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

          For the Quarterly Period Ended March 31, 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) 984-9000               



       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 April 30, 1994
Entergy Corporation      ($0.01 par value)          230,024,379



              ENTERGY CORPORATION AND SUBSIDIARIES
             INDEX TO QUARTERLY REPORT ON FORM 10-Q
                         March 31, 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            54
Part II:
  Item 1.  Legal Proceedings                              67
  Item 4.  Submission of Matters to a Vote 
           of Security Holders                            73
  Item 5.  Other Information                              75
  Item 6.  Exhibits and Reports on Form 8-K               77
Experts                                                   80
Signature                                                 81



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, filed by the individual registrants with
the SEC on March 17, 1994, and must 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 Grand Gulf
                         1, Waterford 3, and ANO
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
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, that 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 and
                         capacity of 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"
System Agreement         Agreement, effective January 1, 1983,
                         as modified by a June 13, 1985, decision
                         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 March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ----------- ----------- (In Thousands) ASSETS Utility Plant: Electric $20,878,026 $20,848,844 Plant acquisition adjustment - GSU 377,052 380,117 Electric plant under leases 664,806 663,024 Property under capital leases - electric 173,954 175,276 Natural gas 190,621 156,452 Steam products 43,176 75,689 Construction work in progress 651,028 533,112 Nuclear fuel under capital leases 321,253 329,433 Nuclear fuel 24,901 17,760 ----------- ----------- Total 23,324,817 23,179,707 Less - accumulated depreciation and amortization 7,296,056 7,157,981 ----------- ----------- Utility plant - net 16,028,761 16,021,726 ----------- ----------- Other Property and Investments: Decommissioning trust funds 197,532 172,960 Other 185,612 183,597 ----------- ----------- Total 383,144 356,557 ----------- ----------- Current Assets: Cash and cash equivalents: Cash 169,935 27,345 Temporary cash investments - at cost, which approximates market 324,990 536,404 ----------- ----------- Total cash and cash equivalents 494,925 563,749 Special deposits 9,247 36,612 Notes receivable 17,076 17,710 Accounts receivable: Customer (less allowance for doubtful accounts of $8.6 million in 1994 and $8.8 million in 1993) 296,603 315,796 Other 61,544 81,931 Accrued unbilled revenues 207,053 257,321 Fuel inventory 86,582 110,204 Materials and supplies - at average cost 359,209 360,353 Rate deferrals 345,622 333,311 Prepayments and other 95,960 98,144 ----------- ----------- Total 1,973,821 2,175,131 ----------- ----------- Deferred Debits and Other Assets: Rate deferrals 1,785,163 1,876,051 SFAS 109 regulatory asset - net 1,220,674 1,385,824 Long-term receivables 235,546 228,030 Unamortized loss on reacquired debt 246,673 210,698 Other 640,825 622,680 ----------- ----------- Total 4,128,881 4,323,283 ----------- ----------- TOTAL $22,514,607 $22,876,697 =========== =========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ----------- ----------- (In Thousands) CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $0.01 par value, authorized 500,000,000 shares; issued 231,219,737 shares in 1994 and 1993 $2,312 $2,312 Paid-in capital 4,224,207 4,223,682 Retained earnings 2,172,493 2,310,082 Less - treasury stock (1,001,243 shares in 1994) 35,456 - ----------- ----------- Total common shareholders' equity 6,363,556 6,536,076 Preference stock 150,000 150,000 Subsidiaries' preferred stock: Without sinking fund 550,955 550,955 With sinking fund 324,803 349,053 Long-term debt 7,309,630 7,355,962 ----------- ----------- Total 14,698,944 14,942,046 ----------- ----------- Other Noncurrent Liabilities: Obligations under capital leases 310,508 322,867 Other 294,907 270,318 ----------- ----------- Total 605,415 593,185 ----------- ----------- Current Liabilities: Currently maturing long-term debt 371,210 322,010 Notes payable 43,667 43,667 Accounts payable 310,136 413,727 Customer deposits 129,365 127,524 Taxes accrued 135,207 118,267 Accumulated deferred income taxes 80,312 44,637 Interest accrued 201,505 210,894 Dividends declared 117,881 13,404 Deferred revenue - gas supplier judgment proceeds 4,349 14,632 Deferred fuel cost 9,251 4,528 Obligations under capital leases 185,603 194,015 Other 202,616 240,471 ----------- ----------- Total 1,791,102 1,747,776 ----------- ----------- Deferred Credits: Accumulated deferred income taxes 3,831,036 3,849,439 Accumulated deferred investment tax credits 777,123 802,273 Other 810,987 941,978 ----------- ----------- Total 5,419,146 5,593,690 ----------- ----------- Commitments and Contingencies (Notes 1 and 2) TOTAL $22,514,607 $22,876,697 =========== =========== See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 ----------- ----------- (In Thousands) Operating Revenues: Electric $1,340,252 $897,266 Natural gas 54,079 29,146 Steam products 11,708 - ----------- ----------- Total 1,406,039 926,412 ----------- ----------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 314,728 176,935 Purchased power 124,796 56,813 Nuclear refueling outage expenses 16,825 17,099 Other operation and maintenance 334,932 231,069 Depreciation and decommissioning 160,809 110,130 Taxes other than income taxes 72,852 48,410 Income taxes 33,553 31,786 Rate deferrals: Rate deferrals - (1,313) Amortization of rate deferrals 93,674 62,740 ----------- ----------- Total 1,152,169 733,669 ----------- ----------- Operating Income 253,870 192,743 ----------- ----------- Other Income (Deductions): Allowance for equity funds used during construction 3,535 2,152 Miscellaneous - net 14,362 15,387 Income taxes (8,197) (9,577) ----------- ----------- Total 9,700 7,962 ----------- ----------- Interest and Other Charges: Interest on long-term debt 160,395 123,719 Other interest - net 14,140 6,614 Allowance for borrowed funds used during construction (2,642) (1,526) Preferred and preference dividend requirements of subsidiaries and other 20,942 14,585 ----------- ----------- Total 192,835 143,392 ----------- ----------- Income before Cumulative Effect of a Change in Accounting Principle 70,735 57,313 Cumulative effect to January 1, 1993, of Accruing Unbilled Revenues (net of income taxes of $57,188) - 93,841 ----------- ----------- Net Income $70,735 $151,154 =========== =========== Earnings per average common share before cumulative effect of a change in accounting principle $0.31 $0.33 Earnings per average common share $0.31 $0.86 Dividends declared per common share $0.90 $0.80 Average number of common shares outstanding 230,584,786 175,108,922 See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Activities: Net income $70,735 $151,154 Noncash items included in net income: Cumulative effect of a change in accounting principle - (93,841) Change in rate deferrals/excess capacity-net 80,768 36,290 Depreciation and decommissioning 160,809 110,130 Deferred income taxes and investment tax credits 1,064 (8,218) Allowance for equity funds used during construction (3,535) (2,152) Amortization of deferred revenues (10,283) (9,311) Provision for estimated losses and reserves (13,503) 9,934 Changes in working capital: Receivables 89,848 35,943 Fuel inventory 23,622 4,065 Accounts payable (103,591) (48,034) Taxes accrued 16,940 9,505 Interest accrued (9,389) (8,124) Other working capital accounts 36 (770) Refunds to customers - gas contract settlement - (56,027) Decommissioning trust contributions (5,516) (5,706) Other 24,426 30,796 -------- -------- Net cash flow provided by operating activities 322,431 155,634 -------- -------- Investing Activities: Construction/capital expenditures (175,107) (86,836) Allowance for equity funds used during construction 3,535 2,152 Nuclear fuel purchases (9,344) (17,015) Proceeds from sale/leaseback of nuclear fuel 1,035 - Investment in nonregulated/nonutility properties 240 (58,229) Decrease in other temporary investments - 9,012 -------- -------- Net cash flow used in investing activities (179,641) (150,916) -------- -------- Financing Activities: Proceeds from the issuance of: First mortgage bonds - 100,000 General and refunding mortgage bonds - 195,000 Bank notes and other long term debt - 788 Premium and expense on refinancing sale/leaseback bond (47,602) - Retirement of: First mortgage bonds (400) (88,585) General and refunding mortgage bonds - (84,400) Bank notes and other long-term debt (44) - Repurchase of common stock (35,590) (6,524) Redemption of preferred stock (24,250) (22,000) Common stock dividends paid (103,728) (69,629) -------- -------- Net cash flow provided by (used in) financing activities (211,614) 24,650 -------- -------- Net increase (decrease) in cash and cash equivalents (68,824) 29,368 Cash and cash equivalents at beginning of period 563,749 379,792 -------- -------- Cash and cash equivalents at end of period $494,925 $409,160 ======== ========
ENTERGY CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $169,748 $134,450 Income taxes $(6,070) $14,197 Noncash investing and financing activities: Capital lease obligations incurred $20,547 $232 Excess of fair value of decommissioning trust assets over amount invested $15,634 - See Notes to Financial Statements.
ENTERGY CORPORATION AND SUBSIDIARIES SELECTED OPERATING RESULTS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) Increase/ Description 1994 1993 (Decrease) % - ----------------------------------------------------------------------------------- (In Millions) Electric Operating Revenues: Residential $ 476.0 $ 323.1 $ 152.9 47 Commercial 339.1 227.0 112.1 49 Industrial 436.1 268.5 167.6 62 Governmental 38.9 31.1 7.8 25 --------- ------- ------- Total retail 1,290.1 849.7 440.4 52 Sales for resale 69.4 58.2 11.2 19 Other (19.3) (10.6) (8.7) (82) --------- ------- ------- Total $ 1,340.2 $ 897.3 $ 442.9 49 ========= ======= ======= Billed Electric Energy Sales (Millions of KWH): Residential 6,062 4,072 1,990 49 Commercial 4,406 2,884 1,522 53 Industrial 9,728 5,853 3,875 66 Governmental 525 433 92 21 --------- ------- ------- Total retail 20,721 13,242 7,479 56 Sales for resale 1,736 1,704 32 2 --------- ------- ------- Total 22,457 14,946 7,511 50 ========= ======= ======= Note: On December 31, 1993, GSU became a wholly-owned subsidiary of Entergy Corporation. In accordance with the purchase method of accounting, the 1993 first quarter operating results does not include GSU's operating results.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ---------- ---------- (In Thousands) ASSETS Utility Plant: Electric $4,107,725 $4,098,355 Property under capital leases 61,608 62,139 Construction work in progress 221,518 197,005 Nuclear fuel under capital lease 96,411 93,606 ---------- ---------- Total 4,487,262 4,451,105 Less - accumulated depreciation and amortization 1,634,841 1,604,318 ---------- ---------- Utility plant - net 2,852,421 2,846,787 ---------- ---------- Other Property and Investments: Investment in subsidary companies - at equity 11,232 11,232 Decommissioning trust fund 126,294 108,192 Other - at cost (less accumulated depreciation) 4,337 4,257 ---------- ---------- Total 141,863 123,681 ---------- ---------- Current Assets: Cash 33,223 1,825 Accounts receivable: Customer (less allowance for doubtful accounts of $2.1 million in 1994 and 1993) 58,607 65,641 Associated companies 25,140 18,312 Other 12,177 20,817 Accrued unbilled revenues 70,290 83,378 Fuel inventory - at average cost 39,225 51,920 Materials and supplies - at average cost 81,266 81,398 Rate deferrals 97,080 92,592 Deferred excess capacity 9,210 9,115 Prepayments and other 23,184 28,303 ---------- ---------- Total 449,402 453,301 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 446,832 475,387 Deferred excess capacity 26,180 28,465 SFAS 109 regulatory asset - net 243,924 234,015 Unamortized loss on reaquired debt 59,346 60,169 Other 114,333 112,300 ---------- ---------- Total 890,615 910,336 ---------- ---------- TOTAL $4,334,301 $4,334,105 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY BALANCE SHEETS March 31, 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 452,416 448,811 ---------- ---------- Total common shareholder's equity 1,043,730 1,040,125 Preferred stock: Without sinking fund 176,350 176,350 With sinking fund 65,027 70,027 Long-term debt 1,315,548 1,313,315 ---------- ---------- Total 2,600,655 2,599,817 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 97,082 94,861 Other 51,871 59,750 ---------- ---------- Total 148,953 154,611 ---------- ---------- Current Liabilities: Currently maturing long-term debt 3,020 3,020 Notes payable: Associated companies 31,992 21,395 Other 667 667 Accounts payable: Associated companies 38,122 45,177 Other 74,941 93,611 Customer deposits 15,234 15,241 Taxes accrued 63,180 43,013 Accumulated deferred income taxes 33,469 32,367 Interest accrued 31,076 31,410 Dividends declared 4,883 5,049 Nuclear refueling reserve 5,024 3,070 Co-owner advances 39,438 39,435 Deferred fuel cost 15,951 16,130 Obligations under capital leases 60,937 60,883 Other 24,158 29,789 ---------- ---------- Total 442,092 440,257 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 876,561 876,618 Accumulated deferred investment tax credits 151,798 154,723 Other 114,242 108,079 ---------- ---------- Total 1,142,601 1,139,420 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,334,301 $4,334,105 ========== ========== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Revenues: $371,091 $346,740 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel related expenses 63,474 58,952 Purchased power 91,182 81,670 Nuclear refueling outage expenses 8,634 12,485 Other operation and maintenance 80,526 84,755 Depreciation and decommissioning 35,718 33,431 Taxes other than income taxes 9,115 7,380 Income taxes (2,405) (3,115) Amortization of rate deferrals 40,173 34,221 -------- -------- Total 326,417 309,779 -------- -------- Operating Income 44,674 36,961 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 1,154 1,279 Miscellaneous - net 14,659 15,172 Income taxes (5,771) (10,239) -------- -------- Total 10,042 6,212 -------- -------- Interest Charges: Interest on long-term debt 25,233 27,269 Other interest - net 3,915 917 Allowance for borrowed funds used during construction (820) (907) -------- -------- Total 28,328 27,279 -------- -------- Income before Cumulative Effect of a Change in Accounting Principle 26,388 15,894 Cumulative Effect to January 1, 1993, of Accruing Unbilled Revenues (net of income taxes of $31,140) - 50,187 -------- -------- Net Income 26,388 66,081 Preferred Stock Dividend Requirements and Other 4,883 5,262 -------- -------- Earnings Applicable to Common Stock $21,505 $60,819 ======== ======== See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 ------- ------- (In Thousands) Operating Activities: Net income $26,388 $66,081 Noncash items included in net income: Cumulative effect of a change in accounting principle - (50,187) Change in rate deferrals/excess capacity-net 26,257 19,878 Depreciation and decommissioning 35,718 33,431 Deferred income taxes and investment tax credits (11,751) (16,374) Allowance for equity funds used during construction (1,154) (1,279) Changes in working capital: Receivables 21,934 26,478 Fuel inventory 12,695 163 Accounts payable (25,725) (15,703) Taxes accrued 20,167 17,638 Interest accrued (334) 1,893 Other working capital accounts 1,391 (5,316) Decommissioning trust contributions (2,545) (3,195) Other (14,857) 11,412 ------- ------- Net cash flow provided by operating activities 88,184 84,920 ------- ------- Investing Activities: Construction expenditures (40,188) (30,908) Allowance for equity funds used during construction 1,154 1,279 ------- ------- Net cash flow used in investing activities (39,034) (29,629) ------- ------- Financing Activities: Retirement of first mortgage bonds (400) (15,400) Redemption of preferred stock (5,000) (5,000) Change in short-term borrowings 10,597 (4,000) Dividends paid: Common stock (17,900) (6,000) Preferred stock (5,049) (5,481) ------- ------- Net cash flow used in financing activities (17,752) (35,881) ------- ------- Net increase in cash and cash equivalents 31,398 19,410 Cash and cash equivalents at beginning of period 1,825 - ------- ------- Cash and cash equivalents at end of period $33,223 $19,410 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $24,655 $24,976 Income taxes $(242) $11,252 Noncash investing and financing activities: Capital lease obligations incurred $14,313 $232 Excess of fair value of decommissionning trust assets over amount invested $13,463 - See Notes to Financial Statements.
ARKANSAS POWER & LIGHT COMPANY SELECTED OPERATING RESULTS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) Increase/ Description 1994 1993 (Decrease) % - ---------------------------------------------------------------------------------- (In Millions) Electric Operating Revenues: Residential $ 123.3 $ 118.9 $ 4.4 4 Commercial 66.3 63.8 2.5 4 Industrial 72.8 70.4 2.4 3 Governmental 4.1 3.8 0.3 8 ------- ------- ------ Total retail 266.5 256.9 9.6 4 Sales for resale 110.9 95.8 15.1 16 Other (6.3) (6.0) (0.3) (5) ------- ------- ------ Total $ 371.1 $ 346.7 $ 24.4 7 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 1,438 1,370 68 5 Commercial 931 888 43 5 Industrial 1,364 1,295 69 5 Governmental 58 55 3 5 ------- ------- ------ Total retail 3,791 3,608 183 5 Sales for resale 4,454 3,972 482 12 ------- ------- ------ Total 8,245 7,580 665 9 ======= ======= ======
GULF STATES UTILITIES COMPANY BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ---------- ---------- (In Thousands) ASSETS Utility Plant: Electric $6,836,203 $6,825,989 Natural gas 43,176 42,786 Steam products 75,720 75,689 Property under capital leases 86,382 86,039 Construction work in progress 58,018 50,080 Nuclear fuel under capital leases 87,372 94,828 ---------- ---------- Total 7,186,871 7,175,411 Less - accumulated depreciation and amortization 2,367,935 2,323,804 ---------- ---------- Utility plant - net 4,818,936 4,851,607 ---------- ---------- Other Property and Investments: Decommissioning trust fund 19,050 17,873 Other - at cost (less accumulated depreciation) 29,070 29,360 ---------- ---------- Total 48,120 47,233 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 43,505 3,012 Temporary cash investments - at cost, which approximates market: Associated companies 58,651 - Other 80,239 258,337 ---------- ---------- Total cash and cash equivalents 182,395 261,349 Accounts receivable: Customer (less allowance for doubtful accounts of $2.2 million in 1994 and $2.4 million in 1993) 118,476 117,369 Associated companies 6,642 - Other 21,083 18,371 Accrued unbilled revenues 28,199 32,572 Deferred fuel costs - 5,883 Fuel inventory 18,902 23,448 Materials and supplies - at average cost 88,863 86,831 Rate deferrals 92,593 90,775 Prepayments and other 28,724 48,948 ---------- ---------- Total 585,877 685,546 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 614,210 638,015 SFAS 109 regulatory asset - net 435,767 432,411 Long-term receivables 227,237 218,079 Unamortized loss on reacquired debt 69,248 70,970 Other 198,673 193,490 ---------- ---------- Total 1,545,135 1,552,965 ---------- ---------- TOTAL $6,998,068 $7,137,351 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY BALANCE SHEETS March 31, 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 569,951 666,401 ---------- ---------- Total common shareholder's equity 1,836,350 1,932,760 Preference stock 150,000 150,000 Preferred stock: Without sinking fund 136,444 136,444 With sinking fund 98,754 101,004 Long-term debt 2,368,715 2,368,639 ---------- ---------- Total 4,590,263 4,688,847 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 142,841 152,359 Other 45,686 47,107 ---------- ---------- Total 188,527 199,466 ---------- ---------- Current Liabilities: Currently maturing long-term debt 425 425 Accounts payable: Associated companies 13,318 2,745 Other 68,649 109,840 Customer deposits 22,443 21,958 Taxes accrued 29,658 22,856 Interest accrued 65,891 59,516 Nuclear refueling reserve 23,902 22,356 Obligations under capital leases 33,416 41,713 Other 66,261 98,074 ---------- ---------- Total 323,963 379,483 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 1,226,373 1,222,999 Accumulated deferred investment tax credits 93,333 94,455 Deferred River Bend finance charges 100,675 106,765 Other 474,934 445,336 ---------- ---------- Total 1,895,315 1,869,555 ---------- ---------- Commitments and Contingencies (Note 1 and 2) TOTAL $6,998,068 $7,137,351 ========== ========== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Revenues: Electric $402,104 $381,531 Natural gas 15,846 12,524 Steam products 11,708 10,123 -------- -------- Total 429,658 404,178 -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel related expenses, and gas purchased for resale 119,018 118,369 Purchased power 60,220 36,271 Nuclear refueling outage expenses 3,600 4,800 Other operation and maintenance 100,970 93,468 Depreciation and decommissioning 47,867 47,277 Taxes other than income taxes 24,346 24,904 Income taxes (821) (4,822) Amortization of rate deferrals 15,897 14,503 -------- -------- Total 371,097 334,770 -------- -------- Operating Income 58,561 69,408 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 260 113 Miscellaneous - net 4,443 3,989 Income taxes (1,972) (4,751) -------- -------- Total 2,731 (649) -------- -------- Interest Charges: Interest on long-term debt 48,980 51,604 Other interest - net 1,475 2,375 Allowance for borrowed funds used during construction (206) (227) -------- -------- Total 50,249 53,752 -------- -------- Income before the Cumulative Effect of Accounting Changes 11,043 15,007 Cumulative Effect to January 1, 1993, of Accruing Unbilled Revenues (net of income taxes of $6,940) - 10,660 -------- -------- Net Income 11,043 25,667 Preferred and Preference Stock Dividend Requirements and Other 7,407 9,891 -------- -------- Earnings Applicable to Common Stock $3,636 $15,776 ======== ======== See Notes to Financial Statements.
GULF STATES UTILITIES COMPANY STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Activities: Net income $11,043 $25,667 Noncash items included in net income: Cumulative effect of accounting changes - (10,660) Change in rate deferrals 15,897 14,503 Depreciation and decommissioning 47,867 47,277 Deferred income taxes and investment tax credits 1,150 (52) Allowance for equity funds used during construction (260) (113) Changes in working capital: Receivables (6,088) 12,893 Fuel inventory 4,546 1,615 Accounts payable (30,618) (36,739) Taxes accrued 6,802 9,935 Interest accrued 6,375 7,276 Other working capital accounts (8,093) 3,945 Decommissioning trust contributions (493) (739) Purchased power settlement - (124,300) Other 5,648 19,083 -------- -------- Net cash flow provided by (used in) operating activities 53,776 (30,409) -------- -------- Investing Activities: Construction expenditures (20,824) (21,564) Allowance for equity funds used during construction 260 113 Nuclear fuel purchases (3,538) (2,118) Proceeds from sale/leaseback of nuclear fuel 1,035 2,118 Refund of escrow account and other property - 8,503 -------- -------- Net cash flow used in investing activities (23,067) (12,948) Financing Activities: Proceeds from issuance of other long-term debt - 21,440 Retirement of other long-term debt - (17,974) Redemption of preferred stock (2,250) (4,500) Dividends paid: Common stock (100,000) - Preferred and preference stock (7,413) (9,922) -------- -------- Net cash flow used in financing activities (109,663) (10,956) -------- -------- Net decrease in cash and cash equivalents (78,954) (54,313) Cash and cash equivalents at beginning of period 261,349 197,741 -------- -------- Cash and cash equivalents at end of period $182,395 $143,428 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest - net of amount capitalized $40,192 $42,038 Excess of fair value of decommissioning trust assets over amount invested $390 - See Notes to Financial Statements.
GULF STATES UTILITIES SELECTED OPERATING RESULTS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) Increase/ Description 1994 1993 (Decrease) % - ---------------------------------------------------------------------------------- (In Millions) Electric Department Operating revenues: Residential $ 123.8 $ 117.2 $ 6.6 6 Commercial 94.7 91.4 3.3 4 Industrial 153.0 154.7 (1.7) (1) Governmental 6.3 6.7 (0.4) (6) ------- ------- ------ Total retail 377.8 370.0 7.8 2 Sales for resale 18.4 6.3 12.1 192 Other 5.9 5.2 0.7 13 ------- ------- ------ Total Electric Department $ 402.1 $ 381.5 $ 20.6 5 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 1,601 1,418 183 13 Commercial 1,307 1,207 100 8 Industrial 3,575 3,411 164 5 Governmental 74 74 0 0 ------- ------- ------ Total retail 6,557 6,110 447 7 Sales for resale 541 127 414 326 ------- ------- ------ Total Electric Department 7,098 6,237 861 14 Steam Department 410 377 33 9 ------- ------- ------ Total 7,508 6,614 894 14 ======= ======= ======
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ---------- ---------- (In Thousands) ASSETS Utility Plant: Electric $4,652,930 $4,646,020 Electric plant under lease 226,395 225,083 Construction work in progress 163,492 133,536 Nuclear fuel under capital lease 66,415 61,375 Nuclear fuel 5,065 3,823 ---------- ---------- Total 5,114,297 5,069,837 Less - accumulated depreciation and amortization 1,529,189 1,496,107 ---------- ---------- Utility plant - net 3,585,108 3,573,730 ---------- ---------- Other Property and Investments: Nonutility property 20,060 20,060 Decommissioning trust fund 24,452 22,109 Investment in subsidiary company - at equity 14,230 14,230 Other 1,000 984 ---------- ---------- Total 59,742 57,383 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 6,436 - Temporary cash investments - at cost, which approximates market 27,770 33,489 ---------- ---------- Total cash and cash equivalents 34,206 33,489 Special deposits 3,149 19,077 Accounts receivable: Customer (less allowance for doubtful accounts of $1.1 million in 1994 and 1993) 55,416 66,575 Associated companies 5,866 2,952 Other 8,891 10,656 Accrued unbilled revenues 50,948 64,314 Deferred fuel costs 7,212 - Accumulated deferred income taxes 3,393 6,031 Materials and supplies - at average cost 84,065 87,204 Rate deferrals 28,422 28,422 Prepayments and other 24,393 16,510 ---------- ---------- Total 305,961 335,230 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 47,372 54,031 SFAS 109 regulatory asset - net 350,157 349,703 Unamortized loss on reaquired debt 46,804 47,853 Other 48,181 46,068 ---------- ---------- Total 492,514 497,655 ---------- ---------- TOTAL $4,443,325 $4,463,998 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY BALANCE SHEETS March 31, 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 (5,771) (6,109) Retained earnings 103,006 89,849 ---------- ---------- Total common shareholder's equity 1,186,135 1,172,640 Preferred stock: Without sinking fund 160,500 160,500 With sinking fund 118,802 126,302 Long-term debt 1,457,751 1,457,626 ---------- ---------- Total 2,923,188 2,917,068 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 32,082 27,508 Other 29,600 27,672 ---------- ---------- Total 61,682 55,180 ---------- ---------- Current Liabilities: Currently maturing long-term debt 25,315 25,315 Notes payable-associated companies 24,893 52,041 Accounts payable: Associated companies 41,911 33,523 Other 56,928 76,284 Customer deposits 53,022 52,234 Taxes accrued 28,505 15,110 Interest accrued 36,118 42,141 Dividends declared 5,701 5,938 Deferred revenue - gas supplier judgment proceeds 4,349 14,632 Deferred fuel cost - 605 Obligations under capital leases 33,867 33,867 Other 8,382 9,741 ---------- ---------- Total 318,991 361,431 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 845,538 834,899 Accumulated deferred investment tax credits 187,128 188,843 Deferred interest - Waterford 3 lease obligation 25,530 25,372 Other 81,268 81,205 ---------- ---------- Total 1,139,464 1,130,319 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $4,443,325 $4,463,998 ========== ========== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Revenues: $383,826 $357,856 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 58,108 62,596 Purchased power 103,496 85,661 Nuclear refueling outage expenses 4,591 4,567 Other operation and maintenance 73,632 75,883 Depreciation and decommissioning 37,392 35,388 Taxes other than income taxes 14,437 11,552 Income taxes 16,843 18,675 Amortization of rate deferrals 6,659 6,659 -------- -------- Total 315,158 300,981 -------- -------- Operating Income 68,668 56,875 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 1,111 603 Miscellaneous - net 607 457 Income taxes (10) 2,285 -------- -------- Total 1,708 3,345 -------- -------- Interest Charges: Interest on long-term debt 31,197 31,112 Other interest - net 2,884 3,777 Allowance for borrowed funds used during construction (801) (402) -------- -------- Total 33,280 34,487 -------- -------- Net Income 37,096 25,733 Preferred Stock Dividend Requirements and Other 6,119 6,456 -------- -------- Earnings Applicable to Common Stock $30,977 $19,277 ======== ======== See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 ------- ------- (In Thousands) Operating Activities: Net income $37,096 $25,733 Noncash items included in net income: Change in rate deferrals 6,659 6,659 Depreciation and decommissioning 37,392 35,388 Deferred income taxes and investment tax credits 11,147 9,133 Allowance for equity funds used during construction (1,111) (603) Amortization of deferred revenues (10,283) (9,311) Changes in working capital: Receivables 23,376 12,076 Accounts payable (10,968) (34,287) Taxes accrued 13,395 14,069 Interest accrued (6,023) (3,986) Other working capital accounts 2,796 13,481 Refunds to customers - gas contract settlement - (56,027) Decommissioning trust contributions (1,204) (1,000) Other (2,755) 4,119 ------- ------- Net cash flow provided by operating activities 99,517 15,444 ------- ------- Investing Activities: Construction expenditures (41,381) (37,935) Allowance for equity funds used during construction 1,111 603 ------- ------- Net cash flow used in investing activities (40,270) (37,332) ------- ------- Financing Activities: Proceeds from the issuance of first mortgage bonds - 100,000 Change in short-term borrowings (27,148) - Retirement of other long-term debt (44) - Redemption of preferred stock (7,500) (7,500) Dividends paid: Common stock (17,900) (30,600) Preferred stock (5,938) (6,675) ------- ------- Net cash flow provided by (used in) financing activities (58,530) 55,225 ------- ------- Net increase in cash and cash equivalents 717 33,337 Cash and cash equivalents at beginning of period 33,489 22,782 ------- ------- Cash and cash equivalents at end of period $34,206 $56,119 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $37,730 $37,425 Income taxes - $2,016 Noncash investing and financing activities: Capital lease obligations incurred $9,677 - Excess of fair value of decommissioning trust assets over amount invested $843 - See Notes to Financial Statements.
LOUISIANA POWER & LIGHT COMPANY SELECTED OPERATING RESULTS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) Increase/ Description 1994 1993 (Decrease) % - ----------------------------------------------------------------------------------- (In Millions) Electric Operating Revenues: Residential $ 124.9 $ 109.6 $ 15.3 14 Commercial 80.8 73.2 7.6 10 Industrial 159.9 152.4 7.5 5 Governmental 7.9 7.5 0.4 5 ------- ------- ------ Total retail 373.5 342.7 30.8 9 Sales for resale 6.9 6.3 0.6 10 Other 3.4 8.9 (5.5) (62) ------- ------- ------ Total $ 383.8 $ 357.9 $ 25.9 7 ======= ======= ====== Billed Electric Energy Sales (Millions of KWH): Residential 1,680 1,484 196 13 Commercial 1,028 935 93 10 Industrial 3,977 3,825 152 4 Governmental 107 102 5 5 ------- ------- ------ Total retail 6,792 6,346 446 7 Sales for resale 128 140 (12) (9) ------- ------- ------ Total 6,920 6,486 434 7 ======= ======= ======
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ---------- ---------- (In Thousands) ASSETS Utility Plant: Electric $1,394,289 $1,389,229 Construction work in progress 104,201 62,699 ---------- ---------- Total 1,498,490 1,451,928 Less - accumulated depreciation and amortization 573,732 577,728 ---------- ---------- Utility plant - net 924,758 874,200 ---------- ---------- Other Property and Investments: Investment in subsidiary company - at equity 5,531 5,531 Other 4,758 4,760 ---------- ---------- Total 10,289 10,291 ---------- ---------- Current Assets: Cash 41,876 7,999 Notes receivable 6,939 7,118 Accounts receivable: Customer (less allowance for doubtful accounts of $2.5 million in 1994 and 1993) 32,900 33,155 Associated companies 5,022 7,342 Other 3,318 3,672 Accrued unbilled revenues 42,124 57,414 Fuel inventory - at average cost 8,987 8,652 Materials and supplies - at average cost 20,893 20,886 Rate deferrals 101,459 96,935 Prepayments and other 8,102 13,763 ---------- ---------- Total 271,620 256,936 ---------- ---------- Deferred Debits and Other Assets: Rate deferrals 479,043 504,428 Notes receivable 8,309 9,951 Other 32,928 20,931 ---------- ---------- Total 520,280 535,310 ---------- ---------- TOTAL $1,726,947 $1,676,737 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY BALANCE SHEETS March 31, 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 235,921 236,337 ---------- ---------- Total common shareholder's equity 433,485 433,799 Preferred stock: Without sinking fund 57,881 57,881 With sinking fund 38,770 46,770 Long-term debt 476,194 516,156 ---------- ---------- Total 1,006,330 1,054,606 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 654 686 Other 8,935 6,231 ---------- ---------- Total 9,589 6,917 ---------- ---------- Current Liabilities: Currently maturing long-term debt 88,250 48,250 Notes payable - associated companies 71,589 11,568 Accounts payable: Associated companies 35,272 29,181 Other 23,855 12,157 Customer deposits 21,687 21,474 Taxes accrued 10,106 24,252 Accumulated deferred income taxes 43,099 41,758 Interest accrued 16,215 23,171 Dividends declared 1,955 1,985 Obligations under capital leases 148 156 Other 15,900 17,147 ---------- ---------- Total 328,076 231,099 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 310,783 311,616 Accumulated deferred investment tax credits 36,734 37,193 SFAS 109 regulatory liability - net 23,466 23,626 Other 11,969 11,680 ---------- ---------- Total 382,952 384,115 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $1,726,947 $1,676,737 ========== ========== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Revenues: $187,417 $179,467 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 22,795 9,933 Purchased power 64,322 75,389 Other operation and maintenance 36,573 33,404 Depreciation and amortization 8,706 8,018 Taxes other than income taxes 10,276 10,011 Income taxes 1,225 990 Amortization of rate deferrals 24,805 17,588 -------- -------- Total 168,702 155,333 -------- -------- Operating Income 18,715 24,134 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 576 169 Miscellaneous - net 94 502 Income taxes (36) (187) -------- -------- Total 634 484 -------- -------- Interest Charges: Interest on long-term debt 12,037 13,922 Other interest - net 1,430 741 Allowance for borrowed funds used during construction (367) (121) -------- -------- Total 13,100 14,542 -------- -------- Income before Cumulative Effect of a Change in Accounting Principle 6,249 10,076 Cumulative Effect to January 1, 1993, of Accruing Unbilled Revenues (net of income taxes of $19,456) - 32,706 -------- -------- Net Income 6,249 42,782 Preferred Stock Dividend Requirements and Other 2,075 2,395 -------- -------- Earnings Applicable to Common Stock $4,174 $40,387 ======== ======== See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 ------- ------- (In Thousands) Operating Activities: Net income $6,249 $42,782 Noncash items included in net income: Cumulative effect of a change in accounting principle - (32,706) Change in rate deferrals 20,861 9,791 Depreciation and amortization 8,706 8,018 Deferred income taxes and investment tax credits 673 (2,531) Allowance for equity funds used during construction (576) (169) Changes in working capital: Receivables 18,219 16,686 Fuel inventory (335) 349 Accounts payable 17,789 5,679 Taxes accrued (14,146) (16,511) Interest accrued (6,956) (7,670) Other working capital accounts 4,799 (3,317) Other (8,419) 1,688 ------- ------- Net cash flow provided by operating activities 46,864 22,089 ------- ------- Investing Activities: Construction expenditures (58,989) (10,854) Allowance for equity funds used during construction 576 169 ------- ------- Net cash flow used in investing activities (58,413) (10,685) ------- ------- Financing Activities: Proceeds from issuance of general and refunding bonds - 125,000 Retirement of: First mortgage bonds - (73,185) General and refunding bonds - (55,000) Redemption of preferred stock (8,000) (8,000) Dividends paid: Common stock (4,600) (13,000) Preferred stock (1,995) (2,427) Change in short-term borrowings 60,021 - ------- ------- Net cash flow provided by (used in) financing activities 45,426 (26,612) ------- ------- Net increase (decrease) in cash and cash equivalents 33,877 (15,208) Cash and cash equivalents at beginning of period 7,999 34,008 ------- ------- Cash and cash equivalents at end of period $41,876 $18,800 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $19,590 $22,211 Income taxes $(1,532) $3,428 See Notes to Financial Statements.
MISSISSIPPI POWER & LIGHT COMPANY SELECTED OPERATING RESULTS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) Increase/ Description 1994 1993 (Decrease) % - ----------------------------------------------------------------------------------- (In Millions) Electric Operating Revenues: Residential $ 76.1 $ 70.0 $ 6.1 9 Commercial 58.4 53.4 5.0 9 Industrial 44.1 40.0 4.1 10 Governmental 6.6 6.4 0.2 3 ------ ------ ----- Total retail 185.2 169.8 15.4 9 Sales for resale 8.1 5.6 2.5 45 Other (5.9) 4.1 (10.0) (244) ------ ------ ----- Total $187.4 $179.5 $ 7.9 4 ====== ====== ===== Billed Electric Energy Sales (Millions of KWH): Residential 976 890 86 10 Commercial 683 624 59 9 Industrial 692 623 69 11 Governmental 77 74 3 4 ------ ------ ----- Total retail 2,428 2,211 217 10 Sales for resale 132 51 81 159 ------ ------ ----- Total 2,560 2,262 298 13 ====== ====== =====
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) ASSETS Utility Plant: Electric $478,873 $476,976 Natural gas 114,902 113,666 Construction work in progress 17,726 15,205 -------- -------- Total 611,501 605,847 Less - accumulated depreciation and amortization 334,716 330,268 -------- -------- Utility plant - net 276,785 275,579 -------- -------- Other Investments: Investment in subsidiary company - at equity 3,259 3,259 -------- -------- Current Assets: Cash and cash equivalents: Cash 2,597 1,176 Temporary cash investments - at cost, which approximates market: Associated companies 27,764 10,034 Other 31,972 32,107 -------- -------- Total cash and cash equivalents 62,333 43,317 Accounts receivable: Customer (less allowance for doubtful accounts of $0.8 million in 1994 and 1993) 31,203 35,801 Associated companies 1,166 1,378 Other 774 876 Accrued unbilled revenues 15,492 19,643 Deferred electric fuel and resale gas costs 1,141 6,323 Materials and supplies - at average cost 9,203 11,885 Rate deferrals 26,068 24,587 Prepayments and other 10,732 2,994 -------- -------- Total 158,112 146,804 -------- -------- Deferred Debits and Other Assets: Rate deferrals 197,706 204,190 SFAS 109 regulatory asset - net 9,164 9,004 Other 9,349 8,769 -------- -------- Total 216,219 221,963 -------- -------- TOTAL $654,375 $647,605 ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) CAPITALIZATION AND LIABILITIES 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 101,911 100,556 -------- -------- Total common shareholder's equity 171,856 170,456 Preferred stock: Without sinking fund 19,780 19,780 With sinking fund 3,450 4,950 Long-term debt 179,124 188,312 -------- -------- Total 374,210 383,498 -------- -------- Other Noncurrent Liabilities: Accumulated provision for losses 18,022 18,022 Other 5,561 3,351 -------- -------- Total 23,583 21,373 -------- -------- Current Liabilities: Currently maturing long-term debt 24,200 15,000 Accounts payable: Associated companies 18,635 23,080 Other 19,697 22,011 Customer deposits 16,978 16,617 Accumulated deferred income taxes 3,880 4,968 Taxes accrued 11,018 5,161 Interest accrued 4,754 5,472 Dividends declared 374 432 Other 16,174 6,935 -------- -------- Total 115,710 99,676 Deferred Credits: Accumulated deferred income taxes 102,265 105,096 Accumulated deferred investment tax credits 11,406 11,592 Other 27,201 26,370 -------- -------- Total 140,872 143,058 -------- -------- Commitments and Contingencies (Notes 1 and 2) TOTAL $654,375 $647,605 ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Revenues: Electric $78,855 $79,419 Natural gas 38,233 29,147 -------- -------- Total 117,088 108,566 -------- -------- Operating Expenses: Operation and maintenance: Fuel, fuel-related expenses, and gas purchased for resale 33,915 26,133 Purchased power 37,732 37,013 Other operation and maintenance 19,671 21,971 Depreciation and amortization 4,710 4,292 Taxes other than income taxes 7,054 6,270 Income taxes 619 1,101 Rate deferrals: Rate deferrals - (1,313) Amortization of rate deferrals 6,928 4,271 -------- -------- Total 110,629 99,738 -------- -------- Operating Income 6,459 8,828 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 113 - Miscellaneous - net 510 378 Income taxes (525) 192 -------- -------- Total 98 570 -------- -------- Interest Charges: Interest on long-term debt 4,369 5,044 Other interest - net 459 374 Allowance for borrowed funds used during construction (84) (2) -------- -------- Total 4,744 5,416 -------- -------- Income before Cumulative Effect of a Change in Accounting Principle 1,813 3,982 Cumulative Effect to January 1, 1993, of Accruing Unbilled Revenues (net of income taxes of $6,592) - 10,948 -------- -------- Net Income 1,813 14,930 Preferred Stock Dividend Requirements and Other 458 471 -------- -------- Earnings Applicable to Common Stock $ 1,355 $14,459 ======== ======== See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 ------- ------- (In Thousands) Operating Activities: Net income $1,813 $14,930 Noncash items included in net income: Cumulative effect of a change in accounting principle - (10,948) Change in rate deferrals 5,003 2,056 Depreciation and amortization 4,710 4,292 Deferred income taxes and investment tax credits (4,254) (1,384) Allowance for equity funds used during construction (113) - Changes in working capital: Receivables 9,063 2,483 Accounts payable (6,759) (3,521) Taxes accrued 5,857 2,909 Interest accrued (718) 471 Other working capital accounts 9,726 (4,746) Other 2,180 1,097 ------- ------- Net cash flow provided by operating activities 26,508 7,639 ------- ------- Investing Activities: Construction expenditures (5,634) (3,779) Allowance for equity funds used during construction 113 - ------- ------- Net cash flow used in investing activities (5,521) (3,779) ------- ------- Financing Activities: Proceeds from the issuance of general and refunding bonds - 70,000 Retirement of general and refunding bonds - (29,400) Redemption of preferred stock (1,500) (1,500) Preferred stock dividend payments (471) (490) ------- ------- Net cash flow provided by (used in) financing activities (1,971) 38,610 ------- ------- Net increase in cash and cash equivalents 19,016 42,470 Cash and cash equivalents at beginning of period 43,317 46,070 ------- ------- Cash and cash equivalents at end of period $62,333 $88,540 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest - net of amount capitalized $5,244 $4,820 Income taxes - $2,386 See Notes to Financial Statements.
NEW ORLEANS PUBLIC SERVICE INC. SELECTED OPERATING RESULTS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) Increase/ Description 1994 1993 (Decrease) % - ---------------------------------------------------------------------------------- (In Millions) Electric operating Revenues: Residential $ 28.0 $ 24.6 $ 3.4 14 Commercial 39.0 36.5 2.5 7 Industrial 6.3 5.8 0.5 9 Governmental 13.9 13.4 0.5 4 ------ ------ ------ Total retail 87.2 80.3 6.9 9 Sales for resale 1.4 2.5 (1.1) (44) Other (9.7) (3.4) (6.3)(185) ------ ------ ------ Total $ 78.9 $ 79.4 $ (0.5) (1) ====== ====== ====== Billed Electric Energy Sales (Millions of KWH): Residential 367 327 40 12 Commercial 457 437 20 5 Industrial 119 110 9 8 Governmental 210 202 8 4 ------ ------ ------ Total retail 1,153 1,076 77 7 Sales for resale 29 81 (52) (64) ------ ------ ------ Total 1,182 1,157 25 2 ====== ====== ======
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS March 31, 1994 and December 31, 1993 (Unaudited) 1994 1993 ---------- ---------- (In Thousands) ASSETS Utility Plant: Electric $3,027,642 $3,027,537 Electric plant under lease 438,411 437,941 Construction work in progress 42,665 41,442 Nuclear fuel under capital lease 71,055 79,625 ---------- ---------- Total 3,579,773 3,586,545 Less - accumulated depreciation 694,415 669,666 ---------- ---------- Utility plant - net 2,885,358 2,916,879 ---------- ---------- Other Investments: Decommissioning trust fund 27,736 24,787 ---------- ---------- Current Assets: Cash and cash equivalents: Cash 10,783 2,424 Temporary cash investments - at cost, which approximates market: Associated companies 61,078 46,601 Other 70,336 147,107 ---------- ---------- Total cash and cash equivalents 142,197 196,132 Accounts receivable: Associated companies 63,077 57,216 Other 2,752 2,057 Materials and supplies - at average cost 70,296 69,765 Recoverable income taxes 64,600 63,400 Prepayments and other 7,893 4,835 ---------- ---------- Total 350,815 393,405 ---------- ---------- Deferred Debits and Other Assets: Recoverable income taxes 9,356 29,289 SFAS 109 regulatory asset - net 385,098 384,317 Unamortized loss on reacquired debt 57,279 17,258 Other 127,219 125,131 ---------- ---------- Total 578,952 555,995 ---------- ---------- TOTAL $3,842,861 $3,891,066 ========== ========== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. BALANCE SHEETS March 31, 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 192,323 228,574 ---------- ---------- Total common shareholder's equity 981,680 1,017,931 Long-term debt 1,512,298 1,511,914 ---------- ---------- Total 2,493,978 2,529,845 ---------- ---------- Other Noncurrent Liabilities: Obligations under capital leases 16,109 24,679 Other 18,229 18,229 ---------- ---------- Total 34,338 42,908 ---------- ---------- Current Liabilities: Currently maturing long-term debt 230,000 230,000 Accounts payable: Associated companies 1,557 1,928 Other 20,481 18,223 Taxes accrued 7,274 20,952 Interest accrued 47,178 48,929 Obligations under capital leases 55,000 55,000 Other 2,528 2,805 ---------- ---------- Total 364,018 377,837 ---------- ---------- Deferred Credits: Accumulated deferred income taxes 779,171 775,630 Accumulated deferred investment tax credits 112,980 113,849 Other 58,376 50,997 ---------- ---------- Total 950,527 940,476 ---------- ---------- Commitments and Contingencies (Notes 1 and 2) TOTAL $3,842,861 $3,891,066 ========== ========== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF INCOME For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Revenues: $147,847 $164,630 -------- -------- Operating Expenses: Operation and maintenance: Fuel and fuel-related expenses 11,987 15,113 Nuclear refueling outage expenses - 47 Other operation and maintenance 21,540 21,050 Depreciation and decommissioning 22,969 22,676 Taxes other than income taxes 6,873 6,219 Income taxes 20,136 23,194 -------- -------- Total 83,505 88,299 -------- -------- Operating Income 64,342 76,331 -------- -------- Other Income (Deductions): Allowance for equity funds used during construction 322 101 Miscellaneous - net 1,837 1,666 Income taxes (1,720) 1,337 -------- -------- Total 439 3,104 -------- -------- Interest Charges: Interest on long-term debt 41,177 46,362 Other interest - net 2,435 1,383 Allowance for borrowed funds used during construction (380) (92) -------- -------- Total 43,232 47,653 -------- -------- Net Income $21,549 $31,782 ======== ======== See Notes to Financial Statements.
SYSTEM ENERGY RESOURCES, INC. STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1994 and 1993 (Unaudited) 1994 1993 -------- -------- (In Thousands) Operating Activities: Net income $21,549 $31,782 Noncash items included in net income: Depreciation and decommissioning 22,969 22,676 Deferred income taxes and investment tax credits 5,705 5,946 Allowance for equity funds used during construction (322) (101) Amortization of debt discount 1,685 1,106 Changes in working capital: Receivables (6,556) 4,540 Accounts payable 1,887 (7,554) Taxes accrued (13,678) (9,856) Interest accrued (1,751) 1,167 Other working capital accounts (3,866) (5,039) Recoverable income taxes 18,733 14,663 Decommissioning trust contributions (1,241) (1,511) Other 8,285 (384) -------- -------- Net cash flow provided by operating activities 53,399 57,435 -------- -------- Investing Activities: Construction expenditures (2,254) (1,850) Allowance for equity funds used during construction 322 101 -------- -------- Net cash flow used in investing activities (1,932) (1,749) -------- -------- Financing Activities: Premium and expenses paid on refinancing sale/leaseback bonds (47,602) - Common stock dividend payments (57,800) (32,000) -------- -------- Net cash flow used in financing activities (105,402) (32,000) -------- -------- Net increase (decrease) in cash and cash equivalents (53,935) 23,686 Cash and cash equivalents at beginning of period 196,132 181,795 -------- -------- Cash and cash equivalents at end of period $142,197 $205,481 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $42,561 $46,578 Income taxes $(3,278) $(4,388) Noncash investing and financing activities: Excess of fair value of decommissioning trust assets over amount invested $938 - 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% of River Bend, respectively, while Big Cajun 2 Unit 3 is owned 42% and 58% by GSU and Cajun, respectively. GSU operates River Bend, and Cajun operates Big Cajun 2 Unit 3. In June 1989, Cajun filed a civil action against GSU in the U. S. District Court for the Middle District of Louisiana. 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 River Bend 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 began on April 12, 1994, on the portion of the suit by Cajun to rescind the Operating Agreement, 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. See pages 103 and 180 of the Form 10-K for the accounting treatment of preacquisition contingencies in connection with the Merger, including any charge resulting from an adverse resolution in the Cajun - River Bend litigation. In July 1992, Cajun notified GSU that it would fund a limited amount of costs related to the fourth refueling outage at River Bend, completed in September 1992. Cajun has also not funded its share of the costs associated with certain additional repairs and improvements at River Bend completed during the 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 and is reviewing its available legal remedies. 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 for the remainder of 1992. In a December 1992 letter, Cajun stated that it would also withhold costs associated with certain additional repairs, of which the majority will be incurred during a refueling outage that began April 15, 1994. GSU believes that Cajun's allegations are without merit and is considering its legal and other remedies available with respect to the underpayments by Cajun. The total resulting from Cajun's failure to fund repair projects, Cajun's funding limitation on the fourth refueling outage, and the weekly funding limitation by Cajun was $36.7 million as of March 31, 1994, compared with a $33.3 million unfunded balance as of December 31, 1993. These amounts are reflected in long-term receivables. During 1994, and for the next several years, it is expected that Cajun's share of River Bend-related costs will be in the range of $60 million to $70 million per year. Cajun's weak financial condition could have a material adverse effect on GSU, including a possible NRC action with respect to the operation of River Bend and a need to bear additional costs associated with the co-owned facilities. If GSU is required to fund Cajun's share of costs, there can be no assurance that such payments will be recovered. Cajun's weak financial condition could also affect the ultimate collectibility of amounts owed to GSU, including any amounts awarded in litigation. 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. GSU interprets the FERC order and the court of appeals' decision to mean that Cajun would owe GSU approximately $86 million as of March 31, 1994. GSU further estimates that if it prevails in its May 1992 motion for rehearing, Cajun would owe GSU approximately $119 million as of March 31, 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 ap proximately $77 million as of March 31, 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. 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 $145.8 million as of March 31, 1994. This amount is reflected in long- term receivables and in other deferred credits, with no effect on net income. 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. GSU's financial position has continued to improve; however, 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 Preferred Stock Maturities and Cash Sinking Fund Construction Expenditures Requirements 1994 1995 1996 1994-1996 Entergy $629 $560 $550 $1,413 AP&L $181 $172 $175 $ 83 GSU $140 $128 $119 $ 215 LP&L $134 $143 $142 $ 162 MP&L $130 $ 63 $ 63 $ 228 NOPSI $ 25 $ 26 $ 26 $ 81 $ 18 $ 22 $ 23 $ 645 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 3 and 4 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 and Waterford 3 are currently estimated to be approximately $806.3 million (based on a recent interim update to the 1992 update of the original cost study) and $320.1 million (based on a recently completed 1993 update to the original cost study), respectively. In March 1994, AP&L filed with the APSC this interim update of the ANO cost study, which reflected significant increases in costs of low-level radioactive waste disposal. AP&L expects to include the updated costs in the annual decommissioning cost rate rider filing with the APSC during the fourth quarter of 1994. As of January 1994, LP&L began funding $4.8 million annually to fund the increased estimated costs for decommissioning Waterford 3. 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 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. 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 resulted 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 March 31, 1994, GSU has accrued cumulative amounts related to the cleanup of six sites at which GSU has been designated a potentially responsible party, totaling $25.2 million since 1990. Through March 31, 1994, GSU has expensed $7.4 million cumulatively on the cleanup, resulting in a remaining liability of $17.8 million as of March 31, 1994. 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 4 below for 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 March 31, 1994, LP&L's total equity capital (including preferred stock) was 48.62% of adjusted capitalization, and its fixed charge coverage ratio was 3.27. 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 March 31, 1994, System Energy's equity and common equity, in each case, approximated 34.03% of its adjusted capitalization, and its fixed charge coverage ratio was 1.86. 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" below for information on a FERC order, that, if ultimately sustained and implemented, could cause System Energy to fall below the required equity and fixed charge coverage covenant levels. System Energy has obtained the consent of the banks to waive these covenants, for the 12-month period beginning with the earlier of the write-off or the first refund, if the August 4 Order is implemented prior to December 31, 1994. 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. 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. 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 prudency, 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 prudency 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 (El Paso Case). 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 August 1992, the court of appeals in the El Paso Case handed down its second opinion on rehearing modifying its previous opinion on deferred accounting. The court's second opinion concluded that the PUCT may lawfully defer operating and maintenance costs and subsequently include them in rate base, but that the Public Utility Regulatory Act prohibits such rate base treatment for deferred carrying costs. The court stated that its opinion would not preclude the recovery of deferred carrying costs. The August 1992 court of appeals opinion was appealed to the Texas Supreme Court where arguments were heard in September 1993. The matter is pending. 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 specifically addressed the PUCT's treatment of certain costs, stating that the PUCT's order was not based on substantial evidence. The Appellate Court also applied its most recent ruling in the El Paso Case to the deferred costs associated with River Bend. However, the Appellate Court cautioned the PUCT to confine its deliberations to the evidence addressed in the original rate case. Certain parties to the case have indicated their position that, on remand, the PUCT may change its original order only with respect to matters specifically discussed by the Appellate Court which, if allowed, would increase GSU's allowed River Bend investment, net of accumulated depreciation and related taxes, by approximately $47 million as of March 31, 1994. GSU believes that under the Appellate Court's decision, the PUCT would be free to reconsider any aspect of its order concerning the abeyed $1.4 billion River Bend investment. GSU has filed a motion for rehearing asking the Appellate Court to modify its order so as to permit the PUCT to take additional evidence on remand. The PUCT and other parties have also moved for rehearing on various grounds. The Appellate Court has not yet ruled on any of these motions. As of March 31, 1994, the River Bend plant costs disallowed for retail ratemaking purposes in Texas, and the River Bend plant costs held in abeyance, and the related cost deferrals totaled (net of taxes) approximately $14 million, $298 million (both net of depreciation), and $170 million, respectively. Allowed Deferrals were approximately $93 million, net of taxes and amortization, as of March 31, 1994. GSU estimates it has collected approximately $146 million of revenues as of March 31, 1994, as a result of the originally ordered rate treatment of these deferred costs. However, if the PUCT adopts the most recent decision in the El Paso Case, the possible refunds approximate $28 million as a result of the inclusion of deferred carrying costs in rate base for the period July 1988 through December 1990. However, if the PUCT reverses its decision to reduce 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 potential refund of amounts described above could be reduced by an amount ranging from $7 million to $19 million. 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 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 March 31, 1994, of up to $312 million could be required based on the PUCT's ultimate ruling. 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 probable that the deferred costs will be allowed. However, assuming the August 1992 court of appeals' opinion in the El Paso Case is upheld and applied to GSU and the deferred River Bend costs currently held in abeyance are not allowed to be recovered in rates as allowable costs, a net of tax write-off of up to $170 million could be required. In addition, future revenues based upon the deferred costs previously allowed in rate base could also be lost and no assurance can be given as to whether or not refunds (up to $28 million as of March 31, 1994) of revenue received based upon such deferred costs previously recorded will be required. 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 Entergy Corporation and System Energy In December 1990, the FERC Division of Audits issued a report for System Energy for the years 1986 through 1988. The report recommended, among other things, 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. Should such refunds and adjusting entries be necessary, System Energy estimates that as of March 31, 1994, its net income would be reduced by approximately $155.3 million. This amount includes System Energy's potential refund obligation, which is estimated to be $118.9 million (including interest) as of March 31, 1994. The ongoing effect of this order, if implemented, would be to reduce System Energy's revenues by approximately $21.4 million during the first twelve months following the write-off and by a comparable amount (but decreasing by approximately $0.4 million per year) in each subsequent year. Assuming AP&L, LP&L, MP&L, and NOPSI are required to refund or credit to their customers all of the System Energy refund (except for those portions attributable to AP&L's and LP&L's retained share of Grand Gulf 1 costs), implementation of the August 4 Order would result in a reduction in Entergy's consolidated net income of approximately $149.1 million as of March 31, 1994. However, this reduction could be partially offset by (1) the write-off by AP&L, LP&L, MP&L, and NOPSI of unamortized balances of corresponding deferred credits (approximately $65.3 million as of March 31, 1994), and (2) any recovery from ratepayers of deferred credits that have been previously amortized and passed on to ratepayers (approximately $26.1 million as of March 31, 1994). The amount of such recovery would depend on the associated retail rate treatment. If the August 4 Order is implemented, System Energy would need the consent of certain banks to temporarily waive 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 in order to avoid violation of the covenants (see "Reimbursement Agreement" above). System Energy has obtained the consent of the banks to waive these covenants, for the 12-month period beginning with the earlier of the write- off or the first refund, if the August 4 Order is implemented prior to December 31, 1994. 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. System Energy believes that its consolidated income tax accounting procedures and related rate treatment are in compliance with SEC and FERC requirements and is vigorously contesting this issue. The ultimate resolution of this matter cannot be predicted. 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 provides 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 to be effective September 1994. Further, the settlement provided for GSU to reduce rates with a $20 million one-time bill credit in December 1993, and to refund approximately $3 million to Texas retail customers on bills rendered in December 1993. The cities' rate inquiries had been settled earlier on the same terms. While no parties to the PUCT rate inquiry now oppose the settlement agreement which has been filed in that case, the settlement agreement is subject to review by the PUCT. The presiding officer in the PUCT rate inquiry has set a June 8, 1994 hearing to consider the merits of the settlement agreement. The cities, who are parties to the PUCT rate inquiry, have filed testimony with the PUCT expressing their reservations about certain aspects of the settlement. However, the cities have announced that those reservations will not cause the cities to oppose the settlement agreement. GSU believes that the PUCT will ultimately issue an order consistent with the settlement agreement, but there can be no assurance in this regard. 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. See Part II, Item 1. "Legal Proceedings," for additional information. Louisiana GSU Previous rate orders of the LPSC have been appealed, and pending resolution of various appellate proceedings, GSU has made no write-off for the disallowance of $30.6 million of rate deferrals that GSU recorded for the period December 16, 1987 through February 18, 1988. LPSC Investigation Entergy Corporation, GSU, and LP&L In response to a preliminary report of the LPSC indicating that the rates of return on equity of several electric utilities subject to the LPSC's jurisdiction may be too high, GSU provided the LPSC with information GSU believes supports the current rate level. In September 1993, the LPSC deferred review of GSU's base rates until the first post-Merger earnings analysis is filed in accordance with the LPSC Merger approval (scheduled for mid- 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. The LPSC is currently scheduled to review LP&L's rates and rate structure in May 1994, which may result in a further decrease in rates. 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 are currently estimated to be $107.0 million, $26.3 million, and $70.8 million for the System, AP&L, and MP&L, respectively with $75.1 million, $15.4 million, and $57.5 million of these amounts estimated to be 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. On April 15, 1994, MP&L filed for rate recovery of the non-plant costs related to the ice storm. See Part II, Item 1. "Legal Proceedings," for additional information on this filing. Estimated construction expenditures (see Note 1) reflect the above amounts. Louisiana Supreme Court Ruling/Refund GSU In 1988, GSU entered into a joint venture with Conoco, Inc., Citgo Petroleum Corporation, and Vista Chemical Company (Industrial Participants) whereby GSU's Nelson Units 1 and 2 were sold to a partnership (NISCO) consisting of the Industrial Participants and GSU. The sale of the units by GSU to NISCO was for an amount in excess of the units' depreciated cost. The Industrial Participants are supplying the fuel for the units, while GSU operates the units at the discretion of the Industrial Participants and purchases the electricity produced by the units. In February 1990, the LPSC disallowed the pass-through to ratepayers for the portion of GSU's cost to purchase power from 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, and GSU recorded an estimated refund provision of $10.1 million, before related income taxes of $4.1 million. Reserve for Revenue Reduction 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%. A review by the Council's advisors of NOPSI's return on equity for the twelve month period ended September 30, 1993, indicates that NOPSI may be required to credit $21.5 million to its customers. In early May 1994, NOPSI determined it was likely that a credit to customers would be required, however, NOPSI estimates that the actual amount of the revenue reduction will be approximately $14.3 million. In the first quarter of 1994, NOPSI recorded a reserve for this revenue reduction which reduced net income by $8.8 million (net of taxes). The Council is expected to order a hearing in the second 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 would be reviewed based on the number of outages at River Bend and the findings in the June 1993 PUCT fuel reconciliation case. Hearings began in March 1994 and are continuing. For information on the June 1993 PUCT fuel reconciliation case, see page 165 of the Form 10-K. NOTE 3. PREFERRED AND COMMON STOCK Entergy Corporation Entergy Corporation has a program to repurchase 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 three months of 1994, 1,005,000 shares of common stock were repurchased and were accounted for as treasury stock using the average cost method, at a cost of $35.6 million. AP&L On January 3, 1994, AP&L redeemed, pursuant to sinking fund requirements, 200,000 shares of its 13.28% Series Preferred Stock, $25 par value. GSU GSU has requested, but has 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 On February 1, 1994, LP&L redeemed, pursuant to sinking fund requirements, 300,000 shares of its 12.64% Series Preferred Stock, $25 par value. On May 2, 1994, LP&L redeemed, pursuant to sinking fund requirements, 416 shares of its 14.72% Series Preferred Stock, $25 par value, which represented the remaining outstanding shares of this series. MP&L On January 3, 1994, MP&L redeemed 70,000 shares of its 9.76% Series Preferred Stock, $100 par value. On March 1, 1994, MP&L redeemed 10,000 shares of its 12.00% Series Preferred Stock, $100 par value. NOPSI On March 1, 1994, NOPSI redeemed 15,000 shares of its 15.44% Series Preferred Stock, $100 par value. NOTE 4. LONG-TERM DEBT AP&L AP&L has requested, but has not yet received, 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 of the sale 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 February 1, 1994, AP&L redeemed, pursuant to sinking fund requirements, $0.4 million of its 8.75% Series First Mortgage Bonds due 1998. GSU GSU has requested, but has 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 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 redeem, purchase, or otherwise acquire its outstanding pollution control revenue bonds and/or industrial development revenue bonds through December 31, 1995. LP&L LP&L has requested, but not yet received, SEC authorization to undertake, should LP&L decide to do so, the refunding of approximately $310 million of intermediate-term and long-term bonds issued by the Owner Trustee when it acquired interests in Waterford 3 in 1989. Such bonds became optionally redeemable in July 1994. MP&L On April 20, 1994, MP&L entered into arrangements with Warren County, Mississippi and Washington County, Mississippi for the issuance of an aggregate 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 issued in 1974. 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 5. RETAINED EARNINGS On January 29, 1994, Entergy Corporation's Board of Directors declared a common stock dividend of 45 cents per share which was paid on March 1, 1994. In addition, on March 25, 1994, Entergy Corporation's Board of Directors declared a common stock dividend of 45 cents per share payable on June 1, 1994. On January 28, 1994, the Boards of Directors of the respective companies listed below declared common stock dividends payable to Entergy Corporation in the following amounts (in millions): Date Company Payable Amount AP&L 2/1/94 $ 17.9 GSU * 2/1/94 $100.0 LP&L 2/1/94 $ 17.9 MP&L 2/1/94 $ 4.6 System 2/1/94 $ 57.8 Energy * Prior to the February 1, 1994, dividend payment, GSU had not paid a common dividend since June 1986. NOTE 6. FAIR VALUE DISCLOSURE 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 the System has recorded on the balance sheet an additional $15.6 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. NOTE 7. 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. As of March 31, 1994, AP&L, GSU, LP&L, and MP&L had unused lines of credit for short- term borrowings of $34.0 million, $3.2 million, $20.2 million, and $30.0 million, respectively. 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 March 31, 1994, Entergy Corporation and the System operating companies had outstanding short-term borrowings from the Money Pool and/or from banks as follows (in millions): Company Money Banks Pool Entergy - $43 Corporation AP&L $32 $0.6 LP&L $24.9 - MP&L $71.6 - __________________________________________ 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 first quarter 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 nevertheless requires significant capital resources for the periodic maturity of certain series of debt and preferred stock. 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 three months ended March 31, 1994 and 1993, was as follows (in millions): Three Months Three Months Company Ended 3/31/94 Ended 3/31/93 Entergy * $322.4 $155.6 AP&L $ 88.2 $ 84.9 GSU $ 53.8 $(30.4) LP&L $ 99.5 $ 15.4 MP&L $ 46.9 $ 22.1 NOPSI $ 26.5 $ 7.6 System Energy $ 53.4 $ 57.4 * Entergy's net cash flow from operations for the three months ended March 31, 1993, excludes GSU because the Merger was not yet consummated. In the first quarter 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 required significant external funds in the form of 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 our 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 future capital requirements through future debt or preferred stock issuances, as discussed below. Also, in order to take advantage of lower interest and dividend rates, Entergy Corporation's subsidiaries 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. 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 $103.7 million in the first three months of 1994. Entergy Corporation receives funds through dividend payments from its subsidiaries. During the first quarter of 1994, these common stock dividend payments totaled $198.2 million, including a $100 million dividend paid by GSU. Certain restrictions may limit the amount of these distributions (see page 94 of the Form 10-K and Note 2 ). See Note 5 for information on dividends declared by Entergy Corporation, the System operating companies, and System Energy in the first quarter of 1994. Entergy Corporation has a program to repurchase shares of its outstanding common stock. The occurrence and amount of such repurchase depend upon market conditions and authorization from Entergy Corporation's Board of Directors. See Note 3 for additional information. Entergy Corporation has requested 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 non-regulated and non-utility businesses, and other activities. Certain agreements and restrictions limit the amount of mortgage bonds and preferred stock that can be issued by the System operating companies and System Energy. Based on the most restrictive applicable tests as of March 31, 1994, and an assumed annual interest or dividend rate of 8.5%, 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 $ 860 $697 GSU $ 407 $ - LP&L $ 69 $750 MP&L $ 237 $231 NOPSI $ 72 $184 System $1,030 * 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. AP&L may also issue preferred stock to refund outstanding preferred stock without meeting an earnings coverage test. GSU has no limitations on the issuance of preference stock. For information on the System operating companies' and System Energy's regulatory authorizations to issue and acquire securities, see Notes 3 and 4, and pages 90-94, 129-131, 170-172, 204-206, 239-241, 271-272, and 301 of the Form 10-K. See Note 7 for information on the System's short-term borrowings. Entergy Corporation and GSU 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 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 to System Energy 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. In December 1990, FERC Division of Audits issued a report 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 over collections from AP&L, LP&L, MP&L, and NOPSI. In August 1992, FERC issued an opinion and order (August 4 Order) affirming an initial decision by a FERC ALJ. System Energy filed a Request for Rehearing, and in October 1992, FERC issued an order allowing additional time for its consideration of the request, and it deferred System Energy's refund obligation until 30 days after FERC issues an order on rehearing. If the decision is implemented, System Energy estimates that as of March 31, 1994, net income would be reduced by $155.3 million. This amount includes refund obligations of approximately $118.9 million (including interest). See Note 2 for additional information. RESULTS OF OPERATIONS ENTERGY On December 31, 1993, GSU became a subsidiary of Entergy Corporation. In accordance with the purchase method of accounting, the 1993 first quarter 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. Net Income Consolidated net income decreased in the first quarter 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 for AP&L, GSU, MP&L, and NOPSI and the effect of implementing SFAS 109. Excluding these items, net income for the first quarter of 1994 decreased by approximately $3.0 million. This decrease was due primarily to the recording of a reserve for revenue reduction by NOPSI as a result of a review of NOPSI's return on equity in accordance with the 1991 Settlement Agreement and a 1992 gas rate settlement (see Note 2). This decrease was partially offset by increased retail operating revenues caused by increased energy sales resulting from colder than normal winter weather in 1994 and from non- weather related growth. In addition, interest on long-term debt and preferred dividend requirements decreased by approximately $18.5 million as a result of continued debt refinancing and stock redemption activities. Significant factors affecting the results of operations and causing variances between the first quarter 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 increased by approximately $62.1 million in the first quarter of 1994 due primarily to improving market conditions and increased retail energy sales resulting from colder than normal winter weather as compared to milder weather in 1993. Additionally, revenues were higher due to increased collections of Grand Gulf 1-related costs and increased fuel adjustment revenues, which do not affect net income. The increase in fuel adjustment revenues was due to increased gas generation resulting from scheduled nuclear refueling outages at Waterford 3 and ANO 2 during the first quarter of 1994. A $14.3 million reduction in revenues, as discussed in "Net Income" above, partially offset these increases. Gas operating revenues increased by approximately $12.4 million in the first quarter of 1994 due primarily to increased retail sales resulting from colder than normal winter weather in 1994. Expenses Purchased power increased by approximately $32.3 million in the first quarter of 1994 due primarily to increased power purchased from nonassociated utilities due to changes in generation requirements for the System operating companies resulting primarily from increased energy sales and fuel-related costs. In addition, purchased power increased in 1994 as a result of nuclear refueling outages at Waterford 3 and ANO 2. Nuclear refueling outage expenses decreased by approximately $5.1 million in the first quarter of 1994 due primarily to a reduction in AP&L's monthly nuclear refueling outage accrual resulting from revisions in estimated outage expenses. The lower monthly accrual began in the fourth quarter of 1993. The amortization of rate deferrals increased by approximately $16.4 million in the first quarter of 1994 due primarily to collection of more Grand Gulf 1-related costs from customers in 1994 as compared to 1993. Other Other interest increased by approximately $5.2 million due to increased amortization of debt expense resulting from continued refinancing of debt. AP&L Net Income Net income decreased in the first quarter 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 and the effect of implementing SFAS 109. Excluding the effects of the change in accounting principle and SFAS 109, net income increased $7.9 million. This increase is due primarily to increased energy sales. Significant factors affecting the results of operations and causing variances between the first quarter 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 and sales increased in the first quarter 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. Further, retail energy sales increased as a result of non-weather related growth. The increase in energy sales was partially offset by milder weather in 1994 and the loss of sales due to an ice storm in February 1994. Additionally, revenues were higher due to increased collections of Grand Gulf 1-related costs and increased recovery of fuel-related costs, which do not affect net income. Expenses Fuel and fuel-related expenses increased in the first quarter of 1994 primarily due to higher energy sales. Purchased power increased in the first quarter of 1994 as a result of changes in generation availability and requirements among the System operating companies and lower nuclear generation as a result of ANO 2's refueling outage in mid-March 1994. The amortization of rate deferrals increased due to increased collection of previously deferred Grand Gulf 1-related costs pursuant to the step-up provisions of AP&L's rate phase-in plan. Nuclear refueling outage expenses decreased in the first quarter of 1994 due primarily to a reduction in AP&L's monthly nuclear refueling outage accrual resulting from revisions in estimated outage expenses. The lower monthly accrual began in the fourth quarter of 1993. Total income taxes decreased in the first quarter of 1994 due primarily to the cumulative effect of the change in accounting principle for unbilled revenues and the effect of implementation of SFAS 109 in the first quarter of 1993. GSU Net Income Net income decreased in the first quarter 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 $4.0 million. This decrease is due primarily to a $6.0 million net of tax refund provision made in March 1994 (see Note 2), and increased operations expense, partially offset by increased energy sales. Significant factors affecting the results of operations and causing variances between the first quarter of 1994 and 1993 are discussed under "Revenues and Sales" and "Expenses" below. Revenues and Sales See GSU's "Selected Operating Results" for information on operating revenues by source and KWH sales. Operating revenues increased in the first quarter of 1994 due primarily to increased retail energy sales resulting from colder than normal winter weather and from non-weather related growth, and increased sales for resale as a result of GSU's participation in the System power pool. Expenses Purchased power increased in the first quarter of 1994 due to participation in joint dispatching through the System power pool resulting from increased energy sales as discussed above. Operation expense increased due to one-time costs associated with safety and performance improvements at River Bend. LP&L Net Income Net income increased in the first quarter of 1994. Excluding the effect of implementing SFAS 109 in the first quarter of 1993, net income increased by $5.6 million. This increase is due primarily to increased operating revenues partially offset by increased other operation and maintenance expenses. Significant factors affecting the results of operations and causing variances between the first quarter 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 increased in the first quarter of 1994 due primarily to increased fuel adjustment revenues, which do not affect net income, to increased retail energy sales resulting from colder than normal winter weather in 1994 and from non-weather related growth. Expenses Purchased power increased in the first quarter of 1994 due primarily to increased power purchased from nonassociated utilities resulting from a scheduled refueling outage at Waterford 3 during the first quarter of 1994, and also due to increased retail energy sales as discussed above. MP&L Net Income Net income decreased in the first quarter 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 and the effect of implementing SFAS 109. Excluding the effects of the change in accounting principle and implementing SFAS 109, net income decreased by $5.6 million. This decrease is due primarily to a decrease in accrued unbilled revenues and increased operation and maintenance expenses, partially offset by an increase in operating revenues. Significant factors affecting the results of operations and causing variances between the first quarter 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 increased in the first quarter of 1994 due to increased retail energy sales resulting from colder than normal winter weather in 1994 and from non-weather related growth, and increased sales for resale to associated and nonassociated companies. These increases were partially offset by a decrease in unbilled revenues. Expenses Fuel for electric generation and fuel-related expenses increased in the first quarter 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 first quarter of 1994 due primarily to changes in generation availability and requirements among the System operating companies. The amortization of rate deferrals increased in the first three months of 1994 reflecting the fact that MP&L, based on the Revised Plan, collected more Grand Gulf 1-related costs from its customers in the first quarter of 1994 than it recovered in the same period in 1993. NOPSI Net Income Net income decreased in the first quarter 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 offset by the effect of implementing SFAS 109. Excluding the effects of the change in accounting principle and implementing SFAS 109, net income decreased $1.9 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 (see Note 2). Significant factors affecting the results of operations and causing variances between the first quarter 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. Operating revenues decreased in the first quarter of 1994 due to the recording of a reserve for revenue reduction of $14.3 million as discussed above. This decrease was partially offset by increased retail energy sales resulting from colder than normal winter weather in 1994 and from non-weather related growth, increased fuel adjustment revenues, and accrued unbilled revenues. Expenses Fuel and fuel-related expenses and gas purchased for resale increased in the first quarter of 1994 due primarily to an increase in the amount of gas purchased for resale and an increase in deferred gas costs due to higher gas sales. The increase in amortization of rate deferrals in the first quarter 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 decreased in the first quarter of 1994 due primarily to a lower rate of return on equity (reduced from 13% to 11%) in System Energy's formula wholesale rates as a result of an August 1993 settlement of a rate proceeding with FERC. This decrease in revenue was partially offset by a reduction in interest expense due to the refinancing of high-cost debt. Significant factors affecting the results of operations and causing variances between the first quarter 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 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 first quarter of 1994 due primarily to the reduction in System Energy's rate of return on equity as discussed above, a lower return on System Energy's decreasing investment in Grand Gulf 1 (caused by depreciation of the unit), and a decrease in operating expenses. Expenses Interest expense decreased in the first quarter 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 gains 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 rate and performance-based plans encourage efficiencies and productivity while permitting utilities 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 United States Court of Appeals for the District of Columbia Circuit. FERC's order, 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 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 125-126 of the Form 10-K. On March 31, 1994, North Little Rock, Arkansas, awarded AP&L a wholesale electric contract which 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 three competitors. On April 29, 1994, one of AP&L's competitors filed a motion with FERC to intervene in the approval process for the contract. See Part II, Item 5. "Other Information" for additional information. 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. GSU's base rates will be reviewed by the LPSC during the first post- Merger earnings analysis, scheduled for mid-1994, for reasonableness of its return on equity. The PUCT will also review GSU's base rates in accordance with its Merger approval plan in mid-1994. 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 quarter of 1994, KWH sales to industrial customers at less than full cost of service, which make up approximately 30% of the total industrial class, increased 24%. Sales to the remaining industrial customers decreased 2%. LP&L's five year rate freeze expired in March 1994. At the same time, approximately $46 million of rate relief that was included in LP&L's retail rates also expired. The LPSC is scheduled to begin a review of LP&L's rates and rate structure in May 1994, which may result in a further decrease in rates. 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 connection with the Merger, NOPSI agreed with the Council to reduce its annual electric base rates by $4.8 million effective for bills rendered on or after November 1, 1993. NOPSI is currently operating under electric and gas base rate freezes through October 31, 1996. For further information, see pages 82- 83 and 266-268 of the Form 10-K. 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%. A review by the Council's advisors of NOPSI's return on equity for the twelve month period ended September 30, 1993, indicates that NOPSI may be required to credit $21.5 million to its customers. In early May 1994, NOPSI determined it was likely that a credit to customers would be required, however, NOPSI estimates that the actual amount of the revenue reduction will be approximately $14.3 million. In the first quarter of 1994, NOPSI recorded a reserve for this revenue reduction which reduced net income by $8.8 million (net of taxes). The Council is expected to order a hearing in the second quarter of 1994 to render a final decision on the actual amount, method, and timing of the credit. NOPSI's future earnings may also be limited by the 1991 NOPSI Settlement and a 1992 gas rate settlement, as discussed above, which may not allow NOPSI to earn a return on equity in excess of 13.76%. 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. To help minimize future costs, Entergy remains committed to least cost planning. In December 1992, AP&L, LP&L, MP&L, and NOPSI each filed a Least Cost Integrated Resource Plan (Least Cost Plan) with their respective retail regulators. GSU is currently working with the PUCT regarding integrated resource planning. Integrated resource or least cost planning includes demand-side measures such as customer energy conservation and supply-side measures such as more efficient power plants. These measures are designed to delay the building of new power plants for the next 20 years. The System operating companies plan to periodically file revised Least Cost Plans. See pages 8-9, 19, 23-24, 25 and 26-27 of the Form 10-K, and Part II, Item 1. "Legal Proceedings" for further information. 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 of Texas retail jurisdiction deferred River Bend operating and carrying costs. System Energy See Note 2 for information with respect to possible write- offs and refunds by System Energy which may result from a decision issued by FERC. 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 quarter of 1994, Entergy Corporation's nonregulated investments reduced consolidated net income by approximately $6.9 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. See Part II, Item 1. "Legal Proceedings," for information on a petition filed with the SEC by the APSC, the Council, and the MPSC alleging that Entergy Corporation has failed to comply with the terms of a 1992 settlement agreement relating to certain non-regulated investments and Item 5. "Other Information" with respect to a new Entergy Corporation subsidiary that is seeking exempt wholesale generation status. 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 March 31, 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 three months ended March 31, 1994, GSU recorded revenues resulting from the sale of electricity from the deregulated asset plan of approximately $8.9 million. Operations and maintenance expenses, including fuel, were approximately $10.6 million, and depreciation expense associated with the deregulated asset plan investment was approximately $4.1 million for the three months ended March 31, 1994. For the first quarter of 1994, GSU recorded nonfuel revenue of $8.0 million (included in the $8.9 million of total deregulated asset plan revenue discussed above) which, absent the deregulated asset plan, would not have been realized. The operations 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. ENTERGY CORPORATION AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. Legal Proceedings Least Cost Planning AP&L, GSU, LP&L, MP&L, and NOPSI As discussed on pages 8-9, 19, 23, 25-27, 76, 122, 197, 232, and 264 of the Form 10-K, AP&L, LP&L, MP&L, and NOPSI have filed a Least Cost Plan with their respective retail regulators, and GSU is currently working with the PUCT regarding integrated resource planning. Several of the APSC public forum meetings were delayed into 1994. The public forum series is now expected to be completed in May 1994. On March 30, 1994, the LPSC extended the current overall discovery, hearing and briefing schedule to provide that such schedule will conclude with the report of the LPSC special counsel on September 16, 1994 rather than on June 14, 1994. The LPSC could render a decision on the basis of this report. On April 7, 1994, the Council issued its resolution with regard to the final phase (Phase III) of the Least Cost Plans initially filed by LP&L and NOPSI with the Council in December 1992. The Council stated that it believes the Least Cost Plans will result in benefits to the community and that the framework followed in the plans is consistent with that contemplated in an ordinance adopted by the Council in 1991 mandating implementation of least cost planning. The Council rejected the 20-year Least Cost Plan of LP&L and NOPSI because it was filed before the Merger and directed the next Least Cost Plan filing (scheduled for December 1994) to include the effects of the Merger. (LP&L and NOPSI believe the Merger will have little, if any, impact on the Least Cost Plan.) Further, the resolution directed LP&L and NOPSI to correct in the next Least Cost Plan filing what the Council regarded as deficiencies, and to address certain issues with regard to certain load-building and supply-side matters. The Council also approved, with certain refinements, LP&L's and NOPSI's demand-side implementation plans. The Council also recognized, but did not rule upon, the separate settlement among Entergy and a contractors' association of certain competition issues raised by contractors, approved the concept of (1) a rider mechanism for recovery of lost contributions and incentives and (2) the commencement of such recovery on January 1, 1996, and directed the opening of a separate docket "to consider alternative industrial rates." LP&L and NOPSI plan to make, in early or mid-May, a CCLM filing in the new docket established by the Council to address the Entergy-proposed pilot CCLM and Council authorization of a fiber optics/coaxial cable network. System Agreement Entergy Corporation, AP&L, LP&L, MP&L, and NOPSI a) As discussed on page 17 of the Form 10-K, on August 20, 1990, the City filed a complaint against Entergy Corporation, AP&L, LP&L, MP&L, NOPSI, and System Energy requesting that FERC investigate AP&L's transfer of generating capacity to Entergy Power and the effect of the transfer on AP&L, LP&L, MP&L, and NOPSI and their ratepayers. On December 15, 1993, FERC issued an opinion declining to address the issue of whether the transfer was prudent until a future time when replacement capacity has been added or planned and finding that, until such time, billings under the System Agreement as affected by the transfer are reasonable. The Entergy parties and the City each filed a request for rehearing of this order, which was denied by FERC on February 28, 1994. The Entergy parties and the City each filed an appeal of the FERC's orders with the D. C. Circuit. b) In the December 15, 1993 order approving the Merger, the FERC also initiated a new 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. FERC established March 8, 1994 as the refund effective date. On February 16, 1994, Entergy Corporation filed an Offer of Settlement to amend the System Agreement prospectively to make it explicit that certain out-of-service generating units may be included in reserve equalization calculations under Service Schedule MSS-1. The LPSC and MPSC contested certain provisions in the proposal, and also argued that LP&L and MP&L were entitled to refunds for MSS-1 payments made in the past. Subsequently, the LPSC and MPSC submitted testimony based on estimates, seeking refunds estimated at $22.6 million and $13.2 million, respectively. On March 14, 1994, Entergy Corporation submitted a motion to the presiding ALJ seeking to limit the scope of the proceeding to prospective issues and to exclude the issue of past refunds. On March 31, 1994, the ALJ limited the scope of the hearing to exclude any claims for retroactive refunds. Thereafter, it was agreed by the parties that the procedural schedule in the case would be stayed until at least May 10, 1994. The LPSC and MPSC stated that they would file complaints with FERC asserting their claims for retroactive refunds, and Entergy Corporation agreed to answer those complaints within three weeks. On April 5, 1994, the LPSC, Mississippi Attorney General (MAG), and MPSC filed a complaint with FERC claiming that Entergy's past reserve equalization charges under System Agreement Schedule MSS-1 violated the System Agreement, sought refunds and requested FERC to hold a hearing to consider this claim. They also asked FERC to expedite its consideration of their complaints and to consolidate any hearings it deems appropriate with these proceedings. Responses by Entergy Corporation and other parties were filed on April 26, 1994. No date has been set for a FERC determination as to whether to set the LPSC, MAG and MPSC complaint for hearing. FERC estimates that it will not be able to render a decision finally concluding all of the issues in these proceedings until November 30, 1995. The amounts potentially subject to refund will continue to accrue at least until FERC issues a final order in the proceedings. Entergy's position is that its MSS-1 charges have been, and will continue to be, in compliance with the System Agreement. Therefore, it is Entergy's position that no refunds are warranted. However, if refunds are ordered for one or more System operating companies on the grounds that their MSS-1 payments were too high, it has not yet been determined whether the revenues for such refunds could or would be obtained through corresponding revised charges to the System operating companies whose MSS-1 charges were too low. Any such revised charges would be subject to FERC approval. Nonregulated Investments Entergy Corporation In April 1994, the APSC, the Council, and the MPSC filed a petition with the SEC alleging that Entergy Corporation has failed to comply with the terms of a 1992 settlement agreement with such parties executed in conjunction with the resolution of various matters pending before the SEC. Specifically, the petitioners contend that Entergy Corporation has failed to provide them with financial statements and other documentation relating to its non-regulated businesses, to submit to an audit of all transactions among Entergy Corporation, its regulated utilities and its non-regulated businesses, and to use its best efforts to obtain SEC approval of specified pricing methods for certain transactions between its regulated and non-regulated businesses. The petitioners assert that, because the SEC's orders approving Entergy Corporation's investments in Entergy SASI and in certain generating and distribution facilities in Argentina (see pages 3-4 of the Form 10-K) were issued in reliance on Entergy Corporation's undertakings in the settlement agreement, the SEC should order Entergy Corporation to comply with the agreement or, alternatively, withdraw its prior approvals of these investments until Entergy Corporation so complies. On May 3, 1994, Entergy Corporation filed with the SEC a response to the petition asserting that it has substantially complied, and is in the process of complying, with the 1992 settlement agreement and requesting the SEC to dismiss the petition. The matter is pending. Merger Related Proceedings Entergy Corporation and GSU a) As discussed on pages 42 and 43 of the Form 10-K, purported class action complaints were filed against GSU and its directors relating to the then proposed merger with Entergy Corporation. GSU executed a Memorandum of Understanding with the counsel for the plaintiffs in these suits agreeing in principle to settle such actions subject to execution of an appropriate stipulation of settlement, approval by the court, and certain other conditions. On March 9, 1994, GSU executed a Stipulation of Settlement Agreement agreeing to settle such actions. The Stipulation was approved by the court on March 23, 1994. The Settlement is subject to certain conditions and entry of a final order by the court after notice and hearing presently scheduled for May 31, 1994. b) As discussed on pages 19, 83, and 163 of the Form 10-K, the settlement agreement that led to the 1993 approval of the Merger by the PUCT required that GSU file a cost-of-service study for informational purposes with the PUCT as soon as possible following closing. GSU is preparing to make that filing in June 1994. The settlement agreement also provided that if an action to reduce GSU's rates were initiated between December 31, 1993 and the time GSU files its first post-closing rate case (as provided in the settlement agreement), the effect of any order actually reducing rates would relate back to the date the action was filed. Pursuant to that provision, the Texas Office of Public Utility Counsel and certain cities served by GSU have instituted actions at the PUCT and at the city level to investigate further the reasonableness of GSU's rates. The PUCT proceeding has been abated pending resolution of the proceedings before the cities. The current schedule for the cases before the cities contemplates final city action on or about August 18, 1994. GSU intends to vigorously oppose any reduction of its rates in these cases. c) As discussed on page 38 of the Form 10-K, on December 28, 1993, Houston Industries Incorporated and Houston Lighting & Power Company filed a petition for reconsideration of the SEC order approving the Merger. By order dated April 28, 1994, the SEC denied the petition, stating that the petition raises no legal or factual issues that would alter the conclusions reached in the order approving the Merger. As also discussed on page 38 of the Form 10-K, 14 parties requested rehearing of certain aspects of FERC's December 1993 order approving the Merger. On May 11, 1994, FERC reaffirmed its approval of the Merger, denied, for the most part, the requests for rehearing, and confirmed its findings that the Merger would result in significant benefits. FERC's orders on the Merger may be subject to appeal to the courts. d) As discussed on page 38 of the Form 10-K, appeals seeking to set aside the LPSC order related to the Merger were filed in the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana, by Houston Lighting & Power Company on August 13, 1993, and by the Alliance for Affordable Energy, Inc. on August 20, 1993. On February 9, 1994, Houston Lighting & Power Company filed a motion voluntarily dismissing its appeal, which motion was granted on February 27, 1994. NRC Fines Entergy Corporation and GSU a) The NRC staff informed Entergy Operations on April 11, 1994 that it proposes to fine GSU $100,000 for apparent fire- protection program violations at River Bend. During a 1993 reassessment of the plant's ability to safely shut down the facility in the event of a fire, GSU found five fire-protection deficiencies that were reported to the NRC. The NRC acknowledged that operator action in most cases could have overcome the fire protection deficiencies and shut down the reactor, and that the probability of these accidents was low. The NRC further recognized that each of the deficiencies was promptly resolved, bringing the program into compliance. b) On April 20, 1994, the NRC fined Entergy Operations $112,500 for security violations at River Bend. The fine was based on security violations identified as a result of inspections conducted by the NRC between April 1992 and August 1993. The NRC acknowledged that Entergy Operations had taken remedial steps and plans other corrective measures to prevent similar violations in the future. Entergy Operations does not plan to contest the fine. Cajun Entergy Corporation and GSU a) As discussed on pages 40-42, 94-95, and 172-173 of the Form 10-K, Cajun filed a civil action against GSU in the U. S. District Court, Middle District of Louisiana, which suit began on April 12, 1994 and is continuing. 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 for the unit, 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. GSU believes the suits are without merit and is contesting them vigorously. 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. b) As discussed on page 31 of the Form 10-K, GSU filed two applications with the NRC to amend the River Bend operating license, and these amendments were issued in December 1993. On February 16, 1994, Cajun filed with the D. C. Circuit petitions for review of the two license amendments issued by the NRC. On March 14, 1994, Entergy Corporation, Entergy Operations, and GSU filed motions to intervene in the D.C. Circuit proceedings. On March 21, 1994, Cajun indicated that it will contend that the NRC erred by deciding that evidentiary hearings were not warranted on antitrust issues, on various issues concerning the Atomic Energy Act, and on certain ongoing litigation between Cajun and GSU regarding River Bend. Cajun will also argue that the NRC erred in failing to find adverse effects on certain alleged Cajun contract rights. NISCO Entergy Corporation and GSU In 1988, GSU entered into a joint venture with Conoco, Inc., Citgo Petroleum Corporation, and Vista Chemical Company (Industrial Participants) whereby GSU's Nelson Units 1 and 2 were sold to a partnership (NISCO) consisting of the Industrial Participants and GSU. The sale of the units by GSU to NISCO was for an amount in excess of the units' depreciated cost. The Industrial Participants are supplying the fuel for the units, while GSU operates the units at the discretion of the Industrial Participants and purchases the electricity produced by the units. In February 1990, the LPSC disallowed the pass-through to ratepayers for the portion of GSU's cost to purchase power from 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, and GSU recorded a estimated refund provision of approximately $10.1 million, before related income taxes of $4.1 million. GSU Asbestos Suits Entergy Corporation and GSU As discussed on pages 39-40 of the Form 10-K, in October 1989, an amended lawsuit petition was filed on behalf of 985 plaintiffs in the District Court of Jefferson County, Texas, 60th Judicial District in Beaumont, Texas, naming 55 defendants including GSU. In February 1990, another amended lawsuit petition was filed in a different state District Court in Jefferson County, Texas, on behalf of over 200 plaintiffs (subsequently amended to include a total of 674) naming 127 defendants including GSU. Possibly 300 to 400 or more of the plaintiffs in Texas may have worked at GSU's premises. At least nine other individual suits have been filed in Beaumont against GSU and others, seeking damages for alleged asbestos exposure. All of the plaintiffs in such suits are also suing GSU and all other defendants on a conspiracy count. Two similar suits have also been filed in Texas on behalf of approximately 220 plaintiffs. There are 39 asbestos-related law suits filed in the 14th Judicial District Court of Calcasieu Parish in Lake Charles, Louisiana, on behalf of an aggregate of 91 plaintiffs naming from 16 to 24 defendants including GSU, and GSU is aware of as many as 61 additional cases that may be filed. The suits allege that each plaintiff contracted an asbestos-related disease from exposure to asbestos insulation products on the premises of such defendants. Management believes that GSU has meritorious defenses, but there can be no assurance as to the outcome of these cases or that additional claims may not be asserted. In asbestos-related suits against the manufacturers, very substantial recoveries have been achieved by large groups of claimants. GSU does not presently believe that the ultimate resolution of these cases will materially adversely affect its financial position or results of operations. LPSC Investigation Entergy Corporation and LP&L As discussed on pages 75, 84, and 199 of the Form 10-K the LPSC is currently scheduled to begin to review LP&L's rates and rate structure in May 1994. February 1994 Ice Storm Entergy Corporation and MP&L As discussed on pages 104 and 245 of the Form 10-K and Note 2, a February 1994 ice storm left more than 80,000 customers without electric power in MP&L's service area. Current estimates of repair costs are $70.8 million, of which $57.5 million is expected to be capitalized as plant related costs. The remaining balance has been recorded by MP&L as a deferred debit. On April 15, 1994, MP&L filed a Notice of Intent to Change Rates with the MPSC under which MP&L proposed to recover certain expenditures associated with the ice storm. MP&L proposes to recover its ice storm costs through a rider schedule ("Storm Damage Rider"). Under the proposed Storm Damage Rider, the initial rate adjustment would occur on August 15, 1994, and would recover ice storm costs incurred by MP&L through May 31, 1994. On or before February 15, 1995, revised rate adjustments reflecting the total ice storm costs would be submitted to the MPSC for review and verification. The revised rate adjustments are proposed to become effective March 15, 1995, and remain in effect until August 15, 1999, at which time MP&L would file revised base rates reflecting the annual revenue requirement associated with the then remaining capital related costs. The MPSC is expected to hold a hearing on the filing and could order a method or level of recovery of ice storm costs different from that proposed by MP&L. The Ice Storm Rider is proposed to operate independently and separately from MP&L's formulary incentive rate plan. See pages 25-26, 83-84, and 235-236 of the Form 10-K for additional information. Livingston Parish Hazardous Waste Suits GSU and LP&L As discussed on pages 39 and 43 of the Form 10-K, various suits have been filed concerning a hazardous waste disposal site in Livingston Parish, Louisiana. At an April 28, 1994 status conference, the United States District Court for the Middle District of Louisiana (Federal District Court) judge stated that he intended to adopt the Federal magistrate's recommendation that the class action not be remanded to the Livingston Parish, Louisiana District Court (State District Court). Further, the judge will review, among other matters, the State District Court class certification to determine whether such certification should be maintained in Federal District Court. The April 11, 1994 State District Court trial date was not met. The matter is pending. Decommissioning Costs Entergy Corporation, AP&L, and LP&L As discussed on pages 29 and 134 of the Form 10-K, estimated decommissioning costs are regularly reviewed and updated. 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. AP&L expects to include the updated costs in the annual decommissioning cost rate rider filing with the APSC during the fourth quarter of 1994. See Note 1 for additional information on updated decommissioning cost estimates. Reserve for Revenue Reduction 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%. A review by the Council's advisors of NOPSI's return on equity for the twelve month period ended September 30, 1993, indicates that NOPSI may be required to credit $21.5 million to its customers. In early May 1994, NOPSI determined it was likely that a credit to customers would be required, however, NOPSI estimates that the actual amount of the revenue reduction will be approximately $14.3 million. In the first quarter of 1994, NOPSI recorded a reserve for this revenue reduction which reduced net income by $8.8 million (net of taxes). The Council is expected to order a hearing in the second quarter of 1994 to render a final decision on the actual amount, method, and timing of the credit. Item 4. Submission of Matters to a Vote of Security Holders Entergy Corporation The annual meeting of stockholders of Entergy Corporation was held on May 6, 1994. The following matters were voted on and received the specified number of votes for, abstentions, votes withheld (against), and broker non-votes: 1. Election of Directors: Votes Broker Name of Nominee Votes For Abstentions Withheld Non-Votes W. Frank Blount 205,283,455 N/A 1,021,762 N/A John A. Cooper, Jr. 205,371,312 N/A 933,905 N/A Lucie J. Fjeldstad 205,274,082 N/A 1,031,135 N/A Norman C. Francis 205,136,089 N/A 1,169,128 N/A Kaneaster Hodges, Jr. 205,267,089 N/A 1,038,128 N/A Robert v. d. Luft 205,251,205 N/A 1,054,012 N/A Edwin Lupberger 205,155,974 N/A 1,149,243 N/A Kinnaird R. McKee 205,296,006 N/A 1,009,211 N/A Paul W. Murrill 205,090,093 N/A 1,215,124 N/A James R. Nichols 205,371,894 N/A 933,323 N/A Eugene H. Owen 205,209,580 N/A 1,095,637 N/A John N. Palmer, Sr. 205,388,740 N/A 916,477 N/A Robert D. Pugh 205,336,833 N/A 968,384 N/A H. Duke Shackelford 205,338,305 N/A 966,912 N/A Wm. Clifford Smith 205,351,721 N/A 953,496 N/A Bismark A. Steinhagen 205,317,947 N/A 987,270 N/A 2. Appointment of independent public accountants, Coopers & Lybrand, for the year 1994: 204,765,999 votes for; 600,386 votes against; 938,832 abstentions; and broker non-votes are not applicable. AP&L A consent in lieu of the annual meeting of common stockholders was executed on May 5, 1994, pursuant to an Arkansas statute that permits such a procedure. The consent was signed on behalf of Entergy Corporation, which owns all of the outstanding common stock. The Board of Directors elected by the common stockholder in and by such consent is as follows: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and R. Drake Keith. GSU A consent in lieu of the annual meeting of common stockholders was executed on May 5, 1994, pursuant to a Texas statute that permits such a procedure. The consent was signed on behalf of Entergy Corporation, which owns all of the outstanding common stock. The Board of Directors elected by the common stockholder in and by such consent is as follows: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Frank F. Gallaher. LP&L A consent in lieu of the annual meeting of common stockholders was executed on May 5, 1994, pursuant to a Louisiana statute that permits such a procedure. The consent was signed on behalf of Entergy Corporation, which owns all of the outstanding common stock. The Board of Directors elected by the common stockholder in and by such consent is as follows: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and John J. Cordaro. MP&L A consent in lieu of the annual meeting of common stockholders was executed on May 5, 1994, pursuant to a Mississippi statute that permits such a procedure. The consent was signed on behalf of Entergy Corporation, which owns all of the outstanding common stock. The Board of Directors elected by the common stockholder in and by such consent is as follows: Michael B. Bemis, Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and Donald E. Meiners. NOPSI A consent in lieu of the annual meeting of common stockholders was executed on May 5, 1994, pursuant to a Louisiana statute that permits such a procedure. The consents were signed on behalf of Entergy Corporation, which owns all of the outstanding common stock. The Board of Directors elected by the common stockholder in and by such consent is as follows: Jerry D. Jackson, Edwin Lupberger, Jerry L. Maulden, and John J. Cordaro. System Energy A consent in lieu of the annual meeting of common stockholders was executed on April 29, 1994, pursuant to an Arkansas statute that permits such a procedure. The consent was signed on behalf of Entergy Corporation, which owns all of the outstanding common stock. The Board of Directors elected by the common stockholder in and by such consent is as follows: Donald C. Hintz, Jerry D. Jackson, Edwin Lupberger, and Jerry L. Maulden. Item 5. Other Information ANO Matters Entergy Corporation and AP&L As discussed on pages 30, 77, and 123 of the Form 10-K leaks in certain steam generator tubes at ANO 2 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 numerous 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. Nonregulated Investments Entergy Corporation As discussed on page 3 of the Form 10-K, Entergy continues to consider opportunities to expand its business, including opportunities in overseas power development. On April 28, 1994, Entergy Power Asia Ltd., an Entergy Corporation subsidiary, filed an application with the FERC requesting exempt wholesale generation status under the Public Utility Holding Company Act of 1935 for one existing 1200-megawatt generating plant and four planned generating plants in China. Wholesale Contract AP&L On March 31, 1994, North Little Rock, Arkansas awarded AP&L a wholesale electric contract which will provide estimated revenues of $347 million to AP&L over its 11-year life. AP&L which has been serving North Little Rock for over 40 years, was awarded the contract after intense bidding with three competitors. The price per KWH was reduced 18%, retroactive to March 1, 1994, with increases in price through the year 2004. On April 29, 1994, Power Systems Ltd. (PSL), one of AP&L's competitors, filed a motion with FERC to intervene in the approval process for AP&L's contract with North Little Rock. PSL alleges that the rates in the contract fail to meet FERC's criteria for below-market prices and unlawfully prohibit other power suppliers from participating in the North Little Rock power market. FERC has until June 1, 1994, to decide whether it will hold hearings on the matter or approve the power supply contract. 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 first quarter of 1994, as reported by The Wall Street Journal as composite transactions, were $37 3/8 and $31 1/8, respectively, per share. For the twelve months ended March 31, 1994, Entergy Corporation paid common stock dividends in an aggregate amount of $1.70 per share. As of March 31, 1994, the consolidated book value of a share of Entergy Corporation's common stock was $28.24 and the last reported sale price of Entergy Corporation's common stock on March 31, 1994, was $31 3/4 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 fixed charges and preferred dividends pursuant to Item 503 of Regulation S-K of the SEC as follows: Twelve Months Ended December 31, March 31, 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) 2.68 GSU 1.16 .80(i) 1.56 1.72 1.54 1.54 LP&L 1.79 2.32 2.40 2.79 3.06 3.16 MP&L 1.04(e) 2.42 2.36 2.37 3.79(h) 2.84 NOPSI 1.89 2.73 5.66(g) 2.66 4.68(h) 3.84 System Energy -(f) 2.10 1.74 2.04 1.87 1.84 Twelve Months Ended December 31, March 31, 1989 1990 1991 1992 1993 1994 Ratios of Earnings to Fixed Charges and Preferred Dividends (a)(b)(c) AP&L 1.88 1.81 1.87 1.86 2.54(h) 2.22 GSU (d) .66(i) .59(i) 1.19 1.37 1.21 1.21 LP&L 1.39 1.87 1.95 2.18 2.39 2.51 MP&L 1.00(e) 1.93 1.94 1.97 3.08(h) 2.28 NOPSI 1.62 2.36 4.97(g) 2.36 4.12(h) 3.38 (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 the $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. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits* **4(a) - Nineteenth Supplemental Indenture to System Energy's Mortgage and Deed of Trust (filed as Exhibit A-2(g) to Rule 24 Certificate dated May 6, 1994 in File No. 70-7946 and incorporated herein by reference). **10(a) - Twenty-ninth Assignment of Availability Agreement, Consent and Agreement, dated as of April 1, 1994, among AP&L, LP&L, MP&L, NOPSI, System Energy, and United States Trust Company of New York and Gerard F. Ganey, as Trustees (filed as Exhibit B-2(f) to Rule 24 Certificate dated May 6, 1994 in File No. 70-7946 and incorporated herein by reference). **10(b) - Twenty-ninth Supplementary Capital Funds Agreement, dated as of April 1, 1994, among Entergy Corporation, System Energy and United States Trust Company of New York and Gerard F. Ganey, as Trustees (filed as Exhibit B-3 (f) to Rule 24 Certificate dated May 6, 1994 in File No. 70-7946 and incorporated herein by reference). 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. 99(a) - AP&L's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined. 99(b) - GSU's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined. 99(c) - LP&L's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined. 99(d) - MP&L's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined. 99(e) - NOPSI's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Pre ferred 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) - Earnings statement of AP&L for the twelve month period ended March 31, 1994, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. 99(i) - Earnings statement of LP&L for the twelve month period ended March 31, 1994, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. 99(j) - Earnings statement of MP&L for the twelve month period ended March 31, 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 NOPSI for the twelve month period ended March 31, 1994, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. 99(l) - Earnings statement of System Energy for the twelve month period ended March 31, 1994, made generally available to security holders pursuant to Section 11(a) of the Securities Act of 1933, as amended. ___________________________ * Reference is made to a duplicate list of exhibits being filed as a part of Form 10-Q for the quarter ended March 31, 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 March 31, 1994. ** Incorporated herein by reference as indicated. (b) Reports on Form 8-K GSU A current report on Form 8-K, dated March 31, 1994, was filed with the SEC on April 6, 1994, reporting information under Item 5. "Other Materially Important Events". Entergy Corporation, AP&L, LP&L, MP&L, NOPSI and System Energy A current report on Form 8-K, dated March 16, 1994, was filed with the SEC on March 21, 1994, reporting information under Item 4. "Changes in Registrant's Certifying Accountant". 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: May 16, 1994


                                             Exhibit 23(a)

          [Letterhead of Friday, Eldredge & Clark]


                              May 10, 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]

                          May 10, 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]



                              May 10, 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,


                              /s/WISE CARTER CHILD & CARAWAY,

                              WISE CARTER CHILD & CARAWAY,
                              Professional Association






                                               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 of by Entergy Corporation, Arkansas Power
and Light Company, Gulf States Utilities Company, Louisiana 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

                              CLARK, THOMAS & WINTERS
                              A Professional Corporation

Austin, Texas
May 10, 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
May 10, 1994



                          
Exhibit 99(a) Arkansas Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Fixed Charges and Preferred Dividends Twelve Months Ended ------------------------------------------------ December 31, March 31, 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 $76,388 Interest on long-term debt - other 31,138 31,195 33,321 31,000 29,791 29,346 Interest on notes payable 828 1,027 -- 117 349 580 Amortization of expense and premium on debt-net(cr) 1,557 1,792 1,112 1,359 2,702 3,286 Other interest (6,295) 1,567 1,303 2,308 8,769 1,484 Interest applicable to rentals 22,349 24,233 21,969 17,657 16,860 15,493 Total fixed charges, as defined 138,604 161,226 158,238 141,758 136,451 126,577 Preferred dividends, as defined (a) 31,298 30,851 31,458 32,195 30,334 26,370 Fixed charges and preferred dividends, as defined $169,902 $192,077 $189,696 $173,953 $166,785 $152,947 Earnings as defined: Net Income $131,979 $129,765 $143,451 $130,529 $205,297 $165,604 Add: Provision for income taxes: Federal & State 8,440 50,921 44,418 57,089 58,162 49,779 Deferred - net 37,268 17,943 11,048 3,490 34,748 8,224 Investment tax credit adjustment - net 3,543 (12,022) (1,600) (9,989) (10,573) (10,566) Fixed charges as above 138,604 161,226 158,238 141,758 136,451 126,577 Total earnings, as defined $319,834 $347,833 $355,555 $322,877 $424,085 $339,619 Ratio of earnings to fixed charges, as defined 2.31 2.16 2.25 2.28 3.11 2.68 Ratio of earnings to fixed charges and preferred dividends, as defined 1.88 1.81 1.87 1.86 2.54 2.22 - ------------------------ (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 Fixed Charges and Preferred Dividends Twelve Months Ended ----------------------------------------------------- December 31, March 31, 1989 1990 1991 1992 1993 1994 ---------------------------------------------------------------- (In Thousands, Except for Ratios) Fixed charges, as defined: Interest on long-term debt $231,170 $218,462 $201,335 $197,218 $172,494 $171,804 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 6,109 Amortization of expense and premium on debt-net(cr) 2,280 2,192 1,999 3,479 8,104 8,368 Interest applicable to rentals 23,244 23,761 24,049 23,759 23,455 21,918 Total fixed charges, as defined 322,705 299,758 284,505 272,175 234,054 227,639 Preferred dividends, as defined (a) 241,829 104,484 90,146 69,617 65,299 62,674 Fixed charges and preferred dividends, as defined $564,534 $404,242 $374,651 $341,792 $299,353 $290,313 Earnings as defined: Income (loss) from continuing operations before extrodinary items and the cumulative effect of accounting changes $13,251 ($36,399) $112,391 $139,413 $69,462 $65,498 Add: Income taxes 37,744 (24,216) 48,250 55,860 58,016 58,532 Fixed charges as above 322,705 299,758 284,505 272,175 234,054 227,639 Total earnings, as defined $373,700 $239,143 $445,146 $467,448 $361,532 $351,669 Ratio of earnings to fixed charges, as defined 1.16 0.80 1.56 1.72 1.54 1.54 Ratio of earnings to fixed charges and preferred dividends, as defined 0.66 0.59 1.19 1.37 1.21 1.21 (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.

Exhibit 99(c) Louisiana Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Fixed Charges and Preferred Dividends Twelve Months Ended ------------------------------------------- December 31, March 31, 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 $60,130 Interest on long-term debt - other 25,400 52,361 61,492 60,425 63,694 64,587 Interest on notes payable -- 87 -- 150 898 984 Interest on lease (nuclear) 9,475 8,756 7,086 5,092 4,574 4,588 Other interest charges 11,300 6,378 5,924 5,591 5,706 4,345 Amortization of expense and premium on debt - net(cr) 2,260 3,397 3,282 7,100 5,720 5,069 Interest applicable to rentals 4,415 4,150 4,295 4,271 3,945 4,410 Total fixed charges, as defined 208,490 177,125 179,403 150,876 145,476 144,113 Preferred dividends, as defined (a) 59,009 42,365 41,212 42,026 40,779 37,508 Fixed charges and preferred dividends, as defined $267,499 $219,490 $220,615 $192,902 $186,255 $181,621 Earnings as defined: Net Income $106,613 $155,049 $166,572 $182,989 $188,808 $200,171 Add: Provision for income taxes: Federal and State 29,069 62,236 8,684 36,465 70,552 69,001 Deferred Federal and State - net 7,840 (9,655) 67,792 51,889 43,017 44,615 Investment tax credit adjustment - net 20,822 26,646 8,244 (1,317) (2,756) (2,740) Fixed charges as above 208,490 177,125 179,403 150,876 145,476 144,113 Total earnings, as defined $372,834 $411,401 $430,695 $420,902 $445,097 $455,160 Ratio of earnings to fixed charges, as defined 1.79 2.32 2.40 2.79 3.06 3.16 Ratio of earnings to fixed charges and preferred dividends, as defined 1.39 1.87 1.95 2.18 2.39 2.51 - ------------------------ (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 Fixed Charges and Preferred Dividends Twelve Months Ended ----------------------------------------------- December 31, March 31, 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 $46,144 Interest on long-term debt - other 4,325 4,300 4,188 4,063 4,070 4,071 Interest on notes payable 1,031 1,512 953 36 7 270 Other interest charges 1,591 1,494 1,444 1,636 1,795 2,087 Amortization of expense and premium on debt-net(cr) 1,548 1,737 1,617 1,685 1,458 1,593 Interest applicable to rentals 533 596 574 521 1,264 1,213 Total fixed charges, as defined 70,023 69,314 68,216 64,587 56,623 55,378 Preferred dividends, as defined (a) 2,584 17,584 14,962 12,823 12,990 13,648 Fixed charges and preferred dividends, as defined $72,607 $86,898 $83,178 $77,410 $69,613 $69,026 Earnings as defined: Net Income $12,419 $60,830 $63,088 $65,036 $101,743 $65,210 Add: Provision for income taxes: Federal and State 370 4,027 (1,001) 4,463 54,418 51,297 Deferred Federal and State - net (8,636) 35,721 32,491 20,430 539 (15,721) Investment tax credit adjustment - net (1,523) (1,835) (1,634) (1,746) 1,036 1,043 Fixed charges as above 70,023 69,314 68,216 64,587 56,623 55,378 Total earnings, as defined $72,653 $168,057 $161,160 $152,770 $214,359 $157,207 Ratio of earnings to fixed charges, as defined 1.04 2.42 2.36 2.37 3.79 2.84 Ratio of earnings to fixed charges and preferred dividends, as defined 1.00 1.93 1.94 1.97 3.08 2.28 - ------------------------ (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 Fixed Charges and Preferred Dividends Twelve Months Ended ----------------------------------------------- December 31, March 31, 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 $18,803 Interest on notes payable -- -- -- -- -- 25 Other interest charges 2,422 831 793 1,714 1,016 1,020 Amortization of expense and premium on debt-net(cr) 579 579 565 576 598 654 Interest applicable to rentals 603 160 517 444 544 652 Total fixed charges, as defined 28,076 26,042 25,740 25,668 21,636 21,154 Preferred dividends, as defined (a) 4,633 4,020 3,582 3,214 2,952 2,935 Fixed charges and preferred dividends, as defined $32,709 $30,062 $29,322 $28,882 $24,588 $24,089 Earnings as defined: Net Income $14,464 $27,542 $74,699 $26,424 $47,709 $34,592 Add: Provision for income taxes: Federal and State 848 134 8,885 16,575 27,479 30,585 Deferred Federal and State - net 9,296 17,370 36,947 (340) 5,203 (4,274) Investment tax credit adjustment - net 444 (75) (591) (170) (744) (729) Fixed charges as above 28,076 26,042 25,740 25,668 21,636 21,154 Total earnings, as defined $53,128 $71,013 $145,680 $68,157 $101,283 $81,328 Ratio of earnings to fixed charges, as defined 1.89 2.73 5.66 2.66 4.68 3.84 Ratio of earnings to fixed charges and preferred dividends, as defined 1.62 2.36 4.97 2.36 4.12 3.38 - ------------------------ (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, March 31, 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 $89,777 Interest on other long-term debt 91,295 91,955 92,187 92,189 93,346 89,856 Interest on lease nuclear 18,298 13,830 10,007 6,265 6,790 6,875 Interest on notes payable -- -- -- -- -- 13 Amortization of expense and premium on debt-net 7,326 10,532 7,495 6,417 4,520 3,920 Other interest charges 2,790 1,460 3,617 1,506 1,600 2,061 Total fixed charges, as defined $268,111 $256,466 $239,657 $210,806 $197,728 $192,502 Earnings as defined: Net Income ($655,524) $168,677 $104,622 $130,141 $93,927 $83,694 Add: Provision for income taxes: Federal and State (168,440) 4,620 (26,848) 35,082 48,314 62,960 Deferred Federal and State - net 93,048 52,962 37,168 23,648 60,690 45,972 Investment tax credit adjustment - net (14,321) 56,320 63,256 30,123 (30,452) (30,381) Fixed charges as above 268,111 256,466 239,657 210,806 197,728 192,502 Total earnings, as defined ($477,126) $539,045 $417,855 $429,800 $370,207 $354,747 Ratio of earnings to fixed charges, as defined (a) 2.10 1.74 2.04 1.87 1.84 - ------------------------ (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(h)

                      ARKANSAS POWER & LIGHT COMPANY
                           STATEMENT OF INCOME
                    Twelve Months Ended March 31, 1994
                              (In Thousands)
                               (Unaudited)


 Operating Revenues:                                         $1,615,919
                                                             ----------
 Operating Expenses:
  Operation and maintenance:
   Fuel and fuel-related expenses                               262,505
   Purchased power                                              359,230
   Nuclear refueling outage expenses                             35,428
   Other operation and maintenance                              360,319
  Depreciation and decommissioning                              137,817
  Taxes other than income taxes                                  30,361
  Income taxes                                                   19,456
  Amortization of rate deferrals                                166,868
                                                             ----------
            Total                                             1,371,984
                                                             ----------
 Operating Income                                               243,935
                                                             ----------
 Other Income (Deductions):
  Allowance for equity funds used 
    during construction                                           3,502
  Miscellaneous - net                                            64,371
  Income taxes                                                  (27,983)
                                                             ----------
            Total                                                39,890

 Interest Charges:
  Interest on long-term debt                                    105,735
  Other interest - net                                           14,817
  Allowance for borrowed funds used 
    during construction                                          (2,331)
                                                             ----------
           Total                                                118,221

 Net Income                                                     165,604

 Preferred Stock Dividend Requirements and Other                 20,498
                                                             ----------
 Earnings Applicable to Common Stock                           $145,106
                                                             ==========

                                                           Exhibit 99(i)

                     LOUISIANA POWER & LIGHT COMPANY
                           STATEMENT OF INCOME
                    Twelve Months Ended March 31, 1994
                              (In Thousands)
                               (Unaudited)


 Operating Revenues:                                         $1,755,636
                                                             ----------
 Operating Expenses:
  Operation and maintenance:
   Fuel and fuel-related expenses                               334,182
   Purchased power                                              399,087
   Nuclear refueling outage expenses                             18,404
   Other operation and maintenance                              338,069
  Depreciation and decommissioning                              144,055
  Taxes other than income taxes                                  53,276
  Income taxes                                                  106,736
  Amortization of rate deferrals                                 28,422
                                                             ----------
            Total                                             1,422,231
                                                             ----------
 Operating Income                                               333,405
                                                             ----------
 Other Income (Deductions):
  Allowance for equity funds used 
    during construction                                           3,089
  Miscellaneous - net                                             2,219
  Income taxes                                                   (4,540)
                                                             ----------
            Total                                                   768

 Interest Charges:
  Interest on long-term debt                                    124,717
  Other interest - net                                           11,432
  Allowance for borrowed funds used 
    during construction                                          (2,147)
                                                             ----------
            Total                                               134,002
                                                             ----------
 Net Income                                                     200,171

 Preferred Stock Dividend Requirements and Other                 24,417
                                                             ----------
 Earnings Applicable to Common Stock                           $175,754
                                                             ==========

                                                           Exhibit 99(j)

                    MISSISSIPPI POWER & LIGHT COMPANY
                           STATEMENT OF INCOME
                    Twelve Months Ended March 31, 1994
                              (In Thousands)
                               (Unaudited)


 Operating Revenues:                                           $903,756
                                                               --------
 Operating Expenses:
  Operation and maintenance:
    Fuel and fuel-related expenses                              153,253
    Purchased power                                             277,949
    Other operation and maintenance                             159,574
  Depreciation and amortization                                  32,840
  Taxes other than income taxes                                  42,143
  Income taxes                                                   33,309
  Amortization of rate deferrals                                 84,787
                                                               --------
            Total                                               783,855
                                                               --------
 
 Operating Income                                               119,901
                                                               --------
 Other Income (Deductions):
  Allowance for equity funds used 
    during construction                                           1,335
  Miscellaneous - net                                               540
  Income taxes                                                   (3,311)
                                                               --------
            Total                                                (1,436)
                                                               --------
 Interest Charges:
  Interest on long-term debt                                     50,215
  Other interest - net                                            3,949
  Allowance for borrowed funds used 
    during construction                                            (909)
                                                               --------
           Total                                                 53,255
                                                               --------
 Net Income                                                      65,210

 Preferred Stock Dividend Requirements and Other                  8,840
                                                               --------
 Earnings Applicable to Common Stock                            $56,370
                                                               ========

                                                           Exhibit 99(k)

                     NEW ORLEANS PUBLIC SERVICE INC.
                           STATEMENT OF INCOME
                    Twelve Months Ended March 31, 1994
                              (In Thousands)
                               (Unaudited)


 Operating Revenues:
  Electric                                                     $423,266
  Natural gas                                                   100,078
                                                               --------
    Total                                                       523,344
                                                               --------
 Operating Expenses:
  Operation and maintenance:
    Fuel, fuel-related expenses, and 
      gas purchased for resale                                  120,233
    Purchased power                                             166,682
    Other operation and maintenance                              85,497
  Depreciation and amortization                                  17,702
  Taxes other than income taxes                                  27,427
  Income taxes                                                   23,750
  Rate deferrals:
    Rate deferrals                                                 (338)
    Amortization of rate deferrals                               25,008
                                                               --------
            Total                                               465,961
                                                               --------
 Operating Income                                                57,383
                                                               --------
 Other Income (Deductions):
  Allowance for equity funds used 
    during construction                                             254
  Miscellaneous - net                                              (923)
  Income taxes                                                   (1,832)
                                                               --------
            Total                                                (2,501)
                                                               --------
 Interest Charges:
  Interest on long-term debt                                     18,803
  Other interest - net                                            1,699
  Allowance for borrowed funds used 
    during construction                                            (212)
                                                               --------
           Total                                                 20,290
                                                               --------
 Net Income                                                      34,592

 Preferred Stock Dividend Requirements and Other                  1,755
                                                               --------
 Earnings Applicable to Common Stock                            $32,837
                                                               ========


                                                              Exhibit 99(l)

                      SYSTEM ENERGY RESOURCES, INC.
                           STATEMENT OF INCOME
                    Twelve Months Ended March 31, 1994
                              (In Thousands)
                               (Unaudited)


 Operating Revenues:                                           $633,985
                                                               --------
 Operating Expenses:
  Operation and maintenance:
   Fuel and fuel-related expenses                                39,170
   Nuclear refueling outage expenses                             20,602
   Other operation and maintenance                              115,190
  Depreciation and decommissioning                               91,213
  Taxes other than income taxes                                  27,243
  Income taxes                                                   80,354
                                                               --------
            Total                                               373,772
                                                               --------
 Operating Income                                               260,213
                                                               --------
 Other Income:
  Allowance for equity funds used 
    during construction                                             993
  Miscellaneous - net                                             6,689
  Income taxes                                                    1,802
                                                               --------
            Total                                                 9,484
                                                               --------
 Interest Charges:
  Interest on long-term debt                                    179,633
  Other interest - net                                            7,172
  Allowance for borrowed funds used 
    during construction                                            (802)
                                                               --------
           Total                                                186,003
                                                               --------
 Net Income                                                     $83,694
                                                               ========

 

This website contains, and has materials that contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expected", "will" and similar expressions are intended to identify forward-looking statements. Entergy's expectations regarding any specific matter is only its forecast regarding the matter. A forecast may be substantially different from actual results, which are effected by various factors that are in Entergy's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.