847) (6,670) Amortization of deferred revenues - (14,632) Changes in working capital: Receivables (91,462) (62,170) Fuel inventory (37,175) 29,723 Accounts payable (74,712) (50,684) Taxes accrued 77,924 27,880 Interest accrued (7,924) (15,542) Reserve for rate refund 9,971 - Other working capital accounts (150,287) (143,630) Decommissioning trust contributions (12,653) (11,742) Provision for estimated losses and reserves 6,480 (4,523) Other 14,561 45,014 -------- -------- Net cash flow provided by operating activities 449,747 508,201 -------- -------- Investing Activities: Construction/capital expenditures (243,061) (327,154) Allowance for equity funds used during construction 4,847 6,670 Nuclear fuel purchases (177,776) (44,994) Proceeds from sale/leaseback of nuclear fuel 210,265 16,144 Investment in nonregulated/nonutility properties (46,243) (113) -------- -------- Net cash flow used in investing activities (251,968) (349,447) -------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 59,410 General and refunding mortgage bonds 109,285 - Other long-term debt 43,538 43,644 Retirement of: First mortgage bonds (96,025) (85,600) General and refunding mortgage bonds (44,200) (45,000) Other long-term debt (45,404) (16,108) Premium and expense on refinancing sale/leaseback bonds - (47,602) Repurchase of common stock - (88,796) Redemption of preferred stock (26,250) (26,259) Changes in short-term borrowings (103,534) 106,200 Common stock dividends paid (204,267) (207,149) -------- -------- Net cash flow used in financing activities (366,857) (307,260) -------- -------- Net decrease in cash and cash equivalents (169,078) (148,506) Cash and cash equivalents at beginning of period 613,907 563,749 -------- -------- Cash and cash equivalents at end of period $444,829 $415,243 ======== ========
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $323,218 $336,230 Income taxes $86,327 $79,097 Noncash investing and financing activities: Capital lease obligations incurred - $24,303 Change in unrealized appreciation/depreciation of decommissioning trust assets $17,521 $7,477 See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $21,350,820 $21,184,013 Plant acquisition adjustment - GSU 479,822 487,955 Electric plant under leases 668,843 668,846 Property under capital leases - electric 155,067 161,950 Natural gas 166,109 164,013 Steam products 77,307 77,307 Construction work in progress 529,091 476,816 Nuclear fuel under capital leases 330,238 265,520 Nuclear fuel 37,463 70,147 ----------- ----------- Total 23,794,760 23,556,567 Less - accumulated depreciation and amortization 7,958,011 7,639,549 ----------- ----------- Utility plant - net 15,836,749 15,917,018 ----------- ----------- Other Property and Investments: Decommissioning trust funds 242,805 207,395 Other 295,445 240,745 ----------- ----------- Total 538,250 448,140 ----------- ----------- Current Assets: Cash and cash equivalents: Cash 116,109 87,700 Temporary cash investments - at cost, which approximates market 328,720 526,207 ----------- ----------- Total cash and cash equivalents 444,829 613,907 Special deposits 17,447 8,074 Notes receivable 15,929 14,446 Accounts receivable: Customer (less allowance for doubtful accounts of $6.7 million in 1995 and 1994) 336,931 336,887 Other 47,970 66,651 Accrued unbilled revenues 350,709 240,610 Deferred fuel 28,662 - Fuel inventory 130,386 93,211 Materials and supplies - at average cost 380,654 365,956 Rate deferrals 398,281 380,612 Prepayments and other 123,526 98,811 ----------- ----------- Total 2,275,324 2,219,165 ----------- ----------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 1,275,634 1,451,926 SFAS 109 regulatory asset - net 1,417,996 1,417,646 Unamortized loss on reacquired debt 228,878 232,420 Other regulatory assets 320,630 316,878 Long-term receivables 277,446 271,097 Other 339,760 339,201 ----------- ----------- Total 3,860,344 4,029,168 ----------- ----------- TOTAL $22,510,667 $22,613,491 =========== =========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $.01 par value, authorized 500,000,000 shares; issued 230,017,485 shares in 1995 and 1994 $2,300 $2,300 Paid-in capital 4,199,643 4,202,134 Retained earnings 2,236,785 2,223,739 Less - treasury stock (2,268,318 shares in 1995 and 2,608,908 in 1994) 67,270 77,378 ----------- ----------- Total common shareholders' equity 6,371,458 6,350,795 Subsidiary's preference stock 150,000 150,000 Subsidiaries' preferred stock: Without sinking fund 550,955 550,955 With sinking fund 273,698 299,946 Long-term debt 7,023,655 7,093,473 ----------- ----------- Total 14,369,766 14,445,169 ----------- ----------- Other Noncurrent Liabilities: Obligations under capital leases 330,548 273,947 Other 320,000 310,977 ----------- ----------- Total 650,548 584,924 ----------- ----------- Current Liabilities: Currently maturing long-term debt 403,060 349,085 Notes payable 68,333 171,867 Accounts payable 396,408 471,120 Customer deposits 138,775 134,478 Taxes accrued 170,502 92,578 Accumulated deferred income taxes 41,342 40,313 Interest accrued 187,715 195,639 Dividends declared 12,883 13,599 Deferred fuel cost - 27,066 Obligations under capital leases 152,730 151,904 Reserve for rate refund 66,943 56,972 Other 278,743 327,330 ----------- ----------- Total 1,917,434 2,031,951 ----------- ----------- Deferred Credits: Accumulated deferred income taxes 3,891,164 3,915,138 Accumulated deferred investment tax credits 667,289 649,898 Other 1,014,466 986,411 ----------- ----------- Total 5,572,919 5,551,447 ----------- ----------- Commitments and Contingencies (Notes 1 and 2) TOTAL $22,510,667 $22,613,491 =========== =========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $412,164 $414,901 $751,760 $785,992 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 63,639 67,759 104,806 131,233 Purchased power 84,176 93,427 165,923 184,609 Nuclear refueling outage expenses 7,903 8,839 14,870 17,473 Other operation and maintenance 85,786 89,372 179,444 169,898 Depreciation, amortization, and decommissioning 39,602 36,540 78,954 72,258 Taxes other than income taxes 9,984 8,508 20,095 17,623 Income taxes 23,813 17,323 21,344 14,918 Amortization of rate deferrals 29,894 33,552 67,927 73,725 -------- -------- -------- -------- Total 344,797 355,320 653,363 681,737 -------- -------- -------- -------- Operating Income 67,367 59,581 98,397 104,255 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 691 896 1,606 2,050 Miscellaneous - net 10,820 11,997 26,352 24,561 Income taxes (4,241) (3,913) (10,338) (9,684) -------- -------- -------- -------- Total 7,270 8,980 17,620 16,927 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 26,611 26,351 53,544 52,695 Other interest - net 624 1,294 3,740 2,003 Allowance for borrowed funds used during construction (442) (847) (1,173) (1,667) -------- -------- -------- -------- Total 26,793 26,798 56,111 53,031 -------- -------- -------- -------- Net Income 47,844 41,763 59,906 68,151 Preferred Stock Dividend Requirements and Other 4,545 4,866 9,106 9,749 -------- -------- -------- -------- Earnings Applicable to Common Stock $43,299 $36,897 $50,800 $58,402 ======== ======== ======== ======== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $59,906 $68,151 Noncash items included in net income: Change in rate deferrals/excess capacity-net 61,207 51,782 Depreciation, amortization, and decommissioning 78,954 72,258 Deferred income taxes and investment tax credits (10,135) (20,012) Allowance for equity funds used during construction (1,606) (2,050) Changes in working capital: Receivables (41,124) (36,401) Fuel inventory (34,626) 27,345 Accounts payable 33,684 (31,606) Taxes accrued 28,691 15,628 Interest accrued (759) (92) Other working capital accounts (9,331) (38,907) Decommissioning trust contributions (6,071) (5,288) Provision for estimated losses and reserves 3,522 (8,224) Other (21,032) (12,839) -------- ------- Net cash flow provided by operating activities 141,280 79,745 -------- ------- Investing Activities: Construction expenditures (78,692) (74,778) Allowance for equity funds used during construction 1,606 2,050 Nuclear fuel purchases (32,874) - Proceeds from sale/leaseback of nuclear fuel 32,831 - -------- ------- Net cash flow used in investing activities (77,129) (72,728) -------- ------- Financing Activities: Proceeds from issuance of other long-term debt - 27,992 Retirement of first mortgage bonds (25,600) (600) Redemption of preferred stock (7,000) (7,000) Changes in short-term borrowings (34,000) 30,246 Dividends paid: Common stock (40,300) (39,400) Preferred stock (9,321) (9,915) -------- ------- Net cash flow provided by (used in) financing activities (116,221) 1,323 -------- ------- Net increase (decrease) in cash and cash equivalents (52,070) 8,340 Cash and cash equivalents at beginning of period 80,756 1,825 -------- ------- Cash and cash equivalents at end of period $28,686 $10,165 ======== ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $51,392 $49,205 Income taxes $13,843 $28,677 Noncash investing and financing activities: Capital lease obligations incurred - $14,626 Change in unrealized appreciation/depreciation of decommissioning trust assets $11,347 $7,210 See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $4,352,381 $4,293,097 Property under capital leases 53,412 56,135 Construction work in progress 144,723 136,701 Nuclear fuel under capital lease 108,967 94,628 ---------- ---------- Total 4,659,483 4,580,561 Less - accumulated depreciation and amortization 1,781,356 1,710,216 ---------- ---------- Utility plant - net 2,878,127 2,870,345 ---------- ---------- Other Property and Investments: Investment in subsidiary companies - at equity 11,215 11,215 Decommissioning trust fund 149,969 127,136 Other - at cost (less accumulated depreciation) 7,487 4,628 ---------- ---------- Total 168,671 142,979 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 10,683 3,737 Temporary cash investments - at cost, which approximates market: Associated companies 2,936 4,713 Other 15,067 72,306 ---------- ---------- Total cash and cash equivalents 28,686 80,756 Accounts receivable: Customer (less allowance for doubtful accounts of $2.0 million in 1995 and 1994) 61,741 53,781 Associated companies 31,119 28,506 Other 8,130 11,181 Accrued unbilled revenues 117,465 83,863 Fuel inventory - at average cost 69,187 34,561 Materials and supplies - at average cost 80,837 79,886 Rate deferrals 122,632 113,630 Deferred excess capacity 8,392 8,414 Prepayments and other 16,223 23,867 ---------- ---------- Total 544,412 518,445 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 294,627 360,496 Deferred excess capacity 15,742 20,060 SFAS 109 regulatory asset - net 219,689 227,068 Unamortized loss on reacquired debt 55,679 57,344 Other regulatory assets 77,411 68,813 Other 28,540 26,665 ---------- ---------- Total 691,688 760,446 ---------- ---------- TOTAL $4,282,898 $4,292,215 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $0.01 par value, authorized 325,000,000 shares; issued and outstanding 46,980,196 shares in 1995 and 1994 $470 $470 Paid-in capital 590,844 590,844 Retained earnings 502,299 491,799 ---------- ---------- Total common shareholder's equity 1,093,613 1,083,113 Preferred stock: Without sinking fund 176,350 176,350 With sinking fund 51,527 58,527 Long-term debt 1,278,691 1,293,879 ---------- ---------- Total 2,600,181 2,611,869 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 105,426 94,534 Other 71,757 68,235 ---------- ---------- Total 177,183 162,769 ---------- ---------- Current Liabilities: Currently maturing long-term debt 28,175 28,175 Notes payable 667 34,667 Accounts payable: Associated companies 41,587 17,345 Other 98,771 89,329 Customer deposits 18,074 17,113 Taxes accrued 73,930 45,239 Accumulated deferred income taxes 34,381 25,043 Interest accrued 30,305 31,064 Dividends declared 4,512 4,727 Co-owner advances 42,144 20,639 Deferred fuel cost 14,267 20,254 Nuclear refueling reserve 29,118 37,954 Obligations under capital leases 56,909 56,154 Other 21,965 45,632 ---------- ---------- Total 494,805 473,335 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 836,175 859,558 Accumulated deferred investment tax credits 115,685 118,548 Other 58,869 66,136 ---------- ---------- Total 1,010,729 1,044,242 ---------- ---------- Commitments and Contingencies (Note 1) TOTAL $4,282,898 $4,292,215 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30,1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues: Electric $462,297 $439,015 $841,088 $841,119 Natural gas 4,521 5,981 14,444 21,827 Steam products 12,791 11,859 23,423 23,567 -------- -------- -------- -------- Total 479,609 456,855 878,955 886,513 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 126,908 119,341 241,829 238,359 Purchased power 41,117 54,839 84,724 115,059 Nuclear refueling outage expenses 2,743 2,520 5,774 5,040 Other operation and maintenance 105,273 103,512 203,627 205,562 Depreciation, amortization, and decommissioning 50,392 49,209 100,731 97,076 Taxes other than income taxes 24,752 9,664 50,131 34,010 Income taxes 23,140 17,573 22,978 16,752 Amortization of rate deferrals 16,506 16,840 33,012 32,737 -------- -------- -------- -------- Total 390,831 373,498 742,806 744,595 -------- -------- -------- -------- Operating Income 88,778 83,357 136,149 141,918 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 266 379 517 639 Miscellaneous - net 5,696 4,085 11,610 8,233 Income taxes (2,164) (2,211) (3,029) (4,183) -------- -------- -------- -------- Total 3,798 2,253 9,098 4,689 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 48,357 48,770 96,627 97,750 Other interest - net 1,083 4,057 2,093 5,237 Allowance for borrowed funds used during construction (217) (301) (461) (507) -------- -------- -------- -------- Total 49,223 52,526 98,259 102,480 -------- -------- -------- -------- Net Income 43,353 33,084 46,988 44,127 Preferred and Preference Stock Dividend Requirements and Other 7,426 7,529 15,016 14,936 -------- -------- -------- -------- Earnings Applicable to Common Stock $35,927 $25,555 $31,972 $29,191 ======== ======== ======== ======== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $46,988 $44,127 Noncash items included in net income: Change in rate deferrals 33,012 32,737 Depreciation, amortization, and decommissioning 101,113 97,076 Deferred income taxes and investment tax credits 25,403 19,454 Allowance for equity funds used during construction (517) (639) Changes in working capital: Receivables (7,940) (29,924) Fuel inventory (1,894) (4,484) Accounts payable (34,007) 10,436 Taxes accrued 24,832 8,655 Interest accrued (9,334) (3,044) Reserve for rate refund 2,381 - Other working capital accounts (87,395) (37,366) Decommissioning trust contributions (1,478) (1,478) Other 9,186 3,127 -------- -------- Net cash flow provided by operating activities 100,350 138,677 -------- -------- Investing Activities: Construction expenditures (53,779) (68,109) Allowance for equity funds used during construction 517 639 Nuclear fuel purchases - (16,145) Proceeds from sale/leaseback of nuclear fuel - 16,145 -------- -------- Net cash flow used in investing activities (53,262) (67,470) -------- -------- Financing Activities: Proceeds from the issuance of other long-term debt 2,277 - Redemption of preferred stock (2,250) (2,250) Dividends paid: Common stock - (183,600) Preferred and preference stock (14,917) (14,831) -------- -------- Net cash flow used in financing activities (14,890) (200,681) -------- -------- Net increase (decrease) in cash and cash equivalents 32,198 (129,474) Cash and cash equivalents at beginning of period 104,644 261,349 -------- -------- Cash and cash equivalents at end of period $136,842 $131,875 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $102,618 $96,470 Income taxes $77 $7,573 Noncash investing and financing activities: Capital lease obligations incurred - $16,145 Change in unrealized appreciation/depreciation of decommissioning trust assets $1,651 ($244) See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $6,886,116 $6,842,726 Natural gas 44,505 44,505 Steam products 77,307 77,307 Property under capital leases 80,977 82,914 Construction work in progress 107,934 96,176 Nuclear fuel under capital leases 61,225 80,042 ---------- ---------- Total 7,258,064 7,223,670 Less - accumulated depreciation and amortization 2,597,889 2,504,826 ---------- ---------- Utility plant - net 4,660,175 4,718,844 ---------- ---------- Other Property and Investments: Decommissioning trust fund 25,051 21,309 Other - at cost (less accumulated depreciation) 36,625 29,315 ---------- ---------- Total 61,676 50,624 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 8,454 8,063 Temporary cash investments - at cost, which approximates market: Associated companies 18,674 5,085 Other 109,714 91,496 ---------- ---------- Total cash and cash equivalents 136,842 104,644 Special deposits 50,784 332 Accounts receivable: Customer (less allowance for doubtful accounts of $0.7 million in 1995 and 1994) 136,858 167,745 Associated companies 8,196 12,732 Other 17,399 20,706 Accrued unbilled revenues 86,140 39,470 Deferred fuel costs 20,659 6,314 Accumulated deferred income taxes 50,448 49,457 Fuel inventory 27,678 25,784 Materials and supplies - at average cost 101,390 90,054 Rate deferrals 93,774 100,478 Prepayments and other 16,524 13,422 ---------- ---------- Total 746,692 631,138 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 468,486 506,974 SFAS 109 regulatory asset - net 436,502 426,358 Unamortized loss on reacquired debt 64,736 63,994 Other regulatory assets 31,486 35,168 Long-term receivables 277,446 264,752 Other 147,750 145,609 ---------- ---------- Total 1,426,406 1,442,855 ---------- ---------- TOTAL $6,894,949 $6,843,461 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 100 shares in 1995 and 1994 $114,055 $114,055 Paid-in capital 1,152,419 1,152,336 Retained earnings 296,400 264,626 ---------- ---------- Total common shareholder's equity 1,562,874 1,531,017 Preference stock 150,000 150,000 Preferred stock: Without sinking fund 136,444 136,444 With sinking fund 92,687 94,934 Long-term debt 2,300,795 2,318,417 ---------- ---------- Total 4,242,800 4,230,812 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 104,959 125,691 Other 72,985 68,753 ---------- ---------- Total 177,944 194,444 ---------- ---------- Current Liabilities: Currently maturing long-term debt 70,425 50,425 Accounts payable: Associated companies 33,189 31,722 Other 105,501 140,975 Customer deposits 22,901 22,216 Taxes accrued 37,310 12,478 Interest accrued 45,993 55,327 Nuclear refueling reserve 18,132 10,117 Obligations under capital leases 37,234 37,265 Reserve for rate refund 59,353 56,972 Other 95,103 111,963 ---------- ---------- Total 525,141 529,460 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 1,113,402 1,100,396 Accumulated deferred investment tax credits 225,442 199,428 Deferred River Bend finance charges 70,226 82,406 Other 539,994 506,515 ---------- ---------- Total 1,949,064 1,888,745 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $6,894,949 $6,843,461 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $406,110 $441,643 $759,106 $825,469 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 59,551 85,518 111,601 143,626 Purchased power 93,478 101,841 168,473 205,337 Nuclear refueling outage expenses 4,516 4,885 9,033 9,476 Other operation and maintenance 72,800 86,143 145,338 159,775 Depreciation, amortization, and decommissioning 38,910 37,451 77,417 74,843 Taxes other than income taxes 14,332 13,919 30,048 28,356 Income taxes 29,667 24,313 48,363 41,156 Amortization of rate deferrals 6,886 6,887 13,546 13,546 -------- -------- -------- -------- Total 320,140 360,957 603,819 676,115 -------- -------- -------- -------- Operating Income 85,970 80,686 155,287 149,354 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 539 978 1,103 2,089 Miscellaneous - net 209 130 581 441 Income taxes 37 50 12 40 -------- -------- -------- -------- Total 785 1,158 1,696 2,570 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 32,512 32,377 65,084 64,850 Other interest - net 1,660 1,763 3,745 3,075 Allowance for borrowed funds used during construction (499) (649) (990) (1,450) -------- -------- -------- -------- Total 33,673 33,491 67,839 66,475 -------- -------- -------- -------- Net Income 53,082 48,353 89,144 85,449 Preferred Stock Dividend Requirements and Other 5,219 5,701 10,810 11,820 -------- -------- -------- -------- Earnings Applicable to Common Stock $47,863 $42,652 $78,334 $73,629 ======== ======== ======== ======== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $89,144 $85,449 Noncash items included in net income: Change in rate deferrals 13,546 13,546 Depreciation, amortization, and decommissioning 77,417 74,843 Deferred income taxes and investment tax credits (10,535) 25,253 Allowance for equity funds used during construction (1,103) (2,089) Amortization of deferred revenues - (14,632) Changes in working capital: Receivables (7,873) (10,807) Accounts payable 5,084 (15,689) Taxes accrued 27,686 8,960 Interest accrued (2,216) (1,061) Other working capital accounts (30,279) (15,707) Decommissioning trust contributions (2,408) (2,408) Other 1,264 1,464 -------- -------- Net cash flow provided by operating activities 159,727 147,122 -------- -------- Investing Activities: Construction expenditures (43,559) (78,552) Allowance for equity funds used during construction 1,103 2,089 Nuclear fuel purchases (40,493) - Proceeds from sale/seaseback of nuclear fuel 40,493 - -------- -------- Net cash flow used in investing activities (42,456) (76,463) -------- -------- Financing Activities: Retirement of: First mortgage bonds - (25,000) Other long-term debt (69) (63) Redemption of preferred stock (7,500) (7,509) Changes in short-term borrowings (9,344) 22,113 Dividends paid: Common stock (86,200) (48,300) Preferred stock (10,743) (11,638) -------- -------- Net cash flow used in financing activities (113,856) (70,397) -------- -------- Net increase in cash and cash equivalents 3,415 262 Cash and cash equivalents at beginning of period 28,718 33,489 -------- -------- Cash and cash equivalents at end of period $32,133 $33,751 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $67,432 $64,396 Income taxes $43,623 $18,219 Noncash investing and financing activities: Capital lease obligations incurred - $9,677 Change in unrealized appreciation/depreciation of decommissioning trust assets $1,934 $220 See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $4,809,009 $4,778,126 Electric plant under lease 229,468 229,468 Construction work in progress 96,859 94,791 Nuclear fuel under capital lease 70,650 44,238 Nuclear fuel 6,346 6,420 ---------- ---------- Total 5,212,332 5,153,043 Less - accumulated depreciation and amortization 1,666,260 1,600,510 ---------- ---------- Utility plant - net 3,546,072 3,552,533 ---------- ---------- Other Property and Investments: Nonutility property 20,060 20,060 Decommissioning trust fund 32,238 27,076 Investment in subsidiary company - at equity 14,230 14,230 Other 1,080 1,078 ---------- ---------- Total 67,608 62,444 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 2,569 - Temporary cash investments - at cost, which approximates market 29,564 28,718 ---------- ---------- Total cash and cash equivalents 32,133 28,718 Special deposits 6,503 3,237 Accounts receivable: Customer (less allowance for doubtful accounts of $1.2 million in 1995 and 1994) 63,093 58,858 Associated companies - 9,827 Other 13,691 11,609 Accrued unbilled revenues 74,492 63,109 Deferred fuel cost 15,278 - Accumulated deferred income taxes 312 3,702 Materials and supplies - at average cost 92,906 89,692 Rate deferrals 28,422 28,422 Prepayments and other 19,584 25,291 ---------- ---------- Total 346,414 322,465 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 12,063 25,609 SFAS 109 regulatory asset - net 374,743 379,263 Unamortized loss on reacquired debt 41,557 43,656 Other regulatory assets 24,385 25,736 Other 25,206 23,733 ---------- ---------- Total 477,954 497,997 ---------- ---------- TOTAL $4,438,048 $4,435,439 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 250,000,000 shares; issued and outstanding 165,173,180 shares in 1995 and 1994 $1,088,900 $1,088,900 Capital stock expense and other (5,029) (5,367) Retained earnings 105,554 113,420 ---------- ---------- Total common shareholder's equity 1,189,425 1,196,953 Preferred stock: Without sinking fund 160,500 160,500 With sinking fund 103,765 111,265 Long-term debt 1,368,399 1,403,055 ---------- ---------- Total 2,822,089 2,871,773 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 42,650 16,238 Other 54,038 54,216 ---------- ---------- Total 96,688 70,454 ---------- ---------- Current Liabilities: Currently maturing long-term debt 110,245 75,320 Notes payable: Associated companies 144 7,954 Other 17,666 19,200 Accounts payable: Associated companies 41,400 20,793 Other 66,680 82,203 Customer deposits 55,947 54,934 Taxes accrued 25,826 (1,860) Interest accrued 40,771 42,987 Dividends declared 5,217 5,489 Deferred fuel cost - 13,983 Obligations under capital leases 28,000 28,000 Other 18,898 20,156 ---------- ---------- Total 410,794 369,159 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 869,019 883,945 Accumulated deferred investment tax credits 148,404 151,259 Deferred interest - Waterford 3 lease obligation 26,345 26,000 Other 64,709 62,849 ---------- ---------- Total 1,108,477 1,124,053 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,438,048 $4,435,439 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $240,310 $229,790 $433,634 $417,207 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 37,741 41,818 67,874 64,613 Purchased power 70,966 58,558 128,010 122,880 Other operation and maintenance 39,937 40,643 72,155 77,216 Depreciation and amortization 9,338 9,051 18,735 17,757 Taxes other than income taxes 10,494 10,460 21,083 20,736 Income taxes 10,731 10,628 14,094 11,853 Amortization of rate deferrals 28,311 24,804 56,621 49,609 -------- -------- -------- -------- Total 207,518 195,962 378,572 364,664 -------- -------- -------- -------- Operating Income 32,792 33,828 55,062 52,543 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 269 445 528 1,021 Miscellaneous - net 796 158 857 252 Income taxes (305) (61) (328) (97) -------- -------- -------- -------- Total 760 542 1,057 1,176 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 11,856 11,614 22,948 24,117 Other interest - net 1,352 1,389 3,258 2,353 Allowance for borrowed funds used during construction (234) (286) (439) (653) -------- -------- -------- -------- Total 12,974 12,717 25,767 25,817 -------- -------- -------- -------- Net Income 20,578 21,653 30,352 27,902 Preferred Stock Dividend Requirements and Other 1,544 1,955 3,251 4,030 -------- -------- -------- -------- Earnings Applicable to Common Stock $19,034 $19,698 $27,101 $23,872 ======== ======== ======== ======== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $30,352 $27,902 Noncash items included in net income: Change in rate deferrals 29,566 44,127 Depreciation and amortization 18,735 17,757 Deferred income taxes and investment tax credits (7,196) (7,288) Allowance for equity funds used during construction (528) (1,021) Changes in working capital: Receivables (19,922) (12,733) Fuel inventory (4,448) 4,110 Accounts payable 23,540 13,367 Taxes accrued (4,239) (239) Interest accrued 903 (4,217) Other working capital accounts (3,864) (4,002) Other 11,856 (4,311) -------- -------- Net cash flow provided by operating activities 74,755 73,452 -------- -------- Investing Activities: Construction expenditures (34,388) (80,224) Allowance for equity funds used during construction 528 1,021 -------- -------- Net cash flow used in investing activities (33,860) (79,203) -------- -------- Financing Activities: Proceeds from the issuance of: General and refunding bonds 79,480 - Other long-term debt - 15,652 Retirement of: General and refunding bonds (20,000) (30,000) First mortgage bonds (20,000) - Other long-term debt (15) (16,045) Redemption of preferred stock (8,000) (8,000) Changes in short-term borrowings (30,000) 49,354 Dividends paid: Common stock (16,400) (8,800) Preferred stock (3,343) (4,054) -------- -------- Net cash flow used in financing activities (18,278) (1,893) -------- -------- Net increase (decrease) in cash and cash equivalents 22,617 (7,644) Cash and cash equivalents at beginning of period 9,598 7,999 -------- -------- Cash and cash equivalents at end of period $32,215 $355 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $24,066 $29,113 Income taxes $15,431 $8,577 See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $1,496,932 $1,475,322 Construction work in progress 78,495 67,119 ---------- ---------- Total 1,575,427 1,542,441 Less - accumulated depreciation and amortization 599,463 582,514 ---------- ---------- Utility plant - net 975,964 959,927 ---------- ---------- Other Property and Investments: Investment in subsidiary company - at equity 5,531 5,531 Other 5,619 5,624 ---------- ---------- Total 11,150 11,155 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 3,434 5,080 Temporary cash investments - at cost, which approximates market Associated companies 4,694 276 Other 24,087 4,242 ---------- ---------- Total cash and cash equivalents 32,215 9,598 Accounts receivable: Customer (less allowance for doubtful accounts of $2.1 million in 1995 and 1994) 46,335 37,501 Associated companies 2,390 4,680 Other 1,852 2,789 Accrued unbilled revenues 54,187 39,873 Fuel inventory - at average cost 9,228 4,780 Materials and supplies - at average cost 22,814 20,642 Rate deferrals 119,637 106,538 Prepayments and other 15,657 10,672 ---------- ---------- Total 304,315 237,073 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 343,055 385,720 Unamortized loss on reacquired debt 9,868 10,488 Other regulatory assets 9,097 10,168 Long-term receivable - 6,345 Other 7,075 8,569 ---------- ---------- Total 369,095 421,290 ---------- ---------- TOTAL $1,660,524 $1,629,445 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 15,000,000 shares; issued and outstanding 8,666,357 shares in 1995 and 1994 $199,326 $199,326 Capital stock expense and other (1,661) (1,762) Retained earnings 242,712 232,011 ---------- ---------- Total common shareholder's equity 440,377 429,575 Preferred stock: Without sinking fund 57,881 57,881 With sinking fund 23,770 31,770 Long-term debt 530,311 475,233 ---------- ---------- Total 1,052,339 994,459 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 485 552 Other 11,522 8,984 ---------- ---------- Total 12,007 9,536 ---------- ---------- Current Liabilities: Currently maturing long-term debt 50,965 65,965 Notes payable - 30,000 Accounts payable: Associated companies 25,207 2,350 Other 30,888 30,205 Customer deposits 23,812 22,793 Taxes accrued 16,582 20,821 Accumulated deferred income taxes 52,249 47,515 Interest accrued 21,280 20,377 Dividends declared 1,433 1,626 Other 30,965 28,692 ---------- ---------- Total 253,381 270,344 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 292,018 301,288 Accumulated deferred investment tax credits 28,753 29,528 SFAS 109 regulatory liability - net 11,213 13,099 Other 10,813 11,191 ---------- ---------- Total 342,797 355,106 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $1,660,524 $1,629,445 ========== ========== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues: Electric $97,070 $107,617 $175,210 $186,472 Natural gas 15,596 16,785 46,342 55,018 ------- -------- -------- -------- Total 112,666 124,402 221,552 241,490 ------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 14,461 26,044 45,439 59,959 Purchased power 44,245 35,209 73,927 72,941 Other operation and maintenance 17,162 20,289 33,915 39,960 Depreciation and amortization 4,786 4,743 9,614 9,453 Taxes other than income taxes 6,607 6,877 13,834 13,931 Income taxes 4,920 7,555 8,195 8,174 Amortization of rate deferrals 7,985 5,805 13,265 12,733 ------- -------- -------- -------- Total 100,166 106,522 198,189 217,151 ------- -------- -------- -------- Operating Income 12,500 17,880 23,363 24,339 ------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 35 124 61 237 Miscellaneous - net 73 474 489 984 Income taxes (28) (184) (188) (709) ------- -------- -------- -------- Total 80 414 362 512 ------- -------- -------- -------- Interest Charges: Interest on long-term debt 3,544 4,268 7,873 8,809 Other interest - net 375 306 967 593 Allowance for borrowed funds used during construction (27) (92) (48) (176) ------- -------- -------- -------- Total 3,892 4,482 8,792 9,226 ------- -------- -------- -------- Net Income 8,688 13,812 14,933 15,625 Preferred Stock Dividend Requirements and Other 317 375 717 833 ------- -------- -------- -------- Earnings Applicable to Common Stock $8,371 $13,437 $14,216 $14,792 ======= ======== ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $14,933 $15,625 Noncash items included in net income: Change in rate deferrals 13,452 10,379 Depreciation and amortization 9,614 9,453 Deferred income taxes and investment tax credits (1,202) (10,899) Allowance for equity funds used during construction (61) (237) Changes in working capital: Receivables (7,972) 2,842 Accounts payable 13,145 (3,801) Taxes accrued (999) 7,173 Interest accrued (594) (679) Income tax refund 704 - Other working capital accounts (16,015) 8,180 Other (10,465) 3,752 ------- ------- Net cash flow provided by operating activities 14,540 41,788 ------- ------- Investing Activities: Construction expenditures (8,738) (10,855) Allowance for equity funds used during construction 61 237 ------- ------- Net cash flow used in investing activities (8,677) (10,618) ------- ------- Financing Activities: Proceeds from the issuance of general and refunding bonds 29,805 - Retirement of general and refunding bonds (24,200) (15,000) Redemption of preferred stock (1,500) (1,500) Dividends paid: Common stock (5,800) (1,400) Preferred stock (775) (845) ------- ------- Net cash flow used in financing activities (2,470) (18,745) ------- ------- Net increase in cash and cash equivalents 3,393 12,425 Cash and cash equivalents at beginning of period 8,031 43,317 ------- ------- Cash and cash equivalents at end of period $11,424 $55,742 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $9,056 $9,663 Income taxes $10,465 $12,671 See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $474,746 $470,560 Natural gas 121,604 119,508 Construction work in progress 9,761 7,284 -------- -------- Total 606,111 597,352 Less - accumulated depreciation and amortization 326,669 319,576 -------- -------- Utility plant - net 279,442 277,776 -------- -------- Other Investments: Investment in subsidiary company - at equity 3,259 3,259 -------- -------- Current Assets: Cash and cash equivalents: Cash 1,815 849 Temporary cash investments - at cost, which approximates market: Associated companies 1,567 2,472 Other 8,042 4,710 -------- -------- Total cash and cash equivalents 11,424 8,031 Accounts receivable: Customer (less allowance for doubtful accounts of $0.8 million in 1995 and 1994) 28,903 23,938 Associated companies 2,844 3,503 Other 136 600 Accrued unbilled revenues 18,425 14,295 Deferred electric fuel and resale gas costs 6,992 856 Materials and supplies - at average cost 9,836 9,676 Rate deferrals 33,815 31,544 Income tax receivable 19,468 20,172 Prepayments and other 11,013 5,636 -------- -------- Total 142,856 118,251 -------- -------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 157,404 173,127 SFAS 109 regulatory asset - net 9,281 8,792 Unamortized loss on reacquired debt 2,147 2,361 Other regulatory assets 5,647 5,647 Other 3,833 3,681 -------- -------- Total 178,312 193,608 -------- -------- TOTAL $603,869 $592,894 ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $4 par value, authorized 10,000,000 shares; issued and outstanding 8,435,900 shares in 1995 and 1994 $33,744 $33,744 Paid-in capital 36,247 36,201 Retained earnings subsequent to the elimination of the accumulated deficit on November 30, 1988 87,302 78,886 -------- -------- Total common shareholder's equity 157,293 148,831 Preferred stock: Without sinking fund 19,780 19,780 With sinking fund 1,950 3,450 Long-term debt 155,935 164,160 -------- -------- Total 334,958 336,221 -------- -------- Other Noncurrent Liabilities: Accumulated provision for losses 17,144 17,318 Other 171 1,745 -------- -------- Total 17,315 19,063 -------- -------- Current Liabilities: Currently maturing long-term debt 38,250 24,200 Accounts payable: Associated companies 15,830 6,456 Other 23,274 19,503 Customer deposits 18,041 17,422 Accumulated deferred income taxes 5,472 4,925 Taxes accrued 1,330 2,329 Interest accrued 4,648 5,242 Other 15,021 19,982 -------- -------- Total 121,866 100,059 -------- -------- Deferred Credits: Accumulated deferred income taxes 88,304 89,246 Accumulated deferred investment tax credits 8,933 9,251 Other 32,493 39,054 -------- -------- Total 129,730 137,551 -------- -------- Commitments and Contingencies (Note 1) TOTAL $603,869 $592,894 ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $158,632 $151,219 $310,296 $299,066 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 3,561 12,234 15,896 24,221 Nuclear refueling outage expenses 19,005 - 21,286 - Other operation and maintenance 23,803 25,951 48,902 47,491 Depreciation, amortization, and decommissioning 24,535 22,998 49,933 45,967 Taxes other than income taxes 7,024 6,645 14,198 13,518 Income taxes 19,414 17,612 38,719 37,748 -------- -------- -------- -------- Total 97,342 85,440 188,934 168,945 -------- -------- -------- -------- Operating Income 61,290 65,779 121,362 130,121 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 552 312 1,032 634 Miscellaneous - net 1,017 1,517 1,742 2,616 Income taxes 501 681 1,052 (1,039) -------- -------- -------- -------- Total 2,070 2,510 3,826 2,211 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 38,162 40,045 75,596 82,907 Other interest - net 1,984 3,412 4,317 3,424 Allowance for borrowed funds used during construction (588) (380) (1,092) (760) -------- -------- -------- -------- Total 39,558 43,077 78,821 85,571 -------- -------- -------- -------- Net Income $23,802 $25,212 $46,367 $46,761 ======== ======== ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $46,367 $46,761 Noncash items included in net income: Depreciation, amortization, and decommissioning 49,933 45,967 Deferred income taxes and investment tax credits (7,335) 8,689 Allowance for equity funds used during construction (1,032) (634) Changes in working capital: Receivables (60,206) (15,093) Accounts payable (181) 13,217 Taxes accrued 14,062 (10,920) Interest accrued 3,127 (6,577) Other working capital accounts (22,710) (5,279) Recoverable income taxes - 26,948 Decommissioning trust contributions (2,696) (2,503) Other 32,074 12,291 ------- -------- Net cash flow provided by operating activities 51,403 112,867 ------- -------- Investing Activities: Construction expenditures (17,178) (4,280) Allowance for equity funds used during construction 1,032 634 Nuclear fuel purchases (52,188) (54) Proceeds from sale/leaseback of nuclear fuel 52,188 - ------- -------- Net cash flow used in investing activities (16,146) (3,700) ------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 59,410 Other long-term debt 43,538 - Retirement of: First mortgage bonds - (60,000) Other long-term debt (45,320) - Premium and expenses paid on refinancing sale/leaseback bonds - (47,602) Common stock dividends paid (47,600) (79,300) ------- -------- Net cash flow used in financing activities (49,382) (127,492) ------- -------- Net decrease in cash and cash equivalents (14,125) (18,325) Cash and cash equivalents at beginning of period 89,703 196,132 ------- -------- Cash and cash equivalents at end of period $75,578 $177,807 ======= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $72,647 $88,723 Income taxes $23,659 $4,730 Noncash investing and financing activities: Change in unrealized appreciation/depreciation of decommissioning trust assets $2,589 $291 See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $2,939,364 $2,939,384 Electric plant under lease 439,375 439,378 Construction work in progress 63,717 46,547 Nuclear fuel under capital lease 89,395 46,688 Nuclear fuel - 26,360 ---------- ---------- Total 3,531,851 3,498,357 Less - accumulated depreciation and amortization 803,705 751,717 ---------- ---------- Utility plant - net 2,728,146 2,746,640 ---------- ---------- Other Investments: Decommissioning trust fund 36,621 30,359 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 155 - Temporary cash investments - at cost, which approximates market: Associated companies 8,252 5,489 Other 67,171 84,214 ---------- ---------- Total cash and cash equivalents 75,578 89,703 Accounts receivable: Associated companies 68,766 7,450 Other 2,302 3,412 Materials and supplies - at average cost 68,959 71,991 Prepayments and other 13,704 5,429 ---------- ---------- Total 229,309 177,985 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: SFAS 109 regulatory asset - net 388,995 389,264 Unamortized loss on reacquired debt 54,891 54,577 Other regulatory assets 197,157 199,080 Other 14,501 15,454 ---------- ---------- Total 655,544 658,375 ---------- ---------- TOTAL $3,649,620 $3,613,359 ========== ========== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS June 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 1995 and 1994 $789,350 $789,350 Paid-in capital 7 7 Retained earnings 84,448 85,681 ---------- ---------- Total common shareholder's equity 873,805 875,038 Long-term debt 1,439,526 1,438,305 ---------- ---------- Total 2,313,331 2,313,343 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 61,395 18,688 Other 14,342 14,342 ---------- ---------- Total 75,737 33,030 ---------- ---------- Current Liabilities: Currently maturing long-term debt 105,000 105,000 Accounts payable: Associated companies 42,420 32,272 Other 12,875 23,204 Taxes accrued 49,444 35,382 Interest accrued 43,923 40,796 Obligations under capital leases 28,000 28,000 Other 2,327 19,794 ---------- ---------- Total 283,989 284,448 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 739,080 746,502 Accumulated deferred investment tax credits 108,846 110,584 FERC Settlement - refund obligation 58,673 60,388 Other 69,964 65,064 ---------- ---------- Total 976,563 982,538 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $3,649,620 $3,613,359 ========== ========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1. COMMITMENTS AND CONTINGENCIES Cajun - River Bend Entergy Corporation and GSU GSU has significant business relationships with Cajun Electric Power Cooperative, Inc. (Cajun), including co-ownership of River Bend and Big Cajun 2, Unit 3. GSU and Cajun, respectively, own 70% and 30% undivided interests in River Bend and 42% and 58% undivided interests in Big Cajun 2, Unit 3. In June 1989, Cajun filed a civil action against GSU in the United States District Court for the Middle District of Louisiana (District Court). Cajun's complaint seeks to annul, rescind, terminate, and/or dissolve the Joint Ownership Participation and Operating Agreement entered into on August 28, 1979 (Operating Agreement) relating to River Bend. The suit also seeks to recover as damages Cajun's alleged $1.6 billion investment in the unit plus attorneys' fees, interest, and costs. Two member cooperatives of Cajun have brought an independent action to declare the Operating Agreement void, based upon failure to get prior LPSC approval alleged to be necessary. GSU believes the suits are without merit and is contesting them vigorously. A trial on the portion of the suit by Cajun to rescind the Operating Agreement was completed in March 1995, and a ruling from the District Court is pending. No assurance can be given as to the outcome of this litigation. If GSU is ultimately unsuccessful in this litigation and is required to pay substantial damages, GSU would probably be unable to make such payments and would probably have to seek relief from its creditors under the United States Bankruptcy Code (Bankruptcy Code). Since 1992 Cajun has not paid its full share of capital costs, operating and maintenance expenses and other costs for repairs and improvements to River Bend. In addition, Cajun paid certain costs and expenses under protest. These actions were taken by Cajun based on its contentions that River Bend operating and maintenance expenses were excessive and that the RUS allegedly would not permit Cajun to pay such costs. Cajun has continued to fund its share of the nuclear decommissioning trust payments for River Bend, as well as insurance and safety-related expenses. Cajun's unpaid portion of River Bend operating and maintenance expenses (including nuclear fuel) and capital costs for the first six months of 1995 was approximately $29.7 million. Cajun's total share of River Bend annual operating and maintenance expenses (including nuclear fuel) and capital costs was approximately $76.1 million in 1994. In view of Cajun's failure to fund its share of River Bend- related operating, maintenance and capital costs, GSU has (i) credited GSU's share of expenses for Big Cajun 2, Unit 3 against amounts due from Cajun to GSU and (ii) sought to market Cajun's share of the power from River Bend and apply the proceeds to the amounts due from Cajun to GSU. As a result, on November 2, 1994, Cajun discontinued supplying GSU with its share of energy from Big Cajun 2, Unit 3. GSU requested an order from the District Court requiring Cajun to supply GSU with this energy, and allowing GSU to credit amounts due to Cajun for Big Cajun 2, Unit 3 energy against amounts Cajun owed to GSU for River Bend. In December 1994, the District Court ordered Cajun to supply GSU with its share of energy from Big Cajun 2, Unit 3 and ordered GSU to make payments for its share of Big Cajun 2, Unit 3 expenses to the registry of the District Court. On December 21, 1994, Cajun filed a petition in the United States Bankruptcy Court for the Middle District of Louisiana seeking relief under Chapter 11 of the Bankruptcy Code. Cajun's bankruptcy could have a material adverse effect on GSU. GSU is taking steps to protect its interests and its claims against Cajun arising from the co-ownership of River Bend and Big Cajun 2, Unit 3. On December 31, 1994, the District Court issued an order lifting an automatic stay as to certain proceedings, with the result that the December 1994 order of the District Court referred to above, remains in effect. Cajun filed a Notice of Appeal on January 18, 1995, to the United States Fifth Circuit Court of Appeals seeking a reversal of the District Court's order. No hearing date has been set on Cajun's appeal. In the bankruptcy proceedings, Cajun filed a motion to reject the Operating Agreement as a burdensome executory contract. GSU responded on January 10, 1995, with a memorandum opposing Cajun's motion. If the District Court were to grant Cajun's motion to reject the Operating Agreement, Cajun would be relieved of its financial obligations under the contract, while GSU would likely have a substantial damage claim arising from any such rejection. Although GSU believes that Cajun's motion to reject the Operating Agreement is without merit, it is not possible to predict the outcome or ultimate impact of these proceedings. During the period in which Cajun is not paying its share of River Bend-related costs, GSU intends to fund all costs necessary for the safe, continuing operation of the unit. The responsibilities of Entergy Operations, as the licensed operator of River Bend, for safely operating and maintaining the unit, are not affected by Cajun's actions. The net amount resulting from Cajun's failure to pay its full share of River Bend-related costs, reduced by the proceeds from the sale of Cajun's share of River Bend power, was $60.6 million as of June 30, 1995, compared with $49 million as of December 31, 1994. These amounts are reflected in long-term receivables with an offsetting reserve in other deferred credits. Cajun's bankruptcy may affect the ultimate collectibility of the amounts owed to GSU, including any amounts that may be awarded in litigation. Cajun - Transmission Service Entergy Corporation and GSU GSU and Cajun are parties to FERC proceedings relating to transmission service charge disputes. In April 1992, FERC issued an order. In May 1992, GSU and Cajun filed motions for rehearing which are pending at FERC. In June 1992, GSU filed a petition for review in the United States Fifth Circuit Court of Appeals (Court of Appeals) regarding certain of the issues decided by FERC. In August 1993, the Court of Appeals rendered a decision reversing the FERC order regarding the portion of such disputes relating to the calculations of certain credits and equalization charges under GSU's service schedules with Cajun. The Court of Appeals opinion remanded these issues to FERC for further pro ceedings consistent with its opinion. In February 1995, FERC clarified its order, eliminating an issue that GSU believes the Court of Appeals directed FERC to reconsider. In April 1995, the ALJ issued a ruling in the remanded portion of the proceeding, which the FERC affirmed in an order issued on August 3, 1995. Under GSU's interpretation of the 1992 FERC order, as modified by its August 3, 1995 order, Cajun would owe GSU approximately $62.1 million as of June 30, 1995. GSU further estimates that if it were to prevail in its May 1992 motion for rehearing and on certain other issues decided adversely to GSU in the February 1995 and the August 1995 FERC orders, which GSU may appeal, Cajun would owe GSU approximately $137.2 million as of June 30, 1995. If Cajun were to prevail in its May 1992 motion for rehearing to FERC, and if GSU were not to prevail in its May 1992 motion for rehearing to FERC, and if Cajun were to appeal the FERC's August 1995 order and prevail, GSU estimates it would owe Cajun approximately $90.4 million as of June 30, 1995. The above amounts are exclusive of a $7.3 million payment by Cajun on December 31, 1990, which the parties agreed to apply to the disputed transmission service charges. Pending FERC's ruling on the May 1992 motions for rehearing, GSU has continued to bill Cajun utilizing the historical billing methodology and has recorded underpaid transmission charges, including interest, in the amount of $167.3 million as of June 30, 1995. This amount is reflected in long-term receivables with an offsetting reserve in other deferred credits. Financial Condition GSU Although GSU received partial rate relief relating to River Bend, GSU's financial position was severely strained from 1986 to 1990 by its inability to earn a return on and fully recover its investment and other costs associated with River Bend. Issues to be finally resolved in PUCT rate proceedings and appeals thereof, as discussed in Note 2, combined with the application of accounting standards, may result in substantial write-offs and charges that could result in substantial net losses being reported by Entergy Corporation and GSU in 1995, and subsequent periods, with resulting substantial adverse adjustments to common equity. Future earnings will continue to be adversely affected by the lack of full recovery and return on the investment and other costs associated with River Bend. Nonregulated Investments Entergy Corporation On March 31, 1995, Entergy Corporation, through its subsidiary, Entergy Power Development Company (EPDC), entered into an agreement with Enron Power Development Corporation, a subsidiary of Enron Corporation, to acquire a 20% interest in the Dabhol Power Project (Project), a 695 megawatt combined cycle facility located in the State of Maharashtra, India. Pursuant to an agreement, EPDC has placed approximately $20.5 million in an escrow account. If EPDC becomes a participant in the Project, its estimated investment in the first phase of the Project would be approximately $90 million. At that time, EPDC would also have an obligation to cover a pro-rata share of the cost overruns up to approximately $30 million. Subsequent to entering into the agreement with Enron Power Development Corporation, the newly-elected Maharashtra state government investigated the Project and its related cost of power. On August 3, 1995, the Chief Minister of Maharashtra stated that the government of Maharashtra has decided to suspend the first phase of the Project, the 695 megawatt facility and "scrap" the second phase of the Project, a 1,320 megawatt facility, and indicated that orders to stop work would be issued. In view of these developments, Entergy is uncertain as to the future of the project and is considering its options. Capital Requirements and Financing Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy See pages 109, 146-148, 189-191, 194, 228-230, 266-268, 299- 301, and 332 of the Form 10-K for information on the System operating companies' and System Energy's construction expenditures (excluding nuclear fuel) for the years 1995, 1996, and 1997, and long-term debt and preferred stock maturities and cash sinking fund requirements for the period 1995-1999. Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs Entergy Corporation, AP&L, GSU, LP&L, and System Energy See pages 110, 149-150, 194-195, 231-232, and 334-335 of the Form 10-K for information on nuclear liability, property and replacement power insurance, and related NRC regulations. See pages 110-112, 150-151, 195-196, 232-233, and 335-336 of the Form 10-K for information on the disposal of spent nuclear fuel, other high-level radioactive waste, and decommissioning costs associated with ANO, River Bend, Waterford 3, and Grand Gulf 1. The staff of the SEC has questioned certain of the financial accounting practices of the electric utility industry regarding the recognition, measurement, and classification of decommissioning costs for nuclear generating stations in the financial statements of electric utilities. In response to these questions, the Financial Accounting Standards Board (FASB) is reviewing the accounting for decommissioning. In June 1995, the FASB reaffirmed its tentative conclusions on measurement issues in accounting for the liability for the decommissioning of nuclear power plants. The FASB supports measurement of the liability based on discounted future cash flows. Those future cash flows should be determined by estimating current costs and adjusting for inflation, efficiencies that may be gained from experience with similar activities, and consideration of reasonable future advances in technology. The FASB also agreed that changes in the decommissioning liability that result from changes in assumptions should be recognized with a corresponding adjustment to the plant asset and depreciation should be revised prospectively. In addition, the FASB agreed that the asset recognized as a result of recognizing the decommissioning liability should be presented with other costs of the plant on the financial statements because the cost of decommissioning the plant is recognized as part of the total cost of the plant asset. If current electric utility industry accounting practices with respect to nuclear decommissioning are changed, among other things, annual provisions for decommissioning could increase, the estimated cost for decommissioning could be recorded as a liability rather than as accumulated depreciation, and trust fund income from decommissioning trusts could be reported as investment income rather than as a reduction to decommissioning expense. ANO Matters Entergy Corporation and AP&L See pages 31, 83, 112, and 138 of the Form 10-K for information on leaks in certain steam generator tubes at ANO 2 that were discovered and repaired during an outage in March 1992. Further inspections and repairs were conducted at subsequent refueling and mid-cycle outages in September 1992, May 1993, April 1994, and January 1995. AP&L's budgeted maintenance expenditures were adequate to cover the cost of such repairs. Beginning in January 1995, ANO 2's output was reduced 15 megawatts or 1.6% due to secondary side fouling, tube plugging, and reduction of primary temperature. Entergy Operations is taking steps at ANO 2 to reduce the number and severity of future tube cracks. However, the unit may be approaching the limit for the number of steam generator tubes that can be plugged with the unit in operation. If the currently established limit is reached, it could require Entergy Operations to insert sleeves in some of the steam generator tubes during future outages. Currently, Entergy Operations is in the process of gathering information and assessing various options for the repair or the replacement of ANO 2's steam generator. Certain of these options could, in the future, require significant capital expenditures and result in additional outages. In addition, Entergy Operations periodically meets with the NRC to discuss such steps and results of inspections of the generator tubes, as well as the timing of future inspections. Additional inspections are planned for the normal refueling outage scheduled for October 1995. Environmental Issues AP&L See pages 34-35 of the Form 10-K for information on PCB contamination at former Reynolds Metals Company (Reynolds) plant sites in Arkansas to which AP&L had supplied power. In May 1995, AP&L was named as a defendant in a suit by Reynolds, seeking to recover a share of the costs associated with the clean up of hazardous substances at a site south of Arkadelphia, Arkansas. Reynolds alleges that it has spent $11.2 million to cleanup the site, and that the site was contaminated in part with PCBs for which AP&L bears some responsibility. AP&L, voluntarily, at its expense, has already completed remediation at a nearby substation site, and believes that it has no liability for contamination at the site that is subject to the Reynolds suit and will contest the lawsuit. Regardless of the outcome, AP&L does not believe this matter would have a materially adverse effect on its financial condition or results of operations. GSU GSU has been notified by the U. S. Environmental Protection Agency (EPA) that it has been designated as a potentially responsible party for the cleanup of certain hazardous waste disposal sites. GSU is currently negotiating with the EPA and state authorities regarding the cleanup of some of these sites. Several class action and other suits have been filed in state and federal courts seeking relief from GSU and others for damages caused by the disposal of hazardous waste and for asbestos- related disease allegedly resulting from exposure on GSU premises. While the amounts at issue in the cleanup efforts and suits may be substantial, GSU believes that its results of operations and financial condition will not be materially adversely affected by the outcome of the suits. Through June 30, 1995, $7.7 million has been expended on the cleanup. As of June 30, 1995, a remaining recorded liability of $20.7 million existed relating to the cleanup of six sites at which GSU has been designated a potentially responsible party. See pages 35-36, 39-40, and 196-197 of the Form 10-K for additional discussion of the sites where GSU has been designated as a potentially responsible party by the EPA. LP&L During 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including waste water impoundments. LP&L determined that certain of its power plant waste water impoundments were affected by these regulations and has chosen to upgrade or close them. As a result, a remaining recorded liability in the amount of $13.8 million existed at June 30, 1995, for waste water upgrades and closures to be completed by 1996. Cumulative expenditures relating to the upgrades and closures of waste water impoundments were $2.3 million as of June 30, 1995. See pages 37 and 233 of the Form 10-K for additional discussions of LP&L's waste water impoundment upgrades and closures. Waterford 3 Lease Obligations LP&L In September 1989, LP&L entered into three substantially identical but entirely separate transactions for the sale and leaseback of undivided interests (aggregating approximately 9.3%) in Waterford 3. See pages 234-235 of the Form 10-K for further information. Upon the occurrence of certain events, LP&L may be obligated to pay amounts sufficient to permit the Owner Participants to withdraw from the lease transactions, and LP&L may be required to assume the outstanding bonds issued by the Owner Trustee to finance, in part, its acquisition of the undivided interests in Waterford 3. These events would include a failure, at specified dates, to maintain equity capital of at least 30% of adjusted capitalization and a fixed charge coverage ratio of at least 1.50 times earnings. As of June 30, 1995, LP&L's total equity capital was 48.23% of adjusted capitalization, and its fixed charge coverage ratio was 3.07. Reimbursement Agreement System Energy Under the provisions of the Reimbursement Agreement, as amended, System Energy has agreed to a number of covenants relating to the maintenance of certain capitalization and fixed charge coverage ratios. System Energy agreed, during the term of the Reimbursement Agreement, to maintain its equity at not less than 33% of its adjusted capitalization (as defined in the Reimbursement Agreement to include certain amounts not included in capitalization for financial statement purposes). In addition, System Energy must maintain, with respect to each fiscal quarter during the term of the Reimbursement Agreement, a ratio of adjusted net income to interest expense (calculated, in each case, as specified in the Reimbursement Agreement) of at least 1.60 times earnings. As of June 30, 1995, System Energy's equity approximated 33.57% of its adjusted capitalization, and its fixed charge coverage ratio was 1.23. As a result of charges recorded in the fourth quarter of 1994 related to an agreement with FERC which settled a long- standing dispute involving income tax allocation procedures, System Energy has obtained the consent of certain banks to waive temporarily the fixed charge coverage covenant in the letters of credit and Reimbursement Agreement until November 30, 1995. (See pages 92-93 and 327 of the Form 10-K for information on the FERC Settlement.) System Energy expects that upon expiration of the waiver period, it will be in compliance with the fixed charge coverage covenant. Absent a waiver, System Energy's failure to satisfy this covenant could cause a draw under and/or early termination of the letters of credit. If the letters of credit are not replaced in a timely manner, a default or early termination of System Energy's leases could result. Draws under the letters of credit must be repaid by System Energy within 5 days (or in some cases, 90 days) following the date of the drawing. See page 334 of the Form 10-K for further information on the Reimbursement Agreement. NOTE 2. RATE AND REGULATORY MATTERS River Bend Entergy Corporation and GSU In May 1988, the PUCT granted GSU a permanent increase in annual revenues of $59.9 million resulting from the inclusion in rate base of approximately $1.6 billion of company-wide River Bend plant investment and approximately $182 million of related Texas retail jurisdiction deferred River Bend costs (Allowed Deferrals). In addition, the PUCT disallowed as imprudent $63.5 million of company-wide River Bend plant costs and placed in abeyance, with no finding as to prudence, approximately $1.4 billion of company-wide River Bend plant investment and approximately $157 million of Texas retail jurisdiction deferred River Bend operating and carrying costs. The PUCT affirmed that the ultimate rate treatment of such amounts would be subject to a future demonstration of the prudence of such costs. GSU and intervening parties appealed this order (Rate Appeal) and GSU filed a separate rate case asking that the abeyed River Bend plant costs be found prudent (Separate Rate Case). Intervening parties filed suit in a Texas district court to prohibit the Separate Rate Case. The district court's decision was ultimately appealed to the Texas Supreme Court, which ruled in 1990 that the prudence of the purported abeyed costs could not be relitigated in a separate rate proceeding. The Texas Supreme Court's decision stated that all issues relating to the merits of the original PUCT order, including the prudence of all River Bend- related costs, should be addressed in the Rate Appeal. In October 1991, the Texas district court in the Rate Appeal issued an order holding that the PUCT had erred in assuming it could set aside $1.4 billion of the total costs of River Bend and consider them in a later proceeding, and that the PUCT had effectively found that GSU had not met its burden of proof related to the amounts placed in abeyance. The court ruled that the Allowed Deferrals should not be included in rate base, and further held that the PUCT had erred in reducing GSU's deferred costs by $1.50 for each $1.00 of revenue collected under the interim rate increases authorized in 1987 and 1988. The court remanded the case to the PUCT with instructions as to the proper handling of the Allowed Deferrals. GSU's motion for rehearing was denied and, in December 1991, GSU filed an appeal of the October 1991 district court order. The PUCT also appealed the October 1991 district court order, which served to supersede the district court's judgment, rendering it unenforceable under Texas law. In August 1994, the Texas Third District Court of Appeals (the Appellate Court) affirmed the district court's decision that there was substantial evidence to support the PUCT's 1988 decision not to include the abeyed construction costs in GSU's rate base. While acknowledging that the PUCT had exceeded its authority when it deferred a decision on the inclusion of those costs in rate base in order to allow GSU a further opportunity to demonstrate the prudence of those costs in a subsequent proceeding, the Appellate Court found that GSU had suffered no harm or lack of due process as a result of the PUCT's error. Accordingly, the Appellate Court held that the PUCT's action had the effect of disallowing the company-wide $1.4 billion of River Bend construction costs for ratemaking purposes. In its August 1994 opinion, the Appellate Court also held that GSU's deferred operating and maintenance costs associated with the allowed portion of River Bend should be included in rate base and that GSU's deferred River Bend carrying costs included in the Allowed Deferrals should also be included in rate base. The Appellate Court's August 1994 opinion affirmed the PUCT's original order in this case. The Appellate Court's August 1994 opinion was entered by two judges, with a third judge dissenting. The dissenting opinion stated that the result of the majority opinion was, among other things, to deprive GSU of due process at the PUCT because the PUCT had never made a finding on the $1.4 billion of construction costs. In October 1994, the Appellate Court denied GSU's motion for rehearing on the August 1994 opinion as to the $1.4 billion in River Bend construction costs and other matters. GSU appealed the Appellate Court's decision to the Texas Supreme Court. The Texas Supreme Court has not yet accepted the appeal, and no date for oral argument has been set. As of June 30, 1995, the River Bend plant costs disallowed for retail ratemaking purposes in Texas, the River Bend plant costs held in abeyance, and the related operating and carrying cost deferrals totaled (net of taxes) approximately $13 million, $280 million (both net of depreciation), and $170 million, respectively. Allowed Deferrals were approximately $86 million, net of taxes and amortization, as of June 30, 1995. GSU estimates it has recorded approximately $169 million of revenues as of June 30, 1995, as a result of the originally ordered rate treatment by the PUCT of these deferred costs. If recovery of the Allowed Deferrals is not upheld, future revenues based upon those allowed deferrals could also be lost, and no assurance can be given as to whether or not refunds to customers of revenue received based upon such deferred costs will be required. No assurance can be given as to the timing or outcome of the remands or appeals described above. GSU has made no write-offs or reserves for the River Bend-related costs. Management believes, based on advice from Clark, Thomas & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the case will be remanded to the PUCT, and the PUCT will be allowed to rule on the prudence of the abeyed River Bend plant costs. Rate Caps imposed by the PUCT's regulatory approval of the Merger could result in GSU's inability to use the full amount of a favorable decision to immediately increase rates; however, a favorable decision could permit some increases and/or limit or prevent decreases during the period the Rate Caps are in effect. Management and legal counsel are unable to predict the amount, if any, of abeyed and previously disallowed River Bend plant costs that ultimately may be disallowed by the PUCT. As of June 30, 1995, a net of tax write- off of up to $293 million could be required based on an ultimate adverse ruling by the PUCT on the abeyed and disallowed costs. In prior proceedings, the PUCT has held that the original cost of nuclear power plants will be included in rates to the extent those costs were prudently incurred. Based upon these decisions, management believes that its River Bend construction costs were prudently incurred and that it is reasonably possible that it will recover in rate base, or otherwise through means such as a deregulated asset plan, all or substantially all of the abeyed River Bend plant costs. However, management also recognizes that it is reasonably possible that not all of the abeyed River Bend plant costs may ultimately be recovered. As part of the Separate Rate Case, GSU filed a cost reconciliation study prepared by Sandlin Associates, management consultants with expertise in the cost analysis of nuclear power plants, which supports the reasonableness of the River Bend costs held in abeyance by the PUCT. This study determined that approximately 82% of the River Bend cost increase above the amount included by the PUCT in rate base was a result of changes in federal nuclear safety requirements and provided other support for the remainder of the abeyed amounts. There have been four other rate proceedings in Texas involving nuclear power plants. Disallowed investment in the plants ranged from 0% to 15%. Each case was unique, and the disallowances in each were made on a case-by-case basis for different reasons. Appeals of two of these PUCT decisions are currently pending. The following factors support management's position that a loss contingency requiring accrual has not occurred, and that all or substantially all of the abeyed plant costs will ultimately be recovered: 1. The $1.4 billion of abeyed River Bend plant costs have never been ruled imprudent and disallowed by the PUCT; 2. Sandlin Associates' analysis which supports the prudence of substantially all of the abeyed construction costs; 3. Historical inclusion by the PUCT of prudent construction costs in rate base; and 4. The analysis of GSU's internal legal staff, which has considerable experience in Texas rate case litigation. Additionally, management believes, based on advice from Clark, Thomas & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the Allowed Deferrals will continue to be recovered in rates, and that it is reasonably possible that the deferred costs related to the $1.4 billion of abeyed River Bend plant costs will be recovered in rates to the extent that the $1.4 billion of abeyed River Bend plant is recovered. However, a net of tax write-off of the $170 million of deferred costs related to the $1.4 billion of abeyed River Bend plant costs would be required if they are not allowed to be recovered in rates. The adoption of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," (SFAS 121) which will become effective January 1, 1996, will require the write-off of the $170 million of rate deferrals discussed above, unless there are favorable regulatory or court actions related to these costs prior to adoption. The standard describes circumstances which may result in assets being impaired and provides criteria for recognition and measurement of asset impairment. See Note 7 for further information regarding SFAS 121. Filings with the PUCT and Texas Cities Entergy Corporation and GSU In connection with the PUCT's investigation of the reasonableness of GSU's rates, on March 20, 1995 the PUCT ordered a $72.9 million annual base rate reduction for the period March 31, 1994 through September 1, 1994, decreasing to an annual base rate reduction of $52.9 million after September 1, 1994. In accordance with the Merger agreement, the rate reduction was applied retroactively to March 31, 1994. As a result, in 1994 GSU recorded a $57 million reserve for rate refund and a $12.8 million reserve for franchise taxes to be refunded. ` On May 26, 1995, the PUCT amended its previously issued March 20, 1995 rate order, reducing the annual base rate reduction by $16.4 million to an annual level of $36.5 million. The PUCT's action was based upon a recent Texas Supreme Court decision not to require a utility to use the prospective tax benefits generated by disallowed expenses to reduce rates. The PUCT's May 26, 1995 amended order no longer requires GSU to pass such prospective tax benefits on to its customers. Therefore, in June 1995, GSU reduced the reserve for rate refund by $18.1 million based on the annual $36.5 million rate reduction. At June 30, 1995, the reserve for rate refund balance was $59.4 million. GSU intends to appeal the PUCT order and no assurance can be given to the timing or outcome of the appeal. Filings with the LPSC Entergy Corporation and GSU In May 1994, GSU made the first required post-Merger earnings analysis filing with the LPSC. On December 14, 1994, the LPSC ordered a $12.7 million annual rate reduction for GSU effective January 1995. The rate order included, among other things, a reduction in GSU's Louisiana jurisdictional authorized return on equity from 12.75% to 10.95% and the amortization for the benefit of the customers of $8.3 million of previously deferred unbilled revenue, representing one-half of the total resulting from a change in accounting for unbilled revenue. In December 1994, GSU received a preliminary injunction from the District Court regarding $8.3 million of the reduction. On January 1, 1995, GSU reduced rates by $4.4 million. GSU filed an appeal of the entire $12.7 million rate reduction with the District Court. In July 1995, the District Court denied the appeal. GSU has appealed the order to the Louisiana Supreme Court; however, no assurance can be given as to the timing or outcome of the appeal. The preliminary injunction relating to $8.3 million of the reduction, will remain in effect during the appeal. On May 31, 1995, GSU filed the second required post-Merger earning analysis filing with the LPSC. Entergy Corporation and LP&L In August 1994, LP&L filed a performance-based formula rate plan with the LPSC. The proposed formula rate plan would continue existing LP&L rates at current levels, while providing financial incentive to reduce costs and maintain high levels of customer satisfaction and system reliability. The plan would allow LP&L the opportunity to earn a higher rate of return if it improves performance over time. Conversely, if performance declines, the rate of return LP&L could earn would be lowered. This provides a financial incentive for LP&L to maintain continuous improvement in all three performance categories (price, customer satisfaction, and service reliability). As a result of the LPSC's base rate review, on June 2, 1995, a $49.4 million reduction in base rates was ordered. This included $10.5 million of rates previously reduced through fuel clause reductions. Therefore, the net effect of the LPSC order was to reduce rates by $38.9 million. The LPSC approved LP&L's proposed formula rate plan with the following modifications. An earnings band will be established with a range from 10.4% to 12% for return on equity. If LP&L's earnings fall within the bandwidth, no adjustment in rates occurs. If LP&L's earnings are above a 12% return on equity, a 60/40 sharing with customers occurs and customers receive 60% of earnings in excess of the 12% through prospective rate reductions. Alternatively, if LP&L's earnings are below a 10.4% return on equity, customers pay 60% of the difference between the realized return on equity and a 10.4% return on equity through prospective rate increases. The LPSC also reduced LP&L's authorized rate of return from 12.76% to 11.2%. The LPSC rate order is retroactive to April 27, 1995. As of June 30, 1995, LP&L had recorded a $7.6 million reserve for rate refund. On June 9, 1995, LP&L appealed the $49.4 million rate reduction. On the same date LP&L also filed a petition for injunctive relief from implementation of $14.7 million of the $49.4 million rate reduction. The $14.7 million of the rate reduction represents revenue made available to LP&L through a previous LPSC order, which in turn allowed LP&L to provide reduced rates to three industrial customers. Subsequently, a request for a $14.7 million rate increase was filed by LP&L. On July 13, 1995, LP&L was granted a preliminary injunction on $14.7 million of the rate reduction by the District Court pending a final LPSC order. No assurance can be given as to the timing or outcome of the appeal or the requested rate increase. Proposed Rate Increase System Energy In May 1995, System Energy filed an application with FERC for a $65.5 million rate increase. The request seeks changes to the System Energy rate schedule, including increases in the revenue requirement associated with decommissioning costs, the depreciation accrual rate, and rate of return on common equity. System Energy requested that the proposed rate increase become effective subject to refund within 60 days after the filing date, but the effective date was suspended until December 1995. MP&L MP&L's allocation of the proposed wholesale rate increase is $21.6 million. In July 1995, MP&L filed a schedule with the MPSC which will defer and later recover the amount of the System Energy rate increase that is approved by the FERC. The deferral, which must be approved by the MPSC, will begin in September 1995 and will end after the new wholesale rates approved by the FERC go into affect. Beginning in 1998, MP&L will collect through its rates the deferral balance and carrying charges. February 1994 Ice Storm/Rate Rider Entergy Corporation and MP&L As discussed on pages 26, 95, and 262 of the Form 10-K, the MPSC approved a stipulation in September 1994, with respect to the recovery of ice storm costs recorded through April 30, 1994. Under the stipulation, MP&L implemented an ice storm rate rider, which increased rates approximately $8 million for a period of five years beginning on September 29, 1994. This stipulation also stated that at the end of the five-year period, the revenue requirement associated with the undepreciated ice storm capitalized costs will be included in MP&L's base rates to the extent that this revenue requirement does not result in MP&L's rate of return on rate base being above the benchmark rate of return under MP&L's formula rate plan. In July 1995, MP&L and the MPSC Staff entered into a joint stipulation which allows for a $2.5 million rate increase for a period of four years beginning September 28, 1995, to recover costs related to the ice storm that were recorded after April 30, 1994. The stipulation also allows for undepreciated ice storm capital costs recorded after April 30, 1994 to be treated as described above. LPSC Fuel Cost Review GSU In November 1993, the LPSC ordered a review of GSU's fuel costs for the period October 1988 through September 1991 (Phase 1) based on the number of outages at River Bend and the findings in the June 1993 PUCT fuel reconciliation case. In July 1994, the LPSC ruled in the Phase 1 case that GSU should refund approximately $27 million to its customers. Under the order, a refund of $13.1 million was made through a billing credit on August 1994 bills. In August 1994, GSU appealed the remaining portion of the LPSC-ordered refund to the district court. GSU has made no reserve for the remaining portion, pending the outcome of the district court appeal, and no assurance can be given as to the timing or outcome of the appeal. The LPSC is currently conducting Phase II of its review of GSU's fuel costs for the period October 1991 through December 1994. On June 30, 1995, the LPSC consultants filed testimony recommending a disallowance of $38.7 million of Phase II fuel costs. Hearings are scheduled to begin in September 1995. No assurance can be given to the timing or the outcome of the review. PUCT Fuel Cost Review GSU For information on the PUCT Fuel Cost Review for the period December 1, 1986 through September 30, 1991, see pages 183-184 of the Form 10-K. On January 9, 1995, GSU and various parties reached an agreement for the reconciliation of over- and under-recovery of fuel and purchased power expenses for the period October 1, 1991, through December 31, 1993. In the fourth quarter of 1994, GSU recorded a reserve of $7.6 million as a result of this settlement. On April 17, 1995, the PUCT issued a final order approving the settlement. NOTE 3. PREFERRED AND COMMON STOCK Entergy Corporation Entergy Corporation periodically repurchases shares of its outstanding common stock either on the open market or through negotiated purchases or tender offers. Stock repurchases depend upon market conditions and authorization by the Entergy Corporation Board of Directors. During the first six months of 1995, no shares of common stock were repurchased. During the first six months of 1995, Entergy Corporation issued 340,590 shares of its previously repurchased common stock, reducing the amount held as treasury stock by $10.1 million. Entergy Corporation issued these shares to meet the requirements of its various stock plans. For further information on Entergy Corporation's stock plans, see pages 103-104 of the Form 10-K. NOTE 4. LONG-TERM DEBT GSU On July 1, 1995, GSU redeemed, pursuant to sinking fund requirements, $50 million of its 9.72% Series Debentures due 1998 and $0.425 million of its 7.00% Series Pollution Control Revenue Bonds due 2006. NOTE 5. RETAINED EARNINGS On July 28, 1995, Entergy Corporation's Board of Directors declared a common stock dividend of 45 cents per share payable on September 1, 1995. NOTE 6. RESTRUCTURING COSTS Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and Entergy Services The restructuring programs announced by Entergy in the third quarter of 1994 included anticipated reductions in the number of employees and the consolidation of offices and facilities. Restructuring charges associated with these programs recorded in 1994 and the first six months of 1995 are shown below by company together with actual termination benefits paid under the program. Restructuring Restructuring Liability Additional Liability Company December 31, Accruals Payments June 30, 1995 1994 (In Millions) AP&L $ 12.2 $ 9.0 $(12.0) $ 9.2 GSU 6.5 7.2 (7.0) 6.7 LP&L 6.8 5.0 (7.9) 3.9 MP&L 6.2 1.1 (4.9) 2.4 NOPSI 3.4 - (1.7) 1.7 Entergy Services - 6.0 (1.5) 4.5 ------- ------ ------ -------- Total $ 35.1 $ 28.3 $(35.0) $ 28.4 ======= ====== ====== ======== The restructuring charges shown above primarily included employee severance costs related to the expected termination of approximately 2,150 employees. In June 1995, the System recorded $24.7 million of additional restructuring costs. As of June 30, 1995, 1,683 employees have either been terminated or accepted voluntary separation under the restructuring plan. Additionally, the System recorded $24.3 million in 1994 (of which $23.8 million was recorded by GSU) for remaining severance and augmented retirement benefits related to the Merger. Actual termination benefits paid under the program during the first six months of 1995 amounted to $17.1 million. During that same period additional accruals of $5.0 million were recorded and adjustments to the allocation of the total liability were made among the System companies. At June 30, 1995 the total remaining System liability of $12.2 million for expected future merger-related outlays was comprised principally of GSU and Entergy Services' liabilities of $8.0 million and $3.0 million, respectively. NOTE 7. ACCOUNTING ISSUES New Accounting Standard - In March 1995, the FASB issued SFAS 121, effective January 1, 1996. This standard describes circumstances which may result in assets (including goodwill such as the Merger acquisition adjustment, see pages 87-88 of the Form 10-K) being impaired and provides criteria for recognition and measurement of asset impairment. Note 2 describes regulatory assets of $170 million (net of tax) related to Texas retail deferred River Bend operating and carrying costs. Management believes these deferred costs will be required to be written off under the provisions of SFAS 121 unless there are favorable regulatory or court actions related to these costs prior to the adoption of the new standard by Entergy. Certain other assets and operations of Entergy totaling approximately $1.8 billion (pre-tax) are most potentially affected by the requirements of SFAS 121. Those assets include AP&L's and LP&L's retained shares of Grand Gulf 1, Entergy Power's investments in the Independence and Ritchie power plants, GSU's Louisiana deregulated asset plan, and Texas jurisdiction abeyed portion of the River Bend plant, in addition to the FERC jurisdiction and steam department operations of GSU. As discussed in the Form 10-K, GSU has previously discontinued the application of SFAS 71 for the Louisiana deregulated asset plan, and operations of the FERC jurisdiction and steam department. Entergy will continually review these assets and operations in order to determine if the carrying value of such assets will be recovered. In most cases this determination will be based on the net cash flows expected to result from such operations and assets. Projected net cash flows will depend on the future operating costs associated with the assets, the efficiency and availability of the assets/generating units, and the future market/price for energy over the remaining life of the assets. __________________________________________ In the opinion of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy, the accompanying unaudited condensed financial statements contain all adjustments (consisting primarily of normal recurring accruals and reclassifying previously reported amounts to conform to current classifications) necessary for a fair statement of the results for the interim periods presented. However, the business of AP&L, GSU, LP&L, MP&L, and NOPSI is subject to seasonal fluctuations, with the peak period occurring during the summer months. The results for the interim periods presented should not be used as a basis for estimating results of operations for a full year. ENTERGY CORPORATION AND SUBSIDIARIES ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy Liquidity is important to Entergy due to the capital intensive nature of its business, which requires large investments in long-lived assets. While large capital expenditures for the construction of new generating capacity are not currently planned, the System does require significant capital resources for the periodic maturity of certain series of debt and preferred stock and ongoing construction expenditures. Net cash flow from operations for Entergy Corporation, the System operating companies, and System Energy for the six months ended June 30, 1995 and 1994, was as follows (in millions): Six Months Six Months Company Ended 6/30/95 Ended 6/30/94 Entergy Corporation $449.7 $508.2 AP&L $141.3 $ 79.7 GSU $100.4 $138.7 LP&L $159.7 $147.1 MP&L $ 74.8 $ 73.5 NOPSI $ 14.5 $ 41.8 System Energy $ 51.4 $112.9 For the six months ended June 30, 1995, AP&L's net cash flow from operations increased due primarily to reduced billings from System Energy resulting from a FERC audit settlement in 1994 and increased other working capital. Partially offsetting this increase in net cash flow at AP&L was a higher fuel inventory level due to the depletion of coal inventory in the first six months of 1994 when spring flooding disrupted the normal coal delivery schedule. GSU's net cash flow from operations decreased for the six months ended June 30, 1995, due primarily to cash required for an upcoming debt retirement, and to reduced working capital. NOPSI's net cash flow from operations decreased for the six months ended June 30, 1995, due primarily to reduced working capital and to refunds associated with the 1994 NOPSI Settlement. System Energy's net cash flow from operations decreased for the six months ended June 30, 1995, due primarily to refunds to associated companies resulting from a FERC audit settlement in 1994. In the first six months of 1995, as in recent years, cash from operations, supplemented by cash on hand, was sufficient to meet substantially all investing and financing requirements, including capital expenditures, dividends, and debt/preferred stock maturities. Entergy's ability to fund most of its capital requirements with cash from operations results from continued efforts to streamline operations and to reduce costs, as well as from collections under the rate phase-in plans, which exceed current cash requirements for the related costs. (In the income statement, these revenue collections are offset by the amortization of previously deferred costs so that there is no effect on net income.) The System operating companies and System Energy have the ability, subject to regulatory approval, to meet capital requirements through future debt or preferred stock issuances, as discussed below. Also, to the extent current market interest and dividend rates allow, the System operating companies and System Energy may continue to refinance high-cost debt and preferred stock prior to maturity. Entergy Corporation will consider investing up to approximately $150 million per year for the next several years in nonregulated business opportunities. See Part II for additional discussion of Entergy Corporation's current and future investments in nonregulated businesses. As discussed in Note 1 and "Significant Factors and Known Trends - Nonregulated Investments", as of June 30, 1995, EPDC has made an initial investment in the Dabhol Power Project by depositing $20.5 million in an escrow account. Certain agreements and restrictions limit the amount of mortgage bonds and preferred stock that can be issued by each of the System operating companies and System Energy. Based on the most restrictive applicable tests as of June 30, 1995, and assumed annual interest or dividend rates of 8% for bonds and 8.75% for preferred stock, each of the System operating companies and System Energy could have issued bonds or preferred stock in the following amounts (in millions): Company Bonds Preferred Stock AP&L $274 $462 GSU $ - $ - LP&L $ 61 $867 MP&L $187 $ 81 NOPSI $ 20 $ 13 System Energy $ 44 * * System Energy's charter does not provide for the issuance of preferred stock. In addition, the System operating companies and System Energy have the ability, subject to certain conditions, to issue bonds against retired bonds, in some cases without meeting an earnings coverage test. As a result of the charges recorded in 1994, GSU is currently precluded from issuing first mortgage bonds under its earnings coverage test. However, GSU has the ability to issue up to approximately $578 million of first mortgage bonds against previously retired bonds. AP&L may also issue preferred stock to refund outstanding preferred stock without meeting an earnings coverage test. GSU has no earnings coverage limitations on the issuance of preference stock. For information on the System operating companies' and System Energy's regulatory authorizations to issue and acquire securities, see Notes 3 and 4, and pages 102-105, 146-148, 189- 191, 228-230, 266-268, 299-301, and 332 of the Form 10-K. The System operating companies and System Energy have SEC authorization to effect short-term borrowings. As of June 30, 1995, GSU has unused lines of credit for short-term borrowings totaling $5.0 million. See pages 101, 145, 188, 227, 265, 299, and 331 of the Form 10-K for information on the System operating companies', System Energy's and Entergy Services' short-term borrowing authorizations and bank lines of credit. At June 30, 1995, the System operating companies, Entergy Services and System Fuels had outstanding short-term borrowings from the Money Pool and/or from banks as follows (in millions): Company Money Pool Banks LP&L $ 0.1 $17.7 Entergy Operations $10.6 $ - Entergy Services $36.4 $35.0 System Fuels $ - $15.0 On July 27, 1995, Entergy Corporation received SEC authorization for a $300 million bank line of credit and negotiations with a group of banks to provide up to $300 million in loans to Entergy Corporation are currently proceeding. Proceeds from this bank line of credit are expected to be used for common stock repurchases, investments in nonregulated and nonutility businesses, and other general corporate activities. Entergy Corporation's current primary capital requirements are to invest periodically in, or make loans to, its subsidiaries. Entergy Corporation expects to meet these requirements in 1995 - 1997 with internally generated funds and cash on hand. Entergy Corporation also pays dividends on its common stock, which aggregated $204 million in the first six months of 1995. Declarations of dividends on common stock are made at the discretion of the Board. It is anticipated that management will not recommend future dividend increases to the Board unless such increases are justified by sustained earnings growth of Entergy Corporation and its subsidiaries. Entergy Corporation receives funds through dividend payments from its subsidiaries. During the first six months of 1995, these common stock dividend payments totaled $196 million. Certain restrictions may limit the amount of these distributions. See page 106 of the Form 10-K for additional information. GSU did not make common stock dividend payments to Entergy Corporation in the first six months of 1995. Entergy Corporation has a program to repurchase shares of its outstanding common stock. The timing and amount of such repurchases depend upon market conditions and Board authorization. See Note 3 for additional information. Recent rate reductions, as discussed in Note 2, as well as any future rate reductions, have increased the need for Entergy to stabilize and reduce costs in order to meet the increasing competition in the utility industry as well as develop additional sources of income. Entergy Corporation and GSU See Notes 1 and 2 regarding litigation with Cajun and River Bend rate appeals. Write-offs or charges resulting from adverse rulings in these matters, or ultimately required by the application of SFAS 121 (see Note 7) could result in additional net losses being reported by Entergy Corporation and GSU in 1995 and subsequent periods, with resulting adverse adjustments to common equity of Entergy Corporation and GSU. Also, adverse resolution of these matters could adversely affect GSU's ability to continue to pay dividends and obtain financing, which could in turn affect GSU's liquidity. Entergy Corporation and System Energy Under the Capital Funds Agreement, Entergy Corporation has agreed to supply to System Energy sufficient capital to maintain System Energy's equity capital at an amount equal to a minimum of 35% of its total capitalization (excluding short-term debt), and to permit the continuation of commercial operation of Grand Gulf 1 and to pay in full all indebtedness for borrowed money of System Energy when due under any circumstances. In addition, under supplements to the Capital Funds Agreement assigning System Energy's rights as security for specific debt of System Energy, Entergy Corporation has agreed to make cash capital contributions, if required, to enable System Energy to make payments on such debt when due. The Capital Funds Agreement can be terminated by the parties thereto, subject to the receipt of consents of certain creditors. RESULTS OF OPERATIONS ENTERGY Net Income Consolidated net income increased for the three months ended June 30, 1995 due primarily to increased wholesale revenues from customers outside of Entergy's service area, a reduction of the provision for a GSU rate refund associated with a 1995 PUCT rate order, and a decrease in interest charges. Consolidated net income increased slightly for the six months ended June 30, 1995 due primarily to an increase in other income and a decrease in interest charges. Significant factors affecting the results of operations and causing variances between the three months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are Entergy's electric revenues by source and KWH sales. Three Months Ended Increase Description 1995 1994 (Decrease) (In Millions) Electric Operating Revenues: Residential $ 480.0 $ 489.1 $(9.1) (2) Commercial 357.3 372.2 (14.9) (4) Industrial 433.0 461.5 (28.5) (6) Governmental 37.5 40.7 (3.2) (8) ------------------------ Total retail 1,307.8 1,363.5 (55.7) (4) Sales for resale 82.7 76.3 6.4 8 Other 148.7 111.9 36.8 33 ------------------------- Total $1,539.2 $1,551.7 $(12.5) (1) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 6,047 5,806 241 4 Commercial 4,958 4,813 145 3 Industrial 10,325 10,106 219 2 Governmental 564 553 11 2 ----------------------- Total retail 21,894 21,278 616 3 Sales for resale 2,406 2,035 371 18 ----------------------- Total 24,300 23,313 987 4 ======================= Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 921.5 $ 965.1 $(43.6) (5) Commercial 682.0 711.3 (29.3) (4) Industrial 847.0 897.6 (50.6) (6) Governmental 72.7 79.6 (6.9) (9) -------------------------- Total retail 2,523.2 2,653.6 (130.4) (5) Sales for resale 157.2 145.7 11.5 8 Other 153.5 92.6 60.9 66 -------------------------- Total $2,833.9 $2,891.9 $(58.0) (2) ========================== Billed Electric Energy Sales (Millions of KWH): Residential 11,907 11,868 39 - Commercial 9,431 9,219 212 2 Industrial 20,360 19,833 527 3 Governmental 1,103 1,079 24 2 ------------------------ Total retail 42,801 41,999 802 2 Sales for resale 4,283 3,771 512 14 ------------------------ Total 47,084 45,770 1,314 3 ======================== Electric operating revenues decreased for the three months and six months ended June 30, 1995 due primarily to decreased fuel adjustment revenues, partially offset by a reduction of the provision of a GSU rate refund associated with a 1995 PUCT rate order, increased weather-related sales, an increase in wholesale revenues from outside Entergy's service area, and increased other revenues. The decrease in fuel adjustment revenues reflects a decrease in fuel prices. Other revenues increased primarily due to the Grand Gulf over/under recovery, which does not affect net income. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(8.1) $(22.4) Rate riders (5.1) (12.5) Fuel cost recovery (62.7) (108.8) Sales volume/weather 25.5 26.2 Other revenue (including unbilled) 31.5 48.0 Sales for resale 6.4 11.5 ------ ------ Total $(12.5) $(58.0) ====== ====== Gas operating revenues decreased in the first six months of 1995 due primarily to milder than normal winter weather, decreased fuel adjustment revenues and gas rate reductions agreed to in the 1994 NOPSI Settlement. Expenses Operating expenses decreased for three months and six months ended June 30, 1995 due primarily to decreased fuel and purchased power expenses, partially offset by increased nuclear outage expenses and income taxes. Fuel for electric generation and fuel- related expenses decreased due primarily to lower fuel costs. Purchased power decreased due primarily to decreased power purchases from non-associated utilities due to changes in generation requirements for the System operating companies. Nuclear refueling outage expense increased due primarily to a Grand Gulf 1 refueling outage at System Energy. Income taxes increased due primarily to higher pretax income, a decrease in tax depreciation at LP&L's Waterford 3 and GSU's River Bend plants, and decreased amortization of investment tax credits related to the 1994 FERC Settlement. Interest charges decreased for the three months and six months ended June 30, 1995 due primarily to retirement and refinancing of high-cost long-term debt, partially offset by carrying charges related to the System Energy 1994 FERC Settlement. AP&L Net Income Net income increased in the second quarter of 1995 due primarily to higher retail non-fuel revenues and lower other operation and maintenance expenses partially offset by lower sales for resale and higher income tax expense. Net income decreased in the first six months of 1995 due primarily to decreased sales for resale and higher other operation and maintenance, depreciation, and income tax expenses. Significant factors affecting the results of operations and causing variances between the three months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are AP&L's operating revenues by source and KWH sales for the three months and six months ended June 30, 1995 and 1994: Three Months Ended Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 109.0 $ 108.3 $ 0.7 1 Commercial 73.9 74.8 (0.9) (1) Industrial 84.9 80.6 4.3 5 Governmental 4.0 4.1 (0.1) (2) ------------------------ Total retail 271.8 267.8 4.0 1 Sales for resale Associated companies 51.2 60.4 (9.2) (15) Non-associated companies 40.5 42.5 (2.0) (5) Other 48.7 44.2 4.5 10 ------------------------ Total $ 412.2 $ 414.9 $(2.7) (1) ======================== Billed Electric Energy Sales (Millions of KWH): Residential 1,149 1,141 8 1 Commercial 976 986 (10) (1) Industrial 1,515 1,441 74 5 Governmental 66 57 9 16 ---------------------- Total retail 3,706 3,625 81 2 Sales for resale Associated companies 2,396 2,988 (592) (20) Non-associated companies 1,156 1,065 91 9 ---------------------- Total 7,258 7,678 (420) (5) ====================== Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 233.2 $ 231.6 $ 1.6 1 Commercial 142.2 141.1 1.1 1 Industrial 162.5 153.4 9.1 6 Governmental 8.0 8.2 (0.2) (2) ------------------------- Total retail 545.9 534.3 11.6 2 Sales for resale Associated companies 80.3 127.0 (46.7) (37) Non-associated companies 79.1 86.8 (7.7) (9) Other 46.5 37.9 8.6 23 ------------------------- Total $ 751.8 $ 786.0 $(34.2) (4) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 2,576 2,579 (3) - Commercial 1,923 1,917 6 - Industrial 2,954 2,805 149 5 Governmental 119 115 4 3 ------------------------- Total retail 7,572 7,416 156 2 Sales for resale Associated companies 3,755 6,238 (2,483) (40) Non-associated companies 2,029 2,269 (240) (11) ------------------------- Total 13,356 15,923 (2,567) (16) ========================= Electric operating revenues decreased in the second quarter and first six months of 1995 due primarily to lower sales for resale to associated companies caused by changes in generation availability and requirements among the System operating companies. This decrease was partially offset by higher retail sales due primarily to an increase in customers and power usage. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $1.6 $ 2.6 Rate riders 1.4 1.7 Fuel cost recovery (0.6) 3.6 Sales volume/weather 1.7 3.8 Other revenue (including unbilled) 4.4 8.5 Sales for resale (11.2) (54.4) ----- ------ Total $(2.7) $(34.2) ===== ====== Expenses Operating expenses decreased in the second quarter of 1995 due primarily to lower fuel and fuel-related expenses and purchased power expenses partially offset by higher income tax expense. Fuel and fuel-related expenses and purchased power expenses decreased due to the lower sales for resale to associated companies as noted in "Revenues and Sales" above. The increase in income tax expense is primarily due to higher pretax income. Operating expenses decreased for the six months of 1995 due primarily to lower fuel and fuel-related expenses and purchased power expenses partially offset by higher other operation and maintenance expenses and income tax expenses. Fuel and purchased power expenses decreased for the reasons discussed above. The increase in other operation and maintenance expenses is primarily the result of additional work being performed and the use of materials during ANO 1's scheduled refueling outage which began in mid-February 1995 and was completed in early April 1995. In addition, ANO 2 experienced a 30 day mid-cycle outage during the first quarter of 1995 which also required additional work and materials. Income tax expense increased primarily due to the write-off in 1994 of the investment tax credit in accordance with the FERC Settlement. GSU Net Income Net income increased for the three months and six months ended June 30, 1995 primarily due to a reduction of the provision for rate refund associated with a 1995 PUCT rate order (see Note 2 for further information). This increase was partially offset by an increase in taxes other than income taxes. Significant factors affecting the results of operations and causing variances between the three months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenue and Sales Detailed below are GSU's operating revenues by source and KWH sales for the three months and six months ended June 30, 1995 and 1994: Three Months Ended Increase Description 1995 1994 (Decrease) % (In millions) Electric Department Operating Revenues: Residential $ 132.6 $ 132.7 $(0.1) - Commercial 99.3 102.4 (3.1) (3) Industrial 145.2 159.9 (14.7) (9) Governmental 6.2 6.4 (0.2) (3) -------------------------- Total retail 383.3 401.4 (18.1) (5) Sales for resale Associated companies 22.6 4.7 17.9 381 Non-associated companies 15.8 15.7 0.1 1 Other 40.6 17.2 23.4 136 -------------------------- Total Electric Department $ 462.3 $439.0 $ 23.3 5 ========================== Billed Electric Energy Sales (Millions of KWH): Residential 1,754 1,672 82 5 Commercial 1,507 1,462 45 3 Industrial 3,677 3,811 (134) (4) Governmental 63 74 (11) (15) ------------------------ Total retail 7,001 7,019 (18) - Sales for resale Associated companies 1,057 589 468 79 Non-associated companies 548 120 428 357 ------------------------ Total Electric Department 8,606 7,728 878 11 Steam Department 452 421 31 7 ------------------------ Total 9,058 8,149 909 11 ======================== Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Department Operating Revenues: Residential $ 249.1 $ 256.5 $(7.4) (3) Commercial 191.6 197.1 (5.5) (3) Industrial 287.5 312.9 (25.4) (8) Governmental 12.4 12.7 (0.3) (2) ------------------------- Total retail 740.6 779.2 (38.6) (5) Sales for resale Associated companies 32.8 14.0 18.8 134 Non-associated companies 30.6 24.8 5.8 23 Other 37.1 23.1 14.0 61 ------------------------- Total Electric Department $ 841.1 $841.1 - - ========================= Billed Electric Energy Sales (Millions of KWH): Residential 3,315 3,273 42 1 Commercial 2,849 2,769 80 3 Industrial 7,347 7,386 (39) (1) Governmental 151 148 3 2 ---------------------- Total retail 13,662 13,576 86 1 Sales for resale Associated companies 1,558 987 571 58 Non-associated companies 1,021 263 758 288 ---------------------- Total Electric Department 16,241 14,826 1,415 10 Steam Department 849 831 18 2 ---------------------- Total 17,090 15,657 1,433 9 ====================== Electric operating revenues increased in the three months ended June 30, 1995 primarily due to a reduction of the provision for rate refund associated with a 1995 PUCT rate order and an increase in sales for resale. This increase was partially offset by a decrease in fuel revenues. Electric operating revenues were basically unchanged for the first six months of 1995 primarily due to lower fuel revenues which were offset by higher sales for resale. Sales for resale increased as a result of an increase in sales to associated companies caused by changes in generation availability and requirements among the System operating companies. Gas operating revenues decreased for the first six months of 1995 primarily due to a decrease in residential sales. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $12.2 $(6.6) Fuel cost recovery (24.8) (38.9) Sales volume/weather 3.5 6.1 Other revenue (including unbilled) 14.4 14.8 Sales for resale 18.0 24.6 ----- ----- Total $23.3 $ - ===== ===== Expenses Operating expenses increased for the three months ended June 30, 1995 primarily due to increased taxes other than income taxes and income taxes, partially offset by lower purchased power expense. Taxes other than income taxes increased primarily due to a refund of franchise taxes in 1994. Income taxes increased primarily due to a decrease in tax depreciation associated with River Bend and higher pre-tax income for this period. Purchased power expense decreased primarily due to the changes in generation availability and requirements among the System operating companies. This increase in generation was offset by a decrease in the price of fuel. Operating expenses remained relatively unchanged for the first six months of 1995 primarily due to the same reasons as the three months ended June 30, 1995 (discussed above). In addition, other operation and maintenance expenses increased slightly primarily due to additional restructuring charges which were partially offset by the prior year severance charges related to the merger. Other interest - net decreased for the three months and six months ended June 30, 1995 primarily due to the one time interest charge associated with the March 1994 Louisiana Supreme Court ruling requiring GSU to refund to ratepayers the portion of GSU's cost to purchase power from Nelson Industrial Steam Company (NISCO) representing the excess of NISCO's purchase price of the units over GSU's depreciated cost of the units. LP&L Net Income Net income increased for the three months and six months ended June 30, 1995. This is due primarily to lower other operating and maintenance expenses partially offset by higher income tax expense. Significant factors affecting the results of operations and causing variances between the three months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are LP&L's operating revenues by source and KWH sales for the three months and six months ended June 30, 1995 and 1994. Three Months Ended Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 132.9 $ 139.4 $(6.5) (5) Commercial 85.4 92.0 (6.6) (7) Industrial 153.5 169.1 (15.6) (9) Governmental 7.8 7.9 (0.1) (1) ------------------------ Total retail 379.6 408.4 (28.8) (7) Sales for resale Associated companies 0.2 0.1 0.1 100 Non-associated companies 13.6 8.7 4.9 56 Other 12.7 24.4 (11.7) (48) ------------------------ Total $ 406.1 $ 441.6 $(35.5) (8) ======================== Billed Electric Energy Sales (Millions of KWH): Residential 1,787 1,691 96 6 Commercial 1,159 1,118 41 4 Industrial 4,247 3,979 268 7 Governmental 108 99 9 9 ---------------------- Total retail 7,301 6,887 414 6 Sales for resale Associated companies 9 1 8 80 Non-associated companies 360 216 144 67 ---------------------- Total 7,670 7,104 566 8 ====================== Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 244.8 $ 264.4 $(19.6) (7) Commercial 161.4 172.8 (11.4) (7) Industrial 302.4 329.0 (26.6) (8) Governmental 15.5 15.8 (0.3) (2) ------------------------- Total retail 724.1 782.0 (57.9) (7) Sales for resale Associated companies 0.4 0.2 0.2 100 Non-associated companies 23.6 15.5 8.1 52 Other 11.0 27.8 (16.8) (60) ------------------------- Total $ 759.1 $ 825.5 $(66.4) (8) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 3,374 3,371 3 - Commercial 2,178 2,146 32 1 Industrial 8,326 7,956 370 5 Governmental 218 206 12 6 ----------------------- Total retail 14,096 13,679 417 3 Sales for resale Associated companies 19 4 15 37 Non-associated companies 574 341 233 68 ----------------------- Total 14,689 14,024 665 5 ======================= Electric operating revenues were lower in the three months and six months ended June 30, 1995 primarily due to lower fuel adjustment revenues, which do not affect net income. In addition, a reserve for rate refund was established (see Note 2 for further information) and completion of the amortization of the proceeds resulting from litigation with a gas supplier in the second quarter of 1994 resulted in decreased other operating revenues partially offset by higher sales to non-associated utilities. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(10.4) $(9.7) Fuel cost recovery (39.9) (66.2) Sales volume/weather 13.8 10.5 Other revenue (including unbilled) (4.0) (9.3) Sales for resale 5.0 8.3 ------ ------ Total $(35.5) $(66.4) ====== ====== Expenses Operating expenses decreased for the three months and six months ended June 30, 1995 primarily due to lower fuel, purchased power, and other operation and maintenance expenses partially offset by higher income tax expense. Fuel expenses decreased primarily due to lower deferred fuel cost. The decrease in purchased power expense is primarily due to changes in generation availability and requirements among the System operating companies. Other operation and maintenance expenses decreased primarily due to lower fossil and nuclear maintenance activities and a court settlement reducing legal expense. Income taxes increased primarily due to a decrease in tax depreciation associated with Waterford 3 and higher pre-tax income. MP&L Net Income Net income decreased slightly in the three months ended June 30, 1995 due primarily to decreased sales for resale. Net income increased in the six months ended June 30, 1995 due primarily to a decrease in other operation and maintenance expenses and an increase in sales. The increase in sales was partially offset by lower retail revenues due to the effects of a March 1994 rate reduction. Significant factors affecting the results of operations and causing variances between the three months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are MP&L's operating revenues by source and KWH sales for the three months and six months ended June 30, 1995 and 1994: Three Months Ended Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 74.5 $ 75.0 $(0.5) (1) Commercial 63.2 61.9 1.3 2 Industrial 43.7 45.0 (1.3) (3) Governmental 6.8 7.3 (0.5) (7) -------------------------- Total retail 188.2 189.2 (1.0) (1) Sales for resale Associated companies 6.0 11.0 (5.0) (45) Non-associated companies 5.4 4.5 0.9 20 Other 40.7 25.1 15.6 62 -------------------------- Total $ 240.3 $ 229.8 $ 10.5 5 ========================== Billed Electric Energy Sales (Millions of KWH): Residential 884 869 15 2 Commercial 794 749 45 6 Industrial 741 713 28 4 Governmental 80 87 (7) (8) ----------------------- Total retail 2,499 2,418 81 3 Sales for resale Associated companies 100 300 (200) (67) Non-associated companies 176 141 35 25 ----------------------- Total 2,775 2,859 (84) (3) ======================= Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 141.6 $ 151.1 $ (9.5) (6) Commercial 118.8 120.3 (1.5) (1) Industrial 83.9 89.1 (5.2) (6) Governmental 13.3 13.9 (0.6) (4) ------------------------- Total retail 357.6 374.4 (16.8) (4) Sales for resale Associated companies 12.6 16.1 (3.5) (22) Non-associated companies 9.6 7.5 2.1 28 Other 53.8 19.2 34.6 180 ------------------------- Total $ 433.6 $ 417.2 $ 16.4 4 ========================= Billed Electric Energy Sales (Millions of KWH): Residential 1,817 1,845 (28) (2) Commercial 1,518 1,432 86 6 Industrial 1,464 1,405 59 4 Governmental 158 164 (6) (4) ---------------------- Total retail 4,957 4,846 111 2 Sales for resale Associated companies 259 356 (97) (27) Non-associated companies 316 217 99 46 ---------------------- Total 5,532 5,419 113 2 ====================== Electric operating revenues increased in the three months ended June 30, 1995 due to an increase in other revenues, partially offset by lower sales for resale. Other revenues increased primarily due to Grand Gulf over/under recovery, which does not affect net income. Sales for resale decreased primarily due to changes in generation availability and requirements among the System operating companies. Electric operating revenues increased in the six months ended June 30, 1995 due to an increase in other revenues, partially offset by lower retail revenues. Other revenues increased primarily due to Grand Gulf over/under recovery, which does not affect net income. Retail revenues decreased primarily due to the effects of a March 1994 rate reduction. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(0.5) $(5.4) Grand Gulf rate rider (6.4) (14.3) Fuel cost recovery 3.9 (0.2) Sales volume/weather 2.1 3.1 Other revenue (including unbilled) 15.6 34.6 Sales for resale (4.2) (1.4) ----- ----- Total $10.5 $16.4 ===== ===== Expenses Operating expenses increased for the three months and six months ended June 30, 1995 primarily due to increased amortization of rate deferrals and increased fuel and purchase power costs. In addition, the increase in operating expenses for the six months ended June 30, 1995 was partially offset by a decrease in other operation and maintenance expense. The amortization of rate deferrals increased in the three months and six months ended June 30, 1995 reflecting the fact that MP&L, based on the Revised Plan, collected more Grand Gulf 1-related costs from its customers in the three months and six months ended June 30, 1995 than it recovered in the same period in 1994. Purchased power increased for the three months ended June 30, 1995 primarily due to increased purchase power prices. Fuel and fuel- related expenses and purchased power increased for the six months ended June 30, 1995 due to increased generation requirements resulting from increased energy sales. Other operation and maintenance expenses decreased for the six months ended June 30, 1995 primarily due to increased maintenance incurred at various plant sites during the three months ended March 31, 1994. NOPSI Net Income Net income decreased in the three months and six months ended June 30, 1995 due primarily to a permanent rate reduction that took effect on January 1, 1995 partially offset by a decrease in other operation and maintenance expenses. Significant factors affecting the results of operations and causing variances between the three months and six months ended June 30, 1995 and 1994 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales Detailed below are NOPSI's operating revenues by source and KWH sales for the three months and six months ended June 30, 1995 and 1994. Three Months Ended Increase Description 1995 1994 (Decrease) % (In millions) Electric Operating Revenues: Residential $ 31.0 $ 33.6 $ (2.6) (8) Commercial 35.4 41.1 (5.7) (14) Industrial 5.6 6.8 (1.2) (18) Governmental 12.8 15.1 (2.3) (15) ------------------------ Total retail 84.8 96.6 (11.8) (12) Sales for resale Associated companies 0.0 0.9 (0.9) (100) Non-associated companies 2.4 2.2 0.2 9 Other 9.9 7.9 2.0 25 ------------------------ Total $ 97.1 $ 107.6 $(10.5) (10) ======================== Billed Electric Energy Sales (Millions of KWH): Residential 473 433 40 9 Commercial 522 498 24 5 Industrial 146 135 11 8 Governmental 248 234 14 6 ----------------------- Total retail 1,389 1,300 89 7 Sales for resale Associated companies 2 34 (32) (94) Non-associated companies 76 67 9 13 ----------------------- Total 1,467 1,401 66 5 ======================= Six Months Ended Increase Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 52.8 $ 61.6 $ (8.8) (14) Commercial 67.9 80.1 (12.2) (15) Industrial 10.7 13.1 (2.4) (18) Governmental 23.5 29.0 (5.5) (19) ------------------------ Total retail 154.9 183.8 (28.9) (16) Sales for resale Associated companies 1.3 0.9 0.4 44 Non-associated companies 4.3 3.6 0.7 19 Other 14.7 (1.8) 16.5 (917) ------------------------- Total $ 175.2 $ 186.5 $(11.3) (6) ========================= Billed Electric Energy Sales (Millions of KWH): Residential 825 800 25 3 Commercial 962 955 7 1 Industrial 269 254 15 6 Governmental 458 445 13 3 ----------------------- Total retail 2,514 2,454 60 2 Sales for resale Associated companies 68 36 32 8 Non-associated companies 136 94 42 4 ----------------------- Total 2,718 2,584 134 5 ======================= Electric operating revenues decreased in the three months and six months ended June 30, 1995 due primarily to a decrease in retail base revenues. This decrease was partially offset by a reserve for revenue reduction recorded in the first quarter of 1994 and increased sales for resale to associated companies for the six months ended June 30, 1995. The changes in electric operating revenue for the three months and six months ended June 30, 1995 are as follows: Three Months Ended Six Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(10.8) $(3.3) Fuel cost recovery (1.4) (7.1) Sales volume/weather 4.3 2.7 Other revenue (including unbilled) (1.9) (4.7) Sales for resale (0.7) 1.1 ------ ------ Total $(10.5) $(11.3) ====== ====== For the three months and six months ended June 30, 1995, gas operating revenues decreased due primarily to decreased gas sales, the rate reduction agreed to in the 1994 NOPSI Settlement effective January 1, 1995, and a lower unit purchase price for gas purchased for resale. Expenses Operating expenses decreased for the three months and six months ended June 30, 1995 due primarily to lower fuel and other operation and maintenance expenses. The decrease in fuel and fuel-related expenses is partially offset by an increase in purchased power expenses for the three months ended June 30, 1995. Gas purchased for resale decreased for the six months ended June 30, 1995 due primarily to decreased gas sales and a lower unit purchase price. Purchased power expenses increased in the three months and six months ended June 30, 1995 due primarily to changes in generation requirements among the System operating companies and higher costs. Other operation and maintenance expenses decreased primarily due to a decrease in maintenance activity and lower payroll expenses. The decrease in payroll expenses is the result of restructuring and a decrease in the number of employees. Income taxes decreased in the three months ended June 30, 1995 due primarily to lower pre-tax income. SYSTEM ENERGY Net Income Net income decreased for the three months ended June 30, 1995, due primarily to increased nuclear refueling outage expenses, partially offset by an increase in revenues. Net income for the six months ended June 30, 1995 was virtually unchanged from the same period in 1994. Significant factors affecting the results of operations and causing variances between the second quarters and first six months of 1995 and 1994 are discussed under "Revenues" and "Expenses" below. Revenues Operating revenues recover operating expenses, depreciation and capital costs attributable to Grand Gulf 1. The capital costs are computed by allowing a return on System Energy's common equity funds allocable to its net investment in Grand Gulf 1 and adding to such amount System Energy's effective interest cost for its debt allocable to its investment in Grand Gulf 1. Operating revenues increased for the three months and six months ended June 30, 1995, due primarily to increased expenses in connection with a Grand Gulf 1 refueling outage and higher depreciation, amortization, and decommissioning expense offset by a lower return on System Energy's decreasing investment in Grand Gulf 1 (caused by depreciation of the unit). Expenses Operation and maintenance expenses increased for the three months and six months ended June 30, 1995, principally as a result of a refueling outage which began April 15, 1995 and ended June 9, 1995. Fuel expense decreased for the second quarter and first six months of 1995 as a result of the refueling outage. Depreciation, amortization, and decommissioning expense increased for the three months and six months ended June 30, due primarily to increases of $2 million and $5 million, respectively, in amortization expense as a result of the reclassification of $81 million of Grand Gulf 1 costs in accordance with the November 1994 FERC Settlement. The increase in amortization expense was partially offset by a decrease in depreciation expense related to the reclassified costs. Interest expense decreased in the second quarter and first six months of 1995 due primarily to the retirement and refinancing of high-cost long-term debt. SIGNIFICANT FACTORS AND KNOWN TRENDS Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy Competition and Industry Challenges The electric utility industry, including Entergy, is experiencing increased competitive pressures. Entergy is seeking to continue as a leading competitor in the changing electric energy business. Competition presents Entergy with many challenges. The following have been identified by Entergy as its major competitive challenges. Entergy Retail and Wholesale Rate Issues Increasing competition anticipated in the utility industry as well as recent rate reductions increase the need for Entergy to reduce its costs. The retail regulatory philosophy is shifting in some jurisdictions from traditional cost-of-service regulation to incentive-rate regulation. Incentive and performance-based rate plans encourage efficiencies and productivity while permitting utilities and their customers to share in the results. MP&L implemented an incentive-rate plan in March 1994, and in June 1995, the LPSC approved a performance based formula rate plan for LP&L. GSU agreed to shared-savings plans as part of the Merger. Recognizing that many industrial customers have energy alternatives, Entergy continues to work with these customers to address their needs. In certain cases, competitive prices are negotiated, using variable-rate designs. As discussed on pages 23, 26, 27-28, 92, 94-95, 97, 183, 261 and 295 of the Form 10-K during the fiscal year 1994, GSU's Louisiana jurisdiction, MP&L and NOPSI reduced rates in accordance with regulatory orders. During the first six months of 1995, GSU's Texas jurisdiction and LP&L were also required by regulators to reduce rates. See Note 2 for additional discussion of Entergy's rate activities. In connection with the Merger, AP&L and MP&L agreed with their respective retail regulators not to request any general retail rate increases that would take effect before November 1998, with certain exceptions. MP&L also agreed that during this period retail base rates under its formula rate plan would not be increased above the level of rates in effect on November 1, 1993. GSU agreed with the LPSC and PUCT to a five-year Rate Cap (beginning January 1, 1994) on retail electric rates, and to pass through to retail customers the fuel savings and a certain percentage of the nonfuel savings created by the Merger. In the wholesale rate area, FERC approved in 1992, with certain modifications, the proposal of AP&L, LP&L, MP&L, NOPSI, and Entergy Power to sell wholesale power at market-based rates and to provide to electric utilities "open access" to the System's transmission system (subject to certain requirements). GSU was later added to this filing. On October 31, 1994, as amended on January 25, 1995, Entergy Services filed with FERC revised transmission tariffs intended to provide access to transmission service on the same or comparable bases, terms, and conditions as the System operating companies, and the tariffs were subsequently approved. Open access and market pricing, once they take effect, will increase marketing opportunities for the System, but will also expose the System to the risk of loss of load or reduced revenues due to competition with alternative suppliers. In light of the rate issues discussed above, Entergy's utility subsidiaries are aggressively reducing costs to avoid potential earnings erosions that might result, as well as to compete successfully by becoming a low-cost producer. In 1995, Entergy implemented a restructuring program related to certain of its operating units, designed to reduce costs and to improve operating efficiencies. See pages 117, 155, 201, 238, and 306 of the Form 10-K and Note 6 for further information. Also, in response to an increasingly competitive environment, AP&L, LP&L, MP&L, and NOPSI have announced intentions to revise their initial least-cost planning activities, and GSU is continuing to work with the LPSC and PUCT regarding integrated resource planning. Potential Changes in the Electric Utility Industry Retail wheeling, the transmission by an electric utility of energy produced by another entity over the utility's transmission and distribution system to a retail customer in the electric utility's area of service, is also evolving. Over a dozen states have been or are studying or experimenting with the concept of retail competition. In April 1994, the state of Michigan initiated a five-year experiment that would allow limited competition among public utilities; however, it is currently being challenged in the courts. In May 1995, the California Public Utilities Commission adopted a preliminary proposal to create a wholesale power pool (Poolco). Under the proposal the FERC would have exclusive jurisdiction over the pool, while an independent operator would manage the transmission network and generation dispatch. Customers would access Poolco through bilateral contracts at least two years after the pool begins operation. The Rhode Island Public Utilities Commission has adopted a proposal calling for, among other things, retail wheeling and the unbundling of generation from transmission and distribution services. The Massachusetts Department of Public Utilities has also considered a similar proposal. These types of proposals are indicative of the movement of the retail electric market toward deregulation and increased competition. The retail market for electricity is expected to become more competitive with such moves toward deregulation and with greater focus on customer choice. The movement of the retail electric market toward deregulation and increased competition is also prevalent in areas of the country in which Entergy presently operates. On April 21, 1995, a newly incorporated entity, Crescent City Utilities, Inc., submitted to the Council a draft resolution intended to permit the use of NOPSI's gas and electric transmission and distribution facilities by any other franchised utility to supply electricity and gas to retail customers in New Orleans. On April 27, 1995, the Council issued a statement noting that the Council played no role in the development of the resolution, that it had not received the document formally and that no hearings had been scheduled to address its merits. However, the Council later stated its intention to schedule public hearings to consider competition in the electric utility service industries and retail electric industry. No schedule for such hearings has been announced. The Texas legislature has recently revised the Public Utility Regulatory Act, the law regulating electric utilities in Texas. The revised law permits utility and non-utility exempt wholesale generators and power marketers to sell wholesale power in the state. The revised law also allows for flexible pricing but does not change the current law governing retail wheeling or treatment of federal income taxes. During the second quarter of 1995, the Louisiana legislature considered a bill permitting local retail wheeling; however, the bill was defeated. In some areas of the country, municipalities (or comparable entities) whose residents are served at the retail level by an investor-owned utility pursuant to a franchise, are exploring the possibility of establishing new distribution systems in order to serve retail customers, especially large industrial customers, that currently receive service from an investor-owned utility. These options depend on the terms of a utility's franchise as well as on state law and regulation. In addition, FERC's authority to order utilities to transmit for a new or expanding municipal system is limited in certain respects. Where successful, however, the establishment of a municipal system or the acquisition by a municipal system of a utility's customers could result in the inability of a utility to recover costs that it has incurred in serving those customers. In mid-1994, FERC issued a notice of proposed rulemaking concerning a regulatory framework for dealing with recovery of stranded costs, such as those associated with high-cost nuclear generating units, which may be incurred by electric utilities as a result of increased competition. In addition to addressing recovery of stranded costs related to wholesale service, the proposal requested comment as to recovery of retail stranded costs in transmission rates where state regulatory authorities failed to address the issue or were in conflict. On March 29, 1995, FERC issued a supplemental notice of proposed rulemaking in this proceeding which would require public utilities to provide non-discriminatory open access transmission service to wholesale customers, and which would also provide guidance on the recovery of wholesale and retail stranded costs. Under the proposal, public utilities would be required to file transmission tariffs for both point-to-point and network services. Model transmission tariffs were included in the proposal. With regard to pending proceedings, including Entergy's tariff proceeding, FERC directed the parties to proceed with their cases while taking into account FERC's views expressed in the proposed rule. Comments will be filed in August 1995, with reply comments in October 1995. The risk of exposure to stranded costs which may result from competition in the industry will depend on the extent and timing of retail competition, the resolution of jurisdictional issues concerning stranded cost recovery, and the extent to which such costs are recovered from departing or remaining customers, among other matters. Significant Industrial Cogeneration Effects Cogeneration projects developed or considered by certain of GSU's industrial customers over the last several years have resulted in GSU developing and securing approval of rates lower than the rates previously approved by the PUCT and LPSC for such industrial customers. Such rates are designed to retain such customers, and to compete for and to develop new loads, and do not presently recover GSU's full cost of service. The pricing agreements at non-full cost of service based rates fully recover all related costs but provide only a minimal return on investments. Substantially all of such pricing agreements expire no later than 1997. In the second quarter of 1995, KWH sales to GSU's industrial customers at non-full cost of service rates made up approximately 25% of GSU's total industrial class. In March 1995, LP&L received notice from a large industrial customer that the customer has decided to proceed with its proposed cogeneration project for the purpose of fulfilling its future electric energy needs. The customer will continue to purchase its energy requirements until its cogeneration facilities are completed, which is expected to be sometime after 1999. During 1994, this customer represented approximately 8% of total LP&L industrial sales, and provided $19 million of base revenue. The Energy Policy Act of 1992 The Energy Policy Act of 1992 (EPAct) addresses a wide range of energy issues and is altering the way Entergy and the rest of the electric utility industry operate. The EPAct encourages competition and affords utilities the opportunities and the risks associated with an open and more competitive market environment. The EPAct creates exemptions from regulation under the Public Utility Holding Company Act of 1935 and creates a class of exempt wholesale generators consisting of utility affiliates and nonutilities that are owners and operators of facilities for the generation and transmission of power for sales at wholesale. The EPAct also gives FERC the authority to order investor-owned utilities, including the System operating companies, to transmit power and energy to or for wholesale purchasers and sellers. The law creates the potential for electric utilities and other power producers to gain increased access to the transmission systems of other entities to facilitate wholesale sales. Both the System operating companies and Entergy Power expect to compete in this market. In addition, the EPAct allows utilities to own and operate foreign generation, transmission, and distribution facilities. See "Nonregulated Investments" below for further information. Public Utility Holding Company Act of 1935 Entergy, along with 10 other electric utility holding companies, recently asked Congress to repeal the Public Utility Holding Company Act of 1935 (HCA). The HCA requires detailed oversight by the SEC of many business practices and activities of utility holding companies and their subsidiaries including, among other things, nonutility activities. In June 1995, the SEC adopted a report proposing options for the repeal or the significant modification of the HCA and proposed rule changes that would reduce the regulations governing utility holding companies. Entergy believes that the HCA inhibits its ability to compete in the evolving electric energy marketplace, and largely duplicates the oversight activities already performed by FERC and state and local public service commissions. On June 30, 1995, the SEC amended certain rules under the HCA to exempt the requirement to receive prior authorization for all capital contributions by a parent company to its subsidiary company. Litigation and Regulatory Proceedings See Note 1 for information on the bankruptcy proceedings of Cajun and litigation with Cajun concerning Cajun's ownership interest in River Bend and the related possible material adverse effects on GSU's financial condition. See Note 2 for information on the possible material adverse effects on GSU's financial condition and results of operations due to $463 million of potential net of tax write-offs, and $169 million in refunds of previously collected revenue. These possible write-offs and refunds are in connection with outstanding appeals and remands regarding the River Bend plant and rate deferrals. Entergy Corporation and GSU The acquisition of GSU by Entergy Corporation was the largest electric utility merger in United States history. Entergy expects to achieve $850 million in fuel cost savings and $670 million in operation and maintenance expense savings over 10 years as a result of the Merger. Although common shareholders experienced some dilution in earnings as a result of the Merger, Entergy believes that the Merger will ultimately be beneficial to common shareholders in terms of strategic benefits as well as economies and efficiencies produced. For further information, see pages 117-118 and 201 of the Form 10-K. Nonregulated Investments As discussed in Note 1 and on pages 3 and 4 of the Form 10- K, Entergy Corporation continues to consider opportunities to expand its utility and utility-related businesses that are not regulated by state and local regulatory authorities (nonregulated businesses). Entergy Corporation's investment strategy is to invest in nonregulated business opportunities that have the potential to earn a greater rate of return than its regulated utility operations, and Entergy Corporation may invest up to approximately $150 million per year for the next several years in nonregulated businesses. See Part II for additional discussion of Entergy Corporation's current and future investments in nonregulated businesses. As of June 30, 1995, Entergy Corporation's investment in nonregulated subsidiaries totaled $506.1 million. In the near term, these investments are unlikely to have a positive effect on earnings; however, management believes that these investments will contribute to future earnings growth. For the first six months of 1995, Entergy Corporation's nonregulated investments reduced consolidated net income by approximately $21.6 million. On March 31, 1995, Entergy Corporation, through its subsidiary, Entergy Power Development Company (EPDC), entered into an agreement with Enron Power Development Corporation, a subsidiary of Enron Corporation, to acquire a 20% interest in the Dabhol Power Project (Project), a 695 megawatt combined cycle facility located in the State of Maharashtra, India. Pursuant to an agreement, EPDC has placed approximately $20.5 million in an escrow account. If EPDC becomes a participant in the Project, its estimated investment in the first phase of the Project would be approximately $90 million. At that time, EPDC would also have an obligation to cover a pro-rata share of the cost overruns up to approximately $30 million. Subsequent to entering into the agreement with Enron Power Development Corporation, the newly- elected Maharashtra state government investigated the Project and its related cost of power. On August 3, 1995, the Chief Minister of Maharashtra stated that the government of Maharashtra has decided to suspend the first phase of the Project, the 695 megawatt facility, and "scrap" the second phase of the Project, a 1320 megawatt facility, and indicated that orders to stop work would be issued. In view of these developments, Entergy is uncertain as to the future of the project and is considering its options. As discussed on page 3 of the Form 10-K, Entergy Corporation requested authorization from the SEC to convert the debt obligation of Entergy Power into equity. On April 18, 1995, Entergy Corporation received authorization from the SEC to consummate this transaction and converted this debt obligation into equity. As discussed in Part II and on page 4 of the Form 10-K, Entergy Corporation provided to Entergy SASI $72.3 million in loans to fund Entergy SASI's installment sale agreements with its customers. In June 1995, Entergy Corporation contributed $125 million in capital to Entergy SASI through Entergy Enterprises, Inc. thus allowing Entergy SASI to convert its debt obligation to Entergy Corporation into equity. In June 1995, Entergy requested approval from the SEC to form a new non-regulated subsidiary named Entergy Technologies Company (ETC). ETC will offer bulk interstate telecommunications service to telecommunications providers who will in turn market that contracted capacity to third parties. ETC will allow Entergy to take advantage of the rapidly expanding telecommunications industry by marketing a portion of Entergy's existing telecommunications system. ANO Matters Entergy Operations has made inspections and repairs from time to time on ANO 2's steam generator. Currently, Entergy Operations is in the process of gathering information and assessing various options for the repair or the replacement of ANO 2's steam generator. See Note 1 for additional information. Deregulated Portion of River Bend As of June 30, 1995, GSU had not recovered a significant amount of its investment in, or received any return associated with, the portion of River Bend included in the deregulated asset plan in Louisiana and the portion of River Bend placed in abeyance as part of the Texas rate order which went into effect in July 1988. See Note 2 for further information. Future earnings will continue to be adversely affected by the lack of full recovery and return on the investment and other costs associated with River Bend. For the six months ended June 30, 1995, GSU recorded revenues resulting from the sale of electricity from the deregulated asset plan of approximately $16.5 million which, absent the deregulated asset plan, would not have been realized. Operation and maintenance expenses, including fuel, were approximately $16.5 million, and depreciation expense associated with the deregulated asset plan investment was approximately $9.2 million for the six months ended June 30, 1995. For the six months ended June 30, 1995, GSU recorded nonfuel revenue of $0.2 million (included in the $16.5 million of total deregulated asset plan revenue discussed above) which, absent the deregulated asset plan, would not have been realized. The operation and maintenance expenses and depreciation expense allocated to the deregulated asset plan as detailed above would have been incurred at River Bend with or without the deregulated asset plan. The future impact of the deregulated asset plan on GSU's results of operations and financial position will depend on River Bend's future operating costs, the unit's efficiency and availability and the future market for energy over the remaining life of the unit. In addition, the deregulated asset plan will be subject to the requirements of SFAS 121 as discussed in Note 7 in determining the recognition of any asset impairment. Property Tax Exemptions Exemptions from the payment of Louisiana local property taxes on Waterford 3 and River Bend, which have been in effect for 10 years for each of the plants, will expire in December 1995 and December 1996, respectively. LP&L and GSU are working with tax authorities to determine the method for calculating the amount of the property taxes to be paid when the exemptions expire. LP&L believes that assessed property taxes will be recovered from its customers through rates. GSU believes that assessed property taxes allocated to its retail jurisdictions will be recovered from those customers through rates. Environmental Issues GSU has been notified by the U. S. Environmental Protection Agency (EPA) that it has been designated as a potentially responsible party for the cleanup of certain hazardous waste disposal sites. GSU is currently negotiating with the EPA and state authorities regarding the cleanup of some of these sites. Several class action and other suits have been filed in state and federal courts seeking relief from GSU and others for damages caused by the disposal of hazardous waste and for asbestos- related disease allegedly resulting from exposure on GSU premises. While the amounts at issue in the cleanup efforts and suits may be substantial, GSU believes that its results of operations and financial condition will not be materially adversely affected by the outcome of the suits. Through June 30, 1995, $7.7 million has been expended on the cleanup. As of June 30, 1995, a remaining recorded liability of $20.7 million existed relating to the cleanup of six sites where GSU has been designated a potentially responsible party. See pages 35-36, 39- 40, and 196-197 of the Form 10-K and Note 1 for additional discussion of the sites in which GSU has been designated as a potentially responsible party by the EPA. During 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including waste water impoundments. LP&L determined that certain of its power plant waste water impoundments were affected by these regulations and has chosen to upgrade or close them. As a result, a remaining recorded liability in the amount of $13.8 million existed at June 30, 1995, for waste water upgrades and closures to be completed by 1996. Cumulative expenditures relating to the upgrades and closures of waste water impoundments were $2.3 million as of June 30, 1995. See pages 37 and 233 of the Form 10-K and Note 1 for additional discussions of LP&L's waste water impoundment upgrades and closures. Accounting Issues New Accounting Standard - In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS 121) effective January 1, 1996. This standard describes circumstances which may result in assets being impaired and provides criteria for recognition and measurement of asset impairment. See Notes 2 and 7 for information regarding the potential impacts of the new accounting standard on Entergy. Continued Application of SFAS 71 - As a result of the EPAct and actions of regulatory commissions, the electric utility industry is moving toward a combination of competition and a modified regulatory environment. The System's financial statements currently reflect, for the most part, assets and costs based on current cost-based ratemaking regulations, in accordance with SFAS 71, "Accounting for the Effects of Certain Types of Regulation." Continued applicability of SFAS 71 to the System's financial statements requires that rates set by an independent regulator on a cost-of-service basis can actually be charged to and collected from customers. In the event that either all or a portion of a utility's operations cease to meet those criteria for various reasons, including deregulation, a change in the method of regulation or a change in the competitive environment for the utility's regulated services, the utility should discontinue application of SFAS 71 for the relevant portion. That discontinuation should be reported by elimination from the balance sheet of the effects of any actions of regulators recorded as regulatory assets and liabilities. As of June 30, 1995, and for the foreseeable future, the System's financial statements continue to follow SFAS 71, except for certain portions of GSU's business (see page 88 of the Form 10-K for additional information). Accounting for Decommissioning Costs - The staff of the SEC has questioned certain of the financial accounting practices of the electric utility industry regarding the recognition, measurement, and classification of nuclear decommissioning costs for nuclear generating stations in the financial statements of electric utilities. See Note 1 for the FASB's tentative conclusions regarding changes in the accounting for decommissioning costs and the potential impact of these changes on Entergy. ENTERGY CORPORATION AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. Legal Proceedings System Agreement Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI In June 1995, the APSC filed a complaint with FERC alleging that because of changed circumstances FERC's allocation of nuclear decommissioning costs in the System is no longer just and reasonable. The APSC proposes that the System Agreement be amended to provide a new schedule that would equalize nuclear decommissioning costs according to load responsibility among the pre-merger operating companies. See pages 16-17 of the Form 10-K for a discussion of the LPSC's complaint filed with FERC alleging that the System Agreement results in unjust and unreasonable rates. On April 24, 1995, Entergy filed a response to the LPSC's complaint. In April 1995, the LPSC filed an amended complaint with FERC. Entergy filed a response to the LPSC's amended complaint in June 1995. Merger-Related Proceedings Entergy Corporation and GSU See page 31 of the Form 10-K and page 71 of the First Quarter Form 10-Q for information relating to the proceeding pending before the NRC Atomic Safety and Licensing Board (ASLB), which was instigated by Cajun and concerns the two Merger-related NRC issued license amendments for River Bend. In June 1995, the NRC affirmed its original findings that there had been no significant antitrust changes in the positions of Cajun and GSU as a result of the Merger; and therefore, reissued the license amendments approving the Merger. The NRC has decided not to petition the D.C. Circuit for a rehearing; however, it is expected that Cajun will file a petition for review with the D.C. Circuit. See pages 38-39 of the Form 10-K for information regarding other merger-related suits. Cajun - River Bend Entergy Corporation and GSU See Note 1, and also see pages 40 - 41, 106 - 108, and 191 - 193 of the Form 10-K; and pages 34 - 35 of the First Quarter Form 10-Q for a discussion of the Cajun litigation. A hearing was held on the pending Motions to Appoint a Trustee in the Cajun bankruptcy case. An order was issued on August 1, 1995, directing that the U.S. Trustee appoint a trustee in the Cajun bankruptcy case within five dates from the date of the order. A decision was also issued regarding the preemption dispute among Cajun, the RUS, and the LPSC, the LPSC's ratemaking authority is not preempted by the Federal law establishing the RUS. Environmental Issues AP&L See Note 1 and pages 34 and 35 of the Form 10-K for information on PCB contamination at former Reynolds Metals Company (Reynolds) plant sites in Arkansas to which AP&L had supplied power. In May 1995, AP&L was named as a defendant in a suit by Reynolds, seeking to recover a share of the costs associated with the cleanup of hazardous substances at a site south of Arkadelphia, Arkansas. Reynolds alleges that it has spent $11.2 million to clean up the site, and that the site was contaminated in part with PCBs for which AP&L bears some responsibility. AP&L, voluntarily, at its expense, has already completed remediation at a nearby substation site, and believes that it has no liability for contamination at the site that is subject to the Reynolds suit and will contest the lawsuit. Regardless of the outcome, AP&L does not believe this matter would have a materially adverse effect on its financial condition or results of operations. Item 4. Submission of Matters to a Vote of Security Holders Election of Board of Directors Entergy Corporation The annual meeting of stockholders of Entergy Corporation was held on May 26, 1995. The following matters were voted on and received the specified number of votes for, abstentions, votes withheld (against), and broker non-votes: 1. Election of Directors: Votes Broker Name of Nominee Votes For Abstentions Withheld Non-Votes W. Frank Blount 195,996,179 N/A 1,910,038 N/A John A. Cooper, Jr. 196,085,800 N/A 1,820,417 N/A Lucie J. Fjeldstad 195,943,352 N/A 1,962,865 N/A Norman C. Francis 195,727,190 N/A 2,179,027 N/A Kaneaster Hodges, Jr. 196,007,250 N/A 1,898,967 N/A Robert v. d. Luft 195,861,980 N/A 2,044,237 N/A Edwin Lupberger 194,768,932 N/A 3,137,285 N/A Kinnaird R. McKee 196,015,061 N/A 1,891,156 N/A Paul W. Murrill 195,952,044 N/A 1,954,173 N/A James R. Nichols 196,073,895 N/A 1,832,322 N/A Eugene H. Owen 196,006,852 N/A 1,899,365 N/A John N. Palmer, Sr. 196,147,203 N/A 1,759,014 N/A Robert D. Pugh 196,031,905 N/A 1,874,312 N/A H. Duke Shackelford 196,016,109 N/A 1,890,098 N/A Wm. Clifford Smith 196,113,786 N/A 1,792,431 N/A Bismark A. Steinhagen 196,109,636 N/A 1,796,581 N/A 2. Appointment of independent public accountants, Coopers & Lybrand L.L.P., for the year 1995: 194,866,985 votes for; 2,145,346 votes against; 893,886 abstentions; and broker non- votes are not applicable. AP&L A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of AP&L: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, R. Drake Keith, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. GSU A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of GSU: Michael B. Bemis, Frank F. Gallaher, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. LP&L A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of LP&L: Michael B. Bemis, John J. Cordaro, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. MP&L A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of MP&L: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, Gerald D. McInvale, and Donald E. Meiners. NOPSI A consent in lieu of the annual meeting of common stockholders was executed on May 17, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of NOPSI: John J. Cordaro, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Gerald D. McInvale. System Energy A consent in lieu of the annual meeting of common stockholders was executed on April 14, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of common stock. The common stockholder, by such consent, elected the following individuals to serve as directors constituting the Board of Directors of System Energy: Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, and Jerry L. Maulden. Item 5. Other Information Nonregulated Investments Entergy Corporation and Entergy Power Development Company As discussed on pages 3 and 4 of the Form 10-K, Entergy Corporation continues to consider opportunities to expand its business, including opportunities in overseas power development. See Note 1 and pages 36, 48, 66, and 73 of the First Quarter Form 10-Q for a discussion of EPDC's agreement with Enron Power Development Corporation to acquire a 20% investment in the Project in the State of Maharashtra, India. Subsequent to entering into the agreement with Enron Power Development Corporation, the newly-elected Maharashtra state government investigated the Project and its related cost of power. On August 3, 1995, the Chief Minister of Maharashtra stated that the government of Maharashtra has decided to suspend the first phase of the Project, the 695 megawatt facility, and "scrap" the second phase of the Project, a 1320 megawatt facility, and indicated that orders to stop work would be issued. In view of these developments, Entergy is uncertain as to the future of the project and is considering its options. Entergy Corporation and Entergy Technologies Company In June 1995, Entergy requested approval from the SEC to form a new non-regulated subsidiary named ETC. ETC will offer bulk interstate telecommunications service to telecommunications providers who will in turn market that contracted capacity to third parties. ETC will allow Entergy to take advantage of the rapidly expanding telecommunications industry by marketing a portion of Entergy's existing telecommunications system. Entergy Corporation, Entergy Enterprises, Inc., and Entergy Systems and Service, Inc. As discussed on page 4 of the Form 10-K, Entergy Enterprises Inc.'s (Enterprises) subsidiary, Entergy Systems and Service, Inc. (Entergy SASI), held an equity interest in Systems and Service International, Inc. (SASI), a manufacturer of efficient lighting products. In April 1995, Entergy SASI and SASI amended their Distribution Agreement. As a result, Entergy SASI liquidated its equity interest in SASI. The amended distribution agreement provided for a reduction in SASI's profit margin on its sale of products to Entergy SASI and transferred the rights to certain of SASI's energy efficient technologies to Entergy SASI. In exchange, among other things, Entergy SASI transferred to SASI all of its equity ownership in SASI. As discussed on page 4 of the Form 10-K, Entergy Corporation provided to Entergy SASI $72.3 million in loans to fund Entergy SASI's installment sale agreements with its customers. In June 1995, Entergy Corporation contributed $125 million in capital to Entergy SASI through Entergy Enterprises, thus allowing Entergy SASI to convert its debt obligation to Entergy Corporation into equity. Entergy Corporation and Entergy Enterprises, Inc. In June 1995, the SEC authorized Entergy Corporation to invest up to $350 million through December 31, 1997 in its subsidiary, Enterprises. Such investments may take the form of purchases of common stock, capital contributions, loans, and/or guarantees of the indebtedness or other obligations of Enterprises or certain of its associate companies. Subsequently, the SEC amended Rule 45(b)(4) under the Holding Company Act to exempt the requirement to receive prior authorization for all capital contributions by a parent company to its subsidiary company. Labor Contract Negotiations Entergy Corporation and GSU As discussed on page 73 of the First Quarter Form 10-Q, the labor union contract between GSU and the International Brotherhood of Electrical Workers (IBEW) expired on June 24, 1995. The labor contract covers approximately 1,900 GSU employees in Southeast Texas and Southwest Louisiana. Negotiators for GSU and the IBEW have been unsuccessful in negotiating a new agreement for the non River Bend portion of the IBEW. A federal mediator was called in on July 9, 1995, to assist the parties in resolving their differences, but the mediation effort was unsuccessful. In subsequent meetings, the IBEW voted to reject GSU's final settlement offer as well as a contingent offer and authorized the union leadership to call a strike if necessary. The IBEW employees continue to work without a contract. If a strike should occur, GSU intends to continue its operations with the assistance of management and supervisory personnel and outside contractors. The River Bend bargaining unit of the IBEW signed a new two year contract on August 3, 1995. Common Stock Price Range and Dividends Entergy Corporation The shares of Entergy Corporation's common stock are listed on the New York, Chicago, and Pacific Stock Exchanges. The high and low sales prices of Entergy Corporation's common stock for the second quarter of 1995, as reported by The Wall Street Journal as composite transactions, were $25.375 and $21.00, respectively, per share. For the twelve months ended June 30, 1995, Entergy Corporation paid common stock dividends in an aggregate amount of $1.80 per share. As of June 30, 1995, the consolidated book value of a share of Entergy Corporation's common stock was $27.98, and the last reported sale price of Entergy Corporation's common stock on June 30, 1995, was $24 1/8 per share. Earnings Ratios AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy The System operating companies and System Energy have calculated ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends pursuant to Item 503 of Regulation S-K of the SEC as follows: Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Ratios of Earnings to Fixed Charges (a) AP&L 2.16 2.25 2.28 3.11(f) 2.32 2.29 GSU .80(g) 1.56 1.72 1.54 .36(g) .38(g) LP&L 2.32 2.40 2.79 3.06 2.91 2.95 MP&L 2.42 2.36 2.37 3.79(f) 2.12 2.21 NOPSI 2.73 5.66(e) 2.66 4.68(f) 1.91 1.86 System Energy 2.10 1.74 2.04 1.87 1.23 1.23 Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Ratios of Earnings to Combined Fixed Charges and Preferred Dividends (a)(b)(c) AP&L 1.81 1.87 1.86 2.54(f) 1.97 1.94 GSU (d) .59(g) 1.19 1.37 1.21 .29(g) .30(g) ) LP&L 1.87 1.95 2.18 2.39 2.43 2.47 MP&L 1.93 1.94 1.97 3.08(f) 1.81 1.91 NOPSI 2.36 4.97(e) 2.36 4.12(f) 1.73 1.70 (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. (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. (c) System Energy's Amended and Restated Articles of Incorporation do not currently provide for the issuance of preferred stock. (d) "Preferred Dividends" in the case of GSU also include dividends on preference stock. (e) Earnings for the year ended December 31, 1991 include the $90 million effect of the 1991 NOPSI Settlement. (f) Earnings for the year ended December 31, 1993 include $81 million, $52 million, and $18 million for AP&L, MP&L, and NOPSI, respectively, related to the change in accounting principle to provide for the accrual of estimated unbilled revenues. (g) Earnings for the years ended December 31, 1994 and 1990, for GSU were not adequate to cover fixed charges by $144.8 million and $60.6 million, respectively. Earnings for the years ended December 31, 1994 and 1990, for GSU were not adequate to cover combined fixed charges and preferred dividends by $197.1 million and $165.1 million, respectively. Earnings for the twelve months ended June 30, 1995 for GSU were not adequate to cover fixed charges by $136.6 million. Earnings for the twelve months ended June 30, 1995 for GSU were not adequate to cover combined fixed charges and preferred dividends by $187.8 million. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits* 3(a) Articles of Amendment, dated July 20, 1995 and Restated Articles of Incorporation, as of December 21, 1983 of MP&L. 23(a) Consent of Friday, Eldredge & Clark. - 23(b) Consent of Monroe & Lemann (A Professional - Corporation). 23(c) Consent of Wise Carter Child & Caraway, Professional - Association. 23(d) Consent of Clark, Thomas & Winters (A Professional - Corporation). 23(e) Consent of Sandlin Associates. - 27(a) Financial Data Schedule for Entergy Corporation and - Subsidiaries as of June 30, 1995. 27(b) Financial Data Schedule for AP&L as of June 30, 1995. - 27(c) Financial Data Schedule for GSU as of June 30, 1995. - 27(d) Financial Data Schedule for LP&L as of June 30, 1995. - 27(e) Financial Data Schedule for MP&L as of June 30, 1995. - 27(f) Financial Data Schedule for NOPSI as of June 30, 1995. - 27(g) Financial Data Schedule for System Energy as of June - 30, 1995. 99(a) AP&L's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(b) GSU's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(c) LP&L's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(d) MP&L's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(e) NOPSI's Computation of Ratios of Earnings to Fixed - Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(f) System Energy's Computation of Ratios of Earnings to - Fixed Charges, as defined. ** 99(g) Annual Reports on Form 10-K of Entergy Corporation, - AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the fiscal year ended December 31, 1994, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0- 320, 0-5807, and 1-9067, respectively). ** 99(h) Quarterly Report on Form 10-Q of Entergy Corporation, - AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the quarter ended March 31, 1995, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0-320, 0-5807, and 1-9067, respectively). 99(i) Earnings statement of MP&L for the twelve month period - ended June 30, 1995, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. 99(j) Earnings statement of System Energy for the twelve - month period ended June 30, 1995, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. ** 99(k) Opinion of Clark, Thomas & Winters, a professional - corporation, dated September 30, 1992 regarding the effect of the October 1, 1991 judgment in GSU v. PUCT in the District Court of Travis County, Texas (99-1 in Registration No. 33-48889). ** 99(l) Opinion of Clark, Thomas & Winters, a professional - corporation, dated August 8, 1994 regarding recovery of costs deferred pursuant to PUCT order in Docket 6525 (filed as Exhibit 99(j) to Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 in File No. 1-2703). 99(m) Opinion of Clark, Thomas & Winters, a professional - corporation, confirming its opinions dated September 30, 1992 and August 8, 1994. ___________________________ * Reference is made to a duplicate list of exhibits being filed as a part of Form 10-Q for the quarter ended June 30, 1995, which list, prepared in accordance with Item 102 of Regulation S-T of the Securities and Exchange Commission, immediately precedes the exhibits being filed with Form 10-Q for the quarter ended June 30, 1995. ** Incorporated herein by reference as indicated. (b) Reports on Form 8-K Entergy A current report on Form 8-K, dated July 26, 1995, was filed with the SEC on July 26, 1995, reporting information under Item 5. "Other Events." GSU A current report on Form 8-K, dated July 26, 1995, was filed with the SEC on July 26, 1995, reporting information under Item 5. "Other Events." EXPERTS All statements in Part II of this Quarterly Report on Form 10-Q as to matters of law and legal conclusions, based on the belief or opinion of AP&L, LP&L, MP&L, NOPSI, and System Energy or otherwise, pertaining to the titles to properties, franchises and other operating rights of certain of the registrants filing this Quarterly Report on Form 10-Q, and their subsidiaries, the regulations to which they are subject and any legal proceedings to which they are parties are made on the authority of Friday, Eldredge & Clark, 2000 First Commercial Building, 400 West Capitol, Little Rock, Arkansas, as to AP&L; Monroe & Lemann (A Professional Corporation), 201 St. Charles Avenue, Suite 3300, New Orleans, Louisiana, as to LP&L and NOPSI; and Wise Carter Child & Caraway, Professional Association, Heritage Building, Jackson, Mississippi, as to MP&L and System Energy. The statements attributed to Clark, Thomas & Winters, a professional corporation, as to legal conclusions with respect to GSU's rate regulation in Texas in Note 2 to Entergy Corporation and Subsidiaries Consolidated Financial Statements, "Rate and Regulatory Matters," have been reviewed by such firm and are included herein upon the authority of such firm as experts. The statements attributed to Sandlin Associates regarding the analysis of River Bend construction costs of GSU in Note 2 to Entergy Corporation and Subsidiaries Consolidated Financial Statements, "Rate and Regulatory Matters," have been reviewed by such firm and are included herein upon the authority of such firm as experts. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries. ENTERGY CORPORATION ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. /s/ Gerald D. McInvale Gerald D. McInvale Executive Vice President and Chief Financial Officer (For each Registrant and for each as Principal Financial Officer) Date: August 7, 1995 EX-3 2 Exhibit 3(a) RESTATED ARTICLES OF INCORPORATION OF MISSISSIPPI POWER & LIGHT COMPANY Pursuant to the provisions of Section 64 of the Misissippi Business Corporation Law (Section 79-3-127, Mississippi Code of 1972, as amended), the undersigned Corporation adopts the following Restated Articles of Incorporation: FIRST: The name of the Corporation is MISSISSIPPI POWER & LIGHT COMPANY. SECOND: The period of its duration is ninety-nine (99) years. THIRD: The purpose or purposes which the Corporation is authorized to pursue are: To acquire, buy, hold, own, sell, lease, exchange, dispose of, finance, deal in, construct, build, equip, improve, use, operate, maintain and work upon: (a) Any and all kinds of plants and systems for the manufacture, production, storage, utilization, purchase, sale, supply, transmission, distribution or disposition of electricity, natural or artificial gas, water or steam, or power produccd thereby, or of ice and refrigeration of any and every kind; (b) Any and all kinds of telephone, telegraph, radio, wireless and other systems, facilities and devices for the receipt and transmission of sounds and signals, any and all kinds of interurban, city and street railways and railroads and bus lines for the transportation of passengers and/or freight, transmission lines, systems, appliances, equipment and devices and tracks, stations, buildings and other structures and facilities; (c) Any and all kinds of works, power plants, manufactories, structures, substations, systems, tracks, machinery, generators, motors, lamps, poles, pipes, wires, cables, conduits, apparatus, devices, equipment, supplies, articles and merchandise of every kind pertaining to or in anywise connected with the construction, operation or maintenance of telephone, telegraph, radio, wireless and other systems, facilities and devices for the receipt and transmission of sounds and signals, or of interurban, city and street railways and railroads and bus lines, or in anywise connected with or pertaining to the manufacture, production, purchase, use, sale, supply, transmission, distribution, regulation, control or application of electricity, natural or artificial gas, water, steam, ice, refrigeration and power or any other purposes; To acquire, buy, hold, own, sell, lease, exchange, dispose of, transmit, distribute, deal in, use, manufacture, produce, furnish and supply street and interurban railway and bus service, electricity, natural or artificial gas, light, heat, ice, refrigeration, water and steam in any form and for any purposes whatsoever, and any power or force or energy in any form and for any purposes whatsoever; To buy, sell, manufacture, produce and generally deal in milk, cream and any articles or substances used or usable in or in connection with the manufacture and production of ice cream, ices, beverages and soda fountain supplies; to buy, sell, manufacture, produce and generally deal in ice cream and ices; To acquire, organize, assemble, develop, build up and operate constructing and operating and other organizations and systems, and to hire, sell, lease, exchange, turn over, deliver and dispose of such organizations and systems in whole or in part and as going organizations and systems and otherwise, and to enter into and perform contracts, agreements and undertakings of any kind in connection with any or all the foregoing powers; To do a general contracting business; To purchase, acquire, develop, mine, explore, drill, hold, own and dispose of lands, interests in and rights with respect to lands and waters and fixed and movable property; To borrow money and contract debts when necessary for the transaction of the business of the Corporation or for the exercise of its corporate rights, privileges or franchises or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures and other obligations and evidences of indebtedness payable at a specified time or times or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or otherwise or unsecured, for money borrowed or in payment for property purchased or acquired or any other lawful objects; To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock of, or any bonds, securities or evidences of indebtedness created by, any other corporation or corporations of the State of Mississippi or any other state or government and, while the owner of such stock, to exercise all the rights, powers and privileges of individual ownership with respect thereto including the right to vote thereon, and to consent and otherwise act with respect thereto; To aid in any manner any corporation or association, domestic or foreign, or any firm or individual, any shares of stock in which or any bonds, debentures, notes, securities, evidences of indebtedness, contracts or obligations of which are held by or for the Corporation or in which or in the welfare of which the Corporation shall have any interest, and to do any acts designed to protect, preserve, improve or enhance the value of any property at any time held or controlled by the Corporation, or in which it may be at any time interested; and to organize or promote or facilitate the organization of subsidiary companies; To purchase, hold, sell and transfer shares of its own capital stock, provided that the Corporation shall not purchase its own shares of capital stock except frorn surplus of its assets over its liabilities including capital; and provided, further, that the shares of its own capital stock owned by the Corporation shall not be voted upon directly or indirectly nor counted as outstanding for the purposes of any stockholders' quorum or vote; In any manner to acquire, enjoy, utilize and to dispose of patents, copyrights and trade-marks and any licenses or other rights or interests therein and thereunder: To purchase, acquire, hold, own or dispose of franchises, concessions, consents, privileges and licenses necessary for and in its opinion useful or desirable for or in connection with the foregoing powers; To do all and everything necessary and proper for the accomplishment of the objects enumerated in these Restated Articles of Incorporation or any amendment thereof or necessary or incidental to the protection and benefits of the Corporation, and in general to carry on any lawful business necessary or not incidental to the attainment of the objects of the Corporation whether or not such business is similar in nature to the objects set forth in these Restated Articles of Incorporation or any amendment thereof. To do any or all things herein set forth, to the same extent and as fully as natural persons might or could do, and in any part of the world, and as principal, agent, contractor or otherwise, and either alone or in conjunction with any other persons, firms, associations or corporations; To conduct its business in all its branches in the State of Mississippi, other states, the District of Columbia, the territories and colonies of the United States, and any foreign countries, and to have one or more offices out of the State of Mississippi and to hold, purchase, mortgage and convey real and personal property both within and without the State of Mississippi; provided, however, that the Corporation shall not exercise any of the powers set forth herein for the purpose of engaging in business as a street railway, telegraph or telephone company unless prior thereto this Article Third shall have been amended to set forth a description of the line and the points it will traverse. FOURTH: The aggregate number of shares which the Corporation shall have authority to issue is 17,004,478 shares, divided into 2,004,476 shares of Preferred Stock of the par value of $100 per share and 15,000,000 shares of Common Stock without par value. The preferences, limitations and relative rights in respect of the shares of each class and the variations in the relative rights and preferences as between series of any preferred or special class in series are as follows: The Preferred Stock shall be issuable in one or more series from tirne to time and the shares of each series shall have the same rank and be identical with each other and shall have the same relative rights except with respect to the following: (a) The number of shares to constitute each such series and the distinctive designation thereof; (b) The annual rate or rates of dividends payable on shares of such series, the dates on which dividends shall be paid in each year and the date from which such dividends shall commence to accumulate; (c) The amount or amounts payable upon redemption thereof; and (d) The sinking fund provisions, if any, for the redemption or purchase of shares; which different characterics of clauses (a), (b), (c) and (d) above may be stated and expressed with respect to each series in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors or in these Restated Articles of Incorporation of any amendment thereof. A series of 60,000 shares of Preferred Stock shall: (a) be designated "4.36% Preferred Stock Cumulative, $100 Par Value"; (b) have a dividend rate of $4.36 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be February 1, 1963, and such dividends to be cumulative from the last date to which dividends upon the 4.36% Preferred Stock Cumulative, $100 Par Value, of Mississippi Power & Light Company, a Florida corporation, are paid; (c) be subject to redemption in the manner provided herein with respect to the Preferred Stock at the price of $105.36 per share if redeemed on or before February 1, 1964, and of $103.88 per share if redeemed after February 1, 1964, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption. A series of 44,476 shares of the Preferred Stock shall: (a) be designated "4.56% Preferred Stock, Cumulative, $100 Par Value"; (b) have a dividend rate of $4.56 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be February 1, 1963, and such dividends to be cumulative from the last date to which dividends upon the 4.56% Preferred Stock, Cumulative, $100 Par Value, of Mississippi Power & Light Company, a Florida corporation, are paid; and (c) be subject to redemption in the manner provided herein with respect to the Preferred Stock at the price of $108.50 per share if redeemed on or before November 1, l964, and of $107.00 per share if redeemed after November 1, 1964, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption. A series of 100,000 shares of the Preferred Stock shall: (a) be designated "4.92% Preferred Stock, Cumulative, $100 Par Value"; (b) have a dividend rate of $4.92 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be February 1, 1966, and such dividends to be cumulative from the date of issue of said series; and (c) be subject to redemption at the price of $106.30 per share if redeemed on or before January 1, 1971, of $104.38 per share if redeemed after January 1, 1971 and on or before January 1, 1976, and of $102.88 per share if redeemed after January 1, 1976, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption. A series of 75,000 shares of the Preferred Stock shall: (a) be designated "9.16% Preferred Stock, Cumulative, $100 Par Value"; (b) have a dividend rate of $9.16 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be November 1, 1970, and such dividends to be cumulative from the date of issue of said series; and (c) be subject to redemption at the price of $110.93 per share if redeemed on or before August 1, 1975, of $108.64 per share if redeemed after August 1, 1975 and on or before August 1, 1980, of $106.35 per share if redeemed after August 1, 1980 and on or before August 1, 1985, and of $104.06 per share if redeemed after August 1, 1985, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 9.16% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to August 1, 1975 if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 9.16% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally aocepted financial practice) or such stock has an effective dividend cost to the Corporation (so computed) of less than the effective dividend cost to the Corporation of the 9.16% Preferred Stock, Cumulative, $100 Per Value. A series of 100,000 shares of the Preferred Stock shall: (a) be designated "7.44% Preferred Stock, Cumulative, $100 Par Value"; (b) have a dividend rate of $7.44 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be May 1, 1973, and such dividends to be cumulative from February 14, 1973; and (c) be subject to redemption at the price of $108.39 per share if redeemed on or before February 1, 1978, of $106.53 per share if redeemed after February 1, 1978 and on or before February 1, 1983, of $104.67 per share if redeemed after February 1, 1983 and on or before February 1, 1988, and of $102.81 per share if redeemed after February 1, 1988, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 7.44% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to February 1, 1978 if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 7.44% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Corporation (so computed) of less than the effective dividend cost to the Corporation of the 7.44% Preferred Stock, Cumulative, S100 Par Value. A series of 200,000 shares of the Preferred Stock shall: (a) be designated "17% Preferred Stock, Cumulative, $100 Par Value" (b) have a dividend rate of $17.00 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be November 1, 1981, and such dividends to be cumulative from the date of issuance; (c) be subject to redemption at the price of $117.00 per share if redeemed on or before September 1, 1986, of $112.75 per share if redeemed after September 1, 1986 and on or before September 1, 1991, of $108.50 per share if redeemed after September 1, 1991 and on or before September 1, 1996, and of $104.25 per share if redeemed after September 1, 1996, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 17% Preferred Stock Cumulative, $100 Par Value, shall be redeemed prior to September 1, 1986 if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 17% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock; has an effective dividend cost to the Corporation (so computed) of less than the effective dividend cost to the Corporation of the 17% Preferred Stock, Cumulative, $100 Par Value; and (d) be subject to redemption as and for a sinking fund as follows: On September 1, 1986 and on each September 1 thereafter (each such date being hereinafter referred to as a "17% Sinking Fund Redemption Date"), for so long as any shares of the 17% Preferred Stock, Cumulative, $100 Par Value, shall remain outstanding, the Corporation shall redeem, out of funds legally available therefor, 10,000 shares of the 17% Preferred Stock, Cumulative, $100 Par VaIue (or the number of shares then outstanding if less than 10,000) at the sinking fund redemption price of $100 per share plus, as to each share so redeemed, an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date of redemption (the obligation of the Corporation so to redeem the shares of the 17% Preferred Stock, Cumulative, $100 Par Value, being hereinafter referred to as the "17% Sinking Fund Obligation"); the 17% Sinking Fund Obligation shall be cumulative; if on any 17% Sinking Fund Redemption Date, the Corporation shall not have funds legally available therefor sufficient to redeem the full number of shares required to be redeemed on that date, the 17% Sinking Fund Obligation with respect to the shares not redeemed shall carry forward to each successive 17% Sinking Fund Redemption Date until such shares shall have been redeemed; whenever on any 17% Sinking Fund Redemption Date, the funds of the Corporation legally available for the satisfaction of the 17% Sinking Fund Obligation and all other sinking fund and similar obligations then existing with respect to any other class or series of its stock ranking on a parity as to dividends or assets with the 17% Preferred Stock, Cumulative, $100 Par Value (such Obligation and obligations collectively being hereinafter referred to as the "Total Sinking Fund Obligation") are insufficient to permit the Corporation to satisfy fully its Total Sinking Fund Obligation on that date, the Corporation shall apply to the satisfaction of its 17% Sinking Fund Obligation on that date that proportion of such legally available funds which is equal to the ratio of such 17% Sinking Fund Obligation to such Total Sinking Fund Obligation; in addition to the 17% Sinking Fund Obligation, the Corporation shall have the option, which shall be noncumulative, to redeem, upon authorization of the Board of Directors, on each 17% Sinking Fund Redemption Date, at the aforesaid sinking fund redemption price, up to 10,000 additional shares of the 17% Preferred Stock, Cumulative, $100 Par Value; the Corporation shall be entitled, at its election, to credit against its 17% Sinking Fund Obligation on any 17% Sinking Fund Redemption Date any shares of the 17% Preferred Stock, Cumulative, Stock Par Value (including shares of the 17% Preferred Stock, Cumulative, $100 Par Value optionally redeemed at the aforesaid sinking fund price) theretofore redeemed (other than shares of the 17% Preferred Stock, Cumulative, $100 Par Value redeemed pursuant to the 17% Sinking Fund Obligation) purchased or otherwise acquired and not previously credited against the 17% Sinking Fund Obligation. A series of 100,000 shares of the Preferred Stock shall: (a) be designated "14-3/4% Preferred Stock, Cumulative, $100 Par Value"; (b) have a divedend rate of $14.75 per share per annum payable quarterly on February 1, May 1, August 1 and November 1 of each year, the first dividend date to be May 1 1982, and such dividends to be cumulative from the date of issuance; (c) be subject to redemption at the price of $114.75 per share if redeemed after the issuanoe and sale and on or before March 1, 1983, $113.11 per share if redeemed after March 1, 1983 and on or before March 1, 1984, $111.47 per share if redeemed after March 1, 1984 and on or before March 1, 1985, $109.83 per share if redeemed after March 1, 1985 and on or before March 1, 1986, $108.19 per share if redeemed after March 1, 1986 and on or before March 1, 1987, $106.56 per share if redeemed after March 1, 1987 and on or before March 1, 1988, $104.92 per share if redeemed after March 1, 1988 and on or before March 1, 1989, $103.28 per share if redeemed after March 1, 1989 and on or before March 1, l990, $101.64 per share if redeemed after March 1, 1990 and on or before March 1, 1991, and $100.00 per share if redeemed after March 1, 1991, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 14-3/4% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to March 1, 1987 if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 14-3/4% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Corporation (so oomputed) of less than the effective dividend cost to the Corporation of the 14-3/4% Preferred Stock, Cumulative, $100 Par Value; and (d) be subject to redemption as and for a sinking fund as follows. On March 1, 1990, 1991 and 1992 (each such date being hereinafteir referred to as a "14-3/4% Sinking Fund Redemption Date"), the Corporation shall redeem, out of funds legally available therefor, 33,333, 33,333 and 33,334 shares, respectively, of the 14-3/4% Preferred Stock, Cumulative, $100 Par Value, at the sinking fund redemption price of $100 per share plus, as to each share so redeemed, an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date of redemption (the obligation of the Corporation so to redeem the shares of the 14-3/4% Preferred Stock, Cumulative, $100 Par Value, being hereinafter referred to as the "14-3/4% Sinking Fund Obligation"); the 14-3/4% Sinking Fund Obligation shall be cumulative; if on any 14-3/4% Sinking Fund Redemption Date, the Corporation shall not have funds legally available therefor sufficient to redeem the full number of shares required to be redeemed on that date, the 14-3/4% Sinking Fund Obligation with respect to the shares not redeemed shall carry forward to each successive 14-3/4% Sinking Fund Redemption Date (or, in the event the 14-3/4% Sinking Fund Obligation is not satisfied on March 1, 1992, to such date as soon thereafter as funds are legally available to satisfy the 14-3/4% Sinking Fund Obligation) until such shares shall have been redeemed; whenever on any 14-3/4% Sinking Fund Redemption Date, the funds of the Corporation legally available for the satisfaction of the 14-3/4% Sinking Fund Obligation and all other sinking fund and similar obligations then existing with respect to any other class or series of its stock ranking on a parity as to dividends or assets with the 14-3/4% Preferred Stock, Cumulative, $100 Par Value (such Obligation and obligations collectively being hereinafter referred to as the "Total Sinking Fund Obligation") are insufficient to permit the Corporation to satisfy fully its Total Sinking Fund Obligation on that date, the Corporation shall apply to the satisfaction of its 14-3/4% Sinking Fund Obligation on that date that proportion of such legally available funds which is equal to the ratio of such 14-3/4% Sinking Fund Obligation to such Total Sinking Fund Obligation. A series of 100,000 shares of the Preferred Stock shall: (a) be designated "12.00% Preferred Stock, Cumulative, $100 Par Value"; (b) have a dividend rate of $12.00 per share per annum payable quarterly on February 1, May 1, August 1 and November l of each year, the first dividend date to be May 1, 1983, and such dividends to be cumulative from the date of issuance; (c) be subject to redemption at the price of $112.00 per share if redeemed on or before March 1, 1988, of $109.00 per share if redeemed after March 1, 1988 and on or before March 1, 1993, of $106.00 per share if redeemed after March 1, 1993 and on or before March 1, 1998, and of $103.00 per share if redeemed after March 1, 1998, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 12.00% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to March 1, 1988 if such redemption is for the purpose or in anticipa tion of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 12.00% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Corporation (so computed) of less than 12.7497% to per annum; and (d) be subject to redemption as and for a sinking fund as follows: on March 1, 1888 and on each March 1 thereafter (each such date being hereinafter referred to as a "12.00% Sinking Fund Redemption Date"), for so long as any shares of the 12.00% Preferred Stock, Cumulative, $100 Par Value, shall remain outstanding, the Corporation shall redeem, out of funds legally available therefor, 5,000 shares of the 12.00% Preferred Stock, Cumulative, $100 Par Value (or the number of shares then outstanding if less than 5,000) at the sinking fund redemption price of $100 per share plus, as to each share so redeemed, an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date of redemption (the obligation of the Corporation so to redeem the shares of the 12.00% Preferred Stock, Cumulative, $100 Par Value, being hereinafter referred to as the "12.00% Sinking Fund Obligation"); the 12.00% Sinking Fund Obligation shall be cumulative; if on any 12.00% Sinking Fund Redemption Date, the Corporation shall not have funds legally available therefor sufficient to redeem the full number of shares required to be redeemed on that date, the 12.00% Sinking Fund Obligation with respect to the shares not redeemed shall carry forward to each successive 12.00% Sinking Fund Redemption Date until such shares shall have been redeemed; whenever on any 12.00% Sinking Fund Redemption Date, the funds of the Corporation legally available for the satisfaction of the 12.00% Sinking Fund Obligation and all other sinking fund and similar obligations then existing with respect to any other class or series of its stock ranking on a parity as to dividends or assets with the 12.00% Preferred Stock Cumulative, $100 Par Value (such Obligation and obligations collectively being hereinafter referred to as the "Total Sinking Fund Obligation") are insufficient to permit the Corporation to satisfy fully its Total Sinking Fund Obligation on that date, the Corporation shall apply to the satisfaction of its 12.00% Sinking Fund Obligation on that date that proportion of such legally available funds which is equal to the ratio of such 12.00% Sinking Fund Obligation to such Total Sinking Fund Obligation; in addition to the 12.00% Sinking Fund Obligation, the Corporation shall have the option, which shall be noncumulative, to redeem, upon authorization of the Board of Directors, on each 12.00% Sinking Fund Redemption Date, at the aforesaid sinking fund redemption price, up to 5,000 additional shares of the 12.00% Preferred Stock Cumulative, $100 Par Value; the Corporation shall be entitled, at its election, to credit against its 12.00% Sinking Fund Obligation on any 12.00% Sinking Fund Redemption Date any shares of the 12.00% Preferred Stock, Cumulative, $100 Par Value (including shares of the 12.00% Preferred Stock Cumulative, $100 Par Value optionally redeemed at the aforesaid sinking fund price) theretofore redeemed (other than shares of the 12.00% Preferred Stock, Cumulative, $100 Par Value redeemed pursuant to the 12.00% Sinking Fund Obligation) purchased or otherwise acquired and not previously credited against the 12.00% Sinking Fund Obligation. Subject to the foregoing, the distinguishing characteristics of the Preferred Stock shall be: (A) Each series of the Preferred Stock, pari passu with all shares of preferred stock of any class or series then outstanding, shall be entitled but only when and as declared by the Board of Directors, out of funds legally available for the payment of dividends in preference to the Common Stock, to dividends at tbe rate stated and expressed with respect to such series herein or by the resolution or resolutions providing for the issue of such series adopted by tbe Board of Directors; such dividends to be cumulative from such date and payable on such dates in each year as may be stated and expressed in said resolution, to stockholders of record as of a date not to exceed 40 days and not less than 10 days preceding the dividend payment dates so fixed. (B) If and when dividends payable on any of the Preferred Stock of the Corporation at any time outstanding shall be in defauIt in an amount equal to four full quarterly payments or more per share, and thereafter until all dividends on any such preferred stock in default shall have been paid, the holders of the Preferred Stock pari passu with the holders of other preferred stock then outstanding, voting separately as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, and, except as provided in the following paragraph, the holders of the Comrnon Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Corporation. The termns of office, as directors, of all persons who may be directors of the Corporation at the time shall terminate upon the election of a majority of the Board of Directors by the holders of the Preferred Stock except that if the holders of the Common Stock shall not have elected the remaining directors of the Corporation, then, and only in that event, the directors of the Corporation in office just prior to the election of a majority of the Board of Directors by the holders of the Preferred Stock shall elect the remaining directors of the Corporation. Thereafter, while such default continues and the majority of the Board of Directors is being elected by the holders of the Preferred Stock, the remaining directors, whether elected by directors, as aforesaid, or whether originally or later elected by holders of the Common Stock shall continue in office until their successors are elected by holders of the Common Stock and shall qualify. If and when all dividends then in default on the Preferred Stock; then outstanding shall be paid (such dividends to be declared and paid out of any funds legally available therefor as soon as reasonably practicable), the holders of the Preferred Stock shall be divested of any special right with respect to the election of directors, and the voting power of the holders of the Preferred Stock and the holders of the Common Stock shall revert to the status existing before the first dividend payment date on which dividends on the Preferred Stock were not paid in full, but always subject to the same provisions for vesting such special rights in the bolders of the Preferred Stock in case of further like defaults in the payment of dividends thereon as described in the immediately foregoing paragraph. Upon termination of any such special voting right upon payment of all accumulated and unpaid dividends on the Preferred Stock, the terms of office of all persons who may have been elected directors of the Corporation by vote of the holders of the Preferred Stock as a class, pursuant to such special voting right shall forthwith terminate, and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. In case of any vacancy in the office of a director occurring among the directors elected by the holders of the Preferred Stock, voting separately as a class, the remaining directors elected by the holders of the Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term or terms of the director or directors whose place or places shall be vacant. Likewise, in case of any vacancy in the office of a director occurring among the directors not elected by the holders of the Preferred Stock, the remaining directors not elected by the holders of the Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term or terms of the director or directors whose place or places shall be vacant. Whenever the right shall have accrued to the holders of the Preferred Stock to elect directors, voting separately as a class, it shall be the duty of the President, a Vice-President or the Secretary of the Corporation forthwith to call and cause notice to be given to the shareholders entitled to vote of a meeting to be held at such time as the Corporation's officers may fix, not less than forty-five nor more than sixty days after the accrual of such right, for the purpose of electing directors. The notice so given shall be mailed to each holder of record of preferred stock at his last known address appearing on the books of the Corporation and shall set forth, among other things, (i) that by reason of the fact that dividends payable on preferred stock are in default in an amount equal to four full quarterly payments or more per share, the holders of the Preferred Stock, voting separately as a class, have the right to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors of the Corporation, (ii) that any holder of the Preferred Stock has the right, at any reasonable time, to inspect, and make copies of, the list or lists of holders of the Preferred Stock maintained at the principal office of the Corporation or at the office of any Transfer Agent of the Preferred Stock, and (iii) either the entirety of this paragraph or the substance thereof with respect to the number of shares of the Preferred Stock required to be represented at any meeting, or adjournment thereof, called for the election of directors of the Corporation. At the first meeting of stockholders held for the purpose of electing directors during such time as the holders of the Preferred Stock shall have the special right, voting separately as a class, to elect directors, the presence in person or by proxy of the holders of a majority of the outstanding Common Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of a majority of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors; provided, however, that in the absence of a quorum of the holders of the Preferred Stock, no election of directors shall be held, but a majority of the holders of the Preferred Stock who are present in person or by proxy shall have power to adjourn the election of the directors to a date not less than fifteen nor more than fifty days from the giving of the notice of such adjourned meeting hereinafter provided for; and provided, further, that at such adjourned meeting, the presence in person or by proxy of the holders of 35% of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors. In the event such first meeting of stockholders shall be so adjourned, it shall be the duty of the President, a Vice- President or the Secretary of the Corporation, within ten days from the date on which such first meeting shall have been adjourned, to cause notice of such adjourned meeting to be given to the shareholders entitled to vote thereat, such adjourned meeting to be held not less than fifteen days nor more than fifty days from the giving of such second notice. Such second notice. shall be given in the form and manner hereinabove provided for with respect to the notice required to be given of such first meeting of stockholders, and shall further set forth that a quorum was not present at such first meeting and that the holders of 35% of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors at such adjourned meeting. If the requisite quorum of holders of the Preferred Stock shall not be present at said adjourned meeting, then the directors of the Corporation then in office shall remain in office until the next Annual Meeting of the Corporation, or special meeting in lieu thereof and until their successors shall have been elected and shall qualify. Neither such first meeting nor such adjourned meeting shall be held on a date within sixty days of the date of the next Annual Meeting of the Corporation, or special meeting in lieu thereof. At each Annual Meeting of the Corporation, or special meeting in lieu thereof, held during such time as the holders of the Preferred Stock, voting separately as a class. shall have the right to elect a majority of the Board of Directors, the foregoing provisions of this paragraph shall govern each Annual Meeting, or special meeting in lieu thereof, as if said Annual Meeting or special meeting were the first meeting of stockholders held for the purpose of electing directors after the right of the holders of the Preferred Stock, voting separately as a class, to elect a majority of the Board of Directors, should have accrued the exception, that if, at any adjourned annual meeting, or special meeting in lieu thereof, the holders of 35% of the outstanding Preferred Stock are not present in person or by proxy, all the directors shall be elected by a vote of the holders of a majority of the Common Stock of the Corporation present or represented at the meeting. (C) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of at least two-thirds of the total number of shares of the Preferred Stock then outstanding: (1) create, authorize or issue any new stock which, after issuance would rank prior to the Preferred Stock as to dividends, in liquidation, dissolution, winding up or distribution, or create, authorize or issue any security convertible into shares of any such stock except for the purpose of providing funds for the redemption of all of the Preferred Stock then outstanding, such new stock or security not to be issued until such redemption shall have been authorized and notice of such redemption given and the aggregate redemption price deposited as provided in paragraph (G) below; provided, however, that any such new stock or security shall be issued within twelve months after the vote of the Preferred Stock herein provided for authorizing the issuance of such new stock or security; or (2) amend, alter, or repeal any of the rights, preferences or powers of the holders of the Preferred Stock so as to affect adversely any such rights, preferences or powers; provided, however, that if such amendment, alteration or repeal affects adversely the rights, preferences or powers of one or more, but not all, series of Preferred Stock at the time outstanding, only the consent of the holders of at least two-thirds of the total number of outstanding shares of all series so affected shall be required; and provided, further, that an amendment to increase or decrease the authorized amount of Preferred Stock or to create or authorize, or increase or decrease the amount of, any class of stock; ranking on a parity with the outstanding shares of the Preferred Stock as to dividends or assets shall not be deemed to affect adversely the rights, preferences or powers of the holders of the Preferred Stock or any series thereof. (D) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Preferred Stock then outstanding: (1) merge or consolidate with or into any other corporation or corporations or sell or otherwise dispose of all or substantially all of the assets of the Corporation, unless such merger or consolidation or sale or other disposition, or the exchange, issuance or assumption of all securities to be issued or assumed in connection with any such merger or consolidation or sale or other disposition, shall have been ordered, approved or permitted under the Public Utility Holding Company Act of 1935; or (2) issue or assume any unsecured notes, debentures or other securities representing unsecured indebtedness for purposes other than (i) the refunding of outstanding unsecured indebtedness theretofore issued or assumed by the Corporation resulting in equal or longer maturities, or (ii) the reacquisition, redemption or other retirement of all outstanding shares of the Preferred Stock, if immediately after such issue or assumption, the total principal amount of all unsecured notes, debentures or other securities representing unsecured indebtedness issued or assumed by the Corporation, including unsecured indebtedness then to be issued or assumed (but excluding the principal amount then outstanding of any unsecured notes, debentures, or other securities representing unsecured indebtedness having a maturity in excess of ten (10) years and in amount not exceeding 10% of the aggregate of (a) and (b) of this section below) would exceed ten per centum (10%) of the aggregate of (a) the total principal amount of all bonds or other securities representing secured indebtedness issued or assumed by the Corporation and then to be outstanding, and (b) the capital and surplus of the Corporation as then to be stated on the books of account of the Corporation. When unsecured notes, debentures or other securities representing unsecured debt of a maturity in excess of ten (10) years shall become of a maturity of ten (10) years or less, it shall then be regarded as unsecured debt of a maturity of less than ten (10) years and shall be computed with such debt for the purpose of determining the percentage ratio to the sum of (a) and (b) above of unsecured debt of a maturity of less than ten (10) years, and when provision shall have been made, whether through a sinking fund or otherwise, for the retirement, prior to their maturity, of unsecured notes, debentures, or other securities representing unsecured debt of a maturity in excess of ten (10) years, the amount of any such security so required to be retired in less than ten (10) years shall be regarded as unsecured debt of a maturity of less than ten (10) years (and not as unsecured debt of a maturity in excess of ten (10) years) and shall be computed with such debt for the purpose of determining the percentage ratio to the sum of (a) and (b) above of unsecured debt of a maturity of less than ten (10) years, provided, however, that the payment due upon the maturity of unsecured debt having an original single maturity in excess of ten (10) years or the payment due upon the latest maturity of any serial debt which had original maturities in excess of ten (10) years shall not, for purposes of this provision, be regarded as unsecured debt of a maturity of less than ten (10) years until such payment or payments shall be required to be made within three (3) years; furthermore, when unsecured notes, debentures or other securities representing unsecured debt of a maturity of less than ten (10) years shall exceed 10% of the sum of (a) and (b) above, no additional unsecured notes, debentures or other securities representing unsecured debt shall be issued or assumed (except for the purpose set forth in (i) or (ii) above) until such ratio is reduced to 10% of the sum of (a) and (b) above; or (3) issue, sell or otherwise dispose of any shares of the Preferred Stock in addition to the 104,476 shares of the Preferred Stock originally authorized, or of any other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, unless the gross income of the Corporation and Mississippi Power & Light Company, a Florida corporation, for a period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the issuance, sale or disposition of such stock, determined in accordance with generally acccepted accounting practices (but in any event after deducting all taxes and the greater of (a) the amount for said period charged by the Corporation and Mississippi Power & Light Company, a Florida corporation, on their books to depreciation expense or (b) the largest amount required to be provided therefor by any mortgage indenture of the Corporation) to be available for the payment of interest, shall have been at least one and one-half times the sum of (i) the annual interest charges on all interest bearing indebtedness of the Corporation and (ii) the annual dividend requirements on all outstanding shares of the Preferred Stock and of all other classes of stock ranking prior to, or on a parity with, the Preferred Stock as to dividends or distributions, including the shares proposed to be issued; provided, that there shall be excluded from the foregoing computation interest charges on all indebtedness and dividends on all shares of stock which are to be retired in connection with the issue of such additional shares of the Preferred Stock or other class of stocks ranking prior to, or on a parity with, the Preferred Stock as to dividends or distributions; and provided, further, that in any case where such additional shares of the Preferred Stock, or other class of stock ranking on a parity with the Preferred Stock as to dividends or distributions, are to be issued in connection with the acquisition of additional property, the gross income of the property to be so acquired, computed on the same basis as the gross income of the Corporation, may be included on a pro forma basis in making the foregoing computation; or (4) issue, sell, or otherwise dispose of any shares of the Preferred Stock, in addition to the 104,476 shares of the Preferred Stock originally authorized, or of any other class of stock ranking on a parity with the Preferred Stock as to dividends or distributions, unless the aggregate of the capital of the Corporation applicable to the Common Stock and the surplus of the Corporation shall be not less than the aggregate amount payable on the involuntary liquidation, dissolution, or winding up of the Corporation, in respect of all shares of the Preferred Stock and all shares of stock, if any, ranking prior thereto, or on a parity therewith, as to dividends or distributions, which will be outstanding after the issue of the shares proposed to be issued; provided, that if, for the purposes of meeting the requirements of this subparagraph (4), it becomes necessary to take into consideration any earned surplus of the Corporation, the Corporation shall not thereafter pay any dividends on shares of the Common Stock which would result in reducing the Corporation's Common Stock equity (as in paragraph (H) hereinafter defined) to an amount less than the aggregate amount payable, on involuntary liquidation, dissolution or winding up the Corporation, on all shares of the Preferred Stock and of any stock ranking prior to, or on a parity with, the Preferred Stock, as to dividends or other distributions, at the time outstanding. (E) Each holder of Conunon Stock of the Corporation shall be entitled to one vote, in person or by proxy, for each share of such stock standing in his name on the books of the Corporation. Except as hereinbefore expressly provided in this Section Fourth, the holders of the Preferred Stock shall have no power to vote and shall be entitled to no notice of any meeting of the stockholders of the Corporation. As to matters upon which holders of the Preferred Stock are entitled to vote as hereinbefore expressly provided, each holder of such Preferred Stock shall be entitled to one vote, in person or by proxy, for each share of such Preferred Stock standing in his name on the books of the Corporation. (F) In the event of any voluntary liquidation, dissolution or winding up of the Corporation, the Preferred Stock, pari passu with all shares of preferred stock of any class or series then outstanding, shall have a preference over the Common Stock until an amount equal to the then current redemption price shall have been paid. In the event of any involuntary liquidation, dissolution or winding up of the Corporation, which shall include any such liquidation, dissolution or winding up which may arise out of or result from the condemnation or purchase of all or a major portion of the properties of the Corporation, by (i) the United States Government or any authority, agency or instrumentality thereof, (ii) a state of the United States or any polltical subdivision, authority, agency, or instrumentality thereof, or (iii) a disrict, cooperative or other association or entity not organized for profit, the Preferred Stock, pari passu with all shares of preferred stock of any class or series then outstanding, shall also have a preference over the Common Stock until the full par value thereof and an amount equal to all accumulated and unpaid dividends thereon shall have been paid by dividends or distribution. (G) Upon the affirmative vote of a majority of the shares of the issued and outstanding Common Stock at any annual meeting, or any special meeting called for that purpose, the Corporation may at any time redeem all of any series of said Preferred Stock or may from time to time redeem any part thereof, by paying in cash the redemption price then applicable thereto as stated and expressed with respect to such series in the resolution providing for the issue of such shares adopted by the Board of Directors of the Corporation, or in these Restated Articles of Incorporation or any amendment thereof, plus, in each case, an amount equivalent to the accumulated and unpaid dividends, if any, to the date of redemption. Notice of the intention of the Corporation to redeem all or any part of the Preferred Stock shall be mailed not less than thirty (30) days nor more than sixty (60) days before the date of redemption to each holder of record of Preferred Stock to be redeemed, at his post office address as shown by the Corporation's records, and not less than thirty (30) days' nor more than sixty (60) days' notioe of such redemption may be published in such manner as may be prescribed by resolution of the Board of Directors of the Corporation; and, in the event of such publication, no defect in the mailing of such notice shall affect the validity of the proceedings for the redemption of any shares of Preferred Stock so to be redeemed. Contemporaneously with the mailing or the publication of such notice as aforesaid or at any time thereafter prior to the date of redemption, the Corporation may deposit the aggregate redemption price (or the portion thereof not already paid in the redemption of such Preferred Stock so to be redeemed) with any bank or trust company in the City of New York, New York, or in the City of Jackson, Mississippi, named in such notice, payable to the order of the record holders of the Preferred Stock so to be redeemed, as the case may be, on the endorsement and surrender of their certificates, and thereupon said holders shall cease to be stockholders wlth respect to such shares; and from and after the making of such deposit such holders shall have no interest in or claim against the Corporation with respect to said shares, but shall be enlitled only to receive such moneys from said bank or trust company, with interest, if any, allowed by such bank or trust company on such moneys deposited as in this paragraph provided, on endorsement and surrender of their certificates, as aforesaid. Any moneys so deposited, plus interest thereon, if any, remaining unclaimed at the end of six years from the date fixed for redemption, if thereafter requested by resolution of the Board of Directors, shall be repaid to the Corporation, and in the event of such repayment to the Corporation, such holders of record of the shares so redeemed as shall not have made claim against such moneys prior to such repayment to the Corporation, shall be deemed to be unsecured creditors of the Corporation for an amount, without interest, equivalent to the amount deposited, plus interest thereon, if any, allowed by such bank or trust company, as above stated, for the redemption of such shares and so paid to the Corporation. Shares of the Preferred Stock which have been redeemed shall not be reissued. If less than all of the shares of the Preferred Stock are to be redeemed, the shares thereof to be redeemed shall be selected by lot, in such manner as the Board of Directors of the Corporation shall determine, by an independent bank or trust company selected for that purpose by the Board of Directors of the Corporation. Nothing herein contained shall limit any legal right of the Corporation to purchase or otherwise acquire any shares of the Preferred Stock; provided, however, that, so long as any shares of the Preferred Stock are outstanding, the Corporation shall not redeem, purchase or otherwise acquire less than all of the shares of the Preferred Stock, if, at the time of such redemption, purchase or other acquisition, dividends payable on the Preferred Stock shall be in default in whole or in part, unless, prior to or concurrently with such redemption, purchase or other acquisition, all such defaults shall be cured or unless such redemption, purchase or other acquisition shall have been ordered, approved or permitted under the Public Utility Holding Company Act of 1935; and provided further that, so long as any shares of the Preferred Stock are outstanding, the Corporation shall not make any payment or set aside any funds for payment into any sinking fund for the purchase or redemption of any shares of the Preferred Stock, if, at the time of such payment, or the setting apart of funds for such payment, dividends payable on the Preferred Stock shall be in default in whole or in part, unless, prior to or concurrently with such payment or the setting apart of funds for such payment, all such defaults shall be cured or unless such payment, or the setting apart of funds for such payment, shall bave been ordered, approved or permitted under the Public Utility Holding Company Act of 1935. Any shares of the Preferred Stock so redeemed, purchased or acquired shall retired and cancelled. (H) For the purposes of this paragraph (H) and subparagraph (4) of paragraph (D) the term "Common Stock Equity" shall mean the aggregate of the par value of, or stated capital represented by, the outstanding shares (other than shares owned by the Corporation) of stock ranking junior to the Preferred Stock as to dividends and assets, of the premium on such junior stock and of the surplus (including earned surplus, capital surplus and surplus invested in plant) of the Corporation less (1) any amounts recorded on the books of the Corporation for utility plant and other plant in excess of the original cost thereof, (2) unamortized debt discount and expense, capital stock discount and expense and any other intangible items set forth on the asset side of the balance sheet as a result of accounting convention, (3) the excess, if any, of the aggregate amount payable on involuntary liquidation, dissolution or winding up of the affairs of the Corporation upon all outstanding preferred stock of the Corporation over the aggregate par or stated value thereof and any premiums thereon and (4) the excess, if any, for the period beginning with January 1, 1954, to the end of the month within ninety (90) days preceding the date as of which Common Stock Equity is determined, of the cumulative amount computed under re quirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (this cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements), over the amount charged by the Corporation and Mississippi Power & Light Company, a Florida corporation, on their books for depreciation during such period, including the final fraction of a year; provided, however, that no deductions shall be required to be made in respect of items referred to in subdivisions (1) and (2) of this paragraph (H) in cases in which such items are being amortized or are provided for, or are being provided for, by reserves. For the purpose of this paragraph (H): (i) the term "total capitalization" shall mean the sum of the Common Stock Equity plus item three (3) in this paragraph (H) and the stated capital applicable to, and any premium on, outstanding stock of the Corporation not included in Common Stock Equity, and the principal amount of all outstanding debt of the Corporation maturing more than twelve months after the date of issue thereof; and (ii) the term "dividends on Common Stock" shall embrace dividends on Common Stock (other than dividends payable only in shares of Common Stock), distributions on, and purchases or other acquisitions for value of, any Common Stock of the Corporation or other stock if any, subordinate to its Preferred Stock. So long as any shares of the Preferred Stock are outstanding, the Corporation shall not declare or pay any dividends on the Common Stock, except as follows: (a) If and so long as the Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than 20% of total capitalization, the Corporation shall not declare such dividends in an amount which, together with all other dividends on Common Stock paid within the year ending with and including the date on which such dividend is payable, exceeds 50% of the net income of the Corporation available for dividends on the Common Stock for the twelve full calendar months immediately preceding the month in which such dividends are declared, except in an amount not exceeding the aggregate of dividends on Common Stock which under the restrictions set forth above in this subparagraph (a) could have been, and have not been, declared; and (b) If and so long as the Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than 25% but not less than 20% of total capitalization, the Corporation shall not declare dividends on the Common Stock in an amount which, together with all other dividends on Comrnon Stock paid within the year ending with and including the date on which such dividend is payable, exceeds 75% of the net income of the Corporation and Mississippi Power & Light Company, a Florida corporation, available for dividends on the Common Stock for the twelve full calendar months immediately preceding the month in which such dividends are declared, except in an amount not exceeding the aggregate of dividends on Common Stock which under the restrictions set forth above in subparagraph (a) and in this subparagraph (b) could have been and have not been declared; and (c) If any time when the Common Stock Equity is 25% or more of total capitalization, the Corporation may not declare dividends on shares of the Common Stock which would reduce the Common Stock Equity below 25% of total capitalization, except to the extent provided in subparagraphs (a) and (b) above. At anytime when the aggregate of all amounts credited subsequent to January 1, 1954, to the depreciation reserve account of the Corporation and Mississippi Power & Light Company, a Florida corporation, through charges to operating revenue deductions or otherwise on the books of the Corporation and Mississippi Power & Light Company, a Florida corporation, shall be less than the amount computed as provided in clause (aa) below, under requirements contained in the Corporation's mortgage indentures, then for the purposes of subparagraphs (a) and (b) above, in determining the earnings available for common stock dividends during any twelve-month period, the amount to be provided for depreciation in that period shall be (aa) the greater of the cumulative amount charged to depreciation expense on the books of the Corporation and Mississippi Power & Light Company, a Florida corporation, or the cumulative amount computer under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (the latter cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing co- existing mortgage indenture requirements) for the period from January 1, 1954, to and including said twelve-month period, less (bb) the greater of the cumulative amount charged to depreciation expense on the books of the Corporation and Mississippi Power & Light Company, a Florida corporation, or the cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (the latter cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements) from January 1, 1954, up to but excluding said twelve-month period; provided that in the event any company other than Mississippi Power & Light Company, a Florida corporation, is merged into the Corporation the "cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions" referred to above shall be computed without regard, for the period perior to the merger, of property acquired in the merger, and the "cumulative amount charged to depreciation expense on the books of the Corporation" shall be exclusive of amounts provided for such property prior to the merger. (I) The Board of Directors are hereby expressly authorized by resolution or resolutions to state and express the series and distinctive serial designation of any authorized and unissued shares of Preferred Stock proposed to be issued, the number of shares to constitute each such series, the annnal rate or rates of dividends payable on shares of each series together with the dates on which such dividends shall be paid in each year, the date from which such dividends shall commence to accumulate, the amount or amounts payable upon redemption and the sinking fund provisions, if any, for the redemption or purchase of shares. (J) Dividends may be paid upon the Common Stock only when (i) dividends have been paid or declared and funds set apart for the payment of dividends as aforesaid on the Preferred Stock from thc date(s) after which dividends thereon became cumulative, to the beginning of the period then current, with respect to which such dividends on the Preferred Stock are usually declared, and (ii) all payments have been made or funds have been set aside for payments then or theretofore due under sinking fund provisions, if any, for the redemption or purchase of shares of any series of the Preferred Stock, but whenever (x) there shall have been paid or declared and funds shall have been set apart for the payment of all such dividends upon the Preferred Stock as aforesaid, and (y) all payments shall have been made or funds shall have been set aside for payments then or theretofore due under sinking fund provisions, if any, for the redemption or purchase of shares of any series of the Preferred Stock, then, subject to the limitations above set forth, dividends upon the Common Stock may be declared payable then or thereafter, out of any net earnings or surplus of assets over liabilities, including capital, then remaining. After the payment of the limited dividends and/or shares in distribution of assets to which the Preferred Stock is expressly entitled in preference to the Common Stock, in accordancc with the provisions hereinabove set forth, the Common Stock alone (subject to the rights of any class of stock hereafter authorized) shall receive all further dividends and shares in distribution. (K) Subject to the limitations hereinabove set forth the Corporation from time to time may resell any of its own stock, purchased or otherwise acquired by it as hereinafter provided for, at such price as may be fixed by its Board of Directors or Executive Committee. (L) Subject to the limitations hereinabove set forth the Corporation in order to acquire funds with which to redeem any outstanding Preferred Stock of any class, may issue and sell stock of any class then authorized but unissued, bonds, notes, evidences of indebtedness, or other securities. (M) Subject to the limitations hereinabove set forth the Board of Directors of the Corporation may at any time authorize the conversion or exchange of the whole or any particular share of the outstanding preferred stock of any class with the consent of the holder thereof, into or for stock of any other class at the time of such consent authorized but unissued and may fix the terms and conditions upon which such conversion or exchange may be made; provided that without the consent of the holders of record of two-thirds of the shares of Common Stock outstanding given at a meeting of the holders of the Common Stock called and held as provided by the By-Laws or given in writing without a meeting, the Board of Directors shall not authorize the conversion or exchange of any preferred stock of any class into or for Common Stock or authorize the conversion or exchange of any preferred stock; of any class into or for preferred stock of any other class, if by such conversion or exchange the amount which the holders of the shares of stock so converted or exchanged would be entitled to receive either as dividends or shares in distribution of assets in preference to the Common Stock would be increased. (N) A consolidation, merger or amalgamation of the Corporation with or into any other corporation or corporations shall not be deemed a distribution of assets of the Corporation within the meaning of any provisions of these Restated Articles of Incorporation. (O) The consideration received by the Corporation from the sale of any additional stock without nominal or par value shall be entered in the Corporation's capital stock account. (P) Subject to the limitations hereinabove set forth upon the vote of a majority of all the Directors of the Corporation and of a majority of the total number of shares of stock then issued and outstanding and entitled to vote, irrespective of class (or if the vote of a larger number or different proportion of shares is required by the laws of the State of Mississippi not withstanding the above agreement of the stockholders of the Corporation to the contrary, then upon the vote of the larger number or different proportion of shares so required), the Corporation may from time to time create or authorize one or more other classes of stock with such preferences, designations, rights, privileges, powers, restrictions, limitations and qualifi cations as may be determined by said vote, which may be the same as or different from the preferences, designations, rights, privileges, powers, restrictions, limitations and qualifications of the classes of stock of the Corporation then authorized. Any such vote authorizing the creation of a new class of stock may provide that all moneys payable by the Corporation with respect to any class of stock thereby authorized shall be paid in the money of any foreign country named therein or designated by the Board of Directors, pursuant to authority therein granted, at a fixed rate of exchange with the money of the United States of America therein stated or provided for and all such payments shall be made accordingly. Any such vote may authorize any shares of any class then authorized but unissued to be issued as shares of such new class or classes (Q) Subject to the limitations hereinabove set forth, either the Preferred Stock or the Common Stock or both of said classes of stock, may be increased at any time upon vote of the holders of a majority of the total number of shares of the Corporation then issued and outstanding and entitled to vote thereon, irrespective of class. (R) If any provisions in this Section Fourth shall be in conflict or inconsistent with any other provisions of these Restated Articles of Incorporation of the Corporation the provisions of this Section Fourth shall prevail and govern. FIFTH: The Corporation will not commence business until at least $1,000 has been received by it as consideration for the issuance of shares. SIXTH: Existing provisions limiting or denying to shareholders the preemptive right to acquire additional or treasury shares of the Corporation are: No holder of any stock of the Corporation shall be entitled as of right to purchase or subscribe for any part of any unissued stock of the Corporation, or any additional stock of any class to be issued by reason of any increase of the authorized capital stock of the Corporation or of bonds, certificates of indebtedness, debentures, or other securities convertible into stock of the Corporation, but any such unissued stock or any such additional authorized issue of new stock, or of securities convertible into stock, may be issued and disposed of by the Board of Directors without offering to the stockholders then of record, or to any class of stockholders, any thereof on any terms. SEVENTH: Existing provisions of the Restated Articles of Incorporation for the regulation of the internal affairs of the Corporation are: (a) General authority is hereby conferred upon the Board of Directors to fix the consideration for which shares of stock of the Corporation without nominal or par value may be issued and disposed of, and the shares of stock of the Corporation without nominal or par value, whether authorized by these Restated Articles of Incorporation or by subsequent increase of the authorized number of shares of stock or by amendment of these Restated Articles of Incorporation by consolidation or merger or otherwise, and/or any securities convertible into stock of the Corporation without nominal or par value may be issued and disposed of for such consideration and on such terms and in such manner as may be fixed from time to time by the Board of Directors. (b) The issue of the whole, or any part determined by the Board of Directors, of the shares of stock of the Corporation as partly paid, and subject to calls thereon until the whole thereof shall have been paid, is hereby authorized. (c) The Board of Directors shall have power to authorize the payment of compensation to the directors for services to the Corporation, including fees for attendance at meetings of the Board of Directors or the Executive Committee and all other committees and to determine the amount of such compensation and fees. (d) The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed and the Board of Directors may, in their discretion, require the owner of the lost or destroyed certificate, or his legal representative, to give bond in such sum as they may direct as indemnity against any claim that may be made against the Corporation, its officers, employees or agents by reason thereof; a new certificate may be issued without requiring any bond when, in the judgment of the directors, it is proper so to do. If the Corporation shall neglect or refuse to issue such a new certificate and it shall appear that the owner thereof has applied to the Corporation for a new certificate in place thereof and has made due proof of the loss or destruction thereof and has given such notice of his application for such new certificate on such newspaper of general circulation, published in the State of Mississippi as reasonably should be approved by the Board of Directors, and in such other newspaper as may be required by the Board of Directors, and has tendered to the Corporation adequate security to indemnify the Corporation, its officers employees, or agents, and any person other than such applicant who shall thereafter appear to be the lawful owner of such alleged lost or destroyed certificate against damage, loss or expense because of the issuance of such new certificate, and the effect thereof as herein provided, then, unless there is adequate cause why such new certificate shall not be issued, the Corporation, upon the receipt of said indemnity, shall issue a new certificate of stock in place of such lost or destroyed certificate. In the event that the Corporation shall nevertheless refuse to issue a new certificate as aforesaid, the applicant may then petition any court of competent jurisdiction for relief against the failure of the Corporation to perform its obligations hereunder. In the event that the Corporation shall issue such new certificate, any person who shall thereafter claim any rights under the certificate in place of which such new certificate is issued, whether such new certificate is issued pursuant to the judgment or decree of such court or voluntarily by the Corporation after the publication of notice and the receipt of proof and indemnity as aforesaid, shall have recourse to such indemnity and the Corporation shall be discharged from all liability to such person by reason of such certificate and the shares represented thereby. (e) No stockholder shall have any right to inspect any account, book or document of the Corporation, except as conferred by statute or authorized by the directors. (f) A director of the Corporation shall not be disqualified by his office from dealing or contracting with the Corporation either as a vendor, purchaser or otherwise, nor shall any transaction or contract of the Corporation be void or voidable by reason of the fact that any director or any firm of which any director is a member or any corporation of which any director is a shareholder, officer or director, is in any way interested in such transaction or contract, provided that such transaction or contract is or shall be authorized, ratified or approved either (1) by a vote of a majority of a quorum of the Board of Directors or the Executive Committee, without counting in such majority or quorum any directors so interested or members of a firm so interested or a shareholder, officer or director of a corporation so interested, or (2) by the written consent, or by vote at a stockholders' meeting of the holders of record of a majority in number of all the outstanding shares of stock of the Corporation entitled to vote; nor shall any director be liable to account to the Corporation for any profits realized by or from or through any such transaction or contract of the Corporation, authorized, ratified or approved as aforesaid by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, officer or director was interested in such transaction or contract. Nothing herein contained shall create any liability in the events above described or prevent the authorization, ratification or approval of such contract in any other manner provided by law. (g) Any director may be removed, whether cause shall be assigned for his removal or not, and his place filled at any meeting of the stockholders by the vote of a majority of the outstanding stock of the Corporation entitled to vote. Vacancies in the Board of Directors, except vacancies arising from the removal of directors, shall be filed by the directors remaining in office. (h) Any property of the Corporation not essential to the conduct of its corporate business and purposes may be sold, leased, exchanged or otherwise disposed of by authority of its Board of Directors and the Corporation may sell, lease or exchange all of its property and franchises or any of its property, franchises, corporate rights or privileges essential to the conduct of its corporate business and purposes upon the consent of and for such considerations and upon such terms as may be authorized by a majority of the Board of Directors and the holders of a majority of the outstanding shares of stock entitled to vote, expressed in writing or by vote at a meeting called for that purpose in the manner provided by the By-Laws of the Corporation for special meetings of stockholders; and at no time shall any of the plants, properties, easements, franchises (other than corporate franchises) or securities then owned by the Corporation be deemed to be property, franchises, corporate rights or privileges essential to the conduct of the corporate business and purposes of the Corporation. Upon the vote or consent of the stockholders required to dissolve the Corporation, the Corporation shall have power, as the attorney and agent of the holders of all of its outstanding stock, to sell, assign and transfer all such stock to a new corporation organized under the laws of the United States, the State of Mississippi or any other state, and to receive as the consideration therefor shares of stock of such new corporation of the several classes into which the stock of the Corporation is then divided, equal in number to the number of shares of stock of the Corporation of said several classes then outstanding, such shares of said new corporation to have the same preferences, voting powers, restrictions and qualifications thereof as may then attach to the classes of stock of the Corporation then outstanding so far as the same shall be consistent with such laws of the United States or of the State of Mississippi or of such other state, except that the whole or any part of such stock or any class thereof may be stock with or without nominal or par value. In order to make effective such a sale, assignment and transfer, the Corporation shall have the right to transfer all its outstanding stock on its books and to issue and deliver new certificates therefor in such names and amounts as such new corporation may direct without receiving for cancellation the certificates for such stock previously issued and then outstanding. Upon completion of such sale, assignment and transfer, the holders of the stock of the Corporation shall have no rights or interests in or against the Corporation except the right, upon surrender of certificates for stock of the Corporation properly endorsed, if required, to receive from the Corporation certificates for shares of stock of such new corporation of the class corresponding to the class of the shares surrendered, equal in number to the number of shares of the stock of the Corporation so surrendered. (i) Upon the written assent or pursuant to the affirmative vote in person or by proxy of the holders of a majority in number of the shares then outstanding and entitled to vote, irrespective of class, (1) any or every statute of the State of Mississippi hereafter enacted, whereby the rights, powers or privileges of the Corporation are or may be increased, diminished or in any way affected or whereby the rights, powers or privileges of the stockholders of corporations organized under the law under which the Corporation is organized, are increased, diminished or in any way affected or whereby effect is given to the action taken by any part, less than all, of the stockholders of any such corporation, shall, notwithstanding any provisions which may at the time be contained in these Restated Articles of Incorporation or any law, apply to the Corporation, and shall be binding not only upon the Corporation, but upon every stockholder thereof, to the same extent as if such statute had been in force at the date of the making and filing of these Restated Articles of Incorporation and/or (2) amendments of these Restated Articles of Incorporation authorized at the time of the making of such amendments by the laws of the State of Mississippi may be made. EIGHTH: The Restated Articles of Incorporation correctly set forth without change the corresponding provisions of the Articles of Incorporation as heretofore amended and restated, and supersede the original Articles of Incorporation, and all amendments thereto, and prior Restated Articles of Incorporation and all amendments thereto. DATED: December 21, 1983. MISSISSIPPI POWER & LIGHT COMPANY By: D. C. LUTKEN Its President [CORPORATE SEAL] By: F. S. YORK, JR. Its Secretary STATE OF MISSISSIPPI COUNTY OF HINDS I, Bethel Ferguson, a Notary Public, do hereby certify that on this 21st day of December, 1983, personally appeared before me D. C. Lutken. who, being by me first duly sworn, declared that he is the President of Mississippi Power & Light Company, that he signed the foregoing document as President of the Corporation, and that the statements therein contained are true. BETHEL FERGUSON Notary Public My commission expires July 23, 1987. [NOTARY'S SEAL] RESTATED ARTICLES OF INCORPORATION of MISSISSIPPI POWER & LIGHT COMPANY Filing and Recording Data Restated Articles of Incorporation filed with Secretary of State- -December 21, 1983 Certificate of Restated Articles of Incorporation issued by Secretary of State--December 21, 1983 Certificate of Restated Articles of Incorporation and Restated Articles of Incorporation filed for record in the office of the Chancery Clerk of the First Judicial District of Hinds County, Mississippi, Book 189, Page 624--December 22, 1983. MISSISSIPPI POWER & LIGHT COMPANY Statement of Resolution Establishing Series of Shares October 25, 1984 Pursuant to the provisions of Section 79-3-29 of the Mississippi Business Corporation Law, the undersigned Corporation submits the following statement for the purpose of establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof: 1. The name of the corporation is Mississippi Power & Light Company. 2. The attached resolution establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof was duly adopted by the Board of Directors of the Corporation on October 24, 1984. Dated this the 25th day of October, 1984. MISSISSIPPI POWER & LIGHT COMPANY By/s/ William Cavanaugh, III William Cavanaugh, III President By /s/ Frank S. York, Jr. Frank S. York, Jr. Senior Vice President, Chief Financial Officer and Secretary STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this October 25, 1984, personally appeared before me William Cavanaugh, III, who, being by me first duly sworn, declared that he is President of Mississippi Power & Light Company, that he executed the foregoing document as President of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: March 30, 1986 STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this October 25, 1984, personally appeared before me Frank S. York, Jr., who, being by me first duly sworn, declared that he is Senior Vice President, Chief Financial Officer and Secretary of Mississippi Power & Light Company, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: March 30, 1986 RESOLVED That there is hereby established a series of the Preferred Stock of Mississippi Power & Light Company as follows: A series of 150,000 shares of the Preferred Stock shall: (a) be designated "16.16% Preferred Stock, Cumulative, $100 Par Value;" (b) have a dividend rate of $16.16 per share per annum payable quarterly on February 1, May 1, August 1, and November 1 of each year, the first dividend date to be February 1, 1986, and such dividends to be cumulative from the date of issuance; (c) be subject to redemption at the price of $116.16 per share if redeemed on or before November 1, 1989, of $112.12 per share if redeemed after November 1, 1989, and on or before November 1, 1994, of $108.08 per share if redeemed after November 1, 1994, and on or before November 1, 1999, and of $104.04 per share if redeemed after November 1, 1999, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 16.16% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to November 1, 1989, if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 16.16% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Corporation (so computed) of less than 16.2772% per annum; and (d) be subject to redemption as and for a sinking fund as follows: on November 1, 1989 and on each November 1 thereafter (each such date being hereinafter referred to as a "16.16% Sinking Fund Redemption Date"), for so long as any shares of the 16.16% Preferred Stock, Cumulative, $100 Par Value, shall remain outstanding, the Corporation shall redeem, out of funds legally available therefor, 7,500 shares of the 16.16% Preferred Stock, Cumulative, $100 Par Value, (or the number of shares than outstanding if less than 7,500) at the sinking fund redemption price of $100 per share plus, as to each share so redeemed, an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date of redemption (the obligation of the Corporation so to redeem the shares of the 16.16% Preferred Stock, Cumulative, $100 Par Value, being hereinafter referred to as the "16.16% Sinking Fund Obligation"); the 16.16% Sinking Fund Obligation shall be cumulative; if on any 16.16% Sinking Fund Redemption Date, the Corporation shall not have funds legally available therefor sufficient to redeem the full number of shares required to be redeemed on that date, the 16.16% Sinking Fund Obligation with respect to the shares not redeemed shall carry forward to each successive 16.16% Sinking Fund Redemption Date until such shares shall have been redeemed; whenever on any 16.16% Sinking Fund Redemption Date, the funds of the Corporation legally available for the satisfaction of the 16.16% Sinking Fund Obligation and all other sinking fund and similar obligations than existing with respect to any other class or series of its stock ranking on a parity as to dividends or assets with the 16.16% Preferred Stock, Cumulative, $100 Par Value (such obligation and obligations collectively being hereinafter referred to as the "Total Sinking Fund Obligations"), are insufficient to permit the Corporation to satisfy fully its Total Sinking Fund Obligation on that date, the Corporation shall apply to the satisfaction on its 16.16% Sinking Fund Obligation on that date that proportion of such legally available funds which is equal to the ratio of such 16.16% Sinking Fund Obligation to such Total Sinking Fund Obligation; in addition to the 16.16% Sinking Fund Obligation, the Corporation shall have the option, which shall be noncumulative, to redeem, upon authorization of the Board of Directors, on each 16.16% Sinking Fund Redemption Date, at the aforesaid sinking fund redemption price, up to 7,500 additional shares of the 16.16% Preferred Stock, Cumulative $100 Par Value; the Corporation shall be entitled, at its election, to credit against its 16.16% Sinking Fund Obligation on any 16.16% Sinking Fund Redemption Date any shares of the Preferred Stock, Cumulative, $100 Par Value (including shares of the 16.16% Preferred Stock, Cumulative, $100 Par Value, optionally redeemed at the aforesaid sinking fund price) theretofore redeemed (other than shares of the 16.16% Preferred Stock, Cumulative, $100 Par Value, redeemed pursuant to the 16.16% Sinking Fund Obligation) purchased or otherwise acquired and not previously credited against the 16.16% Sinking Fund Obligation. MISSISSIPPI POWER & LIGHT COMPANY Statement of Resolution Establishing Series of Shares July 24, 1986 Pursuant to the provisions of Section 79-3-29 of the Mississippi Code of 1972, the undersigned Corporation submits the following statement for the purpose of establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof: 1. The name of the corporation is Mississippi Power & Light Company. 2. The attached resolution establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof was duly adopted by the Board of Directors of the Corporation on July 24, 1986. Dated this the 24th day of July, 1986. MISSISSIPPI POWER & LIGHT COMPANY By/s/ William Cavanaugh, III William Cavanaugh, III President By /s/ Frank S. York, Jr. Frank S. York, Jr. Senior Vice President, Chief Financial Officer and Secretary STATE OF MISSISSIPPI COUNTY OF MINDS I, Joseph L. Blount, a Notary Public, do hereby certify that on this July 24, 1986, personally appeared before me William Cavanaugh, III, who, being by me first duly sworn, declared that he is President of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as President of the Corporation, and that the statements therein contained are true. /s/ Joseph L. Blount Joseph L. Blount, Notary Public My Commission Expires: January 20, 1990 STATE OF MISSISSIPPI COUNTY OF MINDS I, Joseph L. Blount, a Notary Public, do hereby certify that on this July 24, 1986, personally appeared before me Frank S. York, Jr., who, being by me first duly sworn, declared that he is Senior Vice President, Chief Financial Officer and Secretary of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joseph L. Blount Joseph L. Blount, Notary Public My Commission Expires: January 20, 1990 RESOLVED That there is hereby established a series of the Preferred Stock of Mississippi Power & Light Company as follows: A series of 350,000 shares of the Preferred Stock shall: (a) be designated "9% Preferred Stock, Cumulative, $100 Par Value;" (b) have a dividend rate of $9.00 per share per annum payable quarterly on February 1, May 1, August 1, and November 1 of each year, the first dividend date to be November 1, 1986, and such dividends to be cumulative from the date of issuance; (c) be subject to redemption at the price of $109.00 per share if redeemed on or before July 1, 1991, of $106.75 per share if redeemed after July 1, 1991, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 9% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to July 1, 1991, if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 9% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Corporation (so computed) of less than 9.9901% per annum; and (d) be subject to redemption as and for a sinking fund as follows: on July 1, 1991, and on each July 1 thereafter (each such date being hereinafter referred to as a "9% Sinking Fund Redemption Date"), for so long as any shares of the 9% Preferred Stock, Cumulative, $100 Par Value, shall remain outstanding, the Corporation shall redeem, out of funds legally available therefor, 70,000 shares of the 9% Preferred Stock, Cumulative, $100 Par Value, (or the number of shares than outstanding if less than 70,000) at the sinking fund redemption price of $100 per share plus, as to each share so redeemed, an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date of redemption (the obligation of the Corporation so to redeem the shares of the 9% Preferred Stock, Cumulative, $100 Par Value, being hereinafter referred to as the "9% Sinking Fund Obligation"); the 9% Sinking Fund Obligation shall be cumulative; if on any 9.% Sinking Fund Redemption Date, the Corporation shall not have funds legally available therefor sufficient to redeem the full number of shares required to be redeemed on that date, the 9% Sinking Fund Obligation with respect to the shares not redeemed shall carry forward to each successive 9% Sinking Fund Redemption Date until such shares shall have been redeemed; whenever on any 9% Sinking Fund Redemption Date, the funds of the Corporation legally available for the satisfaction of the 9% Sinking Fund Obligation and all other sinking fund and similar obligations than existing with respect to any other class or series of its stock ranking on a parity as to dividends or assets with the 9% Preferred Stock, Cumulative, $100 Par Value (such obligation and obligations collectively being hereinafter referred to as the "Total Sinking Fund Obligations"), are insufficient to permit the Corporation to satisfy fully its Total Sinking Fund Obligation on that date, the Corporation shall apply to the satisfaction on its 9% Sinking Fund Obligation on that date that proportion of such legally available funds which is equal to the ratio of such 9% Sinking Fund Obligation to such Total Sinking Fund Obligation; the Corporation shall be entitled, at its election, to credit against its 9% Sinking Fund Obligation on any 9% Sinking Fund Redemption Date any shares of the Preferred Stock, Cumulative, $100 Par Value, theretofore redeemed (other than shares of the 9% Preferred Stock, Cumulative, $100 Par Value, redeemed pursuant to the 9% Sinking Fund Obligation) purchased or otherwise acquired and not previously credited against the 9% Sinking Fund Obligation. MISSISSIPPI POWER & LIGHT COMPANY Statement of Cancellation of Shares September 1, 1986 Pursuant to the provisions of Section 79-3-133 of the Mississippi Code of 1972, the undersigned Corporation submits the following statement of cancellation of redeemable shares by redemption: 1. The name of the corporation is Mississippi Power & Light Company. 2. The number of redeemable shares cancelled through redemption is 20,000 shares of 17% preferred stock, cumulative, $100 par value. 3. The aggregate number of issued shares, itemized by class and series, after giving effect to such cancellation is as follows: (a) 6,275,000 shares of common stock, without par value; (b) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (c) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (d) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (e) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (f) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (g) 180,000 shares of 17% preferred stock, cumulative, $100 par value; (h) 100,000 shares of 14.75% preferred stock, cumulative, $100 par value; (i) 100,000 shares of 12% preferred stock, cumulative, $100 par value; (j) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (k) 350,000 shares of 9% preferred stock, cumulative, $100 par value; 4. The amount, expressed in dollars, of the stated capital of the Corporation, after giving effect to such cancellation is $270,205,800.00. 5. The Restated Articles of Incorporation of the Corporation provide that the cancelled shares shall not be reissued, and the number of shares which the Corporation has authority to issue, itemized by class, after giving effect to such cancellation, is as follows: (a) 15,000,000 shares of common stock, without par value, 6,275,000 of such shares being issued and outstanding at the date hereof; and (b) 1,984,476 shares of preferred stock, 1,258,808 shares of which are issued and outstanding as outlined above. Dated this the 10th day of December, 1986. MISSISSIPPI POWER & LIGHT COMPANY By /s/ Frank S. York, Jr. Frank S. York, Jr. Senior Vice President, Chief Financial Officer and Secretary By /s/ A. H. Mapp A. H. Mapp Assistant Secretary and Assistant Treasurer STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this 10th day of December, 1986, personally appeared before me Frank S. York, Jr., who, being by me first duly sworn, declared that he is Senior Vice President, Chief Financial Officer and Secretary of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this 10th day of December, 1986, personally appeared before me A. H. Mapp, who, being by me first duly sworn, declared that he is Assistant Secretary and Assistant Treasurer of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ MISSISSIPPI POWER & LIGHT COMPANY Statement of Cancellation of Shares November 1, 1986 Pursuant to the provisions of Section 79-3-133 of the Mississippi Code of 1972, the undersigned Corporation submits the following statement of cancellation of redeemable shares by redemption: 1. The name of the corporation is Mississippi Power & Light Company. 2. The number of redeemable shares cancelled through redemption is 180,000 shares of 17% preferred stock, cumulative, $100 par value. 3. The aggregate number of issued shares, itemized by class and series, after giving effect to such cancellation is as follows: (a) 6,275,000 shares of common stock, without par value; (b) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (c) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (d) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (e) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (f) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (g) 100,000 shares of 14.75% preferred stock, cumulative, $100 par value; (h) 100,000 shares of 12% preferred stock, cumulative, $100 par value; (i) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (j) 350,000 shares of 9% preferred stock, cumulative, $100 par value; 4. The amount, expressed in dollars, of the stated capital of the Corporation, after giving effect to such cancellation is $252,205,800.00. 5. The Restated Articles of Incorporation of the Corporation provide that the cancelled shares shall not be reissued, and the number of shares which the Corporation has authority to issue, itemized by class, after giving effect to such cancellation, is as follows: (a) 15,000,000 shares of common stock, without par value, 6,275,000 of such shares being issued and outstanding at the date hereof; and (b) 1,804,476 shares of preferred stock, 1,078,808 shares of which are issued and outstanding as outlined above. Dated this the 10th day of December, 1986. MISSISSIPPI POWER & LIGHT COMPANY By /s/ Frank S. York, Jr. Frank S. York, Jr. Senior Vice President, Chief Financial Officer and Secretary By /s/ A. H. Mapp A. H. Mapp Assistant Secretary and Assistant Treasurer STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this 10th day of December, 1986, personally appeared before me Frank S. York, Jr., who, being by me first duly sworn, declared that he is Senior Vice President, Chief Financial Officer and Secretary of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this 10th day of December, 1986, personally appeared before me A. H. Mapp, who, being by me first duly sworn, declared that he is Assistant Secretary and Assistant Treasurer of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ MISSISSIPPI POWER & LIGHT COMPANY Statement of Cancellation of Shares November 1, 1986 Pursuant to the provisions of Section 79-3-133 of the Mississippi Code of 1972, the undersigned Corporation submits the following statement of cancellation of redeemable shares by redemption: 1. The name of the corporation is Mississippi Power & Light Company. 2. The number of redeemable shares cancelled through redemption is 100,000 shares of 14.75% preferred stock, cumulative, $100 par value. 3. The aggregate number of issued shares, itemized by class and series, after giving effect to such cancellation is as follows: (a) 6,275,000 shares of common stock, without par value; (b) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (c) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (d) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (e) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (f) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (g) 100,000 shares of 12% preferred stock, cumulative, $100 par value; (h) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (i) 350,000 shares of 9% preferred stock, cumulative, $100 par value; 4. The amount, expressed in dollars, of the stated capital of the Corporation, after giving effect to such cancellation is $242,205,800.00. 5. The Restated Articles of Incorporation of the Corporation provide that the cancelled shares shall not be reissued, and the number of shares which the Corporation has authority to issue, itemized by class, after giving effect to such cancellation, is as follows: (a) 15,000,000 shares of common stock, without par value, 6,275,000 of such shares being issued and outstanding at the date hereof; and (b) 1,704,476 shares of preferred stock, 978,808 shares of which are issued and outstanding as outlined above. Dated this the 10th day of December, 1986. MISSISSIPPI POWER & LIGHT COMPANY By /s/ Frank S. York, Jr. Frank S. York, Jr. Senior Vice President, Chief Financial Officer and Secretary By /s/ A. H. Mapp A. H. Mapp Assistant Secretary and Assistant Treasurer STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this 10th day of December, 1986, personally appeared before me Frank S. York, Jr., who, being by me first duly sworn, declared that he is Senior Vice President, Chief Financial Officer and Secretary of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this 10th day of December, 1986, personally appeared before me A. H. Mapp, who, being by me first duly sworn, declared that he is Assistant Secretary and Assistant Treasurer of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ MISSISSIPPI POWER & LIGHT COMPANY Statement of Resolution Establishing Series of Shares January 13, 1987 Pursuant to the provisions of Section 79-3-29 of the Mississippi Code of 1972, the undersigned Corporation submits the following statement for the purpose of establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof: 1. The name of the corporation is Mississippi Power & Light Company. 2. The attached resolution establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof was duly adopted by the Board of Directors of the Corporation on January 13, 1987. Dated this the 13th day of January, 1987. MISSISSIPPI POWER & LIGHT COMPANY By /s/ D. C. Lutken D. C. Lutken President, Chairman of the Board and Chief Executive Officer By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this January 13, 1987, personally appeared before me D. C. Lutken, who, being by me first duly sworn, declared that he is President, Chairman of the Board and Chief Executive Officer of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as President, Chairman of the Board and Chief Executive Officer of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ STATE OF MISSISSIPPI COUNTY OF MINDS I, Joy L. Spears, a Notary Public, do hereby certify that on this January 13, 1987, personally appeared before me G. A. Goff, who, being by me first duly sworn, declared that he is Senior Vice President, Chief Financial Officer and Secretary of Mississippi Power & Light Company, a Mississippi corporation, that he executed the foregoing document as Senior Vice President, Chief Financial Officer and Secretary of the Corporation, and that the statements therein contained are true. /s/ Joy L. Spears Joy L. Spears, Notary Public My Commission Expires: ________________________ RESOLVED That there is hereby established a series of the Preferred Stock of Mississippi Power & Light Company as follows: A series of 350,000 shares of the Preferred Stock shall: (a) be designated "9.76% Preferred Stock, Cumulative, $100 Par Value;" (b) have a dividend rate of $9.76 per share per annum payable quarterly on February 1, May 1, August 1, and November 1 of each year, the first dividend date to be May 1, 1987, and such dividends to be cumulative from the date of issuance; (c) be subject to redemption at the price of $109.76 per share if redeemed on or before January 1, 1988, of $108.68 per share if redeemed after January 1, 1988, and on or before January 1, 1989, of $107.60 per share if redeemed after January 1, 1989,, and on or before January 1, 1990, of $106.51 per share if redeemed after January 1, 1990, and on or before January 1, 1991, of $105.43 per share if redeemed after January 1, 1991, and on or before January 1, 1992, of $104.34 per share if redeemed after January 1, 1992, and on or before January 1, 1993, of $103.26 per share if redeemed after January 1, 1993, and on or before January 1, 1994, of $102.17 per share if redeemed after January 1, 1994, and on or before January 1, 1995, of $101.09 per share if redeemed after January 1, 1995, and on or before January 1, 1996, and of $100.00 per share if redeemed after January 1, 1996, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption; provided, however, that no share of the 9.76% Preferred Stock, Cumulative, $100 Par Value, shall be redeemed prior to January 1, 1992, if such redemption is for the purpose or in anticipation of refunding such share through the use, directly or indirectly, of funds borrowed by the Corporation, or through the use, directly or indirectly, of funds derived through the issuance by the Corporation of stock ranking prior to or on a parity with the 9.76% Preferred Stock, Cumulative, $100 Par Value, as to dividends or assets, if such borrowed funds have an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Corporation (so computed) of less than 9.9165% per annum; and (d) be subject to redemption as and for a sinking fund as follows: on January 1, 1993, and on each January 1 thereafter (each such date being hereinafter referred to as a "9.76% Sinking Fund Redemption Date"), for so long as any shares of the 9.76% Preferred Stock, Cumulative, $100 Par Value, shall remain outstanding, the Corporation shall redeem, out of funds legally available therefor, 70,000 shares of the 9.76% Preferred Stock, Cumulative, $100 Par Value, (or the number of shares than outstanding if less than 70,000) at the sinking fund redemption price of $100 per share plus, as to each share so redeemed, an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date of redemption (the obligation of the Corporation so to redeem the shares of the 9.76% Preferred Stock, Cumulative, $100 Par Value, being hereinafter referred to as the "9.76% Sinking Fund Obligation"); the 9.76% Sinking Fund Obligation shall be cumulative; if on any 9.76% Sinking Fund Redemption Date, the Corporation shall not have funds legally available therefor sufficient to redeem the full number of shares required to be redeemed on that date, the 9.76% Sinking Fund Obligation with respect to the shares not redeemed shall carry forward to each successive 9.76% Sinking Fund Redemption Date until such shares shall have been redeemed; whenever on any 9.76% Sinking Fund Redemption Date, the funds of the Corporation legally available for the satisfaction of the 9.76% Sinking Fund Obligation and all other sinking fund and similar obligations than existing with respect to any other class or series of its stock ranking on a parity as to dividends or assets with the 9.76% Preferred Stock, Cumulative, $100 Par Value (such obligation and obligations collectively being hereinafter referred to as the "Total Sinking Fund Obligations"), are insufficient to permit the Corporation to satisfy fully its Total Sinking Fund Obligation on that date, the Corporation shall apply to the satisfaction on its 9.76% Sinking Fund Obligation on that date that proportion of such legally available funds which is equal to the ratio of such 9.76% Sinking Fund Obligation to such Total Sinking Fund Obligation; the Corporation shall be entitled, at its election, to credit against its 9.76% Sinking Fund Obligation on any 9.76% Sinking Fund Redemption Date any shares of the Preferred Stock, Cumulative, $100 Par Value, theretofore redeemed (other than shares of the 9.76% Preferred Stock, Cumulative, $100 Par Value, redeemed pursuant to the 9.76% Sinking Fund Obligation) purchased or otherwise acquired and not previously credited against the 9.76% Sinking Fund Obligation. FURTHER RESOLVED That the officers of the Company are hereby authorized and directed to execute, file, publish and record all such statements and other documents, and to do and perform all such other and further acts and things, as in the judgment of the officer or officers taking such action may be necessary or desirable for the purpose of causing the immediately preceding resolution to become fully effective and of causing said resolution to become and constitute an amendment of the Restated Articles of Incorporation of the Company, all in the manner and to the extent required by the Mississippi Business Corporation Law. MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (Supp. 1987) March 8, 1988 The undersigned corporation, pursuant to Section 79-4-6.31 of the Mississippi Code of 1972, as amended, submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 5,000 shares of 12% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 6,275,000 of such shares being issued and outstanding at the date hereof; and (b)1,699,476 shares of preferred stock, 1,323,808 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 95,000 shares of 12% preferred stock, cumulative, $100 par value; (vii) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 8th day of March, 1988. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary By /s/ J. R. Martin J. R. Martin Treasurer and Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (Supp. 1988) January 19, 1989 The undersigned corporation, pursuant to Section 79-4-6.31 of the Mississippi Code of 1972, as amended, submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 1,500 shares of 12% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,699,476 shares of preferred stock, 1,323,808 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 93,500 shares of 12% preferred stock, cumulative, $100 par value; (vii) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 19th day of January, 1989. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary REGISTERED AGENT/OFFICE STATEMENT OF CHANGE (Mark appropriate box) X DOMESTIC X PROFIT FOREIGN NONPROFIT 1. Name of Corporation: Mississippi Power & Light Company Federal Tax ID: 64-0205830 2. Current street address of registered office: 308 East Pearl Street Jackson, Mississippi 39201 3. New street address of registered office: (No change) 4. Name of current registered agent: Donald C. Lutken or Robert C. Grenfell 5. Name of new registered agent: Michael B. Bemis or Robert C. Grenfell 6. (Mark appropriate box) (X) The undersigned hereby accepts designation as registered agent for service of process. /s/ Michael B. Bemis /s/ Robert C. Grenfell ( ) Statement of written consent if attached. 7. ( ) Nonprofit. The street address of the registered office and the street address of the principal office of its registered agent will be identical. (X) Profit. The street address of the registered office and the street address of the business office of its registered agent will be identical. 8. The corporation has been notified of the change of registered office. Mississippi Power & Light Company Corporate Name By: Michael B. Bemis, President and COO /s/ Michael B. Bemis PRINTED NAME/CORPORATE TITLE SIGNATURE MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (Supp. 1988) March 30, 1989 The undersigned corporation, pursuant to Section 79-4-6.31 of the Mississippi Code of 1972, as amended, submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 8,500 shares of 12% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,699,476 shares of preferred stock, 1,323,808 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 85,000 shares of 12% preferred stock, cumulative, $100 par value; (vii) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 30th day of March, 1989. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (Supp. 1988) March 30, 1989 The undersigned corporation, pursuant to Section 79-4-6.31 of the Mississippi Code of 1972, as amended, submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 5,800 shares of 12% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,692,176 shares of preferred stock, 1,316,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 87,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 150,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 30th day of March, 1989. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary ARTICLES OF CORRECTION (Mark appropriate box) X PROFIT NONPROFIT The undersigned corporation, pursuant to Section 79-4-1.24 (if a profit corporation) or Section 79-11-113 (if a nonprofit corporation) of the Mississippi Code of 1972, as amended, hereby executes the following document and sets forth: 1. The name of the corporation is: Mississippi Power & Light Company 2. (Mark appropriate box.) (X) The document to be corrected is Articles of Amendment which became effective on March 31, 1989 (date). ( ) A copy of the document to be corrected is attached. 3. The aforesaid articles contain the following incorrect statement: See Attachment "A" 4. a. The reason such statement is incorrect is: The reduction in the number of shares of the class and series referred to in attachment A was incorrectly states as 8,500, and should have been 5,800, which incorrect statement is a component of certain other statements made in the Articles of Amendment, all as reflected in attachment "A". or b. The manner in which the execution of such document was defective was: 5. The correction is as follows: Attachment "B", a new executed form of Articles of Amendment, is substituted in its entirety for the Articles of Amendment referred to above. 6. The certificate of correction shall become effective on March 31, 1989. By: Mississippi Power & Light Company /s/ G. A. Goff printed name/corporation title G. A. Goff Senior Vice President, Chief Financial Officer and Secretary ATTACHMENT "A" The following incorrect statements were included in the Articles of Amendment under Miss. Code Ann. Section 74-4-6.31 (Supp. 1988) dated March 30, 1989: 1. Paragraph 2 thereof provided as follows: "The reduction in the number of authorized shares, itemized by class and series, is 8,500 shares of 12% Preferred Stock, Cumulative, $100 par value." 2. Paragraph 3(b) provided in part as follows: "1,699,476 shares of preferred stock, 1,323,808 shares of which are issued and outstanding in the following series: (vi) 85,000 shares of 12% preferred stock, cumulative, $100 par value; MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (Supp. 1988) November 2, 1989 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (Supp. 1988), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 90,000 shares of 16.16% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,602,176 shares of preferred stock, 1,226,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $200 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 87,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 60,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 2nd day of November, 1989. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1972) March 28, 1990 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1972), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 10,000 shares of 12.009% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,592,176 shares of preferred stock, 1,216,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $200 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 77,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 60,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 30th day of March, 1990. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1972) November 2, 1990 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1972), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 15,000 shares of 16.16% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,577,176 shares of preferred stock, 1,201,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 77,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 45,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 2nd day of November, 1990. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary [Letterhead of Wise Carter Child & Caraway] March 26, 1991 Ms. Sylvia Jacobs Branch Supervisor-Corporations Business Services Secretary of State of State of Mississippi 202 North Congress Street, Suite 601 Jackson, MS 39205 Re: Mississippi Power & Light Company Articles of Amendment Dear Ms. Jacobs: I received your Notice of Return regarding the Articles of Amendment we recently filed for Mississippi Power & Light Company under Section 79-4-6.31 of the Mississippi Code. Your Notice of Return states that we must use Form C-3 provided in the Guide for Domestic Corporations published by the Mississippi Secretary of State. I draw your attention to the fact that the Articles of Amendment we are filing are being filed under Section 79-4-6.31 (1989) of the Mississippi Code, and not Section 79-4-10.06. I agree that if we were filing Articles of Amendment under Section 79-4-10.06, the proper form to use would be Form C-3 provided by the Mississippi Secretary of State. However, the Articles of Amendment we are filing are being filed only because stock was redeemed by the corporation and is now being cancelled. We have used the form enclosed with this letter numerous times in the past to file Articles of Amendment pursuant to Section 79-4-6.31, after consultation with Ray Bailey. It is my opinion that the form for the standard Articles of Amendment would not be appropriate for the type of amendment we are filing, and there is no place on the form to provide the information required under Section 79-4-6.31. Accordingly, I am returning our duplicate originals of the Articles of Amendment and request that you file one among the records in your office, and return the conformed copy, marked "Filed," to my attention at the above address. If you have any questions, please feel free to call at the above direct dial number. Very truly yours, /s/ J. Michael Cockrell J. Michael Cockrell DMC/st Enclosure MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) March 18, 1991 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is (a) 80 shares of 4.36% preferred stock, cumulative, $100 par value; (b) 588 shares of 4.56% preferred stock, cumulative, $100 par value; and (c) 10,000 shares of 12% preferred stock, cumulative, $100 par value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,566,508 shares of preferred stock, 1,191,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 67,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 45,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)350,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 18th day of March, 1991. MISSISSIPPI POWER & LIGHT COMPANY By /s/ G. A. Goff G. A. Goff Senior Vice President, Chief Financial Officer and Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) July 12, 1991 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,496,508 shares of preferred stock, 1,121,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 67,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 45,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)280,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 12th day of July, 1991. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp A. H. Mapp Assistant Treasurer and Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) November 19, 1991 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 15,000 shares of 16.16% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,481,508 shares of preferred stock, 1,106,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 67,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 30,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)280,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 19th day of November, 1991. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp A. H. Mapp Assistant Treasurer and Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) March 13, 1992 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 10,000 shares of 12% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 7,579,400 of such shares being issued and outstanding at the date hereof; and (b)1,471,508 shares of preferred stock, 1,096,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 57,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 30,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)280,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 13th day of March, 1992. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) July 15, 1992 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)1,401,508 shares of preferred stock, 1,026,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 57,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 30,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)210,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and Dated this the 15th day of July, 1992. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment - Statement of Resolution Establishing Series of Shares October 22, 1992 Pursuant to the provisions of Section 79-4-6.02(d) of the Mississippi Code of 1972 (Supp. 1989), Mississippi Power & Light Company submits the following statement for the purpose of establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof: 1. The name of the corporation is Mississippi Power & Light Company. 2. The attached resolution establishing and designating a series of shares and fixing and determining the relative rights and preferences thereof was duly adopted by the Board of Directors of the Corporation on October 22, 1992. Dated this the 22nd day of October, 1992. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp Allan H. Mapp Assistant Secretary and Assistant Treasurer MISSISSIPPI POWER & LIGHT COMPANY Excerpts from the minutes of the Meeting of the Board of Directors held on October 22, 1992 RESOLVED That there is hereby established a series of the Preferred Stock of Mississippi Power & Light Company as follows: A series of 200,000 shares of the Preferred Stock shall: (a) be designated as the "8.36% Preferred Stock, Cumulative, $100 Par Value"; (b) have a dividend rate of $8.36 per share per annum payable quarterly on February 1, May 1, August 1, and November 1 of each year, the first dividend date to be February 1, 1993, and such dividends to be cumulative from the date of issuance; and (c) be subject to redemption at the price of $100 par share plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption (except that no share of the 8.36% Preferred Stock shall be redeemed on or before October 1, 1997). FURTHER RESOLVED That the officers of the Company are hereby authorized and directed to execute, file and publish and record all such statements and other documents, and to do and perform all such other and further acts and things, as in the judgment of the officer and officers taking such action may be necessary or desirable for the purpose of causing the immediately preceding resolution to become fully effective and of causing said resolution to become and constitute an amendment of the Restated Articles of Incorporation of the Company, all in the manner and to the extent required by the Mississippi Business Corporation Law. MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) November 6, 1992 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 15,000 shares of 16.16% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)1,386,508 shares of preferred stock, 1,211,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 57,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 15,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)210,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 350,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (x) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 6th day of November, 1993. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) January 12, 1993 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.76% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)1,316,508 shares of preferred stock, 1,141,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 57,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 15,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)210,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 280,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (x) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 12th day of January, 1993. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) March 10, 1993 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 10,000 shares of 12.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)1,306,508 shares of preferred stock, 1,131,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 47,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 15,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)210,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 280,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (x) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 10th day of March, 1993. MISSISSIPPI POWER & LIGHT COMPANY By /s/ A. H. Mapp Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) July 12, 1993 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)1,236,508 shares of preferred stock, 1,061,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 47,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 15,000 shares of 16.16% preferred stock, cumulative, $100 par value; (viii)140,000 shares of 9% preferred stock, cumulative, $100 par value; (ix) 280,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (x) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 12th day of July, 1993. MISSISSIPPI POWER & LIGHT COMPANY By /s/ James W. Snider Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) November 15, 1993 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 15,000 shares of 16.16% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)1,221,508 shares of preferred stock, 1,046,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 47,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 140,000 shares of 9% preferred stock, cumulative, $100 par value; (viii)280,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (ix) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 15th day of November, 1993. MISSISSIPPI POWER & LIGHT COMPANY By /s/ James W. Snider Title: Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-10.06 (1989) February 4, 1994 The undersigned corporation, pursuant to Section 79-4-10.06 of the Mississippi Code of 1972, as amended, submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. As evidenced by the attached Stockholder's Written Approval of Amendment authorizing 1,500,000 additional shares of Preferred Stock of the par value of $100 per share, the following amendment of the Restated Articles of Incorporation, as amended (the "Charter"), was proposed by the Board of Directors of Mississippi Power & Light Company on October 29, 1993, was adopted by the stockholders of the Corporation entitled to vote on the amendment on February 4, 1994, in accordance with and in the manner prescribed by the laws of the State of Mississippi and the Charter of Mississippi Power & Light Company: The first paragraph in Article FOURTH of the Charter is amended to read as follows: FOURTH: The aggregate number of shares which the Corporation shall have authority to issue is 17,721,508 shares, divided into 2,721,508 shares of Preferred Stock of the par value of $100 per share and 15,000,000 shares of Common Stock without par value. 3. Pursuant to the Laws of the State of Mississippi and the Charter of Mississippi Power & Light Company, the holders of Preferred Stock of the par value of $100 per share were not entitled to vote on the amendment as a separate voting group. The holders of the outstanding shares of common stock were the only stockholders entitled to vote on the amendment. 4. The number of shares of common stock of the corporation outstanding at the time of such adoption was 8,666,357; and the number of shares entitled to vote thereon was 8,666,357. Dated this the 4th day of February, 1994. MISSISSIPPI POWER & LIGHT COMPANY By: /s/ Edwin Lupberger Edwin Lupberger Chairman of the Board and Chief Executive Officer By: /s/ Donald E. Meiners Donald E. Meiners President MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) March 17, 1994 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 10,000 shares of 12.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)2,641,508 shares of preferred stock, 966,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 37,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 140,000 shares of 9% preferred stock, cumulative, $100 par value; (viii)210,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (ix) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 17th day of March, 1994. MISSISSIPPI POWER & LIGHT COMPANY By: /s/ J. W. Snider, Jr. Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) August 1, 1994 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)2,571,508 shares of preferred stock, 896,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 37,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 70,000 shares of 9% preferred stock, cumulative, $100 par value; (viii)210,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (ix) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 1st day of August, 1994. MISSISSIPPI POWER & LIGHT COMPANY By: /s/ J. W. Snider, Jr. Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) January 18, 1995 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.76% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)2,501,508 shares of preferred stock, 826,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 37,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 70,000 shares of 9% preferred stock, cumulative, $100 par value; (viii)140,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (ix) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 18th day of January, 1995. MISSISSIPPI POWER & LIGHT COMPANY By: /s/ J. W. Snider, Jr. Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) March 7, 1995 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 10,000 shares of 12.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)2,491,508 shares of preferred stock, 816,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 27,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 70,000 shares of 9% preferred stock, cumulative, $100 par value; (viii)140,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (ix) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 7th day of March, 1995. MISSISSIPPI POWER & LIGHT COMPANY By: /s/ J. W. Snider, Jr. Assistant Secretary MISSISSIPPI POWER & LIGHT COMPANY Articles of Amendment Under Miss. Code Ann. Section 79-4-6.31 (1989) July 20, 1995 The undersigned corporation, pursuant to Miss. Code Ann. Section 79-4-6.31 (1989), submits the following document and sets forth: 1. The name of the corporation is Mississippi Power & Light Company. 2. The reduction in the number of authorized shares, itemized by class and series, is 70,000 shares of 9.00% Preferred Stock, Cumulative, $100 Par Value. 3. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares is as follows: (a)15,000,000 shares of common stock, without par value, 8,666,357 of such shares being issued and outstanding at the date hereof; and (b)2,421,508 shares of preferred stock, 746,508 shares of which are issued and outstanding in the following series: (i) 59,920 shares of 4.36% preferred stock, cumulative, $100 par value; (ii) 43,888 shares of 4.56% preferred stock, cumulative, $100 par value; (iii) 100,000 shares of 4.92% preferred stock, cumulative, $100 par value; (iv) 75,000 shares of 9.16% preferred stock, cumulative, $100 par value; (v) 100,000 shares of 7.44% preferred stock, cumulative, $100 par value; (vi) 27,700 shares of 12% preferred stock, cumulative, $100 par value; (vii) 140,000 shares of 9.76% preferred stock, cumulative, $100 par value; and (ix) 200,000 shares of 8.36% preferred stock, cumulative, $100 par value. Dated this the 20th day of July, 1995. MISSISSIPPI POWER & LIGHT COMPANY By: /s/ J. W. Snider, Jr. Assistant Secretary EX-23 3 Exhibit 23(a) [Letterhead of Friday, Eldredge & Clark] August 7, 1995 Entergy Corporation 225 Baronne Street New Orleans, Louisiana 70112 Gentlemen: We consent to the reference to our firm under the heading "Experts" in the Quarterly Report on Form 10-Q being filed on or about the date hereof by Entergy Corporation, Arkansas Power & Light Company ("AP&L"), Gulf States Utilities Company, Louisiana Power & Light Company, Mississippi Power & Light Company, New Orleans Public Service Inc. and System Energy Resources, Inc. We further consent to the incorporation by reference of such reference to our firm into AP&L's Registration Statements (Form S- 3, File Nos. 33-36149, 33-48356 and 33-50289), and related Prospectuses pertaining to AP&L's First Mortgage Bonds and/or Preferred Stock and First Mortgage Bonds, respectively. Very truly yours, /s/ Friday, Eldredge & Clark FRIDAY, ELDREDGE & CLARK EX-23 4 Exhibit 23(b) [Letterhead of Monroe & Lemann] August 7, 1995 Entergy Corporation 225 Baronne Street New Orleans, Louisiana 70112 Gentlemen: We consent to the reference to our firm under the heading "Experts" in the Quarterly Report on Form 10-Q being filed on or about the date hereof by Entergy Corporation, Arkansas Power & Light Company, Gulf States Utilities Company, Louisiana Power & Light Company ("LP&L"), Mississippi Power & Light Company, New Orleans Public Service Inc. ("NOPSI") and System Energy Resources, Inc. We further consent to the incorporation by reference of such reference to our firm into LP&L's Registration Statements on Form S-3, and the related prospectuses (File Nos. 33-50937, 33-46085 and 33-39221) pertaining to LP&L's First Mortgage Bonds and Preferred Stock, and into NOPSI's Registration Statement on Form S-3, and the related prospectus (File No. 33- 57926) pertaining to NOPSI's General and Refunding Mortgage Bonds. Very truly yours, /s/ Monroe & Lemann MONROE & LEMANN EX-23 5 EXHIBIT 23(c) August 7, 1995 Entergy Corporation 225 Baronne Street New Orleans, Louisiana 70112 Ladies and Gentlemen: We consent to the reference to our firm under the heading "Experts" in the Quarterly Report on Form 10-Q being filed on or about the date hereof by Entergy Corporation, Arkansas Power & Light Company, Gulf States Utilities Company, Louisiana Power & Light Company, Mississippi Power & Light Company ("MP&L"), New Orleans Public Service Inc., and System Energy Resources, Inc. ("System Energy"). We further consent to the incorporation by reference of such reference to our firm into System Energy's Registration Statement on Form S-3, and the related prospectus (File No. 33-61189) pertaining to System Energy's Debt Securities, and into MP&L's Registration Statements on Form S-3, and the related prospectuses (File Nos. 33-53004, 33-55826 and 33- 50507) pertaining to MP&L's General and Refunding Mortgage Bonds and MP&L's Preferred Stock. Very truly yours, WISE CARTER CHILD & CARAWAY, Professional Association By: /s/ Robert B. McGehee Robert B. McGehee EX-23 6 Exhibit 23(d) [Letterhead of Clark, Thomas & Winters] CONSENT We consent to the reference to our firm under the heading "Experts" in the Quarterly Report on Form 10-Q being filed on or about the date hereof by Entergy Corporation, Arkansas Power & Light Company, Gulf States Utilities Company ("GSU"), Louisiana Power & Light Company, Mississippi Power & Light Company, New Orleans Public Service Inc. and System Energy Resources, Inc. We further consent to the incorporation by reference in the registration statements of GSU on Form S-3 and Form S-8 (File Numbers 2-76551, 2-98011, 33-49739, and 33-51181) of such reference and Statements of Legal Conclusions. /s/ Clark, Thomas & Winters A Professional Corporation CLARK, THOMAS & WINTERS, A Professional Corporation Austin, Texas August 7, 1995 EX-23 7 Exhibit 23(e) CONSENT We consent to the reference to our firm under the heading "Experts" in the Quarterly Report on Form 10-Q being filed on or about the date hereof by Entergy Corporation, Arkansas Power & Light Company, Gulf States Utilities Company ("GSU"), Louisiana Power & Light Company, Mississippi Power & Light Company, New Orleans Public Service Inc. and System Energy Resources, Inc. We further consent to the incorporation by reference of such reference to our firm into GSU's Registration Statements on Form S-3 and Form S-8 (File Numbers 2-76551, 2-98011, 33-49739 and 33- 51181) of such reference and Statements. /s/ L. S. Sandlin SANDLIN ASSOCIATES Management Consultants Pasco, Washington August 7, 1995 EX-27 8
UT This schedule contains summary financial information extracted from Entergy Corporation financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000065984 ENTERGY CORPORATION 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 15,836,749 538,250 2,275,324 3,860,344 0 22,510,667 2,300 4,132,373 2,236,785 6,371,458 273,698 550,955 7,023,655 68,333 0 0 403,060 0 330,548 152,730 7,336,230 22,510,667 2,918,137 147,104 2,201,300 2,348,404 569,733 20,316 590,049 332,121 257,928 38,900 219,028 204,267 0 449,747 0 0
EX-27 9
UT This schedule contains summary financial information extracted from AP&L'S financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000007323 ARKANSAS POWER & LIGHT COMPANY 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 2,878,127 168,671 544,412 691,688 0 4,282,898 470 590,844 502,299 1,093,613 51,527 176,350 1,278,691 667 0 0 28,175 0 105,426 56,909 1,491,540 4,282,898 751,760 21,344 632,019 653,363 98,397 17,620 116,017 56,111 59,906 9,106 50,800 40,300 0 141,280 0 0
EX-27 10
UT This schedule contains summary financial information extracted from GSU'S financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000044570 GULF STATES UTILITIES COMPANY 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 4,660,175 61,676 746,692 1,426,406 0 6,894,949 114,055 1,152,419 296,400 1,562,874 92,687 136,444 2,300,795 0 0 0 70,425 0 104,959 37,234 2,589,531 6,894,949 878,955 22,978 719,828 742,806 136,149 9,098 145,247 98,259 46,988 15,016 31,972 0 0 100,350 0 0
EX-27 11
UT This schedule contains summary financial information extracted from LP&L'S financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000060527 LOUISIANA POWER & LIGHT COMPANY 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 3,546,072 67,608 346,414 477,954 0 4,438,048 1,088,900 (5,029) 105,554 1,189,425 103,765 160,500 1,368,399 17,810 0 0 110,245 0 42,650 28,000 1,417,254 4,438,048 759,106 48,363 555,456 603,819 155,287 1,696 156,983 67,839 89,144 10,810 78,334 86,200 0 159,727 0 0
EX-27 12
UT This schedule contains summary financial information extracted from MP&L'S financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000066901 MISSISSIPPI POWER & LIGHT COMPANY 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 975,964 11,150 304,315 369,095 0 1,660,524 199,326 (1,661) 242,712 440,377 23,770 57,881 530,311 0 0 0 50,965 0 485 0 556,735 1,660,524 433,634 14,094 364,478 378,572 55,062 1,057 56,119 25,767 30,352 3,251 27,101 16,400 0 74,755 0 0
EX-27 13
UT This schedule contains summary financial information extracted from NOPSI'S financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000071508 NEW ORLEANS PUBLIC SERVICE INC. 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 279,442 3,259 142,856 178,312 0 603,869 33,744 36,247 87,302 157,293 1,950 19,780 155,935 0 0 0 38,250 0 0 0 230,661 603,869 221,552 8,195 189,994 198,189 23,363 362 23,725 8,792 14,933 717 14,216 5,800 0 14,540 0 0
EX-27 14
UT This schedule contains summary financial information extracted from System Energy's financial statements for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 0000202584 SYSTEM ENERGY RESOURCES, INC. 1,000 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 2,728,146 36,621 229,309 655,544 0 3,649,620 789,350 7 84,448 873,805 0 0 1,439,526 0 0 0 105,000 0 61,395 28,000 1,141,894 3,649,620 310,296 38,719 150,215 188,934 121,362 3,826 125,188 78,821 46,367 0 46,367 47,600 0 51,403 0 0
EX-99 15
Exhibit 99(a) Arkansas Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on long-term debt $132,607 $133,854 $120,317 $107,771 $101,439 $102,358 Interest on notes payable 1,027 -- 117 349 1,311 718 Amortization of expense and premium on debt-net(cr) 1,792 1,112 1,359 2,702 4,563 4,492 Other interest 1,567 1,303 2,308 8,769 3,501 5,831 Interest applicable to rentals 24,233 21,969 17,657 16,860 19,140 19,014 ---------------------------------------------------------- Total fixed charges, as defined 161,226 158,238 141,758 136,451 129,954 132,413 Preferred dividends, as defined (a) 30,851 31,458 32,195 30,334 23,234 23,678 ---------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $192,077 $189,696 $173,953 $166,785 $153,188 $156,091 ========================================================== Earnings as defined: Net Income $129,765 $143,451 $130,529 $205,297 $142,263 $134,018 Add: Provision for income taxes: Federal & State 50,921 44,418 57,089 58,162 83,300 80,503 Deferred - net 17,943 11,048 3,490 34,748 (17,939) (11,009) Investment tax credit adjustment - net (12,022) (1,600) (9,989) (10,573) (36,141) (33,193) Fixed charges as above 161,226 158,238 141,758 136,451 129,954 132,413 ---------------------------------------------------------- Total earnings, as defined $347,833 $355,555 $322,877 $424,085 $301,437 $302,732 ========================================================== Ratio of earnings to fixed charges, as defined 2.16 2.25 2.28 3.11 2.32 2.29 ========================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.81 1.87 1.86 2.54 1.97 1.94 ========================================================== ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate.
EX-99 16
Exhibit 99(b) Gulf States Utilities Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on mortgage bonds $218,462 $201,335 $197,218 $172,494 $167,082 $166,105 Interest on notes payable 24,295 8,446 - - 763 1,013 Interest on long-term debt - other 12,668 19,507 21,155 19,440 19,440 19,440 Other interest 18,380 29,169 26,564 10,561 7,957 4,564 Amortization of expense and premium on debt-net(cr) 2,192 1,999 3,479 8,104 8,892 8,746 Interest applicable to rentals 23,761 24,049 23,759 23,455 21,539 18,992 ---------------------------------------------------------- Total fixed charges, as defined 299,758 284,505 272,175 234,054 225,673 218,860 Preferred dividends, as defined (a) 104,484 90,146 69,617 65,299 52,210 51,166 ---------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $404,242 $374,651 $341,792 $299,353 $277,883 $270,026 ========================================================== Earnings as defined: Income (loss) from continuing operations before extraordinary items and the cumulative effect of accounting changes ($36,399) $112,391 $139,413 $69,462 ($82,755) ($79,894) Add: Income Taxes (24,216) 48,250 55,860 58,016 (62,086) (56,719) Fixed charges as above 299,758 284,505 272,175 234,054 225,673 218,860 ---------------------------------------------------------- Total earnings, as defined $239,143 $445,146 $467,448 $361,532 $80,832 $82,247 ========================================================== Ratio of earnings to fixed charges, as defined 0.80 1.56 1.72 1.54 0.36 0.38 ========================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 0.59 1.19 1.37 1.21 0.29 0.30 ========================================================== (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate. (b) Earnings for the year ended December 31, 1994 and 1990, for GSU were not adequate to cover fixed charges by $144.8 million and $60.6 million, respectively. Earnings for the years ended December 31, 1994 and 1990, for GSU were not adequate to cover fixed charges and preferred dividends by $197.1 million and $165.1 million, respectively. Earnings for the twelve months ended June 30, 1995 for GSU were not adequate to cover fixed charges by $136.6 million. Earnings for the twelve months ended June 30, 1995 for GSU were not adequate to cover fixed charges and preferred dividends by $187.8 million.
EX-99 17
Exhibit 99(c) Louisiana Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on long-term debt $154,357 $158,816 $128,672 $124,633 $124,820 $124,984 Interest on notes payable 87 -- 150 898 1,948 1,597 Other interest charges 6,378 5,924 5,591 5,706 4,546 5,566 Amortization of expense and premium on debt - net(cr) 3,397 3,282 7,100 5,720 5,130 5,201 Interest applicable to rentals 12,906 11,381 9,363 8,519 8,332 10,399 ---------------------------------------------------------- Total fixed charges, as defined 177,125 179,403 150,876 145,476 144,776 147,747 Preferred dividends, as defined (a) 42,365 41,212 42,026 40,779 29,171 28,448 ---------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $219,490 $220,615 $192,902 $186,255 $173,947 $176,195 ========================================================== Earnings as defined: Net Income $155,049 $166,572 $182,989 $188,808 $213,839 $217,535 Add: Provision for income taxes: Federal and State 62,236 8,684 36,465 70,552 79,260 122,284 Deferred Federal and State - net (9,655) 67,792 51,889 43,017 21,580 (14,743) Investment tax credit adjustment - net 26,646 8,244 (1,317) (2,756) (37,552) (37,017) Fixed charges as above 177,125 179,403 150,876 145,476 144,776 147,747 ---------------------------------------------------------- Total earnings, as defined $411,401 $430,695 $420,902 $445,097 $421,903 $435,806 ========================================================== Ratio of earnings to fixed charges, as defined 2.32 2.40 2.79 3.06 2.91 2.95 ========================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.87 1.95 2.18 2.39 2.43 2.47 ========================================================== ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate.
EX-99 18
Exhibit 99(d) Mississippi Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on long-term debt $63,975 $63,628 $60,709 $52,099 $46,081 $45,034 Interest on notes payable 1,512 953 36 7 1,348 797 Other interest charges 1,494 1,444 1,636 1,795 3,581 5,037 Amortization of expense and premium on debt-net(cr) 1,737 1,617 1,685 1,458 1,754 1,633 Interest applicable to rentals 596 574 521 1,264 1,716 2,270 --------------------------------------------------------- Total fixed charges, as defined 69,314 68,216 64,587 56,623 54,480 54,771 Preferred dividends, as defined (a) 17,584 14,962 12,823 12,990 9,447 8,638 --------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $86,898 $83,178 $77,410 $69,613 $63,927 $63,409 ========================================================= Earnings as defined: Net Income $60,830 $63,088 $65,036 $101,743 $48,779 $51,229 Add: Provision for income taxes: Federal and State 4,027 (1,001) 4,463 54,418 46,884 49,264 Deferred Federal and State - net 35,721 32,491 20,430 539 (26,763) (26,792) Investment tax credit adjustment - net (1,835) (1,634) (1,746) 1,036 (7,645) (7,525) Fixed charges as above 69,314 68,216 64,587 56,623 54,480 54,771 ---------------------------------------------------------- Total earnings, as defined $168,057 $161,160 $152,770 $214,359 $115,735 $120,947 ========================================================== Ratio of earnings to fixed charges, as defined 2.42 2.36 2.37 3.79 2.12 2.21 ========================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.93 1.94 1.97 3.08 1.81 1.91 ========================================================== ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate.
EX-99 19
Exhibit 99(e) New Orleans Public Service Inc. Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on mortgage bonds $24,472 $23,865 $22,934 $19,478 $16,382 $15,461 Interest on notes payable -- -- -- -- 153 121 Other interest charges 831 793 1,714 1,016 1,027 1,432 Amortization of expense and premium on debt-net(cr) 579 565 576 598 710 694 Interest applicable to rentals 160 517 444 544 1,245 1,537 --------------------------------------------------------- Total fixed charges, as defined 26,042 25,740 25,668 21,636 19,517 19,245 Preferred dividends, as defined (a) 4,020 3,582 3,214 2,952 2,071 1,885 --------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $30,062 $29,322 $28,882 $24,588 $21,588 $21,130 ========================================================= Earnings as defined: Net Income $27,542 $74,699 $26,424 $47,709 $13,211 $12,520 Add: Provision for income taxes: Federal and State 134 8,885 16,575 27,479 22,606 12,409 Deferred Federal and State - net 17,370 36,947 (340) 5,203 (15,674) (6,020) Investment tax credit adjustment - net (75) (591) (170) (744) (2,332) (2,289) Fixed charges as above 26,042 25,740 25,668 21,636 19,517 19,245 --------------------------------------------------------- Total earnings, as defined $71,013 $145,680 $68,157 $101,283 $37,328 $35,865 ========================================================= Ratio of earnings to fixed charges, as defined 2.73 5.66 2.66 4.68 1.91 1.86 ========================================================= Ratio of earnings to combined fixed charges and preferred dividends, as defined 2.36 4.97 2.36 4.12 1.73 1.70 ========================================================= ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate. (b) Earnings for the twelve months ended December 31, 1991 include the $90 million effect of the 1991 NOPSI Settlement.
EX-99 20
Exhibit 99 (f) System Energy Resources, Inc. Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Fixed Charges Twelve Months Ended December 31, June 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on long-term debt $230,644 $218,538 $196,618 $184,818 $162,517 $153,191 Interest on notes payable 0 0 0 0 88 141 Amortization of expense and premium on debt-net 10,532 7,495 6,417 4,520 6,731 6,355 Interest applicable to rentals 13,830 10,007 6,265 6,790 7,546 5,889 Other interest charges 1,460 3,617 1,506 1,600 7,168 10,400 -------------------------------------------------------------- Total fixed charges, as defined $256,466 $239,657 $210,806 $197,728 $184,050 $175,976 ============================================================== Earnings as defined: Net Income $168,677 $104,622 $130,141 $93,927 $5,407 $5,030 Add: Provision for income taxes: Federal and State 4,620 (26,848) 35,082 48,314 67,477 82,393 Deferred Federal and State - net 52,962 37,168 23,648 60,690 (27,374) (43,399) Investment tax credit adjustment - net 56,320 63,256 30,123 (30,452) (3,265) (3,265) Fixed charges as above 256,466 239,657 210,806 197,728 184,050 175,976 -------------------------------------------------------------- Total earnings, as defined $539,045 $417,855 $429,800 $370,207 $226,295 $216,735 ============================================================== Ratio of earnings to fixed charges, as defined 2.10 1.74 2.04 1.87 1.23 1.23 ==============================================================
EX-99 21 Exhibit 99(i) MISSISSIPPI POWER & LIGHT COMPANY STATEMENT OF INCOME Twelve Months Ended June 30, 1995 (In Thousands) (Unaudited) Operating Revenues: $864,315 -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 163,488 Purchased power 240,149 Other operation and maintenance 151,893 Depreciation and amortization 37,570 Taxes other than income taxes 44,310 Income taxes 18,892 Amortization of rate deferrals 109,737 -------- Total 766,039 -------- Operating Income 98,276 -------- Other Income (Deductions): Allowance for equity funds used during construction 1,167 Miscellaneous - net (512) Income taxes 3,945 -------- Total 4,600 -------- Interest Charges: Interest on long-term debt 46,666 Other interest - net 5,834 Allowance for borrowed funds used during construction (853) -------- Total 51,647 -------- Net Income 51,229 Preferred Stock Dividend Requirements and Other 6,845 -------- Earnings Applicable to Common Stock $44,384 ======== EX-99 22 Exhibit 99 (j) SYSTEM ENERGY RESOURCES, INC. STATEMENT OF INCOME Twelve Months Ended June 30, 1995 (In Thousands) (Unaudited) Operating Revenues $486,193 -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 39,782 Nuclear refueling outage expenses 21,286 Other operation and maintenance 97,915 Depreciation, amortization, and 97,827 decommissioning Taxes other than income taxes 27,317 Income taxes 39,058 -------- Total 323,185 -------- Operating Income 163,008 -------- Other Income (Deductions): Allowance for equity funds used during construction 1,488 Miscellaneous - net 5,528 Income taxes 3,341 -------- Total 10,357 -------- Interest Charges: Interest on long-term debt 161,937 Other interest - net 8,150 Allowance for borrowed funds used during construction (1,735) -------- Total 168,352 -------- Net Income $5,013 ======== EX-99 23 Exhibit 99(m) [LETTERHEAD OF CLARK, THOMAS & WINTERS] August 7, 1995 Gulf States Utilities Company 639 Loyola Avenue New Orleans, LA 70112 Attn: Scott Forbes Re: SEC Form 10-Q of Gulf States Utilities Company (the "Company") for the quarter ending June 30, 1995 Dear Mr. Forbes: Our firm has rendered to the Company two opinion letters dated September 30, 1992 and August 8, 1994, concerning certain issues presented in the appeal of PUCT Docket No. 7195 now pending in the Texas Third District Court of Appeals. In connection with the above-referenced Form 10-Q, we confirm to you as of the date hereof that we continue to hold the opinions set forth in the letter dated August 8, 1994 and in the September 30, 1992 letter which addressed the recovery of $1.45 billion of abeyed construction costs. CLARK, THOMAS & WINTERS A Professional Corporation /s/ Clark, Thomas & Winters, A Professional Corporation _______________________________ The opinion letters dated September 30, 1992 indicate that the amount of River Bend plant costs held in abeyance was $1.45 billion. The more correct amount, as indicated by the Company in its securities filings to which those opinions related, is $1.4 billion.