-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JRrtmL0hVvsoHEBG2yY0nm1Vu2SwjUo4tJJtBHK1bwjbXAy4DoLagGyaplTh6msP 3V4s7ENoNhWLnKuyxFQijg== 0000065984-95-000061.txt : 19951107 0000065984-95-000061.hdr.sgml : 19951107 ACCESSION NUMBER: 0000065984-95-000061 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951106 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: 95587437 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: 95587438 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: 95587439 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: 95587440 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: 95587441 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: 95587442 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: 95587443 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 September 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) 368-5000 0-5807 NEW ORLEANS PUBLIC SERVICE INC. 72-0273040 (a Louisiana corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 529-5262 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 October 31, 1995 Entergy Corporation ($0.01 par value) 227,756,167 ENTERGY CORPORATION AND SUBSIDIARIES INDEX TO QUARTERLY REPORT ON FORM 10-Q September 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 (Loss) 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 42 Part II: Item 1. Legal Proceedings 64 Item 4. Submission of Matters to a Vote of Security Holders 65 Item 5. Other Information 66 Item 6. Exhibits and Reports on Form 8-K 68 Experts 70 Signature 71 This combined Quarterly Report on 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 Quarterly Report on Form 10-Q supplements and updates the Annual Report on Form 10-K for the calendar year ended December 31, 1994, and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and June 30, 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 2 Unit No. 2 of ANO AP&L Arkansas Power & Light Company APSC Arkansas Public Service Commission Cajun Cajun Electric Power Cooperative, Inc. Capital Funds Agreement Agreement, dated as of June 21, 1974, as amended, between System Energy and Entergy Corporation, and the assignments thereof 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. FASB Financial Accounting Standards Board FERC Federal Energy Regulatory Commission 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 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) 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 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 Energy System Energy Resources, Inc. System Fuels System Fuels, Inc. System operating AP&L, GSU, LP&L, MP&L and NOPSI, companies 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 Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands, Except Share Data) Operating Revenues: Electric $1,910,287 $1,776,982 $4,744,213 $4,668,907 Natural gas 15,073 17,107 75,861 93,952 Steam products 12,095 11,435 35,518 35,002 ---------- ---------- ---------- ---------- Total 1,937,455 1,805,524 4,855,592 4,797,861 ---------- ---------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 464,751 430,718 1,066,258 1,103,157 Purchased power 107,262 72,169 285,254 306,798 Nuclear refueling outage expenses 19,591 15,730 70,554 46,949 Other operation and maintenance 335,701 468,911 1,032,596 1,172,916 Depreciation, amortization, and decommissioning 176,093 166,387 515,194 488,052 Taxes other than income taxes 76,209 71,446 226,677 214,365 Income taxes 180,208 130,795 327,312 254,101 Amortization of rate deferrals 131,665 112,757 316,039 295,107 ---------- ---------- ---------- ---------- Total 1,491,480 1,468,913 3,839,884 3,881,445 ---------- ---------- ---------- ---------- Operating Income 445,975 336,611 1,015,708 916,416 ---------- ---------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 2,206 2,603 7,053 9,273 Miscellaneous - net (4,401) (2,900) 11,877 14,991 Income taxes 1,877 (2,859) 1,068 (14,239) ---------- ---------- ---------- ---------- Total (318) (3,156) 19,998 10,025 ---------- ---------- ---------- ---------- Interest Charges: Interest on long-term debt 157,760 167,754 479,433 501,273 Other interest - net 6,302 4,424 20,954 12,621 Allowance for borrowed funds used during construction (1,978) (2,228) (6,182) (7,397) Preferred and preference dividend requirements of subsidiaries and other 20,455 20,306 59,355 61,674 ---------- ---------- ---------- ---------- Total 182,539 190,256 553,560 568,171 ---------- ---------- ---------- ---------- Net Income $263,118 $143,199 $482,146 $358,270 ========== ========== ========== ========== Earnings per average common share $1.16 $0.63 $2.12 $1.56 Dividends declared per common share $0.45 $0.45 $1.35 $1.35 Average number of common shares outstanding 227,751,471 227,470,521 227,639,262 229,154,520 See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $482,146 $358,270 Noncash items included in net income: Change in rate deferrals/excess capacity-net 285,174 307,313 Depreciation, amortization, and decommissioning 515,194 488,052 Deferred income taxes and investment tax credits (2,053) 7,582 Allowance for equity funds used during construction (7,053) (9,273) Amortization of deferred revenues - (14,632) Changes in working capital: Receivables (188,087) (99,413) Fuel inventory (33,839) 23,910 Accounts payable (70,656) (40,482) Taxes accrued 219,714 112,623 Interest accrued (7,768) (14,278) Reserve for rate refund (51,685) - Other working capital accounts (127,972) 43,981 Decommissioning trust contributions (21,189) (18,215) Provision for estimated losses and reserves 13,425 (6,242) Other 64,092 (18,596) --------- --------- Net cash flow provided by operating activities 1,069,443 1,120,600 --------- --------- Investing Activities: Construction/capital expenditures (401,031) (481,178) Allowance for equity funds used during construction 7,053 9,273 Nuclear fuel purchases (207,211) (109,838) Proceeds from sale/leaseback of nuclear fuel 224,265 85,178 Investment in nonregulated/nonutility properties (25,979) 199 -------- -------- Net cash flow used in investing activities (402,903) (496,366) -------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 83,944 General and refunding mortgage bonds 109,285 - Other long-term debt 43,538 63,590 Retirement of: First mortgage bonds (45,800) (103,800) General and refunding mortgage bonds (54,200) (45,000) Other long-term debt (96,949) (45,410) Premium and expense on refinancing sale/leaseback bonds - (47,663) Repurchase of common stock - (119,486) Redemption of preferred stock (39,605) (43,860) Changes in short-term borrowings (171,219) 63,199 Common stock dividends paid (306,465) (309,469) -------- -------- Net cash flow used in financing activities (561,415) (503,955) -------- -------- Net increase in cash and cash equivalents 105,125 120,279 Cash and cash equivalents at beginning of period 613,907 563,749 -------- -------- Cash and cash equivalents at end of period $719,032 $684,028 ======== ========
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Nine Months Ended September 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 $476,637 $496,933 Income taxes $161,938 $131,607 Noncash investing and financing activities: Capital lease obligations incurred - $69,520 Change in unrealized appreciation/depreciation of decommissioning trust assets $13,221 $9,068 See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $21,603,761 $21,184,013 Plant acquisition adjustment - GSU 475,756 487,955 Electric plant under leases 672,725 668,846 Property under capital leases - electric 151,640 161,950 Natural gas 165,483 164,013 Steam products 77,414 77,307 Construction work in progress 415,242 476,816 Nuclear fuel under capital leases 311,072 265,520 Nuclear fuel 60,633 70,147 ---------- ---------- Total 23,933,726 23,556,567 Less - accumulated depreciation and 8,131,661 7,639,549 amortization ---------- ---------- Utility plant - net 15,802,065 15,917,018 ---------- ---------- Other Property and Investments: Decommissioning trust funds 256,180 207,395 Other 273,883 240,745 ---------- ---------- Total 530,063 448,140 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 97,486 87,700 Temporary cash investments - at cost, which approximates market 621,546 526,207 ---------- ---------- Total cash and cash equivalents 719,032 613,907 Special deposits 5,772 8,074 Notes receivable 15,194 14,446 Accounts receivable: Customer (less allowance for doubtful accounts of $6.7 million in 1995 and 1994) 414,177 336,887 Other 83,314 66,651 Accrued unbilled revenues 334,744 240,610 Deferred fuel 6,495 - Fuel inventory 127,050 93,211 Materials and supplies - at average cost 372,605 365,956 Rate deferrals 412,952 380,612 Prepayments and other 122,494 98,811 ---------- ---------- Total 2,613,829 2,219,165 ---------- ---------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 1,142,811 1,451,926 SFAS 109 regulatory asset - net 1,429,652 1,417,646 Unamortized loss on reacquired debt 223,717 232,420 Other regulatory assets 292,248 316,878 Long-term receivables 224,789 271,097 Other 337,442 339,201 ---------- ---------- Total 3,650,659 4,029,168 ---------- ---------- TOTAL $22,596,616 $22,613,491 ========== ========== See Notes to Financial Statements. ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 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 4,201,435 4,202,134 Retained earnings 2,396,953 2,223,739 Less - treasury stock (2,261,318 shares in 1995 and 2,608,908 in 1994) 67,122 77,378 ---------- ---------- Total common shareholders' equity 6,533,566 6,350,795 Subsidiary's preference stock 150,000 150,000 Subsidiaries' preferred stock: Without sinking fund 550,955 550,955 With sinking fund 260,342 299,946 Long-term debt 6,749,860 7,093,473 ---------- ---------- Total 14,244,723 14,445,169 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 308,068 273,947 Other 321,247 310,977 ---------- ---------- Total 629,315 584,924 ---------- ---------- Current Liabilities: Currently maturing long-term debt 667,375 349,085 Notes payable 648 171,867 Accounts payable 400,464 471,120 Customer deposits 138,851 134,478 Taxes accrued 312,292 92,578 Accumulated deferred income taxes 60,844 40,313 Interest accrued 187,871 195,639 Dividends declared 12,942 13,599 Deferred fuel cost - 27,066 Obligations under capital leases 152,968 151,904 Reserve for rate refund 5,287 56,972 Other 257,324 327,330 ---------- ---------- Total 2,196,866 2,031,951 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 3,892,970 3,915,138 Accumulated deferred investment tax credits 658,038 649,898 Other 974,704 986,411 ---------- ---------- Total 5,525,712 5,551,447 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $22,596,616 $22,613,491 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $530,448 $470,770 $1,282,208 $1,256,762 -------- -------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 77,987 74,050 182,793 205,283 Purchased power 100,803 80,326 266,726 264,935 Nuclear refueling outage expenses 7,923 8,059 22,793 25,532 Other operation and maintenance 92,079 118,413 271,523 288,311 Depreciation, amortization, and decommissioning 42,603 38,671 121,557 110,929 Taxes other than income taxes 8,546 7,961 28,641 25,584 Income taxes 38,188 30,569 59,532 45,487 Amortization of rate deferrals 68,243 56,558 136,170 130,283 -------- -------- ---------- ---------- Total 436,372 414,607 1,089,735 1,096,344 -------- -------- ---------- ---------- Operating Income 94,076 56,163 192,473 160,418 -------- -------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 770 894 2,376 2,944 Miscellaneous - net 10,036 10,785 36,388 35,346 Income taxes (3,941) (4,250) (14,279) (13,934) -------- -------- ---------- ---------- Total 6,865 7,429 24,485 24,356 -------- -------- ---------- ---------- Interest Charges: Interest on long-term debt 26,566 26,587 80,110 79,282 Other interest - net 906 1,287 4,646 3,290 Allowance for borrowed funds used during construction (494) (912) (1,667) (2,579) -------- -------- ---------- ---------- Total 26,978 26,962 83,089 79,993 -------- -------- ---------- ---------- Net Income 73,963 36,630 133,869 104,781 Preferred Stock Dividend Requirements and Other 4,511 4,781 13,617 14,530 -------- -------- ---------- ---------- Earnings Applicable to Common Stock $69,452 $31,849 $120,252 $90,251 ======== ======== ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $133,869 $104,781 Noncash items included in net income: Change in rate deferrals/excess capacity-net 93,740 77,607 Depreciation, amortization, and decommissioning 121,557 110,929 Deferred income taxes and investment tax credits (37,132) (42,973) Allowance for equity funds used during construction (2,376) (2,944) Changes in working capital: Receivables (82,496) (38,663) Fuel inventory (32,524) 26,905 Accounts payable 34,625 (2,690) Taxes accrued 51,147 43,226 Interest accrued 253 460 Other working capital accounts 3,453 586 Decommissioning trust contributions (10,563) (8,525) Provision for estimated losses and reserves 4,423 5,206 Other 4,132 (17,073) -------- -------- Net cash flow provided by operating activities 282,108 256,832 -------- -------- Investing Activities: Construction expenditures (117,203) (122,279) Allowance for equity funds used during construction 2,376 2,944 Nuclear fuel purchases (41,843) (33,477) Proceeds from sale/leaseback of nuclear fuel 41,832 33,477 -------- -------- Net cash flow used in investing activities (114,838) (119,335) -------- -------- Financing Activities: Proceeds from issuance of other long-term debt - 27,992 Retirement of: First mortgage bonds (25,800) (800) Other long-term debt - (28,761) Redemption of preferred stock (7,000) (9,000) Changes in short-term borrowings (34,000) 12,605 Dividends paid: Common stock (83,600) (75,000) Preferred stock (13,833) (14,798) -------- -------- Net cash flow used in financing activities (164,233) (87,762) -------- -------- Net increase in cash and cash equivalents 3,037 49,735 Cash and cash equivalents at beginning of period 80,756 1,825 -------- -------- Cash and cash equivalents at end of period $83,793 $51,560 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $74,689 $73,515 Income taxes $55,710 $54,117 Noncash investing and financing activities: Capital lease obligations incurred - $41,122 Change in unrealized appreciation/depreciation of decommissioning trust assets $6,811 $8,872 See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $4,421,730 $4,293,097 Property under capital leases 52,802 56,135 Construction work in progress 106,354 136,701 Nuclear fuel under capital lease 107,117 94,628 --------- --------- Total 4,688,003 4,580,561 Less - accumulated depreciation and 1,823,395 1,710,216 amortization --------- --------- Utility plant - net 2,864,608 2,870,345 --------- --------- Other Property and Investments: Investment in subsidiary companies - at 11,215 11,215 equity Decommissioning trust fund 157,741 127,136 Other - at cost (less accumulated 7,578 4,628 depreciation) --------- --------- Total 176,534 142,979 --------- --------- Current Assets: Cash and cash equivalents: Cash 10,724 3,737 Temporary cash investments - at cost, which approximates market: Associated companies 11,051 4,713 Other 62,018 72,306 --------- --------- Total cash and cash equivalents 83,793 80,756 Accounts receivable: Customer (less allowance for doubtful accounts of $2.0 million in 1995 and 1994) 106,652 53,781 Associated companies 36,785 28,506 Other 7,605 11,181 Accrued unbilled revenues 108,785 83,863 Fuel inventory - at average cost 67,085 34,561 Materials and supplies - at average cost 76,527 79,886 Rate deferrals 127,133 113,630 Deferred excess capacity 9,978 8,414 Prepayments and other 15,949 23,867 --------- --------- Total 640,292 518,445 --------- --------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 261,652 360,496 Deferred excess capacity 10,097 20,060 SFAS 109 regulatory asset - net 222,501 227,068 Unamortized loss on reacquired debt 54,846 57,344 Other regulatory assets 45,106 68,813 Other 33,963 26,665 --------- --------- Total 628,165 760,446 --------- --------- TOTAL $4,309,599 $4,292,215 ========= ========= See Notes to Financial Statements. ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS September 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 528,450 491,799 --------- --------- Total common shareholder's equity 1,119,764 1,083,113 Preferred stock: Without sinking fund 176,350 176,350 With sinking fund 51,527 58,527 Long-term debt 1,281,030 1,293,879 --------- --------- Total 2,628,671 2,611,869 --------- --------- Other Noncurrent Liabilities: Obligations under capital leases 102,937 94,534 Other 72,658 68,235 --------- --------- Total 175,595 162,769 --------- --------- Current Liabilities: Currently maturing long-term debt 27,425 28,175 Notes payable 667 34,667 Accounts payable: Associated companies 43,993 17,345 Other 97,306 89,329 Customer deposits 18,237 17,113 Taxes accrued 96,386 45,239 Accumulated deferred income taxes 34,249 25,043 Interest accrued 31,317 31,064 Dividends declared 4,512 4,727 Co-owner advances 37,944 20,639 Deferred fuel cost 14,732 20,254 Nuclear refueling reserve 34,416 37,954 Obligations under capital leases 56,971 56,154 Other 28,439 45,632 --------- --------- Total 526,594 473,335 --------- --------- Deferred Credits: Accumulated deferred income taxes 812,727 859,558 Accumulated deferred investment tax credits 114,253 118,548 Other 51,759 66,136 --------- --------- Total 978,739 1,044,242 --------- --------- Commitments and Contingencies (Note 1) TOTAL $4,309,599 $4,292,215 ========= ========= See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF INCOME (LOSS) For the Three and Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues: Electric $524,982 $530,209 $1,366,070 $1,371,328 Natural gas 3,210 3,887 17,654 25,714 Steam products 12,095 11,435 35,518 35,002 -------- -------- ---------- ---------- Total 540,287 545,531 1,419,242 1,432,044 -------- -------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 149,535 154,881 391,364 393,240 Purchased power 47,901 44,330 132,625 159,389 Nuclear refueling outage expenses 2,580 2,707 8,354 7,747 Other operation and maintenance 91,939 171,054 295,566 376,616 Depreciation, amortization, and decommissioning 50,606 48,786 151,337 145,862 Taxes other than income taxes 26,951 24,623 77,082 58,633 Income taxes 40,737 17,458 63,715 34,210 Amortization of rate deferrals 16,507 16,839 49,519 49,576 -------- -------- ---------- ---------- Total 426,756 480,678 1,169,562 1,225,273 -------- -------- ---------- ---------- Operating Income 113,531 64,853 249,680 206,771 -------- -------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 253 417 770 1,056 Miscellaneous - net 6,213 (78,886) 17,823 (70,653) Income taxes (2,110) 31,590 (5,139) 27,407 -------- -------- ---------- ---------- Total 4,356 (46,879) 13,454 (42,190) -------- -------- ---------- ---------- Interest Charges: Interest on long-term debt 47,426 48,804 144,053 146,554 Other interest - net 2,588 1,172 4,681 6,409 Allowance for borrowed funds used during construction (239) (340) (700) (847) -------- -------- ---------- ---------- Total 49,775 49,636 148,034 152,116 -------- -------- ---------- ---------- Net Income (Loss) 68,112 (31,662) 115,100 12,465 Preferred and Preference Stock Dividend Requirements and Other 7,341 7,506 22,357 22,442 -------- -------- ---------- ---------- Earnings (Loss) Applicable to Common Stock $60,771 ($39,168) $92,743 ($9,977) ======== ======== ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $115,100 $12,465 Noncash items included in net income: Change in rate deferrals 49,519 80,138 Depreciation, amortization, and decommissioning 151,337 145,862 Deferred income taxes and investment tax credits 69,060 16,257 Allowance for equity funds used during construction (770) (1,056) Changes in working capital: Receivables 41,808 (50,881) Fuel inventory (3,598) (3,750) Accounts payable (21,476) 22,872 Taxes accrued 35,701 14,579 Interest accrued 4,254 3,792 Reserve for rate refund (51,268) - Other working capital accounts (53,032) 15,330 Decommissioning trust contributions (2,959) (2,217) Other 10,591 24,946 -------- -------- Net cash flow provided by operating activities 344,267 278,337 -------- -------- Investing Activities: Construction expenditures (112,237) (101,952) Allowance for equity funds used during construction 770 1,056 Nuclear fuel purchases - (25,205) Proceeds from sale/leaseback of nuclear fuel - 25,205 -------- -------- Net cash flow used in investing activities (111,467) (100,896) -------- -------- Financing Activities: Proceeds from the issuance of other long-term debt 2,277 - Retirement of other long-term debt (50,425) (425) Redemption of preferred stock (4,850) (4,850) Dividends paid: Common stock - (289,100) Preferred and preference stock (22,208) (22,343) -------- -------- Net cash flow used in financing activities (75,206) (316,718) -------- -------- Net increase (decrease) in cash and cash equivalents 157,594 (139,277) Cash and cash equivalents at beginning of period 104,644 261,349 -------- -------- Cash and cash equivalents at end of period $262,238 $122,072 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $136,526 $136,957 Income taxes $288 $137 Noncash investing and financing activities: Capital lease obligations incurred - $18,721 Change in unrealized appreciation/depreciation of decommissioning trust assets $1,738 ($200) See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $6,928,954 $6,842,726 Natural gas 44,505 44,505 Steam products 77,414 77,307 Property under capital leases 79,323 82,914 Construction work in progress 118,319 96,176 Nuclear fuel under capital leases 53,102 80,042 --------- --------- Total 7,301,617 7,223,670 Less - accumulated depreciation and 2,645,827 2,504,826 amortization --------- --------- Utility plant - net 4,655,790 4,718,844 --------- --------- Other Property and Investments: Decommissioning trust fund 26,993 21,309 Other - at cost (less accumulated 28,567 29,315 depreciation) --------- --------- Total 55,560 50,624 --------- --------- Current Assets: Cash and cash equivalents: Cash 13,893 8,063 Temporary cash investments - at cost, which approximates market: Associated companies 35,496 5,085 Other 212,849 91,496 --------- --------- Total cash and cash equivalents 262,238 104,644 Accounts receivable: Customer (less allowance for doubtful accounts of $0.7 million in 1995 and 1994) 97,846 167,745 Associated companies 6,908 12,732 Other 11,864 20,706 Accrued unbilled revenues 82,227 39,470 Deferred fuel costs 20,932 6,314 Accumulated deferred income taxes 26,448 49,457 Fuel inventory 29,382 25,784 Materials and supplies - at average cost 101,820 90,054 Rate deferrals 95,469 100,478 Prepayments and other 22,676 13,754 --------- --------- Total 757,810 631,138 --------- --------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 444,195 506,974 SFAS 109 regulatory asset - net 444,420 426,358 Unamortized loss on reacquired debt 62,973 63,994 Other regulatory assets 29,683 35,168 Long-term receivables 254,432 264,752 Other 153,360 145,609 --------- --------- Total 1,389,063 1,442,855 --------- --------- TOTAL $6,858,223 $6,843,461 ========= ========= See Notes to Financial Statements. GULF STATES UTILITIES COMPANY BALANCE SHEETS September 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 1,152,469 1,152,336 Retained earnings 357,171 264,626 --------- --------- Total common shareholder's equity 1,623,695 1,531,017 Preference stock 150,000 150,000 Preferred stock: Without sinking fund 136,444 136,444 With sinking fund 90,087 94,934 Long-term debt 2,250,420 2,318,417 --------- --------- Total 4,250,646 4,230,812 --------- --------- Other Noncurrent Liabilities: Obligations under capital leases 95,051 125,691 Other 76,170 68,753 --------- --------- Total 171,221 194,444 --------- --------- Current Liabilities: Currently maturing long-term debt 70,425 50,425 Accounts payable: Associated companies 39,388 31,722 Other 111,833 140,975 Customer deposits 21,793 22,216 Taxes accrued 48,179 12,478 Interest accrued 59,581 55,327 Nuclear refueling reserve 21,522 10,117 Obligations under capital leases 37,366 37,265 Reserve for rate refund 5,704 56,972 Other 83,255 111,963 --------- --------- Total 499,046 529,460 --------- --------- Deferred Credits: Accumulated deferred income taxes 1,144,821 1,100,396 Accumulated deferred investment tax credits 220,583 199,428 Deferred River Bend finance charges 64,137 82,406 Other 507,769 506,515 --------- --------- Total 1,937,310 1,888,745 --------- --------- Commitments and Contingencies (Notes 1 and 2) TOTAL $6,858,223 $6,843,461 ========= ========= See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $528,975 $502,458 $1,288,081 $1,327,927 -------- -------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 116,015 113,688 227,616 257,314 Purchased power 92,944 83,942 261,417 289,279 Nuclear refueling outage expenses 4,517 4,195 13,550 13,671 Other operation and maintenance 70,865 100,800 216,203 260,575 Depreciation, amortization, and decommissioning 42,212 38,499 119,629 113,342 Taxes other than income taxes 13,133 14,377 43,181 42,733 Income taxes 56,003 39,015 104,366 80,171 Amortization of rate deferrals 8,118 8,118 21,664 21,664 -------- -------- ---------- ---------- Total 403,807 402,634 1,007,626 1,078,749 -------- -------- ---------- ---------- Operating Income 125,168 99,824 280,455 249,178 -------- -------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 424 766 1,527 2,855 Miscellaneous - net 1,137 (154) 1,718 287 Income taxes (319) 150 (307) 190 -------- -------- ---------- ---------- Total 1,242 762 2,938 3,332 -------- -------- ---------- ---------- Interest Charges: Interest on long-term debt 32,737 32,543 97,821 97,393 Other interest - net 1,355 1,560 5,100 4,635 Allowance for borrowed funds used during construction (501) (546) (1,491) (1,996) -------- -------- ---------- ---------- Total 33,591 33,557 101,430 100,032 -------- -------- ---------- ---------- Net Income 92,819 67,029 181,963 152,478 Preferred Stock Dividend Requirements and Other 5,367 5,848 16,177 17,668 -------- -------- ---------- ---------- Earnings Applicable to Common Stock $87,452 $61,181 $165,786 $134,810 ======== ======== ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $181,963 $152,478 Noncash items included in net income: Change in rate deferrals 21,664 21,664 Depreciation, amortization, and decommissioning 119,629 113,342 Deferred income taxes and investment tax credits (22,022) 31,788 Allowance for equity funds used during construction (1,527) (2,855) Amortization of deferred revenues - (14,632) Changes in working capital: Receivables (51,126) (25,193) Accounts payable (741) (24,406) Taxes accrued 84,144 39,867 Interest accrued (5,232) (4,776) Other working capital accounts (4,885) 17,969 Decommissioning trust contributions (3,611) (3,796) Other (10,049) 3,051 -------- -------- Net cash flow provided by operating activities 308,207 304,501 -------- -------- Investing Activities: Construction expenditures (77,319) (107,708) Allowance for equity funds used during construction 1,527 2,855 Nuclear fuel purchases (45,493) - Proceeds from sale/seaseback of nuclear fuel 45,493 - -------- -------- Net cash flow used in investing activities (75,792) (104,853) -------- -------- Financing Activities: Proceeds from the issuance of other long-term debt - 19,946 Retirement of: First mortgage bonds - (25,000) Other long-term debt (239) (240) Redemption of preferred stock (11,254) (13,510) Changes in short-term borrowings (27,154) (32,841) Dividends paid: Common stock (134,000) (90,400) Preferred stock (15,896) (17,285) -------- -------- Net cash flow used in financing activities (188,543) (159,330) -------- -------- Net increase in cash and cash equivalents 43,872 40,318 Cash and cash equivalents at beginning of period 28,718 33,489 -------- -------- Cash and cash equivalents at end of period $72,590 $73,807 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $102,574 $100,081 Income taxes $63,296 $32,400 Noncash investing and financing activities: Capital lease obligations incurred - $9,677 Change in unrealized appreciation/depreciation of decommissioning trust assets $2,043 $184 See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $4,864,083 $4,778,126 Electric plant under lease 229,468 229,468 Construction work in progress 74,130 94,791 Nuclear fuel under capital lease 69,267 44,238 Nuclear fuel 14,049 6,420 --------- --------- Total 5,250,997 5,153,043 Less - accumulated depreciation and 1,706,469 1,600,510 amortization --------- --------- Utility plant - net 3,544,528 3,552,533 --------- --------- Other Property and Investments: Nonutility property 20,060 20,060 Decommissioning trust fund 33,953 27,076 Investment in subsidiary company - at equity 14,230 14,230 Other 1,087 1,078 --------- --------- Total 69,330 62,444 --------- --------- Current Assets: Cash and cash equivalents: Cash 3,720 - Temporary cash investments - at cost, which approximates market: Associated companies 5,880 - Other 62,990 28,718 --------- --------- Total cash and cash equivalents 72,590 28,718 Accounts receivable: Customer (less allowance for doubtful accounts of $1.2 million in 1995 and 1994) 103,913 58,858 Associated companies 8,278 9,827 Other 9,206 11,609 Accrued unbilled revenues 73,132 63,109 Accumulated deferred income taxes 6,079 3,702 Materials and supplies - at average cost 90,342 89,692 Rate deferrals 28,422 28,422 Prepayments and other 14,931 28,528 --------- --------- Total 406,893 322,465 --------- --------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 3,945 25,609 SFAS 109 regulatory asset - net 373,257 379,263 Unamortized loss on reacquired debt 40,508 43,656 Other regulatory assets 23,981 25,736 Other 25,989 23,733 --------- --------- Total 467,680 497,997 --------- --------- TOTAL $4,488,431 $4,435,439 ========= ========= See Notes to Financial Statements. LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS September 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 (4,835) (5,367) Retained earnings 145,206 113,420 --------- --------- Total common shareholder's equity 1,229,271 1,196,953 Preferred stock: Without sinking fund 160,500 160,500 With sinking fund 100,009 111,265 Long-term debt 1,368,386 1,403,055 --------- --------- Total 2,858,166 2,871,773 --------- --------- Other Noncurrent Liabilities: Obligations under capital leases 41,267 16,238 Other 53,679 54,216 --------- --------- Total 94,946 70,454 --------- --------- Current Liabilities: Currently maturing long-term debt 110,260 75,320 Notes payable: Associated companies - 7,954 Other - 19,200 Accounts payable: Associated companies 45,239 20,793 Other 57,016 82,203 Customer deposits 56,363 54,934 Taxes accrued 82,284 (1,860) Interest accrued 37,755 42,987 Dividends declared 5,239 5,489 Deferred fuel cost 1,161 13,983 Obligations under capital leases 28,000 28,000 Other 13,718 20,156 --------- --------- Total 437,035 369,159 --------- --------- Deferred Credits: Accumulated deferred income taxes 862,417 883,945 Accumulated deferred investment tax credits 146,977 151,259 Deferred interest - Waterford 3 lease 25,146 26,000 obligation Other 63,744 62,849 --------- --------- Total 1,098,284 1,124,053 --------- --------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,488,431 $4,435,439 ========= ========= See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $258,848 $234,274 $692,482 $651,481 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 62,557 53,097 130,431 117,710 Purchased power 55,696 59,155 183,706 182,035 Other operation and maintenance 31,815 41,327 103,970 118,543 Depreciation and amortization 9,614 9,513 28,349 27,270 Taxes other than income taxes 13,139 11,275 34,222 32,011 Income taxes 15,928 11,427 30,022 23,280 Amortization of rate deferrals 28,310 24,805 84,931 74,414 -------- -------- -------- -------- Total 217,059 210,599 595,631 575,263 -------- -------- -------- -------- Operating Income 41,789 23,675 96,851 76,218 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 235 365 763 1,386 Miscellaneous - net 413 (337) 1,270 (85) Income taxes (158) 129 (486) 32 -------- -------- -------- -------- Total 490 157 1,547 1,333 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 12,451 11,882 35,399 35,999 Other interest - net 806 1,330 4,064 3,683 Allowance for borrowed funds used during construction (206) (236) (645) (889) -------- -------- -------- -------- Total 13,051 12,976 38,818 38,793 -------- -------- -------- -------- Net Income 29,228 10,856 59,580 38,758 Preferred Stock Dividend Requirements and Other 2,917 1,797 6,168 5,827 -------- -------- -------- -------- Earnings Applicable to Common Stock $26,311 $9,059 $53,412 $32,931 ======== ======== ======== ======== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $59,580 $38,758 Noncash items included in net income: Change in rate deferrals 78,772 92,135 Depreciation and amortization 28,349 27,270 Deferred income taxes and investment tax credits (24,436) (22,092) Allowance for equity funds used during construction (763) (1,386) Changes in working capital: Receivables (29,362) (12,592) Fuel inventory (3,327) 5,058 Accounts payable 24,505 17,513 Taxes accrued 24,979 9,361 Interest accrued (3,689) (11,213) Other working capital accounts (16,475) 428 Other 1,273 11,129 -------- -------- Net cash flow provided by operating activities 139,406 154,369 -------- -------- Investing Activities: Construction expenditures (55,616) (100,369) Allowance for equity funds used during construction 763 1,386 -------- -------- Net cash flow used in investing activities (54,853) (98,983) -------- -------- Financing Activities: Proceeds from the issuance of: General and refunding bonds 79,480 24,534 Other long-term debt - 15,652 Retirement of: General and refunding bonds (30,000) (30,000) First mortgage bonds (20,000) (18,000) Other long-term debt (965) (16,045) Redemption of preferred stock (15,000) (15,000) Changes in short-term borrowings (30,000) 18,432 Dividends paid: Common stock (35,400) (28,000) Preferred stock (4,782) (5,851) -------- -------- Net cash flow used in financing activities (56,667) (54,278) -------- -------- Net increase in cash and cash equivalents 27,886 1,108 Cash and cash equivalents at beginning of period 9,598 7,999 -------- -------- Cash and cash equivalents at end of period $37,484 $9,107 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $41,304 $48,664 Income taxes $27,413 $19,007 See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $1,543,888 $1,475,322 Construction work in progress 51,336 67,119 --------- --------- Total 1,595,224 1,542,441 Less - accumulated depreciation and 607,407 582,514 amortization --------- --------- Utility plant - net 987,817 959,927 --------- --------- Other Property and Investments: Investment in subsidiary company - at equity 5,531 5,531 Other 5,617 5,624 --------- --------- Total 11,148 11,155 --------- --------- Current Assets: Cash and cash equivalents: Cash 5,770 5,080 Temporary cash investments - at cost, which approximates market Associated companies 4,797 276 Other 26,917 4,242 Total cash and cash equivalents 37,484 9,598 Accounts receivable: Customer (less allowance for doubtful accounts of $2.1 million in 1995 and 1994) 61,911 43,846 Associated companies 4,566 4,680 Other 1,968 2,789 Accrued unbilled revenues 52,105 39,873 Fuel inventory - at average cost 8,107 4,780 Materials and supplies - at average cost 21,237 20,642 Rate deferrals 126,378 106,538 Prepayments and other 7,484 10,672 --------- --------- Total 321,240 243,418 --------- --------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 287,108 385,720 Unamortized loss on reacquired debt 9,557 10,488 Other regulatory assets 9,385 10,168 Other 8,000 8,569 --------- --------- Total 314,050 414,945 --------- --------- TOTAL $1,634,255 $1,629,445 ========= ========= See Notes to Financial Statements. MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS September 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 (218) (1,762) Retained earnings 250,023 232,011 --------- --------- Total common shareholder's equity 449,131 429,575 Preferred stock: Without sinking fund 57,881 57,881 With sinking fund 16,770 31,770 Long-term debt 504,358 475,233 --------- --------- Total 1,028,140 994,459 --------- --------- Other Noncurrent Liabilities: Obligations under capital leases 456 552 Other 8,345 8,984 --------- --------- Total 8,801 9,536 --------- --------- Current Liabilities: Currently maturing long-term debt 66,015 65,965 Notes payable - 30,000 Accounts payable: Associated companies 27,340 2,350 Other 29,720 30,205 Customer deposits 24,062 22,793 Taxes accrued 45,800 20,821 Accumulated deferred income taxes 52,426 47,515 Interest accrued 16,688 20,377 Dividends declared 1,468 1,626 Other 8,357 28,692 --------- --------- Total 271,876 270,344 --------- --------- Deferred Credits: Accumulated deferred income taxes 276,791 301,288 Accumulated deferred investment tax credits 28,366 29,528 SFAS 109 regulatory liability - net 9,410 13,099 Other 10,871 11,191 --------- --------- Total 325,438 355,106 --------- --------- Commitments and Contingencies (Notes 1 and 2) TOTAL $1,634,255 $1,629,445 ========= ========= See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues: Electric $134,855 $120,354 $310,065 $306,826 Natural gas 11,865 13,220 58,207 68,238 -------- -------- -------- -------- Total 146,720 133,574 368,272 375,064 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 29,649 23,814 75,088 83,773 Purchased power 40,850 42,999 114,777 115,940 Other operation and maintenance 22,409 23,444 56,324 63,404 Depreciation and amortization 4,898 4,903 14,512 14,356 Taxes other than income taxes 7,425 7,206 21,259 21,137 Income taxes 9,915 8,829 18,110 17,003 Amortization of rate deferrals 10,489 6,438 23,754 19,171 -------- -------- -------- -------- Total 125,635 117,633 323,824 334,784 -------- -------- -------- -------- Operating Income 21,085 15,941 44,448 40,280 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 43 60 104 297 Miscellaneous - net 504 499 993 1,483 Income taxes (194) (192) (382) (901) -------- -------- -------- -------- Total 353 367 715 879 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 4,023 4,148 11,896 12,957 Other interest - net 588 272 1,555 865 Allowance for borrowed funds used during construction (35) (45) (83) (221) -------- -------- -------- -------- Total 4,576 4,375 13,368 13,601 -------- -------- -------- -------- Net Income 16,862 11,933 31,795 27,558 Preferred Stock Dividend Requirements and Other 318 329 1,035 1,162 -------- -------- -------- -------- Earnings Applicable to Common Stock $16,544 $11,604 $30,760 $26,396 ======== ======== ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $31,795 $27,558 Noncash items included in net income: Change in rate deferrals 23,211 17,499 Depreciation and amortization 14,512 14,356 Deferred income taxes and investment tax credits (5,853) (15,705) Allowance for equity funds used during construction (104) (297) Changes in working capital: Receivables (20,681) 1,957 Accounts payable 14,100 (3,718) Taxes accrued 11,525 1,677 Interest accrued (279) (960) Income tax refund 20,172 - Other working capital accounts (4,328) 13,534 Other (13,380) 5,050 -------- -------- Net cash flow provided by operating activities 70,690 60,951 -------- -------- Investing Activities: Construction expenditures (14,637) (16,269) Allowance for equity funds used during construction 104 297 -------- -------- Net cash flow used in investing activities (14,533) (15,972) -------- -------- 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 (14,100) (14,400) Preferred stock (1,046) (1,220) -------- -------- Net cash flow used in financing activities (11,041) (32,120) -------- -------- Net increase in cash and cash equivalents 45,116 12,859 Cash and cash equivalents at beginning of period 8,031 43,317 -------- -------- Cash and cash equivalents at end of period $53,147 $56,176 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $13,173 $14,213 Income taxes (refund) - net ($6,469) $32,115 See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $479,206 $470,560 Natural gas 120,977 119,508 Construction work in progress 11,728 7,284 -------- -------- Total 611,911 597,352 Less - accumulated depreciation and 331,185 319,576 amortization -------- -------- Utility plant - net 280,726 277,776 -------- -------- Other Investments: Investment in subsidiary company - at equity 3,259 3,259 -------- -------- Current Assets: Cash and cash equivalents: Cash 2,161 849 Temporary cash investments - at cost, which approximates market: Associated companies 7,711 2,472 Other 43,275 4,710 -------- -------- Total cash and cash equivalents 53,147 8,031 Accounts receivable: Customer (less allowance for doubtful accounts of $0.8 million in 1995 and 1994) 43,856 23,938 Associated companies 150 3,503 Other 516 600 Accrued unbilled revenues 18,495 14,295 Deferred electric fuel and resale gas costs 1,455 856 Materials and supplies - at average cost 9,400 9,676 Rate deferrals 35,549 31,544 Income tax receivable - 20,172 Prepayments and other 7,792 5,636 ------- ------- Total 170,360 118,251 ------- ------- Deferred Debits and Other Assets: Regulatory assets: Rate deferrals 145,911 173,127 SFAS 109 regulatory asset - net 9,463 8,792 Unamortized loss on reacquired debt 2,039 2,361 Other regulatory assets 5,647 5,647 Other 3,890 3,681 ------- ------- Total 166,950 193,608 ------- ------- TOTAL $621,295 $592,894 ======= ======= See Notes to Financial Statements. NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS September 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 95,545 78,886 ------- ------- Total common shareholder's equity 165,536 148,831 Preferred stock: Without sinking fund 19,780 19,780 With sinking fund 1,950 3,450 Long-term debt 155,946 164,160 ------- ------- Total 343,212 336,221 ------- ------- Other Noncurrent Liabilities 17,336 19,063 ------- ------- Current Liabilities: Currently maturing long-term debt 38,250 24,200 Accounts payable: Associated companies 18,915 6,456 Other 21,143 19,503 Customer deposits 18,396 17,422 Accumulated deferred income taxes 4,980 4,925 Taxes accrued 13,854 2,329 Interest accrued 4,963 5,242 Other 17,159 19,982 ------- ------- Total 137,660 100,059 ------- ------- Deferred Credits: Accumulated deferred income taxes 84,485 89,246 Accumulated deferred investment tax credits 8,775 9,251 Other 29,827 39,054 ------- ------- Total 123,087 137,551 ------- ------- Commitments and Contingencies (Note 1) TOTAL $621,295 $592,894 ======= ======= See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1995 and 1994 (Unaudited) Three Months Ended Nine Months Ended 1995 1994 1995 1994 (In Thousands) Operating Revenues $144,758 $150,949 $455,054 $450,015 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 11,194 11,440 27,090 35,661 Nuclear refueling outage expenses 4,571 - 25,857 - Other operation and maintenance 21,154 26,829 70,056 74,320 Depreciation, amortization, and decommissioning 24,530 23,026 74,463 68,993 Taxes other than income taxes 6,590 5,637 20,788 19,155 Income taxes 19,056 18,148 57,775 55,896 -------- -------- -------- -------- Total 87,095 85,080 276,029 254,025 -------- -------- -------- -------- Operating Income 57,663 65,869 179,025 195,990 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 479 101 1,511 735 Miscellaneous - net 783 2,025 2,525 4,641 Income taxes 448 569 1,500 (470) -------- -------- -------- -------- Total 1,710 2,695 5,536 4,906 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 34,557 43,790 110,153 129,088 Other interest - net 1,952 18 6,269 1,051 Allowance for borrowed funds used during construction (502) (178) (1,594) (938) -------- -------- -------- -------- Total 36,007 43,630 114,828 129,201 -------- -------- -------- -------- Net Income $23,366 $24,934 $69,733 $71,695 ======== ======== ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 and 1994 (Unaudited) 1995 1994 (In Thousands) Operating Activities: Net income $69,733 $71,695 Noncash items included in net income: Depreciation, amortization, and decommissioning 74,463 68,993 Deferred income taxes and investment tax credits (11,378) 16,535 Allowance for equity funds used during construction (1,511) (735) Changes in working capital: Receivables (56,341) (3,994) Accounts payable (25,063) 8,469 Taxes accrued 672 4,770 Interest accrued (4,281) (1,457) Other working capital accounts (23,343) (1,474) Recoverable income taxes - 32,940 Decommissioning trust contributions (4,055) (3,764) Other 32,303 14,893 -------- -------- Net cash flow provided by operating activities 51,199 206,871 -------- -------- Investing Activities: Construction expenditures (19,524) (12,254) Allowance for equity funds used during construction 1,511 735 Nuclear fuel purchases (52,188) (54) Proceeds from sale/leaseback of nuclear fuel 52,188 - -------- -------- Net cash flow used in investing activities (18,013) (11,573) -------- -------- 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 (69,500) (124,300) -------- -------- Net cash flow used in financing activities (71,282) (172,492) -------- -------- Net (decrease)increase in cash and cash equivalents (38,096) 22,806 Cash and cash equivalents at beginning of period 89,703 196,132 -------- -------- Cash and cash equivalents at end of period $51,607 $218,938 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $114,514 $125,519 Income taxes (refund) - net $65,637 ($3,477) Noncash investing and financing activities: Change in unrealized appreciation/depreciation of decommissioning trust assets $2,629 $212 See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS September 30, 1995 and December 31, 1994 (Unaudited) 1995 1994 (In Thousands) ASSETS Utility Plant: Electric $2,969,233 $2,939,384 Electric plant under lease 443,257 439,378 Construction work in progress 32,311 46,547 Nuclear fuel under capital lease 81,586 46,688 Nuclear fuel - 26,360 --------- --------- Total 3,526,387 3,498,357 Less - accumulated depreciation and 828,374 751,717 amortization --------- --------- Utility plant - net 2,698,013 2,746,640 --------- --------- Other Investments: Decommissioning trust fund 38,606 30,359 Current Assets: Cash and cash equivalents: Cash 212 - Temporary cash investments - at cost, which approximates market: Associated companies 7,773 5,489 Other 43,622 84,214 --------- --------- Total cash and cash equivalents 51,607 89,703 Accounts receivable: Associated companies 63,984 7,450 Other 3,219 3,412 Materials and supplies - at average cost 69,178 71,991 Prepayments and other 13,878 5,429 --------- --------- Total 201,866 177,985 --------- --------- Deferred Debits and Other Assets: Regulatory assets: SFAS 109 regulatory asset - net 389,422 389,264 Unamortized loss on reacquired debt 53,793 54,577 Other regulatory assets 201,346 199,080 Other 14,931 15,454 --------- --------- Total 659,492 658,375 --------- --------- TOTAL $3,597,977 $3,613,359 ========= ========= See Notes to Financial Statements. SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS September 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 85,914 85,681 --------- --------- Total common shareholder's equity 875,271 875,038 Long-term debt 1,189,720 1,438,305 --------- --------- Total 2,064,991 2,313,343 --------- --------- Other Noncurrent Liabilities: Obligations under capital leases 53,585 18,688 Other 17,447 14,342 --------- --------- Total 71,032 33,030 --------- --------- Current Liabilities: Currently maturing long-term debt 355,000 105,000 Accounts payable: Associated companies 17,560 32,272 Other 12,853 23,204 Taxes accrued 36,054 35,382 Interest accrued 36,515 40,796 Obligations under capital leases 28,000 28,000 Other 2,087 19,794 --------- --------- Total 488,069 284,448 --------- --------- Deferred Credits: Accumulated deferred income taxes 734,438 746,502 Accumulated deferred investment tax credits 107,977 110,584 FERC Settlement - refund obligation 57,775 60,388 Other 73,695 65,064 --------- --------- Total 973,885 982,538 --------- --------- Commitments and Contingencies (Notes 1 and 2) TOTAL $3,597,977 $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, 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 Eastern 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. 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 could be forced to seek relief from its creditors under the United States Bankruptcy Code. A trial on the portion of the suit by Cajun to rescind the Operating Agreement which began in April 1994 was completed in March 1995. On October 24, 1995, the District Court issued a memorandum opinion ruling in favor of GSU. The District Court found that Cajun did not prove that GSU fraudulently induced it to execute the Operating Agreement and that Cajun failed to timely assert its claim. A final judgment will be entered when the District Court issues its detailed written opinions. It is uncertain when the District Court Judge's final opinion will be entered, or whether Cajun will appeal the decision. Cajun has not paid its full share of capital costs, operating and maintenance expenses and other costs for repairs and improvements to River Bend since 1992. Cajun's unpaid portion of River Bend operating and maintenance expenses (including nuclear fuel) and capital costs for the first nine months of 1995 was approximately $42.8 million. The cumulative cost to GSU resulting from Cajun's failure to pay its full share of River Bend-related costs, reduced by the proceeds from the sale by GSU of Cajun's share of River Bend power, was $59.1 million as of September 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. See Note 8 of Entergy Corporation's and GSU's Form 10-K for additional information regarding the Cajun litigation, Cajun's December 21, 1994 bankruptcy filing, related filings and the ongoing potential effects of these matters upon GSU. 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. Cajun - Transmission Service (Entergy Corporation and GSU) In orders issued on August 3, 1995, and October 2, 1995, the FERC affirmed the ALJ's April 1995 ruling in the remanded portion of GSU's and Cajun's ongoing transmission service charge disputes before the FERC. Both GSU and Cajun have petitioned for appeal to the D.C Circuit. Under GSU's interpretation of a 1992 FERC order, as modified by its August 3, 1995, and October 2, 1995 orders, Cajun would owe GSU approximately $63.3 million as of September 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, August 1995 and October 1995 FERC orders, which GSU has appealed, Cajun would owe GSU approximately $140.3 million as of September 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 prevail in appealing the FERC's August and October 1995 orders, GSU estimates it would owe Cajun approximately $92.1 million as of September 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 $169.7 million as of September 30, 1995. This amount is reflected in long-term receivables with an offsetting reserve in other deferred credits. Cajun's bankruptcy may affect GSU's collection of the above amounts. The FERC has determined that the collection of the pre-petition debt of Cajun is an issue properly decided in the bankruptcy proceeding. For additional information regarding the GSU and Cajun transmission service charge disputes, see Note 8 to Entergy Corporation's and GSU's Form 10-K. 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 (Enron), 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. Subsequent to entering into the agreement with Enron, 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 had 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 September 1995, the Maharashtra state government announced its decision to resume discussions with Enron regarding the Project. On September 11, 1995, EPDC and Enron amended their original agreement entered into on March 31, 1995. The amended agreement provides EPDC with an option to participate in the Project under the original terms of the agreement, with the option expiring on May 1, 1996. Enron may sell the 20% interest to any third party provided that EPDC has not notified Enron in writing of its desire to exercise the option. In addition the amended agreement resulted in the return of EPDC's $20.5 million investment previously held in escrow. Capital Requirements and Financing (Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI and System Energy) See Note 8 to Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's Form 10-K and Note 7 to System Energy's 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, MP&L, NOPSI and System Energy) See Note 8 to Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's Form 10-K and Note 7 to System Energy's Form 10-K for information on nuclear liability, property and replacement power insurance, related NRC regulations, 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 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 concluded that changes in the decommissioning liability resulting 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 concluded that the asset recognized as a result of recognizing the decommissioning liability should be presented with other plant costs on the financial statements because the cost of decommissioning the plant is recognized as part of the total cost of the plant asset. Subsequent to the FASB reaching the above tentative conclusions, the scope of the FASB's review was expanded to consider not only the accounting for decommissioning liabilities, but also liabilities related to the closure and removal of all long-lived assets. If current electric utility industry accounting practices with respect to nuclear decommissioning are changed, 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 Note 8 to Entergy Corporation's and AP&L's 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 including the most recent refueling outage in October 1995. 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. During the October 1995 inspection, additional cracks in the tubes were discovered. 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, Entergy Operations could be required during future outages to insert sleeves in some of the steam generator tubes which were previously plugged. Entergy Operations is in the process of gathering information and assessing various options for the repair or the replacement of ANO 2's steam generators. Certain of these options could, in the future, require significant capital expenditures and result in additional outages. Entergy Operations periodically meets with the NRC to discuss the results of inspections of the generator tubes, as well as the timing of future inspections. Environmental Issues (AP&L) In May 1995, AP&L was named as a defendant in a suit by Reynolds Metals Company (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 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 is contesting 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. See "Environmental Regulation" in Item 1 of Part I of Entergy Corporation's and AP&L's Form 10-K for information on PCB contamination at former Reynolds plant sites in Arkansas to which AP&L had supplied power. (GSU) GSU has been designated as a potentially responsible party for the clean-up of certain hazardous waste disposal sites. GSU is currently negotiating with the EPA and state authorities regarding the clean-up of certain of these sites. Through September 30, 1995, $7.7 million has been expended on the clean-up. As of September 30, 1995, a remaining recorded liability of $22.1 million existed relating to the clean-up of the sites at which GSU has been designated a potentially responsible party. See Note 8 to GSU's Form 10-K for additional discussion of the sites where GSU has been designated as a potentially responsible party by the EPA, and related litigation. (LP&L) During 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including regulation of waste water impoundments. LP&L has 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 $12.8 million existed at September 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 $4.1 million as of September 30, 1995. See Note 8 to LP&L's Form 10-K for additional discussion of LP&L's waste water impoundment upgrades and closures. Waterford 3 Lease Obligations (LP&L) LP&L entered into three transactions for the sale and leaseback of undivided interests (aggregating approximately 9.3%) in Waterford 3. 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. See Note 9 to LP&L's Form 10- K for further information. Reimbursement Agreement (System Energy) Under the provisions of a bank letter of credit reimbursement agreement, System Energy has agreed to a number of covenants relating to the maintenance of certain capitalization and fixed charge coverage ratios. System Energy agreed, during the term of the reimbursement agreement, to maintain its equity at not less than 33% of its adjusted capitalization (defined in the reimbursement agreement to include certain amounts not included in capitalization for financial statement purposes). In addition, System Energy must maintain, with respect to each fiscal quarter during the term of the reimbursement agreement, a ratio of adjusted net income to interest expense (calculated, in each case, as specified in the reimbursement agreement) of at least 1.60 times earnings. As 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 reimbursement agreement until November 30, 1995. As of September 30, 1995, System Energy's equity approximated 33.66% of its adjusted capitalization, and its fixed charge coverage ratio was 1.24. System Energy expects that upon expiration of the waiver period, it will be in compliance with the fixed charge coverage covenant. See Note 7 to System Energy's 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. As discussed in Note 2 to Entergy Corporation's and GSU's Form 10-K, various appeals of the PUCT's order have been filed. GSU has filed an appeal with 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 September 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, $277 million (both net of depreciation), and $169 million, respectively. Allowed Deferrals were approximately $84 million, net of taxes and amortization, as of September 30, 1995. GSU estimates it has recorded approximately $177 million of revenues as of September 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 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. As discussed in Note 2 to Entergy Corporation's and GSU's Form 10-K, 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 that the PUCT will be allowed to rule on the prudence of the abeyed River Bend plant costs. 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 September 30, 1995, a net of tax write-off of up to $290 million could be required based on an ultimate adverse ruling by the PUCT on the abeyed and disallowed plant costs. 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. Analysis by Sandlin Associates, management consultants with expertise in the cost of nuclear power plants, 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 legal counsel, 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 $169 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 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," (SFAS 121) will become effective January 1, 1996. SFAS 121 changes the standard for continued recognition of regulatory assets, and as a result GSU will be required to write-off the $169 million of rate deferrals discussed above, unless there are favorable regulatory or court actions related to the recovery of these costs prior to adoption. The standard also 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) On March 20,1995, in connection with the PUCT's investigation of the reasonableness of GSU's rates, 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. ` On May 26, 1995, the PUCT amended its previously issued March 20, 1995 rate order, reducing the $52.9 million annual base rate reduction to an annual level of $36.5 million. The PUCT's action was based, in part, 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 required GSU to pass such prospective tax benefits on to its customers. The rate refund, retroactive to March 31, 1994, was approximately $61.8 million (including interest) and was refunded to customers in September, October and November 1995. The rate refund was previously reserved, and therefore had no impact to income in the current quarter. GSU and other parties have appealed the PUCT order, but no assurance can be given as to the timing or outcome of the appeal. Filings with the LPSC (Entergy Corporation and GSU) In May 1994, GSU made a required earnings analysis filing with the LPSC for the test year preceeding the Merger (1993). On December 14, 1994, the LPSC ordered a $12.7 million annual rate reduction for GSU effective January 1995. 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, which denied the appeal in July 1995. GSU has appealed the order to the Louisiana Supreme Court. The preliminary injunction relating to $8.3 million of the reduction will remain in effect during the appeal. On May 31, 1995, GSU filed its first required post-Merger earnings analysis with the LPSC. Hearings on this review are scheduled to begin in mid-December 1995 and a decision is expected in early 1996. (Entergy Corporation and LP&L) See Note 2 to Entergy Corporation's and LP&L's Form 10-K for a discussion of LP&L's performance-based formula rate plan filed with the LPSC. On June 2, 1995, as a result of the LPSC's earnings review of LP&L's performance-based formula rate plan, a $49.4 million reduction in base rates was ordered. This included $10.5 million of rate reductions previously made through the fuel adjustment clause. 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 is to 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. 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 portion 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 by the District Court on $14.7 million of the rate reduction pending a final LPSC order. No assurance can be given as to the timing or outcome of the appeal or the requested rate increase. The rate refund, retroactive to April 28, 1995, was approximately $8.2 million and was refunded to customers in the months of September and October 1995. The rate refund was previously reserved, and therefore represents no impact to income in the current quarter. Proposed Rate Increase (System Energy) System Energy filed an application on May 12, 1995, 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. Hearings on System Energy's request are scheduled to begin in January 1996. (MP&L) MP&L's allocation of the proposed System Energy wholesale rate increase is $21.6 million. In July 1995, MP&L filed a schedule with the MPSC which will defer the ultimate amount of the System Energy rate increase. The deferral plan, which was approved by the MPSC in September 1995, will begin in December 1995, the effective date of the System Energy rate increase, and will end after the issuance of a Final Order by the FERC. February 1994 Ice Storm/Rate Rider (Entergy Corporation and MP&L) As discussed in Note 2 to Entergy Corporation's and MP&L's 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 September 1995, the MPSC approved a second 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 (Entergy Corporation and GSU) See Note 2 to Entergy Corporation's and GSU's Form 10-K, for a discussion of the LPSC's review of GSU's fuel costs for the period October 1988 through September 1991 and GSU's subsequent appeal of $13.9 million of fuel costs disallowed by the LPSC. The LPSC is currently conducting the second phase 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 fuel costs. Hearings are scheduled to begin in December 1995. No assurance can be given as to the timing or the outcome of the review. NOTE 3. COMMON STOCK (Entergy Corporation) Entergy Corporation from time to time may make purchases of its outstanding common stock depending upon market conditions and authorization by the Entergy Corporation Board of Directors. During the first nine months of 1995, no shares of common stock were repurchased. During the first nine months of 1995, Entergy Corporation issued 347,590 shares of its previously repurchased common stock, reducing the amount held as treasury stock by $10.3 million. Entergy Corporation issued these shares to meet the requirements of its various stock plans. NOTE 4. LONG-TERM DEBT (MP&L) On October 15, 1995, MP&L retired $15 million of its 5.95% Series G&R Bonds upon maturity. (System Energy) On October 1, 1995 System Energy retired $105 million of its 6.12% Series First Mortgage Bonds upon maturity. On October 11, 1995, System Energy issued $30 million of its 7.38% Series Debentures due 2000. NOTE 5. RETAINED EARNINGS (Entergy Corporation) On October 27, 1995, Entergy Corporation's Board of Directors declared a common stock dividend of 45 cents per share payable on December 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. Actual restructuring charges associated with these programs recorded in 1994 and the first nine months of 1995 are shown below by company along with the actual termination benefits paid under the program. Restructuring Restructuring Liability Additional Liability Company December 31, Accruals Payments September 30, 1994 1995 (In Millions) AP&L $ 12.2 $ 9.0 $(16.1) $ 5.1 GSU 6.5 7.2 (11.7) 2.0 LP&L 6.8 5.0 (10.1) 1.7 MP&L 6.2 1.1 (5.9) 1.4 NOPSI 3.4 - (2.2) 1.2 Entergy Services - 6.0 (3.2) 2.8 ------ ----- ------ -------- Total $ 35.1 $28.3 $(49.2) $ 14.2 ====== ===== ====== ======== The restructuring charges shown above primarily included employee severance costs related to the expected termination of approximately 2,706 employees. As of September 30, 1995, 1,807 employees have either been terminated or accepted voluntary separation packages 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 nine months of 1995 amounted to $18.5 million. During that same period, adjustments to the allocation of the total liability were made among the System companies. At September 30, 1995, the total remaining System liability for expected future Merger- related outlays was $5.9 million, comprised principally of GSU's and Entergy Services' liabilities of $4.3 million and $1.2 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 Note 1 to Entergy Corporation's Form 10-K) being impaired. The standard also provides criteria for recognition and measurement of asset impairment. Note 2 describes regulatory assets of $169 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 $1.7 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 under the FERC jurisdiction and the steam department. Entergy will periodically 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 Net cash flow from operations for Entergy Corporation, the System operating companies and System Energy for the nine months ended September 30, 1995 and 1994, was as follows (in millions): Nine Months Nine Months Company Ended 9/30/95 Ended 9/30/94 Entergy Corporation $1,069.4 $1,120.6 AP&L $ 282.1 $ 256.8 GSU $ 344.3 $ 278.3 LP&L $ 308.2 $ 304.5 MP&L $ 139.4 $ 154.4 NOPSI $ 70.7 $ 61.0 System Energy $ 51.2 $ 206.9 For the nine months ended September 30, 1995, AP&L's net cash flow from operations increased because of reduced billings from System Energy resulting from a FERC audit settlement in 1994. Partially offsetting this increase in AP&L's net cash flow was a higher fuel inventory level in 1995 due to the depletion of coal inventory in 1994 when spring flooding disrupted the normal coal delivery schedule. GSU's net cash flow from operations increased for the nine months ended September 30, 1995, due primarily to lower operation and maintenance expenses and higher deferred income taxes. This increase was partially offset by a portion of the Texas retail rate refund made in September 1995, representing $53 million, and a smaller reduction in rate deferrals in 1995 as compared to 1994. MP&L's cash flow from operations decreased for the nine months ended September 30, 1995, as the result of increased accounts receivable balances due to increased sales from warmer weather. In addition, MP&L's share of the System Energy FERC audit settlement was refunded to customers in August 1995, decreasing cash provided by operating activities. System Energy's net cash flow from operations decreased for the nine months ended September 30, 1995, due primarily to refunds to associated companies resulting from a FERC audit settlement in 1994. In the first nine 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 rate phase-in plans that 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. 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 September 30, 1995, and assumed annual interest or dividend rates of 8.25% for bonds and 8.50% for preferred stock, each of the System operating companies and System Energy could have issued mortgage bonds or preferred stock in the following amounts (in millions): Company Mortgage Bonds Preferred Stock AP&L $292 $ 763 GSU $318 $ - LP&L $ 80 $1,100 MP&L $238 $ 253 NOPSI $ 55 $ 50 System Energy $ 52 (a) (a) 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. In addition to issuable mortgage bonds determined by the above restrictive tests, 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. See Notes 5 and 6 to Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's Form 10-K and Note 5 to System Energy's Form 10-K for long-term debt and preferred stock issuances and retirements. The System operating companies and System Energy have SEC authorization to effect short-term borrowings. See Note 4 to Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and System Energy's 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 September 30, 1995, Entergy Operations, Entergy Services and System Fuels had outstanding short-term borrowings from the Money Pool as follows (in millions): Company Money Pool Entergy Operations $ 9.3 Entergy Services $56.7 System Fuels $21.6 On July 27, 1995, Entergy Corporation received SEC authorization for a $300 million bank credit facility. In October 1995, a credit agreement was signed with a group of banks to provide up to $300 million in loans to Entergy Corporation. Proceeds from this bank credit facility 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 paid dividends which aggregated $306 million on its common stock in the first nine 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. Such dividend payments totaled $337 million for the first nine months of 1995. See Note 7 to Entergy Corporation's Form 10-K for information on dividend restrictions. GSU did not make common stock dividend payments to Entergy Corporation in the first nine months of 1995. Recent rate reductions, as discussed in Note 2, as well as any future rate reductions, increase the need for Entergy to continue to 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. Adverse rulings in the River Bend rate appeal could result in approximately $459 million of potential write- offs (net of tax) and $177 million in refunds of previously collected revenue. Such write-offs and charges as well as the application of SFAS 121 (see Note 7) could result in substantial 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 obtain financing, which could in turn affect GSU's liquidity, and GSU's ability to pay dividends. 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), 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 to the agreement, subject to the receipt of consents of certain creditors. RESULTS OF OPERATIONS ENTERGY Net Income Consolidated net income increased for the three and nine months ended September 30, 1995 due primarily to a decrease in other operation and maintenance expense, increased weather related sales, and decreased interest expense, partially offset by the ongoing effect of 1994 and 1995 rate reductions. Significant factors affecting the results of operations and causing variances between the three months and nine months ended September 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 for the three months and nine months ended September 30, 1995 and 1994. Three Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 793.7 $ 726.3 $ 67.4 9 Commercial 451.4 435.8 15.6 4 Industrial 504.3 488.6 15.7 3 Governmental 42.7 42.7 0.0 0 --------- --------- ------- Total retail 1,792.1 1,693.4 98.7 6 Sales for resale 122.0 89.8 32.2 36 Other (3.8) (6.2) 2.4 (39) --------- --------- ------- Total $ 1,910.3 $ 1,777.0 $ 133.3 8 ========= ========= ======= Billed Electric Energy Sales (Millions of KWH): Residential 9,923 8,848 1,075 12 Commercial 6,310 5,916 394 7 Industrial 11,257 10,675 582 5 Governmental 644 609 35 6 --------- --------- ------- Total retail 28,134 26,048 2,086 8 Sales for resale 3,945 2,503 1,442 58 --------- --------- ------- Total 32,079 28,551 3,528 12 ========= ========= ======= Nine Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 1,715.2 $ 1,691.3 $ 23.9 1 Commercial 1,133.4 1,147.2 (13.8) (1) Industrial 1,351.3 1,386.2 (34.9) (3) Governmental 115.4 122.3 (6.9) (6) --------- --------- ------ Total retail 4,315.3 4,347.0 (31.7) (1) Sales for resale 279.2 235.5 43.7 19 Other 149.7 86.4 63.3 73 --------- --------- ------ Total $ 4,744.2 $ 4,668.9 $ 75.3 2 ========= ========= ====== Billed Electric Energy Sales (Millions of KWH): Residential 21,830 20,716 1,114 5 Commercial 15,741 15,135 606 4 Industrial 31,617 30,481 1,136 4 Governmental 1,747 1,688 59 3 --------- --------- ------ Total retail 70,935 68,020 2,915 4 Sales for resale 8,228 6,274 1,954 31 --------- --------- ------ Total 79,163 74,294 4,869 7 ========= ========= ====== Electric operating revenues increased in the three months ended September 30, 1995 as a result of an increase in retail sales and sales for resale, partially offset by rate reductions at GSU, LP&L and NOPSI . Warmer weather and non-weather related volume growth, contributed equally to the increase in retail electric operating revenues. The increase in sales for resale was primarily from increased energy sales outside of Entergy's service area. Electric operating revenues increased for the nine months ended September 30, 1995 due primarily to increased retail sales, increased wholesale revenues from outside Entergy's service area and increased other revenue, partially offset by rate reductions at GSU, LP&L and NOPSI and lower fuel adjustment revenues. Approximately 72 percent of the sales volume/weather increase in electric operating revenue resulted from increased customers and associated usage, while the remainder resulted from warmer weather. Other revenues increased for the nine months ended September 30, 1995 due primarily to an increase in unbilled revenues attributable to warmer weather in the current period and an increase in MP&L's Grand Gulf over/under recovery. For the nine months ended September 30, 1995, MP&L undercollected its share of Grand Gulf 1 related costs due to decreased revenues from its Grand Gulf 1 rate rider. For the same period last year MP&L was in an overcollected position. The increased undercollected position in the current year has resulted in MP&L recording additional other revenue for these undercollected Grand Gulf 1 costs. The Grand Gulf 1 over/under collection has no effect on net income. The changes in electric operating revenue for the three months and nine months ended September 30, 1995 are as follows: Three Months Ended Nine Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(34.9) $(55.6) Rate riders 5.0 (0.6) Fuel cost recovery 42.4 (57.0) Sales volume/weather 91.9 118.0 Other revenue (including unbilled) (4.5) 25.5 Sales for resale 33.4 45.0 ------ ----- Total $133.3 $75.3 ====== ===== Gas operating revenues decreased for the three and nine months ended September 30, 1995 because of milder than normal winter weather, decreased fuel adjustment revenues and gas rate reductions agreed to in the 1994 NOPSI Settlement. Expenses Operating expenses increased for the three months ended September 30, 1995 due primarily to increased purchased power expenses resulting from changes in generation availability and requirements among the System operating companies, increased income taxes due primarily to higher pre-tax book income, and increased amortization of rate deferrals attributable to the collection of more Grand Gulf 1 related costs from customers in 1995 as compared to 1994. Other operation and maintenance expenses decreased due primarily to charges made in September 1994 for Merger-related costs, restructuring costs, increased storm damage costs and increased environmental reserves. Operating expenses decreased for the nine months ended September 30, 1995 as the result of decreased operating and maintenance expenses partially offset by increased nuclear refueling outage expense due to a Grand Gulf 1 refueling outage at System Energy. Income taxes also increased because of higher pretax income, a decrease in tax depreciation at Waterford 3 and River Bend and decreased amortization of investment tax credits related to the 1994 FERC Settlement. Other operation and maintenance expenses decreased due primarily to charges made in September 1994 for Merger-related costs, restructuring costs, increased storm damage costs and increased environmental reserves. Interest charges decreased for the three months and nine months ended September 30, 1995 due primarily to the retirement and refinancing of higher costing long-term debt. AP&L Net Income Net income increased in the three months ended September 30, 1995 due primarily to an increase in revenues from retail energy sales and a decrease in other operation and maintenance expenses partially offset by an increase in income tax expense and the amortization of rate deferrals. Net income increased in the first nine months of 1995 due primarily to higher revenues from retail energy sales partially offset by an increase in depreciation, amortization, and decommissioning expense and an increase in income tax expense. Significant factors affecting the results of operations and causing variances between the three months and nine months ended September 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 nine months ended September 30, 1995 and 1994. Three Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 200.1 $ 170.5 $ 29.6 17 Commercial 103.3 95.2 8.1 9 Industrial 111.4 100.5 10.9 11 Governmental 5.1 4.7 0.4 9 ------- ------- ------ Total retail 419.9 370.9 49.0 13 Sales for resale Associated companies 52.1 50.8 1.3 3 Non-associated companies 60.8 49.2 11.6 24 Other (2.4) (0.1) (2.3) * ------- ------- ------ Total $ 530.4 $ 470.8 $ 59.6 13 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 2,092 1,802 290 16 Commercial 1,359 1,259 100 8 Industrial 1,752 1,561 191 12 Governmental 70 63 7 11 ------- ------- ------ Total retail 5,273 4,685 588 13 Sales for resale Associated companies 2,484 2,379 105 4 Non-associated companies 1,661 1,324 337 25 ------- ------- ------ Total 9,418 8,388 1,030 12 ======= ======= ====== Nine Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 433.3 $ 402.1 $ 31.2 8 Commercial 245.5 236.3 9.2 4 Industrial 273.9 253.9 20.0 8 Governmental 13.1 12.9 0.2 2 --------- --------- ------ Total retail 965.8 905.2 60.6 7 Sales for resale Associated companies 132.4 178.1 (45.7) (26) Non-associated companies 139.9 135.6 4.3 3 Other 44.1 37.9 6.2 16 --------- --------- ------ Total $ 1,282.2 $ 1,256.8 $ 25.4 2 ========= ========= ====== Billed Electric Energy Sales (Millions of KWH): Residential 4,668 4,381 287 7 Commercial 3,282 3,177 105 3 Industrial 4,706 4,392 314 7 Governmental 189 178 11 6 --------- --------- ------ Total retail 12,845 12,128 717 6 Sales for resale Associated companies 6,239 8,617 (2,378) (28) Non-associated companies 3,830 3,601 229 6 --------- --------- ------ Total 22,914 24,346 (1,432) (6) ========= ========= ====== * - Greater than 200%. Electric operating revenues increased for the three months ended September 30, 1995 as the result of an increase in retail energy sales and fuel adjustment revenues. Approximately 58 percent of the sales volume/weather increase in electric operating revenue resulted from warmer weather in the third quarter of 1995. Electric operating revenues increased for the nine months ended September 30, 1995 due primarily to increased retail energy sales and fuel adjustment revenues partially offset by a decrease in sales for resale to associated companies. Approximately 70 percent of the sales volume/weather increase in electric operating revenue resulted from increased customers and associated usage, while the remainder resulted from warmer weather. The decrease in sales for resale to associated companies is caused by changes in generation availability and requirements among the System operating companies. The changes in electric operating revenue for the three months and nine months ended September 30, 1995 are as follows: Three Months Ended Nine Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(5.2) $(0.9) Rate riders 9.6 13.0 Fuel cost recovery 15.3 26.2 Sales volume/weather 28.7 32.4 Other revenue (including unbilled) (4.3) (5.2) Sales for resale 15.5 (40.1) ----- ----- Total $59.6 $25.4 ===== ===== Expenses Operating expenses increased in the three months ended September 30, 1995 due primarily to an increase in fuel and purchased power expenses, income tax expense, and the amortization of rate deferrals partially offset by a decrease in other operation and maintenance expense. The increase in fuel and purchased power expenses is largely due to a 12% increase in total sales volume. Fuel and purchased power expenses also increased as the result of replacement power purchased during the ANO 2 outage which began in mid September 1995 and is scheduled to end in November 1995. Income tax expense increased because of higher pretax income. The amortization of rate deferrals increased primarily due to the over-recovery of Grand Gulf 1 charges from customers. The decrease in other operation and maintenance expense is largely due to restructuring costs recorded in 1994. Operating expenses decreased for the first nine months of 1995 because of lower fuel and fuel-related expenses offset by an increase in depreciation, decommissioning and amortization expense and income tax expense. Fuel expenses decreased as the result of a decrease in total sales volume of 6%. Depreciation, amortization, and decommissioning expenses increased primarily due to additions and upgrades at ANO and to additions to transmission lines, substations and other equipment. Also, decommissioning expense increased due to the implementation of the decommissioning rate rider which resulted from the decommissioning study performed in 1994. Income tax expense increased primarily due to the write-off in 1994 of investment tax credits in accordance with the FERC Settlement as well as an increase in income taxes due to higher pretax income. GSU Net Income Net income increased for the three months and nine months ended September 30, 1995 primarily due to a decrease in other operation and maintenance expenses and an increase in miscellaneous income, partially offset by an increase in income taxes and taxes other than income taxes. Significant factors affecting the results of operations and causing variances between the three months and nine months ended September 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 nine months ended September 30, 1995 and 1994: Three Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Department Operating Revenues: Residential $ 198.6 $ 192.2 $ 6.4 3 Commercial 120.3 115.6 4.7 4 Industrial 167.3 162.8 4.5 3 Governmental 5.9 6.4 (0.5) (8) ------- ------- ----- Total retail 492.1 477.0 15.1 3 Sales for resale Associated companies 11.1 19.9 (8.8) (44) Non-associated companies 21.7 16.4 5.3 32 Other 0.1 16.9 (16.8) (99) ------- ------- ----- Total Electric Department $ 525.0 $ 530.2 ($5.2) (1) ======= ======= ===== Billed Electric Energy Sales (Millions of KWH): Residential 2,697 2,502 195 8 Commercial 1,831 1,743 88 5 Industrial 4,153 3,851 302 8 Governmental 80 77 3 4 ------ ------ ---- Total retail 8,761 8,173 588 7 Sales for resale Associated companies 534 1,109 (575) (52) Non-associated companies 722 231 491 * ------ ------ ---- Total Electric Department 10,017 9,513 504 5 Steam Department 459 426 33 8 ------ ------ ---- Total 10,476 9,939 537 5 ====== ====== ==== Nine Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Department Operating Revenues: Residential $ 447.7 $ 448.7 $(1.0) - Commercial 311.9 312.7 (0.8) - Industrial 454.8 475.7 (20.9) (4) Governmental 18.3 19.1 (0.8) (4) -------- -------- ----- Total retail 1,232.7 1,256.2 (23.5) (2) Sales for resale Associated companies 43.9 33.9 10.0 29 Non-associated companies 52.3 41.2 11.1 27 Other 37.2 40.0 (2.8) (7) -------- -------- ----- Total Electric Department $1,366.1 $1,371.3 ($5.2) - ======== ======== ===== Billed Electric Energy Sales (Millions of KWH): Residential 6,012 5,775 237 4 Commercial 4,680 4,512 168 4 Industrial 11,500 11,237 263 2 Governmental 231 225 6 3 ------ ------ ----- Total retail 22,423 21,749 674 3 Sales for resale Associated companies 2,092 2,096 (4) - Non-associated companies 1,744 494 1,250 * ------ ------ ----- Total Electric Department 26,259 24,339 1,920 8 Steam Department 1,308 1,257 51 4 ------ ------ ----- Total 27,567 25,596 1,971 8 ====== ====== ===== * - Greater than 200%. Electric operating revenues remained relatively unchanged for the three months ended September 30, 1995. An increase in sales volume was partially offset by a decrease in base rates and lower sales for resale. Approximately 66 percent and 34 percent of the sales volume/weather increase in electric operating revenue resulted from increased customers and associated usage and warmer summer weather, respectively. Base rates decreased as a result of rate reductions in effect for Texas and Louisiana. Electric operating revenues remained relatively unchanged for the first nine months of 1995 primarily due to lower fuel revenues and a decrease in base rates which were offset by higher sales for resale and an increase in sales volume. Base rates decreased as a result of rate reductions in effect for Texas and Louisiana. Sales for resale increased as a result of changes in generation availability and requirements among the System operating companies. Sales volume increased due to favorable weather and an increase in usage by all customer classes. Approximately 75 percent of the sales volume/weather increase in electric operating revenue resulted from increased customers and associated usage. Gas operating revenues decreased for the three months and nine months ended September 30, 1995 primarily due to a decrease in residential sales. This decrease was the result of a milder winter than in 1994. The changes in electric operating revenue for the three months and nine months ended September 30, 1995 are as follows: Three Months Ended Nine Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(11.8) $(18.4) Fuel cost recovery 5.7 (33.2) Sales volume/weather 21.9 28.0 Other revenue (including unbilled) (17.5) (2.7) Sales for resale (3.5) 21.1 ----- ----- Total $(5.2) $(5.2) ===== ===== Expenses Operating expenses decreased for the three months and nine months ended September 30, 1995 as the result of lower operation and maintenance expenses, partially offset by higher income taxes and taxes other than income taxes. Other operation and maintenance expenses decreased primarily due to charges made in September 1994 for Merger-related costs, restructuring costs and certain pre-acquisition contingencies including unfunded Cajun- River Bend costs and environmental clean-up costs. Taxes other than income taxes increased in 1995 because of a refund of franchise taxes in 1994. Income taxes increased primarily due to higher pre-tax income in 1995 and a decrease in tax depreciation associated with River Bend. Additionally, purchased power expenses decreased for the nine months ending September 30, 1995 due to the availability of less expensive gas fuel for use in electric generation as well as changes in the generation requirements among the System operating companies. Other Miscellaneous income - net increased in the three months and nine months ended September 30, 1995 as the result of certain adjustments made in September 1994 related to pre-acquisition contingencies including Cajun-River Bend litigation and the write- off of previously disallowed rate deferrals. Income taxes on other income increased in the three months and nine months ended September 30, 1995 due to the charges discussed above. LP&L Net Income Net income increased for the three months ended September 30, 1995 due primarily to increased revenue and decreased other operation and maintenance expense, partially offset by an increase in fuel, purchased power and income tax expenses. Net income increased for the nine months ended September 30, 1995 due primarily to a decrease in fuel, purchased power and other operation and maintenance expense, partially offset by a decrease in revenue and increased income tax expense. Significant factors affecting the results of operations and causing variances between the three months and nine months ended September 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 nine months ended September 30, 1995 and 1994. Three Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 214.7 $ 196.4 $ 18.3 9 Commercial 105.8 102.6 3.2 3 Industrial 172.7 170.9 1.8 1 Governmental 8.2 8.4 (0.2) (2) ------- ------- ------ Total retail 501.4 478.3 23.1 5 Sales for resale Associated companies 0.6 0.2 0.4 * Non-associated companies 18.5 16.4 2.1 13 Other 8.5 7.6 0.9 12 ------- ------- ------ Total $ 529.0 $ 502.5 $ 26.5 5 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 2,812 2,493 319 13 Commercial 1,456 1,356 100 7 Industrial 4,416 4,305 111 3 Governmental 114 112 2 2 ------ ------ ----- Total retail 8,798 8,266 532 6 Sales for resale Associated companies 19 6 13 * Non-associated companies 468 269 199 74 ------ ------ ----- Total 9,285 8,541 744 9 ====== ====== ===== Nine Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 459.5 $ 460.8 $(1.3) - Commercial 267.2 275.4 (8.2) (3) Industrial 475.1 499.9 (24.8) (5) Governmental 23.7 24.2 (0.5) (2) --------- --------- ------ Total retail 1,225.5 1,260.3 (34.8) (3) Sales for resale Associated companies 1.0 0.4 0.6 150 Non-associated companies 42.1 31.9 10.2 32 Other 19.5 35.3 (15.8) (45) --------- --------- ------ Total $ 1,288.1 $ 1,327.9 $(39.8) (3) ========= ========= ====== Billed Electric Energy Sales (Millions of KWH): Residential 6,186 5,864 322 5 Commercial 3,634 3,502 132 4 Industrial 12,742 12,261 481 4 Governmental 332 318 14 4 --------- --------- ------ Total retail 22,894 21,945 949 4 Sales for resale Associated companies 38 10 28 280 Non-associated companies 1,042 610 432 71 --------- --------- ------ Total 23,974 22,565 1,409 6 ========= ========= ====== * - Greater than 200%. Electric operating revenues increased in the three months ended September 30, 1995 primarily due to weather-related sales. Approximately 55 percent of the sales volume/weather increase in electric operating revenue resulted from warmer weather, while the remainder resulted from increased customers and associated usage. Higher fuel adjustment revenues, which do not affect net income, also contributed to the increase. The base rate reduction ordered in the second quarter of 1995, discussed at Note 2, partially reduced the effect of these increases. Electric operating revenues were lower in the nine months ended September 30, 1995 because of lower fuel adjustment revenues, which do not affect net income. Additionally, the base rate reduction ordered in the second quarter of 1995, as discussed in Note 2, and the completion of the amortization of proceeds from litigation with a gas supplier in the second quarter of 1994, resulted in reduced revenues. These decreases were partially offset by increased usage by residential and industrial customers and higher sales to non-associated utilities. The changes in electric operating revenue for the three months and nine months ended September 30, 1995 are as follows: Three Months Ended Nine Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(9.0) $(18.7) Fuel cost recovery 11.2 (55.0) Sales volume/weather 25.6 36.0 Other revenue (including unbilled (3.8) (12.9) Sales for resale 2.5 10.8 ----- ------ Total $26.5 $(39.8) ===== ====== Expenses Operating expenses remained relatively unchanged for the three months ended September 30, 1995. Increases in fuel and purchased power and income taxes were offset by a decrease in other operation and maintenance expenses. The increase in fuel and purchased power is primarily due to increased weather-related energy sales. Income taxes increased as the result of a decrease in tax depreciation associated with Waterford 3 and higher pre- tax income. Other operation and maintenance expenses decreased for the three months ending September 30, 1995 due to waste water site closures in the third quarter of 1994, as discussed in Note 1, lower payroll expenses and reduced legal fees. Payroll expenses decreased as a result of the restructuring program announced during the third quarter of 1994, as discussed in Note 6. During 1994 additional legal fees were incurred relating to litigation with a gas supplier. Operating expenses decreased for the nine months ended September 30, 1995 due to decreases in fuel expense, purchased power and other operation and maintenance expenses partially offset by an increase in income taxes. The decrease in fuel and purchased power expense is due to lower fuel prices partially offset by an increase in generation. Other operation and maintenance expenses decreased for the nine months ending September 30, 1995 due to waste water site closures in the third quarter of 1994, as discussed in Note 1, lower payroll expenses, decreased fossil and nuclear maintenance expenses and reduced legal fees. Payroll expenses decreased as a result of the restructuring program announced during the third quarter of 1994, as discussed in Note 6. During 1994 additional legal fees were incurred relating to litigation with a gas supplier. 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 increased for the three and nine months ended September 30, 1995, primarily due to an increase in revenues and a decrease in other operation and maintenance expense. Cumulative sales for the three and nine months ended September 30, 1995, increased due to warmer weather and greater customer usage. Other operation and maintenance expense decreased for the three months and nine months ended September 30, 1995, due to reduced scheduled maintenance at power plants and a reduction in employees under the restructuring program. In addition, other operation and maintenance expense decreased for the nine months ended September 30, 1995, due to the absence of Merger-related costs. Significant factors affecting the results of operations and causing variances between the three months and nine months ended September 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 nine months ended September 30, 1995 and 1994: Three Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 121.5 $ 115.7 $ 5.8 5 Commercial 78.8 78.1 0.7 1 Industrial 46.2 47.9 (1.7) (4) Governmental 7.2 7.4 (0.2) (3) ------- ------- ------ Total retail 253.7 249.1 4.6 2 Sales for resale Associated companies 15.0 9.1 5.9 65 Non-associated companies 8.3 5.0 3.3 66 Other (18.2) (28.9) 10.7 (37) ------- ------- ------ Total $ 258.8 $ 234.3 $ 24.5 10 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 1,524 1,363 161 12 Commercial 1,043 977 66 7 Industrial 792 795 (3) - Governmental 94 90 4 4 ------- ------- ------ Total retail 3,453 3,225 228 7 Sales for resale Associated companies 512 238 274 115 Non-associated companies 278 159 119 75 ------- ------- ------ Total 4,243 3,622 621 17 ======= ======= ====== Nine Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 263.1 $ 266.8 $(3.7) (1) Commercial 197.7 198.4 (0.7) - Industrial 130.1 137.0 (6.9) (5) Governmental 20.5 21.3 (0.8) (4) ------- ------- ------ Total retail 611.4 623.5 (12.1) (2) Sales for resale Associated companies 27.6 25.2 2.4 10 Non-associated companies 17.9 12.5 5.4 43 Other 35.6 (9.7) 45.3 * ------- ------- ------ Total $ 692.5 $ 651.5 $ 41.0 6 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 3,341 3,208 133 4 Commercial 2,561 2,409 152 6 Industrial 2,256 2,200 56 3 Governmental 252 254 (2) (1) ------- ------- ------ Total retail 8,410 8,071 339 4 Sales for resale Associated companies 771 594 177 30 Non-associated companies 594 376 218 58 ------- ------- ------ Total 9,775 9,041 734 8 ======= ======= ====== * - Greater than 200%. Electric operating revenues increased in the three months ended September 30, 1995, due to an increase in other revenues, sales volume and sales for resale. Increased unbilled revenues due to warmer weather in the summer months caused an increase in other revenue. Approximately 69 percent of the sales volume/weather increase in electric operating revenue resulted from warmer weather, while the remainder resulted from increased customers and associated usage. Sales for resale, specifically sales to associated companies, increased primarily due to changes in the generation requirements among the System operating companies. Electric operating revenues increased for the nine months ended September 30, 1995, due to an increase in other revenue, sales volume and sales for resale, partially offset by a decrease in revenues from the Grand Gulf 1 rate rider. For the nine months ended September 30, 1995, MP&L undercollected its share of Grand Gulf 1 related costs due to decreased revenues from the Grand Gulf 1 rate rider. For the same period last year MP&L was in an overcollected position. The increased undercollected position in the current year has resulted in MP&L recording additional other revenue for these undercollected Grand Gulf 1 costs. The Grand Gulf 1 over/under collection has no effect on net income. Increased unbilled revenues due to warmer weather and increased sales volume in the summer months of 1995 caused an increase in other revenue. Approximately 57 percent and 43 percent of the sales volume/weather increase in electric operating revenue resulted from increased customers and associated usage and warmer summer weather, respectively. Sales for resale increased primarily due to increases in MP&L's available generation. The changes in electric operating revenue for the three months and nine months ended September 30, 1995 are as follows: Three Months Ended Nine Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $2.1 $(3.3) Grand Gulf rate rider (4.5) (13.6) Fuel cost recovery 3.5 5.4 Sales volume/weather 6.8 9.9 Other revenue (including unbilled) 7.4 34.8 Sales for resale 9.2 7.8 ----- ----- Total $24.5 $41.0 ===== ===== Expenses Fuel and fuel-related expenses increased for the three and nine months ended September 30, 1995 due to increased generation requirements resulting from increased energy sales. The increase in fuel and fuel-related expenses was partially offset by lower gas costs. Purchased power expenses decreased for the three months ended September 30, 1995 due to the availability of less expensive gas for the use in electric generation as well as changes in the generation requirements among the System operating companies. Other operation and maintenance expenses decreased for the three months ending September 30, 1995, due to 1994 Merger-related costs allocated to MP&L and payroll expenses. No significant Merger- related costs were allocated to MP&L during the current year. Payroll expenses decreased as a result of the restructuring program announced and accrued for during the third quarter of 1994. The restructuring program included a reduction in the number of MP&L employees during 1995. Other operation and maintenance expenses decreased for the nine months ended September 30, 1995, due to lower maintenance expenses at various power plants, 1994 Merger-related costs and payroll expenses. Income taxes increased for the three months and nine months ended September 30, 1995 primarily due to a higher pretax income resulting from increased revenue and reduced operating and maintenance expense. The amortization of rate deferrals increased for the three and nine months ended September 30, 1995 in accordance with Grand Gulf 1 related deferral plan. The increase in interest on long-term debt for the three months ended September 30, 1995 is due to the increase in the amount of long- term debt partially offset by the maturity of higher interest-bearing debt in February and July 1995. In April 1995, MP&L issued $80 million of 8.8% Series G&R Bonds due in 2005. NOPSI Net Income Net income increased for the three months ended September 30, 1995 due primarily to a September 1994 provision for litigation related to the City of New Orleans street lighting dispute. Net income increased for the nine months ended September 30, 1995 as the result of a decrease in other operation and maintenance expense. Significant factors affecting the results of operations and causing variances between the three months and nine months ended September 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 nine months ended September 30, 1995 and 1994. Three Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 58.9 $ 51.4 $ 7.5 15 Commercial 43.2 44.3 (1.1) (2) Industrial 6.7 6.6 0.1 2 Governmental 16.2 15.8 0.4 3 ------- ------- ------ Total retail 125.0 118.1 6.9 6 Sales for resale Associated companies 0.1 0.1 - - Non-associated companies 3.5 2.1 1.4 67 Other 6.3 0.1 6.2 * ------- ------- ------ Total $ 134.9 $ 120.4 $ 14.5 12 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 798 688 110 16 Commercial 621 580 41 7 Industrial 144 138 6 4 Governmental 286 268 18 7 ------- ------- ------ Total retail 1,849 1,674 175 10 Sales for resale Associated companies 3 3 - - Non-associated companies 107 58 49 84 ------- ------- ------ Total 1,959 1,735 224 13 ======= ======= ====== Nine Months Ended Increase/ Description 1995 1994 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 111.7 $ 113.0 $(1.3) (1) Commercial 111.1 124.4 (13.3) (11) Industrial 17.4 19.7 (2.3) (12) Governmental 39.7 44.8 (5.1) (11) ------- ------- ----- Total retail 279.9 301.9 (22.0) (7) Sales for resale Associated companies 1.4 1.0 0.4 40 Non-associated companies 7.8 5.7 2.1 37 Other 21.0 (1.8) 22.8 * ------- ------- ----- Total $ 310.1 $ 306.8 $ 3.3 1 ======= ======= ===== Billed Electric Energy Sales (Millions of KWH): Residential 1,623 1,488 135 9 Commercial 1,583 1,535 48 3 Industrial 413 392 21 5 Governmental 744 713 31 4 ------- ------- ----- Total retail 4,363 4,128 235 6 Sales for resale Associated companies 71 39 32 82 Non-associated companies 243 152 91 60 ------- ------- ----- Total 4,677 4,319 358 8 ======= ======= ===== * - Greater than 200%. Electric operating revenues increased for the three months and nine months ended September 30, 1995 because of an increase in energy sales partially offset by the impact of a permanent rate reduction that took effect on January 1, 1995. The increase in energy sales is due to increased sales volume and increased sales for resale to non- associated utilities. For the three months and nine months ended September 30, 1995, approximately 57 and 73 percent of the sales volume/weather increase in electric operating revenue resulted from increased customers and associated usage, respectively; the remainder increase resulted from warmer weather. The changes in electric operating revenue for the three months and nine months ended September 30, 1995 are as follows: Three Months Ended Nine Months Ended Description Increase/(Decrease) Increase/(Decrease) (In Millions) Change in base rates $(11.0) $(14.3) Fuel cost recovery 6.7 (0.4) Sales volume/weather 9.0 11.7 Other revenue (including unbilled) 8.4 3.8 Sales for resale 1.4 2.5 ----- ----- Total $14.5 $ 3.3 ===== ===== For the three months and nine months ended September 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 increased for the three months ended September 30, 1995 as the result of an increase in fuel expenses and the amortization of rate deferrals. The increase in fuel and fuel-related expenses is primarily due to the increase in weather- related energy sales. The amortization of rate deferrals increased primarily as a result of the collection of larger amounts of previously deferred costs under the 1991 NOPSI Settlement. Operating expenses decreased for the nine months ended September 30, 1995 due primarily to a decrease in fuel expenses and other operation and maintenance expenses, partially offset by an increase in the amortization of rate deferrals. The decrease in fuel and fuel-related expenses is primarily due to a decrease in gas purchased for resale as a result of lower gas sales and a lower unit purchase price partially offset by an increase in energy sales. 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 the 1994 restructuring and the related decrease in employees. The amortization of rate deferrals increased as the result of the collection of larger amounts of previously deferred costs under the 1991 NOPSI Settlement. SYSTEM ENERGY Net Income Net income decreased for the three months and nine months ended September 1995, as the result of revenues being adversely impacted by a lower Grand Gulf 1 rate base. Significant factors affecting the results of operations and causing variances between the three months and nine 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. 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 decreased for the three months ended September 30, 1995, due primarily to a lower return on System Energy's decreasing investment in Grand Gulf 1 (caused by depreciation of the unit and the reclassification of plant costs discussed below), offset by the recovery of increased expenses in connection with a Grand Gulf 1 refueling outage and higher depreciation, amortization and decommissioning expense. Operating revenues for the nine months ended September 30, 1995 increased as a result of the recovery of higher current operating expenses related to the Grand Gulf 1 refueling outage, partially offset by a lower return on System Energy's decreasing investment in Grand Gulf 1. Expenses Nuclear refueling outage expenses increased for the three months and nine months ended September 30, 1995 principally as a result of a refueling outage which began April 15, 1995 and ended June 21, 1995. There was no refueling outage for Grand Gulf 1 in 1994. Fuel expense decreased for the first nine months of 1995 as a result of the refueling outage. Other operation and maintenance expenses decreased for the three months ended September 30, 1995 primarily as a result of lower payroll and overhead expenses and lower payments associated with the sale/leaseback of Grand Gulf 1. Depreciation, amortization and decommissioning expense increased for the three months and nine months ended September 30, 1995, due primarily to increases of $2 million and $7 million, respectively, in amortization expense as a result of the reclassification of $81 million of Grand Gulf 1 costs in accordance with the 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 for the three months and nine months ended September 30, 1995 due primarily to the retirement and refinancing of higher costing 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 See "Significant Factors and Known Trends" in Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and System Energy's Form 10-K for a discussion of the increasing competitive pressures facing the electric utility industry. Entergy Retail and Wholesale Rate Issues See Note 2 to Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's, NOPSI's and System Energy's Form 10-K, for a discussion of the ongoing trend of regulatory ordered rate reductions as well as incentive rate regulation. 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, continues to evolve. Approximately 40 states have been or are studying or experimenting with the concept of retail competition. 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 Poolco, while an independent operator would manage the transmission network and generation dispatch. Customers would gain access to the Poolco through bilateral contracts at least two years after it 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 adopted a similar proposal which is to be in place by mid-1996. Such 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. The Council has not scheduled hearings relating to this resolution. 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 the treatment of federal income taxes. During the second quarter of 1995, the Louisiana legislature considered a bill permitting local retail wheeling. The bill was defeated. The chairman of the PUCT recently introduced a proposal for discussion by the Commission concerning the restructuring of the electric utility industry in Texas. The proposal is designed to implement greater wholesale electric competition in Texas and addresses the issues of transmission service comparability, the unbundling of electric utility operations, market-based pricing, performance-based ratemaking and the recovery of stranded costs as part of the transition to a more competitive electric industry environment. Another indication of the trend toward greater competition in the electric utility industry is the recent surge of utility mergers. This trend is expected to continue. Such mergers are motivated by the drive to lower costs to increase economies of scale and consolidation of administrative functions at the merged entities. The lowered costs achieved will make the merged utilities more formidable competitors in the future. Certain of the proposed merged utilities will likely be in direct competition with Entergy in the future if these mergers are consummated. As discussed in "Significant Factors and Known Trends" in Entergy Corporation's, AP&L's, GSU's, LP&L's, MP&L's and NOPSI's Form 10-K the FERC issued a notice of proposed rulemaking in mid-1994, concerning a regulatory framework for dealing with recovery of stranded costs. On March 29, 1995, the 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 would also provide guidance on the recovery of wholesale and retail stranded costs. 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 and reply comments on the proposed rulemaking have now been filed with FERC by interested parties. Certain of the parties filing comments have proposed that the FERC should order the immediate unbundling of all retail services as part of the final rulemaking in this proceeding. In early October 1995, the FERC issued an order granting exempt wholesale generator status to Entergy Power Marketing Corporation, a wholly-owned subsidiary of Entergy Enterprises, Inc., which is a wholly-owned subsidiary of Entergy Corporation. 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 third quarter of 1995, KWH sales to GSU's industrial customers at non-full cost of service rates made up approximately 28% of GSU's total industrial class KWH sales. The Council has recently approved a resolution requiring the prior approval by the Council of regulatory treatment of any lost contribution to fixed costs as a result of incentive rate agreements with large industrial or commercial customers entered into for the purposes of retaining those customers. The resolution also requires prior approval by Council of regulatory treatment of stranded costs which may result from the loss of large customers. During 1995, LP&L received separate notices from two large industrial customers that have decided to proceed with proposed cogeneration projects for the purpose of fulfilling their future electric energy needs. These customers will continue to purchase their energy requirements from LP&L until their cogeneration facilities are completed, which is expected to be between the years 1999 and 2000. During 1994, these two customers combined represented approximately 18% of total LP&L industrial sales, and provided $36 million of base revenue. Public Utility Holding Company Act of 1935 Entergy, along with other electric utility holding companies, recently requested 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 the FERC and state and local regulators. On June 30, 1995, the SEC adopted a rule change under the HCA to eliminate the requirement to receive prior authorization for all capital contributions by a parent company to its subsidiary company. Proposed legislation to reform the HCA in an effort to streamline regulation of utilities recently was introduced in the Senate. The proposed legislation would transfer oversight of public utility holding companies from the SEC to the FERC. Nonregulated Investments As discussed in Note 1 and in "Corporate Development" in Item 1 of Part I of Entergy Corporation's Form 10-K, Entergy Corporation is considering opportunities to expand its utility and utility-related businesses that are not regulated by state and/or local regulatory authorities (nonregulated businesses). As of September 30, 1995, Entergy Corporation's net investment, reduced by accumulated losses, in nonregulated subsidiaries totaled $493.0 million. For the first nine months of 1995, Entergy Corporation's nonregulated investments reduced consolidated net income by approximately $31.8 million. See Part II for additional discussion of Entergy Corporation's investment in nonregulated businesses. ANO Matters Entergy Operations has made inspections and repairs from time to time on ANO 2's steam generators that are owned by AP&L. During the October 1995 inspection, additional cracks in the tubes were discovered. 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 September 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 nine months ended September 30, 1995, GSU recorded revenues resulting from the sale of electricity from the deregulated asset plan of approximately $26.3 million ($24.5 million represent non-fuel revenue)which, absent the deregulated asset plan, would not have been realized. Operation and maintenance expenses, including fuel, were approximately $23.8 million, and depreciation expense associated with the deregulated asset plan investment was approximately $13.8 million for the nine months ended September 30, 1995. 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 LP&L and GSU are working with tax authorities to determine the method for calculating the amount of property taxes to be paid when Waterford 3's and River Bend's local property tax exemptions expire in December 1995 and December 1996, respectively. 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 clean-up of certain hazardous waste disposal sites. GSU is currently negotiating with the EPA and state authorities regarding the clean-up of certain of these sites. See Note 1 for additional information. During 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including regulation of waste water impoundments. LP&L has determined that certain of its power plant waste water impoundments were affected by these regulations and has chosen to upgrade or close them. See Note 1 for additional information. Accounting Issues New Accounting Standard - In March 1995, the FASB issued SFAS 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 Energy Policy Act of 1992 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 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 September 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. 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 Merger-Related Proceedings (Entergy Corporation and GSU) See "State Regulation" in Item 1 of Part I of Entergy Corporation's Form 10-K and Part II of Entergy Corporation's Form 10- Q for the quarterly periods ending March 31, 1995 and June 30, 1995, 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 license amendments issued by the NRC 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. Cajun filed a petition for review with the D.C. Circuit. See "Other Regulation and Litigation" in Item 1 of Part I of Entergy Corporation's Form 10-K for information regarding other Merger- related suits. Cajun - River Bend (Entergy Corporation and GSU) See Note 8 of Entergy Corporation's and GSU's Form 10-K and Part II of Entergy Corporation's Form 10-Q for the quarterly period ending June 30, 1995, for a discussion of the Cajun litigation. In an order issued by the District Court in August 1995, the U.S. Trustee was directed to appoint a trustee in the Cajun bankruptcy case. A former federal bankruptcy judge, Ralph Mabey, was appointed as trustee to oversee Cajun in bankruptcy. The LPSC and Cajun have appealed the appointment of a trustee to the United States Court of Appeals for the Fifth Circuit. In October 1995, the United States Court of Appeals for the Fifth Circuit affirmed the District Court's preliminary injunction in the Cajun litigation. The preliminary injunction stipulated that GSU should make payments for its portion of expenses for Big Cajun 2, Unit 3 into the registry of the District Court. As of September 30, 1995, $29.6 million had been paid by GSU into the registry of the District Court. A trial on the portion of the suit by Cajun to rescind the Operating Agreement which began in April 1994 was completed in March 1995. On October 24, 1995, the District Court issued a memorandum opinion ruling in favor of GSU. The District Court found that Cajun did not prove that GSU fraudulently induced it to execute the Operating Agreement and Cajun failed to timely assert its claim. A final judgment will be entered when the District Court issues its detailed written reasons. It is uncertain when the District Court Judge's final opinion will be entered, or whether Cajun will appeal the decision. Cajun-Transmission Services (Entergy Corporation and GSU) See Note 1 and also see Note 8 of Entergy Corporation's and GSU's Form 10-K for a discussion of FERC proceedings relating to GSU and Cajun transmission service charge disputes. In orders issued on August 3, 1995, and October 2, 1995, the FERC affirmed the ALJ's April 1995, ruling in the remanded portion of GSU's and Cajun's ongoing transmission service charge disputes before the FERC. Both GSU and Cajun have petitioned for appeal to the D.C Circuit. Cajun-Service Dispute (Entergy Corporation and GSU) See "Other Regulation and Litigation " in Item 1 of Part I of Entergy Corporation's Form 10-K for a discussion of the transmission service dispute in which Cajun requested that GSU provide the transmission of power over GSU's transmission system to certain industrial customers in Lake Charles, Louisiana. In October 1995, the D.C. Circuit affirmed the FERC's previous opinion in its entirety. The FERC held that GSU properly exercised its contractual right to refuse to provide transmission service to Cajun. Filings with the APSC (Entergy Corporation, AP&L and Entergy Power) In September 1995, the APSC approved a waiver application filed by Entergy Power which would enable Entergy Power to make sales to wholesale entities in Arkansas which are not currently served by AP&L. In response to a request by certain Arkansas cities, the APSC agreed to decide whether Entergy Power can also sell to the wholesale entities that currently are served by AP&L. Mississippi Cities Complaint (Entergy Corporation and MP&L) As discussed in "Significant Factors and Known Trends" of MP&L's Form 10-K, in October 1994 certain Mississippi cities filed a complaint in state court against MP&L and eight other power associations requesting the repeal of certain amendments to the Mississippi Public Utilities Act that prevent municipalities from acquiring a utility's facilities that are located in municipalities where the utility holds a certificate to serve. In October 1995, the state court dismissed the complaint. Plaintiffs have until November 27, 1995, to appeal to the Mississippi Supreme Court. City of New Orleans Complaint (Entergy Corporation, AP&L, LP&L, MP&L, NOPSI and System Energy) As discussed in "Wholesale Rate Matters" in Item 1 of Part I of Entergy Corporation's Form 10-K, in August 1990, the City of New Orleans filed a complaint against Entergy Corporation, AP&L, LP&L, MP&L, NOPSI and System Energy requesting that the FERC investigate AP&L's transfer of its interest in Independence 2 and Ritchie 2 to Entergy Power and the effect of the transfer on AP&L, LP&L, MP&L and NOPSI and their ratepayers. On October 20, 1995, the D.C. Circuit affirmed the FERC's original orders. The FERC's original orders held that the transfer and its effect on current rates were prudent. However, the prudency of the transfer on future replacement costs was deferred until a time when the need for such replacement capacity occurs. Crown Vista Energy Project (Entergy Corporation and Entergy Power Development Corporation) EPDC entered into a joint venture, known as Crown Vista Energy Project (Crown Vista), with Mission Energy and Ahlstrom Development to provide power to Jersey Central Power & Light (JCP&L). In August 1995 Mission Energy filed a complaint against Entergy Corporation and EPDC alleging that EPDC improperly failed to pay at least $1.4 million in certain project development costs to Mission Energy. Mission Energy seeks to recoup these payments. The complaint also seeks declaratory relief regarding Mission Energy's obligation to reimburse EPDC for previously incurred development expenses in the event that Mission Energy sells, disposes of or transfers any of its interest in Crown Vista to another party. It is believed that Mission Energy has reached a settlement with General Public Utilities Corporation, parent of JCP&L, which provides for a payment to Mission Energy in consideration for the cessation of development of Crown Vista. Crown Vista's purchased power agreements with JCP&L have been sold and Mission Energy has paid a portion of the sales proceeds to Ahlstrom Development. However, Mission Energy has made no settlement with EPDC. EPDC anticipates filing claims against Mission Energy to obtain reimbursement of the approximately $8.7 million in Crown Vista development costs incurred to date by EPDC. Management believes it has valid grounds to recover its investment in Crown Vista. No assurances can be given as to the timing or outcome of this matter. Item 4. Submission of Matters to a Vote of Security Holders Redemption of Preferred Stock (Entergy Corporation and NOPSI) A consent in lieu of a special meeting of NOPSI common stockholders was executed on July 14, 1995. The consent was signed on behalf of Entergy Corporation, the holder of all issued and outstanding shares of NOPSI common stock. The common stockholder, by such consent, approved the redemption of the remaining outstanding shares (19,495 shares) of NOPSI's 15.44% Series Preferred Stock, Cumulative, $100 Par Value. Item 5. Other Information Nonregulated Investments (Entergy Corporation and Entergy, S.A.) As discussed in "Corporate Development" in Item 1 of Part I of Entergy Corporation's Form 10-K, Entergy Corporation's subsidiary, Entergy, S.A., acquired a 10% interest in a consortium with other nonaffiliated companies that acquired a 60% interest in Central Costanera, S.A. (Costanera), a steam electric generating facility located in Argentina. During the three months ending September 30, 1995, Entergy, S.A. purchased 3.9% of the outstanding stock of the Central Buenos Aires Project (the CBA Project) for $1.7 million. Through Entergy, S.A.'s interest in Costanera, Entergy, S.A. indirectly purchased an additional 3% of the outstanding stock of the CBA Project. In October 1995, Entergy Power Holding Limited, a wholly owned subsidiary of Entergy Corporation, purchased Entergy, S.A.'s interest in the CBA Project and purchased an additional 3.9% of the outstanding stock of the CBA Project for $1.9 million. The CBA Project includes the addition of a 220 megawatt combustion turbine and heat recovery boiler to a generating unit at the Costanera steam electric generating facility. This addition will provide electricity to the Argentina transmission grid and steam to the Costanera generating unit. The open cycle portion of the CBA Project, which will provide electricity to the Argentina transmission grid, is expected to be in commercial operation by the end of October 1995. The steam recovery portion, which will provide steam to the Costanera generating unit, is expected to be in operation in October 1996. Labor Contract Negotiations (Entergy Corporation AP&L, GSU and MP&L) As discussed in Part II of Entergy Corporation's Form 10-Q for the quarterly periods ending March 31, 1995 and June 30, 1995, 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 settlement offer as well as a contingent offer and authorized the union leadership to call a strike if necessary. In August 1995, GSU implemented its last, best and final offer, but there has been no acceptance of this offer. 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. On October 12 and 14, 1995, the IBEW voted to accept a new three- year collective bargaining agreement with AP&L and MP&L, respectively. 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: Ratios of Earnings to Fixed Charges Twelve Months Ended December 31, September 30, 1990 1991 1992 1993 1994 1995 AP&L 2.16 2.25 2.28 3.11(b) 2.32 2.63 GSU .80(c) 1.56 1.72 1.54 .36(c) 1.09 LP&L 2.32 2.40 2.79 3.06 2.91 3.26 MP&L 2.42 2.36 2.37 3.79(b) 2.12 2.63 NOPSI 2.73 5.66 2.66 4.68(b) 1.91 2.19 System Energy 2.10 1.74 2.04 1.87 1.23 1.24 Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1990 1991 1992 1993 1994 1995 AP&L 1.81 1.87 1.86 2.54(b) 1.97 2.24 GSU (a) .59(c) 1.19 1.37 1.21 .29(c) .96(c) LP&L 1.87 1.95 2.18 2.39 2.43 2.73 MP&L 1.93 1.94 1.97 3.08(b) 1.81 2.29 NOPSI 2.36 4.97 2.36 4.12(b) 1.73 2.01 (a) "Preferred Dividends" in the case of GSU also include dividends on preference stock. (b) 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. (c) Earnings of GSU for the years ended December 31, 1994 and 1990, were not adequate to cover fixed charges by $144.8 million and $60.6 million, respectively. Earnings of GSU for the years ended December 31, 1994 and 1990, were not adequate to cover combined fixed charges and preferred dividends by $197.1 million and $165.1 million, respectively. Earnings of GSU for the twelve months ended September 30, 1995 were not adequate to cover combined fixed charges and preferred dividends by $10 million. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits* **4(a) Credit Agreement, dated as of October 10, 1995, among Entergy, the Banks (Bank of America National Trust & Savings Association, The Bank of New York, Chemical Bank, Citibank, N.A., Union Bank of Switzerland, ABN AMRO Bank N.V., The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Bank, N.A., First National Bank of Commerce, and Whitney National Bank) and Citibank, N.A.,as Agent (filed as Exhibit B to Rule 24 Certificate dated October 20, 1995 in File No. 70- 8149). **4(b) Indenture, dated as of September 1, 1995, between System Energy Resources, Inc. and Chemical Bank (filed as Exhibit B-10(a) to Rule 24 Certificate dated October 20, 1995). 23(a) - Consent of Clark, Thomas & Winters (A Professional Corporation). 23(b) - Consent of Sandlin Associates. 27(a) - Financial Data Schedule for Entergy Corporation and Subsidiaries as of September 30, 1995. 27(b) - Financial Data Schedule for AP&L as of September 30, 1995. 27(c) - Financial Data Schedule for GSU as of September 30, 1995. 27(d) - Financial Data Schedule for LP&L as of September 30, 1995. 27(e) - Financial Data Schedule for MP&L as of September 30, 1995. 27(f) - Financial Data Schedule for NOPSI as of September 30, 1995. 27(g) - Financial Data Schedule for System Energy as of September 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) - Quarterly Report on Form 10-Q of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the quarter ended June 30, 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(j) - 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(k) - 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(l) - 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 September 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 September 30, 1995. ** Incorporated herein by reference as indicated. (b) Reports on Form 8-K Entergy A current report on Form 8-K, dated October 25, 1995, was filed with the SEC on October 25, 1995, reporting information under Item 5. "Other Events." GSU A current report on Form 8-K, dated October 25, 1995, was filed with the SEC on October 25, 1995, reporting information under Item 5. "Other Events." EXPERTS 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/ Louis E. Buck, Jr. Louis E. Buck, Jr. Vice President, Chief Accounting Officer and Assistant Secretary (For each Registrant and for each as Principal Accounting Officer) Date: November 6, 1995 EX-23 2 Exhibit 23(a) [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 November 6, 1995 EX-23 3 Exhibit 23(b) 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/ Sandlin Associates SANDLIN ASSOCIATES Management Consultants Pasco, Washington November 6, 1995 EX-27 4 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from Entergy's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 017 ENTERGY CORPORATION AND SUBSIDIARIES 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 15,802,065 530,063 2,613,829 3,650,659 0 22,596,616 2,300 4,201,435 2,396,953 6,533,566 260,342 550,955 6,749,860 648 0 0 667,375 0 308,068 152,968 7,305,712 22,596,616 4,855,592 327,312 3,512,572 3,839,884 1,015,708 19,998 1,035,706 553,560 541,501 59,355 482,146 306,465 0 1,069,443 0 0
EX-27 5 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from AP&L's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 001 ARKANSAS POWER & LIGHT COMPANY 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 2,864,608 176,534 640,292 628,165 0 4,309,599 470 590,844 528,450 1,119,764 51,527 176,350 1,281,030 667 0 0 27,425 0 102,937 56,971 1,492,928 4,309,599 1,282,208 59,532 1,030,203 1,089,735 192,473 24,485 216,958 83,089 133,869 13,617 120,252 83,600 0 282,108 0 0
EX-27 6 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from GSU's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 003 GULF STATES UTILITIES COMPANY 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 4,655,790 55,560 757,810 1,389,063 0 6,858,223 114,055 1,152,469 357,171 1,623,695 90,087 136,444 2,250,420 0 0 0 70,425 0 95,051 37,366 2,554,735 6,858,223 1,419,242 63,715 1,105,847 1,169,562 249,680 13,454 263,134 148,034 115,100 22,357 92,743 0 0 344,267 0 0
EX-27 7 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from LP&L's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 009 LOUISIANA POWER & LIGHT COMPANY 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 3,544,528 69,330 406,893 467,680 0 4,488,431 1,088,900 (4,835) 145,206 1,229,271 100,009 160,500 1,368,386 0 0 0 110,260 0 41,267 28,000 1,450,738 4,488,431 1,288,081 104,366 903,260 1,007,626 280,455 2,938 283,393 101,430 181,963 16,177 165,786 134,000 0 308,207 0 0
EX-27 8 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from MP&L's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 010 MISSISSIPPI POWER & LIGHT COMPANY 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 987,817 11,148 321,240 314,050 0 1,634,255 199,326 (218) 250,023 449,131 16,770 57,881 504,358 0 0 0 66,015 0 456 0 539,644 1,634,255 692,482 30,022 565,609 595,631 96,851 1,547 98,398 38,818 59,580 6,168 53,412 35,400 0 139,406 0 0
EX-27 9 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from NOPSI's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 011 NEW ORLEANS PUBLIC SERVICE INC 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 280,726 3,259 170,360 166,950 0 621,295 33,744 36,247 95,545 165,536 1,950 19,780 155,946 0 0 0 38,250 0 0 0 239,833 621,295 368,272 18,110 305,714 323,824 44,448 715 45,163 13,368 31,795 1,035 30,760 14,100 0 70,690 0 0
EX-27 10 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT This schedule contains summary financial information extracted from SERI's financial statements for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 012 SYSTEM ENERGY RESOURCES, INC. 1,000 9-MOS DEC-31-1994 SEP-30-1995 PER-BOOK 2,698,013 38,606 201,866 659,492 0 3,597,977 789,350 7 85,914 875,271 0 0 1,189,720 0 0 0 355,000 0 53,585 28,000 1,096,401 3,597,977 455,054 57,775 218,254 276,029 179,025 5,536 184,561 114,828 69,733 0 69,733 69,500 0 51,199 0 0
EX-99 11
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, September 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 $102,335 Interest on notes payable 1,027 -- 117 349 1,311 715 Amortization of expense and premium on debt-net(cr) 1,792 1,112 1,359 2,702 4,563 4,495 Other interest 1,567 1,303 2,308 8,769 3,501 5,452 Interest applicable to rentals 24,233 21,969 17,657 16,860 19,140 18,663 ---------------------------------------------------------------- Total fixed charges, as defined 161,226 158,238 141,758 136,451 129,954 131,660 Preferred dividends, as defined (a) 30,851 31,458 32,195 30,334 23,234 23,035 ---------------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $192,077 $189,696 $173,953 $166,785 $153,188 $154,695 ================================================================ Earnings as defined: Net Income $129,765 $143,451 $130,529 $205,297 $142,263 $171,350 Add: Provision for income taxes: Federal & State 50,921 44,418 57,089 58,162 83,300 91,850 Deferred - net 17,943 11,048 3,490 34,748 (17,939) (16,546) Investment tax credit adjustment - net (12,022) (1,600) (9,989) (10,573) (36,141) (31,693) Fixed charges as above 161,226 158,238 141,758 136,451 129,954 131,660 ---------------------------------------------------------------- Total earnings, as defined $347,833 $355,555 $322,877 $424,085 $301,437 $346,621 ================================================================ Ratio of earnings to fixed charges, as defined 2.16 2.25 2.28 3.11 2.32 2.63 ================================================================ Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.81 1.87 1.86 2.54 1.97 2.24 ================================================================ - ------------------------ (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 12
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, September 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on long-term debt $218,462 $201,335 $197,218 $172,494 $167,082 $183,987 Interest on notes payable 36,963 27,953 21,155 19,440 20,203 741 Other interest 18,380 29,169 26,564 10,561 7,957 6,251 Amortization of expense and premium on debt-net(cr) 2,192 1,999 3,479 8,104 8,892 8,926 Interest applicable to rentals 23,761 24,049 23,759 23,455 21,539 18,343 ---------------------------------------------------------------- Total fixed charges, as defined 299,758 284,505 272,175 234,054 225,673 218,248 Preferred dividends, as defined (a) 104,484 90,146 69,617 65,299 52,210 30,015 ---------------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $404,242 $374,651 $341,792 $299,353 $277,883 $248,263 ================================================================ 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) $19,810 Add: Income Taxes (24,216) 48,250 55,860 58,016 (62,086) 205 Fixed charges as above 299,758 284,505 272,175 234,054 225,673 218,248 ---------------------------------------------------------------- Total earnings, as defined $239,143 $445,146 $467,448 $361,532 $80,832 $238,263 ================================================================ Ratio of earnings to fixed charges, as defined 0.80 1.56 1.72 1.54 0.36 1.09 ================================================================ Ratio of earnings to combined fixed charges and preferred dividends, as defined 0.59 1.19 1.37 1.21 0.29 0.96 ================================================================ ___________________ (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 September 30, 1995 for GSU were not adequate to cover fixed charges and preferred dividends by $10.0 million.
EX-99 13
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, September 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 $124,992 Interest on notes payable 87 -- 150 898 1,948 1,729 Other interest charges 6,378 5,924 5,591 5,706 4,546 5,230 Amortization of expense and premium on debt - net(cr) 3,397 3,282 7,100 5,720 5,130 5,387 Interest applicable to rentals 12,906 11,381 9,363 8,519 8,332 9,088 ---------------------------------------------------------------- Total fixed charges, as defined 177,125 179,403 150,876 145,476 144,776 146,426 Preferred dividends, as defined (a) 42,365 41,212 42,026 40,779 29,171 28,777 ---------------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $219,490 $220,615 $192,902 $186,255 $173,947 $175,203 ================================================================ Earnings as defined: Net Income $155,049 $166,572 $182,989 $188,808 $213,839 $243,325 Add: Provision for income taxes: Federal and State 62,236 8,684 36,465 70,552 79,260 152,648 Deferred Federal and State - net (9,655) 67,792 51,889 43,017 21,580 (27,948) Investment tax credit adjustment - net 26,646 8,244 (1,317) (2,756) (37,552) (36,721) Fixed charges as above 177,125 179,403 150,876 145,476 144,776 146,426 ---------------------------------------------------------------- Total earnings, as defined $411,401 $430,695 $420,902 $445,097 $421,903 $477,730 ================================================================ Ratio of earnings to fixed charges, as defined 2.32 2.40 2.79 3.06 2.91 3.26 ================================================================ Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.87 1.95 2.18 2.39 2.43 2.73 ================================================================ - ------------------------ (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 14
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, September 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 $45,619 Interest on notes payable 1,512 953 36 7 1,348 521 Other interest charges 1,494 1,444 1,636 1,795 3,581 4,789 Amortization of expense and premium on debt-net(cr) 1,737 1,617 1,685 1,458 1,754 1,616 Interest applicable to rentals 596 574 521 1,264 1,716 2,341 --------------------------------------------------------------- Total fixed charges, as defined 69,314 68,216 64,587 56,623 54,480 54,886 Preferred dividends, as defined (a) 17,584 14,962 12,823 12,990 9,447 8,168 --------------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $86,898 $83,178 $77,410 $69,613 $63,927 $63,054 =============================================================== Earnings as defined: Net Income $60,830 $63,088 $65,036 $101,743 $48,779 $69,601 Add: Provision for income taxes: Federal and State 4,027 (1,001) 4,463 54,418 46,884 56,488 Deferred Federal and State - net 35,721 32,491 20,430 539 (26,763) (29,301) Investment tax credit adjustment - net (1,835) (1,634) (1,746) 1,036 (7,645) (7,452) Fixed charges as above 69,314 68,216 64,587 56,623 54,480 54,886 ---------------------------------------------------------------- Total earnings, as defined $168,057 $161,160 $152,770 $214,359 $115,735 $144,222 ================================================================ Ratio of earnings to fixed charges, as defined 2.42 2.36 2.37 3.79 2.12 2.63 ================================================================ Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.93 1.94 1.97 3.08 1.81 2.29 ================================================================ - ------------------------ (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 15
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, September 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on long-term debt $24,472 $23,865 $22,934 $19,478 $16,382 $15,381 Interest on notes payable -- -- -- -- 153 144 Other interest charges 831 793 1,714 1,016 1,027 1,725 Amortization of expense and premium on debt-net(cr) 579 565 576 598 710 649 Interest applicable to rentals 160 517 444 544 1,245 1,057 --------------------------------------------------------------- Total fixed charges, as defined 26,042 25,740 25,668 21,636 19,517 18,956 Preferred dividends, as defined (a) 4,020 3,582 3,214 2,952 2,071 1,770 --------------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $30,062 $29,322 $28,882 $24,588 $21,588 $20,726 =============================================================== Earnings as defined: Net Income $27,542 $74,699 $26,424 $47,709 $13,211 $17,448 Add: Provision for income taxes: Federal and State 134 8,885 16,575 27,479 22,606 13,343 Deferred Federal and State - net 17,370 36,947 (340) 5,203 (15,674) (5,896) Investment tax credit adjustment - net (75) (591) (170) (744) (2,332) (2,259) Fixed charges as above 26,042 25,740 25,668 21,636 19,517 18,956 --------------------------------------------------------------- Total earnings, as defined $71,013 $145,680 $68,157 $101,283 $37,328 $41,592 =============================================================== Ratio of earnings to fixed charges, as defined 2.73 5.66 2.66 4.68 1.91 2.19 =============================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 2.36 4.97 2.36 4.12 1.73 2.01 =============================================================== - ------------------------ (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 16
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, September 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 $144,125 Interest on notes payable 0 0 0 0 88 172 Amortization of expense and premium on debt-net 10,532 7,495 6,417 4,520 6,731 6,188 Interest applicable to rentals 13,830 10,007 6,265 6,790 7,546 5,982 Other interest charges 1,460 3,617 1,506 1,600 7,168 12,304 --------------------------------------------------------------- Total fixed charges, as defined $256,466 $239,657 $210,806 $197,728 $184,050 $168,771 =============================================================== Earnings as defined: Net Income $168,677 $104,622 $130,141 $93,927 $5,407 $3,445 Add: Provision for income taxes: Federal and State 4,620 (26,848) 35,082 48,314 67,477 95,297 Deferred Federal and State - net 52,962 37,168 23,648 60,690 (27,374) (55,287) Investment tax credit adjustment - net 56,320 63,256 30,123 (30,452) (3,265) (3,265) Fixed charges as above 256,466 239,657 210,806 197,728 184,050 168,771 --------------------------------------------------------------- Total earnings, as defined $539,045 $417,855 $429,800 $370,207 $226,295 $208,961 =============================================================== Ratio of earnings to fixed charges, as defined 2.10 1.74 2.04 1.87 1.23 1.24 ===============================================================
EX-99 17 Exhibit 99(l) [LETTERHEAD OF CLARK, THOMAS & WINTERS] November 6, 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 September 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. -----END PRIVACY-ENHANCED MESSAGE-----