FORM 10-Q
                                
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
(Mark One)
   X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

          For the Quarterly Period Ended September 30, 1994

          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ____________ to____________

Commission      Registrant, State of Incorporation,    I.R.S. Employer
File Number     Address and Telephone Number           Identification No.
                                                       
1-11299         ENTERGY CORPORATION                    13-5550175
                (a Delaware corporation)               
                225 Baronne Street                     
                New Orleans, Louisiana 70112           
                Telephone (504) 529-5262               
                                                       
1-10764         ARKANSAS POWER & LIGHT COMPANY         71-0005900
                (an Arkansas corporation)              
                425 West Capitol Avenue, 40th Floor    
                Little Rock, Arkansas 72201            
                Telephone (501) 377-4000               
                                                       
1-2703          GULF STATES UTILITIES COMPANY          74-0662730
                (a Texas corporation)                  
                350 Pine Street                        
                Beaumont, Texas  77701                 
                Telephone (409) 838-6631               
                                                       
1-8474          LOUISIANA POWER & LIGHT COMPANY        72-0245590
                (a Louisiana corporation)              
                639 Loyola Avenue                      
                New Orleans, Louisiana 70112           
                Telephone (504) 569-4000               
                                                       
0-320           MISSISSIPPI POWER & LIGHT COMPANY      64-0205830
                (a Mississippi corporation)            
                308 East Pearl Street                  
                Jackson, Mississippi 39201             
                Telephone (601) 969-2311               
                                                       
0-5807          NEW ORLEANS PUBLIC SERVICE INC.        72-0273040
                (a Louisiana corporation)              
                639 Loyola Avenue                      
                New Orleans, Louisiana 70112           
                Telephone (504) 569-4000               
                                                       
1-9067          SYSTEM ENERGY RESOURCES, INC.          72-0752777
                (an Arkansas corporation)              
                Echelon One                            
                1340 Echelon Parkway                   
                Jackson, Mississippi 39213             
                Telephone (601) 368-5000               
      



      Indicate by check mark whether the registrants (1) have
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrants were
required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.

Yes     X      No

Common Stock Outstanding                   Outstanding at October 31, 1994
Entergy Corporation       ($0.01 par value)          227,378,729

              
              

              ENTERGY CORPORATION AND SUBSIDIARIES
             INDEX TO QUARTERLY REPORT ON FORM 10-Q
                       September 30, 1994

                                                         Page
                                                        Number

Definitions                                                1
Financial Statements:
  Entergy Corporation and Subsidiaries:
    Consolidated Balance Sheets                            4
    Statements of Consolidated Income                      6
    Statements of Consolidated Cash Flows                  7
    Selected Operating Results                             9
  Arkansas Power & Light Company:
    Balance Sheets                                        10
    Statements of Income                                  12
    Statements of Cash Flows                              13
    Selected Operating Results                            14
  Gulf States Utilities Company:
    Balance Sheets                                        15
    Statements of Income                                  17
    Statements of Cash Flows                              18
    Selected Operating Results                            19
  Louisiana Power & Light Company:
    Balance Sheets                                        20
    Statements of Income                                  22
    Statements of Cash Flows                              23
    Selected Operating Results                            24
  Mississippi Power & Light Company:
    Balance Sheets                                        25
    Statements of Income                                  27
    Statements of Cash Flows                              28
    Selected Operating Results                            29
  New Orleans Public Service Inc.:
    Balance Sheets                                        30
    Statements of Income                                  32
    Statements of Cash Flows                              33
    Selected Operating Results                            34
  System Energy Resources, Inc.:
    Balance Sheets                                        35
    Statements of Income                                  37
    Statements of Cash Flows                              38
Notes to Financial Statements                             39
Management's Financial Discussion and Analysis            58
Part II:
  Item 1.  Legal Proceedings                              74
  Item 5.  Other Information                              78
  Item 6.  Exhibits and Reports on Form 8-K               81
Experts                                                   83
Signature                                                 84




This combined Form 10-Q is separately filed by Entergy
Corporation, Arkansas Power & Light Company, Gulf States
Utilities Company, Louisiana Power & Light Company, Mississippi
Power & Light Company, New Orleans Public Service Inc., and
System Energy Resources, Inc.  Information contained herein
relating to any individual company is filed by such company on
its own behalf.  Each company makes no representation as to
information relating to the other companies.  This combined Form
10-Q supplements and updates the Form 10-K for the calendar year
ended December 31, 1993, and the Forms 10-Q for the quarters
ended March 31, 1994 and June 30, 1994, filed by the individual
registrants with the SEC,  and should be read in conjunction
therewith.

                           DEFINITIONS

Certain abbreviations or acronyms used in the text are defined
below:

   Abbreviation or Acronym        Term

ALJ                      Administrative Law Judge
ANO                      Arkansas  Nuclear One  Steam  Electric
                         Generating Station
ANO 2                    Unit No. 2 of ANO
AP&L                     Arkansas Power & Light Company
APSC                     Arkansas Public Service Commission
Availability Agreement   Agreement, dated as of June 21,  1974,
                         as  amended,  among  System  Energy  and
                         AP&L,  LP&L,  MP&L, and NOPSI,  and  the
                         assignments thereof
Capital Funds Agreement  Agreement, dated as of June 21,  1974,
                         as  amended, between System  Energy  and
                         Entergy Corporation, and the assignments
                         thereof
CCLM                     Customer-Controlled Load Management (a
                         DSM activity utilizing residential time-
                         of-use rates)
City of New Orleans 
   or City               New Orleans, Louisiana
Council                  Council  of  the  City of  New  Orleans,
                         Louisiana
D.C. Circuit             United States Court of Appeals for the
                         District of Columbia Circuit
DSM                      Demand-Side Management (Least Cost Plan
                         activities  that  influence  electricity
                         usage by customers)
Entergy Corporation      Entergy   Corporation,   a   Delaware
                         corporation,   successor   to    Entergy
                         Corporation, a Florida Corporation
Entergy Operations       Entergy Operations, Inc., a subsidiary
                         of    Entergy   Corporation   that   has
                         operating responsibility for ANO,  Grand
                         Gulf 1, River Bend, and Waterford 3
Entergy or System        Entergy  Corporation and  its  various
                         direct and indirect subsidiaries
Entergy Power            Entergy  Power, Inc., a subsidiary  of
                         Entergy    Corporation   that    markets
                         capacity   and   energy   from   certain
                         generating facilities to other  parties,
                         principally non-affiliates, for resale
Entergy Services         Entergy Services, Inc.
FERC                     Federal Energy Regulatory Commission
First Quarter Form 10-Q  The  combined Quarterly Report on Form
                         10-Q  for  the quarter ended  March  31,
                         1994, of Entergy, AP&L, GSU, LP&L, MP&L,
                         NOPSI, and System Energy
Form 10-K                The combined Annual Report on Form 10-K
                         for the year ended December 31, 1993, of
                         Entergy,  AP&L, GSU, LP&L, MP&L,  NOPSI,
                         and System Energy
G&R Bonds                General  and Refunding Mortgage  Bonds
                         issued and issuable by MP&L and NOPSI
Grand Gulf Station       Grand  Gulf  Steam  Electric  Generating
                         Station
Grand Gulf 1             Unit No. 1 of the Grand Gulf Station
GSU                      Gulf States Utilities Company
KWH                      Kilowatt-Hour(s)
Least Cost Plan          Least  Cost  Integrated Resource  Plan
                         (combination of demand- and  supply-side
                         resources  to  be  used  by  Entergy  to
                         satisfy electricity demand)
LP&L                     Louisiana Power & Light Company
LPSC                     Louisiana Public Service Commission
Merger                   The     combination    transaction,
                         consummated  on December  31,  1993,  by
                         which GSU became a subsidiary of Entergy
                         Corporation   and  Entergy   Corporation
                         became a Delaware Corporation
Money Pool               System Money Pool, which allows certain
                         System companies to borrow from, or lend
                         to, certain other System companies
MP&L                     Mississippi Power & Light Company
MPSC                     Mississippi Public Service Commission
1991 NOPSI Settlement    Agreement, retroactive to  October  4,
                         1991,  among NOPSI, the Council and  the
                         Alliance  for  Affordable  Energy,  Inc.
                         that   settled  certain  Grand  Gulf   1
                         prudence  issues and pending  litigation
                         related to a resolution adopted  by  the
                         Council  disallowing  the  recovery   by
                         NOPSI  of  $135  million  of  previously
                         deferred Grand Gulf 1-related costs
NOPSI                    New Orleans Public Service Inc.
NRC                      Nuclear Regulatory Commission
Owner Participant        A corporation that, in connection with
                         the   Waterford  3  sale  and  leaseback
                         transactions, has acquired a  beneficial
                         interest  in a trust, the Owner  Trustee
                         of  which  is  the owner and  lessor  of
                         undivided interests in Waterford 3
Owner Trustee            Each  institution  and/or  individual
                         acting  as Owner Trustee under  a  trust
                         agreement  with an Owner Participant  in
                         connection   with the Waterford  3  sale
                         and leaseback transactions
PUCT                     Public Utility Commission of Texas
Rate Cap                 The level of GSU's retail electric base
                         rates in effect at December 31, 1993 for
                         the  Louisiana retail jurisdiction,  and
                         the  level in effect prior to the  Texas
                         Cities  Rate  Settlement for  the  Texas
                         retail  jurisdiction, which may  not  be
                         exceeded  for  the five years  following
                         December 31, 1993
Reallocation Agreement   1981 Agreement, superseded in part by a
                         June  13,  1985 decision  of  the  FERC,
                         among  AP&L,  LP&L,  MP&L,  NOPSI,   and
                         System  Energy, relating to the sale  of
                         capacity and energy from the Grand  Gulf
                         Station
River Bend               River  Bend Steam Electric  Generating
                         Station, owned 70% by GSU
Revised Plan             MP&L's Grand Gulf 1-related rate phase-
                         in plan, originally approved by the MPSC
                         in  an  order  issued on  September  16,
                         1985,  as  modified by  the  MPSC  order
                         issued September 29, 1988, to bring such
                         plan    into   compliance    with    the
                         requirements of SFAS No. 92
SEC                      Securities and Exchange Commission
SFAS                     Statement   of  Financial  Accounting
                         Standards   as   promulgated   by    the
                         Financial Accounting Standards Board
SFAS 109                 SFAS  No.  109, "Accounting  for  Income
                         Taxes"
Second Quarter Form 10-Q The  combined Quarterly Report on Form
                         10-Q  for  the  quarter ended  June  30,
                         1994, of Entergy, AP&L, GSU, LP&L, MP&L,
                         NOPSI, and System Energy
System Agreement         Agreement, effective January 1,  1983,
                         as subsequently modified by decisions of
                         the  FERC,  among  the System  operating
                         companies  relating to  the  sharing  of
                         generating  capacity  and  other   power
                         resources
System Energy            System Energy Resources, Inc.
System Fuels             System Fuels, Inc.
System operating 
 companies               AP&L, GSU, LP&L, MP&L, and  NOPSI,
                         collectively
System or Entergy        Entergy  Corporation and  its  various
                         direct and indirect subsidiaries
Unit Power Sales 
 Agreement               Agreement, dated as  of  June  10,
                         1982,  as  amended,  among  AP&L,  LP&L,
                         MP&L, NOPSI, and System Energy, relating
                         to  the sale of capacity and energy from
                         System Energy's share of Grand Gulf 1
Waterford 3              Unit  No.  3   of the Waterford  Steam
                         Electric Generating Station
                                                
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $21,323,257 $20,848,844 Plant acquisition adjustment - GSU 424,540 380,117 Electric plant under leases 665,579 663,024 Property under capital leases - electric 167,304 175,276 Natural gas 161,811 156,452 Steam products 75,922 75,689 Construction work in progress 442,780 533,112 Nuclear fuel under capital leases 289,775 329,433 Nuclear fuel 44,101 17,760 ----------- ----------- Total 23,595,069 23,179,707 Less - accumulated depreciation and amortization 7,563,520 7,157,981 ----------- ----------- Utility plant - net 16,031,549 16,021,726 ----------- ----------- Other Property and Investments: Decommissioning trust funds 208,362 172,960 Other 192,915 183,597 ----------- ----------- Total 401,277 356,557 ----------- ----------- Current Assets: Cash and cash equivalents: Cash 118,682 27,345 Temporary cash investments - at cost, which approximates market 565,346 536,404 ----------- ----------- Total cash and cash equivalents 684,028 563,749 Special deposits 9,854 36,612 Notes receivable 15,795 17,710 Accounts receivable: Customer (less allowance for doubtful accounts of $6.7 million in 1994 and $8.8 million in 1993) 400,106 315,796 Other 68,513 81,931 Accrued unbilled revenues 285,842 257,321 Fuel inventory 86,294 110,204 Materials and supplies - at average cost 360,663 360,353 Rate deferrals 363,747 333,311 Prepayments and other 96,655 98,144 ----------- ----------- Total 2,371,497 2,175,131 ----------- ----------- Deferred Debits and Other Assets: Rate deferrals 1,545,303 1,876,051 SFAS 109 regulatory asset - net 1,390,075 1,385,824 Long-term receivables 244,790 228,030 Unamortized loss on reacquired debt 237,598 210,698 Other 592,310 622,680 ----------- ----------- Total 4,010,076 4,323,283 ----------- ----------- TOTAL $22,814,399 $22,876,697 =========== =========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $.01 par value, authorized 500,000,000 shares; issued 229,989,737 shares in 1994 and 231,219,737 shares in 1993 $2,300 $2,312 Paid-in capital 4,201,981 4,223,682 Retained earnings 2,345,156 2,310,082 Less - treasury stock (2,611,158 shares in 1994) 77,440 - ----------- ----------- Total common shareholders' equity 6,471,997 6,536,076 Preference stock 150,000 150,000 Subsidiaries' preferred stock: Without sinking fund 550,955 550,955 With sinking fund 305,183 349,053 Long-term debt 7,288,021 7,355,962 ----------- ----------- Total 14,766,156 14,942,046 ----------- ----------- Other Noncurrent Liabilities: Obligations under capital leases 266,457 322,867 Other 296,551 296,876 ----------- ----------- Total 563,008 619,743 ----------- ----------- Current Liabilities: Currently maturing long-term debt 353,930 322,010 Notes payable 106,866 43,667 Accounts payable 373,245 413,727 Customer deposits 133,864 127,524 Taxes accrued 230,890 118,267 Accumulated deferred income taxes 52,666 44,637 Interest accrued 196,616 210,894 Dividends declared 13,858 13,404 Deferred revenue - gas supplier judgment proceeds - 14,632 Deferred fuel cost 9,915 4,528 Obligations under capital leases 190,301 194,015 Other 235,411 233,009 ----------- ----------- Total 1,897,562 1,740,314 ----------- ----------- Deferred Credits: Accumulated deferred income taxes 3,812,618 3,849,439 Accumulated deferred investment tax credits 762,513 802,273 Other 1,012,542 922,882 ----------- ----------- Total 5,587,673 5,574,594 ----------- ----------- Commitments and Contingencies (Notes 1 and 2) TOTAL $22,814,399 $22,876,697 =========== =========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands, Except Share Data) Operating Revenues: Electric $1,776,982 $1,397,007 $4,668,907 $3,345,757 Natural gas 17,107 13,944 93,952 61,708 Steam products 11,435 - 35,002 - ---------- ---------- ---------- ---------- Total 1,805,524 1,410,951 4,797,861 3,407,465 ---------- ---------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 430,718 305,928 1,103,157 664,824 Purchased power 72,169 72,679 306,798 208,212 Nuclear refueling outage expenses 14,960 12,079 46,949 42,764 Operation and maintenance 469,681 257,438 1,172,916 735,938 Depreciation and decommissioning 166,387 110,676 488,052 329,898 Taxes other than income taxes 71,446 48,599 214,365 145,643 Income taxes 130,795 150,033 254,101 252,744 Rate deferrals Rate deferrals - (25) - (1,651) Amortization of rate deferrals 112,757 93,606 295,107 215,838 ---------- ---------- ---------- ---------- Total 1,468,913 1,051,013 3,881,445 2,594,210 ---------- ---------- ---------- ---------- Operating Income 336,611 359,938 916,416 813,255 ---------- ---------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 2,603 1,451 9,273 5,777 Miscellaneous - net (2,900) 13,894 14,991 43,928 Income taxes (2,859) (1,194) (14,239) (16,411) ---------- ---------- ---------- ---------- Total (3,156) 14,151 10,025 33,294 ---------- ---------- ---------- ---------- Interest Charges: Interest on long-term debt 160,928 121,503 480,189 368,332 Other interest - net 11,250 6,125 33,705 17,624 Allowance for borrowed funds used during construction (2,228) (953) (7,397) (3,974) Preferred dividend requirements of subsidiaries and other 20,306 13,984 61,674 42,964 ---------- ---------- ---------- ---------- Total 190,256 140,659 568,171 424,946 ---------- ---------- ---------- ---------- Income before Cumulative Effect of a Change in Accounting Principle 143,199 233,430 358,270 421,603 Cumulative effect to January 1, 1993 of Accruing Unbilled Revenues (net of income taxes of $57,188) - - - 93,841 ---------- ---------- ---------- ---------- Net Income $143,199 $233,430 $358,270 $515,444 ========== ========== ========== ========== Earnings per average common share before cumulative effect of a change in accounting principle $0.63 $1.34 $1.56 $2.41 Earnings per average common share $0.63 $1.34 $1.56 $2.95 Dividends declared per common share $0.45 $0.40 $1.35 $1.20 Average number of common shares outstanding 227,470,521 174,534,253 229,154,520 174,794,391 See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $358,270 $515,444 Noncash items included in net income: Cumulative effect of a change in accounting principle - (93,841) Change in rate deferrals/excess capacity-net 307,313 158,287 Depreciation and decommissioning 488,052 329,898 Deferred income taxes and investment tax credits 7,582 16,022 Allowance for equity funds used during construction (9,273) (5,777) Amortization of deferred revenues (14,632) (32,196) Changes in working capital: Receivables (99,413) (148,980) Fuel inventory 23,910 20,909 Accounts payable (40,482) (55,775) Taxes accrued 112,623 90,085 Interest accrued (14,278) (13,001) Other working capital accounts 43,981 (35,784) Refunds to customers - gas contract settlement - (56,027) Decommissioning trust contributions (18,215) (14,903) Provision for estimated losses and reserves (6,242) 39,741 Other (18,596) 62,330 --------- -------- Net cash flow provided by operating activities 1,120,600 776,432 --------- -------- Investing Activities: Construction / capital expenditures (481,178) (279,561) Allowance for equity funds used during construction 9,273 5,777 Nuclear fuel purchases (109,838) (62,170) Proceeds from sale/leaseback of nuclear fuel 85,178 61,302 Investment in nonregulated/nonutility properties 199 (58,407) Decrease in other temporary investments - 17,012 --------- -------- Net cash flow used in investing activities (496,366) (316,047) --------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds 83,944 275,000 General and refunding mortgage bonds - 285,000 Other long-term debt 63,590 80,299 Premium and expense on refinancing sale/leaseback bonds (47,663) - Retirement of: First mortgage bonds (103,800) (475,615) General and refunding mortgage bonds (45,000) (99,400) Other long-term debt (45,410) (68,563) Repurchase of common stock (119,486) (20,558) Redemption of preferred stock (43,860) (44,000) Common stock dividends paid (309,469) (208,908) Changes in short-term borrowings 63,199 - --------- -------- Net cash flow used in financing activities (503,955) (276,745) --------- -------- Net increase in cash and cash equivalents 120,279 183,640 Cash and cash equivalents at beginning of period 563,749 379,792 --------- -------- Cash and cash equivalents at end of period $684,028 $563,432 ========= ========
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $496,933 $388,051 Income taxes $131,607 $101,782 Noncash investing and financing activities: Capital lease obligations incurred $69,520 $61,302 Excess of fair value of decommissioning trust assets over amount invested $9,068 - See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES SELECTED OPERATING RESULTS For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 726.3 $ 598.5 $ 127.8 21 Commercial 435.8 334.4 101.4 30 Industrial 488.6 333.4 155.2 47 Governmental 42.7 39.4 3.3 8 --------- -------- ------- Total retail 1,693.4 1,305.7 387.7 30 Sales for resale 112.2 91.1 21.1 23 Other (28.6) 0.2 (28.8) * --------- -------- ------- Total $ 1,777.0 $1,397.0 $ 380.0 27 ========= ======== ======= Billed Electric Energy Sales (Millions of KWH): Residential 8,848 6,916 1,932 28 Commercial 5,916 4,220 1,696 40 Industrial 10,675 6,592 4,083 62 Governmental 609 540 69 13 --------- -------- -------- Total retail 26,048 18,268 7,780 43 Sales for resale 2,503 2,296 207 9 --------- -------- -------- Total 28,551 20,564 7,987 39 ========= ======== ======== Nine Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 1,691.3 $1,241.9 $ 449.4 36 Commercial 1,147.2 805.1 342.1 42 Industrial 1,386.2 878.4 507.8 58 Governmental 122.3 101.9 20.4 20 --------- -------- -------- Total retail 4,347.0 3,027.3 1,319.7 44 Sales for resale 272.3 225.3 47.0 21 Other 49.6 93.2 (43.6) (47) --------- -------- -------- Total $ 4,668.9 $3,345.8 $1,323.1 40 ========= ======== ======== Billed Electric Energy Sales (Millions of KWH): Residential 20,716 14,788 5,928 40 Commercial 15,135 10,173 4,962 49 Industrial 30,481 18,479 12,002 65 Governmental 1,688 1,414 274 19 --------- -------- -------- Total retail 68,020 44,854 23,166 52 Sales for resale 6,274 6,416 (142) (2) --------- -------- -------- Total 74,294 51,270 23,024 45 ========= ======== ======== Note: On December 31, 1993, GSU became a wholly-owned subsidiary of Entergy Corporation. In accordance with the purchase method of accounting, the 1993 third quarter and year to date operating results do not include GSU operating results. * Decrease greater than 200 percent.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $4,286,317 $4,098,355 Property under capital leases 59,190 62,139 Construction work in progress 111,961 197,005 Nuclear fuel under capital lease 100,060 93,606 ---------- ---------- Total 4,557,528 4,451,105 Less - accumulated depreciation and amortization 1,696,801 1,604,318 ---------- ---------- Utility plant - net 2,860,727 2,846,787 ---------- ---------- Other Property and Investments: Investment in subsidiary companies - at equity 11,232 11,232 Decommissioning trust fund 130,514 108,192 Other - at cost (less accumulated depreciation) 4,545 4,257 ---------- ---------- Total 146,291 123,681 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 18,663 1,825 Temporary cash investments - at cost, which approximates market: Associated companies 4,904 - Other 27,993 - ---------- ---------- Total cash and cash equivalents 51,560 1,825 Accounts receivable: Customer (less allowance for doubtful accounts of $2.0 million in 1994 and $2.1 million in 1993) 81,652 65,641 Associated companies 30,441 18,312 Other 12,478 20,817 Accrued unbilled revenues 102,240 83,378 Fuel inventory - at average cost 25,015 51,920 Materials and supplies - at average cost 79,650 81,398 Rate deferrals 108,113 92,592 Deferred excess capacity 9,062 9,115 Prepayments and other 20,222 28,303 ---------- ---------- Total 520,433 453,301 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 389,260 475,387 Deferred excess capacity 21,517 28,465 SFAS 109 regulatory asset - net 211,835 234,015 Unamortized loss on reacquired debt 58,176 60,169 Other 116,448 112,300 ---------- ---------- Total 797,236 910,336 ---------- ---------- TOTAL $4,324,687 $4,334,105 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $0.01 par value, authorized 325,000,000 shares; issued and outstanding 46,980,196 shares in 1994 and 1993 $470 $470 Paid-in capital 590,844 590,844 Retained earnings 464,062 448,811 ---------- ---------- Total common shareholder's equity 1,055,376 1,040,125 Preferred stock: Without sinking fund 176,350 176,350 With sinking fund 61,027 70,027 Long-term debt 1,293,886 1,313,315 ---------- ---------- Total 2,586,639 2,599,817 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 97,976 94,861 Other 70,664 66,879 ---------- ---------- Total 168,640 161,740 ---------- ---------- Current Liabilities: Currently maturing long-term debt 28,020 3,020 Notes payable: Associated companies - 21,395 Other 34,667 667 Accounts payable: Associated companies 38,010 45,177 Other 98,088 93,611 Customer deposits 16,839 15,241 Taxes accrued 86,239 43,013 Accumulated deferred income taxes 36,537 32,367 Interest accrued 31,870 31,410 Dividends declared 4,780 5,049 Co-owner advances 22,402 39,435 Deferred fuel cost 19,840 16,130 Nuclear refueling reserve 30,347 30,677 Obligations under capital leases 61,274 60,883 Other 25,446 25,730 ---------- ---------- Total 534,359 463,805 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 816,232 876,618 Accumulated deferred investment tax credits 145,946 154,723 Other 72,871 77,402 ---------- ---------- Total 1,035,049 1,108,743 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,324,687 $4,334,105 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands) Operating Revenues $470,770 $519,822 $1,256,762 $1,250,213 -------- -------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 74,050 80,284 205,283 197,559 Purchased power 80,326 90,653 264,935 265,084 Nuclear refueling outage expenses 8,059 5,279 25,532 26,011 Other operation and maintenance 118,413 95,052 288,311 272,550 Depreciation and decommissioning 38,671 34,601 110,929 101,156 Taxes other than income taxes 7,961 6,750 25,584 20,491 Income taxes 30,569 40,680 45,487 45,226 Amortization of rate deferrals 56,558 65,039 130,283 130,359 -------- -------- ---------- ---------- Total 414,607 418,338 1,096,344 1,058,436 -------- -------- ---------- ---------- Operating Income 56,163 101,484 160,418 191,777 -------- -------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 894 383 2,944 2,695 Miscellaneous - net 10,785 14,662 35,346 44,739 Income taxes (4,250) (6,838) (13,934) (24,233) -------- -------- ---------- ---------- Total 7,429 8,207 24,356 23,201 -------- -------- ---------- ---------- Interest Charges: Interest on long-term debt 25,464 27,171 75,842 81,607 Other interest - net 2,410 1,080 6,730 3,097 Allowance for borrowed funds used during construction (912) (237) (2,579) (1,869) -------- -------- ---------- ---------- Total 26,962 28,014 79,993 82,835 -------- -------- ---------- ---------- Income before Cumulative Effect of a Change in Accounting Principle 36,630 81,677 104,781 132,143 Cumulative Effect to January 1, 1993 of Accruing Unbilled Revenues (net of income taxes of $31,140) - - - 50,187 -------- -------- ---------- ---------- Net Income 36,630 81,677 104,781 182,330 Preferred Stock Dividend Requirements and Other 4,781 5,267 14,530 15,828 -------- -------- ---------- ---------- Earnings Applicable to Common Stock $31,849 $76,410 $90,251 $166,502 ======== ======== ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $104,781 $182,330 Noncash items included in net income: Cumulative effect of a change in accounting principle - (50,187) Change in rate deferrals/excess capacity-net 77,607 65,517 Depreciation and decommissioning 110,929 101,156 Deferred income taxes and investment tax credits (42,973) (25,214) Allowance for equity funds used during construction (2,944) (2,695) Changes in working capital: Receivables (38,663) (22,383) Fuel inventory 26,905 24,812 Accounts payable (2,690) 2,100 Taxes accrued 43,226 24,449 Interest accrued 460 (395) Other working capital accounts 586 (15,615) Decommissioning trust contributions (8,525) (8,224) Provision for estimated losses and reserves 5,206 8,862 Other (17,073) (15,022) --------- -------- Net cash flow provided by operating activities 256,832 269,491 --------- -------- Investing Activities: Construction expenditures (122,279) (108,063) Allowance for equity funds used during construction 2,944 2,695 Nuclear fuel purchases (33,477) (29,072) Proceeds from sale/leaseback of nuclear fuel 33,477 29,072 --------- -------- Net cash flow used in investing activities (119,335) (105,368) --------- -------- Financing Activities: Proceeds from issuance of: First mortgage bonds - 115,000 Other long-term debt 27,992 47,299 Retirement of: First mortgage bonds (800) (135,889) Other long-term debt (28,761) (46,350) Redemption of preferred stock (9,000) (9,000) Changes in short-term borrowings 12,605 (4,000) Dividends paid: Common stock (75,000) (37,700) Preferred stock (14,798) (16,095) --------- -------- Net cash flow provided by financing activities (87,762) (86,735) --------- -------- Net increase in cash and cash equivalents 49,735 77,388 Cash and cash equivalents at beginning of period 1,825 - --------- -------- Cash and cash equivalents at end of period $51,560 $77,388 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $73,515 $79,265 Income taxes $54,117 $54,293 Noncash investing and financing activities: Capital lease obligations incurred $41,122 $29,072 Excess of fair value of decommissioning trust assets over amount invested $8,872 - See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY SELECTED OPERATING RESULTS For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 170.5 $ 197.9 ($27.4) (14) Commercial 95.2 103.0 (7.8) (8) Industrial 100.5 107.1 (6.6) (6) Governmental 4.7 5.0 (0.3) (6) ------- ------- ------ Total retail 370.9 413.0 (42.1) (10) Sales for resale 99.9 96.9 3.0 3 Other 0.0 9.9 (9.9) (100) ------- ------- ------ Total $ 470.8 $ 519.8 ($49.0) (9) ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 1,802 2,041 (239) (12) Commercial 1,260 1,329 (69) (5) Industrial 1,587 1,605 (18) (1) Governmental 63 68 (5) (7) ------- ------- ------ Total retail 4,712 5,043 (331) (7) Sales for resale 3,711 2,980 731 25 ------- ------- ------ Total 8,423 8,023 400 5 ======= ======= ====== Nine Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 402.1 $ 420.5 ($ 18.4) (4) Commercial 236.3 236.1 0.2 - Industrial 253.9 253.1 0.8 - Governmental 12.9 12.8 0.1 1 -------- -------- ------ Total retail 905.2 922.5 (17.3) (2) Sales for resale 313.7 291.8 21.9 8 Other 37.9 35.9 2.0 6 -------- -------- ------ Total $1,256.8 $1,250.2 $ 6.6 1 ======== ======== ====== Billed Electric Energy Sales (Millions of KWH): Residential 4,381 4,517 (136) (3) Commercial 3,177 3,136 41 1 Industrial 4,392 4,247 145 3 Governmental 178 177 1 1 ------- ------- ------ Total retail 12,128 12,077 51 - Sales for resale 12,218 10,895 1,323 12 ------- ------- ------ Total 24,346 22,972 1,374 6 ======= ======= ======
GULF STATES UTILITIES COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $6,879,066 $6,825,989 Natural gas 43,556 42,786 Steam products 75,922 75,689 Property under capital leases 84,142 86,039 Construction work in progress 94,476 50,080 Nuclear fuel under capital leases 81,464 94,828 ---------- ---------- Total 7,258,626 7,175,411 Less - accumulated depreciation and amortization 2,458,358 2,323,804 ---------- ---------- Utility plant - net 4,800,268 4,851,607 ---------- ---------- Other Property and Investments: Decommissioning trust fund 20,712 17,873 Other - at cost (less accumulated depreciation) 29,738 29,360 ---------- ---------- Total 50,450 47,233 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 18,748 3,012 Temporary cash investments - at cost, which approximates market: Associated companies 13,515 - Other 89,809 258,337 ---------- ---------- Total cash and cash equivalents 122,072 261,349 Accounts receivable: Customer (less allowance for doubtful accounts of $0.7 million in 1994 and $2.4 million in 1993) 145,636 117,369 Associated companies 11,651 - Other 19,855 18,371 Accrued unbilled revenues 42,051 32,572 Deferred fuel costs 18,930 5,883 Accumulated deferred income taxes 29,064 28,425 Fuel inventory 27,198 23,448 Materials and supplies - at average cost 89,234 86,831 Rate deferrals 97,850 90,775 Prepayments and other 21,404 20,523 ---------- ---------- Total 624,945 685,546 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 532,532 638,015 SFAS 109 regulatory asset - net 427,634 432,411 Long-term receivables 239,327 218,079 Unamortized loss on reacquired debt 65,802 70,970 Other 189,723 193,490 ---------- ---------- Total 1,455,018 1,552,965 ---------- ---------- TOTAL $6,930,681 $7,137,351 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 100 shares in 1994 and 1993 $114,055 $114,055 Paid-in capital 1,152,344 1,152,304 Retained earnings 367,323 666,401 ---------- ---------- Total common shareholder's equity 1,633,722 1,932,760 Preference stock 150,000 150,000 Preferred stock: Without sinking fund 136,444 136,444 With sinking fund 96,143 101,004 Long-term debt 2,318,375 2,368,639 ---------- ---------- Total 4,334,684 4,688,847 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 129,021 152,359 Other 66,214 65,259 ---------- ---------- Total 195,235 217,618 ---------- ---------- Current Liabilities: Currently maturing long-term debt 50,425 425 Accounts payable: Associated companies 37,221 2,745 Other 98,236 109,840 Customer deposits 22,916 21,958 Taxes accrued 37,435 22,856 Interest accrued 63,308 59,516 Nuclear refueling reserve 8,425 22,356 Obligations under capital leases 37,720 41,713 Other 114,283 97,741 ---------- ---------- Total 469,969 379,150 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 1,259,262 1,222,999 Accumulated deferred investment tax credits 91,090 94,455 Deferred River Bend finance charges 88,495 106,765 Other 491,946 427,517 ---------- ---------- Total 1,930,793 1,851,736 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $6,930,681 $7,137,351 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands) Operating Revenues: Electric $530,209 $559,296 $1,371,328 $1,364,027 Natural gas 3,887 4,818 25,714 23,349 Steam products 11,435 10,493 35,002 33,632 -------- -------- ---------- ---------- Total 545,531 574,607 1,432,044 1,421,008 -------- -------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses and gas purchased for resale 154,881 185,138 393,240 430,452 Purchased power 44,330 27,294 159,389 101,600 Nuclear refueling outage expenses 2,707 3,360 7,747 10,080 Other operation and maintenance 171,054 103,401 376,616 293,403 Depreciation and decommissioning 48,786 47,276 145,862 141,830 Taxes other than income taxes 24,623 24,322 58,633 72,869 Income taxes 17,458 50,359 34,210 55,656 Amortization of rate deferrals 16,839 15,425 49,576 45,689 -------- -------- ---------- ---------- Total 480,678 456,575 1,225,273 1,151,579 -------- -------- ---------- ---------- Operating Income 64,853 118,032 206,771 269,429 -------- -------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 417 126 1,056 383 Miscellaneous - net (78,886) 5,786 (70,653) 14,978 Income taxes 31,590 (1,678) 27,407 (9,572) -------- -------- ---------- ---------- Total (46,879) 4,234 (42,190) 5,789 -------- -------- ---------- ---------- Interest Charges: Interest on long-term debt 48,804 50,925 146,554 153,538 Other interest - net 1,172 1,335 6,409 5,924 Allowance for borrowed funds used during construction (340) (149) (847) (472) -------- -------- ---------- ---------- Total 49,636 52,111 152,116 158,990 -------- -------- ---------- ---------- Income (Loss) before Extraordinary Items and the Cumulative Effect of Accounting Changes (31,662) 70,155 12,465 116,228 Extraordinary Items (net of income taxes) - (974) - (1,259) Cumulative Effect to January 1, 1993, of Accruing Unbilled Revenues (net of income taxes of $ 6,940) - - - 10,660 -------- -------- ---------- ---------- Net Income (Loss) (31,662) 69,181 12,465 125,629 Preferred and Preference Stock Dividend Requirements and Other 7,506 7,921 22,442 28,118 -------- -------- ---------- ---------- Earnings (Loss) Applicable to Common Stock ($39,168) $61,260 ($9,977) $97,511 ======== ======== ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $12,465 $125,629 Noncash items included in net income: Extraordinary items - 1,259 Cumulative effect of a change in accounting principle - (10,660) Change in rate deferrals 80,138 45,689 Depreciation and decommissioning 145,862 141,830 Deferred income taxes and investment tax credits 16,257 53,452 Allowance for equity funds used during construction (1,056) (383) Changes in working capital: Receivables (50,881) (35,524) Fuel inventory (3,750) 4,468 Accounts payable 22,872 (2,336) Taxes accrued 14,579 38,151 Interest accrued 3,792 3,878 Other working capital accounts 15,330 (15,214) Decommissioning trust contributions (2,217) (2,217) Purchased power settlement - (169,300) Other 24,946 (5,491) --------- -------- Net cash flow provided by operating activities 278,337 173,231 --------- -------- Investing Activities: Construction expenditures (101,952) (82,454) Allowance for equity funds used during construction 1,056 383 Nuclear fuel purchases (25,205) (2,118) Proceeds from sale/leaseback of nuclear fuel 25,205 2,118 Refund of escrow account and other property - 6,710 --------- -------- Net cash flow used in investing activities (100,896) (75,361) --------- -------- Financing Activities: Proceeds from the issuance of: Preference stock - 146,625 First mortgage bonds - 338,379 Other long-term debt - 21,440 Retirement of: First mortgage bonds - (360,200) Other long-term debt (425) (18,398) Redemption of preferred and preference stock (4,850) (172,408) Dividends paid: Common stock (289,100) - Preferred and preference stock (22,343) (28,525) --------- -------- Net cash flow used in financing activities (316,718) (73,087) --------- -------- Net increase (decrease) in cash and cash equivalents (139,277) 24,783 Cash and cash equivalents at beginning of period 261,349 197,741 --------- -------- Cash and cash equivalents at end of period $122,072 $222,524 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $136,957 $143,875 Income taxes $137 - Noncash investing and financing activities: Capital lease obligations incurred $18,721 $2,302 Deficiency of fair value of decommissioning trust assets over amount invested ($200) - See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY SELECTED OPERATING RESULTS For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Department Operating Revenues: Residential $ 192.2 $ 218.4 ($ 26.2) (12) Commercial 115.6 126.4 (10.8) (9) Industrial 162.8 174.4 (11.6) (7) Governmental 6.4 6.9 (0.5) (7) ------- ------- ------- Total retail 477.0 526.1 (49.1) (9) Sales for resale 36.3 10.9 25.4 233 Other 16.9 22.3 (5.4) (24) ------- ------- ------- Total Electric Department $ 530.2 $ 559.3 ($ 29.1) (5) ======= ======= ======= Billed Electric Energy Sales (Millions of KWH): Residential 2,502 2,639 (137) (5) Commercial 1,743 1,756 (13) (1) Industrial 3,851 3,736 115 3 Governmental 77 78 (1) (1) ------- ------- ------- Total retail 8,173 8,209 (36) - Sales for resale 1,340 249 1,091 438 ------- ------- ------- Total Electric Department 9,513 8,458 1,055 12 Steam Department 426 418 8 2 ------- ------- ------- Total 9,939 8,876 1,063 12 ======= ======= ======= Nine Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Department Operating Revenues: Residential $ 448.7 $ 464.5 ($ 15.8) (3) Commercial 312.7 318.6 (5.9) (2) Industrial 475.7 494.6 (18.9) (4) Governmental 19.1 20.1 (1.0) (5) -------- -------- ------- Total retail 1,256.2 1,297.8 (41.6) (3) Sales for resale 75.1 24.3 50.8 209 Other 40.0 41.9 (1.9) (5) -------- -------- ------- Total Electric Department $1,371.3 $1,364.0 $ 7.3 1 ======== ======== ======= Billed Electric Energy Sales (Millions of KWH): Residential 5,775 5,589 186 3 Commercial 4,512 4,332 180 4 Industrial 11,237 10,758 479 4 Governmental 225 224 1 - -------- -------- ------- Total retail 21,749 20,903 846 4 Sales for resale 2,590 510 2,080 408 -------- -------- ------- Total Electric Department 24,339 21,413 2,926 14 Steam Department 1,257 1,210 47 4 -------- -------- ------- Total 25,596 22,623 2,973 13 ======== ======== =======
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $4,754,371 $4,646,020 Electric plant under lease 226,395 225,083 Construction work in progress 100,690 133,536 Nuclear fuel under capital lease 52,413 61,375 Nuclear fuel 5,065 3,823 ---------- ---------- Total 5,138,934 5,069,837 Less - accumulated depreciation and amortization 1,575,308 1,496,107 ---------- ---------- Utility plant - net 3,563,626 3,573,730 ---------- ---------- Other Property and Investments: Nonutility property 20,060 20,060 Decommissioning trust fund 26,802 22,109 Investment in subsidiary company - at equity 14,230 14,230 Other 1,032 984 ---------- ---------- Total 62,124 57,383 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 13,157 - Temporary cash investments - at cost, which approximates market: Associated companies 4,815 - Other 55,835 33,489 ---------- ---------- Total cash and cash equivalents 73,807 33,489 Special deposits 4,683 19,077 Accounts receivable: Customer (less allowance for doubtful accounts of $1.2 million in 1994 and of $1.1 million in 1993) 82,159 66,575 Associated companies 4,319 2,952 Other 11,444 10,656 Accrued unbilled revenues 71,768 64,314 Accumulated deferred income taxes 2,510 6,031 Materials and supplies - at average cost 87,108 87,204 Rate deferrals 28,422 28,422 Prepayments and other 29,080 16,510 ---------- ---------- Total 395,300 335,230 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 32,368 54,031 SFAS 109 regulatory asset - net 357,214 349,703 Unamortized loss on reacquired debt 44,705 47,853 Other 48,140 46,068 ---------- ---------- Total 482,427 497,655 ---------- ---------- TOTAL $4,503,477 $4,463,998 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 250,000,000 shares; issued and outstanding 165,173,180 shares in 1994 and 1993 $1,088,900 $1,088,900 Capital stock expense and other (5,529) (6,109) Retained earnings 134,409 89,849 ---------- ---------- Total common shareholder's equity 1,217,780 1,172,640 Preferred stock: Without sinking fund 160,500 160,500 With sinking fund 112,793 126,302 Long-term debt 1,477,964 1,457,626 ---------- ---------- Total 2,969,037 2,917,068 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 18,546 27,508 Other 48,480 28,909 ---------- ---------- Total 67,026 56,417 ---------- ---------- Current Liabilities: Currently maturing long-term debt 320 25,315 Notes payable: Associated companies - 52,041 Other 19,200 - Accounts payable: Associated companies 29,141 33,523 Other 56,260 76,284 Customer deposits 54,457 52,234 Taxes accrued 54,977 15,110 Interest accrued 37,365 42,141 Dividends declared 5,523 5,938 Deferred revenue - gas supplier judgment proceeds - 14,632 Deferred fuel cost 11,644 605 Obligations under capital leases 33,867 33,867 Other 12,528 9,741 ---------- ---------- Total 315,282 361,431 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 870,810 834,899 Accumulated deferred investment tax credits 183,698 188,843 Deferred interest - Waterford 3 lease obligation 25,844 25,372 Other 71,780 79,968 ---------- ---------- Total 1,152,132 1,129,082 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,503,477 $4,463,998 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands) Operating Revenues $502,458 $545,487 $1,327,927 $1,302,913 -------- -------- ---------- ---------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 113,688 120,692 257,314 233,279 Purchased power 83,942 99,256 289,279 289,488 Nuclear refueling outage expenses 4,195 4,591 13,671 13,789 Other operation and maintenance 100,800 86,306 260,575 244,857 Depreciation and decommissioning 38,499 35,537 113,342 106,446 Taxes other than income taxes 14,377 11,823 42,733 35,707 Income taxes 39,015 54,375 80,171 96,547 Amortization of rate deferrals 8,118 8,118 21,664 21,664 -------- -------- ---------- ---------- Total 402,634 420,698 1,078,749 1,041,777 -------- -------- ---------- ---------- Operating Income 99,824 124,789 249,178 261,136 -------- -------- ---------- ---------- Other Income (Deductions): Allowance for equity funds used during construction 766 545 2,855 1,869 Miscellaneous - net (154) 198 287 848 Income taxes 150 361 190 2,601 -------- -------- ---------- ---------- Total 762 1,104 3,332 5,318 -------- -------- ---------- ---------- Interest Charges: Interest on long-term debt 31,264 30,818 93,561 93,691 Other interest - net 2,839 3,169 8,467 9,077 Allowance for borrowed funds used during construction (546) (381) (1,996) (1,266) -------- -------- ---------- ---------- Total 33,557 33,606 100,032 101,502 -------- -------- ---------- ---------- Net Income 67,029 92,287 152,478 164,952 Preferred Stock Dividend Requirements and Other 5,848 6,069 17,668 18,816 -------- -------- ---------- ---------- Earnings Applicable to Common Stock $61,181 $86,218 $134,810 $146,136 ======== ======== ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $152,478 $164,952 Noncash items included in net income: Change in rate deferrals 21,664 21,663 Depreciation and decommissioning 113,342 106,446 Deferred income taxes and investment tax credits 31,788 44,430 Allowance for equity funds used during construction (2,855) (1,869) Amortization of deferred revenues (14,632) (32,196) Changes in working capital: Receivables (25,193) (39,410) Accounts payable (24,406) (30,916) Taxes accrued 39,867 42,703 Interest accrued (4,776) (4,406) Other working capital accounts 17,969 (3,862) Refunds to customers - gas contract settlement - (56,027) Decommissioning trust contributions (3,796) (3,000) Other 3,051 16,922 --------- -------- Net cash flow provided by operating activities 304,501 225,430 --------- -------- Investing Activities: Construction expenditures (107,708) (98,021) Allowance for equity funds used during construction 2,855 1,869 --------- -------- Net cash flow used in investing activities (104,853) (96,152) --------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 100,000 Other long-term debt 19,946 33,000 Changes in short-term borrowings (32,841) - Retirement of: First mortgage bonds (25,000) (100,919) Other long-term debt (240) (21,983) Redemption of preferred stock (13,510) (18,500) Dividends paid: Common stock (90,400) (81,400) Preferred stock (17,285) (19,265) --------- -------- Net cash flow used in financing activities (159,330) (109,067) --------- -------- Net increase in cash and cash equivalents 40,318 20,211 Cash and cash equivalents at beginning of period 33,489 22,782 --------- -------- Cash and cash equivalents at end of period $73,807 $42,993 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $100,081 $101,463 Income taxes $32,400 $20,967 Noncash investing and financing activities: Capital lease obligations incurred $9,677 - Excess of fair value of decommissioning trust assets over amount invested $184 - See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY SELECTED OPERATING RESULTS For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 196.4 $ 213.9 ($ 17.5) (8) Commercial 102.6 105.2 (2.6) (2) Industrial 170.9 171.8 (0.9) (1) Governmental 8.4 7.8 0.6 8 ------- ------- ------- Total retail 478.3 498.7 (20.4) (4) Sales for resale 10.4 19.8 (9.4) (47) Other 13.8 27.0 (13.2) (49) ------- ------- ------- Total $ 502.5 $ 545.5 ($43.0) (8) ======= ======= ======= Billed Electric Energy Sales (Millions of KWH): Residential 2,493 2,674 (181) (7) Commercial 1,356 1,370 (14) (1) Industrial 4,305 4,122 183 4 Governmental 112 103 9 9 ------- ------- ------- Total retail 8,266 8,269 (3) - Sales for resale 275 519 (244) (47) ------- ------- ------- Total 8,541 8,788 (247) (3) ======= ======= ======= Nine Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 460.8 $ 440.5 $ 20.3 5 Commercial 275.4 257.1 18.3 7 Industrial 499.9 476.5 23.4 5 Governmental 24.2 21.9 2.3 11 -------- -------- ------- Total retail 1,260.3 1,196.0 64.3 5 Sales for resale 26.1 38.7 (12.6) (33) Other 41.5 68.2 (26.7) (39) -------- -------- ------- Total $1,327.9 $1,302.9 $ 25.0 2 ======== ======== ======= Billed Electric Energy Sales (Millions of KWH): Residential 5,864 5,693 171 3 Commercial 3,502 3,330 172 5 Industrial 12,261 11,856 405 3 Governmental 318 297 21 7 ------- ------- ------- Total retail 21,945 21,176 769 4 Sales for resale 620 1,038 (418) (40) ------- ------- ------- Total 22,565 22,214 351 2 ======= ======= =======
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $1,460,766 $1,389,229 Construction work in progress 63,444 62,699 ---------- ---------- Total 1,524,210 1,451,928 Less - accumulated depreciation and amortization 575,410 577,728 ---------- ---------- Utility plant - net 948,800 874,200 ---------- ---------- Other Property and Investments: Investment in subsidiary company - at equity 5,531 5,531 Other 4,754 4,760 ---------- ---------- Total 10,285 10,291 ---------- ---------- Current Assets: Cash 9,107 7,999 Notes receivable 6,216 7,118 Accounts receivable: Customer (less allowance for doubtful accounts of $2.1 million in 1994 and $2.5 million in 1993) 52,803 33,155 Associated companies 7,348 7,342 Other 3,975 3,672 Accrued unbilled revenues 50,049 57,414 Fuel inventory - at average cost 3,594 8,652 Materials and supplies - at average cost 20,236 20,886 Rate deferrals 99,538 96,935 Prepayments and other 7,268 13,763 ---------- ---------- Total 260,134 256,936 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 409,690 504,428 Notes receivable 5,463 9,951 Other 29,196 20,931 ---------- ---------- Total 444,349 535,310 ---------- ---------- TOTAL $1,663,568 $1,676,737 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 15,000,000 shares; issued and outstanding 8,666,357 shares in 1994 and 1993 $199,326 $199,326 Capital stock expense and other (1,762) (1,864) Retained earnings 241,330 236,337 ---------- ---------- Total common shareholder's equity 438,894 433,799 Preferred stock: Without sinking fund 57,881 57,881 With sinking fund 31,770 46,770 Long-term debt 490,187 516,156 ---------- ---------- Total 1,018,732 1,054,606 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 589 686 Other 11,377 6,231 ---------- ---------- Total 11,966 6,917 ---------- ---------- Current Liabilities: Currently maturing long-term debt 50,965 48,250 Notes payable: Associated companies - 11,568 Other 30,000 - Accounts payable: Associated companies 25,555 29,181 Other 33,296 12,157 Customer deposits 22,290 21,474 Taxes accrued 33,613 24,252 Accumulated deferred income taxes 44,975 41,758 Interest accrued 11,958 23,171 Dividends declared 1,797 1,985 Other 8,843 17,303 ---------- ---------- Total 263,292 231,099 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 304,884 311,616 Accumulated deferred investment tax credits 35,818 37,193 SFAS 109 regulatory liability - net 18,851 23,626 Other 10,025 11,680 ---------- ---------- Total 369,578 384,115 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $1,663,568 $1,676,737 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands) Operating Revenues $234,274 $264,419 $651,481 $673,392 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 53,097 62,435 117,710 103,784 Purchased power 59,155 66,810 182,035 213,493 Other operation and maintenance 41,327 39,018 118,543 111,018 Depreciation and amortization 9,513 8,011 27,270 24,009 Taxes other than income taxes 11,275 10,157 32,011 29,991 Income taxes 11,427 20,504 23,280 35,831 Amortization of rate deferrals 24,805 17,588 74,414 52,765 -------- -------- -------- -------- Total 210,599 224,523 575,263 570,891 -------- -------- -------- -------- Operating Income 23,675 39,896 76,218 102,501 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 365 237 1,386 632 Miscellaneous - net (337) 703 (85) 1,258 Income taxes 129 (274) 32 (481) -------- -------- -------- -------- Total 157 666 1,333 1,409 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 11,461 13,028 34,657 39,749 Other interest - net 1,751 782 5,025 2,276 Allowance for borrowed funds used during construction (236) (169) (889) (451) -------- -------- -------- -------- Total 12,976 13,641 38,793 41,574 -------- -------- -------- -------- Income before Cumulative Effect of a Change in Accounting Principle 10,856 26,921 38,758 62,336 Cumulative Effect to January 1, 1993 of Accruing Unbilled Revenues (net of income taxes of $19,456) - - - 32,706 -------- -------- -------- -------- Net Income 10,856 26,921 38,758 95,042 Preferred Stock Dividend Requirements and Other 1,797 2,216 5,827 6,985 -------- -------- -------- -------- Earnings Applicable to Common Stock $9,059 $24,705 $32,931 $88,057 ======== ======== ======== ======== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $38,758 $95,042 Noncash items included in net income: Cumulative effect of a change in accounting principle - (32,706) Change in rate deferrals 92,135 60,650 Depreciation and amortization 27,270 24,009 Deferred income taxes and investment tax credits (22,092) (16,423) Allowance for equity funds used during construction (1,386) (632) Changes in working capital: Receivables (12,592) (30,788) Fuel inventory 5,058 2,964 Accounts payable 17,513 (3,320) Taxes accrued 9,361 17,789 Interest accrued (11,213) (7,664) Other working capital accounts 428 (5,935) Other 11,129 6,818 --------- -------- Net cash flow provided by operating activities 154,369 109,804 --------- -------- Investing Activities: Construction expenditures (100,369) (39,148) Allowance for equity funds used during construction 1,386 632 --------- -------- Net cash flow used in investing activities (98,983) (38,516) --------- -------- Financing Activities: Proceeds from issuance of: General and refunding bonds 24,534 185,000 Other long-term debt 15,652 - Retirement of: First mortgage bonds (18,000) (137,672) General and refunding bonds (30,000) (55,000) Other long-term debt (16,045) (230) Redemption of preferred stock (15,000) (15,000) Dividends paid: Common stock (28,000) (34,100) Preferred stock (5,851) (7,122) Changes in short-term borrowings 18,432 - --------- -------- Net cash flow used in financing activities (54,278) (64,124) --------- -------- Net increase in cash and cash equivalents 1,108 7,164 Cash and cash equivalents at beginning of period 7,999 34,008 --------- -------- Cash and cash equivalents at end of period $9,107 $41,172 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $48,664 $48,211 Income taxes $19,007 $31,169 See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY SELECTED OPERATING RESULTS For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 115.7 $ 126.4 ($ 10.7) (8) Commercial 78.1 78.1 0.0 - Industrial 47.9 47.7 0.2 - Governmental 7.4 8.2 (0.8) (10) ------- ------- ------- Total retail 249.1 260.4 (11.3) (4) Sales for resale 14.1 25.0 (10.9) (44) Other (28.9) (21.0) (7.9) (38) ------- ------- ------- Total $ 234.3 $ 264.4 ($ 30.1) (11) ======= ======= ======= Billed Electric Energy Sales (Millions of KWH): Residential 1,363 1,442 (79) (5) Commercial 977 928 49 5 Industrial 795 735 60 8 Governmental 90 99 (9) (9) ------- ------- ------- Total retail 3,225 3,204 21 1 Sales for resale 397 724 (327) (45) ------- ------- ------- Total 3,622 3,928 (306) (8) ======= ======= ======= Nine Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 266.8 $ 266.6 $ 0.2 - Commercial 198.4 189.0 9.4 5 Industrial 137.0 130.0 7.0 5 Governmental 21.3 21.4 (0.1) - ------- ------- ------- Total retail 623.5 607.0 16.5 3 Sales for resale 37.7 43.5 (5.8) (13) Other (9.7) 22.9 (32.6) (142) ------- ------- ------- Total $ 651.5 $ 673.4 ($ 21.9) (3) ======= ======= ======= Billed Electric Energy Sales (Millions of KWH): Residential 3,208 3,105 103 3 Commercial 2,409 2,208 201 9 Industrial 2,200 2,009 191 10 Governmental 254 250 4 2 ------- ------- ------- Total retail 8,071 7,572 499 7 Sales for resale 970 1,090 (120) (11) ------- ------- ------- Total 9,041 8,662 379 4 ======= ======= =======
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $488,098 $476,976 Natural gas 118,256 113,666 Construction work in progress 8,065 15,205 ---------- ---------- Total 614,419 605,847 Less - accumulated depreciation and amortization 338,597 330,268 ---------- ---------- Utility plant - net 275,822 275,579 ---------- ---------- Other Investments: Investment in subsidiary company - at equity 3,259 3,259 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 2,841 1,176 Temporary cash investments - at cost, which approximates market: Associated companies 7,950 10,034 Other 45,385 32,107 ---------- ---------- Total cash and cash equivalents 56,176 43,317 Accounts receivable: Customer (less allowance for doubtful accounts of $0.8 million in 1994 and 1993) 33,964 35,801 Associated companies 1,346 1,378 Other 697 876 Accrued unbilled revenues 19,734 19,643 Deferred electric fuel and resale gas costs 2,639 6,323 Materials and supplies - at average cost 10,969 11,885 Rate deferrals 29,824 24,587 Prepayments and other 6,140 2,994 ---------- ---------- Total 161,489 146,804 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 181,454 204,190 SFAS 109 regulatory asset - net 9,725 9,004 Other 9,666 8,769 ---------- ---------- Total 200,845 221,963 ---------- ---------- TOTAL $641,415 $647,605 ========== ========== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABLITIES Capitalization: Common stock, $4 par value, authorized 10,000,000 shares; issued and outstanding 8,435,900 shares in 1994 and 1993 $33,744 $33,744 Paid-in capital 36,201 36,156 Retained earnings subsequent to the elimination of the accumulated deficit of $13.9 million on November 30, 1988 112,507 100,556 ---------- ---------- Total common shareholder's equity 182,452 170,456 Preferred stock: Without sinking fund 19,780 19,780 With sinking fund 3,450 4,950 Long-term debt 164,148 188,312 ---------- ---------- Total 369,830 383,498 ---------- ---------- Other Noncurrent Liabilities: Accumulated provision for losses 17,491 18,062 Other 7,864 3,351 ---------- ---------- Total 25,355 21,413 ---------- ---------- Current Liabilities: Currently maturing long-term debt 24,200 15,000 Accounts payable: Associated companies 20,228 23,080 Other 21,145 22,011 Customer deposits 17,362 16,617 Accumulated deferred income taxes 2,728 4,968 Taxes accrued 6,838 5,161 Interest accrued 4,512 5,472 Other 18,644 7,367 ---------- ---------- Total 115,657 99,676 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 92,895 105,096 Accumulated deferred investment tax credits 11,034 11,592 Other 26,644 26,330 ---------- ---------- Total 130,573 143,018 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $641,415 $647,605 ========== ========== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands) Operating Revenues: Electric $120,354 $140,666 $306,826 $321,650 Natural gas 13,220 13,944 68,238 61,708 -------- -------- -------- -------- Total 133,574 154,610 375,064 383,358 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses and gas purchased for resale 23,814 27,158 83,773 73,967 Purchased power 42,999 47,016 115,940 123,479 Other operation and maintenance 23,444 21,242 63,404 63,809 Depreciation and amortization 4,903 4,290 14,356 12,884 Taxes other than income taxes 7,206 7,344 21,137 20,352 Income taxes 8,829 15,076 17,003 23,203 Rate deferrals: Rate deferrals - (25) - (1,651) Amortization of rate deferrals 6,438 2,861 19,171 11,050 -------- -------- -------- -------- Total 117,633 124,962 334,784 327,093 -------- -------- -------- -------- Operating Income 15,941 29,648 40,280 56,265 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 60 40 297 74 Miscellaneous - net 499 385 1,483 1,523 Income taxes (192) (156) (901) (140) -------- -------- -------- -------- Total 367 269 879 1,457 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 3,959 4,707 12,423 15,109 Other interest - net 461 403 1,399 1,143 Allowance for borrowed funds used during construction (45) (36) (221) (69) -------- -------- -------- -------- Total 4,375 5,074 13,601 16,183 -------- -------- -------- -------- Income before Cumulative Effect of a Change in Accounting Principle 11,933 24,843 27,558 41,539 Cumulative Effect to January 1, 1993 of Accruing Unbilled Revenues (net of income taxes of $6,592) - - - 10,948 -------- -------- -------- -------- Net Income 11,933 24,843 27,558 52,487 Preferred Stock Dividend Requirements and Other 329 432 1,162 1,335 -------- -------- -------- -------- Earnings Applicable to Common Stock $11,604 $24,411 $26,396 $51,152 ======== ======== ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $27,558 $52,487 Noncash items included in net income: Cumulative effect of a change in accounting principle - (10,948) Change in rate deferrals 17,499 10,456 Depreciation and amortization 14,356 12,884 Deferred income taxes and investment tax credits (15,705) 78 Allowance for equity funds used during construction (297) (74) Net pension expense - 3,260 Changes in working capital: Receivables 1,957 (15,645) Accounts payable (3,718) (5,719) Taxes accrued 1,677 3,594 Interest accrued (960) (898) Other working capital accounts 13,534 (29,502) Other 5,050 1,585 --------- -------- Net cash flow provided by operating activities 60,951 21,558 --------- -------- Investing Activities: Construction expenditures (16,269) (13,320) Allowance for equity funds used during construction 297 74 --------- -------- Net cash flow used in investing activities (15,972) (13,246) --------- -------- Financing Activities: Proceeds from the issuance of general and refunding bonds - 100,000 Retirement of: First mortgage bonds - (41,135) General and refunding bonds (15,000) (44,400) Redemption of preferred stock (1,500) (1,500) Dividends paid: Common stock (14,400) (11,700) Preferred stock (1,220) (1,393) --------- -------- Net cash flow used in financing activities (32,120) (128) --------- -------- Net increase in cash and cash equivalents 12,859 8,184 Cash and cash equivalents at beginning of period 43,317 46,070 --------- -------- Cash and cash equivalents at end of period $56,176 $54,254 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $14,213 $17,372 Income taxes $32,115 $17,954 See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. SELECTED OPERATING RESULTS For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 51.4 $ 60.2 ($ 8.8) (15) Commercial 44.3 48.1 (3.8) (8) Industrial 6.6 6.8 (0.2) (3) Governmental 15.8 18.5 (2.7) (15) ------ ------ ------ Total retail 118.1 133.6 (15.5) (12) Sales for resale 2.2 3.5 (1.3) (37) Other 0.1 3.6 (3.5) (97) ------ ------ ------ Total $120.4 $140.7 ($20.3) (14) ====== ====== ====== Billed Electric Energy Sales (Millions of KWH): Residential 688 759 (71) (9) Commercial 580 593 (13) (2) Industrial 138 130 8 6 Governmental 268 270 (2) (1) ------ ------ ------ Total retail 1,674 1,752 (78) (4) Sales for resale 61 96 (35) (36) ------ ------ ------ Total 1,735 1,848 (113) (6) ====== ====== ====== Nine Months Ended Increase/ Description 1994 1993 (Decrease) % (In Millions) Electric Operating Revenues: Residential $ 113.0 $ 114.2 ($ 1.2) (1) Commercial 124.4 122.9 1.5 1 Industrial 19.7 18.8 0.9 5 Governmental 44.8 45.9 (1.1) (2) ------ ------ ------ Total retail 301.9 301.8 0.1 - Sales for resale 6.7 9.3 (2.6) (28) Other (1.8) 10.6 (12.4) (117) ------ ------ ------ Total $306.8 $321.7 ($14.9) (5) ====== ====== ====== Billed Electric Energy Sales (Millions of KWH): Residential 1,488 1,473 15 1 Commercial 1,535 1,499 36 2 Industrial 392 367 25 7 Governmental 713 690 23 3 ------ ------ ------ Total retail 4,128 4,029 99 2 Sales for resale 191 281 (90) (32) ------ ------ ------ Total 4,319 4,310 9 - ====== ====== ======
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) ASSETS Utility Plant: Electric $3,036,792 $3,027,537 Electric plant under lease 439,184 437,941 Construction work in progress 39,472 41,442 Nuclear fuel under capital lease 55,838 79,625 ---------- ---------- Total 3,571,286 3,586,545 Less - accumulated depreciation 741,534 669,666 ---------- ---------- Utility plant - net 2,829,752 2,916,879 ---------- ---------- Other Investments: Decommissioning trust fund 30,333 24,787 ---------- ---------- Current Assets: Cash and cash equivalents: Cash - 2,424 Temporary cash investments - at cost, which approximates market: Associated companies 32,635 46,601 Other 186,303 147,107 ---------- ---------- Total cash and cash equivalents 218,938 196,132 Accounts receivable: Associated companies 59,750 57,216 Other 3,517 2,057 Materials and supplies - at average cost 70,802 69,765 Recoverable income taxes 53,000 63,400 Prepayments and other 4,297 4,835 ---------- ---------- Total 410,304 393,405 ---------- ---------- Deferred Debits and Other Assets: Recoverable income taxes 6,749 29,289 SFAS 109 regulatory asset - net 386,553 384,317 Unamortized loss on reacquired debt 55,647 17,258 Other 133,652 125,131 ---------- ---------- Total 582,601 555,995 ---------- ---------- TOTAL $3,852,990 $3,891,066 ========== ========== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS September 30, 1994 and December 31, 1993 (Unaudited) 1994 1993 (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 1994 and 1993 $789,350 $789,350 Paid-in capital 7 7 Retained earnings 175,969 228,574 ---------- ---------- Total common shareholder's equity 965,326 1,017,931 Long-term debt 1,543,037 1,511,914 ---------- ---------- Total 2,508,363 2,529,845 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 838 24,679 Other 18,050 18,229 ---------- ---------- Total 18,888 42,908 ---------- ---------- Current Liabilities: Currently maturing long-term debt 200,000 230,000 Accounts payable: Associated companies 6,071 1,928 Other 22,603 18,223 Taxes accrued 25,722 20,952 Interest accrued 47,472 48,929 Obligations under capital leases 55,000 55,000 Other 1,830 2,805 ---------- ---------- Total 358,698 377,837 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 791,276 775,630 Accumulated deferred investment tax credits 111,242 113,849 Other 64,523 50,997 ---------- ---------- Total 967,041 940,476 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $3,852,990 $3,891,066 ========== ========== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF INCOME For the Three and Nine Months Ended September 30, 1994 and 1993 (Unaudited) Three Months Ended Nine Months Ended 1994 1993 1994 1993 (In Thousands) Operating Revenues $150,949 $155,071 $450,015 $473,228 -------- -------- -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 11,440 10,081 35,661 40,423 Other operation and maintenance 26,829 33,525 74,320 80,880 Depreciation and decommissioning 23,026 22,749 68,993 68,167 Taxes other than income taxes 5,637 6,768 19,155 19,648 Income taxes 18,148 17,956 55,896 58,248 -------- -------- -------- -------- Total 85,080 91,079 254,025 267,366 -------- -------- -------- -------- Operating Income 65,869 63,992 195,990 205,862 -------- -------- -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 101 245 735 506 Miscellaneous - net 2,025 1,519 4,641 4,565 Income taxes 569 4,069 (470) 6,359 -------- -------- -------- -------- Total 2,695 5,833 4,906 11,430 -------- -------- -------- -------- Interest Charges: Interest on long-term debt 42,076 45,780 123,950 138,176 Other interest - net 1,732 1,131 6,189 3,337 Allowance for borrowed funds used during construction (178) (128) (938) (313) -------- -------- -------- -------- Total 43,630 46,783 129,201 141,200 -------- -------- -------- -------- Net Income $24,934 $23,042 $71,695 $76,092 ======== ======== ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1994 and 1993 (Unaudited) 1994 1993 (In Thousands) Operating Activities: Net income $71,695 $76,092 Noncash items included in net income: Depreciation and decommissioning 68,993 68,167 Deferred income taxes and investment tax credits 16,535 16,375 Allowance for equity funds used during construction (735) (506) Amortization of debt discount 3,388 3,358 Amortization of loss on reacquired debt 1,750 - Changes in working capital: Receivables (3,994) 5,069 Accounts payable 8,469 (8,195) Taxes accrued 4,770 8,083 Interest accrued (1,457) 324 Other working capital accounts (1,474) (1,410) Recoverable income taxes 32,940 61,771 Decommissioning trust contributions (3,764) (3,679) Provision for estimated losses and reserves - 29,403 Other 9,755 (1,438) --------- -------- Net cash flow provided by operating activities 206,871 253,414 --------- -------- Investing Activities: Construction expenditures (12,254) (10,646) Allowance for equity funds used during construction 735 506 Nuclear fuel purchases (54) (32,230) Proceeds from sale/leaseback of nuclear fuel - 32,230 --------- -------- Net cash flow used in investing activities (11,573) (10,140) --------- -------- Financing Activities: Proceeds from the issuance of first mortgage bonds 59,410 60,000 Retirement of first mortgage bonds (60,000) (60,000) Premium and expenses paid on refinancing sale/leaseback bonds (47,602) - Common stock dividends paid (124,300) (210,100) --------- -------- Net cash flow used in financing activities (172,492) (210,100) --------- -------- Net increase in cash and cash equivalents 22,806 33,174 Cash and cash equivalents at beginning of period 196,132 181,795 --------- -------- Cash and cash equivalents at end of period $218,938 $214,969 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $125,519 $137,517 Income taxes (refund) ($3,477) ($36,534) Noncash investing and financing activities: Capital lease obligations incurred - $32,230 Excess of fair value of decommissioning trust assets over amount invested $212 - See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1. COMMITMENTS AND CONTINGENCIES Cajun - River Bend Entergy Corporation and GSU GSU has significant business relationships with Cajun Electric Power Cooperative, Inc. (Cajun), including co-ownership of River Bend and Big Cajun 2 Unit 3. GSU and Cajun own 70% and 30% undivided interests in River Bend, respectively, and 42% and 58% undivided interests in Big Cajun 2 Unit 3, respectively. In June 1989, Cajun filed a civil action against GSU in the United States District Court for the Middle District of Louisiana (District Court). Cajun stated in its complaint that the object of the suit is to annul, rescind, terminate, and/or dissolve the Joint Ownership Participation and Operating Agreement entered into on August 28, 1979 (Operating Agreement) relating to River Bend. Cajun alleges fraud and error by GSU, breach of its fiduciary duties owed to Cajun, and/or GSU's repudiation, renunciation, abandonment, or dissolution of its core obligations under the Operating Agreement, as well as the lack or failure of cause and/or consideration for Cajun's performance under the Operating Agreement. The suit seeks to recover Cajun's alleged $1.6 billion investment in the unit as damages, plus attorneys' fees, interest, and costs. Two member cooperatives of Cajun have brought an independent action to declare the Operating Agreement void, based upon failure to get prior LPSC approval alleged to be necessary. GSU believes the suits are without merit and is contesting them vigorously. A trial without jury on the portion of the suit by Cajun to rescind the Operating Agreement began on April 12, 1994, and is continuing. No assurance can be given as to the outcome of this litigation. If GSU were ultimately unsuccessful in this litigation and were required to make substantial payments, GSU would probably be unable to make such payments and would probably have to seek relief from its creditors under the Bankruptcy Code. If GSU prevails in this litigation, no assurance can be provided that Cajun's weak financial condition will allow funding of all required costs of Cajun's ownership in River Bend. During 1992, Cajun notified GSU that it would not fund its full share of costs related to the fourth refueling outage at River Bend, completed in September 1992. Cajun has also not funded its full share of the costs associated with certain additional repairs and improvements at River Bend completed during that refueling outage. GSU has paid the costs associated with such repairs and improvements without waiving any rights against Cajun. GSU believes that Cajun is obligated to pay its share of such costs under the terms of the applicable contract. Cajun has filed a suit seeking a declaration that it does not owe such funds and seeking injunctive relief against GSU. GSU is contesting such suit. In September 1992, GSU received a letter from Cajun alleging that the operating and maintenance costs for River Bend are "far in excess of industry averages" and that "it would be imprudent for Cajun to fund these excessive costs." Cajun further stated that until it is satisfied it would fund a maximum of $700,000 per week under protest during the remainder of 1992. In a December 1992 letter, Cajun stated that it would also withhold costs associated with certain additional repairs, the majority of which were incurred during the fifth refueling outage completed in July 1994. In a letter dated October 21, 1994, and at a subsequent meeting, Cajun representatives advised Entergy Corporation and GSU that on October 25, 1994, Cajun would exhaust its 1994 budget for operating and maintenance expenses for River Bend, and that it would not make any further payments to GSU in 1994 for River Bend operating, maintenance or capital costs. Cajun also advised that it does not expect the Rural Electrification Administration (which provided funding to Cajun for its investment in River Bend) to permit it to budget funds in 1995 to pay its share of operating and maintenance expenses or capital costs for River Bend. However, Cajun stated that it will continue to fund its share of the nuclear decommissioning trust payments for River Bend, as well as insurance and safety-related expenses. GSU estimates that the unpaid portion of Cajun's River Bend operating, maintenance, and capital costs for the remainder of 1994 will aggregate approximately $10 million. Cajun's share of River Bend annual operating (including nuclear fuel) and maintenance expenses and capital costs was approximately $69 million in 1993. In view of Cajun's stated expectation that it will fund only a limited portion of its share of River Bend related operating, maintenance, and capital costs in 1994 and for the foreseeable future, GSU has notified Cajun that it will (i) credit GSU's share of expenses for Big Cajun 2, Unit 3 against amounts due from Cajun to GSU and (ii) seek to market Cajun's share of the power from River Bend and apply the proceeds to the amounts due from Cajun to GSU. On November 2, 1994, Cajun discontinued GSU's entitlement of energy from Big Cajun 2, Unit 3. In response, on November 3, 1994, GSU filed pleadings in District Court seeking an order requiring Cajun to provide GSU with the energy from Big Cajun 2, Unit 3 to which GSU is entitled, and holding that GSU is entitled to credit amounts due from GSU to Cajun for Big Cajun 2, Unit 3 against amounts due from Cajun to GSU with respect to River Bend. The District Court held a hearing on this motion on November 7, 1994. The matter is pending. During the period in which Cajun is not paying its share of River Bend costs, GSU intends to fund all costs necessary for the safe, continuing operation of the unit. The responsibilities of Entergy Operations as the licensed operator of River Bend, for safely operating and maintaining the unit are not affected by Cajun's actions. The total resulting from Cajun's failure to fund repair projects, Cajun's funding limitation on refueling outages, and the weekly funding limitation by Cajun was $36.6 million as of September 30, 1994, compared with $33.3 million as of December 31, 1993. These amounts are reflected in long-term receivables with an offsetting reserve in other deferred credits. Cajun's weak financial condition may affect the ultimate collectibility of the amounts owed to GSU, including any amounts that may be awarded in litigation. GSU has been informed that Cajun has serious financial problems including a finding during 1994 of imprudence by the LPSC on Cajun's participation in the River Bend nuclear project. Cajun's weak financial condition could have a material adverse effect on GSU, including the possibility of an NRC action with respect to the operation of River Bend and a need to bear additional costs associated with the co-owned facilities. In September 1994, in connection with Entergy Corporation's analysis of certain preacquisition contingencies, Entergy Corporation increased its acquisition adjustment and GSU recorded a loss provision associated with the River Bend litigation between GSU and Cajun and certain underpayments by Cajun of River Bend costs, in accordance with SFAS No. 5, "Accounting for Contingencies." See Note 8 for additional information on provisions for preacquisition contingencies recorded during the third quarter of 1994. Cajun - Transmission Service Entergy Corporation and GSU GSU and Cajun are parties to FERC proceedings related to transmission service charge disputes. In April 1992, FERC issued a final order. In May 1992, GSU and Cajun filed motions for rehearings which are pending consideration by FERC. In June 1992, GSU filed a petition for review in the United States Court of Appeals regarding certain of the issues decided by FERC. In August 1993, the United States Court of Appeals rendered an opinion reversing the FERC order regarding the portion of such disputes relating to the calculations of certain credits and equalization charges under GSU's service schedules with Cajun. The opinion remanded the issues to FERC for further proceedings consistent with its opinion. In January 1994, FERC denied GSU's request to collect a surcharge while FERC considers the court's remand, which GSU has appealed. GSU interprets the FERC order and the United States Court of Appeals' decision to mean that Cajun would owe GSU approximately $91 million as of September 30, 1994. GSU further estimates that if it prevails in its May 1992 motion for rehearing, Cajun would owe GSU approximately $127 million as of September 30, 1994. If Cajun were to prevail in its May 1992 motion for rehearing to FERC, and if GSU were not to prevail in its May 1992 motion for rehearing to FERC, and if FERC does not implement the court's remand as GSU contends is required, GSU estimates it would owe Cajun approximately $83 million as of September 30, 1994. The above amounts are exclusive of a $7.3 million payment by Cajun on December 31, 1990, which the parties agreed to apply to the disputed transmission service charges. GSU and Cajun further agreed that their positions at FERC would remain unaffected by the $7.3 million payment. Pending FERC's ruling on the May 1992 motions for rehearing, GSU has continued to bill Cajun utilizing the historical billing methodology and has booked underpaid transmission charges, including interest, in the amount of $156 million as of September 30, 1994. This amount is reflected in long-term receivables with an offsetting reserve in other deferred credits. Financial Condition GSU Although GSU received partial rate relief relating to River Bend, GSU's financial position was strained from 1986 to 1990 by its inability to earn a return on and fully recover its investment and other costs associated with River Bend. Issues to be finally resolved in PUCT rate proceedings and appeals thereof, as discussed in Note 2, combined with the application of accounting standards, may result in substantial write-offs and charges that could result in substantial net losses being reported in 1994, and subsequent periods, with resulting substantial adverse adjustments to common shareholder's equity. Future earnings will continue to be adversely affected by the lack of full recovery and return on the investment and other costs associated with River Bend. Capital Requirements and Financing Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy Construction expenditures (excluding nuclear fuel) for the years 1994, 1995, and 1996, and long-term debt and preferred stock maturities and cash sinking fund requirements for the period 1994-1996, are estimated to total (in millions): Long-term Debt and Construction Expenditures Preferred Stock Maturities and Cash Sinking Fund Requirements 1994 1995 1996 1994-1996 Entergy $614 $560 $550 $1,414 AP&L $177 $172 $175 $ 112 GSU $135 $128 $119 $ 214 LP&L $142 $143 $142 $ 165 MP&L $116 $ 63 $ 63 $ 228 NOPSI $ 24 $ 26 $ 26 $ 81 System $ 18 $ 22 $ 23 $ 615 Energy The System plans to meet the above requirements with internally generated funds, including collections under the System operating companies' rate phase-in plans, and cash on hand, supplemented by the issuance of long-term debt and preferred stock. See pages 130-131, 205-206, 240-241, 271-272, and 301 of the Form 10-K and Notes 4 and 5 for information on the possible issuance of preferred stock, common stock, and long-term debt, and the possible retirement, redemption, purchase, or other acquisition of outstanding securities by the System operating companies and System Energy. Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs Entergy Corporation, AP&L, GSU, LP&L, and System Energy See pages 96-97, 133-134, 174-175, 208, and 304 of the Form 10-K for information on nuclear liability, property and replacement power insurance, and related NRC regulations. See pages 97-98, 134, 175, 208-209, and 304-305 of the Form 10-K for information on the disposal of spent nuclear fuel, other high-level radioactive waste, and decommissioning costs associated with ANO, River Bend, Waterford 3, and Grand Gulf 1. Decommissioning costs for ANO, Waterford 3, and Grand Gulf 1 have been recently revised to be approximately $806.3 million, $320.1 million, and $365.9 million, respectively. In March 1994, AP&L filed with the APSC an interim update of the ANO cost study, which reflected significant increases in costs of low-level radioactive waste disposal. On October 5, 1994, the APSC issued an order approving AP&L's updated decommissioning costs to be included in rates through a rate rider. As of January 1994, LP&L began funding $4.8 million annually to fund the increased estimated costs for decommissioning Waterford 3. In August 1994, LP&L filed its recently revised cost study in connection with the LPSC's investigation of LP&L's rates (see Note 2). In October 1994, GSU presented the 1991 update to the 1985 original decommissioning cost study in the current Texas Cities rate proceeding. The staff of the SEC has questioned certain of the current accounting practices of the electric utility industry, regarding the recognition, measurement, and classification of decommissioning costs for nuclear generating stations in the financial statements of electric utilities. In response to these questions, the Financial Accounting Standards Board has agreed to review the accounting for removal costs, including decommissioning. If current electric utility industry accounting practices for such decommissioning are changed, annual provisions for decommissioning could increase, the estimated cost for decommissioning could be recorded as a liability rather than as accumulated depreciation, and trust fund income from the external decommissioning trusts could be reported as investment income rather than as a reduction to decommissioning expense. ANO Matters Entergy Corporation and AP&L See pages 30, 77, and 123 of the Form 10-K for information on leaks in certain steam generator tubes at ANO 2 that were discovered and repaired during an outage in March 1992. During a refueling outage in September 1992, a comprehensive inspection of all steam generator tubing was conducted and necessary repairs were made. During a mid-cycle outage in May 1993, a scheduled special inspection of certain steam generator tubing was conducted by Entergy Operations, and additional repairs were made. Entergy Operations operated ANO 2 with no further steam generator inspections until the refueling outage that was completed on April 23, 1994. Inspections during the outage revealed additional cracks; however, most were smaller than those seen in earlier inspections, except for one relatively large crack. Based upon results of these inspections and an inconclusive pressure test, Entergy Operations plans to inspect the steam generator tubes during a mid-cycle outage tentatively scheduled for January 1995. The operations and power output of the unit have not been materially adversely affected. Environmental Issues GSU GSU has been notified by the U. S. Environmental Protection Agency (EPA) that it has been designated as a potentially responsible party for the cleanup of sites on which GSU and others have or have been alleged to have disposed of material designated as hazardous waste. GSU is currently negotiating with the EPA and state authorities regarding the cleanup of some of these sites. Several class action and other suits have been filed in state and federal courts seeking relief from GSU and others for damages caused by the disposal of hazardous waste and for asbestos-related disease allegedly resulting from exposure on GSU premises. While the amounts at issue in the cleanup efforts and suits may be substantial, GSU believes that its results of operations and financial condition will not be materially affected by the outcome of the suits. As of September 30, 1994, GSU has accrued cumulative amounts related to the cleanup of six sites at which GSU has been designated a potentially responsible party, totaling $27.7 million since 1990. Through September 30, 1994, GSU has expended $7.3 million cumulatively on the cleanup, resulting in a remaining recorded liability of $20.4 million as of September 30, 1994. LP&L In 1993, the Louisiana Department of Environmental Quality issued new rules for solid waste regulation, including waste water impoundments. LP&L has determined that certain of its power plant waste water sites are affected by these regulations and has chosen to close them rather than retrofit and permit them. In September 1994, LP&L recorded a liability of $9.7 million for costs related to the closure of these waste water sites. Waterford 3 Lease Obligations LP&L In September 1989, LP&L entered into three substantially identical, but entirely separate, transactions for the sale and leaseback of three undivided portions (aggregating approximately 9.3%) of its 100% ownership interest in Waterford 3. See pages 210-211 of the Form 10-K and Note 5 below for further information. Upon the occurrence of certain events, LP&L may be obligated to pay amounts sufficient to permit the Owner Participants to withdraw from the lease transactions, and LP&L may be required to assume the outstanding bonds issued by the Owner Trustee to finance, in part, its acquisition of the undivided interests in Waterford 3. These events include failure, at specified dates, to maintain equity capital of at least 30% of adjusted capitalization and a fixed charge coverage ratio of at least 1.50. As of September 30, 1994, LP&L's total equity capital was 49.34% of adjusted capitalization, and its fixed charge coverage ratio was 3.01. LP&L did not exercise its option to repurchase the undivided interests in Waterford 3 on the fifth anniversary (September 1994) of the closing date of the sale and leaseback transactions. As a result, LP&L was required to provide collateral to the Owner Participants for the equity portion of certain amounts payable by LP&L under the lease. Such collateral was in the form of a new series of first mortgage bonds in the aggregate principal amount of $208.2 million issued by LP&L in September 1994, under its first mortgage bond indenture. Reimbursement Agreement System Energy Under the provisions of the Reimbursement Agreement, as amended, and letters of credit related to the Grand Gulf 1 sale and leaseback transactions, System Energy has agreed to a number of covenants relating to the maintenance of equity at not less than 33%, and common equity at not less than 29%, of adjusted capitalization, and a fixed charge coverage ratio of at least 1.60. As of September 30, 1994, System Energy's equity and common equity, in each case, approximated 34% of its adjusted capitalization, and its fixed charge coverage ratio was 1.96. Failure by System Energy to perform its covenants under the Reimbursement Agreement could give rise to a draw under the letters of credit and/or an early termination of the letters of credit. If such letters of credit were not replaced in a timely manner, a default under System Energy's related leases could result. See Note 2, "FERC Audit - Proposed Settlement," for information on a proposed settlement, which, if ultimately sustained and implemented, would cause System Energy to fall below the required equity and fixed charge coverage covenant levels. System Energy has obtained the consent of the banks (parties to the Reimbursement Agreement) to waive these covenants for the 12-month period beginning with the earlier of a write-off or the first refund, if such write-off or refund occurs prior to December 31, 1994. System Energy believes the conditions included in the proposed settlement are covered by the waiver. The waiver is conditioned upon System Energy not paying any common stock dividends to Entergy Corporation until the equity ratio covenant is once again met. If the proposed settlement had been in effect as of September 30, 1994, System Energy's common equity would have been approximately 32% of its adjusted capitalization, and its fixed charge coverage ratio would have been approximately 1.27. System Energy expects that after the 12- month waiver period, it will be in compliance with the equity and fixed charge covenants. Also, see pages 296-297 of the Form 10-K for further information. System Fuels AP&L, LP&L, MP&L, NOPSI, and System Energy See pages 133, 207, 242-243, 274, and 305 of the Form 10-K for information on certain commitments and contingencies of System Fuels, and related commitments and contingencies of AP&L, LP&L, MP&L, NOPSI, and System Energy, respectively, in connection with System Fuels' fuel procurement programs. Internal Revenue Service Tax Audit Entergy In August 1994, Entergy received an IRS report covering the federal income tax audit of Entergy Corporation and subsidiaries for the years 1988 - 1990. The report asserts an $80 million tax deficiency for the 1990 consolidated federal income tax returns related primarily to the application of accelerated investment tax credits associated with Waterford 3 and Grand Gulf nuclear plants. Entergy believes there is no tax deficiency and is vigorously contesting the proposed assessment. Other Entergy Corporation and System Energy See pages 96 and 302 of the Form 10-K for information on Entergy Corporation's commitments to System Energy under the Capital Funds Agreement. AP&L, LP&L, MP&L, NOPSI, and System Energy See pages 302-303 of the Form 10-K for information on System Energy relating to the Unit Power Sales, Availability, and Reallocation Agreements. See also pages 132-133, 206-207, 242, and 273-274 of the Form 10-K for information on commitments and potential liabilities of AP&L, LP&L, MP&L, and NOPSI, respectively, relating to these agreements. NOTE 2. RATE AND REGULATORY MATTERS River Bend Entergy Corporation and GSU In May 1988, the PUCT granted GSU a permanent increase in annual revenues of $59.9 million resulting from the inclusion in rate base of approximately $1.6 billion of company-wide River Bend plant investment and approximately $182 million of related Texas retail jurisdiction deferred River Bend costs (Allowed Deferrals). In addition, the PUCT disallowed as imprudent $63.5 million of company-wide River Bend plant costs and placed in abeyance, with no finding of prudence, approximately $1.4 billion of company-wide River Bend plant investment and approximately $157 million of Texas retail jurisdiction deferred River Bend operating and carrying costs. The PUCT affirmed that the ultimate rate treatment of such amounts would be subject to future demonstration of the prudence of such costs. GSU and intervening parties appealed this order (Rate Appeal) and GSU filed a separate rate case asking that the abeyed River Bend plant costs be found prudent (Separate Rate Case). Intervening parties filed suit in a Texas district court to prohibit the Separate Rate Case. The district court's decision was ultimately appealed to the Texas Supreme Court, which ruled in 1990 that the prudence of the purported abeyed costs could not be relitigated in a separate rate proceeding. The Texas Supreme Court's decision stated that all issues relating to the merits of the original PUCT order, including the prudence of all River Bend- related costs, should be addressed in the Rate Appeal. In October 1991, the Texas district court in the Rate Appeal issued an order holding that, while it was clear the PUCT made an error in assuming it could set aside $1.4 billion of the total costs of River Bend and consider them in a later proceeding, the PUCT, nevertheless, found that GSU had not met its burden of proof related to the amounts placed in abeyance. The court also ruled that the Allowed Deferrals should not be included in rate base under a 1991 decision regarding El Paso Electric Company's similar deferred costs. The court further stated that the PUCT had erred in reducing GSU's deferred costs by $1.50 for each $1.00 of revenue collected under the interim rate increases authorized in 1987 and 1988. The court remanded the case to the PUCT with instructions as to the proper handling of the Allowed Deferrals. GSU's motion for rehearing was denied and, in December 1991, GSU filed an appeal of the October 1991 district court order. The PUCT also appealed the October 1991 district court order, which served to supersede the district court's judgment, rendering it unenforceable under Texas law. In September 1993, the Texas Third District Court of Appeals (the Appellate Court) remanded the October 1991 district court decision to the PUCT "to reexamine the record evidence to whatever extent necessary to render a final order supported by substantial evidence and not inconsistent with our opinion." The Appellate Court held that the PUCT's failure to include the company-wide $1.4 billion of River Bend construction costs in rate base was not based on substantial evidence. The Appellate Court also held that GSU's deferred operating and maintenance costs associated with the allowed portion of River Bend should be included in rate base, but that its deferred River Bend carrying costs should not be included in rate base. In May 1994, the Appellate Court withdrew its September 1993 opinion and entered a substitute opinion. In August 1994, the Appellate Court issued a third opinion in the Rate Appeal, further revising its September 1993 opinion. In the August 1994 opinion, the Appellate Court affirmed the district court's decision that there was substantial evidence to support the PUCT's 1988 decision not to include the abeyed construction costs in GSU's rate base. While acknowledging that the PUCT had exceeded its authority when it attempted to defer a decision on the inclusion of those costs in rate base in order to allow GSU a further opportunity to demonstrate the prudence of those costs in a subsequent proceeding, the Appellate Court found that GSU had suffered no harm or lack of due process as a result of the PUCT's error. Accordingly, the Appellate Court held that the PUCT's action had the effect of disallowing the company-wide $1.4 billion of River Bend construction costs for ratemaking purposes. In its August 1994 opinion, the Appellate Court repeated its earlier decision that GSU's deferred operating and maintenance costs associated with the allowed portion of River Bend should be included in rate base and changed that order to provide that GSU's deferred River Bend carrying costs included in the Allowed Deferrals should also be included in rate base. The Appellate Court's August 1994 opinion affirmed the PUCT's original order in this case. The Appellate Court's August 1994 opinion was entered by two judges, with a third judge dissenting. The dissenting opinion states that the result of the majority opinion is, among other things, to deprive GSU of due process at the PUCT because the PUCT never reached a finding on the $1.4 billion of construction costs. In October 1994, the Appellate Court denied GSU's motion for rehearing on the August 1994 opinion as to the $1.4 billion in River Bend construction costs and other matters. GSU plans to appeal the Appellate Court's decision to the Texas Supreme Court. As of September 30, 1994, the River Bend plant costs disallowed for retail ratemaking purposes in Texas, the River Bend plant costs held in abeyance, and the related operating and carrying cost deferrals totaled (net of taxes) approximately $14 million, $297 million (both net of depreciation), and $170 million, respectively. Allowed Deferrals were approximately $90 million, net of taxes and amortization, as of September 30, 1994. GSU estimates it has collected approximately $153 million of revenues as of September 30, 1994, as a result of the originally ordered rate treatment by the PUCT of these deferred costs. If recovery of the Allowed Deferrals is not upheld, future revenues based upon those allowed deferrals could also be lost, and no assurance can be given as to whether or not refunds of revenue received based upon such deferred costs previously recorded will be required. No assurance can be given as to the timing or outcome of the remands or appeals described above. Pending further developments in these cases, GSU has made no write-offs or reserves for the River Bend-related costs. Management believes, based on advice from Clark, Thomas & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the case will be remanded to the PUCT, and the PUCT will be allowed to rule on the prudence of the abeyed River Bend plant costs. Rate Caps imposed by the PUCT's regulatory approval of the Merger could result in GSU being unable to use the full amount of a favorable decision to immediately increase rates; however, a favorable decision could permit some increases and/or limit or prevent decreases during the period the Rate Caps are in effect. At this time, management and legal counsel are unable to predict the amount, if any, of the abeyed and previously disallowed River Bend plant costs that ultimately may be disallowed by the PUCT. A net of tax write-off as of September 30, 1994, of up to $311 million could be required based on an ultimate adverse ruling by the PUCT on the abeyed and disallowed costs. In prior proceedings, the PUCT has held that the original cost of nuclear power plants will be included in rates to the extent those costs were prudently incurred. Based upon the PUCT's prior decisions, management believes that its River Bend construction costs were prudently incurred and that it is reasonably possible that it will recover in rate base, or otherwise through means such as a deregulated asset plan, all or substantially all of the abeyed River Bend plant costs. However, management also recognizes that it is reasonably possible that not all of the abeyed River Bend plant costs may ultimately be recovered. As part of its direct case in the Separate Rate Case, GSU filed a cost reconciliation study prepared by Sandlin Associates, management consultants with expertise in the cost analysis of nuclear power plants, which supports the reasonableness of the River Bend costs held in abeyance by the PUCT. This reconciliation study determined that approximately 82% of the River Bend cost increase above the amount included by the PUCT in rate base was a result of changes in federal nuclear safety requirements and provided other support for the remainder of the abeyed amounts. There have been four other rate proceedings in Texas involving nuclear power plants. Investment in the plants ultimately disallowed ranged from 0% to 15%. Each case was unique, and the disallowances in each were made on a case-by-case basis for different reasons. Appeals of most, if not all, of these PUCT decisions are currently pending. The following factors support management's position that a loss contingency requiring accrual has not occurred, and its belief that all, or substantially all, of the abeyed plant costs will ultimately be recovered: 1. The $1.4 billion of abeyed River Bend plant costs have never been ruled imprudent and disallowed by the PUCT. 2. Sandlin Associates' analysis which supports the prudence of substantially all of the abeyed construction costs. 3. Historical inclusion by the PUCT of prudent construction costs in rate base. 4. The analysis of GSU's internal legal staff, which has considerable experience in Texas rate case litigation. Additionally, management believes, based on advice from Clark, Thomas, & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the Allowed Deferrals will continue to be recovered in rates. Management also believes, based on advice from Clark, Thomas, & Winters, a Professional Corporation, legal counsel of record in the Rate Appeal, that it is reasonably possible that the deferred costs related to the $1.4 billion of abeyed River Bend plant costs will be recovered in rates to the extent that the $1.4 billion of abeyed River Bend plant is recovered. However, a net of tax write-off of the $170 million of deferred costs related to the $1.4 billion of abeyed River Bend plant costs would be required if they are not allowed to be recovered in rates. See pages 103 and 180 of the Form 10-K for the accounting treatment of preacquisition contingencies, including any River Bend write-down. FERC Audit - Proposed Settlement Entergy Corporation and System Energy In December 1990, FERC Division of Audits issued an audit report for System Energy for the years 1986 through 1988. The report recommended that System Energy (1) write off, and not recover in rates, approximately $95 million of Grand Gulf 1 costs included in utility plant related to certain System income tax allocation procedures alleged to be inconsistent with FERC's accounting requirements, and (2) compute refunds for the years 1987 to date to correct for resulting overcollections from AP&L, LP&L, MP&L, and NOPSI. In August 1992, FERC issued an opinion and order (August 4 Order) which found that System Energy overstated its Grand Gulf 1 utility plant account by approximately $95 million as indicated in FERC's report. The order required System Energy to make adjusting accounting entries and refunds, with interest, to AP&L, LP&L, MP&L, and NOPSI within 90 days from the date of the order. System Energy filed a request for rehearing, and in October 1992, FERC issued an order allowing additional time for its consideration of the request. In addition, it deferred System Energy's refund obligation until 30 days after FERC issues an order on rehearing. In June 1994, System Energy, AP&L, LP&L, MP&L, and NOPSI reached a tentative settlement with the FERC staff and other parties. The proposed settlement was filed with FERC on October 7, 1994. FERC has not approved the proposed settlement, and therefore, the effects of the settlement have not been recorded. The proposed settlement would require System Energy to refund or credit approximately $61.7 million to AP&L, LP&L, MP&L, and NOPSI, which would in turn make refunds or credits to their customers (except for those portions attributable to AP&L's and LP&L's retained share of Grand Gulf 1 costs). Additionally, System Energy would refund or credit a total of approximately $62 million, plus interest, to AP&L, LP&L, MP&L, and NOPSI over the period through June 2004. The proposed settlement would also require the write-off of certain related unamortized balances of deferred investment tax credits by AP&L, LP&L, MP&L, and NOPSI. Had the proposed settlement been effective in the third quarter of 1994, it would have reduced Entergy Corporation's consolidated net income for the quarter and nine months ended September 30, 1994, by approximately $68.2 million, offset by the write-off of the unamortized balances of related deferred investment tax credits of approximately $69.4 million ($2.9 million for Entergy Corporation; $27.3 million for AP&L; $31.5 million for LP&L; $6 million for MP&L; and $1.7 million for NOPSI). Pursuant to the proposed settlement, System Energy would also reclassify from utility plant to other deferred debits approximately $81 million of other Grand Gulf 1 costs. Although excluded from rate base, System Energy would be permitted to recover such costs over a 10 year period. Interest on the $62 million refund and the loss of the return on the $81 million of other Grand Gulf 1 costs will reduce Entergy's and System Energy's net income by approximately $10 million annually over the next 10 years. There can be no assurance that FERC will ultimately approve the settlement in its current form. As a result of the charges associated with the refunds, System Energy requires the consent of certain banks (parties to the Reimbursement Agreements) to waive temporarily the fixed charge coverage and equity ratio covenants in the letters of credit and Reimbursement Agreement related to the Grand Gulf 1 sale and leaseback transaction. System Energy has obtained the consent of the banks to waive these covenants, for the 12-month period beginning with the earlier of a write-off or the first refund, if such refund occurs prior to December 31, 1994. System Energy believes the conditions included in the proposed settlement are covered by the waiver. The waiver is conditioned upon System Energy not paying any common stock dividends to Entergy Corporation until the equity ratio covenant is once again met. Absent a waiver, System Energy's failure to perform these covenants could cause a draw under the letters of credit and/or early termination of the letters of credit. If the letters of credit were not replaced in a timely manner, a default or early termination of System Energy's leases could result. Texas Cities Rate Settlement Entergy Corporation and GSU In June 1993, 13 cities within GSU's Texas service area instituted an investigation to determine whether GSU's current rates were justified. In October 1993, the general counsel of the PUCT instituted an inquiry into the reasonableness of GSU's rates. In November 1993, a settlement agreement was filed with the PUCT which provided for an initial reduction in GSU's annual retail base revenues in Texas of approximately $22.5 million effective for electric usage on or after November 1, 1993, and a second reduction of $20 million effective September 1994. Pursuant to the settlement, GSU reduced rates with a $20 million one-time bill credit in December 1993, and refunded approximately $3 million to Texas retail customers on bills rendered in December 1993. The PUCT approved the settlement agreement on July 21, 1994. The cities' rate inquiries were settled earlier on the same terms. Filings with the PUCT and Texas Cities Entergy Corporation and GSU In March 1994, the Texas Office of Public Utility Counsel and certain cities served by GSU instituted a second investigation of the reasonableness of GSU's rates. In June 1994, GSU provided the cities with information that GSU believes supports the current rate level. GSU filed the same information with the PUCT in June 1994, pursuant to provisions of the Merger. In August 1994, the cities' consultants issued a report that indicated GSU's current rates were approximately $40 to $50 million in excess of current requirements. GSU can provide no assurance as to the ultimate outcome in this matter, and any resulting rate reduction could be applied retroactively to March 31, 1994, in accordance with the Merger agreement. In September 1994, various cities adopted ordinances directing GSU to reduce its Texas retail rates by $45.9 million. GSU has appealed the cities' ordinances to the PUCT where the reasonableness of GSU's rates will be reviewed. Hearings are scheduled to begin in November 1994. LPSC Investigation Entergy Corporation, GSU, and LP&L In May 1994, GSU made the required first post-Merger earnings analysis filing with the LPSC, which indicated a revenue deficiency of $46.4 million. On September 22, 1994, LPSC consultants recommended that GSU base rates be reduced by $30 million. On November 7, 1994, LPSC consultants filed additional testimony which recommended lowering GSU's rate reduction to $10.8 million from the previously recommended $30 million rate reduction. Hearings are scheduled to begin on November 14, 1994. Recognizing that LP&L was subject to a rate freeze until March 1994, the LPSC requested LP&L to explain its "relatively high cost of debt" compared to other electric utilities subject to LPSC jurisdiction. LP&L responded to this request, and in an August 1993 report to the LPSC, the LPSC's legal consultants acknowledged LP&L's rationale for its cost of debt in comparison to two other utilities subject to the LPSC's jurisdiction. In October 1993, the LPSC approved a schedule to conduct a review of LP&L's rates and rate structure upon the expiration of LP&L's rate freeze. Discovery is currently underway and hearings are scheduled to begin in December 1994. In August 1994, LP&L filed a performance-based formula rate plan with the LPSC. The proposed formula rate plan would continue existing LP&L rates at current levels, while providing financial incentive to reduce costs and maintain high levels of customer satisfaction and system reliability. A performance rating adjustment feature of the plan would allow LP&L the opportunity to earn a higher rate of return if it improves performance over time. Conversely, if performance declines, the rate of return LP&L could earn would be lowered. This provides financial incentive for LP&L to maintain continuous improvement in all three performance categories (customer price, customer satisfaction, and customer reliability). Under the proposed plan, if LP&L's earnings fall within a bandwidth around a benchmark rate of return, there would be no adjustment in rates. If LP&L's earnings are above the bandwidth, the proposed plan would automatically reduce LP&L's base rates. Alternatively, if LP&L's earnings are below the bandwidth, the proposed plan would automatically increase LP&L's base rates. The reduction or increase in base rates would be an amount representing 50% of the difference between the earned rate of return and the nearest limit of the bandwidth. In no event would the annual adjustment in rates exceed 2% of LP&L's retail revenues. Hearings are scheduled to begin in February 1995. February 1994 Ice Storm Entergy Corporation, AP&L, and MP&L In early February 1994, an ice storm left more than 221,000 Entergy customers without electric power across the System's four- state service area. The storm was the most severe natural disaster ever to affect the System, causing damage to transmission and distribution lines, equipment, poles, and facilities in certain areas, primarily in Mississippi. Repair costs totaled approximately $110.3 million, $28.6 million, and $73.8 million for the System, AP&L, and MP&L, respectively, with $79.8 million, $17.0 million, and $61.0 million of these amounts capitalized as plant-related costs. The remaining balances have been charged against the respective companies' regulatory storm damage reserves, except for MP&L which recorded a deferred debit. Estimated construction expenditures (see Note 1) reflect the above amounts. On April 15, 1994, MP&L filed for rate recovery of costs related to the ice storm. MP&L's filing, as subsequently amended, requested recovery of the revenue requirement associated with MP&L's ice storm costs recorded through April 30, 1994, representing approximately 86% of the total estimated ice storm costs. MP&L intends to make another ice storm rate filing with the MPSC by early 1995 to recover ice storm costs recorded by MP&L after April 30, 1994. In August 1994, MP&L and the MPSC's Public Utilities Staff (MPUS) entered into a stipulation with respect to the recovery of ice storm costs recorded through April 30, 1994, and in September 1994, the MPSC approved the stipulation. Under the stipulation, MP&L will implement for five years, an ice storm rider schedule, which went into effect on September 29, 1994, that will increase rates approximately $8 million annually. At the end of the five year period, the revenue requirement associated with the undepreciated ice storm capitalized costs will be included in MP&L's base rates to the extent that this revenue requirement does not result in MP&L's rate of return on rate base being above the benchmark rate of return under MP&L's formula rate plan. NOPSI Rate Reduction/Credit Entergy Corporation and NOPSI See pages 27 and 266-268 of the Form 10-K for information regarding the 1991 NOPSI Settlement and a 1992 gas rate settlement. Under the terms of the 1991 NOPSI Settlement and a 1992 gas rate settlement, NOPSI agreed that during the period October 1, 1992 through October 31, 1996, the Council will have the right to investigate the appropriateness of NOPSI's rates if NOPSI's return on equity on its operations (calculated in accordance with the applicable provisions of the 1991 NOPSI Settlement and a 1992 gas rate settlement) for twelve month periods subsequent to September 30, 1992, were to exceed 13.76%, and after rate hearing(s), to impose a credit on NOPSI's customers' bills over the ensuing twelve month period in an amount that would have allowed NOPSI, during the relevant test year, to earn a return on equity incident to its operations of no less than 12.76%. On July 7, 1994, NOPSI and the Council agreed that, based on the test year ended September 30, 1993, NOPSI's earnings exceeded its revenue requirement by $24.95 million and in accordance with the terms of the 1991 NOPSI Settlement and a 1992 gas rate settlement, there would be a prospective base rate reduction for twelve months commencing July 14, 1994. The reduction, because of a rate freeze, will be accomplished by means of a credit (to be expressed on a per KWH basis) to customers' bills. The per kilowatt hour credit will be calculated by dividing test year overearnings by test year KWH consumption and applied to kilowatt hour usage during the period ending July 13, 1995. In the first quarter of 1994, NOPSI recorded a $14.3 million reserve for the anticipated revenue reduction, which reduced net income by $8.8 million (net of tax). The reserve has been and will continue to be reduced by the actual credits prospectively applied to customers bills in accordance with the terms of the July 7, 1994 agreement. Management believes that any rate investigation by the Council in accordance with the 1991 settlement agreement and a 1992 gas rate settlement which may propose a base rate reduction to be in effect after the expiration of the rate freeze should reflect, as an offset, any rate reduction credit then in effect as a result of overearnings during the rate freeze period. NOPSI can provide no assurance as to the level of return on common equity that will be achieved from operations, nor the amount of rate reduction/credit, if any, prior to or after the end of the rate freeze. On November 1, 1994, NOPSI filed with the Council an analysis of its earnings for the test year ended September 30, 1994, which indicated a rate reduction/credit of approximately $24 million is required. The Council is expected to order a hearing in the fourth quarter of 1994 to render a final decision on the actual amount, method, and timing of the credit. LPSC Fuel Cost Review GSU In November 1993, the LPSC ordered a review of GSU's fuel costs. The LPSC stated that fuel costs for the period October 1988 through September 1991 (Phase 1) would be reviewed based on the number of outages at River Bend and the findings in the June 1993 PUCT fuel reconciliation case. In July 1994, the LPSC made a decision in the Phase 1 fuel review case and ordered GSU to refund approximately $27 million to its customers. Under the order, a refund of $13.1 million, which was not contested under a recent Louisiana Supreme Court decision as discussed below, was made through a billing credit on August bills. In August 1994, GSU appealed the remaining portion of the LPSC ordered refund to the district court. GSU has made no reserve for the remaining portion, pending outcome of the district court appeal. In February 1990, the LPSC disallowed the pass-through to ratepayers for the portion of GSU's cost to purchase power from Nelson Industrial Steam Company (NISCO) representing the excess of NISCO's purchase price of the units over GSU's depreciated cost of the units. GSU appealed the 1990 order. In March 1994, the Louisiana Supreme Court ruled in favor of the LPSC. GSU recorded an estimated refund provision of $13.1 million, before related income taxes of $5.3 million. PUCT Fuel Cost Review GSU For information on the June 1993 PUCT fuel reconciliation case, see page 164 of the Form 10-K. In June 1994, GSU filed a petition with the PUCT for the reconciliation of over- and under- recovery of fuel and purchased power expenses for the period October 1, 1991, through December 31, 1993, in accordance with the Texas Merger settlement agreement. GSU is required to reconcile its fuel costs from the end of the period of its last fuel reconciliation through the Merger closing date to reflect the fuel and purchased power costs GSU incurred as a stand-alone company. GSU believes there was a net under-recovery of approximately $4.6 million for the period but has indicated that it does not propose to surcharge the under-recovery at this time. A prehearing conference was held on July 18, 1994, at which time a procedural schedule was adopted which provides for hearings to begin on January 9, 1995. NOTE 3. LINES OF CREDIT AND RELATED BORROWINGS See pages 89, 129, 169, 203, 239, 270, and 300 of the Form 10-K for information on Entergy Corporation's, the System operating companies', and System Energy's short-term borrowing authorizations, including the Money Pool, and certain limitations thereon, and lines of credit with banks. On March 25, 1994, GSU received SEC authorization to participate in the Money Pool. GSU is authorized to effect short-term borrowings of up to $125 million, subject to increase to as much as $455 million after further SEC approval. On April 21, 1994, AP&L, LP&L, and MP&L received SEC approval to increase their short-term borrowing limits to $200 million (from $125 million), $200 million (from $125 million), and $113 million (from $100 million), respectively. As of September 30, 1994, the System operating companies and System Energy had no outstanding borrowings from the Money Pool. As of September 30, 1994, Entergy Corporation, the System operating companies, and System Energy had outstanding short-term borrowings from banks as follows (in millions): Company Banks Entergy Corporation - AP&L $34.0 GSU - LP&L $19.2 MP&L $30.0 NOPSI - System Energy - As of September 30, 1994, GSU had unused lines of credit for short-term borrowings of $5.0 million. NOTE 4. PREFERRED AND COMMON STOCK Entergy Corporation Entergy Corporation periodically repurchases shares of its outstanding common stock either on the open market or through negotiated purchases or tender offers. Stock repurchases are made from time to time depending upon market conditions and authorization of the Entergy Corporation Board of Directors. During the first nine months of 1994, 4,035,000 shares of common stock were repurchased and were accounted for as treasury stock using the average cost method at a cost of $119.5 million. In August 1994, 1,230,000 shares of the common stock repurchased were retired. AP&L During the first nine months of 1994, AP&L redeemed the following series of preferred stock pursuant to sinking fund requirements: Redemption Date Series Par Value Shares 1/1/94 13.28% Series $25 200,000 6/1/94 9.92% Series $25 80,000 7/1/94 10.60% Series $100 20,000 On November 1, 1994, AP&L redeemed, pursuant to sinking fund requirements, 25,000 shares of its 8.52% Series Preferred Stock, $100 par value. GSU GSU has requested, but not yet received, SEC authorization to issue and sell, through December 31, 1995, up to $700 million aggregate principal amount of preferred stock and/or first mortgage bonds and medium term notes. The proceeds will be used for general corporate purposes and the repayment and/or redemption of certain outstanding securities. On March 15, 1994, GSU redeemed, pursuant to sinking fund requirements, 22,500 shares of its Adjustable Rate Series B Preferred Stock, $100 par value. LP&L During the first nine months of 1994, LP&L redeemed the following series of preferred stock pursuant to sinking fund requirements: Redemption Date Series Par Value Shares 2/1/94 12.64% Series $25 300,000 5/2/94 14.72% Series $25 416 7/1/94 10.72% Series $25 240,000 On October 1, 1994, LP&L redeemed, pursuant to sinking fund requirements, 61,121 shares of its 13.12% Series Preferred Stock, $25 par value, which represented the remaining outstanding shares of this series. MP&L During the first nine months of 1994, MP&L redeemed the following series of preferred stock pursuant to sinking fund requirements: Redemption Date Series Par Value Shares Date 1/1/94 9.76% Series $100 70,000 3/1/94 12.00% Series $100 10,000 7/1/94 9.00% Series $100 70,000 NOPSI On March 1, 1994, NOPSI redeemed 15,000 shares of its 15.44% Series Preferred Stock, $100 par value. NOTE 5. LONG-TERM DEBT AP&L AP&L has SEC authorization to enter into arrangements for the issuance and sale, through December 31, 1996, of up to $200 million aggregate principal amount of tax-exempt bonds. The proceeds have been or will be used to acquire and construct certain pollution control or sewage and solid waste disposal facilities at AP&L's generating plants or to refinance outstanding tax-exempt bonds issued for that purpose. On June 22, 1994, AP&L entered into arrangements with Pope County, Arkansas, and Jefferson County, Arkansas, for the issuance and sale of $19.5 million of 6.30% Pollution Control Revenue Refunding Bonds (Pope Bonds) due 2016 and $9.2 million of 6.30% Pollution Control Revenue Refunding Bonds (Jefferson Bonds) due 2018, respectively. Funds provided by the issuance of the Pope Bonds and Jefferson Bonds were used on July 15, 1994, to redeem $16.6 million of Pope County, Arkansas Pollution Control Revenue Bonds 7.375% due 2006, $2.9 million of Pope County, Arkansas Pollution Control Revenue Bonds 7.25% due 2008, and $9.2 million of Jefferson County, Arkansas Pollution Control Revenue Bonds 7.25% due 2008. During the first nine months of 1994, AP&L redeemed the following first mortgage bonds pursuant to sinking fund requirements: Redemption Date Series Principal (in thousands) 2/1/94 8.75% Series Due 1998 $400 5/1/94 6.25% Series Due 1996 $200 8/1/94 9.75% Series Due 2000 $200 GSU GSU has requested, but not yet received, SEC authorization to issue and sell, through December 31, 1995, up to $700 million aggregate principal amount of its first mortgage bonds, medium term notes and/or preferred stock. The proceeds will be used for general corporate purposes and the repayment or redemption of certain outstanding securities. GSU has also requested, but not yet received, SEC authorization to enter into arrangements for the issuance and sale, through December 31, 1995, of up to $250 million aggregate principal amount of tax-exempt bonds for the financing or refinancing of certain sewage and/or solid waste disposal facilities. The proceeds from the sale of tax-exempt bonds will be used to finance certain sewage and/or solid waste disposal or pollution control facilities or to refinance outstanding tax-exempt bonds issued for that purpose. In addition, GSU has requested, but has not yet received, SEC authorization to purchase or otherwise acquire its outstanding pollution control revenue bonds and/or industrial development revenue bonds through December 31, 1995. On July 1, 1994, GSU redeemed, pursuant to sinking fund requirements, $0.425 million of Iberville Parish 7.0% Series Pollution Control Revenue Bonds. LP&L LP&L has requested, but not yet received, SEC authorization to undertake the refunding of approximately $310 million of intermediate-term and long-term bonds issued by the Owner Trustee to acquire interests in Waterford 3 in 1989. Such bonds became optionally redeemable in July 1994. On July 20, 1994, LP&L entered into arrangements with the Parish of St. Charles, Louisiana, for the issuance of $20.4 million of its 6-7/8% Environmental Revenue Bonds due 2024. During the first nine months of 1994, LP&L redeemed, pursuant to sinking fund requirements, $0.2 million of various series of its pollution control and industrial revenue bond obligations. On June 1, 1994, LP&L retired $25 million of its 4.625% Series First Mortgage Bonds upon maturity. MP&L On April 1, 1994, MP&L retired $30 million of its 9.9% Series G&R Bonds upon maturity. On April 20, 1994, MP&L entered into arrangements with Warren County, Mississippi and Washington County, Mississippi for the issuance of $16.0 million principal amount of 7% Pollution Control Revenue Refunding Bonds due 2022, the proceeds of which were used to redeem $8.1 million principal amount of 8.5% Warren County Pollution Control Revenue Bonds and $7.9 million principal amount of 7.5% Washington County Pollution Control Revenue Bonds on May 13, 1994. On July 14, 1994, MP&L issued $25 million of its 8.25% Series G&R Bonds due 2004. A portion of the net proceeds from the issuance and sale of these G&R Bonds was used on July 15, 1994, to retire $18 million of MP&L's 11.11% Series G&R Bonds upon maturity. NOPSI On May 2, 1994, NOPSI redeemed, pursuant to sinking fund requirements, $15 million of its 10.95% Series G&R Bonds. System Energy On January 11, 1994, System Energy refinanced $435 million aggregate principal amount of secured lease obligation bonds originally issued as part of the financing for the sale and leaseback of undivided portions of Grand Gulf 1. The secured lease obligation bonds of $356 million, 7.43% series due 2011 and $79 million, 8.2% series due 2014 are indirectly secured by liens on, and a security interest in, certain ownership interests and the respective leases relating to Grand Gulf 1. On April 28, 1994, System Energy issued $60 million of its 7-5/8% Series First Mortgage Bonds due 1999. On May 2, 1994, System Energy redeemed, pursuant to mandatory and optional sinking fund requirements, $60 million of its 11% Series First Mortgage Bonds due 2000. NOTE 6. RETAINED EARNINGS On October 28, 1994, Entergy Corporation's Board of Directors declared a common stock dividend of 45 cents per share payable on December 1, 1994. NOTE 7. NEW ACCOUNTING STANDARDS SFAS 115 The System adopted the provisions of SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," effective January 1, 1994. As a result, as of September 30, 1994, the System has recorded on the balance sheet an additional $9.1 million in decommissioning trust funds, representing the amount by which the fair value of the securities held in such funds exceeds the amounts recovered in rates and deposited in the funds and the related earnings on the amounts deposited. Due to the regulatory treatment for decommissioning trust funds, the System recorded an offsetting amount in unrealized gains on investment securities as a regulatory liability in other deferred credits. SFAS 116 In the third quarter of 1994, the System adopted the provisions of SFAS No. 116, "Accounting for Contributions Received and Contributions Made." As a result, the System recorded a liability of approximately $10.8 million for contribution commitments. NOTE 8. PREACQUISITION CONTINGENCIES Entergy Corporation and GSU See pages 103 and 180 of the Form 10-K for a discussion of accounting for preacquisition contingencies in connection with the Merger. Entergy Corporation has completed its analyses with respect to certain GSU preacquisition contingencies and has revised the allocation of the purchase price for a number of preacquisition contingencies. In September 1994, GSU wrote-off assets or recorded liabilities totaling approximately $67.8 million net of tax for the Cajun-River Bend litigation, unfunded Cajun-River Bend costs, environmental cleanup costs, obsolete spare parts, and Louisiana River Bend rate deferrals previously disallowed by the LPSC (see pages 86 and 165 of the Form 10-K). Entergy Corporation is continuing its analyses of certain other preacquisition contingencies and additional adjustments to the allocation of the purchase price may occur in the fourth quarter of 1994. NOTE 9. RESTRUCTURING COSTS Entergy, AP&L, GSU, LP&L, MP&L, and NOPSI During the third quarter of 1994, Entergy announced a restructuring program related to certain of its operating units. The program is designed to reduce costs, improve operating efficiencies, and increase shareholder value in order to enable Entergy to become a low-cost producer. The program includes reductions in the number of employees and the consolidation of offices and facilities. In the third quarter of 1994, AP&L, GSU, LP&L, MP&L, and NOPSI recorded restructuring charges of $7.9 million, $6.1 million, $3.3 million, $2.2 million, and $2.8 million respectively. These charges primarily include employee severance costs related to the expected termination of approximately 1,084 employees. As of September 30, 1994, no employees have been terminated and no termination benefits have been paid under this restructuring program. Additionally, GSU recorded $23.8 million in the third quarter of 1994 for remaining severance and augmented retirement benefits related to the Merger. __________________________________________ In the opinion of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy, the accompanying unaudited condensed financial statements contain all adjustments (consisting primarily of normal recurring accruals and reclassifying previously reported amounts to conform to current classifications) necessary for a fair statement of the results for the interim periods presented. However, the business of AP&L, GSU, LP&L, MP&L, and NOPSI is subject to seasonal fluctuations with the peak period occurring during the summer months. The results for the interim periods presented should not be used as a basis for estimating results of operations for a full year. In accordance with the purchase method of accounting, the 1993 third quarter and first nine months results of operations for Entergy Corporation reported in its Statements of Consolidated Income and Cash Flows do not include GSU's results of operations. However, the Results of Operations discussion in "Management's Financial Discussion & Analysis" is presented with GSU's 1993 results of operations included for comparative purposes. This information is not necessarily indicative of the results of operations that would have occurred had the Merger been consummated for the period for which it is being given effect, nor is it necessarily indicative of future operating results. ENTERGY CORPORATION AND SUBSIDIARIES ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Entergy, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy Liquidity is important to Entergy due to the capital intensive nature of its business, which requires large investments in long-lived assets. While large capital expenditures for the construction of new generating capacity are not currently planned, the System does require significant capital resources for the periodic maturity of certain series of debt and preferred stock and ongoing construction expenditures. See Note 1 for additional information on the System's capital and refinancing requirements in 1994 - 1996. Net cash flow from operations for Entergy, the System operating companies, and System Energy for the nine months ended September 30, 1994 and 1993, was as follows (in millions): Nine Months Nine Months Company Ended 9/30/94 Ended 9/30/93 Entergy * $1,120.6 $776.4 AP&L $ 256.8 $269.5 GSU $ 278.3 $173.2 LP&L $ 304.5 $225.4 MP&L $ 154.4 $109.8 NOPSI $ 61.0 $ 21.6 System Energy $ 206.9 $253.4 * Entergy's net cash flow from operations for the nine months ended September 30, 1993, excludes GSU because the Merger was not yet consummated. In the first nine months of 1994, as in recent years, cash from operations, supplemented by cash on hand, was sufficient to meet substantially all investing and financing requirements, including capital expenditures, dividends, and debt/preferred stock maturities. (However, MP&L substantially increased its short-term borrowings because of unexpected costs incurred as a result of an ice storm.) Entergy's ability to fund most of its capital requirements with cash from operations results, in part, from continued efforts to streamline operations and reduce costs as well as collections under the Grand Gulf 1 rate phase-in plans, which exceed current cash requirements for Grand Gulf 1- related costs. (In the income statement, these revenue collections are offset by the amortization of previously deferred costs; therefore, there is no effect on net income.) The System operating companies and System Energy have the ability, subject to regulatory approval, to meet capital requirements through future debt or preferred stock issuances, as discussed below. Also, to the extent current market interest and dividend rates allow, the System operating companies and System Energy may continue to refinance high-cost debt and preferred stock prior to maturity. Productive investment of excess funds is necessary to enhance the long-term value of Entergy Corporation's common stock. Entergy Corporation expects to invest approximately $150 million per year in nonregulated and nonutility businesses. See "Significant Factors and Known Trends - Nonregulated Investments" for additional information. In October 1994, Entergy Corporation invested $50 million in the Hub River Company which is constructing a generating station near Karachi, Pakistan. Entergy Corporation's current primary capital requirements are to periodically invest in, or make loans to, its subsidiaries. Entergy Corporation expects to meet these requirements in 1994 - 1996 with internally generated funds and cash on hand. Entergy Corporation also pays dividends on its common stock, which aggregated $309.5 million in the first nine months of 1994. Declarations of dividends on common stock are made at the discretion of Entergy Corporation's Board of Directors (Board). Management will recommend future dividend increases to the Board only if such increases are justified by sustained earnings growth of Entergy Corporation and its subsidiaries. Entergy Corporation receives funds through dividend payments from its subsidiaries. During the first nine months of 1994, these common stock dividend payments totaled $621.2 million. Certain restrictions may limit the amount of these distributions (see page 94 of the Form 10-K and Note 2). Entergy Corporation has a program to repurchase shares of its outstanding common stock. The timing and amount of such repurchases depend upon market conditions and authorization from the Board. See Note 4 for additional information. Entergy Corporation has requested, but not yet received, SEC authorization for a $300 million bank line of credit, the proceeds of which are expected to be used for common stock repurchases, investments in nonregulated and nonutility businesses, and other activities. Certain parties have intervened in this proceeding, and the application is pending. Earnings coverage tests, bondable property additions, and equity ratio requirements (in the case of System Energy) limit the amount of mortgage bonds and preferred stock that can be issued by each of the System operating companies and System Energy. Based on the most restrictive applicable tests as of September 30, 1994, and an assumed annual interest or dividend rate of 9.25%, each of the System operating companies and System Energy could have issued bonds or preferred stock in the following amounts (in millions): Company Bonds Preferred Stock AP&L $239 $348 GSU $ - $ - LP&L $ 87 $513 MP&L $246 $ 81 NOPSI $ 88 $ 88 System $295 * Energy * System Energy's charter does not provide for the issuance of preferred stock. In addition, the System operating companies and System Energy have the conditional ability to issue bonds against the retirement of bonds, in some cases without meeting an earnings coverage test. As a result of the charges recorded in the third quarter of 1994 as discussed in Notes 8 and 9, GSU is currently precluded from issuing first mortgage bonds under its earnings coverage test. However, GSU has the ability to issue up to approximately $526 million of first mortgage bonds against previously retired bonds. AP&L may also issue preferred stock to refund outstanding preferred stock without meeting an earnings coverage test. GSU has no earnings coverage limitations on the issuance of preference stock. For information on the System operating companies' and System Energy's regulatory authorizations to issue and acquire securities, see Notes 4 and 5, and pages 90-94, 129-131, 170-172, 204-206, 239-241, 271-272, and 301 of the Form 10-K. See Note 3 for information on the System's short-term borrowings. Entergy Corporation and GSU In September 1994, Entergy Corporation completed its analyses with respect to certain preacquisition contingencies and revised the allocation of the purchase price for a number of preacquisition contingencies. In accordance with the purchase method of accounting, Entergy Corporation increased its acquisition adjustment and GSU reduced net income by approximately $67.8 million net of tax. See Notes 2 and 8 for additional information on provisions for preacquisition contingencies recorded in September 1994. See Notes 1 and 2, and Part II, Item 1. "Legal Proceedings," regarding litigation with Cajun and River Bend rate appeals. Substantial write-offs or charges resulting from adverse rulings in these matters could result in substantial additional net losses being reported by GSU in 1994, and subsequent periods, with resulting substantial adverse adjustments to common shareholder's equity. Also, adverse resolution of these matters could adversely affect GSU's ability to continue to pay dividends and obtain financing, which could in turn affect GSU's liquidity. Entergy Corporation and System Energy In connection with the financing of Grand Gulf 1, Entergy Corporation has undertaken to provide System Energy with sufficient capital to (1) maintain System Energy's equity capital at an amount equal to at least 35% of System Energy's total capitalization (excluding short-term debt), (2) permit the continuation of commercial operation of Grand Gulf 1, and (3) enable System Energy to pay in full all borrowings of System Energy, whether at maturity, on prepayment, on acceleration or otherwise. In addition, Entergy Corporation has agreed to make certain cash capital contributions, if required, to enable System Energy to make payments when due on its long-term debt. System Energy The financial condition of System Energy significantly depends on the continued commercial operation of Grand Gulf 1 and on the receipt of payments from AP&L, LP&L, MP&L, and NOPSI. Such payments are System Energy's only source of operating revenues. In addition, System Energy's financial condition could be affected by the outcome of a pending FERC audit matter. As discussed in Note 2, FERC Division of Audits issued a report in December 1990 that recommended that System Energy write off and not recover in rates approximately $95 million of Grand Gulf 1 costs included in utility plant, and compute refunds for overcollections from AP&L, LP&L, MP&L, and NOPSI. In June 1994, System Energy, AP&L, LP&L, MP&L, and NOPSI reached a tentative settlement with the FERC staff and certain other parties. The proposed settlement was filed with FERC on October 7, 1994. FERC has not approved the proposed settlement, and therefore, the effects of the settlement have not been recorded. The proposed settlement, which is subject to approval by FERC, would require System Energy to refund or credit approximately $61.7 million to AP&L, LP&L, MP&L, and NOPSI, which would in turn make refunds or credits to their customers (except for those portions attributable to AP&L's and LP&L's retained share of Grand Gulf 1 costs). Additionally, System Energy would refund or credit a total of approximately $62 million, plus interest, to AP&L, LP&L, MP&L, and NOPSI over the period through June 2004. Interest on the $62 million refund and loss of the return on certain Grand Gulf 1 costs will reduce Entergy's and System Energy's net income by approximately $10 million annually over the next 10 years. However, there can be no assurance that FERC will ultimately approve the settlement in its current form. See Note 2 for additional information. Also, see Note 1 for certain restrictions on the payment of common dividends by System Energy in connection with the proposed settlement. NOPSI As discussed in Note 2, under the terms of the 1991 NOPSI Settlement and a 1992 gas rate settlement, the Council has the right to review NOPSI's return on equity annually through October 31, 1996. Also, NOPSI is currently operating under electric and gas base rate freezes through October 31, 1996. On July 7, 1994, NOPSI and the Council agreed that, based on the test year ended September 30, 1993, NOPSI's earnings exceeded its revenue requirement by $24.95 million and in accordance with the terms of the 1991 NOPSI Settlement and a 1992 gas rate settlement, there would be a prospective base rate reduction for twelve months commencing July 14, 1994. The reduction, because of a rate freeze, will be accomplished by means of a credit (to be expressed on a per KWH basis) to customers' bills. On November 1, 1994, NOPSI filed with the Council an analysis of its earnings for the test year ended September 30, 1994, which indicated a rate reduction/credit of approximately $24 million is required. RESULTS OF OPERATIONS ENTERGY On December 31, 1993, GSU became a subsidiary of Entergy Corporation. In accordance with the purchase method of accounting, the nine months ended September 1993 results of operations for Entergy Corporation and subsidiaries reported in its Statements of Consolidated Income and Cash Flows do not include GSU's results of operations. However, the following discussion is presented with GSU's 1993 results of operations included for comparative purposes. In the third quarter of 1994, Entergy recorded certain one- time, non-recurring charges which significantly affected results of operations as discussed below. These one-time charges included, among other things, Merger related costs and restructuring costs (see Note 9). Net Income Consolidated net income decreased $151.5 million in the third quarter of 1994 due primarily to decreased revenues, increased merger-related costs, certain restructuring costs, and decreased miscellaneous income - net, partially offset by a decrease in interest expense as explained below. Consolidated net income decreased in the first nine months of 1994 due primarily to the one-time recording in 1993 of the cumulative effect of the change in accounting principle for unbilled revenues for AP&L, MP&L, GSU, and NOPSI. Excluding the effect of the change in accounting principle, net income decreased in the first nine months of 1994 by approximately $150.2 million. This resulted from a decrease in retail revenues, increased merger related costs, certain restructuring costs, and decreased miscellaneous income - net, partially offset by a decrease in interest on long-term debt and preferred dividend requirements as a result of continued debt refinancing and stock redemption activities. Significant factors affecting the results of operations and causing variances between the third quarter and first nine months of 1994 and 1993 are discussed under "Revenues and Sales," "Expenses," and "Other" below. Revenues and Sales See Entergy's "Selected Operating Results" for information on operating revenues by source and KWH sales. Electric operating revenues decreased $178.5 million in the third quarter due primarily to lower retail energy sales and decreased unbilled revenues resulting from cooler than normal summer weather as compared to 1993. Additionally, revenues were lower due to decreased fuel adjustment revenues and rate reductions at GSU and MP&L, and decreased fuel adjustment revenues at NOPSI. Electric operating revenues decreased $31.0 million in the first nine months of 1994 due primarily to rate reductions at GSU, MP&L, and NOPSI, and decreased unbilled revenues, partially offset by increased retail energy sales. Gas operating revenues increased $8.9 million in the first nine months of 1994 due primarily to increased retail sales resulting from colder than normal winter weather, partially offset by lower gas sales in the third quarter of 1994 due to a warmer than normal spring. Expenses Fuel for electric generation and fuel-related expenses decreased $60.3 million in the third quarter of 1994 due primarily to decreased energy sales as discussed in "Revenues and Sales" above. Purchased power decreased $27.0 million in the third quarter of 1994 due primarily to decreased power purchases from nonassociated utilities due to changes in generation requirements for the System operating companies resulting primarily from decreased energy sales and fuel-related costs. Other operation and maintenance expenses increased in the third quarter of 1994 due primarily to increased GSU merger related costs, as discussed in Note 9, increased storm damage costs and environmental reserves, and recognition of certain restructuring costs. Nuclear refueling outage expenses decreased $5.9 million in the first nine months of 1994 due primarily due to Grand Gulf outage expenses incurred in the third quarter of 1993 and lower outage expense accruals at River Bend. Income taxes decreased in the third quarter and first nine months of 1994 due primarily to lower pre-tax book income. The amortization of rate deferrals increased $33.6 million in the first nine months of 1994 due primarily to collection of more Grand Gulf 1-related costs from customers in 1994 as compared to 1993. Interest expense decreased $7.7 million in the third quarter and $31.5 million for in the first nine months of 1994 due primarily to the refinancing of high cost debt. Preferred dividend requirements decreased $1.6 million in the third quarter and $9.4 million for the first nine months of 1994 due primarily to stock redemption activities. Other Miscellaneous income - net decreased $22.6 million in the third quarter and $43.9 million in the first nine months of 1994 due primarily to amortization of plant acquisition adjustments related to the Merger, the early adoption of SFAS No. 116, as discussed in Note 7, and reduced Grand Gulf 1 carrying charges at AP&L. AP&L Net Income Net income decreased in the third quarter of 1994 due primarily to decreased operating revenues and increased operating and maintenance expenses. Net income decreased in the first nine months of 1994 due primarily to the one-time recording in the first quarter of 1993 of the cumulative effect of the change in accounting principle for unbilled revenues. Excluding the effect of the change in accounting principle, net income decreased $27.4 million. This decrease is due primarily to increased operation and maintenance expense as a result of restructuring costs and storm damage activity in the second and third quarters of 1994. Significant factors affecting the results of operations and causing variances between the third quarters and first nine months of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales See AP&L's "Selected Operating Results" for information on operating revenues by source and KWH sales. Electric operating revenues decreased in the third quarter of 1994 due to lower retail energy sales. Electric operating revenues also decreased due to decreased collections of Grand Gulf 1-related costs and lower fuel adjustment revenues, which do not impact net income. Total sales increased in the third quarter due primarily to increased sales for resale to associated companies, caused by changes in generation availability and requirements among the System operating companies, partially offset by lower retail sales due to a cooler summer than prior year. Electric operating revenues and sales increased in the first nine months of 1994 due primarily to an increase in sales for resale to associated companies caused by changes in generation availability and requirements among the System operating companies, and increased commercial and industrial sales, partially offset by decreased collections of Grand Gulf 1-related costs and decreased recovery of fuel-related costs, which do not impact net income. Expenses Purchased power decreased in the third quarter of 1994 as a result of lower prices, partially offset by an increase in the amount of power purchased. Other operation and maintenance expense increased in the third quarter and first nine months of 1994 due primarily to storm damage costs and restructuring costs as discussed in Note 9. Depreciation and decommissioning expense increased in the third quarter and first nine months of 1994 due primarily to additions and upgrades to the ANO isometric drawing and financial management systems, and to additions and replacements to the ANO steam generator and plant monitoring systems. The amortization of rate deferrals decreased in the third quarter of 1994 due primarily to reduced Grand Gulf 1 carrying charges. Total income taxes decreased in the third quarter and first nine months of 1994 due to lower pretax income. Other Miscellaneous income - net decreased in the third quarter of 1994 due primarily to reduced Grand Gulf 1 carrying charges. GSU Net Income Net income decreased in the third quarter and first nine months of 1994 primarily due to write-offs associated with certain preacquisition contingencies as discussed in Note 8, and additional merger related costs, and restructuring costs as discussed in Note 9. Significant factors affecting the results of operations and causing variances between the third quarter and first nine months of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenue and Sales See GSU's "Selected Operating Results" for information on operating revenues by source and KWH sales. Operating revenues decreased in the third quarter of 1994 due primarily to lower retail revenues partially offset by increased sales for resale. The decrease in electric operating revenues was primarily due to a decrease in fuel recovery revenue, current and prior year rate reductions in Texas and a cooler summer than the prior year, which offset the increase in wholesale revenues. Energy sales increased due to higher sales for resale as a result of GSU's participation in the System power pool. Operating revenues increased slightly in the first nine months of 1994 due primarily to increased wholesale revenues associated with higher sales for resale partially offset by lower retail revenues. The decrease in retail revenues is primarily due to a decrease in fuel recovery revenue and a November 1993 rate reduction in Texas, partially offset by favorable weather in the first and second quarters as compared to the prior year. Sales for resale increased as a result of GSU's participation in the System power pool. Expenses Purchased power increased in the third quarter and first nine months of 1994 due to GSU's participation in joint dispatching through the System power pool resulting from increased energy sales as discussed above. In addition, the increase in purchased power expense for the first nine months of 1994 was also due to the recording of a provision for refund of disallowed purchased power costs resulting from a Louisiana Supreme Court ruling in the second quarter as discussed in Note 2. Fuel, fuel-related expenses and gas purchased for resale decreased in the third quarter of 1994 primarily due to lower gas prices. Operation and maintenance expenses increased in the third quarter and first nine months of 1994 due primarily to charges associated with certain preacquisition contingencies as discussed in Note 8, additional merger related costs, and restructuring costs as discussed in Note 9. Income taxes decreased in the third quarter and first nine months of 1994 due primarily to lower pretax income. Taxes other than income taxes decreased in the first nine months of 1994 due to a $15.1 million franchise tax refund. Other Miscellaneous income - net decreased in the third quarter and first nine months of 1994 due primarily to certain preacquisition contingencies as discussed in Note 8, including Cajun River Bend litigation, the write-off of previously disallowed rate deferrals, and obsolete spare parts. Income taxes decreased in the third quarter and first nine months of 1994 due primarily to the charges discussed above. LP&L Net Income Net income decreased in the third quarter of 1994 due primarily to decreased operating revenues and increased other operation and maintenance expenses. For the first nine months of 1994 net income decreased primarily due to higher operation and maintenance expenses. Significant factors affecting the results of operations and causing variances between the third quarters and first nine months of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales See LP&L's "Selected Operating Results" for information on operating revenues by source and KWH sales. Electric operating revenues were lower in the third quarter of 1994 primarily due to decreased retail and wholesale revenues. The decrease in retail energy sales is primarily due to a cooler summer than the prior year which reduced sales to residential and commercial customers partially offset by higher industrial sales. Lower sales for resale to associated and nonassociated companies also contributed to the decrease in electric operating revenues for the third quarter of 1994. In addition, completion of the amortization of the proceeds resulting from litigation with a gas supplier resulted in decreased other operating revenues for the third quarter and first nine months of 1994. Electric operating revenues were slightly higher during the first nine months of 1994 primarily due to higher fuel adjustment revenues, which do not affect net income, and increased retail energy sales, partially offset by lower wholesale and other operating revenues. Expenses Operating expenses decreased for the third quarter of 1994 primarily due to lower purchased power and income tax expense partially offset by higher other operation and maintenance expenses. Other operation and maintenance expense increased primarily due to the impact of expenses related to restructuring costs as discussed in Note 9 and power plant waste water site closures as discussed in Note 1. Purchased power decreased primarily due to lower cost. The decrease in income tax expense reflects lower pretax book income for the third quarter of 1994. Operating expenses increased slightly for the first nine months of 1994 primarily due to higher fuel and other operation and maintenance expense partially offset by lower income tax expense. The increase in fuel expense for the first nine months of 1994 is primarily due to an increase in deferred fuel expense related to the over-recovery of fuel cost in the current period. Other operation and maintenance expense increased for the first nine months of 1994 primarily due to third quarter expenses related to restructuring costs as discussed in Note 9, and power plant waste water site closures as discussed in Note 1. The decrease in income tax expense reflects lower pretax book income for the first nine months of 1994. MP&L Net Income Net income decreased in the third quarter of 1994 due primarily to decreased electric operating revenues. Net income decreased in the first nine months of 1994 due primarily to the one-time recording in the first quarter of 1993 of the cumulative effect of the change in accounting principle for unbilled revenues. Excluding the effect of the change in accounting principle, net income decreased by $23.6 million. This decrease for the first nine months of 1994 is primarily due to decreased electric operating revenues. Significant factors affecting the results of operations and causing variances between the third quarters and first nine months of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales See MP&L's "Selected Operating Results" for information on operating revenues by source and KWH sales. Electric operating revenues decreased in the third quarter primarily due to the impact of the incentive rate plan that went into effect in March 1994, a cooler summer than the prior year period, and lower wholesale revenues. During the first nine months of 1994, electric operating revenues decreased primarily due to the second quarter incentive rate plan, partially offset by higher energy sales and higher fuel adjustment revenues that do not effect net income. In addition to the factors cited above for revenues, accrued unbilled revenues decreased due to a change in the cycle billing dates offset by an increase in billed revenues. This decrease was partially offset by increased retail energy sales resulting from increased commercial and industrial sales. Expenses Fuel for electric generation and fuel-related expenses decreased in the third quarter of 1994 due primarily to improved generating efficiency at certain MP&L plants. Fuel for electric generation and fuel-related expenses increased in the first nine months of 1994 due primarily to an increase in generation requirements resulting primarily from increased energy sales as discussed in "Revenues and Sales" above. Purchased power expense decreased in the third quarter and first nine months of 1994 due primarily to changes in generation availability and requirements among the System operating companies. A lower per unit price for power purchased also contributed to the decrease in purchased power in the third quarter of 1994. The amortization of rate deferrals increase in the third quarter and first nine months of 1994 reflected the fact that MP&L, based on the Revised Plan, collected more Grand Gulf 1-related costs from its customers in the third quarter and first nine months of 1994 than it recovered in the same period in 1993. Income taxes decreased in the first nine months due primarily to lower pretax income. NOPSI Net Income Net income decreased in the third quarter of 1994 due primarily to lower operating revenues partially offset by lower operating expenses. Net income decreased for the first nine months of 1994 due primarily to the one-time recording of the cumulative effect of the change in accounting principle for unbilled revenues in 1993. Excluding the effect of the change in accounting principle, net income decreased for the first nine months of 1994 by $14 million. This decrease is due primarily to the recording of a reserve for revenue reduction as a result of a review of NOPSI's return on equity in accordance with the 1991 NOPSI Settlement and a 1992 gas rate settlement. Significant factors affecting the results of operations and causing variances between the third quarters and first nine months of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales See NOPSI's "Selected Operating Results" for information on operating revenues by source and KWH sales. Electric operating revenues decreased in the third quarter due primarily to a decrease in energy sales and lower fuel adjustment revenues. The decrease in electric operating revenues in the first nine months of 1994 was due primarily to the recording of a reserve as discussed in "Net Income" above. Electric energy sales decreased in the third quarter due primarily to a decrease in residential sales resulting from a cooler summer than the prior year. Electric energy sales were flat for the first nine months of 1994 due primarily to a slight increase in retail sales resulting from a colder winter and warmer spring weather than in the previous year, offset by a decrease in sales for resale. For the first nine months of 1994, gas operating revenues increased due primarily to increased gas sales in the first quarter as a result of a colder winter than the prior year, partially offset by lower second and third quarter gas sales. Expenses Fuel for electric generation and fuel-related expenses decreased in the third quarter of 1994 due primarily to a decrease in energy sales as discussed in "Revenue and Sales" above, and lower gas fuel costs. The decrease in fuel price for the third quarter of 1994 was partially offset by an increase in deferred fuel expense due to the over-recovery of fuel costs in the current period. For the first nine months of 1994 fuel for electric generation and fuel-related expenses increased due to higher deferred fuel expense partially offset by lower fuel costs relating to a change in the fuel mix from oil in the prior year to gas in the current period. Purchased power expense decreased in the third quarter and first nine months of 1994 due primarily to changes in generation requirements among the System operating companies and lower costs. Gas purchased for resale decreased for the third quarter of 1994 due to decreased gas sales. Income taxes decreased in the third quarter and first nine months due primarily to lower pretax income. The increase in the amortization of rate deferrals in the third quarter and the first nine months of 1994 is primarily a result of the collection of larger amounts of previously deferred costs under the 1991 NOPSI Settlement. SYSTEM ENERGY Net Income Net income increased in the third quarter of 1994 due primarily to an adjustment in the third quarter of 1993 related to the recording of a reserve for revenues in the third quarter of 1993 as a result of a FERC investigation of the return on equity of System Energy's formula wholesale rates and a reduction in interest expense due to the refinancing of high-cost debt. Net income decreased in the first nine months of 1994 due primarily to a lower rate of return on System Energy's decreasing investment in Grand Gulf 1, partially offset by a decrease in interest expense due to refinancing of high-cost long-term debt. Significant factors affecting the results of operations and causing variances between the third quarters and first nine months of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenues Operating revenues recover operating expenses, depreciation and capital costs attributable to Grand Gulf 1. The capital costs are computed by allowing a return on System Energy's common equity funds allocable to its net investment in Grand Gulf 1 and adding to such amount System Energy's effective interest cost for its debt allocable to its investment in Grand Gulf 1. Operating revenues decreased in the third quarter of 1994 due primarily to a lower return on System Energy's decreasing investment in Grand Gulf 1 (caused by depreciation of the unit) and increased expenses in connection with Grand Gulf 1 refueling outage in the third quarter of 1993. Operating revenues decreased in the first nine months due primarily to a lower return on System Energy's decreasing investment in Grand Gulf 1 and a decrease in fuel expenses. Expenses Fuel for electric generation and fuel-related expenses increased in the third quarter primarily due to per unit price. Fuel for electric generation and fuel-related expenses decreased in the first nine months primarily due to a lower per unit cost for nuclear fuel as a result of a favorable market for uranium. Income taxes decreased in the first nine months due primarily to lower pretax income and adjustments to the SFAS 109 deferred tax balances. Interest expense decreased in the first nine months of 1994 due primarily to the refinancing of high-cost long-term debt. SIGNIFICANT FACTORS AND KNOWN TRENDS Entergy Corporation and GSU Entergy Corporation-GSU Merger On December 31, 1993, Entergy completed the Merger and became one of the nation's largest electric utilities. With GSU as its fifth retail operating company, Entergy gained size, expanded market area, economies of scale, an additional nuclear unit (River Bend), and a more price-competitive fuel mix. As a result of the Merger, Entergy estimates $850 million in fuel cost savings and $670 million in operation and maintenance expense savings over the next decade. It is possible that common shareholders may experience some dilution in earnings in the short term as a result of the Merger. However, Entergy Corporation believes that the Merger will be beneficial to common shareholders over the longer term, both in terms of the strategic benefits and the economies and efficiencies expected to be produced. For further information, see pages 103-104 and 180 of the Form 10-K and "Litigation and Regulatory Proceedings" below. Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI Competition Entergy welcomes competition in the electric energy business and believes that a more competitive environment should benefit our shareholders, customers, and employees. However, competition presents Entergy with many challenges. The following have been identified by Entergy as its major competitive challenges. Retail and Wholesale Rate Issues Increasing competition in the utility industry brings an increased need to stabilize or reduce retail rates. The retail regulatory environment is shifting from traditional rate-base regulation to incentive rate regulation. Incentive and performance-based rate plans encourage efficiencies and productivity while permitting utilities and their customers to share in the results. Retail wheeling, which requires utilities to "wheel" or move power from third parties to their own retail customers, is evolving. As a result, the retail market is expected to become more competitive. In the wholesale rate area, FERC approved in 1992, with certain modifications, the proposal of AP&L, LP&L, MP&L, NOPSI, and Entergy Power to sell wholesale power at market-based rates and to provide to electric utilities "open access" to the System's transmission system (subject to certain requirements). GSU was later added to this filing. Various intervenors in the proceeding filed petitions for review with the D.C. Circuit. See Part II, Item 1. "Legal Proceedings," for information on a ruling by the D.C. Circuit regarding Entergy's open access transmission rates. Open access and market pricing, once it takes effect, will increase marketing opportunities for the System, but will also expose the System to the risk of loss of load or reduced revenues due to competition with alternative suppliers. In connection with the Merger, AP&L agreed with the APSC not to request any general retail rate increases that would take effect before November 1998, with certain exceptions. For further information, see pages 82-83 and 125-126 of the Form 10- K. On March 31, 1994, North Little Rock, Arkansas, awarded AP&L a wholesale electric contract that will provide estimated revenues of $347 million over 11 years. Under the contract, the price per KWH was reduced 18%, retroactive to March 1, 1994, with increases in price through the year 2004. AP&L, which has been serving North Little Rock for over 40 years, was awarded the contract after intense bidding with several competitors. FERC accepted the contract, but one of AP&L's competitors has requested a rehearing and has filed complaints against AP&L and North Little Rock challenging the contract. In connection with the Merger, GSU agreed with the LPSC and PUCT to a five-year Rate Cap on retail electric rates, and to pass through to retail customers the fuel savings and a certain percentage of the nonfuel savings created by the Merger. Under the terms of their respective Merger agreements, the LPSC and PUCT will review GSU's base rates during the first post-Merger earnings analysis for reasonableness of its return on equity. In May 1994 and June 1994, GSU made its first post-Merger earnings analysis filings with the LPSC and PUCT, respectively, which GSU believes support the current levels of rates. For further information, see pages 82-83 and 163-164 of the Form 10-K. See Note 2 for information on recent filings by certain Texas cities seeking a reduction in GSU's rates. Cogeneration projects developed or considered by certain of GSU's industrial customers over the last several years have resulted in GSU developing and securing approval of rates lower than the rates previously approved by the PUCT and LPSC for such industrial customers. Such rates are designed to retain such customers, and to compete for and develop new loads, and do not presently recover GSU's full cost of service. The pricing agreements at non-full cost of service based rates fully recover all related costs but provide only a minimal return. Substantially all of such pricing agreements expire no later than 1997. During the first nine months of 1994, KWH sales to GSU's industrial customers at less than full cost of service, which make up approximately 28% of the total industrial class, increased 15%. Sales to the remaining industrial customers increased 1%. LP&L's five year rate freeze expired in March 1994. At the same time, approximately $46 million of annual rate relief that was included in LP&L's retail rates also expired. In October 1993, the LPSC approved a schedule to conduct a review of LP&L's rates and rate structure upon the expiration of LP&L's rate freeze. Discovery is currently underway and hearings are scheduled to begin in December 1994. In August 1994, LP&L filed a performance-based formula rate plan with the LPSC. The proposed formula rate plan would continue existing LP&L rates at current levels, while providing financial incentive to reduce costs and maintain high levels of customer satisfaction and system reliability. Hearings are scheduled to begin in February 1995. See Note 2 for additional information. In February 1994, the MPSC conducted a general review of MP&L's current rates and in March 1994, the MPSC issued a final order adopting a formula rate plan for MP&L that will allow for periodic small adjustments in rates based on a comparison of earned to benchmark returns and upon certain performance factors. The order also adopted previously agreed-upon stipulations of a required return on equity of 11% and certain accounting adjustments that result in a 4.3% ($28.1 million) reduction in MP&L's June 30, 1993, test-year operating revenues. Pursuant to the MPSC's order, on March 18, 1994, MP&L filed rates designed to provide for this reduction in operating revenues for the test year. These rates are effective for service rendered on or after March 25, 1994. See pages 83-84 and 235-236 of the Form 10-K for further information. In connection with the Merger, MP&L agreed with its retail regulator not to request any general retail rate increases that would take effect before November 1998, with certain exceptions. For further information, see pages 82-83 and 236 of the Form 10- K, and Part II, Item 1. "Legal Proceedings." In light of the rate issues discussed above, Entergy is aggressively reducing costs to avoid potential earnings erosions that might result as well as to successfully compete by becoming a low-cost producer. In December 1992, AP&L, LP&L, MP&L, and NOPSI each filed a Least Cost Plan with their respective retail regulators, and GSU is currently working with the PUCT regarding integrated resource planning. However, in response to an increasingly competitive electric utility environment, AP&L, LP&L, MP&L, and NOPSI have announced their intentions to revise their Least Cost Plan activities. In this regard, AP&L, GSU, LP&L, MP&L, and NOPSI intend to adopt the ratepayer impact measure test as their primary economic criterion for DSM programs rather than the total resource cost test that had been used in developing the initial Least Cost Plans. Therefore, absent overriding customer, strategic, or public interests, AP&L, GSU, LP&L, MP&L, and NOPSI will propose those DSM programs that have the potential for lower rates to all customers, rather than DSM programs that, while providing direct benefits to participants, may result in higher rates for everyone, including non-participants. In addition, AP&L, GSU, LP&L (outside the city of New Orleans), and MP&L will no longer seek a pre-approved cost recovery rider as a mechanism for recovering program costs, lost contributions and incentives. See Part II, Item 1. "Legal Proceedings," for information on filings made by AP&L, LP&L, and MP&L with their respective regulators in connection with proposed changes to their Least Cost Plans. Notwithstanding the changes noted above, LP&L and NOPSI intend to implement the DSM programs already approved by the Council. However, LP&L and NOPSI intend to pursue appropriate changes in the Council ordinance establishing the Least Cost Plans framework and planning criteria. The Energy Policy Act of 1992 The Energy Policy Act of 1992 (Energy Act) is changing the business of transmitting and distributing electricity. The Energy Act encourages competition and affords utilities the opportunities, and the risks, associated with an open and more competitive market environment. The Energy Act increases competition in the wholesale energy market through the creation of exempt wholesale generators (EWGs). Entergy is competing in this market through its independent power subsidiary, Entergy Power Development Corporation. The Energy Act also gives FERC the authority to order investor-owned utilities to provide transmission access to or for other utilities, including EWGs. In addition, the Energy Act allows utilities to own and operate foreign generation, transmission, and distribution facilities. See "Nonregulated Investments" below for further information. Entergy Corporation and GSU Litigation and Regulatory Proceedings See Note 1 and Part II, Item 1. "Legal Proceedings," for information on litigation with Cajun concerning Cajun's ownership interest in River Bend and the possible material adverse effects on GSU's financial condition in the event that GSU is ultimately unsuccessful in this litigation, including a possible filing under the bankruptcy laws. See Note 2 for information on the possibility of material adverse effects on GSU's financial condition and results of operations as a result of substantial write-offs and/or refunds in connection with outstanding appeals and remands regarding approximately $1.4 billion of abeyed company-wide River Bend plant costs and approximately $187 million ($170 million net of tax) of Texas retail jurisdiction deferred River Bend operating and carrying costs. System Energy FERC Audit - Proposed Settlement See Note 2 for information with respect to a proposed settlement between System Energy and FERC in connection with a decision issued by FERC in August 1992. Entergy Corporation Nonregulated Investments Entergy Corporation continues to seek new opportunities to expand its electric energy business, including expansion into related nonutility businesses. These opportunities include new domestic ventures such as Entergy Systems and Service, Inc. (Entergy SASI), the region's only full-service provider of energy- efficient lighting and related services, previously established ventures in Argentina, and planned investments in Asia, Central America and South America. Entergy Corporation expects to invest approximately $150 million per year in nonregulated business opportunities. Additional shareholder and/or regulatory approvals may be required for such acquisitions to take place. In the first nine months of 1994, Entergy Corporation's nonregulated investments reduced consolidated net income by approximately $19.3 million. In the near term, these investments are not likely to have a positive effect on earnings; but management believes that these investments could contribute to future earnings growth. Entergy Corporation and AP&L ANO Matters See pages 30, 77, and 123 of the Form 10-K for information on leaks in certain steam generator tubes at ANO 2 that were discovered and repaired during an outage in March 1992. During a refueling outage in September 1992, a comprehensive inspection of all steam generator tubing was conducted and necessary repairs were made. During a mid-cycle outage in May 1993, a scheduled special inspection of certain steam generator tubing was conducted by Entergy Operations and additional repairs were made. Entergy Operations operated ANO 2 with no further steam generator inspections until the refueling outage which was completed on April 23, 1994. Inspections during the outage revealed additional cracks; however, most were smaller than those seen in earlier inspections, except for one relatively large crack. Based upon results of these inspections and an inconclusive pressure test, Entergy Operations plans to inspect the steam generator tubes during a mid-cycle outage tentatively scheduled for January 1995. The operations and power output of the unit have not been materially adversely affected. GSU Deregulated Portion of River Bend As of September 30, 1994, GSU had not recovered a significant amount of its investment in, or received any return associated with, the portion of River Bend included in the deregulated asset plan in Louisiana and the portion of River Bend placed in abeyance as part of the Texas rate order which went into effect in July 1988. See pages 157 and 165 of the Form 10-K for further information. Future earnings will continue to be limited as long as the limited recovery of the investment and lack of return continues. For the nine months ended September 30, 1994, GSU recorded revenues resulting from the sale of electricity from the deregulated asset plan of approximately $26.2 million. Operation and maintenance expenses, including fuel, were approximately $31.3 million, and depreciation expense associated with the deregulated asset plan investment was approximately $12.3 million for the nine months ended September 30, 1994. For the first nine months of 1994, GSU recorded nonfuel revenue of $24.3 million (included in the $26.2 million of total deregulated asset plan revenue discussed above) which, absent the deregulated asset plan, would not have been realized. The operation and maintenance expenses and depreciation expense allocated to the deregulated asset plan as detailed above would have been incurred at River Bend with or without the deregulated asset plan. The future impact of the deregulated asset plan on GSU's results of operations and financial position will depend on River Bend's future operating costs, the unit's efficiency and availability, and the future market for energy over the remaining life of the unit. Based on current estimates of the factors discussed above, GSU anticipates that future revenues from the deregulated asset plan will fully recover all related costs. LPSC Fuel Cost Review In November 1993, the LPSC ordered a review of GSU's fuel costs. The LPSC stated that fuel costs for the period October 1988 through September 1991 (Phase 1) would be reviewed based on the number of outages at River Bend and the findings in the June 1993 PUCT fuel reconciliation case. In July 1994, the LPSC made a decision in the GSU/Louisiana Phase 1 fuel review case and ordered GSU to refund approximately $27 million to its customers. Under the order, a refund of $13.1 million, which was not contested under a recent Louisiana Supreme Court decision as discussed in Note 2, was made through a billing credit on August bills. In August 1994, GSU appealed the remaining portion of the LPSC ordered refund to the district court. GSU has made no reserve for the remaining portion, pending outcome of the district court appeal. Accounting for Decommissioning Costs The Financial Accounting Standards Board has agreed to review the accounting for removal costs, which includes the accounting for decommissioning of nuclear plants. This project could possibly change the System's, as well as the entire utility industry's, accounting for such costs. ENTERGY CORPORATION AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. Legal Proceedings River Bend Entergy Corporation and GSU See Note 2 and also see pages 20-22, 80-82, and 160-163 of the Form 10-K, pages 44-46 of the First Quarter Form 10-Q, and pages 44-47 and 70-71 of the Second Quarter Form 10-Q, for a discussion of outstanding appeals and remands regarding approximately $1.4 billion of abeyed company-wide River Bend plant costs and approximately $157 million of Texas retail jurisdiction deferred River Bend operating and carrying costs. See Note 1 and also see pages 40-42, 94-95, and 172-173 of the Form 10-K, pages 39-40 and 70 of the First Quarter Form 10-Q, and pages 39-40 of the Second Quarter Form 10-Q, for a discussion of proceedings between GSU and Cajun. LPSC Fuel Cost Review GSU See pages 23 and 165 of the Form 10-K, page 49 of the First Quarter Form 10-Q, and pages 50 and 71 of the Second Quarter Form 10-Q, for a discussion of an LPSC ordered refund to GSU customers. In August 1994, GSU appealed the contested portion of the LPSC ordered refund to the district court. Cajun/Jefferson Davis GSU See page 40 of the Form 10-K for a discussion of a suit brought against GSU by Cajun and Jefferson Davis for failing to provide transmission services. On March 21, 1994, FERC issued an order affirming the ALJ and dismissing Cajun's complaint, finding that GSU properly exercised its contractual right to refuse to provide the service. On August 3, 1994, FERC denied rehearing. On August 12, 1994, Cajun filed a petition for review of FERC's orders in the United States Court of Appeals for the District of Columbia Circuit. The matter is pending. Least Cost Planning AP&L, GSU, LP&L, MP&L, and NOPSI See pages 8-9, 19, 23, 25-27, 76, 122, 197, 232, and 264 of the Form 10-K, page 67 of the First Quarter Form 10-Q, and page 72 of the Second Quarter Form 10-Q, for a discussion of Least Cost Planning. On July 1, 1994, AP&L filed a motion requesting that the APSC approve the withdrawal of AP&L's Least Cost Plan filed December 1, 1992, and July 1, 1993, and to rescind its directive that AP&L file another Least Cost Plan in March 1995. On October 5, 1994, the APSC issued an order that suspended the individual dockets and established a new one. Hearings are scheduled to begin in April 1995. On September 28, 1994, LP&L and NOPSI filed a report with the Council that discussed Entergy's Least Cost Plan activities in other jurisdictions and described the motivations for these activities. LP&L and NOPSI also filed a motion requesting that the Council defer the filing of a new Least Cost Plan, which the existing Least Cost Plan Ordinance required on December 1, 1994. On October 6, 1994, the Council approved an amendment to the City Code that rescinded the December 1, 1994 filing requirement and allowed the Council to set a future date for a new filing. The Council's actions also established that there would be a set of hearings to consider a wide range of Least Cost Plan issues, and that a new filing date would be established following these hearings. These rulings do not affect the ongoing DSM programs that LP&L and NOPSI are currently implementing in the City. System Agreement Entergy Corporation, AP&L, LP&L, MP&L, and NOPSI See pages 67-68 of the First Quarter Form 10-Q, and page 73 of the Second Quarter Form 10-Q for a discussion related to FERC's proceeding to consider whether the System Agreement permits certain out-of-service generating units to be included in reserve equalization calculations under Service Schedule MSS-1 of that agreement. Entergy submitted testimony on September 23, 1994, describing the impacts (not including interest) on Service Schedule MSS-1 calculations during the period 1987 through 1993. LP&L and MP&L would have been overbilled by $10.6 and $8.8 million , respectively, and AP&L and NOPSI would have been underbilled by $6.3 and $13.1 million, respectively. Merger-Related Proceedings Entergy Corporation and GSU a) See pages 19, 83, and 163 of the Form 10-K, page 69 of the First Quarter Form 10-Q, and page 74 of the Second Quarter Form 10-Q, for information on a GSU cost-of-service study filed with the PUCT and Texas Cities. In August 1994, the cities' consultants issued a report that indicated GSU's current rates were approximately $40 to $50 million in excess of current requirements. In September 1994, various cities adopted ordinances directing GSU to reduce its rates on a Texas retail basis by $45.9 million. GSU has appealed the cities' ordinances to the PUCT where the reasonableness of GSU's rates will be reviewed. The PUCT has scheduled a hearing on the merits for November 21, 1994. Final action by the PUCT is expected in March 1995. GSU can provide no assurance as to the ultimate outcome in this matter; however, any rate reduction could be retroactive to March 31, 1994. b) See page 38 of the Form 10-K, page 69 of the First Quarter Form 10-Q, and page 74 of the Second Quarter Form 10-Q, for information on parties contesting FERC's order approving the Merger. On August 9, 1994, Cajun filed a motion for remand and partial summary grant of its petition for review. Cajun argued that FERC's orders approving the Merger relied on the Entergy transmission service tariff and because of the D.C. Circuit's opinion finding the transmission tariff to be flawed (see "Open Access Transmission" below), the Court should summarily grant Cajun's petition for review, in part, and remand these matters to FERC for further proceedings. Entergy responded that judicial economy would best be served by holding the case in abeyance until FERC addresses the transmission tariff. On September 6, 1994, Occidental Chemical Corporation (OCC) and Arkansas Electric Energy Consumers (AEEC) filed a motion for remand and partial summary disposition, to FERC for a full evidentiary hearing on Merger competition issues. OCC and AEEC opposed any delay of a remand by holding the proceedings in abeyance because it would allegedly serve to prolong the present potential for anticompetitive harm. Entergy opposed the OCC and AEEC motion in a response filed on September 16, 1994, arguing that OCC and AEEC provided no basis for FERC to hold an evidentiary hearing on the competitive impacts of the Merger. FERC also opposed the OCC and AEEC motion, requesting again that the Court hold the proceedings in abeyance. The motions filed by Cajun, OCC and AEEC are pending. c) As discussed on page 38 of the Form 10-K, petitions for review of the SEC order approving various aspects of the Merger were filed with the D.C. Circuit in February 1994 by Houston Industries Incorporated, Houston Lighting and Power Company, and Cajun. These petitions have been consolidated. In September 1994, the SEC filed a motion with the D.C. Circuit seeking a remand of the Merger proceedings to the SEC to permit the agency to supplement or amend its findings and order regarding the Merger's anti-competitive effects in light of the July 12, 1994, opinion of the D.C. Circuit which overturned certain findings of FERC regarding the Entergy System's "open access" transmission tariff (see page 75 of the Second Quarter Form 10-Q). The matter is pending before the D.C. Circuit. d) See page 31 of the Form 10-K for information on Cajun's suit claiming that the NRC erred by issuing two license amendments for River Bend. On August 23, 1994, the NRC issued an order disallowing GSU's appeal in the ASLB proceeding and upholding the ASLB's January 27, 1994 order. A hearing on the proceeding before the ASLB on Cajun's contention has been set for May 9, 1995. FERC Audit - Proposed Settlement Entergy Corporation and System Energy See Note 2 and also see pages 16, 84-85, and 296-297 of the Form 10-K, pages 46-47 of the First Quarter Form 10-Q, and pages 47-48, and 75 of the Second Quarter Form 10-Q, for information on a proposed settlement of a FERC audit of System Energy. On October 7, 1994, System Energy filed with FERC for approval of the proposed settlement. Open Access Transmission Entergy Corporation, AP&L, GSU, LP&L, MP&L, and NOPSI See page 17 of the Form 10-K and page 75 of the Second Quarter Form 10-Q for a discussion of various petitions filed with the United States Court of Appeals for the District of Columbia Circuit related to FERC's 1992 orders regarding open access transmission and the sale of wholesale power at market- based rates. On August 23, 1994, Entergy submitted a letter to FERC in connection with the D.C. Circuit's remand. Entergy committed to revise its transmission service tariff to facilitate the expeditious resolution of the case and to provide "comparability of service" over the Entergy transmission network. Entergy further committed that the revised transmission service tariff would withdraw the specific provisions regarding recovery of stranded investment found problematic by the D.C. Circuit. To date, Entergy has not sought recovery of stranded investment costs in rates under the transmission tariffs and the remand to FERC is not expected to result in refunds of any amounts that have been collected pursuant to transmission tariffs. LPSC Investigation/Formula Rate Plan Entergy Corporation and LP&L See Note 2 and pages 75, 84, and 199 of the Form 10-K, pages 48 and 71 of the First Quarter Form 10-Q, and pages 49 and 76 of the Second Quarter Form 10-Q, for a discussion of an LPSC investigation and a subsequent LP&L formula rate plan filing with the LPSC. Incentive Rate Plan Entergy and MP&L See pages 25-26, 83-84, and 235-236 of the Form 10-K and page 76 of the Second Quarter Form 10-Q for a discussion of MP&L's incentive rate plan approved by the MPSC. On October 6, 1994, Mississippi Valley Gas filed a motion with the Mississippi Supreme Court to voluntarily dismiss its appeal. February 1994 Ice Storm Entergy Corporation, AP&L, and MP&L See Note 2 for a discussion of MP&L's rate recovery of the February 1994 ice storm damages. NRC Fine Entergy Corporation and LP&L On August 19, 1994, the NRC notified Entergy Operations that it will be fined $112,500 for violations at Waterford 3. Entergy Operations discovered and reported the problems which would have affected several engineered safety features related to the ventilation and filtration systems following a loss of their normal power supply. The problems were traced to a system design change installed in various systems between October 1992 and April 1993. Entergy Operations did not contest the fine. Spent Nuclear Fuel Entergy Corporation, AP&L, GSU, LP&L, and System Energy See pages 29, 97-98, 134, 175, 208-209, and 304 of the Form 10-K for information regarding spent nuclear fuel. Entergy Operations and System Fuels joined in lawsuits against the Department of Energy (DOE), seeking clarification of the DOE's responsibility to receive spent nuclear fuel beginning in 1998. The original suits, filed June 20, 1994, asked for a ruling that the Nuclear Waste Policy Act requires the DOE to begin taking title to the spent fuel and start removing it from nuclear power plants in 1998, a mandate for and court monitoring of DOE's nuclear waste management program to enable fuel acceptance beginning in 1998, and the potential for escrow of customer payments to the Nuclear Waste Fund. Municipalities Entergy Corporation, LP&L and MP&L On August 24, 1994, the Terrebonne Parish Council adopted an ordinance authorizing the Terrebonne Parish Consolidated Government (Government) to enter into negotiations with LP&L to settle a pending lawsuit filed by LP&L on March 27, 1992, against the Government and its Department of Utilities, pertaining to alleged unlawful actions in usurping certain service locations of LP&L. This ordinance also authorizes the Government to seek court action to expropriate LP&L's facilities in the city of Houma, but only in the event a settlement is not reached with respect to the pending lawsuit. The matter is pending. On October 11, 1994, twelve Mississippi cities filed a complaint in state court against MP&L and eight electric power associations seeking a judgment from the court declaring unconstitutional certain Mississippi statutes that establish the procedure that must be followed before a municipality can acquire the facilities and certificate rights of a utility serving in the municipality. Specifically, the suit requests that the court declare unconstitutional certain 1987 amendments to the Mississippi Public Utilities Act that require that the MPSC cancel a utility's certificate to serve in the municipality before a municipality may acquire a utility's facilities located in the municipality. The suit also requests that the court find that Mississippi municipalities can serve any consumer in the boundaries of the municipality (and within one mile thereof). Such a finding would be contrary to a number of Mississippi Supreme Court decisions that have held that a municipality cannot serve in another utility's service area even where the municipal boundaries extend into such service area. The matter is pending. Sales/Use Tax Issues Entergy Corporation, GSU, LP&L, and NOPSI The Louisiana Supreme Court (Court) recently issued an opinion (in a case in which none of the System companies is a party), holding, in part, that the Louisiana state legislature's suspension of state sales and use tax exemptions also has the effect of suspending exemptions from local sales and use taxes. The Court has granted an application for rehearing on this issue and, therefore, its decision is not yet final. However, if the Court's decision is not changed, previously exempt sales of electricity and gas, fuels and other items used to generate electricity in Louisiana by GSU, LP&L, and NOPSI, as well as other items exempt from sales and use taxes, could be subject to local sales and use taxes. If the Court's decision were to have retroactive application, GSU, LP&L, and NOPSI could be liable for back sales and use taxes. The final outcome of this matter cannot yet be determined, but a unfavorable result could have a material adverse effect upon Entergy, GSU, LP&L, and NOPSI. The matter is pending. See page 43 of the Form 10-K and page 77 of the Second Quarter Form 10-Q for a discussion of disputes and litigation between LP&L and tax authorities in St. Charles Parish, Louisiana (Parish), with respect to sales, use and lease taxes allegedly applicable to nuclear fuel. On October 13, 1994, Parish tax authorities sued LP&L and Entergy in the Civil District Court of Orleans Parish, Louisiana, claiming that $1.4 million of sales and use and lease taxes paid under protest by LP&L with respect to newly acquired nuclear fuel were not, in fact, paid under protest and should be disposed of by Parish, and that unspecified additional taxes, interest, and penalties are due. LP&L presently has a suit pending in Parish seeking to recover the $1.4 million in taxes paid under protest, and will contest the suit in Orleans Parish, which LP&L and Entergy believes is without merit. Item 5. Other Information River Bend Unplanned Outage Entergy Corporation and GSU On September 8, 1994, River Bend automatically shut down due to false high water signals. As River Bend was ready to begin operations on October 10, 1994, seepage was detected from some high pressure water lines. The lines were repaired and the unit was placed back in service on October 21, 1994. On October 28, 1994, the unit was shut down because of water leakage from a recirculating pump seal. The seal was repaired and the unit was placed back in service on November 3, 1994. Nonregulated Investments Entergy Corporation As discussed on page 3 of the Form 10-K and Page 75 of the First Quarter Form 10-Q, Entergy continues to consider opportunities to expand its business, including opportunities in overseas power development. In October 1994, Entergy Corporation invested $50 million in the Hub River Company which is constructing a generating station near Karachi, Pakistan. Common Stock Price Range and Dividends Entergy Corporation The shares of Entergy Corporation's common stock are listed on the New York, Chicago, and Pacific Stock Exchanges. The high and low sales prices of Entergy Corporation's common stock for the third quarter of 1994, as reported by The Wall Street Journal as composite transactions, were $26 1/4 and $22 5/8, respectively, per share. For the twelve months ended September 30, 1994, Entergy Corporation paid common stock dividends in an aggregate amount of $1.80 per share. As of September 30, 1994, the consolidated book value of a share of Entergy Corporation's common stock was $28.46 and the last reported sale price of Entergy Corporation's common stock on September 30, 1994, was $23 1/4 per share. Earnings Ratios AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy The System operating companies and System Energy have calculated ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends pursuant to Item 503 of Regulation S-K of the SEC as follows: Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 Ratios of Earnings to Fixed Charges (a) AP&L 2.31 2.16 2.25 2.28 3.11(h) 2.37 GSU 1.16 .80(i) 1.56 1.72 1.54 .84(i) LP&L 1.79 2.32 2.40 2.79 3.06 2.88 MP&L 1.04(e) 2.42 2.36 2.37 3.79(h) 2.26 NOPSI 1.89 2.73 5.66(g) 2.66 4.68(h) 3.18 System Energy -(f) 2.10 1.74 2.04 1.87 1.93 Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 Ratios of Earnings to Combined Fixed Charges and Preferred Dividends (a)(b)(c) AP&L 1.88 1.81 1.87 1.86 2.54(h) 1.96 GSU (d) .66(i) .59(i) 1.19 1.37 1.21 .75(i) LP&L 1.39 1.87 1.95 2.18 2.39 2.32 MP&L 1.00(e) 1.93 1.94 1.97 3.08(h) 1.86 NOPSI 1.62 2.36 4.97(g) 2.36 4.12(h) 2.76 (a) "Earnings," as defined by SEC Regulation S-K, represent the aggregate of (1) net income, (2) taxes based on income, (3) investment tax credit adjustments - net, and (4) fixed charges. "Fixed Charges" include interest (whether expensed or capitalized), related amortization, and interest applicable to rentals charged to operating expenses. (b) "Preferred Dividends," as defined by SEC Regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the effective income tax rate. (c) System Energy's Amended and Restated Articles of Incorporation do not currently provide for the issuance of preferred stock. (d) "Preferred Dividends" in the case of GSU also include dividends on preference stock. (e) Earnings for the twelve months ended December 31, 1989 include the impact of the write-off of $60 million of deferred Grand Gulf 1-related costs pursuant to an agreement between MP&L and the MPSC. (f) Earnings for the year ended December 31, 1989 were inadequate to cover fixed charges due to System Energy's cancellation and write-off of its investment in Grand Gulf 2 in September 1989. The amount of the coverage deficiency for fixed charges was $745.2 million. (g) Earnings for the year ended December 31, 1991 include the $90 million effect of the 1991 NOPSI Settlement. (h) Earnings for the year ended December 31, 1993 include $81 million, $52 million, and $18 million for AP&L, MP&L, and NOPSI, respectively, related to the change in accounting principle to provide for the accrual of estimated unbilled revenues. (i) Earnings for the year ended December 31, 1990 for GSU were not adequate to cover fixed charges by $60.6 million. Earnings for the years ended December 31, 1990 and 1989, were not adequate to cover fixed charges and preferred dividends by $165.1 million and $190.8 million, respectively. Earnings in 1990 include a $205 million charge for the settlement of a purchase power dispute. Earnings for the twelve months ended September 30, 1994 were not adequate to cover fixed charges by $34.7 million. Earnings for the twelve months ended September 30, 1994 were not adequate to cover fixed charges and preferred dividends by $64.5 million. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits* 3(a) - Articles of Amendment dated August 1, 1994 and Restated Articles of Incorporation, as of December 21, 1983 of MP&L. ** 4(a) - Fiftieth Supplemental Indenture, dated as of September 1, 1994, supplementing and amending LP&L's Mortgage and Deed of Trust, dated as of April 1, 1994, as herefore supplemented and amended (filed as Exhibit A-4(c) to Rule 24 Certificate dated September 28, 1994 in File No. 70-7653). 23(a) - Consent of Friday, Eldredge & Clark. 23(b) - Consent of Monroe & Lemann (A Professional Corporation). 23(c) - Consent of Wise Carter Child & Caraway, Professional Association. 23(d) - Consent of Clark, Thomas & Winters. 23(e) - Consent of Sandlin Associates. 27(a) - Financial Data Schedule for Entergy Corporation and Subsidiaries as of September 30, 1994. 27(b) - Financial Data Schedule for AP&L as of September 30, 1994. 27(c) - Financial Data Schedule for GSU as of September 30, 1994. 27(d) - Financial Data Schedule for LP&L as of September 30, 1994. 27(e) - Financial Data Schedule for MP&L as of September 30, 1994. 27(f) - Financial Data Schedule for NOPSI as of September 30, 1994. 27(g) - Financial Data Schedule for System Energy as of September 30, 1994. 99(a) - AP&L's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(b) - GSU's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(c) - LP&L's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(d) - MP&L's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(e) - NOPSI's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined. 99(f) - System Energy's Computation of Ratios of Earnings to Fixed Charges, as defined. **99(g) - Annual Reports on Form 10-K of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the fiscal year ended December 31, 1993, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1- 2703, 1-8474, 0-320, 0-5807, and 1-9067, respectively). **99(h) - Quarterly Report on Form 10-Q of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the quarter ended March 31, 1994, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0- 320, 0-5807, and 1-9067, respectively). **99(i) - Quarterly Report on Form 10-Q of Entergy Corporation, AP&L, GSU, LP&L, MP&L, NOPSI, and System Energy for the quarter ended June 30, 1994, portions of which are incorporated herein by reference as described elsewhere in this document (filed with the SEC in File Nos. 1-11299, 1-10764, 1-2703, 1-8474, 0- 320, 0-5807, and 1-9067, respectively). 99(j) - Earnings statement of AP&L for the twelve month period ended September 30, 1994, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. 99(k) - Earnings statement of MP&L for the twelve month period ended September 30, 1994, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. **99(l) - Opinion of Clark, Thomas & Winters, a professional corporation, dated September 30, 1992 regarding the effect of the October 1, 1991 judgment in GSU v. PUCT in the District Court of Travis County, Texas (99-1 in Registration No. 33-48889). **99(m) - Opinion of Clark, Thomas & Winters, a professional corporation, dated August 8, 1994 regarding recovery of costs deferred pursuant to PUCT order in Docket 6525 (filed as Exhibit 99(j) to Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 in File No. 1-2703). 99(n) - Opinion of Clark, Thomas & Winters, a professional corporation, confirming its opinions dated September 30, 1992 and August 8, 1994. ___________________________ * Reference is made to a duplicate list of exhibits being filed as a part of Form 10-Q for the quarter ended September 30, 1994, which list, prepared in accordance with Item 102 of Regulation S-T of the Securities and Exchange Commission, immediately precedes the exhibits being filed with Form 10-Q for the quarter ended September 30, 1994. ** Incorporated herein by reference as indicated. (b) Reports on Form 8-K Entergy A current report on Form 8-K, dated October 21, 1994, was filed with the SEC on October 28, 1994, reporting information under Item 5. "Other Materially Important Events." GSU A current report on Form 8-K, dated October 21, 1994, was filed with the SEC on October 28, 1994, reporting information under Item 5. "Other Materially Important Events." EXPERTS All statements in Part II of this Quarterly Report on Form 10-Q as to matters of law and legal conclusions, based on the belief or opinion of AP&L, LP&L, MP&L, NOPSI, and System Energy or otherwise, pertaining to the titles to properties, franchises and other operating rights of certain of the registrants filing this Quarterly Report on Form 10-Q, and their subsidiaries, the regulations to which they are subject and any legal proceedings to which they are parties are made on the authority of Friday, Eldredge & Clark, 2000 First Commercial Building, 400 West Capitol, Little Rock, Arkansas, as to AP&L; Monroe & Lemann (A Professional Corporation), 201 St. Charles Avenue, Suite 3300, New Orleans, Louisiana, as to LP&L and NOPSI; and Wise Carter Child & Caraway, Professional Association, Heritage Building, Jackson, Mississippi, as to MP&L and System Energy. The statements attributed to Clark, Thomas & Winters, a professional corporation, as to legal conclusions with respect to GSU's rate regulation in Texas in Note 2 to Entergy Corporation and Subsidiaries Consolidated Financial Statements, "Rate and Regulatory Matters," have been reviewed by such firm and are included herein upon the authority of such firm as experts. The statements attributed to Sandlin Associates regarding the analysis of River Bend construction costs of GSU in Note 2 to Entergy Corporation and Subsidiaries Consolidated Financial Statements, "Rate and Regulatory Matters," have been reviewed by such firm and are included herein upon the authority of such firm as experts. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries. ENTERGY CORPORATION ARKANSAS POWER & LIGHT COMPANY GULF STATES UTILITIES COMPANY LOUISIANA POWER & LIGHT COMPANY MISSISSIPPI POWER & LIGHT COMPANY NEW ORLEANS PUBLIC SERVICE INC. SYSTEM ENERGY RESOURCES, INC. /s/ Lee W. Randall Lee W. Randall Vice President and Chief Accounting Officer (For each Registrant and for each as Principal Accounting Officer) Date: November 10, 1994
                                                     Exhibit 3(a)
                                
               RESTATED ARTICLES OF INCORPORATION
                                
                               OF

                MISSISSIPPI POWER & LIGHT COMPANY


    Pursuant to the provisions of Section 64 of the Misissippi
Business Corporation Law (Section 79-3-127, Mississippi Code of
1972, as amended), the undersigned Corporation adopts the
following Restated Articles of Incorporation:
    
     FIRST: The name of the Corporation is MISSISSIPPI POWER &
LIGHT COMPANY.

     SECOND: The period of its duration is ninety-nine (99)
years.

     THIRD: The purpose or purposes which the Corporation is
authorized to pursue are:

     To acquire, buy, hold, own, sell, lease, exchange, dispose
of, finance, deal in, construct, build, equip, improve, use,
operate, maintain and work upon:

        (a) Any and all kinds of plants and systems for the
     manufacture, production, storage, utilization, purchase,
     sale, supply, transmission, distribution or disposition of
     electricity, natural or artificial gas, water or steam, or
     power produccd tbereby, or of ice and refrigeration of any
     and every kind;
        
        (b) Any and all kinds of telephone, telegraph, radio,
     wireless and other systems, facilities and devices for the
     receipt and transmission of sounds and signals, any and all
     kinds of interurban, city and street railways and railroads
     and bus lines for the transportation of passengers and/or
     freight, transmission lines, systems, appliances, equipment
     and devices and tracks, stations, buildings and other
     structures and facilities;
        
        (c) Any and all kinds of works, power plants,
     manufactories, structures, substations, systems, tracks,
     machinery, generators, motors, lamps, poles, pipes, wires,
     cables, conduits, apparatus, devices, equipment, supplies,
     articles and merchandise of every kind pertaining to or in
     anywise connected with the construction, operation or
     maintenance of telephone, telegraph, radio, wireless and
     other systems, facilities and devices for the receipt and
     transmission of sounds and signals, or of interurban, city
     and street railways and railroads and bus lines, or in
     anywise connected with or pertaining to the manufacture,
     production, purchase, use, sale, supply, transmission,
     distribution, regulation, control or application of
     electricity, natural or artificial gas, water, steam, ice,
     refrigeration and power or any other purposes;
        
     To acquire, buy, hold, own, sell, lease, exchange, dispose
of, transmit, distribute, deal in, use, manufacture, produce,
furnish and supply street and interurban railway and bus service,
electricity, natural or artificial gas, light, heat, ice,
refrigeration, water and steam in any form and for any purposes
whatsoever, and any power or force or energy in any form and for
any purposes whatsoever;
    
    To buy, sell, manufacture, produce and generally deal in
milk, cream and any articles or substances used or usable in or
in connection with the manufacture and production of ice cream,
ices, beverages and soda fountain supplies; to buy, sell,
manufacture, produce and generally deal in ice cream and ices;
    
     To acquire, organize, assemble, develop, build up and
operate constructing and operating and other organizations and
systems, and to hire, sell, lease, exchange, turn over, deliver
and dispose of such organizations and systems in whole or in part
and as going organizations and systems and otherwise, and to
enter into and perform contracts, agreements and undertakings of
any kind in connection with any or all the foregoing powers;

     To do a general contracting business;

     To purchase, acquire, develop, mine, explore, drill, hold,
own and dispose of lands, interests in and rights with respect to
lands and waters and fixed and movable property;

     To borrow money and contract debts when necessary for the
transaction of the business of the Corporation or for the
exercise of its corporate rights, privileges or franchises or for
any other lawful purpose of its incorporation; to issue bonds,
promissory notes, bills of exchange, debentures and other
obligations and evidences of indebtedness payable at a specified
time or times or payable upon the happening of a specified event
or events, whether secured by mortgage, pledge or otherwise or
unsecured, for money borrowed or in payment for property
purchased or acquired or any other lawful objects;

     To guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of
indebtedness created by, any other corporation or corporations of
the State of Mississippi or any other state or government and,
while the owner of such stock, to exercise all the rights, powers
and privileges of individual ownership with respect thereto
including the right to vote thereon, and to consent and otherwise
act with respect thereto;

     To aid in any manner any corporation or association,
domestic or foreign, or any firm or individual, any shares of
stock in which or any bonds, debentures, notes, securities,
evidences of indebtedness, contracts or obligations of which are
held by or for the Corporation or in which or in the welfare of
which the Corporation shall have any interest, and to do any acts
designed to protect, preserve, improve or enhance the value of
any property at any time held or controlled by the Corporation,
or in which it may be at any time interested; and to organize or
promote or facilitate the organization of subsidiary companies;

     To purchase, hold, sell and transfer shares of its own
capital stock, provided that the Corporation shall not purchase
its own shares of capital stock except frorn surplus of its
assets over its liabilities including capital; and provided,
further, that the shares of its own capital stock owned by the
Corporation shall not be voted upon directly or indirectly nor
counted as outstanding for the purposes of any stockholders'
quorum or vote;

     In any manner to acquire, enjoy, utilize and to dispose of
patents, copyrights and trade-marks and any licenses or other
rights or interests therein and thereunder:
    
    To purchase, acquire, hold, own or dispose of franchises,
concessions, consents, privileges and licenses necessary for and
in its opinion useful or desirable for or in connection with the
foregoing powers;
    
     To do all and everything necessary and proper for the
accomplishment of the objects enumerated in these Restated
Articles of Incorporation or any amendment thereof or necessary
or incidental to the protection and benefits of the Corporation,
and in general to carry on any lawful business necessary or not
incidental to the attainment of the objects of the Corporation
whether or not such business is similar in nature to the objects
set forth in these Restated Articles of Incorporation or any
amendment thereof.

     To do any or all things herein set forth, to the same extent
and as fully as natural persons might or could do, and in any
part of the world, and as principal, agent, contractor or
otherwise, and either alone or in conjunction with any other
persons, firms, associations or corporations;

     To conduct its business in all its branches in the State of
Mississippi, other states, the District of Columbia, the
territories and colonies of the United States, and any foreign
countries, and to have one or more offices out of the State of
Mississippi and to hold, purchase, mortgage and convey real and
personal property both within and without the State of
Mississippi; provided, however, that the Corporation shall not
exercise any of the powers set forth herein for the purpose of
engaging in business as a street railway, telegraph or telephone
company unless prior tbereto this Article Third shall have been
amended to set forth a description of the line and the points it
will traverse.

     FOURTH: The aggregate number of shares which the Corporation
shall have authority to issue is 17,004,478 shares, divided into
2,004,476 shares of Preferred Stock of the par value of $100 per
share and 15,000,000 shares of Common Stock without par value.

     The preferences, limitations and relative rights in respect
of the shares of each class and the variations in the relative
rights and preferences as between series of any preferred or
special class in series are as follows:

     The Preferred Stock shall be issuable in one or more series
from tirne to time and the shares of each series shall have the
same rank and be identical with each other and shall have the
same relative rights except with respect to the following:
        
        (a) The number of shares to constitute each such series
     and the distinctive designation thereof;
        
        (b) The annual rate or rates of dividends payable on
     shares of such series, the dates on which dividends shall be
     paid in each year and the date from which such dividends
     shall commence to accumulate;
        
        (c) The amount or amounts payable upon redemption
     thereof; and
        
        (d) The sinking fund provisions, if any, for the
     redemption or purchase of shares;

which different characterics of clauses (a), (b), (c) and (d)
above may be stated and expressed with respect to each series in
the resolution or resolutions providing for the issue of such
series adopted by the Board of Directors or in these Restated
Articles of Incorporation of any amendment thereof.

     A series of 60,000 shares of Preferred Stock shall:

        (a) be designated "4.36% Preferred Stock Cumulative,
     $100 Par Value";
        
        (b) have a dividend rate of $4.36 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be
     February 1, 1963, and such dividends to be cumulative from
     the last date to which dividends upon the 4.36% Preferred
     Stock Cumulative, $100 Par Value, of Mississippi Power &
     Light Company, a Florida corporation, are paid;
        
        (c) be subject to redemption in the manner provided
     herein with respect to the Preferred Stock at the price of
     $105.36 per share if redeemed on or before February 1, 1964,
     and of $103.88 per share if redeemed after February 1, 1964,
     in each case plus an amount equivalent to the accumulated
     and unpaid dividends thereon, if any, to the date fixed for
     redemption.

A series of 44,476 shares of the Preferred Stock shall:

        (a) be designated "4.56% Preferred Stock, Cumulative,
     $100 Par Value";
        
        (b) have a dividend rate of $4.56 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be
     February 1, 1963, and such dividends to be cumulative from
     the last date to which dividends upon the 4.56% Preferred
     Stock, Cumulative, $100 Par Value, of Mississippi Power &
     Light Company, a Florida corporation, are paid; and
        
        (c) be subject to redemption in the manner provided
     herein with respect to the Preferred Stock at the price of
     $108.50 per share if redeemed on or before November 1, l964,
     and of $107.00 per share if redeemed after November 1, 1964,
     in each case plus an amount equivalent to the accumulated
     and unpaid dividends thereon, if any, to the date fixed for
     redemption.

A series of 100,000 shares of the Preferred Stock shall:

        (a) be designated "4.92% Preferred Stock, Cumulative,
     $100 Par Value";
        
        (b) have a dividend rate of $4.92 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be
     February 1, 1966, and such dividends to be cumulative from
     the date of issue of said series; and
        
        (c) be subject to redemption at the price of $106.30 per
     share if redeemed on or before January 1, 1971, of $104.38
     per share if redeemed after January 1, 1971 and on or before
     January 1, 1976, and of $102.88 per share if redeemed after
     January 1, 1976, in each case plus an amount equivalent to
     the accumulated and unpaid dividends thereon, if any, to the
     date fixed for redemption.

A series of 75,000 shares of the Preferred Stock shall:

        (a) be designated "9.16% Preferred Stock, Cumulative,
     $100 Par Value";
        
        (b) have a dividend rate of $9.16 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be
     November 1, 1970, and such dividends to be cumulative from
     the date of issue of said series; and
        
        (c) be subject to redemption at the price of $110.93 per
     share if redeemed on or before August 1, 1975, of $108.64
     per share if redeemed after August 1, 1975 and on or before
     August 1, 1980, of $106.35 per share if redeemed after
     August 1, 1980 and on or before August 1, 1985, and of
     $104.06 per share if redeemed after August 1, 1985, in each
     case plus an amount equivalent to the accumulated and unpaid
     dividends thereon, if any, to the date fixed for redemption;
     provided, however, that no share of the 9.16% Preferred
     Stock, Cumulative, $100 Par Value, shall be redeemed prior
     to August 1, 1975 if such redemption is for the purpose or
     in anticipation of refunding such share through the use,
     directly or indirectly, of funds borrowed by the
     Corporation, or through the use, directly or indirectly, of
     funds derived through the issuance by the Corporation of
     stock ranking prior to or on a parity with the 9.16%
     Preferred Stock, Cumulative, $100 Par Value, as to dividends
     or assets, if such borrowed funds have an effective interest
     cost to the Corporation (computed in accordance with
     generally aocepted financial practice) or such stock has an
     effective dividend cost to the Corporation (so computed) of
     less than the effective dividend cost to the Corporation of
     the 9.16% Preferred Stock, Cumulative, $100 Per Value.

A series of 100,000 shares of the Preferred Stock shall:

        (a) be designated "7.44% Preferred Stock, Cumulative,
     $100 Par Value";
        
        (b) have a dividend rate of $7.44 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be May
     1, 1973, and such dividends to be cumulative from February
     14, 1973; and
        
        (c) be subject to redemption at the price of $108.39 per
     share if redeemed on or before February 1, 1978, of $106.53
     per share if redeemed after February 1, 1978 and on or
     before February 1, 1983, of $104.67 per share if redeemed
     after February 1, 1983 and on or before February 1, 1988,
     and of $102.81 per share if redeemed after February 1, 1988,
     in each case plus an amount equivalent to the accumulated
     and unpaid dividends thereon, if any, to the date fixed for
     redemption; provided, however, that no share of the 7.44%
     Preferred Stock, Cumulative, $100 Par Value, shall be
     redeemed prior to February 1, 1978 if such redemption is for
     the purpose or in anticipation of refunding such share
     through the use, directly or indirectly, of funds borrowed
     by the Corporation, or through the use, directly or
     indirectly, of funds derived through the issuance by the
     Corporation of stock ranking prior to or on a parity with
     the 7.44% Preferred Stock, Cumulative, $100 Par Value, as to
     dividends or assets, if such borrowed funds have an
     effective interest cost to the Corporation (computed in
     accordance with generally accepted financial practice) or
     such stock has an effective dividend cost to the Corporation
     (so computed) of less than the effective dividend cost to
     the Corporation of the 7.44% Preferred Stock, Cumulative,
     S100 Par Value.

A series of 200,000 shares of the Preferred Stock shall:

        (a) be designated "17% Preferred Stock, Cumulative, $100
     Par Value"
        
        (b) have a dividend rate of $17.00 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be
     November 1, 1981, and such dividends to be cumulative from
     the date of issuance;
        
        (c) be subject to redemption at the price of $117.00 per
     share if redeemed on or before September 1, 1986, of $112.75
     per share if redeemed after September 1, 1986 and on or
     before September 1, 1991, of $108.50 per share if redeemed
     after September 1, 1991 and on or before September 1, 1996,
     and of $104.25 per share if redeemed after September 1,
     1996, in each case plus an amount equivalent to the
     accumulated and unpaid dividends thereon, if any, to the
     date fixed for redemption; provided, however, that no share
     of the 17% Preferred Stock Cumulative, $100 Par Value, shall
     be redeemed prior to September 1, 1986 if such redemption is
     for the purpose or in anticipation of refunding such share
     through the use, directly or indirectly, of funds borrowed
     by the Corporation or through the use, directly or
     indirectly, of funds derived through the issuance by the
     Corporation of stock ranking prior to or on a parity with
     the 17% Preferred Stock, Cumulative, $100 Par Value, as to
     dividends or assets if such borrowed funds have an effective
     interest cost to the Corporation (computed in accordance
     with generally accepted financial practice) or such stock;
     has an effective dividend cost to the Corporation (so
     computed) of less than the effective dividend cost to the
     Corporation of the 17% Preferred Stock, Cumulative, $100 Par
     Value; and
        
        (d) be subject to redemption as and for a sinking fund
     as follows: On September 1, 1986 and on each September 1
     thereafter (each such date being hereinafter referred to as
     a "17% Sinking Fund Redemption Date"), for so long as any
     shares of the 17% Preferred Stock, Cumulative, $100 Par
     Value, shall remain outstanding, the Corporation shall
     redeem, out of funds legally available therefor, 10,000
     shares of the 17% Preferred Stock, Cumulative, $100 Par
     VaIue (or the number of shares then outstanding if less than
     10,000) at the sinking fund redemption price of $100 per
     share plus, as to each share so redeemed, an amount
     equivalent to the accumulated and unpaid dividends thereon,
     if any, to the date of redemption (the obligation of the
     Corporation so to redeem the shares of the 17% Preferred
     Stock, Cumulative, $100 Par Value, being hereinafter
     referred to as the "17% Sinking Fund Obligation"); the 17%
     Sinking Fund Obligation shall be cumulative; if on any 17%
     Sinking Fund Redemption Date, the Corporation shall not have
     funds legally available therefor sufficient to redeem the
     full number of shares required to be redeemed on that date,
     the 17% Sinking Fund Obligation with respect to the shares
     not redeemed shall carry forward to each successive 17%
     Sinking Fund Redemption Date until such shares shall have
     been redeemed; whenever on any 17% Sinking Fund Redemption
     Date, the funds of the Corporation legally available for the
     satisfaction of the 17% Sinking Fund Obligation and all
     other sinking fund and similar obligations then existing
     with respect to any other class or series of its stock
     ranking on a parity as to dividends or assets with the 17%
     Preferred Stock, Cumulative, $100 Par Value (such Obligation
     and obligations collectively being hereinafter referred to
     as the "Total Sinking Fund Obligation") are insufficient to
     permit the Corporation to satisfy fully its Total Sinking
     Fund Obligation on that date, the Corporation shall apply to
     the satisfaction of its 17% Sinking Fund Obligation on that
     date that proportion of such legally available funds which
     is equal to the ratio of such 17% Sinking Fund Obligation to
     such Total Sinking Fund Obligation; in addition to the 17%
     Sinking Fund Obligation, the Corporation shall have the
     option, which shall be noncumulative, to redeem, upon
     authorization of the Board of Directors, on each 17% Sinking
     Fund Redemption Date, at the aforesaid sinking fund
     redemption price, up to 10,000 additional shares of the 17%
     Preferred Stock, Cumulative, $100 Par Value; the Corporation
     shall be entitled, at its election, to credit against its
     17% Sinking Fund Obligation on any 17% Sinking Fund
     Redemption Date any shares of the 17% Preferred Stock,
     Cumulative, Stock Par Value (including shares of the 17%
     Preferred Stock, Cumulative, $100 Par Value optionally
     redeemed at the aforesaid sinking fund price) theretofore
     redeemed (other than shares of the 17% Preferred Stock,
     Cumulative, $100 Par Value redeemed pursuant to the 17%
     Sinking Fund Obligation) purchased or otherwise acquired and
     not previously credited against the 17% Sinking Fund
     Obligation.

A series of 100,000 shares of the Preferred Stock shall:
        
        (a) be designated "14-3/4% Preferred Stock, Cumulative,
     $100 Par Value";
        
        (b) have a divedend rate of $14.75 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November 1 of each year, the first dividend date to be May 1
     1982, and such dividends to be cumulative from the date of
     issuance;
        
        (c) be subject to redemption at the price of $114.75 per
     share if redeemed after the issuanoe and sale and on or
     before March 1, 1983, $113.11 per share if redeemed after
     March 1, 1983 and on or before March 1, 1984, $111.47 per
     share if redeemed after March 1, 1984 and on or before March
     1, 1985, $109.83 per share if redeemed after March 1, 1985
     and on or before March 1, 1986, $108.19 per share if
     redeemed after March 1, 1986 and on or before March 1, 1987,
     $106.56  per share if redeemed after March 1, 1987 and on or
     before March 1, 1988, $104.92 per share if redeemed after
     March 1, 1988 and on or before March 1, 1989, $103.28 per
     share if redeemed after March 1, 1989 and on or before March
     1, l990, $101.64 per share if redeemed after March 1, 1990
     and on or before March 1, 1991, and $100.00 per share if
     redeemed after March 1, 1991, in each case plus an amount
     equivalent to the accumulated and unpaid dividends thereon,
     if any, to the date fixed for redemption; provided, however,
     that no share of the 14-3/4% Preferred Stock, Cumulative,
     $100 Par Value, shall be redeemed prior to March 1, 1987 if
     such redemption is for the purpose or in anticipation of
     refunding such share through the use, directly or
     indirectly, of funds borrowed by the Corporation, or through
     the use, directly or indirectly, of funds derived through
     the issuance by the Corporation of stock ranking prior to or
     on a parity with the 14-3/4% Preferred Stock, Cumulative,
     $100 Par Value, as to dividends or assets, if such borrowed
     funds have an effective interest cost to the Corporation
     (computed in accordance with generally accepted financial
     practice) or such stock has an effective dividend cost to
     the Corporation (so oomputed) of less than the effective
     dividend cost to the Corporation of the 14-3/4% Preferred
     Stock, Cumulative, $100 Par Value; and
        
        (d) be subject to redemption as and for a sinking fund
     as follows.  On March 1, 1990, 1991 and 1992 (each such date
     being hereinafteir referred to as a "14-3/4% Sinking Fund
     Redemption Date"), the Corporation shall redeem, out of
     funds legally available therefor, 33,333, 33,333 and 33,334
     shares, respectively, of the 14-3/4% Preferred Stock,
     Cumulative, $100 Par Value, at the sinking fund redemption
     price of $100 per share plus, as to each share so redeemed,
     an amount equivalent to the accumulated and unpaid dividends
     thereon, if any, to the date of redemption (the obligation
     of the Corporation so to redeem the shares of the 14-3/4%
     Preferred Stock, Cumulative, $100 Par Value, being
     hereinafter referred to as the "14-3/4% Sinking Fund
     Obligation"); the 14-3/4% Sinking Fund Obligation shall be
     cumulative; if on any 14-3/4% Sinking Fund Redemption Date,
     the Corporation shall not have funds legally available
     therefor sufficient to redeem the full number of shares
     required to be redeemed on that date, the 14-3/4% Sinking
     Fund Obligation with respect to the shares not redeemed
     shall carry forward to each successive 14-3/4% Sinking Fund
     Redemption Date (or, in the event the 14-3/4% Sinking Fund
     Obligation is not satisfied on March 1, 1992, to such date
     as soon thereafter as funds are legally available to satisfy
     the 14-3/4% Sinking Fund Obligation) until such shares shall
     have been redeemed; whenever on any 14-3/4% Sinking Fund
     Redemption Date, the funds of the Corporation legally
     available for the satisfaction of the 14-3/4% Sinking Fund
     Obligation and all other sinking fund and similar
     obligations then existing with respect to any other class or
     series of its stock ranking on a parity as to dividends or
     assets with the 14-3/4% Preferred Stock, Cumulative, $100
     Par Value (such Obligation and obligations collectively
     being hereinafter referred to as the "Total Sinking Fund
     Obligation") are insufficient to permit the Corporation to
     satisfy fully its Total Sinking Fund Obligation on that
     date, the Corporation shall apply to the satisfaction of its
     14-3/4% Sinking Fund Obligation on that date that proportion
     of such legally available funds which is equal to the ratio
     of such 14-3/4% Sinking Fund Obligation to such Total
     Sinking Fund Obligation.
        
A series of 100,000 shares of the Preferred Stock shall:
         
         (a) be designated "12.00% Preferred Stock, Cumulative,
     $100 Par Value";
     
        (b) have a dividend rate of $12.00 per share per annum
     payable quarterly on February 1, May 1, August 1 and
     November l of each year, the first dividend date to be May
     1, 1983, and such dividends to be cumulative from the date
     of issuance;
        
        (c) be subject to redemption at the price of $112.00 per
     share if redeemed on or before March 1, 1988, of $109.00 per
     share if redeemed after March 1, 1988 and on or before March
     1, 1993, of $106.00 per share if redeemed after March 1,
     1993 and on or before March 1, 1998, and of $103.00 per
     share if redeemed after March 1, 1998, in each case plus an
     amount equivalent to the accumulated and unpaid dividends
     thereon, if any, to the date fixed for redemption; provided,
     however, that no share of the 12.00% Preferred Stock,
     Cumulative, $100 Par Value, shall be redeemed prior to March
     1, 1988 if such redemption is for the purpose or in anticipa
     tion of refunding such share through the use, directly or
     indirectly, of funds borrowed by the Corporation, or through
     the use, directly or indirectly, of funds derived through
     the issuance by the Corporation of stock ranking prior to or
     on a parity with the 12.00% Preferred Stock, Cumulative,
     $100 Par Value, as to dividends or assets, if such borrowed
     funds have an effective interest cost to the Corporation
     (computed in accordance with generally accepted financial
     practice) or such stock has an effective dividend cost to
     the Corporation (so computed) of less than 12.7497% to per
     annum; and
     
          (d) be subject to redemption as and for a sinking fund
     as follows: on March 1, 1888 and on each March 1 thereafter
     (each such date being hereinafter referred to as a "12.00%
     Sinking Fund Redemption Date"), for so long as any shares of
     the 12.00% Preferred Stock, Cumulative, $100 Par Value,
     shall remain outstanding, the Corporation shall redeem, out
     of funds legally available therefor, 5,000 shares of the
     12.00% Preferred Stock, Cumulative, $100 Par Value (or the
     number of shares then outstanding if less than 5,000) at the
     sinking fund redemption price of $100 per share plus, as to
     each share so redeemed, an amount equivalent to the
     accumulated and unpaid dividends thereon, if any, to the
     date of redemption (the obligation of the Corporation so to
     redeem the shares of the 12.00% Preferred Stock, Cumulative,
     $100 Par Value, being hereinafter referred to as the "12.00%
     Sinking Fund Obligation"); the 12.00% Sinking Fund
     Obligation shall be cumulative; if on any 12.00% Sinking
     Fund Redemption Date, the Corporation shall not have funds
     legally available therefor sufficient to redeem the full
     number of shares required to be redeemed on that date, the
     12.00% Sinking Fund Obligation with respect to the shares
     not redeemed shall carry forward to each successive 12.00%
     Sinking Fund Redemption Date until such shares shall have
     been redeemed; whenever on any 12.00% Sinking Fund
     Redemption Date, the funds of the Corporation legally
     available for the satisfaction of the 12.00% Sinking Fund
     Obligation and all other sinking fund and similar
     obligations then existing with respect to any other class or
     series of its stock ranking on a parity as to dividends or
     assets with the 12.00% Preferred Stock Cumulative, $100 Par
     Value (such Obligation and obligations collectively being
     hereinafter referred to as the "Total Sinking Fund
     Obligation") are insufficient to permit the Corporation to
     satisfy fully its Total Sinking Fund Obligation on that
     date, the Corporation shall apply to the satisfaction of its
     12.00% Sinking Fund Obligation on that date that proportion
     of such legally available funds which is equal to the ratio
     of such 12.00% Sinking Fund Obligation to such Total Sinking
     Fund Obligation; in addition to the 12.00% Sinking Fund
     Obligation, the Corporation shall have the option, which
     shall be noncumulative, to redeem, upon authorization of the
     Board of Directors, on each 12.00% Sinking Fund Redemption
     Date, at the aforesaid sinking fund redemption price, up to
     5,000 additional shares of the 12.00% Preferred Stock
     Cumulative, $100 Par Value; the Corporation shall be
     entitled, at its election, to credit against its 12.00%
     Sinking Fund Obligation on any 12.00% Sinking Fund
     Redemption Date any shares of the 12.00% Preferred Stock,
     Cumulative, $100 Par Value (including shares of the 12.00%
     Preferred Stock Cumulative, $100 Par Value optionally
     redeemed at the aforesaid sinking fund price) theretofore
     redeemed (other than shares of the 12.00% Preferred Stock,
     Cumulative, $100 Par Value redeemed pursuant to the 12.00%
     Sinking Fund Obligation) purchased or otherwise acquired and
     not previously credited against the 12.00% Sinking Fund
     Obligation.
    
    Subject to the foregoing, the distinguishing characteristics
of the Preferred Stock shall be:
    
     (A) Each series of the Preferred Stock, pari passu with all
shares of preferred stock of any class or series then
outstanding, shall be entitled but only when and as declared by
the Board of Directors, out of funds legally available for the
payment of dividends in preference to the Common Stock, to
dividends at tbe rate stated and expressed with respect to such
series herein or by the resolution or resolutions providing for
the issue of such series adopted by tbe Board of Directors; such
dividends to be cumulative from such date and payable on such
dates in each year as may be stated and expressed in said
resolution, to stockholders of record as of a date not to exceed
40 days and not less than 10 days preceding the dividend payment
dates so fixed.

     (B) If and when dividends payable on any of the Preferred
Stock of the Corporation at any time outstanding shall be in
defauIt in an amount equal to four full quarterly payments or
more per share, and thereafter until all dividends on any such
preferred stock in default shall have been paid, the holders of
the Preferred Stock pari passu with the holders of other
preferred stock then outstanding, voting separately as a class,
shall be entitled to elect the smallest number of directors
necessary to constitute a majority of the full Board of
Directors, and, except as provided in the following paragraph,
the holders of the Comrnon Stock, voting separately as a class,
shall be entitled to elect the remaining directors of the
Corporation. The termns of office, as directors, of all persons
who may be directors of the Corporation at the time shall
terminate upon the election of a majority of the Board of
Directors by the holders of the Preferred Stock except that if
the holders of the Common Stock shall not have elected the
remaining directors of the Corporation, then, and only in that
event, the directors of the Corporation in office just prior to
the election of a majority of the Board of Directors by the
holders of the Preferred Stock shall elect the remaining
directors of the Corporation. Thereafter, while such default
continues and the majority of the Board of Directors is being
elected by the holders of the Preferred Stock, the remaining
directors, whether elected by directors, as aforesaid, or whether
originally or later elected by holders of the Common Stock shall
continue in office until their successors are elected by holders
of the Common Stock and shall qualify.

    If and when all dividends then in default on the Preferred
Stock; then outstanding shall be paid (such dividends to be
declared and paid out of any funds legally available therefor as
soon as reasonably practicable), the holders of the Preferred
Stock shall be divested of any special right with respect to the
election of directors, and the voting power of the holders of the
Preferred Stock and the holders of the Common Stock shall revert
to the status existing before the first dividend payment date on
which dividends on the Preferred Stock were not paid in full,
but always subject to the same provisions for vesting such
special rights in the bolders of the Preferred Stock in case of
further like defaults in the payment of dividends thereon as
described in the immediately foregoing paragraph. Upon
termination of any such special voting right upon payment of all
accumulated and unpaid dividends on the Preferred Stock, the
terms of office of all persons who may have been elected
directors of the Corporation by vote of the holders of the
Preferred Stock as a class, pursuant to such special voting right
shall forthwith terminate, and the resulting vacancies shall be
filled by the vote of a majority of the remaining directors.
    
     In case of any vacancy in the office of a director occurring
among the directors elected by the holders of the Preferred
Stock, voting separately as a class, the remaining directors
elected by the holders of the Preferred Stock, by affirmative
vote of a majority thereof, or the remaining director so elected
if there be but one, may elect a successor or successors to hold
office for the unexpired term or terms of the director or
directors whose place or places shall be vacant. Likewise, in
case of any vacancy in the office of a director occurring among
the directors not elected by the holders of the Preferred Stock,
the remaining directors not elected by the holders of the
Preferred Stock, by affirmative vote of a majority thereof, or
the remaining director so elected if there be but one, may elect
a successor or successors to hold office for the unexpired term
or terms of the director or directors whose place or places shall
be vacant.

     Whenever the right shall have accrued to the holders of the
Preferred Stock to elect directors, voting separately as a class,
it shall be the duty of the President, a Vice-President or the
Secretary of the Corporation forthwith to call and cause notice
to be given to the shareholders entitled to vote of a meeting to
be held at such time as the Corporation's officers may fix, not
less than forty-five nor more than sixty days after the accrual
of such right, for the purpose of electing directors. The notice
so given shall be mailed to each holder of record of preferred
stock at his last known address appearing on the books of the
Corporation and shall set forth, among other things, (i) that by
reason of the fact that dividends payable on preferred stock are
in default in an amount equal to four full quarterly payments or
more per share, the holders of the Preferred Stock, voting
separately as a class, have the right to elect the smallest
number of directors necessary to constitute a majority of the
full Board of Directors of the Corporation, (ii) that any holder
of the Preferred Stock has the right, at any reasonable time, to
inspect, and make copies of, the list or lists of holders of the
Preferred Stock maintained at the principal office of the
Corporation or at the office of any Transfer Agent of the
Preferred Stock, and (iii) either the entirety of this paragraph
or the substance thereof with respect to the number of shares of
the Preferred Stock required to be represented at any meeting, or
adjournment thereof, called for the election of directors of the
Corporation. At the first meeting of stockholders held for the
purpose of electing directors during such time as the holders of
the Preferred Stock shall have the special right, voting
separately as a class, to elect directors, the presence in person
or by proxy of the holders of a majority of the outstanding
Common Stock shall be required to constitute a quorum of such
class for the election of directors, and the presence in person
or by proxy of the holders of a majority of the outstanding
Preferred Stock shall be required to constitute a quorum of such
class for the election of directors; provided, however, that in
the absence of a quorum of the holders of the Preferred Stock, no
election of directors shall be held, but a majority of the
holders of the Preferred Stock who are present in person or by
proxy shall have power to adjourn the election of the directors
to a date not less than fifteen nor more than fifty days from the
giving of the notice of such adjourned meeting hereinafter
provided for; and provided, further, that at such adjourned
meeting, the presence in person or by proxy of the holders of 35%
of the outstanding Preferred Stock shall be required to
constitute a quorum of such class for the election of directors.
In the event such first meeting of stockholders shall be so
adjourned, it shall be the duty of the President, a Vice-
President or the Secretary of the Corporation, within ten days
from the date on which such first meeting shall have been
adjourned, to cause notice of such adjourned meeting to be given
to the shareholders entitled to vote thereat, such adjourned
meeting to be held not less than fifteen days nor more than fifty
days from the giving of such second notice. Such second notice.
shall be given in the form and manner hereinabove provided for
with respect to the notice required to be given of such first
meeting of stockholders, and shall further set forth that a
quorum was not present at such first meeting and that the holders
of 35% of the outstanding Preferred Stock shall be required to
constitute a quorum of such class for the election of directors
at such adjourned meeting. If the requisite quorum of holders of
the Preferred Stock shall not be present at said adjourned
meeting, then the directors of the Corporation then in office
shall remain in office until the next Annual Meeting of the
Corporation, or special meeting in lieu thereof and until their
successors shall have been elected and shall qualify. Neither
such first meeting nor such adjourned meeting shall be held on a
date within sixty days of the date of the next Annual Meeting of
the Corporation, or special meeting in lieu thereof. At each
Annual Meeting of the Corporation, or special meeting in lieu
thereof, held during such time as the holders of the Preferred
Stock, voting separately as a class. shall have the right to
elect a majority of the Board of Directors, the foregoing
provisions of this paragraph shall govern each Annual Meeting, or
special meeting in lieu thereof, as if said Annual Meeting or
special meeting were the first meeting of stockholders held for
the purpose of electing directors after the right of the holders
of the Preferred Stock, voting separately as a class, to elect a
majority of the Board of Directors, should have accrued the
exception, that if, at any adjourned annual meeting, or special
meeting in lieu thereof, the holders of 35% of the outstanding
Preferred Stock are not present in person or by proxy, all the
directors shall be elected by a vote of the holders of a majority
of the Common Stock of the Corporation present or represented at
the meeting.

    (C) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of at least
two-thirds of the total number of shares of the Preferred Stock
then outstanding:
    
          (1) create, authorize or issue any new stock which,
     after issuance would rank prior to the Preferred Stock as to
     dividends, in liquidation, dissolution, winding up or
     distribution, or create, authorize or issue any security
     convertible into shares of any such stock except for the
     purpose of providing funds for the redemption of all of the
     Preferred Stock then outstanding, such new stock or security
     not to be issued until such redemption shall have been
     authorized and notice of such redemption given and the
     aggregate redemption price deposited as provided in
     paragraph (G) below; provided, however, that any such new
     stock or security shall be issued within twelve months after
     the vote of the Preferred Stock herein provided for
     authorizing the issuance of such new stock or security; or

          (2) amend, alter, or repeal any of the rights,
     preferences or powers of the holders of the Preferred Stock
     so as to affect adversely any such rights, preferences or
     powers; provided, however, that if such amendment,
     alteration or repeal affects adversely the rights,
     preferences or powers of one or more, but not all, series of
     Preferred Stock at the time outstanding, only the consent of
     the holders of at least two-thirds of the total number of
     outstanding shares of all series so affected shall be
     required; and provided, further, that an amendment to
     increase or decrease the authorized amount of Preferred
     Stock or to create or authorize, or increase or decrease the
     amount of, any class of stock; ranking on a parity with the
     outstanding shares of the Preferred Stock as to dividends or
     assets shall not be deemed to affect adversely the rights,
     preferences or powers of the holders of the Preferred Stock
     or any series thereof.

     (D) So long as any shares of the Preferred Stock are
outstanding, the Corporation shall not, without the consent
(given by vote at a meeting called for that purpose) of the
holders of a majority of the total number of shares of the
Preferred Stock then outstanding:

          (1) merge or consolidate with or into any other
     corporation or corporations or sell or otherwise dispose of
     all or substantially all of the assets of the Corporation,
     unless such merger or consolidation or sale or other
     disposition, or the exchange, issuance or assumption of all
     securities to be issued or assumed in connection with any
     such merger or consolidation or sale or other disposition,
     shall have been ordered, approved or permitted under the
     Public Utility Holding Company Act of 1935; or

          (2) issue or assume any unsecured notes, debentures or
     other securities representing unsecured indebtedness for
     purposes other than (i) the refunding of outstanding
     unsecured indebtedness theretofore issued or assumed by the
     Corporation resulting in equal or longer maturities, or (ii)
     the reacquisition, redemption or other retirement of all
     outstanding shares of the Preferred Stock, if immediately
     after such issue or assumption, the total principal amount
     of all unsecured notes, debentures or other securities
     representing unsecured indebtedness issued or assumed by the
     Corporation, including unsecured indebtedness then to be
     issued or assumed (but excluding the principal amount then
     outstanding of any unsecured notes, debentures, or other
     securities representing unsecured indebtedness having a
     maturity in excess of ten (10) years and in amount not
     exceeding 10% of the aggregate of (a) and (b) of this
     section below) would exceed ten per centum (10%) of the
     aggregate of (a) the total principal amount of all bonds or
     other securities representing secured indebtedness issued or
     assumed by the Corporation and then to be outstanding, and
     (b) the capital and surplus of the Corporation as then to be
     stated on the books of account of the Corporation.  When
     unsecured notes, debentures or other securities representing
     unsecured debt of a maturity in excess of ten (10) years
     shall become of a maturity of ten (10) years or less, it
     shall then be regarded as unsecured debt of a maturity of
     less than ten (10) years and shall be computed with such
     debt for the purpose of determining the percentage ratio to
     the sum of (a) and (b) above of unsecured debt of a maturity
     of less than ten (10) years, and when provision shall have
     been made, whether through a sinking fund or otherwise, for
     the retirement, prior to their maturity, of unsecured notes,
     debentures, or other securities representing unsecured debt
     of a maturity in excess of ten (10) years, the amount of any
     such security so required to be retired in less than ten
     (10) years shall be regarded as unsecured debt of a maturity
     of less than ten (10) years (and not as unsecured debt of a
     maturity in excess of ten (10) years) and shall be computed
     with such debt for the purpose of determining the percentage
     ratio to the sum of (a) and (b) above of unsecured debt of a
     maturity of less than ten (10) years, provided, however,
     that the payment due upon the maturity of unsecured debt
     having an original single maturity in excess of ten (10)
     years or the payment due upon the latest maturity of any
     serial debt which had original maturities in excess of ten
     (10) years shall not, for purposes of this provision, be
     regarded as unsecured debt of a maturity of less than ten
     (10) years until such payment or payments shall be required
     to be made within three (3) years; furthermore, when
     unsecured notes, debentures or other securities representing
     unsecured debt of a maturity of less than ten (10) years
     shall exceed 10% of the sum of (a) and (b) above, no
     additional unsecured notes, debentures or other securities
     representing unsecured debt shall be issued or assumed
     (except for the purpose set forth in (i) or (ii) above)
     until such ratio is reduced to 10% of the sum of (a) and (b)
     above; or

          (3) issue, sell or otherwise dispose of any shares of
     the Preferred Stock in addition to the 104,476 shares of the
     Preferred Stock originally authorized, or of any other class
     of stock ranking on a parity with the Preferred Stock as to
     dividends or in liquidation, dissolution, winding up or
     distribution, unless the gross income of the Corporation and
     Mississippi Power & Light Company, a Florida corporation,
     for a period of twelve (12) consecutive calendar months
     within the fifteen (15) calendar months immediately
     preceding the issuance, sale or disposition of such stock,
     determined in accordance with generally acccepted accounting
     practices (but in any event after deducting all taxes and
     the greater of (a) the amount for said period charged by the
     Corporation and Mississippi Power & Light Company, a Florida
     corporation, on their books to depreciation expense or (b)
     the largest amount required to be provided therefor by any
     mortgage indenture of the Corporation) to be available for
     the payment of interest, shall have been at least one and
     one-half times the sum of (i) the annual interest charges on
     all interest bearing indebtedness of the Corporation and
     (ii) the annual dividend requirements on all outstanding
     shares of the Preferred Stock and of all other classes of
     stock ranking prior to, or on a parity with, the Preferred
     Stock as to dividends or distributions, including the shares
     proposed to be issued; provided, that there shall be
     excluded from the foregoing computation interest charges on
     all indebtedness and dividends on all shares of stock which
     are to be retired in connection with the issue of such
     additional shares of the Preferred Stock or other class of
     stocks ranking prior to, or on a parity with, the Preferred
     Stock as to dividends or distributions; and provided,
     further, that in any case where such additional shares of
     the Preferred Stock, or other class of stock ranking on a
     parity with the Preferred Stock as to dividends or
     distributions, are to be issued in connection with the
     acquisition of additional property, the gross income of the
     property to be so acquired, computed on the same basis as
     the gross income of the Corporation, may be included on a
     pro forma basis in making the foregoing computation; or

          (4) issue, sell, or otherwise dispose of any shares of
     the Preferred Stock, in addition to the 104,476 shares of
     the Preferred Stock originally authorized, or of any other
     class of stock ranking on a parity with the Preferred Stock
     as to dividends or distributions, unless the aggregate of
     the capital of the Corporation applicable to the Common
     Stock and the surplus of the Corporation shall be not less
     than the aggregate amount payable on the involuntary
     liquidation, dissolution, or winding up of the Corporation,
     in respect of all shares of the Preferred Stock and all
     shares of stock, if any, ranking prior thereto, or on a
     parity therewith, as to dividends or distributions, which
     will be outstanding after the issue of the shares proposed
     to be issued; provided, that if, for the purposes of meeting
     the requirements of this subparagraph (4), it becomes
     necessary to take into consideration any earned surplus of
     the Corporation, the Corporation shall not thereafter pay
     any dividends on shares of the Common Stock which would
     result in reducing the Corporation's Common Stock equity (as
     in paragraph (H) hereinafter defined) to an amount less than
     the aggregate amount payable, on involuntary liquidation,
     dissolution or winding up the Corporation, on all shares of
     the Preferred Stock and of any stock ranking prior to, or on
     a parity with, the Preferred Stock, as to dividends or other
     distributions, at the time outstanding.

     (E) Each holder of Conunon Stock of the Corporation shall be
entitled to one vote, in person or by proxy, for each share of
such stock standing in his name on the books of the Corporation.
Except as hereinbefore expressly provided in this Section Fourth,
the holders of the Preferred Stock shall have no power to vote
and shall be entitled to no notice of any meeting of the
stockholders of the Corporation. As to matters upon which holders
of the Preferred Stock are entitled to vote as hereinbefore
expressly provided, each holder of such Preferred Stock shall be
entitled to one vote, in person or by proxy, for each share of
such Preferred Stock standing in his name on the books of the
Corporation.

    (F) In the event of any voluntary liquidation, dissolution or
winding up of the Corporation, the Preferred Stock, pari passu
with all shares of preferred stock of any class or series then
outstanding, shall have a preference over the Common Stock until
an amount equal to the then current redemption price shall have
been paid.  In the event of any involuntary liquidation,
dissolution or winding up of the Corporation, which shall include
any such liquidation, dissolution or winding up which may arise
out of or result from the condemnation or purchase of all or a
major portion of the properties of the Corporation, by (i) the
United States Government or any authority, agency or
instrumentality thereof, (ii) a state of the United States or any
polltical subdivision, authority, agency, or instrumentality
thereof, or (iii) a disrict, cooperative or other association or
entity not organized for profit, the Preferred Stock, pari passu
with all shares of preferred stock of any class or series then
outstanding, shall also have a preference over the Common Stock
until the full par value thereof and an amount equal to all
accumulated and unpaid dividends thereon shall have been paid by
dividends or distribution.
    
     (G) Upon the affirmative vote of a majority of the shares of
the issued and outstanding Common Stock at any annual meeting, or
any special meeting called for that purpose, the Corporation may
at any time redeem all of any series of said Preferred Stock or
may from time to time redeem any part thereof, by paying in cash
the redemption price then applicable thereto as stated and
expressed with respect to such series in the resolution providing
for the issue of such shares adopted by the Board of Directors of
the Corporation, or in these Restated Articles of Incorporation
or any amendment thereof, plus, in each case, an amount
equivalent to the accumulated and unpaid dividends, if any, to
the date of redemption.  Notice of the intention of the
Corporation to redeem all or any part of the Preferred Stock
shall be mailed not less than thirty (30) days nor more than
sixty (60) days before the date of redemption to each holder of
record of Preferred Stock to be redeemed, at his post office
address as shown by the Corporation's records, and not less than
thirty (30) days' nor more than sixty (60) days' notioe of such
redemption may be published in such manner as may be prescribed
by resolution of the Board of Directors of the Corporation; and,
in the event of such publication, no defect in the mailing of
such notice shall affect the validity of the proceedings for the
redemption of any shares of Preferred Stock so to be redeemed.
Contemporaneously with the mailing or the publication of such
notice as aforesaid or at any time thereafter prior to the date
of redemption, the Corporation may deposit the aggregate
redemption price (or the portion thereof not already paid in the
redemption of such Preferred Stock so to be redeemed) with any
bank or trust company in the City of New York, New York, or in
the City of Jackson, Mississippi, named in such notice, payable
to the order of the record holders of the Preferred Stock so to
be redeemed, as the case may be, on the endorsement and surrender
of their certificates, and thereupon said holders shall cease to
be stockholders wlth respect to such shares; and from and after
the making of such deposit such holders shall have no interest in
or claim against the Corporation with respect to said shares, but
shall be enlitled only to receive such moneys from said bank or
trust company, with interest, if any, allowed by such bank or
trust company on such moneys deposited as in this paragraph
provided, on endorsement and surrender of their certificates, as
aforesaid.  Any moneys so deposited, plus interest thereon, if
any, remaining unclaimed at the end of six years from the date
fixed for redemption, if thereafter requested by resolution of
the Board of Directors, shall be repaid to the Corporation, and
in the event of such repayment to the Corporation, such holders
of record of the shares so redeemed as shall not have made claim
against such moneys prior to such repayment to the Corporation,
shall be deemed to be unsecured creditors of the Corporation for
an amount, without interest, equivalent to the amount deposited,
plus interest thereon, if any, allowed by such bank or trust
company, as above stated, for the redemption of such shares and
so paid to the Corporation. Shares of the Preferred Stock which
have been redeemed shall not be reissued.  If less than all of
the shares of the Preferred Stock are to be redeemed, the shares
thereof to be redeemed shall be selected by lot, in such manner
as the Board of Directors of the Corporation shall determine, by
an independent bank or trust company selected for that purpose by
the Board of Directors of the Corporation.  Nothing herein
contained shall limit any legal right of the Corporation to
purchase or otherwise acquire any shares of the Preferred Stock;
provided, however, that, so long as any shares of the Preferred
Stock are outstanding, the Corporation shall not redeem, purchase
or otherwise acquire less than all of the shares of the Preferred
Stock, if, at the time of such redemption, purchase or other
acquisition, dividends payable on the Preferred Stock shall be in
default in whole or in part, unless, prior to or concurrently
with such redemption, purchase or other acquisition, all such
defaults shall be cured or unless such redemption, purchase or
other acquisition shall have been ordered, approved or permitted
under the Public Utility Holding Company Act of 1935; and
provided further that, so long as any shares of the Preferred
Stock are outstanding, the Corporation shall not make any payment
or set aside any funds for payment into any sinking fund for the
purchase or redemption of any shares of the Preferred Stock, if,
at the time of such payment, or the setting apart of funds for
such payment, dividends payable on the Preferred Stock shall be
in default in whole or in part, unless, prior to or concurrently
with such payment or the setting apart of funds for such payment,
all such defaults shall be cured or unless such payment, or the
setting apart of funds for such payment, shall bave been ordered,
approved or permitted under the Public Utility Holding Company
Act of 1935.  Any shares of the Preferred Stock so redeemed,
purchased or acquired shall retired and cancelled.

     (H) For the purposes of this paragraph (H) and subparagraph
(4) of paragraph (D) the term "Common Stock Equity" shall mean
the aggregate of the par value of, or stated capital represented
by, the outstanding shares (other than shares owned by the
Corporation) of stock ranking junior to the Preferred Stock as to
dividends and assets, of the premium on such junior stock and of
the surplus (including earned surplus, capital surplus and
surplus invested in plant) of the Corporation less (1) any
amounts recorded on the books of the Corporation for utility
plant and other plant in excess of the original cost thereof, (2)
unamortized debt discount and expense, capital stock discount and
expense and any other intangible items set forth on the asset
side of the balance sheet as a result of accounting convention,
(3) the excess, if any, of the aggregate amount payable on
involuntary liquidation, dissolution or winding up of the affairs
of the Corporation upon all outstanding preferred stock of the
Corporation over the aggregate par or stated value thereof and
any premiums thereon and (4) the excess, if any, for the period
beginning with January 1, 1954, to the end of the month within
ninety (90) days preceding the date as of which Common Stock
Equity is determined, of the cumulative amount computed under re
quirements contained in the Corporation's mortgage indentures
relating to minimum depreciation provisions (this cumulative
amount being the aggregate of the largest amounts separately
computed for entire periods of differing coexisting mortgage
indenture requirements), over the amount charged by the
Corporation and Mississippi Power & Light Company, a Florida
corporation, on their books for depreciation during such period,
including the final fraction of a year; provided, however, that
no deductions shall be required to be made in respect of items
referred to in subdivisions (1) and (2) of this paragraph (H) in
cases in which such items are being amortized or are provided
for, or are being provided for, by reserves. For the purpose of
this paragraph (H): (i) the term "total capitalization" shall
mean the sum of the Common Stock Equity plus item three (3) in
this paragraph (H) and the stated capital applicable to, and any
premium on, outstanding stock of the Corporation not included in
Common Stock Equity, and the principal amount of all outstanding
debt of the Corporation maturing more than twelve months after
the date of issue thereof; and (ii) the term "dividends on Common
Stock" shall embrace dividends on Common Stock (other than
dividends payable only in shares of Common Stock), distributions
on, and purchases or other acquisitions for value of, any Common
Stock of the Corporation or other stock if any, subordinate to
its Preferred Stock.  So long as any shares of the Preferred
Stock are outstanding, the Corporation shall not declare or pay
any dividends on the Common Stock, except as follows:
    
          (a) If and so long as the Common Stock Equity at the
     end of the calendar month immediately preceding the date on
     which a dividend on Common Stock is declared is, or as a
     result of such dividend would become, less than 20% of total
     capitalization, the Corporation shall not declare such
     dividends in an amount which, together with all other
     dividends on Common Stock paid within the year ending with
     and including the date on which such dividend is payable,
     exceeds 50% of the net income of the Corporation available
     for dividends on the Common Stock for the twelve full
     calendar months immediately preceding the month in which
     such dividends are declared, except in an amount not
     exceeding the aggregate of dividends on Common Stock which
     under the restrictions set forth above in this subparagraph
     (a) could have been, and have not been, declared; and
     
          (b) If and so long as the Common Stock Equity at the
     end of the calendar month immediately preceding the date on
     which a dividend on Common Stock is declared is, or as a
     result of such dividend would become, less than 25% but not
     less than 20% of total capitalization, the Corporation shall
     not declare dividends on the Common Stock in an amount
     which, together with all other dividends on Comrnon Stock
     paid within the year ending with and including the date on
     which such dividend is payable, exceeds 75% of the net
     income of the Corporation and Mississippi Power & Light
     Company, a Florida corporation, available for dividends on
     the Common Stock for the twelve full calendar months
     immediately preceding the month in which such dividends are
     declared, except in an amount not exceeding the aggregate of
     dividends on Common Stock which under the restrictions set
     forth above in subparagraph (a) and in this subparagraph (b)
     could have been and have not been declared; and
     
          (c) If any time when the Common Stock Equity is 25% or
     more of total capitalization, the Corporation may not
     declare dividends on shares of the Common Stock which would
     reduce the Common Stock Equity below 25% of total
     capitalization, except to the extent provided in
     subparagraphs (a) and (b) above.

     At anytime when the aggregate of all amounts credited
subsequent to January 1, 1954, to the depreciation reserve
account of the Corporation and Mississippi Power & Light Company,
a Florida corporation, through charges to operating revenue
deductions or otherwise on the books of the Corporation and
Mississippi Power & Light Company, a Florida corporation, shall
be less than the amount computed as provided in clause (aa)
below, under requirements contained in the Corporation's mortgage
indentures, then for the purposes of subparagraphs (a) and (b)
above, in determining the earnings available for common stock
dividends during any twelve-month period, the amount to be
provided for depreciation in that period shall be (aa) the
greater of the cumulative amount charged to depreciation expense
on the books of the Corporation and Mississippi Power & Light
Company, a Florida corporation, or the cumulative amount computer
under requirements contained in the Corporation's mortgage
indentures relating to minimum depreciation provisions (the
latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing co-
existing mortgage indenture requirements) for the period from
January 1, 1954, to and including said twelve-month period, less
(bb) the greater of the cumulative amount charged to depreciation
expense on the books of the Corporation and Mississippi Power &
Light Company, a Florida corporation, or the cumulative amount
computed under requirements contained in the Corporation's
mortgage indentures relating to minimum depreciation provisions
(the latter cumulative amount being the aggregate of the largest
amounts separately computed for entire periods of differing
coexisting mortgage indenture requirements) from January 1, 1954,
up to but excluding said twelve-month period; provided that in
the event any company other than Mississippi Power & Light
Company, a Florida corporation, is merged into the Corporation
the "cumulative amount computed under requirements contained in
the Corporation's mortgage indentures relating to minimum
depreciation provisions" referred to above shall be computed
without regard, for the period perior to the merger, of property
acquired in the merger, and the "cumulative amount charged to
depreciation expense on the books of the Corporation" shall be
exclusive of amounts provided for such property prior to the
merger.

     (I) The Board of Directors are hereby expressly authorized
by resolution or resolutions to state and express the series and
distinctive serial designation of any authorized and unissued
shares of Preferred Stock proposed to be issued, the number of
shares to constitute each such series, the annnal rate or rates
of dividends payable on shares of each series together with the
dates on which such dividends shall be paid in each year, the
date from which such dividends shall commence to accumulate, the
amount or amounts payable upon redemption and the sinking fund
provisions, if any, for the redemption or purchase of shares.

    (J) Dividends may be paid upon the Common Stock only when (i)
dividends have been paid or declared and funds set apart for the
payment of dividends as aforesaid on the Preferred Stock from thc
date(s) after which dividends thereon became cumulative, to the
beginning of the period then current, with respect to which such
dividends on the Preferred Stock are usually declared, and (ii)
all payments have been made or funds have been set aside for
payments then or theretofore due under sinking fund provisions,
if any, for the redemption or purchase of shares of any series of
the Preferred Stock, but whenever (x) there shall have been paid
or declared and funds shall have been set apart for the payment
of all such dividends upon the Preferred Stock as aforesaid, and
(y) all payments shall have been made or funds shall have been
set aside for payments then or theretofore due under sinking fund
provisions, if any, for the redemption or purchase of shares of
any series of the Preferred Stock, then, subject to the
limitations above set forth, dividends upon the Common Stock may
be declared payable then or thereafter, out of any net earnings
or surplus of assets over liabilities, including capital, then
remaining. After the payment of the limited dividends and/or
shares in distribution of assets to which the Preferred Stock is
expressly entitled in preference to the Common Stock, in
accordancc with the provisions hereinabove set forth, the Common
Stock alone (subject to the rights of any class of stock
hereafter authorized) shall receive all further dividends and
shares in distribution.

     (K) Subject to the limitations hereinabove set forth the
Corporation from time to time may resell any of its own stock,
purchased or otherwise acquired by it as hereinafter provided
for, at such price as may be fixed by its Board of Directors or
Executive Committee.

     (L) Subject to the limitations hereinabove set forth the
Corporation in order to acquire funds with which to redeem any
outstanding Preferred Stock of any class, may issue and sell
stock of any class then authorized but unissued, bonds, notes,
evidences of indebtedness, or other securities.

     (M) Subject to the limitations hereinabove set forth the
Board of Directors of the Corporation may at any time authorize
the conversion or exchange of the whole or any particular share
of the outstanding preferred stock of any class with the consent
of the holder thereof, into or for stock of any other class at
the time of such consent authorized but unissued and may fix the
terms and conditions upon which such conversion or exchange may
be made; provided that without the consent of the holders of
record of two-thirds of the shares of Common Stock outstanding
given at a meeting of the holders of the Common Stock called and
held as provided by the By-Laws or given in writing without a
meeting, the Board of Directors shall not authorize the
conversion or exchange of any preferred stock of any class into
or for Common Stock or authorize the conversion or exchange of
any preferred stock; of any class into or for preferred stock of
any other class, if by such conversion or exchange the amount
which the holders of the shares of stock so converted or
exchanged would be entitled to receive either as dividends or
shares in distribution of assets in preference to the Common
Stock would be increased.

     (N) A consolidation, merger or amalgamation of the
Corporation with or into any other corporation or corporations
shall not be deemed a distribution of assets of the Corporation
within the meaning of any provisions of these Restated Articles
of Incorporation.
    
     (O) The consideration received by the Corporation from the
sale of any additional stock without nominal or par value shall
be entered in the Corporation's capital stock account.

     (P) Subject to the limitations hereinabove set forth upon
the vote of a majority of all the Directors of the Corporation
and of a majority of the total number of shares of stock then
issued and outstanding and entitled to vote, irrespective of
class (or if the vote of a larger number or different proportion
of shares is required by the laws of the State of Mississippi not
withstanding the above agreement of the stockholders of the
Corporation to the contrary, then upon the vote of the larger
number or different proportion of shares so required), the
Corporation may from time to time create or authorize one or more
other classes of stock with such preferences, designations,
rights, privileges, powers, restrictions, limitations and qualifi
cations as may be determined by said vote, which may be the same
as or different from the preferences, designations, rights,
privileges, powers, restrictions, limitations and qualifications
of the classes of stock of the Corporation then authorized. Any
such vote authorizing the creation of a new class of stock may
provide that all moneys payable by the Corporation with respect
to any class of stock thereby authorized shall be paid in the
money of any foreign country named therein or designated by the
Board of Directors, pursuant to authority therein granted, at a
fixed rate of exchange with the money of the United States of
America therein stated or provided for and all such payments
shall be made accordingly. Any such vote may authorize any shares
of any class then authorized but unissued to be issued as shares
of such new class or classes

     (Q) Subject to the limitations hereinabove set forth, either
the Preferred Stock or the Common Stock or both of said classes
of stock, may be increased at any time upon vote of the holders
of a majority of the total number of shares of the Corporation
then issued and outstanding and entitled to vote thereon,
irrespective of class.

     (R) If any provisions in this Section Fourth shall be in
conflict or inconsistent with any other provisions of these
Restated Articles of Incorporation of the Corporation the
provisions of this Section Fourth shall prevail and govern.

     FIFTH:  The Corporation will not commence business until at
least $1,000 has been received by it as consideration for the
issuance of shares.

     SIXTH: Existing provisions limiting or denying to
shareholders the preemptive right to acquire additional or
treasury shares of the Corporation are:
    
     No holder of any stock of the Corporation shall be entitled
as of right to purchase or subscribe for any part of any unissued
stock of the Corporation, or any additional stock of any class to
be issued by reason of any increase of the authorized capital
stock of the Corporation or of bonds, certificates of
indebtedness, debentures, or other securities convertible into
stock of the Corporation, but any such unissued stock or any such
additional authorized issue of new stock, or of securities
convertible into stock, may be issued and disposed of by the
Board of Directors without offering to the stockholders then of
record, or to any class of stockholders, any thereof on any
terms.

     SEVENTH: Existing provisions of the Restated Articles of
Incorporation for the regulation of the internal affairs of the
Corporation are:
     
          (a) General authority is hereby conferred upon the
     Board of Directors to fix the consideration for which shares
     of stock of the Corporation without nominal or par value may
     be issued and disposed of, and the shares of stock of the
     Corporation without nominal or par value, whether authorized
     by these Restated Articles of Incorporation or by subsequent
     increase of the authorized number of shares of stock or by
     amendment of these Restated Articles of Incorporation by
     consolidation or merger or otherwise, and/or any securities
     convertible into stock of the Corporation without nominal or
     par value may be issued and disposed of for such
     consideration and on such terms and in such manner as may be
     fixed from time to time by the Board of Directors.
     
          (b) The issue of the whole, or any part determined by
     the Board of Directors, of the shares of stock of the
     Corporation as partly paid, and subject to calls thereon
     until the whole thereof shall have been paid, is hereby
     authorized.
     
          (c) The Board of Directors shall have power to
     authorize the payment of compensation to the directors for
     services to the Corporation, including fees for attendance
     at meetings of the Board of Directors or the Executive
     Committee and all other committees and to determine the
     amount of such compensation and fees.

          (d) The Corporation may issue a new certificate of
     stock in the place of any certificate theretofore issued by
     it, alleged to have been lost or destroyed and the Board of
     Directors may, in their discretion, require the owner of the
     lost or destroyed certificate, or his legal representative,
     to give bond in such sum as they may direct as indemnity
     against any claim that may be made against the Corporation,
     its officers, employees or agents by reason thereof; a new
     certificate may be issued without requiring any bond when,
     in the judgment of the directors, it is proper so to do.
     
          If the Corporation shall neglect or refuse to issue
     such a new certificate and it shall appear that the owner
     thereof has applied to the Corporation for a new certificate
     in place thereof and has made due proof of the loss or
     destruction thereof and has given such notice of his
     application for such new certificate on such newspaper of
     general circulation, published in the State of Mississippi
     as reasonably should be approved by the Board of Directors,
     and in such other newspaper as may be required by the Board
     of Directors, and has tendered to the Corporation adequate
     security to indemnify the Corporation, its officers
     employees, or agents, and any person other than such
     applicant who shall thereafter appear to be the lawful owner
     of such alleged lost or destroyed certificate against
     damage, loss or expense because of the issuance of such new
     certificate, and the effect thereof as herein provided,
     then, unless there is adequate cause why such new
     certificate shall not be issued, the Corporation, upon the
     receipt of said indemnity, shall issue a new certificate of
     stock in place of such lost or destroyed certificate. In the
     event that the Corporation shall nevertheless refuse to
     issue a new certificate as aforesaid, the applicant may then
     petition any court of competent jurisdiction for relief
     against the failure of the Corporation to perform its
     obligations hereunder. In the event that the Corporation
     shall issue such new certificate, any person who shall
     thereafter claim any rights under the certificate in place
     of which such new certificate is issued, whether such new
     certificate is issued pursuant to the judgment or decree of
     such court or voluntarily by the Corporation after the
     publication of notice and the receipt of proof and indemnity
     as aforesaid, shall have recourse to such indemnity and the
     Corporation shall be discharged from all liability to such
     person by reason of such certificate and the shares
     represented thereby.
     
          (e) No stockholder shall have any right to inspect any
     account, book or document of the Corporation, except as
     conferred by statute or authorized by the directors.
         
          (f) A director of the Corporation shall not be
     disqualified by his office from dealing or contracting with
     the Corporation either as a vendor, purchaser or otherwise,
     nor shall any transaction or contract of the Corporation be
     void or voidable by reason of the fact that any director or
     any firm of which any director is a member or any
     corporation of which any director is a shareholder, officer
     or director, is in any way interested in such transaction or
     contract, provided that such transaction or contract is or
     shall be authorized, ratified or approved either (1) by a
     vote of a majority of a quorum of the Board of Directors or
     the Executive Committee, without counting in such majority
     or quorum any directors so interested or members of a firm
     so interested or a shareholder, officer or director of a
     corporation so interested, or (2) by the written consent, or
     by vote at a stockholders' meeting of the holders of record
     of a majority in number of all the outstanding shares of
     stock of the Corporation entitled to vote; nor shall any
     director be liable to account to the Corporation for any
     profits realized by or from or through any such transaction
     or contract of the Corporation, authorized, ratified or
     approved as aforesaid by reason of the fact that he or any
     firm of which he is a member or any corporation of which he
     is a shareholder, officer or director was interested in such
     transaction or contract. Nothing herein contained shall
     create any liability in the events above described or
     prevent the authorization, ratification or approval of such
     contract in any other manner provided by law.
     
          (g) Any director may be removed, whether cause shall be
     assigned for his removal or not, and his place filled at any
     meeting of the stockholders by the vote of a majority of the
     outstanding stock of the Corporation entitled to vote.
     Vacancies in the Board of Directors, except vacancies
     arising from the removal of directors, shall be filed by the
     directors remaining in office.
     
          (h) Any property of the Corporation not essential to
     the conduct of its corporate business and purposes may be
     sold, leased, exchanged or otherwise disposed of by
     authority of its Board of Directors and the Corporation may
     sell, lease or exchange all of its property and franchises
     or any of its property, franchises, corporate rights or
     privileges essential to the conduct of its corporate
     business and purposes upon the consent of and for such
     considerations and upon such terms as may be authorized by a
     majority of the Board of Directors and the holders of a
     majority of the outstanding shares of stock entitled to
     vote, expressed in writing or by vote at a meeting called
     for that purpose in the manner provided by the By-Laws of
     the Corporation for special meetings of stockholders; and at
     no time shall any of the plants, properties, easements,
     franchises (other than corporate franchises) or securities
     then owned by the Corporation be deemed to be property,
     franchises, corporate rights or privileges essential to the
     conduct of the corporate business and purposes of the
     Corporation.
     
          Upon the vote or consent of the stockholders required
     to dissolve the Corporation, the Corporation shall have
     power, as the attorney and agent of the holders of all of
     its outstanding stock, to sell, assign and transfer all such
     stock to a new corporation organized under the laws of the
     United States, the State of Mississippi or any other state,
     and to receive as the consideration therefor shares of stock
     of such new corporation of the several classes into which
     the stock of the Corporation is then divided, equal in
     number to the number of shares of stock of the Corporation
     of said several classes then outstanding, such shares of
     said new corporation to have the same preferences, voting
     powers, restrictions and qualifications thereof as may then
     attach to the classes of stock of the Corporation then
     outstanding so far as the same shall be consistent with such
     laws of the United States or of the State of Mississippi or
     of such other state, except that the whole or any part of
     such stock or any class thereof may be stock with or without
     nominal or par value. In order to make effective such a
     sale, assignment and transfer, the Corporation shall have
     the right to transfer all its outstanding stock on its books
     and to issue and deliver new certificates therefor in such
     names and amounts as such new corporation may direct without
     receiving for cancellation the certificates for such stock
     previously issued and then outstanding. Upon completion of
     such sale, assignment and transfer, the holders of the stock
     of the Corporation shall have no rights or interests in or
     against the Corporation except the right, upon surrender of
     certificates for stock of the Corporation properly endorsed,
     if required, to receive from the Corporation certificates
     for shares of stock of such new corporation of the class
     corresponding to the class of the shares surrendered, equal
     in number to the number of shares of the stock of the
     Corporation so surrendered.
     
          (i) Upon the written assent or pursuant to the
     affirmative vote in person or by proxy of the holders of a
     majority in number of the shares then outstanding and
     entitled to vote, irrespective of class, (1) any or every
     statute of the State of Mississippi hereafter enacted,
     whereby the rights, powers or privileges of the Corporation
     are or may be increased, diminished or in any way affected
     or whereby the rights, powers or privileges of the
     stockholders of corporations organized under the law under
     which the Corporation is organized, are increased,
     diminished or in any way affected or whereby effect is given
     to the action taken by any part, less than all, of the
     stockholders of any such corporation, shall, notwithstanding
     any provisions which may at the time be contained in these
     Restated Articles of Incorporation or any law, apply to the
     Corporation, and shall be binding not only upon the
     Corporation, but upon every stockholder thereof, to the same
     extent as if such statute had been in force at the date of
     the making and filing of these Restated Articles of
     Incorporation and/or (2) amendments of these Restated
     Articles of Incorporation authorized at the time of the
     making of such amendments by the laws of the State of
     Mississippi may be made.
     
     EIGHTH: The Restated Articles of Incorporation correctly set
forth without change the corresponding provisions of the Articles
of Incorporation as heretofore amended and restated, and
supersede the original Articles of Incorporation, and all
amendments thereto, and prior Restated Articles of Incorporation
and all amendments thereto.

     DATED: December 21, 1983.



                         MISSISSIPPI POWER & LIGHT COMPANY



                          By: D. C. LUTKEN

                               Its President

[CORPORATE SEAL]


                         By: F. S. YORK, JR.

                                Its Secretary


STATE OF MISSISSIPPI
COUNTY OF HINDS

    I, Bethel Ferguson, a Notary Public, do hereby certify that
on this 21st day of December, 1983, personally appeared before me
D. C. Lutken. who, being by me first duly sworn, declared that he
is the President of Mississippi Power & Light Company, that he
signed the foregoing document as President of the Corporation,
and that the statements therein contained are true.
                                BETHEL FERGUSON
                                  Notary Public

My commission expires July 23, 1987.

                                   [NOTARY'S SEAL]


               RESTATED ARTICLES OF INCORPORATION
                               of
                MISSISSIPPI POWER & LIGHT COMPANY
                                
                                
                    Filing and Recording Data


Restated Articles of Incorporation filed with Secretary of State-
- -December 21, 1983

Certificate of Restated Articles of Incorporation issued by
Secretary of State--December 21, 1983

Certificate of Restated Articles of Incorporation and Restated
Articles of Incorporation filed for record in the office of the
Chancery Clerk of the First Judicial District of Hinds County,
Mississippi, Book 189, Page 624--December 22, 1983.
                
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
      Statement of Resolution Establishing Series of Shares
                                
                        October 25, 1984

     Pursuant to the provisions of Section 79-3-29 of the
Mississippi Business Corporation Law, the undersigned Corporation
submits the following statement for the purpose of establishing
and designating a series of shares and fixing and determining the
relative rights and preferences thereof:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The attached resolution establishing and designating a
         series of shares and fixing and determining the relative
         rights and preferences thereof was duly adopted by the
         Board of Directors of the Corporation on October 24,
         1984.
        
         Dated this the 25th day of October, 1984.
        
                         MISSISSIPPI POWER & LIGHT COMPANY



                         By/s/ William Cavanaugh, III
                              William Cavanaugh, III
                                    President


                         By   /s/ Frank S. York, Jr.
                                Frank S. York, Jr.
                              Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                                

                                

STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this October 25, 1984, personally appeared before me William
Cavanaugh, III, who, being by me first duly sworn, declared that
he is President of Mississippi Power & Light Company, that he
executed the foregoing document as President of the Corporation,
and that the statements therein contained are true.


                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public


My Commission Expires:


   March 30, 1986









STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this October 25, 1984, personally appeared before me Frank S.
York, Jr., who, being by me first duly sworn, declared that he is
Senior Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, that he executed the foregoing
document as Senior Vice President, Chief Financial Officer and
Secretary of the Corporation, and that the statements therein
contained are true.


                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public




My Commission Expires:


   March 30, 1986




RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:

A series of 150,000 shares of the Preferred Stock shall:

     (a)  be designated "16.16% Preferred Stock, Cumulative, $100
Par Value;"

     (b)  have a dividend rate of $16.16 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be February 1, 1986, and
such dividends to be cumulative from the date of issuance;

     (c)  be subject to redemption at the price of $116.16 per
share if redeemed on or before November 1, 1989, of $112.12 per
share if redeemed after November 1, 1989, and on or before
November 1, 1994, of $108.08 per share if redeemed after November
1, 1994, and on or before November 1, 1999, and of $104.04 per
share if redeemed after November 1, 1999, in each case plus an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption; provided,
however, that no share of the 16.16% Preferred Stock, Cumulative,
$100 Par Value, shall be redeemed prior to November 1, 1989, if
such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Corporation, or through the use, directly
or indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with the
16.16% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of less
than 16.2772% per annum; and

     (d)  be subject to redemption as and for a sinking fund as
follows:  on November 1, 1989 and on each November 1 thereafter
(each such date being hereinafter referred to as a "16.16%
Sinking Fund Redemption Date"), for so long as any shares of the
16.16% Preferred Stock, Cumulative, $100 Par Value, shall remain
outstanding, the Corporation shall redeem, out of funds legally
available therefor, 7,500 shares of the 16.16% Preferred Stock,
Cumulative, $100 Par Value, (or the number of shares than
outstanding if less than 7,500) at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 16.16% Preferred
Stock, Cumulative, $100 Par Value, being hereinafter referred to
as the "16.16% Sinking Fund Obligation"); the 16.16% Sinking Fund
Obligation shall be cumulative; if on any 16.16% Sinking Fund
Redemption Date, the Corporation shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 16.16% Sinking Fund
Obligation with respect to the shares not redeemed shall carry
forward to each successive 16.16% Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any
16.16% Sinking Fund Redemption Date, the funds of the Corporation
legally available for the satisfaction of the 16.16% Sinking Fund
Obligation and all other sinking fund and similar obligations
than existing with respect to any other class or series of its
stock ranking on a parity as to dividends or assets with the
16.16% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"),  are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 16.16% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 16.16% Sinking Fund Obligation to such
Total Sinking Fund Obligation; in addition to the 16.16% Sinking
Fund Obligation, the Corporation shall have the option, which
shall be noncumulative, to redeem, upon authorization of the
Board of Directors, on each 16.16% Sinking Fund Redemption Date,
at the aforesaid sinking fund redemption price, up to 7,500
additional shares of the 16.16% Preferred Stock, Cumulative $100
Par Value; the Corporation shall be entitled, at its election, to
credit against its 16.16% Sinking Fund Obligation on any 16.16%
Sinking Fund Redemption Date any shares of the Preferred Stock,
Cumulative, $100 Par Value (including shares of the 16.16%
Preferred Stock, Cumulative, $100 Par Value, optionally redeemed
at the aforesaid sinking fund price) theretofore redeemed (other
than shares of the 16.16% Preferred Stock, Cumulative, $100 Par
Value, redeemed pursuant to the 16.16% Sinking Fund Obligation)
purchased or otherwise acquired and not previously credited
against the 16.16% Sinking Fund Obligation.
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
      Statement of Resolution Establishing Series of Shares
                                
                          July 24, 1986
                                
     Pursuant to the provisions of Section 79-3-29 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement for the purpose of establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The attached resolution establishing and designating a
         series of shares and fixing and determining the relative
         rights and preferences thereof was duly adopted by the
         Board of Directors of the Corporation on July 24, 1986.
         
         Dated this the 24th day of July, 1986.
        
                         MISSISSIPPI POWER & LIGHT COMPANY



                         By/s/ William Cavanaugh, III
                              William Cavanaugh, III
                                    President


                         By   /s/ Frank S. York, Jr.
                                Frank S. York, Jr.
                              Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                                

                                

STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joseph L. Blount, a Notary Public, do hereby certify that
on this July 24, 1986, personally appeared before me William
Cavanaugh, III, who, being by me first duly sworn, declared that
he is President of Mississippi Power & Light Company, a
Mississippi corporation, that he executed the foregoing document
as President of the Corporation, and that the statements therein
contained are true.


                                 /s/ Joseph L. Blount
                              Joseph L. Blount, Notary Public


My Commission Expires:


   January 20, 1990









STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joseph L. Blount, a Notary Public, do hereby certify that
on this July 24, 1986, personally appeared before me Frank S.
York, Jr., who, being by me first duly sworn, declared that he is
Senior Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as Senior Vice President,
Chief Financial Officer and Secretary of the Corporation, and
that the statements therein contained are true.


                                   /s/ Joseph L. Blount
                              Joseph L. Blount, Notary Public




My Commission Expires:


   January 20, 1990




RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:

A series of 350,000 shares of the Preferred Stock shall:

     (a)  be designated "9% Preferred Stock, Cumulative, $100 Par
Value;"

     (b)  have a dividend rate of $9.00 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be November 1, 1986, and
such dividends to be cumulative from the date of issuance;

     (c)  be subject to redemption at the price of $109.00 per
share if redeemed on or before July 1, 1991, of $106.75 per share
if redeemed after July 1, 1991, in each case plus an amount
equivalent to the accumulated and unpaid dividends thereon, if
any, to the date fixed for redemption; provided, however, that no
share of the 9% Preferred Stock, Cumulative, $100 Par Value,
shall be redeemed prior to July 1, 1991, if such redemption is
for the purpose or in anticipation of refunding such share
through the use, directly or indirectly, of funds borrowed by the
Corporation, or through the use, directly or indirectly, of funds
derived through the issuance by the Corporation of stock ranking
prior to or on a parity with the 9% Preferred Stock, Cumulative,
$100 Par Value, as to dividends or assets, if such borrowed funds
have an effective interest cost to the Corporation (computed in
accordance with generally accepted financial practice) or such
stock has an effective dividend cost to the Corporation (so
computed) of less than 9.9901% per annum; and

     (d)  be subject to redemption as and for a sinking fund as
follows:  on July 1, 1991, and on each July 1 thereafter (each
such date being hereinafter referred to as a "9% Sinking Fund
Redemption Date"), for so long as any shares of the 9% Preferred
Stock, Cumulative, $100 Par Value, shall remain outstanding, the
Corporation shall redeem, out of funds legally available
therefor, 70,000 shares of the 9% Preferred Stock, Cumulative,
$100 Par Value, (or the number of shares than outstanding if less
than 70,000) at the sinking fund redemption price of $100 per
share plus, as to each share so redeemed, an amount equivalent to
the accumulated and unpaid dividends thereon, if any, to the date
of redemption (the obligation of the Corporation so to redeem the
shares of the 9% Preferred Stock, Cumulative, $100 Par Value,
being hereinafter referred to as the "9% Sinking Fund
Obligation"); the 9% Sinking Fund Obligation shall be cumulative;
if on any 9.% Sinking Fund Redemption Date, the Corporation shall
not have funds legally available therefor sufficient to redeem
the full number of shares required to be redeemed on that date,
the 9% Sinking Fund Obligation with respect to the shares not
redeemed shall carry forward to each successive 9% Sinking Fund
Redemption Date until such shares shall have been redeemed;
whenever on any 9% Sinking Fund Redemption Date, the funds of the
Corporation legally available for the satisfaction of the 9%
Sinking Fund Obligation and all other sinking fund and similar
obligations than existing with respect to any other class or
series of its stock ranking on a parity as to dividends or assets
with the 9% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"),  are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 9% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 9% Sinking Fund Obligation to such
Total Sinking Fund Obligation; the Corporation shall be entitled,
at its election, to credit against its 9% Sinking Fund Obligation
on any 9% Sinking Fund Redemption Date any shares of the
Preferred Stock, Cumulative, $100 Par Value, theretofore
redeemed (other than shares of the 9% Preferred Stock,
Cumulative, $100 Par Value, redeemed pursuant to the 9% Sinking
Fund Obligation) purchased or otherwise acquired and not
previously credited against the 9% Sinking Fund Obligation.



                MISSISSIPPI POWER & LIGHT COMPANY
                                
               Statement of Cancellation of Shares
                                
                        September 1, 1986
                                
     Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:

     1. The name of the corporation is Mississippi Power & Light
        Company.
     
     2. The number of redeemable shares cancelled through
        redemption is 20,000 shares of 17% preferred stock,
        cumulative, $100 par value.
     
     3. The aggregate number of issued shares, itemized by class
        and series, after giving effect to such cancellation is
        as follows:
        
        (a) 6,275,000 shares of common stock, without par value;
        (b) 59,920 shares of 4.36% preferred stock, cumulative,
             $100 par value;
        (c) 43,888 shares of 4.56% preferred stock, cumulative,
             $100 par value;
        (d) 100,000 shares of 4.92% preferred stock, cumulative,
             $100 par value;
        (e) 75,000 shares of 9.16% preferred stock, cumulative,
             $100 par value;
        (f) 100,000 shares of 7.44% preferred stock, cumulative,
             $100 par value;
        (g) 180,000 shares of 17% preferred stock, cumulative,
             $100 par value;
        (h) 100,000 shares of 14.75% preferred stock,
             cumulative, $100 par value;
        (i) 100,000 shares of 12% preferred stock, cumulative,
             $100 par value;
        (j) 150,000 shares of 16.16% preferred stock,
             cumulative, $100 par value;
        (k) 350,000 shares of 9% preferred stock, cumulative,
             $100 par value;
     
     4. The amount, expressed in dollars, of the stated
        capital of the Corporation, after giving effect to such
        cancellation is $270,205,800.00.
     
     5. The Restated Articles of Incorporation of the
        Corporation provide that the cancelled shares shall not
        be reissued, and the number of shares which the
        Corporation has authority to issue, itemized by class,
        after giving effect to such cancellation, is as follows:
        
        (a)  15,000,000 shares of common stock, without par
             value, 6,275,000 of such shares being issued and
             outstanding at the date hereof; and
        (b)  1,984,476 shares of preferred stock, 1,258,808
             shares of which are issued and outstanding as
             outlined above.
        
        Dated this the 10th day of December, 1986.
        
                         MISSISSIPPI POWER & LIGHT COMPANY

                         By   /s/ Frank S. York, Jr.
                                  Frank S. York, Jr.
                               Senior Vice President,
                              Chief Financial Officer
                                   and Secretary

                         By        /s/ A. H. Mapp
                                     A. H. Mapp
                               Assistant Secretary and
                                 Assistant Treasurer
                                
STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.

                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public
My Commission Expires:

________________________


STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.

                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public

My Commission Expires:

________________________
                                


                MISSISSIPPI POWER & LIGHT COMPANY
                                
               Statement of Cancellation of Shares
                                
                        November 1, 1986
                                
     Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:

     1. The name of the corporation is Mississippi Power & Light
        Company.
     
     2. The number of redeemable shares cancelled through
        redemption is 180,000 shares of 17% preferred stock,
        cumulative, $100 par value.
     
     3. The aggregate number of issued shares, itemized by class
        and series, after giving effect to such cancellation is
        as follows:
        
        (a) 6,275,000 shares of common stock, without par value;
        (b) 59,920 shares of 4.36% preferred stock, cumulative,
             $100 par value;
        (c) 43,888 shares of 4.56% preferred stock, cumulative,
             $100 par value;
        (d) 100,000 shares of 4.92% preferred stock, cumulative,
             $100 par value;
        (e) 75,000 shares of 9.16% preferred stock, cumulative,
             $100 par value;
        (f) 100,000 shares of 7.44% preferred stock, cumulative,
             $100 par value;
        (g) 100,000 shares of 14.75% preferred stock,
             cumulative, $100 par value;
        (h) 100,000 shares of 12% preferred stock, cumulative,
             $100 par value;
        (i) 150,000 shares of 16.16% preferred stock,
             cumulative, $100 par value;
        (j) 350,000 shares of 9% preferred stock, cumulative,
             $100 par value;
     
     4. The amount, expressed in dollars, of the stated
        capital of the Corporation, after giving effect to such
        cancellation is $252,205,800.00.
     
     5. The Restated Articles of Incorporation of the
        Corporation provide that the cancelled shares shall not
        be reissued, and the number of shares which the
        Corporation has authority to issue, itemized by class,
        after giving effect to such cancellation, is as follows:
        
        (a)  15,000,000 shares of common stock, without par
             value, 6,275,000 of such shares being issued and
             outstanding at the date hereof; and
        (b)  1,804,476 shares of preferred stock, 1,078,808
             shares of which are issued and outstanding as
             outlined above.
        
        Dated this the 10th day of December, 1986.
        
                         MISSISSIPPI POWER & LIGHT COMPANY

                         By   /s/ Frank S. York, Jr.
                                  Frank S. York, Jr.
                               Senior Vice President,
                              Chief Financial Officer
                                   and Secretary

                         By        /s/ A. H. Mapp
                                     A. H. Mapp
                               Assistant Secretary and
                                 Assistant Treasurer
                                

STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.

                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public

My Commission Expires:

________________________


STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.

                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public

My Commission Expires:

________________________




                MISSISSIPPI POWER & LIGHT COMPANY
                                
               Statement of Cancellation of Shares
                                
                        November 1, 1986
                                
     Pursuant to the provisions of Section 79-3-133 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement of cancellation of redeemable shares by
redemption:

     1. The name of the corporation is Mississippi Power & Light
        Company.
     
     2. The number of redeemable shares cancelled through
        redemption is 100,000 shares of 14.75% preferred stock,
        cumulative, $100 par value.
     
     3. The aggregate number of issued shares, itemized by class
        and series, after giving effect to such cancellation is
        as follows:
        
        (a) 6,275,000 shares of common stock, without par value;
        (b) 59,920 shares of 4.36% preferred stock, cumulative,
             $100 par value;
        (c) 43,888 shares of 4.56% preferred stock, cumulative,
             $100 par value;
        (d) 100,000 shares of 4.92% preferred stock, cumulative,
             $100 par value;
        (e) 75,000 shares of 9.16% preferred stock, cumulative,
             $100 par value;
        (f) 100,000 shares of 7.44% preferred stock, cumulative,
             $100 par value;
        (g) 100,000 shares of 12% preferred stock, cumulative,
             $100 par value;
        (h) 150,000 shares of 16.16% preferred stock,
             cumulative, $100 par value;
        (i) 350,000 shares of 9% preferred stock, cumulative,
             $100 par value;
     
     4. The amount, expressed in dollars, of the stated
        capital of the Corporation, after giving effect to such
        cancellation is $242,205,800.00.
     
     5. The Restated Articles of Incorporation of the
        Corporation provide that the cancelled shares shall not
        be reissued, and the number of shares which the
        Corporation has authority to issue, itemized by class,
        after giving effect to such cancellation, is as follows:
        
        (a) 15,000,000 shares of common stock, without par
             value, 6,275,000 of such shares being issued and
             outstanding at the date hereof; and
        (b) 1,704,476 shares of preferred stock, 978,808 shares
             of which are issued and outstanding as outlined
             above.
        
        Dated this the 10th day of December, 1986.
        
                         MISSISSIPPI POWER & LIGHT COMPANY

                         By   /s/ Frank S. York, Jr.
                                  Frank S. York, Jr.
                               Senior Vice President,
                              Chief Financial Officer
                                   and Secretary

                         By        /s/ A. H. Mapp
                                     A. H. Mapp
                               Assistant Secretary and
                                 Assistant Treasurer
                                

STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me
Frank S. York, Jr., who, being by me first duly sworn, declared
that he is Senior Vice President, Chief Financial Officer and
Secretary of Mississippi Power & Light Company, a Mississippi
corporation, that he executed the foregoing document as Senior
Vice President, Chief Financial Officer and Secretary of the
Corporation, and that the statements therein contained are true.

                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public

My Commission Expires:

________________________


STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this 10th day of December, 1986, personally appeared before me A.
H. Mapp, who, being by me first duly sworn, declared that he is
Assistant Secretary and Assistant Treasurer of Mississippi Power
& Light Company, a Mississippi corporation, that he executed the
foregoing document as Senior Vice President, Chief Financial
Officer and Secretary of the Corporation, and that the statements
therein contained are true.

                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public

My Commission Expires:

________________________




                MISSISSIPPI POWER & LIGHT COMPANY
                                
      Statement of Resolution Establishing Series of Shares
                                
                        January 13, 1987
                                
     Pursuant to the provisions of Section 79-3-29 of the
Mississippi Code of 1972, the undersigned Corporation submits the
following statement for the purpose of establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The attached resolution establishing and designating a
         series of shares and fixing and determining the relative
         rights and preferences thereof was duly adopted by the
         Board of Directors of the Corporation on January 13,
         1987.
        
         Dated this the 13th day of January, 1987.
        
                         MISSISSIPPI POWER & LIGHT COMPANY



                         By      /s/ D. C. Lutken
                                   D. C. Lutken
                              President, Chairman of
                               the Board and Chief
                                Executive Officer


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                                

                                

STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this January 13, 1987, personally appeared before me D. C.
Lutken, who, being by me first duly sworn, declared that he is
President, Chairman of the Board and Chief Executive Officer of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as President, Chairman of
the Board and Chief Executive Officer of the Corporation, and
that the statements therein contained are true.


                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public


My Commission Expires:


________________________









STATE OF MISSISSIPPI

COUNTY OF MINDS

     I, Joy L. Spears, a Notary Public, do hereby certify that on
this January 13, 1987, personally appeared before me G. A. Goff,
who, being by me first duly sworn, declared that he is Senior
Vice President, Chief Financial Officer and Secretary of
Mississippi Power & Light Company, a Mississippi corporation,
that he executed the foregoing document as Senior Vice President,
Chief Financial Officer and Secretary of the Corporation, and
that the statements therein contained are true.


                                 /s/ Joy L. Spears
                              Joy L. Spears, Notary Public




My Commission Expires:


________________________




RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:

A series of 350,000 shares of the Preferred Stock shall:

     (a)  be designated "9.76% Preferred Stock, Cumulative, $100
Par Value;"

     (b)  have a dividend rate of $9.76 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be May 1, 1987, and such
dividends to be cumulative from the date of issuance;

     (c)  be subject to redemption at the price of $109.76 per
share if redeemed on or before January 1, 1988, of $108.68 per
share if redeemed after January 1, 1988, and on or before January
1, 1989, of $107.60 per share if redeemed after January 1, 1989,,
and on or before January 1, 1990, of $106.51 per share if
redeemed after January 1, 1990, and on or before January 1, 1991,
of $105.43 per share if redeemed after January 1, 1991, and on or
before January 1, 1992, of $104.34 per share if redeemed after
January 1, 1992, and on or before January 1, 1993, of $103.26 per
share if redeemed after January 1, 1993, and on or before January
1, 1994, of $102.17 per share if redeemed after January 1, 1994,
and on or before January 1, 1995, of $101.09 per share if
redeemed after January 1, 1995, and on or before January 1, 1996,
and of $100.00 per share if redeemed after January 1, 1996, in
each case plus an amount equivalent to the accumulated and unpaid
dividends thereon, if any, to the date fixed for redemption;
provided, however, that no share of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, shall be redeemed prior to January 1,
1992, if such redemption is for the purpose or in anticipation of
refunding such share through the use, directly or indirectly, of
funds borrowed by the Corporation, or through the use, directly
or indirectly, of funds derived through the issuance by the
Corporation of stock ranking prior to or on a parity with the
9.76% Preferred Stock, Cumulative, $100 Par Value, as to
dividends or assets, if such borrowed funds have an effective
interest cost to the Corporation (computed in accordance with
generally accepted financial practice) or such stock has an
effective dividend cost to the Corporation (so computed) of less
than 9.9165% per annum; and

     (d)  be subject to redemption as and for a sinking fund as
follows:  on January 1, 1993, and on each January 1 thereafter
(each such date being hereinafter referred to as a "9.76% Sinking
Fund Redemption Date"), for so long as any shares of the 9.76%
Preferred Stock, Cumulative, $100 Par Value, shall remain
outstanding, the Corporation shall redeem, out of funds legally
available therefor, 70,000 shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, (or the number of shares than
outstanding if less than 70,000) at the sinking fund redemption
price of $100 per share plus, as to each share so redeemed, an
amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date of redemption (the obligation of the
Corporation so to redeem the shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, being hereinafter referred to as the
"9.76% Sinking Fund Obligation"); the 9.76% Sinking Fund
Obligation shall be cumulative; if on any 9.76% Sinking Fund
Redemption Date, the Corporation shall not have funds legally
available therefor sufficient to redeem the full number of shares
required to be redeemed on that date, the 9.76% Sinking Fund
Obligation with respect to the shares not redeemed shall carry
forward to each successive 9.76% Sinking Fund Redemption Date
until such shares shall have been redeemed; whenever on any 9.76%
Sinking Fund Redemption Date, the funds of the Corporation
legally available for the satisfaction of the 9.76% Sinking Fund
Obligation and all other sinking fund and similar obligations
than existing with respect to any other class or series of its
stock ranking on a parity as to dividends or assets with the
9.76% Preferred Stock, Cumulative, $100 Par Value (such
obligation and obligations collectively being hereinafter
referred to as the "Total Sinking Fund Obligations"),  are
insufficient to permit the Corporation to satisfy fully its Total
Sinking Fund Obligation on that date, the Corporation shall apply
to the satisfaction on its 9.76% Sinking Fund Obligation on that
date that proportion of such legally available funds which is
equal to the ratio of such 9.76% Sinking Fund Obligation to such
Total Sinking Fund Obligation; the Corporation shall be entitled,
at its election, to credit against its 9.76% Sinking Fund
Obligation on any 9.76% Sinking Fund Redemption Date any shares
of the Preferred Stock, Cumulative, $100 Par Value, theretofore
redeemed (other than shares of the 9.76% Preferred Stock,
Cumulative, $100 Par Value, redeemed pursuant to the 9.76%
Sinking Fund Obligation) purchased or otherwise acquired and not
previously credited against the 9.76% Sinking Fund Obligation.

FURTHER RESOLVED That the officers of the Company are hereby
authorized and directed to execute, file, publish and record all
such statements and other documents, and to do and perform all
such other and further acts and things, as in the judgment of the
officer or officers taking such action may be necessary or
desirable for the purpose of causing the immediately preceding
resolution to become fully effective and of causing said
resolution to become and constitute an amendment of the Restated
Articles of Incorporation of the Company, all in the manner and
to the extent required by the Mississippi Business Corporation
Law.




                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                 Section 79-4-6.31 (Supp. 1987)
                                
                          March 8, 1988
                                
     The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 5,000 shares of 12%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
         (a)15,000,000 shares of common stock, without par value,
            6,275,000 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,699,476 shares of preferred stock, 1,323,808 shares
            of which are issued and outstanding in the following
            series:
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 95,000 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)150,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
         Dated this the 8th day of March, 1988.
        
                         MISSISSIPPI POWER & LIGHT COMPANY

                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary

                         By      /s/ J. R. Martin
                                   J. R. Martin
                              Treasurer and Assistant
                                     Secretary
                
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                 Section 79-4-6.31 (Supp. 1988)
                                
                        January 19, 1989
                                
     The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 1,500 shares of 12%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,699,476 shares of preferred stock, 1,323,808 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 93,500 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)150,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 19th day of January, 1989.
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
           
           

           REGISTERED AGENT/OFFICE STATEMENT OF CHANGE
                     (Mark appropriate box)
                                

             X DOMESTIC               X PROFIT

               FOREIGN                  NONPROFIT


1.   Name of Corporation:
          Mississippi Power & Light Company

                                  Federal Tax ID:  64-0205830

2.   Current street address of registered office:
          308 East Pearl Street
          Jackson, Mississippi  39201

3.   New street address of registered office:  (No change)


4.   Name of current registered agent:
          Donald C. Lutken or Robert C. Grenfell

5.   Name of new registered agent:
          Michael B. Bemis or Robert C. Grenfell

6.   (Mark appropriate box)
     (X)  The undersigned hereby accepts designation as
          registered agent for service of process.

               /s/ Michael B. Bemis
               /s/ Robert C. Grenfell

     ( )  Statement of written consent if attached.

7.   ( )  Nonprofit. The street address of the registered
                     office and the street address of the
                     principal office of its registered
                     agent will be identical.
     (X)  Profit.    The street address of the registered
                     office and the street address of the
                     business office of its registered agent
                     will be identical.

8.   The corporation has been notified of the change of
     registered office.

          Mississippi Power & Light Company
             Corporate Name



By:   Michael B. Bemis, President and COO  /s/ Michael B. Bemis
        PRINTED NAME/CORPORATE TITLE              SIGNATURE
                                

                                
                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                 Section 79-4-6.31 (Supp. 1988)
                                
                         March 30, 1989
                                
     The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 8,500 shares of 12%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,699,476 shares of preferred stock, 1,323,808 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 85,000 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)150,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 30th day of March, 1989.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                 Section 79-4-6.31 (Supp. 1988)
                                
                         March 30, 1989
                                
     The undersigned corporation, pursuant to Section 79-4-6.31
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 5,800 shares of 12%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,692,176 shares of preferred stock, 1,316,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 87,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)150,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 30th day of March, 1989.
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                                



                     ARTICLES OF CORRECTION
                     (Mark appropriate box)
                                

            X  PROFIT                   NONPROFIT


The undersigned corporation, pursuant to Section 79-4-1.24 (if a
profit corporation) or Section 79-11-113 (if a nonprofit
corporation) of the Mississippi Code of 1972, as amended, hereby
executes the following document and sets forth:

1.   The name of the corporation is:
          Mississippi Power & Light Company

2.   (Mark appropriate box.)
     (X)  The document to be corrected is Articles of
          Amendment which became effective on March 31,
          1989 (date).

     ( )  A copy of the document to be corrected is attached.

3.   The aforesaid articles contain the following incorrect
     statement:
          See Attachment "A"

4.   a. The reason such statement is incorrect is:  The
     reduction in the number of shares of the class and
     series referred to in attachment A was incorrectly
     states as 8,500, and should have been 5,800, which
     incorrect statement is a component of certain other
     statements made in the Articles of Amendment, all as
     reflected in attachment "A".

     or

     b. The manner in which the execution of such document
     was defective was:

5.   The correction is as follows: Attachment "B", a new
     executed form of Articles of Amendment, is substituted
     in its entirety for the Articles of Amendment referred
     to above.

6.   The certificate of correction shall become effective on
     March 31, 1989.


By: Mississippi Power & Light Company          /s/ G. A. Goff
      printed name/corporation title            G. A. Goff
                                        Senior Vice President,
                                        Chief Financial Officer
                                             and Secretary

                                

                         ATTACHMENT "A"
                                

     The following incorrect statements were included in the
Articles of Amendment under Miss. Code Ann. Section 74-4-6.31
(Supp. 1988) dated March 30, 1989:

      1.  Paragraph 2 thereof provided as follows:  "The
          reduction in the number of authorized shares, itemized
          by class and series, is 8,500 shares of 12% Preferred
          Stock, Cumulative, $100 par value."
      
      2.  Paragraph 3(b) provided in part as follows:  "1,699,476
          shares of preferred stock, 1,323,808 shares of which
          are issued and outstanding in the following series:
      
          (vi) 85,000 shares of 12% preferred stock,
               cumulative, $100 par value;
      
                                
                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                 Section 79-4-6.31 (Supp. 1988)
                                
                        November 2, 1989
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (Supp. 1988), submits the following document
and sets forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 90,000 shares of 16.16%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,602,176 shares of preferred stock, 1,226,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $200 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 87,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)60,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 2nd day of November, 1989.
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1972)
                                
                         March 28, 1990
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1972), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 10,000 shares of
         12.009% Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,592,176 shares of preferred stock, 1,216,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $200 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 77,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)60,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 30th day of March, 1990.
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1972)
                                
                        November 2, 1990
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1972), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 15,000 shares of 16.16%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,577,176 shares of preferred stock, 1,201,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 77,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)45,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 2nd day of November, 1990.
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                                


           [Letterhead of Wise Carter Child & Caraway]


                         March 26, 1991
                                

Ms. Sylvia Jacobs
Branch Supervisor-Corporations Business Services
Secretary of State of State of Mississippi
202 North Congress Street, Suite 601
Jackson, MS  39205


Re:  Mississippi Power & Light Company
     Articles of Amendment

Dear Ms. Jacobs:

     I received your Notice of Return regarding the Articles of
Amendment we recently filed for Mississippi Power & Light Company
under Section 79-4-6.31 of the Mississippi Code.  Your Notice of
Return states that we must use Form C-3 provided in the Guide for
Domestic Corporations published by the Mississippi Secretary of
State.

     I draw your attention to the fact that the Articles of
Amendment we are filing are being filed under Section 79-4-6.31
(1989) of the Mississippi Code, and not Section 79-4-10.06.  I
agree that if we were filing Articles of Amendment under Section
79-4-10.06, the proper form to use would be Form C-3 provided by
the Mississippi Secretary of State.  However, the Articles of
Amendment we are filing are being filed only because stock was
redeemed by the corporation and is now being cancelled.

     We have used the form enclosed with this letter numerous
times in the past to file Articles of Amendment pursuant to
Section 79-4-6.31, after consultation with Ray Bailey.  It is my
opinion that the form for the standard Articles of Amendment
would not be appropriate for the type of amendment we are filing,
and there is no place on the form to provide the information
required under Section 79-4-6.31.  Accordingly, I am returning
our duplicate originals of the Articles of Amendment and request
that you file one among the records in your office, and return
the conformed copy, marked "Filed," to my attention at the above
address.

     If you have any questions, please feel free to call at the
above direct dial number.


                         Very truly yours,


                            /s/ J. Michael Cockrell
                              J. Michael Cockrell
                                
DMC/st
Enclosure
                                



                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                         March 18, 1991
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is (a) 80 shares of 4.36%
         preferred stock, cumulative, $100 par value; (b) 588
         shares of 4.56% preferred stock, cumulative, $100 par
         value; and (c) 10,000 shares of 12% preferred stock,
         cumulative, $100 par value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,566,508 shares of preferred stock, 1,191,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 67,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)45,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)350,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 18th day of March, 1991.
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ G. A. Goff
                                   G. A. Goff
                               Senior Vice President,
                              Chief Financial Officer
                                  and Secretary
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                          July 12, 1991
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 70,000 shares of 9.00%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,496,508 shares of preferred stock, 1,121,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 67,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)45,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)280,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 12th day of July, 1991.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ A. H. Mapp
                                     A. H. Mapp
                              Assistant Treasurer and
                                 Assistant Secretary
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                        November 19, 1991
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 15,000 shares of 16.16%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,481,508 shares of preferred stock, 1,106,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 67,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)30,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)280,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 19th day of November, 1991.
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ A. H. Mapp
                                     A. H. Mapp
                              Assistant Treasurer and
                                 Assistant Secretary



                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                         March 13, 1992
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 10,000 shares of 12%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            7,579,400 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,471,508 shares of preferred stock, 1,096,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 57,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)30,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)280,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 13th day of March, 1992.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ A. H. Mapp
                         Title:    Assistant Secretary
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                          July 15, 1992
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 70,000 shares of 9.00%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,401,508 shares of preferred stock, 1,026,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 57,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)30,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)210,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
        
        Dated this the 15th day of July, 1992.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ A. H. Mapp
                         Title:    Assistant Secretary


                MISSISSIPPI POWER & LIGHT COMPANY
                                
         Articles of Amendment - Statement of Resolution
                  Establishing Series of Shares
                                
                        October 22, 1992
                                
     Pursuant to the provisions of Section 79-4-6.02(d) of the
Mississippi Code of 1972 (Supp. 1989), Mississippi Power & Light
Company submits the following statement for the purpose of
establishing and designating a series of shares and fixing and
determining the relative rights and preferences thereof:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The attached resolution establishing and designating a
         series of shares and fixing and determining the relative
         rights and preferences thereof was duly adopted by the
         Board of Directors of the Corporation on October 22,
         1992.
        
         Dated this the 22nd day of October, 1992.
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By       /s/ A. H. Mapp
                                  Allan H. Mapp
                              Assistant Secretary and
                                 Assistant Treasurer
                                



                MISSISSIPPI POWER & LIGHT COMPANY
            Excerpts from the minutes of the Meeting
       of the Board of Directors held on October 22, 1992

RESOLVED That there is hereby established a series of the
Preferred Stock of Mississippi Power & Light Company as follows:

A series of 200,000 shares of the Preferred Stock shall:

     (a)  be designated as the "8.36% Preferred Stock,
Cumulative, $100 Par Value";

     (b)  have a dividend rate of $8.36 per share per annum
payable quarterly on February 1, May 1, August 1, and November 1
of each year, the first dividend date to be February 1, 1993, and
such dividends to be cumulative from the date of issuance; and

     (c)  be subject to redemption at the price of $100 par share
plus an amount equivalent to the accumulated and unpaid dividends
thereon, if any, to the date fixed for redemption (except that no
share of the 8.36% Preferred Stock shall be redeemed on or before
October 1, 1997).

FURTHER RESOLVED That the officers of the Company are hereby
authorized and directed to execute, file and publish and record
all such statements and other documents, and to do and perform
all such other and further acts and things, as in the judgment of
the officer and officers taking such action may be necessary or
desirable for the purpose of causing the immediately preceding
resolution to become fully effective and of causing said
resolution to become and constitute an amendment of the Restated
Articles of Incorporation of the Company, all in the manner and
to the extent required by the Mississippi Business Corporation
Law.




                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                        November 6, 1992
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 15,000 shares of 16.16%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,386,508 shares of preferred stock, 1,211,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 57,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)15,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)210,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 350,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (x)  200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 6th day of November, 1993.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By     /s/ A. H. Mapp
                         Title:    Assistant Secretary



                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                        January 12, 1993
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 70,000 shares of 9.76%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,316,508 shares of preferred stock, 1,141,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 57,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)15,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)210,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 280,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (x)  200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 12th day of January, 1993.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By      /s/ A. H. Mapp
                         Title:    Assistant Secretary



                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                         March 10, 1993
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 10,000 shares of 12.00%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,306,508 shares of preferred stock, 1,131,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 47,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)15,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)210,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 280,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (x)  200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 10th day of March, 1993.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By       /s/ A. H. Mapp
                         Title:    Assistant Secretary


                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                          July 12, 1993
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 70,000 shares of 9.00%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,236,508 shares of preferred stock, 1,061,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 47,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)15,000 shares of 16.16% preferred stock,
                  cumulative, $100 par value;
            (viii)140,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (ix) 280,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (x)  200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 12th day of July, 1993.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By  /s/ James W. Snider
                         Title:    Assistant Secretary
                
                
                

                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                        November 15, 1993
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 15,000 shares of 16.16%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)1,221,508 shares of preferred stock, 1,046,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 47,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)140,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (viii)280,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (ix) 200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 15th day of November, 1993.
        
        
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By  /s/ James W. Snider
                         Title:    Assistant Secretary



                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-10.06 (1989)
                                
                        February 4, 1994
                                
     The undersigned corporation, pursuant to Section 79-4-10.06
of the Mississippi Code of 1972, as amended, submits the
following document and sets forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  As evidenced by the attached Stockholder's Written
         Approval of Amendment authorizing 1,500,000 additional
         shares of Preferred Stock of the par value of $100 per
         share, the following amendment of the Restated Articles
         of Incorporation, as amended (the "Charter"), was
         proposed by the Board of Directors of Mississippi Power
         & Light Company on October 29, 1993, was adopted by the
         stockholders of the Corporation entitled to vote on the
         amendment on February 4, 1994, in accordance with and in
         the manner prescribed by the laws of the State of
         Mississippi and the Charter of Mississippi Power & Light
         Company:
     
         The first paragraph in Article FOURTH of the Charter is
         amended to read as follows:
     
             FOURTH: The aggregate number of shares which the
             Corporation shall have authority to issue is
             17,721,508 shares, divided into 2,721,508 shares of
             Preferred Stock of the par value of $100 per share
             and 15,000,000 shares of Common Stock without par
             value.
        
     3.  Pursuant to the Laws of the State of Mississippi and the
         Charter of Mississippi Power & Light Company, the
         holders of Preferred Stock of the par value of $100 per
         share were not entitled to vote on the amendment as a
         separate voting group.  The holders of the outstanding
         shares of common stock were the only stockholders
         entitled to vote on the amendment.
     
     4.  The number of shares of common stock of the corporation
         outstanding at the time of such adoption was 8,666,357;
         and the number of shares entitled to vote thereon was
         8,666,357.
        
         Dated this the 4th day of February, 1994.
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By:   /s/ Edwin Lupberger
                                   Edwin Lupberger
                              Chairman of the Board and
                               Chief Executive Officer


                         By:   /s/ Donald E. Meiners
                                   Donald E. Meiners
                                      President



                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                         March 17, 1994
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 10,000 shares of 12.00%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)2,641,508 shares of preferred stock, 966,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 37,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)140,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (viii)210,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (ix) 200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 17th day of March, 1994.
     
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By:   /s/ J. W. Snider, Jr.
                                   Assistant Secretary
                
                
                
                MISSISSIPPI POWER & LIGHT COMPANY
                                
           Articles of Amendment Under Miss. Code Ann.
                                
                    Section 79-4-6.31 (1989)
                                
                         August 1, 1994
                                
     The undersigned corporation, pursuant to Miss. Code Ann.
Section 79-4-6.31 (1989), submits the following document and sets
forth:

     1.  The name of the corporation is Mississippi Power & Light
         Company.
     2.  The reduction in the number of authorized shares,
         itemized by class and series, is 70,000 shares of 9.00%
         Preferred Stock, Cumulative, $100 Par Value.
     3.  The total number of authorized shares, itemized by class
         and series, remaining after reduction of the shares is
         as follows:
        
         (a)15,000,000 shares of common stock, without par value,
            8,666,357 of such shares being issued and
            outstanding at the date hereof; and
         (b)2,571,508 shares of preferred stock, 896,508 shares
            of which are issued and outstanding in the following
            series:
            
            (i)  59,920 shares of 4.36% preferred stock,
                  cumulative, $100 par value;
            (ii) 43,888 shares of 4.56% preferred stock,
                  cumulative, $100 par value;
            (iii)100,000 shares of 4.92% preferred stock,
                  cumulative, $100 par value;
            (iv) 75,000 shares of 9.16% preferred stock,
                  cumulative, $100 par value;
            (v)  100,000 shares of 7.44% preferred stock,
                  cumulative, $100 par value;
            (vi) 37,700 shares of 12% preferred stock,
                  cumulative, $100 par value;
            (vii)70,000 shares of 9% preferred stock,
                  cumulative, $100 par value;
            (viii)210,000 shares of 9.76% preferred stock,
                  cumulative, $100 par value; and
            (ix) 200,000 shares of 8.36% preferred stock,
                  cumulative, $100 par value.
        
        Dated this the 1st day of August, 1994.
     
        
                         MISSISSIPPI POWER & LIGHT COMPANY


                         By:   /s/ J. W. Snider, Jr.
                                   Assistant Secretary


                                             Exhibit 23(a)


            [Letterhead of Friday, Eldredge & Clark]
                                
                                
                        November 7, 1994


Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112

Gentlemen:

     We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company ("AP&L"), Gulf States Utilities Company, Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc.  We
further consent to the incorporation by reference of such
reference to our firm into AP&L's Registration Statements (Form S-
3, File Nos. 33-36149, 33-48356 and 33-50289), and related
Prospectuses pertaining to AP&L's First Mortgage Bonds and/or
Preferred Stock and First Mortgage Bonds, respectively.


                                        Very truly yours,

                                        /s/ Friday, Eldredge & Clark

                                        FRIDAY, ELDREDGE & CLARK


                                             Exhibit 23(b)


                 [Letterhead of Monroe & Lemann]
                                
                                
                        November 7, 1994
                                

Entergy Corporation
225 Baronne Street
New Orleans, Louisiana 70112

Gentlemen:

     We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company, Louisiana Power &
Light Company ("LP&L"), Mississippi Power & Light Company, New
Orleans Public Service Inc. ("NOPSI") and System Energy
Resources, Inc.  We further consent to the incorporation by
reference of such reference to our firm into LP&L's Registration
Statements on Form S-3, and the related prospectuses (File Nos.
33-50937, 33-46085 and 33-39221) pertaining to LP&L's First
Mortgage Bonds and Preferred Stock, and into NOPSI's Registration
Statement on Form S-3, and the related prospectus (File No. 33-
57926) pertaining to NOPSI's General and Refunding Mortgage
Bonds.


                                        Very truly yours,

                                        /s/ Monroe & Lemann

                                        MONROE & LEMANN


                                                    Exhibit 23(c)


           [Letterhead of Wise Carter Child & Caraway]


                        November 7, 1994
                                
                                
                                
                                
                                                                 
                                                                 
                                                                 
Entergy Corporation
225 Baronne Street
New Orleans, Louisiana  70112

Gentlemen:

     We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company, Louisiana Power &
Light Company, Mississippi Power & Light Company ("MP&L"), New
Orleans Public Service Inc., and System Energy Resources, Inc.
("System Energy").  We further consent to the incorporation by
reference of such reference to our firm into System Energy's
Registration Statement on Form S-3, and the related prospectus
(File No. 33-47662) pertaining to System Energy's First Mortgage
Bonds, and into MP&L's Registration Statements on Form S-3, and
the related prospectuses (File Nos. 33-53004, 33-55826 and 33-
50507) pertaining to MP&L's Preferred Stock.

                         Very truly yours,
                         
                         WISE CARTER CHILD & CARAWAY,
                         Professional Association
                         
                         
                         
                         By:   /s/ Robert B. McGehee
                              Robert B. McGehee
                              

                                             Exhibit 23(d)




             [Letterhead of Clark, Thomas & Winters]



                             CONSENT


     We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company ("GSU"), Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc.  We
further consent to the incorporation by reference in the
registration statements of GSU on Form S-3 and Form S-8 (File
Numbers 2-76551, 2-98011, 33-49739, and 33-51181) of such
reference and Statements of Legal Conclusions.



                                   /s/ Clark, Thomas & Winters
                                   A Professional Corporation

                                   CLARK, THOMAS & WINTERS,
                                   A Professional Corporation

Austin, Texas
November 7, 1994



                                             Exhibit 23(e)


                             CONSENT


     We consent to the reference to our firm under the heading
"Experts" in the Quarterly Report on Form 10-Q being filed on or
about the date hereof by Entergy Corporation, Arkansas Power &
Light Company, Gulf States Utilities Company ("GSU"), Louisiana
Power & Light Company, Mississippi Power & Light Company, New
Orleans Public Service Inc. and System Energy Resources, Inc.  We
further consent to the incorporation by reference of such
reference to our firm into GSU's Registration Statements  on Form
S-3 and Form S-8 (File Numbers 2-76551, 2-98011, 33-49739 and 33-
51181) of such reference and Statements.



                                        /s/ Sandlin Associates

                                        SANDLIN ASSOCIATES
                                        Management Consultants

Pasco, Washington
November 7, 1994



 

CT This schedule contains summary financial information extracted from Entergy Corporation and Subsidiaries financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000065984 ENTERGY CORPORATION 1,000 9-MOS DEC-31-1993 SEP-30-1994 22,814,399 2,300 305,183 550,955 6,469,697 22,814,399 4,797,861 254,101 358,270 0 0 0 358,270 1.56 0
 

UT This schedule contains summary financial information extracted from AP&L's financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000007323 ARKANSAS POWER & LIGHT COMPANY 1,000 9-MOS DEC-31-1993 SEP-30-1994 PER-BOOK 2,860,727 146,291 520,433 797,236 0 4,324,687 470 590,844 464,062 1,055,376 61,027 176,350 1,293,886 34,667 0 0 28,020 0 97,976 61,274 1,516,111 4,324,687 1,256,762 45,487 1,050,857 1,096,344 160,418 24,356 184,774 79,993 104,781 14,530 90,251 75,000 0 256,832 0 0
 

UT This schedule contains summary financial information extracted from GSU's financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000044570 GULF STATES UTILITIES COMPANY 1,000 9-MOS DEC-31-1993 SEP-30-1994 PER-BOOK 4,800,268 50,450 624,945 1,455,018 0 6,930,681 114,055 1,152,344 367,323 1,633,722 96,143 136,444 2,318,375 0 0 0 50,425 0 129,021 37,720 2,528,831 6,930,681 1,432,044 34,210 1,191,063 1,225,273 206,771 (42,190) 164,581 152,116 12,465 22,442 (9,977) 289,100 0 278,337 0 0
 

UT This schedule contains summary financial information extracted from LP&L's financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000060527 LOUISIANA POWER & LIGHT COMPANY 1,000 9-MOS DEC-31-1993 SEP-30-1994 PER-BOOK 3,563,626 62,124 395,300 482,427 0 4,503,477 1,088,900 (5,529) 134,409 1,217,780 112,793 160,500 1,477,964 19,200 0 0 320 0 18,546 33,867 1,462,507 4,503,477 1,327,927 80,171 998,578 1,078,749 249,178 3,332 252,510 100,032 152,478 17,668 134,810 90,400 0 304,501 0 0
 

UT This schedule contains summary financial information extracted from MP&L's financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000066901 MISSISSIPPI POWER & LIGHT COMPANY 1,000 9-MOS DEC-31-1993 SEP-30-1994 PER-BOOK 948,800 10,285 260,134 444,349 0 1,663,568 199,326 (1,762) 241,330 438,894 31,770 57,881 490,187 30,000 0 0 50,965 0 589 0 563,282 1,663,568 651,481 23,280 551,983 575,263 76,218 1,333 77,551 38,793 38,758 5,827 32,931 28,000 0 154,369 0 0
 

UT This schedule contains summary financial information extracted from NOPSI's financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000071508 NEW ORLEANS PUBLIC SERVICE INC. 1,000 9-MOS DEC-31-1993 SEP-30-1994 PER-BOOK 275,822 3,259 161,489 200,845 0 641,415 33,744 36,201 112,507 182,452 3,450 19,780 164,148 0 0 0 24,200 0 0 0 247,385 641,415 375,064 17,003 317,781 334,784 40,280 879 41,159 13,601 27,558 1,162 26,396 14,400 0 60,951 0 0
 

UT This schedule contains summary financial information extracted from System Energy's financial statements for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 0000202584 SYSTEM ENERGY RESOURCES, INC. 1,000 9-MOS DEC-31-1993 SEP-30-1994 PER-BOOK 2,829,752 30,333 410,304 582,601 0 3,852,990 789,350 7 175,969 965,326 0 0 1,543,037 0 0 0 200,000 0 838 55,000 1,088,789 3,852,990 450,015 55,896 198,129 254,025 195,990 4,906 200,896 129,201 71,695 0 71,695 124,300 0 206,871 0 0
Exhibit 99(a) Arkansas Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on long-term debt $89,027 $101,412 $100,533 $89,317 $77,980 $72,780 Interest on long-term debt - other 31,138 31,195 33,321 31,000 29,791 29,226 Interest on notes payable 828 1,027 -- 117 349 1,161 Amortization of expense and premium on debt-net(cr) 1,557 1,792 1,112 1,359 2,702 4,475 Other interest (6,295) 1,567 1,303 2,308 8,769 877 Interest applicable to rentals 22,349 24,233 21,969 17,657 16,860 14,697 --------------------------------------------------------------------- Total fixed charges, as defined 138,604 161,226 158,238 141,758 136,451 123,216 Preferred dividends, as defined (a) 31,298 30,851 31,458 32,195 30,334 25,889 --------------------------------------------------------------------- Combined fixed charges and preferred dividends, as $169,902 $192,077 $189,696 $173,953 $166,785 $149,105 defined ===================================================================== Earnings as defined: Net Income $131,979 $129,765 $143,451 $130,529 $205,297 $127,749 Add: Provision for income taxes: Federal & State 8,440 50,921 44,418 57,089 58,162 65,883 Deferred - net 37,268 17,943 11,048 3,490 34,748 (14,084) Investment tax credit adjustment - net 3,543 (12,022) (1,600) (9,989) (10,573) (10,639) Fixed charges as above 138,604 161,226 158,238 141,758 136,451 123,216 --------------------------------------------------------------------- Total earnings, as defined $319,834 $347,833 $355,555 $322,877 $424,085 $292,125 ===================================================================== Ratio of earnings to fixed charges, as defined 2.31 2.16 2.25 2.28 3.11 2.37 ===================================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.88 1.81 1.87 1.86 2.54 1.96 ===================================================================== - ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate.
Exhibit 99(b) Gulf States Utilities Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on mortgage bonds $231,170 $218,462 $201,335 $197,218 $172,494 $166,498 Interest on notes payable 33,185 24,295 8,446 - - - Interest on long-term debt - other 19,495 12,668 19,507 21,155 19,440 19,440 Other interest 13,331 18,380 29,169 26,564 10,561 7,743 Amortization of expense and premium on debt-net(cr) 2,280 2,192 1,999 3,479 8,104 8,842 Interest applicable to rentals 23,244 23,761 24,049 23,759 23,455 21,390 --------------------------------------------------------------------- Total fixed charges, as defined 322,705 299,758 284,505 272,175 234,054 223,913 Preferred dividends, as defined (a) 241,829 104,484 90,146 69,617 65,299 29,817 --------------------------------------------------------------------- Combined fixed charges and preferred dividends, as defined $564,534 $404,242 $374,651 $341,792 $299,353 $253,730 ===================================================================== Earnings as defined: Income (loss) from continuing operations before extraordinary items and the cumulative effect of accounting changes $13,251 ($36,399) $112,391 $139,413 $69,462 ($34,301) Add: Income taxes 37,744 (24,216) 48,250 55,860 58,016 (409) Fixed charges as above 322,705 299,758 284,505 272,175 234,054 223,913 --------------------------------------------------------------------- Total earnings, as defined (b) $373,700 $239,143 $445,146 $467,448 $361,532 $189,203 ===================================================================== Ratio of earnings to fixed charges, as defined 1.16 0.80 1.56 1.72 1.54 0.84 ===================================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 0.66 0.59 1.19 1.37 1.21 0.75 ===================================================================== (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate. (b) Earnings for the year ended December 31, 1990, for GSU were not adequate to cover fixed charges by $60.6 million. Earnings for the years ended December 31, 1990 and 1989, were not adequate adequate to cover fixed charges and preferred and preference dividends by $165.1 million and $190.8 million, respectively. Earnings in 1990 include a $205 million charge for the settlement of a purchased power dispute. Earnings for the twelve months ended September 30, 1994 were not adequate to cover fixed charges by $34.7 million. Earnings for the twelve months ended September 30, 1994 were not adequate to cover fixed charges and preferred dividends by $64.5 million.
Exhibit 99(c) Louisiana Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on mortgage bonds $155,640 $101,996 $97,324 $68,247 $60,939 $58,627 Interest on long-term debt - other 25,400 52,361 61,492 60,425 63,694 65,875 Interest on notes payable -- 87 -- 150 898 1,782 Interest on lease (nuclear) 9,475 8,756 7,086 5,092 4,574 5,038 Other interest charges 11,300 6,378 5,924 5,591 5,706 3,544 Amortization of expense and premium on debt-net (cr) 2,260 3,397 3,282 7,100 5,720 5,106 Interest applicable to rentals 4,415 4,150 4,295 4,271 3,945 4,991 --------------------------------------------------------------------- Total fixed charges, as defined 208,490 177,125 179,403 150,876 145,476 144,963 Preferred dividends, as defined (a) 59,009 42,365 41,212 42,026 40,779 35,566 --------------------------------------------------------------------- Combined fixed charges and preferred dividends, as $267,499 $219,490 $220,615 $192,902 $186,255 $180,529 defined ===================================================================== Earnings as defined: Net Income $106,613 $155,049 $166,572 $182,989 $188,808 $176,333 Add: Provision for income taxes: Federal and State 29,069 62,236 8,684 36,465 70,552 74,342 Deferred Federal and State - net 7,840 (9,655) 67,792 51,889 43,017 25,302 Investment tax credit adjustment - net 20,822 26,646 8,244 (1,317) (2,756) (2,796) Fixed charges as above 208,490 177,125 179,403 150,876 145,476 144,963 --------------------------------------------------------------------- Total earnings, as defined $372,834 $411,401 $430,695 $420,902 $445,097 $418,144 ===================================================================== Ratio of earnings to fixed charges, as defined 1.79 2.32 2.40 2.79 3.06 2.88 ===================================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.39 1.87 1.95 2.18 2.39 2.32 ===================================================================== - ------------------------ (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 99(d) Mississippi Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on long-term debt $60,995 $59,675 $59,440 $56,646 $48,029 $43,311 Interest on long-term debt - other 4,325 4,300 4,188 4,063 4,070 3,697 Interest on notes payable 1,031 1,512 953 36 7 1,242 Other interest charges 1,591 1,494 1,444 1,636 1,795 2,992 Amortization of expense and premium on debt-net(cr) 1,548 1,737 1,617 1,685 1,458 1,775 Interest applicable to rentals 533 596 574 521 1,264 1,496 ------------------------------------------------------------------ Total fixed charges, as defined 70,023 69,314 68,216 64,587 56,623 54,513 Preferred dividends, as defined (a) 2,584 17,584 14,962 12,823 12,990 11,982 ------------------------------------------------------------------ Combined fixed charges and preferred dividends, as defined $72,607 $86,898 $83,178 $77,410 $69,613 $66,495 ================================================================== Earnings as defined: Net Income $12,419 $60,830 $63,088 $65,036 $101,743 $45,458 Add: Provision for income taxes: Federal and State 370 4,027 (1,001) 4,463 54,418 47,021 Deferred Federal and State - net (8,636) 35,721 32,491 20,430 539 (24,565) Investment tax credit adjustment - net (1,523) (1,835) (1,634) (1,746) 1,036 1,014 Fixed charges as above 70,023 69,314 68,216 64,587 56,623 54,513 ------------------------------------------------------------------ Total earnings, as defined $72,653 $168,057 $161,160 $152,770 $214,359 $123,441 ================================================================== Ratio of earnings to fixed charges, as defined 1.04 2.42 2.36 2.37 3.79 2.26 ================================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.00 1.93 1.94 1.97 3.08 1.86 ================================================================== - ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate. (b) Earnings for the twelve months ended December 31, 1989 include the impact of the write-off of $60 million of deferred Grand Gulf 1 - related costs pursuant to an agreement between MP&L and the MPSC.
Exhibit 99(e) New Orleans Public Service Inc. Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on mortgage bonds $24,472 $24,472 $23,865 $22,934 $19,478 $16,792 Interest on notes payable -- -- -- -- -- 102 Other interest charges 2,422 831 793 1,714 1,016 1,046 Amortization of expense and premium on debt-net(cr) 579 579 565 576 598 723 Interest applicable to rentals 603 160 517 444 544 903 ------------------------------------------------------------------ Total fixed charges, as defined 28,076 26,042 25,740 25,668 21,636 19,566 Preferred dividends, as defined (a) 4,633 4,020 3,582 3,214 2,952 2,987 ------------------------------------------------------------------ Combined fixed charges and preferred dividends, as defined $32,709 $30,062 $29,322 $28,882 $24,588 $22,553 ================================================================== Earnings as defined: Net Income $14,464 $27,542 $74,699 $26,424 $47,709 $22,780 Add: Provision for income taxes: Federal and State 848 134 8,885 16,575 27,479 37,823 Deferred Federal and State - net 9,296 17,370 36,947 (340) 5,203 (17,191) Investment tax credit adjustment - net 444 (75) (591) (170) (744) (725) Fixed charges as above 28,076 26,042 25,740 25,668 21,636 19,566 ------------------------------------------------------------------ Total earnings, as defined $53,128 $71,013 $145,680 $68,157 $101,283 $62,253 ================================================================== Ratio of earnings to fixed charges, as defined 1.89 2.73 5.66 2.66 4.68 3.18 ================================================================== Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.62 2.36 4.97 2.36 4.12 2.76 ================================================================== - ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate. (b) Earnings for the twelve months ended December 31, 1991 include the $90 million effect of the 1991 NOPSI Settlement.
Exhibit 99 (f) System Energy Resources, Inc. Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Fixed Charges Twelve Months Ended December 31, September 30, 1989 1990 1991 1992 1993 1994 (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on mortgage bonds $148,402 $138,689 $126,351 $104,429 $91,472 $84,857 Interest on other long-term debt 91,295 91,955 92,187 92,189 93,346 85,735 Interest on lease nuclear 18,298 13,830 10,007 6,265 6,790 7,321 Interest on notes payable 0 0 0 0 0 46 Amortization of expense and premium on debt-net 7,326 10,532 7,495 6,417 4,520 6,300 Other interest charges 2,790 1,460 3,617 1,506 1,600 1,934 ------------------------------------------------------------------- Total fixed charges, as defined $268,111 $256,466 $239,657 $210,806 $197,728 $186,193 =================================================================== Earnings as defined: Net Income ($655,524) $168,677 $104,622 $130,141 $93,927 $89,529 Add: Provision for income taxes: Federal and State (168,440) 4,620 (26,848) 35,082 48,314 67,039 Deferred Federal and State - net 93,048 52,962 37,168 23,648 60,690 46,231 Investment tax credit adjustment - net (14,321) 56,320 63,256 30,123 (30,452) (30,240) Fixed charges as above 268,111 256,466 239,657 210,806 197,728 186,193 -------------------------------------------------------------------- Total earnings, as defined ($477,126) $539,045 $417,855 $429,800 $370,207 $358,752 ==================================================================== Ratio of earnings to fixed charges, as defined (a) 2.10 1.74 2.04 1.87 1.93 ==================================================================== - ------------------------ (a) Earnings for the twelve months ended December 31, 1989 were inadequate to cover fixed charges due to System Energy's cancellation and write-off of its investment in Grand Gulf 2 in September 1989. The amount of the coverage deficiency for fixed charges was $745.2 million.
                                                                Exhibit 99(j)
                                                                             
               ARKANSAS POWER & LIGHT COMPANY
                     STATEMENT OF INCOME
           Twelve Months Ended September 30, 1994
                        (In Thousands)
                         (Unaudited)
                                                                             
                                                                             
Operating Revenues:                                                $1,598,117
                                                                   ----------
          
Operating Expenses:                                                           
 Operation and maintenance:                                                   
  Fuel and fuel-related expenses                                      265,707
  Purchased power                                                     349,569
  Nuclear refueling outage expenses                                    38,800
  Other operation and maintenance                                     380,309
 Depreciation and decommissioning                                     145,303
 Taxes other than income taxes                                         33,719
 Income taxes                                                          19,007
 Amortization of rate deferrals                                       160,840
                                                                   ----------
           Total                                                    1,393,254
                                                                   ----------
       
Operating Income                                                      204,863
                                                                   ---------- 
       
Other Income (Deductions):                                                    
 Allowance for equity funds used                                              
   during construction                                                  3,876
 Miscellaneous - net                                                   55,491
 Income taxes                                                         (22,152)
                                                                   ----------
           Total                                                       37,215
                                                                   ---------- 
       
Interest Charges:                                                             
 Interest on long-term debt                                           102,006
 Other interest - net                                                  15,452
 Allowance for borrowed funds used                                            
   during construction                                                 (3,128)
                                                                   ----------
          Total                                                       114,330
                                                                   ---------- 
       
Net Income                                                            127,748
                                                                             
Preferred Stock Dividend Requirements and Other                        19,579
                                                                   ---------- 
      
Earnings Applicable to Common Stock                                  $108,169
                                                                   ========== 
         
                                                                             


                                                          Exhibit 99(k)
                                                                       
           MISSISSIPPI POWER & LIGHT COMPANY
                  STATEMENT OF INCOME
        Twelve Months Ended September 30, 1994
                     (In Thousands)
                      (Unaudited)
                                                                       
                                                                       
Operating Revenues:                                            $873,895
                                                               --------        
Operating Expenses:                                                     
 Operation and maintenance:                                             
   Fuel and fuel-related expenses                               154,317
   Purchased power                                              257,558
   Other operation and maintenance                              163,930
 Depreciation and amortization                                   35,413
 Taxes other than income taxes                                   43,898
 Income taxes                                                    20,523
 Amortization of rate deferrals                                  99,219
                                                               --------
           Total                                                774,858
                                                               --------         
Operating Income                                                 99,037
                                                               --------         
Other Income (Deductions):                                              
 Allowance for equity funds used                                        
   during construction                                            1,682
 Miscellaneous - net                                               (395)
 Income taxes                                                    (2,949)
                                                               --------
           Total                                                 (1,662)
                                                               --------         
Interest Charges:                                                       
 Interest on long-term debt                                      47,008
 Other interest - net                                             6,009
 Allowance for borrowed funds used                                      
   during construction                                           (1,101)
                                                               --------
          Total                                                  51,916
                                                               --------        
Net Income                                                       45,459
                                                                       
Preferred Stock Dividend Requirements and Other                   8,002
                                                               --------       
Earnings Applicable to Common Stock                             $37,457
                                                               ========       


                                                Exhibit 99(n)
                                
             [LETTERHEAD OF CLARK, THOMAS & WINTERS]
                                
                                
                                
                        November 7, 1994
                                
                                
                                
Gulf States Utilities Company
639 Loyola Avenue
New Orleans, LA  70112
Attn: Scott Forbes


     Re:  SEC Form 10-Q of Gulf States Utilities Company (the
          "Company") for the quarter ending September 30,
          1994
     
Dear Mr. Forbes:

     Our firm has rendered to the Company two opinion letters
dated September 30, 1992 and August 8, 1994, concerning
certain issues presented in the appeal of PUCT Docket No.
7195 now pending in the Texas Third District Court of
Appeals.  In connection with the above-referenced Form 10-Q,
we confirm to you as of the date hereof that we continue to
hold the opinions set forth in the letter dated August 8,
1994 and in the September 30, 1992 letter which addressed the
recovery of $1.45 billion of abeyed construction costs.



                              CLARK, THOMAS & WINTERS
                              A Professional Corporation


                              /s/ Clark, Thomas & Winters,
                              A Professional Corporation

  The opinion letters dated September 30, 1992 indicate
       that the amount of River Bend plant costs held in abeyance
       was $1.45 billion.  The more correct amount, as indicated by
       the Company in its securities filings to which those
       opinions related, is $1.4 billion.


 

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