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__________________________________________________________________________________________ UNITED STATES (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF For the Quarterly Period Ended March 31, 2007 OR TRANSITION REPORT PURSUANT TO SECTION 13 For the transition period from ____________ to ____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
THE SECURITIES EXCHANGE ACT OF 1934
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Registrant, State of Incorporation, Address of |
|
Registrant, State of Incorporation, Address of |
|
1-11299 |
ENTERGY CORPORATION |
1-31508 |
ENTERGY MISSISSIPPI, INC. |
|
1-10764 |
ENTERGY ARKANSAS, INC. |
0-5807 |
ENTERGY NEW ORLEANS, INC. |
|
1-27031 |
ENTERGY GULF STATES, INC. |
1-9067 |
SYSTEM ENERGY RESOURCES, INC. |
|
1-32718 |
ENTERGY LOUISIANA, LLC |
|||
__________________________________________________________________________________________
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 þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large |
|
|
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Entergy Corporation |
Ö |
||||
Entergy Arkansas, Inc. |
Ö |
||||
Entergy Gulf States, Inc. |
Ö |
||||
Entergy Louisiana, LLC |
Ö |
||||
Entergy Mississippi, Inc. |
Ö |
||||
Entergy New Orleans, Inc. |
Ö |
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System Energy Resources, Inc. |
Ö |
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes
o No þ
Outstanding at April 30, 2007 |
||
Entergy Corporation |
($0.01 par value) |
197,264,890 |
Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Resources, Inc. separately file this combined Quarterly Report on Form 10-Q. Information contained herein relating to any individual company is filed by such company on its own behalf. Each company reports herein only as to itself and makes no other representations whatsoever as to any other company. 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, 2006, filed by the individual registrants with the SEC, and should be read in conjunction therewith.
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 2007
Page Number |
|||
Definitions |
1 |
||
Entergy Corporation and Subsidiaries |
|||
Management's Financial Discussion and Analysis |
|||
Hurricane Katrina and Hurricane Rita |
4 |
||
Results of Operations |
6 |
||
Liquidity and Capital Resources |
8 |
||
Significant Factors and Known Trends |
11 |
||
Critical Accounting Estimates |
14 |
||
New Accounting Pronouncements |
14 |
||
Consolidated Statements of Income |
16 |
||
Consolidated Statements of Cash Flows |
18 |
||
Consolidated Balance Sheets |
20 |
||
Consolidated Statements of Retained Earnings, Comprehensive Income, and |
22 |
||
Selected Operating Results |
23 |
||
Notes to Financial Statements |
24 |
||
Part I. Item 4. Controls and Procedures |
39 |
||
Entergy Arkansas, Inc. |
|||
Management's Financial Discussion and Analysis |
|||
Results of Operations |
40 |
||
Liquidity and Capital Resources |
42 |
||
Significant Factors and Known Trends |
43 |
||
Critical Accounting Estimates |
44 |
||
New Accounting Pronouncements |
44 |
||
Income Statements |
45 |
||
Statements of Cash Flows |
47 |
||
Balance Sheets |
48 |
||
Selected Operating Results |
50 |
||
Entergy Gulf States, Inc. |
|||
Management's Financial Discussion and Analysis |
|||
Hurricane Rita and Hurricane Katrina |
51 |
||
Results of Operations |
51 |
||
Liquidity and Capital Resources |
53 |
||
Significant Factors and Known Trends |
54 |
||
Critical Accounting Estimates |
55 |
||
New Accounting Pronouncements |
55 |
||
Income Statements |
56 |
||
Statements of Cash Flows |
57 |
||
Balance Sheets |
58 |
||
Statements of Retained Earnings and Comprehensive Income |
60 |
||
Selected Operating Results |
61 |
||
Entergy Louisiana, LLC |
|||
Management's Financial Discussion and Analysis |
|||
Hurricane Rita and Hurricane Katrina |
62 |
||
Results of Operations |
62 |
||
Liquidity and Capital Resources |
64 |
||
Significant Factors and Known Trends |
65 |
||
Critical Accounting Estimates |
66 |
||
New Accounting Pronouncements |
66 |
||
Income Statements |
67 |
||
Statements of Cash Flows |
69 |
||
Balance Sheets |
70 |
ENTERGY CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 2007
Page Number |
|||
Statements of Members' Equity and Comprehensive Income |
72 |
||
Selected Operating Results |
73 |
||
Entergy Mississippi, Inc. |
|||
Management's Financial Discussion and Analysis |
|||
Results of Operations |
74 |
||
Liquidity and Capital Resources |
75 |
||
Significant Factors and Known Trends |
77 |
||
Critical Accounting Estimates |
77 |
||
New Accounting Pronouncements |
77 |
||
Income Statements |
78 |
||
Statements of Cash Flows |
79 |
||
Balance Sheets |
80 |
||
Selected Operating Results |
82 |
||
Entergy New Orleans, Inc. (Debtor-in-possession) |
|||
Management's Financial Discussion and Analysis |
|||
Hurricane Katrina |
83 |
||
Bankruptcy Proceedings |
83 |
||
Results of Operations |
84 |
||
Liquidity and Capital Resources |
85 |
||
Significant Factors and Known Trends |
87 |
||
Critical Accounting Estimates |
87 |
||
New Accounting Pronouncements |
87 |
||
Income Statements |
88 |
||
Statements of Cash Flows |
89 |
||
Balance Sheets |
90 |
||
Selected Operating Results |
92 |
||
System Energy Resources, Inc. |
|||
Management's Financial Discussion and Analysis |
|||
Results of Operations |
93 |
||
Liquidity and Capital Resources |
93 |
||
Significant Factors and Known Trends |
94 |
||
Critical Accounting Estimates |
94 |
||
New Accounting Pronouncements |
94 |
||
Income Statements |
95 |
||
Statements of Cash Flows |
97 |
||
Balance Sheets |
98 |
||
Part II. Other Information |
|||
Item 1. Legal Proceedings |
100 |
||
Item 1A. Risk Factors |
100 |
||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
100 |
||
Item 5. Other Information |
100 |
||
Item 6. Exhibits |
103 |
||
Signature |
106 |
FORWARD-LOOKING INFORMATION
In this combined report and from time to time, Entergy Corporation and the Registrant Subsidiaries each makes statements as a registrant concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "intends," "plans," "predicts" and "estimates" and similar expressions are intended to identify forward-looking statements but are not the only means to identify these statements. Although each of these registrants believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Any forward-looking statement is based on information current as of the date of this combined report and speaks only as of the date on which such statement is made. Except to the extent required by the federal securities laws, these registrants undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Forward-looking statements involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including those factors discussed or incorporated by reference in (a) Item 1A. Risk Factors in the Form 10-K, (b) Management's Financial Discussion and Analysis in the Form 10-K and in this report, and (c) the following factors (in addition to others described elsewhere in this combined report and in subsequent securities filings):
FORWARD-LOOKING INFORMATION (Concluded)
DEFINITIONS
Certain abbreviations or acronyms used in the text are defined below:
Abbreviation or Acronym |
Term |
AEEC |
Arkansas Electric Energy Consumers |
AFUDC |
Allowance for Funds Used During Construction |
ALJ |
Administrative Law Judge |
ANO 1 and 2 |
Units 1 and 2 of Arkansas Nuclear One Steam Electric Generating Station (nuclear), owned by Entergy Arkansas |
APSC |
Arkansas Public Service Commission |
Average realized price per MWh |
Revenue per MWh billed |
Board |
Board of Directors of Entergy Corporation |
Cajun |
Cajun Electric Power Cooperative, Inc. |
capacity factor |
Actual plant output divided by maximum potential plant output for the period |
City Council or Council |
Council of the City of New Orleans, Louisiana |
CPI-U |
Consumer Price Index - Urban |
DOE |
United States Department of Energy |
EITF |
FASB's Emerging Issues Task Force |
Energy Commodity Services |
Entergy's business segment that includes Entergy-Koch, LP and Entergy's non-nuclear wholesale assets business |
Entergy |
Entergy Corporation and its direct and indirect subsidiaries |
Entergy Corporation |
Entergy Corporation, a Delaware corporation |
Entergy-Koch |
Entergy-Koch, LP, a joint venture equally owned by subsidiaries of Entergy and Koch Industries, Inc. |
Entergy Louisiana |
Entergy Louisiana Holdings, Inc. and Entergy Louisiana, LLC |
EPA |
United States Environmental Protection Agency |
EPDC |
Entergy Power Development Corporation, a wholly-owned subsidiary of Entergy Corporation |
ERCOT |
Electric Reliability Council of Texas |
FASB |
Financial Accounting Standards Board |
FEMA |
Federal Emergency Management Agency |
FERC |
Federal Energy Regulatory Commission |
firm liquidated damages |
Transaction that requires receipt or delivery of energy at a specified delivery point (usually at a market hub not associated with a specific asset); if a party fails to deliver or receive energy, the defaulting party must compensate the other party as specified in the contract |
Form 10-K |
Annual Report on Form 10-K for the calendar year ended December 31, 2006 filed by Entergy Corporation and its Registrant Subsidiaries with the SEC |
FSP |
FASB Staff Position |
Grand Gulf |
Unit No. 1 of Grand Gulf Steam Electric Generating Station (nuclear), 90% owned or leased by System Energy |
GWh |
Gigawatt-hour(s), which equals one million kilowatt-hours |
GWh billed |
Total number of GWh billed to all customers |
Independence |
Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by Entergy Mississippi, and 7% by Entergy Power |
IRS |
Internal Revenue Service |
ISO |
Independent System Operator |
kV |
Kilovolt |
kW |
Kilowatt |
1
DEFINITIONS (Continued)
Abbreviation or Acronym |
Term |
kWh |
Kilowatt-hour(s) |
LDEQ |
Louisiana Department of Environmental Quality |
LPSC |
Louisiana Public Service Commission |
Mcf |
One thousand cubic feet of gas |
MMBtu |
One million British Thermal Units |
MPSC |
Mississippi Public Service Commission |
MW |
Megawatt(s), which equals one thousand kilowatt(s) |
MWh |
Megawatt-hour(s) |
Nelson Unit 6 |
Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, owned 70% by Entergy Gulf States |
Net debt ratio |
Gross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents |
Net MW in operation |
Installed capacity owned and operated |
Net revenue |
Operating revenue net of fuel, fuel-related, and purchased power expenses; and other regulatory credits |
Non-Utility Nuclear |
Entergy's business segment that owns and operates six nuclear power plants and sells electric power produced by those plants primarily to wholesale customers |
NRC |
Nuclear Regulatory Commission |
NYPA |
New York Power Authority |
OASIS |
Open Access Same Time Information Systems |
PPA |
Purchased power agreement |
production cost |
Cost in $/MMBtu associated with delivering gas, excluding the cost of the gas |
PRP |
Potentially responsible party (a person or entity that may be responsible for remediation of environmental contamination) |
PUCT |
Public Utility Commission of Texas |
PUHCA 1935 |
Public Utility Holding Company Act of 1935, as amended |
PUHCA 2005 |
Public Utility Holding Company Act of 2005, which repealed PUHCA 1935, among other things |
PURPA |
Public Utility Regulatory Policies Act of 1978 |
Registrant Subsidiaries |
Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Resources, Inc. |
Ritchie Unit 2 |
Unit 2 of the R.E. Ritchie Steam Electric Generating Station (gas/oil) |
River Bend |
River Bend Steam Electric Generating Station (nuclear), owned by Entergy Gulf States |
SEC |
Securities and Exchange Commission |
SFAS |
Statement of Financial Accounting Standards as promulgated by the FASB |
SMEPA |
South Mississippi Electric Power Agency, which owns a 10% interest in Grand Gulf |
spark spread |
Dollar difference between electricity prices per unit and natural gas prices after assuming a conversion ratio for the number of natural gas units necessary to generate one unit of electricity |
System Agreement |
Agreement, effective January 1, 1983, as modified, among the domestic utility companies relating to the sharing of generating capacity and other power resources |
2
DEFINITIONS (Concluded)
Abbreviation or Acronym |
Term |
System Energy |
System Energy Resources, Inc. |
System Fuels |
System Fuels, Inc. |
TWh |
Terawatt-hour(s), which equals one billion kilowatt-hours |
unit-contingent |
Transaction under which power is supplied from a specific generation asset; if the specified generation asset is unavailable as a result of forced or planned outage or unanticipated event or circumstance, the seller is not liable to the buyer for any damages resulting from the seller's failure to deliver power |
unit-contingent with |
Transaction under which power is supplied from a specific generation asset; if the specified generation asset is unavailable as a result of forced or planned outage or unanticipated event or circumstance, the seller is not liable to the buyer for any damages resulting from the seller's failure to deliver power unless the actual availability over a specified period of time is below an availability threshold specified in the contract |
Unit Power Sales Agreement |
Agreement, dated as of June 10, 1982, as amended and approved by FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, relating to the sale of capacity and energy from System Energy's share of Grand Gulf |
UK |
The United Kingdom of Great Britain and Northern Ireland |
Utility |
Entergy's business segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution |
Utility operating companies |
Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans |
Waterford 3 |
Unit No. 3 (nuclear) of the Waterford Steam Electric Generating Station, 100% owned or leased by Entergy Louisiana |
weather-adjusted usage |
Electric usage excluding the estimated effects of deviations from normal weather |
White Bluff |
White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas |
3
ENTERGY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Entergy operates primarily through two business segments: Utility and Non-Utility Nuclear.
In addition to its two primary, reportable, operating segments, Entergy also operates the non-nuclear wholesale assets business. The non-nuclear wholesale assets business sells to wholesale customers the electric power produced by power plants that it owns while it focuses on improving performance and exploring sales or restructuring opportunities for its power plants.
Hurricane Katrina and Hurricane Rita
See the Form 10-K for a discussion of the effects of Hurricanes Katrina and Rita, which in August and September 2005 caused catastrophic damage to portions of the Utility's service territory in Louisiana, Mississippi, and Texas, including the effect of extensive flooding that resulted from levee breaks in and around the greater New Orleans area.
Entergy has reached an agreement with one of its excess insurers under which Entergy will receive $69.5 million in settlement of its Hurricane Katrina claim. Entergy expects that $53.7 million of this amount will be allocated to Entergy New Orleans. Entergy New Orleans submitted the agreement to the bankruptcy court, which approved the agreement on April 25, 2007. Entergy expects to receive the proceeds under the settlement agreement by the end of May 2007.
Community Development Block Grants (CDBG)
See the Form 10-K for a discussion of the Katrina Relief Bill, a hurricane aid package that includes $11.5 billion in Community Development Block Grants (for the states affected by Hurricanes Katrina, Rita, and Wilma) that allows state and local leaders to fund individual recovery priorities.
In March 2007, the City Council certified that Entergy New Orleans has incurred $205 million in storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan, and certified Entergy New Orleans' estimated costs of $465 million for the gas system rebuild. In April 2007, Entergy New Orleans executed an agreement with the Louisiana Office of Community Development under which $200 million of CDBG funds will be made available to Entergy New Orleans. Entergy New Orleans submitted the agreement to the bankruptcy court, which approved it on April 25, 2007. Entergy New Orleans received $171.7 million of the funds on April 27, 2007, and the remainder will be paid to Entergy New Orleans as it incurs and submits additional eligible costs.
Entergy New Orleans Bankruptcy
See the Form 10-K for a discussion of the Entergy New Orleans bankruptcy proceeding. On May 7, 2007, the bankruptcy judge entered an order confirming Entergy New Orleans' plan of reorganization. With the receipt of CDBG funds, and the agreement on insurance recovery with one of its excess insurers, Entergy New Orleans waived the conditions precedent in its plan of reorganization, and the plan became effective on May 8, 2007.
4
Following are significant terms in Entergy New Orleans' plan of reorganization:
Entergy New Orleans currently estimates that the prepetition claims that will be allowed and paid (either in cash or by notes) in the bankruptcy case will approximate the prepetition liabilities currently recorded by Entergy New Orleans, including interest.
With confirmation of the plan of reorganization, Entergy expects to reconsolidate Entergy New Orleans in the second quarter 2007, retroactive to January 1, 2007. Because Entergy owns all of the common stock of Entergy New Orleans, reconsolidation will not affect the amount of net income that Entergy records from Entergy New Orleans' operations for any current or prior period, but will result in Entergy New Orleans' results being included in each individual income statement line item in 2007, rather than just its net income being presented as "Equity in earnings (loss) of unconsolidated equity affiliates," as will remain the case for 2005 and 2006.
5
Results of Operations
Following are income statement variances for Utility, Non-Utility Nuclear, Parent & Other, and Entergy comparing the first quarter 2007 to the first quarter 2006 showing how much the line item increased or (decreased) in comparison to the prior period:
|
|
|
Non-Utility |
|
Parent & Other (1) |
|
||
(In Thousands) |
||||||||
|
|
|
|
|
|
|
||
2006 Consolidated Net Income |
|
$119,752 |
|
$81,530 |
|
($7,654) |
$193,628 |
|
Net revenue (operating revenue less fuel |
|
|
|
|
|
|||
Other operation and maintenance expenses |
|
26,208 |
(3,459) |
(11,210) |
11,539 |
|||
Taxes other than income taxes |
|
6,680 |
(1,270) |
4,161 |
9,571 |
|||
Depreciation |
|
17,413 |
1,146 |
384 |
18,943 |
|||
Other income |
|
9,900 |
(442) |
7,101 |
16,559 |
|||
Interest charges |
|
5,848 |
(5,163) |
10,080 |
10,765 |
|||
Other expenses and discontinued operations |
|
1,058 |
2,112 |
(2,238) |
932 |
|||
Income taxes |
|
2,207 |
31,819 |
(8,303) |
25,723 |
|||
2007 Consolidated Net Income |
|
$104,450 |
|
$128,170 |
|
($20,425) |
$212,195 |
(1) |
Parent & Other includes eliminations, which are primarily intersegment activity. |
Refer to "ENTERGY CORPORATION AND SUBSIDIARIES - SELECTED OPERATING RESULTS" for further information with respect to operating statistics.
Net Revenue
Utility
Following is an analysis of the change in net revenue comparing the first quarter of 2007 to the first quarter of 2006.
|
|
Amount |
|
|
(In Millions) |
|
|
|
2006 net revenue |
|
$924.2 |
Volume/weather |
|
68.1 |
Base revenues |
26.8 |
|
Pass-through rider revenue |
8.5 |
|
Net wholesale revenue |
(19.0) |
|
Fuel recovery |
|
(25.6) |
Purchased power capacity |
(37.2) |
|
Other |
|
12.6 |
2007 net revenue |
|
$958.4 |
6
The volume/weather variance resulted primarily from increased electricity usage, including increased usage during the unbilled sales period and more favorable weather compared to the same period in 2006. Billed usage increased by a total of 1,015 GWh, an increase of 5%. See Note 1 to the financial statements in the Form 10-K for a discussion of the accounting for unbilled revenues.
The base revenues variance resulted from rate increases primarily at Entergy Louisiana effective September 2006 for the 2005 formula rate plan filing to recover LPSC-approved incremental deferred and ongoing purchased power capacity costs and for the interim recovery of storm costs. The formula rate plan filing is discussed in Note 2 to the financial statements in the Form 10-K.
The pass-through rider revenue variance is due to a change in 2006 in the accounting for city franchise tax revenues in Arkansas as directed by the APSC. The change results in an increase in rider revenue with a corresponding increase in taxes other than income taxes, resulting in no effect on net income.
The net wholesale revenue variance is primarily due to decreased results from wholesale contracts and lower wholesale prices.
The purchased power capacity variance is due to higher capacity charges and new purchased power contracts that began in mid-2006. A portion of the variance is due to the amortization of deferred capacity costs and is offset in base revenues due to base rate increases implemented to recover incremental deferred and ongoing purchased power capacity charges at Entergy Louisiana, as discussed above.
Non-Utility Nuclear
Net revenue increased for Non-Utility Nuclear primarily due to higher pricing in its contracts to sell power, partially offset by reduced production as a result of a refueling outage in the first quarter of 2007. There were no refueling outages in the first quarter of 2006. Following are key performance measures for Non-Utility Nuclear for the first quarters of 2007 and 2006:
|
2007 |
|
2006 |
|
|
|
|
|
|
Net MW in operation at March 31 |
|
4,200 |
|
4,135 |
Average realized price per MWh |
|
$55.11 |
|
$44.28 |
GWh billed |
|
8,315 |
|
8,763 |
Capacity factor |
|
90.5% |
|
97.1% |
Parent & Other
Net revenue decreased for Parent & Other primarily due to lower production as a result of an additional plant outage in the first quarter 2007 compared to the same period in 2006.
7
Other Operation and Maintenance Expenses
Utility
Other operation and maintenance expenses increased from $359 million for the first quarter of 2006 to $385 million for the first quarter of 2007 primarily due to:
Parent & Other
Other operation and maintenance expenses decreased from $20 million for the first quarter of 2006 to $9 million for the first quarter of 2007 primarily due to restoration expenses at the Harrison County plant incurred in the first quarter of 2006.
Other Income
Utility
Depreciation and amortization expenses increased from $186 million for the first quarter of 2006 to $203 million for the first quarter of 2007 primarily due to an increase in plant in service.
Other income increased from $43 million for the first quarter of 2006 to $53 million for the first quarter of 2007 primarily due to carrying charges on storm costs.
Income Taxes
The effective income tax rates for the first quarters of 2007 and 2006 were 39.9% and 36.8%, respectively. The difference in the effective income tax rate versus the statutory rate of 35% for the first quarter of 2007 is primarily due to book and tax timing differences for utility plant items and state income taxes, partially offset by book and tax differences related to the allowance for equity funds used during construction and the amortization of investment tax credits.
Liquidity and Capital Resources
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy's capital structure, capital expenditure plans and other uses of capital, and sources of capital. Following are updates to that discussion.
8
Capital Structure
Entergy's capitalization is balanced between equity and debt, as shown in the following table. The increase in the debt to capital percentage from 2006 to 2007 is the result of additional borrowings under Entergy Corporation's revolving credit facilities, along with a decrease in shareholders' equity primarily due to repurchases of common stock.
|
|
March 31, |
|
December 31, |
|
|
|
|
|
Net debt to net capital |
|
51.8% |
|
49.4% |
Effect of subtracting cash from debt |
|
2.9% |
|
2.9% |
Debt to capital |
|
54.7% |
|
52.3% |
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, preferred stock with sinking fund, and long-term debt, including the currently maturing portion. Capital consists of debt, common shareholders' equity, and preferred stock without sinking fund. Net capital consists of capital less cash and cash equivalents. Entergy uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy's financial condition.
As discussed in the Form 10-K, Entergy Corporation has in place two separate revolving credit facilities, a five-year credit facility and a three-year credit facility. The five-year credit facility expires in May 2010 and the three-year facility expires in December 2008. Entergy Corporation also has the ability to issue letters of credit against the total borrowing capacity of both the three-year and the five-year credit facilities. Following is a summary of the borrowings outstanding and capacity available under these facilities as of March 31, 2007:
|
|
|
Letters |
Capacity |
||||
(In Millions) |
||||||||
5-Year Facility |
$2,000 |
$895 |
$79 |
$1,026 |
||||
3-Year Facility |
$1,500 |
$540 |
$- |
$960 |
See Note 4 to the financial statements for additional discussion of Entergy's credit facilities, and see Part II, Item 5 for an update of the borrowings outstanding as of May 8, 2007.
Capital Expenditure Plans and Other Uses of Capital
See the table in the Form 10-K under "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Capital Expenditure Plans and Other Uses of Capital," which sets forth the amounts of planned construction and other capital investments by operating segment for 2007 through 2009.
In April 2007, Entergy's Non-Utility Nuclear business purchased the 798 MW Palisades nuclear energy plant located near South Haven, Michigan from Consumers Energy Company for a cash payment of $380 million. Entergy received the plant, nuclear fuel, inventories, and other assets. The liability to decommission the plant, as well as related decommissioning trust funds of approximately $250 million, was also transferred to Entergy's Non-Utility Nuclear business. Entergy's Non-Utility Nuclear business executed a unit contingent, 15-year purchased power agreement (PPA) with Consumers Energy for 100% of the plant's output, excluding any future uprates. Prices under the PPA range from $43.50/MWh in 2007 to $61.50/MWh in 2022, and the average price under the PPA is $51/MWh. In the first quarter 2007, the NRC renewed Palisades' operating license until 2031. Also as part of the transaction, Consumers Energy paid Entergy's Non-Utility Nuclear business $30 million to assume responsibility for spent fuel at the decommissioned Big Rock Point nuclear plant, which is located near Charlevoix, Michigan.
9
In April 2007, Entergy Louisiana announced that it plans to pursue the self-build solid fuel repowering of a 538MW unit at its Little Gypsy plant. Petroleum coke will be the unit's primary fuel source. Entergy Louisiana expects to spend $1.02 billion on the project, and expects the project to be completed in 2011-2012. The planned capital investment estimate in the Form 10-K included the capital required for a project of this type.
Debtor-in-Possession Credit Agreement
See the Form 10-K for a discussion of the Entergy New Orleans debtor-in-possession (DIP) credit facility between Entergy New Orleans as borrower and Entergy Corporation as lender. As of March 31, 2007, Entergy New Orleans had $42 million of outstanding borrowings under the DIP credit agreement. During April 2007, at the same time that it made a scheduled pension plan contribution, Entergy New Orleans borrowed under the DIP credit agreement, and on May 8, 2007 had $67 million of outstanding borrowings under the DIP credit agreement.
Cash Flow Activity
As shown in Entergy's Statements of Cash Flows, cash flows for the three months ended March 31, 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Millions) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$1,016 |
|
$583 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
476 |
|
1,012 |
|
Investing activities |
|
(253) |
|
(859) |
|
Financing activities |
|
(159) |
|
16 |
Net increase in cash and cash equivalents |
|
64 |
|
169 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$1,080 |
|
$752 |
Operating Activities
Entergy's cash flow provided by operating activities decreased by $536 million for the three months ended March 31, 2007 compared to the three months ended March 31, 2006. Following are cash flows from operating activities by segment:
10
Investing Activities
Net cash used in investing activities decreased by $606 million for the three months ended March 31, 2007 compared to the three months ended March 31, 2006 primarily due to the following activity:
Financing Activities
Financing activities used $159 million of cash for the three months ended March 31, 2007 compared to providing $16 million of cash for the three months ended March 31, 2006 primarily due to the following activity:
This activity was offset by Entergy Corporation increasing the net borrowings under its credit facilities by $615 million in the first quarter 2007, compared to increasing the net borrowings under its credit facilities by $20 million in the first quarter 2006. See Note 4 to the financial statements for a description of the Entergy Corporation credit facilities.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for discussions of rate regulation, federal regulation, and market and credit risk sensitive instruments. Following are updates to the information provided in the Form 10-K.
State and Local Rate Regulation
See the Form 10-K for a chart summarizing material rate proceedings. See Note 2 to the financial statements herein for updates to the proceedings discussed in that chart.
Federal Regulation
See the Form 10-K for a discussion of federal regulatory proceedings. Following are updates to that discussion.
System Agreement Proceedings
During March and April 2007, the Utility operating companies made four separate filings with the FERC proposing modifications to the formula used to calculate the rough production cost equalization payments/receipts. The proposed modifications will (1) continue to reflect in the calculation the results of the Utility operating companies' gas hedging program for boiler fuel; (2) confirm the allocation of an individual Utility operating company's bandwidth payment/receipt to its wholesale loads, if any, and establish the allocation between retail jurisdictions in the case of Entergy Louisiana and Entergy Gulf States that provide retail service to customers in two separate jurisdictions; (3) modify the basis for functionalizing certain categories of costs among the Utility operating companies to be consistent with other service schedules in the System Agreement; and (4) properly reflect in the calculation property under capital lease. The Utility operating comp anies have requested that all four
11
filings be allowed to become effective no later than May 29, 2007 so that they can be reflected in the calculation of the first payments/receipts. The APSC, LPSC, MPSC, City Council, and the AEEC have each intervened and in some instances protested one or more of these four filings. Separately, on April 3, 2007, the LPSC filed a complaint with the FERC in which it seeks to have the FERC order the following modifications to the rough production costs equalization calculation: (1) elimination of interruptible loads from the methodology used to allocate demand-related capacity costs; and (2) change of the method used to re-price energy from the Vidalia hydroelectric project for purposes of calculating production cost disparities. Entergy has filed an intervention and protest in this proceeding.
In conjunction with the recent application of Entergy Gulf States and Calcasieu Power, LLC seeking FERC approval of Entergy Gulf States' acquisition of the Calcasieu Generating Facility, the Utility operating companies filed a Petition for Declaratory Order requesting that the FERC find either (1) that in those circumstances where a resource to be acquired or constructed has been determined by Entergy's Operating Committee to be a resource devoted to serving Entergy System load and has been approved by the applicable retail regulator, the cost of such resource shall be reflected in the production cost disparity calculation; or (2) that Entergy Gulf States' acquisition of the Calcasieu facility is prudent and the costs are properly reflected in the production cost disparity calculation. The APSC, LPSC, MPSC, City Council, NRG, Occidental, LEUG, AEEC, and EPSA have intervened in the proceeding, with the APSC, LPSC, and City Council filing protests.
On April 3, 2007, the U.S. Court of Appeals for the D.C. Circuit issued its opinion in the LPSC's appeal of the FERC's March 2004 and April 2005 orders related to the treatment under the System Agreement of the Utility operating companies' interruptible loads. In its opinion, the D.C. Circuit concluded that the FERC (1) acted arbitrarily and capriciously by allowing the Utility operating companies to phase-in the effects of the elimination of the interruptible load over a 12-month period of time; (2) failed to adequately explain why refunds could not be ordered under Section 206(c) of the Federal Power Act; and (3) exercised appropriately its discretion to defer addressing the cost of sulfur dioxide allowances until a later time. The D.C. Circuit remanded the matter to the FERC for a more considered determination on the issue of refunds.
On April 27, 2007, the FERC denied the requests for rehearing filed regarding the Utility operating companies' compliance filing to implement the System Agreement decision, with one exception regarding the issue of retrospective refunds. That issue will be addressed subsequent to the remanded proceeding involving the interruptible load decision discussed in the previous paragraph.
Independent Coordinator of Transmission (ICT)
As discussed in the Form 10-K, in the FERC's April 2006 order approving Entergy's ICT proposal, the FERC stated that the weekly procurement process (WPP) must be operational within approximately 14 months of the FERC order, or June 24, 2007, or the FERC may reevaluate all approvals to proceed with the ICT. The Utility operating companies have been working with the ICT and a software vendor to develop the software and systems necessary to implement the WPP and currently expect that the WPP will commence operations on June 18, 2007. The software and systems are still being developed and tested, however. Entergy will notify the FERC as soon as practicable if it and the ICT determine that the June 24, 2007 deadline for implementing the WPP cannot be met. The Utility operating companies also filed with the FERC on April 24, 2007 a request to make certain corrections and limited modifications to the current WPP tariff provisions and requested that the F ERC allow these proposed changes to go into effect no later than June 18, 2007. Additionally, Entergy Gulf States and Entergy Louisiana are required to file with the LPSC a compliance filing for review of the model to be used in the WPP prior to receiving final approval for implementation of the WPP. The Utility operating companies currently expect to submit the required compliance filing during May 2007.
Available Flowgate Capacity (AFC) Proceeding
In accordance with the provisions of the FERC order approving the ICT, during the first quarter 2007 the Utility operating companies notified the FERC, the ICT, and the stakeholders that certain instances had been identified in which software errors related to the AFC process had resulted in the reporting of inaccurate data. Following the reporting of the initial errors, certain market participants urged the FERC to move forward with
12
the AFC hearing process in light of those errors. In April 2007, the FERC issued an order terminating the AFC hearing, now that Entergy's ICT has been installed. Requests for rehearing of the FERC order canceling the AFC hearing are due in May 2007.
Market and Credit Risk Sensitive Instruments
Commodity Price Risk
Power Generation
As discussed more fully in the Form 10-K, the sale of electricity from the power generation plants owned by Entergy's Non-Utility Nuclear business, unless otherwise contracted, is subject to the variability of market power prices. Following is an updated summary of the amount of the Non-Utility Nuclear business' output that is sold forward as of March 31, 2007 under physical or financial contracts (2007 represents the remaining three quarters of the year):
2007 |
2008 |
2009 |
2010 |
2011 |
|||||||
Non-Utility Nuclear (including Palisades acquisition): |
|||||||||||
Percent of planned generation sold forward: |
|||||||||||
Unit-contingent |
44% |
48% |
38% |
25% |
23% |
||||||
Unit-contingent with availability guarantees (1) |
45% |
36% |
28% |
22% |
7% |
||||||
Firm liquidated damages |
6% |
4% |
0% |
0% |
0% |
||||||
Total |
95% |
88% |
66% |
47% |
30% |
||||||
Planned generation (TWh) |
30 |
41 |
41 |
41 |
42 |
||||||
Average contracted price per MWh |
$48 |
$54 |
$57 |
$53 |
$47 |
(1) |
A sale of power on a unit contingent basis coupled with a guarantee of availability provides for the payment to the power purchaser of contract damages, if incurred, in the event the seller fails to deliver power as a result of the failure of the specified generation unit to generate power at or above a specified availability threshold. All of Entergy's outstanding guarantees of availability provide for dollar limits on Entergy's maximum liability under such guarantees. |
The Vermont Yankee acquisition included a 10-year PPA under which the former owners will buy the power produced by the plant through the expiration in 2012 of the current operating license for the plant. The PPA includes an adjustment clause under which the prices specified in the PPA will be adjusted downward monthly if power market prices drop below PPA prices, which has not happened thus far and is not expected in the foreseeable future.
See the Form 10-K for a discussion of Non-Utility Nuclear's value sharing agreements with NYPA involving energy sales from the Fitzpatrick and Indian Point 3 power plants. Non-Utility Nuclear calculated that nothing was owed to NYPA under the value sharing agreements for 2005. On November 1, 2006, NYPA filed a demand for arbitration claiming that $90.5 million was due to NYPA under these agreements for 2005. Non-Utility Nuclear filed a motion in New York state court to determine whether NYPA's claim should be decided by a court as opposed to an arbitrator. In February 2007, the court issued an order denying Non-Utility Nuclear's request, and NYPA's claim is now in binding arbitration. Non-Utility Nuclear has also calculated that nothing was owed to NYPA under the value sharing agreements for 2006. On April 24, 2007, NYPA filed an amended demand for arbitration claiming that an additional $54 million was due to NYPA under the value sharing agreements for 2006. With respect to bot h of these claims, Non-Utility Nuclear disagrees with NYPA's interpretation of the value sharing agreements, believes it has meritorious defenses to NYPA's claims, and intends to defend against those claims vigorously.
Some of the agreements to sell the power produced by Entergy's Non-Utility Nuclear power plants contain provisions that require an Entergy subsidiary to provide collateral to secure its obligations under the agreements. The Entergy subsidiary is required to provide collateral based upon the difference between the current market and contracted power prices in the regions where Non-Utility Nuclear sells power. The primary form of
13
collateral to satisfy these requirements is an Entergy Corporation guaranty. Cash and letters of credit are also acceptable forms of collateral. At March 31, 2007, based on power prices at that time, Entergy had in place as collateral $797 million of Entergy Corporation guarantees for wholesale transactions, including $73 million of guarantees that support letters of credit. The assurance requirement associated with Non-Utility Nuclear is estimated to increase by an amount of up to $297 million if gas prices increase $1 per MMBtu in both the short- and long-term markets. In the event of a decrease in Entergy Corporation's credit rating to below investment grade, Entergy will be required to replace Entergy Corporation guarantees with cash or letters of credit under some of the agreements.
In addition to selling the power produced by its plants, the Non-Utility Nuclear business sells installed capacity to load-serving distribution companies in order for those companies to meet requirements placed on them by the ISO in their area. Following is a summary of the amount of the Non-Utility Nuclear business' installed capacity that is currently sold forward, and the blended amount of the Non-Utility Nuclear business' planned generation output and installed capacity that is currently sold forward as of March 31, 2007 (2007 represents the remaining three quarters of the year):
2007 |
2008 |
2009 |
2010 |
2011 |
|||||||
Non-Utility Nuclear (including Palisades acquisition): |
|||||||||||
Percent of capacity sold forward: |
|||||||||||
Bundled capacity and energy contracts |
23% |
27% |
27% |
27% |
26% |
||||||
Capacity contracts |
63% |
39% |
26% |
9% |
3% |
||||||
Total |
86% |
66% |
53% |
36% |
29% |
||||||
Planned net MW in operation |
4,998 |
4,998 |
4,998 |
4,998 |
4,998 |
||||||
Average capacity contract price per kW per month |
$1.7 |
$1.4 |
$1.3 |
$1.7 |
$2.0 |
||||||
Blended Capacity and Energy (based on revenues) |
|||||||||||
% of planned generation and capacity sold forward |
92% |
83% |
60% |
39% |
22% |
||||||
Average contract revenue per MWh |
$49 |
$54 |
$58 |
$54 |
$47 |
As of March 31, 2007, approximately 98% of Non-Utility Nuclear's counterparty exposure from energy and capacity contracts is with counterparties with investment grade credit ratings.
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy's accounting for nuclear decommissioning costs, unbilled revenue, impairment of long-lived assets, qualified pension and other postretirement benefits, and other contingencies.
New Accounting Pronouncements
The FASB issued Statement of Financial Accounting Standards No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (SFAS 159) during the first quarter of 2007. SFAS 159 provides an option for companies to select certain financial assets and liabilities to be accounted for at fair value with changes in the fair value of those assets or liabilities being reported through earnings. The intent of the standard is to mitigate volatility in reported earnings caused by the application of the more complicated fair value hedging accounting rules. Under SFAS 159, companies can select existing assets or liabilities for this fair value option concurrent with the effective date of January 1, 2008 for companies with fiscal years ending December 31 or can select future assets or liabilities as they are acquired or entered into. Entergy is in the process of evaluating the potential effect of making this accounting election.
In June 2006, the EITF reached a consensus on EITF Issue 06-3 "How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation)" (EITF 06-3). The scope of this issue includes any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction between a seller and a customer, and may include, but is not limited to, sales, use, value added, and some excise taxes. Under EITF 06-3, the presentation of taxes within the scope of this issue on either a gross basis (included in revenues and costs) or a net basis (excluded from revenues) basis is an
14
accounting policy decision that should be disclosed. For any such taxes reported on a gross basis, the amounts of those taxes in interim and annual financial statements, for each period for which an income statement is presented, should be disclosed if those amounts are significant. Entergy's policy is to present such taxes on a net basis. EITF 06-3 did not affect Entergy's financial statements.
15
ENTERGY CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF INCOME | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands, Except Share Data) | ||||
OPERATING REVENUES | ||||
Electric | $2,064,653 | $2,092,933 | ||
Natural gas | 37,928 | 37,415 | ||
Competitive businesses | 497,649 | 437,683 | ||
TOTAL | 2,600,230 | 2,568,031 | ||
OPERATING EXPENSES | ||||
Operating and Maintenance: | ||||
Fuel, fuel-related expenses, and | ||||
gas purchased for resale | 709,981 | 840,171 | ||
Purchased power | 477,753 | 461,370 | ||
Nuclear refueling outage expenses | 42,975 | 41,993 | ||
Other operation and maintenance | 540,969 | 529,430 | ||
Decommissioning | 37,785 | 35,596 | ||
Taxes other than income taxes | 112,909 | 103,338 | ||
Depreciation and amortization | 224,331 | 205,388 | ||
Other regulatory charges (credits) - net | 22,507 | (44,018) | ||
TOTAL | 2,169,210 | 2,173,268 | ||
OPERATING INCOME | 431,020 | 394,763 | ||
OTHER INCOME | ||||
Allowance for equity funds used during construction | 16,067 | 15,459 | ||
Interest and dividend income | 57,768 | 43,831 | ||
Equity in earnings of unconsolidated equity affiliates | 4,534 | 3,586 | ||
Miscellaneous - net | (5,141) | (6,207) | ||
TOTAL | 73,228 | 56,669 | ||
INTEREST AND OTHER CHARGES | ||||
Interest on long-term debt | 119,854 | 120,481 | ||
Other interest - net | 31,297 | 17,261 | ||
Allowance for borrowed funds used during construction | (9,631) | (9,045) | ||
Preferred dividend requirements and other | 5,980 | 8,038 | ||
TOTAL | 147,500 | 136,735 | ||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 356,748 | 314,697 | ||
Income taxes | 144,553 | 118,830 | ||
INCOME FROM CONTINUING OPERATIONS | 212,195 | 195,867 | ||
LOSS FROM DISCONTINUED OPERATIONS (net of income tax | ||||
benefit of ($1,204)) | - | (2,239) | ||
CONSOLIDATED NET INCOME | $212,195 | $193,628 | ||
Basic earnings (loss) per average common share: | ||||
Continuing operations | $1.06 | $0.94 | ||
Discontinued operations | - | ($0.01) | ||
Basic earnings per average common share | $1.06 | $0.93 | ||
Diluted earnings (loss) per average common share: | ||||
Continuing operations | $1.03 | $0.93 | ||
Discontinued operations | - | ($0.01) | ||
Diluted earnings per average common share | $1.03 | $0.92 | ||
Dividends declared per common share | $0.54 | $0.54 | ||
Basic average number of common shares outstanding | 200,549,935 | 207,732,341 | ||
Diluted average number of common shares outstanding | 206,133,440 | 211,374,512 | ||
See Notes to Financial Statements. |
16
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17
ENTERGY CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING ACTIVITIES | ||||
Consolidated net income | $212,195 | $193,628 | ||
Adjustments to reconcile consolidated net income to net cash flow | ||||
provided by operating activities: | ||||
Reserve for regulatory adjustments | 10,931 | 42,162 | ||
Other regulatory charges (credits) - net | 22,507 | (44,018) | ||
Depreciation, amortization, and decommissioning | 262,117 | 241,807 | ||
Deferred income taxes, investment tax credits, and non-current taxes accrued | 368,709 | 370,774 | ||
Equity in earnings of unconsolidated equity affiliates - net of dividends | (4,534) | (1,412) | ||
Changes in working capital: | ||||
Receivables | 63,874 | 328,019 | ||
Fuel inventory | (4,648) | (28,607) | ||
Accounts payable | (288,421) | (256,420) | ||
Taxes accrued | (187,324) | 35,968 | ||
Interest accrued | (20,827) | (16,861) | ||
Deferred fuel | 151,853 | 199,619 | ||
Other working capital accounts | (110,493) | 140,795 | ||
Provision for estimated losses and reserves | (15,918) | 15,029 | ||
Changes in other regulatory assets | 68,790 | (75,674) | ||
Other | (52,702) | (132,294) | ||
Net cash flow provided by operating activities | 476,109 | 1,012,515 | ||
INVESTING ACTIVITIES | ||||
Construction/capital expenditures | (284,731) | (664,178) | ||
Allowance for equity funds used during construction | 16,067 | 15,459 | ||
Nuclear fuel purchases | (184,806) | (91,027) | ||
Proceeds from sale/leaseback of nuclear fuel | 114,486 | 8,827 | ||
Proceeds from sale of assets and businesses | 2,617 | - | ||
Payment for purchase of plant | - | (88,199) | ||
Decrease in other investments | 113,027 | 12,340 | ||
Proceeds from nuclear decommissioning trust fund sales | 160,007 | 283,874 | ||
Investment in nuclear decommissioning trust funds | (189,536) | (312,417) | ||
Other regulatory investments | - | (23,448) | ||
Net cash flow used in investing activities | (252,869) | (858,769) | ||
See Notes to Financial Statements. | ||||
18 |
||||
ENTERGY CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
FINANCING ACTIVITIES | ||||
Proceeds from the issuance of: | ||||
Long-term debt | 820,016 | 748,584 | ||
Preferred stock | - | 73,354 | ||
Common stock and treasury stock | 30,889 | 11,805 | ||
Retirement of long-term debt | (334,873) | (655,649) | ||
Repurchase of common stock | (558,186) | - | ||
Redemption of preferred stock | (2,250) | (2,250) | ||
Changes in credit line borrowings - net | - | (40,000) | ||
Dividends paid: | ||||
Common stock | (108,967) | (112,190) | ||
Preferred stock | (5,987) | (7,661) | ||
Net cash flow provided by (used in) financing activities | (159,358) | 15,993 | ||
Effect of exchange rates on cash and cash equivalents | (11) | (173) | ||
Net increase in cash and cash equivalents | 63,871 | 169,566 | ||
Cash and cash equivalents at beginning of period | 1,016,152 | 582,820 | ||
Cash and cash equivalents at end of period | $1,080,023 | $752,386 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid/(received) during the period for: | ||||
Interest - net of amount capitalized | $165,856 | $146,429 | ||
Income taxes | $31,433 | ($345,366) | ||
See Notes to Financial Statements. | ||||
19
ENTERGY CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
ASSETS | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents: | ||||
Cash | $113,975 | $117,379 | ||
Temporary cash investments - at cost, | ||||
which approximates market | 966,048 | 898,773 | ||
Total cash and cash equivalents | 1,080,023 | 1,016,152 | ||
Note receivable - Entergy New Orleans DIP loan | 42,026 | 51,934 | ||
Notes receivable | 614 | 699 | ||
Accounts receivable: | ||||
Customer | 405,416 | 410,512 | ||
Allowance for doubtful accounts | (19,386) | (19,348) | ||
Other | 446,710 | 487,264 | ||
Accrued unbilled revenues | 230,980 | 249,165 | ||
Total receivables | 1,063,720 | 1,127,593 | ||
Accumulated deferred income taxes | 19,533 | 11,680 | ||
Fuel inventory - at average cost | 197,746 | 193,098 | ||
Materials and supplies - at average cost | 616,893 | 604,998 | ||
Deferred nuclear refueling outage costs | 144,176 | 147,521 | ||
Prepayments and other | 131,377 | 171,759 | ||
TOTAL | 3,296,108 | 3,325,434 | ||
OTHER PROPERTY AND INVESTMENTS | ||||
Investment in affiliates - at equity | 233,520 | 229,089 | ||
Decommissioning trust funds | 2,905,580 | 2,858,523 | ||
Non-utility property - at cost (less accumulated depreciation) | 210,285 | 212,726 | ||
Other | 41,777 | 47,115 | ||
TOTAL | 3,391,162 | 3,347,453 | ||
PROPERTY, PLANT AND EQUIPMENT | ||||
Electric | 30,950,535 | 30,713,284 | ||
Property under capital lease | 729,443 | 730,182 | ||
Natural gas | 94,785 | 92,787 | ||
Construction work in progress | 778,900 | 786,147 | ||
Nuclear fuel under capital lease | 222,203 | 269,485 | ||
Nuclear fuel | 646,191 | 561,291 | ||
TOTAL PROPERTY, PLANT AND EQUIPMENT | 33,422,057 | 33,153,176 | ||
Less - accumulated depreciation and amortization | 13,883,748 | 13,715,099 | ||
PROPERTY, PLANT AND EQUIPMENT - NET | 19,538,309 | 19,438,077 | ||
DEFERRED DEBITS AND OTHER ASSETS | ||||
Regulatory assets: | ||||
SFAS 109 regulatory asset - net | 744,424 | 740,110 | ||
Other regulatory assets | 2,653,282 | 2,768,352 | ||
Deferred fuel costs | 168,122 | 168,122 | ||
Long-term receivables | 17,875 | 19,349 | ||
Goodwill | 377,172 | 377,172 | ||
Other | 960,388 | 898,662 | ||
TOTAL | 4,921,263 | 4,971,767 | ||
TOTAL ASSETS | $31,146,842 | $31,082,731 | ||
See Notes to Financial Statements. | ||||
20 | ||||
ENTERGY CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT LIABILITIES | ||||
Currently maturing long-term debt | $271,942 | $181,576 | ||
Notes payable | 25,039 | 25,039 | ||
Accounts payable | 812,018 | 1,122,596 | ||
Customer deposits | 256,753 | 248,031 | ||
Taxes accrued | - | 187,324 | ||
Interest accrued | 140,004 | 160,831 | ||
Deferred fuel costs | 224,883 | 73,031 | ||
Obligations under capital leases | 153,186 | 153,246 | ||
Pension and other postretirement liabilities | 33,726 | 41,912 | ||
Other | 170,902 | 271,544 | ||
TOTAL | 2,088,453 | 2,465,130 | ||
NON-CURRENT LIABILITIES | ||||
Accumulated deferred income taxes and taxes accrued | 6,142,823 | 5,820,700 | ||
Accumulated deferred investment tax credits | 354,102 | 358,550 | ||
Obligations under capital leases | 218,118 | 188,033 | ||
Other regulatory liabilities | 506,016 | 449,237 | ||
Decommissioning and asset retirement cost liabilities | 2,058,544 | 2,023,846 | ||
Transition to competition | 79,098 | 79,098 | ||
Accumulated provisions | 91,286 | 88,902 | ||
Pension and other postretirement liabilities | 1,438,754 | 1,410,433 | ||
Long-term debt | 9,197,328 | 8,798,087 | ||
Preferred stock with sinking fund | 8,250 | 10,500 | ||
Other | 780,099 | 847,415 | ||
TOTAL | 20,874,418 | 20,074,801 | ||
Commitments and Contingencies | ||||
Preferred stock without sinking fund | 344,915 | 344,913 | ||
SHAREHOLDERS' EQUITY | ||||
Common stock, $.01 par value, authorized 500,000,000 | ||||
shares; issued 248,174,087 shares in 2007 and in 2006 | 2,482 | 2,482 | ||
Paid-in capital | 4,831,803 | 4,827,265 | ||
Retained earnings | 6,211,617 | 6,113,042 | ||
Accumulated other comprehensive loss | (54,560) | (100,512) | ||
Less - treasury stock, at cost (50,353,826 shares in 2007 and | ||||
45,506,311 shares in 2006) | 3,152,286 | 2,644,390 | ||
TOTAL | 7,839,056 | 8,197,887 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $31,146,842 | $31,082,731 | ||
See Notes to Financial Statements. | ||||
21
ENTERGY CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS, COMPREHENSIVE INCOME, AND PAID-IN CAPITAL | ||||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||||
(Unaudited) | ||||||||||
2007 | 2006 | |||||||||
(In Thousands) | ||||||||||
RETAINED EARNINGS | ||||||||||
Retained Earnings - Beginning of period | $6,113,042 | $5,433,931 | ||||||||
Add: | ||||||||||
Consolidated net income | 212,195 | $212,195 | 193,628 | $193,628 | ||||||
Adjustment related to FIN 48 implementation | (4,600) | - | ||||||||
Total | 207,595 | 193,628 | ||||||||
Deduct: | ||||||||||
Dividends declared on common stock | 109,020 | 112,138 | ||||||||
Capital stock and other expenses | - | - | ||||||||
Total | 109,020 | 112,138 | ||||||||
Retained Earnings - End of period | $6,211,617 | $5,515,421 | ||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||||
Balance at beginning of period: | ||||||||||
Accumulated derivative instrument fair value changes | ($105,578) | ($392,614) | ||||||||
Pension and other postretirement liabilities | (105,909) | - | ||||||||
Net unrealized investment gains | 104,551 | 67,923 | ||||||||
Foreign currency translation | 6,424 | 3,217 | ||||||||
Minimum pension liability | - | (22,345) | ||||||||
Total | (100,512) | (343,819) | ||||||||
Net derivative instrument fair value changes | ||||||||||
arising during the period (net of tax expense of $28,325 and $120,392) | 41,467 | 41,467 | 191,313 | 191,313 | ||||||
Pension and other postretirement liabilities (net of tax expense of $274) | 478 | 478 | - | - | ||||||
Net unrealized investment gains (net of tax expense of $2,790 and $2,314) | 3,996 | 3,996 | 3,327 | 3,327 | ||||||
Foreign currency translation (net of tax expense of $6 and $93) | 11 | 11 | 173 | 173 | ||||||
Balance at end of period: | ||||||||||
Accumulated derivative instrument fair value changes | (64,111) | (201,301) | ||||||||
Pension and other postretirement liabilities | (105,431) | - | ||||||||
Net unrealized investment gains | 108,547 | 71,250 | ||||||||
Foreign currency translation | 6,435 | 3,390 | ||||||||
Minimum pension liability | - | (22,345) | ||||||||
Total | ($54,560) | ($149,006) | ||||||||
Comprehensive Income | $258,147 | $388,441 | ||||||||
PAID-IN CAPITAL | ||||||||||
Paid-in Capital - Beginning of period | $4,827,265 | $4,817,637 | ||||||||
Add (Deduct): | ||||||||||
Common stock issuances related to stock plans | 4,538 | (1,600) | ||||||||
Paid-in Capital - End of period | $4,831,803 | $4,816,037 | ||||||||
See Notes to Financial Statements. |
22
ENTERGY CORPORATION AND SUBSIDIARIES | ||||||||
SELECTED OPERATING RESULTS | ||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||
(Unaudited) | ||||||||
Increase/ | ||||||||
Description | 2007 | 2006 | (Decrease) | % | ||||
(Dollars in Millions) | ||||||||
Utility Electric Operating Revenues: | ||||||||
Residential | $719 | $697 | $22 | 3 | ||||
Commercial | 518 | 541 | (23) | (4) | ||||
Industrial | 623 | 667 | (44) | (7) | ||||
Governmental | 37 | 40 | (3) | (8) | ||||
Total retail | 1,897 | 1,945 | (48) | (2) | ||||
Sales for resale | 131 | 175 | (44) | (25) | ||||
Other | 37 | (27) | 64 | 237 | ||||
Total | $2,065 | $2,093 | ($28) | (1) | ||||
Utility Billed Electric Energy | ||||||||
Sales (GWh): | ||||||||
Residential | 7,558 | 6,917 | 641 | 9 | ||||
Commercial | 5,721 | 5,499 | 222 | 4 | ||||
Industrial | 9,186 | 9,042 | 144 | 2 | ||||
Governmental | 385 | 377 | 8 | 2 | ||||
Total retail | 22,850 | 21,835 | 1,015 | 5 | ||||
Sales for resale | 2,536 | 2,761 | (225) | (8) | ||||
Total | 25,386 | 24,596 | 790 | 3 | ||||
23
ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Entergy New Orleans Bankruptcy
See Note 9 to the financial statements for information on the Entergy New Orleans bankruptcy proceeding.
Nuclear Insurance
See Note 8 to the financial statements in the Form 10-K for information on nuclear liability and property insurance associated with Entergy's nuclear power plants. Following is an update to that information.
Property Insurance
In April 2007, the excess layer coverage for the Utility nuclear plants was increased to $750 million per occurrence per plant and the blanket layer coverage (shared among the plants) for the Utility nuclear plants was decreased to $350 million per occurrence.
Non-Nuclear Property Insurance
See Note 8 to the financial statements in the Form 10-K for information on Entergy's non-nuclear property insurance program. Following is an update to that information.
Entergy has reached an agreement with one of its excess insurers under which Entergy will receive $69.5 million in settlement of its Hurricane Katrina claim. Entergy expects that $53.7 million of this amount will be allocated to Entergy New Orleans. Entergy New Orleans submitted the agreement to the bankruptcy court, which approved the agreement on April 25, 2007. Entergy expects to receive the proceeds under the settlement agreement by the end of May 2007.
NYPA Value Sharing Agreements
See Note 8 to the financial statements in the Form 10-K for information on the NYPA Value Sharing Agreements. Non-Utility Nuclear calculated that nothing was owed to NYPA under the value sharing agreements for 2005. On November 1, 2006, NYPA filed a demand for arbitration claiming that $90.5 million was due to NYPA under these agreements for 2005. Non-Utility Nuclear filed a motion in New York state court to determine whether NYPA's claim should be decided by a court as opposed to an arbitrator. In February 2007, the court issued an order denying Non-Utility Nuclear's request, and NYPA's claim is now in binding arbitration. Non-Utility Nuclear has also calculated that nothing was owed to NYPA under the value sharing agreements for 2006. On April 24, 2007, NYPA filed an amended demand for arbitration claiming that an additional $54 million was due to NYPA under the value sharing agreements for 2006. With respect to both of these claims, Non-Utility Nuclear disagrees with NYPA's interpretation of the value sharing agreements, believes it has meritorious defenses to NYPA's claims, and intends to defend against those claims vigorously.
CashPoint Bankruptcy (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans)
See Note 8 to the financial statements in the Form 10-K for information regarding the bankruptcy of CashPoint, which managed a network of payment agents for the Utility operating companies.
24
Employment Litigation
Entergy Corporation and the Registrant Subsidiaries are defendants in numerous lawsuits and other labor-related proceedings filed by former employees asserting that they were wrongfully terminated and/or discriminated against on the basis of age, race, sex, and/or other protected characteristics. Entergy Corporation and these subsidiaries are vigorously defending these suits and deny any liability to the plaintiffs. Nevertheless, no assurance can be given as to the outcome of these cases.
Asbestos and Hazardous Material Litigation (Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans)
See Note 8 to the financial statements in the Form 10-K for information regarding asbestos and hazardous material litigation at Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans.
NOTE 2. RATE AND REGULATORY MATTERS
Regulatory Assets
Other Regulatory Assets
See Note 2 to the financial statements in the Form 10-K for information regarding regulatory assets in the Utility business reflected on the balance sheets of Entergy and the Registrant Subsidiaries.
Deferred Fuel Costs
See Note 2 to the financial statements in the Form 10-K for information regarding fuel proceedings involving the Utility operating companies. Following are updates to that information.
Entergy Arkansas
In March 2007, in order to allow further consideration by the APSC, the APSC granted Entergy Arkansas' petition for rehearing and for stay of the APSC's January 2007 order in the proceeding investigating Entergy Arkansas' interim energy cost rate.
In March 2007, Entergy Arkansas filed with the APSC its annual energy cost rate for the period April 2007 through March 2008. The filed energy cost rate decreased from $0.02827/kWh to $0.01179/kWh.
Entergy Gulf States (Texas)
In March 2007, Entergy Gulf States filed with the PUCT a request to refund $78.5 million, including interest, of fuel cost recovery over-collections for the period through January 2007. Entergy Gulf States requested that the proposed refund be made over a six-month period beginning June 2007; however, the refund period is subject to the PUCT's discretion.
25
Storm Cost Recovery Filings
See Note 2 to the financial statements in the Form 10-K for information regarding storm cost recovery filings involving the Utility operating companies. The following are updates to the Form 10-K.
Entergy Gulf States - Texas
In April 2007, the PUCT issued its financing order authorizing the issuance of securitization bonds to recover $353 million of hurricane reconstruction costs and up to $6 million of transaction costs, offset by $32 million of related deferred income tax benefits. Entergy Gulf States expects by mid-2007 to implement rates to recover revenues to pay the securitization bonds, and expects to receive securitization funding by the end of the third quarter 2007.
Entergy Gulf States - Louisiana and Entergy Louisiana
In February 2007, Entergy Louisiana and Entergy Gulf States filed rebuttal testimony and filed a second supplemental and amending application by which they seek authority from the LPSC to securitize their storm cost recovery and storm reserve amounts, together with certain debt retirement costs and upfront and ongoing costs of the securitized debt issued. Securitization is authorized by a law signed by the Governor of Louisiana in May 2006. The filing updates actual storm-related costs through January 2007 and estimated future costs, declaring that Entergy Louisiana's costs are $561 million and Entergy Gulf States' costs are $219 million. The filing also updates the requested storm reserve amounts, requesting $141 million for Entergy Louisiana and $87 million for Entergy Gulf States. Hearings began in late-April 2007. At the start of the hearing, a stipulation among Entergy Gulf States, Entergy Louisiana, the LPSC staff, and most other parties in the proceeding was read into the record. The stipulation quantifies the balance of storm restoration costs for recovery as $545 million for Entergy Louisiana and $187 million for Entergy Gulf States, and sets the storm reserve amounts at $152 million for Entergy Louisiana and $87 million for Entergy Gulf States. The stipulation also calls for securitization of the storm restoration costs and storm reserves in those same amounts. The LPSC has not issued a decision in the proceeding.
Entergy New Orleans
In March 2007, the City Council certified that Entergy New Orleans has incurred $205 million in storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan, and certified Entergy New Orleans' estimated costs of $465 million for the gas system rebuild. In April 2007, Entergy New Orleans executed an agreement with the Louisiana Office of Community Development under which $200 million of CDBG funds will be made available to Entergy New Orleans. Entergy New Orleans submitted the agreement to the bankruptcy court, which approved it on April 25, 2007. Entergy New Orleans received $171.7 million of the funds on April 27, 2007, and the remainder will be paid to Entergy New Orleans as it incurs and submits additional eligible costs.
Retail Rate Proceedings
See Note 2 to the financial statements in the Form 10-K for information regarding retail rate proceedings involving the Utility operating companies. The following are updates to the Form 10-K.
Filings with the APSC (Entergy Arkansas)
In March 2007, Entergy Arkansas filed rebuttal testimony in the rate case that it filed in August 2006. The rebuttal testimony requests an annual rate increase of $106.5 million, and retains a return on common equity (ROE) of 11.25%. A primary reason for the decline in the rate request from the original request of $150 million is the removal of the revenue requirement for the proposed acquisition of a load-following, combined cycle gas-fired generation resource, because Entergy Arkansas was not able to complete negotiations with the owner within the time requirements of the rate case. Also, in March 2007 and April 2007, the APSC staff and intervenors filed additional testimony. The APSC staff's filings indicate that an annual rate increase of $2 million is warranted, with a proposed ROE of 9.9%. The APSC staff has also taken positions, which Entergy
26
Arkansas opposes, regarding costs accumulated in the storm reserve, FERC-allocated System Agreement cost allocation, and removal costs associated with the termination of a lease that could have an adverse effect on future financial results. An evidentiary hearing in the rate case proceeding ended in early-May 2007.
Filings with the LPSC (Entergy Gulf States)
In January 2007, Entergy Gulf States filed with the LPSC its gas rate stabilization plan for the test year ending September 30, 2006. The filing showed a revenue deficiency of $3.5 million based on an ROE mid-point of 10.5%. In March 2007, Entergy Gulf States filed a set of rate and rider schedules that reflected all proposed LPSC staff adjustments and implemented a $2.4 million base rate increase effective with the first billing cycle of April 2007 pursuant to the rate stabilization plan.
Filings with the MPSC (Entergy Mississippi)
In March 2007, Entergy Mississippi made its annual scheduled formula rate plan filing for the 2006 test year with the MPSC. The filing shows that an increase of $12.9 million in annual electric revenues is warranted. The Mississippi Public Utilities Staff is reviewing the filing.
Electric Industry Restructuring
Texas (Entergy Gulf States)
Refer to Note 2 to the financial statements in the Form 10-K for the current Texas legislation and Entergy Gulf States' proposed transition to competition plan.
In December 2006, the PUCT asked for parties to brief the effects of the 2005 legislation on the competition dockets of Entergy Gulf States, most notably, the settlement that the parties entered with respect to the unbundling of Entergy Gulf States for retail open access. Finding that the 2005 legislation now provides the mechanism by which Entergy Gulf States will transition to competition, the PUCT, on February 1, 2007, dismissed Entergy Gulf States' unbundled cost of service proceeding. After analyzing the PUCT's decision, Entergy Gulf States recorded a provision for its estimated exposure related to certain past fuel cost recoveries that may be credited to customers.
27
Common Stock
Earnings per Share
The following tables present Entergy's basic and diluted earnings per share calculations included on the consolidated income statement:
|
|
For the Three Months Ended March 31, |
|||||||
|
|
2007 |
|
2006 |
|||||
|
|
(In Millions, Except Per Share Data) |
|||||||
|
|
|
|
$/share |
|
|
|
$/share |
|
Earnings applicable to common stock |
|
$212.2 |
|
|
|
$193.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares |
|
|
|
|
|
|
|
|
|
Average dilutive effect of: |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
4.8 |
|
(0.025) |
|
3.5 |
|
(0.015) |
Equity Units |
0.7 |
(0.003) |
- |
- |
|||||
|
Deferred Units |
|
0.1 |
|
(0.001) |
|
0.2 |
|
(0.001) |
Average number of common shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entergy's stock option and other equity compensation plans are discussed in Note 12 to the consolidated financial statements in the Form 10-K.
Treasury Stock
During the first quarter of 2007, Entergy Corporation issued 824,527 shares of its previously repurchased common stock to satisfy stock option exercises and other stock-based awards. During the first quarter of 2007, Entergy Corporation purchased 5,672,042 shares of common stock for a total purchase price of $558.2 million.
Retained Earnings
On April 4, 2007, Entergy Corporation's Board of Directors declared a common stock dividend of $0.54 per share, payable on June 1, 2007 to holders of record as of May 10, 2007.
Accumulated Other Comprehensive Income
Cash flow hedges with net unrealized losses of approximately $67.8 million net-of-tax at March 31, 2007 are expected to be reclassified into earnings during the next twelve months.
28
NOTE 4. LINES OF CREDIT, RELATED SHORT-TERM BORROWINGS, AND LONG-TERM DEBT
Entergy Corporation has in place two separate revolving credit facilities, a five-year credit facility and a three-year credit facility. The five-year credit facility, which expires in May 2010, has a borrowing capacity of $2 billion and the three-year facility, which expires in December 2008, has a borrowing capacity of $1.5 billion. Entergy Corporation also has the ability to issue letters of credit against the total borrowing capacity of both credit facilities. The commitment fee for these facilities is currently 0.13% per annum of the unused amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior debt ratings of the Utility operating companies. Following is a summary of the borrowings outstanding and capacity available under these facilities as of March 31, 2007.
|
|
|
Letters |
Capacity |
||||
(In Millions) |
||||||||
5-Year Facility |
$2,000 |
$895 |
$79 |
$1,026 |
||||
3-Year Facility |
$1,500 |
$540 |
$- |
$960 |
See Part II, Item 5 for an update of the borrowings outstanding as of May 8, 2007.
Entergy Corporation's facilities require it to maintain a consolidated debt ratio of 65% or less of its total capitalization. If Entergy fails to meet this ratio, or if Entergy or the Utility operating companies (except Entergy New Orleans) and System Energy default on other indebtedness or are in bankruptcy or insolvency proceedings, an acceleration of the facilities' maturity dates may occur.
Entergy Arkansas, Entergy Gulf States, and Entergy Mississippi, each had credit facilities available as of March 31, 2007 as follows:
|
|
|
|
Amount of |
|
Amount Drawn as of |
|
|
|
|
|
|
|
Entergy Arkansas |
|
April 2007 |
|
$85 million |
|
- |
Entergy Gulf States |
February 2011 |
$50 million (a) |
- |
|||
Entergy Mississippi |
|
May 2007 |
|
$30 million (b) |
|
- |
Entergy Mississippi |
|
May 2007 |
|
$20 million (b) |
|
- |
(a) |
The credit facility allows Entergy Gulf States to issue letters of credit against the borrowing capacity of the facility. As of March 31, 2007, $1.4 million in letters of credit had been issued. |
(b) |
Borrowings under the Entergy Mississippi credit facilities may be secured by a security interest in its accounts receivable. |
In April 2007, Entergy Arkansas renewed its credit facility through April 2008 and increased the amount of the credit facility to $100 million. Prior to expiration on May 31, 2007, it is expected that Entergy Mississippi will renew both of its credit facilities.
The credit facilities have variable interest rates and the average commitment fee is 0.13%. The Entergy Arkansas credit facility requires that it maintain total shareholders' equity of at least 25% of its total assets.
The short-term borrowings of the Registrant Subsidiaries (other than Entergy New Orleans) and certain other Entergy subsidiaries are limited to amounts authorized by the FERC. The current FERC-authorized limits are effective through March 31, 2008. In addition to borrowings from commercial banks, these companies are authorized under a FERC order to borrow from the Entergy System money pool. The money pool is an inter-company borrowing arrangement designed to reduce Entergy's subsidiaries' dependence on external short-term borrowings. Borrowings from the money pool and external borrowings combined may not exceed the FERC authorized limits. As of March 31, 2007, Entergy's subsidiaries' aggregate money pool and external short-term borrowings authorized limit was $2.0 billion, the aggregate outstanding borrowing from the money pool was $330.1 million, and Entergy's subsidiaries' had no outstanding short-term borrowing from external sources.
29
The following are the FERC-authorized limits for short-term borrowings effective February 8, 2006 and the outstanding short-term borrowings from the money pool for the Registrant Subsidiaries (other than Entergy New Orleans) as of March 31, 2007:
|
|
Authorized |
|
Borrowings |
|
|
(In Millions) |
||
|
|
|
|
|
Entergy Arkansas |
|
$250 |
|
- |
Entergy Gulf States |
|
$350 |
|
- |
Entergy Louisiana |
|
$250 |
|
$67.1 |
Entergy Mississippi |
|
$175 |
|
- |
System Energy |
|
$200 |
|
- |
Under a savings provision in PUHCA 2005, which repealed PUHCA 1935, Entergy New Orleans may continue to be a participant in the money pool to the extent authorized by its SEC PUHCA 1935 order. However, Entergy New Orleans has not made, and does not expect to make, any additional money pool borrowings while it is in bankruptcy proceedings. Entergy New Orleans had $37.2 million in borrowings outstanding from the money pool as of its bankruptcy filing date, September 23, 2005.
In January 2007, Entergy Mississippi redeemed, prior to maturity, $100 million of 4.35% Series of First Mortgage Bonds due April 2008.
Entergy New Orleans Debtor-in-Possession Credit Facility
See Note 4 in the Form 10-K for a discussion of the Entergy New Orleans $200 million debtor-in-possession (DIP) credit facility. As of March 31, 2007, Entergy New Orleans had $42 million of outstanding borrowings under the DIP credit agreement. During April 2007, at the same time that it made a scheduled pension plan contribution, Entergy New Orleans borrowed under the DIP credit agreement, and on May 8, 2007 had $67 million of outstanding borrowings under the DIP credit agreement.
NOTE 5. ACQUISITIONS
In April 2007, Entergy's Non-Utility Nuclear business purchased the 798 MW Palisades nuclear energy plant located near South Haven, Michigan from Consumers Energy Company for a cash payment of $380 million. Entergy received the plant, nuclear fuel, inventories, and other assets. The liability to decommission the plant, as well as related decommissioning trust funds of approximately $250 million, was also transferred to Entergy's Non-Utility Nuclear business. Entergy's Non-Utility Nuclear business executed a unit contingent, 15-year purchased power agreement (PPA) with Consumers Energy for 100% of the plant's output, excluding any future uprates. Prices under the PPA range from $43.50/MWh in 2007 to $61.50/MWh in 2022, and the average price under the PPA is $51/MWh. In the first quarter 2007, the NRC renewed Palisades' operating license until 2031. Also as part of the transaction, Consumers Energy paid Entergy's Non-Utility Nuclear business $30 million to assume responsibility for spent fuel at the decommissioned Big Rock Point nuclear plant, which is located near Charlevoix, Michigan.
30
NOTE 6. STOCK-BASED COMPENSATION
Entergy grants stock options, which are described more fully in Note 12 to the consolidated financial statements in the Form 10-K. Entergy adopted SFAS 123R, "Share-Based Payment" on January 1, 2006. The adoption of the standard did not materially affect Entergy's financial position, results of operations, or cash flows because Entergy adopted the fair value based method of accounting for stock options prescribed by SFAS 123, "Accounting for Stock-Based Compensation" on January 1, 2003. Prior to 2003, Entergy applied the recognition and measurement principles of APB Opinion 25, "Accounting for Stock Issued to Employees," and related Interpretations in accounting for those plans. Awards under Entergy's plans generally vest over three years.
The following table includes financial information for stock options for each of the years presented:
2007 |
2006 |
||
(In Millions) |
|||
Compensation expense included in Entergy's Net Income for the first quarter |
$3.3 |
$2.8 |
|
Tax benefit recognized in Entergy's Net Income for the first quarter |
$1.3 |
$1.1 |
|
Compensation cost capitalized as part of fixed assets and inventory as of |
|
|
Entergy granted 1,854,900 stock options during the first quarter of 2007 with a weighted-average fair value of $14.15. At March 31, 2007, there were 11,834,930 stock options outstanding with a weighted-average exercise price of $57.54. The aggregate intrinsic value of the stock options outstanding was $561 million.
NOTE 7. RETIREMENT AND OTHER POSTRETIREMENT BENEFITS
Components of Net Pension Cost
Entergy's qualified pension cost, including amounts capitalized, for the first quarters of 2007 and 2006, included the following components:
|
|
2007 |
|
2006 |
|
|
(In Thousands) |
||
|
|
|
|
|
Service cost - benefits earned during the period |
|
$23,428 |
|
$23,176 |
Interest cost on projected benefit obligation |
|
44,602 |
|
41,814 |
Expected return on assets |
|
(49,179) |
|
(44,482) |
Amortization of prior service cost |
|
1,338 |
|
1,365 |
Amortization of loss |
|
11,075 |
|
10,931 |
Net pension costs |
|
$31,264 |
|
$32,804 |
31
The Registrant Subsidiaries' qualified pension cost, including amounts capitalized, for the first quarters of 2007 and 2006, included the following components:
|
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
2007 |
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
|
|
(In Thousands) |
||||||||||
Service cost - benefits earned |
|
|
|
|
|
|
|
|
|
|
|
|
during the period |
|
$3,638 |
|
$3,011 |
|
$2,231 |
|
$1,089 |
|
$470 |
|
$1,021 |
Interest cost on projected |
|
|
|
|
|
|
|
|
|
|
|
|
benefit obligation |
|
10,498 |
|
8,139 |
|
6,251 |
|
3,371 |
|
1,260 |
|
1,710 |
Expected return on assets |
|
(11,009) |
|
(10,750) |
|
(7,808) |
|
(3,837) |
|
(1,446) |
|
(2,136) |
Amortization of prior service cost |
|
412 |
|
304 |
|
160 |
|
114 |
|
44 |
|
12 |
Amortization of loss |
|
2,721 |
|
623 |
|
1,433 |
|
749 |
|
368 |
|
151 |
Net pension cost |
|
$6,260 |
|
$1,327 |
|
$2,267 |
|
$1,486 |
|
$696 |
|
$758 |
|
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
2006 |
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
|
|
(In Thousands) |
||||||||||
Service cost - benefits earned |
|
|
|
|
|
|
|
|
|
|
|
|
during the period |
|
$3,626 |
|
$2,993 |
|
$2,182 |
|
$1,077 |
|
$501 |
|
$1,031 |
Interest cost on projected |
|
|
|
|
|
|
|
|
|
|
|
|
benefit obligation |
|
9,915 |
|
7,914 |
|
6,052 |
|
3,252 |
|
1,282 |
|
1,604 |
Expected return on assets |
|
(9,834) |
|
(10,176) |
|
(7,114) |
|
(3,683) |
|
(884) |
|
(1,775) |
Amortization of prior service cost |
|
415 |
|
309 |
|
141 |
|
128 |
|
56 |
|
12 |
Amortization of loss |
|
2,438 |
|
640 |
|
1,509 |
|
725 |
|
509 |
|
167 |
Net pension cost |
|
$6,560 |
|
$1,680 |
|
$2,770 |
|
$1,499 |
|
$1,464 |
|
$1,039 |
Entergy recognized $4.0 million and $3.9 million in pension cost for its non-qualified pension plans in the first quarters of 2007 and 2006, respectively.
The Registrant Subsidiaries recognized the following pension cost for their non-qualified pension plans in the first quarters of 2007 and 2006:
|
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
|
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
|
|
(In Thousands) |
|||||||||
Non-Qualified Pension Cost First |
|
$123 |
|
$317 |
|
$6 |
|
$44 |
|
$57 |
|
Non-Qualified Pension Cost First |
|
$113 |
|
$220 |
|
$5 |
|
$36 |
|
$54 |
|
32
Components of Net Other Postretirement Benefit Cost
Entergy's other postretirement benefit cost, including amounts capitalized, for the first quarters of 2007 and 2006, included the following components:
|
|
2007 |
|
2006 |
|
|
(In Thousands) |
||
|
|
|
|
|
Service cost - benefits earned during the period |
|
$10,638 |
|
$10,370 |
Interest cost on APBO |
|
14,816 |
|
14,316 |
Expected return on assets |
|
(5,577) |
|
(4,756) |
Amortization of transition obligation |
|
542 |
|
542 |
Amortization of prior service cost |
|
(4,049) |
|
(3,688) |
Amortization of loss |
|
4,461 |
|
5,698 |
Net other postretirement benefit cost |
|
$20,831 |
|
$22,482 |
The Registrant Subsidiaries' other postretirement benefit cost, including amounts capitalized, for the first quarters of 2007 and 2006, included the following components:
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
|
2007 |
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
|
|
(In Thousands) |
||||||||||
Service cost - benefits earned |
|
|
|
|
|
|
|
|
|
|
|
|
during the period |
|
$1,525 |
|
$1,547 |
|
$973 |
|
$476 |
|
$255 |
|
$451 |
Interest cost on APBO |
|
3,037 |
|
2,876 |
|
1,941 |
|
1,049 |
|
870 |
|
433 |
Expected return on assets |
|
(2,231) |
|
(1,697) |
|
- |
|
(819) |
|
(682) |
|
(470) |
Amortization of transition obligation |
|
205 |
|
151 |
|
96 |
|
88 |
|
416 |
|
2 |
Amortization of prior service cost |
|
(197) |
|
218 |
|
117 |
|
(62) |
|
90 |
|
(283) |
Amortization of loss |
|
1,500 |
|
793 |
|
764 |
|
613 |
|
282 |
|
149 |
Net other postretirement benefit cost |
|
$3,839 |
|
$3,888 |
|
$3,891 |
|
$1,345 |
|
$1,231 |
|
$282 |
|
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
2006 |
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
|
|
(In Thousands) |
||||||||||
Service cost - benefits earned |
|
|
|
|
|
|
|
|
|
|
|
|
during the period |
|
$1,337 |
|
$1,254 |
|
$854 |
|
$419 |
|
$232 |
|
$414 |
Interest cost on APBO |
|
2,844 |
|
2,747 |
|
1,856 |
|
944 |
|
856 |
|
407 |
Expected return on assets |
|
(1,797) |
|
(1,489) |
|
- |
|
(709) |
|
(611) |
|
(421) |
Amortization of transition obligation |
|
205 |
|
151 |
|
96 |
|
88 |
|
416 |
|
2 |
Amortization of prior service cost |
|
(408) |
|
- |
|
(24) |
|
(137) |
|
10 |
|
(301) |
Amortization of loss |
|
1,671 |
|
1,002 |
|
893 |
|
644 |
|
343 |
|
207 |
Net other postretirement benefit cost |
|
$3,852 |
|
$3,665 |
|
$3,675 |
|
$1,249 |
|
$1,246 |
|
$308 |
Employer Contributions
Entergy expects to contribute $176 million to its qualified pension plans in 2007. As of the end of April 2007, Entergy had contributed $96 million to its pension plans. Therefore, Entergy presently anticipates contributing an additional $80 million to fund its qualified pension plans in 2007.
33
The Registrant Subsidiaries expect to contribute the following to qualified pension plans in 2007:
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
|
|
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
|
|
(In Thousands) |
||||||||||
Expected 2007 pension contributions |
|
|
|
|
|
|
|
|
|
|
|
|
Pension contributions made through |
|
$ - |
|
$16,550 |
|
|
|
$ - |
|
$28,459 |
|
$3,538 |
Remaining estimated pension |
|
$6,987 |
|
$8,796 |
|
|
|
$784 |
|
$15,126 |
|
$2,150 |
Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Medicare Act)
Based on actuarial analysis, the estimated impact of future Medicare subsidies reduced the December 31, 2006 Accumulated Postretirement Benefit Obligation (APBO) by $183 million, and reduced the first quarter 2007 and 2006 other postretirement benefit cost by $6.3 million and $6.9 million, respectively. In the first quarter 2007, Entergy received $0.9 million in Medicare subsidies for prescription drug claims during the third quarter 2006.
Based on actuarial analysis, the estimated impact of future Medicare subsidies reduced the December 31, 2006 APBO and the first quarters 2007 and 2006 other postretirement benefit cost for the Registrant Subsidiaries as follows:
|
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
|
|
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
|
|
(In Thousands) |
||||||||||
Reduction in 12/31/2006 APBO |
|
($40,636) |
|
($35,991) |
|
($22,486) |
|
($13,560) |
|
($10,110) |
|
($5,966) |
Reduction in first quarter 2007 |
|
|
|
|
|
|
|
|
|
|
|
|
other postretirement benefit cost |
|
($1,376) |
|
($1,222) |
|
($762) |
|
($438) |
|
($311) |
|
($246) |
Reduction in first quarter 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
other postretirement benefit cost |
|
($1,562) |
|
($1,332) |
|
($865) |
|
($512) |
|
($376) |
|
($268) |
Medicare subsidies received in |
|
|
|
|
|
|
|
|
|
|
|
For further information on the Medicare Act refer to Note 11 to the financial statements in the Form 10-K.
34
NOTE 8. BUSINESS SEGMENT INFORMATION
Entergy's reportable segments as of March 31, 2007 are Utility and Non-Utility Nuclear. "All Other" includes the parent company, Entergy Corporation, and other business activity, including the non-nuclear wholesale assets business and earnings on the proceeds of sales of previously-owned businesses. As a result of the Entergy New Orleans bankruptcy filing, Entergy discontinued the consolidation of Entergy New Orleans retroactive to January 1, 2005, and is reporting Entergy New Orleans results under the equity method of accounting in the Utility segment. As discussed more thoroughly in Note 9 to the financial statements, Entergy expects to reconsolidate Entergy New Orleans in the second quarter 2007, retroactive to January 1, 2007.
Entergy's segment financial information for the first quarters of 2007 and 2006 is as follows:
|
|
|
|
|
|
|
|
|
|
|
(In Thousands) |
||||||||||
2007 |
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
$2,103,269 |
|
$458,251 |
|
$45,048 |
|
($6,338) |
|
$2,600,230 |
|
Equity in earnings of |
|
|
|
|
|
|||||
unconsolidated equity affiliates |
$2,909 |
|
$- |
|
$1,625 |
|
$- |
|
$4,534 |
|
Income Taxes (Benefit) |
$79,180 |
|
$84,735 |
|
($19,362) |
|
$- |
|
$144,553 |
|
Net Income (Loss) |
$104,450 |
|
$128,170 |
|
($20,425) |
|
$- |
|
$212,195 |
|
Total Assets |
$25,167,308 |
$5,513,662 |
$2,887,861 |
($2,421,989) |
$31,146,842 |
|||||
|
|
|
|
|
|
|||||
2006 |
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
$2,131,020 |
|
$388,010 |
|
$66,688 |
|
($17,687) |
|
$2,568,031 |
|
Equity in earnings (loss) of |
|
|
|
|
|
|||||
unconsolidated equity affiliates |
$5,643 |
|
$- |
|
($2,057) |
|
$- |
|
$3,586 |
|
Income Taxes (Benefit) |
$76,973 |
|
$52,916 |
|
($11,059) |
|
$- |
|
$118,830 |
|
Net Income (Loss) |
$119,752 |
|
$81,530 |
|
($7,622) |
|
($32) |
|
$193,628 |
|
Total Assets |
$24,736,486 |
$5,037,167 |
$3,451,763 |
($2,709,370) |
$30,516,046 |
Businesses marked with * are sometimes referred to as the "competitive businesses," with the exception of the parent company, Entergy Corporation. Eliminations are primarily intersegment activity. Almost all of Entergy's goodwill is related to the Utility segment.
NOTE 9. ENTERGY NEW ORLEANS BANKRUPTCY PROCEEDING
See Note 18 to the financial statements in the Form 10-K for a discussion of the Entergy New Orleans bankruptcy proceeding. On May 7, 2007, the bankruptcy judge entered an order confirming Entergy New Orleans' plan of reorganization. With the receipt of CDBG funds, and the agreement on insurance recovery with one of its excess insurers, Entergy New Orleans waived the conditions precedent in its plan of reorganization, and the plan became effective on May 8, 2007.
35
Following are significant terms in Entergy New Orleans' plan of reorganization:
Entergy New Orleans currently estimates that the prepetition claims that will be allowed and paid (either in cash or by notes) in the bankruptcy case will approximate the prepetition liabilities currently recorded by Entergy New Orleans, including interest.
(Entergy Corporation)
Entergy's income statement for the three months ended March 31, 2007 includes $41 million in operating revenues and $34 million in purchased power expenses from transactions with Entergy New Orleans. Entergy's income statement for the three months ended March 31, 2006 includes $61 million in operating revenues and $7 million in purchased power expenses from transactions with Entergy New Orleans. Entergy's balance sheet as of March 31, 2007 includes $98 million of accounts that are payable to Entergy affiliates by Entergy New Orleans. Entergy's balance sheet as of December 31, 2006 includes $95 million of accounts that are payable to Entergy affiliates by Entergy New Orleans.
With confirmation of the plan of reorganization, Entergy expects to reconsolidate Entergy New Orleans in the second quarter 2007, retroactive to January 1, 2007. Because Entergy owns all of the common stock of Entergy New Orleans, reconsolidation will not affect the amount of net income that Entergy records from Entergy New Orleans' operations for any current or prior period, but will result in Entergy New Orleans' results being included in each individual income statement line item in 2007, rather than just its net income being presented as "Equity in earnings (loss) of unconsolidated equity affiliates," as will remain the case for 2005 and 2006.
(Entergy New Orleans)
Reorganization items reported as operating expenses in the income statements for the three months ended March 31, 2007 and 2006 primarily consist of professional fees associated with the bankruptcy case.
36
NOTE 10. INCOME TAXES
Entergy or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, Entergy is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years before 2002. Entergy's U.S. income tax returns for 2002 and 2003 are currently under examination by the IRS, and the examination is anticipated to be completed by the end of 2007. As of March 31, 2007, the IRS has not proposed any significant adjustments resulting from the current examination.
On November 16, 2006, the IRS issued a Notice of Deficiency to Entergy for the tax years 1997 and 1998. The Notice asserts that Entergy owes additional tax of $17.3 million for 1997 and $61.7 million for 1998. Entergy and the IRS have settled all issues for 1997 and 1998 except for those raised in the Notice which are described as follows: 1) The IRS believes that U.K. Windfall Tax paid by London Electricity, a former subsidiary of Entergy, was not an eligible tax under the foreign tax credit provisions of the Internal Revenue Code. Entergy believes that it properly claimed a foreign tax credit for the tax year 1998 attributable to the Windfall Tax paid by London Electricity. This issue accounts for $59.7 million of the 1998 deficiency. 2) The IRS denied Entergy's change in method of accounting for street lighting assets and the related increase in depreciation deductions for 1997 and 1998. Entergy believes that street lighting assets are a separate line of business not subject to the same 20-year depreciable life as distribution assets, but rather are properly classified as having a 7-year depreciable life. This issue accounts for all of the 1997 deficiency of $17.3 million and $2 million of the 1998 deficiency. On December 6, 2006, Entergy filed a petition in the U.S. Tax Court requesting a redetermination of these issues and the resulting deficiencies.
Entergy expects the IRS to issue another Notice of Deficiency in 2007 for the years 1999 - 2001 related to the U.K. Windfall Tax credit and street lighting issues indicating deficiencies of approximately $29 million and $7 million, respectively. In addition, Entergy expects the IRS to include in the Notice an amount related to depreciation deductions that resulted from Entergy's purchase price allocations on its acquisitions of the Pilgrim and Indian Point 2 power plants. Entergy's allocation methodology results in nuclear plant depreciation deductions which have been disallowed by the IRS. Entergy estimates that the 1999 - 2001 deficiency related to nuclear plant depreciation will be approximately $11 million.
For years after 2001, the U.K. Windfall Tax, street lighting, and nuclear plant depreciation issues resulted in federal and state tax benefits of approximately $63 million, $6 million, and $52 million, respectively for each issue, for a total of $121 million.
In summary, these three issues have resulted in tax reductions of approximately $152 million for foreign tax credits, $32 million for street lighting, and $63 million for nuclear depreciation, for a total of $247 million for all years. The potential for accrued federal and state interest on these three issues for all years is estimated to be approximately $69 million, after-tax and net of deposit offsets. Entergy believes that the provisions recorded in its financial statements and as shown in the table below are sufficient to address these three issues as well as other liabilities that are reasonably estimable, including an estimate of probable interest expense, associated with all uncertain tax positions.
Entergy has $124 million in deposits on account with the IRS covering these three and all other uncertain tax positions.
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48) was issued in July 2006. FIN 48 establishes a "more-likely-than-not" recognition threshold that must be met before a tax benefit can be recognized in the financial statements. If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded. Entergy and the Registrant Subsidiaries adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48), on January 1, 2007. As a result of the implementation of FIN 48, Entergy recognized an increase in the
37
liability for unrecognized tax benefits of approximately $5 million, which was accounted for as a reduction to the January 1, 2007 balance of retained earnings.
As of January 1, 2007, Entergy had a total balance of unrecognized tax benefits of approximately $2 billion. Included in this balance of unrecognized tax benefits are $1.7 billion of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. Entergy's January 1, 2007 balance of unrecognized tax benefits includes $244 million which could affect the effective income tax rate. Entergy accrues interest and penalties expenses related to unrecognized tax benefits in income tax expense. Entergy's January 1, 2007 balance of unrecognized tax benefits includes approximately $52 million accrued for the possible payment of interest and penalties.
As of January 1, 2007, Entergy and the Registrant Subsidiaries have total balances of unrecognized tax benefits, which did not change significantly during the three months ended March 31, 2007, reflected in their balance sheets as follows:
|
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
Entergy |
|
System |
||
|
Entergy |
Arkansas |
|
Gulf States |
|
Louisiana |
|
Mississippi |
|
New Orleans |
|
Energy |
||
(In Thousands) |
||||||||||||||
Taxes accrued |
|
($184,372) |
($43,445) |
|
($640) |
|
$234 |
|
$5,830 |
|
$4,304 |
|
($35,506) |
|
Accumulated deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrecognized |
|
|
|
|
|
|
|
|
|
|
|
|
|
The Registrant Subsidiaries' January 1, 2007 balances of unrecognized tax benefits include amounts which could affect the effective income tax rate as follows (in millions):
Entergy Arkansas |
$0.8 |
Entergy Gulf States |
$3.6 |
Entergy Louisiana |
$1.2 |
Entergy Mississippi |
$3.4 |
Entergy New Orleans |
$1.4 |
System Energy |
$1.7 |
The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense. Included in the January 1, 2007 balance of unrecognized tax benefits were accruals for the possible payment of interest and penalty as follows (in millions):
Entergy Arkansas |
$1.6 |
Entergy Gulf States |
$4.0 |
Entergy Louisiana |
$0.8 |
Entergy Mississippi |
$3.9 |
Entergy New Orleans |
$0.9 |
System Energy |
$0.8 |
Entergy and the Registrant Subsidiaries do not expect that total unrecognized tax benefits will significantly change within the next twelve months.
38
NOTE 11. NEW ACCOUNTING PRONOUNCEMENTS
The FASB issued Statement of Financial Accounting Standards No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (SFAS 159) during the first quarter of 2007. SFAS 159 provides an option for companies to select certain financial assets and liabilities to be accounted for at fair value with changes in the fair value of those assets or liabilities being reported through earnings. The intent of the standard is to mitigate volatility in reported earnings caused by the application of the more complicated fair value hedging accounting rules. Under SFAS 159, companies can select existing assets or liabilities for this fair value option concurrent with the effective date of January 1, 2008 for companies with fiscal years ending December 31 or can select future assets or liabilities as they are acquired or entered into. Entergy is in the process of evaluating the potential effect of making this accounting election.
In June 2006, the EITF reached a consensus on EITF Issue 06-3 "How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation)" (EITF 06-3). The scope of this issue includes any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction between a seller and a customer, and may include, but is not limited to, sales, use, value added, and some excise taxes. Under EITF 06-3, the presentation of taxes within the scope of this issue on either a gross basis (included in revenues and costs) or a net basis (excluded from revenues) is an accounting policy decision that should be disclosed. For any such taxes reported on a gross basis, the amounts of those taxes in interim and annual financial statements, for each period for which an income statement is presented, should be disclosed if those amounts are significant. Entergy's pol icy is to present such taxes on a net basis. EITF 06-3 did not affect Entergy's financial statements.
__________________________________
In the opinion of the management of Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, the accompanying unaudited financial statements contain all adjustments (consisting primarily of normal recurring accruals and reclassification of previously reported amounts to conform to current classifications) necessary for a fair statement of the results for the interim periods presented. The business of the Registrant Subsidiaries is subject to seasonal fluctuations, however, with the peak periods occurring during the third quarter. The results for the interim periods presented should not be used as a basis for estimating results of operations for a full year.
Part I, Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of March 31, 2007, evaluations were performed under the supervision and with the participation of Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy Resources (individually "Registrant" and collectively the "Registrants") management, including their respective Chief Executive Officers (CEO) and Chief Financial Officers (CFO). The evaluations assessed the effectiveness of the Registrants' disclosure controls and procedures. Based on the evaluations, each CEO and CFO has concluded that, as to the Registrant or Registrants for which they serve as CEO or CFO, the Registrant's or Registrants' disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commi ssion rules and forms; and that the Registrant's or Registrants' disclosure controls and procedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant's or Registrants' management, including their respective CEOs and CFOs, as appropriate to allow timely decisions regarding required disclosure.
39
ENTERGY ARKANSAS, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Results of Operations
Net Income
Net income remained relatively unchanged for the first quarter of 2007 compared to the first quarter of 2006 because higher net revenue was offset by higher taxes other than income taxes and higher other operation and maintenance expenses.
Net Revenue
Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory credits. Following is an analysis of the change in net revenue comparing the first quarter of 2007 to the first quarter of 2006.
|
|
Amount |
|
|
(In Millions) |
|
|
|
2006 net revenue |
|
$231.7 |
Pass-through rider revenue |
8.5 |
|
Volume/weather |
8.3 |
|
Deferred fuel cost revisions |
|
7.3 |
Net wholesale revenue |
(10.9) |
|
Other |
|
8.4 |
2007 net revenue |
|
$253.3 |
The pass-through rider revenue variance is primarily due to a change in August 2006 in the accounting for city franchise tax revenues as directed by the APSC. The change results in an increase in rider revenue with a corresponding increase in taxes other than income taxes resulting in no effect on net income.
The volume/weather variance is primarily due to an increase in electricity usage, including the effect of more favorable weather compared to 2006. Billed retail electricity usage increased by a total of 113 GWh.
The deferred fuel cost revisions variance is primarily due to the 2006 energy cost recovery true-up, made in the first quarter of 2007, which increased net revenue by $6.6 million.
The net wholesale revenue variance is primarily due to decreased results from wholesale contracts and lower wholesale prices.
Gross operating revenues and fuel and purchased power expenses
Gross operating revenues increased primarily due to:
40
The increase was partially offset by a decrease of $17.7 million in gross wholesale revenue due to lower wholesale prices and a decrease in volume.
Fuel and purchased power expenses increased primarily due to an increase in deferred fuel expense associated with higher energy cost recovery rates collected from customers.
Other Income Statement Variances
Other operation and maintenance expenses increased primarily due to:
Partially offsetting the increase was a decrease of $1.6 million in payroll and benefits costs.
Taxes other than income taxes increased primarily due to an increase in city franchise tax expense due to a change in August 2006 in the accounting for city franchise tax revenues as directed by the APSC. The change results in an increase in taxes other than income taxes with a corresponding increase in rider revenue, resulting in no effect on net income.
Depreciation and amortization expenses increased primarily due to an increase in plant in service and a revision in 2006 of estimated depreciable lives involving certain intangible assets.
Other income increased primarily due to a revision to the allowance for equity funds used during construction related to removal costs.
Interest and other charges increased primarily due to interest expense of $2.9 million recorded in the first quarter of 2007 on advances from independent power producers per a FERC order, partially offset by a revision to the allowance for borrowed funds used during construction related to removal costs.
Income Taxes
The effective income tax rates for the first quarters of 2007 and 2006 were 45.4% and 44.1%, respectively. The difference in the effective income tax rate for the first quarter of 2007 versus the federal statutory rate of 35.0% is primarily due to book and tax differences related to utility plant items and state income taxes, partially offset by book and tax differences related to the allowance for equity funds used during construction. The difference in the effective income tax rate for the first quarter of 2006 versus the federal statutory rate of 35.0% is primarily due to book and tax differences related to utility plant items and state income taxes, partially offset by the amortization of investment tax credits.
41
Liquidity and Capital Resources
Cash Flow
Cash flows for the first quarters of 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Thousands) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$34,815 |
|
$9,393 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
208,282 |
|
95,463 |
|
Investing activities |
|
(115,117) |
|
(89,049) |
|
Financing activities |
|
(17,518) |
|
28,556 |
Net increase in cash and cash equivalents |
|
75,647 |
|
34,970 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$110,462 |
|
$44,363 |
Operating Activities
Cash flow from operations increased $112.8 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to the timing of payments to vendors, increased recovery of deferred fuel costs, and the timing of the collection of receivables from customers.
Investing Activities
Net cash flow used in investing activities increased $26.1 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to money pool activity.
Financing Activities
Financing activities used $17.5 million for the first quarter of 2007 compared to providing $28.6 million for the first quarter of 2006 primarily due to the issuance of $75 million of preferred stock in March 2006, partially offset by money pool activity.
Capital Structure
Entergy Arkansas' capitalization is balanced between equity and debt, as shown in the following table.
|
|
March 31, |
|
December 31, |
|
|
|
|
|
Net debt to net capital |
|
45.9% |
|
47.5% |
Effect of subtracting cash from debt |
|
2.0% |
|
0.6% |
Debt to capital |
|
47.9% |
|
48.1% |
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and shareholders' equity. Net capital consists of capital less cash and cash equivalents. Entergy Arkansas uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Arkansas' financial condition.
42
Uses and Sources of Capital
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Arkansas' uses and sources of capital. Following are updates to the information provided in the Form 10-K.
In April 2007, Entergy Arkansas renewed its credit facility through April 2008 and increased the amount of the credit facility to $100 million. There were no outstanding borrowings under the Entergy Arkansas credit facility as of March 31, 2007.
Entergy Arkansas' receivables from or (payables to) the money pool were as follows:
March 31, |
|
December 31, |
|
March 31, |
|
December 31, |
(In Thousands) |
||||||
|
|
|
|
|
|
|
$62,748 |
|
$16,109 |
|
$24,577 |
|
($27,346) |
See Note 4 to the financial statements in the Form 10-K for a description of the money pool.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for a discussion of state and local rate regulation, energy cost rate investigation, federal regulation, utility restructuring, nuclear matters, and environmental risks. Following are updates to the information provided in the Form 10-K.
State and Local Rate Regulation
Entergy Arkansas
In March 2007, Entergy Arkansas filed with the APSC its annual energy cost rate for the period April 2007 through March 2008. The filed energy cost rate decreased from $0.02827/kWh to $0.01179/kWh.
In March 2007, Entergy Arkansas filed rebuttal testimony in the rate case that it filed in August 2006. The rebuttal testimony requests an annual rate increase of $106.5 million, and retains a return on common equity (ROE) of 11.25%. A primary reason for the decline in the rate request from the original request of $150 million is the removal of the revenue requirement for the proposed acquisition of a load-following, combined cycle gas-fired generation resource, because Entergy Arkansas was not able to complete negotiations with the owner within the time requirements of the rate case. Also, in March 2007 and April 2007, the APSC staff and intervenors filed additional testimony. The APSC staff's filings indicate that an annual rate increase of $2 million is warranted, with a proposed ROE of 9.9%. The APSC staff has also taken positions, which Entergy Arkansas opposes, regarding costs accumulated in the storm reserve, FERC-allocated System Agreement cost all ocation, and removal costs associated with the termination of a lease that could have an adverse effect on future financial results. An evidentiary hearing in the rate case proceeding ended in early-May 2007.
Energy Cost Rate Investigation
In March 2007, in order to allow further consideration by the APSC, the APSC granted Entergy Arkansas' petition for rehearing and for stay of the APSC's January 2007 order in the proceeding investigating Entergy Arkansas' interim energy cost rate.
43
Federal Regulation
See "System Agreement Proceedings", "Independent Coordinator of Transmission", and "Available Flowgate Capacity Proceeding" in the "Significant Factors and Known Trends" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for updates to the discussion in the Form 10-K.
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Arkansas' accounting for nuclear decommissioning costs, unbilled revenue, and qualified pension and other postretirement benefits.
New Accounting Pronouncements
See "New Accounting Pronouncements" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for a discussion of new accounting pronouncements.
44
ENTERGY ARKANSAS, INC. | ||||
INCOME STATEMENTS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING REVENUES | ||||
Electric | $502,738 | $447,622 | ||
OPERATING EXPENSES | ||||
Operation and Maintenance: | ||||
Fuel, fuel-related expenses, and | ||||
gas purchased for resale | 138,039 | 102,471 | ||
Purchased power | 116,405 | 118,930 | ||
Nuclear refueling outage expenses | 7,013 | 7,355 | ||
Other operation and maintenance | 99,855 | 91,755 | ||
Decommissioning | 8,000 | 7,483 | ||
Taxes other than income taxes | 19,983 | 9,620 | ||
Depreciation and amortization | 56,065 | 52,818 | ||
Other regulatory credits - net | (5,028) | (5,527) | ||
TOTAL | 440,332 | 384,905 | ||
OPERATING INCOME | 62,406 | 62,717 | ||
OTHER INCOME | ||||
Allowance for equity funds used during construction | 5,596 | 1,902 | ||
Interest and dividend income | 7,583 | 7,675 | ||
Miscellaneous - net | (1,206) | (885) | ||
TOTAL | 11,973 | 8,692 | ||
INTEREST AND OTHER CHARGES | ||||
Interest on long-term debt | 19,354 | 18,978 | ||
Other interest - net | 4,897 | 1,540 | ||
Allowance for borrowed funds used during construction | (2,744) | (857) | ||
TOTAL | 21,507 | 19,661 | ||
INCOME BEFORE INCOME TAXES | 52,872 | 51,748 | ||
Income taxes | 23,990 | 22,825 | ||
NET INCOME | 28,882 | 28,923 | ||
Preferred dividend requirements and other | 1,718 | 2,038 | ||
EARNINGS APPLICABLE TO | ||||
COMMON STOCK | $27,164 | $26,885 | ||
See Notes to Financial Statements. | ||||
45
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46
ENTERGY ARKANSAS, INC. | ||||
STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING ACTIVITIES | ||||
Net income | $28,882 | $28,923 | ||
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||||
Reserve for regulatory adjustments | (552) | 7,082 | ||
Other regulatory credits - net | (5,028) | (5,527) | ||
Depreciation, amortization, and decommissioning | 64,065 | 60,301 | ||
Deferred income taxes,investment tax credits, and non-current taxes accrued | 67,344 | 20,019 | ||
Changes in working capital: | ||||
Receivables | 39,292 | 25,549 | ||
Fuel inventory | (12,908) | (14,869) | ||
Accounts payable | (27,956) | (69,957) | ||
Taxes accrued | (30,513) | 9,570 | ||
Interest accrued | 596 | 3,666 | ||
Deferred fuel costs | 84,739 | 47,312 | ||
Other working capital accounts | 3,845 | 5,649 | ||
Provision for estimated losses and reserves | 134 | (1,214) | ||
Changes in other regulatory assets | 8,441 | 2,037 | ||
Other | (12,099) | (23,078) | ||
Net cash flow provided by operating activities | 208,282 | 95,463 | ||
INVESTING ACTIVITIES | ||||
Construction expenditures | (72,495) | (63,547) | ||
Allowance for equity funds used during construction | 5,596 | 1,902 | ||
Nuclear fuel purchases | (30,530) | - - | ||
Proceeds from sale/leaseback of nuclear fuel | 32,601 | - - | ||
Proceeds from nuclear decommissioning trust fund sales | 7,008 | 48,526 | ||
Investment in nuclear decommissioning trust funds | (10,658) | (51,353) | ||
Change in money pool receivable - net | (46,639) | (24,577) | ||
Net cash flow used in investing activities | (115,117) | (89,049) | ||
FINANCING ACTIVITIES | ||||
Proceeds from the issuance of preferred stock | - - | 73,446 | ||
Change in money pool payable - net | - - | (27,346) | ||
Dividends paid: | ||||
Common stock | (15,800) | (15,600) | ||
Preferred stock | (1,718) | (1,944) | ||
Net cash flow provided by (used in) financing activities | (17,518) | 28,556 | ||
Net increase in cash and cash equivalents | 75,647 | 34,970 | ||
Cash and cash equivalents at beginning of period | 34,815 | 9,393 | ||
Cash and cash equivalents at end of period | $110,462 | $44,363 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid during the period for: | ||||
Interest - net of amount capitalized | $20,361 | $14,049 | ||
See Notes to Financial Statements. | ||||
47
ENTERGY ARKANSAS, INC. | ||||
BALANCE SHEETS | ||||
ASSETS | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents: | ||||
Cash | $2,684 | $2,849 | ||
Temporary cash investments - at cost, | ||||
which approximates market | 107,778 | 31,966 | ||
Total cash and cash equivalents | 110,462 | 34,815 | ||
Accounts receivable: | ||||
Customer | 106,874 | 105,347 | ||
Allowance for doubtful accounts | (15,031) | (15,257) | ||
Associated companies | 101,243 | 57,554 | ||
Other | 84,748 | 114,108 | ||
Accrued unbilled revenues | 58,141 | 66,876 | ||
Total accounts receivable | 335,975 | 328,628 | ||
Deferred fuel costs | - - | 2,157 | ||
Accumulated deferred income taxes | 22,086 | 19,232 | ||
Fuel inventory - at average cost | 35,881 | 22,973 | ||
Materials and supplies - at average cost | 102,660 | 100,061 | ||
Deferred nuclear refueling outage costs | 17,892 | 23,678 | ||
Prepayments and other | 9,073 | 6,368 | ||
TOTAL | 634,029 | 537,912 | ||
OTHER PROPERTY AND INVESTMENTS | ||||
Investment in affiliates - at equity | 11,205 | 11,206 | ||
Decommissioning trust funds | 444,162 | 439,408 | ||
Non-utility property - at cost (less accumulated depreciation) | 1,445 | 1,446 | ||
Other | 2,976 | 2,976 | ||
TOTAL | 459,788 | 455,036 | ||
UTILITY PLANT | ||||
Electric | 6,643,784 | 6,599,348 | ||
Property under capital lease | 4,534 | 5,260 | ||
Construction work in progress | 128,018 | 113,069 | ||
Nuclear fuel under capital lease | 121,397 | 124,850 | ||
Nuclear fuel | 19,253 | 21,044 | ||
TOTAL UTILITY PLANT | 6,916,986 | 6,863,571 | ||
Less - accumulated depreciation and amortization | 3,019,804 | 2,986,576 | ||
UTILITY PLANT - NET | 3,897,182 | 3,876,995 | ||
DEFERRED DEBITS AND OTHER ASSETS | ||||
Regulatory assets: | ||||
SFAS 109 regulatory asset - net | 86,312 | 93,682 | ||
Other regulatory assets | 529,742 | 542,052 | ||
Other | 40,812 | 35,359 | ||
TOTAL | 656,866 | 671,093 | ||
TOTAL ASSETS | $5,647,865 | $5,541,036 | ||
See Notes to Financial Statements. | ||||
48 | ||||
ENTERGY ARKANSAS, INC. | ||||
BALANCE SHEETS | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT LIABILITIES | ||||
Accounts payable: | ||||
Associated companies | $36,553 | $64,546 | ||
Other | 116,478 | 117,655 | ||
Customer deposits | 52,896 | 49,978 | ||
Taxes accrued | 6,648 | 37,161 | ||
Interest accrued | 20,175 | 19,579 | ||
Deferred fuel costs | 82,582 | - - | ||
Obligations under capital leases | 56,203 | 56,265 | ||
Other | 14,648 | 15,372 | ||
TOTAL | 386,183 | 360,556 | ||
NON-CURRENT LIABILITIES | ||||
Accumulated deferred income taxes and taxes accrued | 1,306,294 | 1,243,855 | ||
Accumulated deferred investment tax credits | 58,839 | 59,834 | ||
Obligations under capital leases | 69,728 | 73,845 | ||
Other regulatory liabilities | 104,454 | 103,350 | ||
Decommissioning | 480,810 | 472,810 | ||
Accumulated provisions | 14,673 | 14,539 | ||
Pension and other postretirement liabilities | 258,407 | 259,147 | ||
Long-term debt | 1,308,400 | 1,306,201 | ||
Other | 98,438 | 96,623 | ||
TOTAL | 3,700,043 | 3,630,204 | ||
Commitments and Contingencies | ||||
SHAREHOLDERS' EQUITY | ||||
Preferred stock without sinking fund | 116,350 | 116,350 | ||
Common stock, $0.01 par value, authorized 325,000,000 | ||||
shares; issued and outstanding 46,980,196 shares in 2007 | ||||
and 2006 | 470 | 470 | ||
Paid-in capital | 588,527 | 588,528 | ||
Retained earnings | 856,292 | 844,928 | ||
TOTAL | 1,561,639 | 1,550,276 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $5,647,865 | $5,541,036 | ||
See Notes to Financial Statements. | ||||
49
ENTERGY ARKANSAS, INC. | ||||||||
SELECTED OPERATING RESULTS | ||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||
(Unaudited) | ||||||||
Increase/ | ||||||||
Description | 2007 | 2006 | (Decrease) | % | ||||
(Dollars In Millions) | ||||||||
Electric Operating Revenues: | ||||||||
Residential | $ 181 | $ 151 | $ 30 | 20 | ||||
Commercial | 99 | 80 | 19 | 24 | ||||
Industrial | 102 | 89 | 13 | 15 | ||||
Governmental | 5 | 4 | 1 | 25 | ||||
Total retail | 387 | 324 | 63 | 19 | ||||
Sales for resale | ||||||||
Associated companies | 78 | 78 | - - | - - | ||||
Non-associated companies | 33 | 51 | (18) | (35) | ||||
Other | 5 | (5) | 10 | 200 | ||||
Total | $ 503 | $ 448 | $ 55 | 12 | ||||
Billed Electric Energy | ||||||||
Sales (GWh): | ||||||||
Residential | 2,032 | 1,910 | 122 | 6 | ||||
Commercial | 1,327 | 1,279 | 48 | 4 | ||||
Industrial | 1,721 | 1,778 | (57) | (3) | ||||
Governmental | 65 | 65 | - | - - | ||||
Total retail | 5,145 | 5,032 | 113 | 2 | ||||
Sales for resale | ||||||||
Associated companies | 1,993 | 1,865 | 128 | 7 | ||||
Non-associated companies | 669 | 856 | (187) | (22) | ||||
Total | 7,807 | 7,753 | 54 | 1 | ||||
50
ENTERGY GULF STATES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Hurricane Rita and Hurricane Katrina
See the Form 10-K for a discussion of the effects of Hurricanes Katrina and Rita, which hit Entergy Gulf States' service territory in the Texas and Louisiana jurisdictions in August and September 2005, which resulted in power outages, significant damage to electric distribution, transmission, and generation and gas infrastructure, and the loss of sales and customers due to mandatory evacuations, and Entergy Gulf States' efforts to recover storm restoration costs. Following is an update to that discussion.
Storm Cost Recovery Filings with Retail Regulators
In April 2007, the PUCT issued its financing order authorizing the issuance of securitization bonds to recover $353 million of hurricane reconstruction costs and up to $6 million of transaction costs, offset by $32 million of related deferred income tax benefits. Entergy Gulf States expects by mid-2007 to implement rates to recover revenues to pay the securitization bonds, and expects to receive securitization funding by the end of the third quarter 2007.
In February 2007, Entergy Louisiana and Entergy Gulf States filed rebuttal testimony and filed a second supplemental and amending application by which they seek authority from the LPSC to securitize their storm cost recovery and storm reserve amounts, together with certain debt retirement costs and upfront and ongoing costs of the securitized debt issued. Securitization is authorized by a law signed by the Governor of Louisiana in May 2006. The filing updates actual storm-related costs through January 2007 and estimated future costs, declaring that Entergy Louisiana's costs are $561 million and Entergy Gulf States' costs are $219 million. The filing also updates the requested storm reserve amounts, requesting $141 million for Entergy Louisiana and $87 million for Entergy Gulf States. Hearings began in late-April 2007. At the start of the hearing, a stipulation among Entergy Gulf States, Entergy Louisiana, the LPSC staff, and most other parties in the proceeding was read into the record. The stipulation quantifies the balance of storm restoration costs for recovery as $545 million for Entergy Louisiana and $187 million for Entergy Gulf States, and sets the storm reserve amounts at $152 million for Entergy Louisiana and $87 million for Entergy Gulf States. The stipulation also calls for securitization of the storm restoration costs and storm reserves in those same amounts. The LPSC has not issued a decision in the proceeding.
Results of Operations
Net Income
Net income decreased $17.5 million primarily due to lower net revenue and a higher effective income tax rate partially offset by higher other income.
Net Revenue
Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses and 3) other regulatory charges. Following is an analysis of the change in net revenue comparing the first quarter of 2007 to the first quarter of 2006.
|
|
Amount |
|
|
(In Millions) |
|
|
|
2006 net revenue |
|
$295.0 |
Fuel recovery |
|
(33.1) |
Volume/weather |
|
19.8 |
Other |
|
(3.2) |
2007 net revenue |
|
$278.5 |
51
The fuel recovery variance resulted primarily from adjustments of fuel clause recoveries in the first quarter of 2006 in Entergy Gulf States' Louisiana jurisdiction and a reserve for potential rate refunds in the first quarter of 2007 in Entergy Gulf States' Texas jurisdiction as a result of a PUCT ruling related to the application of past PUCT rulings addressing transition to competition in Texas.
The volume/weather variance is primarily due to increased electricity usage, including increased usage during the unbilled sales period and the effect of more favorable weather compared to the same period in 2006. Billed usage increased a total of 185 GWh. See Note 1 to the financial statements in the Form 10-K for a discussion of the accounting for unbilled revenues.
Gross operating revenues, fuel and purchased power expenses, and other regulatory charges
Gross operating revenues decreased primarily due to a decrease in fuel cost recovery revenues of $97 million due to lower fuel rates. The decrease was partially offset by more favorable volume/weather as discussed above.
Fuel and purchased power expenses decreased primarily due to decreased recovery of fuel and purchased power costs as a result of lower fuel rates.
Other regulatory charges increased primarily due to higher purchased power capacity charges.
Other Income Statement Variances
Taxes other than income taxes decreased primarily due to lower Louisiana franchise taxes resulting from lower fuel recovery revenues as discussed above.
Other income increased primarily due to carrying charges on storm restoration costs approved by the PUCT, in addition to interest earned on money pool investments. The PUCT approval and the securitization filing for the recovery of reconstruction costs are discussed in Note 2 to the financial statements in the Form 10-K and Note 2 to the financial statements herein.
Interest and other charges increased primarily due to interest recorded on advances from independent power producers per a FERC order and interest recorded on deferred fuel costs.
Income Taxes
The effective income tax rate was 39.8% for the first quarter of 2007 and 27.6% for the first quarter of 2006. The difference in the effective income tax rate for the first quarter of 2007 versus the federal statutory rate of 35% is due to book and tax differences related to utility plant items and state income taxes, partially offset by book and tax differences related to the allowance for equity funds used during construction. The difference in the effective income tax rate for the first quarter of 2006 is primarily due to book and tax differences related to the allowance for equity funds used during construction and utility plant items, the amortization of investment tax credits, and flow-through book and tax timing differences.
52
Liquidity and Capital Resources
Cash Flow
Cash flows for the first quarters of 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Thousands) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$180,381 |
|
$25,373 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
141,210 |
|
138,424 |
|
Investing activities |
|
(88,201) |
|
(153,109) |
|
Financing activities |
|
(36,818) |
|
1,845 |
Net increase (decrease) in cash and cash equivalents |
|
16,191 |
|
(12,840) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$196,572 |
|
$12,533 |
Investing Activities
Net cash used in investing activities decreased $64.9 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to a decrease in construction expenditures of $137 million due to storm-related projects in 2006, partially offset by money pool activity.
Financing Activities
Financing activities used cash of $36.8 million for the first quarter of 2007 compared to providing cash of $1.8 million for the first quarter of 2006 primarily due to common stock dividends paid in 2007 and money pool activity.
Capital Structure
Entergy Gulf States' capitalization is balanced between equity and debt, as shown in the following table.
|
|
March 31, |
|
December 31, |
|
|
|
|
|
|
|
Net debt to net capital |
|
49.9% |
|
50.1% |
|
Effect of subtracting cash from debt |
|
2.1% |
|
1.9% |
|
Debt to capital |
|
52.0% |
|
52.0% |
|
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, preferred stock with sinking fund, and long-term debt, including the currently maturing portion. Capital consists of debt and shareholders' equity. Net capital consists of capital less cash and cash equivalents. Entergy Gulf States uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Gulf States' financial condition.
53
Uses and Sources of Capital
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Gulf States' uses and sources of capital. Following are updates to the information provided in the Form 10-K.
Entergy Gulf States' receivables from or (payables to) the money pool were as follows:
March 31, |
|
December 31, |
|
March 31, |
|
December 31, |
(In Thousands) |
||||||
|
|
|
|
|
|
|
$107,555 |
|
$75,048 |
|
($5,124) |
|
$64,011 |
See Note 4 to the financial statements in the Form 10-K for a description of the money pool.
Entergy Gulf States has a $50 million line of credit. The line of credit allows Entergy Gulf States to borrow money and to issue letters of credit. $1.4 million in letters of credit were issued under the facility at March 31, 2007, and no borrowings were outstanding. The line of credit terminates in February 2011.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for a discussion of transition to retail competition; state and local rate regulation; federal regulation; the Energy Policy Act of 2005; industrial, commercial, and wholesale customers; nuclear matters; environmental risks; and litigation risks. Following are updates to the information disclosed in the Form 10-K.
Jurisdictional Separation Plan
In March 2007, Entergy Gulf States filed an application with the FERC requesting authorization to implement its jurisdictional separation plan that will result in the restructuring of Entergy Gulf States into two separate utilities, one subject solely to the retail jurisdiction of the LPSC (EGS-LA) and the other subject solely to the retail jurisdiction of the PUCT (ETI). Interventions and protests are due by May 14, 2007.
In addition to the terms of the plan described in the Form 10-K, additional terms of the plan include that EGS-LA will retain the entirety of Entergy Gulf States' outstanding long-term debt. Under one or more debt assumption agreements with EGS-LA, ETI would assume a portion of this long-term debt allocable to the portion of Entergy Gulf States' assets allocated to ETI. EGS-LA will record an assumption asset to reflect the long-term debt assumed by ETI. ETI would grant EGS-LA a first lien on its assets to secure its debt obligations under the debt assumption agreement or agreements. ETI would have three years from the date of separation to pay off the assumed debt. In addition, under the proposal, the currently outstanding preferred stock of Entergy Gulf States would be redeemed as part of the jurisdictional separation.
Entergy Gulf States has also filed with the FERC an application, on behalf of ETI, for authority from the end of 2007 through March 31, 2010 to issue up to $200 million of short-term debt, up to $300 million of tax-exempt bonds, and up to $1.4 billion of other long-term securities, including common and preferred stock and long-term debt. Entergy Gulf States, on behalf of EGS-LA, has filed a similar FERC application for authority over the same time period to issue up to $200 million of short-term debt, up to $500 million of tax-exempt bonds and up to $750 million of other long-term securities, including common and preferred membership units and long-term debt.
Additional FERC filings and a filing with the NRC will be made before the separation can occur. In addition, under the LPSC order approving the jurisdictional separation plan, jurisdictional separation will not occur if Entergy Gulf States cannot obtain reasonable assurances from the rating agencies that upon the separation there will not be a downgrade in ETI's or EGS-LA's credit ratings from Entergy Gulf States' credit ratings. Entergy Gulf States' current target for completing the jurisdictional separation is projected to be the end of 2007.
54
State and Local Rate Regulation
In March 2007, Entergy Gulf States filed with the PUCT a request to refund $78.5 million, including interest, of fuel cost recovery over-collections for the period through January 2007. Entergy Gulf States requested that the proposed refund be made over a six-month period beginning June 2007; however, the refund period is subject to the PUCT's discretion.
Federal Regulation
See "System Agreement Proceedings", "Independent Coordinator of Transmission", and "Available Flowgate Capacity Proceeding" in the "Significant Factors and Known Trends" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for updates to the discussion in the Form 10-K.
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Gulf States' accounting for nuclear decommissioning costs, the application of SFAS 71, unbilled revenue, and qualified pension and other postretirement benefits.
New Accounting Pronouncements
See "New Accounting Pronouncements" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for a discussion of new accounting pronouncements.
55
ENTERGY GULF STATES, INC. | ||||
INCOME STATEMENTS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING REVENUES | ||||
Electric | $795,254 | $855,790 | ||
Natural gas | 37,928 | 37,415 | ||
TOTAL | 833,182 | 893,205 | ||
OPERATING EXPENSES | ||||
Operation and Maintenance: | ||||
Fuel, fuel-related expenses, and | ||||
gas purchased for resale | 239,568 | 284,876 | ||
Purchased power | 306,804 | 313,092 | ||
Nuclear refueling outage expenses | 3,656 | 4,674 | ||
Other operation and maintenance | 125,854 | 121,557 | ||
Decommissioning | 2,844 | 2,622 | ||
Taxes other than income taxes | 31,311 | 36,025 | ||
Depreciation and amortization | 52,415 | 48,695 | ||
Other regulatory charges - net | 8,358 | 269 | ||
TOTAL | 770,810 | 811,810 | ||
OPERATING INCOME | 62,372 | 81,395 | ||
OTHER INCOME | ||||
Allowance for equity funds used during construction | 4,432 | 6,046 | ||
Interest and dividend income | 16,375 | 8,103 | ||
Miscellaneous - net | - - | (910) | ||
TOTAL | 20,807 | 13,239 | ||
INTEREST AND OTHER CHARGES | ||||
Interest on long-term debt | 34,893 | 33,653 | ||
Other interest - net | 5,344 | 2,096 | ||
Allowance for borrowed funds used during construction | (2,888) | (3,309) | ||
TOTAL | 37,349 | 32,440 | ||
INCOME BEFORE INCOME TAXES | 45,830 | 62,194 | ||
Income taxes | 18,233 | 17,145 | ||
NET INCOME | 27,597 | 45,049 | ||
Preferred dividend requirements and other | 962 | 1,022 | ||
EARNINGS APPLICABLE TO | ||||
COMMON STOCK | $26,635 | $44,027 | ||
See Notes to Financial Statements. |
56
ENTERGY GULF STATES, INC. | ||||
STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING ACTIVITIES | ||||
Net income | $27,597 | $45,049 | ||
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||||
Reserve for regulatory adjustments | 11,816 | 6,087 | ||
Other regulatory charges - net | 8,358 | 269 | ||
Depreciation, amortization, and decommissioning | 55,259 | 51,317 | ||
Deferred income taxes, investment tax credits, and non-current taxes accrued | 13,128 | 32,760 | ||
Changes in working capital: | ||||
Receivables | 17,530 | 120,195 | ||
Fuel inventory | (6,595) | (9,143) | ||
Accounts payable | (6,063) | (17,833) | ||
Taxes accrued | (384) | - | ||
Interest accrued | 579 | (102) | ||
Deferred fuel costs | 34,127 | 27,723 | ||
Other working capital accounts | (18,560) | (660) | ||
Provision for estimated losses and reserves | 693 | (769) | ||
Changes in other regulatory assets | 7,971 | (106,199) | ||
Other | (4,246) | (10,270) | ||
Net cash flow provided by operating activities | 141,210 | 138,424 | ||
INVESTING ACTIVITIES | ||||
Construction expenditures | (69,249) | (206,217) | ||
Allowance for equity funds used during construction | 4,432 | 6,046 | ||
Insurance proceeds | 8,134 | - | ||
Nuclear fuel purchases | (7,461) | (6,102) | ||
Proceeds from sale/leaseback of nuclear fuel | 9,923 | 5,391 | ||
Proceeds from nuclear decommissioning trust fund sales | 12,093 | 20,360 | ||
Investment in nuclear decommissioning trust funds | (15,947) | (23,891) | ||
Change in money pool receivable - net | (32,507) | 64,011 | ||
Changes in other investments - net | 2,381 | 915 | ||
Other regulatory investments | - | (13,622) | ||
Net cash flow used in investing activities | (88,201) | (153,109) | ||
FINANCING ACTIVITIES | ||||
Change in money pool payable - net | - | 5,124 | ||
Redemption of preferred stock | (2,250) | (2,250) | ||
Dividends paid: | ||||
Common stock | (33,600) | - | ||
Preferred stock | (968) | (1,029) | ||
Net cash flow provided by (used in) financing activities | (36,818) | 1,845 | ||
Net increase (decrease) in cash and cash equivalents | 16,191 | (12,840) | ||
Cash and cash equivalents at beginning of period | 180,381 | 25,373 | ||
Cash and cash equivalents at end of period | $196,572 | $12,533 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid during the period for: | ||||
Interest - net of amount capitalized | $37,457 | $33,485 | ||
See Notes to Financial Statements. |
57
ENTERGY GULF STATES, INC. | |||||
BALANCE SHEETS | |||||
ASSETS | |||||
March 31, 2007 and December 31, 2006 | |||||
(Unaudited) | |||||
2007 | 2006 | ||||
(In Thousands) | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents: | |||||
Cash | $2,608 | $2,923 | |||
Temporary cash investments - at cost, | |||||
which approximates market | 193,964 | 177,458 | |||
Total cash and cash equivalents | 196,572 | 180,381 | |||
Accounts receivable: | |||||
Customer | 139,578 | 146,144 | |||
Allowance for doubtful accounts | (1,522) | (1,618) | |||
Associated companies | 133,836 | 106,990 | |||
Other | 46,838 | 50,811 | |||
Accrued unbilled revenues | 78,112 | 79,538 | |||
Total accounts receivable | 396,842 | 381,865 | |||
Accumulated deferred income taxes | 17,934 | 20,352 | |||
Fuel inventory - at average cost | 75,806 | 69,211 | |||
Materials and supplies - at average cost | 122,329 | 120,245 | |||
Deferred nuclear refueling outage costs | 9,517 | 12,971 | |||
Prepayments and other | 19,071 | 16,725 | |||
TOTAL | 838,071 | 801,750 | |||
OTHER PROPERTY AND INVESTMENTS | |||||
Decommissioning trust funds | 348,388 | 344,911 | |||
Non-utility property - at cost (less accumulated depreciation) | 94,263 | 94,776 | |||
Other | 23,585 | 25,218 | |||
TOTAL | 466,236 | 464,905 | |||
UTILITY PLANT | |||||
Electric | 8,905,494 | 8,857,166 | |||
Natural gas | 94,366 | 92,368 | |||
Construction work in progress | 145,111 | 149,392 | |||
Nuclear fuel under capital lease | 65,604 | 73,422 | |||
Nuclear fuel | 9,715 | 10,821 | |||
TOTAL UTILITY PLANT | 9,220,290 | 9,183,169 | |||
Less - accumulated depreciation and amortization | 4,299,104 | 4,263,307 | |||
UTILITY PLANT - NET | 4,921,186 | 4,919,862 | |||
DEFERRED DEBITS AND OTHER ASSETS | |||||
Regulatory assets: | |||||
SFAS 109 regulatory asset - net | 478,795 | 465,259 | |||
Other regulatory assets | 967,100 | 1,001,016 | |||
Deferred fuel costs | 100,124 | 100,124 | |||
Long-term receivables | 8,359 | 9,833 | |||
Other | 29,854 | 23,928 | |||
TOTAL | 1,584,232 | 1,600,160 | |||
TOTAL ASSETS | $7,809,725 | $7,786,677 | |||
See Notes to Financial Statements. | |||||
58 | |||||
ENTERGY GULF STATES, INC. | |||||
BALANCE SHEETS | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
March 31, 2007 and December 31, 2006 | |||||
(Unaudited) | |||||
2007 | 2006 | ||||
(In Thousands) | |||||
CURRENT LIABILITIES | |||||
Accounts payable: | |||||
Associated companies | $103,101 | $79,584 | |||
Other | 161,479 | 200,746 | |||
Customer deposits | 71,355 | 68,844 | |||
Taxes accrued | 27,397 | 27,781 | |||
Interest accrued | 35,062 | 34,483 | |||
Deferred fuel costs | 60,389 | 26,262 | |||
Obligations under capital leases | 24,769 | 24,769 | |||
Pension and other postretirement liabilities | 7,735 | 7,662 | |||
Other | 11,833 | 31,933 | |||
TOTAL | 503,120 | 502,064 | |||
NON-CURRENT LIABILITIES | |||||
Accumulated deferred income taxes and taxes accrued | 1,827,120 | 1,803,461 | |||
Accumulated deferred investment tax credits | 125,775 | 127,202 | |||
Obligations under capital leases | 40,835 | 48,653 | |||
Other regulatory liabilities | 60,434 | 53,648 | |||
Decommissioning and asset retirement cost liabilities | 195,124 | 191,036 | |||
Transition to competition | 79,098 | 79,098 | |||
Accumulated provisions | 23,151 | 21,245 | |||
Pension and other postretirement liabilities | 142,805 | 141,834 | |||
Long-term debt | 2,358,939 | 2,358,327 | |||
Preferred stock with sinking fund | 8,250 | 10,500 | |||
Other | 198,827 | 196,731 | |||
TOTAL | 5,060,358 | 5,031,735 | |||
Commitments and Contingencies | |||||
SHAREHOLDERS' EQUITY | |||||
Preferred stock without sinking fund | 47,327 | 47,327 | |||
Common stock, no par value, authorized 200,000,000 | |||||
shares; issued and outstanding 100 shares in 2007 and 2006 | 114,055 | 114,055 | |||
Paid-in capital | 1,457,486 | 1,457,486 | |||
Retained earnings | 646,959 | 653,924 | |||
Accumulated other comprehensive loss | (19,580) | (19,914) | |||
TOTAL | 2,246,247 | 2,252,878 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $7,809,725 | $7,786,677 | |||
See Notes to Financial Statements. |
59
ENTERGY GULF STATES, INC. | |||||||||
STATEMENTS OF RETAINED EARNINGS AND COMPREHENSIVE INCOME | |||||||||
For the Three Months Ended March 31, 2007 and 2006 | |||||||||
(Unaudited) | |||||||||
2007 | 2006 | ||||||||
(In Thousands) | |||||||||
RETAINED EARNINGS | |||||||||
Retained Earnings - Beginning of period | $653,924 | $659,102 | |||||||
Add: Net Income | 27,597 | $27,597 | 45,049 | $45,049 | |||||
Deduct: | |||||||||
Dividends declared on common stock | 33,600 | - - | |||||||
Preferred dividend requirements and other | 962 | 962 | 1,022 | 1,022 | |||||
34,562 | 1,022 | ||||||||
Retained Earnings - End of period | $646,959 | $703,129 | |||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS (Net of Taxes): | |||||||||
Balance at beginning of period: | |||||||||
Pension and other postretirement liabilities | ($19,914) | $ - | |||||||
Other accumulated comprehensive income items | - | (1,409) | |||||||
Pension and other postretirement liabilities (net of tax expense of $326) | $334 | $334 | - | ||||||
Net unrealized investment gains | - | - | 55 | 55 | |||||
Balance at end of period: | |||||||||
Pension and other postretirement liabilities | (19,580) | - - | |||||||
Other accumulated comprehensive income items | - | (1,354) | |||||||
Total | ($19,580) | ($1,354) | |||||||
Comprehensive Income | $26,969 | $44,082 | |||||||
See Notes to Financial Statements. | |||||||||
60
ENTERGY GULF STATES, INC. | ||||||||
SELECTED OPERATING RESULTS | ||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||
(Unaudited) | ||||||||
Increase/ | ||||||||
Description | 2007 | 2006 | (Decrease) | % | ||||
(Dollars In Millions) | ||||||||
Electric Operating Revenues: | ||||||||
Residential | $242 | $240 | $2 | 1 | ||||
Commercial | 193 | 210 | (17) | (8) | ||||
Industrial | 255 | 317 | (62) | (20) | ||||
Governmental | 12 | 13 | (1) | (8) | ||||
Total retail | 702 | 780 | (78) | (10) | ||||
Sales for resale | ||||||||
Associated companies | 28 | 27 | 1 | 4 | ||||
Non-associated companies | 50 | 52 | (2) | (4) | ||||
Other | 15 | (3) | 18 | 600 | ||||
Total | $795 | $856 | ($61) | (7) | ||||
Billed Electric Energy | ||||||||
Sales (GWh): | ||||||||
Residential | 2,322 | 2,096 | 226 | 11 | ||||
Commercial | 2,024 | 1,970 | 54 | 3 | ||||
Industrial | 3,584 | 3,679 | (95) | (3) | ||||
Governmental | 112 | 112 | - - | - | ||||
Total retail | 8,042 | 7,857 | 185 | 2 | ||||
Sales for resale | ||||||||
Associated companies | 754 | 585 | 169 | 29 | ||||
Non-associated companies | 851 | 617 | 234 | 38 | ||||
Total | 9,647 | 9,059 | 588 | 6 | ||||
61
ENTERGY LOUISIANA, LLC
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Hurricane Rita and Hurricane Katrina
See the Form 10-K for a discussion of the effects of Hurricanes Katrina and Rita, which caused catastrophic damage to Entergy Louisiana's service territory in August and September 2005, including the effect of extensive flooding that resulted from levee breaks in and around Entergy Louisiana's service territory, and Entergy Louisiana's efforts to recover storm restoration costs.
In February 2007, Entergy Louisiana and Entergy Gulf States filed rebuttal testimony and filed a second supplemental and amending application by which they seek authority from the LPSC to securitize their storm cost recovery and storm reserve amounts, together with certain debt retirement costs and upfront and ongoing costs of the securitized debt issued. Securitization is authorized by a law signed by the Governor of Louisiana in May 2006. The filing updates actual storm-related costs through January 2007 and estimated future costs, declaring that Entergy Louisiana's costs are $561 million and Entergy Gulf States' costs are $219 million. The filing also updates the requested storm reserve amounts, requesting $141 million for Entergy Louisiana and $87 million for Entergy Gulf States. Hearings began in late-April 2007. At the start of the hearing, a stipulation among Entergy Gulf States, Entergy Louisiana, the LPSC staff, and most other parties in the proceeding was read into the record. The stipulation quantifies the balance of storm restoration costs for recovery as $545 million for Entergy Louisiana and $187 million for Entergy Gulf States, and sets the storm reserve amounts at $152 million for Entergy Louisiana and $87 million for Entergy Gulf States. The stipulation also calls for securitization of the storm restoration costs and storm reserves in those same amounts. The LPSC has not issued a decision in the proceeding.
Results of Operations
Net Income
Net income increased $6.4 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to higher net revenue, partially offset by higher other operation and maintenance expenses, higher depreciation and amortization expenses, and lower other income.
Net Revenue
Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges (credits). Following is an analysis of the change in net revenue comparing the first quarter of 2007 to the first quarter of 2006.
|
|
Amount |
|
|
(In Millions) |
|
|
|
2006 net revenue |
|
$187.6 |
Volume/weather |
|
32.5 |
Base revenues |
27.2 |
|
Purchased power capacity |
(30.5) |
|
Other |
|
(2.4) |
2007 net revenue |
|
$214.4 |
The volume/weather variance is due to increased electricity usage primarily in the industrial class, including electricity sales during the unbilled service period and the effect of more favorable weather in the service territory compared to 2006. Billed retail electricity usage increased a total of 573 GWh in all sectors. See Note 1 to the financial statements in the Form 10-K for a discussion of the accounting for unbilled revenues.
62
The base revenues variance is primarily due to increases effective September 2006 for the 2005 formula rate plan filing to recover LPSC-approved incremental deferred and ongoing capacity costs and for the interim recovery of storm costs. See Note 2 to the financial statements in the Form 10-K for a discussion of the formula rate plan filing.
The purchased power capacity variance is primarily due to higher purchased power capacity charges and the amortization of capacity charges effective September 2006 as a result of the formula rate plan filing in May 2006. A portion of the purchased power capacity costs is offset in base revenues due to a base rate increase implemented to recover incremental deferred and ongoing purchased power capacity charges, as mentioned above. See Note 2 to the financial statements in the Form 10-K for a discussion of the formula rate plan filing.
Gross operating revenues, fuel and purchased power expenses, and other regulatory charges (credits)
Gross operating revenues increased primarily due to:
The increase was partially offset by a decrease of $42.9 million in gross wholesale revenue due to decreased sales to affiliated systems.
Fuel and purchased power expenses increased primarily due to an increase in the average market price of purchased power and an increase in net area demand, partially offset by a decrease in the recovery from customers of deferred fuel costs.
Other regulatory credits decreased primarily due to the deferral of capacity charges in 2006 in addition to the amortization of these capacity charges in 2007 as a result of the May 2006 formula rate plan filing (for the 2005 test year) with the LPSC to recover such costs through base rates effective September 2006.
Other Income Statement Variances
Other operation and maintenance expenses increased primarily due to:
The increase was partially offset by the following:
Depreciation and amortization expenses increased primarily due to a revision made in the first quarter of 2006 of estimated depreciable lives involving certain intangible assets and an increase in plant in service.
63
Other income decreased primarily due to:
Income Taxes
The effective income tax rates for the first quarters of 2007 and 2006 were 35.6% and 39.9%, respectively. The difference in the effective income tax rate for the first quarter of 2006 versus the federal statutory rate of 35.0% is primarily due to state income taxes and book and tax differences related to utility plant items, partially offset by book and tax differences related to the allowance for equity funds used during construction and the amortization of investment tax credits.
Liquidity and Capital Resources
Cash Flow
Cash flows for the first quarters of 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Thousands) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$2,743 |
|
$105,285 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
29,837 |
|
192,210 |
|
Investing activities |
|
(41,487) |
|
(218,567) |
|
Financing activities |
|
11,325 |
|
(71,254) |
Net decrease in cash and cash equivalents |
|
(325) |
|
(97,611) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$2,418 |
|
$7,674 |
Operating Activities
Cash flow from operations decreased $162.4 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to timing of collections of receivables from customers and payments to vendors, partially offset by increased recovery of deferred fuel costs.
Investing Activities
The decrease of $177.1 million in net cash used by investing activities for the first quarter of 2007 compared to the first quarter of 2006 is primarily due to higher distribution and transmission construction expenditures in 2006 due to Hurricanes Katrina and Rita.
Financing Activities
Entergy Louisiana's financing activities provided $11.3 million for the first quarter of 2007 compared to using $71.3 million for the first quarter of 2006 primarily due to money pool activity and the payment of $40 million on a credit facility in 2006.
64
Capital Structure
Entergy Louisiana's capitalization is balanced between equity and debt, as shown in the following table.
|
|
March 31, |
December 31, |
|
|
|
|||
Net debt to net capital |
|
45.8% |
46.4% |
|
Effect of subtracting cash from debt |
|
0.1% |
- |
|
Debt to capital |
|
45.9% |
46.4% |
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and members' equity. Net capital consists of capital less cash and cash equivalents. Entergy Louisiana uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Louisiana's financial condition.
Uses and Sources of Capital
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Louisiana's uses and sources of capital.
In April 2007, Entergy Louisiana announced that it plans to pursue the self-build solid fuel repowering of a 538MW unit at its Little Gypsy plant. Petroleum coke will be the unit's primary fuel source. Entergy Louisiana expects to spend $1.02 billion on the project, and expects the project to be completed in 2011-2012. The planned capital investment estimate in the Form 10-K included the capital required for a project of this type.
Entergy Louisiana's payables to the money pool were as follows:
March 31, |
|
December 31, |
|
March 31, |
|
December 31, |
(In Thousands) |
||||||
|
|
|
|
|
|
|
($67,103) |
|
($54,041) |
|
($38,871) |
|
($68,677) |
See Note 4 to the financial statements in the Form 10-K for a description of the money pool.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for a discussion of state and local rate regulation, federal regulation, the Energy Policy Act of 2005, utility restructuring, nuclear matters, environmental risks, and litigation risks. Following are updates to the information provided in the Form 10-K.
Federal Regulation
See "System Agreement Proceedings", "Independent Coordinator of Transmission", and "Available Flowgate Capacity Proceeding" in the "Significant Factors and Known Trends" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for updates to the discussion in the Form 10-K.
65
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Louisiana's accounting for nuclear decommissioning costs, unbilled revenue, and qualified pension and other postretirement benefits.
New Accounting Pronouncements
See "New Accounting Pronouncements" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for a discussion of new accounting pronouncements.
66
ENTERGY LOUISIANA, LLC | ||||
INCOME STATEMENTS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING REVENUES | ||||
Electric | $617,479 | $552,057 | ||
OPERATING EXPENSES | ||||
Operation and Maintenance: | ||||
Fuel, fuel-related expenses, and | ||||
gas purchased for resale | 193,956 | 204,004 | ||
Purchased power | 197,763 | 176,614 | ||
Nuclear refueling outage expenses | 4,197 | 4,234 | ||
Other operation and maintenance | 91,467 | 84,102 | ||
Decommissioning | 4,508 | 4,196 | ||
Taxes other than income taxes | 13,814 | 16,006 | ||
Depreciation and amortization | 48,978 | 42,085 | ||
Other regulatory charges (credits) - net | 11,343 | (16,138) | ||
TOTAL | 566,026 | 515,103 | ||
OPERATING INCOME | 51,453 | 36,954 | ||
OTHER INCOME | ||||
Allowance for equity funds used during construction | 3,948 | 5,587 | ||
Interest and dividend income | 3,594 | 5,442 | ||
Miscellaneous - net | (1,232) | (798) | ||
TOTAL | 6,310 | 10,231 | ||
INTEREST AND OTHER CHARGES | ||||
Interest on long-term debt | 20,233 | 20,378 | ||
Other interest - net | 3,360 | 1,708 | ||
Allowance for borrowed funds used during construction | (2,746) | (3,851) | ||
TOTAL | 20,847 | 18,235 | ||
INCOME BEFORE INCOME TAXES | 36,916 | 28,950 | ||
Income taxes | 13,148 | 11,554 | ||
NET INCOME | 23,768 | 17,396 | ||
Preferred dividend requirements and other | 1,738 | 1,738 | ||
EARNINGS APPLICABLE TO | ||||
COMMON EQUITY | $22,030 | $15,658 | ||
See Notes to Financial Statements. |
67
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68
ENTERGY LOUISIANA, LLC | ||||
STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING ACTIVITIES | ||||
Net income | $23,768 | $17,396 | ||
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||||
Reserve for regulatory adjustments | 104 | (185) | ||
Other regulatory charges (credits) - net | 11,343 | (16,138) | ||
Depreciation, amortization, and decommissioning | 53,486 | 46,281 | ||
Deferred income taxes, investment tax credits, and non-current taxes accrued | 17,108 | (149,174) | ||
Changes in working capital: | ||||
Receivables | (19,852) | 143,629 | ||
Accounts payable | (100,435) | (42,366) | ||
Taxes accrued | 15,123 | 35,756 | ||
Interest accrued | (1,764) | (2,397) | ||
Deferred fuel costs | 52,789 | 1,507 | ||
Other working capital accounts | (22,023) | 153,597 | ||
Provision for estimated losses and reserves | (2,209) | 1,067 | ||
Changes in other regulatory assets | 7,084 | 23,903 | ||
Other | (4,685) | (20,666) | ||
Net cash flow provided by operating activities | 29,837 | 192,210 | ||
INVESTING ACTIVITIES | ||||
Construction expenditures | (56,974) | (211,398) | ||
Allowance for equity funds used during construction | 3,948 | 5,587 | ||
Insurance proceeds | 2,765 | - - | ||
Nuclear fuel purchases | (3,103) | - - | ||
Proceeds from the sale/leaseback of nuclear fuel | 14,279 | - - | ||
Proceeds from nuclear decommissioning trust fund sales | 3,693 | 7,187 | ||
Investment in nuclear decommissioning trust funds | (6,095) | (10,117) | ||
Other regulatory investments | - - | (9,826) | ||
Net cash flow used in investing activities | (41,487) | (218,567) | ||
FINANCING ACTIVITIES | ||||
Additional equity from parent | 1,119 | - | ||
Change in money pool payable - net | 13,062 | (29,806) | ||
Changes in short-term borrowings | - - | (40,000) | ||
Distributions paid: | ||||
Preferred membership interests | (2,856) | (1,448) | ||
Net cash flow provided by (used in) financing activities | 11,325 | (71,254) | ||
Net decrease in cash and cash equivalents | (325) | (97,611) | ||
Cash and cash equivalents at beginning of period | 2,743 | 105,285 | ||
Cash and cash equivalents at end of period | $2,418 | $7,674 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid during the period for: | ||||
Interest - net of amount capitalized | $24,402 | $23,521 | ||
See Notes to Financial Statements. |
69
ENTERGY LOUISIANA, LLC | ||||
BALANCE SHEETS | ||||
ASSETS | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | $2,418 | $2,743 | ||
Accounts receivable: | ||||
Customer | 105,071 | 97,207 | ||
Allowance for doubtful accounts | (2,192) | (1,856) | ||
Associated companies | 48,235 | 28,621 | ||
Other | 19,380 | 22,652 | ||
Accrued unbilled revenues | 65,610 | 69,628 | ||
Total accounts receivable | 236,104 | 216,252 | ||
Deferred fuel costs | - - | 46,310 | ||
Materials and supplies - at average cost | 101,689 | 98,284 | ||
Deferred nuclear refueling outage costs | 20,292 | 23,639 | ||
Prepayments and other | 14,212 | 5,769 | ||
TOTAL | 374,715 | 392,997 | ||
OTHER PROPERTY AND INVESTMENTS | ||||
Decommissioning trust funds | 220,158 | 208,926 | ||
Non-utility property - at cost (less accumulated depreciation) | 1,624 | 1,670 | ||
Other | 4 | 4 | ||
TOTAL | 221,786 | 210,600 | ||
UTILITY PLANT | ||||
Electric | 6,755,036 | 6,693,633 | ||
Property under capital lease | 252,972 | 252,972 | ||
Construction work in progress | 177,219 | 190,454 | ||
Nuclear fuel under capital lease | 75,120 | 82,464 | ||
TOTAL UTILITY PLANT | 7,260,347 | 7,219,523 | ||
Less - accumulated depreciation and amortization | 3,002,111 | 2,959,422 | ||
UTILITY PLANT - NET | 4,258,236 | 4,260,101 | ||
DEFERRED DEBITS AND OTHER ASSETS | ||||
Regulatory assets: | ||||
SFAS 109 regulatory asset - net | 156,720 | 157,789 | ||
Other regulatory assets | 501,323 | 539,309 | ||
Deferred fuel costs | 67,998 | 67,998 | ||
Long-term receivables | 5,986 | 5,986 | ||
Other | 25,795 | 20,062 | ||
TOTAL | 757,822 | 791,144 | ||
TOTAL ASSETS | $5,612,559 | $5,654,842 | ||
See Notes to Financial Statements. | ||||
70 | ||||
ENTERGY LOUISIANA, LLC | ||||
BALANCE SHEETS | ||||
LIABILITIES AND MEMBERS' EQUITY | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT LIABILITIES | ||||
Accounts payable: | ||||
Associated companies | $139,778 | $160,555 | ||
Other | 127,109 | 203,076 | ||
Customer deposits | 74,361 | 72,579 | ||
Taxes accrued | 21,360 | 6,237 | ||
Accumulated deferred income taxes | 15,974 | 32,026 | ||
Interest accrued | 28,725 | 30,489 | ||
Deferred fuel cost | 6,479 | - - | ||
Obligations under capital leases | 39,067 | 39,067 | ||
Pension and other postretirement liabilities | 8,368 | 8,276 | ||
Other | 14,014 | 30,425 | ||
TOTAL | 475,235 | 582,730 | ||
NON-CURRENT LIABILITIES | ||||
Accumulated deferred income taxes and taxes accrued | 1,852,511 | 1,827,900 | ||
Accumulated deferred investment tax credits | 88,443 | 89,242 | ||
Obligations under capital leases | 36,052 | 43,397 | ||
Other regulatory liabilities | 69,005 | 50,210 | ||
Decommissioning | 243,045 | 238,536 | ||
Accumulated provisions | 21,589 | 23,798 | ||
Pension and other postretirement liabilities | 148,184 | 146,646 | ||
Long-term debt | 1,147,650 | 1,147,647 | ||
Other | 88,877 | 86,428 | ||
TOTAL | 3,695,356 | 3,653,804 | ||
Commitments and Contingencies | ||||
MEMBERS' EQUITY | ||||
Preferred membership interests without sinking fund | 100,000 | 100,000 | ||
Members' equity | 1,367,152 | 1,344,003 | ||
Accumulated other comprehensive loss | (25,184) | (25,695) | ||
TOTAL | 1,441,968 | 1,418,308 | ||
TOTAL LIABILITIES AND MEMBERS' EQUITY | $5,612,559 | $5,654,842 | ||
See Notes to Financial Statements. |
71
ENTERGY LOUISIANA, LLC | ||||||||
STATEMENTS OF MEMBERS' EQUITY AND COMPREHENSIVE INCOME | ||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||
(Unaudited) | ||||||||
2007 | 2006 | |||||||
(In Thousands) | ||||||||
MEMBERS' EQUITY | ||||||||
Members' Equity - Beginning of period | $1,344,003 | $1,105,172 | ||||||
Add: | ||||||||
Net income | 23,768 | $23,768 | 17,396 | $17,396 | ||||
Additional equity from parent | 1,119 | 65,703 | ||||||
24,887 | 83,099 | |||||||
Deduct: | ||||||||
Distributions declared: | ||||||||
Preferred membership interests | 1,738 | 1,738 | 1,738 | 1,738 | ||||
Other | - | 97 | ||||||
1,738 | 1,835 | |||||||
Members' Equity - End of period | $1,367,152 | $1,186,436 | ||||||
ACCUMULATED OTHER COMPREHENSIVE | ||||||||
INCOME (Net of Taxes): | ||||||||
Balance at beginning of period: | ||||||||
Pension and other postretirement liabilities | ($25,695) | $- | ||||||
Pension and other postretirement liabilities (net of tax expense of $466) | 511 | 511 | - | |||||
Balance at end of period: | ||||||||
Pension and other postretirement liabilities | ($25,184) | $- | ||||||
Comprehensive Income | $22,541 | $15,658 | ||||||
See Notes to Financial Statements. | ||||||||
72
ENTERGY LOUISIANA, LLC | ||||||||
SELECTED OPERATING RESULTS | ||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||
(Unaudited) | ||||||||
Increase/ | ||||||||
Description | 2007 | 2006 | (Decrease) | % | ||||
(Dollars In Millions) | ||||||||
Electric Operating Revenues: | ||||||||
Residential | $196 | $161 | $35 | 22 | ||||
Commercial | 136 | 119 | 17 | 14 | ||||
Industrial | 225 | 193 | 32 | 17 | ||||
Governmental | 12 | 11 | 1 | 9 | ||||
Total retail | 569 | 484 | 85 | 18 | ||||
Sales for resale | ||||||||
Associated companies | 38 | 80 | (42) | (53) | ||||
Non-associated companies | 2 | 2 | - | - - | ||||
Other | 8 | (14) | 22 | 157 | ||||
Total | $617 | $552 | $65 | 12 | ||||
Billed Electric Energy | ||||||||
Sales (GWh): | ||||||||
Residential | 1,952 | 1,771 | 181 | 10 | ||||
Commercial | 1,300 | 1,246 | 54 | 4 | ||||
Industrial | 3,228 | 2,894 | 334 | 12 | ||||
Governmental | 115 | 111 | 4 | 4 | ||||
Total retail (1) | 6,595 | 6,022 | 573 | 10 | ||||
Sales for resale | ||||||||
Associated companies | 342 | 723 | (381) | (53) | ||||
Non-associated companies | 32 | 14 | 18 | 129 | ||||
Total | 6,969 | 6,759 | 210 | 3 | ||||
(1) 2006 billed electric energy sales includes 96 GWh of billings related to 2005 deliveries that were billed in |
||||||||
73
ENTERGY MISSISSIPPI, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Results of Operations
Net income increased $2.1 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to higher other income and higher net revenue, partially offset by higher other operation and maintenance expenses, higher depreciation and amortization expense, and a higher effective income tax rate.
Net Revenue
Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges (credits). Following is an analysis of the change in net revenue comparing the first quarter of 2007 to the first quarter of 2006.
Amount |
||
(In Millions) |
||
2006 net revenue |
$90.3 |
|
Volume/weather |
7.8 |
|
Attala costs |
(6.6) |
|
Other |
2.4 |
|
2007 net revenue |
$93.9 |
The volume/weather variance is primarily due to increased usage primarily during the unbilled sales period and more favorable weather on billed sales compared to the same period in 2006. 9; See Note 1 to the financial statements in the Form 10-K for a discussion of the accounting for unbilled revenues.
The Attala costs variance is primarily due to the deferral of Attala costs during the first quarter of 2006 that was recovered in the second quarter of 2006. The net income effect of this cost deferral was partially offset in other operation and maintenance expenses, depreciation expense, and taxes other than income taxes.
Gross operating revenues, fuel and purchased power expenses, and other regulatory charges (credits)
Gross operating revenues decreased primarily due to a decrease of $147.3 million in fuel cost recovery revenues due to lower fuel rates, partially offset by higher power management rider rates.
Fuel and purchased power expenses decreased primarily due to a decrease in deferred fuel expense due to a decrease in fuel rates.
Other regulatory charges increased primarily due to the refunding in 2006, through the power management recovery rider, of gains recorded on gas hedging contracts in addition to the over-recovery in 2007, through the Grand Gulf rider, of Grand Gulf capacity charges. The increase was partially offset by the deferral of Attala costs in 2006, discussed above. There is no material effect on net income due to quarterly adjustments to the power management recovery rider.
74
Other Income Statement Variances
Other operation and maintenance expense increased primarily due to:
The increase was partially offset by a decrease of $1.7 million in loss reserves in 2007.
Depreciation and amortization expenses increased primarily due to an increase in plant in service. The increase is also due to an adjustment made in February 2006 as a result of a revision in estimated depreciable lives involving certain intangible assets.
Taxes other than income taxes decreased primarily due to lower franchise taxes in 2007.
Other income increased primarily due to the gain recorded on the sale of non-utility property and higher interest earned on money pool investments.
Interest expense decreased primarily due to a decrease in long-term debt outstanding as a result of the redemption of $100 million of first mortgage bonds in January 2007. Interest expense also decreased due to money pool activity.
Income Taxes
The effective income tax rates for the first quarters of 2007 and 2006 were 35.6% and 0.4%, respectively. The difference in the effective tax rate for the first quarter of 2006 versus the federal statutory rate of 35.0% is primarily due to book and tax differences related to the allowance for equity funds used during construction, the amortization of investment tax credits, and book and tax differences related to utility plant items.
Liquidity and Capital Resources
Cash Flow
Cash flows for the first quarters of 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Thousands) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$73,417 |
|
$4,523 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
(18,033) |
|
60,292 |
|
Investing activities |
|
84,504 |
|
(135,611) |
|
Financing activities |
|
(102,707) |
|
80,199 |
Net increase (decrease) in cash and cash equivalents |
|
(36,236) |
|
4,880 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$37,181 |
|
$9,403 |
75
Operating Activities
Entergy Mississippi's operating activities used $18.0 million for the first quarter of 2007 compared to providing $60.3 million for the first quarter of 2006 primarily due to decreased collection of deferred fuel and purchased power costs, partially offset by the timing of payments to vendors.
Investing Activities
Investing activities provided $84.5 million in cash flow for the first quarter of 2007 compared to using $135.6 million for the first quarter 2006 primarily due to:
Financing Activities
Entergy's Mississippi's financing activities used $102.7 million for the first quarter of 2007 compared to providing $80.2 million for the first quarter of 2006 primarily due to the redemption, prior to maturity, of $100 million of first mortgage bonds in January 2007, and the issuance of $100 million of long-term debt during 2006, partially offset by money pool activity.
Capital Structure
Entergy Mississippi's capitalization is balanced between equity and debt, as shown in the following table. The decrease in the debt to capital percentage as of March 31, 2007 is primarily due to the redemption of $100 million of First Mortgage Bonds in January 2007.
|
|
March 31, |
|
December 31, |
|
|
|
|
|
Net debt to net capital |
|
49.5% |
|
51.9% |
Effect of subtracting cash from debt |
|
1.4% |
|
2.4% |
Debt to capital |
|
50.9% |
|
54.3% |
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and shareholders' equity. Net capital consists of capital less cash and cash equivalents. Entergy Mississippi uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Mississippi's financial condition.
76
Uses and Sources of Capital
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Mississippi's uses and sources of capital. Following are updates to the information presented in the Form 10-K.
Entergy Mississippi's receivables from or (payables to) the money pool were as follows:
March 31, |
|
December 31, |
|
March 31, |
|
December 31, |
(In Thousands) |
||||||
|
|
|
|
|
|
|
$29,999 |
|
$39,573 |
|
($65,732) |
|
($84,066) |
See Note 4 to the financial statements in the Form 10-K for a description of the money pool.
As discussed in the Form 10-K, Entergy Mississippi has two separate credit facilities in the aggregate amount of $50 million that expire in May 2007. Borrowings under the credit facilities may be secured by a security interest in Entergy Mississippi's accounts receivable. Entergy Mississippi expects to renew both of its credit facilities prior to expiration. No borrowings were outstanding under either facility as of March 31, 2007.
In January 2007, Entergy Mississippi redeemed, prior to maturity, $100 million of 4.35% Series of First Mortgage Bonds due April 2008.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for a discussion of state and local rate regulation, federal regulation, the Energy Policy Act of 2005, and utility restructuring. The following is an update to the information provided in the Form 10-K.
State and Local Rate Regulation
In March 2007, Entergy Mississippi made its annual scheduled formula rate plan filing for the 2006 test year with the MPSC. The filing shows that an increase of $12.9 million in annual electric revenues is warranted. The Mississippi Public Utilities Staff is reviewing the filing.
Federal Regulation
See "System Agreement Proceedings", "Independent Coordinator of Transmission", and "Available Flowgate Capacity Proceeding" in the "Significant Factors and Known Trends" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for updates to the discussion in the Form 10-K.
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Mississippi's accounting for unbilled revenue and qualified pension and other postretirement benefits.
New Accounting Pronouncements
See "New Accounting Pronouncements" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for a discussion of new accounting pronouncements.
77
ENTERGY MISSISSIPPI, INC. |
||||
INCOME STATEMENTS |
||||
For the Three Months Ended March 31, 2007 and 2006 |
||||
(Unaudited) |
||||
2007 |
2006 |
|||
(In Thousands) |
||||
OPERATING REVENUES |
||||
Electric |
$270,525 |
$373,234 |
||
OPERATING EXPENSES |
||||
Operation and Maintenance: |
||||
Fuel, fuel-related expenses, and |
||||
gas purchased for resale |
70,974 |
179,157 |
||
Purchased power |
95,835 |
124,426 |
||
Other operation and maintenance |
45,115 |
40,965 |
||
Taxes other than income taxes |
15,015 |
17,516 |
||
Depreciation and amortization |
20,269 |
16,996 |
||
Other regulatory charges (credits) - net |
9,795 |
(20,642) |
||
TOTAL |
257,003 |
358,418 |
||
OPERATING INCOME |
13,522 |
14,816 |
||
OTHER INCOME |
||||
Allowance for equity funds used during construction |
1,676 |
1,241 |
||
Interest and dividend income |
1,448 |
229 |
||
Miscellaneous - net |
2,252 |
(562) |
||
TOTAL |
5,376 |
908 |
||
INTEREST AND OTHER CHARGES |
||||
Interest on long-term debt |
10,382 |
11,115 |
||
Other interest - net |
1,235 |
2,112 |
||
Allowance for borrowed funds used during construction |
(1,119) |
(814) |
||
TOTAL |
10,498 |
12,413 |
||
INCOME BEFORE INCOME TAXES |
8,400 |
3,311 |
||
Income taxes |
2,991 |
14 |
||
NET INCOME |
5,409 |
3,297 |
||
Preferred dividend requirements and other |
707 |
707 |
||
EARNINGS APPLICABLE TO |
||||
COMMON STOCK |
$4,702 |
$2,590 |
||
See Notes to Financial Statements. |
||||
78
ENTERGY MISSISSIPPI, INC. |
||||
STATEMENTS OF CASH FLOWS |
||||
For the Three Months Ended March 31, 2007 and 2006 |
||||
(Unaudited) |
||||
2007 |
2006 |
|||
(In Thousands) |
||||
OPERATING ACTIVITIES |
||||
Net income |
$5,409 |
$3,297 |
||
Adjustments to reconcile net income to net cash flow provided by operating activities: |
||||
Other regulatory charges (credits) - net |
9,795 |
(20,642) |
||
Depreciation and amortization |
20,269 |
16,996 |
||
Deferred income taxes, investment tax credits, and non-current taxes accrued |
(2,936) |
62,760 |
||
Changes in working capital: |
||||
Receivables |
11,621 |
14,211 |
||
Fuel inventory |
(44) |
(3,103) |
||
Accounts payable |
(10,893) |
(53,206) |
||
Taxes accrued |
(23,943) |
(33,121) |
||
Interest accrued |
1,697 |
1,323 |
||
Deferred fuel costs |
(19,802) |
123,076 |
||
Other working capital accounts |
(15,662) |
(38,085) |
||
Provision for estimated losses and reserves |
292 |
(23) |
||
Changes in other regulatory assets |
18,322 |
(14,621) |
||
Other |
(12,158) |
1,430 |
||
Net cash flow provided by (used in) operating activities |
(18,033) |
60,292 |
||
INVESTING ACTIVITIES |
||||
Construction expenditures |
(29,362) |
(48,653) |
||
Payment for purchase of plant |
- |
(88,199) |
||
Allowance for equity funds used during construction |
1,676 |
1,241 |
||
Change in money pool receivable - net |
9,574 |
- |
||
Change in other temporary investments - net |
100,000 |
- |
||
Proceeds from sale of assets |
2,616 |
- |
||
Net cash flow provided by (used in) investing activities |
84,504 |
(135,611) |
||
FINANCING ACTIVITIES |
||||
Proceeds from the issuance of long-term debt |
- |
99,240 |
||
Retirement of long-term debt |
(100,000) |
- |
||
Change in money pool payable - net |
- |
(18,334) |
||
Dividends paid: |
||||
Common stock |
(2,000) |
- |
||
Preferred stock |
(707) |
(707) |
||
Net cash flow provided by (used in) financing activities |
(102,707) |
80,199 |
||
Net increase (decrease) in cash and cash equivalents |
(36,236) |
4,880 |
||
Cash and cash equivalents at beginning of period |
73,417 |
4,523 |
||
Cash and cash equivalents at end of period |
$37,181 |
$9,403 |
||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||
Cash paid during the period for: |
||||
Interest - net of amount capitalized |
$9,401 |
$11,390 |
||
See Notes to Financial Statements. |
79
ENTERGY MISSISSIPPI, INC. |
||||
BALANCE SHEETS |
||||
ASSETS |
||||
March 31, 2007 and December 31, 2006 |
||||
(Unaudited) |
||||
2007 |
2006 |
|||
(In Thousands) |
||||
CURRENT ASSETS |
||||
Cash and cash equivalents: |
||||
Cash |
$1,703 |
$2,128 |
||
Temporary cash investment - at cost, |
||||
which approximates market |
35,478 |
71,289 |
||
Total cash and cash equivalents |
37,181 |
73,417 |
||
Accounts receivable: |
||||
Customer |
53,439 |
61,216 |
||
Allowance for doubtful accounts |
(642) |
(616) |
||
Associated companies |
36,367 |
45,040 |
||
Other |
7,966 |
9,032 |
||
Accrued unbilled revenues |
28,897 |
32,550 |
||
Total accounts receivable |
126,027 |
147,222 |
||
Accumulated deferred income taxes |
432 |
- |
||
Fuel inventory - at average cost |
7,689 |
7,645 |
||
Materials and supplies - at average cost |
29,886 |
28,607 |
||
Other special deposits |
- |
100,000 |
||
Prepayments and other |
13,674 |
7,398 |
||
TOTAL |
214,889 |
364,289 |
||
OTHER PROPERTY AND INVESTMENTS |
||||
Investment in affiliates - at equity |
5,531 |
5,531 |
||
Non-utility property - at cost (less accumulated depreciation) |
5,243 |
6,061 |
||
TOTAL |
10,774 |
11,592 |
||
UTILITY PLANT |
||||
Electric |
2,736,499 |
2,692,971 |
||
Property under capital lease |
4 |
17 |
||
Construction work in progress |
65,331 |
79,950 |
||
TOTAL UTILITY PLANT |
2,801,834 |
2,772,938 |
||
Less - accumulated depreciation and amortization |
959,553 |
945,548 |
||
UTILITY PLANT - NET |
1,842,281 |
1,827,390 |
||
DEFERRED DEBITS AND OTHER ASSETS |
||||
Regulatory assets: |
||||
SFAS 109 regulatory asset - net |
28,579 |
26,378 |
||
Other regulatory assets |
160,980 |
186,986 |
||
Long-term receivables |
2,288 |
2,288 |
||
Other |
24,653 |
21,968 |
||
TOTAL |
216,500 |
237,620 |
||
TOTAL ASSETS |
$2,284,444 |
$2,440,891 |
||
See Notes to Financial Statements. |
||||
80 | ||||
ENTERGY MISSISSIPPI, INC. |
||||
BALANCE SHEETS |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
March 31, 2007 and December 31, 2006 |
||||
(Unaudited) |
||||
2007 |
2006 |
|||
(In Thousands) |
||||
CURRENT LIABILITIES |
||||
Accounts payable: |
||||
Associated companies |
$58,171 |
$59,696 |
||
Other |
26,843 |
38,097 |
||
Customer deposits |
53,296 |
51,568 |
||
Taxes accrued |
21,744 |
45,687 |
||
Accumulated deferred income taxes |
- |
3,963 |
||
Interest accrued |
14,760 |
13,063 |
||
Deferred fuel costs |
75,434 |
95,236 |
||
Obligations under capital leases |
4 |
2 |
||
Other |
7,787 |
17,622 |
||
TOTAL |
258,039 |
324,934 |
||
NON-CURRENT LIABILITIES |
||||
Accumulated deferred income taxes and taxes accrued |
519,452 |
516,558 |
||
Accumulated deferred investment tax credits |
10,722 |
11,047 |
||
Other regulatory liabilities |
5,965 |
- |
||
Asset retirement cost liabilities |
4,315 |
4,254 |
||
Accumulated provisions |
10,328 |
10,036 |
||
Pension and other postretirement liabilities |
64,368 |
64,604 |
||
Long-term debt |
695,218 |
795,187 |
||
Other |
45,317 |
46,253 |
||
TOTAL |
1,355,685 |
1,447,939 |
||
Commitments and Contingencies |
||||
SHAREHOLDERS' EQUITY |
||||
Preferred stock without sinking fund |
50,381 |
50,381 |
||
Common stock, no par value, authorized 15,000,000 |
||||
shares; issued and outstanding 8,666,357 shares in 2007 and 2006 |
199,326 |
199,326 |
||
Capital stock expense and other |
(690) |
(690) |
||
Retained earnings |
421,703 |
419,001 |
||
TOTAL |
670,720 |
668,018 |
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$2,284,444 |
$2,440,891 |
||
See Notes to Financial Statements. |
||||
81
ENTERGY MISSISSIPPI, INC. |
||||||||
SELECTED OPERATING RESULTS |
||||||||
For the Three Months Ended March 31, 2007 and 2006 |
||||||||
(Unaudited) |
||||||||
Increase/ |
||||||||
Description |
2007 |
2006 |
(Decrease) |
% |
||||
(Dollars In Millions) |
||||||||
Electric Operating Revenues: |
||||||||
Residential |
$ 101 |
$ 146 |
($45) |
(31) |
||||
Commercial |
90 |
130 |
(40) |
(31) |
||||
Industrial |
41 |
68 |
(27) |
(40) |
||||
Governmental |
9 |
13 |
(4) |
(31) |
||||
Total retail |
241 |
357 |
(116) |
(32) |
||||
Sales for resale |
||||||||
Associated companies |
16 |
8 |
8 |
100 |
||||
Non-associated companies |
6 |
8 |
(2) |
(25) |
||||
Other |
7 |
- |
7 |
- |
||||
Total |
$ 270 |
$ 373 |
($103) |
(28) |
||||
Billed Electric Energy |
||||||||
Sales (GWh): |
||||||||
Residential |
1,251 |
1,185 |
66 |
6 |
||||
Commercial |
1,070 |
1,040 |
30 |
3 |
||||
Industrial |
653 |
701 |
(48) |
(7) |
||||
Governmental |
95 |
93 |
2 |
2 |
||||
Total retail |
3,069 |
3,019 |
50 |
2 |
||||
Sales for resale |
||||||||
Associated companies |
146 |
71 |
75 |
106 |
||||
Non-associated companies |
84 |
68 |
16 |
24 |
||||
Total |
3,299 |
3,158 |
141 |
4 |
||||
82
ENTERGY NEW ORLEANS, INC. (Debtor-in-possession)
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Hurricane Katrina
See the Form 10-K for a discussion of the effects of Hurricane Katrina, which in August 2005 caused catastrophic damage to Entergy New Orleans' service territory, including the effect of extensive flooding that resulted from levee breaks in and around the New Orleans area, and Entergy New Orleans' efforts to seek recovery of storm restoration costs.
In March 2007, the City Council certified that Entergy New Orleans has incurred $205 million in storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan, and certified Entergy New Orleans' estimated costs of $465 million for the gas system rebuild. In April 2007, Entergy New Orleans executed an agreement with the Louisiana Office of Community Development under which $200 million of CDBG funds will be made available to Entergy New Orleans. Entergy New Orleans submitted the agreement to the bankruptcy court, which approved it on April 25, 2007. Entergy New Orleans received $171.7 million of the funds on April 27, 2007, and the remainder will be paid to Entergy New Orleans as it incurs and submits additional eligible costs.
Entergy has reached an agreement with one of its excess insurers under which Entergy will receive $69.5 million in settlement of its Hurricane Katrina claim. Entergy expects that $53.7 million of this amount will be allocated to Entergy New Orleans. Entergy New Orleans submitted the agreement to the bankruptcy court, which approved the agreement on April 25, 2007. Entergy expects to receive the proceeds under the settlement agreement by the end of May 2007.
Bankruptcy Proceedings
See the Form 10-K for a discussion of the Entergy New Orleans bankruptcy proceeding. On May 7, 2007, the bankruptcy judge entered an order confirming Entergy New Orleans' plan of reorganization. With the receipt of CDBG funds, and the agreement on insurance recovery with one of its excess insurers, Entergy New Orleans waived the conditions precedent in its plan of reorganization, and the plan became effective on May 8, 2007. Following are significant terms in Entergy New Orleans' plan of reorganization:
83
Entergy New Orleans currently estimates that the prepetition claims that will be allowed and paid (either in cash or by notes) in the bankruptcy case will approximate the prepetition liabilities currently recorded by Entergy New Orleans, including interest.
With confirmation of the plan of reorganization, Entergy expects to reconsolidate Entergy New Orleans in the second quarter 2007, retroactive to January 1, 2007. Because Entergy owns all of the common stock of Entergy New Orleans, reconsolidation will not affect the amount of net income that Entergy records from Entergy New Orleans' operations for any current or prior period, but will result in Entergy New Orleans' results being included in each individual income statement line item in 2007, rather than just its net income being presented as "Equity in earnings (loss) of unconsolidated equity affiliates," as will remain the case for 2005 and 2006.
Results of Operations
Net Income
Net income decreased $2.5 million in the first quarter 2007 compared to the first quarter 2006 primarily due to higher other operation and maintenance expenses and higher interest charges, partially offset by higher net revenue.
Net Revenue
Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges. Following is an analysis of the changes in net revenue comparing the first quarter of 2007 to the first quarter of 2006.
Amount |
||
(In Millions) |
||
2006 net revenue |
$40.3 |
|
Fuel recovery |
21.1 |
|
Volume/weather |
11.3 |
|
Net wholesale revenue |
(25.3) |
|
Other |
2.6 |
|
2007 net revenue |
$50.0 |
The fuel recovery variance is due to the inclusion of Grand Gulf costs in fuel recoveries effective July 1, 2006. In June 2006, the City Council approved the recovery of Grand Gulf costs through the fuel adjustment clause, without a corresponding change in base rates (a significant portion of Grand Gulf costs was previously recovered through base rates).
The volume/weather variance is due to an increase in electricity usage in the service territory in 2007 compared to the same period in 2006. The first quarter of 2006 was affected by customer losses following Hurricane Katrina. Billed retail electricity usage increased a total of 224 GWh compared to the first quarter of 2006, an increase of 32%.
The net wholesale revenue variance is due to higher energy available for resale sales in 2006 due to the decrease in retail usage caused by customer losses following Hurricane Katrina. In addition, 2006 revenue includes the sales into the wholesale market of Entergy New Orleans' share of the output of Grand Gulf, pursuant to City Council approval of measures proposed by Entergy New Orleans to address the reduction in
84
Entergy New Orleans' retail customer demand caused by Hurricane Katrina and to provide revenue support for the costs of Entergy New Orleans' share of Grand Gulf.
Other Income Statement Variances
Other operation and maintenance expenses increased primarily due to storm restoration work capitalized in 2006 as a result of Hurricane Katrina compared to normal operations and maintenance work in 2007.
Other income increased due to carrying costs of $2 million related to the Hurricane Katrina storm costs regulatory asset.
Interest and other charges increased primarily due to interest accruals on first mortgage bonds. On September 23, 2006, when the one-year interest moratorium agreed to by the bondholders expired, Entergy New Orleans resumed interest accruals on its outstanding first mortgage bonds. In addition, Entergy New Orleans began accruing interest on affiliate accounts payable as a result of its plan of reorganization filed with the bankruptcy court in February 2007. The plan of reorganization is discussed in Note 18 to the financial statements in the Form 10-K and updated in Note 9 to the financial statements herein.
Income Taxes
The effective income tax rate was 32.4% for the first quarter of 2007 and 37.5% for the first quarter of 2006. The effective income tax rate for the first quarter of 2007 was lower than the federal statutory rate of 35% primarily due to book and tax differences related to the allowance of equity funds used during construction and the amortization of deferred income taxes and investment tax credits, partially offset by book and tax differences related to utility plant items and state income taxes.
Preferred Dividends
No preferred dividends were declared during the first quarter of 2006. Due to its bankruptcy, Entergy New Orleans did not pay the preferred stock dividends due October 1, 2005; January 1, 2006; or April 1, 2006.
Because its plan of reorganization proposes to pay the accumulated, unpaid dividends on all three series of its preferred stock, Entergy New Orleans began accruing for those dividends in the fourth quarter 2006. The plan of reorganization is discussed in Note 9 to the financial statements.
Liquidity and Capital Resources
Debtor-in-Possession Credit Facility
See the Form 10-K for a discussion of the Entergy New Orleans debtor-in-possession (DIP) credit facility between Entergy New Orleans as borrower and Entergy Corporation as lender. As of March 31, 2007, Entergy New Orleans had $42 million of outstanding borrowings under the DIP credit agreement. During April 2007, at the same time as it made a scheduled pension plan contribution, Entergy New Orleans borrowed under the DIP credit agreement, and on May 8, 2007 had $67 million of outstanding borrowings under the DIP credit agreement.
85
Cash Flow
Cash flows for the first quarters of 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Thousands) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$17,093 |
|
$48,056 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
17,191 |
|
30,729 |
|
Investing activities |
|
(3,795) |
|
(43,240) |
|
Financing activities |
|
(10,000) |
|
(10,000) |
Net increase (decrease) in cash and cash equivalents |
|
3,396 |
|
(22,511) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$20,489 |
|
$25,545 |
Operating Activities
Net cash provided by operating activities decreased $13.5 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to an increase in interest paid of $6.9 million. Entergy New Orleans' operating cash flow for the first quarter of 2007 is also affected by increased operating activity in 2007 compared to the first quarter of 2006 following Hurricane Katrina.
Investing Activities
Net cash used in investing activities decreased $39.4 million for the first quarter of 2007 compared to the first quarter of 2006 primarily due to capital expenditure activity in 2006 related to Hurricane Katrina. Entergy New Orleans also received proceeds of $10 million related to the sale in the first quarter of 2007 of a power plant that had been out of service since 1984.
Capital Structure
Entergy New Orleans' capitalization is shown in the following table.
|
|
March 31, |
|
December 31, |
|
|
|
|
|
|
|
Net debt to net capital |
|
58.7% |
|
60.4% |
|
Effect of subtracting cash from debt |
1.9% |
1.5% |
|||
Debt to capital |
|
60.6% |
|
61.9% |
|
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable and long-term debt, including the currently maturing portion. Capital consists of debt and shareholders' equity. Net capital consists of capital less cash and cash equivalents. Entergy New Orleans uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy New Orleans' financial condition.
86
Uses and Sources of Capital
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy New Orleans' uses and sources of capital. The following are updates to the Form 10-K.
Entergy New Orleans' payables to the money pool were as follows:
March 31, |
|
December 31, |
|
March 31, |
|
December 31, |
(In Thousands) |
||||||
|
|
|
|
|
|
|
($37,166) |
|
($37,166) |
|
($37,166) |
|
($37,166) |
See Note 4 to the financial statements in the Form 10-K for a description of the money pool. Entergy New Orleans remains a participant in the money pool, but Entergy New Orleans has not made, and does not expect to make, any additional borrowings from the money pool while it is in bankruptcy proceedings. See Bankruptcy Proceedings above for a discussion of the treatment in Entergy New Orleans' plan of reorganization of the payable to the money pool.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for a discussion of state and local rate regulation, federal regulation, the Energy Policy Act of 2005, environmental risks, and litigation risks. Following are updates to the discussion in the Form 10-K.
Federal Regulation
See "System Agreement Proceedings", "Independent Coordinator of Transmission", and "Available Flowgate Capacity Proceeding" in the "Significant Factors and Known Trends" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for updates to the discussion in the Form 10-K.
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy New Orleans' accounting for unbilled revenue and qualified pension and other postretirement benefits.
New Accounting Pronouncements
See "New Accounting Pronouncements" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for a discussion of new accounting pronouncements.
87
ENTERGY NEW ORLEANS, INC. | ||||
(DEBTOR-IN-POSSESSION) | ||||
INCOME STATEMENTS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING REVENUES | ||||
Electric | $121,619 | $99,249 | ||
Natural gas | 47,023 | 37,012 | ||
TOTAL | 168,642 | 136,261 | ||
OPERATING EXPENSES | ||||
Operation and Maintenance: | ||||
Fuel, fuel-related expenses, and | ||||
gas purchased for resale | 77,431 | 34,668 | ||
Purchased power | 40,159 | 60,237 | ||
Other operation and maintenance | 22,205 | 13,810 | ||
Taxes other than income taxes | 9,774 | 8,600 | ||
Depreciation and amortization | 8,123 | 7,464 | ||
Reorganization items | 2,343 | 1,678 | ||
Other regulatory charges - net | 1,033 | 1,043 | ||
TOTAL | 161,068 | 127,500 | ||
OPERATING INCOME | 7,574 | 8,761 | ||
OTHER INCOME | ||||
Allowance for equity funds used during construction | 1,191 | 1,079 | ||
Interest and dividend income | 2,733 | 803 | ||
Miscellaneous - net | (179) | (152) | ||
TOTAL | 3,745 | 1,730 | ||
INTEREST AND OTHER CHARGES | ||||
Interest on long-term debt | 3,245 | 184 | ||
Other interest - net | 4,309 | 2,141 | ||
Allowance for borrowed funds used during construction | (898) | (863) | ||
TOTAL | 6,656 | 1,462 | ||
INCOME BEFORE INCOME TAXES | 4,663 | 9,029 | ||
Income taxes | 1,513 | 3,386 | ||
NET INCOME | 3,150 | 5,643 | ||
Preferred dividend requirements and other | 241 | - - | ||
EARNINGS APPLICABLE TO | ||||
COMMON STOCK | $2,909 | $5,643 | ||
See Notes to Financial Statements. | ||||
88
ENTERGY NEW ORLEANS, INC. | ||||
(DEBTOR-IN-POSSESSION) | ||||
STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING ACTIVITIES | ||||
Net income | $3,150 | $5,643 | ||
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||||
Other regulatory charges - net | 1,033 | 1,043 | ||
Depreciation and amortization | 8,123 | 7,464 | ||
Deferred income taxes, investment tax credits, and non-current taxes accrued | 15,615 | 70,879 | ||
Changes in working capital: | ||||
Receivables | (6,626) | 14,565 | ||
Fuel inventory | 4,843 | 6,820 | ||
Accounts payable | 15,069 | (6,995) | ||
Taxes accrued | 7,123 | - | ||
Interest accrued | (1,377) | 282 | ||
Deferred fuel costs | 2,207 | 4,581 | ||
Other working capital accounts | (5,790) | (66,694) | ||
Provision for estimated losses and reserves | 421 | - | ||
Changes in other regulatory assets | (1,175) | 7,308 | ||
Other | (25,425) | (14,167) | ||
Net cash flow provided by operating activities | 17,191 | 30,729 | ||
INVESTING ACTIVITIES | ||||
Construction expenditures | (17,836) | (44,319) | ||
Allowance for equity funds used during construction | 1,191 | 1,079 | ||
Insurance proceeds | 2,804 | - | ||
Proceeds from the sale of assets | 10,046 | - | ||
Net cash flow used in investing activities | (3,795) | (43,240) | ||
FINANCING ACTIVITIES | ||||
Repayment of DIP credit facility | (9,908) | (10,000) | ||
Dividends paid: | ||||
Preferred stock | (92) | - | ||
Net cash flow used in financing activities | (10,000) | (10,000) | ||
Net increase (decrease) in cash and cash equivalents | 3,396 | (22,511) | ||
Cash and cash equivalents at beginning of period | 17,093 | 48,056 | ||
Cash and cash equivalents at end of period | $20,489 | $25,545 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid during the period for: | ||||
Interest - net of amount capitalized | $8,745 | $1,859 | ||
See Notes to Financial Statements. | ||||
89
ENTERGY NEW ORLEANS, INC. | ||||
(DEBTOR-IN-POSSESSION) | ||||
BALANCE SHEETS | ||||
ASSETS | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | ||||
Cash | $661 | $3,886 | ||
Temporary cash investments - at cost | ||||
which approximates market | 19,828 | 13,207 | ||
Total cash and cash equivalents | 20,489 | 17,093 | ||
Accounts receivable: | ||||
Customer | 60,758 | 58,999 | ||
Allowance for doubtful accounts | (10,389) | (10,563) | ||
Associated companies | 23,607 | 17,797 | ||
Other | 9,589 | 8,428 | ||
Accrued unbilled revenues | 21,480 | 23,758 | ||
Total accounts receivable | 105,045 | 98,419 | ||
Deferred fuel costs | 16,789 | 18,996 | ||
Fuel inventory - at average cost | 198 | 5,041 | ||
Materials and supplies - at average cost | 7,612 | 7,825 | ||
Prepayments and other | 10,904 | 5,641 | ||
TOTAL | 161,037 | 153,015 | ||
OTHER PROPERTY AND INVESTMENTS | ||||
Investment in affiliates - at equity | 3,259 | 3,259 | ||
Non-utility property at cost (less accumulated depreciation) | 1,016 | 1,107 | ||
TOTAL | 4,275 | 4,366 | ||
UTILITY PLANT | ||||
Electric | 700,959 | 698,081 | ||
Natural gas | 190,483 | 186,932 | ||
Construction work in progress | 12,858 | 21,824 | ||
TOTAL UTILITY PLANT | 904,300 | 906,837 | ||
Less - accumulated depreciation and amortization | 455,464 | 446,673 | ||
UTILITY PLANT - NET | 448,836 | 460,164 | ||
DEFERRED DEBITS AND OTHER ASSETS | ||||
Regulatory assets: | ||||
Other regulatory assets | 300,824 | 295,440 | ||
Long term receivables | 936 | 936 | ||
Other | 9,464 | 7,230 | ||
TOTAL | 311,224 | 303,606 | ||
TOTAL ASSETS | $925,372 | $921,151 | ||
See Notes to Financial Statements. | ||||
90 | ||||
ENTERGY NEW ORLEANS, INC. | ||||
(DEBTOR-IN-POSSESSION) | ||||
BALANCE SHEETS | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
March 31, 2007 and December 31, 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
CURRENT LIABILITIES | ||||
DIP credit facility | $42,026 | $51,934 | ||
Accounts payable: | ||||
Associated companies | 97,771 | 94,686 | ||
Other | 76,245 | 76,831 | ||
Customer deposits | 16,139 | 14,808 | ||
Taxes accrued | 9,209 | 2,086 | ||
Accumulated deferred income taxes | 2,005 | 2,924 | ||
Interest accrued | 16,627 | 18,004 | ||
Other | 4,232 | 6,154 | ||
TOTAL CURRENT LIABILITIES | 264,254 | 267,427 | ||
NON-CURRENT LIABILITIES | ||||
Accumulated deferred income taxes and taxes accrued | 95,003 | 98,884 | ||
Accumulated deferred investment tax credits | 3,067 | 3,157 | ||
SFAS 109 regulatory liability - net | 71,740 | 71,870 | ||
Other regulatory liabilities | 9,522 | - - | ||
Retirement cost liability | 2,635 | 2,591 | ||
Accumulated provisions | 8,806 | 8,385 | ||
Pension and other postretirement liabilities | 59,125 | 60,033 | ||
Long-term debt | 229,879 | 229,875 | ||
Other | 4,664 | 5,161 | ||
TOTAL NON-CURRENT LIABILITIES | 484,441 | 479,956 | ||
Commitments and Contingencies | ||||
SHAREHOLDERS' EQUITY | ||||
Preferred stock without sinking fund | 19,780 | 19,780 | ||
Common stock, $4 par value, authorized 10,000,000 | ||||
shares; issued and outstanding 8,435,900 shares in 2007 | ||||
and 2006 | 33,744 | 33,744 | ||
Paid-in capital | 36,294 | 36,294 | ||
Retained earnings | 86,859 | 83,950 | ||
TOTAL | 176,677 | 173,768 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $925,372 | $921,151 | ||
See Notes to Financial Statements. |
91
ENTERGY NEW ORLEANS, INC. | ||||||||
(DEBTOR-IN-POSSESSION) | ||||||||
SELECTED OPERATING RESULTS | ||||||||
For the Three Months Ended March 31, 2007 and 2006 | ||||||||
(Unaudited) | ||||||||
Increase/ | ||||||||
Description | 2007 | 2006 | (Decrease) | % | ||||
(Dollars In Millions) | ||||||||
Electric Operating Revenues: | ||||||||
Residential | $25 | $17 | $8 | 47 | ||||
Commercial | 38 | 35 | 3 | 9 | ||||
Industrial | 10 | 8 | 2 | 25 | ||||
Governmental | 15 | 10 | 5 | 50 | ||||
Total retail | 88 | 70 | 18 | 26 | ||||
Sales for resale | ||||||||
Associated companies | 34 | 7 | 27 | 386 | ||||
Non-associated companies | - | 27 | (27) | (100) | ||||
Other | - | (5) | 5 | 100 | ||||
Total | $122 | $99 | $23 | 23 | ||||
Billed Electric Energy | ||||||||
Sales (GWh): | ||||||||
Residential | 234 | 138 | 96 | 70 | ||||
Commercial | 395 | 360 | 35 | 10 | ||||
Industrial | 137 | 102 | 35 | 34 | ||||
Governmental | 164 | 106 | 58 | 55 | ||||
Total retail | 930 | 706 | 224 | 32 | ||||
Sales for resale | ||||||||
Associated companies | 350 | 120 | 230 | 192 | ||||
Non-associated companies | 2 | 407 | (405) | (100) | ||||
Total | 1,282 | 1,233 | 49 | 4 | ||||
92
SYSTEM ENERGY RESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
Results of Operations
System Energy's principal asset consists of a 90% ownership and leasehold interest in Grand Gulf. The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy's operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement. Payments under the Unit Power Sales Agreement are System Energy's only source of operating revenues. Net income decreased by $3.5 million for the first quarter of 2007 compared to the first quarter of 2006. The decrease is primarily due to a decrease in rate base in the first quarter of 2007 compared to the same period in 2006 resulting in lower operating income.
Liquidity and Capital Resources
Cash Flow
Cash flows for the first quarters of 2007 and 2006 were as follows:
|
|
2007 |
|
2006 |
|
|
|
(In Thousands) |
|||
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$135,012 |
|
$75,704 |
|
|
|
|
|
|
|
Cash flow provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
59,420 |
|
59,065 |
|
Investing activities |
|
(31,754) |
|
107,623 |
|
Financing activities |
|
(45,835) |
|
(57,089) |
Net increase (decrease) in cash and cash equivalents |
|
(18,169) |
|
109,599 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$116,843 |
|
$185,303 |
Investing Activities
Investing activities used $31.8 million in cash flow for the first quarter of 2007 compared to providing $107.6 million for the first quarter of 2006 primarily due to money pool activity.
Financing Activities
The decrease of $11.3 million in net cash used in financing activities for the first quarter of 2007 compared to the first quarter of 2006 was primarily due to a decrease of $11.6 million in common stock dividends.
93
Capital Structure
System Energy's capitalization is balanced between equity and debt, as shown in the following table.
|
|
March 31, |
|
December 31, |
|
|
|
|
|
Net debt to net capital |
|
47.7% |
|
46.4% |
Effect of subtracting cash from debt |
|
3.5% |
|
4.2% |
Debt to capital |
|
51.2% |
|
50.6% |
Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and common shareholder's equity. Net capital consists of capital less cash and cash equivalents. System Energy uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating System Energy's financial condition.
Uses and Sources of Capital
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of System Energy's uses and sources of capital. The following is an update to the Form 10-K.
System Energy's receivables from the money pool were as follows:
March 31, |
|
December 31, |
|
March 31, |
|
December 31, |
(In Thousands) |
||||||
|
|
|
|
|
|
|
$99,031 |
|
$88,231 |
|
$155,495 |
|
$277,287 |
See Note 4 to the financial statements in the Form 10-K for a description of the money pool.
Significant Factors and Known Trends
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Significant Factors and Known Trends" in the Form 10-K for a discussion of the Energy Policy Act of 2005, nuclear matters, litigation risks, and environmental risks.
Critical Accounting Estimates
See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in System Energy's accounting for nuclear decommissioning costs and qualified pension and other postretirement benefits.
New Accounting Pronouncements
See "New Accounting Pronouncements" section of Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis for a discussion of new accounting pronouncements.
94
SYSTEM ENERGY RESOURCES, INC. | ||||
INCOME STATEMENTS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING REVENUES | ||||
Electric | $126,157 | $131,654 | ||
OPERATING EXPENSES | ||||
Operation and Maintenance: | ||||
Fuel, fuel-related expenses, and | ||||
gas purchased for resale | 8,388 | 11,213 | ||
Nuclear refueling outage expenses | 4,535 | 3,573 | ||
Other operation and maintenance | 24,237 | 23,252 | ||
Decommissioning | 6,255 | 5,819 | ||
Taxes other than income taxes | 8,411 | 6,189 | ||
Depreciation and amortization | 25,962 | 25,677 | ||
Other regulatory credits - net | (1,960) | (1,980) | ||
TOTAL | 75,828 | 73,743 | ||
OPERATING INCOME | 50,329 | 57,911 | ||
OTHER INCOME | ||||
Allowance for equity funds used during construction | 416 | 683 | ||
Interest and dividend income | 5,815 | 5,629 | ||
Miscellaneous - net | (79) | (107) | ||
TOTAL | 6,152 | 6,205 | ||
INTEREST AND OTHER CHARGES | ||||
Interest on long-term debt | 12,353 | 12,533 | ||
Other interest - net | 16 | 28 | ||
Allowance for borrowed funds used during construction | (135) | (215) | ||
TOTAL | 12,234 | 12,346 | ||
INCOME BEFORE INCOME TAXES | 44,247 | 51,770 | ||
Income taxes | 16,950 | 21,022 | ||
NET INCOME | $27,297 | $30,748 | ||
See Notes to Financial Statements. | ||||
95
(Page left blank intentionally)
96
SYSTEM ENERGY RESOURCES, INC. | ||||
STATEMENTS OF CASH FLOWS | ||||
For the Three Months Ended March 31, 2007 and 2006 | ||||
(Unaudited) | ||||
2007 | 2006 | |||
(In Thousands) | ||||
OPERATING ACTIVITIES | ||||
Net income | $27,297 | $30,748 | ||
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||||
Other regulatory credits - net | (1,960) | (1,980) | ||
Depreciation, amortization, and decommissioning | 32,217 | 31,496 | ||
Deferred income taxes, investment tax credits and non-current taxes accrued | 57,248 | 25,174 | ||
Changes in working capital: | ||||
Receivables | 969 | 8,979 | ||
Accounts payable | 17,411 | 1,039 | ||
Taxes accrued | (47,988) | (18,964) | ||
Interest accrued | (31,678) | (30,412) | ||
Other working capital accounts | (17,321) | (2,097) | ||
Changes in other regulatory assets | 721 | (4,392) | ||
Other | 22,504 | 19,474 | ||
Net cash flow provided by operating activities | 59,420 | 59,065 | ||
INVESTING ACTIVITIES | ||||
Construction expenditures | (14,275) | (8,122) | ||
Allowance for equity funds used during construction | 416 | 683 | ||
Nuclear fuel purchases | (56,279) | (370) | ||
Proceeds from sale/leaseback of nuclear fuel | 56,370 | 370 | ||
Proceeds from nuclear decommissioning trust fund sales | 27,337 | 27,489 | ||
Investment in nuclear decommissioning trust funds | (34,523) | (34,219) | ||
Change in money pool receivable - net | (10,800) | 121,792 | ||
Net cash flow provided by (used in) investing activities | (31,754) | 107,623 | ||
FINANCING ACTIVITIES | ||||
Retirement of long-term debt | (23,335) | (22,989) | ||
Dividends paid: | ||||
Common stock | (22,500) | (34,100) | ||
Net cash flow used in financing activities | (45,835) | (57,089) | ||
Net increase (decrease) in cash and cash equivalents | (18,169) | 109,599 | ||
Cash and cash equivalents at beginning of period | 135,012 | 75,704 | ||
Cash and cash equivalents at end of period | $116,843 | $185,303 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid during the period for: | ||||
Interest - net of amount capitalized | $42,592 | $41,520 | ||
See Notes to Financial Statements. | ||||
97
SYSTEM ENERGY RESOURCES, INC. | ||||||
BALANCE SHEETS | ||||||
ASSETS | ||||||
March 31, 2007 and December 31, 2006 | ||||||
(Unaudited) | ||||||
2007 | 2006 | |||||
(In Thousands) | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents: | ||||||
Cash | $143 | $56 | ||||
Temporary cash investments - at cost, | ||||||
which approximates market | 116,700 | 134,956 | ||||
Total cash and cash equivalents | 116,843 | 135,012 | ||||
Accounts receivable: | ||||||
Associated companies | 142,349 | 142,121 | ||||
Other | 12,904 | 3,301 | ||||
Total accounts receivable | 155,253 | 145,422 | ||||
Materials and supplies - at average cost | 60,846 | 61,097 | ||||
Deferred nuclear refueling outage costs | 13,166 | 5,060 | ||||
Prepayments and other | 10,946 | 1,480 | ||||
TOTAL | 357,054 | 348,071 | ||||
OTHER PROPERTY AND INVESTMENTS | ||||||
Decommissioning trust funds | 289,801 | 281,430 | ||||
UTILITY PLANT | ||||||
Electric | 3,245,500 | 3,248,582 | ||||
Property under capital lease | 471,933 | 471,933 | ||||
Construction work in progress | 49,481 | 38,088 | ||||
Nuclear fuel under capital lease | 104,645 | 55,280 | ||||
Nuclear fuel | 10,222 | 10,222 | ||||
TOTAL UTILITY PLANT | 3,881,781 | 3,824,105 | ||||
Less - accumulated depreciation and amortization | 2,021,979 | 2,000,320 | ||||
UTILITY PLANT - NET | 1,859,802 | 1,823,785 | ||||
DEFERRED DEBITS AND OTHER ASSETS | ||||||
Regulatory assets: | ||||||
SFAS 109 regulatory asset - net | 88,288 | 92,600 | ||||
Other regulatory assets | 295,030 | 293,292 | ||||
Other | 13,396 | 14,062 | ||||
TOTAL | 396,714 | 399,954 | ||||
TOTAL ASSETS | $2,903,371 | $2,853,240 | ||||
See Notes to Financial Statements. | ||||||
98 | ||||||
SYSTEM ENERGY RESOURCES, INC. | ||||||
BALANCE SHEETS | ||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | ||||||
March 31, 2007 and December 31, 2006 | ||||||
(Unaudited) | ||||||
2007 | 2006 | |||||
(In Thousands) | ||||||
CURRENT LIABILITIES | ||||||
Currently maturing long-term debt | $96,701 | $93,335 | ||||
Accounts payable: | ||||||
Associated companies | 4,966 | 1,634 | ||||
Other | 40,715 | 26,636 | ||||
Taxes accrued | - | 47,988 | ||||
Accumulated deferred income taxes | 4,945 | 1,828 | ||||
Interest accrued | 14,457 | 46,135 | ||||
Obligations under capital leases | 33,142 | 33,142 | ||||
TOTAL | 194,926 | 250,698 | ||||
NON-CURRENT LIABILITIES | ||||||
Accumulated deferred income taxes and taxes accrued | 353,318 | 304,691 | ||||
Accumulated deferred investment tax credits | 67,791 | 68,660 | ||||
Obligations under capital leases | 71,503 | 22,138 | ||||
Other regulatory liabilities | 266,158 | 242,029 | ||||
Decommissioning | 349,101 | 342,846 | ||||
Accumulated provisions | 2,422 | 2,422 | ||||
Pension and other postretirement liabilities | 32,735 | 32,060 | ||||
Long-term debt | 703,234 | 729,914 | ||||
Other | - | 396 | ||||
TOTAL | 1,846,262 | 1,745,156 | ||||
Commitments and Contingencies | ||||||
SHAREHOLDER'S EQUITY | ||||||
Common stock, no par value, authorized 1,000,000 shares; | ||||||
issued and outstanding 789,350 shares in 2007 and 2006 | 789,350 | 789,350 | ||||
Retained earnings | 72,833 | 68,036 | ||||
TOTAL | 862,183 | 857,386 | ||||
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY | $2,903,371 | $2,853,240 | ||||
See Notes to Financial Statements. | ||||||
99
ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See "PART I, Item 1, Litigation" in the Form 10-K for a discussion of legal, administrative, and other regulatory proceedings affecting Entergy.
Item 1A. Risk Factors
There have been no material changes to the risk factors discussed in "PART I, Item 1A, Risk Factors" in the Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities (1)
Period |
|
Total Number of |
|
Average Price Paid |
|
Total Number of |
|
Maximum $ |
|
|
|
|
|
|
|
|
|
1/01/2007-1/31/2007 |
|
55,000 |
|
$92.07 |
|
55,000 |
|
$1,500,000,000 |
2/01/2007-2/28/2007 |
|
4,907,042 |
|
$98.39 |
|
4,907,042 |
|
$1,027,316,661 |
3/01/2007-3/31/2007 |
|
710,000 |
|
$98.92 |
|
710,000 |
|
$999,999,949 |
Total |
|
5,672,042 |
|
$98.39 |
|
5,672,042 |
|
|
(1) |
In accordance with Entergy's stock-based compensation plans, Entergy periodically grants stock options to key employees, which may be exercised to obtain shares of Entergy's common stock. According to the plans, these shares can be newly issued shares, treasury stock, or shares purchased on the open market. Entergy's management has been authorized by the Board to repurchase on the open market shares up to an amount sufficient to fund the exercise of grants under the plans. In addition to this authority, on January 29, 2007, the Board approved a repurchase program under which Entergy is authorized to repurchase up to $1.5 billion of its common stock. The program does not have an expiration date, but Entergy expects to complete it over the next two years. See Note 12 to the financial statements in the Form 10-K for additional discussion of the stock-based compensation plans. |
(2) |
Maximum amount of shares that may yet be repurchased relates only to the $1.5 billion plan and does not include an estimate of the amount of shares that may be purchased to fund the exercise of grants under the stock-based compensation plans. |
Item 5. Other Information
Other Generation Resources
On April 5, 2007 the FERC issued an Opinion and Order on Rehearing and Clarification (Opinion) in the proceeding involving Entergy Louisiana and Entergy New Orleans' three long-term contracts to procure power from affiliates that are discussed in Part 1, Item 1 of the Form 10-K. In its Opinion, the FERC rejects the Utility operating companies and the LPSC's request to allow Entergy New Orleans and Entergy Louisiana to purchase the Independence plant capacity and energy for a term extending for the life-of-the-unit, as originally proposed, as opposed to the ten-year term ordered by the FERC in its initial opinion. The Opinion also clarifies that while the Utility operating companies' use of bid information obtained from the 2002 request for proposal to develop the Entergy Arkansas base load purchase power agreements was improper, the record does not establish that the communications constituted a violation of the Utility operating companies' code of conduct. The Opinio n further
100
clarified that the retained share of Grand Gulf that is purchased by Entergy Louisiana and Entergy New Orleans from Entergy Arkansas should be priced at cost, and not at the below-cost price of $46/MWh specified in the original opinion. Additionally, the Opinion rejects: (1) the LPSC's argument that one-month capacity sales by Entergy Arkansas to third parties triggered a right-of-first refusal on behalf of the other Utility operating companies related to Entergy Arkansas' base load capacity; and (2) the LPSC's argument that Entergy Gulf States was entitled to a portion of the River Bend purchased power agreement (rather than just Entergy Louisiana and Entergy New Orleans) and the LPSC's jurisdictional arguments related thereto.
Environmental Regulation and Proceedings
Clean Air Act and Subsequent Amendments
New Source Review (NSR)
In April 2007 the U.S. Supreme Court ruled that the applicability of Clean Air Act NSR requirements are not limited only to modifications that create an increase in hourly emission rates, but also can apply to modifications that create an increase in annual emission rates (Environmental Defense v. Duke Energy). This holding reversed a Fourth Circuit Court of Appeals decision limiting the applicability of NSR. This Supreme Court decision may result in a renewed effort by the EPA to bring enforcement actions against electric generating units for major non-permitted facility modifications. As discussed in the Form 10-K, Entergy has an established process for identifying modifications requiring additional Clean Air Act permitting approval and has not been the subject of EPA or state enforcement action regarding NSR.
Future Legislative and Regulatory Developments
In April 2007 the U.S. Supreme Court held that the EPA is authorized by the current provisions of the Clean Air Act to regulate emissions of CO2 and other "greenhouse gases" as "pollutants" (Massachusetts v. EPA) and that the EPA is required to regulate these emissions from motor vehicles if the emissions are anticipated to endanger public health or welfare. The Supreme Court directed the EPA to make further findings in this regard. The decision is expected to affect a similar case pending in the U.S. Court of Appeals for the D.C. Circuit (Coke Oven Environmental Task Force v. EPA) considering the same question under a similar Clean Air Act provision in the context of CO2 emissions from electric generating units. Although Entergy cannot predict how the D.C. Circuit or the EPA will react to the Supreme Court decision, one outcome could be a decision to regulate, under the Clean Air Act, emissions of CO2 and other "greenhouse gases" from motor vehicles or from power plants. Entergy is participating as a friend of the court in both of these cases in support of reasonable market-based regulation of CO2 as a pollutant under the Clean Air Act.
Bankruptcy of Entergy New Orleans - Order Confirming Plan of Reorganization
On May 7, 2007, Judge Jerry Brown of the United States Bankruptcy Court for the Eastern District of Louisiana entered an order confirming Entergy New Orleans' plan of reorganization under the provisions of Chapter 11 of the United States Bankruptcy Code (Case No. 05-17697). For a summary of the material features of the plan of reorganization, see "Bankruptcy Proceedings" in Entergy New Orleans' Management's Financial Discussion and Analysis in this report on Form 10-Q. No shares or other units of Entergy Corporation or Entergy New Orleans are reserved for future issuance in respect of claims and interests filed and allowed under the plan. Information regarding the assets and liabilities of Entergy New Orleans can be found in its financial statements and the notes thereto contained in the report on Form 10-Q. A copy of the plan of reorganization as confirmed is included as Exhibit 2(a) to this report on Form 10-Q.
101
Entergy Corporation Revolving Credit Facilities
As more fully-described in its report on Form 8-K filed on June 1, 2005 and in Note 4 to the financial statements in this report, Entergy Corporation has two revolving credit facilities available to it. Entergy Corporation from time to time has borrowed under the facilities and has also from time to time issued letters of credit against the borrowing capacity of the facilities. Following is a summary of the borrowings outstanding and capacity available under these facilities as of May 8, 2007:
|
|
|
Letters |
Capacity |
||||
(In Millions) |
||||||||
5-Year Facility |
$2,000 |
$895 |
$79 |
$1,026 |
||||
3-Year Facility |
$1,500 |
$1,030 |
$- |
$470 |
Amendment to Entergy New Orleans Articles of Incorporation and By-Laws
Effective May 8, 2007, pursuant to the terms of its plan of reorganization, Entergy New Orleans amended its articles of incorporation and its by-laws. The amendments:
The Amended and Restated Articles of Incorporation of Entergy New Orleans, Inc. are included as Exhibit 3(a) and the Amended By-Laws of Entergy New Orleans, Inc. are included as Exhibit 3(b) to this report on Form 10-Q.
102
Earnings Ratios (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)
The Registrant Subsidiaries have calculated ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends/distributions pursuant to Item 503 of Regulation S-K of the SEC as follows:
Ratios of Earnings to Fixed Charges |
|||||||||||
Twelve Months Ended |
|||||||||||
December 31, |
March 31, |
||||||||||
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
||||||
Entergy Arkansas |
2.79 |
3.17 |
3.37 |
3.75 |
3.37 |
3.30 |
|||||
Entergy Gulf States |
2.49 |
1.51 |
3.04 |
3.34 |
3.01 |
2.85 |
|||||
Entergy Louisiana |
3.14 |
3.93 |
3.60 |
3.50 |
3.23 |
3.26 |
|||||
Entergy Mississippi |
2.48 |
3.06 |
3.41 |
3.16 |
2.54 |
2.68 |
|||||
Entergy New Orleans |
(a) |
1.73 |
3.60 |
1.22 |
1.52 |
1.24 |
|||||
System Energy |
3.25 |
3.66 |
3.95 |
3.85 |
4.05 |
3.94 |
Ratios of Earnings to Combined Fixed Charges |
|||||||||||
Twelve Months Ended |
|||||||||||
December 31, |
March 31, |
||||||||||
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
||||||
Entergy Arkansas |
2.53 |
2.79 |
2.98 |
3.34 |
3.06 |
3.01 |
|||||
Entergy Gulf States |
2.40 |
1.45 |
2.90 |
3.18 |
2.90 |
2.74 |
|||||
Entergy Louisiana |
- |
- |
- |
- |
2.90 |
2.94 |
|||||
Entergy Mississippi |
2.27 |
2.77 |
3.07 |
2.83 |
2.34 |
2.45 |
|||||
Entergy New Orleans |
(a) |
1.59 |
3.31 |
1.12 |
1.35 |
1.11 |
(a) |
Earnings for the twelve months ended December 31, 2002, for Entergy New Orleans were not adequate to cover fixed charges and combined fixed charges and preferred dividends by $0.7 million and $3.4 million, respectively. |
Item 6. Exhibits *
2(a) - |
Chapter 11 Plan of Reorganization of Entergy New Orleans, Inc., as modified, dated May 2, 2007, confirmed by bankruptcy court order dated May 7, 2007. |
|
3(a) - |
Amended and Restated Articles of Incorporation of Entergy New Orleans, Inc., as amended May 8, 2007. |
|
3(b) - |
Amended By-Laws of Entergy New Orleans, Inc., as amended May 8, 2007. |
|
12(a) - |
Entergy Arkansas' Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. |
|
12(b) - |
Entergy Gulf States' Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. |
|
12(c) - |
Entergy Louisiana's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Distributions, as defined. |
|
103 | ||
12(d) - |
Entergy Mississippi's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. |
|
12(e) - |
Entergy New Orleans' Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. |
|
12(f) - |
System Energy's Computation of Ratios of Earnings to Fixed Charges, as defined. |
|
31(a) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation. |
|
31(b) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation. |
|
31(c) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas. |
|
31(d) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas. |
|
31(e) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Gulf States. |
|
31(f) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Gulf States. |
|
31(g) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Gulf States. |
|
31(h) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana. |
|
31(i) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana. |
|
31(j) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi. |
|
31(k) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi. |
|
31(l) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans. |
|
31(m) - |
Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans. |
|
31(n) - |
Rule 13a-14(a)/15d-14(a) Certification for System Energy. |
|
31(o) - |
Rule 13a-14(a)/15d-14(a) Certification for System Energy. |
|
32(a) - |
Section 1350 Certification for Entergy Corporation. |
|
32(b) - |
Section 1350 Certification for Entergy Corporation. |
|
32(c) - |
Section 1350 Certification for Entergy Arkansas. |
|
32(d) - |
Section 1350 Certification for Entergy Arkansas. |
|
32(e) - |
Section 1350 Certification for Entergy Gulf States. |
|
32(f) - |
Section 1350 Certification for Entergy Gulf States. |
|
32(g) - |
Section 1350 Certification for Entergy Gulf States. |
|
32(h) - |
Section 1350 Certification for Entergy Louisiana. |
|
32(i) - |
Section 1350 Certification for Entergy Louisiana. |
|
104 | ||
32(j) - |
Section 1350 Certification for Entergy Mississippi. |
|
32(k) - |
Section 1350 Certification for Entergy Mississippi. |
|
32(l) - |
Section 1350 Certification for Entergy New Orleans. |
|
32(m) - |
Section 1350 Certification for Entergy New Orleans. |
|
32(n) - |
Section 1350 Certification for System Energy. |
|
32(o) - |
Section 1350 Certification for System Energy. |
___________________________
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy Corporation agrees to furnish to the Commission upon request any instrument with respect to long-term debt that is not registered or listed herein as an Exhibit because the total amount of securities authorized under such agreement does not exceed ten percent of the total assets of Entergy Corporation and its subsidiaries on a consolidated basis.
* |
Reference is made to a duplicate list of exhibits being filed as a part of this report on Form 10-Q for the quarter ended March 31, 2007, which list, prepared in accordance with Item 102 of Regulation S-T of the SEC, immediately precedes the exhibits being filed with this report on Form 10-Q for the quarter ended March 31, 2007. |
** |
Incorporated herein by reference as indicated. |
105
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 |
/s/ Nathan E. Langston Senior Vice President and Chief Accounting Officer (For each Registrant and for each as Principal Accounting Officer) |
Date: May 9, 2007
106
Exhibit 2(a)
EXHIBIT A
TO THE CONFIRMATION ORDER
CHAPTER 11 PLAN OF REORGANIZATION OF ENTERGY
NEW ORLEANS, INC., AS MODIFIED, DATED MAY 2, 2007
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
* * * * * * * * * * * * * * * * * | * | |
IN RE: ENTERGY NEW ORLEANS, INC. Debtor |
* * * * * * * * |
Case No. 05-17697 Chapter 11 Section "B" |
* * * * * * * * * * * * * * * * * | * |
FOURTH AMENDED CHAPTER 11 PLAN OF REORGANIZATION OF ENTERGY NEW ORLEANS, INC.,
AS MODIFIED, DATED MAY 2, 2007
|
R. PATRICK VANCE (#13008) ELIZABETH J. FUTRELL (#5863) NAN ROBERTS EITEL (#19910) TARA G. RICHARD (#26356) JOSHUA J. LEWIS (#29950) Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P. 201 St. Charles Avenue New Orleans, LA 70170-5100 Phone: (504) 582-8000 Fax: (504) 582-8011 Attorneys for Entergy New Orleans, Inc., The debtor and debtor-in-possession |
Entergy New Orleans, Inc., the debtor and debtor-in-possession herein (the "Debtor" or "ENOI"), proposes the following Fourth Amended Chapter 11 Plan of Reorganization, as Modified (this "Plan" or the "Debtor's Plan") for the resolution of the outstanding claims against and equity interests in the Debtor. The Debtor is a proponent of the Plan within the meaning of section 1129 of the Bankruptcy Code, 11 U.S.C. 1129. For a discussion of the Debtor's history, businesses, results of operations, historical financial information, projections and properties, and for a summary and analysis of the Debtor's Plan, reference is made to the Disclosure Statement Filed by the Debtor that accompanies the Debtor's Plan (the "Disclosure Statement" or the "Debtor's Disclosure Statement"). There also are other agreements and documents that are referenced in the Debtor's Plan or the Debtor's Disclosure Statement and that will be available for review.
ARTICLE I
DEFINED TERMS AND RULES OF INTERPRETATION
In addition to such other terms as may be defined in other
Sections of this Plan, the following capitalized terms will have the following
meanings:
Section 1.1 "2006 FRP Applications" collectively means the 2006 Electric FRP
Application and the 2006 Gas FRP Application, as each may be amended or modified
from time to time by the Debtor.
Section 1.2 "2006 Electric FRP Application" means the Debtor's 2006 Electric
Formula Rate Plan Filing for the Evaluation Period Ended December 31, 2005,
filed with the City Council on June 30, 2006, proceeding nos. UD-01-04 and
UD-03-01, as may be amended or modified from time to time by the Debtor.
Section 1.3 "2006 Gas FRP Application" means the Debtor's 2006 Gas Formula Rate
Plan Filing for the Evaluation Period Ended December 31, 2005, filed with the
City Council on June 30, 2006, proceeding nos. UD-01-04 and UD-03-01, as may be
amended or modified from time to time by the Debtor.
Section 1.4 "2006 Storm Cost Recovery and Reserve Application" means the
Debtor's Application for Authorization to Implement Riders to Recover Costs
Related to Hurricanes Katrina and Rita and to Adequately Fund a Storm Reserve of
Entergy New Orleans, Inc, filed with the City Council on June 30, 2006,
proceeding nos. UD-06-01 and 02, and includes both the Storm Cost Recovery
Riders and Storm Reserve Riders, as the same may be amended or modified from
time to time by the Debtor.
Section 1.5 "4.36% Preferred Series" means the series of preferred stock issued
by ENOI, and designated as the 4.36% Preferred Stock, Cumulative $100 par value.
Section 1.6 "4.75% Preferred Series" means the series of preferred stock issued
by ENOI, and designated as the 4.75% Preferred Stock, Cumulative $100 par value.
Section 1.7 "5.56% Preferred Series" means the series of preferred stock issued
by ENOI, and designated as the 5.56% Preferred Stock, Cumulative $100 par value.
Section 1.8 "Ad Hoc Bondholders Committee" means the ad hoc committee consisting
of Bay Harbour Management, Bay Harbour 90-1, Ltd., Bay Harbour Master LTD,
Institutional Benchmarks Master Fund Limited, MSS Distressed & Opportunities 2,
BHCO Master, Ltd., Drawbridge Special Opportunities Advisors LLC, Drawbridge DSO
Securities LLC, Drawbridge OSO Securities LLC, Drawbridge Global Macro Master
Fund Ltd., Catalyst Credit Opportunity Master Fund LLP, LYXOR Catalyst Credit
Opportunity Ltd., Catalyst Investment Management Co., LLC, Luminous Management,
LLC, Luminous Energy Partners Master Fund, LTD, Luminous Asset Partners, LP, and
J.P. Morgan Securities Inc., each in its capacity as a Bondholder.
Section 1.9 "Ad Hoc Bondholders Committee Fees" means the obligations incurred
by the Ad Hoc Bondholders Committee to reimburse the reasonable fees and
expenses of (a) Kazowitz, Benson, Torres & Friedmann LLP, and (b) its local
counsel, as the professionals retained by the Ad Hoc Bondholders Committee;
provided, however, that (a) such Ad Hoc Bondholders Committee Fees shall not
exceed $250,000, and (b) the Debtor's payment of the Ad Hoc Bondholders
Committee Fees shall be subject to a reasonableness review by the Bankruptcy
Court either pursuant to the Fee Order, if applicable, or otherwise, in the
Bankruptcy Court's discretion.
Section 1.10 "Administrative Claim" means a Claim for costs and expenses of
administration allowed under sections 503(b), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including: (a) the actual and necessary costs and expenses
incurred after the Petition Date of preserving the Estate and operating the
Debtor's business, including Administrative Trade Claims and DIP Financing
Claim; (b) the Professional Fee Claims; (c) the U.S. Trustee Fees; (d) the
Administrative Claims, if any, of the PBGC; (e) the Bond Trustee's Claim and the
Bond Trustee's Professional Fee Claim pursuant to the provisions of Section 4.2
of the Debtor's Plan; (f) the FGIC Professional Fee Claim pursuant to the
provisions of 4.3 of the Debtor's Plan; (g) the Ad Hoc Bondholders Committee
Fees; and (h) the Cure Amount Claims.
Section 1.11 "Administrative Claim Bar Date" means the date by which, except as
otherwise provided in the Debtor's Plan, all requests for payment of
Administrative Claims are required to be Filed with the Bankruptcy Court.
Section 1.12 "Administrative Claim Bar Date Order" means the Order of the
Bankruptcy Court (which may be the Confirmation Order) establishing the
Administrative Claim Bar Date.
Section 1.13 "Administrative Trade Claim" means an Administrative Claim arising
from or with respect to the sale of goods or rendition of services on or after
the Petition Date in the ordinary course of the Debtor's business, including
Administrative Claims of employees for ordinary course wages, expense
reimbursement and health and welfare benefits.
Section 1.14 "Affiliate" has the same meaning set forth in section 101(2) of the
Bankruptcy Code.
Section 1.15 "Allowed" means, (a) when used with respect to an
Administrative Claim, all or any portion of an Administrative Claim (i) that has
been allowed, or adjudicated in favor of the Holder by estimation or
liquidation, by a Final Order, or (ii) that was incurred by the Debtor in the
ordinary course of business during the Bankruptcy Case, or (iii) that is
specifically deemed allowed pursuant to the Debtor's Plan; provided, however,
that in no event shall a post-petition obligation that is contingent or Disputed
and subject to liquidation through pending or prospective litigation, including,
but not limited to, alleged obligations arising from personal injury, property
damage, products liability, consumer complaints, employment law, secondary payor
liability, or any other disputed legal or equitable claim based on tort,
statute, contract, equity, or applicable state law, be considered to be an
obligation which is payable in the ordinary course of business; or (b) when used
with respect to a Claim other than an Administrative Claim, such Claim or any
portion thereof (i) that has been allowed, or adjudicated in favor of the Holder
by estimation or liquidation, by a Final Order, or (ii) as to which (x) no Proof
of Claim has been Filed, and (y) the liquidated and noncontingent amount of
which is included in the Schedules, other than a Claim that is included in the
Schedules at zero, in an unknown amount, or as Disputed, or (iii) for which a
Proof of Claim in a liquidated amount has been timely Filed with the Bankruptcy
Court pursuant to the Bankruptcy Code, any Final Order of the Bankruptcy Court,
or other applicable bankruptcy law, and as to which either (x) no objection to
its allowance has been Filed within the periods of limitation fixed by the
Debtor's Plan, the Bankruptcy Code, or any Order of the Bankruptcy Court, or (y)
any objection to its allowance has been settled or withdrawn, or has been denied
by a Final Order, or (iv) that is expressly allowed in a liquidated amount in
the Debtor's Plan, or (v) is specifically deemed allowed pursuant to the
Debtor's Plan.
Section 1.16 "Ballot" means the form to be distributed with the Debtor's
Disclosure Statement to each Holder of an Impaired Claim, Preferred Interest, or
Equity Interest on which the Holder shall indicate, among other things,
acceptance or rejection of the Debtor's Plan.
Section 1.17 "Bankruptcy Case" means this case no. 05-17697 in the Bankruptcy
Court under chapter 11 of the Bankruptcy Code Filed on September 23, 2005.
Section 1.18 "Bankruptcy Causes of Action" means all claims or causes of action
of the Debtor against any and all third parties for the recovery of (a)
transfers of Cash, offsets, debt forgiveness and other types or kinds of
property, or the value thereof, recoverable exclusively pursuant to sections
544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code, or otherwise
applicable non-bankruptcy law, (b) any claims or causes of action of the Debtor
for subordination under section 510 of the Bankruptcy Code or under other
applicable laws, and (c) all claims or causes of action that arise under title
11 of the United States Code
Section 1.19 "Bankruptcy Code" means title 11 section 101 et seq. of the United
States Code, as amended from time to time.
Section 1.20 "Bankruptcy Court" means the United States Bankruptcy Court for the
Eastern District of Louisiana, having jurisdiction over the Bankruptcy Case, or
if such court ceases to exercise jurisdiction over the Bankruptcy Case, such
court or adjunct thereof that exercises jurisdiction over the Bankruptcy Case.
Section 1.21 "Bankruptcy Rules" mean the Federal Rules of Bankruptcy Procedure
as provided by the United States Supreme Court under section 2075 of title 28 of
the United States Code, and any Local Rules of the Bankruptcy Court.
Section 1.22 "Bar Date" means the last day for Filing proofs of claim, as
established by the Bankruptcy Court.
Section 1.23 "Bar Date Order" means the Order (P-653) that established the Bar
Date, as the same may have been amended.
Section 1.24 "Bonds" collectively means the (a) First Mortgage Bonds, 6.75%
Thirteenth Series, due on October 15, 2017, in the principal amount of
$25,000,000, issued pursuant to the Bond Indenture and Mortgage on or about
October 18, 2002, (b) First Mortgage Bonds 3.875% Fourteenth Series, due on
August 1, 2008, in the original principal amount of $30,000,000, issued pursuant
to the Bond Indenture and Mortgage on or about July 31, 2003, (c) First Mortgage
Bonds, 5.25% Fifteenth Series, due on August 1, 2013, in the original principal
amount of $70,000,000, issued pursuant to the Bond Indenture and Mortgage on or
about July 31, 2003, (d) Insured Quarterly First Mortgage Bonds, 5.65% Sixteenth
Series, due on September 1, 2029, in the original principal amount of
$40,000,000, issued pursuant to the Bond Indenture and Mortgage on or about
August 1, 2004, (e) Insured Quarterly First Mortgage Bonds, 5.60% Seventeenth
Series, due on September 1, 2024, in the original principal amount of
$35,000,000, issued pursuant to the Bond Indenture and Mortgage on or about
August 15, 2004, and (f) the First Mortgage Bonds, 4.98% Eighteenth Series, due
on July 1, 2010, in the original principal amount of $30,000,000, issued
pursuant to the Bond Indenture and Mortgage on or about June 22, 2005.
Section 1.25 "Bond Claim" means the Secured Claim arising on or with respect to
the Bonds, which is comprised of the following: (a) the principal amount
of $229,935,000; plus (b) any unpaid interest as of the Effective Date (whether
accruing before or after the Petition Date), notwithstanding any stipulation
regarding interest contained in the DIP Financing Final Order or otherwise, at
the non-default rate provided in the Bond Indenture and Mortgage through
September 24, 2006, in the approximate amount of $13,571,565, minus that portion
of the FGIC Cure Amount Claim related to interest for such period; plus (c) if
the Effective Date has not occurred by June 30, 2007, interest at the applicable
non-default rate provided in the Bond Indenture and Mortgage on the amount in
clause (b) from and after June 30, 2007 until paid; plus (d) interest on the
outstanding principal amount of the Bonds at the applicable non-default rate
provided in the Bond Indenture and Mortgage after September 24, 2006, net of any
periodic Cash payments made by the Debtor on account of the Stipulation and
Order, and, in each case to the extent applicable, minus that portion of the
FGIC Cure Amount Claim related to interest for such period.
Section 1.26 "Bondholders" collectively means the Holders of the Bond Claims as
of the Voting Record Date (for purposes of soliciting votes on the Debtor's
Plan), or on the Distribution Record Date (for purposes of distributions
pursuant to the Debtor's Plan).
Section 1.27 "Bond Collateral" collectively means all of Debtor's property and
assets that collateralized and secured the Bond Claims as granted and provided
for in the Bond Indenture and Mortgage immediately before the Petition Date,
together with all repairs, replacements, additions, betterments and improvements
made to such property and assets at any time, including but not limited to
(irrespective of whether the Bond Trustee's security interest or Lien existed
immediately before the Petition Date and/or pursuant to the DIP Financing Final
Order) the Insurance
Policies and Proceeds.
Section 1.28 "Bond Indenture and Mortgage" collectively means that certain
Mortgage and Deed of Trust, dated as of May 1, 1987, as supplemented or amended
from time to time, by and between ENOI, as issuer, and Bank of Montreal Trust
Company, Mark G. McLaughlin and Z. George Klodnicki, as Co-Trustees, together
with any and all supplements thereto.
Section 1.29 "Bond Trustee" collectively means The Bank of New York (successor
to Harris Trust Company of New York and Bank of Montreal Trust Company) as
Trustee, and any co-trustee who serves pursuant to the Bond Indenture and
Mortgage.
Section 1.30 "Bond Trustee's Claim" means the Administrative Claim of the Bond
Trustee in respect of its internal reasonable fees and expenses for services
rendered by the Bond Trustee under the Bond Indenture and Mortgage until the
Effective Date, subject to the provisions of Section 4.2 of the Debtor's Plan;
provided, however, that the Bond Trustee's Claim shall not include the Bond
Trustee's Professional Fee Claim or the Bond Claim.
Section 1.31 "Bond Trustee's Professional Fee Claim" means any Claim of the Bond
Trustee for reimbursement of the reasonable fees and expenses of the Bond
Trustee's Professionals incurred in connection with the Debtor or the Bankruptcy
Case through the Effective Date, subject to the provisions of Section 4.2 of the
Debtor's Plan.
Section 1.32 "Bond Trustee's Professionals" collectively means (a) Heller,
Draper, Hayden, Patrick & Horn, LLP, (b) Emmet, Marvin & Martin, LLP, and (c)
Houlihan, Lokey, Howard & Zukin.
Section 1.33 "Business Day" means any day other than a Saturday, Sunday, or
other day on which commercial banks in New Orleans, Louisiana are required or
authorized to close by law or executive order.
Section 1.34 "Capital One" means Capital One, National Association.
Section 1.35 "Capital One Collateral" means all of the Debtor's interests in its
accounts receivable from its retail electric and natural gas utility customers,
as set forth in that certain Security Agreement, by and between the Debtor and
Capital One, dated July 20, 2005, a copy of which is attached to Capital One's
Proof of Claim.
Section 1.36 "Capital One Secured Claim" means and includes all loans, advances,
interest, indebtedness, liabilities, obligations, guarantees, covenants, and
duties at any time owing by the Debtor to Capital One, whether or not evidenced
by any note or other instrument and whether or not for the payment of money,
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, together with all interest accruing thereon and any and
all costs of collection, late fees, charges, expenses and attorney's fees, and
such other obligations provided for in the agreements and documents between the
Debtor and Capital One.
Section 1.37 "Cash" means legal tender of the United States of America and
equivalents thereof.
Section 1.38 "Causes of Action" collectively means, without limitation, any and
all actions, causes of action, liabilities, obligations, rights, suits, debts,
sums of money, damages, judgments, claims and demands whatsoever, whether known
or unknown, in law, equity or otherwise, including, without limitation, any and
all Bankruptcy Causes of Action.
Section 1.39 "CDBG Funds" means the Cash awarded or to be awarded to the Debtor
in response to the Debtor's application for a grant pursuant to HUD's Community
Development Block Grant Program.
Section 1.40 "City Council" means The Council of the City of New Orleans,
Louisiana.
Section 1.41 "Claim" has the same meaning set forth in section 101(5) of the
Bankruptcy Code.
Section 1.42 "Class" means a category of Holders of Claims, Preferred Interests,
or Equity Interests, as more fully described in Article II of the Debtor's Plan.
Section 1.43 "Clerk" means the Clerk of the Bankruptcy Court.
Section 1.44 "Confirmation" means the entry of an Order by the Bankruptcy Court
confirming the Debtor's Plan.
Section 1.45 "Confirmation Date" means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the Docket.
Section 1.46 "Confirmation Hearing" means the hearing held by the Bankruptcy
Court to consider confirmation of the Debtor's Plan pursuant to section
1129 of the Bankruptcy Code, as such hearing may be adjourned or continued from
time to time.
Section 1.47 "Confirmation Order" means the Order of the Bankruptcy Court
confirming the Debtor's Plan pursuant to section 1129 of the Bankruptcy Code.
Section 1.48 "Confirmation Procedures Order" means the Order granting the
Debtor's Motion for Entry of an Order Approving (I) the Confirmation Hearing
Notice, the Manner of Mailing and Service of the Solicitation Package and
Confirmation Notice and Publication of the Confirmation Hearing Date, (II) the
Voting Agent and Procedures for Voting and Tabulation of Ballots, (III) the
Forms of Ballots, and (IV) the Procedures for Allowing Claims for Voting
Purposes (P-1543).
Section 1.49 "Creditors' Committee" means the Official Committee of Unsecured
Creditors of the Debtor, as appointed by the U. S. Trustee pursuant to section
1102 of the Bankruptcy Code.
Section 1.50 "Cure Amount Claim" means any Claim based upon the Debtor's
defaults on an Executory Contract or Unexpired Lease that exist at the time that
the Debtor assumes such Executory Contract or Unexpired Lease pursuant to
section 365 of the Bankruptcy Code, including without limitation the FGIC Cure
Amount Claim; provided, however, that Cure Amount Claim excludes any Claim (or
any portion of any Claim) by an Affiliate of the Debtor to the extent that it is
for amounts the Debtor owes for the period before the Petition Date pursuant to
any Executory Contract assumed by the Debtor other than (a) the ISES PPA, (b) RB
30 PPA, (c) the WBL PPA, or (d) the UPSA.
Section 1.51 "Debtor" has the meaning set forth in the introductory paragraph of
the Debtor's Plan.
Section 1.52 "DIP Financing Claim" means the Claims arising from or with respect
to the DIP Financing Facility pursuant to the DIP Financing Final Order.
Section 1.53 "DIP Financing Facility" means the credit facility pursuant to
which Entergy Corporation has been advancing loans from time to time to the
Debtor in accordance with that certain DIP Credit Agreement dated as of
September 26, 2005 by and between Entergy Corporation and the Debtor, as it may
be amended or modified from time to time, the documents entered into in
connection therewith and the DIP Financing Final Order.
Section 1.54 "DIP Financing Final Order" collectively means that certain Final
Order (I) Authorizing Debtor To Use Cash Collateral and to Obtain Post Petition
Financing Pursuant to 11 U.S.C. 105, 361, 362, 363(c)(1), 363(c)(2), 364(c)(1),
364(c)(2), 364(c)(3), 364(d)(1) and 364(e), (II) Granting Adequate Protection to
Pre-Petition Secured Parties Pursuant to 11 U.S.C. 361, 362, 363 and 364, and
(III) Approving Stipulation (P-456), as the same was thereafter extended by the
Bankruptcy Court (P-1084), including the stipulation set forth on the record at
the hearing held on December 7, 2005 (P-458) (as set forth in the transcript of
such hearing), and the Order (P- 739) approving the Motion for Order Approving
Settlement with the Bank of New York, as Successor Trustee, Pursuant to
Bankruptcy Rule 9019 (P-558).
Section 1.55 "Disbursing Agent" means the Reorganized Debtor or an entity
designated by the Reorganized Debtor to act as a Disbursing Agent pursuant to
the Debtor's Plan.
Section 1.56 "Disclosure Statement" or the "Debtor's Disclosure Statement" means
the disclosure statement Filed by the Debtor that relates to this Plan,
including, without limitation, all exhibits and schedules thereto, as approved
by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code.
Section 1.57 "Disputed" means, as to any Administrative Claim or Claim against
or Interest in the Debtor, (a) any Claim proof of which was required to be Filed
by Order of the Bankruptcy Court, but as to which a Proof of Claim was not
timely or properly Filed, (b) any Claim which was timely and properly Filed, but
which has been or hereafter is listed on the Schedules as unliquidated, disputed
or contingent, (c) any Administrative Claim, Claim or Interest which is disputed
under the Debtor's Plan, or (d) any Administrative Claim, Claim or Interest, to
which the Debtor, Creditors' Committee or, if not prohibited by the Debtor's
Plan, any other party in interest, has interposed a timely objection, which
objection has not been withdrawn or determined by a Final Order. Any Claim that
is deemed Allowed pursuant the Debtor's Plan shall not be Disputed within the
meaning of this definition
Section 1.58 "Distribution Record Date" means the first Business Day after the
Confirmation Date.
Section 1.59 "Docket" means the docket in the Bankruptcy Case maintained by the
Clerk.
Section 1.60 "Document Website" means the internet site with the address
www.bmccorp.net, at which the Debtor's Plan, the Plan Exhibits, the Debtor's
Disclosure Statement, and the schedules to the Debtor's Disclosure Statement
will be available, without charge, to any party in interest and the public.
Section 1.61 "Effective Date" means the first Business Day after which the
conditions specified in Section 9.1 of the Debtor's Plan have been satisfied or
waived.
Section 1.62 "ENOI" has the meaning set forth in the introductory paragraph of
the Debtor's Plan.
Section 1.63 "Entergy Arkansas" means Entergy Arkansas, Inc., an Arkansas
corporation, formerly named Arkansas Power & Light Company, and an ENOI
Affiliate.
Section 1.64 "Entergy Corporation" means Entergy Corporation, a Delaware
Corporation, and the sole owner of the Equity Interests.
Section 1.65 "Entergy Gulf States" means Entergy Gulf States, Inc., a Texas
corporation, and an ENOI Affiliate.
Section 1.66 "Entergy Louisiana" means Entergy Louisiana, LLC, a Texas limited
liability company, and its predecessor Entergy Louisiana, Inc. (formerly named
Louisiana Power & Light Company), both ENOI Affiliates.
Section 1.67 "Entergy Mississippi" means Entergy Mississippi, Inc., a
Mississippi corporation, formerly named Mississippi Power & Light Company, and
an ENOI Affiliate.
Section 1.68 "Entergy Operations" means Entergy Operations, Inc., a Delaware
corporation that is directly owned by Entergy Corporation and is the nuclear
plant operator for the nuclear plants that are owned by the regulated utilities
of Entergy Corporation.
Section 1.69 "Entergy Services" means Entergy Services, Inc., a Delaware
corporation, and an ENOI Affiliate.
Section 1.70 "Entergy System" means the generating resources and bulk
transmission facilities that are jointly operated as a single, integrated
electric system of the Operating Companies, the operation of which is subject to
the System Agreement.
Section 1.71 "Entergy System Money Pool" means the intercompany cash management
system currently in effect among Entergy Corporation (as a lender only), Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy
Operations, Entergy Services, SERI and System Fuels in which these participants
are authorized to loan excess available funds to, and borrow at specified
maximum borrowing limits from, the other participants.
Section 1.72 "Entity" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company,
unincorporated organization, estate, trust, governmental unit or other entity,
including the Debtor and the Office of the U.S. Trustee, whether singular or
plural.
Section 1.73 "Equity Interests" collectively means a legal, equitable, or
contractual Claim arising from any share or other instrument evidencing an
ownership in the Debtor, whether or not transferable or denominated "stock" or
any similar security, and any options, warrants, rights, convertible securities,
liquidation preference or other right to acquire such shares or other
instruments, or the right to payment or compensation based on such interest,
including but not limited to, Claims arising from rescission of the purchase or
sale of such stock ownership interest, or damages arising from the purchase or
sale of interest of such stock ownership interest, or for reimbursement or
contribution on account of such Claim; provided, however, Equity Interests
exclude Preferred Interests.
Section 1.74 "Estate" means the estate created upon the commencement of the
Bankruptcy Case by section 541 of the Bankruptcy Code.
Section 1.75 "Executory Contract" means a contract to which the Debtor is a
party that is subject to assumption, assumption and assignment, or rejection
under section 365 of the Bankruptcy Code.
Section 1.76 "Excess Carriers" collectively means excess insurance coverage that
was placed through Underwriters at Lloyd's, London, and Hartford Steam Boiler
Inspection & Insurance Company, a wholly owned subsidiary of American
International Group.
Section 1.77 "Exculpated Parties" collectively means Released Parties.
Section 1.78 "Fee Order" means that certain Order entered August 17, 2006
(P-1081).
Section 1.79 "FERC" means the Federal Energy Regulatory Commission.
Section 1.80 "FGIC" means Financial Guaranty Insurance Company, the insurer of
the Insured Bonds.
Section 1.81 "FGIC Agreements" collectively means the FGIC Insurance Agreements
and the Surety Bonds.
Section 1.82 "FGIC Cure Amount Claim" means (a) $4,216,340, plus (b) any
interest payments FGIC made on the Insured Bonds after November 30, 2006 and
before the Effective Date that is not paid to FGIC or the Bond Trustee pursuant
to the Stipulation and Order, plus (c) if the Effective Date shall not have
occurred on or before June 30, 2007, interest on the amounts in (a) and (b) of
this Section 1.83 of the Debtor's Plan, net of any periodic Cash payments made
by the Debtor in respect of such amounts under the Stipulation and Order, which
additional interest shall begin to accrue on July 1, 2007, and shall accrue at
the interest rate specified in Section 2.02 of the FGIC Insurance Agreements,
until
such amounts are paid.
Section 1.83 "FGIC Insurance Agreements" collectively means (a) that certain
Insurance Agreement dated as of August 17, 2004 between the Debtor and FGIC
related to financial guarantee insurance policy number 04010507, together with
such financial guarantee insurance policy with respect to the Sixteenth Bond
Series, and (b) that certain Insurance Agreement dated as of August 24, 2004
between the Debtor and FGIC related to financial guarantee insurance policy
number 04010544, together with such financial guarantee insurance policy, with
respect to the Seventeenth Bond Series.
Section 1.84 "FGIC Professionals" collectively means King & Spalding LLP,
McGlinchey Stafford, PLLC and The Blackstone Group L.P.
Section 1.85 "FGIC Professional Fee Claim" means any Claim of FGIC for
reimbursement of the reasonable fees and expenses of the FGIC Professionals
incurred in connection with the Debtor or the Bankruptcy Case through the
Effective Date, subject to the provisions of Section 4.3 of the Debtor's Plan.
Section 1.86 "File," "Filed" or "Filing" means file, filed or filing with the
Bankruptcy Court or its authorized designee in the Bankruptcy Case.
Section 1.87 "Final Order" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the Docket in the
Bankruptcy Case, or on the docket of any other court, the operation or effect of
which has not been stayed, reversed, or amended, and as to which order or
judgment (or any revision, modification, or amendment thereof) the time to
appeal or seek review or rehearing or leave to appeal has expired and as to
which no appeal or petition for review or rehearing or leave to appeal was filed
or, if filed, no appeal or petition for review or rehearing remains pending;
provided, however, that the possibility that a motion under Rule 59 or Rule 60
of the Federal Rules of Civil Procedure, or any analogous rule under the
Bankruptcy Rules, may be filed with respect to such order or judgment shall not
cause such order or judgment not to be a Final Order.
Section 1.88 "General Unsecured Claim" means any Claim that arose before the
Petition Date that is not an Administrative Claim, Cure Amount Claim, Priority
Tax Claim, Other Priority Claim, Capital One Secured Claim, Bond Claim, Other
Secured Claim, Intercompany Claim, Litigation Claim, Workers' Compensation
Claim, Government Environmental Claim, or Odom Claim.
Section 1.89 "General Unsecured Claim Note" and "General Unsecured Claim Notes"
means, individually, each promissory note to be issued by the Reorganized Debtor
to the Holder of an Allowed General Unsecured Claim, in accordance with Option B
of Section 5.5 of the Debtor's Plan, and collectively, all such promissory
notes, to be substantially in the form of Plan Exhibit 1.89.
Section 1.90 "Government Environmental Claim" collectively means the Claims of
the U.S. Government and/or the State of Louisiana for damages allegedly caused
by the actions or inactions of the Debtor before the Petition Date, and that
allegedly caused the death of pelicans.
Section 1.91 "Grand Gulf" means Unit No. 1 of Grand Gulf Steam Electric
Generating Station (nuclear), 90% owned or leased by SERI.
Section 1.92 "Holder" means any Entity that holds a Claim or Interest.
Section 1.93 "HUD" means the United States Department of Housing and Urban
Development.
Section 1.94 "Impaired" means, with respect to any Claim or Interest, that such
Claim or Interest is impaired within the meaning of section 1124 of the
Bankruptcy Code.
Section 1.95 "Insurance Policies and Proceeds" collectively means (a) all of the
past, present and future insurance policies entered into by any Entity
(including, without limitation, the Debtor, the Reorganized Debtor, Entergy
Corporation, Entergy Services or any of the Affiliates of the Debtor or the
Reorganized Debtor) for the benefit of the Debtor, whether or not currently in
effect, to the extent they insure all or any part of the Bond Collateral, and
(b) all of the proceeds of such insurance policies paid on account of the Bond
Collateral, whether or not such proceeds have been paid to the Debtor or the
Reorganized Debtor.
Section 1.96 "Interests" collectively means the Equity Interests and Preferred
Interests.
Section 1.97 "Insured Bonds" collectively means the Sixteenth Bond Series and
the Seventeenth Bond Series.
Section 1.98 "Intercompany Claims" collectively means any Claim by an ENOI
Affiliate; provided, however, Intercompany Claims excludes (a) the DIP Financing
Claim, (b) the Subordinated DIP Financing Claim, (c) any Administrative Claim,
and (d) any Cure Amount Claim.
Section 1.99 "Intercompany Note" and "Intercompany Notes" means, individually,
each promissory note to be issued by the Reorganized Debtor to the Holder of an
Allowed Intercompany Claim in the principal amount of such Allowed Intercompany
Claim, and collectively, all such promissory notes, to be substantially in
the form of and having the terms set forth in Plan Exhibit 1.99, and otherwise
consistent with the provisions of Section 5.6 of the Debtor's Plan.
Section 1.100 "IRS" means the Internal Revenue Service of the Department of
Treasury of the United States of America.
Section 1.101 "ISES PPA" means that certain Master Power Purchase and Sale
Agreement by and between ENOI, as purchaser, and Entergy Power, Inc., as seller,
related to a portion of the power generated by Unit 2 of the Independence Steam
Electric Station, a coal-fired electric generating station owned in part by
Energy Power, Inc. Any Claim based upon the Debtor's defaults, if any, on the
ISES PPA that exist at the time the Debtor assumes the ISES PPA pursuant to
section 365 of the Bankruptcy Code shall be a Cure Amount Claim.
Section 1.102 "Katrina Insurance Proceeds" means the proceeds of any policy of
insurance that provided coverage for any losses suffered by the Debtor that were
incurred by or as a result of Hurricane Katrina and its aftermath, including
primary non-nuclear property insurance coverage that was placed through OIL and
certain excess insurance coverage that was placed through the Excess Carriers.
Section 1.103 "Katrina Insurance Protocol" means the protocol regarding the
allocation and distribution of the Katrina Insurance Proceeds, approved by the
Bankruptcy Court by Order dated May 25, 2006 (P-867); provided, however, that
the references in the Debtor's Plan do not indicate that the Katrina Insurance
Protocol will survive the Effective Date.
Section 1.104 "Lien" has the same meaning set forth in section 101(37) of the
Bankruptcy Code.
Section 1.105 "Litigation Claims" collectively means any Claim that has not been
settled, compromised or otherwise resolved before the Effective Date, and (a)
that arises from death, bodily injury, sickness, disease, medical monitoring or
other personal injuries (whether physical, emotional or otherwise), whether or
not such Claim relates, directly or indirectly, in whole or in part, to (i)
asbestos or asbestos containing products for which the Debtor allegedly has
liability, (ii) that arises out of allegations of property damage, products
liability or similar legal theories of recovery, or (iii) that arises under any
federal, state or local statute, rule, regulation or ordinance governing,
regulating or relating to health, safety, hazardous substances or the
environment, or (b) that is asserted in currently pending regulatory,
administrative or adjudicatory proceedings, or appeals or further regulatory,
administrative or adjudicatory proceedings resulting therefrom, commenced by or
on behalf of ratepayers, or that is asserted in pending or subsequently filed
lawsuits related to pending regulatory, administrative or adjudicatory
proceedings resulting therefrom,
that are commenced by or on behalf of ratepayers, including any such pending or
subsequently filed lawsuits that were stayed, deferred, or dismissed without
prejudice pending resolution of any such regulatory, administrative or
adjudicatory proceedings; provided, however, Litigation Claims do not include
(a) the Workers' Compensation Claims, (b) the Government Environmental Claim, or
(c) the Odom Claim.
Section 1.106 "LRA" means the Louisiana Recovery Authority.
Section 1.107 "LRA Resolution" means the resolution, dated October 12, 2006,
pursuant to which the LRA voted to recommend $200 million in CDBG Funds for ENOI.
Section 1.108 "Material Adverse Change" means the occurrence of an event that
causes significant asset or property damage or a significant reduction in the
Debtor's customer base or any event or circumstance that, in the reasonable
judgment of the Debtor, is likely to have a material adverse effect on the
Debtor's financial condition, business, performance, operations or properties of
the Debtor, including but not limited to the Debtor's ability to obtain
insurance coverage that is substantially similar to the coverage that existed as
of the Petition Date for a substantially similar premium.
Section 1.109 "Odom Claim" means the judgment rendered against the Debtor in
Odom v. Phillips et al., in the case that was pending before the Civil District
Court for the Parish of Orleans, and any subsequent judgment that may be
rendered therein, or as a result of any appeal or writ of review thereof.
Section 1.110 "OIL" means Oil Insurance Limited, a mutual insurance company of
which Entergy Corporation is a shareholder.
Section 1.111 "Operating Companies" collectively means the Debtor, Entergy
Arkansas, Entergy Gulf States, Entergy Louisiana, and Entergy Mississippi.
Section 1.112 "Order" means an order or judgment of the Bankruptcy Court as
entered on the Docket.
Section 1.113 "Ordinary Course Professionals Order" collectively means the Order
(P-433) that approved ENOI's Application for an Order Nunc Pro Tunc Authorizing
the Employment and Compensation of Certain Professionals Utilized in the
Ordinary Course of the Debtor's Business (P-261), together with any subsequent
Order approving a subsequent application Filed by ENOI for an Order authorizing
the employment and compensation of professionals utilized in the ordinary course
of the Debtor's business.
Section 1.114 "Other Priority Claim" means any Claim, other than an
Administrative Claim or a Priority Tax Claim, that is entitled to priority in
right of payment pursuant to section 507(a) of the Bankruptcy Code.
Section 1.115 "Other Retirement, Employment and Incentive Compensation Programs"
means the retirement (other than the Qualified Retirement Plan), employment,
welfare, incentive, severance, and other plans for or agreements with one or
more of ENOI's active and retired directors, officers and employees that existed
on and after the Petition Date, as more fully described in Plan Exhibit 1.115.
Section 1.116 "Other Secured Claim" means any Secured Claim other than the
Capital One Secured Claim, the Bond Claims, and the DIP Financing Claim.
Section 1.117 "PBGC" means the Pension Benefit Guaranty Corporation, a
wholly-owned United States government corporation and an agency of the United
States of America that administers the defined benefit pension plan termination
insurance programs under Title IV of the Employee Retirement Income Security Act
of 1974, as amended.
Section 1.118 "Petition Date" means September 23, 2005.
Section 1.119 "Plan" or the "Debtor's Plan" means this Chapter 11 Plan of
Reorganization, Filed by the Debtor, as the same may be amended, together with
the Plan Exhibits.
Section 1.120 "Plan Exhibits" mean the exhibits that are attached to the
Debtor's Plan, or will be Filed no later than ten (10) Business Days before the
commencement of the Confirmation Hearing.
Section 1.121 "Post-Petition Bond Liens" means the additional security interests
and Liens granted to the Bond Trustee, on behalf of the Bondholders, pursuant to
the DIP Financing Final Order, consisting solely of those security interests and
Liens that encumber property other than the Bond Collateral. For the avoidance
of doubt, the Post-Petition Bond Liens shall not include the security interests
or Liens of the Bond Trustee on the Bond Collateral (including, but not limited
to (irrespective of whether the Bond Trustee's security interest or Lien existed
immediately before the Petition Date and/or pursuant to the DIP Financing Final
Order), the Insurance Policies and Proceeds).
Section 1.122 "Preferred Interests" collectively means the 4.36% Preferred
Series, the 4.75% Preferred Series, and the 5.56% Preferred Series.
Section 1.123 "Priority Tax Claim" means a Claim arising under United States
federal, state or local Tax laws that is entitled to priority in payment
pursuant to section 507(a)(8) of the Bankruptcy Code.
Section 1.124 "Professional" means any professional employed in the Bankruptcy
Case pursuant to sections 327 or 1103 of the Bankruptcy Code or any professional
or other entity seeking compensation or reimbursement of expenses in connection
with the Bankruptcy Case pursuant to section 503(b) of the Bankruptcy Code.
Section 1.125 "Professional Fee Claims" mean the Claims of (a) any Professional
in the Bankruptcy Case pursuant to sections 330 or 1103 of the Bankruptcy Code,
or (b) any Professional or other entity seeking compensation or reimbursement of
expenses in connection with the Bankruptcy Case pursuant to sections 503(b)(2),
503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code; provided, however,
that Professional Fee Claims does not include the Bond Trustee's Claim, the Bond
Trustee's Professional Fee Claim, the FGIC Professional Fee Claim, or the Ad Hoc
Bondholders Committee Fees.
Section 1.126 "Proof of Claim" means a proof of claim that was Filed in this
Bankruptcy Case.
Section 1.127 "Qualified Retirement Plan" means the Entergy Corporation
Retirement Plan for Non-Bargaining Employees, a defined benefit plan that is
qualified under section 401(a) of the Internal Revenue Code of 1986, as amended,
that existed as of the Petition Date.
Section 1.128 "RB 30 PPA" means that certain Master Power Purchase and Sale
Agreement by and between ENOI, as purchaser, and Entergy Gulf States, as seller,
related to a portion of the power generated by River Bend. Any Claim based upon
the Debtor's defaults, if any, on the RB 30 PPA that exist at the time the
Debtor assumes the RB 30 PPA pursuant to section 365 of the Bankruptcy Code
shall be a Cure Amount Claim.
Section 1.129 "Released Parties" means any of (or collectively, all of) FGIC,
the Bond Trustee, the Creditors' Committee, Ad Hoc Bondholders Committee, the
Debtor's Affiliates, and the Debtor's and such other parties' respective former
and current officers, directors, employees, agents, members (in their capacity
as such), financial advisors, attorneys and other representatives.
Section 1.130 "Reorganized Debtor" means the Debtor on and after the Effective
Date.
Section 1.131 "Retiree Benefit" means payments to any Entity for the purpose of
providing or reimbursing payments for retired employees of the Debtor and of any
other Entities as to which the Debtor is obligated to provide retiree benefits
and the eligible spouses and eligible dependents of such retired employees, for
medical, surgical, or hospital care benefits, or in the event of death of a
retiree under any plan, fund or program (through the purchase of insurance or
otherwise) maintained or established by the Debtor before the Petition Date, as
such plan, fund or program was then in effect or as heretofore or hereafter
amended.
Section 1.132 "Schedules" collectively means the schedules of assets and
liabilities, the list of Holders of Interests and the statement of financial
affairs Filed by the Debtor under section 521 of the Bankruptcy Code and
Bankruptcy Rule 1007, and all amendments and modifications thereto through the
Confirmation Date.
Section 1.133 "Secured Claim" means an Allowed Claim that is secured by a Lien
on the property of the Estate, as provided in section 506(a) of the Bankruptcy
Code, which is valid, perfected and enforceable and not avoidable, to the extent
of the value of such Lien, as determined by a Final Order of the Bankruptcy
Court pursuant to section 506 of the Bankruptcy Code, or as otherwise agreed in
writing by the Debtor or Reorganized Debtor and the Holder of such Claim.
Section 1.134 "SEC" means the United States Securities and Exchange Commission.
Section 1.135 "Securities Act" means the Securities Act of 1933, 15 U.S.C.
77a-77aa, as now in effect or hereafter amended.
Section 1.136 "SERI" means System Energy Resources, Inc., an Arkansas
corporation, and an ENOI Affiliate.
Section 1.137 "Seventeenth Bond Series" means the Insured Quarterly First
Mortgage Bonds, 5.60% Seventeenth Series, due on September 1, 2024, in the
original principal amount of $35,000,000, issued pursuant to the Bond Indenture
and Mortgage on or about August 15, 2004.
Section 1.138 "Sixteenth Bond Series" means the Insured Quarterly First Mortgage
Bonds, 5.65% Sixteenth Series, due on September 1, 2029, in the original
principal amount of $40,000,000, issued pursuant to the Bond Indenture and
Mortgage on or about August 1, 2004.
Section 1.139 "Stipulation of Amount and Nature of Claim" means a stipulation or
other agreement between the Debtor or Reorganized Debtor and a Holder of a Claim
or Interest, or an agreed Order of the Bankruptcy Court, establishing the amount
and nature of a Claim.
Section 1.140 "Stipulation and Order" means that certain Stipulation by and
among the Debtor, the Bond Trustee and FGIC, Filed on December 8, 2006 (P-1469),
and approved by the Bankruptcy Court on December 19, 2006 (P-1493).
Section 1.141 "Storm Cost Recovery Riders" means those tariffs proposed in the
2006 Storm Restoration and Reserve Application whereby the Debtor seeks to
recover certain of its gas and electric costs related to Hurricanes Katrina and
Rita, as the same may be amended or modified from time to time by the Debtor.
Section 1.142 "Storm Reserve Riders" means those tariffs proposed in the 2006
Storm Restoration and Reserve Application whereby the Debtor seeks to recover
and reserve money dedicated to future storm restoration and rebuild costs for
its gas and electric systems, as the same may be amended or modified from time
to time by the Debtor.
Section 1.143 "Subordinated DIP Financing Claim" means the Claim for repayment
of the money advanced under the DIP Financing Facility to pay quarterly
dividends on the 4 _% Preferred Series, which repayment obligation is
subordinated according to an Order of the Bankruptcy Court (P-814).
Section 1.144 "Surety Bonds" collectively means (a) that certain surety bond
issued by FGIC dated August 17, 2004 related to financial guarantee insurance
policy number 04010507, and (b) that certain surety bond issued by FGIC dated
August 24, 2004 related to financial guarantee insurance policy number 04010544.
Section 1.145 "System Agreement" means that certain Agreement, effective January
1, 1983, as modified, approved by the FERC on June 13, 1985, pursuant to which
the Operating Companies share certain benefits and costs of joint operation of
the Energy System.
Section 1.146 "System Fuels" means System Fuels, Inc., a Louisiana corporation
that is owned by Entergy Arkansas, Entergy Louisiana Properties, LLC, Entergy
Mississippi and the Debtor.
Section 1.147 "Tax" means (a) any net income, alternative or add-on minimum,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, property, environmental or other tax, assessment or
charge of any kind whatsoever (together in each instance with any interest,
penalty, addition to tax or additional amount) imposed by any federal, state,
local or foreign taxing authority, or (b) any liability for payment of any
amounts of the foregoing types as a result of being a member of an affiliated,
consolidated, combined or unitary group, or being a party to any agreement or
arrangement whereby liability for payment of any such amounts is determined by
reference to the liability of any other entity.
Section 1.148 "Tax Claim" means any Claim of a governmental unit, whether
federal, state or local, for recovery of a tax of any kind whatsoever (including
any interest, penalty or addition thereto) incurred or arising before the
Effective Date, including but not limited to Claims of the kind specified in
sections 502(i) and 507(a)(8) of the Bankruptcy Code.
Section 1.149 "Unexpired Lease" means a lease to which the Debtor is a party
that is subject to assumption, assumption and assignment or rejection under
section 365 of the Bankruptcy Code.
Section 1.150 "Unimpaired" means, with respect to any Claim or Interest, that
such Claim or Interest is not impaired within the meaning of section 1124 of the
Bankruptcy Code.
Section 1.151 "U.S. Government" means the United States of America, but does not
include the IRS.
Section 1.152 "Unsecured Debt Provision" collectively means those provisions of
the Amended and Restated Articles of Incorporation of Entergy New Orleans, Inc.,
effective November 15, 1999, that require, under the circumstances set forth
therein, the Holders of the Preferred Interests to consent to the issuance or
assumption of unsecured notes, debentures or other securities representing
unsecured indebtedness, as provided in Article Fifth, paragraph 7(b), and
Article Fifth, II, paragraph (D)(2).
Section 1.153 "UPSA" means that certain Unit Power Sales Agreement, dated as of
June 10, 1982, as amended and approved by FERC, among the Debtor, Entergy
Arkansas, Entergy Louisiana, Entergy Mississippi, and SERI, relating to the sale
of capacity and energy from SERI's share of Grand Gulf. Any Claim based upon the
Debtor's defaults, if any, on the UPSA that exist at the time the Debtor assumes
the UPSA pursuant to section 365 of the Bankruptcy Code shall be a Cure Amount
Claim.
Section 1.154 "U.S. Trustee Fees" collectively means all fees and charges
assessed against the Estate under chapter 123 of title 28, United States Code,
28 U.S.C. 1911-1930.
Section 1.155 "Voting Record Date" means the date, as established in the
Confirmation Procedures Order as the date by Order of the Bankruptcy Court, for
determining the Holders of Claims and Interests, who are entitled to vote on the
Plan, in accordance with Bankruptcy Rule 3017(d).
Section 1.156 "WBL PPA" means that certain Master Power Purchase and Sale
Agreement by and between ENOI, as purchaser, and Entergy Arkansas, as seller,
related to power generated by six solid fuel units (coal and nuclear) owned by
Entergy Arkansas. Any Claim based upon the Debtor's defaults, if any, on the WBL
PPA that exist at the time the Debtor assumes the WBL PPA pursuant to section
365 of the Bankruptcy Code shall be a Cure Amount Claim.
Section 1.157 "Workers' Compensation Claims" collectively means all Claims
against the Debtor for the payment of workers' compensation benefits under
applicable law.
Section 1.158 Interpretation; Application of Definitions and Rules of
Construction. Wherever from the context it appears appropriate, each term stated
in either the singular or the plural shall include both the singular and the
plural and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter. The rules of construction contained
in section 102 of the Bankruptcy Code shall apply to the construction of the
Debtor's Plan. A term used herein that is not defined herein, but that is used
in the Bankruptcy Code, shall have the meaning ascribed to that term in the
Bankruptcy Code. The headings in the Debtor's Plan are for convenience of
reference only and shall not limit or otherwise affect the provisions of the
Debtor's Plan.
Any reference in the Debtor's Plan to a document or instrument being in a
particular form means that the document or instrument shall be in substantially
such form. Any reference in the Debtor's Plan to an existing document or
instrument means such document or instrument as it may have been amended,
modified or supplemented from time to time. Unless otherwise specified, all
Section, Article, schedule or exhibit references in the Debtor's Plan are to the
respective Section in, Article of, schedule to, or exhibit to, the Debtor's
Plan. The words "herein," "hereof," "hereto," "hereunder" and other words of
similar import refer to the Debtor's Plan as a whole and not to any particular
Section or clause contained in the Debtor's Plan. All Plan Exhibits
are incorporated into the Debtor's Plan, and shall be deemed to be included in
the Debtor's Plan, regardless of when such Plan Exhibits are Filed.
In computing any period of time prescribed or allowed by the Debtor's Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply as though the Debtor's Plan is
an Order of the Bankruptcy Court.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
Section 2.1 Division of Claims. For all purposes, including organization,
voting, Confirmation and distributions pursuant to the Debtor's Plan, except as
otherwise provided herein, all Claims (except for Administrative Claims and
Priority Tax Claims) and Interests are classified as provided in Article II of
the Debtor's Plan.
Section 2.2 Allowed Claims and Interests. A Claim or Interest is treated in a
particular Class only to the extent such Claim or Interest is Allowed.
Section 2.3 Classification of Claims and Interests. Claims and Interests are
classified as follows:
(a) Class 1 consists of Other Priority Claims.
(b) Class 2 consists of the Capital One Secured Claim.
(c) Class 3 consists of the Bond Claims.
(d) Class 4 consists of the Other Secured Claims.
(e) Class 5 consists of General Unsecured Claims.
(f) Class 6 consists of Intercompany Claims.
(g) Class 7 consists of the Litigation Claims.
(h) Class 8 consists of the Workers' Compensation Claims.
(i) Class 9 consists of the Government Environmental Claim.
(j) Class 10 consists of the Odom Claim.
(k) Class 11A consists of the 4.36% Preferred Series, Class 11B consists of the
4.75% Preferred Series, and Class 11C consists of the 5.56% Preferred Series.
(l) Class 12 consists of the Equity Interests.
ARTICLE III
IDENTIFICATION OF UNIMPAIRED AND
IMPAIRED CLASSES OF CLAIMS AND INTERESTS
Section 3.1 Unimpaired Classes of Claims and Interests. The Claims and Interests
in Class 1 (Other Priority Claims), Class 7 (Litigation Claims), Class 8
(Workers' Compensation Claims), Class 9 (Government Environmental Claim) are
Unimpaired under the Debtor's Plan, and are deemed to have accepted the Debtor's
Plan under the provisions of section 1126(f) of the Bankruptcy Code. The Debtor
will not solicit acceptances of the Debtor's Plan from Holders of Claims or
Interests in Class 1, Class 7, Class 8, or Class 9.
Section 3.2 Impaired Classes of Claims and Interests. The Claims and Interests
in Class 2 (Capital One Secured Claim), Class 3 (Bond Claims), Class 4 (Other
Secured Claims), Class 5 (General Unsecured Claims), Class 6 (Intercompany
Claims), Class 10 (Odom Claim), Class 11A (the 4.36% Preferred Series), Class
11B (the 4.75% Preferred Series), Class 11C (the 5.56% Preferred Series), and
Class 12 (Equity Interests) are Impaired under the Debtor's Plan, and the Debtor
will solicit acceptances of the Debtor's Plan from the Holders of Claims and
Interests in Class 2, Class 3, Class 4, Class 5, Class 6, Class 10, Class 11A,
Class 11B, Class 11C and Class 12. Pursuant to the Confirmation Procedures Order
and Section 5.3(d) of the Debtor's Plan, and consistent with the Bond Indenture
and Mortgage and the FGIC Insurance Agreements, FGIC is entitled to vote to
accept or reject the Debtor's Plan as if it were the Holder of the Insured
Bonds.
ARTICLE IV
TREATMENT OF CERTAIN UNCLASSIFIED
ADMINISTRATIVE CLAIMS, CERTAIN FEES AND TAXES
Section 4.1 Unclassified Claims.
(a) Payment of Administrative Claims
(i) Administrative Claims in General. Except as otherwise provided herein or
unless otherwise agreed in a written agreement by and between the Holder of an
Administrative Claim and the Debtor or Reorganized Debtor, each Holder of an
Allowed Administrative Claim will receive from the Reorganized Debtor, in full
satisfaction of its Administrative Claim, Cash equal to the Allowed amount of
such Administrative Claim either (A) within fifteen (15) days of the
Administrative Claims Bar Date, or (B) if the Administrative Claim is not
Allowed on or before the Effective Date, within thirty (30) days after the date
on which (i) an Order that Allows such Administrative Claim becomes a Final
Order, or (ii) a Stipulation of Amount and Nature of Claim is executed by the
Reorganized Debtor and the Holder of such Administrative Claim.
(ii) U.S. Trustee Fees. On or before the Effective Date, fees payable pursuant
to 28 U.S.C. 1930(a)(6) will be paid by the Debtor or the Disbursing Agent in
Cash. All fees payable pursuant to 28 U.S.C. 1930(a)(6) will be paid by the
Reorganized Debtor in accordance therewith until the closing of the Bankruptcy
Case pursuant to section 350(a) of the Bankruptcy Code.
(iii) Ordinary Course Liabilities. Unless otherwise agreed in written agreement
by and between the Holder of any such Claim and the Debtor, Allowed
Administrative Claims based on liabilities incurred by the Debtor in the
ordinary course of its business (including Administrative Trade Claims,
Administrative Claims of governmental units for Taxes, including Tax audit
Claims related to tax years commencing after the Petition Date, Allowed
Administrative Claims of the PBGC, if any, and Allowed Administrative Claims
arising from Executory Contracts and Unexpired Leases of the kind described in
Section 8.2 of the Debtor's Plan, other than Cure Amount Claims) will be paid by
the Reorganized Debtor pursuant to the terms and conditions of the particular
transaction giving rise to such Administrative Claims. Allowed Cure Amount
Claims will be paid in accordance with Section 8.2 of the Debtor's Plan, and
Section 5.3 of the Debtor's Plan (with respect to the FGIC Cure Amount Claim) in
each case without any further action by the Holders of such Administrative
Claims.
(iv) The DIP Financing Claim. Unless otherwise agreed in written agreement by
and between Entergy Corporation and the Debtor or Reorganized Debtor, within
fifteen (15) days of the Effective Date, the DIP Financing Claim will be paid in
full in Cash, without any further action by Entergy Corporation; provided,
however, that the Bankruptcy Court will resolve any dispute regarding the amount
of the DIP Financing Claim; and further provided, however, that the portion of
the DIP Financing Claim constituting the Subordinated DIP Financing Claim will
be paid as provided in Section 4.1(a)(v) of the Debtor's Plan.
(v) The Subordinated DIP Financing Claim. The Subordinated DIP Financing
Claim will be paid in full in Cash, without any further action by Entergy
Corporation, within ten (10) days from the date that all other Allowed Claims
are paid when they are due under the Debtor's Plan.
Section 4.2 Bond Trustee's Professional Fee Claim and the Bond Trustee's Claim.
(a) Bond Trustee's Professional Fee Claim. The Bond Trustee's Professional Fee
Claim shall be Allowed in accordance with the terms and procedures set forth in
the Fee Order. Within fifteen (15) days after the Effective Date, the Bond
Trustee will receive from the Reorganized Debtor Cash equal to the amount of
such Allowed Bond Trustee's Professional Fee Claim (to the extent not previously
paid by the Debtor) in full satisfaction of the Bond Trustee's Professional Fee
Claim, and neither the Bond Trustee nor the Bond Trustee's Professionals shall
have any additional Claim against the Debtor or the Reorganized Debtor for
services rendered by the Bond Trustee's Professionals in connection with the
Bankruptcy Case through the Effective Date. The Bond Trustee's Professional Fee
Claim in respect of its financial advisors, Houlihan, Lokey, Howard, Zukin ("Houlihan"),
shall be deemed Allowed on the Effective Date in the following amounts,
exclusive of amounts previously paid by the Debtor (it being agreed that the
following amounts are reasonable): $150,000 plus reasonable expenses for each
month from the Petition Date through November 30, 2006; $75,000 plus reasonable
expenses for the month of December 2006; $37,500 plus reasonable expenses per
month from January 2007 through the month that the Confirmation Date occurs; and
$25,000 plus reasonable expenses per month thereafter through the month that the
Effective Date occurs. The Debtor's payment of the Bond Trustee's Professional
Fee Claim (including the fees and expenses of Houlihan) shall remain subject to
a reasonableness review by the Bankruptcy Court pursuant to the Fee Order.
(b) Bond Trustee's Claim. The Bond Trustee's Claim shall be Allowed in
accordance with the terms and procedures set forth in the Fee Order. Within
fifteen (15) days after the Effective Date, the Bond Trustee will receive from
the Reorganized Debtor Cash equal to the amount of such Allowed Bond Trustee's
Claim (to the extent not previously paid by the Debtor) in full satisfaction of
the Bond Trustee's Claim, and the Bond Trustee shall have no additional Claim
against the Debtor or the Reorganized Debtor for services rendered or expenses
incurred on or before the Effective Date in connection with the Bankruptcy Case.
The Debtor's payment of the Bond Trustee's Claim shall remain subject to a
reasonableness review by the Bankruptcy Court pursuant to the Fee Order.
Section 4.3 FGIC Professional Fee Claim. The FGIC Professional Fee Claim shall
be Allowed in accordance with the terms and procedures set forth in the Fee
Order, regardless of whether the applicable FGIC Professional has been
previously determined to be a "Lender Professional" covered by the Fee Order.
Within fifteen (15) days after the Effective Date, FGIC will receive from the
Reorganized Debtor Cash equal to the amount of such Allowed FGIC Professional
Fee Claim (to the extent not previously paid) in full satisfaction of the FGIC
Professional Fee Claim, and neither FGIC nor the FGIC Professionals shall have
any additional Claim against the Debtor or Reorganized Debtor for services
rendered by the FGIC Professionals in connection with the Bankruptcy Case
through the Effective Date. The FGIC Professional Fee Claim in respect of its
financial advisors, The Blackstone Group, LP, shall be Allowed (regardless of
whether The Blackstone Group, LP is determined to be a "Lender Professional"
covered by the Fee Order) pursuant to the Debtor's Plan in the amount of
$750,000 plus reasonable expenses, it being agreed that
$750,000 is a reasonable fee; provided, however, that the Debtor's payment of
the FGIC Professional Fee Claim (including the fees and expenses of The
Blackstone Group, LP) shall remain subject to a reasonableness review by the
Bankruptcy Court either pursuant to the Fee Order, if applicable, or otherwise,
in the Bankruptcy Court's discretion.
Section 4.4 Bar Dates for Administrative Claims.
(a) General Bar Date Provisions. Except as otherwise provided in the Debtor's
Plan or the Administrative Claim Bar Date Order, requests for payment of
Administrative Claims must be Filed on or before the Administrative Claim Bar
Date and served pursuant to the procedures specified in the Administrative Claim
Bar Date Order. Holders of Administrative Claims that are required to File and
serve a request for payment of such Administrative Claims and that do not File
and serve such a request by such date will be forever barred from asserting such
Administrative Claims against the Debtor, the Reorganized Debtor, or their
respective property, and such Administrative Claims will be deemed waived and
released as of the Effective Date. Objections to such requests must be Filed and
served on the Reorganized Debtor and the requesting party by the later of (i)
one hundred and twenty (120) days after the Effective Date, and (ii) sixty (60)
days after the Filing of the applicable request for payment of Administrative
Claims.
(b) Bar Dates for Certain Administrative Claims.
(i) Professional Fee Claims. Professionals or other Entities asserting a
Professional Fee Claim for services rendered before the Effective Date must File
and serve on the Reorganized Debtor and such other Entities who are designated
by the Bankruptcy Rules, the Confirmation Order, or other Order of the
Bankruptcy Court, an application for final allowance of such Professional Fee
Claims within sixty (60) days after the Effective Date; provided, however, that
any Professional who may receive compensation or reimbursement of expenses
pursuant to the Ordinary Course Professionals Order may continue to receive such
compensation and reimbursement of expenses for services rendered before the
Effective Date, without further Bankruptcy Court review or approval, pursuant to
the Ordinary Course Professionals Order. Objections to any Professional Fee
Claims, including any objections by the U.S. Trustee, must be Filed and served
on the Reorganized Debtor and the requesting party by the later of (A) ninety
(90) days after the Effective Date, and (B) thirty (30) days after the Filing of
the applicable request for payment of the Professional Fee Claims. To the extent
necessary, the Confirmation Order will amend and supersede any previously
entered Order of the Bankruptcy Court, regarding the payment of Professional Fee
Claims.
(ii) Ordinary Course Liabilities. Holders of Administrative Claims based on
liabilities incurred by the Debtor in the ordinary course of its business,
including Administrative Trade Claims, Administrative Claims of governmental
units for Taxes (including tax audit Claims arising after the Petition Date) and
Administrative Claims arising from Executory Contracts and Unexpired Leases
other than Cure Amount Claims will not be required to File or serve any request
for payment of such Administrative Claims. Such Administrative Claims will be
satisfied pursuant to Section 4.1(a)(iii) of the Debtor's Plan.
(iii) The DIP Financing Claim. Entergy Corporation will not be required to File
or serve any request for payment of the DIP Financing Claim, and such Claim will
be treated as an Allowed Claim and satisfied pursuant to Section 4.1(a)(iv) and
(v) of the Debtor's Plan.
(iv) The Bond Trustee's Professional Fee Claim, the Bond Trustee's Claim, the
FGIC Professional Fee Claim and the FGIC Cure Amount Claim. Except as provided
in the Fee Order, the Bond Trustee and FGIC will not be required to File or
serve any request for payment of the Bond Trustee's Professional Fee Claim, the
Bond Trustee's Claim, or the FGIC Professional Fee Claim, and the foregoing
Claims will be treated as Allowed Claims and satisfied pursuant to Sections 4.2
and 4.3 of the Debtor's Plan. FGIC shall not be required to File or serve any
request for payment of the FGIC Cure Amount Claim which shall be paid pursuant
to Section 5.3 of the Debtor's Plan.
Section 4.5 Payment of Priority Tax Claims. Unless otherwise agreed in a written
agreement by and between the Holder of a Priority Tax Claim and the Debtor or
Reorganized Debtor, pursuant to section 1129(a)(9)(C) of the Bankruptcy Code,
each Holder of an Allowed Priority Tax Claim will receive, in full satisfaction
of its Priority Tax Claim, deferred Cash payments over a period not exceeding
six years from the date of assessment of such Priority Tax Claim. Except as to
Priority Tax Claims held by the IRS, payments will be made in equal quarterly
installments of principal (commencing on the later of the Effective Date and the
first quarterly distribution date following the date such Claim becomes an
Allowed Claim), plus simple interest accruing from the Effective Date at the
rate publicly quoted on the Confirmation Date by The Wall Street Journal as the
"base rate on corporate loans posted by at least 75% of the nation's 30 largest
banks" on the unpaid portion of each Allowed Priority Tax Claim (or upon such
other terms determined by the Bankruptcy Court to provide the Holders of such
Priority Tax Claims with deferred Cash payments having a value, as of the
Effective Date, equal to the allowed amount of such Priority Tax Claims). The
Priority Tax Claims of the IRS will be paid in monthly payments that will bear
interest at the rate provided by Internal Revenue Code sections 6621 and 6622,
with the first such payment being due sixty days after assessment of the tax
liabilities in question. The Reorganized Debtor will have the right to pay any
Allowed Priority Tax Claim, or any remaining balance of such Priority Tax Claim,
in full at any time on or after the Effective Date, without premium or penalty.
ARTICLE V
TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
Section 5.1 Class 1 Claims (Other Priority Claims). Class 1 consists of the
Other Priority Claims. Unless otherwise agreed in a written agreement by and
between the Holder of an Other Priority Claim and the Debtor or Reorganized
Debtor, in full satisfaction of the Holder's Other Priority Claim, each Holder
of an Other Priority Claim will receive Cash in an amount equal to the Allowed
amount of such Holder's Other Priority Claim. If the Holder's Other Priority
Claim is Allowed on or before the Effective Date, the Disbursing Agent will make
the distribution to such Holder within fifteen (15) days of the Effective Date.
If, however, the Holder's Other Priority Claim is not Allowed on or before the
Effective Date, the Disbursing Agent will make the distribution to such Holder
within fifteen (15) days after the earlier of the date on which (a) an Order
allowing the Other Priority Claim becomes a Final Order, or (b) such Holder and
the Debtor or Reorganized Debtor execute a Stipulation Regarding the Amount and
Nature of the Claim.
Section 5.2 Class 2 (Capital One Secured Claim). Class 2 consists of the Capital
One Secured Claim. Unless Capital One and the Debtor or Reorganized Debtor
otherwise agree, in writing, in full satisfaction of the Capital One Secured
Claim, Capital One will receive Cash in an amount equal to the Allowed amount of
the Capital One Secured Claim. If the Capital One Secured Claim is Allowed on or
before the Effective Date, the Disbursing Agent will make the distribution to
Capital One within fifteen (15) days of the Effective Date. If, however, the
Capital One
Secured Claim is not Allowed on or before the Effective Date, the Disbursing
Agent will make the distribution to Capital One within fifteen (15) days after
the earlier of the date on which (a) an Order that allows the Capital One
Secured Claim becomes a Final Order, or (b) Capital One and the Debtor or
Reorganized Debtor execute a Stipulation Regarding the Amount and Nature of the
Claim. In any event, payment in Cash of the Allowed Capital One Secured Claim is
conditioned on the simultaneous execution and delivery by the Holder of the Lien
in the Capital One Collateral of all necessary documentation to effect a full
release of such Lien. Unless and until payment is made, the Capital One
Collateral will continue to secure the Capital One Secured Claim until the
Capital One Secured Claim is satisfied.
Section 5.3 Class 3 (Bond Claims).
(a) Treatment. Class 3 consists of the Bond Claims. On the Effective Date:
(i) The Bond Collateral will continue to secure the Bond Claims as provided in
the Bond Indenture and Mortgage, and the Bond Collateral will not be released,
modified, cancelled or discharged under the Debtor's Plan or the Confirmation
Order;
(ii) Immediately upon full payment of the DIP Financing Facility, without the
necessity of any further notice or Order, the Post-Petition Bond Liens will be
dissolved and released, and until the DIP Financing Facility is fully paid the
Post-Petition Bond Liens shall remain in full force and effect;
(iii) The terms and conditions of the Bonds and the Bond Indenture and Mortgage
(including without limitation the provisions of Section 9.05 of the Bond
Indenture and Mortgage) and the FGIC Agreements will remain unaltered (and shall
be supplemented by Section 5.3(c) of the Debtor's Plan), the Bond Claims shall
become obligations of the Reorganized Debtor, and the Reorganized Debtor shall
have, undertake and perform all obligations to pay interest and principal, in
such amounts and as and when due, pursuant to the Debtor's Plan, the Bonds, the
Bond Indenture and Mortgage and the FGIC Agreements;
(iv) Notwithstanding anything to the contrary, any and all defaults and events
of defaults or events which, with the passage of time, the giving of notice or
both, would constitute defaults or events of defaults or would otherwise give
rise to the right to exercise remedies under the Bond Indenture and Mortgage or
the Bonds, in each case occurring prior to the Effective Date, shall be deemed
to be cured, without further action or notice (or, to the extent cure is not
applicable, to be irrevocably waived as of the Petition Date in accordance with
the terms thereof), by the
treatment provided under the Debtor's Plan; and
(v) The Bond Claim shall be deemed Allowed pursuant to the Debtor's Plan, and
the Disbursing Agent will distribute Cash to the Bond Trustee, for the benefit
of the Bondholders, in an amount equal to the amounts set forth in clauses (b),
(c) and (d) of the definition of Bond Claim in Section 1.25 of the Debtor's
Plan.
(b) The FGIC Agreements. With respect to the FGIC Insurance Agreements and the
Surety Bonds: (i) the legal, equitable, and contractual rights of FGIC and the
Bond Trustee under the FGIC Insurance Agreements and the Surety Bonds shall
remain unaltered and shall survive and be unaffected by entry of the
Confirmation Order; (ii) the legal, equitable, and contractual obligations of
ENOI under the FGIC Insurance Agreements shall remain unaltered and the FGIC
Insurance Agreements shall become obligations of the Reorganized Debtor; and
(iii) on the Effective Date, FGIC shall receive Cash in an amount equal to the
FGIC Cure Amount Claim (which Claim shall be deemed Allowed pursuant to the
Debtor's Plan) and, subject to the provisions of Section 4.3 of the Debtor's
Plan, the FGIC Professional Fee Claim. Notwithstanding anything contained in the
Debtor's Plan, FGIC's rights under the Bond Indenture and Mortgage, the FGIC
Insurance Agreements, and/or applicable law (including, without limitation, any
and all subrogation rights) are hereby expressly reserved; provided, however,
notwithstanding anything to the contrary in this Section 5.3(b) of the Debtor's
Plan, or any other provision of the Debtor's Plan, any and all defaults and
events of defaults or events which, with the passage of time, the giving of
notice or both, would constitute defaults or events of defaults or would
otherwise give rise to the right to exercise remedies under the FGIC Insurance
Agreements, in each case occurring prior to the Effective Date, shall be deemed
to be cured without further action or notice (or, to the extent cure is not
applicable, to be irrevocably waived in accordance with the terms thereof), by
the treatment provided under the Debtor's Plan.
(c) Insurance Policies and Proceeds. The Bond Trustee's Liens, security
interests and rights in the Debtor's rights in the Insurance Policies and
Proceeds (whether the Debtor, the Reorganized Debtor, Entergy Corporation and/or
Entergy Services are named as the insured parties) be and are hereby found and
declared (and the Confirmation Order shall so find and declare) to be valid and
fully perfected, and such Liens, security interests and rights be and they are
hereby acknowledged, reaffirmed, regranted and perfected as a continuing
security interest in the form of a collateral assignment or otherwise.
Notwithstanding anything in the Bond Indenture and Mortgage to the contrary, the
Debtor and the Reorganized Debtor hereby grant to the Bond Trustee a security
interest in the Debtor's and the Reorganized Debtor's rights with respect to
such Insurance Policies and Proceeds, including the right to receive proceeds of
the same from the named insured, whether such rights exist as general
intangibles, accounts receivable or some other type of collateral, and the
Debtor and the Reorganized Debtor will take all necessary action to evidence the
perfection of such security interest. The Debtor and the Reorganized Debtor
agree that, if it is not a named insured, it will cause the named insured to
agree to receive and to distribute the Debtor's and the Reorganized Debtor's
allocable share of the proceeds of such Insurance Policies and Proceeds in a
manner consistent with the allocation provisions of the Katrina Insurance
Protocol (whether in respect of insurance proceeds related to Hurricane Katrina
or any other insurance proceeds as to which the Debtor and the Reorganized
Debtor may now or in the future be entitled), and will provide notice to such
named insured of the Bond Trustee's security interest in the Debtor's and the
Reorganized Debtor's rights to receive such proceeds. The Confirmation Order
shall set forth the foregoing provisions.
(d) Insured Bonds Voting Rights. Pursuant to Section 5.03(a) of the FGIC
Insurance Agreements and Section 2.03 of the supplemental indentures for the
Sixteenth Bond Series and Seventeenth Bond Series, FGIC is entitled to vote to
accept or reject the Debtor's Plan as if it were the Holder of the Insured
Bonds.
(e) Ad Hoc Bondholders Committee Fees. On the Effective Date, the Disbursing
Agent will distribute Cash to the Ad Hoc Bondholders Committee, on behalf of the
members of the Ad Hoc Bondholders Committee, in an amount equal to the Ad Hoc
Bondholders Committee Fees. Notwithstanding the foregoing, the Debtor's payment
of the Ad Hoc Bondholders Committee Fees shall be subject to a reasonableness
review by the Bankruptcy Court either pursuant to the Fee Order, if applicable,
or otherwise, in the Bankruptcy Court's discretion.
Section 5.4 Class 4 (Other Secured Claims). Class 4 consists of the Other
Secured Claims. Except as otherwise agreed, in writing, by the Holder of an
Other Secured Claim and the Debtor or Reorganized Debtor, on the later of the
Effective Date and the date on which such Claim is Allowed, each Holder of an
Allowed Other Secured Claim will be entitled to receive treatment on account of
such Allowed Other Secured Claim in the manner set forth in either Option A or B
below, at the Debtor's election. The Debtor will be deemed to have elected
Option B, except with respect to any Allowed Other Secured Claim as to which the
Debtor elects Option A in a certification Filed within fifteen (15) days before
the commencement of the Confirmation Hearing.
Option A: Each Holder of an Allowed Claim in Class 4 with respect to which the
Debtor or Reorganized Debtor elects Option A will receive, in satisfaction of
its Allowed Class 4 Claim, Cash equal to the Allowed amount of such Claim.
Option B: Each Allowed Claim in Class 4 with respect to which the Debtor or
Reorganized Debtor elects Option B, or is deemed to have elected Option B, will
be Unimpaired within the meaning of section 1123 of the Bankruptcy Code.
Section 5.5 Class 5 (General Unsecured Claims). Class 5 consists of General
Unsecured Claims. Unless otherwise agreed in a written agreement by and between
the Holder of a General Unsecured Claim and the Debtor or Reorganized Debtor, in
full satisfaction of the General Unsecured Claim, each Holder of a General
Unsecured Claim will receive one of the following alternative treatments:
Option A: If Class 5 votes to accept the Debtor's Plan in accordance with
section 1126 of the Bankruptcy Code, each Holder of a General Unsecured Claim
will receive Cash equal to the aggregate amount of (a) the Allowed amount of
such Holder's General Unsecured Claim, and (b) interest on the principal amount
of the Allowed amount of such Holder's General Unsecured Claim at the following
per annum interest rates: (i) six percent (6%) from the Petition Date through
December 31, 2005; (ii) eight percent (8%) from January 1, 2006 through December
31, 2006; and (iii) the applicable Louisiana judicial interest rate plus one
percent (1%) from January 1, 2007, until paid. If the Holder's General Unsecured
Claim is Allowed on or before the Effective Date, the Disbursing Agent will make
the distribution to the Holder within fifteen (15) days of the Effective Date.
If, however, the Holder's General Unsecured Claim is not Allowed on or before
the Effective Date, the Disbursing Agent will make the distribution to such
Holder within fifteen (15) days after the earlier of the date on which (a) an
Order allowing the General Unsecured Claim becomes a Final Order, or (b) the
Holder and the Debtor or Reorganized Debtor execute a Stipulation Regarding the
Amount and Nature of the Claim.
Option B: If Class 5 votes to reject the Debtor's Plan in accordance with
section 1126 of the Bankruptcy Code, each Holder of a General Unsecured Claim
will receive an General Unsecured Claim Note in the principal amount of the
Allowed amount of such Holder's General Unsecured Claim. The General Unsecured
Claim Notes will mature on the third anniversary of the Effective Date, and will
bear interest at the following per annum rates: (i) from the Petition Date
through December 31, 2005, at six percent (6%); (ii) from January 1, 2006
through December 31, 2006, at eight percent (8%); and (iii) from January 1,
2007, until paid, at the applicable Louisiana judicial interest rate plus one
percent (1%); provided, however, that if the Holder has a General Unsecured
Claim in the Allowed amount of $1,000 or less, such Holder will receive Cash
equal to the principal amount of the Allowed amount of such Holder's General
Unsecured Claim, together with interest at the following per annum rates: (i)
from the Petition Date through December 31, 2005, at six percent (6%); (ii) from
January 1, 2006 through December 31, 2006, at eight percent (8%); and (iii) from
January 1, 2007, until paid, at the applicable Louisiana judicial interest rate
plus one percent (1%). If the Holder's General Unsecured Claim is Allowed on or
before the Effective Date, the Reorganized Debtor will issue the General
Unsecured Claim Note to the Holder, or make the distribution if the Holder's
General Unsecured Claim is in the Allowed amount of $1,000 or less, within
fifteen (15) days of the Effective Date. If, however, the Holder's General
Unsecured Claim is not Allowed on or before the Effective Date, the Reorganized
Debtor will issue the General Unsecured Claim Note to the Holder, or make the
Cash distribution if the Holder's General Unsecured Claim is in the Allowed
amount of $1,000 or less, within fifteen (15) days after the earlier of the date
on which (i) an Order allowing the General Unsecured Claim becomes a Final
Order, or (ii) the Holder and the Debtor or Reorganized Debtor execute a
Stipulation Regarding the Amount and Nature of the Claim.
Section 5.6 Class 6 (Intercompany Claims). Class 6 consists of Intercompany
Claims. In full satisfaction of the Intercompany Claims, each Holder of an
Intercompany Claim will receive an Intercompany Note in the principal amount of
the Allowed amount of such Holder's Intercompany Claim plus an amount equal to
interest on such Allowed Claim at the following per annum rates: (a) from the
Petition Date through December 31, 2005, at six percent (6%); (b) from January
1, 2006 through December 31, 2006, at eight percent (8%); and (c) from January
1, 2007, until the
Effective Date, at the applicable Louisiana judicial interest rate plus one
percent (1%). The Intercompany Notes will mature on the third anniversary of the
Effective Date, or, at the Debtor's option, the earlier sale, transfer or other
disposition of all or substantially all of the Reorganized Debtor's distribution
assets. The Intercompany Notes will bear interest, until paid, at the applicable
Louisiana judicial interest rate plus one percent (1%). If the Holder's
Intercompany Claim is Allowed on or before the Effective Date, the Reorganized
Debtor will issue the Intercompany Note to the Holder within fifteen (15) days
of the Effective Date. If, however, the Holder's Intercompany Claim is not
Allowed on or before the Effective Date, the Reorganized Debtor will issue the
Intercompany Note to the Holder within fifteen (15) days after the earlier of
the date on which (a) an Order allowing the Intercompany Claim becomes a Final
Order, or (b) the Holder and the Debtor or Reorganized Debtor execute a
Stipulation Regarding the Amount and Nature of the Claim; provided, however,
that any Stipulation Regarding the Amount and Nature of Claims with respect to
an Intercompany Claim shall require Bankruptcy Court approval, after notice and
hearing.
Section 5.7 Class 7 (Litigation Claims). Class 7 consists of the Litigation
Claims. Unless otherwise agreed in a written agreement by and between the Holder
of a Litigation Claim and the Debtor or Reorganized Debtor, each Litigation
Claim is Unimpaired under the Debtor's Plan, shall not be discharged, and the
legal, equitable and contractual rights to which such Litigation Claim entitles
the Holder of such Claim shall be unaltered by the Debtor's Plan.
Section 5.8 Class 8 (Workers' Compensation Claims). Class 8 consists of Workers'
Compensation Claims. The Disbursing Agent will pay all Workers' Compensation
Claims that are Allowed and determined to be valid under applicable state law
and the corresponding programs that the Debtor maintains, in accordance with the
terms and conditions of such state law and such programs. Nothing in the
Debtor's Plan shall be deemed to discharge, release, or relieve the Debtor or
Reorganized Debtor from any current or future liability with respect to any
Allowed Workers Compensation Claim, regardless of when the underlying injuries
occurred.
Section 5.9 Class 9 (Government Environmental Claim). Class 9 consists of the
Government Environmental Claim. On the Effective Date, the Government
Environmental Claim will be deemed an Allowed Claim in the amount of $250,000.
In full satisfaction of the Allowed Government Environmental Claim, within
fifteen (15) days of the Effective Date, the Disbursing Agent will make
distributions of $150,000 to the Louisiana Wildlife and Fisheries Foundation,
and $100,000 to the U.S. Fish & Wildlife Service.
Section 5.10 Class 10 (Odom Claim). Class 10 consists of the Odom Claim. The
Odom Claim is a Disputed Claim, and the Holder(s) of the Odom Claim are subject
to the injunction of Section 10.2 of the Debtor's Plan. Nevertheless, the
Holder(s) of the Odom Claim and the Debtor may continue to prosecute and/or to
defend the Odom Claim in the courts of the State of Louisiana, but the Holder(s)
of the Odom Claim are and shall be enjoined from taking any action against the
Debtor, the Reorganized Debtor, any insurer on any policy of insurance providing
insurance in favor of the Debtor or Reorganized Debtor, or the property of any
of them to collect or to further the collection of any portion of the Odom
Claim, other than such action as may be allowed pursuant to other provisions of
the Debtor's Plan. Upon entry of a final judgment that is not the subject
of any appeal or writ of review and that has not been stayed by order of a court
of competent jurisdiction, to the extent that such final
judgment remains in full force and effect (a) the Odom Claim will become an
Allowed Claim and will be entitled to the treatment afforded to General
Unsecured Claims in Class 5, and (b) the Holder(s) of the Odom Claim may take
any action to collect the Odom Claim allowed by non-bankruptcy law against any
insurer on any policy of insurance in favor of the Debtor or Reorganized Debtor
or any property of any such insurer.
Section 5.11 Class 11 (Preferred Interests). Class 11 consists of the Preferred
Interests, including Class 11A, Class 11B, and Class 11C.
(a) Class 11A (4.36% Preferred Series). The Holders of the 4.36% Preferred
Series will be entitled to one of the following treatments:
Option A: If Class 11A votes in favor of the Debtor's Plan, (i) the 4.36%
Preferred Series will remain outstanding, (ii) within fifteen (15) days of the
Effective Date, the Disbursing Agent will pay to the Holders of the 4.36%
Preferred Series any accumulated, unpaid dividends, and (iii) the Holders of the
4.36% Preferred Series will be entitled to the same rights and privileges that
existed on the Effective Date; provided, however, on and after the Effective
Date, the Unsecured Debt Provision will terminate and have no force or effect.
Option B: If, on the other hand, Class 11A does not vote in favor of the
Debtor's Plan, in full satisfaction of the 4.36% Preferred Series, the Debtor
will provide treatment to the Holders of the 4.36% Preferred which is fair and
equitable with respect to the 4.36% Preferred Series. Upon the Effective Date (i)
the 4.36% Preferred Series will be cancelled and rendered null and void, without
any corporate action or any action under any applicable agreement, law,
regulation, rule or order, and (ii) the obligations of the Debtor and
Reorganized Debtor under any and all agreements and instruments related to
the 4.36% Preferred Series, or executed in connection therewith, shall be
discharged.
(b) Class 11B (4.75% Preferred Series). The Holders of the 4.75% Preferred
Series will be entitled to one of the following treatments:
Option A: If Class 11B votes in favor of the Debtor's Plan, (i) the 4.75%
Preferred Series will remain outstanding, (ii) within fifteen (15) days of the
Effective Date, the Disbursing Agent will pay to the Holders of the 4.75%
Preferred Series any accumulated, unpaid dividends, and (iii) the Holders of the
4.75% Preferred Series will be entitled to the same rights and privileges that
existed on the Effective Date; provided, however, on and after the Effective
Date, the Unsecured Debt Provision will terminate and have no force or effect.
Option B: If, on the other hand, Class 11B does not vote in favor of the
Debtor's Plan, in full satisfaction of the 4.75% Preferred Series, the Debtor
will provide treatment to the Holders of the 4.75% Preferred which is fair and
equitable with respect to the 4.75% Preferred Series. Upon the Effective Date, (i)
the 4.75% Preferred Series will be cancelled and rendered null and void, without
any corporate action or any action under any applicable agreement, law,
regulation, rule or order, and (ii) the obligations of the Debtor and
Reorganized Debtor under any and all agreements and instruments related to the
4.75% Preferred Series, or executed in connection therewith, shall be
discharged.
(c) Class 11C (5.56% Preferred Series). The Holders of the 5.56% Preferred
Series will be entitled to one of the following treatments:
Option A: If Class 11C votes in favor of the Debtor's Plan, (i) the 5.56%
Preferred Series will remain outstanding, (ii) within fifteen (15) days of the
Effective Date, the Disbursing Agent will pay to the Holders of the 5.56%
Preferred Series any accumulated, unpaid dividends, and (iii) the Holders
of the 5.56% Preferred Series will be entitled to the same rights and privileges
that existed on the Effective Date; provided, however, on and after the
Effective Date, the Unsecured Debt Provision will terminate and have no force or
effect.
Option B: If, on the other hand, Class 11C does not vote in favor of the
Debtor's Plan, in full satisfaction of the 5.56% Preferred Series, the Debtor
will provide treatment to the Holders of the 5.56% Preferred which is fair and
equitable with respect to the 5.56% Preferred Series. Upon the Effective Date (i)
the 5.56% Preferred Series will be cancelled and rendered null and void, without
any corporate action or any action under any applicable agreement, law,
regulation, rule or order, and (ii) the obligations of the Debtor and
Reorganized Debtor under any and all agreements and instruments related to the
5.56% Preferred Series, or executed in connection therewith, shall be
discharged.
Section 5.12 Class 12 (Equity Interests). Class 12 consists of the Equity
Interests. The Equity Interests are Impaired. The Holder of the Equity Interests
shall retain such Equity Interests after the Effective Date, subject to the
provisions of Section 6.4 of the Debtor's Plan.
ARTICLE VI
MEANS FOR IMPLEMENTATION
OF THE DEBTOR'S PLAN
Section 6.1 Continued Corporate Existence and Vesting of Assets in the
Reorganized Debtor. On and after the Effective Date, the Debtor will continue to
exist as the Reorganized Debtor, with all the powers of such a legal entity
under applicable law and without prejudice to any right to alter or terminate
such existence (whether by merger, dissolution or otherwise) under applicable
law. Except as otherwise provided in the Debtor's Plan (and subject to Section
6.2 of the Debtor's Plan), on and after the Effective Date, all property of the
Debtor's Estate, and any property acquired by the Debtor or Reorganized Debtor
under the Debtor's Plan, will vest in the Reorganized Debtor, free and clear of
all Claims, Liens, charges, other encumbrances, and the Preferred Interests in
Class 11A, Class 11B or Class 11C. On and after the Effective Date, the
Reorganized Debtor may operate its business and may use, acquire and dispose of
property and compromise or settle any Claims without supervision or approval by
the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than those restrictions expressly imposed by the
Debtor's Plan or the Confirmation Order. Without limiting the foregoing, the
Reorganized Debtor will pay the charges that it incurs on or after the Effective
Date for Professionals' fees, disbursements, expenses or related support
services (including fees relating to the preparation of fee applications for
such Professional) without application to the Bankruptcy Court.
Section 6.2 Corporate Governance, Directors and Officers, Employment-Related
Agreements and Compensation Programs.
(a) The Reorganized Debtor's Amended and Restated Articles of Incorporation and
Bylaws. As of the Effective Date, the Reorganized Debtor's Amended and Restated
Articles of Incorporation and Bylaws will be substantially in the form of Plan
Exhibit 6.2(a). Among other things, the Amended and Restated Articles of
Incorporation and Bylaws (a) will no longer include the Unsecured Debt
Provision, (b) will prohibit the issuance of nonvoting equity securities to the
extent required by section 1123(a) of the Bankruptcy Code, (c) will provide for
the restriction of dividends contained in Section 6.4 of the Debtor's Plan, and
(d) will specify that the foregoing dividend restriction is not for the benefit
of, and does not affect the rights of, the Preferred Interests for any purpose,
including Article Fifth(J) of the Amended and Restated Articles of
Incorporation. After the Effective Date, the Reorganized Debtor may further
amend and restate its Amended and Restated Articles of Incorporation or Bylaws
as permitted by the General Corporation Law of the State of Louisiana, subject
to the terms and conditions of such constituent documents and in accordance with
Section 9(b) of Ordinance No. 6822 Commission Council Series of the City of New
Orleans, adopted April 18, 1922 and known as the Settlement Ordinance, as same
may be modified, repealed or superseded.
(b) Directors and Officers of the Reorganized Debtor. The initial members of the
boards of directors and initial officers of the Reorganized Debtor will consist
of the individuals identified on Plan Exhibit 6.2(b). Each such director and
officer will serve from and after the Effective Date until his or her successor
is duly elected and qualified or until his earlier death, resignation,
disqualification or removal in accordance with the terms of the Amended and
Restated Articles of Incorporation and Bylaws of the Reorganized Debtor and
applicable state law. Plan Exhibit 6.2(b) identifies the initial term for each
director in accordance with the provisions of the Amended and Restated Articles
of Incorporation and Bylaws of the Reorganized Debtor.
(c) The Qualified Retirement Plan and the Other Retirement, Employment and
Incentive Compensation Programs. As of the Effective Date, the Reorganized
Debtor will have authority to maintain, amend or revise the Qualified Retirement
Plan and the Other Retirement, Employment and Incentive Programs, subject to the
terms and conditions thereof.
(d) Corporate Action. The following (which will occur and be deemed effective as
of the date specified in the documents effectuating the same or, if no date is
so specified, the Effective Date) will be deemed authorized and approved in all
respects and for all purposes without any requirement of further action by the
Holders of Preferred Interests or Equity Interests, or the directors of the
Debtor or Reorganized Debtor or any other person or entity: (i) the adoption of
the Amended and Restated Articles of Incorporation and Bylaws for the
Reorganized Debtor; (ii) the initial selection of directors and officers for the
Reorganized Debtor; (iii) the distribution of Cash pursuant to the Debtor's
Plan; (iv) the declaration of accumulated unpaid dividends on the Preferred
Interests being paid within fifteen (15) days of the Effective Date pursuant to
Section 5.11(a) of the Debtor's Plan; and (v) the other matters provided for
under the Debtor's Plan involving the corporate structure of the Debtor or
Reorganized Debtor or corporate action to be taken by, or required of, the
Debtor or Reorganized Debtor.
Section 6.3 Entergy System Money Pool. From and after the Effective Date, ENOI
intends to be a participant in the Entergy System Money Pool. Such participation
is authorized through November 30, 2007 by the SEC Orders (HCAR No. 27918, dated
November 30, 2004), as filed with FERC under provisions of the Public Utility
Holding Company Act of 2005, and participation thereafter will require a final
order from FERC authorizing ENOI's issuance of short-term debt securities under
the terms of the Entergy System Money Pool. The Confirmation Order shall provide
that any and all money deposited, contributed to or loaned by the Reorganized
Debtor into the Entergy System Money Pool (net of amounts borrowed by the
Reorganized Debtor after the Effective Date and then outstanding but before
reduction for any attempted or actual setoff by any participant in the Entergy
System Money Pool or Entergy Services), and interest thereon, will be
immediately returned to the Reorganized Debtor upon written notice to Entergy
Services, as agent for the Money Pool participants under the terms of the
Entergy System Money Pool Agreement.
Section 6.4 Limitation on Declaring and Paying Common Dividends to Equity
Interests. ENOI agrees it will not pay a common dividend in 2007 and 2008. In
addition, for a period of three years after the Effective Date, the Reorganized
Debtor agrees that it will not declare or pay any dividends on its common stock
unless (a) the common equity ratio of its capital structure is at or above 40%,
and (b) after giving effect to any such dividend, the common equity ratio will
not fall below 40%. For purposes of determining the Reorganized Debtor's capital
structure, there shall specifically be excluded from debt (x) the principal
amount of the Intercompany Notes to be issued to Affiliates in accordance with
Section 5.6 of the Debtor's Plan and (y) the principal amount of any
securitization bonds issued in connection with the recovery of ENOI's storm
costs. Notwithstanding the foregoing, the Reorganized Debtor's agreement to
restrict dividend payments on common stock shall cease in the event and on the
date that (i) the Reorganized Debtor sells all or substantially all of its
distribution assets to the City of New Orleans or to a third party, or (ii) the
credit rating of the Reorganized Debtor is published as investment grade by
either Standard & Poor's or Moody's and the credit rating of the Reorganized
Debtor's senior secured debt is published as investment grade by Standard &
Poor's or Moody's; provided, however, that in the event that the Reorganized
Debtor achieves investment grade credit rating, then for a period of three years
after the Effective Date, no common dividend shall be paid if such payment would
cause the credit rating of the Reorganized Debtor to drop below investment grade
as stated in clause (ii) in the immediate preceding sentence. Nothing in Section
6.4 of the Debtor's Plan, or the Amended and Restated Articles of Incorporation
provided for in Section 6.2(a) of the Debtor's Plan, will be considered to be
for the benefit of, or affecting the rights of, the Preferred Interests.
Section 6.5 Preservation of Causes of Action by the Debtor and the Reorganized
Debtor. Except as provided in the Debtor's Plan or in any contract, instrument,
release or other agreement entered into or delivered in connection with the
Debtor's Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtor will retain and may enforce any claims, demands, rights and
Causes of Action that the Debtor or Estate may hold, to the extent not expressly
released under the Debtor's Plan. The Reorganized Debtor may pursue such
retained claims, demands, rights or Causes of Action, as appropriate, in
accordance with the best interests of the Reorganized Debtor. Further, the
Reorganized Debtor retains its rights to File and pursue any adversary
proceedings against any creditor or vendor related to debit balances or deposits
owed to the Debtor. Notwithstanding the foregoing, in the context of the
Debtor's Plan, the Debtor does not anticipate commencing any Bankruptcy Causes
of Action which would provide for recovery from creditors who received
preferential transfers under section 547 of the
Bankruptcy Code, and is not aware of any other Bankruptcy Causes of Action it
may have.
Section 6.6 Stipulation Regarding the Amount and Nature of the Claim. Except as
provided in Section 5.6 of the Debtor's Plan with respect to the Intercompany
Claims, from and after the Effective Date, the Reorganized Debtor will have
authority to enter into a Stipulation Regarding the Amount and Nature of the
Claim without the necessity of obtaining Bankruptcy Court approval.
Section 6.7 Effectuating Documents; Further Transactions; Exemption from Certain
Transfer Taxes. The Chairman of the Board, Chief Executive Officer, President,
any Executive Vice President, Chief Financial Officer, Chief Operating Officer,
any Senior Vice President or any Vice President of each Debtor or Reorganized
Debtor will be authorized to execute, deliver, file or record such contracts,
instruments, releases and other agreements and documents and take such actions
as may be necessary, appropriate or desirable to effectuate and implement the
provisions of the Debtor's Plan. The Secretary or any Assistant Secretary of the
Debtor or Reorganized Debtor will be authorized to certify or attest to any of
the foregoing actions. Pursuant to section 1146(c) of the Bankruptcy Code, the
following will not be subject to a stamp tax, real estate transfer tax, sales or
use tax or similar Tax: (a) the creation of any mortgage, deed of trust, lien or
other security interest; (b) the making or assignment of any lease or sublease;
(c) any Restructuring Transaction; or (d) the making or delivery of any deed,
bill of sale or other instrument of transfer or assignment or any plan of
merger, consolidation, liquidation or dissolution under, in furtherance of or in
connection with the Debtor's Plan.
ARTICLE VII
PROVISIONS GOVERNING DISTRIBUTIONS
Section 7.1 Distribution for Allowed Claims as of the Effective Date. Except as
otherwise provided in Article VII of the Debtor's Plan, distributions to be made
on the Effective Date to Holders of Claims that are Allowed on or before the
Effective Date will be deemed made on the Effective Date if made on the
Effective Date or as promptly thereafter as is practicable, but in any event
within fifteen (15) days after the Effective Date unless (a) such Claim is a
Cure Amount Claim associated with an Executory Contract or Unexpired Lease to be
assumed pursuant to the Debtor's Plan about which there is dispute, in which
case the paying on account of such Claim will be made in accordance with Section
8.2 of the Debtor's Plan, or (b) such distribution is returned to the Disbursing
Agent as undeliverable in accordance with Section 7.3 of the Debtor's Plan.
Section 7.2 Delivery of Distributions.
(a) Generally. Except as provided in Section 7.2(b) of the Debtor's Plan with
respect to the Bond Claims, the Disbursing Agent will make distributions to the
Holders of Allowed Claims. With respect to the Holders of Bond Claims in Class
3, the Disbursing Agent will make distributions to the Bond Trustee.
(b) Special Provisions Regarding Distributions to the Holders of Bond Claims.
The Disbursing Agent will make any distribution to Holders of an Allowed Bond
Claims to the Bond Trustee for subsequent distribution to the Holders of the
Bond Claims as of the Distribution Record Date in accordance with the Bond
Indenture and Mortgage; provided, however, that distributions being made
pursuant to Section 5.3(b)(iii) of the Debtor's Plan in respect of the FGIC Cure
Amount Claim shall be paid directly to FGIC.
Section 7.3 Undeliverable Distributions.
(a) No Further Attempts at Delivery. If any distribution to a Holder of an
Allowed Claim other than a Bond Claims or an Allowed Preferred Interest is
returned to the Disbursing Agent as undeliverable, then unless and until the
Disbursing Agent is notified in writing of the Holder's then-current address: (i)
such undeliverable distributions will remain in the possession of the Disbursing
Agent, and no further attempt will be made to deliver such distribution; and
(ii) no attempt will be made to deliver subsequent distributions to such Holder.
(b) Forfeiture. Any Holder of an Allowed Claim (other than a Bond Claim) or
Allowed Preferred Interest that does not assert a claim for an undeliverable
distribution by delivering to the Disbursing Agent a written notice setting
forth such Holder's then-current address within one hundred and eighty (180)
days after the later of (i) the Effective Date, and (ii) the last date on which
a distribution was deliverable to the Holder, will have its claim for
undeliverable distributions discharged and will be forever barred from asserting
such claim or any claim for subsequent distributions against the Debtor,
Reorganized Debtor, the Disbursing Agent, or their respective properties.
(c) No Requirement to Attempt to Locate Holders. Nothing contained in the
Debtor's Plan will require the Disbursing Agent, the Debtor or Reorganized
Debtor to attempt to locate any Holder of an Allowed Claim or Allowed Preferred
Interest.
Section 7.4 Exemption from Securities Laws. The issuance of the Intercompany
Notes and any other securities that may be deemed issued pursuant to the
Debtor's Plan shall be exempt from any securities laws registration requirements
to the fullest extent permitted by section 1145 of the Bankruptcy Code.
Section 7.5 Means of Cash Payments. Except as otherwise provided in the Debtor's
Plan, Cash payments made pursuant to the Debtor's Plan will be in United States
currency by checks drawn on the account of the Disbursing Agent, or by wire
transfer from a domestic bank; provided, however, that Cash payments to foreign
Holders of Allowed Claims and Allowed Preferred Interests may be made. If a
check included in a distribution to a Holder of an Allowed Claim or Allowed
Preferred Interest is not cashed within one hundred and eighty (180) days of the
issuance thereof, the Disbursing Agent will void such check and such
distribution will be treated as undeliverable as provided in Section 7.3(b) and
(c) of the Debtor's Plan.
Section 7.6 Setoffs. Except with respect to (a) Claims of the Debtor released
pursuant to the Debtor's Plan or any contract, instrument, release, or other
agreement or document entered into or delivered in connection with the Debtor's
Plan, (b) the DIP Financing Claim, and (c) Claims Allowed pursuant to the
Debtor's Plan (including the Bond Claims, the Bond Trustee's Professional Fee
Claim, the Bond Trustee's Claim, the FGIC Professional Fee Claim, the Ad Hoc
Bondholders Committee Fees, and the FGIC Cure Amount Claim), the Debtor or
Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code or
applicable nonbankruptcy law, set off against any Allowed Claim and the
distributions to be made pursuant to the Debtor's Plan on account of such Claim
(before any distribution is made on account of such Claim) the Claims, rights
and Causes of Action of any nature that the Debtor may hold against the Holder
of such Allowed Claim; provided, however, that neither the failure to effect a
setoff nor the allowance of any Claim hereunder will constitute a waiver or
release by the Debtor or Reorganized Debtor of any claims, rights and Causes of
Action that the Debtor may possess against such a Holder, which are preserved
under the Debtor's Plan.
Section 7.7 Distribution Record Date.
(a) Allowed Claims (other than the Bond Claims) and Allowed Preferred Interests.
The Disbursing Agent will have no obligation to recognize the transfer of, or
the sale of any participation in, any Allowed Claim or Allowed Preferred
Interest that occurs after the Distribution Record Date and will be entitled for
all purposes herein to recognize and make distributions only to those Holders of
Allowed Claims and Allowed Preferred Interests that are Holders of such Claims
and Preferred Interests, or participants therein, as of the Distribution Record
Date.
(b) Allowed Bond Claims. For the purpose of making any distributions under the
Debtor's Plan, neither the Disbursing Agent nor the Bond Trustee will have any
obligation to recognize the transfer or sale of any Bond Claims that occurs
after the Distribution Record Date.
(c) Pending Transfers. Except as otherwise provided in a Final Order of the
Bankruptcy Code, the transferees of Claims that are transferred pursuant to
Bankruptcy Rule 3001 before the Distribution Record Date will be treated as
Holders of such Claims for all purposes, notwithstanding that any period
provided by Bankruptcy Rule 3001 for objection to such a transfer has not
expired before the Distribution Record Date.
ARTICLE VIII
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
Section 8.1 Executory Contracts or Unexpired Leases to Be Rejected or Assumed.
(a) Generally. Except as otherwise provided in the Debtor's Plan or in any
contract, instrument, release or other agreement or document entered into in
connection with the Debtor's Plan, each Executory Contract or Unexpired Lease
that is listed on Plan Exhibit 8.1 will be deemed rejected pursuant to section
365 of the Bankruptcy Code. The Confirmation Order will constitute an Order of
the Bankruptcy Court approving each such rejection, pursuant to section 365 of
the Bankruptcy Code, as of the Effective Date; provided, however, that, with the
exception of the FGIC Insurance Agreements, the ISES PPA, the RB 30 PPA, the WBL
PPA, the UPSA, and that certain Master Leasing Agreement by and between BLC
Corporation and ENOI, dated as of December 1, 1983, as amended and supplemented
(each of which will be assumed on the Effective Date), at any time before March
1, 2007, the Debtor reserves the right to amend Plan Exhibit 8.1 to (i) delete
any Executory Contract or Unexpired Lease listed therein, thus providing for its
assumption pursuant to Article VIII of this Plan, or (ii) add any Executory
Contract or Unexpired Lease thereto, thus providing for its rejection pursuant
to this Section 8.1 of the Debtor's Plan. The Debtor will provide notice of any
amendments to Plan Exhibit 8.1 to the Creditors' Committee and the parties to
the Executory Contracts or Unexpired Leases affected thereby. Such notice be
sent by overnight delivery or telecopy, and will include a Ballot and a form for
Filing a Proof of Claim. Any Claims arising from cure amounts required to be
paid in connection with the assumption of Executory Contracts with Affiliates or
Unexpired Leases with Affiliates which are not Cure Amount Claims will be
treated as Intercompany Claims in Section in 5.6 of the Debtor's Plan.
(b) Approval of Assumptions. The Confirmation Order will constitute an Order of
the Bankruptcy Court approving the assumption of each Executory Contract and
Unexpired Lease that is not rejected pursuant to Section 8.1 of the Debtor's
Plan, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date.
An Order of the Bankruptcy Court entered on or before the Confirmation Date will
specify the procedures for providing notice to each party whose Executory
Contract or Unexpired Lease is being assumed pursuant to the Debtor's Plan of: (i)
the contract or lease being assumed; (ii) the Cure Amount Claim, if any, that
the Debtor believes it would be obligated to pay in connection with such
assumption; and (iii) the procedures for such party to object to the assumption
of the applicable contract or lease or the amount of the proposed Cure Amount
Claim.
Section 8.2 Payments Related to the Assumption of Executory Contracts and
Unexpired Leases. To the extent that such Claims constitute monetary defaults,
the Cure Amount Claims associated with each Executory Contract or Unexpired
Lease to be assumed pursuant to the Debtor's Plan will be satisfied, pursuant to
section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor: (a) by
payment of the Cure Amount Claim in Cash on the Effective Date; or (b) on such
other terms as are agreed to by the parties to such Executory Contract or
Unexpired Lease. If
there is a dispute regarding the amount of any Cure Amount Claim, or any other
matter pertaining to assumption of such contract or lease, the payment of any
Cure Amount Claim required by section 365(b)(1) of the Bankruptcy Code will be
made following the entry of a Final Order resolving the dispute and approving
the assumption.
Section 8.3 Bar Date for Rejection Damages. Notwithstanding anything in the Bar
Date Order to the contrary, if the rejection of an Executory Contract or
Unexpired Lease pursuant to Article VIII of this Plan gives rise to a Claim by
the other party or parties to such contract or lease, such Claim will be forever
barred and will not be enforceable against the Debtor, the Reorganized Debtor,
the successor of any of them, or the property of any of them, unless a request
for payment of Administrative Claim is Filed and served on the Reorganized
Debtor pursuant to the procedures specified in the Confirmation Procedures
Order, the notice of the entry of the Confirmation Order, or another Order of
the Bankruptcy Court entered on the Docket within thirty (30) days after the
Effective Date.
Section 8.4 Obligations to Indemnify Directors, Officers and Employees. The
obligations of the Debtor or Reorganized Debtor to indemnify any person who is
serving or has served as one of its directors, officers or employees by reason
of such person's prior or future service in such a capacity or as a director,
officer or employee of another corporation, partnership or other legal entity,
to the extent provided in the applicable certificates of incorporation or
bylaws, by statutory law or by written agreement, policies or procedures of or
with the Debtor, will be deemed and treated as executory contracts that are
assumed by the Debtor or Reorganized Debtor pursuant to the Debtor's Plan and
section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such
indemnification obligations will survive and be unaffected by entry of the
Confirmation Order, irrespective of whether such indemnification is owed for an
act or event occurring before, on or after the Petition Date.
Section 8.5 Contracts and Leases Entered Into After the Petition Date. Contracts
and leases entered into after the Petition Date by the Debtor, including any
Executory Contracts or Unexpired Leases assumed by the Debtor, will be performed
by the Debtor or Reorganized Debtor liable thereunder in the ordinary course of
its business. Accordingly, such contracts and leases (including any assumed
Executory Contracts and Unexpired Leases) will survive and remain unaffected by
entry of the Confirmation Order.
Section 8.6 Insurance Policies and Agreements.
(a) Assumed Insurance Policies and Agreements. To the extent that the insurance
policies issued to, or insurance agreements entered into by, the Debtor before
the Petition Date constitute executory contracts under section 365 of the
Bankruptcy Code, then, notwithstanding anything contained in Article VIII to the
contrary, the Debtor's Plan will constitute a motion to assume such insurance
policies and agreements, and, subject to the occurrence of the Effective Date,
the entry of the Confirmation Order will constitute approval of such assumption
pursuant to section 365(a) of the Bankruptcy Code and a finding by the
Bankruptcy Court that each such assumption is in the best interest of the
Debtor, its estate, and all parties in interest in the Bankruptcy Case. Except
as otherwise provided in Section 5.3(b) of the Debtor's Plan with respect to the
FGIC Cure Amount Claim, unless otherwise determined by the Bankruptcy Court
pursuant to a Final Order or agreed to by the parties thereto before the
Effective Date, no payments are required to cure any defaults of the Debtor
existing as of the Confirmation Date with respect to each such insurance policy
or agreement.
(b) Reservation of Rights. Except for the releases set forth in Section 10.3(b)
of the Debtor's Plan, nothing contained in the Debtor's Plan will constitute a
waiver of any claim, right or Cause of Action that the Debtor or the Reorganized
Debtor may hold against an insurer under
any policy of insurance or insurance agreement.
Section 8.7 Assumption of the Bonds, the Bond Indenture and Mortgage, and the
FGIC Insurance Agreements. To the extent that the Bonds, the Bond Indenture and
Mortgage, and the FGIC Insurance Agreements are executory contracts within the
meaning of section 365 of the Bankruptcy Code, then, notwithstanding anything
contained in Article VIII of the Debtor's Plan to the contrary, the Debtor's
Plan will constitute a motion to assume the foregoing (as applicable). Subject
to the occurrence of the Effective Date, the entry of the Confirmation Order on
the Docket will (a) constitute approval of such assumption pursuant to section
365(a) of the Bankruptcy Code, (b) a finding by the Bankruptcy Court that each
such assumption is in the best interest of the Debtor, its estate, and all
parties in interest in the Bankruptcy Case, and (c) a determination by the
Bankruptcy Court that each of the Bonds and the Bond Indenture and Mortgage and
the FGIC Insurance Agreements are deemed assumed by the Debtor as of the
Effective Date; provided, however, (a) that the payment of the FGIC Cure Amount
Claim and the Allowed FGIC Professional Fee Claim shall constitute the cure of
any default under the FGIC Insurance Agreements, such that no additional Cure
Amount Claim shall exist with respect to the assumption of the FGIC Insurance
Agreements, and (b) that the treatment provided under the Debtor's Plan in
respect of the Bond Claims, Bond Trustee's Professional Fee Claims and the Bond
Trustee's Claim shall constitute the cure of any default under the Bonds and the
Bond Indenture and Mortgage, such that no additional Cure Amount Claim shall
exist with respect to the assumption of the Bonds and the Bond Indenture and
Mortgage.
Section 8.8 Compensation and Benefit Programs. Except as otherwise provided in a
motion Filed before the Effective Date, all employment plans, practices,
programs and policies maintained by the Debtor as of the Effective Date shall
remain in full force and effect following the Effective Date, subject to any and
all rights of the Debtor under applicable non-bankruptcy law to amend or
terminate such plans, practices, programs and policies.
Section 8.9 Retiree Benefits. Payment of any Retiree Benefits (as such benefits
existed on the Petition Date) shall be continued solely to the extent, and for
the duration of the period, that the Debtor is contractually or legally
obligated to provide such benefits, subject to any and all rights of the
Debtor under applicable law (including, without limitation, the Debtor's right
to amend or terminate such Retiree Benefits before or after the Effective Date).
ARTICLE IX
CONDITIONS TO DEBTOR'S PLAN BECOMING EFFECTIVE AND IMPLEMENTATION
OF THE DEBTOR'S PLAN
Section 9.1 Conditions to Debtor's Plan Becoming Effective. The Debtor's Plan
shall not be consummated, and the Effective Date shall not occur, until each of
the following conditions has been satisfied or duly waived pursuant to Section
9.2 of the Debtor's Plan:
(a) The Confirmation Order shall have been entered by the Bankruptcy Court in a
form reasonably satisfactory to the Debtor, FGIC and the Bond Trustee, and no
injunction shall be in existence with respect to the Confirmation Order.
(b) The Debtor shall have received in Cash at least $200 million in CDBG Funds.
(c) The Debtor shall have received in Cash at least $50 million in Katrina
Insurance Proceeds.
(d) The Stipulation and Order and the Fee Order shall remain in full force and
effect and the Debtor shall have fully complied with all of its obligations
thereunder.
(e) No Material Adverse Change shall have occurred from and after the
Confirmation Date.
Section 9.2 Waiver of Conditions to the Effective Date. One or more of the
foregoing conditions to the Effective Date may be waived, in whole or in part,
by the Debtor at any time and without any Order of the Bankruptcy Court;
provided, however, that FGIC and the Bond Trustee must consent to the waiver of
the conditions set forth in Section 9.1(a) or Section 9.1(d) of the Debtor's
Plan.
Section 9.3 Filing Notice of Occurrence of Effective Date. The Debtor shall File
a notice of occurrence of the Effective Date within one (1) Business Day of the
Effective Date, and such Notice must (a) state that all conditions to the
Debtor's Plan becoming effective have been satisfied, (b) contain a written
acknowledgement by FGIC and the Bond Trustee that the conditions set forth in
Section 9.1(a) and Section 9.1(d) of the Debtor's Plan have been satisfied or
waived in accordance with the Debtor's Plan, and (c) state the date of the
Effective Date.
Section 9.4 Failure of Conditions. In the event that, on or before June 30,
2007, one or more of the conditions specified in Section 9.1 of the Debtor's
Plan does not occur, or has not been waived as provided in Section 9.2 of the
Debtor's Plan, the Confirmation Order shall be vacated, no distributions under
the Debtor's Plan shall be made, and the Debtor and all Holders of Claims and
Interests shall be restored to the status quo ante as of the day immediately
preceding the Confirmation Date as though the Confirmation Date never occurred,
and FGIC and the Bondholders shall have the right to withdraw (without any
further Bankruptcy Court approval) any ballots cast with respect to the Debtor's
Plan; provided, however, that the Debtor reserves the right to seek from the
Bankruptcy Court, for reasonable cause, after notice and hearing, an extension
of the June 30, 2007 deadline for the Effective Date to occur, subject to the
following: (a) no extension of the Effective Date past December 31, 2007 shall
occur unless and until the Debtor pays, after first obtaining Bankruptcy Court
authority to pay (after notice and hearing), (i) the amounts set forth in clause
(b) of the definition of Bond Claim in Section 1.25 of the Debtor's Plan to the
Bond Trustee, and (ii) the FGIC Cure Amount Claim to FGIC; (b) no extension of
the Effective Date past June 30, 2007 shall occur unless and until the Debtor
pays the amounts set forth in clause (c) of the definition of Bond Claim in
Section 1.25 of the Debtor's Plan to the Bond Trustee and continues to pay such
amounts through the Effective Date; and (c) no extension of the Effective Date
past June 30, 2008 shall occur without the prior
written consent of FGIC and the Bond Trustee in their sole discretion.
ARTICLE X
DISCHARGE AND INJUNCTION
Section 10.1 Discharge of Claims.
(a) Except as otherwise expressly provided in the Debtor's Plan or the
Confirmation Order, the rights afforded under the Debtor's Plan and the
treatment of Claims under the Debtor's Plan will be in exchange for and in
complete satisfaction, discharge and release of all Claims arising on or before
the Effective Date. Except as provided in the Debtor's Plan or the Confirmation
Order, as of the Effective Date, the Debtor's Plan shall discharge the Debtor
from all Claims or other debts that arose on or before the Effective Date, and
all debts of the kind specified in section 502(g), 502(h), or 502(i) of the
Bankruptcy Code, whether or not (i) a Proof of Claim based on such debt is Filed
or deemed Filed pursuant to section 501 of the Bankruptcy Code, (ii) a Claim
based on such debt is Allowed pursuant to section 502 of the Bankruptcy Code, or
(iii) the
Holder of such Claim voted to accept the Debtor's Plan.
(b) In accordance with the foregoing, except as provided in the Debtor's Plan or
the Confirmation Order, the Confirmation Order will be a judicial determination,
as of the Effective Date, of a discharge of all Claims and other debts and
liabilities against the Debtor, pursuant to sections 524 and 1141 of the
Bankruptcy Code, and such discharge will void any judgment obtained against the
Debtor at any time to the extent that such judgment relates to a discharged
Claim.
(c) Solely with respect to the United States (which term shall include for
purposes of the Debtor's Plan, all agencies of the United States),
notwithstanding any other provision of the Debtor's Plan to the contrary,
nothing in the Debtor's Plan or the Confirmation Order shall operate to
expand the Debtor's discharge beyond those established by the Bankruptcy Code
unless otherwise agreed to a written agreement, by and between the United States
and the Debtor or Reorganized Debtor.
Section 10.2 Injunction. Except as otherwise expressly provided in the Debtor's
Plan or the Confirmation Order, as of the Effective Date, any Entity that has
held, currently holds or may hold a Claim or other debt, liability, or Preferred
Interest that is discharged, released, waived, settled or deemed satisfied in
accordance with the Debtor's Plan will be permanently enjoined from taking any
of the following actions on account of any such Claims, debts, liabilities, or
Preferred Interests: (a) commencing or continuing in any manner any action or
Cause of Action or other proceeding against the Debtor, the Reorganized Debtor,
or the property of either of them, other than to enforce any right that does not
comply with, or is inconsistent with, the provisions of the Debtor's Plan; (b)
enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order against the Debtor, the Reorganized Debtor, or the
property of either of them, other than as permitted pursuant to (a) above; (c)
creating, perfecting or enforcing any Lien or encumbrance of any kind against
the Debtor, the Reorganized Debtor, or the property of either of them, other
than as permitted pursuant to (a) above; (d) asserting a setoff, right of
subrogation or recoupment of any kind against any debt, liability or obligation
due to the Debtor or Reorganized Debtor; and (e) commencing or continuing any
action or Cause of Action, in any manner, in any place that does not comply with
or is inconsistent with the Debtor's Plan; provided, however, (a) that such
injunction shall not preclude the United States of America or any of its police
or regulatory agencies from enforcing their police or regulatory powers, (b)
that except in connection with a properly Filed Proof of Claim for an Allowed
Claim, the foregoing proviso does not permit the United States of America or any
of its police or regulatory agencies to obtain any monetary recovery from the
Debtor or its property or interests in property with respect to any such Claim
or other debt or liability that is discharged or Preferred Interest or Equity
Interest, including, without limitation, any monetary claim or penalty in
furtherance of a police or regulatory power, (c) in accordance with Section 11.2
of the Debtor's Plan, such injunction shall not preclude the City Council or the
City of New Orleans from enforcing their police and regulatory powers, including
with respect to regulatory actions based upon unresolved regulatory matters that
arose before the Petition Date and that could result in orders to refund or
credit ratepayers, or (d) except in connection with a properly Filed Proof of
Claim for an Allowed Claim by the City Council or the City of New Orleans for
their own account, the foregoing proviso (c) does not permit the City Council or
the City of New Orleans or any of its police or regulatory agencies to obtain
any monetary recovery from the Debtor or its property or interests in property
with respect to any Claim or other debt or liability that is discharged,
including, without limitation, any monetary claim or penalty in furtherance of a
police or regulatory power.
Section 10.3 Releases.
(a) RELEASES BY THE BONDHOLDERS. AS OF THE EFFECTIVE DATE, IN CONSIDERATION OF
THE OBLIGATIONS OF THE DEBTOR, THE REORGANIZED DEBTOR AND THE ESTATE UNDER THE
DEBTOR'S PLAN, AND OTHER CONTRACTS, INSTRUMENTS, AGREEMENTS OR DOCUMENTS TO BE
ENTERED INTO, OR DELIVERED IN CONNECTION WITH, THE DEBTOR'S PLAN, FGIC AND EACH
HOLDER OF A BOND CLAIM, AND THEIR SUCCESSORS AND ASSIGNS, TO THE FULLEST
EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AS SUCH LAW MAY BE EXTENDED SUBSEQUENT
TO THE EFFECTIVE DATE, WILL BE DEEMED TO FOREVER RELEASE, WAIVE AND DISCHARGE
ANY AND ALL CLAIMS, OBLIGATIONS, RIGHTS, CAUSES OF ACTION AND LIABILITIES,
WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING OR HEREAFTER
ARISING, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION, TRANSACTION, OR
OCCURRENCE TAKING PLACE ON, OR BEFORE, THE EFFECTIVE DATE IN ANY WAY RELATING TO
THE DEBTOR, THIS BANKRUPTCY CASE OR THE DEBTOR'S PLAN THAT SUCH ENTITY HAS, HAD
OR MAY HAVE (AS OF THE EFFECTIVE DATE) AGAINST ANY OF FGIC, THE BOND TRUSTEE,
THE AD HOC BONDHOLDERS COMMITTEE AND EACH PARTIES' OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, MEMBERS (IN THEIR CAPACITY AS SUCH), FINANCIAL ADVISORS,
ATTORNEYS AND OTHER REPRESENTATIVES.
(b) RELEASES BY THE DEBTOR AND THE REORGANIZED DEBTOR. AS OF THE EFFECTIVE DATE,
IN CONSIDERATION OF THE OBLIGATIONS OF THE RELEASED PARTIES UNDER THE DEBTOR'S
PLAN, AND OTHER CONTRACTS, INSTRUMENTS, AGREEMENTS OR DOCUMENTS TO BE ENTERED
INTO, OR DELIVERED IN CONNECTION WITH, THE DEBTOR'S PLAN, THEIR PARTICIPATION IN
THE NEGOTIATION AND IMPLEMENTATION OF THE DEBTOR'S PLAN AND THEIR SERVICES
DURING THIS BANKRUPTCY CASE, THE DEBTOR, ON ITS OWN BEHALF AND ON BEHALF OF THE
REORGANIZED DEBTOR AND ITS ESTATE, HEREBY FOREVER RELEASES, WAIVES AND
DISCHARGES ANY AND ALL CLAIMS, OBLIGATIONS, RIGHTS, CAUSES OF ACTION AND
LIABILITIES, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING OR
HEREAFTER ARISING, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION,
TRANSACTION, OR OCCURRENCE TAKING PLACE ON, OR BEFORE, THE EFFECTIVE DATE
(INCLUDING WITHOUT LIMITATION ANY OF THE FOREGOING WHICH MAY BE ASSERTED
DERIVATIVELY ON BEHALF OF THE DEBTOR, THE ESTATE OR THE REORGANIZED DEBTOR) IN
ANY WAY RELATING TO THE DEBTOR, THIS BANKRUPTCY CASE OR THE DEBTOR'S PLAN THAT
THE DEBTOR, ITS ESTATE OR THE REORGANIZED DEBTOR HAS, HAD OR MAY HAVE AGAINST
ANY OF THE RELEASED PARTIES OTHER THAN (i) THE AFFILIATES OF THE DEBTOR, AND
(ii) THE OFFICERS AND DIRECTORS OF THE AFFILIATES OF THE DEBTOR (IN THEIR
CAPACITY AS SUCH).
Section 10.4 Limitations of Releases. The releases provided for in Section
10.3(a) of the Debtor's Plan shall be effective only as to those Bondholders
that vote to accept the Debtor's Plan.
Section 10.5 Term of the Automatic Stays. Unless otherwise provided in the
Debtor's Plan or the Confirmation Order, the automatic stay set forth in section
362 of the Bankruptcy Code shall remain in full force and effect until the
Effective Date. Nothing in this Section 10.5 of the Debtor's Plan, however,
shall be construed as a limitation of the permanent discharge and injunction
provisions provided for in the Debtor's Plan.
Section 10.6 Provisions as to the Qualified Retirement Plan. Notwithstanding the
provisions of Sections 10.1 and 10.2 of the Debtor's Plan, or any other
provision of the Debtor's Plan, nothing in the Debtor's Plan, the Confirmation
Order, or section 1141 of the Bankruptcy Code shall, or shall be construed to,
discharge, release, or relieve the Debtor or any other party, in any capacity,
from any liability with respect to the Qualified Retirement Plan, or any other
defined benefit plan sponsored by Entergy Corporation or any member of its
controlled group, under any law, governmental policy, or regulatory provision;
and further provided that the PBGC shall not be enjoined from enforcing such
liability as a result of the provisions for satisfaction, release and discharge
of Claims that are contained in the Debtor's Plan.
Section 10.7 Release of Liens. Except as otherwise provided in the Debtor's Plan
or in any contract, instrument, release or other agreement or document entered
into or delivered, on the Effective Date, all mortgages, deeds of trust, Liens
or other security interests or encumbrances of any kind against the property of
the Estate will be fully released and discharged, and all of the right, title
and interest of any Holder of such mortgages, deeds of trust, Liens or other
security interests, including any rights to any collateral thereunder, will
revert to the Reorganized Debtor and its successors and assigns and the former
Holder thereof will, upon request of the Debtor, execute such documents
evidencing such release and discharge as the Debtor may reasonably request.
Section 10.8 Exculpation. AS OF THE EFFECTIVE DATE, THE EXCULPATED PARTIES SHALL
NOT HAVE NOR INCUR LIABILITY TO ANY ENTITY FOR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN IN CONNECTION WITH OR RELATED TO THE FORMULATION, PREPARATION,
DISSEMINATION, IMPLEMENTATION, CONFIRMATION, OR CONSUMMATION OF THE DEBTOR'S
PLAN, THE DEBTOR'S DISCLOSURE STATEMENT, EARLIER VERSIONS OF SAME OR ANY
CONTRACT, INSTRUMENT, RELEASE, OTHER AGREEMENT OR DOCUMENT CREATED OR ENTERED
INTO, OR ANY OTHER ACTION TAKEN OR OMITTED TO BE TAKEN, IN CONNECTION WITH THE
DEBTOR'S PLAN OR THIS BANKRUPTCY CASE; PROVIDED, HOWEVER, (a) THAT THE FOREGOING
PROVISIONS OF THIS SECTION SHALL HAVE NO EFFECT ON THE LIABILITY OF ANY ENTITY
THAT WOULD OTHERWISE RESULT FROM ANY SUCH ACTION OR OMISSION TO THE EXTENT
THAT SUCH ACTION OR OMISSION IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, AND (b) THAT NOTHING IN THIS SECTION
10.8 OF THE DEBTOR'S PLAN SHALL, OR SHALL BE DEEMED TO, RELEASE THE EXCULPATED
PARTIES FROM, OR EXCULPATE THE EXCULPATED PARTIES WITH RESPECT TO, THEIR
RESPECTIVE OBLIGATIONS OR COVENANTS ARISING PURSUANT TO THE DEBTOR'S PLAN.
ARTICLE XI
REGULATION, RATES AND TARIFFS
AND THE CDBG FUNDS
Section 11.1 Regulation. The Debtor continues to be subject to both federal and
local regulation. On and after the Effective Date, the Reorganized Debtor shall
continue to be regulated by: (a) FERC; and (b) the City Council in accordance
with the Home Rule Charter of the City of New Orleans, as amended through
January 1, 1996, and other applicable statutes, ordinances, resolutions and
regulations.
Section 11.2 Rates and Tariffs. The Debtor's Plan is not intended to impair,
alter, modify, increase or decrease any prepetition or postpetition (a) rate,
tariff, regulatory order or regulatory proceeding of FERC or the City Council,
(b) agreement relating to any such rate, tariff, order or proceeding, (c) right
of appeal, action or collateral challenge that the Debtor, FERC or the City
Council might have with respect to any of the foregoing, or (d) the regulatory
authority or jurisdiction of FERC or the City Council.
Section 11.3 CDBG Funds. Nothing in the Debtor's Plan shall alter the six (6)
conditions to the Debtor's receipt of the CDBG Funds, as requested by the City
Council, that are contained in the LRA Resolution, as follows:
(a) CDBG Funds may only be used to offset the cost of restoration,
reconstruction and rebuilding of ENOI's damaged electric and gas utility
systems, and to offset such other unrecovered fixed costs as may be the
responsibility of ratepayers;
(b) CDBG Funds should be used to mitigate and/or eliminate possible rate
increases to New Orleans utility ratepayers;
(c) No CDBG Funds may be used to profit ENOI's parent, Entergy Corporation;
(d) ENOI must agree that all restoration, reconstruction, and rebuilding costs
claimed for CDBG Funds must be certified as reasonable and necessary through an
independent process approved by the LRA;
(e) ENOI must not claim in any forum capital assets paid for with CDBG Funds as
additions to the rate base for ratemaking purposes or for the valuation of
ENOI's assets in connection with the city's perpetual option to purchase set
forth in the applicable 1922 Ordinances, as amended; and
(f) Any CDBG Funds awarded to ENOI should be exempt from existing or future
liens held by any of the Bondholders and, except to the extent necessary to
reimburse audited expenditures for restoration, reconstruction, and rebuilding,
the Entergy Corporation debtor-in-possession loan to ENOI.
ARTICLE XII
RETENTION OF JURISDICTION
Until the entry of a final decree in accordance with Bankruptcy Rule 3022, the
Bankruptcy Court shall have jurisdiction of all matters arising under, arising
out of or relating to this Bankruptcy Case including, but not limited to, the
following:
(a) to insure that the purpose and intent of the Debtor's Plan are carried out;
(b) to consider any modification of the Debtor's Plan under section 1127 of the
Bankruptcy Code;
(c) to hear and determine all Claims, controversies, defaults, suits and
disputes against the Debtor, including, but not limited to, any Disputed
Administrative Claim or Disputed Claim;
(d) to hear, determine and enforce all Claims and Causes of Action;
(e) to hear and determine all controversies, suits, defaults and disputes that
may arise in connection with the interpretation, execution or enforcement of the
Debtor's Plan;
(f) to hear and determine all requests for compensation and/or reimbursement of
expenses for services rendered or expenses incurred before the Effective Date
which may be made after the Effective Date;
(g) to hear and determine all objections to Administrative Claims, Claims,
controversies, suits and disputes that may be pending at or initiated after the
Effective Date, except as provided in the Confirmation Order;
(h) to consider and act on the compromise and settlement of any Administrative
Claim, Claim or Cause of Action on behalf of or against the Debtor;
(i) to enforce and interpret by injunction or otherwise the terms and conditions
of the Debtor's Plan;
(j) to enter Final Order concluding and terminating this Bankruptcy Case;
(k) to correct any defect, cure any omission, or reconcile any inconsistency in
the Debtor's Plan or Confirmation Order necessary or helpful to carry out the
purposes and intent of the Debtor's Plan;
(l) to determine all questions and disputes regarding titles to the assets of
the Debtor or Reorganized Debtor;
(m) to classify the Claims or Interests of any Holder and to re-examine Claims
allowed for purposes of voting, and to determine objections to Administrative
Claims, Claims and Interests;
(n) to consider and act on such other matters consistent with the Debtor's Plan
as may be provided in the Confirmation Order;
(o) to enforce any injunction or stay whether arising under the Bankruptcy Code
or Rules, or the Debtor's Plan; and/or
(p) to consider the rejection of executory contracts and/or leases that are not
discovered before Confirmation and allow Claims for damages with respect to the
rejection of any such executory contracts or leases within such future time as
the Bankruptcy Court may direct.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Creditors' Committee. The Creditors' Committee shall continue to
exist until the Effective Date.
Section 13.2 Modification of the Debtor's Plan. Subject to the restrictions on
modification set forth in section 1127 of the Bankruptcy Code and Bankruptcy
Rules 2002 and 3019, the Debtor or Reorganized Debtor, as the case may be,
reserves the right to alter, amend or modify the Debtor's Plan before its
substantial consummation; provided, however, the prior written consent of FGIC
and the Bond Trustee shall be required for any such alterations, amendments or
modifications (whether or not deemed material, non-material or adversely
affecting FGIC, the Bond Trustee, or the interests of the Bondholders) to the
following: (a) Sections 4.1, 4.2, 4.3, 4.4, 5.3, 5.6, 6.3, 6.4, 6.6, 7.2, 7.6,
7.7, 8.1, 8.2, 8.6, 8.7, 13.2, 13.3, or 13.6 of the Debtor's Plan; (b) the
definitions in Article I of the Debtor's Plan that are used in Sections 4.1,
4.2, 4.3, 4.4, 5.3, 5.6, 6.3, 6.4, 6.6, 7.2, 7.6, 7.7, 8.1, 8.2, 8.6, 8.7 13.2,
13.3, or 13.6 of the Debtor's Plan, (c) Articles IX and X of the Debtor's Plan,
or (d) Plan Exhibit 1.99 (i.e., the form of the Intercompany Note).
Section 13.3 Revocation or Withdrawal of the Debtor's Plan. The Debtor reserves
the right to revoke or withdraw the Debtor's Plan at any time before the
Confirmation Date by Filing a notice of withdrawal or revocation. The Filing of
such notice of withdrawal or revocation shall constitute an automatic
termination of the Debtor's exclusive periods for Filing a plan of
reorganization and soliciting acceptances thereof. Further, the Filing of a
notice of withdrawal by the Debtor after the Confirmation Date shall constitute
an automatic termination of the Debtor's exclusive periods for Filing a plan of
reorganization and soliciting acceptances thereof.
Section 13.4 Plan Exhibits. All Plan Exhibits are incorporated by reference and
are intended to be an integral part of this document as though fully set forth
in the Plan.
Section 13.5 Service of Certain Plan Exhibits and Disclosure Statement Exhibits.
Because the Plan Exhibits are voluminous, not all of the Plan Exhibits are being
served with copies of the Plan and the Debtor's Disclosure Statement. Any party
in interest may obtain the Plan Exhibits from the Document Website.
Section 13.6 Binding Effect. The Debtor's Plan shall be binding upon and inure
to the benefit of the Debtor, the Reorganized Debtor, the Holders of Claims,
Preferred Interests, and Equity Interests, together with their respective
successors and assigns, and with respect to Section 6.3 of the Debtor's Plan,
Entergy Services and the Affiliates who participate in the Entergy System Money
Pool
Section 13.7 Successors and Assigns. The rights, benefits and obligations of any
Entity named or referred to in the Debtor's Plan shall be binding on, and shall
inure to the benefit of, any heir, executor, administrator, successor or assign
of such Entity.
Section 13.8 Headings. Headings are used in the Debtor's Plan for convenience
and reference only, and shall not constitute a part of the Debtor's Plan for any
other purpose.
Section 13.9 Governing Law. Except to the extent that the Bankruptcy Code is
applicable, the rights and obligations arising under the Debtor's Plan shall be
governed by, and construed and enforced as provided in the laws of the State of
Louisiana.
Section 13.10 Notices. All notices, requests, elections or demands to or upon
the Reorganized Debtor in connection with the Debtor's Plan shall be in writing
and shall be deemed to have been given when received or, if mailed, three (3)
days after the date of mailing provided such writing shall have been sent by
registered or certified mail, postage prepaid, return receipt requested, and
sent to the following:
To the Debtor or Reorganized Debtor:
R. Patrick Vance
Elizabeth J. Futrell
Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P.
201 St. Charles Avenue
New Orleans, Louisiana 70170-5100
Attorneys for the Debtor
To Entergy Corporation:
J. Ronald Trost
Cronin & Vris, LLP
380 Madison Avenue, 24th Floor
New York, NY 10017
Attorneys for Entergy Corporation
and
Robert D. Sloan
Executive Vice President and General Counsel
Entergy Corporation
639 Loyola Avenue
L-ENT-26D
New Orleans, LA 70113
To the Creditors' Committee:
Philip K. Jones, Jr.
Liskow & Lewis, PLC
701 Poydras Street, Suite 5000
New Orleans, Louisiana 70139-5099
Attorneys for the Creditors' Committee
To the Bond Trustee:
William H. Patrick, III
Heller, Draper, Hayden, Patrick & Horn, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6103
Attorneys for The Bank of New York, as Bond Trustee
and
Edward P. Zujkowski
Emmet, Marvin & Martin, LLP
120 Broadway
32nd Floor
New York, New York 10271
Attorneys for The Bank of New York, as Bond Trustee
and
Loretta A. Lundberg
Vice President
The Bank of New York, as Bond Trustee
101 Barclay Street
New York, New York 10286
To FGIC:
H. Slayton Dabney, Jr.
George B. South, III
King & Spalding LLP
1185 Avenue of the Americas
New York, NY 10036
Attorneys for FGIC
and
Carolanne Gardner
Financial Guaranty Insurance Company
125 Park Ave., Fl. 6
New York, NY 10017
To the Ad Hoc Bondholders Committee:
David S. Rosner
Daniel A. Fliman
Kasowitz, Benson, Torres & Friedman LLP
1633 Broadway
New York, NY 10019
To the City Council:
Basile J. Uddo
3445 N. Causeway Blvd., Suite 724
Metairie, LA 70002
Attorney for the City Council
and
Clinton A. Vince
Paul E. Nordstrom
Sullivan & Worcester
1666 K Street, NW
Washington, D.C. 20006
Advisors to the City Council
To the U.S. Trustee's Office:
Mr. Robert Gravolet, Jr.
Office of the United States Trustee
Texaco Center
400 Poydras Street, Suite 2110
New Orleans, Louisiana 70130
All notices and requests to Holders shall be sent to their last known addresses.
Section 13.11 No Admissions. Notwithstanding anything herein to the contrary,
nothing contained in the Debtor's Plan shall be deemed an admission by any
Entity with respect to any matter set forth herein.
ARTICLE XIV
CRAMDOWN
The Debtor may request Confirmation under section 1129(b) of the Bankruptcy
Code, if any Impaired Class does not accept the Debtor's Plan pursuant to
section 1126 of the Bankruptcy Code. The Debtor reserves the right to alter the
treatment of any Class to effectuate a cramdown under section 1129(b) of the
Bankruptcy Code.
Dated: As of May , 2007
ENTERGY NEW ORLEANS, INC.
By:
RODERICK K. WEST
President and Chief
Executive Officer
____________________________
R. PATRICK VANCE (#13008)
ELIZABETH J. FUTRELL (05863)
NAN ROBERTS EITEL (#19910)
TARA G. RICHARD (#26356)
JOSHUA J. LEWIS (#29950)
Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P.
201 St. Charles Avenue
New Orleans, LA 70170-5100
Phone: (504) 582-8000
Fax: (504) 582-8011
Attorneys for Entergy New Orleans, Inc.
the debtor and debtor-in-possession
PLAN EXHIBIT 1.89
FORM OF THE GENERAL UNSECURED CLAIM NOTE
[INTENTIONALLY LEFT BLANK
BECAUSE CLASS 5 VOTED TO ACCEPT THE DEBTOR'S PLAN]
PLAN EXHIBIT 1.99
FORM OF INTERCOMPANY NOTE
$____________
May __, 2007
New Orleans, Louisiana
For value received, the undersigned, Entergy New Orleans, Inc., a Louisiana corporation, (the "Debtor"), promises to pay to the order of [Name of Affiliate] ("Payee") at its account at the office of Capital One Bank, 313 Carondelet Street, New Orleans, Louisiana (the "Bank") or such other account or bank that Payee shall notify Debtor in writing, in lawful money of the United States of America, the principal amount of ________________________ [amount of Allowed Claim plus accrued interest pursuant to the Fourth Amended Chapter 11 Plan of Reorganization for Entergy New Orleans, Inc., as Modified, Dated May _, 2007, through May __, 2007, the Effective Date of the Debtor's Plan], payable on the third anniversary of this Note (the "Maturity Date").
Interest shall accrue on the principal amount hereof at the following per annum rates: from the date of this Note through December 31, 2007, at ten and one half percent (10.5%); and from January 1, 2008, until paid in full, at the Louisiana judicial interest rate plus one percent (1%). Past due amounts of principal and interest shall accrue interest at the Louisiana judicial interest rate plus three percent (3%). The Debtor promises to pay accrued interest on a quarterly basis to Payee at its account at said office of the Bank, or such other account or bank that Payee shall notify Debtor in writing, on the first banking day of each of March, June, September and December and on the date on which the amounts hereunder become due and payable, whether at the Maturity Date or such sooner date as this Note may become due and payable hereunder.
In case this Note should be placed in the hands of an attorney to institute legal proceedings to recover the amount hereof or any part hereof, in principal or interest, or to protect the interests of the holder or holders hereof, or in case the same should be placed in the hands of an attorney for collection, compromise or other action, the Debtor binds itself to pay the reasonable fee of the attorney who may be employed for that purpose.
The Debtor hereby waives presentment for payment, demand, notice of non-payment, protest and all pleas of division and discussion. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder shall operate as a waiver of such rights. Notwithstanding any terms of this Note to the contrary, however, both Debtor and Payee and its successors and assigns, explicitly waive any right of set-off and/or mutual compensation.
The principal amount and accrued interest of this Note may not be prepaid, in whole or in part at any time prior to the Maturity Date, except at the Debtor's option, upon the sale, transfer or other disposition of all or substantially all of Debtor's distribution assets, in which case the principal amount and accrued interest shall become immediately due and payable upon such disposition.
In the event that Debtor fails to pay interest on the principal amount within ten (10) Business Days after the same becomes due and payable, then the Payee by written notice to Debtor has the right to declare the principal amount and all interest thereon to be immediately due and payable, whereupon such principal amount, all such interest and all default interest shall become due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Debtor. The principal amount and all interest thereon shall become automatically due and payable without further notice or action of any kind immediately upon the filing of a petition for relief under any chapter of the United States Bankruptcy Code for the Debtor.
Without the prior written consent of both The Bank of New York, in its capacity as Indenture Trustee, and Financial Guaranty Insurance Company, none of the following provisions of the Note may be modified or amended: (a) any provision governing the maturity of the Note; (b) any provision governing the prepayment of any amount owed on the Note; (c) any provision governing the interest rates applicable to the Note; or (d) any provision related to the Debtor or Payor's rights of set-off and/or mutual compensation.
This Note shall be governed by, and construed in accordance with, the laws of the State of Louisiana.
IN WITNESS WHEREOF, the undersigned has caused this Note to
be executed by its officer hereunto duly authorized.
ENTERGY NEW ORLEANS, INC.
By: ____________________________
Name:
Title:
[NAME OF AFFILIATE]
Agreed to:
By: ____________________________
Name:
Title:
PLAN EXHIBIT 1.115
OTHER EMPLOYMENT AND
INCENTIVE COMPENSATION PROGRAMS
Executive Financial Counseling Program of Entergy Corporation and Subsidiaries (10(a)64 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amended and Restated Executive Annual Incentive Plan of Entergy Corporation and Subsidiaries, effective January 1, 2003 (10(b) to Form 10-Q for the quarter ended March 31, 2003 in 1-11299), as amended or supplemented. |
Equity Ownership Plan of Entergy Corporation and Subsidiaries (A-4(a) to Rule 24 Certificate dated May 24, 1991 in 70-7831), as amended or supplemented. |
Amendment No. 1 to the Equity Ownership Plan of Entergy Corporation and Subsidiaries (10(a)71 to Form 10-K for the year ended December 31, 1992 in 1-3517), as amended or supplemented. |
Amended and Restated 1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries (10(a) to Form 10-Q for the quarter ended March 31, 2003 in 1-11299), as amended or supplemented. |
Supplemental Retirement Plan of Entergy Corporation and Subsidiaries, as amended effective January 1, 2000 (10(a)70 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 28, 2001, to the Supplemental Retirement Plan of Entergy Corporation and Subsidiaries (10(a)71 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries, as amended effective January 1, 2000 (10(a)72 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 28, 2001, to the Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries (10(a)73 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Executive Disability Plan of Entergy Corporation and Subsidiaries (10(a)74 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amended and Restated Executive Deferred Compensation Plan of Entergy Corporation and Subsidiaries, dated June 10, 2003 (10(d) to Form 10-Q for the quarter ended June 30, 2003 in 1-11299), as amended or supplemented. |
Equity Awards Plan of Entergy Corporation and Subsidiaries, effective as of August 31, 2000 (10(a)77 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 7, 2001, to the Equity Awards Plan of Entergy Corporation and Subsidiaries (10(a)78 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 10, 2001, to the Equity Awards Plan of Entergy Corporation and Subsidiaries (10(b) to Form 10-Q for the quarter ended March 31, 2002 in 1-11299), as amended or supplemented. |
Restatement of System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective as of March 8, 2004 (10(d) to Form 10-Q for the quarter ended March 31, 2004 in 1-11299), as amended or supplemented |
First Amendment of the System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective December 29, 2004 (10(a)76 to Form 10-K for the year ended December 31, 2004 in 1-11299), as amended or supplemented. |
Second Amendment of the System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective April 15, 2005 (10(a) to Form 10-Q for the quarter ended March 31, 2005 in 1-11299), as amended or supplemented. |
System Executive Continuity Plan II of Entergy Corporation and Subsidiaries, effective March 8, 2004 (10(e) to Form 10-Q for the quarter ended March 31, 2004 in 1-11299), as amended or supplemented. |
First Amendment of the System Executive Continuity Plan II of Entergy Corporation and Subsidiaries, effective December 29, 2004 (10(a)78 to Form 10-K for the year ended December 31, 2004 in 1-11299), as amended or supplemented. |
Post-Retirement Plan of Entergy Corporation and Subsidiaries, as amended effective January 1, 2000 (10(a)80 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 28, 2001, to the Post-Retirement Plan of Entergy Corporation and Subsidiaries (10(a)81 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Pension Equalization Plan of Entergy Corporation and Subsidiaries, as amended effective January 1, 2000 (10(a)82 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 28, 2001, to the Pension Equalization Plan of Entergy Corporation and Subsidiaries (10(a)83 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective January 1, 2000 (10(a)87 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
Amendment, effective December 28, 2001, to the System Executive Retirement Plan of Entergy Corporation and Subsidiaries (10(a)88 to Form 10-K for the year ended December 31, 2001 in 1-11299), as amended or supplemented. |
PLAN EXHIBIT 6.2(a)
THE REORGANIZED DEBTOR'S AMENDED AND RESTATED ARTICLES OF INCORPORATION AND BYLAWS
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ENTERGY NEW ORLEANS, INC.
FIRST: The name of the Corporation shall be "ENTERGY NEW ORLEANS, INC.", and said Corporation shall have, possess and exercise all the rights, powers, privileges, immunities and franchises of the corporations, parties hereto, and shall be subject to all the duties and obligations of said respective corporations; it shall have, enjoy and be possessed of all of the property, real, personal and mixed, of every kind and nature, owned, possessed and enjoyed by or for said corporations, parties hereto; it shall have power to issue bonds and dispose of the same, in such form and denominations and bearing such interest as the Board of Directors may determine, and to secure payment thereof by mortgage of every and all of the property, franchises, rights, privileges and immunities of said Corporation at the time of the consolidation acquired or thereafter to be acquired and of the companies, parties hereto; to do all acts and things which said companies so consolidated or any of them might have done previous to said consolidation, and the further right to consolidate with any other street railway company, electric company or gas light company, or any other consolidated company.
SECOND: Said Corporation, "ENTERGY NEW ORLEANS, INC.", under its said corporate name, shall have power and authority to have and enjoy perpetual corporate existence and succession from and after the date hereof; to contract, sue and be sued; to make and use a corporate seal and the same to break or alter at pleasure; to hold, receive, lease, purchase and convey, as well as mortgage, hypothecate and pledge property, real, personal and mixed, corporeal and incorporeal; to name and appoint such managers, agents, directors and officers as its business, interests or convenience may require; and to make and establish, as well as alter and amend from time to time such by-laws, rules and regulations for the proper conduct, management and regulation of the affairs of said Corporation as may be necessary and proper; and to have, possess and enjoy all rights, powers, privileges, franchises and immunities now or hereafter authorized by law.
THIRD: The Domicile of said Corporation shall be in the City of New Orleans, State of Louisiana, and all citations or other legal process shall be served upon those individuals as identified by resolution of the Board of Directors of the Corporation.
FOURTH: The objects and purposes for which this Corporation is established to engage in any lawful activity for which corporations may be formed under the Business Corporation Law of Louisiana.
FIFTH: The amount of the capital stock of the Corporation shall be Seventy-seven Million Four Hundred Nine Thousand Eight Hundred Dollars ($77,409,800), together with the aggregate par value of capital stock issued after September 1, 1969, by this Corporation as hereinafter provided.
The total authorized number of shares of capital stock that may be issued by the Corporation shall be 10,347,798 shares, of which 10,000,000 shares shall have a par value of $4 per share and 347,798 shares shall have a par value of $l00 per share.
The shares of capital stock hereby authorized to be issued shall be divided among the following classes:
10,000,000 shares of $4 par value per share shall be Common Stock;
77,798 shares of $100 par value per share shall be 4-3/4% Preferred Stock (hereinafter sometimes referred to as the "4-3/4% Preferred Stock"); and
270,000 shares of $100 par value per share shall be Preferred Stock (which, together with such additional shares thereof as may be hereafter authorized, is hereinafter sometimes referred to as the "Preferred Stock").
The term "preferred stock" as used herein shall include the 4-3/4% Preferred Stock, the Preferred Stock and any other class of stock having a preference over the Common Stock as to dividends, distribution of assets, or in liquidation, dissolution or winding up.
Except as otherwise in this Article FIFTH provided and to the extent not prohibited by law, the Corporation may acquire funds for, or otherwise effect, the redemption or purchase of any of its shares through the issuance or sale of any of its stocks, bonds, or other securities.
Stocks of the Corporation, whether authorized herein or upon any subsequent increase of the number of shares of capital stock, may be issued by the Board of Directors of the Corporation from time to time for such consideration permitted by law as may be fixed from time to time by the Board of Directors, and general authority to the Board of Directors so to fix such consideration is hereby and herein granted; provided, however, that stock having a par value may not be issued for less than the par value thereof; and provided further, that such consideration may be in the form of money paid, labor done, or property actually received by the Corporation.
No holder of any stock of the Corporation shall be entitled as of right to purchase or subscribe for any part of any unissued stock of the Corporation, or of any additional stock of any class, to be issued by reason of any increase of the authorized capital stock, or of the number of shares of the Corporation, or of bonds, certificates of indebtedness, debentures or other securities convertible into stock of the Corporation, but any such unissued stock or any such additional authorized issues of new stock, or of securities convertible into stock, may be issued and disposed of by the Board of Directors to such persons, firms, corporations, or associations, and upon such terms as the Board of Directors may, in their discretion, determine, without offering to the stockholders then of record, or to any class of stockholders, any thereof, on the same terms or on any terms.
The preferred stock shall not entitle any holder thereof to vote at any meeting of stockholders or election of the Corporation or otherwise to participate in any action taken by the Corporation or its stockholders, but all the voting power shall be vested in the holders of the Common Stock, except as otherwise in this Article FIFTH provided. Each stockholder shall be entitled to one vote for each share of Common Stock of the Corporation standing in his name on the books of the Corporation.
Except as otherwise in this Article FIFTH provided, upon the vote of a majority of the total number of shares of stock then issued and outstanding, and entitled to vote, as herein provided, or upon such larger vote as may be required by law, this agreement may be amended from time to time so as to permit the Corporation to create or authorize one or more other classes of stock with such preferences, designations, rights, privileges, voting powers, including votes on proceedings prescribed by statute, and subject to such restrictions, limitations and qualifications with respect to voting and otherwise as may be determined by said vote, which may be the same or different from the preferences, designations, rights, privileges, voting powers, restrictions, limitations and qualifications with respect to voting or otherwise of the classes of stock of the Corporation then authorized. Any such vote and amendment may authorize any shares of any class then authorized but unissued to be issued as shares of such new class or classes.
Except as otherwise in this Article FIFTH provided, the Board of Directors of the Corporation may at any time authorize the conversion or exchange of the whole or any particular share of the outstanding preferred stock of any class, with the consent of the holder thereof, into or for stock of any other class which at the time of such consent is authorized but unissued, and may fix the terms and conditions upon which such conversion or exchange may be made; provided that, without the consent of the holders of record of two-thirds of the shares of Common Stock outstanding given at a meeting of the holders of the Common Stock called and held as provided by the By-Laws or given in writing without a meeting as authorized by law, the Board of Directors shall not authorize the conversion or exchange of any preferred stock of any class into or for Common Stock or authorize the conversion or exchange of any preferred stock of any class into or for preferred stock of any other class, if by such conversion or exchange the amount which the holders of the shares of stock so converted or exchanged would be entitled to receive either as dividends or shares in distribution of assets in preference to the Common Stock would be increased.
Except as otherwise in this Article FIFTH provided, any class of stock may be increased at any time upon vote of the holders of two-thirds (or such smaller number, not less than a majority, as may be permitted by law) of the shares of the Corporation then issued and outstanding and entitled to vote thereon; provided, however, that so long as any share of the 4-3/4% Preferred Stock remains outstanding, the amount to which the capital stock of the Corporation may be increased is Two Hundred Million Dollars ($200,000,000).
Except as otherwise in this Article FIFTH provided, the Corporation from time to time may resell any of its own stock, purchased or otherwise acquired by it as hereinafter provided for, at such price permitted by law as may be fixed by its Board of Directors or Executive Committee.
I
The designations, voting powers, preferences, dividend and redemption rights (including votes on proceedings prescribed by statute), and other relative rights or restrictions, limitations and qualifications of the 4-3/4% Preferred Stock having a par value of $100 per share shall be as follows:
(1) The holders of the 4-3/4% Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the surplus of the Corporation as provided by law, cumulative preferred dividends at the rate of 4-3/4% per annum from July 1, 1944, and no more, payable quarterly on the first days of January, April, July and October of each year, before any dividends shall be declared or paid upon or set apart for the Common Stock of the Corporation. Such cumulative preferred dividends shall accrue on each share from the quarterly dividend payment date next preceding the date of the original issue of such share, unless such stock shall be issued on a quarterly dividend payment date, and, in such case, from said date. The first quarterly dividend shall be payable on October 1, 1944, and shall be cumulative from July 1, 1944.
(2) No dividends shall be declared at any time upon the Common Stock of the Corporation unless all accumulated and unpaid dividends upon the outstanding 4-3/4% Preferred Stock shall have been declared and shall have been paid in full or a sum sufficient for payment thereof shall have been set aside for that purpose from said surplus of the Corporation, in which event dividends may be declared by the Board of Directors on the Common Stock out of said surplus of the Corporation, subject to the rights of any other class of stock then outstanding. The term "accumulated and unpaid dividends" as used herein with respect to the 4-3/4% Preferred Stock shall mean dividends on all the outstanding 4-3/4% Preferred Stock from the respective dates from which such dividends accumulate to the date as of which accumulated and unpaid dividends are being determined, less the aggregate of dividends theretofore declared and paid or set apart for payment upon such outstanding 4-3/4% Preferred Stock.
(3) The 4-3/4% Preferred Stock may be called for redemption in whole or in part at any time at the option of the Board of Directors by mailing notice thereof to the holders of record of the shares to be redeemed at least thirty (30) days prior to the date fixed for redemption, and such shares may be then redeemed by paying, for each share so called, an amount equal to all accumulated and unpaid dividends thereon to the date fixed for such redemption, plus One Hundred Eleven and 50/100 Dollars ($111.50) per share as to any shares redeemed prior to July 1, 1954, and One Hundred Five Dollars ($105.00) per share as to any shares redeemed on July 1, 1954, and thereafter. In case of the redemption of part only of the 4-3/4% Preferred Stock at the time outstanding, the Corporation shall select by lot, or in such other manner as the Board of Directors may determine, the shares so to be redeemed, provided that there shall be no obligation to redeem less than a whole share. Notice of the intention of the Corporation to redeem the 4-3/4% Preferred Stock shall be mailed not less than thirty (30) days before the date of redemption to each holder of record of 4-3/4% Preferred Stock to be redeemed at his post office address appearing upon the books of the Corporation, and upon the deposit of the aggregate redemption price (or the portion thereof not already paid in the redemption of shares so to be redeemed) with any national bank or trust company in the City of New York or in the City of New Orleans, named in such notice, payable in the amounts aforesaid to the respective orders of the record holders of the 4-3/4% Preferred Stock so to be redeemed on endorsement and surrender of their certificates; said holders shall, at the time fixed in such notice for such redemption, cease to be stockholders with respect to said shares and from and after the making of such deposit, said holders shall have no interest in or claim against the Corporation with respect to said shares and shall be entitled only to receive said moneys from said bank or trust company without interest.
(4) In the case of any distribution of any assets of the Corporation in repayment in whole or in part of any outstanding shares of its capital stock, whether upon dissolution of the Corporation or liquidation or sale of any or all of its assets or otherwise, except in case of redemption as hereinbefore provided, there shall be paid to the holders of the 4-3/4% Preferred Stock (a) in case such dissolution, liquidation or sale shall be voluntary, One Hundred Five Dollars ($105) per share and (b) in case such dissolution, liquidation or sale shall be involuntary, One Hundred Dollars ($100) per share, plus in each case an amount equal to all accumulated and unpaid dividends thereon before any sum shall be paid to, or any assets distributed among, the holders of the Common Stock, and after such payment to the holders of the 4-3/4% Preferred Stock, all remaining assets and funds shall be distributed among the holders of the Common Stock of the Corporation subject to the rights of any other class of stock then outstanding.
(5) The holders of the 4-3/4% Preferred Stock shall not be entitled to any payment by way of dividends or otherwise, or have any rights in the property of the Corporation or in the distribution thereof, other than as is specifically provided in the preceding paragraphs with respect to the 4-3/4% Preferred Stock.
(6) No holder of any of the 4-3/4% Preferred Stock shall be entitled to vote at any election of directors or, except as otherwise required by statute, on any other matter submitted to the stockholders, provided that, if and whenever four (4) quarter-yearly dividends payable on any part of the 4-3/4% Preferred Stock shall be accumulated and unpaid, the holders of the 4-3/4% Preferred Stock as a class shall thereafter at all elections of directors have the exclusive right to elect the smallest number of directors of the Corporation which shall constitute a majority of the authorized number of directors, and the holders of the Common Stock of the Corporation as a class shall have the exclusive right to elect the remaining number of directors of the Corporation, which right of the holders of the 4-3/4% Preferred Stock, however, shall cease when all accumulated and unpaid dividends on the 4-3/4% Preferred Stock shall have been paid in full, or provision shall have been made for such payment; and provided further, that if and when the surplus of the Corporation, out of which dividends might lawfully be declared, is in excess of such accumulated and unpaid dividends, then the declaration and payment of such dividends shall not be unreasonably withheld. The terms of office of all persons who may be directors of the Corporation at the time when the right to elect a majority of the directors shall accrue to the 4-3/4% Preferred Stockholders, as herein provided, shall terminate upon the election of their successors at the next annual meeting of the stockholders or at an earlier special meeting of the stockholders held as hereinafter provided. Such special meeting shall be held at any time after the accrual of such voting power, upon notice similar to that provided in the Consolidation Agreement and/or the By-Laws of the Corporation for annual and all other stockholders' meetings, which notice shall be given at the request in writing of the holders of not less than ten per centum (10%) of the number of shares of the then outstanding 4-3/4% Preferred Stock, addressed to the Secretary of the Corporation at its principal business office. Upon the termination of such exclusive right of the holders of the 4-3/4% Preferred Stock to elect a majority of the directors of the Corporation, the terms of office of all the directors of the Corporation shall terminate upon the election of their successors at the next annual meeting of the stockholders or at an earlier special meeting of the stockholders held as hereinafter provided. Such special meeting shall be held at any time after the termination of such right of the 4-3/4% Preferred Stockholders to elect a majority of the directors, upon notice similar to that provided in the Articles of Incorporation and/or the By-Laws of the Corporation for annual and all other stockholders' meetings, which notice shall be given at the request in writing of the holders of not less than ten per centum (10%) of the number of shares of the then outstanding Common Stock, addressed to the Secretary of the Corporation at its principal office.
(7) So long as any share of the 4-3/4% Preferred Stock remains outstanding, the consent or authorization of the holders of at least a majority of the outstanding shares of the 4-3/4% Preferred Stock then outstanding, voting as a class (given at a meeting called for that purpose), shall be necessary for effecting or validating any of the following:
(a) The issuance of any additional shares of 4-3/4% Preferred Stock, or of any other class of stock ranking prior to or on a parity with the 4-3/4% Preferred Stock as to dividends or other distributions, (i) unless the net earnings of the Corporation available for dividends on the 4-3/4% Preferred Stock, determined in accordance with generally-accepted accounting practices, for any twelve (12) consecutive calendar months' period within the fifteen (15) calendar months preceding the month within which the additional shares are to be issued, shall have been at least twice the dividend requirements for a twelve (12) month period upon the entire amount of 4-3/4% Preferred Stock and all such other stock ranking prior to or on a parity with the 4-3/4% Preferred Stock as to dividends or other distributions to be outstanding immediately after the proposed issue of such additional shares, and (ii) unless the aggregate of the capital of the Corporation applicable to the Common Stock and the surplus of the Corporation shall be not less than the amount payable upon involuntary dissolution to the holders of the 4-3/4% Preferred Stock and such other stock to be outstanding immediately after the proposed issue of such additional shares.
(b) The merger or consolidation of the Corporation with or into any other corporation or corporations, unless such merger or consolidation, or the issuance and assumption of all securities to be issued or assumed in connection with such merger or consolidation, shall have been ordered, approved, or permitted by the Federal Energy Regulatory Commission (or by any succeeding regulatory authority of the United States of America having jurisdiction in the premises) under the provisions of the Federal Power Act, as amended, or exempted by said Commission from the requirements of said Act, provided that the provisions of this clause (b) shall not apply to the purchase or other acquisition by the Corporation of franchises or assets of another corporation in any manner which does not involve a merger or consolidation.
(8) Notwithstanding any other provision of this Article FIFTH, the consent or authorization of the holders of at least two-thirds of the total number of shares of 4-3/4% Preferred Stock at the time outstanding shall be necessary to authorize the creation of any class of stock which would be preferred as to assets or dividends over the 4-3/4% Preferred Stock, or to amend the Articles of Incorporation so as to change the express terms and provisions of the 4-3/4% Preferred Stock then outstanding in any manner substantially prejudicial to the holders thereof.
II
The Preferred Stock shall be issuable in one or more series from time to time and the shares of each series shall have the same rank and be identical with each other and shall have the same relative rights, except with respect to amounts payable on voluntary liquidation as specified in Section (F) below and to the following characteristics:
(a) The number of shares to constitute each such series and the distinctive designation thereof;
(b) The annual rate or rates of dividends payable on shares of such series, the dates on which dividends shall be paid in each year, and the date from which such dividends shall commence to accumulate:
(c) The amount or amounts payable upon redemption thereof; and
(d) The terms and amount of sinking fund requirements (if any) for the purchase or redemption of each series of the Preferred Stock other than the initial series and the second series of the Preferred Stock;
which different characteristics of clauses (a), (b), (c), and (d) above are set forth below.
The initial series of the Preferred Stock shall:
(a) consist of 60,000 shares and be designated "4.36% Preferred Stock";
(b) have a dividend rate of Four and 36/100 Dollars ($4.36) per share per annum payable quarterly on January 1, April 1, July 1 and October 1 of each year; such dividends shall accumulate on each share from the quarterly dividend payment date next preceding the date of the original issue of such share, unless such stock shall be issued on a quarterly dividend payment date and in such case from said date. The first quarterly dividend shall be payable on April 1, 1956, and shall be cumulative from January 1, 1956; and
(c) be subject to redemption in the manner provided herein with respect to the Preferred Stock at the price of One Hundred Seven and 08/100 Dollars ($107.08) per share if redeemed on or before January 1, 1961, of One Hundred Six and 08/100 Dollars ($106.08) per share if redeemed after January 1, 1961, and on or before January 1, 1966, and of One Hundred Four and 58/100 Dollars ($104.58) per share if redeemed after January 1, 1966, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption.
The second series of the Preferred Stock shall:
(a) consist of 60,000 shares and be designated "5.56% Preferred Stock";
(b) have a dividend rate of Five and 56/100 Dollars ($5.56) per share per annum payable quarterly on January 1, April 1, July 1 and October 1 of each year; such dividends shall accumulate on each share from and including April 26, 1967. The first dividend shall be payable on July 1, 1967, and shall be cumulative from and including April 26, 1967; and
(c) be subject to redemption in the manner provided herein with respect to the Preferred Stock at the price of One Hundred Six and 65/100 Dollars ($106.65) per share if redeemed on or before April 1, 1972, of One Hundred Four and 09/100 Dollars ($104.09) per share if redeemed after April 1, 1972, and on or before April 1, 1977, and of One Hundred Two and 59/100 Dollars ($102.59) per share if redeemed after April 1, 1977, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption.
Subject to the foregoing, the distinguishing characteristics of the Preferred Stock shall be: (A) Each series of the Preferred Stock, pari passu with all shares of preferred stock of any class or series then outstanding, shall be entitled, but only when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, in preference to the Common Stock, to dividends at the rate stated and expressed with respect to such series herein; such dividends to be cumulative from such date and payable on such dates in each year as may be stated and expressed herein, to stockholders of record as of a date not to exceed forty (40) days and not less than ten (10) days preceding the dividend payment dates so fixed.
(B) If and when all outstanding shares of the 4-3/4% Preferred Stock shall have been redeemed, acquired or otherwise retired, then:
(1) If and when dividends payable on any of the Preferred Stock (which, for the purposes of this Section (B), shall be deemed to be all outstanding shares of the Preferred Stock of any series, and such other preferred stock of any class or series, ranking prior to or on a parity with the Preferred Stock as to dividends and in liquidation, dissolution, winding up, or distribution, as may be lawfully issued) shall be in default in an amount equal to four (4) full quarterly payments or more per share, and thereafter until all dividends on any of the Preferred Stock in default shall have been paid, the holders of all of the then outstanding Preferred Stock, voting as a class, in contra-distinction to the Common Stock as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, and the holders of the Common Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Corporation, anything in these Articles of Incorporation to the contrary notwithstanding. The terms of office, as directors of all persons who may be directors of the Corporation at the time shall terminate upon the election of a majority of the Board of Directors by the holders of the Preferred Stock, except that if the holders of the Common Stock shall not have elected the remaining directors of the Corporation, then, and only in that event, the directors of the Corporation in office just prior to the election of a majority of the Board of Directors by the holders of the Preferred Stock shall elect the remaining directors of the Corporation. Thereafter, while such default continues and the majority of the Board of Directors is being elected by the holders of the Preferred Stock, the remaining directors, whether elected by directors, as aforesaid, or whether originally or later elected by holders of the Common Stock, shall continue in office until their successors are elected by holders of the Common Stock and shall qualify.
(2) If and when all dividends then in default on any of the Preferred Stock then outstanding shall be paid (such dividends to be declared and paid out of any funds legally available therefor as soon as reasonably practicable), the holders of the Preferred Stock shall be divested of any special right with respect to the election of directors, and the voting power of the holders of the Preferred Stock and the holders of the Common Stock shall revert to the status existing before the first dividend payment date on which dividends on any of the Preferred Stock were not paid in full, but always subject to the same provisions for vesting such special rights in the holders of the Preferred Stock in case of further like default or defaults in the payment of dividends thereon as described in the immediately foregoing paragraph. Upon termination of any such special voting right upon payment of all accumulated and unpaid dividends on the Preferred Stock, the terms of office of all persons who may have been elected directors of the Corporation by vote of the holders of the Preferred Stock as a class, pursuant to such special voting right, shall forthwith terminate, and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. In case of any vacancy in the office of a director occurring among the directors elected by the holders of the Preferred Stock voting as a class, the remaining directors elected by the holders of the Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term or terms of the director or directors whose place or places shall be vacant. Likewise, in case of any vacancy in the office of a director occurring among the directors not elected by the holders of the Preferred Stock, the remaining directors not elected by the holders of the Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term or terms of the director or directors whose place or places shall be vacant.
(3) Whenever the special voting right shall have accrued to the holders of the Preferred Stock to elect directors, voting as a class, it shall be the duty of the President, a Vice-President or the Secretary of the Corporation forthwith to call a meeting, and cause notice thereof to be given to the stockholders, including all of the holders of the then outstanding shares of Preferred Stock, entitled to vote at such meeting, to be held at such time as the Corporation's officers may fix, not less than forty-five (45) nor more than sixty (60) days after the accrual of such right, for the purpose of electing directors. The notice so given shall be mailed to each holder of record of Preferred Stock at his last known address appearing on the books of the Corporation and shall set forth, among other things, (i) that by reason of the fact that dividends payable on Preferred Stock are in default in an amount equal to four (4) full quarterly payments or more per share, the holders of all of the then outstanding Preferred Stock, voting as a class, have the right to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors of the Corporation, (ii) that any holder of the Preferred Stock has the right, at any reasonable time, to inspect and make copies of the list or lists of holders of the Preferred Stock maintained at the principal office of the Corporation or at the office of any Transfer Agent or Agents of the Preferred Stock, and (iii) either the entirety of this paragraph or the substance thereof with respect to the number of shares of the Preferred Stock required to be represented at any meeting, or adjournment thereof, called for the election of directors of the Corporation. At the first meeting of stockholders held for the purpose of electing directors during such time as the holders of the Preferred Stock shall have the special right, voting as a class, to elect directors, the presence in person or by proxy of the holders of a majority of the outstanding Common Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of a majority of all of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors; provided, however, that in the absence of a quorum of the holders of the Preferred Stock or of the holders of the Common Stock, no election of directors shall be held and the meeting shall be adjourned to the same time the following day; and provided, further, that at such first adjourned meeting, the presence in person or by proxy of the holders of thirty-five per centum (35%) of all of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of thirty-five per centum (35%) of the outstanding Common Stock shall be required to constitute a quorum of such class for the election of directors, and in the absence of a quorum of the holders of the Preferred Stock or of the holders of the Common Stock no election of directors shall be held and the meeting shall be adjourned to the same time the following day; and provided, further, that at such second adjourned meeting such number of the holders of the Preferred Stock and of the holders of the Common Stock as are present in person or by proxy shall constitute a quorum of their respective classes of stock for the election of directors. If no holders of the Preferred Stock are present at said second adjourned meeting, then the directors of the Corporation then in office shall remain in office until the next Annual Meeting of the Corporation, or special meeting in lieu thereof, and until their successors shall have been elected and shall qualify. No such meeting shall be held on a date within sixty (60) days of the date of the next Annual Meeting of the Corporation or special meeting in lieu thereof. At each Annual Meeting of the Corporation, or special meeting in lieu thereof, held during such time as the holders of all of the then outstanding Preferred Stock, voting as a class, shall have the right to elect a majority of the Board of Directors, the foregoing provisions of this paragraph shall govern each Annual Meeting, or special meeting in lieu thereof, as if said Annual Meeting or special meeting were the first meeting of stockholders held for the purpose of electing directors after the right of the holders of all of the Preferred Stock, voting as a class, to elect a majority of the Board of Directors, should have accrued with the exception, that if at any second adjourned Annual Meeting, or special meeting in lieu thereof, no holders of the outstanding Preferred Stock are present in person or by proxy, all the directors shall be elected by a vote of the holders of a majority of the Common Stock of the Corporation present or represented at the meeting.
(C) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of at least two-thirds of the total number of shares of the Preferred Stock then outstanding, voting as a class:
(1) create, authorize or issue any new stock which, after issuance, would rank prior to the Preferred Stock as to dividends, in liquidation, dissolution, winding up or distribution, or create, authorize or issue any security convertible into shares of any such stock, except for the purpose of providing funds for the redemption of all of the Preferred Stock then outstanding, such new stock or security not to be issued until such redemption shall have been authorized and notice of such redemption given and the aggregate redemption price deposited as provided in Section (G) below; provided, however, that any such new stock or security shall be issued within twelve (12) months after the vote of the Preferred Stock herein provided for authorizing the issuance of such new stock or security; or
(2) amend, alter or repeal any of the rights, preferences or powers of the holders of the Preferred Stock so as to affect adversely any such rights, preferences or powers; provided, however, that if such amendment, alteration or repeal affects adversely the rights, preferences or Powers of one or more, but not all, series of Preferred Stock at the time outstanding, only the consent of the holders of at least two-thirds of the total number of outstanding shares of all series so affected shall be required; and provided, further, that an amendment to increase or decrease the authorized amount of Preferred Stock, or to create or authorize, or increase or decrease the amount of, any class of stock ranking on a parity with the outstanding shares of the Preferred Stock as to dividends or assets shall not be deemed to affect adversely the rights, preferences or powers of the holders of the Preferred Stock or any series thereof.
(D) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Preferred Stock then outstanding voting as a class:
(1) merge or consolidate with or into any other corporation or corporations or sell or otherwise dispose of all or substantially all of the assets of the Corporation, unless such merger or consolidation or sale or other disposition, or the exchange, issuance or assumption of all securities to be issued or assumed in connection with any such merger or consolidation or sale or other disposition, shall have been ordered, approved or permitted by the Federal Energy Regulatory Commission under the Federal Power Act, as amended, or exempted by said Commission from the requirements of said Act, provided that the provisions of this subsection (1) shall not apply to the purchase or other acquisition by the Corporation of franchises or assets of another corporation in any manner which does not involve a merger or consolidation; or
(2) issue, sell, or otherwise dispose of any shares of the Preferred Stock, in addition to the 60,000 shares of the Preferred Stock initially authorized, or of any other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, unless the gross income of the Corporation for a period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the issuance, sale or disposition of such stock, determined in accordance with generally accepted accounting practices (but in any event after deducting all taxes and the greater of (a) the amount for said period appropriated from income to the property retirement reserve by the Corporation on its books or (b) the largest amount required to be provided therefor by any mortgage indenture of the Corporation) to be available for the payment of interest, shall have been at least one and one-half (1-1/2) times the sum of (i) the annual interest charges on all interest bearing indebtedness of the Corporation and (ii) the annual dividend requirements on all outstanding shares of the Preferred Stock and of all other classes of stock ranking prior to, or on a parity with, the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, including the shares proposed to be issued; provided, that there shall be excluded from the foregoing computation interest charges on all indebtedness and dividends on all shares of the Preferred Stock or on any other class of stock ranking prior to, or on a parity with, the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution which are to be retired in connection with the issue of such additional shares; and provided, further, that in any case where such additional shares of the Preferred Stock, or other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, are to be issued in connection with the acquisition of additional property, the gross income of the property to be so acquired, computed on the same basis as the gross income of the Corporation, may be included on a pro forma basis in making the foregoing computation; or
(3) issue, sell, or otherwise dispose of any shares of the Preferred Stock,
or of any other class of stock ranking on a parity with the Preferred Stock as
to dividends or in liquidation, dissolution, winding up or distribution, unless
the aggregate of the capital of the Corporation applicable to the Common Stock
and the surplus of the Corporation shall be not less than the aggregate amount
payable on the involuntary liquidation, dissolution or winding up of the
Corporation, in respect of all shares of the Preferred Stock and all shares of
any other class of stock, if any, ranking prior thereto, or on a parity
therewith, as to dividends or in liquidation, dissolution, winding up or
distribution, which will be outstanding after the issue of the shares proposed
to be issued; provided, that if, for the purposes of meeting the requirements of
this subsection (43), it becomes
necessary to take into consideration any earned surplus of the Corporation, the
Corporation shall not thereafter pay any dividends on shares of the Common Stock
which would result in reducing the Corporation's Common Stock Equity (as in
Section (H) hereinafter defined) to an amount less than the aggregate amount
payable, on involuntary liquidation, dissolution or winding up of the
Corporation, on all shares of the Preferred Stock and of any other class of
stock ranking prior to, or on a parity with, the Preferred Stock, as to
dividends or other distributions, at the time outstanding.
(E) Except as herein expressly provided, the holders of the Preferred Stock shall have no power to vote and shall be entitled to no notice of any meeting of the stockholders of the Corporation. As to matters upon which holders of the Preferred Stock are entitled to vote, as herein expressly provided, each holder of such Preferred Stock shall be entitled to one vote, in person or by proxy, for each share of such Preferred Stock standing in his name on the books of the Corporation.
(F) In the event of any voluntary liquidation, dissolution or winding up of the Corporation, the Preferred Stock, pari passu with all shares of preferred stock of any other class or series then outstanding shall have a preference over the Common Stock until an amount equal to the then current redemption price, including accumulated and unpaid dividends, if any, shall have been paid. In the event of any involuntary liquidation, dissolution or winding up of the Corporation, which shall include any such liquidation, dissolution or winding up which may arise out of or result from the condemnation or purchase of all or a major portion of the properties of the Corporation, by (i) the United States Government or any authority, agency or instrumentality thereof, (ii) a state of the United States or any political subdivision, authority, agency, or instrumentality thereof or (iii) a district, cooperative or other association or entity not organized for profit, the Preferred Stock, pari passu with all shares of preferred stock of any other class or series then outstanding, shall also have a preference over the Common Stock until the full par value thereof, and an amount equal to the accumulated and unpaid dividends thereon, if any, shall have been paid by dividends or distribution.
(G) Upon the affirmative vote of a majority of the shares of the issued and outstanding Common Stock at any annual meeting, or any special meeting called for that purpose, the Corporation may at any time redeem all of any series of said Preferred Stock, or may from time to time redeem any part of any series thereof, by paying in cash the redemption price then applicable thereto, plus, in each case, an amount equivalent to the accumulated and unpaid dividends, if any, to the date fixed for redemption. Notice of the intention of the Corporation to redeem all or any part of the Preferred Stock shall be mailed not less than thirty (30) days nor more than sixty (60) days before the date fixed for redemption to each holder of record of Preferred Stock to be redeemed, at his post office address as shown by the Corporation's records, and not less than thirty (30) days' nor more than sixty (60) days' notice of such redemption may be published in such manner as may be prescribed by resolution of the Board of Directors of the Corporation; and in the event of such publication, no defect in the mailing of such notice shall affect the validity of the proceedings for the redemption of any shares of Preferred Stock so to be redeemed. Contemporaneously with the mailing or the publication of such notice, as aforesaid, or at any time thereafter prior to the date fixed for redemption, the Corporation may deposit the aggregate redemption price (or the portion thereof not already paid in the redemption of such Preferred Stock so to be redeemed) with any bank or trust company in the City of New York, New York, or in the City of New Orleans, Louisiana, named in such notice, payable to the order of the record holders of the Preferred Stock so to be redeemed, as the case may be, on the endorsement and surrender of their certificates, and thereupon said holders shall cease to be stockholders with respect to such shares; and from and after the making of such deposit such holders shall have no interest in or claim against the Corporation with respect to said shares, but shall be entitled only to receive such moneys from said bank or trust company, with interest, if any, allowed by such bank or trust company on such moneys deposited as in this Section (G) provided, on endorsement and surrender of their certificates, as aforesaid. Any moneys so deposited, plus interest thereon, if any, remaining unclaimed at the end of six (6) years from the date fixed for redemption, if thereafter requested by resolution of the Board of Directors, shall be repaid to the Corporation, and in the event of such repayment to the Corporation, such holders of record of the shares so redeemed as shall not have made claim against such moneys prior to such repayment to the Corporation, shall be deemed to be unsecured creditors of the Corporation for an amount, without interest, equivalent to the amount deposited, plus interest thereon, if any, allowed by such bank or trust company, as above stated, for the redemption of such shares and so paid to the Corporation. Shares of the Preferred Stock which have been redeemed shall not be reissued. If less than all of the shares of any series of the Preferred Stock are to be redeemed, the shares thereof to be redeemed shall be selected by lot, in such manner as the Board of Directors of the Corporation shall determine, by an independent bank or trust company selected for that purpose by the Board of Directors of the Corporation. Nothing herein contained shall limit any legal right of the Corporation to purchase or otherwise acquire any shares of the Preferred Stock; provided, however, that, so long as any shares of the Preferred Stock (which term, for purposes of this proviso, shall include the 4-3/4% Preferred Stock) are outstanding, the Corporation shall not (i) make any payment, or set aside funds for payment, into any sinking fund for the purchase or redemption of any shares of the Preferred Stock, or (ii) redeem, purchase or otherwise acquire less than all of the shares of the Preferred Stock, if, at the time of such payment or setting aside of funds for payment into such sinking fund, or of such redemption, purchase or other acquisition, dividends payable on the Preferred Stock shall be in default in whole or in part, unless prior to or concurrently with such payment or setting aside of funds for payment into such sinking fund, and/or such redemption, purchase or other acquisition, as the case may be, all such defaults shall be cured or unless such payment or setting aside of funds for payment into such sinking fund, and/or such redemption, purchase or other acquisition, as the case may be, shall have been ordered, approved or permitted under the Federal Power Act. Any shares of the Preferred Stock so redeemed, purchased or acquired shall be retired and cancelled.
(H) For the purposes of this Section (H) and subsection (43)
of Section (D) the term "Common Stock Equity" shall mean the aggregate of the
par value of, or stated capital represented by, the outstanding shares (other
than shares owned by the Corporation) of stock ranking junior to the Preferred
Stock as to dividends and assets, of the premium on such junior stock and of the
surplus (including earned surplus, capital surplus and surplus invested in
plant) of the Corporation, less (1) any amounts recorded on the books of the
Corporation for utility plant and other plant in excess of the original cost
thereof, (2) unamortized debt discount and expense, capital stock discount and
expense and any other intangible items set forth on the asset side of the
balance sheet as a result of accounting convention, (3) the excess, if any, of
the aggregate amount payable on involuntary liquidation, dissolution or winding
up of the affairs of the Corporation upon all outstanding preferred stock of the
Corporation over the aggregate par or stated value thereof and any premiums
thereon, and (4) the excess, if any, for the period beginning with January 1,
1955, to the end of a month within ninety (90) days preceding the date as of
which Common Stock Equity is determined, of the cumulative amount computed under
requirements contained in the Corporation's mortgage indentures relating to
minimum depreciation provisions (this cumulative amount being the aggregate of
the largest amounts separately computed for entire periods of differing
coexisting mortgage indenture requirements), over the amount appropriated from
income to the property retirement reserve by the Corporation on its books during
such period, including the final fraction of a year; provided, however, that no
deductions shall be required to be made in respect of items referred to in items
(1) and (2) of this Section (H) in cases in which such items are being amortized
or are provided for, or are being provided for, by reserves. For the purpose of
this Section (H): (i) the term "total capitalization" shall mean the sum of the
Common Stock Equity, plus item (3) in this Section (H) and the stated capital
applicable to, and any premium on, outstanding stock of the Corporation not
included in Common Stock Equity, and the principal amount of all outstanding
debt of the Corporation maturing more than twelve (12) months after the date of
issue thereof; and (ii) the term "dividends on Common Stock" shall embrace
dividends on Common Stock (other than dividends payable only in shares of Common
Stock), distributions on, and purchases or other
acquisitions for value of, any Common Stock of the Corporation or other stock,
if any, junior to the Preferred Stock. So long as any shares of the Preferred
Stock are outstanding, the Corporation shall not declare or pay any dividends on
Common Stock, except as follows:
(a) If and so long as the Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than twenty per centum (20%) of total capitalization, the Corporation shall not declare such dividends in an amount which, together with all other dividends on Common Stock paid within the year ending with and including the date on which such dividend is payable, exceeds fifty per centum (50%) of the net income of the Corporation available for dividends on the Common Stock for the twelve (12) full calendar months immediately preceding the month in which such dividends are declared, except in an amount not exceeding the aggregate of dividends on Common Stock which under the restrictions set forth above in this subsection (a) could have been, and have not been, declared; and
(b) If and so long as the Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than twenty-five per centum (25%) but not less than twenty per centum (20%) of total capitalization, the Corporation shall not declare dividends on the Common Stock in an amount which, together with all other dividends on Common Stock paid within the year ending with and including the date on which such dividend is payable, exceeds seventy-five per centum (75%) of the net income of the Corporation available for dividends on the Common Stock for the twelve (12) full calendar months immediately preceding the month in which such dividends are declared, except in an amount not exceeding the aggregate of dividends on Common Stock which under the restrictions set forth above in subsection (a) and in this subsection (b) could have been, and have not been, declared; and
(c) At any time when the Common Stock Equity is twenty-five per centum (25%) or more of total capitalization, the Corporation may not declare dividends on shares of the Common Stock which would reduce the Common Stock Equity below twenty-five per centum (25%) of total capitalization, except to the extent provided in subsections (a) and (b) above.
At any time when the aggregate of all amounts credited subsequent to January 1, 1955, to the property retirement reserve (accumulated provision for depreciation) account of the Corporation through charges to operating revenue deductions or otherwise on the books of the Corporation shall be less than the amount computed as provided in clause (aa) below, under requirements contained in the Corporation's mortgage indentures, then for the purposes of subsections (a) and (b) above, in determining the net income available for common stock dividends during any twelve (12) month period, the amount to be provided for depreciation in that period shall be (aa) the greater of the cumulative amount appropriated from income to the property retirement reserve (accumulated provision for depreciation) on the books of the Corporation or the cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (the latter cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements) for the period from January 1, 1955, to and including said twelve (12) month period, less (bb) the greater of the cumulative amount appropriated from income to the property retirement reserve (accumulated provision for depreciation) on the books of the Corporation or the cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (the latter cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements) from January 1, 1955, up to but excluding said twelve (12) month period; provided that, in the event any company is merged into the Corporation, the "cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions" referred to above shall be computed without regard, for the period prior to the merger, of property acquired in the merger, and the "cumulative amount appropriated from income to the property retirement reserve (accumulated provision for depreciation) on the books of the Corporation" shall be exclusive of amounts provided for such property prior to the merger.
(I) Dividends may be paid upon the Common Stock only when (i) dividends have been paid or declared and funds set apart for the payment of dividends as aforesaid on the Preferred Stock (which term, for purposes of this Section (I), shall include the 4-3/4% Preferred Stock) from the date(s) after which dividends thereon became cumulative, to the beginning of the period then current, with respect to which such dividends on the Preferred Stock are usually declared, and (ii) all payments have been made or funds have been set aside for payments then or theretofore due under the terms of sinking fund requirements (if any) for the purchase or redemption of shares of the Preferred Stock, but whenever (x) all such dividends upon the Preferred Stock as aforesaid shall have been paid or declared and funds shall have been set apart for the payment thereof upon the Preferred Stock and (y) all payments shall have been made or funds shall have been set aside for all payments then or theretofore due under the terms of sinking fund requirements (if any) for the purchase or redemption of shares of the Preferred Stock, then, subject to the limitations above set forth and subject to the rights of any other class of stock then outstanding, dividends upon the Common Stock may be declared payable then or thereafter, out of any net earnings or surplus of assets over liabilities, including capital, then remaining.
(J) The Corporation reserves the right, without any vote or consent of the Preferred Stock as a class or of any series of Preferred Stock, to amend these Articles of Incorporation in any or all of the following respects:
(1) So that the right vested exclusively in the holders of the 4-3/4% Preferred Stock as a class to elect the smallest number of directors, which shall constitute a majority of the authorized number of directors upon default in dividends upon the 4-3/4% Preferred Stock, shall thereafter be shared with the holders of Preferred Stock and any other preferred stock of any class or series, ranking prior to, or on a parity with, the Preferred Stock as to dividends and distributions, all voting as one class, to the same extent and with the same effect as though the 4-3/4% Preferred Stock had been redeemed, acquired or otherwise retired and had been reissued as a series of Preferred Stock;
(2) So that the 4-3/4% Preferred Stock shall thereafter be a series of 4-3/4% Preferred Stock within the class of Preferred Stock herein authorized, limited in number to the number of shares of 4-3/4% Preferred Stock authorized to be issued prior to such amendment, with the same annual rate of dividend, the same dates on which dividends shall be paid each year, the same date from which dividends shall commence to accumulate, the same amounts payable on redemption and the same amounts payable upon distribution of assets, as were provided with respect to the shares of 4-3/4% Preferred Stock prior to such amendment.
SIXTH: The corporate power of this Corporation shall be vested in, and exercised by, a Board of Directors to be composed of not less than three (3) nor more than fifteen (15) persons, to be elected annually at a meeting of stockholders to be held on any date selected by the stockholders. The number of persons, within the foregoing limits, to compose the Board of Directors at any given time, shall be fixed by either the stockholders or by the Board of Directors. A majority of the Board of Directors shall constitute a quorum for the transaction of business unless the By-Laws of this Corporation, adopted by the Board of Directors, shall provide for a lesser number.
Vacancies and newly created Directorships resulting from any increase on the authorized number of Directors may be filled as provided in the By-Laws.
A failure to elect directors on the date above specified shall not dissolve the Corporation, nor impair its corporate existence or management, but the directors then in office shall remain in office until their successors shall have been duly elected and qualified.
Notice of such meeting and of all other stockholders' meetings shall be given in the manner prescribed by law, and, when not so prescribed, then written notice of such meetings shall be addressed to each stockholder entitled to vote at said meeting, at such address as may have been furnished by him for notice hereunder and deposited in the post office, at least fifteen (15) days before the date of said meeting, postage prepaid. No notice need be given to any person whose stock was acquired, or who became a registered owner thereof, on or after the date upon which notice of a meeting of stockholders was mailed or delivered. The By-Laws of the Corporation may provide for any additional form of notice.
The books for the transfer of the stock may be closed for such periods before and during the payment of dividends and the holding of meetings of stockholders, not to exceed thirty (30) days at any one time, as the Board of Directors may from time to time determine; and the Corporation shall make no transfer of stock on the books during such period.
The Board of Directors shall elect individuals to occupy offices as provided in the By-Laws. The powers and duties of every officer, agent and employee shall be such as may be conferred upon them by the By-Laws, the Board of Directors or the Executive Committee, and all officers, agents and employees shall hold office and employment at the pleasure of the Board of Directors.
In furtherance and not in limitation of the powers conferred by law, either the Board of directors or the stockholders are expressly authorized to make, alter and repeal the By-Laws of the Corporation. The Board of Directors may make and establish, as well as alter and amend, all such rules and regulations, not inconsistent herewith, necessary and proper in its judgment for the conduct and management of the business and affairs and the exercise of the corporate powers of this Corporation, and said Board of Directors shall have full power and authority to borrow money and to execute mortgages and pledges and create liens; to issue bonds, notes and other obligations, and to secure same by mortgage and/or pledge or otherwise, and generally to do any and all things reasonable, convenient or necessary for the proper conduct of the business and affairs of this Corporation; and, in its discretion, the Board of Directors may create and select an Executive Committee to be composed of not less than two (2) of its own members, to which committee the Board of Directors may grant all or any of its powers to be exercised during the interim between meetings of the Board of Directors itself.
A director of this Corporation shall not be disqualified by his office from dealing or contracting with the Corporation either as vendor, purchaser or otherwise, nor shall any transaction or contract of this Corporation be void or voidable by reason of the fact that any director or any firm of which any director is a member, or any corporation of which any director is a shareholder or director, is in any way interested in such transaction or contract, provided that such transaction or contract is or shall be authorized, ratified or approved either (1) by vote of a majority of a quorum of the Board of Directors or of the Executive Committee without counting in such majority or quorum any director so interested, or members of a firm so interested, or a shareholder or director of a corporation so interested, or (2) by a vote at a stockholders' meeting of the holders of record of a majority of all the outstanding shares of Common Stock of the Corporation, or by writing or writings signed by a majority of such holders; nor shall any director be liable to account to the Corporation for any profits realized by and from or through any such transaction or contract of this Corporation authorized, ratified or approved, as aforesaid, by reason of the fact that he or any firm of which he is a member, or any corporation of which he is a shareholder or director, was interested in such transaction or contract.
SEVENTH: Except as hereinbefore in Article FIFTH hereof provided, with respect to certain voting rights conferred upon the preferred stock, the provisions hereof may be modified, changed, altered or amended to the extent and in the manner now or hereafter permitted by law for the amendment of the articles of incorporation or act of incorporation of a corporation, or the capital stock or the number of shares of the capital stock of this Corporation may be increased or decreased, or new classes or series of stock may be created, or the number of shares of any class or series of stock may be changed with the assent of two-thirds (or such smaller number, not less than a majority, as may be permitted by law) of the shares of the outstanding Common Stock of this Corporation expressed, given and obtained at a general meeting of such stockholders convened for such purposes, or any of them, after previous notice of such meeting shall have been given to each Common Stockholder in the manner hereinabove provided, unless other notice for a meeting of such character be prescribed by law, in which event notice shall be given in conformity with law.
Whenever this Corporation may be dissolved, either by limitation or from any other cause, its affairs shall be liquidated by three (3) commissioners to be elected by the holders of the Common Stock at a meeting convened for said purpose as above provided and after due notice; a majority of said stock represented at such meeting shall be requisite for the election of such commissioners. Such commissioners shall remain in office until the affairs of this Corporation shall have been fully liquidated. In case of the death or resignation of any one or more of said commissioners, the vacancy or vacancies shall be filled by the survivor or survivors. In the event of any disagreement among said commissioners, the action of the majority shall prevail and be binding.
The provisions of the Business Corporation Law of Louisiana and of all other statutes relating to corporations of the character of this Corporation whether consolidated or otherwise, shall be applicable to this Corporation so far as concerns the rights and powers of this Corporation and its stockholders. Upon the written consent or the vote of the holders of a majority in number of the shares then outstanding and entitled to vote, or, if the consent or vote of the holders of a larger number of shares is required by law, then, upon such larger consent or vote as may be required by law (1) any and every statute of the State of Louisiana hereinafter adopted whereby the rights, powers or privileges of the stockholders of corporations organized under the general laws of said State are increased, diminished or in any way affected, or whereby effect is given to the action taken by any part less than all of the stockholders of any such corporation shall, notwithstanding any provision which may at the time be contained in this agreement of consolidation, apply to this Corporation and shall be binding not only upon this Corporation but upon every stockholder thereof to the same extent as if such statute had been in force at the date of the making and filing of this agreement of consolidation, and/or (2) amendments to this agreement of consolidation authorized at the time of the making of such amendments by the laws of the State of Louisiana, may be made; provided, however, that no such consent or vote shall alter or change the amounts which the holders of outstanding preferred stock are entitled to receive as dividends or in distribution of assets in preference to the holders of the Common Stock, or decrease the price at which preferred stock may be redeemed, all as hereinabove provided, except with the consent of the holders of at least ninety per centum (90%) of the then outstanding preferred stock, which consent may be expressed by each stockholder either in writing or by vote at an annual or special stockholders' meeting.
EIGHTH: No stockholder shall ever be held liable for the contracts or faults or defaults of this Corporation in any further sum than the unpaid balance of the consideration, if any, due the Corporation on the shares of stock owned by him; nor shall any mere informality in organization or consolidation have the effect of rendering this agreement null, or of exposing a stockholder to any liability beyond the unpaid amount remaining due on his said stock.
NINTH: The officers of the Corporation shall have and exercise such powers and duties as may be conferred upon them by the Board of Directors or the Executive Committee of the Corporation.
TENTH: The rights of creditors and all liens upon the property of each of the parties hereto shall be preserved unimpaired and the property and franchises of each of said corporations, parties hereto, shall pass to and vest in the Corporation, subject to all lawful debts, guarantees, liabilities and obligations existing against each of said corporations, except as herein otherwise provided, and all of said debts, liabilities and obligations of the New Orleans Company and/or the Consumers Company and/or the Citizens Company, parties hereto, shall be provided for, paid and discharged by the Corporation, except as herein otherwise provided, and all contracts and agreements existing between each of said corporations, parties hereto, and any other person, firm or corporation shall be carried out and performed by the Corporation.
All of the rights and obligations of the New Orleans Company arising out of and/or imposed by Ordinance No. 6822 Commission Council Series of the City of New Orleans, adopted April 18, 1922, and known as the "Settlement Ordinance", and Ordinances Nos. 7067, 7068 and 7069, respectively, Commission Council Series of the City of New Orleans, adopted September 2, 1922, supplemental thereto, and/or other ordinances supplemental thereto or amendatory thereof, shall pass to and be assumed by the Corporation, and nothing herein contained shall be construed as changing, affecting or impairing the provisions of said ordinances, as presently existing.
ELEVENTH: So long as bonds of any series of the Corporation's (a) First Mortgage Bonds, 6.75% Thirteenth Series, due on October 15, 2017, (b) First Mortgage Bonds, 3.875% Fourteenth Series, due on August 1, 2008, (c) First Mortgage Bonds, 5.25% Fifteenth Series, due on August 1, 2013, (d) Insured Quarterly First Mortgage Bonds, 5.65% Sixteenth Series, due on September 1, 2029, (e) Insured Quarterly First Mortgage Bonds, 5.60% Seventeenth Series, due on September 1, 2024, or (f) First Mortgage Bonds, 4.98% Eighteenth Series, due on July 1, 2010, remain outstanding, the Corporation shall not:
(I) Declare or pay any dividends on Common Stock during calendar years 2007 and 2008; or
(II) Declare or pay any dividends on Common Stock during calendar year 2009, or thereafter through the period ending on the third anniversary of the [Effective Date], if Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than forty per centum (40%) of total capitalization. For purposes of this Article ELEVENTH, the terms "Common Stock Equity", "total capitalization" and "dividends on Common Stock" shall have the respective meanings ascribed to them in Section (H) of Article FIFTH, except that, solely for purposes of this Article ELEVENTH, the term "total capitalization" shall exclude (x) the principal amount of the Intercompany Notes as defined in, and to be issued to the Corporation's affiliates in accordance with Section 5.6 of the Corporation's Plan of Reorganization as confirmed by the U.S. Bankruptcy Court for the Eastern District of Louisiana in Case No. 05-17697 and (y) the principal amount of any securitization bonds that may be issued from time to time in connection with the recovery of the Corporation's storm costs arising from Hurricane Katrina.
The restrictions on dividends on Common Stock set forth in this Article ELEVENTH shall not apply, and therefore the Corporation may declare and pay dividends on Common Stock without regard to this Article ELEVENTH (but subject to any other applicable restrictions on dividends on Common Stock set forth in Article FIFTH), during any period in which (a) the corporate credit rating of the Corporation, as published by either Standard & Poor's Ratings Group, a division of McGraw-Hill Companies (herein defined as "S&P") or Moody's Investors Service, Inc. (herein defined as "Moody's"), is listed as investment grade and (b) the credit rating of the Corporation's senior secured debt is designated as investment grade by either S&P or Moody's; provided, however, that if, subsequently, a relevant investment grade rating set forth in (a) or (b) above is adjusted by either S&P or Moody's, as the case may be, such that it is no longer investment grade, then the Corporation shall not, from and after the time of such rating adjustment, declare or pay further dividends on Common Stock except in accordance with the restrictions set forth in (I) or (II) above, as the case may be.
This Article ELEVENTH shall, by its terms, terminate and cease to be in effect on the earlier of (i) the date on which the Corporation transfers, sells or otherwise disposes all or substantially all of its distribution assets to the City of New Orleans and/or to one or more of its designees and/or to one or more other third parties, and (ii) the third anniversary of the [Effective Date].
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AMENDED
BY-LAWS
OF
ENTERGY NEW ORLEANS, INC.
ARTICLE I.
OFFICES
The principal business office of the Corporation shall be in New Orleans, Louisiana, or in such other location as designated by the Board of Directors. The Corporation may also have offices at such other places as the Board of Directors may from time to time designate or the business of the Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders, whether annual or special, shall be held at a location fixed by the Board of Directors or by the stockholders.
SECTION 2. Annual Meeting. The annual meeting of stockholders for the election of Directors and the transaction of such other business as may properly come before the meeting shall be held on such date and at such time of day as shall have been fixed by the Board of Directors or by the stockholders.
SECTION 3. Special Meetings. Special meetings of the stockholders may be held at any time upon the call of (i) a majority of the entire Board of Directors, (ii) the President, (iii) the Chairman of the Board, (iv) the person, if any, designated by the Board of Directors as the Chief Executive Officer, or (v) the holders of not less than a majority of the outstanding stock entitled to vote at the special meeting.
SECTION 4. Organization. The Chief Executive Officer or, in his absence, a person appointed by him or, in default of such appointment, the officer next in seniority of position (as determined by the Secretary or, in the Secretary's absence, the Assistant Secretary), shall call meetings of the stockholders to order and shall act as chairman thereof. The Secretary of the Corporation, if present, shall act as secretary of all meetings of stockholders, and, in his absence, the presiding officer may appoint a secretary.
SECTION 5. Action by Consent. Any action required or permitted to be taken at any meeting of the stockholders, whether annual or special, may be taken without a meeting, if prior to such action a written consent thereto is signed by a sufficient percentage of shareholders to satisfy the minimum requirements of state law.
ARTICLE III.
DIRECTORS
SECTION 1. General Powers. The property, affairs and business of the Corporation shall be managed by the Board of Directors.
SECTION 2. Term of Office. The term of office of each Director shall be until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until the earlier death, resignation or removal of such Director.
SECTION 3. Number of Directors. The number of Directors which shall constitute the whole Board of Directors shall be not more than fifteen (15) nor less than three (3), with the exact number at any given time to be fixed by a resolution of the Board of Directors or by the stockholders.
SECTION 4. Meetings; Notice. Meetings of the Board of Directors shall be held at such place as may from time to time be fixed by resolution of the Board or by the Chairman of the Board, the Vice Chairman, the President or a Vice President and as may be specified in the notice or waiver of notice of any meeting. Notice may be written, electronic or oral and may be given at any time prior to the meeting. Notice may be waived by a Director either prior to or following a meeting. Directors present at a meeting shall be deemed to have waived notice thereof. Meetings of the Board of Directors, or any committee thereof, may be held by means of a video conference, a telephone conference or similar communications equipment. The Chairman of the Board, or in the absence of the Chairman of the Board, the Vice Chairman, shall preside at all meetings of the Board of Directors.
SECTION 5. Quorum. A majority of the Board of Directors shall be necessary to constitute a quorum for the transaction of business, and the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum is present when the meeting is convened, the Directors present may continue to conduct the business of the meeting, taking action by vote of a majority of a quorum as fixed above, until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum as fixed above, or the refusal of any Director present to vote.
SECTION 6. Action By Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if, prior to such action, a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or such committee, as the case may be.
SECTION 7. Advisory Directors. The stockholders or the Board of Directors may elect one or more Advisory Directors of the Corporation. Advisory Directors may be called upon individually or as a group by the Board of Directors or Officers of the Corporation to give advice and counsel to the Corporation. Advisory Directors shall receive from the Corporation such remuneration as shall be fixed by the Board of Directors. Terms of Advisory Directors shall expire on the day of the Annual Meeting of the Corporation, provided, however, that Advisory Directors shall serve at the pleasure of the Board of Directors and may be removed at any time with or without cause by a vote of the Board of Directors. For the purpose of Article IX (Indemnification) of these By-Laws, Advisory Directors of the Corporation shall enjoy the same rights and privileges as Directors of the Corporation.
SECTION 8. Vacancies; Removal. Vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by the stockholders or by the Board of Directors, and the Directors so chosen shall hold office until the next annual election. The stockholders may by majority vote remove any Director from his directorship, whether cause shall be assigned for such removal or not.
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. Executive Committee. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, establish an Executive Committee of not less than two or more than five members, to serve at the pleasure of the Board of Directors, which Executive Committee shall consist of such directors as the Board of Directors may from time to time designate.
SECTION 2. Procedure. The Executive Committee shall meet at the call of any of the members of the Executive Committee. A majority of the members shall be necessary to constitute a quorum and action shall be taken by a majority vote of those present.
SECTION 3. Powers and Reports. During the intervals between the meetings of the Board of Directors, the Executive Committee shall possess and may exercise, to the full extent authorized by law, all the powers of the Board of Directors in the management and direction of the business and affairs of the Corporation. The taking of an action by the Executive Committee shall be conclusive evidence that the Board of Directors was not in session when such action was taken. The Executive Committee shall keep regular minutes of its proceedings and all action by the Executive Committee shall be reported to the Board of Directors at its meeting next following the meeting of the Executive Committee and shall be subject to revision or alteration by the Board of Directors; provided, that no rights of third parties shall be affected by such revision or alteration.
SECTION 4. Other Committees. From time to time the Board of Directors, by the affirmative vote of a majority of the whole Board of Directors, may appoint other committees for any purpose or purposes, and such committees shall have such powers as shall be conferred by the resolution of appointment; provided, however, that no such committee shall be authorized to exercise the powers of the Board of Directors. The quorum of any such committee so appointed shall be a majority of the membership of that committee.
ARTICLE V.
OFFICERS
SECTION 1. Required and Discretionary Officers. The Board of Directors shall elect individuals to occupy at least three executive offices: President, Secretary and Treasurer. In its discretion, the Board of Directors may elect individuals to occupy other executive offices, including Chairman of the Board, Vice Chairman of the Board, Chief Executive Officer, Chief Operating Officer, Vice President and such other executive offices as the Board shall designate. Officers shall be elected annually and shall hold office until their respective successors shall have been duly elected and qualified, or until such officer shall have died or resigned or shall have been removed by majority vote of the whole Board of Directors. To the extent permitted by law, individuals may occupy more than one office.
SECTION 2. Chairman and Vice Chairman of the Board of Directors. When a Chairman of the Board and/or Vice Chairman is elected by the Board of Directors, he or she shall be a member of the Board of Directors, shall preside at all meetings of the Board of Directors, and shall have such other duties as from time to time may be assigned to him or her by the Board of Directors or by the Executive Committee.
SECTION 3. President. The President shall perform duties incident to the office of the president of a corporation and such other duties as from time to time may be assigned to him or her by the Board of Directors, by the Executive Committee or, if the Board has elected a Chief Executive Officer and if the Chief Executive Officer is not the President, by the Chief Executive Officer.
SECTION 4. Vice Presidents. Each Vice President shall have such powers and shall perform such duties as from time to time may be conferred upon or assigned to him or her by the Board of Directors, the Executive Committee, the President or the Chief Executive Officer.
SECTION 5. Secretary. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors in books provided for the purpose; shall see that all notices are duly given in accordance with the provisions of law and these By-Laws; shall be custodian of the records and of the corporate seal of the Corporation; shall see that the corporate seal is affixed to all documents the execution of which under the seal is duly authorized, and, when the seal is so affixed, he may attest the same; and, in general, shall perform all duties incident to the office of the secretary of a corporation, and such other duties as from time to time may be assigned to the Secretary by the Chief Executive Officer, the Chairman of the Board, the Vice Chairman, the President, the Board of Directors or the Executive Committee. The Secretary shall also keep, or cause to be kept, a stock book, containing the names, alphabetically arranged, of all persons who are stockholders of the Corporation, showing their addresses of record, the number of shares held by them respectively, and the date when they respectively became the owners of stock of the Corporation.
SECTION 6. Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation, and shall deposit, or cause to be deposited, in the name of the Corporation, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by the Treasurer, by an assistant Treasurer or by any other individual designated by the Board of Directors. The Treasurer may endorse for collection on behalf of the Corporation, checks, notes and other obligations; may sign receipts and vouchers for payments made to the Corporation singly or jointly with another person as the Board of Directors may authorize; may sign checks of the Corporation and pay out and dispose of the proceeds as the Board of Directors may authorize; shall render or cause to be rendered to the Chairman of the Board, the President and the Board of Directors, whenever requested, an account of the financial condition of the Corporation; and, in general, shall perform all the duties incident to the office of a treasurer of a corporation, and such other duties as from time to time may be assigned to him by the Chairman of the Board, the Vice Chairman, the President, the Board of Directors or the Executive Committee.
SECTION 7. Subordinate Officers. The Board of Directors may appoint such assistant secretaries, assistant treasurers and other officers as it may deem desirable. Each such officer shall hold office for such period, have such authority and perform such duties as the Board of Directors may prescribe. The Board of Directors may, from time to time, authorize any officer to appoint and remove such officers and to prescribe the powers and duties thereof.
SECTION 8. Vacancies; Absences. Any vacancy in any of the above offices may be filled by the Board of Directors at any regular or special meeting. Except when the law requires the act of a particular officer, the Board of Directors or the Executive Committee, whenever necessary, may, in the absence of any officer, designate any other officer or properly qualified employee, to perform the duties of the absent officer for the time being, and such designated officer or employee shall have, when so acting, all the powers herein given to such absent officer.
SECTION 9. Resignations. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, the Chairman of the Board, the Vice Chairman, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon written receipt thereof by the Board of Directors or by such officer.
ARTICLE VI.
CAPITAL STOCK
SECTION 1. Stock Certificates. Every stockholder shall be entitled to have a certificate certifying the number of shares owned by him in the Corporation. Stock certificates shall be signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. Such seal may be facsimile, engraved or printed. Where such certificate is signed (1) by a transfer agent or an assistant transfer agent, other than the Corporation itself, or (2) by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of the Chairman of the Board, the Vice Chairman of the Board, the President, Vice President, Treasurer, Secretary, Assistant Treasurer or Assistant Secretary may be facsimile. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the Corporation.
SECTION 2. Transfer of Shares. The shares of stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his attorney lawfully constituted, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof or guaranty of the authenticity of the signature as the Corporation or its agents may reasonably require. The Board of Directors may appoint one or more transfer agents and registrars of the stock of the Corporation. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact and legal owner thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by law.
SECTION 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, mutilated or destroyed, and may require the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, mutilated or destroyed.
ARTICLE VII.
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the Corporation's bank accounts and all bills of exchange, promissory notes, acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, person or persons, as shall be thereunto authorized by the Board of Directors or as may be designated in a manner authorized by the Board of Directors.
SECTION 2. Execution of Contracts, Assignments, etc. All contracts, agreements, endorsements, assignments, transfers, stock powers, and other instruments shall be signed by such officer or officers, person or persons, as shall be thereunto authorized by the Board of Directors or as may be designated in a manner authorized by the Board of Directors.
SECTION 3. Voting of Stock and Execution of Proxies. The Chairman of the Board, the Vice Chairman, the President or any Vice President or any other officer of the Corporation designated by the Board of Directors, the Chairman of the Board, or the President shall be authorized to attend any meeting of the stockholders of any other corporation in which the Corporation is an owner of stock and to vote such stock upon all matters coming before such meeting. The Chairman of the Board, the Vice Chairman, the President or any Vice President may sign and issue proxies to vote shares of stock of other corporations owned by the Corporation.
ARTICLE VIII.
SEAL
The seal of the Corporation shall show the year of its incorporation and shall be in such form as the Board of Directors shall prescribe. The seal on any corporate obligation for the payment of money may be a facsimile, engraved or printed.
ARTICLE IX.
INDEMNIFICATION
SECTION 1. Mandatory Indemnification - Third Party Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding ("Action"), whether civil, criminal, administrative or investigative (other than an Action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgements, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such Action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal Action, had no reasonable cause to believe the conduct was unlawful. The termination of any Action by judgement, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Action or proceeding, had reasonable cause to believe that the conduct was unlawful.
SECTION 2. Mandatory Indemnification - Derivative Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Action by or in the right of the Corporation to procure a judgement in its favor by reason of the fact that such person is or was a director, officer, or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees and amounts paid in settlement not exceeding the estimated expense of litigating the Action to a conclusion) actually and reasonably incurred by such person in connection with the defense or settlement of such Action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interest of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of such person's duty to the Corporation unless and only to the extent that the court in which such Action was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
SECTION 3. Mandatory Indemnification - Successful Party. To the extent that a director, officer, employee or agent of the Corporation, or any person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in the defense of any such Action, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.
SECTION 4. Permissive Indemnification. Notwithstanding any limitations of the indemnification provided by Sections 1 and 2, the Corporation may, to the fullest extent authorized by law, indemnify any person who is or was a party or is threatened to be made a party to any Action by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against all or part of any expenses (including attorneys' fees), judgements, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Action, if it shall be determined in accordance with the applicable procedures set forth in Section 5 that such person is fairly and reasonably entitled to such indemnification.
SECTION 5. Procedure. Any indemnification under Sections 1, 2 or 4 (unless ordered by a court) shall be made by the Corporation only as authorized by the Board of Directors (which may so act whether or not there is a sufficient number of disinterested directors to constitute a quorum) in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standards of conduct set forth in Sections 1 and 2 or is entitled to indemnification under Section 4. Such determination, in the case of indemnification made pursuant to Section 1 or Section 2 shall be made (1) by the Board of Directors by a majority vote of a quorum, as defined in the Certificate of Incorporation or the By-Laws, consisting of directors who are not or were not parties to any pending or completed Action giving rise to the proposed indemnification, or (2) if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel (who may be, but need not be, outside counsel to the Corporation) in a written opinion, or (3) by the shareholder(s) of the Corporation. Such determination, in the case of indemnification made pursuant to Section 4, shall be made by the Board of Directors by a majority vote of a quorum, as defined in the Certificate of Incorporation or the By-Laws, consisting of directors who are not or were not parties to any pending or completed Action giving rise to the proposed indemnification or by the shareholders.
SECTION 6. Advance Payments. Expenses (including attorneys' fees) incurred or reasonably expected to be incurred by a director, officer or employee of the Corporation in defending against any claim asserted or threatened against such person in such capacity or arising out of such person's status as such shall be paid by the Corporation in advance of the final determination thereof, if authorized by the Board of Directors (which may so act whether or not there is a sufficient number of disinterested directors to constitute a quorum) upon receipt by the Corporation of his written request therefor and such person's written promise to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized or required in this article.
SECTION 7. Provisions Not Exclusive. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person seeking indemnification may be entitled under any law, Bylaw, agreement, vote of shareholders or disinterested directors or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 8. Miscellaneous. For purposes of this Article, and without any limitation whatsoever upon the generality thereof, the term "fines" as used herein shall be deemed to include (i) penalties imposed by the Nuclear Regulatory Commission (the "NRC") pursuant to Section 206 of the Energy Reorganization Act of 1974 and Part 21 of NRC regulations thereunder, as they may be amended from time to time, and any other penalties, whether similar or dissimilar, imposed by the NRC, and (ii) excise taxes assessed with respect to an employee benefit plan pursuant to the Employee Retirement Income Security Act of 1974, as it may be amended from time to time, ("ERISA"). For purposes of determining the entitlement of a director, officer or employee of the Corporation to indemnification under this Article, the term "other enterprise" shall be deemed to include an employee benefit plan governed by ERISA. The Corporation shall be deemed to have requested such person to serve as a director, officer or employee of such a plan where such person is a trustee of the plan or where the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to such plan or its participants or beneficiaries, and action taken or permitted by such person in the performance of his duties with respect to such employee benefit plan for which is a purpose reasonably believed by him to be in the interest of the participants and beneficiaries of the plan, shall be deemed to meet the standard of conduct required for indemnification hereunder. Any act, omission, step or conduct taken or had in good faith which is required, authorized or approved by any order or orders issued pursuant to the Public Utility Holding Company Act of 1935 or any other federal statute or any state statute or municipal ordinance shall be deemed to meet the standard of conduct required for indemnification hereunder.
ARTICLE X.
CONFLICTS
In the event that any provisions of these By-Laws conflict with the Articles of Incorporation or with state or federal statutes, the Articles of Incorporation or such statutes shall take precedence over such provisions of these By-Laws.
ARTICLE XI.
AMENDMENTS
Subject to the provisions of applicable law and of the Articles of Incorporation, these By-Laws may be altered, amended or repealed and new By-Laws adopted either by the stockholders or by the Board of Directors.
REVISED PLAN EXHIBIT 6.2(b)
INITIAL MEMBERS OF THE BOARD OF DIRECTORS AND
INITIAL OFFICERS OF THE REORGANIZED DEBTOR
The initial members (collectively, the "Directors") of the board of directors (the "Board of Directors") for the Reorganized Debtor 1 will consist of the following individuals: Daniel E. Packer, Roderick K. West, and Tracie L. Boutte. Each of the Directors has served as member of the Debtor's board of directors during the pendency of this Bankruptcy Case. The Reorganized Debtor will not pay compensation to any Director for their service as a Director. Each of the Directors are currently serving a one-year term that commenced on July 31, 2006, and it is anticipated that the Directors will be re-elected and will serve for a term of one year, commencing on July 31, 2007, unless the Director retires or resigns earlier.
The following individuals will serve as officers of the Reorganized Debtor (the "Reorganized Debtor's Officers"):
Daniel E. Packer | Chairman of the Board of Directors |
Roderick K. West | President and Chief Executive Officer |
Joseph T. Henderson | Senior Vice President and General Tax Counsel |
Nathan E. Langston | Senior Vice President and Chief Accounting Officer |
Robert D. Sloan | Executive Vice President, General Counsel and Secretary |
Jay A. Lewis | Vice President, Chief Financial Officer - Utilities Operations Group |
Tracie L. Boutte | Vice President, Regulatory Affairs - New Orleans |
Steven C. McNeal | Vice President and Treasurer |
Paul A. Castanon | Assistant Secretary |
Dawn Abuso | Assistant Secretary |
Michael A. Caruso | Assistant Treasurer |
Gary S. Hofman | Assistant Treasurer |
Mary Ann Valladares | Assistant Treasurer |
Frank Williford | Assistant Treasurer |
Rory L. Roberts | Tax Officer |
Patricia A. Galbraith | Tax Officer |
Each of the Reorganized Debtor's Officers will serve for a
term of one year, commencing on April 2, 2007, until the next election of
officers or until their successors are elected and qualified.
1. Capitalized terms used herein shall have the meaning ascribed to them in the
Debtor's Fourth Amended Chapter 11 Plan of Reorganization for Entergy New
Orleans, Inc., as Modified (P-1675).
The following individuals (collectively, the "Advisory Directors") have agreed
to serve in an advisory capacity to the Board of Directors:
James M . Cain
Sandra Rhodes Duncan
Leon R. Fulton
Alden McDonald
Ann M. Milling
Dr. Timothy P. Ryan
Howard Rodgers III
Charles C. Teamer,
Sr.
The Advisory Directors will not have any right to vote on the Board of
Directors. Each of the Directors are currently serving a one-year term that
commenced on April 2, 2007, unless the Advisory Director retires or resigns
earlier.
PLAN EXHIBIT 8.1
LIST OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
TO BE REJECTED AS OF THE EFFECTIVE DATE
|
|
|
|||
Lease or Executory Contract |
Counterparty |
Leased Premises |
|||
Lease dated February 3, 1994, amended May 11, 2004 | Carrollton Central Plaza Associates | 3801 Cambronne Street | |||
3301 Veterans Blvd. | Suite 118 | ||||
Suite 209 | New Orleans, LA | ||||
Metairie, LA 70002 | |||||
Lease | Lake Forest Plaza, LLC | 5700 Read Blvd. | |||
c/o Gowri S. Kailas | Suite 325 | ||||
Registered Agent | New Orleans, LA | ||||
3525 N. Causeway Blvd. | |||||
Suite 605 | |||||
Metairie, LA 70002 | |||||
Agreement for Natural Gas Sales dated March 1, 1995 | Apache Corporation (assignee of Aquila Energy Resources Corporation) | n/a | |||
c/o Robin B. Cheatham | |||||
Adams and Reese, LLP | |||||
701 Poydras Street | |||||
Suite 4500 | |||||
New Orleans, LA 70139 | |||||
Effective May 8, 2007
Exhibit 3(a)
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ENTERGY NEW ORLEANS, INC.
FIRST: The name of the Corporation shall be "ENTERGY NEW ORLEANS, INC.", and said Corporation shall have, possess and exercise all the rights, powers, privileges, immunities and franchises of the corporations, parties hereto, and shall be subject to all the duties and obligations of said respective corporations; it shall have, enjoy and be possessed of all of the property, real, personal and mixed, of every kind and nature, owned, possessed and enjoyed by or for said corporations, parties hereto; it shall have power to issue bonds and dispose of the same, in such form and denominations and bearing such interest as the Board of Directors may determine, and to secure payment thereof by mortgage of every and all of the property, franchises, rights, privileges and immunities of said Corporation at the time of the consolidation acquired or thereafter to be acquired and of the companies, parties hereto; to do all acts and things which said companies so consolidated or any of them might have done previous to said consolidation, and the further right to consolidate with any other street railway company, electric company or gas light company, or any other consolidated company.
SECOND: Said Corporation, "ENTERGY NEW ORLEANS, INC.", under its said corporate name, shall have power and authority to have and enjoy perpetual corporate existence and succession from and after the date hereof; to contract, sue and be sued; to make and use a corporate seal and the same to break or alter at pleasure; to hold, receive, lease, purchase and convey, as well as mortgage, hypothecate and pledge property, real, personal and mixed, corporeal and incorporeal; to name and appoint such managers, agents, directors and officers as its business, interests or convenience may require; and to make and establish, as well as alter and amend from time to time such by-laws, rules and regulations for the proper conduct, management and regulation of the affairs of said Corporation as may be necessary and proper; and to have, possess and enjoy all rights, powers, privileges, franchises and immunities now or hereafter authorized by law.
THIRD: The Domicile of said Corporation shall be in the City of New Orleans, State of Louisiana, and all citations or other legal process shall be served upon those individuals as identified by resolution of the Board of Directors of the Corporation.
FOURTH: The objects and purposes for which this Corporation is established to engage in any lawful activity for which corporations may be formed under the Business Corporation Law of Louisiana.
FIFTH: The amount of the capital stock of the Corporation shall be Seventy-seven Million Four Hundred Nine Thousand Eight Hundred Dollars ($77,409,800), together with the aggregate par value of capital stock issued after September 1, 1969, by this Corporation as hereinafter provided.
The total authorized number of shares of capital stock that may be issued by the Corporation shall be 10,347,798 shares, of which 10,000,000 shares shall have a par value of $4 per share and 347,798 shares shall have a par value of $l00 per share.
The shares of capital stock hereby authorized to be issued shall be divided among the following classes:
10,000,000 shares of $4 par value per share shall be Common Stock;
77,798 shares of $100 par value per share shall be 4-3/4% Preferred Stock (hereinafter sometimes referred to as the "4-3/4% Preferred Stock"); and
270,000 shares of $100 par value per share shall be Preferred Stock (which, together with such additional shares thereof as may be hereafter authorized, is hereinafter sometimes referred to as the "Preferred Stock").
The term "preferred stock" as used herein shall include the 4-3/4% Preferred Stock, the Preferred Stock and any other class of stock having a preference over the Common Stock as to dividends, distribution of assets, or in liquidation, dissolution or winding up.
Except as otherwise in this Article FIFTH provided and to the extent not prohibited by law, the Corporation may acquire funds for, or otherwise effect, the redemption or purchase of any of its shares through the issuance or sale of any of its stocks, bonds, or other securities.
Stocks of the Corporation, whether authorized herein or upon any subsequent increase of the number of shares of capital stock, may be issued by the Board of Directors of the Corporation from time to time for such consideration permitted by law as may be fixed from time to time by the Board of Directors, and general authority to the Board of Directors so to fix such consideration is hereby and herein granted; provided, however, that stock having a par value may not be issued for less than the par value thereof; and provided further, that such consideration may be in the form of money paid, labor done, or property actually received by the Corporation.
No holder of any stock of the Corporation shall be entitled as of right to purchase or subscribe for any part of any unissued stock of the Corporation, or of any additional stock of any class, to be issued by reason of any increase of the authorized capital stock, or of the number of shares of the Corporation, or of bonds, certificates of indebtedness, debentures or other securities convertible into stock of the Corporation, but any such unissued stock or any such additional authorized issues of new stock, or of securities convertible into stock, may be issued and disposed of by the Board of Directors to such persons, firms, corporations, or associations, and upon such terms as the Board of Directors may, in their discretion, determine, without offering to the stockholders then of record, or to any class of stockholders, any thereof, on the same terms or on any terms.
The preferred stock shall not entitle any holder thereof to vote at any meeting of stockholders or election of the Corporation or otherwise to participate in any action taken by the Corporation or its stockholders, but all the voting power shall be vested in the holders of the Common Stock, except as otherwise in this Article FIFTH provided. Each stockholder shall be entitled to one vote for each share of Common Stock of the Corporation standing in his name on the books of the Corporation.
Except as otherwise in this Article FIFTH provided, upon the vote of a majority of the total number of shares of stock then issued and outstanding, and entitled to vote, as herein provided, or upon such larger vote as may be required by law, this agreement may be amended from time to time so as to permit the Corporation to create or authorize one or more other classes of stock with such preferences, designations, rights, privileges, voting powers, including votes on proceedings prescribed by statute, and subject to such restrictions, limitations and qualifications with respect to voting and otherwise as may be determined by said vote, which may be the same or different from the preferences, designations, rights, privileges, voting powers, restrictions, limitations and qualifications with respect to voting or otherwise of the classes of stock of the Corporation then authorized. Any such vote and amendment may authorize any shares of any class then authorized but unissued to be issued as shares of such new class or classes.
Except as otherwise in this Article FIFTH provided, the Board of Directors of the Corporation may at any time authorize the conversion or exchange of the whole or any particular share of the outstanding preferred stock of any class, with the consent of the holder thereof, into or for stock of any other class which at the time of such consent is authorized but unissued, and may fix the terms and conditions upon which such conversion or exchange may be made; provided that, without the consent of the holders of record of two-thirds of the shares of Common Stock outstanding given at a meeting of the holders of the Common Stock called and held as provided by the By-Laws or given in writing without a meeting as authorized by law, the Board of Directors shall not authorize the conversion or exchange of any preferred stock of any class into or for Common Stock or authorize the conversion or exchange of any preferred stock of any class into or for preferred stock of any other class, if by such conv ersion or exchange the amount which the holders of the shares of stock so converted or exchanged would be entitled to receive either as dividends or shares in distribution of assets in preference to the Common Stock would be increased.
Except as otherwise in this Article FIFTH provided, any class of stock may be increased at any time upon vote of the holders of two-thirds (or such smaller number, not less than a majority, as may be permitted by law) of the shares of the Corporation then issued and outstanding and entitled to vote thereon; provided, however, that so long as any share of the 4-3/4% Preferred Stock remains outstanding, the amount to which the capital stock of the Corporation may be increased is Two Hundred Million Dollars ($200,000,000).
Except as otherwise in this Article FIFTH provided, the Corporation from time to time may resell any of its own stock, purchased or otherwise acquired by it as hereinafter provided for, at such price permitted by law as may be fixed by its Board of Directors or Executive Committee.
I
The designations, voting powers, preferences, dividend and redemption rights (including votes on proceedings prescribed by statute), and other relative rights or restrictions, limitations and qualifications of the 4-3/4% Preferred Stock having a par value of $100 per share shall be as follows:
(1) The holders of the 4-3/4% Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the surplus of the Corporation as provided by law, cumulative preferred dividends at the rate of 4-3/4% per annum from July 1, 1944, and no more, payable quarterly on the first days of January, April, July and October of each year, before any dividends shall be declared or paid upon or set apart for the Common Stock of the Corporation. Such cumulative preferred dividends shall accrue on each share from the quarterly dividend payment date next preceding the date of the original issue of such share, unless such stock shall be issued on a quarterly dividend payment date, and, in such case, from said date. The first quarterly dividend shall be payable on October 1, 1944, and shall be cumulative from July 1, 1944.
(2) No dividends shall be declared at any time upon the Common Stock of the Corporation unless all accumulated and unpaid dividends upon the outstanding 4-3/4% Preferred Stock shall have been declared and shall have been paid in full or a sum sufficient for payment thereof shall have been set aside for that purpose from said surplus of the Corporation, in which event dividends may be declared by the Board of Directors on the Common Stock out of said surplus of the Corporation, subject to the rights of any other class of stock then outstanding. The term "accumulated and unpaid dividends" as used herein with respect to the 4-3/4% Preferred Stock shall mean dividends on all the outstanding 4-3/4% Preferred Stock from the respective dates from which such dividends accumulate to the date as of which accumulated and unpaid dividends are being determined, less the aggregate of dividends theretofore declared and paid or s et apart for payment upon such outstanding 4-3/4% Preferred Stock.
(3) The 4-3/4% Preferred Stock may be called for redemption in whole or in part at any time at the option of the Board of Directors by mailing notice thereof to the holders of record of the shares to be redeemed at least thirty (30) days prior to the date fixed for redemption, and such shares may be then redeemed by paying, for each share so called, an amount equal to all accumulated and unpaid dividends thereon to the date fixed for such redemption, plus One Hundred Eleven and 50/100 Dollars ($111.50) per share as to any shares redeemed prior to July 1, 1954, and One Hundred Five Dollars ($105.00) per share as to any shares redeemed on July 1, 1954, and thereafter. In case of the redemption of part only of the 4-3/4% Preferred Stock at the time outstanding, the Corporation shall select by lot, or in such other manner as the Board of Directors may determine, the shares so to be redeemed, provided that there shall be no obligation to redeem less than a whole share. N otice of the intention of the Corporation to redeem the 4-3/4% Preferred Stock shall be mailed not less than thirty (30) days before the date of redemption to each holder of record of 4-3/4% Preferred Stock to be redeemed at his post office address appearing upon the books of the Corporation, and upon the deposit of the aggregate redemption price (or the portion thereof not already paid in the redemption of shares so to be redeemed) with any national bank or trust company in the City of New York or in the City of New Orleans, named in such notice, payable in the amounts aforesaid to the respective orders of the record holders of the 4-3/4% Preferred Stock so to be redeemed on endorsement and surrender of their certificates; said holders shall, at the time fixed in such notice for such redemption, cease to be stockholders with respect to said shares and from and after the making of such deposit, said holders shall have no interest in or claim against the Corporation with respect to said shares and shall be entitled only to receive said moneys from said bank or trust company without interest.
(4) In the case of any distribution of any assets of the Corporation in repayment in whole or in part of any outstanding shares of its capital stock, whether upon dissolution of the Corporation or liquidation or sale of any or all of its assets or otherwise, except in case of redemption as hereinbefore provided, there shall be paid to the holders of the 4-3/4% Preferred Stock (a) in case such dissolution, liquidation or sale shall be voluntary, One Hundred Five Dollars ($105) per share and (b) in case such dissolution, liquidation or sale shall be involuntary, One Hundred Dollars ($100) per share, plus in each case an amount equal to all accumulated and unpaid dividends thereon before any sum shall be paid to, or any assets distributed among, the holders of the Common Stock, and after such payment to the holders of the 4-3/4% Preferred Stock, all remaining assets and funds shall be distributed among the holders of the Common Stock of the Corporation subject to the rights of any other class of stock then outstanding.
(5) The holders of the 4-3/4% Preferred Stock shall not be entitled to any payment by way of dividends or otherwise, or have any rights in the property of the Corporation or in the distribution thereof, other than as is specifically provided in the preceding paragraphs with respect to the 4-3/4% Preferred Stock.
(6) No holder of any of the 4-3/4% Preferred Stock shall be entitled to vote at any election of directors or, except as otherwise required by statute, on any other matter submitted to the stockholders, provided that, if and whenever four (4) quarter-yearly dividends payable on any part of the 4-3/4% Preferred Stock shall be accumulated and unpaid, the holders of the 4-3/4% Preferred Stock as a class shall thereafter at all elections of directors have the exclusive right to elect the smallest number of directors of the Corporation which shall constitute a majority of the authorized number of directors, and the holders of the Common Stock of the Corporation as a class shall have the exclusive right to elect the remaining number of directors of the Corporation, which right of the holders of the 4-3/4% Preferred Stock, however, shall cease when all accumulated and unpaid dividends on the 4-3/4% Preferred Stock shall have been paid in full, or provision shall have been made for such payment; an d provided further, that if and when the surplus of the Corporation, out of which dividends might lawfully be declared, is in excess of such accumulated and unpaid dividends, then the declaration and payment of such dividends shall not be unreasonably withheld. The terms of office of all persons who may be directors of the Corporation at the time when the right to elect a majority of the directors shall accrue to the 4-3/4% Preferred Stockholders, as herein provided, shall terminate upon the election of their successors at the next annual meeting of the stockholders or at an earlier special meeting of the stockholders held as hereinafter provided. Such special meeting shall be held at any time after the accrual of such voting power, upon notice similar to that provided in the Consolidation Agreement and/or the By-Laws of the Corporation for annual and all other stockholders' meetings, which notice shall be given at the request in writing of the holders of not less than ten per centum (10%) of the number of shares of the then outstanding 4-3/4% Preferred Stock, addressed to the Secretary of the Corporation at its principal business office. Upon the termination of such exclusive right of the holders of the 4-3/4% Preferred Stock to elect a majority of the directors of the Corporation, the terms of office of all the directors of the Corporation shall terminate upon the election of their successors at the next annual meeting of the stockholders or at an earlier special meeting of the stockholders held as hereinafter provided. Such special meeting shall be held at any time after the termination of such right of the 4-3/4% Preferred Stockholders to elect a majority of the directors, upon notice similar to that provided in the Articles of Incorporation and/or the By-Laws of the Corporation for annual and all other stockholders' meetings, which notice shall be given at the request in writing of the holders of not less than ten per centum (10%) of the number of shares of the then outstanding Common Stock, addressed to the Secretary of the Corporation at its principal office.
(7) So long as any share of the 4-3/4% Preferred Stock remains outstanding, the consent or authorization of the holders of at least a majority of the outstanding shares of the 4-3/4% Preferred Stock then outstanding, voting as a class (given at a meeting called for that purpose), shall be necessary for effecting or validating any of the following:
(a) The issuance of any additional shares of 4-3/4% Preferred Stock, or of any other class of stock ranking prior to or on a parity with the 4-3/4% Preferred Stock as to dividends or other distributions, (i) unless the net earnings of the Corporation available for dividends on the 4-3/4% Preferred Stock, determined in accordance with generally-accepted accounting practices, for any twelve (12) consecutive calendar months' period within the fifteen (15) calendar months preceding the month within which the additional shares are to be issued, shall have been at least twice the dividend requirements for a twelve (12) month period upon the entire amount of 4-3/4% Preferred Stock and all such other stock ranking prior to or on a parity with the 4-3/4% Preferred Stock as to dividends or other distributions to be outstanding immediately after the proposed issue of such additional shares, and (ii) unless the aggregate of the capital of the Corporation applicable to the Common Stock and the surplus of the Corporation shall be not less than the amount payable upon involuntary dissolution to the holders of the 4-3/4% Preferred Stock and such other stock to be outstanding immediately after the proposed issue of such additional shares.
(b) The merger or consolidation of the Corporation with or into any other corporation or corporations, unless such merger or consolidation, or the issuance and assumption of all securities to be issued or assumed in connection with such merger or consolidation, shall have been ordered, approved, or permitted by the Federal Energy Regulatory Commission (or by any succeeding regulatory authority of the United States of America having jurisdiction in the premises) under the provisions of the Federal Power Act, as amended, or exempted by said Commission from the requirements of said Act, provided that the provisions of this clause (b) shall not apply to the purchase or other acquisition by the Corporation of franchises or assets of another corporation in any manner which does not involve a merger or consolidation.
(8) Notwithstanding any other provision of this Article FIFTH, the consent or authorization of the holders of at least two-thirds of the total number of shares of 4-3/4% Preferred Stock at the time outstanding shall be necessary to authorize the creation of any class of stock which would be preferred as to assets or dividends over the 4-3/4% Preferred Stock, or to amend the Articles of Incorporation so as to change the express terms and provisions of the 4-3/4% Preferred Stock then outstanding in any manner substantially prejudicial to the holders thereof.
II
The Preferred Stock shall be issuable in one or more series from time to time and the shares of each series shall have the same rank and be identical with each other and shall have the same relative rights, except with respect to amounts payable on voluntary liquidation as specified in Section (F) below and to the following characteristics:
(a) The number of shares to constitute each such series and the distinctive designation thereof;
(b) The annual rate or rates of dividends payable on shares of such series, the dates on which dividends shall be paid in each year, and the date from which such dividends shall commence to accumulate:
(c) The amount or amounts payable upon redemption thereof; and
(d) The terms and amount of sinking fund requirements (if any) for the purchase or redemption of each series of the Preferred Stock other than the initial series and the second series of the Preferred Stock;
which different characteristics of clauses (a), (b), (c), and (d) above are set forth below.
The initial series of the Preferred Stock shall:
(a) consist of 60,000 shares and be designated "4.36% Preferred Stock";
(b) have a dividend rate of Four and 36/100 Dollars ($4.36) per share per annum payable quarterly on January 1, April 1, July 1 and October 1 of each year; such dividends shall accumulate on each share from the quarterly dividend payment date next preceding the date of the original issue of such share, unless such stock shall be issued on a quarterly dividend payment date and in such case from said date. The first quarterly dividend shall be payable on April 1, 1956, and shall be cumulative from January 1, 1956; and
(c) be subject to redemption in the manner provided herein with respect to the Preferred Stock at the price of One Hundred Seven and 08/100 Dollars ($107.08) per share if redeemed on or before January 1, 1961, of One Hundred Six and 08/100 Dollars ($106.08) per share if redeemed after January 1, 1961, and on or before January 1, 1966, and of One Hundred Four and 58/100 Dollars ($104.58) per share if redeemed after January 1, 1966, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption.
The second series of the Preferred Stock shall:
(a) consist of 60,000 shares and be designated "5.56% Preferred Stock";
(b) have a dividend rate of Five and 56/100 Dollars ($5.56) per share per annum payable quarterly on January 1, April 1, July 1 and October 1 of each year; such dividends shall accumulate on each share from and including April 26, 1967. The first dividend shall be payable on July 1, 1967, and shall be cumulative from and including April 26, 1967; and
(c) be subject to redemption in the manner provided herein with respect to the Preferred Stock at the price of One Hundred Six and 65/100 Dollars ($106.65) per share if redeemed on or before April 1, 1972, of One Hundred Four and 09/100 Dollars ($104.09) per share if redeemed after April 1, 1972, and on or before April 1, 1977, and of One Hundred Two and 59/100 Dollars ($102.59) per share if redeemed after April 1, 1977, in each case plus an amount equivalent to the accumulated and unpaid dividends thereon, if any, to the date fixed for redemption.
Subject to the foregoing, the distinguishing characteristics of the Preferred Stock shall be: (A) Each series of the Preferred Stock, pari passu with all shares of preferred stock of any class or series then outstanding, shall be entitled, but only when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, in preference to the Common Stock, to dividends at the rate stated and expressed with respect to such series herein; such dividends to be cumulative from such date and payable on such dates in each year as may be stated and expressed herein, to stockholders of record as of a date not to exceed forty (40) days and not less than ten (10) days preceding the dividend payment dates so fixed.
(B) If and when all outstanding shares of the 4-3/4% Preferred Stock shall have been redeemed, acquired or otherwise retired, then:
(1) If and when dividends payable on any of the Preferred Stock (which, for the purposes of this Section (B), shall be deemed to be all outstanding shares of the Preferred Stock of any series, and such other preferred stock of any class or series, ranking prior to or on a parity with the Preferred Stock as to dividends and in liquidation, dissolution, winding up, or distribution, as may be lawfully issued) shall be in default in an amount equal to four (4) full quarterly payments or more per share, and thereafter until all dividends on any of the Preferred Stock in default shall have been paid, the holders of all of the then outstanding Preferred Stock, voting as a class, in contra-distinction to the Common Stock as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors, and the holders of the Common Stock, voting separately as a class, shall be entitled to elect the remaining directors of the Corporation, anyt hing in these Articles of Incorporation to the contrary notwithstanding. The terms of office, as directors of all persons who may be directors of the Corporation at the time shall terminate upon the election of a majority of the Board of Directors by the holders of the Preferred Stock, except that if the holders of the Common Stock shall not have elected the remaining directors of the Corporation, then, and only in that event, the directors of the Corporation in office just prior to the election of a majority of the Board of Directors by the holders of the Preferred Stock shall elect the remaining directors of the Corporation. Thereafter, while such default continues and the majority of the Board of Directors is being elected by the holders of the Preferred Stock, the remaining directors, whether elected by directors, as aforesaid, or whether originally or later elected by holders of the Common Stock, shall continue in office until their successors are elected by holders of the Common Stock and shall quali fy.
(2) If and when all dividends then in default on any of the Preferred Stock then outstanding shall be paid (such dividends to be declared and paid out of any funds legally available therefor as soon as reasonably practicable), the holders of the Preferred Stock shall be divested of any special right with respect to the election of directors, and the voting power of the holders of the Preferred Stock and the holders of the Common Stock shall revert to the status existing before the first dividend payment date on which dividends on any of the Preferred Stock were not paid in full, but always subject to the same provisions for vesting such special rights in the holders of the Preferred Stock in case of further like default or defaults in the payment of dividends thereon as described in the immediately foregoing paragraph. Upon termination of any such special voting right upon payment of all accumulated and unpaid dividends on the Preferred Stock, the terms of office of all persons who may ha ve been elected directors of the Corporation by vote of the holders of the Preferred Stock as a class, pursuant to such special voting right, shall forthwith terminate, and the resulting vacancies shall be filled by the vote of a majority of the remaining directors. In case of any vacancy in the office of a director occurring among the directors elected by the holders of the Preferred Stock voting as a class, the remaining directors elected by the holders of the Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term or terms of the director or directors whose place or places shall be vacant. Likewise, in case of any vacancy in the office of a director occurring among the directors not elected by the holders of the Preferred Stock, the remaining directors not elected by the holders of the Preferred Stock, by affirmative vote of a majority thereof, or the remaining director so elected if there be but one, may elect a successor or successors to hold office for the unexpired term or terms of the director or directors whose place or places shall be vacant.
(3) Whenever the special voting right shall have accrued to the holders of the Preferred Stock to elect directors, voting as a class, it shall be the duty of the President, a Vice-President or the Secretary of the Corporation forthwith to call a meeting, and cause notice thereof to be given to the stockholders, including all of the holders of the then outstanding shares of Preferred Stock, entitled to vote at such meeting, to be held at such time as the Corporation's officers may fix, not less than forty-five (45) nor more than sixty (60) days after the accrual of such right, for the purpose of electing directors. The notice so given shall be mailed to each holder of record of Preferred Stock at his last known address appearing on the books of the Corporation and shall set forth, among other things, (i) that by reason of the fact that dividends payable on Preferred Stock are in default in an amount equal to four (4) full quarterly payments or more per share, the holders of all of the then outstanding Preferred Stock, voting as a class, have the right to elect the smallest number of directors necessary to constitute a majority of the full Board of Directors of the Corporation, (ii) that any holder of the Preferred Stock has the right, at any reasonable time, to inspect and make copies of the list or lists of holders of the Preferred Stock maintained at the principal office of the Corporation or at the office of any Transfer Agent or Agents of the Preferred Stock, and (iii) either the entirety of this paragraph or the substance thereof with respect to the number of shares of the Preferred Stock required to be represented at any meeting, or adjournment thereof, called for the election of directors of the Corporation. At the first meeting of stockholders held for the purpose of electing directors during such time as the holders of the Preferred Stock shall have the special right, voting as a class, to elect directors, the presence in person or by proxy of the holders of a majority of the outsta nding Common Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of a majority of all of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors; provided, however, that in the absence of a quorum of the holders of the Preferred Stock or of the holders of the Common Stock, no election of directors shall be held and the meeting shall be adjourned to the same time the following day; and provided, further, that at such first adjourned meeting, the presence in person or by proxy of the holders of thirty-five per centum (35%) of all of the outstanding Preferred Stock shall be required to constitute a quorum of such class for the election of directors, and the presence in person or by proxy of the holders of thirty-five per centum (35%) of the outstanding Common Stock shall be required to constitute a quorum of such class for the election of direct ors, and in the absence of a quorum of the holders of the Preferred Stock or of the holders of the Common Stock no election of directors shall be held and the meeting shall be adjourned to the same time the following day; and provided, further, that at such second adjourned meeting such number of the holders of the Preferred Stock and of the holders of the Common Stock as are present in person or by proxy shall constitute a quorum of their respective classes of stock for the election of directors. If no holders of the Preferred Stock are present at said second adjourned meeting, then the directors of the Corporation then in office shall remain in office until the next Annual Meeting of the Corporation, or special meeting in lieu thereof, and until their successors shall have been elected and shall qualify. No such meeting shall be held on a date within sixty (60) days of the date of the next Annual Meeting of the Corporation or special meeting in lieu thereof. At each Annual Meeting of the Corporation, or special meeting in lieu thereof, held during such time as the holders of all of the then outstanding Preferred Stock, voting as a class, shall have the right to elect a majority of the Board of Directors, the foregoing provisions of this paragraph shall govern each Annual Meeting, or special meeting in lieu thereof, as if said Annual Meeting or special meeting were the first meeting of stockholders held for the purpose of electing directors after the right of the holders of all of the Preferred Stock, voting as a class, to elect a majority of the Board of Directors, should have accrued with the exception, that if at any second adjourned Annual Meeting, or special meeting in lieu thereof, no holders of the outstanding Preferred Stock are present in person or by proxy, all the directors shall be elected by a vote of the holders of a majority of the Common Stock of the Corporation present or represented at the meeting.
(C) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of at least two-thirds of the total number of shares of the Preferred Stock then outstanding, voting as a class:
(1) create, authorize or issue any new stock which, after issuance, would rank prior to the Preferred Stock as to dividends, in liquidation, dissolution, winding up or distribution, or create, authorize or issue any security convertible into shares of any such stock, except for the purpose of providing funds for the redemption of all of the Preferred Stock then outstanding, such new stock or security not to be issued until such redemption shall have been authorized and notice of such redemption given and the aggregate redemption price deposited as provided in Section (G) below; provided, however, that any such new stock or security shall be issued within twelve (12) months after the vote of the Preferred Stock herein provided for authorizing the issuance of such new stock or security; or
(2) amend, alter or repeal any of the rights, preferences or powers of the holders of the Preferred Stock so as to affect adversely any such rights, preferences or powers; provided, however, that if such amendment, alteration or repeal affects adversely the rights, preferences or Powers of one or more, but not all, series of Preferred Stock at the time outstanding, only the consent of the holders of at least two-thirds of the total number of outstanding shares of all series so affected shall be required; and provided, further, that an amendment to increase or decrease the authorized amount of Preferred Stock, or to create or authorize, or increase or decrease the amount of, any class of stock ranking on a parity with the outstanding shares of the Preferred Stock as to dividends or assets shall not be deemed to affect adversely the rights, preferences or powers of the holders of the Preferred Stock or any series thereof.
(D) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of a majority of the total number of shares of the Preferred Stock then outstanding voting as a class:
(1) merge or consolidate with or into any other corporation or corporations or sell or otherwise dispose of all or substantially all of the assets of the Corporation, unless such merger or consolidation or sale or other disposition, or the exchange, issuance or assumption of all securities to be issued or assumed in connection with any such merger or consolidation or sale or other disposition, shall have been ordered, approved or permitted by the Federal Energy Regulatory Commission under the Federal Power Act, as amended, or exempted by said Commission from the requirements of said Act, provided that the provisions of this subsection (1) shall not apply to the purchase or other acquisition by the Corporation of franchises or assets of another corporation in any manner which does not involve a merger or consolidation; or
(2) issue, sell, or otherwise dispose of any shares of the Preferred Stock, in addition to the 60,000 shares of the Preferred Stock initially authorized, or of any other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, unless the gross income of the Corporation for a period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the issuance, sale or disposition of such stock, determined in accordance with generally accepted accounting practices (but in any event after deducting all taxes and the greater of (a) the amount for said period appropriated from income to the property retirement reserve by the Corporation on its books or (b) the largest amount required to be provided therefor by any mortgage indenture of the Corporation) to be available for the payment of interest, shall have been at least one and one-half (1-1/2) times the sum of (i) the annual interest charges on all interest bearing indebtedness of the Corporation and (ii) the annual dividend requirements on all outstanding shares of the Preferred Stock and of all other classes of stock ranking prior to, or on a parity with, the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, including the shares proposed to be issued; provided, that there shall be excluded from the foregoing computation interest charges on all indebtedness and dividends on all shares of the Preferred Stock or on any other class of stock ranking prior to, or on a parity with, the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution which are to be retired in connection with the issue of such additional shares; and provided, further, that in any case where such additional shares of the Preferred Stock, or other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, are t o be issued in connection with the acquisition of additional property, the gross income of the property to be so acquired, computed on the same basis as the gross income of the Corporation, may be included on a pro forma basis in making the foregoing computation; or
(3) issue, sell, or otherwise dispose of any shares of the Preferred Stock, or of any other class of stock ranking on a parity with the Preferred Stock as to dividends or in liquidation, dissolution, winding up or distribution, unless the aggregate of the capital of the Corporation applicable to the Common Stock and the surplus of the Corporation shall be not less than the aggregate amount payable on the involuntary liquidation, dissolution or winding up of the Corporation, in respect of all shares of the Preferred Stock and all shares of any other class of stock, if any, ranking prior thereto, or on a parity therewith, as to dividends or in liquidation, dissolution, winding up or distribution, which will be outstanding after the issue of the shares proposed to be issued; provided, that if, for the purposes of meeting the requirements of this subsection (43), it becomes necessary to take into consideration any earned surplus of the Corporation, the Corporation shall not thereafter pay any dividends on shares of the Common Stock which would result in reducing the Corporation's Common Stock Equity (as in Section (H) hereinafter defined) to an amount less than the aggregate amount payable, on involuntary liquidation, dissolution or winding up of the Corporation, on all shares of the Preferred Stock and of any other class of stock ranking prior to, or on a parity with, the Preferred Stock, as to dividends or other distributions, at the time outstanding.
(E) Except as herein expressly provided, the holders of the Preferred Stock shall have no power to vote and shall be entitled to no notice of any meeting of the stockholders of the Corporation. As to matters upon which holders of the Preferred Stock are entitled to vote, as herein expressly provided, each holder of such Preferred Stock shall be entitled to one vote, in person or by proxy, for each share of such Preferred Stock standing in his name on the books of the Corporation.
(F) In the event of any voluntary liquidation, dissolution or winding up of the Corporation, the Preferred Stock, pari passu with all shares of preferred stock of any other class or series then outstanding shall have a preference over the Common Stock until an amount equal to the then current redemption price, including accumulated and unpaid dividends, if any, shall have been paid. In the event of any involuntary liquidation, dissolution or winding up of the Corporation, which shall include any such liquidation, dissolution or winding up which may arise out of or result from the condemnation or purchase of all or a major portion of the properties of the Corporation, by (i) the United States Government or any authority, agency or instrumentality thereof, (ii) a state of the United States or any political subdivision, authority, agency, or instrumentality thereof or (iii) a district, cooperative or other association or entity not organized for profit, the Preferred Stock, pari passu with al l shares of preferred stock of any other class or series then outstanding, shall also have a preference over the Common Stock until the full par value thereof, and an amount equal to the accumulated and unpaid dividends thereon, if any, shall have been paid by dividends or distribution.
(G) Upon the affirmative vote of a majority of the shares of the issued and outstanding Common Stock at any annual meeting, or any special meeting called for that purpose, the Corporation may at any time redeem all of any series of said Preferred Stock, or may from time to time redeem any part of any series thereof, by paying in cash the redemption price then applicable thereto, plus, in each case, an amount equivalent to the accumulated and unpaid dividends, if any, to the date fixed for redemption. Notice of the intention of the Corporation to redeem all or any part of the Preferred Stock shall be mailed not less than thirty (30) days nor more than sixty (60) days before the date fixed for redemption to each holder of record of Preferred Stock to be redeemed, at his post office address as shown by the Corporation's records, and not less than thirty (30) days' nor more than sixty (60) days' notice of such redemption may be published in such manner as may be prescribed by resolution of th e Board of Directors of the Corporation; and in the event of such publication, no defect in the mailing of such notice shall affect the validity of the proceedings for the redemption of any shares of Preferred Stock so to be redeemed. Contemporaneously with the mailing or the publication of such notice, as aforesaid, or at any time thereafter prior to the date fixed for redemption, the Corporation may deposit the aggregate redemption price (or the portion thereof not already paid in the redemption of such Preferred Stock so to be redeemed) with any bank or trust company in the City of New York, New York, or in the City of New Orleans, Louisiana, named in such notice, payable to the order of the record holders of the Preferred Stock so to be redeemed, as the case may be, on the endorsement and surrender of their certificates, and thereupon said holders shall cease to be stockholders with respect to such shares; and from and after the making of such deposit such holders shall have no interest in or claim again st the Corporation with respect to said shares, but shall be entitled only to receive such moneys from said bank or trust company, with interest, if any, allowed by such bank or trust company on such moneys deposited as in this Section (G) provided, on endorsement and surrender of their certificates, as aforesaid. Any moneys so deposited, plus interest thereon, if any, remaining unclaimed at the end of six (6) years from the date fixed for redemption, if thereafter requested by resolution of the Board of Directors, shall be repaid to the Corporation, and in the event of such repayment to the Corporation, such holders of record of the shares so redeemed as shall not have made claim against such moneys prior to such repayment to the Corporation, shall be deemed to be unsecured creditors of the Corporation for an amount, without interest, equivalent to the amount deposited, plus interest thereon, if any, allowed by such bank or trust company, as above stated, for the redemption of such shares and so paid to th e Corporation. Shares of the Preferred Stock which have been redeemed shall not be reissued. If less than all of the shares of any series of the Preferred Stock are to be redeemed, the shares thereof to be redeemed shall be selected by lot, in such manner as the Board of Directors of the Corporation shall determine, by an independent bank or trust company selected for that purpose by the Board of Directors of the Corporation. Nothing herein contained shall limit any legal right of the Corporation to purchase or otherwise acquire any shares of the Preferred Stock; provided, however, that, so long as any shares of the Preferred Stock (which term, for purposes of this proviso, shall include the 4-3/4% Preferred Stock) are outstanding, the Corporation shall not (i) make any payment, or set aside funds for payment, into any sinking fund for the purchase or redemption of any shares of the Preferred Stock, or (ii) redeem, purchase or otherwise acquire less than all of the shares of the Preferred Stock, if, at the time of such payment or setting aside of funds for payment into such sinking fund, or of such redemption, purchase or other acquisition, dividends payable on the Preferred Stock shall be in default in whole or in part, unless prior to or concurrently with such payment or setting aside of funds for payment into such sinking fund, and/or such redemption, purchase or other acquisition, as the case may be, all such defaults shall be cured or unless such payment or setting aside of funds for payment into such sinking fund, and/or such redemption, purchase or other acquisition, as the case may be, shall have been ordered, approved or permitted under the Federal Power Act. Any shares of the Preferred Stock so redeemed, purchased or acquired shall be retired and cancelled.
(H) For the purposes of this Section (H) and subsection (43) of Section (D) the term "Common Stock Equity" shall mean the aggregate of the par value of, or stated capital represented by, the outstanding shares (other than shares owned by the Corporation) of stock ranking junior to the Preferred Stock as to dividends and assets, of the premium on such junior stock and of the surplus (including earned surplus, capital surplus and surplus invested in plant) of the Corporation, less (1) any amounts recorded on the books of the Corporation for utility plant and other plant in excess of the original cost thereof, (2) unamortized debt discount and expense, capital stock discount and expense and any other intangible items set forth on the asset side of the balance sheet as a result of accounting convention, (3) the excess, if any, of the aggregate amount payable on involuntary liquidation, dissolution or winding up of the affairs of the Corporation upon all outstanding preferred stock of the Corporation over the aggregate par or stated value thereof and any premiums thereon, and (4) the excess, if any, for the period beginning with January 1, 1955, to the end of a month within ninety (90) days preceding the date as of which Common Stock Equity is determined, of the cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (this cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements), over the amount appropriated from income to the property retirement reserve by the Corporation on its books during such period, including the final fraction of a year; provided, however, that no deductions shall be required to be made in respect of items referred to in items (1) and (2) of this Section (H) in cases in which such items are being amortized or are provided for, or are being provided for, by reserves. For the purpose of this Section (H): (i) the term "total capitalization" shall mean the sum of the Common Stock Equity, plus item (3) in this Section (H) and the stated capital applicable to, and any premium on, outstanding stock of the Corporation not included in Common Stock Equity, and the principal amount of all outstanding debt of the Corporation maturing more than twelve (12) months after the date of issue thereof; and (ii) the term "dividends on Common Stock" shall embrace dividends on Common Stock (other than dividends payable only in shares of Common Stock), distributions on, and purchases or other acquisitions for value of, any Common Stock of the Corporation or other stock, if any, junior to the Preferred Stock. So long as any shares of the Preferred Stock are outstanding, the Corporation shall not declare or pay any dividends on Common Stock, except as follows:
(a) If and so long as the Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than twenty per centum (20%) of total capitalization, the Corporation shall not declare such dividends in an amount which, together with all other dividends on Common Stock paid within the year ending with and including the date on which such dividend is payable, exceeds fifty per centum (50%) of the net income of the Corporation available for dividends on the Common Stock for the twelve (12) full calendar months immediately preceding the month in which such dividends are declared, except in an amount not exceeding the aggregate of dividends on Common Stock which under the restrictions set forth above in this subsection (a) could have been, and have not been, declared; and
(b) If and so long as the Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than twenty-five per centum (25%) but not less than twenty per centum (20%) of total capitalization, the Corporation shall not declare dividends on the Common Stock in an amount which, together with all other dividends on Common Stock paid within the year ending with and including the date on which such dividend is payable, exceeds seventy-five per centum (75%) of the net income of the Corporation available for dividends on the Common Stock for the twelve (12) full calendar months immediately preceding the month in which such dividends are declared, except in an amount not exceeding the aggregate of dividends on Common Stock which under the restrictions set forth above in subsection (a) and in this subsection (b) could have been, and have not been, declared; and
(c) At any time when the Common Stock Equity is twenty-five per centum (25%) or more of total capitalization, the Corporation may not declare dividends on shares of the Common Stock which would reduce the Common Stock Equity below twenty-five per centum (25%) of total capitalization, except to the extent provided in subsections (a) and (b) above.
At any time when the aggregate of all amounts credited subsequent to January 1, 1955, to the property retirement reserve (accumulated provision for depreciation) account of the Corporation through charges to operating revenue deductions or otherwise on the books of the Corporation shall be less than the amount computed as provided in clause (aa) below, under requirements contained in the Corporation's mortgage indentures, then for the purposes of subsections (a) and (b) above, in determining the net income available for common stock dividends during any twelve (12) month period, the amount to be provided for depreciation in that period shall be (aa) the greater of the cumulative amount appropriated from income to the property retirement reserve (accumulated provision for depreciation) on the books of the Corporation or the cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (the latter cumulative amoun t being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements) for the period from January 1, 1955, to and including said twelve (12) month period, less (bb) the greater of the cumulative amount appropriated from income to the property retirement reserve (accumulated provision for depreciation) on the books of the Corporation or the cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions (the latter cumulative amount being the aggregate of the largest amounts separately computed for entire periods of differing coexisting mortgage indenture requirements) from January 1, 1955, up to but excluding said twelve (12) month period; provided that, in the event any company is merged into the Corporation, the "cumulative amount computed under requirements contained in the Corporation's mortgage indentures relating to minimum depreciation provisions" ; referred to above shall be computed without regard, for the period prior to the merger, of property acquired in the merger, and the "cumulative amount appropriated from income to the property retirement reserve (accumulated provision for depreciation) on the books of the Corporation" shall be exclusive of amounts provided for such property prior to the merger.
(I) Dividends may be paid upon the Common Stock only when (i) dividends have been paid or declared and funds set apart for the payment of dividends as aforesaid on the Preferred Stock (which term, for purposes of this Section (I), shall include the 4-3/4% Preferred Stock) from the date(s) after which dividends thereon became cumulative, to the beginning of the period then current, with respect to which such dividends on the Preferred Stock are usually declared, and (ii) all payments have been made or funds have been set aside for payments then or theretofore due under the terms of sinking fund requirements (if any) for the purchase or redemption of shares of the Preferred Stock, but whenever (x) all such dividends upon the Preferred Stock as aforesaid shall have been paid or declared and funds shall have been set apart for the payment thereof upon the Preferred Stock and (y) all payments shall have been made or funds shall have been set aside for all payments then or theretofore due under the terms of sinking fund requirements (if any) for the purchase or redemption of shares of the Preferred Stock, then, subject to the limitations above set forth and subject to the rights of any other class of stock then outstanding, dividends upon the Common Stock may be declared payable then or thereafter, out of any net earnings or surplus of assets over liabilities, including capital, then remaining.
(J) The Corporation reserves the right, without any vote or consent of the Preferred Stock as a class or of any series of Preferred Stock, to amend these Articles of Incorporation in any or all of the following respects:
(1) So that the right vested exclusively in the holders of the 4-3/4% Preferred Stock as a class to elect the smallest number of directors, which shall constitute a majority of the authorized number of directors upon default in dividends upon the 4-3/4% Preferred Stock, shall thereafter be shared with the holders of Preferred Stock and any other preferred stock of any class or series, ranking prior to, or on a parity with, the Preferred Stock as to dividends and distributions, all voting as one class, to the same extent and with the same effect as though the 4-3/4% Preferred Stock had been redeemed, acquired or otherwise retired and had been reissued as a series of Preferred Stock;
(2) So that the 4-3/4% Preferred Stock shall thereafter be a series of 4-3/4% Preferred Stock within the class of Preferred Stock herein authorized, limited in number to the number of shares of 4-3/4% Preferred Stock authorized to be issued prior to such amendment, with the same annual rate of dividend, the same dates on which dividends shall be paid each year, the same date from which dividends shall commence to accumulate, the same amounts payable on redemption and the same amounts payable upon distribution of assets, as were provided with respect to the shares of 4-3/4% Preferred Stock prior to such amendment.
SIXTH: The corporate power of this Corporation shall be vested in, and exercised by, a Board of Directors to be composed of not less than three (3) nor more than fifteen (15) persons, to be elected annually at a meeting of stockholders to be held on any date selected by the stockholders. The number of persons, within the foregoing limits, to compose the Board of Directors at any given time, shall be fixed by either the stockholders or by the Board of Directors. A majority of the Board of Directors shall constitute a quorum for the transaction of business unless the By-Laws of this Corporation, adopted by the Board of Directors, shall provide for a lesser number.
Vacancies and newly created Directorships resulting from any increase on the authorized number of Directors may be filled as provided in the By-Laws.
A failure to elect directors on the date above specified shall not dissolve the Corporation, nor impair its corporate existence or management, but the directors then in office shall remain in office until their successors shall have been duly elected and qualified.
Notice of such meeting and of all other stockholders' meetings shall be given in the manner prescribed by law, and, when not so prescribed, then written notice of such meetings shall be addressed to each stockholder entitled to vote at said meeting, at such address as may have been furnished by him for notice hereunder and deposited in the post office, at least fifteen (15) days before the date of said meeting, postage prepaid. No notice need be given to any person whose stock was acquired, or who became a registered owner thereof, on or after the date upon which notice of a meeting of stockholders was mailed or delivered. The By-Laws of the Corporation may provide for any additional form of notice.
The books for the transfer of the stock may be closed for such periods before and during the payment of dividends and the holding of meetings of stockholders, not to exceed thirty (30) days at any one time, as the Board of Directors may from time to time determine; and the Corporation shall make no transfer of stock on the books during such period.
The Board of Directors shall elect individuals to occupy offices as provided in the By-Laws. The powers and duties of every officer, agent and employee shall be such as may be conferred upon them by the By-Laws, the Board of Directors or the Executive Committee, and all officers, agents and employees shall hold office and employment at the pleasure of the Board of Directors.
In furtherance and not in limitation of the powers conferred by law, either the Board of directors or the stockholders are expressly authorized to make, alter and repeal the By-Laws of the Corporation. The Board of Directors may make and establish, as well as alter and amend, all such rules and regulations, not inconsistent herewith, necessary and proper in its judgment for the conduct and management of the business and affairs and the exercise of the corporate powers of this Corporation, and said Board of Directors shall have full power and authority to borrow money and to execute mortgages and pledges and create liens; to issue bonds, notes and other obligations, and to secure same by mortgage and/or pledge or otherwise, and generally to do any and all things reasonable, convenient or necessary for the proper conduct of the business and affairs of this Corporation; and, in its discretion, the Board of Directors may create and select an Executive Committee to be composed of not less tha n two (2) of its own members, to which committee the Board of Directors may grant all or any of its powers to be exercised during the interim between meetings of the Board of Directors itself.
A director of this Corporation shall not be disqualified by his office from dealing or contracting with the Corporation either as vendor, purchaser or otherwise, nor shall any transaction or contract of this Corporation be void or voidable by reason of the fact that any director or any firm of which any director is a member, or any corporation of which any director is a shareholder or director, is in any way interested in such transaction or contract, provided that such transaction or contract is or shall be authorized, ratified or approved either (1) by vote of a majority of a quorum of the Board of Directors or of the Executive Committee without counting in such majority or quorum any director so interested, or members of a firm so interested, or a shareholder or director of a corporation so interested, or (2) by a vote at a stockholders' meeting of the holders of record of a majority of all the outstanding shares of Common Stock of the Corporation, or by writing or writings signed by a majority of such holders; nor shall any director be liable to account to the Corporation for any profits realized by and from or through any such transaction or contract of this Corporation authorized, ratified or approved, as aforesaid, by reason of the fact that he or any firm of which he is a member, or any corporation of which he is a shareholder or director, was interested in such transaction or contract.
SEVENTH: Except as hereinbefore in Article FIFTH hereof provided, with respect to certain voting rights conferred upon the preferred stock, the provisions hereof may be modified, changed, altered or amended to the extent and in the manner now or hereafter permitted by law for the amendment of the articles of incorporation or act of incorporation of a corporation, or the capital stock or the number of shares of the capital stock of this Corporation may be increased or decreased, or new classes or series of stock may be created, or the number of shares of any class or series of stock may be changed with the assent of two-thirds (or such smaller number, not less than a majority, as may be permitted by law) of the shares of the outstanding Common Stock of this Corporation expressed, given and obtained at a general meeting of such stockholders convened for such purposes, or any of them, after previous notice of such meeting shall have been given to each Common Stockholder in the mann er hereinabove provided, unless other notice for a meeting of such character be prescribed by law, in which event notice shall be given in conformity with law.
Whenever this Corporation may be dissolved, either by limitation or from any other cause, its affairs shall be liquidated by three (3) commissioners to be elected by the holders of the Common Stock at a meeting convened for said purpose as above provided and after due notice; a majority of said stock represented at such meeting shall be requisite for the election of such commissioners. Such commissioners shall remain in office until the affairs of this Corporation shall have been fully liquidated. In case of the death or resignation of any one or more of said commissioners, the vacancy or vacancies shall be filled by the survivor or survivors. In the event of any disagreement among said commissioners, the action of the majority shall prevail and be binding.
The provisions of the Business Corporation Law of Louisiana and of all other statutes relating to corporations of the character of this Corporation whether consolidated or otherwise, shall be applicable to this Corporation so far as concerns the rights and powers of this Corporation and its stockholders. Upon the written consent or the vote of the holders of a majority in number of the shares then outstanding and entitled to vote, or, if the consent or vote of the holders of a larger number of shares is required by law, then, upon such larger consent or vote as may be required by law (1) any and every statute of the State of Louisiana hereinafter adopted whereby the rights, powers or privileges of the stockholders of corporations organized under the general laws of said State are increased, diminished or in any way affected, or whereby effect is given to the action taken by any part less than all of the stockholders of any such corporation shall, notwithstandin g any provision which may at the time be contained in this agreement of consolidation, apply to this Corporation and shall be binding not only upon this Corporation but upon every stockholder thereof to the same extent as if such statute had been in force at the date of the making and filing of this agreement of consolidation, and/or (2) amendments to this agreement of consolidation authorized at the time of the making of such amendments by the laws of the State of Louisiana, may be made; provided, however, that no such consent or vote shall alter or change the amounts which the holders of outstanding preferred stock are entitled to receive as dividends or in distribution of assets in preference to the holders of the Common Stock, or decrease the price at which preferred stock may be redeemed, all as hereinabove provided, except with the consent of the holders of at least ninety per centum (90%) of the then outstanding preferred stock, which consent may be expressed by each stockholder either in writing or b y vote at an annual or special stockholders' meeting.
EIGHTH: No stockholder shall ever be held liable for the contracts or faults or defaults of this Corporation in any further sum than the unpaid balance of the consideration, if any, due the Corporation on the shares of stock owned by him; nor shall any mere informality in organization or consolidation have the effect of rendering this agreement null, or of exposing a stockholder to any liability beyond the unpaid amount remaining due on his said stock.
NINTH: The officers of the Corporation shall have and exercise such powers and duties as may be conferred upon them by the Board of Directors or the Executive Committee of the Corporation.
TENTH: The rights of creditors and all liens upon the property of each of the parties hereto shall be preserved unimpaired and the property and franchises of each of said corporations, parties hereto, shall pass to and vest in the Corporation, subject to all lawful debts, guarantees, liabilities and obligations existing against each of said corporations, except as herein otherwise provided, and all of said debts, liabilities and obligations of the New Orleans Company and/or the Consumers Company and/or the Citizens Company, parties hereto, shall be provided for, paid and discharged by the Corporation, except as herein otherwise provided, and all contracts and agreements existing between each of said corporations, parties hereto, and any other person, firm or corporation shall be carried out and performed by the Corporation.
All of the rights and obligations of the New Orleans Company arising out of and/or imposed by Ordinance No. 6822 Commission Council Series of the City of New Orleans, adopted April 18, 1922, and known as the "Settlement Ordinance", and Ordinances Nos. 7067, 7068 and 7069, respectively, Commission Council Series of the City of New Orleans, adopted September 2, 1922, supplemental thereto, and/or other ordinances supplemental thereto or amendatory thereof, shall pass to and be assumed by the Corporation, and nothing herein contained shall be construed as changing, affecting or impairing the provisions of said ordinances, as presently existing.
ELEVENTH: So long as bonds of any series of the Corporation's (a) First Mortgage Bonds, 6.75% Thirteenth Series, due on October 15, 2017, (b) First Mortgage Bonds, 3.875% Fourteenth Series, due on August 1, 2008, (c) First Mortgage Bonds, 5.25% Fifteenth Series, due on August 1, 2013, (d) Insured Quarterly First Mortgage Bonds, 5.65% Sixteenth Series, due on September 1, 2029, (e) Insured Quarterly First Mortgage Bonds, 5.60% Seventeenth Series, due on September 1, 2024, or (f) First Mortgage Bonds, 4.98% Eighteenth Series, due on July 1, 2010, remain outstanding, the Corporation shall not
(I) Declare or pay any dividends on Common Stock during calendar years 2007 and 2008; or
(II) Declare or pay any dividends on Common Stock during calendar year 2009, or thereafter through the period ending on the third anniversary of the effective date ("Effective Date") of the Corporation' Chapter 11 Plan of Reorganization ("Plan of Reorganization") as confirmed by and pursuant to the Order dated May 7, 2007, issued by the U.S. Bankruptcy Court confirming the Corporation's Plan of Reorganization, being one-business day after such Order, or May 8, 2007, if Common Stock Equity at the end of the calendar month immediately preceding the date on which a dividend on Common Stock is declared is, or as a result of such dividend would become, less than forty per centum (40%) of total capitalization. For purposes of this Article ELEVENTH, the terms "Common Stock Equity", "total capitalization" and "dividends on Common Stock" shall have the respective meanings ascribed to them in Section (H) of Article FIFTH, except t hat, solely for purposes of this Article ELEVENTH, the term "total capitalization" shall exclude (x) the principal amount of the Intercompany Notes as defined in, and to be issued to the Corporation's affiliates in accordance with Section 5.6 of the Corporation's Plan of Reorganization as confirmed by the U.S. Bankruptcy Court for the Eastern District of Louisiana in Case No. 05-17697 and (y) the principal amount of any securitization bonds that may be issued from time to time in connection with the recovery of the Corporation's storm costs arising from Hurricane Katrina.
The restrictions on dividends on Common Stock set forth in this Article ELEVENTH shall not apply, and therefore the Corporation may declare and pay dividends on Common Stock without regard to this Article ELEVENTH (but subject to any other applicable restrictions on dividends on Common Stock set forth in Article FIFTH), during any period in which (a) the corporate credit rating of the Corporation, as published by either Standard & Poor's Ratings Group, a division of McGraw-Hill Companies (herein defined as "S&P") or Moody's Investors Service, Inc. (herein defined as "Moody's"), is listed as investment grade and (b) the credit rating of the Corporation's senior secured debt is designated as investment grade by either S&P or Moody's; provided, however, that if, subsequently, a relevant investment grade rating set forth in (a) or (b) above is adjusted by either S&P or Moody's, as the case may be, such that it is no longer i nvestment grade, then the Corporation shall not, from and after the time of such rating adjustment, declare or pay further dividends on Common Stock except in accordance with the restrictions set forth in (I) or (II) above, as the case may be.
This Article ELEVENTH shall, by its terms, terminate and cease to be in effect on the earlier of (i) the date on which the Corporation transfers, sells or otherwise disposes all or substantially all of its distribution assets to the City of New Orleans and/or to one or more of its designees and/or to one or more other third parties, and (ii) the third anniversary of the Effective Date.
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EFFECTIVE May 8, 2007
Exhibit 3(b)
AMENDED
BY-LAWS
OF
ENTERGY NEW ORLEANS, INC.
ARTICLE I.
OFFICES
The principal business office of the Corporation shall be in New Orleans, Louisiana, or in such other location as designated by the Board of Directors. The Corporation may also have offices at such other places as the Board of Directors may from time to time designate or the business of the Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders, whether annual or special, shall be held at a location fixed by the Board of Directors or by the stockholders.
SECTION 2. Annual Meeting. The annual meeting of stockholders for the election of Directors and the transaction of such other business as may properly come before the meeting shall be held on such date and at such time of day as shall have been fixed by the Board of Directors or by the stockholders.
SECTION 3. Special Meetings. Special meetings of the stockholders may be held at any time upon the call of (i) a majority of the entire Board of Directors, (ii) the President, (iii) the Chairman of the Board, (iv) the person, if any, designated by the Board of Directors as the Chief Executive Officer, or (v) the holders of not less than a majority of the outstanding stock entitled to vote at the special meeting.
SECTION 4. Organization. The Chief Executive Officer or, in his absence, a person appointed by him or, in default of such appointment, the officer next in seniority of position (as determined by the Secretary or, in the Secretary's absence, the Assistant Secretary), shall call meetings of the stockholders to order and shall act as chairman thereof. The Secretary of the Corporation, if present, shall act as secretary of all meetings of stockholders, and, in his absence, the presiding officer may appoint a secretary.
SECTION 5. Action by Consent. Any action required or permitted to be taken at any meeting of the stockholders, whether annual or special, may be taken without a meeting, if prior to such action a written consent thereto is signed by a sufficient percentage of shareholders to satisfy the minimum requirements of state law.
ARTICLE III.
DIRECTORS
SECTION 1. General Powers. The property, affairs and business of the Corporation shall be managed by the Board of Directors.
SECTION 2. Term of Office. The term of office of each Director shall be until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until the earlier death, resignation or removal of such Director.
SECTION 3. Number of Directors. The number of Directors which shall constitute the whole Board of Directors shall be not more than fifteen (15) nor less than three (3), with the exact number at any given time to be fixed by a resolution of the Board of Directors or by the stockholders.
SECTION 4. Meetings; Notice. Meetings of the Board of Directors shall be held at such place as may from time to time be fixed by resolution of the Board or by the Chairman of the Board, the Vice Chairman, the President or a Vice President and as may be specified in the notice or waiver of notice of any meeting. Notice may be written, electronic or oral and may be given at any time prior to the meeting. Notice may be waived by a Director either prior to or following a meeting. Directors present at a meeting shall be deemed to have waived notice thereof. Meetings of the Board of Directors, or any committee thereof, may be held by means of a video conference, a telephone conference or similar communications equipment. The Chairman of the Board, or in the absence of the Chairman of the Board, the Vice Chairman, shall preside at all meetings of the Board of Directors.
SECTION 5. Quorum. A majority of the Board of Directors shall be necessary to constitute a quorum for the transaction of business, and the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum is present when the meeting is convened, the Directors present may continue to conduct the business of the meeting, taking action by vote of a majority of a quorum as fixed above, until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum as fixed above, or the refusal of any Director present to vote.
SECTION 6. Action By Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if, prior to such action, a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or such committee, as the case may be.
SECTION 7. Advisory Directors. The stockholders or the Board of Directors may elect one or more Advisory Directors of the Corporation. Advisory Directors may be called upon individually or as a group by the Board of Directors or Officers of the Corporation to give advice and counsel to the Corporation. Advisory Directors shall receive from the Corporation such remuneration as shall be fixed by the Board of Directors. Terms of Advisory Directors shall expire on the day of the Annual Meeting of the Corporation, provided, however, that Advisory Directors shall serve at the pleasure of the Board of Directors and may be removed at any time with or without cause by a vote of the Board of Directors. For the purpose of Article IX (Indemnification) of these By-Laws, Advisory Directors of the Corporation shall enjoy the same rights and privileges as Directors of the Corporation.
SECTION 8. Vacancies; Removal. Vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by the stockholders or by the Board of Directors, and the Directors so chosen shall hold office until the next annual election. The stockholders may by majority vote remove any Director from his directorship, whether cause shall be assigned for such removal or not.
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. Executive Committee. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, establish an Executive Committee of not less than two or more than five members, to serve at the pleasure of the Board of Directors, which Executive Committee shall consist of such directors as the Board of Directors may from time to time designate.
SECTION 2. Procedure. The Executive Committee shall meet at the call of any of the members of the Executive Committee. A majority of the members shall be necessary to constitute a quorum and action shall be taken by a majority vote of those present.
SECTION 3. Powers and Reports. During the intervals between the meetings of the Board of Directors, the Executive Committee shall possess and may exercise, to the full extent authorized by law, all the powers of the Board of Directors in the management and direction of the business and affairs of the Corporation. The taking of an action by the Executive Committee shall be conclusive evidence that the Board of Directors was not in session when such action was taken. The Executive Committee shall keep regular minutes of its proceedings and all action by the Executive Committee shall be reported to the Board of Directors at its meeting next following the meeting of the Executive Committee and shall be subject to revision or alteration by the Board of Directors; provided, that no rights of third parties shall be affected by such revision or alteration.
SECTION 4. Other Committees. From time to time the Board of Directors, by the affirmative vote of a majority of the whole Board of Directors, may appoint other committees for any purpose or purposes, and such committees shall have such powers as shall be conferred by the resolution of appointment; provided, however, that no such committee shall be authorized to exercise the powers of the Board of Directors. The quorum of any such committee so appointed shall be a majority of the membership of that committee.
ARTICLE V.
OFFICERS
SECTION 1. Required and Discretionary Officers. The Board of Directors shall elect individuals to occupy at least three executive offices: President, Secretary and Treasurer. In its discretion, the Board of Directors may elect individuals to occupy other executive offices, including Chairman of the Board, Vice Chairman of the Board, Chief Executive Officer, Chief Operating Officer, Vice President and such other executive offices as the Board shall designate. Officers shall be elected annually and shall hold office until their respective successors shall have been duly elected and qualified, or until such officer shall have died or resigned or shall have been removed by majority vote of the whole Board of Directors. To the extent permitted by law, individuals may occupy more than one office.
SECTION 2. Chairman and Vice Chairman of the Board of Directors. When a Chairman of the Board and/or Vice Chairman is elected by the Board of Directors, he or she shall be a member of the Board of Directors, shall preside at all meetings of the Board of Directors, and shall have such other duties as from time to time may be assigned to him or her by the Board of Directors or by the Executive Committee.
SECTION 3. President. The President shall perform duties incident to the office of the president of a corporation and such other duties as from time to time may be assigned to him or her by the Board of Directors, by the Executive Committee or, if the Board has elected a Chief Executive Officer and if the Chief Executive Officer is not the President, by the Chief Executive Officer.
SECTION 4. Vice Presidents. Each Vice President shall have such powers and shall perform such duties as from time to time may be conferred upon or assigned to him or her by the Board of Directors, the Executive Committee, the President or the Chief Executive Officer.
SECTION 5. Secretary. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors in books provided for the purpose; shall see that all notices are duly given in accordance with the provisions of law and these By-Laws; shall be custodian of the records and of the corporate seal of the Corporation; shall see that the corporate seal is affixed to all documents the execution of which under the seal is duly authorized, and, when the seal is so affixed, he may attest the same; and, in general, shall perform all duties incident to the office of the secretary of a corporation, and such other duties as from time to time may be assigned to the Secretary by the Chief Executive Officer, the Chairman of the Board, the Vice Chairman, the President, the Board of Directors or the Executive Committee. The Secretary shall also keep, or cause to be kept, a stock book, containing the names, alphabetically arranged, of all persons who are stockholders of the Corporat ion, showing their addresses of record, the number of shares held by them respectively, and the date when they respectively became the owners of stock of the Corporation.
SECTION 6. Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation, and shall deposit, or cause to be deposited, in the name of the Corporation, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by the Treasurer, by an assistant Treasurer or by any other individual designated by the Board of Directors. The Treasurer may endorse for collection on behalf of the Corporation, checks, notes and other obligations; may sign receipts and vouchers for payments made to the Corporation singly or jointly with another person as the Board of Directors may authorize; may sign checks of the Corporation and pay out and dispose of the proceeds as the Board of Directors may authorize; shall render or cause to be rendered to the Chairman of the Board, the President and the Board of Directors, whenever requested, an account of the financial condition of the Corporation; and, in general, shall perform all the duties incident to the office of a treasurer of a corporation, and such other duties as from time to time may be assigned to him by the Chairman of the Board, the Vice Chairman, the President, the Board of Directors or the Executive Committee.
SECTION 7. Subordinate Officers. The Board of Directors may appoint such assistant secretaries, assistant treasurers and other officers as it may deem desirable. Each such officer shall hold office for such period, have such authority and perform such duties as the Board of Directors may prescribe. The Board of Directors may, from time to time, authorize any officer to appoint and remove such officers and to prescribe the powers and duties thereof.
SECTION 8. Vacancies; Absences. Any vacancy in any of the above offices may be filled by the Board of Directors at any regular or special meeting. Except when the law requires the act of a particular officer, the Board of Directors or the Executive Committee, whenever necessary, may, in the absence of any officer, designate any other officer or properly qualified employee, to perform the duties of the absent officer for the time being, and such designated officer or employee shall have, when so acting, all the powers herein given to such absent officer.
SECTION 9. Resignations. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, the Chairman of the Board, the Vice Chairman, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon written receipt thereof by the Board of Directors or by such officer.
ARTICLE VI.
CAPITAL STOCK
SECTION 1. Stock Certificates. Every stockholder shall be entitled to have a certificate certifying the number of shares owned by him in the Corporation. Stock certificates shall be signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation. Such seal may be facsimile, engraved or printed. Where such certificate is signed (1) by a transfer agent or an assistant transfer agent, other than the Corporation itself, or (2) by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of the Chairman of the Board, the Vice Chairman of the Board, the President, Vice President, Treasurer, Secretary, Assistant Treasurer or Assistant Secretary may be facsimile. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the Corporation.
SECTION 2. Transfer of Shares. The shares of stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his attorney lawfully constituted, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof or guaranty of the authenticity of the signature as the Corporation or its agents may reasonably require. The Board of Directors may appoint one or more transfer agents and registrars of the stock of the Corporation. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact and legal owner thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by law.
SECTION 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, mutilated or destroyed, and may require the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, mutilated or destroyed.
ARTICLE VII.
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the Corporation's bank accounts and all bills of exchange, promissory notes, acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, person or persons, as shall be thereunto authorized by the Board of Directors or as may be designated in a manner authorized by the Board of Directors.
SECTION 2. Execution of Contracts, Assignments, etc. All contracts, agreements, endorsements, assignments, transfers, stock powers, and other instruments shall be signed by such officer or officers, person or persons, as shall be thereunto authorized by the Board of Directors or as may be designated in a manner authorized by the Board of Directors.
SECTION 3. Voting of Stock and Execution of Proxies. The Chairman of the Board, the Vice Chairman, the President or any Vice President or any other officer of the Corporation designated by the Board of Directors, the Chairman of the Board, or the President shall be authorized to attend any meeting of the stockholders of any other corporation in which the Corporation is an owner of stock and to vote such stock upon all matters coming before such meeting. The Chairman of the Board, the Vice Chairman, the President or any Vice President may sign and issue proxies to vote shares of stock of other corporations owned by the Corporation.
ARTICLE VIII.
SEAL
The seal of the Corporation shall show the year of its incorporation and shall be in such form as the Board of Directors shall prescribe. The seal on any corporate obligation for the payment of money may be a facsimile, engraved or printed.
ARTICLE IX.
INDEMNIFICATION
SECTION 1. Mandatory Indemnification - Third Party Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding ("Action"), whether civil, criminal, administrative or investigative (other than an Action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgements, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such Action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal Action, had no reasonable cau se to believe the conduct was unlawful. The termination of any Action by judgement, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Action or proceeding, had reasonable cause to believe that the conduct was unlawful.
SECTION 2. Mandatory Indemnification - Derivative Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any Action by or in the right of the Corporation to procure a judgement in its favor by reason of the fact that such person is or was a director, officer, or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees and amounts paid in settlement not exceeding the estimated expense of litigating the Action to a conclusion) actually and reasonably incurred by such person in connection with the defense or settlement of such Action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interest of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of such person's duty to the Corporation unless and only to the extent that the court in which such Action was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
SECTION 3. Mandatory Indemnification - Successful Party. To the extent that a director, officer, employee or agent of the Corporation, or any person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in the defense of any such Action, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.
SECTION 4. Permissive Indemnification. Notwithstanding any limitations of the indemnification provided by Sections 1 and 2, the Corporation may, to the fullest extent authorized by law, indemnify any person who is or was a party or is threatened to be made a party to any Action by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against all or part of any expenses (including attorneys' fees), judgements, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Action, if it shall be determined in accordance with the applicable procedures set forth in Section 5 that such person is fairly and reasonably entitled to such indemnification.
SECTION 5. Procedure. Any indemnification under Sections 1, 2 or 4 (unless ordered by a court) shall be made by the Corporation only as authorized by the Board of Directors (which may so act whether or not there is a sufficient number of disinterested directors to constitute a quorum) in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standards of conduct set forth in Sections 1 and 2 or is entitled to indemnification under Section 4. Such determination, in the case of indemnification made pursuant to Section 1 or Section 2 shall be made (1) by the Board of Directors by a majority vote of a quorum, as defined in the Certificate of Incorporation or the By-Laws, consisting of directors who are not or were not parties to any pending or completed Action giving rise to the proposed indemnification, or (2) if such a quorum is not obtainable or, even if obtainable, a qu orum of disinterested directors so directs, by independent legal counsel (who may be, but need not be, outside counsel to the Corporation) in a written opinion, or (3) by the shareholder(s) of the Corporation. Such determination, in the case of indemnification made pursuant to Section 4, shall be made by the Board of Directors by a majority vote of a quorum, as defined in the Certificate of Incorporation or the By-Laws, consisting of directors who are not or were not parties to any pending or completed Action giving rise to the proposed indemnification or by the shareholders.
SECTION 6. Advance Payments. Expenses (including attorneys' fees) incurred or reasonably expected to be incurred by a director, officer or employee of the Corporation in defending against any claim asserted or threatened against such person in such capacity or arising out of such person's status as such shall be paid by the Corporation in advance of the final determination thereof, if authorized by the Board of Directors (which may so act whether or not there is a sufficient number of disinterested directors to constitute a quorum) upon receipt by the Corporation of his written request therefor and such person's written promise to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized or required in this article.
SECTION 7. Provisions Not Exclusive. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person seeking indemnification may be entitled under any law, Bylaw, agreement, vote of shareholders or disinterested directors or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 8. Miscellaneous. For purposes of this Article, and without any limitation whatsoever upon the generality thereof, the term "fines" as used herein shall be deemed to include (i) penalties imposed by the Nuclear Regulatory Commission (the "NRC") pursuant to Section 206 of the Energy Reorganization Act of 1974 and Part 21 of NRC regulations thereunder, as they may be amended from time to time, and any other penalties, whether similar or dissimilar, imposed by the NRC, and (ii) excise taxes assessed with respect to an employee benefit plan pursuant to the Employee Retirement Income Security Act of 1974, as it may be amended from time to time, ("ERISA"). For purposes of determining the entitlement of a director, officer or employee of the Corporation to indemnification under this Article, the term "other enterprise" shall be deemed to include an employee benefit plan governed by ERISA. The Corporation shall be deemed to have requested such person to serve as a director, officer or emplo yee of such a plan where such person is a trustee of the plan or where the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to such plan or its participants or beneficiaries, and action taken or permitted by such person in the performance of his duties with respect to such employee benefit plan for which is a purpose reasonably believed by him to be in the interest of the participants and beneficiaries of the plan, shall be deemed to meet the standard of conduct required for indemnification hereunder. Any act, omission, step or conduct taken or had in good faith which is required, authorized or approved by any order or orders issued pursuant to the Public Utility Holding Company Act of 1935 or any other federal statute or any state statute or municipal ordinance shall be deemed to meet the standard of conduct required for indemnification hereunder.
ARTICLE X.
CONFLICTS
In the event that any provisions of these By-Laws conflict with the Articles of Incorporation or with state or federal statutes, the Articles of Incorporation or such statutes shall take precedence over such provisions of these By-Laws.
ARTICLE XI.
AMENDMENTS
Subject to the provisions of applicable law and of the Articles of Incorporation, these By-Laws may be altered, amended or repealed and new By-Laws adopted either by the stockholders or by the Board of Directors.
Exhibit 12(a) | ||||||
Entergy Arkansas, 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, | March 31, | |||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
Total Interest Charges | $103,210 | $91,221 | $84,430 | $84,992 | $85,809 | $89,542 |
Interest applicable to rentals | 12,762 | 15,425 | 13,171 | 13,911 | 11,145 | 10,882 |
Total fixed charges, as defined | 115,972 | 106,646 | 97,601 | 98,903 | 96,954 | 100,424 |
Preferred dividends, as defined (a) | 11,869 | 14,274 | 12,646 | 12,093 | 10,041 | 9,540 |
Combined fixed charges and preferred dividends, as defined | $127,841 | $120,920 | $110,247 | $110,996 | $106,995 | $109,964 |
Earnings as defined: | ||||||
Net Income | $135,643 | $126,009 | $142,210 | $174,635 | $173,154 | $173,113 |
Add: | ||||||
Provision for income taxes: | ||||||
Total | 71,404 | 105,296 | 89,064 | 96,949 | 56,824 | 57,989 |
Fixed charges as above | 115,972 | 106,646 | 97,601 | 98,903 | 96,954 | 100,424 |
Total earnings, as defined | $323,019 | $337,951 | $328,875 | $370,487 | $326,932 | $331,526 |
Ratio of earnings to fixed charges, as defined | 2.79 | 3.17 | 3.37 | 3.75 | 3.37 | 3.30 |
Ratio of earnings to combined fixed charges and | ||||||
preferred dividends, as defined | 2.53 | 2.79 | 2.98 | 3.34 | 3.06 | 3.01 |
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(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. | ||||||
Exhibit 12(b) | ||||||
Entergy Gulf States, 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, | March 31, | |||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
Fixed charges, as defined: | ||||||
Total Interest charges | $144,840 | $157,343 | $133,598 | $126,788 | $149,780 | $154,268 |
Interest applicable to rentals | 16,483 | 16,694 | 13,707 | 8,832 | 8,928 | 9,768 |
Total fixed charges, as defined | 161,323 | 174,037 | 147,305 | 135,620 | 158,708 | 164,036 |
Preferred dividends, as defined (a) | 6,190 | 6,845 | 6,991 | 6,444 | 5,969 | 6,156 |
Combined fixed charges and preferred dividends, as defined | $167,513 | $180,882 | $154,296 | $142,064 | $164,677 | $170,192 |
Earnings as defined: | ||||||
Income from continuing operations before extraordinary items and | ||||||
the cumulative effect of accounting changes | $174,078 | $63,895 | $192,264 | $206,497 | $211,988 | $194,536 |
Add: | ||||||
Income Taxes | 65,997 | 24,249 | 108,288 | 110,270 | 107,067 | 108,155 |
Fixed charges as above | 161,323 | 174,037 | 147,305 | 135,620 | 158,708 | 164,036 |
Total earnings, as defined | $401,398 | $262,181 | $447,857 | $452,387 | $477,763 | $466,727 |
Ratio of earnings to fixed charges, as defined | 2.49 | 1.51 | 3.04 | 3.34 | 3.01 | 2.85 |
Ratio of earnings to combined fixed charges and | ||||||
preferred dividends, as defined | 2.40 | 1.45 | 2.90 | 3.18 | 2.90 | 2.74 |
(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. | ||||||
Exhibit 12(c) | ||||||
Entergy Louisiana, LLC | ||||||
Computation of Ratios of Earnings to Fixed Charges and | ||||||
Ratios of Earnings to Combined Fixed Charges and Preferred Distributions | ||||||
Twelve Months Ended | ||||||
December 31, | March 31, | |||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
Fixed charges, as defined: | ||||||
Total Interest | $100,667 | $76,756 | $74,141 | $85,418 | $92,216 | $93,723 |
Interest applicable to rentals | 6,496 | 6,359 | 5,595 | 4,585 | 4,833 | 5,339 |
Total fixed charges, as defined | 107,163 | 83,115 | 79,736 | 90,003 | 97,049 | 99,062 |
Preferred distributions, as defined (a) | - - | - - | - - | - - | 10,906 | 10,713 |
Combined fixed charges and preferred distributions, as defined | $107,163 | $83,115 | $79,736 | $90,003 | $107,955 | $109,775 |
Earnings as defined: | ||||||
Net Income | $144,709 | $146,154 | $127,495 | $128,082 | $137,618 | $143,990 |
Add: | ||||||
Provision for income taxes: | ||||||
Total Taxes | 84,765 | 97,408 | 79,475 | 96,819 | 78,338 | 79,932 |
Fixed charges as above | 107,163 | 83,115 | 79,736 | 90,003 | 97,049 | 99,062 |
Total earnings, as defined | $336,637 | $326,677 | $286,706 | $314,904 | $313,005 | $322,984 |
Ratio of earnings to fixed charges, as defined | 3.14 | 3.93 | 3.60 | 3.50 | 3.23 | 3.26 |
Ratio of earnings to combined fixed charges and | ||||||
preferred distributions, as defined | 3.14 | 3.93 | 3.60 | 3.50 | 2.90 | 2.94 |
(a) "Preferred distributions," as defined by SEC regulation S-K, are computed by dividing the preferred distribution requirement by one hundred percent (100%) minus the income tax rate. | ||||||
Exhibit 12(d) | ||||||
Entergy Mississippi, 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, | March 31, | |||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
Fixed charges, as defined: | ||||||
Total Interest | $45,464 | $47,464 | $44,637 | $43,707 | $51,216 | $49,606 |
Interest applicable to rentals | 1,916 | 1,880 | 1,162 | 771 | 1,427 | 1,581 |
Total fixed charges, as defined | 47,380 | 49,344 | 45,799 | 44,478 | 52,643 | 51,187 |
Preferred dividends, as defined (a) | 4,490 | 5,099 | 5,067 | 5,129 | 4,373 | 4,761 |
Combined fixed charges and preferred dividends, as defined | $51,870 | $54,443 | $50,866 | $49,607 | $57,016 | $55,948 |
Earnings as defined: | ||||||
Net Income | $52,408 | $67,058 | $73,497 | $62,103 | $52,285 | $54,397 |
Add: | ||||||
Provision for income taxes: | ||||||
Total income taxes | 17,846 | 34,431 | 37,040 | 33,952 | 28,567 | 31,544 |
Fixed charges as above | 47,380 | 49,344 | 45,799 | 44,478 | 52,643 | 51,187 |
Total earnings, as defined | $117,634 | $150,833 | $156,336 | $140,533 | $133,495 | $137,128 |
Ratio of earnings to fixed charges, as defined | 2.48 | 3.06 | 3.41 | 3.16 | 2.54 | 2.68 |
Ratio of earnings to combined fixed charges and | ||||||
preferred dividends, as defined | 2.27 | 2.77 | 3.07 | 2.83 | 2.34 | 2.45 |
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(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. | ||||||
Exhibit 12(e) | ||||||
Entergy New Orleans, 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, | March 31, | |||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
Fixed charges, as defined: | ||||||
Total Interest | $27,950 | $17,786 | $16,610 | $13,555 | $19,329 | $24,558 |
Interest applicable to rentals | 1,043 | 910 | 644 | 426 | 527 | 306 |
Total fixed charges, as defined | 28,993 | 18,696 | 17,254 | 13,981 | 19,856 | 24,864 |
Preferred dividends, as defined (a) | 2,736 | 1,686 | 1,545 | 1,172 | 2,501 | 2,858 |
Combined fixed charges and preferred dividends, as defined | $31,729 | $20,382 | $18,799 | $15,153 | $22,357 | $27,722 |
Earnings as defined: | ||||||
Net Income | ($230) | $7,859 | $28,072 | $1,250 | $5,344 | 2,851 |
Add: | ||||||
Provision for income taxes: | ||||||
Total | (422) | 5,875 | 16,868 | 1,790 | 5,051 | 3,178 |
Fixed charges as above | 28,993 | 18,696 | 17,254 | 13,981 | 19,856 | 24,864 |
Total earnings, as defined | $28,341 | $32,430 | $62,194 | $17,021 | $30,251 | $30,893 |
Ratio of earnings to fixed charges, as defined (b) | 0.98 | 1.73 | 3.60 | 1.22 | 1.52 | 1.24 |
Ratio of earnings to combined fixed charges and | ||||||
preferred dividends, as defined (b) | 0.89 | 1.59 | 3.31 | 1.12 | 1.35 | 1.11 |
- ------------------------ | ||||||
(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) For Entergy New Orleans, earnings for the twelve months ended December 31, 2002 were not adequate to cover combined fixed charges and preferred dividends by $0.7 million and $3.4 million, respectively. |
Exhibit 12(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, | March 31, | |||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
Fixed charges, as defined: | ||||||
Total Interest | $76,639 | $64,620 | $58,928 | $60,424 | $59,931 | $59,739 |
Interest applicable to rentals | 3,250 | 3,793 | 3,426 | 3,039 | 3,914 | 4,046 |
Total fixed charges, as defined | $79,889 | $68,413 | $62,354 | $63,463 | $63,845 | $63,785 |
Earnings as defined: | ||||||
Net Income | $103,352 | $106,003 | $105,948 | $111,644 | $140,258 | $136,807 |
Add: | ||||||
Provision for income taxes: | ||||||
Total | 76,177 | 75,845 | 78,013 | 69,343 | 54,529 | 50,457 |
Fixed charges as above | 79,889 | 68,413 | 62,354 | 63,463 | 63,845 | 63,785 |
Total earnings, as defined | $259,418 | $250,261 | $246,315 | $244,450 | $258,632 | $251,049 |
Ratio of earnings to fixed charges, as defined | 3.25 | 3.66 | 3.95 | 3.85 | 4.05 | 3.94 |
Exhibit 31(a)
CERTIFICATIONS
I, J. Wayne Leonard, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Corporation; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ J. Wayne Leonard Chairman and Chief Executive Officer of Entergy Corporation |
Date: May 9, 2007
Exhibit 31(b)
CERTIFICATIONS
I, Leo P. Denault, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Corporation; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Leo P. Denault Executive Vice President and Chief Financial Officer of Entergy Corporation |
Date: May 9, 2007
Exhibit 31(c)
CERTIFICATIONS
I, Hugh T. McDonald, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Arkansas, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Hugh T. McDonald Chairman, President, and Chief Executive Officer of Entergy Arkansas, Inc. |
Date: May 9, 2007
Exhibit 31(d)
CERTIFICATIONS
I, Jay A. Lewis, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Arkansas, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Arkansas, Inc. |
Date: May 9, 2007
Exhibit 31(e)
CERTIFICATIONS
I, Joseph F. Domino, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Gulf States, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Joseph F. Domino Chairman, President and Chief Executive Officer-Texas of Entergy Gulf States, Inc. |
Date: May 9, 2007
Exhibit 31(f)
CERTIFICATIONS
I, E. Renae Conley, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Gulf States, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ E. Renae Conley President and Chief Executive Officer-Louisiana of Entergy Gulf States, Inc. |
Date: May 9, 2007
Exhibit 31(g)
CERTIFICATIONS
I, Jay A. Lewis, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Gulf States, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Gulf States, Inc. |
Date: May 9, 2007
Exhibit 31(h)
CERTIFICATIONS
I, E. Renae Conley, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Louisiana, LLC; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ E. Renae Conley Chair of the Board, President, and Chief Executive Officer of Entergy Louisiana, LLC |
Date: May 9, 2007
Exhibit 31(i)
CERTIFICATIONS
I, Jay A. Lewis, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Louisiana, LLC; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Louisiana, LLC |
Date: May 9, 2007
Exhibit 31(j)
CERTIFICATIONS
I, Carolyn C. Shanks, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Mississippi, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Carolyn C. Shanks Chairman, President, and Chief Executive Officer of Entergy Mississippi, Inc. |
Date: May 9, 2007
Exhibit 31(k)
CERTIFICATIONS
I, Jay A. Lewis, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy Mississippi, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Mississippi, Inc. |
Date: May 9, 2007
Exhibit 31(l)
CERTIFICATIONS
I, Roderick K. West, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy New Orleans, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Roderick K. West President and Chief Executive Officer of Entergy New Orleans, Inc. |
Date: May 9, 2007
Exhibit 31(m)
CERTIFICATIONS
I, Jay A. Lewis, certify that: |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Entergy New Orleans, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy New Orleans, Inc. |
Date: May 9, 2007
Exhibit 31(n)
CERTIFICATIONS
I, Michael R. Kansler, certify that: |
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1. |
I have reviewed this quarterly report on Form 10-Q of System Energy Resources, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Michael R. Kansler Chairman, President, and Chief Executive Officer of System Energy Resources, Inc. |
Date: May 9, 2007
Exhibit 31(o)
CERTIFICATIONS
I, Theodore H. Bunting, Jr., certify that: |
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1. |
I have reviewed this quarterly report on Form 10-Q of System Energy Resources, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Theodore H. Bunting, Jr. Vice President and Chief Financial Officer of System Energy Resources, Inc. |
Date: May 9, 2007
Exhibit 32(a)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, J. Wayne Leonard, Chairman and Chief Executive Officer of Entergy Corporation (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ J. Wayne Leonard Chairman and Chief Executive Officer of Entergy Corporation |
Date: May 9, 2007
Exhibit 32(b)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Leo P. Denault, Executive Vice President and Chief Financial Officer of Entergy Corporation (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Leo P. Denault Executive Vice President and Chief Financial Officer of Entergy Corporation |
Date: May 9, 2007
Exhibit 32(c)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I,
Hugh T. McDonald, Chairman, President and Chief Executive Officer of Entergy Arkansas, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Hugh T. McDonald Chairman, President, and Chief Executive Officer of Entergy Arkansas, Inc. |
Date: May 9, 2007
Exhibit 32(d)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Jay A. Lewis, Vice President and Chief Financial Officer of Entergy Arkansas, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Arkansas, Inc. |
Date: May 9, 2007
Exhibit 32(e)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I,
Joseph F. Domino, Chairman, President and Chief Executive Officer-Texas of Entergy Gulf States, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Joseph F. Domino Chairman, President and Chief Executive Officer-Texas of Entergy Gulf States, Inc. |
Date: May 9, 2007
Exhibit 32(f)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, E. Renae Conley, President and Chief Executive Officer-Louisiana of Entergy Gulf States, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ E. Renae Conley President and Chief Executive Officer-Louisiana of Entergy Gulf States, Inc. |
Date: May 9, 2007
Exhibit 32(g)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Jay A. Lewis, Vice President and Chief Financial Officer of Entergy Gulf States, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Gulf States, Inc. |
Date: May 9, 2007
Exhibit 32(h)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, E. Renae Conley, Chair of the Board, President and Chief Executive Officer of Entergy Louisiana, LLC (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ E. Renae Conley Chair of the Board, President, and Chief Executive Officer of Entergy Louisiana, LLC |
Date: May 9, 2007
Exhibit 32(i)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Jay A. Lewis, Vice President and Chief Financial Officer of Entergy Louisiana, LLC (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Louisiana, LLC |
Date: May 9, 2007
Exhibit 32(j)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I,
Carolyn C. Shanks, Chairman, President and Chief Executive Officer of Entergy Mississippi, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Carolyn C. Shanks Chairman, President, and Chief Executive Officer of Entergy Mississippi, Inc. |
Date: May 9, 2007
Exhibit 32(k)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Jay A. Lewis, Vice President and Chief Financial Officer of Entergy Mississippi, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy Mississippi, Inc. |
Date: May 9, 2007
Exhibit 32(l)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I,
Roderick K. West, President and Chief Executive Officer of Entergy New Orleans, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Roderick K. West President and Chief Executive Officer of Entergy New Orleans, Inc. |
Date: May 9, 2007
Exhibit 32(m)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Jay A. Lewis, Vice President and Chief Financial Officer of Entergy New Orleans, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Jay A. Lewis Vice President and Chief Financial Officer of Entergy New Orleans, Inc. |
Date: May 9, 2007
Exhibit 32(n)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael R. Kansler, Chairman, President and Chief Executive Officer of System Energy Resources, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
/s/ Michael R. Kansler Chairman, President, and Chief Executive Officer of System Energy Resources, Inc. |
Date: May 9, 2007
Exhibit 32(o)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Theodore H. Bunting, Jr., Vice President and Chief Financial Officer of System Energy Resources, Inc. (the "Company"), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the Report. |
____/s/ Theodore H. Bunting, Jr. Vice President and Chief Financial Officer of System Energy Resources, Inc. |
Date: May 9, 2007