ML033040201
| ML033040201 | |
| Person / Time | |
|---|---|
| Site: | Indian Point  |
| Issue date: | 12/12/2000 |
| From: | Groth J Consolidated Edison Co of New York, Entergy Nuclear Indian Point 2, Entergy Nuclear Operations |
| To: | Document Control Desk, NRC/FSME |
| References | |
| -RFPFR | |
| Download: ML033040201 (273) | |
Text
{{#Wiki_filter:UNITED STATES
." SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) l ANNUAL REPORT PURSUANT TO SECrION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1999 OR 03 TRANSION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURIES EXCHANGE ACT OF 1934 For the transition period from to Commission Registrant, State of Ircorpontio, IRS Employer File Number Address otPrindal Executive Offices tend Telephone Number Identification No.
1-11299 ENTERGY CORPORATION 72-1229752 (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000 1-10764 ENTERGY ARKANSAS, INC. 71-0005900 (an Arkansas corporation) 425 West Capitol Avenue, 40th Floor Little Rock, Arkansas 72201 Telephone (501) 377-4000 1-2703 ENTERGY GULF STATES, INC. 74-0662730 (a Texas corporation) 350 Pine Street Beaumont,Texas 77701 Telephone (409) 838-6631 1-8474 ENTERGY LOUISIANA, INC. 72-0245590 (a Louisiana corporation) 4809 Jefferson Highway Jefferson, Louisiana 70121 Telephone (504) 840-2734 0-320 ENTERGY MISSISSIPPI, INC. 64-0205830 (a Mississippi corporation) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 368-5000 0-5 807 ENTERGY NEW ORLEANS, INC. 72-0273040 (a Louisiana corporation) 1600 Perdido Building New Orleans, Louisiana 70112 Telephone (504) 670-3674 1-9067 SYSTEM ENERGY RESOURCES, INC. 72-0752777 (an Arkansas corporation) Echelon One 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000 i I . .. .
Securities registered pursuant to Section 12(b) of the Act: a Name ofEach Exchange Registraint Title of Class on Which Reeistered Entergy Corporation Common Stock, $Q.O1 Par Value - 236,145,752 New York Stock Exchange, Inc. .. .- I .: . shares outstanding at February 29, 2000 . - : .Cicago Stock Exchange Inc. Pacific Exchange Inc. Entergy Arkansas Capital I 8-1/2% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc. Securities,SeriesA A. :..... Entergy Gulf States, Inc. . Preferred Stock, Cumulative, $100 Par Value:
- $4.40 DividendSeries;.. : .. NewYrk Stock Exchange, Inc.
$4.52 Dividend Series ; .;. NeW York Stock.Exchange, Inc.
$5.08 Dividend Series New York Stock Exchange, Inc.
Adjustable Rate Series B (Depository Receipts) New York Stock Exchange, Inc. Preference Stock, Cumulative, without Par Value New York Stock Exchange, Inc. l.75DividendSeries .-. . ., , Entergy Gulf States Capital I 8.75% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc. Securities, Series A Entergy Louisiana Capital I 9% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc. Securities, Series A Securities registered pursuant to Section 12(g) of the Act: Registran Title of Class Entergy Arkansas, Inc. Preferred Stock, Cumulative, $100 Par Value Preferred Stock, Cumulative, $0.01 Par Value Entergy Gulf States, Inc. Preferred Stock, Cumulative, $100 Par Value Entergy Louisiana, Inc. Preferred Stock, Cumulative, $100 Par Value Preferred Stock, Cumulative, $25 Par Value Entergy Mississippi, Inc. Preferred Stock, Cumulative, $100 Par Value Entergy New Orleans, Inc. Preferred Stock, Cumulative, $100 Par Value II
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+/- No Indicate by chilk mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of the registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part m of this Form 10-K or any amendment to this Form 10-K1] The aggregate market value of Entergy Corporation Common'Stock, $0.01 Par Value, held by non-affiliates, was $4.8 billion based on the reported last sale price of such stock on the New York Stock Exchange on February 29, 2000. Entergy Corporation is diri ctly or indirectly the sole holder of the common stock. of Entergy Arkansas, Ic.; Entergy Gulf States, Inc., Entergy Louisiana, Inc., Enter'y Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Reiouries, Inc. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement of Entergy Corporation to be filed in connection with its Annual Meeting of Stockholders, to be held May 12, 2000, are incorporated by reference into Parts [ and mIhereof.
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TABLE OF CONTENTS Page Number Definitions i Part I Item 1. Business 1 Item 2. Properties 34 Item 3. Legal Proceedings 34 Item 4. Submission of Matters to a Vote of Security Holders 34 Directors and Executive Officers of Entergy Corporation 34 Part II Itern 5. Market for Registrants' Common Equity and Related Stockholder Matters 36 Item 6. Selected Financial Data 37 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 37 Item 8. Financial Statements and Supplementary Data 38 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 195 Part m Item 10. Directors and Executive Officers ofthe Registrants 195 Item 11. Executive Compensation 198 Item 12. Security Ownership of Certain Beneficial Owners and Management 207 Item 13. Certain Relationships and Related Transactions 210 Part V Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 211 Signatures 212 Report of Independent Accountants on Financial Statement Schedules 220 Index to Financial Statement Schedules S-1 Exhibit Index E1 This combined Form 10-K is separately filed by Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans, 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 representations only as to itself and makes no other representations whatsoever as to any other company. This report should be read in its entirety. No one section of the report deals with all aspects of the subject matter. FORWARD LOOKING INFORMATION Investors are cautioned that forward-looking statements contained herein with respect to the revenues, earnings, competitive peiformance, or other prospects for the business of Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Resources, Inc. or their affiliated companies may be influenced by factors that could cause actual outcomes to be materially different than anticipated. Such factors include, but are not limited to, the effects of weather, the performance of generating units, the risk of owning and operating nuclear plants, fuel prices and availability, regulatory decisions and the effects of changes in law, litigation results, capital spending requirements, the evolution of competition, changes in technology, changes in accounting standards, changes in capital structure and ownership of assets, risks associated with the electricity and other energy commodity markets, interest rate changes and changes in financial markets generally, changes in foreign currency exchange rates, and other factors.
- DEFNITIONS Certain abbreviations or acronyms used in the text and notes are defined below:
Abbreviation or Acronym Term AFUDC .Allowance for Funds Used-During Constructiohi Algiers 15th Ward of the Cityof New Orleans,;Louisin ALJ Administrative Law Judge " . .. - .*: ANO 1 and 2 Units 1 and 2 of Arkansas Nuclear One .Steam Electric Generating Station (nuclear), owned by EntefgyArkansas APB Accounting Principles Board. ' . - APSC Arkansas Public Service Cdmnission: -i Availability Agreement Agreement, dated as of June21, 1974; as amended, among System Energy and Entergy Arkansas, Entergy iLouisiana, Entergy Mississippi, and Entergy New Orleans, ahd the assigmnints thereof, . Board Board of Directors of Entergy Corporation - - Boston Edison Bosto'Edisonicoomy:. BPS . . . -..British jioundssteling .*A Cajun Cajun Electric Pawer- Cooperative,, Inc.:(currently in Chapter 11 bankruptcy reorganization) ;:'X-ax-*.- Capital Funds Agreement . Agmet; dated as of-June 21;, 1974, as amended, between System Energy and Entergy Corporation, and the hssignments thereof CitiPower CitiPower Pty., an electric distribution company serving Melbourne, Australia and surrounding suburbs, which was acquired by'Entergy effective January 5. 1996, and was sold by Entergy effective December 31, 1998 Council Council of the City of New Orleans, Louisiana
).C. Circuit . ., . United States Court of Appeals for the District of Columbia Circuit'.:
IDOE . . ; - Unitd States Depatmdet ofEnergy: : domestic utility companies Entergy Aiisas,: Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, andEiitergy New Orleans, collectively. E1TF Emerging Issues Task Force . , EMF Electromagnetic fields ENHC . :. EntergyNuclearHolding Company .. EPA - -:EnvironmeitalProtectionAgency J EPAct EnergyPolicyAct-of 1992. . .*i EPDC Entergy Power Development Corporation'. EPMC Entergy Power Marketing Corporation .ET&M--- .- :' tEnteiyTradin
" andMarketing, ILtd.
- ETHC Entergy TecinologyHolding Company' EWG Exempt wholesale generatorunder PUHCA-.
Entergy Entergy Corporation and its various direct and indirect subsidiaries Entergy Arkansas Entergy Arkaisas; Ini. .*- Entergy Corporation ; Enterg' Corpjrktion, a Delaware corporation'; tEntergy Gulf States Entergy Gulf States, hi6., including .its iholly owned subsidiaries - Varibus Corporation, GSG&T, Inc., Prudential Oil & Gas, Inc., and Southern Gulf
-'Railway Company
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DEFINITIONS (Continued) Abbreviation or Acronym Term Entergy London Entergy London Investments plc, formerly Entergy Power UK plc (including its wholly owned subsidiary, London Electricity plc), which was sold by Entergy effective December 4, 1998 Entergy LouisianaI Entergy Louisiana, Inc.... Entergy Mississip1pi .' Entergy Mississippi, Inc;. Entergy New Or6 !ans Entergy New Orledns, Inc. Entergy Nuclear Entergy Nuclear, Inc.: :..:.. Entergy Operatioj as Entergy Operations; Inc.. -: . Entergy Power -Entergy Power, Inc. Entergy Services Entergy Services; Inc.. FASB Financial Accounting Standards Board-FERC Federal Energy Regulatory Commission . , .i FUCO an exempt foreign utility company underPUHCA Grand Gulf 1 and 2 Units 1 and 2 of Grand Gulf Steam Electric Generating Station (nuclear), 90% owned or leased by System Energy..; GWH one million kilowatt-hours Independence Independence: Steam, Electric Station: (coal), owned 16% by Entergy Arkansas, 25% byEntergy Mississippi, and 7% by Entergy Power IRS * ' .Interial Revenue Service. .. KV. 2 kilovolt::-. KW kilowatt;-if .. - KWH kilowatt-hour(s): - London Electricit' London Eletricity plc- a regional electric, company serving London, England, which was acquired by Entergy London effective February 1, 1997, and waf sold byEntergyeffectivpDecember4,41998 LDEQ Louisiana Departrment of Environmental Quality LPSC Louisiana Public Service Commission MCF 1,000 cubic feet of gas : . Merger The combination- transaction,. consummated on December31, 1993, by which Entergy Gulf States became a subsidiary. of Entergy Corporation MPSC Mississippi Public Service Commission - MW Megawatt(s) N/A Not applicable . Nelson Unit 6 Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, owned 70% by Entergy Gulf States . . . NISCO Nelson Industrial Steam Company.. - NRC Nuclear Regulatory Commission... .. Pilgrim Pilgrim Nuclear Station, .670 MW facility located in Plymouth, Massachusetts
*. purchased in-July 1999 from Boston Edison by Entergy's non-utility. nuclear power business PRP Potentially Responsible Party. (a person or entity that may be responsible fbr remediation of environmental contamination)
PUCT Public Utility Commission of Texas PUHCA Public Utility Holding Company Act of 1935, as amended ii
DEFINITIONS (Concluded) Abbreviation or Acronym Term PURPA Public Utility Regulatory Policies Act of 1978 Reallocation Agreement 1981 Agreement, superseded in part by a June 13, 1985 decision of FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy relating to the sale of capacity and energy from Grand Gulf Ritchie 2 Unit 2 of the R. E. Ritchie Steam Electric Generating Station (gas/oil) River Bend River Bend Steam Electric Generating Station (nuclear) SEC Securities and Exchange Commission SFAS Statement of Financial Accounting Standards, promulgated by the FASB SMEPA South Mississippi Electric Power Agency, which owns the remaining 10% interest in Grand Gulf 1 System Agreement Agreement, effective January 1, 1983, as modified, among the domestic utility companies relating to the sharing of generating capacity and other power resources System Energy System Energy Resources, Inc. System Fuels System Fuels, Inc. UK The United Kingdom of Great Britain and Northern Ireland Unit Power Sales Agreement Agreement, dated as of June 10, 1982, as amended and approved by FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, relating to the sale of capacity and energy from System Energy's share of Grand Gulf 1 Waterford 3 Unit No. 3 (nuclear) of the Waterford Steam Electric Generating Station, 100% owned or leased by Entergy Louisiana White Bluff White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas iii
PART I Item 1. Business ,. BUSINESS OF ENTERGY General - Entergy Corporation is a Delaware corporation which, through its subsidiaries, engages prin-,ipallyjin the following businesses: domestic utility operations, power marketing and trading, global power development, and
*,nomestic non-utlitynuclear operations.; Ithas.nosignificantassets otherthazlthe.stock.ofits subsidiaries. Entergy Corporationisiaregistered public utility holding company.under PUHCA.., As such, Entergy Corporation,,and its
- subsidjaries generally are subject to the broad regulatory provisions of PUHCA.. PUHCA geocrally limits, registered
.: *publie utility hoidingjcoipapy.activity to domestic integrated utility.businesses, domstic and foreign ,electric genergtion venturs, foreign utility ownership, telecommunications and information service businesses, and certain
.-oter domestic.energy related businesses., ,Financial infonation regarding Entergy Corporation's operating segments is contained ir Npte)14 toteflinancial statements. . . -*. X
',1 . o.' , . . , . ,.,- . . !_
- ..Domestic Utility Oyerations. .- .. ., .
Entergy Corporation has five wholly-owned domestic retail electric utility subsidiaries: Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and EntergyNew Orleans. As ofDecember 3b 1.999, these utility companies provided retail electric service to approximately 2.5 million customers primarily in portions of
,-.the states of.ArkansasLouisiapa, Mississippi,-6arid Texas.. In addition; Entergy Gulf States furnishes; natural gas
.utilityservice in and aroimd Baton Rouge,.louisiana, and Entergy New Orieans furnishes natural gas utility Fvi ce in New Orleans, Louisiana. The business of,.the~domestic utility companies ,is.subject toseasonal fluctuations, with the peak sales period normally occurring during the third quarter of each year. During 1999, the domestic utility companies' combined retail eleti. sales aegipercentage of total electric sales wiere' residential - 27.8%; commercial
- 21.6%; atdindustial - 39.5%. Retail electric revenues from ,these sectors as a percentage of total electric revenues were: residential - 35.6%; commercial - 24:0%;. and industrial ., 3Q.0%. . Sales to governmental and municipal shrs aindto nonaffiliated utilities accouinted for the balance of energy sales. The major industrial customers of.the doiic utility companies are in the chemical, petroleumqflning,:paper;.and food products industries.. Te etailrates and services of Entergy's domestic retail utiltysubsidiaries are regulated by state and/or local regulatoxy authorities. . .. ... . . .
* *-s~~~~~~~~~~is .4I .. .i. . .
Entergy Corporation also owns 100% of the voting stock of System Energy, an Arkansas corporation that owsnsd leases'an aggregate 90% undivided irestin Grand Gulf. Systa Eierg sells all bf the capacity and
- endidy 6n its intbrest in Grand Gulf 1 atiWhbles tbits oly customers, iitery Arkansas, Entergy Louisiana, Eztergy Mistissipjli, and Entergy New Orleans. Management discusses sales-fion Grand Gulf l moreh6roighly in
'-"'CAPItAI'lQUI iEMENTS AND TUTURE FINANCING'. Certain Svitem Financial 'and Suunort Agreezlienti fJnit Power Sales Agreement" below. System Energyss iWiiolele power sales are siubjef to the jurisdictioof FERd . . . . - ,
5 ;;, -~ r.; ' , : a i .. {41 - .. Eritergy Seiices, a Delaware corporation iholly-owned by Entergy. Corporation, provides managenient, adininlidAtive, accounting, ll, engineering, and oiher services primarily to the domestic utility subsidiaries of
*':iti r' C iptktidn. Enlery `Operations, a Dd&Ware corporation, is also Zholly-owied by Entejyg Corpoltion a~ia lO de nuiari manage i oidnsaid maintenance services inder contract for ANO, River-Bend, Waterford 3, and Grand Gulf 1, subject to the owner oversight of Ent6 "y Ailckas, Entergy Gulf States, EAtergy Louisiana, and System Energy, respectively. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Enteigy New Orleans own 350W! 33%, 19%, and 13%; spectively, of the omon stock of-Srstm Fuels, a Louisiana c6rporaion that inplements and nianages certain progrims to procure, deliver, and store fuel'iupplies for those companies. Entergy Services, Entergy Operations, and System Fuels provide their services to the domestic utility companies and System Energy on an "at cost" basis, pursuant to service agreements approved by the SEC under PUHCA. Information regarding affiliate transactions is contained in Note 13 to the financial statements.
Entergy Gulf States has wholly-owned subsidiaries that (i) own and operate intrastate gas pipelines in Louisiana used primarily to transport fuel to two of Entergy Gulf States' generating stations; (ii) own the' Lewis Creek Station, a gas-fired generating plant, which is leased to and'operated by Entergy Gulf States; and (iii) own several miles of railroad track. constructed in Louisiana primarily for the purpose of transporting coal for use as boiler fuel at Entergy Gulf States' Nelson Unit 6 generating facility. Powee-Marketine and Tradin Entergy'conducts its power-maketing and radihg business primarily through three subsidiaries, Entergy Pd'wee-;EPMC, and ET&M. - :Etergy Power is a domestic power'pioducer thatcowns 665 MW of fossil-fueled genieratio assets located i Aikinsas. Entergy Power's capacity 'and energy is sld'at wholesale principally to EPMO and: Entergy Arkansas: Etergy Power's wholesale power sales tar subject to the jurisdiction of FERC. EPMC engages in the marketing and trading of physical and finAncial energy commodity products3 industrial energy
'management;and risk managent1 serices.. It has authorit-fromn the SECto dial in a:wide range of energy commodities and related financial products. ET&M is engaged in the'narketing And tradinig ofphysical and financial energy commodity products in the UK. Entergy has announced its intent to combine the power marketing and trading business with the global power development business beginning in 2000, and the combined businesses wilt be called Entergy Wholesale Operations.
Global Power Develoiment . . :
';':' . ,.. .:.: ;. +. ,,,, ; ,
-.Entergy's global powerdevelopnent' business is'focusedron1,cchiiring or developing power generation projects in North America and NVestefii Europe and will evaluateapotential oppor'tunities in Latin America. This
- " business owns interests in th'efollowing foreign electric generation a'ssets:
* , * ~~~~~~.;
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.,:. n .-*.
.. .-. ; ;.. Tnvestment.,..' . . . P ercent Ownershi . Status.
" ' Argentina -' Costnxrera, 1260 MW 6% operational Ar*eiiastlia-C6mera-epansion, 220 MW "' 10% operational Chile"-SanIsidt6, 375 MW . 25%;'>. operational
' :' ' 'P ' Paldsan;Hub-River, 1,200MW "5% ' opeiatioial Pen-EdegelI833MW '.. 24% ..operational United Kingdom - Saltend, 1,200 MW 100% under'con~truction United Kingdom - Damhead Creek, 800 MW 100% under construction
*i.3 .- '3. . ff.. -. X Entergy's global power de?,Nlopment business has several; other deyeloprnent; projects. in the. planning stages, includiig projects in Texas, Louisiana, ?isissippi, Spainand BuJgaria. Fairfeld is apl~aiie 1,000 MW combined cycle gas. tuibine merchant o to d, Texas, adjacent to Entergy Gulf States' service
,terrtory. Riversideis a pWanned,425 MW combinedeycle gas tubine cogeneration plant'to be conducted in Lake Chaies LouisiaTa.. Riverside' is pted >o be owned 50% by Entergy's global power development business and 50% by PPG Industries, an industrial customer of Entergy Gulf States. A 300 MW combined-cycle gas turbine merchant power plant is in the planning stages for construction in Vicksburg, Mississippi. An 800 MW combined r.cycle gas. turbine merchant power. plant is in the planning stages for construction near CastelnonlSpain. Entergy
;plans t workwith the.Natidna4 lectric Company of Bulgari to modernize and upgrade Maritza East ml1, an 840 MW coal-fired power plant located in Bulgaria. In preparation for its developmeit plans, Entergy has obtained an option to acquire turbines from. GE. Power Systems. See "CAPITAL REQUIREMENTS AND FUTURE FINANCING" below for further information on the turbines.
Entergy divested the 24 MW Nantong project in China.in 1999 and does not intend to pursue further developments in Asia. In June. 1999, Entergy sold its 5% interest in Edesur, SA., which is the retail electric distribution company for the southern part of Buenos Aires, Argentina. Domestic Non-Utility Nuclear Operations
' i " Efitergy's"doiestic non-utility nuclear power business is focused'on acquiring nuclear power plants and j~ridii~ operations a+/-nd'ianagement 'services' to nuclear power plants owned by other utilities in the United'States.
Plant acquisitions are made through Entergy's wholly-owned subsidiary, ENHC, and operations and management services, including decommissioning services, are provided by Entergy's wholly-owned subsidiary, Entergy Nuclear. In July 1999, Entergy acquired the 670 MW Pilgrim Nuclear Station located in Plymouth, Massachusetts from Boston Edison. The facility has firm total output power purchase agreements (PPAs) with Boston Edison and other utilities that expire at the end of 2004. One hundred percent of the plant output is committed through 2001, which decreases to 50% by 2003. tl Entergy's nuclear business has an outstanding offer to the New York Power Authority (NYPA) for the acquisition of NYPAUs 825 MW James A. FitzPatrick nuclear power plant located near Oswego, New York and NYPA's 980 MW Indian Point 3 nuclear power plant located in Westchester County, New York. On February 24, 2000, NYPA received a competing offer for the purchase of these plants. It is anticipated that the NYPA Board of Trustees will meet in mid to late March to consider the offers. If Entergy's offer is accepted, management expects to close the acquisition by the fourth quarter of 2000. In December 1999, Entergy signed an agreement with Rochestr Gas and Electric '(RG&E) to lease and operate the Nine Mile Point I and 2 nuclear power plants, totaling 1,754 MW, located in Scriba, New York. Nine Mile Point 1 is owned by Niagara Mohaic Power Corporation '(Niagara),and Nine Mile Point 2 is co-owned by RG&E, Niagara, New York State Electric & Gas Corporation (NYSEG), Long Island Lighting Company (doing business as LIPA), and Central Hudson Gas & Electric Corporation. he lease and operating agreement is subject to RGi&E's'ability to'close on its exercise of its right of first refusal to acquire Niagara's and NYSEG's ownership interests in the plants and is subject to approval by the New York Public Service Commission (NYPSC). Niagara and NYSEG filed a proceeding with the NYPSC for the sale of Air ownersbip interests to a third party. Entergy's non-utility nuclear business intervened as a party to the NYPSC proceeding. In that proceeding, the staff of the NYPSC hasstated that it will explore various alternatives for the future ownership and operation of the Nine Mile
,,Plants. . -Ps!. -
Entergy Nuclear provides services to plants owned by other utilities, including engineering,,operations and maintenance, fuel procurement, management and supervision, technical support and training, administrative support, and other managerial or tchnical services required to operate, muintain, and decommission nuclear electric power facilities. Currently Entergy is providing decommissioning services for the Maine Yankee and Millstone Unit 1 nuclear power plants. TIe cost of decommissioning and insuring the plants that Entergy provides decommissioning services for are the responsibility of the plant owners. Business Sales In January 1999, Entergy disposed of its security monitoring business which operated primarily in North and
*South Carolina, Alabama, Florida, Georgia, Mississippi, Louisiana, and Texas. In June 1999, Entergy disposed of - iti'interest in the Hyperion Teleconnunications joint ventures, which operate three Competitive Local Exchange Carriers (CLECs) in Little Rock, Arkansas; Jackson, Mississippi; and Baton Rouge, Louisiana. These CLECs provide long distance carrier access and local exchange services.
- Domestic and Foreign Generation Investment Restrictions and Risks Entergy's ability to invest in domestic and foreign generation businesses is subject to the SEC's regulations under PUHCA. Absent SEC approval, these regulations limit Entergy Corporation's aggregate investment in domestic and foreign generation businesses to an amount equal to 50% of consolidated retained earnings at the time an investment is made. Using the proceeds from the sale of electric distribution businesses in the UK and Australia in 1998, Entergy has the ability to make significant additional investments in domestic and foreign generation businesses without the need of further investment by Entergy Corporation. International operations are subject to the risks inherent in conducting business abroA4 including 'pbssible nationliation or expropriation,.,price a cuencyoexcha ntrols, inflation, limitations, on frei ipation in local enterprses, and.otier restrictions. Changes in the relative value of currencies .T a* or unfavorably affect the financial condition and. results ofoperatipns of. Entergy's non-U.S. businesses. In addition, exchage control restrictionsin certain countries may linmt or prevent the repatriation of earnings..
- . . ;. i . ;' i *1-Selected Data . ., 'I, SeleSe 'dbfsic uteilircus s 'nd sli data for 1999 ae summaized in the following tables:
Customers as of
-,T: *t
-. ~~, *-A~~~~~.. ~December 31., 1999 A'
Irea Served -. -.. ~. Electiic* Gs 3!*,,' f 1 *f. e ; e <r Ri . . : , * - (Inl Thousands)
,, ; , ~.... . - - .. *
'; ' Ente nsas Portions of A oe and Tenne'see 638' - -
Entergy Gulf States Portions of Texas and Louisiana 669- 89' EntergyLouisiapa Portionsof Louiia , 635
,, ,,,53ntrlsyp Ntississ ,. .. 395 Entergy eans ;wCity of New 1 Orleans,,except Algiers, which.
.. ,: ,, ,, . iproviddelectric serviceby EntergyULouisiana 185 ,- 146
- .,Total e customm- * - .. . 2,522; : 235
, . :7 *
* - i, ' 1999?- Seleded Domietic Utility ElciiicEeitr Sales Data i
'.nr
- Enterjy Eteigtr Eurg' Systin Arkasas Gutf States L eisiana Missiisippi New Orleam Energy Enter (a)
(InGWH)
!-~~~~~ s ! s .. t..1.* .J -~cx ~
- cu 0i" s 1866l " 4,34§ 29,095 12,518 5 895 I00,519 0 ....
t'!Ati'^lit's '*t '*f'*'*'-7,592S*2'"" 67?' 415 1,774 441 7,567 Others 4,8f8 3,408 831 426 _ _ _
- 9,714 Total 31,124 38,433 30,341 14,718 6,516 7,567 110,233 Stem DqmMt Sales to stam . ;4 .*
l s E l~I F.
- 3
- I -
.pouts cystnr 44- . 464 Total . .31,12.. 38,897. 30,341 14,718. 6,516 7,567 .110,697 Averap use per residential stoer aKWH) 11,955 ==
.15,322,,, - _ _
15,033 14.180 12,674 _ _ _ _ _NE _
=_Z
. 14,034 (a),' Includes the effect of intercompany eliminations.2 '
1999 - Selected Natural Gas Sales Data Entergy New Orleans and Entergy Gulf States sold 15,106,716 and 6,064,879 MCF, respectively, of natural gas to retail customers in 1999. For the periods 'ended December 31, 1999, 1998,.:and .1997; revenues from natural gas operations were not material for-Entergy Gulf States. Entergy-New Orleans' products and services are discussed
-below in "BUSINESS SEGMENTS." : * .
. : . .s .. 1§ .: . ; - s :: :.x . '8'.:' . . ..
i.Refer to "SELECTED FINANCIALL.DATA: - FIVE-YEAR COMPARISON OF ENTERGY CORPORATION,)" AND* SUBSIDIARIES;' ENTERGY ARKANSAS, ENTERGY. GULF' STATES, ENTERGY' LOUISIANA, ENTERGY 'MISSISSIPPl 'ENTERGY ,NEW ORLEANS, and SYSTEM ENERGY" which follow each company's financial statements in this report, for further information with respect to opeiaingstatistics.-:.. * t'* .**i:* m - - .'. s{ ... . .
'.;V. -.: Er E yees As of December 31, 1999, Entergy had 12,375 employees as follows:
I' Eitergy Corporan ;:. -; .
.3 -41,.-
EntergyAl ;s i :' " 1,490' Ent r Gulf Staftes i,595 Entergy Louisiana 833
*nergy Mississippi s .Entergyew,()rleas -. s .^ ..<..^ ,362-System Energy . . .. X Entergy Operations 3,249
" 'Etergy Services .: l ;.6i *z; -12172 At!,.-
'., ... to Othei subsidiaries 1,102' . 1, . . ;1 !.
Total Full-time 12,214- ' Part-time ej. Total Enterg
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.. ;,. -- , .-- ., 4; : .. . It'. . _..
. 1.
A .,. .: *l.. "; "! Competition As a result of the actions of federal legislative and regulatory bodies over the period of approximately the past twenty years, wholesale markets have developed in which electricity, gas, and other energy related products and. services are purchased and sold at market-based (rather than traditional cost-based) rates. These wholesale markets are continuing to grow and evolve. This has resulted in changes in the ways in which public utilities conduct their business and in the nature of the participants in these wholesale markets, which now include not only public utilities but also power marketers and traders, other energy commodity marketers and traders, wholesale generators of electricity, and a wide range of wholesale customers. Major changes in the retail utility business are now occurring in some parts of the United States, including states in which Entergy's domestic utility companies operate. Both Texas and Arkansas adopted legislation in 1999 aimed at separating ("unbundling) traditional integrated public utilities into distinct distribution, transmission, generation, and various types of retail marketing businesses and introducing competition into the generation component of utility service. Other jurisdictions in which the Entergy domestic utility businesses operate have yet to decide whether to embrace retail competition and utility unbundling, but each of these other jurisdictions is studying the matter. It is anticipated that chaages in the retail electricity markets in the Entergy system.will take place over a number of years, and it is not: necessarily the case that regulators or legislators in different jurisdictions. will coordinate their changes. In sone cases, actions by one jurisdition may even come into conflict with actions by another, creating mutually incompatible obligations for public utilities and holding, companies, including the Entergy system. It is too early to accurately predict all of the effects of the changes that are beginning to take place in the retail energy market. Ho'wever it is anticipated.that these changes will result in fundamental alterations in the way traditional integrated utilities and holding company systems, like Entergy and its domestic ittilitycompanies;,conduct their.business. Some ofthese alterations will be positive for Entergy and its affiliates, while'others will not b..- - These changes will likely result in increased costs associated with utility unbundling and transitioning t.new organizational structures and ways of conducting business. It is possible that the new organizational structures that will be required will result in lost economies of scale, less beneficial cost sharing arrangements within utility holding company systems, and, in some cases, greater difficulty and cost in accessing capital. Utilities, including the domestic utility companies, may be required or encouraged to sell generating plants or interests therein, or the output fiom such plants. They also may be required or.encouraged to sell or turn over operating and management responsibility for some or all of their transmission systems to independent parties. In the case of the domestic utility companies, this would cause a fundamental shift. away from.the operation of their electric generation and transmission assets as an integrated system supporting utility service throughout their combined service territories. As a result of restructuring, Entergy's domestic utility companies may no"lo6nger be able to apply regulated utility accounting principles to :;ome or all of their operations, and'they may be required to write off certain regulatory assets or recognize asset impairments. There are a number of other changes that may result from retail competition and unbundling, including but not limited to changes in labor relations, management and staffing, environmental compliance responsibility, and other aspects of the utility business.
"MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - SIGNIFICANT FACTORS AND KNOWN TRENDS" and Note 2 to the financial statements contain detailed discussions of competitive challenges Entergy faces in the utility industry, including the status of the transition to a more competitive utility business environment for the domestic utility companies.
.. .~~~~~~~~~~~~~~~~~~~~~~I CAPITAL REQUIREMENTS AND FUTURE FINANCING For the years 2000 through 2004, Entergy plans to spend $9.8 billion in, a capital investment plan focused on improving service at the domestic utility companies and growing its global power development and nuclear operations businesses. The estimated allocation in the plan is $4.2 billion to the domestic utility companies, $3.9 billion to the global power development business, and $1.7 billion to the nuclear operations business. The capital investment plan is subject to modification based on the ongoing effects of ransition to competitionplanning and the. ability to recover the regulated utility costs i rates. Additionally, the plan is.contingent upon Entergy's ability <<e capital ttoaccess
-necessary to finance the planned expenditures, and significant borrowings may be.necessary for Entergyto implement these capital spending plans..' Construction expenditures.(including environmental, expenditures and AFUDC,.,,ut excluding nuclear fuel) for Entergy are estimated at $1.5 billion in 2000, $1.7 billion in 2001, and $1.8,billion in 2002. Included in these totals are estimated construction expenditures for the domestic utility companies and System Energy as follows: -. . . . . ..
- .,- ' a. .: .......... .. ::.2000 . :, 2001 ... 20Q2?, . Total .;
(In Millions) . Entergy Arkansas ;$350 $248 -. $188 $786 Enttrgy Gulf States -. 298
- 269 ^ . ¢,204 . . 771 Entergy Louisiana : 202 - 188 i; 162 -552
-o .* . EntergyMississippi . 115. .'. *22 .:. ;.123 : 360
. EntergyNew Orleans . -50. :46 45 -. 141 System Energy ,. 3. 20 '12. - :71
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The domestic utility companies' anticipated spending is focused mainly on (i) distribution and transmission projects that will support continued reliability improvements; () return-to service of generation stations that have been held in reserve shutdo'n. status; and (iii) transitioning to.. a more competitive environment Projected construction expenditures for the replacement of ANO 2's steamigenerators, whichis scheduled forjthethird quarter of 2000, are included in Entergy Arkansas' estimated figures above. Ie replacement of ANO 2's steam generators .is discussed in Note 9 to: the financial-:statements.,.Entergy;in addition to,.meedng construction expenditure requirements, must meet scheduled long-term debt and preferred stock maturities and cash sinking fund requirements. Entergy's capital and financing requirements and available lines of credit are discussed in Notes 4, 5, 6, 7, 9, and 10 to the financial statements. -.-Actual construction costs may vary -from these estimates for a. number of reasons, including changes in load growth estimates; environmental regulations; labor, equipment, materials, and capital costs; modifications to generating units to neet regulatory requirements; and the transition.to competition.
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Entergy's global power development business is currently .constructing two combined-cycle gas.turbine merchant power plants in the UK. Saltend, a 1,200 MW plant, will provide steam and electricity to BP. Chemicals' nearby complex with the remaining electricity to be sold into the UK national power pool. Approximately 75 MW of the capacity will be sold toBP)Chemicals under a PPA with a term of 15 years. Originally scheduled for commercial operation in January' 2000, Saltend's completion has been delayed due to construction problems at the site. The construction contractor has submitted a revised'-construction schedule after substantial analysis, and currently estimates a phased-in completion of the three-init plant with the full plant in service by June 30, 2000. The total cost of this project is 'currently estimated to be 'approximately $824 million. Ahe second plant is an 800 ,MW facility known as Damhead Creek. It is expected to begin commercial operation in the fourth quarter of 2000. Management estimates the total cost of this project at approximately $582 million. The financing of the construction of these two power plants is discussed in Note 7 to the financial statements. In October 1999, Entergy's global power development business obtained anoption to acquire twenty-four GE7FA advanced technology gas turbines, four steam turbines, and eight GE7EA advanced technology gas turbines. Delivery of the turbines is scheduled for 2001 through 2004. The total cost of the turbines, including long-term service agreements with GE Power Systems, is approximately $2.0 billion. The turbines are expected to be used in future generation projects. Management anticipates that the acquisition of these'turbines will be funded by a combination of cash on hand, project financing, and other external financing. Payments scheduled for the acquisition
*of these turbines are $273 million in 2000, $415 million in 2001, and $311 million in.2g02.'
Entergy Corporation's' primary capital requirements are to invest periodically, in; or make loans to, its sibsidiaries and to'invest in neiv enterprises. Managenient discusses Entergy Corporation's current and' future planned investments in its subsidiaries and the' finaxicial'sources for such invesfinenti 'in. "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY ANDCAPITAL RESOURCES." The principal sbures of funds' for Entergy Corporation are dividend'disftributions from its subsidiaries',. fund available under its bank cditfucilities funds receiv d from its dividend reinvestment and stoc purchase plan, and fRds received from the le of assets: Certain System Financial and Sunnort Aereements Unit Power Sales Agreement. (tergy Arkansas,_.Entery Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) The Unit Power Sales Agreement allocates capacity, energy, and the relatedctosts from System Energy's 90% ownership and leasehold interests in Gnid Gulf 1 to. Entergy Arkansas'(36%),. Entergy Louisiana (14%), Entergy Mississippi (33%), and Enfergy New'Orleans (17%). Each of these: c6mpanies is obligated to make payments to System Energy for its entitlement of capacity and energy on a full cost-of-service basis regardless of the quantity of energy delivered, so long as Grand Gulf 1 remains in commercial operations >Payments under the Unit Power Sales Agreement are SystemEnergy's' only source of operating revenues- iThe financial condition of System Energy depends upon the continued commercial operation of Grand Gulf 1 and the receipt of such payments. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans generally recover payments 'made under the Unit Power Sales Agreenient through the! rates charged to their customers: In the case 'of Entergy Arkansas and Entergy. Louisiana, payments are also recovered through sales of electricity from their respective retained sharm of Grand. Gulf. 1. The retained shares are discussed in Note 2 to the financial staments under, the
- .headiug "Grand.Gulf fl eferrals and Retained Shares." '.: .. * .. *
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Availabilitk Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System;Energy) . . : .... . ..
*. . * : a!...;. .' ... a.I. ; '?.; ;d! :
- i.-The'Availability Agreement aong System Energy and Entergy'.Arkansas,. Entergy. Louisiana, Entergy Mississippi, and Entergy New Orleans was entered into in 1974 in connection with the financing by. System Energy of Grand Gulf The Availability Agreement provided that SystemaEnergy would join in the System Agreement on or before the date on which Grand Gulf 1 was placed in commercial operation and would make available to Entergy Arkatisas, Entergy. Louisiana, Entergy Mississippi, and Entergy.New Orleans all capacity and energy available from SystenEnergy's shareofGrand(ul. u. ;.G . . : . . . .
*,:.. . ,,.. , is .. .. ...
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- ..- Entergy Arkansas, Entergy Louisiana, Entergy Missisippi and Entergy'Ndw Orleans also agreed severally to pay System Energy monthly for the right to receive capacity and energy fim Gfiwd Gulf in amounts that (when added.to any amounts received by System'Energy under the:Unit Power. Sales Agreement, or otherwise) would at least equal System Energy's total ofierating'expenses for Grand Gulf (including depreciation at a specified rate) and interest charges. The September 1989 write-off of System-Energy's investment in; Grand Gulf 2, amounting to approximately $900 million, is being amortized for Availability Agreement purposes over 27 years.'-
The allocation percentages under the Availability Agreement are fixed as follows: Entergy Arkansas - 17.1%; Entergy Louisiana - 26.9%O; Entergy Mississippi - 31.3%; and Entergy New Orleans - 24.7%. The allocation percentages under the Availability Agreement would remain in effect and would govern payments made under such agreement in the event of a shortfall of funds available to System. Energy from other sources,. including payments under the Unit Power Sales Agreezent. - * - *
'System Energy has assigned its rights to payments and advances from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans under the Availability Agreement as security for its first mortgage bonds and reimbursement obligations to certain banks providing the letters of credit in connection with the equity funding of the'ale and leaseback'trainsactions'described in Note 10 to the financial statements under "Sale and Leaseback Transactions - Grand Gulf 1 Lease Obligations." 'In these assignments, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans further agreed t, in the event they were prohibited by governmental action from making payments under the Availability Agreement (for example, if FERC reduced or disallowed such payments as constituting excessive rates), they would then make subordinated advances to System Energy in the same amounts and 'atthe same times as' the prohibited payments. System Energy would not be allowed to repaythese subordinated advances so long as it remained in'default under the related indebtednessor in other similar circumstances.
Each of the assignment agreements relating to the Availability Agreement provides that Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Etiteigy New Orleans will make payments directly to System Energy. However, if there is an event of default, those payments must be made directly to the holders of indebtedness that are the beneficiaries of such assignment agreements. The payments must be made pro rata according to the amount of the respective obligations secured.
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the obligations of Entery Arkansas, Entergy Louisiana, Entergy Mississippi, aid Entergy New Orleans to make payments under the Availability Agrednent are subject to .the receipt and continued effectiveness of all necessary-regulatoy. approvals. Sales of caacity and energy under the Availability Agreeient would require that the Availability Agreement be submitted to FERC for approval with respect to the terms of su'ch sale. No such filing with FERC has been made because sales of capacity and energy from Grand Gulf are being made pursuant to the Unit Power Sales Agreement f for any reason, sales of capacity and energy are made in the future pursuant to the Availability Agreement, the jurisdictional portions of the Availability Agreement would be submitted to FERC for approval. Other aspects ofthe Availability Agreement are subject to the jurisdiction of the SEC, whose approval has been obtained, under PUHCA. Since commercial operation of Grand Gulf 1 began; payments under the Unit Power Sales Agreement to SystemEnergy have ecceeded the amounts payable under the Availability Agreement. Therefore, no payments under the Availability Agreement have ever been required. If EntergyArkansas or Entergy Mississippi. fails to make. its Unit Power Sales Agreement payments, and System Energy is unable to obtain funds from other sources, Entergy Louisianaand'Enitbrgy`New Orleans could'become subject to claims or ,demands by'Syftism Energy or its creditors for' payrneits; o'advances wdder he Av ilabiity 'Agreement (or the assignments'thereof) equal to the difference 'between their required Unit Power Sales Agreeient payments and their required Availability Agreement payments. The Availability Agreement may be terminated, amended, or modified by mutual agreement of the parties thereto, without further consent of any assignees or other creditors:!' - * . . . Capital Funds Agreement (Entergy Corporation and System Energy) i System Energy and Entergy Corporation have entered into the Capital Funds Agrment, whereby Entergy Corporition has agreed to supply System Energy with 'sufficient 'capital to '(i) maintain System Energy's -equity capital at an amount equal to a minimum of 35% of its total capitalization (excluding short-term debt) and (ii) permit the continued commercial operation of Grand Gulf I and pay in full all indebtedness for borrowed money of System Energy when due. . ' . - . . Entergy Corporation has entered into various supplements to the Capital Funds Agreement. 'System Energy has assigned it iigD under such -suplements as'security for its'first mortgage bonds and for reimbursement obligations to certain banks providing letters of credit in connection with the equity funding of the sale and leaseback transactions described in Note 10 under "Sale'nd Leasebick Transactions - Grand Gulf 1'Lese Obligations."
-Each such supplement provides that permitted indebtedness for borrowed money incurred by System Energy in connection with the financingof Grand Gulf may be secured by System Energy's rights under the Capital Funds Agreement on a pro rata basis (except fb the Specific Payments, as. defined below).. In additionin the supplements to the Capital Funds Agreement relating to the specific indebtedness being secured, Entergy Corporation has agreed . to make cash capital contributions directly to System Energy: sufficient to enable. System Energy. to make payments .when due'on such indebtedness (Specific Payments): However; if there is an event of default, Entergy Corporation must make those payments directly to the holders of indebtedness benefiting from the supplemental agreemets.. The . payments (other.than the Specific Payments) mustibe made pro.rata according to the amount of the respective obligations benefiting from the supplemental agreements.
The Capital Funds Agreement may be terminated,. amended, or modified.by mnrtual.agreement.of the, parties
- thereto, upon obtaining the consent, if requirAd,&of those holders of System Energy's indebtedness then outstanding who have received the assignment; of the Capital Funds Agreement -. .
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- : ."!. . RATE MATTERS AND REGULATION t*
RateMatters . . . .. . . .. The retail rates of Entergy's domestic utility companies are regulated by state or local regulatory authorities, as described- below.:': I ERC' regulates their..wholesale rates (including intrasyster sales pursuant.to the System Agreement) and interstate tmnsmission. of electricity, as well arates. for System Energy'stsile' iof capacity. and
. energy from Grand Gulf 1 to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and EntergyNew Orleans pursuant to the Unit.Power Sales Agreements. , -i ;
l q. ;; .' l . '* . ;' ~~~~* i -.. ' ' .'.., -*' II1 n Ptr t Wholesale Rate Matters . . . . . .... . . . :.... , . System Enem
- a,
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As described above under CAPITAL REQUIREMENTS AND FUTURE FINANCING - Certain System Financial and Suyvort A reements.".System Energy)recovers costs. related toits interest in Grand Gulf 1 through rates charged to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New 8 Orleans for capacity and energy under the Unit Power. Sales'Agreemet. *... - . .. i ; X
.. In December 1995, System Energy implemented a.$65.5 million rate increase,-subjecttorefid. 3. In 1998,
.FERC approvedrequests. by;Entergy.Arkansis and Entergy Mississippi to accelerate a porti n of-,ther Grand Gulf purchased power obligations. The rate. increase request filed by. SystemEnergy...with FERC and the Grand Gulf accelerated recovery tariffs are discussed in Note 2 to the financial statements.
.. . - - 4* - . .. : .; . . . ... .. e - 0,,l I. . . . ,; . . . 1' System Agreement (Entergy Corporation, Entergy. Arkansas, Entergy Gulf States,, Entergy Louisiana,. Entergy Mississippi, Entergy New Orleans, and System Energy)
The domestic utility companies have historically engaged in the coordinated planning; constru6tion, and operation of generationand transmission facilities pursuant to the terms.of the Systerm Agreement, as described ufider "PROPERTY - Generating Stations." below Restructuring:. in the: electric utility industry will affect these
- coordinated activities in the future.. -.i . . .. :,-. i.aI:Iu , . t ; '
In connection with the Merger in 1993, FERC approved certain rate schedule changes to integrate .Entergy Gulf States into the System Agreement In approving the Merger, 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-l of that agreement. The LPSC and the MPSC submitted testimony in this proceeding seeking retroactive refimds for Entergy Louisiana and Entergy Mississippi estimated at S22.6.million and
.$13.2 million plus related interest charges, respectively. In August 1997, the FERC decided that retroactive refiuds should not be ordered and that the System Agreement should be amended to allow out-of-service units to be included
,:. mreserve equalization.. Appeals made by the LPSC and the MPSC were denied in 1999.. .. . . In March 1995; the LPSC filed a complaint with FERC alleging that the System Agreement results in unjust and unreasonable rates. The LPSC requested that FERC modify the System Agreeiient to exclud curtailable load from the cost allocation determination and to permit Entergy's domestic utility companies that engage in real-time prcing at tdietail leel to be'asssed only the'marginal cost for energy sold among the domestic utility companies. In August 1996, FERC fund'thaf the LPSC's claim that the System Agrement 'is unjust and uSifeasonable was without merit and dismissed the LPSC's complaint. The FERC confirmed this finding, in a September'1997 order
'denying the LPSC's request for rehearing. On appeal, the D.C. Circuit iinardd the matter to FERC forfurther consideration, including the taking of evidence. A procedural schedule has not been set by FERC, and no assurance can be given as to the timing or outcome ofthis proeed.
Open Access Transmission (Entergy Corporation, Entergy EAcansas, Entegy Gulf States, Entergy Louisiana, Entergy Mississippi, and Ent4rgyNew Orleans) ! -. .f tJC . : l* Octo%;:1994, Entergy's domestic utility companies filed revised trahsmission tariffs. InJanuary 1995, FERC made thetansmission tariffs effective; subject to refimd, nd orded 'an iwe'stigaton of Entergy Power's market pricing authority, thereby making Entergy Power's market price rate sch ules subject to refiind. Ln '1996 FERC issuedvo order's designed to 'implement open access Mitisrhsion forwholesale customers by' allowing thiid"paity' stilie rs to transmit ener' ytd customers'over transmission' facilities owned by other C irdea~o. 8S8requires flt 'public utilitidi regulated by FtRC to providc'h6lesaleitransmission access to th~p'ities aid specifically iaddresses issues related to nondiscriminatory transmiision and stranded costs. Order No. 8§t ^id 'ses ces of ond& and requires the implenezsion and in 'oftai;pen access same-ime infomation system by each public utility. Order Nos. 988 and 889 led'toopeacces tismission and'an increase in marketing and trading activities by utilities and power marketers, which intensified competition within the
.ivholi sale,'i*we{L :et ':;:: ' ' ' " '... . ' 5
" L Xuly
* -F-d l996,zln oder o'&mply.with FERC Order No. 88g; the 'domes'hict'iliyTcompanies filed an open access n issioiii*hich i'perseded the October 1994itariffs. InJani y 1997, VERC accepted then-rate terms and conditions of the July 1996 tarif subject to limited modifications. In Mazibi997 FERC issued Order No. 888-A'addressing rehearing requests firom Order No. 888 and directing public utilities to file revised tariffs to refl'i theni equrrictoaished inOrdNo. 888-X: 1n;Juiy'1997, Entry SeM'cF filed 'with the'FERC its who6sale iasmiision access bompliance tariff incorporating the ion-rate't'erms'and conditions of FBR1C Order No.
888-A. In October 1998, FERC issued an order addressing the outstanding tariff rate and market ower is"ues: The order, stipulated that Entergy's open access transmission tariff mitigated .any transmission market power and deteiind tht Wiifuirther'adi6n is noed~l in te investigation of Ente~P&wers' inaipcn pricing authority. The order also affirned that transmission service should be priced at a rolled-in, systemn-wide rate rather than the 'bifuicdted bulk ndll taiisissionfpricing proposed by Ent'ergy. The'FIRC -also rejcbled Hdustomers' requests to receive c6editk for 6zsti - ed faicilides, nding tat he facilities W'=" not integtd with and 'did not support Entiytransmission sysi. iestr. for he g or clarification of the Octobr 1998 orderare pending before FERC policy strongly favors independent control over transmission operations as a means of enhancing cothpeqi4iv' wholesale power mnrkts;';In response to this policy, Entrgy proposed to FERC the formation of a regill'~trnsuission company (Transco). The proposed Tranco would be: " . . o a separate'legal entity regulated by FEIC; ' '.'
- composed of the transmission system transferred to it by the domestic utility companies and other
:. transmission owners in Entergy's region; a operated and Imaintained by employees who would work exclusively for the Transco and would not be employed by Eritergy'or te domestic utility'impanies; and'
- o , passively owne4 by te domestic. utility companies and, other members who trser assets, which will
, .not control or.otherwise direct its operation andmanagemezn. .
In JuI 1999 conclded tat pasive onershpof akTransco July 1999 FERC responded to Ente proqal. Fii6 c ncluded tit pasRiCa by a generating company or other market partipant could meet FERC's. current indepence.ajd governance requirements, provided the Transo? s structured to adrscertaiiijssues and concerns raised by VE.C. The issues and concens identifed by-FERCxr'tetq: .,.. .:.. O the selection process for the Transco's board of diredors; . O the Transco board's fiduciary obligations to thiem ber companies;
, o the ability othe.Tram-,cq to.rsus addidonal ppil; and o restrictions on transactions between the Transco and the er.companies. ..
Managemnt expects to ma additional lins with.federal. state, and local regulatqfy authorities iaddressing these and other issues and, seekiig, rovals firtkm n ofthe Trs. If approvid, ,he Transco would likely bcome operatioxnalin2p0r. , ,... -, In a rulemaking atat ectthe.Transco, FEKR issued Order 200Q in December l999. Qrder 2000 calls for,pwners and operators o sssionlines in th6 -Pniiitates r al tjroasreg r niztions Ord operat~~~~~~~~~~.e co trb.1rstate C(RTOs`) on ayoluntaya basis. ,Prder,2000 rqu . publio.u liti.so.rh ,cot, opete,,. a transmissicn facilities to file~by,,j)cber,l5, 2000 a proposalfor how theyai.nOtorparticiptejn. altematively.to descdbethe s es Icentodsoorthrasons why. isot-ftodbleotpa i te in an RTO. .FERC's Order2000 re TOsbeefyeno eranDecaer,15,2001. 2 ; .. . - FERC is t g flexibility as to te structure oRTOs. For example, it apears ta1RTOsmy3bffr-profit or not-for-profit and may be organized as joint ventures or legal entities of various types. However, RTOs will berequired,,amogth ,er.things, i,6 independent market participants, to bAvq .sufcietregional scope to maintain relabilityand efficieny, to bea in ant seie,,andto nt pperational cont} overxeir regonal ster t .ssiqn The TrFnco, aninde etnt, for-profit transmission companwhlch has eadv beenprpposed to FERC by the domestip.utility cozn-ies. is,Enter's preferrd pp foT comptying ith FERC's .Oidcz2OO., Iowever, Entergy is also exploring other means for complying with Order 2000. Retail Rate 1ratters. , . . . ,*.* .. .*. -. -',' .. C~a. .p~r Arana &s ;gy . -is i,:an, -d;' trg i- Orlea ;..-.- i*J)
.s Ga.(lntergy Arcansas, Enteryt.Ciulf State Enter Lo isiana, ey lssssppl, Certain costs .related to C;Gand,ulf w l, Waterford 3, and Riversend were phased.into. retil rates. over a period of years in order to'avoid the "rate. shock! associated with increasing rates.tq refle4 all such costs at once.
Entergy Arkansas, Ente Lntergy i*.skia, p, andthe. portion of EntergyGulf St reuated b t LPSC have fully recovered such deferred costs associated with one or more of the plants. Entergy New Orleans' phase-in plan expires in 2001. The. retail regulatory philosophy bWs shifted in some jurdctions from traditionA exclusively cost-of-ervice regulation to include performance-based; rate elenents'. .Performance-based,formula rate plans are desgnedlto encourage efficiencies and produclivity while 'pernitting utilities and their c'ustoers to share in the benefiis. Entergy Mississippi and Entergy Louisiana have implemented performance-based formula rate plan. lhe domestic utility companie's have initiated proceeings with state an4 local regulators regarding transition to a more competitive market for electricity.. In addition, retail open access laws have been enacted in Arkansas and Texas. These matters are discussed more thoroughly in Tote 2 to the financial statements. .,- Entey Arkansas Retail Rate Proceedings
- Efntergy Arisas'ii erial retail rate prc dings that were resolved during the past year, are currently
*pendi, o A'bt current ydafrresulis are dicussed in Note 2 to the fiiancial statements.
eeoviy of Grand Glf 1 Costs Under the settlement agreement entered into with the APSC in 1985 and amended in 1988, Entergy Arkansas
-;etains 22%6f its sha ofd rid Guifl costs and recovers te e namzng 78% of its share throughikes. Under the 'niPwer Sales Ageeft Enlergy A 'sh`r6 of Grand Gulf 1 costs is 36%. Inthe event Entergy Arlaisis is not able to sell its retained sliareato thirdh'ae's, it may sell sLfre ieigy to its retail cus omers ata price equal to its avoided energy cost which is currently less than Entergy Arkansas' cost of energy from the retained share.
- Fuel Recovery Entergy Arkansas' rate schedules include an energy cost recovery rider to recover fuel and purchased energy costs. Thd rider Vtiliies 'projected energy cost for the twelve month period commencing on ApriI of each year to develop an energy cost rate, ii6'iis redeteinined annually and includesa'itrue-up adjustment 6flecting the over-recovery or under-recovery of the energy cost for the prior calendar year. . .
Rate Freeze
}et: rr.-i<*
. th:e
,,A! A. :^ . . . t J ' 1:n Decirber- 1997, the ASC apprvi& a settlement grienei t esolving Entergy Akis' tansition to
- bt itition ICes Oride p vision in that setudemei&was that bise rates Hidcl' remain at the level4strfrom thlt c6e unti1Julyf; 200i. 'The teiis of te settleint agree ient ate discusied in Note 2 to the fihancia satnts
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'-nr IlfStates . . ,
Rett'R iteings .. . ' -- . , . - . Entergy Gulf States' material retail rate proceedings that were resolved during 'the past year, ae currently pending, or affect current year results are discussed in Note 2 to the financial statenents. In addition, the 1999
*g ; ineihthAt seted Eni&y Gulf States' 199'6 and '1998 rate'pr6be~diiigs, which is currfnf1 il jr appeal, and various other matters is discussed in Note 2 to the financial statements.
Texas Jurisdiction - River Bend i' Mch.1998, i' the PUCT i.st an order disallowing rtovery of $14 billion' of company-wide abeyed iii plant costs hich ave ben held inayce since 1988.- ntergy Gdlf States has Appealed he PUCT's 'a~A~i - oohsn matter to a Texas District itrt. ettleient agreeient mentioned above addresses i treathent ofieed plant costs, 'and as a'6iul, Entergy Gulf States removed thiieserve for these costs and reduced the plant asset in 1999. Based on advice of counsel, management believes that it is probable thai the matter il be 1elinded again to the PUCT for a further ruling on the prudence of the abeyed plant costs and it is reasonably possible that some portion of these costs will be included in rate base. The abeyed plant costs are discussed in more detail in Note 2 to the financial statements. Fuel Recovery Entergy Gulf States' Texas rate schedules include a fixed fuel factor to recover fuel and purchased power costs not recovered in base rates. The settlement agreement mentioned above established a methodology for semi-annual revisions of the fixed fuel factor in March and September based on the market price of natural gas. This agreement is effective through Deo-mber 2001 or until otherwise ordered by the PUCT. To the extent actual costs vary from the fixed fuel factor, refunds or surcharges are required or permitted. Fuel costs are also subject to reconciliation proceedings at least every three years.
. Entergy Gulf States' Louisiana electric.rate schedules include a fuel adjustment clause designed to recover the cost of fuel and purchased power costs in the second prior month, 'adjusted by a su rcharge, or credit for deferred fuel expense arising from the monthly reconciliation of actual fuel costs incurred with fuel revenues billed to customers. The LPSC and the PUCT fuel cost reviews that were resolved during the past year or are currently pending are discussed in Note 2 to the financial statements.
Enrgy. Gulf, States' Louisiana gas rates include a purchased gas adjustmet based on estimated gas costs for the billinig ronth adjusted-by a surcharge or credit for deferred fuel expense. arising frono the monthly reconciliation ofatual fuel costs incurred with fuel cost revenues.billed tocustomers. Entergy Louisiana Retail Rate Proceedings CliyLisiana's
.E " materal~retail rate proceedings that were resolved during the past year, are.currently pending, oE affect current year resultsare.discussed in Note 2 to the financial statements.
Recovery of Grand Gulf 1 Costs In a series of LPSC orders, court decisions, and agreements from late 1985 to mid-1988, Entergy Louisiana was granted rate relief with'respect. to costs associated with Entergy Lquisiana's. share of capacity and energy from -G~rand Gufj,$ to certin tewjan4d conditions. In November1988, Entergy Louisiana agreed to retain, and bj* not recover from retail raYepayers 18 e of its 14% share of te osts of Grand Gulf l's capacity and-energy. Non-fuel operation and maintenance costs for Grand Gulf 1 are recovered through Entergy Louisiana's base rates. Additionally, Entergy Louisiana is allowed to recover, through the fuel adjustment clause, 4.6 cents per KWH. for the energy related to its retained portion of these costs. Alternatively, Entergy Louisiana may sell such energy nonaffiliated parties at prices above the fuel adjustment clause recovery amount, subject to the LPSC's approval. ,Performance-Based Formula Rate Plan
... : jjl.- . X . . . :. . . . i.
- nterg Louisiara's performance-based formula rate plan filings are discussed, in Note 2.to the financial statements.
Fuel Recovery Entergy Louisiana's rate schedules include a fuel adjustment clause designed to recover the post of fuel in the second prip, month, adjusted by. a' surchrge or credit fir deferre fuel expense arising from the monthly reconciliaion of actual fuel costs' incurred with fuel cost revenues billed to customers. In May 1999,. the LPSC order requiring E rgy Louisiana to realign approximately $15.9 milliop of certain fuel costs from the fuel adjustment clause to base rates. ., Entergy Mississippi Retail Rate Proceedings Entergy Mississippi's material retail rate proceedings that were resolved during the past year, are currently pending, -oror affect.fic current
. t are discussed year..results .s in Note 2 to the financial statements.
Performance-Based Formula Rate Plan . Under its performance-based formula rate plan, Entergy Mississippi's: earned rate of return is calculated ..automatically every 12 months and comparedto and adjusted against a benchmark rate of retum. he benchmark is calculated under a separate formula within the formula rate plan. The formula rate plan allows'for periodic small
.:adjustnents in 'rates based on a comparison of actual earned returns to benchmark returns and upon certain performance factors. The formula rate plan filing for the 1998 test year. is discussed in Note 2 to' the financial statements. The formula rate plan filing for the 1999 test year will be submitted in March 2000.'-..'
Fuel Rdcovery a Entergy Mississippi's rate schedules include an energy :cost recovery rider to recover fuel and purchased energy costs. .Themrider utili 'projected energy costs for the cominig'calendar year to develop an energy cost rate, . which is redetermined annually.and includes pa true-up adjustment reflecting the over-recovery or' under-recovery of the energy cost as of September 30 immediately preceding the annual redetermination. Entergy New Orleans Retail Rate Proceedings - .
.,.ntergy New Orleans' material retailrate proceedings thatwere resolved during the past year, are currently
. pending or affect current year results are discussed in Note 2 to the financial statements. . ' Recovery of Grand Gulf 1 Costs . .
.;.*t;1i..Under Entergy.New Orleans' various rate settlements with the Couicil in 1986, 1988, and 1991, Entergy New. Orleans agreed to absorb and not recover ratepayers a'total of.$96.2.inllion of its Grand Gulf '1 costs.
Entergy New Orleans was permitted to implement annual rate increases ir decreasing amounts each'year through 1995, and to defer certain costs and related carrying charges for recovery on a schedule extending from 1991 through
*2001.iAs of Deceniber 31, 1999, the uncollected balance of Entergy New'Orleans' deferred costs was $35.7 million.
Fuel Recovery Entergy New Orleans' electric rate schedules include a fuel adjustment clause designed to recover the cost of fuel in the second prior .niont, adjusted by a surcharge or credit for'deferred fuel expense arising from the monthly reconciliation of actual fuel costs incurred with fuel cost revenues billed-to customers. The adjustment also includes the difference between non-fuel Grand Gulf I costs 'paid by.Entcrgy New Orleans and the estimate of such costs, which are included in base rates, as provided-in Entergy New Orleans',Grid Gulf 1 rate settlements. Entergy New Orleans. gas rate schedules include an adjustment to reflect estiiated gas 'costs for the billing month, adjusted by a surcharge or credit.similar to that included in the electric fuel Adjustment use.'
.Re'atio '
. I,; ;; b. ...- .. *, .: a. . . .*
Federal Regulation (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) tPUHCA .. .. Entergy Corporation and its various direct and indirct subsidiaries (with the exception lof its EWG and FUCO subsidiaries) are subject to the broad regulatory provisions of PUHCA. Except'wiith respect to investments in certain domestic power projects and foreign utility company projects, the principal regulatory provisions of PUHCA:
- 5-
o limit the operations of a registered holding company system to a single, integrated public utility system, plus certain ancillary and related system and businesses;
.: replatetanra tionsamongaffiliswithinaholdingcompanysystein;- .
goven the, issuance, acquisition and disposition of securities. and assets by registered hoing es
* ;, ..: . andtheirsubsidiaries; -: .. :
. . limit the entry by rgistered holding companies and their subsidiaries into businesses other thanvelectric and/or gas utility businesses; and, .; .
o require SEC approval forcertain utility mergers and acquisitions. Entergy Corporation and other electric utility holding companies have supported legislation in the- United States Congress to repeal PUHCA and transfer certain aspects of the oversight of public utility holding companies
*from the SEC to FERC. :Entergy believes that PUHCA inhibits; its ibillty to compete in the evoaving electric energy marketplace and largely duplicates the oversight activities otherwiseperfonnedbyFERO and otherfederalregulators
- .and by state and localregulators. In June 1995, the. SEC adopted'a; report proposing options forthe-repeal.or significant modification of PUHCk - : * .. .
Federal Power Act . A : The domestic utility companies, System Energy, Entergy Power, and EPMC are subject to theFederal Power Act as adminitered by FERC and the DOE. The Federal Power Act provides for regulatory jurisdiction over the transmission' and wholesale sale of electric energy iminterstate comnmerce, licensing of certain hydroelectric projects and certain other activities, including accounting policies and.practices. Such regulation includes jurisdiction over the rates charged by System Energy for Grand Gulf 1 capacity and energy provided to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans. Efiteigy.Arkansas holds a FERC license.for two hydroelectric projects. (70 MW), which was renewed on July 2; 1980 and expires in February 20031' IniFebruary 1998, Entergy Arkansas filed notice of its intentta relicense these hydroelectric projects;. . . ,. A E~ -~ .* ; '* **.- . I;. * ~ * *~ * * . * ; . Regulation.of the Nuclear Power.ddustry (Entergy Corporation, Entergy Arkansas, Entergy Gulf.Ststes, Entergy Louisiana, and System Energy) Reulation of Nuclear Power
- t ~ ~ ~~~~*
t !* { -. . *
- Under the Atomic EnergyAct of: 1954and the Energy ReorganiationAct of 1974, the operation of nuclear plants is heavily regulated by the NRC, whi has broad power to Impose licensing and safety-related requirements In the event of non-compliance, thb -NRG(;has-th&,authority to impose fines or shut down a unit, or both,.deng upon its assessment of the sdvity of the situation, until compliance is. ahieved.- Entergy Adansas, Entergy Gulf States, Ent rgrLouisianaand Systen Ergygy, as ownerk'of all or portions of ANO; River Bend, Waterfrd.3,and Grand Gulf 1, respectively, and Eatergy Operations, as thelicensee and' opfratc of these units, are subject to the jurisdiction of the NRC. Additionally, Entergy's non-utility nuclear power business is subject to the NRC's jurisdiction as the owner and operator of Pilgrim. Revised safety requirements promulgated by the NRC have, id'the past, necessitated substantial capital expenditures at these nuclear plants, and additional expenditures could be required intheijuture. . .. - ., ': : ' .E .
. * .- t.- . ', .;:
* - ~ :; #3- i The nuclear power industry faces uncertainties with respect to the cost and long-term availability of sites for disposal of spent nuclear fuel and other radioactive waste, nuclear plant operations, the technological and financial aspects of decommissioning plants at the end of their licensed lives, and requirements relating to nuclear insurance.
These matters are briefly discussed below. ' .' . ' -' .~~ . . 1
., . ; . ~ . ~~. . . . ..
Rekii6in of Spent Fuel and Other HkALirl Radioactive Waste Under the Nuclear Waste Policy Act of 1982, the DOE is required, for a specified fee, to construct storage facilities for, and to dispose of, all spent nuclear fuel and other high-level radioactive waste generated by domestic nuclear power reactors. However, the DOE has not yet identified a permanent storage repository and, as a result,
. future' cjpenctifures may be 'equired to1i&es 'spet'fuel storge apaity at Entergy's nuclear plant sites. 'In atn'c~iin` ing spent'hl'di il c ts"with' the D current oi6site stdrage'capacity, and costs 'of aitibiil on-site '&fo4 is'pesented in Note 9 to the fihaneil statemnts. '
Mlrdidiig
'Rua o .w-I~v'el Radoivc~W~ti '"; - ' * ;!>
- I n ;
The availability and cost of disposal facilities for low-level radioactive waste resulting from nonnal nuclear plant operations are subject to a number of uncertainties. Under the Low-Level Radioactive Waste Policy Act of 1980, as amended, each state is responsible for disposal of waste originating in that state, but states may participate in rfgioLd compads!i filfill d! ns'ilities joiztlyF. The States of rai a ind Loisiana participate in the Central Interstate Low-Level Radioactive Waste Compact (Central States Compact), and the State of Mississippi pPrtici s 23i the Soutl ikA-el Rdioac'tive Waste Comp'at (6ufihea Compact). Bdth the Central States Com::tipact an& ':SoutheSt' eCompa& have c'tjxienned iynihe-develbjnket of waste storage
*fhkV&ties. fikg chih'eiAere Pllt'gm iilocatd aoes not p iian r'iona ci act iidhas been slow to fllfll'ast pogiNiir.: A dl~osh S are ' i Stest only nesitthe uzitd Stateg,:but only e site- the Uni~ted Bamnwell Disposal Facility (Barnwell) located in South Carolina, is open to out-of-region generators. The availability of Barnwell provides only a temporary solutionfor Eii~'s w-Ie1elioactive waste w storage, and does not alleviate the need to develop new disposal capacity.
The Southeast Compact process is currently on hold pending resolution of future fing. In December 108, the idt stater the Citrl Sia6 Nm'ak, Vbra lcdnised hlicseb 'plicaion. In Dcenber 1998, teigy and tWboothitiilities n'ie'et* s Mtates Cmpit 'filbd 'i lawiiit ainstthe state of Nebraska seeking damages resulting fui-delays' and 'af~ifilt;Ir c i ss. E AiiasasEntcy Louisiana and Entergy Gulf States, along with other waste generators, fund the development costs for new disposal facilities ielauiib 6eWCetdI l'S Cd&ct \D pt sti be inciired;ine tu*tare';dimcult to predict. The current schedules for the site development in both the Central States Compact and the SotheastCompact are undetermined at this time. Until long-term disposal facilities are established, Entergy will seek continued access to existing facilities. If such access is unavailable, Entergy will store low-evel waste at its nuclear plant sites. Regglation. of Nuclei' iant Det~ 6ssifig # a*:&;~i* Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System' Enegjy are recovering through electric rates the estimated decommissioning costs for ANO, River Bend, Waterford 3, ad Grand Gulf 1, respectively. These amounts are deposited in trust funds whichog~iter with the related dariigs, can only be used for future decommissioning costs. Estimated decommissioning costs are periodic& revieed and updated to reflect inflation and changes in regulatory requirements and technology. Applications are periodically imade to appropriate
*iFatoti'thbritiis'toflect, in'itias, in ijcted deomissioning' In conjunction with the Ists.
Pilgrim acquisition, Entergy received Pilgrim's decommissioning trust fund. Based on cost estimates provided by an outside consultant, Entergy, believes that Pilgrim's decommissioning fund will be adequate to cover future
'deco issii t '&its 'or the pladt miiwtti ii additioia deposits tolieiist. Additionaiinformation with respect to decommissioning costs for ANO, River Bend, Waterford 3, Grand Gulf 1, and Pilgrim i'fouind in Note 9 to the financial statements. *Vi -. "
* ' e EPAct iequire't';a electric utilitie'(indludini -Eterg Arkansas, E dry Gfilf States, Entergy Lbnisiszaa, bid Syitfln emichtiient seVices from the DOE to contribute up to a total 6i)'ht'>rcasedriuii of $150 inilliou anualf overiapp6tmimakly 15 years (adjusted for inflation,' up to atotal of $2.25 billion) fr decontamination and decommissioning of enrichment facilities. In accordance with the EPAct, contributions to decontamination and decommissioning funds are recovered through rates inthe same manner as other fuel costs. The estimated annual contributions by Entergy for decontamination and dcocmissioning fees are discussed in Note 9 to the financial statements.
* * ~.1 . . : , ;,;.
Nuclear Insurance ;, The Price-Anderson Act linits public liability for a single nuclear incident to appxmatly $9.5 billion. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, System Energy, and Entergy's non-utility nuclear power business have protection with nspect to this liability trough a combination of private insurane and. an, industry assessment program, as well as insurance for property damage, costs of n placment power, and other risks relating to nuclear generating units. Insurance applicable to the nuclear programs of Entergy is discussed in. Note 9 to the financial statements. Nuclear Operations - : , , . . -. , ,, . .;
*~~~~ * *~ ~~~~~.. I f General (Entergy Coporation, Entergy Arkansas. EntergyGuf Stes, Entergy uisiand system
; . Enrgy Operations opeates ANO, River Ben Waterfo 3, and Grand 1, subject to the owner oversight of Ente Arkansas, i7lemj' Guff Stats,' Entergy.Louisiana, an System Eperg respectively., .Entergy Arkansas, Entergy GuStatesJFatergy Louisiana, axid System ergy pay directly or reimburse Entergy Operations at cost for its opermtion of the nuclgear units. Entergy's non-utility nuclear power business is the operator oia y j h; $ ; ,t. .. ,~ , -,;. *- , -
,{ o*
ANO Matters (ntery.fpoF n ad EntergyArkasas)., , The replacement of steam generators at ANO 2 is discussed in Note 9 to the financial statements. In Februar.2000 Entergy Mca sas applied to. the NRCfbr a,'wextensio-n of4 ANO l's operating lic e. The current license expires,,in.2W4, ,and, if grantd, the eidensipn,,.Would provide the authority to continue operating the plant until 2034. Manaementxpects the NRC consideration process to take two years. , State RegulatioR (AEnter :Arkans, Entergy, Guif, StaEntergy Louisiana, Entergy Missip , and Entergy New Orleans) , , , . ,:i General . .. . . . . . ... . . Entergy Arkansas is subj ct to regulation by the APSC, which includes the authority to:
, oversee utilityrse J . ;. -
.. . - .i *c o set rates; I.. ..
o determin reasonable and adequate servi~qe;, . - , .. *t... . o require rpoper accQuating; , , . ,,, A , .. O controlleasing; ;, *. . o control the acquisiticn or sale of any public utility plant or property coistitutig an oppratng unitor system; . , -! O set rates of depreciation; of en c a public o issue certificates of convenienceand necessity and ceitificates ofevironntalcompatibili andpublic needand ,,, . . o regulate the issuance and sale of certain securities. Entergy Gulf States is subject to the jurisdiction .o the municipal authorities of a number of incorporated cities in Texas as to retail rates and service. within, their boundaries, with,appe ap IlateeJursditon ndictovereroicoroate such matters residing inthe PUCT. Entergy Gulf States',Texas business is also subject to regulation by the PUCT as to: O retail rates and service in rural areas;
- 18 -
O certification of new generating plants; and
- o: extensions of service into new areas.'
t ., . *? . _ ;
+. '.*'*
' -Entergy Gulf States' Louisiana electric and gas business and Entergy Louisiana are subject to regulation by
.theLPSCasto: - : ' ' - ' "' - i o utility service; o arates and'darges2 ' ' * ' o ". certification of generating facilities; ' ::j' . o power or capacity purchase contracts2 and o depreciation, accounting, and other matters. Entergy Louisiana is also subject to the jurisdiction of the Council with respect to such matters within Algiers in Orleans Parish. . Entergy Mississippi is subject to regulation by the MPSC as to the following:
; o,' utilitservice; .. .- .' *'- .u - .8. .:' .. . .~ I ;' o 'service areas; - ->i ,, ,tA - -:.-. . :' "
e; -acilities;and ' ' :. : :' ' '
- retailrates.
- *A .. ** .! ..
* ' . f ,-* ' ' '- '- * '*
;- ....... ^. .
Entrgy Mississippi is lso subject to regulation by' the APSC as to-the certificate of environmental compatibility and public need for the Independence Station, which is located in Arkansas. Entergy New Orleans is subject to regulation by the Council as to the following:
.0 utilityservice;-- . ' - ,
o rates and charges; o standards of service; o depreciation; accouting,and issuance of certain securities; and > i : .
& other, matters. -- - . ..- ;..+
Franchises
-Entergy Arkansasiholds exclusive franchises to provide electric',service ii approximately 303 incorporated cities' fnd towns in Adransas;;.These' frnchises 3are unlimited in. duration'and continue unless 'the municipalities purchase the utility 'property. 'In Arkaisas, franchises te 'considered to .be contracts and, therefore, are terminable upon breach ofthe terms ofthe fraichise. * ' *. . '.. *
* .. . . .- l* 3 , . . , . .* X. .
;) AoS Entergy Gulf States holds hon-ixclusive franchises, pernits, r.ocertificates of bonvenience and necessity to provide electric and gas service in approximately 55 incorporated municipalities'in Louisiana and approximately 63 incorporated municipalities in Texas. ntergy Gulf States typically is granted 50-year franchises in Texas and 60-year fanchises in Louisiana. Entergy Gulf States' current electric franchises will expire during 2007 - 2036 in Teias-and dring 2015.- 2046 in Louisiana.:-The natural gas franchise in the City of Baton'Rouge will expire in
-2015.-In addition, Entergy Gulf States holds a certificate of convenience and necessity from the'PUCT to provide electric service to areas within 21 ouities in eastern Texas. *- : '
Entergy Louisiana holds 'non-exclusive 'franchises to provid e'electric service in'approximately 116 incorporated Louisiana municipalities. Mostlof these fiinchiseslhave 25-year..terfis,"although six of these municipalities have granted 60-year franchises;. Entergy Louisiana also supplies electrid service in approximately 353 unincorporated communities, all of which are located in Louisiana parishes in which it holds non-exclusive franchises. Entergy Mississippi hat received from the MPSC certificates of public convenience and necessity to provide electric service to areas within 45 counties, including a number of municipalities, in western Mississippi. Under Mississippi statutory, law,. such certificates are exclusive. Entergy Mississippi. may continue to, serve in such municipalities upon payment of a statutory franchise fee, regardless ofwhether an original municipal franchise is still in existence. Entergy New Orleans provides electric and gas service in the City of New Organs:.pursuant to city ordinances (except for in Algiers, which is served by Entergy Louisian; Theserdinances contain a continuing option for the City of New Orleans to purchase Entergy New Orleans? electric and gas utility properties.
- .. ':& .. '~ . ..,. .. ;..
The business of System Energy is limited to wholesale power sales. It has no distribution franchises. Environmental Regulation ;. , . General . * :' * :., . Entergy's facilities and operations are subject to regulation by various domestic and foreign governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, and.hazardous and solid wastes, and other environmental matters. Management believes that its afflcted subsidiaries-are; in substantial compliance with environmental regulations currently applicable to their facilities and.operations.., Because environmental regulations are subject to change, future compliance costs cannot be precisely estimated. However, management estimates that futurescapitWl expenditures for environnental compliance. will not be material for Entergy orany of its reporting subsidiaries; . -; . ; . . ... 1 , v! at il i . ; *--P. * - *:, Clean Air Legislation -r *. E -. . : ... ,..:
- The Clean Air Act Amendments of 1990 (the Act) established the following three programs that currently or in the future may affect Entergy's fossil-fueled generation: A . ...
o an acid rain program for control of sulfur dioxide (SO2) and itrogen.oxides (NOx);. ., o an ozone nonatainment areaprogrm for control of NOx and volatile organic compounds; and O an operating permits program for administration and enforcement of these and other Act programs. Under the acid rain program, Entergy's subsidiaries do not anticipate that they will require additional
.equipment to control SO2 The ActLprovides allowances to.imnostofsthe afected :Entery generating units for
- emissions based upon past emission: levels, and operating characteristics Eachallowance is an etieentto.emit one ton of SO2 per year. Underthe'Act, utilities te or will be required to possess allowances for So emissions from affected generating units. All Entergy fossil-fueled generating units are classified asi "Phase II? units undei the Act and are subject to SOz allowance requirements beginning in the year 2000. Management believes that it will be able
- to operate;.the domestic utility. ompanies' generating units efficiently. without installing. scrabbers oriekpcriencing other significantexpendituresi * '.. * ,. . . . .
- _'-
Additional control equipment was recently installed at certainEntergy Gulf States generating units to achieve NOx reductions due to the ozone nonattainment status of areas served. iiand around Beaumont and Houstoni.Tekas. Texas enviro'rnental authorities imposed.NOx controls on power plants that had to be in place by.November.1999. Entergy Gulf States believes the: cost of additional control:equipmentnecessary'to maintain this compliance is immaterial. In December 1999, Texas authorities proposed future control strategies for public comment Depending on the final strategies adopted, additional. costs will likely be incurred between 2000 and 2007.; Entergy Gulf States has studies underway to estimate the costs that would be incurred based on the!poposed strategies. These estimates willbe refined during 2000 based on the final adopted strategies approved by the EPA. - ... . As part-of legislation passed in Texas in June 1999 to restructure the electric power industry in the state,
- certain g ating Units of Entergy Gulf States will be required to obtain operating permits and meet new, lower emission liiii for NOx: It is expected that Entergy Gulf States will incur costs of approximately $6 million between 2000 and 2003 to meet these new standards. These costs may or may not be recoverable in the restructured electric utility efiirotinent. . . . .
- i. 0. , h . ,. .. : . - . .. :
*OtherEnvironmental. Matters - - .
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as*amended (CERCLA), authorizes the EPA and, indirectly, the states, to mandate cleanup, or reimbursement of clean-up costs,
*: by parties that generate &rtiaisporthazirdous substances released from or at a site. Owxiers and operators of such sites also are daened liable by'CERCLA.'.'CERCLA has, been nterpreted to impose juint and several liability on rsposible.'parties: The domestic utility companies have sent-waste' materials to'various disposal sites over the .;yehrs. Ifi tddition, enronmntal laws now reglate certain ofihe doestic utility companies' operating procedures and maintenance'practicesiwhich historically were not subject to regulation. Some of Entergy's disposal sites have been tsubject of govemmetital action under CERCLA, resulting in site'clean-up'activities: The domestic utility companies have participated to various degrees in accordance with their respective potential liabilities in such site cleanups and have developed experience with clean-up costs. The ffected domestic utility companies have *tablished reserves for such environmental clean-up and restoration activities.- .
EntefAansas ' . -' e,..
.'.1.. Eli'. :. *: :. -!',..
'--~~'
i'.s '_... .¢- - - 'IH Entergy Arkansas' has. received from rnotices the EPA and %e Arkansas Department' of Environmental
'Qiality (ADEQ) allegmg that Entergy Arkansas, along with thiers, may be' iPRP for clean-up costs associated with darloust sites'in 'Arknsas.l Contaminants at the sites 'include polychlorinated biplienyls (PCBs), lead, and other
' Entergd-Arcasas identified PCB contarination at the Little Rock Riiffib Tower site (fomerly Pulaski Heights Substation) during the fall of 1998. Entergy Arkansas performed extensive 'sampling to determine the extent of contamination and received approval from the EPA on its work plan for remediation. Cleanup of the site was
'completed in'November'l 999 at a cost of approximately $320,000. Entergy'Arkansas does not believe that any
- further liabiliy,-if anywithrespecttothidsitewillbematerial..* . .. . ,.
,*.* '.zEntergyArkanisas entered into a Consent Administrative Order with the ADEQ in 1991 that named Entergy Arkansas as'a PRP for the initial stabilization-associated with contamination at the Jtilities 'Services, Inc. state Superfund site located near Rison, Arkansas. This site is neither owned nor operated by any Entergy-afliliated company. This site was found to have soil contaminated by PCBs and pentachlorophenol (a wood preservative). Containers and drums that contained PCBs and other hazardous substances were found at the site: Entergy Arkansas worked with the ADEQ to identify and notify other PRPs with respect to this site. Approximately twenty PRPs have been identified6to'date. 1nDecember'1999, EntergyArkansas, along with'several other PRPs, met with ADEQ
'tepresentatives to 'discuss the cleanup of the site: ;The PRPs'are being encouraged to' undertake a voluntary cleanup and have begun discussions regarding the sharing ofcosts. Etitergy Arkansas' shate of total remediation costs at this site is'e timtd 'at $2.7 million.' As'of December 31, 1999, Entergy Arkansis had incurred approximately $400,000 of these costs. '
Entergy Gulf States ' . ' ' '..
- 1'a *4*+.~ ; ; a'v!;.' ; ;
Entergy Gulf States has been'designated by the EPA as a PRP for the cleanup of certain hazardous waste disposal sites. Entergy Gulf States is negotiating 'with the EPA and state'authorities regarding the cleanup of these sites. Seveal class action and other suits have been filed in state and federal courts seeking relief from Entergy Gulf States and others for damages caused by the disposal of hazardous waste and for asbestos-related disease allegedly resulting from exposure on Entergy Gulf States' premises (see "Other Regulation and Litigation" below).
- - In August 1999, Entergy 'Gulf States received notice from the Texas Natural Resource Conservation Commission (NRCC) that it is considered to be a PRP. fQr the Spector- Salvage Yard in Orange, Texas. The *Spector Salvage site operated from approximately 1944 until ceasing operations ini 1971. Ii addition to general salvage, the facility functioned as a.repository for military surplus equipment and supplies purchased from military, industrial, and chemical facilities. Soil samples from the site indicate the release of heavy metalsand.various organics, including PCBs. The TNRCC requested of all PRPs a submission of a good faith offer to fully fund or conduct a remedial investigation. Entergy Gulf States is still developing its submission and has yet to deternine the extent of its participation as a PIRP. Based on the size of the site, future expenditures for investigation and clean-up are estimated at $400,000...- .
Entergy Gulf,States is currently involved in a remedial investigation of the Lake Charles Service Center site,
*located in Lake. Charles, Louisiana. A manufactured gas plant (MGP) is believed to have operated at this. site from approximately 1916 to 1931. CQal.tar, a by-product of the distillation process employed at MGPs; was apparently routed to a.portion of the propelty for disposal. e same area has also been used as.a landfill. I 1999, Entergy Gulf States signed a.second Administrative.C onsent Order with the EPA to perform: removal action. at.,the site.
Entergy Gulf States believes that its ultimate responsibility for this site will not materially exceed its existing clean-
.upprovisionof$19million. * *. . . * .
- Entergy Gulf States is urrently involved in the.-second phase of. an.investigation of .ntamini of an MGP site, known as the Old Jennings Ice Plant, located in Jennings, Louisiana. The MGP is believed to have operated from approximately 1909 to 1926. The site is currently used for an electrical substation and storage of transmission and distribution equipment. In July 1996, a petroleum-like substance was discovered on the. surface soil, and notification was made.to the LDEQ. The'LDEQ was awareof this; site based-upon a survey performed by an environmental consultant forthe EPA.. Entergy. Gulf States obtained the services of an environimntal consultant to collect core samples and!.to: perform a search ofwhistocalrecords.to. inewhat.activities occurred at Jennings. Results of the core sampling, which found limited amounts of contamination on-site, were submitted to the LDEQ. A plan to determine a cost-effiective remediation strategy will be developed upon completion of a review of
'the sampling report by the LDEQ. Entergy does not expect that its ultimate financial responsibility with respect to this site will be material. The amount of its existing provision for cleanup is $500,000. . . i .
-In 1994, Entergy Gulf States performed a site assessment in conjunction with a construction prcject at the Louisiana Station Generating Plant (Louisiana Station).. In 1995, a further assessment confiried subsurface soil and groundwater impact to three areas on the plant site. After further evaluation, a notification was made to the LDEQ.
. Reniediation of Louisiana Station is.expected to continue through 2001. The remediation cost incurred through December 31, 1999. for this site was $5.6 million, Future costs are not expected to exceed the existing provision of
,Sl9 million, a-: ; .-
2 . . : .
*~ ~~ . : .. .. .- , .. .
Entergy New Orleans *.- .. . . .. . . Entergy New Orleans has completed the stabilization and abatement of asbestos containing material at the A. B. Paterson Generating Plant-located. in!New Orleans, Louisiana. Entergy notified the LDEQ. of its intent to repair and remove insulation and machinery gaskets. . On-site abatement of gaskets, and insulating; material was completed during the third quarter of 1999.,' The cost incurred through December .31, 1999 was approximately $1.9 million. Future costs are not expected to be material. Entergy New Orleans is planning a new substation on a parcel of land located adjacent. to an existing substation which is in close proximity to the Market Street power plant During pre-construction activities in January 2000, significant levels of lead were discovered in both soil- and groundwater at this site. . Entergy New Orleans. has notified the LDEQ of the contamination. In addition to soil removal and disposal, installation of groundwater monitoring wells and a long-term monitoring program may be required. Entergy New. Orleans believes .. remediation costs will not exceed S2 million. Entergy Louisiana and Entergy New Orleans Entergy Louisiana and Entergy New. Orleans have received notices from the EPA. andlor the states of Louisiana and Mississippi that.qne or more ofthem may be a PRP.for the following disposal sites, which are neither
-owned nor operated by anyEntergy subsidiary:.
In October 1997, the Mississippi Department of Ernvironmental Quality.(MDEQ) ordered Entergy
-., -.Louisiana-,to implement a remedial action 'wor plan .prepared;.y a PRPcornmittee for Disposal Systerns, Inc. sites at Fifth Street (Clay Point) anL .Street in Piloxi,-Mississippi, and at WooLnarket, Mississippi. The MDEQ issued a similar order on the same date to Entergy Louisiana's contractor, Ebasco Services, Inc. (Ebasco),, which Entergy Louisiana .has agreed to defend!,and indemnify. A settlement was negotiated for Entergy Louisiana, including Ebasco, for $289,000. This settlement
*. < relievedErtegy Louisiana of future liabilities associated wih thbes s. ,.
* * * **t
- tV . 8 t
- i*:' *. *." ~. }tJ}!S6w ; ;s
-. iFrotn,1992 to 1994, Entergy:Lquisiana performed a site assessment and remedial activities at a retired
.. *. power plant known as the Thibodaux municipal site, previously.owned and: operatedby a Louisiana municipality.. Entergy Louisiana purchased hppwer :plant at this siteas part of the acquisition of
-municipa electrics he site assesst indiced some subsur contamination from fuel oil.
... . . Reniediation.of e. Thidaux site, is expected to continue through200l,. The cost incurred through December.31; 1999 forthe Thibodausite .was $502,000, Future.costs are not expectedto exceed the existing.provision of $3)l8,000... - ,.:.. . ; .
During 1993, the LDEQ issued new rules for solid wast regulation, including regulaton of wastewater inpoundments. Entergy Louisiana and Entergy New Orleans bayederinedibat certain of their power plant wastewater impoundments were affected by these regulations and have chosen to upgrade or close them. As a result, a remaining recorded-liabilityin the amount of $5.9 million for -Entergy.Louisiana and S0,5 million for Entergy New .iOrleans existed at .December 31. 1999 for .wa r upgrades and closr. Completion ,of-this work is pending
- LDEQapproval,, ,, . . . . .;. . ., - . ; . .. -.
Other Regulation andit'igation . .. *. , .. ,". : ; .... Merer (Entergy Corporationand Entergy Gulf States) ,. . . , , .-. ... .. .
. .: U # . ........ : :a~i i' . . ,' *......
Several, parties, 4icluing EnrServices, appealed FERC',s approvalofthe Mergqr to.the D.C. Circuit. Thtergy Services sought Teview ,ofFERC's deletion of a 40% cap on the an~opnt of fuel savings Enter.,Gulf States
,may be required ,tAtferjq oherdomestic-ptility companies under ajracking pnechanismdesigned to protect the other companies from certain unexpected increases in fuel costs. ,:The .other. partie sought to pyertum FERC's decisions on various grounds, including issues as to whether FERC appropriately conditioned the Merger to protect various iterested parties from alleged harm and FERC's reliance on Entergy's transmission tariff.to mitigate any potential anticompetitive impacts of the Merger. Tle D.C. Circuit has ordered that the cases be held in abeyance pending. FERC's issuance of~a.-final order on remand in the.,prqceefings on Entergy's;trapsmission tariff (see discussion qf tariffcase in 'RATE MATTERS A1ID REGULATON - Rate Matters -.Wholesale Rate Matters Open Acces Transimission' above). . ., . .. , .
.Litigation£ ml (n~tergyCorporation, ,Enteigy'Arkansas, EntergyGulf S Ente uisiana,,.E4tergy Mississippi, andEntergyNew Orleans) . ., 'l..
Entergy Corporation and the domestic utility companies are defendants in numerous lawsuits that have been filed by fomer, employees alleging that they.were yriong ully terminated and/or discriminated againsto age, Ente~~ . agaigst-on the basis of age, race, and/or sex. E Ctergy.CoCrporation and, the.domesticutility'cornpanies are vigorously defending these suits and deny any liability to the plaintiffs. However, no assurance can be given as to the 'outcome of these cases.
* -. . * . *1 . -*;
Asbestos and Hazardous Waste suits (Entergy Gulf States)
-' Several lawsuits have been filed on behalf of plaintiffs n state and federal courts in Texas and Louisiana that seek relief fiom Entergy Gulf States as well as nierous' other- defendants for damages caused tb the plaintiffl'or others by the alleged exposure to hazardous waste and asbestos on the defendants' premises.' The plaintiffs in some suits are also suing Entergy Gulf States and all other defendants on a conspiracy claim. It will not be known until discovery is completd how many of the: plaintiffs in any of the foregoing cases actually worked oft Entergy Gulf States' premises. Enterg Gulf States believes that theultimate resolution of these matters Will not be naterial, in the agegat, to itsfinancial pOsftio'. oiksults of operations.,
Union Pacific Railioad (Entetgy Corporation and Entergy Arkansas): In October 1997, Enterey Arkapsas and Entery Services filed a civil suit against Union Pacific Railroad Company (Union Pacific) in the United States District Court for the Middle District of Louisiana. This suit seeks
- damages 'and the termination of coal shipping contracts with Union Pacific because of Union' cific's failure to meet its contractual obligations-tot ship coal to Entergy Arlansas' two coal-firedi plants. Te lawsuit also alleges that such failure has ipaed Entergy Arkisis' ability to generate ansell electricity from these plints. The case has been transferred to the United States District Court fob tie District of Nebrikav In Januazy 1999, on cross motions for
' uminazy judgment, the coiztt'nled that Union Pacifichas breached obligitionsider the &ntracts. Under the
'court's ruling, if the breacheslofthe contracts by Union Pacific are- rven at trial to be;material, rescission of the contracts is available to Entergyas a remedy, in addition to the monetari'daiages to-be awarded. '
Aauila Power (Corporatio (Eter Corporation, Entergy Arkansas, Entergy' Gulf States, Entergy' Louisiana, Entergy Mississippi, and EnterigNew.Orlean§)- - '
- In March 1998, Aquila.Ponwer'Copozttion (AAqifih") filed.'a complainv-with FERC against.Entergy
'Services, as agent' fortlicdomstic utility companies, alleging that the domestic utility-conpanies improperly reserved transmission capacity co Entergy's transmission system, resulting in the denial of Aila s request for transmission service. Aquila's ccmplaint seeks compensation for lost profits, an order prohibiting Entergy and/or its affiliates from engaging in similar conduct, and suspension of the domestic utility cfipanies' and EPMC's tiiet-rate authority. In May 1998, Entergy filed its response denying the Aquila allegations. Subsequently, Aquila amended and restated its complaint, alleging additional instances of improper activities' by Etergy.: TIradditiod to its requests in itsoriginal complaint, Aquila's amended complaint seeks a finding by FERC that Entergy is in violation of FERC Orders No. 8'S aid 889, ard'an orde lhat Entergy should be required to join or-agree to the fornation of akigdependent systemi pert . EntergY'fil'diits roofsbto the amended'and. restated complaint inaJuly 1998, denying the allegd iniproper D~aluct, aid also ioved to dismiss Aquila's complint in September 1998. Aq'uila has respoded, and no haring date has becn stby FERC.'
Ratepaver Lawsuits '(Edty Cor"ition, Entegy Gulf States, Entergy Louisiana, and Entergy New Ofleans)'
- ~ ~: ~ ~ -: .. . ; l '. .. ,' ;, '.@ . ' .: -*.:E' . :
In May 1998, a.group of ratepayesfiled a complaint against Entergy Cororation, Entergy, Power, and Entergy Louisiana in state coiift in- Oileahs Pansh purportedly on behalf of all Eaitergy Louisianaiatepayers:' The plaintiffs seek treble damages for alleged injuries arising from the defendants' alleged: violations of Louisiana's antitrust laws in connection with the costs included in fuel filings with the LPSC and passed through to ratepayers. Among other things, plaintiffs' llege'tihat Entergy Louisiana improperly introduced ertin' costs into the caldulation of the fuel charges, including imprudently purchased high-cost electricity frim its affiliates 'and imprudently purchased high-cost gas. Plaintiffs allege that these practices violated Louisiana's antitrust laws. In addition, plaintiffs seek'to recover interest and at rneyfdes. Exceptions have been filed by Entergy, asserting'that this dispute should be litigated before tho'LPSCi d FERC. At theiappropriate time, if necessary, Entergy will raise its defenses to the antitrust claims.' A'present, the suit in tdte coiut'is stayedby stipulation ofthe parties.'
* . - , .. l, * . .**
Plaintiffs also filed this complaint with the LPSC to initiate a review by the LPSC of Entergy Louisiana's monthly fuel adjustment charge filings and to force restitution to ratepayers of all costs that the plaintiffs allege were .-.improperly included in.those fuel adjustment filings. Marathon Oil Company and Louisiana Energy Users Group have also intervened in the CLPSC.proceeding. Discovery. at the LPSC has been conducted and is expected to
-continue: Direct tesfimonywas filed withthe LPSC by plaintiffs and the iitervenors in July-l999. In their testimony for the period 1989 through 1998, plaintiffs purport toquantify manysof their claims in an amount totaling $544 million, plus interest. The plaintiffs will likely assert additional damages for the period 1974 through 1988. The Entergy companies filed responsive and rebuttalteteimony;in September1999. . Rebuttal testimony by the plaintiffs and intervenors was filed in November 1999. Direct testimony of the LPSC staff will be filed in April 2000, to -which Enterg will be permitted to respond; Hearings before the LPSC are scheduled to begin in September 2000.
Entergy intends to defend this matter vigorously, both in court and at the LPSC. e outcome of the lawsuit and the LPSC proceeding cannot be predicted, at. this time.. Management has provided reserves for thiY,! other litigation, and Entergy Louisiana's formula rate plan proceedings based on its estimate of the outcome of these proceedings .4liformation on fobmula rate plan proceedings is given in Note 2 to the financial'statements. -
-..: -:.In April 999, a groupobf ratepayers filed a complaint against Entergy New Orleans, EntergyCorporation, Entergy Service, and EntergyrPoper in state court.in Orleans.Parish pwportedly on behalf of all Entergy New Orleansiratepayers The plaintiff seek.treble!damae for aleged.injuries arising from-the defendants' alleged violations of Louisiana's antitrust laws in connection with certain costs passed on to ratepayers in Entergy New Orleans's fuel adjustment filings with the Council. In particular, plaintiffs allege that Entergy New Orleans improperly included certain costs in the calculation of fuelcharges .and that Entergy New Orleans imprudently purchased high-cost fuel from other Entergy affiliates. Plaintiffs allege that Entergy New Orleans and the other defendantEntergy ompanies conspiredtb make these purchases'tothe detriment ofEntergyNew Orleans' ratepayers Sand to the bafit ofEntefgy's shaieholders; in violation of Louisiana's antitrust laws. Plaintiffs also seek to recover interest nd.*torney fees. :sEceptidns to the plaintiffs allegations. were filed by Entergy,. asserting, among other things, thf iurisdiction over.these issues Tests with the Council and FERC. .If necessary, at the appropriate time, .EntergyvwilLkaYsb rais its defwsesto the antitust clausis At present,-the suit in state court is stayed by stipulation -oftheparties.-4' .;;aX .4; - W. II-f-t S ;'J' .Z':..; :;.. ' ':, '- * .. '. L i 4J.l* _*- . *;*X ; . 8,
- J * *4 ... .- - ..
- . : Plaintiffsalsbifiled thiscomplaint With the'Councflhin orderto initiate a review by'-the Council of their allegations and to force restitution to ratepayers of all costs they allege were improperly. and inprudently included-in the fuel adjustment filings. Discovery has begun in the proceedings before the Council. The plaintiffs have not yet stated the amount of damages they claim. Entergy intends to defend this matter vigorously, both in court and before the Council. The ultimate outcome of the lawsuit and the Council proceeding cannot be predicted at this time.
.. 'i:l4rlt;d9;.8;agmuX-,.} rsid~
w..en'tal-isinelo,'- ate '!'8 ... ewsie.
. can
-.n:'IE>Aprill998, a group ofesidential'and business jatepayers filed a complaint against Entergy New Orleans in state cdurtinrOrleans Parishipurportedly on behalf of all ratepayers i New Orleans. plaintffs aThe allege that
-Enterg:New.;Orlils has' ove haged.ratepayersby.;at least'$300 million since 1975 n violation of limits on
,EntergyNew Odeans'rate of ririithatthe plantiffs allege were established by ordinances passed bythe Council in
- .192. The plaintiffs.Seek,.amon -.6therthings,i(i) a declaratory judgment that such
- franchise ordinances have been
.violated; and.(ii) daIind tothe Council for.the establishment ofthe amount-of dvercharges plus interest. Entergy 'NeW-Orleans A liVes thealawsuitis.without merit. .Entergy NewOrleans ,has chaged only those'rates authorized by .the Coudcil inadcor'dance with applicable law. Entergy New Orleans is vigorously defending itself in the lawsuit.
- .. ;:- ..- p Ie, S '- --
jJ 3* ' ;.,;; i '1 * . ...
*1n.May..1998,
.. agroup'ofrratepayers filed a complaint against Entergy Louisiana in state court in East Baton Rouge Parish purportedly' an behalf -of all.Entergy Louisiana ratepayers. The plaintiffs allege-that the formula ratemakrig plan authorized by the LPSC has allowed Entergy Louisiana to earn amounts in excess of a fair return.
The plaintiffs seek among other things, (i) a declaratory judgment that the formula.ratemakng plan 'is an improper ratemaking practice; and (ii) a refund of the amounts allegedly charged in excess of proper ratemaking practices.
-*EntergyLouisianabelieves the lawsuit is without merit and is vigorously defending itself.
On Febnary- 28, 2000, a lawsuit wa'icommenced in the Civil District Court for the Parish of Orleans, Louisiana, against ,Entergy,Entergy Gulf.States, Entergy Louisiana, and Entergy New Orleans relating to power outages that. occurred.in July 1999. The plaintiff, who purports to represent a class of similarly situated persons, claims unspecified damages as a result of these outages, which the plaintiff claims were the result of negligence on the part of the Entergy defendnts.- Fntergy, Entergy Gulf States',Entergy Louisiana, and Entergy New Orleans have not yet filed responsive pleadings in the case. However, they will vigorously contestthe plaintiffs allegations, which they believe do not support any'liability toihe laintiff for damages. '.' . . I.. ; , ~
-- {* . * . .. . *- Of -' *.t l*
Caiun Coal Contracts (Entergy Corporation and Entergy Gulf States) , ::
.. ;- . . - -~~~~~~~~~.L. i . : S A discussion of this litigation is included under the caption "Cajun-Coal Contracts" in Note 9 to the financial statements.
Franchise Fee Litigation .(Entergy Corporation and Entergy Gulf States) - ; . Ii September 1998,.the City of Nederland filed. a petition against Entergy Gulf States and Entergy Services in state court in Jefferson County, Texas, purportedly on behalf of all Texas municipalities that have ordinances or agreements with Entergy Gulf States.. The lawsuit alleges 'that Entergy Gulf States has been iunderpaying its
.fiaichise fees due to failure to properly calculate its gross receipts. The plaintiff seeks a judgment.forthe allegedly underpaid fees and punitive 'damages,;Entergy Gulf States believes the lawsuitvi§ without merit and. is vigorously
'defending itself. '. . . ,.: .
-~~~~~~~~~~~~~ -. . A ¶* *b r az
. .,1. .s. . ' dS-;
Fiber Optic Cable Litigation (Entergy Corporation, Entery Gulf States) .I :.; ... .. Il May 1998,' a group: of property owners filed a petition against Entergy Corporation; Entergy Gulf States, Entergy Services, and ETHC in slate court in Jefferson, County, Texas purportedly on behalf of allproperty owners
.throughout. the Entergyi service area who. have conveyed easements; to the defendaits. Thelawftits alleged that *Entergy iistalled fiber optio.cable'across theirprperty .without obtaining appropriate easemesitsnih plaintiffs sought actual damages fbr the use.of the. land and a share of the profits made.through: use of the .fibet optic cables and punitive damages. The defendants have dismissed the petition in state court, and the plaintiffs have commenced an identical lawsuit in the United States District Court in Beaumont, Texas. Entergy is vigorously defending itself in the lawsuit and believes that any damages suffered by. the plaintiff landowners are negligible. andfitat there is no basisfbrtheclaim'seeldnga,shareqfprofits.. . .* ;.. . . . . e; .
v ' . - . ';; .t-:. : i . ; l- i -... . */' ' '.; * .. . .'i ' ; Franchise Service Area Litigation (Entergy Gulf States) . : .. . .! :
- ' ' , , .. - ; ' Ligh - ' ' n In early 1998, Beaumont Power and Light Company (BP&L) unsuccessfully sought a fanchise to provide
. electric service. in the City of Beaumont; Texas, where Entergy Gulf States already holds a fivitehise In November
- 1998,:BP&L: filed a requesti.befoe the PUC -to obtain a certificate of convenience and neceity.({CCN) for those portions of Jefferson County outside the boundaries of any.municipality for which Entergy GulfiStafesprovides retail electric service. BP&L's applicatb'n contemplates using Entergy Gulf States'. facilities in their provision of service.
- In Texas, utilities are required to obtain a.CCN prior.to providing. retail electric service.'Jefferson County is
- currently singly'certificated4o Entergy Gulf States. If BP&L's application i granted, BP&L:would be able to provide retail service to Entergy Gulf States!. customers i the area for which the crtificate.would applyi. BP&L has amendcd its application to add a request for a CCN. toprovide retail electric servicb:within the- City of Beaumont.
The amended application acknowledges that the Texas electric utility restructuring law requires BP&L to use its own facilities to connect to its custoners if it.is granted a CCN. A hearing on the mherits was conducted'in December 1999, and the ALJ is expicted to issue a recommendation in for consideration by the PUCT. . *; Hindusthin Development Corporation Ltd. (Entergy Corporation)... In January 1999, HindusthaniDevel6pment Corporation (HDC) commenced an arbitration proceeding in India against Entergy Power Asia Ltd. (EPAL), an indirect, wholly owned subsidiary of Entergy Corporation. HDC alleges that EPAL did not fulfill its obligations under a Joint Development Agreement (JDA) to:develop a 350 MW cogeneration plant.to be built in Einai India. HDC also alleges that EPAL wrongfully. withdiew as lead developer. Entergy's management believes that HDC's allegations are without merit, and that each party'to.the.JDA had an absolute right of withdrawal. HDC is seeking unispecified damages of $1.1 billion. EPAL is vigorously defending itself in the arbitration proceeding. Ice Storm Litigation (Entergy Corporation and Entergy Gulf States) In January 1997, a group of Entergy Gulf States customers in Texas filed a lawsuit against Entergy Corporation, Entergy Gulf States, and other Entergy subsidiaries in state court in Jefferson County,, Texas purportedly on behalf of all Entergy Gulf States customers in Texas who sustained outages in a January 1997 ice storm: -The lawsuit alleges that Entergy;failed to properly maititain its electrical distribution system and respond to the ice storm. The district court certified the class in April 1999. Entergy has appealed the class certification, and arguments on the appeal rer :heard in FcbruaryjQDOQ. Entergy believes that the lawsuit is without merit and is vigorously defending itself. A similar lawsuit wrs filed in Louisiana in 1997, in which class certification was denied. Litigation Environment (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New 04e ns, and System Energy) The four states in-which the domestic utility companies operate, in particular Louisiana, Mississippi, and Texas, have proven to be unuhially litigious environments. Judges and juries in Lodisinna, Mississippi, and Texas have demonstrated a willingness to grant large verdicts, including punitive damages, to plaintiffs in personal injury, property damage, and business tort cases. Enteigy uses legal and appropriate imeans t contest litigation threatened or filed against it, but the litigation environment in these states poses a significant business risk.
- ,EARNINGS RATIOS OF DOME0 TIC UTILITY COMPANIES AND SYSTEM ENERGY The domestic utility companies' and'System Energy's ratios of eai-ngs to.fixed charges and ratios of earnings to combined fixed charges and preferred dividends pursuant to Item 503 of SEC Regulation S-K are as follows: - . . -. '.
; ; ;.;,; .. *;,Ratios ofEarnings to FixedCharges-Years Ended December 31.
1999 1998 1997 1996' 1995 Entergy Arkansas 2.08 2.63 2.54 2.93 2.56 Entergy Gulf States 2.18 1.40 1.42 1.47 1.86 EntergyLouisiana 3.48 3.18 2.74 3.16 3.18 Entergy Mississippi 2.44 3.04 2.98 3.40 2.92 Entergy New Orleans 3.00 2.59 2.70 3.51 3.93 System Energy 1.90 2.52 2.31 2.21 2.07 Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Years Ended December 31, 1999 1998 1997 1996 1995 Entergy Arkansas 1.80 2.28 2.24 2.44 2.12 Entergy GulfStates(a) 1.86 1.20 1.23 1.19. 1.54 Entergy Louisiana 3.09 2.75 2.36 2.64 2.60 Entergy Mississippi 2.18 2.73 2.69 2.95 2.51 Entergy New Orleans 2.74 2.36 2.44 3.22 3.56 (a) "Preferred Dividends" in the case of Entergy Gulf States also include dividends on preference stock. 27 - --
* ' . ,. :.BUSINESS SEGMENTS : . . .
Entergv Corporation Entergy's business segments are discussed in Note 14 to the financial statements. Entergy New Orleans . .. . . .. As of December-31, 1999, Entergy New. Orleans operating revenues and customer datawas as fillowst-:
- i';
... ' ' "i ' '."' " ';' ElectricOperating' Nattra1Ga.:.
- r.
* ' ' *' *' - ' -'*, - - Re enue :!- 5 'eeveAue: " ' -
kesiclential
* . _* 40% 53%
Commercial 37 ' --
- .. .. Industrial 7% . - ;? . i;
;,, -~; *,Governmenta/Municip1 ., . ;,16% . 17/.. . . .
Number ofCustomers . . 185,OQi. .R 1146-000:---, r Enterry Gulf States For ihe 9efi d Decenber3i 1999u'98% Jlf i 9t6a' opejal rgezu`was detived fiwm the electric utility business. Of the remaining operating revenues, one percent was derived &o the steam business and one t fim the Iiatural gas binei. , *J. * .7 ' '. * .' * .' .
* ' > }S : .' i' .tl>Jr* gg-. .* .f ' :-- u t- -
- t .!#g * )
Financial Information Relating to Products and Srvices Financial infcriation rlating'to Efitergy New Orleans' and Entergy Gulf States' products and services is presented in their resiniical s.
~~~~~~~~~~~~~~~~~~S.
S~~~ ~ ~~~~ .. ~ ~ ~~~~~~~~. L . L l,5.* :. .. PROPERTY
. i Generatiny Stations Domestic Utility Companies and Systemnergy.-
The total capability of the generating stations owned and leased by the domestic utility companies and System Energy as of December 31, 1999, by company and by fuel type, is indicated below. Owned and Leased Capability MW(1)
,;-. .,,;*x.
- t.* - -i . ;.^-}t Turbifie s - id .
- '1 'Intemnal Company Total Fossil Nuclear Combustion Hydro
., .1. .. . .-.......,,-., ,terpAfl4 sas 4,487. (2) ,. .. 1,2,61..
1,,94 . 42 70
.; Entergy S tes . a , 66 9. -5,753:..:,. ,*. <. . . - . -
4 67
-hElergytLouisina , . ,56' (2)., . c.r
,4 . ;907S .. :.. : . 19
; jEntryMi sissippi . 3j063 (2) 3,052 K . . * *. . .
EntecrNewOrleans.-:' 1,077 1,061' 4I"-'- ' 16 . - - SystefnEnergy - lU84' .'.';; - 0 84 '*_-.___x
' ' 1 Total 21,961 17,014 - 4,789 88 70
.(1)..- qe and, "asthe.dependableioad.' bilty as dmn ed under actual
- .. .
- Ptoperating conditionsbased n theiparyfuel;(aurnhing no curtaamnts) each station was designed to (2) Excludes the capacity of fbsil-fueled generating stations placed on extended reserve shutdown as follows:
s .rgy Arkansas.- 204 MW; ntgyGulf States ,-.405 !AW; nterg Louisiana -19 MW; and Entergy
; Mississippi -73 MW. ,Generatingstaos .tat ae,ntexpected to be utilized in e ppar-term to meet load
;7 - rements re plced in extended resere sutdow in 9 rder to i oqper~ting ,x ,ses.,, ....
Entergy's load and capacity projections are reviewed periodically to asws: te need ajid timing for additional generating capacity and interconnections in light of the availability of power, the location of new loads, and maximum*::-, econoryt
.. .... Etergy
,," ..Whe the corestiutiity Whe, the -~ 41y. ,cqpanses
_.,pa s require
,.qr -n..wg.en.genertion aew resources based on load and capabilitynd bulk power availabily, .tIey.,do nt.ec to nstuct pew base load generating Ins the ectyo mee purchasing power in the powity,.;,. ter -pet.to m wholesale power rdcet ndlor m ing gs nSe exteided.reserve shutdown. Currently, plans are being implemented to reactivate several units that are in extended reserve shutdown. Te units, once back on line, will provide an additional 417 MW of capacity to serve customers during peak demand.
teo ... , U~ade~the;te~s eSysten~n~g tege e:qting capacity an.d other power resources aresharedamong th estic ut)i~y* con.panies. Ihe SystemAgrqement provides, among other things, that parties having generating reserves greater than their load requirements (long companies) shall receive Iayments from, those parties having deficiencies in generating reserves (short companies). Such payments are at amounts sufficient to cover certain of the long pomnpanies' costs, including operating exwenses, fixed charges on debt, dividend requirements on preferred and preference stock, and a fair rate of return on common eqity inv s der the, System Agreement, these charges
- Vent are based on costs associated with the long companies' steam electric generating units fueled by oil or gas. In addition, for all energy exchanged among the domestic utility companies under the System Agreement, the short companies are required to pay the cost of fuel consumed in generating such energy plus a charge to cover other associated costs. FERC proceedings relating to the System Agreement are discussed more thoroughly in "RATE MATTERS AND REGULATION - Rate Matters - Wholesale Rate Matters - System Agmmmt," above.
Entergy's domestic utility business is subject to seasonal fluctuations, with the peak period occurring in the summer months. The 1999 (and all-time) peak demand of 20,664 MW occurred on August 18, 1999; Competitive Businesses.' Entergy Power owns 665 MW of fossil-fueled capacity at the Ritchie 2 and Independence plants.
~.
In July 1999, Eitergy's non-utility uiiiclear power business purchased from Boston Edison the 670 MW Pilgrim Nuclear Station, in Plymouth, Massachusetts. The sale included the Pilgrim generating plant and facilities (including nuclear fuel) and a 1,600-acre site on Cape Cod Bay.
-Entergy's giolpaCpower development bisiness is constructing two ccinedcycle gas turbine merchant power plants in the UK Saltend, a 1,200 MW plant located in northeast England, will provide steam and electricity to- BP Chenical's nearby complex with the remaining electricity to be sold into the UK niati power pooL Originally scheduled for comnercial operation in January'2000, Salteni's'coonpletion hai'bin-delhyeddue to construction problems at the site. The construction contractor has subfiitted a revised onstfuction'schedule ailer substantial analysis, and currently estimates a phased-in completion of-the three-unit plant withith'efull plaint in service by June 30,2000. The second plant, an 800 MW facility known as Damhead Creek, is locatedlin. southeast England. It is expected to begin commercial operation in the fourth quarter of 2000.
Infirconbections -- t" -" . . . . The electric generating facilities of the domestic utility companies consist principally of steam-clectric production fcilities. These genednguiits'ar'inty a tinsmission stem operating at various voltages ilb 500 KV: Vith tli; c 6ptfion of a'`isil1'poitioi of Entergy Missrssippi's' 'capacity,operating facilities or interests therein generally an. owned or leased by the domestic utility company serving the air in which the generating facilities are located. All of these generating facilities are centrally dispatched and operated. The ectric gneratig failities of Entirgy's'non-tilifr niuclear power business 'onsist of 'the Pilgrim nuclear prodtictio ii fciliti The facility 'his firmiotal'ouiput powei-purchase agrebment with'Bostoni Edison and other utilities thae'xpirifatdtli 6nAi41004. The iliiplant is dis atched as a par ofthe New England Power Pool (NEPP). The primary purpose of NEPP is to direct the operations of the major generating and transmission ' facilities in the Erijl* regon ' cut ' Entergy's dlomesticitility c'nfnibs are intercoin66ted'witl many heighboring utilities. I' additioni; the
;donistic!'uiility companies aiie'mnmbetibf ilie Soitheasii zEleric 'Reliability CounciX'(SE'RC)2 The primary 'purpod'6ofSERC ist ensure the ieliabiliiandld&icy of the electic bulk power sup'ply ii tlisoutheast region of the United States. SERC isla mrem r'lr of the Nc6'ith.AieiaricinEltic Reliabilify Cou'acil.-.
- s i ' , ***¢, ^*@
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Gas Propertv ' ' 'i As of December 31, 1999; Entergy New Orleans'distributed aiid traisported ntural gas for distribution solely within the limiis of the City of'Ne Orleans thr6ugli a total'of 1,453 miles of gas distributioniias and 41 miles of gas trdhsmission pipeliuis.'
* a 4.' * ' ; ' ,' ' '- , *S' .t ' ' *' -
As of December 31, 1999, the as properties of Entergy Gulf States, which are located in and around Baton Rouge, Louisiana, iWere not material 8nter -GulfStates. ' Titles -; The generating stations 'and major transmission'substations bf Entergy's public utility companies are generally located on properties owned in fee simple. The greater portion of the transmission and distribution lines of the domestic utility companies have been constructed on property of private owners pursuant to easements or on public highways and streets pursuant to appropriate franchises. The rights of each company in the property on which its utility facilities are located are considered by such companyto be edequate for use in the conduct of its business. -Minor defects and irregularities customarily found in properties of lib size and character may existbutsuch defects and irregularities do-not, i'the-opinion of management, materially' impair the use of the properties affected thereby. The doinestic utlitif'fy ihpani6 ken ally have the right of eminent domain, whereby they may, if necessary, perfect or secure titles to, or 'easements d servites s on, privately held lands used in or reasonably necessary for their utility operations. ;
': Substantially al of the physicalprperties ihd assets owned by Enteigy Aksas; Entergy Gulf States, EntergyiLotisiana: and Systein Eiergy are subject to the liens of mortgage's securing the first moritgage bonds of such company. The LeWis Creck giieating station is owned by GSG&T, Inc., a subsidiary df Entergy Gulf States, and is'ndt ibject~io the lien'df the Ekitergy Gulf Sttes mbrtgage securing the first mortgge bonds of Enterg' Gulf States, but is 'leased tb aid 6perated by Entergy Gulf States: All 'of the debt outstanding under the original first mortgages of Entergy Mississippi and 'Entergy New Orleans'hi beef retired and the original first mortgages were cancelled in 1999 and 1997, respectively. As a result, the general and refunding mortgages of Entergy Mississippi and Entergy New Orleans now also constitute a first mortgage lien on substantially all of the respective physical properties and assets of the respective companies.
~~~* ' ,-*-, * - *. $: \.. :. ;'
*t!.-:':
'" ':'""'FUEL SUPPLY' '
;'eThesources of generai6and iverage fuel cost per KWH for-th6 doifiestic utility companies and System Energy forth'ears 1997-1999*wre -
I~ is ;- t ' Nitidral Gat" -;-- Fuel Oil- Nuclear Fuel Coal
' .. r *'t % ';-; '-Cents Cents- ',Cents -- Cents
.. . 6f- -- I per of Per - Pf Per Year Gen KWH Gen KWH Gen KWH Gen KWH 1999 ;; il45 2.75
- 4 -2.06
- 35 .54 16 1.59
.1998 ':*40' 2:50 6 2.37 '40 .53 14 '1.67 1997 -' i * - 39' 2.97 ' i - 4 3.11 41 .54 16 i173 Actual 1999 and projected 2000 sources of generation for the domestic utility companies and System Energy are:
>!; ;, Natural Gas Ful F.ue. Oil - Nudear' Coal
.99. 0 2000 1999 2000 1999 :2000 1999 2000 Entergy Arkansas (a) 10% 7% - - 56% 40% 33% _52%
Entergy Gulf States 66% 68% - - 19% 18% 15% 14% Entergy Louisiana 64% 62% 1% - 35% .. 38% ; Entergy Mississippi 44% 53% 30% 23% - - 26% 24% EntergyNew Orleans 91% 100% 9% - - System Energy - - ' ' 100%(b) 100%(b)' - - Total (a) 45% 42% 4% 2% 35% 33% 16% 22% (a) Hydroelectric power provided an immaterial amount of generation at Entergy Arkansas in 1999 'and is expected to provide an immaterial amount of generation in 2000. I (b) In addition to the nuclear capacity given above for the following companies, the Unit Power Sales Agreement allocates capacity and energy from System Energy's interest in Grand Gulf 1 as follows: Entergy Arkas - 36%; Entergy Louisiana- 14/o; Entergy Mississippi - 33%; and Eptergy New Qrleans 17%. Natural Gas r * . - . The domestic utility companies have long-tern firm and short-tem interrupiblp gas copiracts. Long-term firm contractscomprise less than 26% oft'h dqmestic utility companies' total requirementsbit canqb called up if necessary, to satisfy a significagt percentage of the domesticutility companies' needs.; Shor~tenr contracts and spot-market purchases-satisfy additioa gas requirements. Entergy Gulf States has, 4an portati service agreement with a gas supplier that provie fle,-blnnaturaI gas service to ceringeneing tiozs by.using such supplier's pipeline and gas storage facility. Many factprs inc.luding wellheid deliverability, storage and pipeline pacit , and.denand requirements of end, users, influence the availability and price of natural gas suppli*s fog p .pants P-Den is .tweatr conditions as we as tothe. priacs ofEtler energy ources. Supplies of ai g.gre ep 4t u,,b.,c,4uate in 2000, Howver,, pursuant to, federal and stpte regulaponsr gas supplies opor plants' may, be irnuptedduring periods of shortage. To the extuitnaturalgai supplies.maybe disrupte4 the dometiscutllitycomnpapies will use alternate fuels, such as oil, or rely to a lagerexent,pq,qo4andnuclear geeration. . ,, ,,
- Entergy Arkansas has long-term contracts for low-sulfur Wyoming coal for White Bluff and Independence.
These contracts, which expire in 2002 and 2011,-respectively, provide for approximately 85% of Entergy Arkansas' expected annual coal requirements. Additional requirements are satisfied by spot market purchases. Entergy Gulf States has a contract for, the spply of lvwr-sulfur. Wyog coal fo.r- soa.Upi;,fi ich s uldbe sufficint to satisfy its fuel requirements for that unit through 2010 if all price reopenerae accepted.. If bpdt.parties,cannot agree upon a price, then the contract terminates. Effective April 1, 2000, Louisiana Generating LLC will assume Cajun's,58% ownership interest in theBig Cajun generating.facilities and wl qpate the plant. The management of Louisiana Geierating LLC his a1vi& Enter, Gulf States that it' haseieciitad coal supply and transportation contracts that should provide an adequate supply. of coal for the operation .9 f Big Cajun 2, Unit 3 for the foreseeable future. ;^ .- ., h, ,., . Entergy Arkansas has a long-tern railroa4 transportation contract for the delivery of at least 90% of the coal requirements of both White Bluff and Independence. This contract will expire in the year 2014. However, Entergy Arkansas has filed a lawsuit against the railroad claiming breach of contract-.by the railroad and requesting termination of the contract (see discussion of lawsuit in "RATE MATTERS AND REGULATION - Reeulation - Other Regulation and Litigation.-UnionPacificRailroad" above)k. ,. . , .; Entergy Gulf States has a transportation requirements contract with a railroad to deliver coal to Nelson Unit 6through December 3 1:2004. This contract specities a minimum ariia'to nnage amounting to approximatly otiehalf of the plant's requirements and rovides flexibility for shipping up it all oetie'plant's requirements. Nuclear Fuel ." The nuclear fuel cycle involves the following: o mining and milling of uranium ore to produce a concentrate; o conversion of the concentrate to uranium hexafluoride gas; o enrichment of the hcmAuoride gas; o fabrication of nuclear fuel assemblies for use in fueling nuclear reactors; and o disposa of spent fuel ; 'I System Fuels is responsible for contracts po acquire nuclear material to be used in fueling Entergy Arkansas', Entergy Louisiana's, and System Energy's nuclear units. System Fuels also maintains inventories of such materials during the various stages of processing. Each of these companies purchases enriched uranium hexafluoride from System Fuels, but contracts separately for the fabrication of its own nuclear fuel. The requirements for River Bend are pursuant to contracts made by Entergy Gulf States. The requirements for Pilgrim are pursuant to contracts made ,by Entergy's non-utility nuclear power business. ,.. Based upon currently planned fuel cycles, Entergy's nuclear units currently have contracts and inventory that provide adequate materials and services. Existing contracts for uranium concentrate, conversion of the concentrate to uranium hexafluoride, and enrichment of the uranium hexafluoride will provide a sigiificanf percentage of these materials and services over the next several years. Additional mate4s and services required beyond the coverage of these contracts are expected to be available at a reasonable cost for the foreseeable future.
., .. ~ : ... ,. *H Current fabrication contracts will provide a significant percentage of these materials and services over the next several years. The Nuclear Waste Policy Act of 1982 podes I for the dispgal of spent nuclear fuel or high level waste by the DOE. There is a discussion of spent nuclear fuel disposl in-Note 9 to the finicial statements.
It will be necessary for Entergy to enter into additional arrangements to acquire nuclear fuel in the future. It is not possible to predict the ultimate cost of such arrangements. Entergy ;Aransas, .Entergy: Gulf States, Entpzgy Louisiana, and System. y each have made arrangements to lease nuclear fuel and related equipment and services. The lessors finance the acquisition and ownership of nuclear fuel through credit agreements and the issuance of notes. These arrangements are subject to periodic renewal. There is a discussion of nuclear fuel leases in Note 10 to the financial statements.
.1s ; : 4 Natural Gas Purchased for Resale . . . ... - .
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Entergy New Orleans has several suppliers of natural gas. Its system is interconncd with three interstate and three intrastate pipelines. Entergy New Orleans',primary suppliers currently arp.Coluibia Engy Servies, Inc. (CES), an interstate gas marketer, Bridgeline Gas Distributors, and Pontchartrain Natural Gas via Louisiana Gas Services. Entergy New Orleans has a 'no-notice" service gas purchase contract with CES which guarantees Entery New Orleans gas delivery at any point afer the agreed gas volume has been met The CES gas supply is transported to Entergy New Orleans pursuant to a transportation service agreement with Koch.Gateway Pipeline Company l(KGPC). This service is subject to FERC-approved rates. Entergy New Orleans has firm contracts with its two intrastate suppliers and also makes interruptible spot"'market purchases. In recent years, natural gas deliveries to Entergy New Orleans have been subject primarily to weather-rela curtailments. However, Entergy New Orleans experienced no such curtailments in 1999.- As a result of the implementation of FERC-andated interstate pipeline restructuring in 1993, curtailments of interstate gas supply could occur if Entergy New Orleans' suppliers failed to perform their obligations to deliver gas under their supply agreements. KGPC could curtail transportationcapacity ily in the event of pipeline system constraints. Based on the current supply of natural gas, and absent extreme weather-related curtailments, Entergy New Orleans does not anticipate any interruptions in natural gas deliveries to its customers.
- Entergy Gulf States purchases natural gas for resale under an agreement with Mid Louisiana Gas Company.
Mid Louisiana Gas Company is not allowed to discontinue providing gas to Entergy Gulf States without obtaining FERC approval. Research - Entergy Arkansas, Entergy Gulf States, Entergy Liuisiiua, Entergy Mississippi, and Entergy New Orleans are members of the Electric Power Research Institute (EPRI). EPRI conducts a broad range of research in major technical fields related to the electric utility industry. Entergy:participates in various EPRI projects based on I Entergy's needs'and available resources: Entergy'and its subsidiaries contributed approximately $6 million in 1999,
$8 million in 1998, and $9 million in 1997 to EPRI and other research programs.
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. i; Item 2. Provertlies' .. I` I 7 ' ' ': - . g'; , :: ..-' . :. . ' . : ' . , ;
Information regarding the properties of the registrants is included in Item l.-"Business - PROPERTY," in this report. Item 3. Legal Praceedin' Details' of th&e registrants' material at&eprocdings, environmental regulation and proceedings, and other regulatory proceedings and litigation'that are pending or that terminated in the fourth quarter df 1999 are discussed in Item 1. "Business - RATE MA'TERS AND REGULATION," in this report.
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Itein 4. Subknls'siornof Matters to a VbteofSecuritlfyoldrs - '
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During the fourth quarter of 1999, no matters were submitted to a vote of the security holders of Entergy ';Corporati6n, Ente*rg'Arkansas EnteW Gulf States, Enitergy Lbiiiiana, EntrgyMississippi, Enteiy New Orleans, orSystemEnergy. ., e . . -
* -DIRECTORS AND EXECUTIVE9 OFFICERS OF ENTERGY CORPORATION lirectors . . . .
*'t t. ' . ;..f. '; . ..@,"r Information required by this item concerning directors of Entergy Corporation is set forth under the heading "Proposal I-Election of Directors" contained in the Proxy Statement oft'Entergyr) Cotpration; (th- "Proxy Statement"), to be filed in connection with its Annual Meeting of Stockholders to be held May 12, 2000, ("Annual Meetifng").:!n'dis 'incorpbrated hein!by reference. Iuformaion required by this'iteni concerning officers and directrsbof the re ing 'egisttant'is ieported in Part m of this duniet. - '*
Exiciive Officers . ' ' - ' ':
~~~~~~~* .. ...
£ _. : ,',,
4 .
;Name
- ' . : Agro - Position
- } z o : -iKPeriod
- 1. Wayne1*onaid (ai 'i" p. :hi e v f "'5'c?" and DioiporofEatin '. ' l1999-Present
* *ecto of Ent Arkansas Ente GuifSts Eiergyuisfans, 1998-1999
*T.
,; 'n T ' ' EnfEty Mississipi, Entergy New Orleans 6id System Energy President and Chief Operating Officer of Entergy Coiporation , . .: t. 1998 Chief Operating Officer of Entergy Arkansas, Entergy Gulf States, 1998 Entergy LouisianA, Entergy Mississippi, and tergy New Orleans-ce e of ntergy nie'rgy'r~iesjteas fie~
Orl New Orleans 1~:998
* .President ofEzer~y Cornoifies Strategic Business Unit
- 1996-1998 i'resident ofCinei Capital & Trading- 1996;1998
' Group Vice President and Chief Financial Officei of Cinergy 1994-1996 Corporation .
Jeny L. Maulden (a) (b) 63 'ice Chainnan of Entergy Corporation 1995-1999
'ice Chairmn ofEntergyArkansas, Entergy Gulf Stts, Entergy 1993-1999 Louisiana, Entergy Mississippi, and Entergy. New Orleans Chief Operating Officer of knirgy Arnsas, Entergy Gulf States, 1993-1998.
Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans President and Chief Operating Officer of Entergy Corporation 1993-1995 Director of Entergy Gulf States 1993-1999 Director of Entergy Louisiana 1991-1999 DirectorofEntergy New.Orleans 1991-1998 I)irector of Entergy Mississippi . 1988-1999 I)irector of System Enery 1987-1998 I)irectoi of Enteigy Arkansas 1979-1999
- . Name Are Poslffon Perlod Donald C. Hintz (a) 57 President of Entergy Corporation 1999-Present Executive Vice President and Chief Nuclear Officer of Entergy 1998 Arkansas, Entergy Gulf States, and Entergy Louisiana Group President and ChiefNuclear Operating Officer of Entergy 1997-1998
.-Coporation, EntergyArkansas, Eer Gulf,States, and Entargy
.. Louisiana Executive Vice President and Chief Nuclear Officer of Entergy 1994-1997 Corporation -
Executive Vice President - Nuclearof Entergy Arkansas, Entergy Gulf 1994-1997 States, and EntergyLouisiana ChiefExecutivc Officer and Presidlent of System Energy 1992-1998 Directorof Entergy.GulfStates . 1993-Prcset Director of Entcrgy Arkansas, Entergy.Louisiana, Entergy Mississippi, 1992-Present and System Energy... Director of Entergy New Orleans 1999-Present 1992-1994 Jerzy D. Jackson (a) 55 Executive Vice President ofEntergy Corporation II999-Present President and ChiefExecutive Officer -Louisiana ofEntcrgy Gulf .999-Present States . -.. President and Chief Executive Officer ofEntergy Louisiana 1999-Present ChiefAdministrativc Officer of Entergy Corporation, Entergy Arkansas, 1997-1998 Entergy 13ulf Stat , Entergy LouisiansBEtirgy.Missisippi, and EntrgyNewOrleans. .an Executive VicePresident -Exteal Affairs of Ente'_ Arkansas, 1995-1998 Entergy Gulf States, Entcrgy Louisiana Entergy Mississippi, and Entergy New Orleans.. I. Executive Vice Presideiit - Marketing of Entergy Arkansas, Entergy Gulf 1995 States, Entergy Louisiana, Entergy Mississippi, and Entergy New Executive Vice President - External Affairs of Entergy Corporation . 1994-1998 Director of Entergy Gulf States. . . . 1994-Present Executive Vice President of Marketing of Entergy Corporation 1994-1995 Director of Entergy Louisiana . , 1992-Present Director of EntergyArkansas, Entergy Mississippi and Entergy New 1992-1999 Orleans Secretary of Entergy Gulf States 1994-1995 Director of System Energy. 1993-1995 C. John Wilder (a) 41 Executive Vice President and Chief Financial Officer ofEntergy 1998-Present
* .. Tporation. Entergy Arkanssl ntergy Gulf tates, Entergy Louisiana Entergy Mississippi, Entergy New Orleans, and System Energy Director of Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, 1999-Prisent Entergy Mississippi, Entergy New Orleans, and System Energy Chief Executive Officer of Shell Capital Company . . . . 1998 Assistant Treasurer of the Royal Dutch/Shell Group 1996-1998 Director of Economics and Finance of Shell Exploration and Production 1995-1996
-a: a ( Assistant Treasurer of Shell Oil Company .... .. 1992-1995 Frank F. Gallahe r (a) 54 Senior Vice President, Genration, Transmission andEnerg' i1999-Present Management of Entergy Corporation, Entergy Arkansas, Entergy Gulf
.States, Entergy Louisiana, EntergjMississippi, EntergyNew Orleans, and System Energy Executive VicePresident and Chief Utility Operating Officer for Entergy 1998-1999 Arkansas, Enteagy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans Group Prcsident and Chief Utility Operating Officer of Entcrgy
- 1997-1999 Corporation -
Group President and Chief Utility Operating Officer of Entergy 1997-1998 Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans Director of Entergy Arkansas, Entergy Louisiana, and Entergy 1997-1999 Mississippi -
.Executive Vice President of Operations of Entergy Corporation 1996-1997 fame Aute : . Position Period President of Entergy Gulf States.
- 1994-1996.
-' Direcr of Entergy Gulf States 1993-1999
. cecutive Vice President of Operations ofEntergyArkansas, Entegy 1993-1997 Louisiana; EntaeW Mississippi' and Entergy New OrleanJ Michael G. Thompson (a) 59 Senior Vice Preident and General Counsel of Entergy Corporation 1992-Present Senior Vice President, General Counsel, and Secre of Entergy 1995-Present Arkansas, Entergy Gulf States, Enterg Louisiaa Entergy Mississippi, and Entergy New Orleans
* -SeetaryofEnte'Cciporatic ' 1994-Present Joseph T. Henderson (a) 42 'Vice President and General Tax oimsel of Entergy Cooation, 1999-Present Enteqy Arkansas. Entirgr'Guf Stat, Enter&t Louisiana, Entergy Mississippi, Entery New Odeans and Systein Energy Associate General Tax Coungel -i u - 1998-1999 Senior Tax Counse of Shell Oil Company 1995-1998 Senior Tax Attorney of Shell Oil Company 1994-1995 Nathan E. Langston (a) 51 Vice President and ChiefAccounting Officer of Entergy Corporation. 1998-Present
. 1. ,
Entrgy Aass, Entergy Gulf Stats, Entcrgy Louisia, EnterA Mississippi, EnlerN ewOieans and SystenEiergy.
.Director of Tax Services of Entergy Services 1993-1998 Steven C. MeNeal (a) 43 Vice Pidntiid Treasuer of Entergy 6izton, Enaergy Arkansas 1998-Present Entaly Gulf States, Enter luisian Ent Mippi Enteragy Ne Orleans, nd System Energy Assistant Treastuer of Entergy Arkansas, EntXigy GulfStes, Entergy 1994-1998
- Louis a, dessissippi, Bitery New Orleans, and System Diret of Corporate Finace of Entr Svibs 1994-1998 (a) In addition, this officer is an executive officer and/or director of various other wholly owned subsidiaries of Entergy Corporation and its operating companies.
(b) Mr. Maulden retired effective December 31, 1999.-
'Each officer of Entergy Corporation is elected yearly by the Board of Directors.
PART II. i Item 5. Market for Reaistranbte' Common Equit and Related Stockholder Matters Entergy Corporation
.. *. .: t . ..
The shares of Entergy Corporation's common stock are listed on thd New York Stock, Chicago Stock, and Pacific Exchanges. Ihe high and low prices of Entergy Corporation's common stock fbr each quarterly period in 1999 and 1998 were as follows: 1999 1998 Hih Low Hih Low (In Dollars)
. First 31.1/8 27 1/2 . 30'1/8 27 5/16 Second 33 1/8 27 3/4 29 58 . 23 1/4 Third - 31 9/16 28 3/16 *30,13/16. 26 3/16 Fourth - 30 23 7/8 ;327/16 28 1/16 Consecutive quarterly cash dividends on common stock were paid to stockholders of Entergy Corporation in 1999 and 1998. Quarterly dividends of 30 cents per share were paid in 1999. In 1998, dividends of 45 cents per share were paid in the first and second quarters, and dividends of,30:cents per,share were paid in the third and fourth quarters.
As of February 29, 2000, there were 73,619 stockholders of record of Entergy Corporation. Entergy Corporation's future ability to pay dividends is discussed in Note 8 to the financial statements. In addition to the restrictions described in Note 8, PUHCA provides that, without approval of the SEC,:the unrestricted, . undistributed retained earnings of any Entergy Corporation subsidiary are not available for. distribution to. Entergy Corporation's common stockholders until such earnings are made available to Entergy Corporation.through the declaration of dividends bysuch subsidiaries. ,. ..... , Entergy Corporation, Entergy Arkansas, Entergy.SGplf States, Entergy Louisiana, Entergy Mississippi Entergy New Orleans, and Sstm Energy.; ,. . ..
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There is no market for the common stock of Entergy. Corporation's wholly owned subsidiaries.: Cash dividends on common stock paid by the subsidiaries to Entergy Corporation during 1999 and 1998, were as folLOws 1999 . 1998 ,. f c,
;: -: ;-:(In Millions) .
EntergyArkansas $ 82.7, ... $92.6
. ,.,Entergy
.; GulfStates'....... $ 1070 . $109.4 Entergy'Louisiana $,9,7.01,0. S.138.5 .
Entergy Mississippi $ 34.1 $ 66.0 ... . EntergyNew Orleans $ 26.5 S .9,7*... SystemEnergy $ 75.0 e.; S 72.3. '
;,. ~~~ETHIC.!, $:;10.0,, ;,,-. -- -. .
E s .. - . . i ... . Information with respect to restrictions that limit the ability of, System Energy and the domestic utility companies to pay dividends is prevented in Note 8 to the financial statements. Item 6. Selected Financial Data , .. ,.. Refer to "SELECTED FINANCIAL DATA - FlykYEAR COMPARISON OF ENTERGY CORPORATION AND SUBSIDIARES, . . NTERGY . ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANAJ Er.ERGY MISSISSIPPI, ENTERGY NEW ORLEANS,- and. SYSTEM ENERGY" which follow each company's financial statements in this report, for information with respect to
,;R .'.*
operatin statistics.LJ1J~~~aLGLL~~~i6 i;; Item 7. Mana!ement's Discussion and Analysis of Financial Condition and Results of Onerations -. Refer to MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND
,,. RESOURCES," "--'SIGNIFLCANT FACTORS AND KNOWN TRENDS," and "- RESULTS OF CAPITAL OPERATIONS OF ENTERGY,,;CORPORATION- AND SUBSIDIARIES, ENTERGY ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, ENTERGYMISSISSIPPI, ENTERGY NEW ORLEANS, and SYSTEM ENERGY."' .
Item 7A. Ouantitative and Ounlitative Disclosures About Market Risk Entergy Corporation and Subsidiaries. Refer to information under the heading "ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
- SIGNIFICANT FACTORS AND KNOWN TRENDS."
- Item 8. Financial Statements and Suyplementarv Data.; I INDEX TO FINANCIAL STATEMENTS Entergy Corporation and Subsidiaries:
Report of Management -- :: 40
- Managemient's FinaticalDiscussion and Analysis- f 41 RepdrtoflndepndentAccountants -* . '54 Management's Finicial Discuiisioniand Analysis ' f
' '* ' ' 55 Consolidated Statements of Income For the Years Ended December 31, 999J 1998; znd 1997; 63 Consolidated Statements of Cash Flows FortheYears Ended December 31, 1999, 1998, and 1997 64 ConsolidatedBalince-Sheets, Decembef 31, 1999 aid 1998 . i: ; 66 Consolidated Statements of Retained Earnings, Comprehensive Incomnid d PiM-Iz Capital for the Years ' 68 EndedDecember31, 1999, 1998,and 1997 Selected Financial Data-Five-Year Coparison 69 Entetgy ArkansasIzc6:- " : ' * ***.
- Report of Independent Accountants 70 Management's Financial Discdgiion and.Aii~I'is 71 Income Statements For the Ye;us EiidlDesnber 31, 1999, 1998, and 1997 74 Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 75 Balance Sheets, December31, 1999Vand 1998 76 Statements of Retained Eirnings fothe Years Ended Decembr3 1, 1999,1998; and 1997 78 Selected Financial Data - Five-YearoCompaison n- . .. .* 79 Entergy Gulf States, Inc.: 80 Report of Independent Accountants- C. ;80 Management's Financial Disctlssion and Anaiysis ' - 81 Income Statements For the Years Ended December 31, 1999, 1998, and 1997 85 Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 87 BalanceSheetsDecenber31l999'ancl1998- ., - . - - 88 Statements of Retained Earniins for the*Years Ended Deceliilr31, 1999, 1998, anid 1997' - - 90 Selected Financial Data - Five-Year Comparison 91 Entergy Louisiana, Inc.:
Report of Independent Accountants 92 M~giWnShts Flinancii Discussioxniand AysIs * ' 93' In6nieSiit mentsFo-theYarsEded Decehbee31,9199 9'199,d1997' ' ; ; 96 StaerentsofCashFlP sFof&-`Yeiri iiedDecember3 l,1999, 1998, and 1997 97 BalanceSheets,4)eceihber 31, 1999 and 1998'; - * -* - - * *- 98 Statements of Retained Earnings for the Years Ended December 31, 1999, 1998, and 1997 ' 100 Selected Financial Data - Five-Year Comparison 101 Entergy Mississipp" In'c.' ' - 't : - - : - . Report of Independent Accountants 102 Mabihient's Financial Dis. dsioand Aiialysis
- 103 Income Statements For theYears Ended December 31, 1999; 1998,'nd'1997 . - 106 Statements of Cash FloWs For theYe'ars:Ended Dcembir31; I99, '1998, and 1997 - 107 Balance Sheets, Deember 3, 1999 and 1998 ' - : A i;;! -a ' *' 108 Statements of Retained Earnings for the Years Ended December 31, 1999; 199,azir 1d997 - 110 Selected Financial Data - Five-Year Comparison 111 Entergy New Orleans, Inc.:
Report of Independent Accountants 112 Managmn et's Fincial Discussion and Analysis 113 Incoipp Stateents For theYears Endd December 31, 1999, 1998, and 1997 116 Stateents of Cash Flows For theYears Ened December 31,1999, 1998, and 1997 117 Balance Sheets, December 31, 1999 and 1998 118 Statements of Retained Earnings for the Years Ended December 31, 1999, 1998, and 1997 120
;Sdected Financial Data - Five-Year Comparison- 121 System Energy Resburces, Inc.: - ..
Rrt of Idejiendent Accountants %%': -* 122 Mm.agment's Financial Discussion and Analysis 123
-InemeStat neits FortheYcars Ended December31,'1999, 1998, and 1997 t 125 Statements of Cash Flows FortheYears Ended December 31, 1999, 1998, and 1997 127 Balance Sheets, December 31, 1999 and 199,8 128
- Siiims'ofketained Eanings'foi the Years Ended December 31, 1999, 1998, and i997 130 Secd Finncial Data - Five-Year Comparison 131 Note toFinancial Stat~mients'for Entergy Corporation and Subsidiaries 132
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. 7. 4 V.".".
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i
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I . I ENTERGY CORPORATION AND SUBSIDIARIES REPORTOFrMANAGEMENT, Management of Entergy Corporation and its subsidiaries' ha's prepared 'and is responsible for the financial statements and related financial information included herein. ThMfinniand stateients are aid, ifeally accepted accounting principles in'the United Statis. Financial iiforin included esewher i this' report is consistent with the financial statements.
- a. .i ;i .; - , .
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To meet their responsibilities with respect to financial. informatio naemeA.x mtaimns, and enforces a system of internal accounting controls designed to provide reasonable assurance, on a cost- qeffqqf basis, .to the integrity, objectivity, and reliability of the financial records, and as to the protection of assets;,This. systmincludes communication through written policies and procedures, an. employee. Code of Entegrity,. and au, orgnizational structure that provides for appropriate division of responsibility and.the training of personnel. ,Tisysten is also tested by a comprehensive internal audit program. .. ** ,.. - .-. , . *n. .. The Audit Committee of ourBoard of Directors, composed oly..ofDiectors who are notemplo four company, meets with the independent auditors, manam td and internal accouitn perioicaly to discuss' nternal accounting controls and auditing and financial reporting matters. i'e AuditComite appoints the independent accountants, subject to ratification by th ichblderi lie Chiittee reie with the indeiendent auditors the scope and results of the audit effort. The Committee also meets periodically with the independent auditors and the chief internal auditor without management, providing free access to the Committee. Independent public accountants provide an objective assessment of the degree to which management meets its responsibility for fairness of financial reporting. hey regularly evaluate the system of internal accounting controls and perform such tests and oth :r procedures as they deem necessary to reach and express an opinion on the fairness of the financial statements. Management believes that these policies and procedures provide reasonable assurance that its operations are carried out with a high standard of business conduct J. WAYNE LEONARD C. JOHN WILDER Chief Executive Officer of Entergy Corporation Executive Vice President and Chief Financial Officer THOMAS J. WRIGHT JERRY D. JACKSON Chairman, President, and Chief Executive Officer Chairman of Entergy Gulf States, Inc. and of Entergy Arkansas, Inc. Entergy Louisiana, Inc., President and Chief Executive Officer of Entergy Gulf States, Inc. - Louisiana and Entergy Louisiana, Inc. JOSEPH F. DOMINO CAROLYN C. SHANKS President and Chief Executive Officer of Chairman, President, and Chief Executive Officer Entergy Gulf States, Inc. - Texas of Entergy Mississippi, Inc. DANIEL F. PACKER JERRY W. YELVERTON Chairman, President, and Chief Executive Officer Chairman, President, and Chief Executive Officer of Entergy New Orleans, Inc. of System Energy Resources, Inc. ENTERGY.ORPORATIONAND SUBSIDIARIES
; IMNAGEMBNTS FINANCIA DISCUSSION AND ANALYSIS
?'.LIQUIDTY. AN'DAPIAIL'OES0RES Cash Flow Operations
- ..,. Nt cash flow from opertions fov ntery,$he domsfiv m, andyst mco Enegy for the years
.en~edDecenber.3.1,j,1999, 1998, 8Wd.)99.7 s; t'it,i~.) :'n!Y' .. { f ~*, 1o ;: :.i*r . ; .t;S1 ' t;~~~~ln Vsit; .. zr .-
*~I tiP p gniIS) *8& t(14lt-*
Z Entergy $ 1,307 $ 1,753 $ 1,793 , EntegyAriansas $ 313 $ 409 S 435 Entergy)iulf .tates:X . 1t.5- $ 348: iZA.4t.::,,, Entergy Louisiana $ 410 $ 342 S 315 st*;t f~t ( . I n i;9Newtrl;ans ! rrti!bt 6df!+ .)5. >z S Syteriiihzj'ijA iii ' ,
~:'a~*, j 0j S "299 S 8 )
k4 "I o;~.. (..:R z~...3 Entergy's consolidated cash flow from operations decreased as compared to 1998 primarily due to less cash provided by competitive businesses. The dr6i is'~ttiu 't&iiepcetion of'rate ph6-IiV'T s ifor some of I*n 9,9, c eitive businesses used.$9.3 rmillipn'of operaiash. rom ro with
$151.7 million they contributed in 1998. This change was primarily due to the sal .Londop 1 Electricity and CitiPower in December 1998. Both businesses cdout ,operafi ash flow in 9A98"b "contribute at all in 1999. Offsetting the decrease in operating cash flow in 1999 are the sales of Efficient Solutions, Inc. in September 1998 and Entergy Security, Inc. in January 1999. These businesses used o g Fowjnj?9,98 and used none in 1999. Also, the power marketing and trading business used less operaig'ca'sh fldWin 1999 ihan in 1998. . o .. >...j J;ss: ¢1.
In prior years, rate phase-in plans for some of the domestic utility companies ontribted to cash flow from operations. But Entergy Gulf States' Louisiana retail phase-in plan or River t ai.cop~ piei i February 1998, Entergy Mississippi's phase-in plan for Grand Gulf 1 was compi1 inS Arkansas' phase-in plan for Grand Gulf 1 was completed in November 1998. There re th ui ,. in &d not contribute to operating cash flow in 1999. Entergy New Orleans' phase-in plan for ;tdad~1 mpopeted m 2001.
~.;;
ri 6 'spppating yXn .cash PRqw,decreafe in 19,9,9 primarily due to an increas9e in eivabjes from
)
!qeaqozplpa~e$?? tee ?$crease n I" * -,
- in.erse pool.6rro-fls for Esppn~y se nte'gy p atcs aseber., r 1,9'9 , he oneyp oolMs.a.nterp, arnqra gc ent dstouce e'doeishci utlty comp*7s' coee4en external shortmternbqrroy/ings, ,
Investi g Acivities Net cash provided by investing activities decreased in 1999 due to the sales in 1998 of London Electricity and CitiPower, and higher construction expenditures in 1999. he increased construction expenditures were primarily due to construction of the Saltend and Damhead Creek power plants by Entergy's global power development business, spending on customer service and reliability improvements by the domestic utility companies, and the return to service of generation plants at Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans. I ENERGY CORPORATIONAND SUBSIDIARIES
- MANAGE',MENT'S FINANCL,DISCUSSION AND ANAILYSIS LIQUIDITY AND CAPITAL RESOURCES he following items partially offset the overall decrease:
o $947.4 million of th proceeds from the sale of London Electricity in 1998 was used to purchase notes
'rceivAble wich naitui&d-'in Augusti19902 tJpoh niaturity, $321.4 million ofthe pocees was reinvested in other temporary investenets consisting of U.9. dollar dinomine commercial pa*pand bank deposits; and O the sales of EihtGy Security4 Inc. in Jani* 1999 and Entergy Power Edesur Holding, LTD and several telecommunications btinsses in June 1999.
Financing Activities . . . - .: '
'4h.
Net cash used in fibancing activities decrcai in 1999 primarily due to:' .'; o the reirementin 199 of debtassociatedyithectricity and CitiPower o increased boowings in 1999 under thecredit iciliiesfo te conruction of the Saltend and Damahead Creek power plants by Energy's global1pwerdevelopmeni bPsiness; and o a reduction in dividend payments made by Entergy Corporation in 1999 compared to 1998. A~~' 4-. ',. ::;l,-~.4 '*.~* * : .~ ~1. t~ f i SP~axtially o~setting the overaI~ do,, eraswerthefblwiNN ;. l!guses: . ; o the 1999 repayment of bank borrowings by Entergy Cotorhaion ind ETHCii a portori of the proceeds from the sale of Entergy Secuity, Inc.; otri'ttib tof f .sot in i999 at Entcrgy Arnsas,'Ery Gillf St., and Entg y Ssima,.n,; > ;kl.; ' S-; 5 o "t'ep'ks~ofEnteror orfrgy o moi'ostock .. ' - -' . : V.
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- Entergy requires capital resources for
- o. .insfictio capital c: tlrs~d. i ,- 2 ; ,*,,-4.
'a' debt cap dp~six! Wcpinvtere; junterrstoc c - .-' 'f; .~ ';.* :i.. !Z .:F,.
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For Ae-yaz'20 b to0 h 2004, Enierg4 plGit s $9.8 billioii ni capital nvestiit pkii fcused on
$iid unjproving service; aitht donesiic utility cdmpanies atii~ ~owing fts ~Ilia poe'lr drelopment iid nucl roprations alloction ti plan is $4. billion t6 thi dom utiliti{Vcomili iis, S.9 billi to the global power devefopinzt 6usf:"ss, and $1.7 biLii ti1;b;nucleatoperations busi"ess. Mah dit priovides more information on construction expenditures and long-term debt and preferred stock maturities in Notes 5, 6, 7, and 9 to the financial statements.
- " '." . " . ;'; . . . . . r: . :.
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-.42 -
ENTERGY CORPORATION AND SUBSIDLIRIES MANAGEMENT'S FINANCIALDISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Entergy's sources to meet the above requirements include: o internillygeneratedf unu&, -; *-
- 'cashonhand;' . -I ou debt orprefetred stock issuances; o:,- bank financin under new or existing facilities; . *
- o a asoit-term borrowings;-ani :-
- o*-: ialesofassets.-- . -;
- The capital investment plan discussed above is subject to modification based on the ongoing effects o'f transition to competition planning and t ability to recover the regulated utility costs in rates. Additionally, the'plan is contingent upon Entergy's ability to access the capital necessary to finance the planned expenditures, and significant borrowings may be necessary for Entergy to implement these capital spending plans. The domestic utility coiipanies have plans to'issue debt in 2000, the-proceeds' ofwhich will be used for general corporate purposes, inicluding capital expendture,'the retirement of short-tezr iidebttenessiand, in the case of Entergy Gulf States nhe mandatory redempkion of preference stock.'. On February 15 2000, Entergy Mississippi issued $120nmillion of 7.75% Series First Mortgage Bonds due February 15, 2003.. On Match-9, 2000, Entergy Arkanias issued $100 million of 7.72% Series FirstMortgage Bonds due March 1, 2003. 'P-roceeds of both issuances will be isd, in part, for, the retirement'of short-terrn indebtedness that was incurred for working capital needs and capital expenditures.
-On Februa'i'25,"2000,.Entergy Corporation obtained a 364-day -term loan in the amount-of $120 million, accruing interest at a rate Iof 6.7%: The proceeds are, being used .t6 inake an open-account advance to Entergy Louisiana in oider to -repay maturing debt Entergy Corporation will use any remaining proceeds for general corporate putposes and workingcapital neds. ' ' ' : :. -. * --a.: -: '.
During l999i cash from operations, the sale of businesses, anid cash-on hand met substantially all investing and financing -tequirements. of the domestic utility companies and System Energy. Entergi Corporation received
$532.3 million in dividend payinents from its subsidiaries in 1999. ) .
' . All debf aid tumon and preferred stock issuances are subject to regulatory approvali Preferred stock and
'debt issuances are subject to issuance'tests set forth in corporate charters, bond indentures;afid otireements.
'The domestic utility companies have sufficient capacity under these issuance tests to consummate the financings planned for 2000. The 'domestic utility companies may also establish special purpose trusts br limited partnerships as financing subsidiaries forthe purpose of issuing quarterly income preferred securities.
Managementiexpects the domestic utility companies and System Energy to-continue t refiiance or redeem higher cost debt and preferred stock prior to maturity,-to the extent market conditions and intercst and dividend rates are favorable. . --.. : Entergy's ability to invest in domestic and foreign generation businesses is subject to the SEC's regulations under PUHCA. These regulations limit t6:50% of consolidated retained earnings the total amount that Entergy may invest in douimestic and foreign generation businesses at the time an-investment is rnade. Using the proceeds from the sales of London Electricity and CitiPower, Entergy's FUCO and EWG' subsidiaries have the ability to inake significant additional investments in domestic and foreign generation businesses without the need of further investment by Entergy Corporation.
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ENERGY CORPORATION AII) SUBSIDIARIES MANAGEMENT'S FINANCIALDISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Entergy's global power development business is currentlyoconstructing twcombined-cycle gas turbine merchant power plants in the UK Saltend, a 1,200 MW plant in northeast England, will provide steam and electricity to BP Chemicals' nearby industrial complex, with the remaining electricity to be sold into the UK national power pool. Approximately 75 MW of the capacity will be sold to BP Chemicals under, a PPA with a term of 15 years. Originally scheduled for commercial operation in January 2000, Saltend's completion has bee. delayed due to construction problems at the site. The construction contractor has: submitted a risdconstiuction: schedule after substantial analysis, and currently estimates a phased-in completion of the.:.threernit plantiwithr the full plant in service by June 30, 2000. The total cost of Saltend is currently estimated to be approxiaey $824 million. The second plant, an 800 MW facility known as Damhead Creek is located in southeast England. It is expected to begin commercial operation in te fourth quarter..of. 2000, Management estimates.thaelotaLost-of Daehead. Creek at
- .approximately$,582 million.,<Th: fancing of the.constrnction of these two powerplants is discussedin Note,? to
.the financial statcnents.: s a .. - ,;,s.... . ... ,
- In October 1999, Entergy's global power development business obtained an option to acquire twenty-four GE7FAadvanced technology gas turbines, four steam turbines and eight GE7A.advanced tchnolgygas turbines.
..Delivery of the ttbine, is.scheluled forr00 I through.:2Q04, 'The tota, cost, of thturbines, including long-term service agreements with GE Powe.r Sysiemsis approximately.$2.Qbilion.i Managementlplansto usethe turbines in
-futue generatio~nprojects of the global power development- business, and. anticipates that the.acquisitoaof.the
,turbines willbe fudedtbya' combination of cash on hand, project fiancing: and otherexternal 6nancing Payments schedule,;tr.the. acquisition of these turbines are.$273,illionin 2000.S4l5:1ilioain;2001r and 31Lniillion in 2002.
, .. . On July 13,1999, Entergy's non-tility nuclear powe businsbought the 670 MW Pilgrim Nuclear Station located in Plymiuth, ,Massachusntts,*om Boston Edison, IThe.acquiition included. hplat,, real.e, tate . materials and supplios,ans4,pclear fuel fora purchase price of$81 millihna The purchw price was fundd with a portion of the proceeds from the sales of non-regulated businesses. As part of thePilgr pu Edisontansferred oasn,Boston a $471 million decommissioning trust find to Entergy's non-utility nuclear power business. After a favorable tax dterminatiomuegarding the trust fund Entergy retured $43 million of th:tust fuwd toBosto Edison, Based on cost. estimates provide& by an tside, consultant,. Entergy believes .that. Pilgrim's. decommissioning fund will be adequate to cover future decommissioning costs for thaoPilgrinplant withoutany additional deposits, to the trust-
! ,x': Entergy s uclear business has an outstanding offer t NYPA for the acquisition of NYPA's 825 MW James AEitzPatricknuclear power.pkknt located near Oswego, New.York andNXPA's 980MWndian Poipt$, nuclear power plantlQcated, in Westchester County, New York. On Feb uy,24% 2Q00, NYPA received a- competing, offer for the, purchase of these plants.. It is anticipated.that the NYPA. Board of Trustees will meet.in mid to, late. March to considerthe offers. If Entgy's offer is accepted, management expects toclQse.the acqisitioilbythe fourth quarter of 2000. Entergy would pay $50 million in cash at the closing of the purchase, plus seven annual installments of.
approxiately;$108 million each commencing.one.year from the date,.of-the'closing. Entergy projects that these installmentswill, be paid. from the. proceeds of the sale of power from the plants'and that Entergq. will. invest an additionalS100 million in the plants. . . Entergy,hbasalso made investments in energy-related businesses, including power marketing and trading. Unde PUHCA, the SEC imposes,a limit equal. to 15%of consolidated capitalization on the amount'that may be invsted in such bus'inesses,without.speific SEC.approval. Entergy's capacity to. ake additional investments at December 31, 1999 was approximately $2.2 billion. . . .. .
; ENTERGY CORPORATION AND SUBSIDIARES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES In 1999, Entergy Corporation paid $291.5 million in cash dividends on its common stock. Declarations of dividends on Entergy's common stock are made at the discretion of the Board. The Board evaluates the level of EntergY tommlon stock dividends -based upon Entergy's earnings and financial strenith. Dividend restrictions are discised ri No 8 to the finaiicial statements.
- : ip . :f. t .* s ., :. . . .-
In October 1998; '-the Board approved a plan for the repurchase of Entergy common stock through December 31, 2001 to fulfill the requirements of various compensation and benefit plans: The stock repurchase plan provides for purchases in the open market of up to 5 million shares, for an aggregate consideration of up to
- $250inli6i.::nJuly 1999, the;Board approved the commitment of up to an-additioial:$750 million toward the reuriof Euitergy Aconon stock through December 31, 2001. Shares are being purchased on a discretionary bagig.' :See Note 5 to the fixancial statements for stock repurchases and issuances miade during 1999..
'.1Entergy's capital and *financing requirements and av~ilable lines of credit are more thoroughly discussed in Ndtes 4,^16, 7, 9;and 10 to the financial statements. . . ma Entermv Corporation and System Enerev Pursuant to an agreement with certain creditors, Entergy Corporation has agreed to supply System Energy with sufficient capital to:
. ontain
; ; $ystezn. Energy's equity.capital ata.miniimum of 35% of its total capitalization (excluding
... .. ;.sbortten~feb?); is ..*- ; as.
..o permit the cntinuedcommercial operation of Grand Gulf 1;
- o. pay in full'all System Enegy jndebtednes for borrowed money when due, and o enable System Energy to make payments on specific System Energy debt, under supplements to the agreement assigning System Energy's ights inthe agreement as security for the specific debt.
The Capital Funds Agreement and other Grand Gulf I-related agreeints are more thoroughly discussed in Note 9 to the financial statements.
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ENTERGY CORPORATION AND SUBSIDIARIES MANAG]EMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT FACTORS AND KNOWN TRENDS Domestic Transition to Competition:. , The electric utility industry, for years has, been preparing for the advent of competition in its business, particularly in generation operations. For most electric utilities, the transition from a regulated monopoly to a competitive business is challenging and complex. The new electric utility environment presents opportunities to compete for new customers and creates the risk of loss of existing customers.. It presents opportunities to enter into ew businesses and to'restructurk existing businesses. .. . . . . For Entergy, it is a bmddable undertakings made uniquely difficult because the domestic utility companies operate. in five retail regulatoryt jurisdictions and are subject to the System Agreement; which: contemplates the integrated operation of Entergy's electric generation and, transmission assets throughout the retail service territories. Entergy is striving to achieve consistent paths to competition in all five retail regulatory jurisdictions. Progress was made in; 1999.when thc Arkanss and Texas legislatures enacted laws to.bring about. electric utility, competition. More progress is expected in 2000 as Entergy continues to work with regulatory and legislative officials in all jurisdictions in designing the rules surrounding a competitive electricity industry. State Regulatory and Legislative Activity Arkansas In April 1999; the Arkinsas legislature enacted a law providing for competition in the electric utility industry through retail open access on January 1, 2002. With retail open access, generation' operations will become a competitive business, but transmission'and distribution operations will continue to be regulated. The APSC may delay implementation of retail open access, bit not beyond June 30,' 2003. The provisions ofthe new law-o require utilities to" separate (unbundle) their costs. into generation, transmission, distribution, and customer service functions; o require operation cf trasission facilities 'by an organization independent from the generation, distribution, and retail operations; o provide for the detemiination of and mitigation measures for generation market power, which could require generation asset divestitures; o allow for recovery of stranded and transition costs if the costs are approved by the APSC; o allow for the securitization of approved stranded costs; and o freeze residential and small business customer rates for three years by utilities that will recover stranded costs. Entergy Arkansas filed separate generation, transmission, distribution, and customer service rates with the APSC in December 1999. The rates were based on the cost-of-service study that formed the basis of the rates included in the 1997 settlement agreement discussed in Note 2 to the financial statements. Hearings on the rate filing are scheduled for September 2000. If approved, these rates will become effective July 1, 2001. Entergy Arkansas also filed notice with the APSC in December 1999 of its intent to recover stranded costs. The APSC and various participants in the industry, including Entergy Arkansas, are currently in the process of implementing the legislation through various rulemaking and other proceedings. ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNICANT FACTORS AND KNOWN TRENDS Texas In June 1999; the Texas legislature enacted i law providing' for competition in the electric utility industry -'thiough retaml open access. The faw'provides for retail open access by most electricutilities, including Entergy Gulf States; on Jtnuaiy' I, 2002. With retail'open access; generation and'a new retail provider operation will be competitiie buisinesses, but titansiissioii and distribution' operations 'will continue to be regulated. 'The new itail provider function will be the primary point of contact with'the customers for most services-beyond initiation of electric service and restoration of service following an outage. The provisions of the new law: o require a rate freeze through January 1, 2002 with frozen rates beyond that for residential and small
.i coimfiercial customers of incumbent utilities; - .
" '-' require utilities'tooseparate (unbundle) their generation, transmission and distribution, and retail electric
'provider functions. Entergy Gulf States filed its plan in January 2000 with the PUCT to separate its functions. The plan included separate tratismission and distribution'companies;. -
o require operation in a non-discriminatory "maniner of transmission and' distribution facilities by an organization independent from the generation and retail operations by the time competition is implemented; o allow for recovery of stranded costs incurred in purchasing power and providing electric generation service if the costs are approved by the PUCT; ' - .
.o i'allow'securitiuiuif bfrgulatofy assetsnidstrandedcosts; *'
- 'provide for the determination of and mitigation measures for generation market power, and o i"reqihie utilities to file separated data and proposed transmission, distribution, and competition tariffs by April 1, 2000.
The market power measures include a limit on'the ownership of generation assets by a power generation company within a specified region. The implications of this limit are uncertain for Entergy Gulf States and the Entergy system. However, it is possible that Entergy Gulf States could be required to divest some of its generation assets if Entergy Gulf States is found to have generation market power. The legislation also requires affected utilities to sell at airctiori:at leat'60 days before January 1, 2002, entitlements to at least 15% of their ijstalled generation capacity in Texas.- The obligation to'auction capacity-enitlements continues for up to 60 months after January 1, 2002, or until 40% 6f ustomers'in'the jurisdition have chosen an alterinative supplier, whichever comes first.
* "The' PUCT and arious 'participants 'in the industry are currently in the process of implementing the legislation through various rulemaking and other proceedings. Two significant rules have been issued by the PUCT:
o A'code of conduct was approved bythe'PUCT in December 1999 to ensure that utilities do not allow
' ' affiliates to have a business advantage over competitors; -The rules' allow the continuation 'of shared services affiliates,'such as Eitergy Operations and Entergy Services. *Entergy adopted an internal code of conduct to ensure compliance with the new rules.
o Rules'governing the 'separated costs filing have been issued. Included is a provision establishing, as an "alternative to; a irkdiet-based return on equity, a piesumptively reasonable return on equity for a distribution utility at 200 basis points over its cost of debt. The provision allows the utility to provide evidence'that the'reiurn' should be 'higher. The rules also provide that the utility may propose a performance-based enhancement to the authorized rate of return, based an distribution and transmission company independence. Management does not agree'with the arbitrary level set in the rule, and will seek a higher return in its separated costs filing. A'workshop has been'held by'the PUCT to discuss opportunities to seek a performance-based return. ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCpUSSION AND ANALYSIS SIGNIFICANT. FACTORS AND KNOWN TRENDS Louisiana In March 1999, the LPSC deferred makingadecision on whether.compettion in te electric industry is in the public interest; However,, the LPSC staff outside consultants, and counsel were directed to work together to analyze ' and resolve. issues related to competition and then recommend a plan for its impletion to be considered by the LPSC by January 1, 2001. he LPSC, starf outside consultants, counsel,, and industry members are working together to develop a plan to be submitted to the LPSC. , Mississippi
* .>t*a
.. . I * . . .',,e..-
The MPSC issued a proposed transition plan in June 1998 and continues to hold periodic hearings and request informational.flings reganling various potential effects of retail competition. I February.2000, legislation was introduced in Mississippi to establish a study committee to consider competition and provide a report to the legislature by December. 1,. 2000. Management does not expect. deregulation in Mississippi to occur prior to 2003.
'See Not 2 to the financial stents for additional information.l New Orleans In 1997, Entergy New Orleans filed an electric business restructuring plan with the Council. The Council has not established a procedural schedule to consider electricity restructuring or Entergy's plan. TheCounci is conducting. hearings regarding retail gas competition. Entergy New Orleans. has, filed ,aplan in that proceeding outliningithe conditiQnm under which it could support retail gas competiton. The outcome of this proceeding is uncertain.
Federal Regulatory and.Legislative Activity. Open Access Transmission and Entergv's Transco Proposal .. Competition within the wholesale electric energy market increased with the implepMentation ofopen access traniission..t Open access:allows any supplier to transmit. electricity to its.cusiomers overtransmission facilities owned by a different company.. In 1996,.FERC required all ,puiblic"utilities that: it regulates to provide wholesale transmission access to third partie. FERC also required utilities to implement and maintain an open access same-time information system. Entergy's domestic utility companies made filings with FERC to complywith the FERC requirements.
- FERC policy,. strongly fvors independent control of transmission operations to enhance competitive wholesale power markets. In response to this policy, Entergy proposed, the formation, of a regional transmission company (Transco) and sought guidance from FERC on the proposal. he proposed.Transco would be:
- a separate, independent, incentive-riven transmission co mpany regulated by FERC;.
a govered'by, an independent board of directors with no ties to Entergy or,to any power market
- participant; .. .... a ' . . .
- o composed of the transmission system assets transfeqrWl to it by the domestic utility companies and other transmission owners; .
o operated and maintaired by employees who would work exclusively for the.Transco and would not be employed by Entergy orthe domestic utility companies; and O passively owned with no voting rights by the domestic utility companies and other members who transfer assets. ENTERGY CORPORATIONAND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT.FACTORS AND KNOWN TRENDS In July 1999, FERC responded to Entergy's proposal and stated that passive ownerip of a Tansco by a generating company or other market participant could meet FERC's current independence and governance requirements under . certain circumstances. However, FERC raised concerns about the following issues regarding Entergy's proposal: theselectionproces forthe ranscos b6addf dir .; the Trasco obigioh trd'fduy t embrcopams,
-o 'the abiltyofte Taoo to rlse adtilonaca 'ial and.--.-:
o restrictionsonsiacfon'l~ the Tra sco and the mmber companies-
'Nanaitiant Qe authorities
'11~~~ - d to mak6e additional fings durin 2000. with feder addiessin sforh ~a orinai and l,ostcate,
~ ocal regulatory the Transco. If authorities addrsing ese and oer issues and sekffg neoessary approv;is approved, the Transco id'bcome operationai in 2001. ' ' -,
In a rulemaking tbat Will aflec the Transco, FERC issued Order-2000 ineiebr 1999. Order 2000 calls for owners aiid operators' of'traiiission Iineiiin'the United"States to join regional traniiission organizations ("RTOs') on a voluntary basis. Order 2000 requires public utilities that own, operate, or control interstate tiansmissiofatilities to file by October:15, 2000 ipropsal forlhow they fitehd:to *articipat6in`-an RTO or, alternatively, to describe'the steps they have-takei to do so or the re'asons why it'is not 'efsible to participat6 in'an RTO^ FERC'sOrder-2O00requires'hatRTOs'be ective nolaterthan Decemnbe15;2001... 4 ' -- : : FERC is maintaining flexibility as to the structure of RTOs.1'For examplcit' appears tht RTOsiy 'be for-profit or not-for-profit and may be organized as joint ventures or legal entities of various types. However, RTOs will be required, among other things, to be independent narcet participants, to have suffibient eeal sc- toI.iaitain reliability and efficiency, to be non-discriminatory in granting service, and to maintain'operational control over their rjegional transmision systems:. Z *.,
.;, ; ... *9' Vv 4 -,
'The' Transco, an independent, for-profit'transitissiocf company which has already ben proposed to FERC by the domestic utility comnanies, 'is Egy's preferred apiOaCh for complying vii'FERC's Order 200b. However, Entergy is also exploring other means for complying with Order 2000. .' : '
,~~~~~~~~4 * , 4 . 1 4 , ,; .!*;J-9N1m&;
Dereinlation legislation .: Over.-the past several years, a number of bils, have been introduced in the ,United States Congress to deregulate the generation function of the'electric power industry. .The bills gene~illy hayq provisions t`iat would give retail. consumers the ability to, choose their own electrcservice ptoyider. .,Entergy Crporation has supported some deregulation legislation in Congress that would lead,to. an orderly trans4,oc.to competion and.would.so epeal PUHCA and PURPA. Congressional sentiment appears to be against mandating retail competition by a certain date and in favor of clarifying state authority to order retail choicef1br*9sumers. Congress.adjoqurod-in 1999 vithout final action on a deregulation bill by a committee of the House ir Senate. Industrial and Commercial Customers. . -. . . 4 ,4... . . . . . . . . :4 .4
'.;.. .The domestic utility companies face the risk of losing customers due to competition.. Some of their large industrial and commercial customers are exploring ways to reduce their energy costs., In particular cogeeraton is 'anoption available'to a significant portion of the domestic utility companies' industrial customer base. Ihe domestic utility companies have responded by working with some industrial and commercial customers and negotiating eleciric service contracts that provide service .at rates lower than would otrwise be charged Despitc tese actions, Entey Gulf States and Entergy Louisiana have lost revenue in recent years from large industrial 'customers who have completed cogeneration projects. However, material losses to cogeneration are not expected in 2000.
- EN;1ERGY CORPORATION AND SUBSIDIARIES
.'MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT FACTORS AND' KNOWN TRENDS
",State and ocal Rate Regulation
'The retail rigatory basis for setng rates for electric service is 'shifting in some: jurisdictions from traditional, exclusively cost-of-service regulation to iinclude, performance-based elements. Performance-based formula rate plans are, designed to reward, increased efficiency an4 prdctivit W'ith utility shareholders and customers sharing in the benefits. Entergy Mississippi aind Ent , Louisiana have ipmented performance-based rate plans. These companies made the fouowingfiling iiresu ii n 1999: -.
,,: . . Entvrgy Louisiana submitted its formula rate plan filing fr the 1998 test year and implemented a rate
.2'- & ,,'i-'uction of approxim~tjrna .1S5.0 million,. effective Angiit 1,-99. 'Entergy Louisiana's -filing is
';' ' . sujeci t6'Werier'revinv by the tPSC,'i;ch nay result inii'a'n'-i i c in rates.
o Entergy Mississippi implemented a $13.3 million rate reduitii fte May 1999, based on ItS
*s.. 4,!f~orua rate plan>filing fbr.thol998.test yeaMr.. InJne l999,,gntergy;ississippi revised its filing, reuliang in. Aad~d~ial rate reductio of approximately $1., million, eflective July 1999.
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..AI;9f thedoticp utty iompardes have recently beenordered to grant base rate reductions and have refundd or
.,..creditpd: ctomers.,1br,,.previous overcollections of rates.- The. continuing. pgtern:of rate reductionsreflects completion of rate phase-in plans, lower costs.of servicet ordered by, regulators, and lower authorized. retrns on common equity. The domestic utility companies' retail and wholesale rate matters and proceedings are discussed more thooughb i4 ot,2 to the financial statements..
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Other Electric UtilitATrends,; , .- . .- ,., - ,. , -,
- Utility mergers and joint ventures involving domestic and overseas companies are another continuing trend in the industry. In some, areas of te country, utilities have either sold or are attempting to sell all or a substantial portion oftheirgeneratioj,assets in prr4er tofocus.their businesses on transmission and/or distribution services.
.!Eekrgy, thrbugfits global povnr .devqeIpment and nofTi~lllty nuclear power businesses, intends to expand its generation business. While the global power development business is focused on building new. power plants or modifying existing. plants, the. nuclear business expansion plan focuses on acquiring generation assets of other utilities. ,
In'-- sonic areastdf the Unted' States, municipalities- ae exploring.the possibilityof establishing their own el'ctric ditibdtion s s, ihich wo'uid result i'both residential and large indistrial customers leaving some in e`stt'rinedmilities Ifthi effoi&of a mimicipality are successful, the ivestor-owied utility may be unable to tr~cve~rsme costi'induired for th-purp'ose of serving those customers;-
'Coitinued Ariblfration of SFAS 71 `ind Stranded Cost Exnosure .*' '
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.The domestic utility companies' and System Energy's financial statements primarily reflect assets and costs based. on existing cost-based ratemaldrng regulation in accordance with SFAS 71, "'Accountiig for the Efficts of Certain Types of.Regulation." Urder traditional ratenaking practice, regulated electric utilities are granted exclusive geographic franchises to,'sell electricit*. In'ret the utilities arei obligated to 'iake investments and incur obligaticiLs to serve customers. Prudeatly incuired costs. are recoiered fro'customers 'along with a retur on invRsi egt eulators may require utilities to defer collecting from customers' some operating costs until'a future
'date.'.Ihese -deferred costs are recorde'd as regulatory assets in the financial siatnf. In order to continue applying SFAS.7-lo- its financial statements, a utility's rates must be'set by ai independent regulator on'a costof-service basis and the rates must be'chag t and collected from customers.
ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT.FACrORS AND KNOWN TRENDS As the'geration portion of the utility industry moves toward competition, it isilkly that generation rates will no longer be set on a cost-of-service basis. When 'that occurs, the genernticn portion of the business could be required to discontinue application.of SFAS 71. The result of discontinuing application of SFAS 71. could be the recording of asset impairments. and: the reimoial of egulatory assets and liabilities from .t ba1ance sheet. Management believes that definitive outcomes have not yet been determined regarding the transition to competition in each of Entergy's jurisdictions. Therefore, the regulated operations of the domestic utility coipanies and System
- Energyrcontinue toapply.SWAS 71... Arkansas and Texas have enacted retail oper access laws aswdicribed above,
- but. Enterybelieves that. signifiCat issues rean to .be addressed by Arkansas atfd Texas regulators,: and the enacted laws do not provide sufficient detail to determine definitively the impact on Entergy Arksas'-and Entergy Gulf States' regulated operations.
As Entergy's domestic utility companies move toward conpetition, there are costs or coimts that have
-:benincifrred under. a regulated pricing system that'nigit be impaired or not .recovered int a.competitive market ;-These costs are-referxed to-as stranded costs. Ihe restucwuring laws enacted iin Arkinsas.and Texas provide an .opportunity for the recoveiryof sttanded.costs foUowing review and approval by te APSC or the PUCT. .Nearly all of Entergy's exposure to stranded costs involves comm ints that were approved by reglators. These exposures.
include the following:
.~~~~~~~~~~ . . .i the: allowed cost of constructing its nuclear generating, plants (the i&mestic utility companies' net invhstent innuclear generation is provided in Note Ito the financial tA s),. .
* .n: . o long;-tem contracts:to.purchase power-underthe Unit Power Sales Agreetent and associated with the
-Vidalia prqject, which may.,require paying above-mket prices in :a cmpetitive environment (detail
-concernngthese obligations is providedinNote.9 to the financial statements),
o nuclear power plant decomnissioning costs (detail concerning these costs is provided in Note 9 to the financial statements); o the construction cost of some fossil-fueled generating plants and related contractsto bfuel that. may be above-market price in a competitive market (detail concerning the domestic utility companies' net investment in generation other than nuclear, which is primarily fossil fueled, is provided in Note 1 to the financial statements, and detail concerning certain fuel contracts is provided in Note 9 to the financial statements);and. . o regulatory assets reflected in the bance shets. :. *. As of December 31, 1999, the amount of these potentially strandable costs for Entergy reflected in the
-- financial statements is approximately $1.8. billion atlEntergy Arcansis, $33 billion at Ezitrgy Gulf States, . $25 billion-at Entergy Louisiana, and $0.3 billion at Entergy Mississippi.. The estimated net present value of the *:!obligations described above that are-not ieflected in the.balance sheets for Entergyis approximately:$0.9:billion at *.:.Entergy.Arkansas,40.4 billion at Entergy Gulf States .$.5 billion at Entergy Louisiana, $0.6 billion at Entergy *Mississippi, and $0.3 billin at Entergy New Orleans.- In the nonial course of businessdepreciation, amorfization, and payments under the contractual obligations will continue to reduce these amounts. The actual amount of these costs and obligations tat will be identified as stranded will be determined in regulatory proceedings.: These proceedings will commence in Arkansas and Texas in 2000. The outcome of the proceedings cannot be predicted and w.:uill depend upon a number of variables, including the tining of stranded cost detennination, the values attributable
- .to certain/strandable. assets; assumptions concerning~ fiture market prices for electriity, .and other factors. In addition, because transition legialation or regulation is not in place in Louisiana, Mississippi,. or New Orleans,
- 'x.Entergy cannot predict how those jurisdictions will treat-stranded 'costs and whether Enterg will be able to recover
'allorapartofthecosts inthosejurisdictions.
I ENTERGY CORPORATION AND SUBSIDLARIES
'MANAGEMENT'SFINCIAIJDISCUSSION ANI) ANALYSIS SHINIFCANT FACTORS AND KNOWN-TRENDS
, .Until thdprcedigs n.Akansas and.-Texasprovide.aigrea6revel of certainty, it is anticipated that both
. Entegy Aansas'and Entery Gilf States will continue to.appy SEAS -71totheir regulatedc operaio: SFAS 71 ..twill continue abir'applieL iift Losna,*iMississippi, .and New Ozleans jurisdictions pending legislativeor regulatory ddvel6prments relafiugitotransition to competition. 4if SFAS 71jis.no longer applied by the respective domestic.utility companksand;SystenEnergy, and regulation or.lbgislation does not allow for recoveiy of all or a portion of its stnded costs,.there could be a materialhlverse impdt on the ectedomeiti6 utilitycompanies' and Entergy'itfinancial statemintsc However,'Enterbelieves that the amount of costs th willbc st ed without a 'means o£recovery. or mitigation -for the domestic.utility companies.will bmsignificantlyAless thaz:he amounts
'referied to above.' .Thapplibaticyn of SFAS 71 is discussed-morethorouglily in Note. 1to the financial statements.:
Year 2000 Issues
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.a .. Entergy didnot bxperience any' significant problems! in operations ddc.tq the rbllover to ar:20Q0; dnd there
- were nQ power outages caused by the rollover. Entergytwill. continue to monitor additional dates; during 2000 that
*could be ff to.year 20, 0bythrolover but does not expect material. problems .based ori its testing and the results ofthdJamary!l;2000 rolover.; : ' i' .: ra, ,':. .. . - . ", .. ..
Management expects to spend approximately $54 million for maintenance and modification costs related to year 20QOissues etWeen1998:aiid mid-2000. EntewgythaWsincuriediapproximately $51 riiillio of this total through December 1999. Themaintenaniceior inodification osts associated.with year; 2000 .cornpliance are expensed as incur coso-ncsoftwaretcapit iahdiamord owhile.the over the software's usefulif-. The costs are beingifundedthrougbi bpqratingcash flows. In certain of Entergy's jurisdictions! the expenses hai4 been defelned and will be recovered from ratepayers;into 2002; Total capitalized costs for projects iceleratddue to yar 2000 were
. estiniated to be $2 milli6n,.vhich is tho amount Ehtergy hasincurred through Deceiberl999.;i . :
; ,Ennisexposetothefr lwinirk4et'sks.,
o the commodity price risk associated with its power marketing and tradingbusiness ;'.. . o the interest rate risk associated with certain ofits variable rate creditfacilities; and..i O the interest rate and equity price risk associated with its investments in decommissioning trust funds.
-;li Enterrgs'powerni.irketing and trading busineg§ enters into sales and purchase of electricity. and natural gas for delivery intheifuthre,,rBecaue market'pticsoftelectricity xid natual .gascanwbe .volatiel,Entergy's power miArkting'iandt trading~,business lis exposed .to, risk arising from diffrencesi.- betwe the!. fixed .prices. in: its commitments and fluctuating imarketprites. 'To mitigate it exposure,)Eritergy'i: powez-marketing and trading business enters into electricity and.natural gas futurest swaps, option contractsand electricity forward agreements.
The business also.manages its exposurewith policies liniting its exposure to market risk and daily monitoring of its potentialfinancial exposure. * !'.- '.i~s;. . s'*,* .: . I '.ei~w*>:;
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, Entdrgy's power marketing and trading business ises a-value-at-risk model.(VAR} as one measure of niarket risk fof thtraded.portfolio.: YAR acts. in conjunction with stress testing, position reporting and:profit and-loss reportinginorderto measure ancd control the risk inherent inthe traded portfolio 'Iheprimary use-of VAR is to provide a bendhrark for market risk contained in theitrading portfolio. VAR does rnot function as a comprehensive measure of all risks in a portfolio. Furthermore, VAR is only an appropriate riskfmeasure for products traded in relatively liquid markets.
-. 52 -
ENTEY:OR ORATrNAND)SVBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT FACTORS AND KNOWN TRENDS Management's VAR methodology uses a variancelcovariance approach to the measuren of markt risk.
.The .varancelcovariance approach ass nes jhati , andoz-,y
'p!e4,foq.p pcs,,in W. hprices are jognormallyo d-stribuied~jj appracl eq , ires~ ~pjlowips:. , ,.b. !
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$6.1 million as of Decmber 31,- 1998. D 11itil,tARw Las $3,7mi.li-vitha igh month-end VAR of $7.1 million and a low monthend VAR of $2.0 mi on.
Management's calculation of VAR exposure resents an estimate of reasona..ly.ossiJbiBpt loses ithat would be recognized anits portfolio of derivative financial inst ents, assuming hypotheticalmovenients nprices. It does not represent the maximum possible loss or an expected loss Ctat may occur, becus flegains. and losses will differ from those estimated based upon actual fluctuations in market rates, operating~evposures. an~d the timing thereof, and changes inthe portfolio of derivative financial instruments duing the year. - Entergy uses interest rate swaps to reduce the impact of interest rate changes on certain variable-rate credit facilities associated with its global power development business. Under the interest rate swap agreents, Entergy receives floating-rate interest payments and pays fixed-rate interest rate payments over the life of the agreements. The floating-rate interest that Entergy receives is approximately equal to the interest it must pay on the variable-rate credit facilities. Therefore, through the use of the swrap ageme, Entergy effectively achieves a fixed rate of interest on the credit facilities. These swaps are discussed more thoroughly in Note 7 to the financial statements. Enter is exposed to fluctuations in equity prices and interest rates through its nuclear decommissioning trust funds. The NRC requires Entergy to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, and Pilgrim. The funds are invested primarily in equity securities; fixed-rate, fixed-income securities; and cash and cash equivalents. Management believes that its exposure to market fluctuations will not affect results of operations for the ANO, River Bend, Grand Gulf; and Waterford 3 trust funds because of the application of regulatory accounting principles. The Pilgrim trust fund holds approximately $341 million of fixed-rate, fixed-income securities as of December 31, 1999. These securities have an average coupon rate of 6.67%, an average duration of 6.2 years, and an average maturity of 9.5 years. The Pilgrim trust fund also holds equity securities worh approxiately $81 million as of December 31, 1999. These securities are held in a fund wMich is designed to approximate the Standard & Poor's 500 Index. The decommissioning trust funds are discussed more throughy in Notes 1 and 9 to the financial statements. I Report of Independent Accountants To the Board of Directors and Shareholders of Entergy Corporation: _~ * :i}a' -, --......... In our opinion, thf angonsodted balanrce, sheets and the related consolidated statb iits of inc6nid, of retained earnhMM comprehensive income and paid-4fildaital'aid of cash flows 'present fairlywi iri'materiil, reIp6ts, the financial position of.Entergy Corporation and its subsidiaries at December 31, 1999 and 1998 and the results of their operations andtte i&h flows fofcofthie the eridd ehded Deccinbir 31,i1999 in confonnity with accounting principles generally accepted in the United States. 'Thee fiinciL 'tatemenits are the responsibility of the Coman3's ,iniei our pibitd'expes anoopinion othede finaicial sttdnts based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, *which require titevfpl 'afid: periorm the audit' tb obtain reasonable assiurncchbout whether the financial statements are free of material misstatement An audit includes eaminingon a test basis, evidence supporting the amounts and discl)sures in the financial statements, assessing, the accounting principles used and sntlicatr 'sta niad8'by g'it" and:ealfatin"g the berill financial statement presentation'. We believe that out audits'provide a reasonal, basis forth opinion press aboe. ' Prio&waierhos6Coper LLP - -. 8. 8 .
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- ENTERGY CORPORATION AND SUBSIDIARIES
'MANAGEMENT'STFINANCIAL DISCUSSION AND ANALYSIS
-RESULTS OF OPERATIONS Entergy's results of operations are discussed in two business categoried, -*Domestic Utility Companies and System Energy" and "Competitive Businesses." Domestic Utility Companies and System Energy is Entergy's predominant business segment, contnbuting 73% of Entergy's operating revenue and 93% of its net icomein 1999.
Competitive Businesses include the following segments detailed in Note 14 to the financial statements: power marketing and trading, Eitergty London, CitiPower,-and all other, All other.principallyinludes..global power development, non-utiity nuclear power, and the parent company, Entergy Corporation. ,The elimination of power marketing and trading mark-to-market profits on intercompany power transactions is also included inall other. Note 14 to the financial statents.provides a detailed breakdown of financial information by business segment. Net incomne for the year cd December 31, 1998 'rled 'tii'reults of 6peiations for Entergy London, CitiPower, Efficient Solutions, Inc., Entergy Security, Inc., Entergy Power Edesur Holdings, and several telecommunications businesses. These businesses were sold between late 1998;and d1999, and are therefore not included in some or all of 1999's results of operations. ,. Net Income Entergy Corporation's consolidated net income in 1999 decreased compared toT998 primarily due to: i .o ,th e the D abserc 'oZg;U6don-Eleafricity's results of operations in 1999 because-of the sale of the business in Deccmber '1999,*nd ' '~ o the gains on the sales of London Electricity and CitiPower reflected in 1998 results. The decrease is partially offset by gains on the sales of other businesses in 1999, the loss on Efficient Solutions reflected in 1998 results, a 5% increase in domestic utility net income, and a redictiohiz inet lss for the power marketing and trading business. Entergy' Colfj ation's consolidaed iet intome in l99;increased comparlso A 997 rimarily due to the gains on the sles of oni;n Eledtritit and Cifi6wer and the UK wmrall profits tax rAef etedW 1997 results. to.;,<.* . , . .4^ .*.e J
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4.' I ]ENTERGY CORPORATION AND SUBSIDIARIES e:/MANAGEMENT'S FINANCIALDISCUSSION AND ANALYSIS
'RESULTS OF OPERATIONS ..,Domestic Utilitv Comnanies ancl System Enerv.
.' Revenues and Sales *;: . ,
. .. ^The changes in electric operating revenues for Entergy's domestic utlitbr companies and System Energy for 1999 and 1998 are as followsw;- . . .
- s' ~.
;- ' - :- ;'I . - I hcreasel(Decrease)
Description 1999 1998
, r .', .. '.1 f. ... .:' ~-'(..... '~ nMllions)
.. . .. revenues
* ;: ,,. i $81.2 -($290:3)
Raeridtrs (164.i- (108.6) Fuel cost recovery 188.7 (80.6) Sales volume/weather 5.3 187.3 Other revenue (including unbilled) . 74.3. (191 .Q)..
- Sales for resale' (50.3 80.7 Total"' - $135.'1*- ($402.5)-
Base revenues
* ~: 6usesipreased a rev99en $8.2miT on pmariuy'n >e*t; o a $93.6 million reversal in Juie 1999 of regulatory reserves associated with tie accelerated amortiiation
*of accounting order dferrals in~copjenction with the nient agreement in; Entergy Gulf States' Texas of196nd t is lbe sl t agneenwas approvdd by th6 PUCT i June
'1999:' ,' be'Anet'income efect ofti ivral slargely offset by the amortization of rate dfrrals discussed below, and o a reduction in the amount of reserves recorded in 1999 at Entergy Gulf States compared to 1998 for the anticipated effects of rate proceedings in Texas.
Partially offsetting these increases were: o annual base rate reductions implemented for Entergy Gulf States' Louisiana and Texas retail customers in 1998 and 1999 and Entergy Mississippi customers in 1999; and
- reserves recorded by Entergy Gulf States' Louisiana jurisdiction, Entergy Louisiana, and Entergy New Orleans in 1999 for potential rate actions or rate refunds.
In 1998, base revenues decreased primarily due to base rate reductions, reserves for refunds, and other regulatory adjustments totaling $216.5 million ($129.0 million net of tax) at Entergy Gulf States. These rate reductions and other pending rate proceedings are discussed in Note 2 to the financial statements. ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Rate riderrevenues . - . Rate rider ievenues do not affectiet income because specific incurred expenses offset thm. In 1999, rate rider revenues decreased $164.1 million due to a revised Grand Gulf rider implemented at Entergy Arcansas and Entergy Mississippi. The revised rider eliminated revenues attributable to tbB Grand Gulf phase-in plans, which were completed in 1998, and implemented the Grand Gulf Accelerated Recovery Tariff (GGAR1) alldwing accelerated cAveij aid payment of a portion of the two Eampanies' Grand Gulf purchased power obligations. The tariffs became effective in January 1999 and October 1998, respectivehj. Ii 1998, rate rider revenudecreased $108.6 million due to the decline mthe Grand Gilf 1 cost recovery rate rider revenues at Entergy Arkansas, reflecting scheduled reductions M the phase-in plafi that was completed in November 1998. Rate rider revenues also decreased due to reductions required by the settlement agreement between the APSC and Entergy Arkansas. The settlement agreement with the APSC is discussed in Note 2 to the 3Enancial statments. Fuel cost recovery revenues Fuel cost recovery revenues do not affect net income because they are an increase to revenues that are offiet specific incurred fuel costs ;'
In 1999, fuel ostrecoveryrevenues increased$188.7miUionpfimarilydueto:
0 -an incriased fuelfact& ad'a new fuei surcharg i .lemizted in Enterr'Gulf States' Texas jurisdiction in 1999; o recovery of higher-priced fuel and purchased power costs at Entergy Louisiana due to nuclear outages at Waterfbrd3i99,and - ' o an increase in the energy cost recovery rate effective April 1999 and the completion of a customerrefund obligation in 1998 which lowered 1998 fuel cost recovery at Entergy Arkansas. In 1998, fuel cost recovery revenues decreased $80.6 million primarily due to lower pricing at Entergy Louisiana resulting from a chaiige imgerneration mix. -' -'
*;'* .21' ., .* . stu..'
. ,..e,..'i' Sales volume '" ' ' ' '
In 998, ales volume increased S187.3 million as a result of significantly'warnmr weather at all of the domestic utility companies. - Other revenue ' In 1999, other revenue increased $74.3 million primarily due to a change in estiiriaied unbilled revenues for ' the domestic utility companies. 'The changed estimate more closely aligns the fuel component of unbilled revenues with regulatory treatment. This change is expected to affect comparisons to applicable prior perid amounts through the first quarter of 2000. Comparative impacts are also affected by seasonal variations in demand.
. ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS FINANCAIAL, DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS In 1998, other revenue decreased $191 million primarily due to the revenue portion of the gain recognized in December 1997 on the settlement by Entergy Gulf States of litigation with Cajun, the effect of which was partially offset by regulatory reserves recorded at Entergy Gulf States, in 1997. Other. revenue also decreased due to unfavorable pricing of unbilled revenues resulting from rate reductions at Entergy Gulf States.
.. Sales fr resale... .. .
.. , 199,9, sales for resale decrased $50.3 million primarily due to4le loss of cerai muncipa co-op customer contracts at Entergy Adcansas, .. . . .; , . .
In 1998, sales for resale increased due to increased sales to non-associated companies,. particularly at Entergy Arkansas, and increased demand at Entergy Gulf States . .
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Expenses ... . . Fuel and purchased power expenses In 1999, fuel and purchased power expenses increased due to: O higher gas and purchased power prices as well as increased gas usage at Entergy Arkansas and Entergy Louisiana; o higher fuel recovery, ,due to an increased fuel, factor and fuet surcharge in Entergy Gulf States' Texas jurisdiction; and
. o. an increased energy cost recovery rate in 1999 and the completion. of a customer refund obligation in
' 1998 which lowered 1998 fuel cost recovery at Entergy Arlkansas.
These increases were partially offset by decreased fuel eqenses at Entergy. Mississippi as a result of lower
*.tptal generation. . . ..
Other operation and maintenance expenses In 1999, other operation and maintenance expenses increased ruarily due to increased customer service and reliability improvements throughout the system, increases in storm damage accruals and loss reserves across the system, and increases in maintenance work at Entergy Arkansas and Entergy Mississippi. In1 .1998, other operation and. maintenance expenses increased primarily due to the 1997 settlement of litigation with Cajun, which resulted in the transfer of the 30% inte'rest in River Bend owned by Cajun to Entergy Gulf States. Entergy Gulf States' operating expenses in 1998 included 100% of River Bend's operation and maintenance expenses, as compared to 70% of such expenses for the year ended December 31, 1997. This increase was partially offset by decreased non-refueling outage related contract work and maintenance performed at Entergy Louisiana and lower 'contract labor, materials] and supplies expense, and insurance and materials and supplies refunds at System Energy. ENTERGY CORPORATION AND SUBSIDIARIES
-MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS O-:OPERATIONS Depreciation and amortization expenses In 1999, depreciation and amortization expenses decreased due to:
o lower depreciation-at Eztergy Gulf States as a result ofthe write-down of the River Bend abeyed plant as required by the Texas rate settlement and a review of plant in-service dates; and O reduction in principal payments associated with the sale and leaseback in 1989 of a portion of Grand Gulf 1 at System Energy: Other regulatory charges In 1999, other regulatory charges decreased due to: o lower accruals for transition costs in 1999 at Entergy Arkansas; o a change in the amortization period for deferred River Bend finance charges in the Entergy Gulf States'
- s - " 'Texasril)689diciion;and o deferral of Year 2000 costs at Entergy Gulf States and Entergy Louisiana in accordance withian LPSC order.
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These decrease's were partially offset by increased charges at System Energy as 6!-'result of the implementation ofthe GGART at Entergy Arkansas and Entergy Mississippi. In 1998, other regulatory charges increased primarily due to: o additional accruals of $74.0 million ($45.0 million net of tax) for the transition 'cst account at Entirgy Arkansas; and o the decrease in the under-recovery of Grand Gulf 1-related costs at Entergy Mississippi. ' Theincrease was partially offset by the $15.3 million ($9.3 millionn'et of ta4j reversal of 1997 reserves at Entergy Arkarsas for previously deferred radioactie waste iility costsinDecember
...ost in c
1998...*......fi..
.e*e*n-b*r1 Enterry Xca~n~ssetflement agreement w~ith'the APSC established the transition 'cost account to collect earnings in excess of al aloiwed return on equity fdr offset against potential stranded costs whexi retail a'cess is implemented.
Amortization of rate deferrals ' - In 1999, amortization of rate deferrals decreiised due to the completion of Grand Gulf 1 rate phase-in plans at Entergy Arkansa and Entergy' Mississippi in 1998. These decreases were partially offset by icreased amortization'at Entergy Gulf States due to a reduction of accounting order deferrals in June 1999 in accordance 'with the Texas settlement agreement. In 1998, amortization of rate deferrals decreased because of the completion of rate phase-in plans at Entergy Arkansas, Entergy Gulf States (Louisiana jurisdiction), and Entergy Mississippi.
- 59.
ENTERGY CORPORATION-AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Other Other income In 1999;, other income increased primarily due to an increase in AFUDC resulting from an adjustment recorded in the third quarter of 1999 on certain capital projects. .. .,; In 1998, other income increased primarily due to lower rserves for regulatry adjustments recorded in 1998 than in 1997 at Entergy Gulf Stats. This increase was partially offset by interest income related to the settlement by~iineri Giif States' of litigation with Cajun recorded in December 1997. . v Interest charges.... .. In 1999, interest on long-term debt decreased de to retirement and refinancing oig-term debt at the domestic utility companies and System Energy. ; Other interest increased in 1999 primarily due to interest on the potential refund oSystem Energy's proposed rate increase. In 1998, interest charges decreased due to the retirement of certain long-term debt at the 6onestic utility companies and System Energy. Competitive Businesses . Revenues and Sales Competitive business revenues decreased approximately $2.8 billion for the year ended December 31, 1999. The decrease was primarily due to the sales of E9ter y London and CitiPower in 1998 and decreiasfsales revenues in the power marketing and trading business. The decreased sales revenues in the power mrn~izi and trdig business resulted from decreased electricity trading volumein the peak summer months in 1999 compared to 1998. However, theinpact on net income from these decreased revenues was more thi .offst.by deireased fuel and purchased power expenses as discussed below, resulting in areduction in ojperatzng ioss for this business for the year ended December 31, 1999. The decrease in revenues was partially offset by an increase for the non-utility nuclear business resulting primarily from acquisition and operation of the Pilgrim plant in 1999. Competitive business revenues increased $2.4 billion in 1998 primarily due to increased sales volume in the power marketing a dng business. This business'volume increased call in 1998 due to increased marketing efforts and significaintly warmer weither. The impact on net income fromthese revenue is offset by increased power purchased for resale as discussed below. ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
- - RESULTS OF OPERATIONS
.Eipenses a.....:. . }.-*..i.
- gFuel and purchased power expenses -.
Fuel and purchased power expenses decreased for the.year ended December3l, 1999, ptimarily due to:
... . . . :.::1 .
o the businesssales previously discussed;, - o decreased electricity trading volume in the power marketing and trading bushiess; and o a $44 million ($27 million net of tax) counterparty default incurred in 1998 by the power marketing and trading business. Vo~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I -i 8;s e . . # n - .. *-;. >*i These decreases arelpartially offset by increased gas trading volume in the power marketing and trading business. In 1998, purchased power expenses increased primarily due to significantly increased power trading by the power marketing and trading business. he ower mareting and trading'business also incurred a $44 million ($2tiiliiinrtof*)unteiptydeflliii998. i-. . . . .z.!;, .. O6beroperaiih mian i-iceesnes '- ' ' Other operation and maintenance expenses decreased for the year ended December 31, 1999 primarily due to the business sales previously discussed. The decrease was partially offset by: :.. .:.'. power nriaeti aftd irading business resultiig prinaiiroin inc eased risk git aftn kba-office Suppott and
- ' ' o an increase for the oh-tility nutearpo'wer'business resulting primarily fr6 acquisition and operation of the Pilgrim plant in 1999.
In 1998, other operation and mainteiceekphs increzed rimiydue'to:- acquiisition of.security companies whose operaion and maintenance expenses were included in 1998 but 1-9.
.;noti997;.and - .ines o higher transmission expenses for the power marketing and trading business dueAt6 significantly increased
.powertrdiugsalesvolume. ., ., ..
Other Other income . . ; , , . ;- , . Other income decreased for the year ended December 31, 1999, due primarily to the gains recorded in 1998 on the sales of Entergy London of $327.3 million ($246.8 million net of tax) and CitiPower of $29.8 million ($19.3 million net of tax). The decrease was partially offset by the following: o interest income of $58.5 million in 1999 on the proceeds of the sales of Entergy London and CitiPower, o a $26.7 million ($17 million net of tax) gain on the sale of Entergy Power Edesur Holdings in June 1999; o a $12.9 million ($8.0 million net of tax) gain on the sale of Entergy Hyperion Telecommunications in June 1999; ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS o a $22.0 million ($6.4 million net of tax) gain on the sale of Entergy Security, Inc. in January 1999, including a true-up rcognized in December 1999; o a $7.6 million ($4.9 million net of tax) favorable adjustment to the final sale price of CitiPower in January 1999; a $68.6 million ($35.9 million net of tax) loss one the sale of Efficient Solutions, Inc. (frmerly Entergy Integrated Solutions, Inc.) in September 1998; o $32.8 million ($21.3 million net of tax) of write-downs of Entergy's investments in two Asian projects in 1998; and-:,' o favorable experience on warranty reserves fbr the businesses sold during 1998. In 1998, other income inereased primarily due to the gains recorded on the sales of Entergy London of $327.3 millio'n ($246.8 million net oftax) andCitiPowerof$29.8 million (S19.3 iillionnet oftax). Thisincreasein 1998,wasparialiyoffsetby:,- . . o the $68.6 miion ($35.9 nillion net of tax) loss on the sale of Efficient Solutions, Inc. in September 1998; and o $32.8 million ($21.3 million net of tax) of write-downs of Entergy's investments in electric. generation projects in Asia, one of which was sold. Income taxes
,.The effective income tax rates fbr, 1999, 1998, and 1997 were,37.5%/i, 25.3%, and 61.0%, respectively. The effective income taxrate increased in 1999 primarily due to the items discussed below, thatoccurred in 1998. The increase !as partially offset by the recording of deferred tax beefits n 1999 related to expected'utilization of foreign tax credits.
The effective income tax rate decreased in 1998 principally due to: O- the UK windfall profits tax of $234.1 million at Entergy London recognized in 1997;
'the tax effects of the settlenienit by Entergy Gulf Sttes of litigation:with Cajun in 1997; O. recogmution of $44 million of deferred tax benefits in 1998 related to expected utiliiation of Entcrgy's capital loss c&ryfdrwards; and o a $31.7 million reduction in taxes because of reductions in the'UK c'orporation tax rate from 31% to 30% in the third quarter of 1998.
These decreases were partially offset by a reduction in the UK corporation tax rate from 33% to 31% in 1997, which lowered taxes in 1997 by $64.7 million. ENTERGY CORPORATION AND SUBSIDIARIES
,CON SOLATED STA, NTSOF INCOME For the Yesrs Ended December31,
. 1999 1998 1997
. ; -. .11 , 1% .
(In Thousands, Except Share Data) OPERATING REVENUES Domestic electric S6,271,44 6,136,322 ^6,538,831 Natural gas 110,355 115,355 .: *:137,345 Stean products 15,852 43,167 . i43,664 Coip~ve businesses `. --- 2,375,607 S,199,928 .- 819 086 TOTAV ; I ' ' 8,773,228 11,494,772 ' 9,S38926
.4tt, . , . ( , .. . .,, e....
; . .: . :7. . : . . . ..!,... I .. , - . .
OPERATING EXPENSES 0peratiigsnd.Maintenance ' Fuil, fiel-related expense, and gas rased for resale Puasd power 2,442,48 4,58444 2,318,811 Nuc1iaiirfreuing outagpese 76,057 83,885 73,857 Oheption and maintenance 1,705,545 1,988,040 1,886,149. '. t
- Decomioning ., 45,988 46,750 52,552 ..
Taxes other than income taxes, 339,284 362,153 365,439 4I Depreciation and amortization 698,881 938,179 927,456 Other regulatory charges (credits) - net 8,113 35,136 .- (18,545) Amortizaion of rate deferrals 122,347 237M02 r :421,03 TOTAL 7,521,574 9,982,917 :- '7,704,563 OPERAtJNGINCOME 1,251,654 1,511,855 1,834,363 OTHER INCOME (DEDUCTIONS) Allowance, forequity fimds used during construction ---* 29,291" 12,465 .'--- 10,057 .- Gain on ae ofassets - net 71,926 .274,941 . '2
*32 .
Miscsllaneoips - net IS4,423_ TOTAL.. 2SS 640 373,024 . (199,851) (ANTERESTANDOTHE'GS .
, 1,JNTEREST AND OTHER CHIARGES I-.
Interest on long-term debt . 476,877 735,601 -..4797,266 Otherinterest-net : 82,471 65,047f. . - s-1,424 Distributions on prefered securities of subsidiaries :18,838 *42,628 -; '139 Allowance for borrowed fun'ds used during constructio in (22,85) (10,761) (7,937) TOTA BEO I A- S55601- ; A832,S IS 862,272 9. INCOME BEFORE INCOME TAXES 951,693 1,052,364 f772',240 Income taxes 471,341 CONSOLIDATED NET INCOME 595,026 785,629 300,899 Preferred dividend requirements and other 42,567 46,560 S3,216 EARNINGS APPLICABLE TO COMMON STOCK S552,459 S739,069 Earnings per average comnon share: Basic and diluted S2.25 S3.00 S1.03 Dividends declared per common share S1.20 SI-S0 S1.80 Average number of common shares outstanding: Basic 245,127,460 246,396,469 240,207,539 Diluted 245,326,883 246,572,328 240,347,697 See Notes to Financial Statements. CoNOLIlAtl~ST1/2~ME~T bC~SHFLOWS
- II, ..*.. ( . - j*..;I *;5.
For the Years Ended December 31,
- -J, i - ~I.. . .. .-
1999 1998 1997 (in Thousands) OPERATING ACTIVITIES .:.. iI ;e - 'F *-'J Consolidated net income.. . . - *:. $595,026 * $785,629 ':-? S300,899 Noncash Items bscluded In aet Income: :' 'C -" Gain on Cajun Sctdc:Pet - :I~etr. - .' (246,022) Amotizationof ratmdeferrals ;'.. '. 122,347 .-.237ji32 ... 421,803 Reserve for reguat,,Jqxdi*ashfts ,. ' 10,531 130,69), i; 381,285 Other regulatorycaei (credits) - net' ' '~.'
- ~'~' '~ 8,113 35,136 (18,545)
Depreciation, amortization, and decommissioning 984,929 980,008 Defeamd income taxes and investment tax credits (204;644) , (6k4,563);7 (252,955) Allmwance for equity finds used during construcdon (29,291) ;.4 (10,057) Gain oasale of assets A , (t1.92
- i ; (27J,~4 a(26,432)
Changes In workis pltl (aet of efTtcfs from aqusetons and dispositions Receivables ', .,.>ttt- 9,246 * -j4j 75 (99,411) Fud inventory 20,272 Accounts payabte.' . ' 31221"' 181,243 Taxes accrued ?. 158,733 :w' : S8;SOS" 143,15I Interest accrued l'.i~;' .. (56,552)y -i : (37 ,937 -J.r (9,849) Deferred fuel i,: .,.; i (71,072). .?. (18,993) : (28,412) Other woddng capitl accounts' x- 45,28S-j ;. -
- v43,209 -; (102.03)
Provision for estimate losses and reserves (59,464) ... (133,8S0) . (27,423) Changes in other Rlguoay asiets . ., . j -. (36,379) (13,684) : 28,016 Proceeds from srtt do f Caijin litigatiou ' ' - - .. 102,299 4 Other .. 5 3 " . 108.673 -,,9 6 ) 50,20,4 50.2SO Net cash flow provida by operating actidiies 1,307.369 1.752,698 1,792,771
- - ^ '<u1'kf) s 8@
- ;Iif' i .
INVESTING ACTIVITIES.. Consction/capita expenbitures Allowance for equit; funds used during cotnisUction ' 29,291 * :^K 4---4,.26Si-. : 10.0(847,223) Nuclar fue purchagZ'.:k .. .* . , (137,649) W ' I"
. ..... (39237)
Proceeds frot salkia'seibk of uucle l:' - _ 137,093 128,21 144,442 Proceeds from sale of businesses 351,082 2,275,014 54,IS3 Investment in other nonreulated/nonutility propeties It *t ,( g , jj' (2,039.370) Proceeds fmm notesW c .'ble 956,356 . : IC'1t.. Purchase of other teriporary investments. i, (321,351) 't:; (947,44'r-Decommissioning trust ctntributions and realized change it trut assets -(66; :-. 7,842 .1. : ('68,139) Othea o .re .st,' )I , j t, ,j I .n*;.
,. .Jt ;(2j2S8 1 .^i: 2tjt:l,. (15,966)
Net cash llow pro;Vded.b1y (sed In) iiilvettles! , i.,> (366225) 63AV..'[-bl (2,8SI.283) See Notes to Financial Statments. . ' i " - .., 1, ""i i I : -. ..? Ill.
.1 *.#' '..1. -..;.
O?(' k,, ~~'~ *~~~* . *. -. "
. i, ! -". '`V. J" ' .. - ' 71:---- I . '. - - -'. '
I. I . . . . . ): ? 1. . , .... , -,, P ,
.f -) .1
* '. **t** . *
. .*. . -. . Y I --; - * : - .o 3t,
'I *sti *;i -- -
ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1; I 199 1998 1997
" '-, .-1.1 " .4 (in Thousands)
FINANCING ACTVITIES Ia . .. Proceeds from the Isance of: Long-term debt 1,113,370 . .. .1,904,074 2,047,282 Preferred securities of subsidiary trusts and panships 3S2,323 Common stock 15,320 . 19,341.
.. 305,379 Retirement of:.
Long-term debt ; * (1,195,451) - -'-3,151,680) (751,669) Repurchase of common stock (245,004) (2,964) Redemption of preferred stock (98,597) '(17,481) (124,367) Changes in shost-term borrowrings - net (165,506) 205,412 142,025 Dividends paid: 's " Common stock (291,483) (373,441) (438,183) Preferred stock (43,621) (46,809) (.51270) Net cas flow provided by (used Ia) fInandng*e-fs - (910,972) - (1,463,548) 1,'- 51 1520
. r.> ,> .-
Effect of exchange rates aah and cash equzlvets (948) . , . . 1,S67 . 11,164) Net increase In eash ndeasb einlevae, *29.224 ,:. ,* 353,94S8 441,844 Cash and cash eqa1vs1enbgi*laij olpeirod p Z7Y t 1,184,495 830,547 388.703 Cash and cab equivalents at end of period Sl.2I3,7l9-.-'4t$' S,184,495 . S830,547 SUPPLEMENTALDISCLOSJRE OF CASH F^bW INFORMAMON:
- .3- .'.-. ,'.F...'.:
Cash paid during the period - . Interest - net of amount capitied . $601,739 $833,728 5831.307 Incorne taxes , S373,S37 -. $273,93s $390,238 Noncash investing arnd financing activities: Change In untralized pp iatioi of, $41,.8 $4. 32s decommissioning trust assets. . S41,582 :- .. * .. S46,32S , . $30,951 Treaswy shares issued to acquire security busins $21,464 Net assets acquired from Cajun settlement S319,056 Decommissioning tust fund acquired fron Pilgrim acquisition S471,284 See Notes to Firancia]Statements.'.
- - '. .. i . . I r
. . . . .. I
. I - . p '. .
i . . . i 11- -
. . . 1!.. . I
.. . I ...
I ENTERGY CORPORATION AD SUBSIDIARIES CONSOLIDATED BALANCE SHETS. ASSETS
,- ASES ,. .
*- .. ,., . * -: . 7 i December31, 1999 1993 (In "oulands)
CUR1RENT ASSETS Cash and cash equivalents: . . .. . . Cash S108. 193 S386,74' - i' . :, Temporary cash investments -at cost, which approximates market Il,1052t . *791;731 y 0 _, @t .b - Total'cash and cash equivalents 1,213,719 1,184,495 Other temporary investments - at cost, . fi. .. . . . _ which ap qximates market . 321.351 Notes receivable 2,161 959,328 *-. ' *.-- ; i. Accounts receivables i i . - Customer 290,331 .280,648 : - Allowance for doubtful accounts (9,507) (10,300) . ; . . Other 207,898 197,362 . . Accr"e ubilld revenues 298,616 245,350
- . -. T6l'receivables :'
Deferrtlef hel costs ' ' 7240s363; si - 4 169,589 Fuel inventory -at average cost 94,419 90,408; Material i supplies - at veral cs. Rate deferrals 30,394 37,507 Deferred nuclear refueling outage costi Prepayments and other 7,567 77.749 TOTALi 3,219132lh. ;tl13,643,941 il- t t-. ; . . z OTHER PROPERTY AND INVESTMENTS r. . -... : :... .. : .;..:; vetmetinsubsidiarycdem at qui-snicl 214 214 Decommissioning trust funds 1,246,023 709,01S
'4 .,
Non-utility property -at cost (leas accuulated depreciation) 317,1 65 275,421 Non-regulated investments ,;I . . 19S,0 t03 !:,,487,586, , .; Other- at cost (less accumulated depreciation) 16,7 14 16,041; . . TOTAL 1,778,119 1,488280 ; N, ;. 1 UILITY PLANT Electric 23,163,1 61 '22.704572 ' ' Plant acquisition adjustment 406,929 423'I95*S . Property under capital lease 763,5 i00 789,1SJ ' Natural gas 186,0 41 ' 183,62': -.. . Stearn products - 80,537 . ... *.
- Construction work in progress I.500,6 Ml 7, 911,278;%:
Nuclear fuel under capital lease 286,4 76 282,59S Nuclear fuel 97,6493' 29,690 . . ; TOTAL UTILITY PLANT 26,399.4 17 25,404,533 Less -accumulated depreciation and amortization 10,50,6761 10,075,951 UTILITY PLANT - NET 15 'i00,7;56 15,328,582 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Rate deferrals 16,5 81 125,095 SFAS 109 regulatory asset -net 1,068,0 06 1,141,318 Unamortized loss on reacquired debt 198,6 31 191,786 Other regulatory assets 637.3 70 528,179 Long-term receivables 32,2 60 34,617 Other 533,7 32 354,889 TOTAL 2,487,0 80 2,375,884 TOTAL ASSETS S22,985 ,087 S22,836,694 See Notes to Financial Statements. ENTERGY CORPORATION AND SUBSIDIARIES CONSOUDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 999 1998 (la louadsds) CURRENT LIABILITIES Currently maturing long-tern debt S194,555 S255,221 Notes payable 120,715 296,790 Accounts payabLe 707,678 522,072 Customer deposits 161,909 148,972 Taxes accrued 445,677 284,847 Accumulated deferred income taxes 72,640 31,976 Nuclear refueling outage costs 11,216 16,991 Interest accrued 129,028 185,688 Co-owner advances 7,01S 4,073 Obligations undercapital leases 178,247 176,270 Other 12S,749 59,909 TOTAL 2,154,432 1,981,09 DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 3,310,340 3,538,332 Accumulated deferred investment tax credits 519,910 565,744 Obligations under capital leases 205,464 220,209 FERC settlement -refiund obligation 37,337 43.159 Other regulatory liabilities 199,139 353,163 Decoavnmssioning 703,453 243,400 Transition to competition 157,034 90,623 Regulatory reserves 379,307 674,310 Accumulated provisions 279,425 252,321 Other 535,156 498,989 TOTAL 6,325,565 6,2B0,250 Long4erm debt 6,612,593,. 6,596,617 Preferred stock with sinking fund 69,650
- 167,523
- Preference stock 150,000 150,000 Company-obligated numdatonly redeemable preferred securities of subsidiary busts holding solelyjunior subordinated deferrable debentures 215,000 215,000 SHAREHOLDERS' EQUITY Prefered stock without sinking fund 338,455 338,455 Common stock, S01 parvalue. authorized 500,000,000 shares issued 247.082,345 shares in 1999 and 246.829,076 shares in 1998 2,471 2,468 Paid-in capital 4,636,163 4,630,609 Retained earnings 2,786,467 2,526,89 Accumulated other comprehensive loss
Cumulative foreign currency translation adjustment (68,782) (46,739) Net unrealized investment losses (5,023) Less -treasury stock, at cost (,045,434 shares in 1999 and 208,907 shares in 1998) 231,894 6,186 TOTAL 7,457,857 7,445,495 Conunitments and Contingencies (Notes 2, 9,10. and 1) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $22,985,087 Si136 See Notes to Financial Statements. ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF RETAINED EARNINGS, COMPREHENSIVE INCOME, AND PAID-IN CAPITAL For the Ye Ended Deceber31, 1999 -9 1997
.. (1 nThousands)
RETAINED EARNINGS-RctinedEamings Beniug of period S2,526,18 $2,157,912 S2,341,703 Add -Eaminp &pplicable to common stock 552,459 . S552,459 - . 739,069 ' S739,069 .. . 247,683 S247,6t3 Deduct: Dividends declared on comma stock 294.352 369,498 ; ..432,26S Capital stock and other epnes (1,472 595 -. . t794) Total 292,8S0 370,093 -431,474 Retained Earnings. End of period S2,7864467 W2,526,288 32,157,912
.,I; ACCUMULATED OTHER COMPREHENSIVE INCOME LOSS. . .
Baac at beginning ofpeod (346,739) ($69.817) 3, - - - 2,72S Foreign cummcy rnlation adsnbacut (22,043) 23,071 23,078. (91,542) (91,542) Net unrealited investment bses (.023) (5,03) 2 _
- Balnce at ead orparod (S7905) ($69,817)
$($46,739)
Comprehensive Incomae S525,393 ' - -S762,147 PAID-IN CAPITAL - Paid-in Capita - Beiming of period. -. 4,630,609
- S4.613,572 $4,320,591 Add:
Gain on rcacquisitios of sbaidiaespreemd stocVc r. 273 Common slock isn rated to sbck plns 17,037 - 292,870 . Total 17,037 .. 293143
.& . *.: ft Capital stock discout and odhc expenses . , 162I Total 162
$4,6 ,60 .-
Paid-in Capital- End of period 34,636,163 4,63a60s S4.613,572 See Notes to Financial Statment.
.1..
ENTERGY CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998(1) 1997 (2) 1996(3) 1995 (In Thousands, Except Peiekntages and Per Share Aounts)
- Operating revnue*. . $. 8,773,228 ,$.11,494.,772 $ 9,538,926 $ 7,163,526 S 6,273,072
'w'co'me'95,02 .78,629..$ 00899 S 490,563 -S
.1~d8 6,3 5
,Conolidated nncome 95,026 $ 562,534(5) i, ansershre ........., ,; .. ., : t- ?.;' '- i "
- ,., ,,aficandDiluted ; .......$S,. . 2.25 $S . .1.80 . 2.13 (5)
*.,DisendsDclauedpershr-.S. .1.20:. S 0,S 1.0 1.80 R Mtu onayrgecommon~guit- 7.77% .-;, 10.71 - .3.71% ., 64Yo . . 8.11% *1 Bookvalve~per~ha~e,.year-. $ ,29.78: $. .28.82$,. *, 27.23 .5. 28.51 S j 28.41 *'Tj.Ot asses , ' .:; ' $ 2298081. 622,8 3,6,694..,S 27,000,700 . $ 922,956,025 $22,265,930 *- Ln ogaios4.) -, ;. , 7252,617.i $,7,34%3,4 . 10,154,33Q $ 8,335,150 S 7,484,248 (1) Includes,* effects, ofthe',sale of London.Electricity and CitiPower in December 1998,.. ;
(2) Includes the efficts of the London Electricity acquisition in February 1997. (3) Includes the effects of the CitiPower acquisition in January 1996. (4) Includes long-tenn debt (excluding currently maturing debt), preferred stock with 'sinking fund, preference stock preferred securities of subsidiary trusts and partnership, and noncurrent capital lease obligations. (5) Represents income before cumulative effect of accounting changes. 1999 1998 1997 1996 1995 (Dollars In Thousands) Operating Revenues: Residential $2,231,091 $2,299,317 $2,271,363 $2,277,647 $2,177,348 Commercial 1,502,267 1,513,050 1,581,878 1,573,251 1,491,818 Industrial 1,878,363 1,829,085 2,018,625 1,987,640 1,810,045 Governmental 163,403 172,368 171,773 169,287 154,032 Total retail 5,775,124 5,813,820 6,043,639 6,007,825 5,633,243 Sales for resale 397,844 448,842 359,881 376,011 334,874 Other (1) 98,446 (126,340) 135,311 67,104 119,901 Total $6,271,414 $6,136,322 $6,538,831 $6,450,940 $6,088,018 Billed Electric Energy Sales (GWH): Residential 30,631 30,935 28,286 28,303 27,704 Commercial 23,775 23,177 21,671 21,234 20,719 Industrial 43,549 43,453 44,649 44,340 42,260 Governmental 2,564 2,659 2,507 2,449 2,311 Total retail 100,519 100,224 97,113 96,326 92,994 Sales for resale 9,714 11,187 9,707 10,583 10,471 Total 110,233 111,411 106,820 106,909 103,465 (1) 1998 includes the effect of a reserve for rate refund at Entergy Gulf States. Report of Independent Accountants To the Board of Directors and Shareholders of Entergy ArHsas, Inc.: In our opinion, the accompanying balance sheets aAd the related statements of income, of retained earnings and of cash flows present fairly, in all rnaterial respects, the financial position of Entergy Arkanias, Inc. at December 31, 1999 and 1998, and the results' of its operations and its cash flows for each of the three years in the period ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. These financial statements are te responsibility of the Company's management; our responsibility i'to express an'opinion on these financial statements based on our audits. We ohddicted our audits of these statemenits in accordance with auditing standards gen6rally accepted in the United States; which require that we plan ad perform the audif to! obtain reasonable assurance about whether the fihancial statements are free of material mistatement An audit includes examninin& on a test basis, evidence supporting the aiounts and disclosures"in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasnaible basis for the opinion expressed above. PricewaterhouseCoopers LLP ' New Orleans, Louisiana. February 17, 2000 ENERGY ARKANSAS, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net Income Net ncome decreased in 1999 primarily due to decreased electric operating revenues and increased operation and maintenance expenses, partially offset by lower regulatory charges. Net income decreased in 1998 primarily due to decreased electric operating revenues which were partially offset by lower operation and maintenance expenses and lower interest charges. Revenues and Sales The changes in electric operating revenues for the twelve months ended December 31, 1999 and 1998 are as follows:
.- ncreasel(Decrease).
Description 1999 1998 (In Millions) Base revenues $4.5 ($7.0) iieriders' (68.2) (106.0) Fuel cost recovery , 36.4 (21.8)
, Sales volumeweather 3.8 . 55.8 Otherrevenue (including unbilled)' (25.2) 11.4 Sales forresale (18.1) . .(394).
Total ($66.8) ($107.0) Rate riders Rate rider revenues have no material effect on net income because specific incurred expenses offset them.
,. ...... %s. - : .
In 1999, rate rider revenues decreased as a result of a revised Grand Gulf rider, which includes the completibn of the Gi nd Gulf 1phase-jyi plau'in November 1998,' partially offset by the Grand Gulf Accelerated Recover'Tariff(GGART). The GGART is designed to alw Eitergy Sansas to pay down a portion of its Grand Gulf purchased power obligation in advance of the implemention 'o retail access in canss The rider and GGART became effective ithe fisbilli cycle in Januay 1999. The GGART is discussed further inNote 2 to the financial sttements. .. In 1998, rate rider revenues decreased primarily due to a decline in the Grand Gulf 1 cost recovery rate rider revenue's:' is' declifib reflects scheduled reductions in the phase-i plan Which was completed in November 1998, and reductions required by the settlement agreement with the APSC. This agreement is discussed in more' detail in Note 2 to the financial statements. Fuel cost recovery . Fuel cost recovery revenues do not affect net income because they are an increase to revenues that are offset by specific incurred fuel costs. Fuel cost recovery revenues increased in 1999 due to an increase in the energy cost recovery factor, effective in April 1999, and the completion of a customer refind obligation in 1998, which lowered 1998 fuel cost recovery. ENTERGY ARKANSAS INC.
'MXNAGtMENT'S FINANCUL DISCUISSIONMAND ANALYSIS RESULsTS OF OPERATIONS In 1998, fuel cost recovery revenues decreased due to unfavorable pricing resulting from a change to a fixed fuel factor i January 1998, partially offset byan iicreise in generation.
Other revenue In 1999, other revenue decreased riiily asla result of a change iestimated unbilled revenues and, to a lesser extent, less favorable weather for the unbilled period of 1999. The changed estimate more closely aligns the fuel component of unbilled revenue with its regulatory treatment. The change in estimate istepected: to:affect comparisons of revenue applicable to prior period amounts through the first quarter of 2000. Comparative impacts are also affected by seasona ipacts o'n demand. - ^, In 1998, other revenue, primahily unbillod, increased as a result of significantly warmer weather as conpared to 1997. , - . . Sales for resale In 1999, sales for resale decreasd due to the loss of certain municipal and co-op customer contracts. In 1998, sales for resale decreased primarily due to a decrease in sales to associi companies. The decrease resulted from reduced generation due to outages at both ANOI. and'AN02 ai resiricted generation due to disruption in coal delivenies during the second quarter of 1998: Thip decreXis ws partially offset by an increase in sales revenue from norI-associated comipanies as a result of short-term contracts with certain vholesale customers.
. t , -£ Expenses Fuel and purchased power expenses v ' f@
~~~* . . !, '.'.r In 1999, fil expenses creased primarnly due to:
So higher-iced' gas' geeration ,as a .result of:refueilng, otages at ANLand ANO2, armid-cycle
;,, iinance m outage at.ANO2,limited coal capability at W Bluff Hog parts. of o year, and displacement of highr priced pumhased Mwer, '.
.9;,increase p jrchasedpowercosts due t?1igher marketprices in JulyaircAugusftI999;, ad o an increase in the energy cost recovery rate in April 1999 and the completion of a customer refund obligation in 1998 which lowered 1998 flt cost recovery.
The increase in the energy cost recoveryte allows tyArkansas to recover previously unr-recovered fiel expenses. -. ! .:'! . . ,- .. In 1998, fuel expenses decreased primarily due to the impact of the under-recovered deferred fuel cost in excess of the fixed fuec factor implemented in January 1998, billed to retail customers. Other operation and maintenance - . ' *
- _ * ~ ~~t
'¶ Other operation and maintenance expenses increased for 1999 primarily due to increased customer service costs related to tree trimming around power lines, increased employee pension and benefits costs, and increased plant maintenance costs. * - -
ENTERGY ARKANSAS, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS Other reMulatorv charges in 1999, other regulatory charges decreased primarily as a result of lower accruals for transition costs in 1999, partially offset by the 1998 reversal of the 1997 reserve recorded for the low-level radioactive waste facility.
In 1998, other regulatory charges increased as a result of additional accruals for the transition cost account, partially offset by a small over-recovery of Grand Gulf 1 related costs and the reversal of the 1997 reserve for previously deferred radioactive waste facility costs. The transition cost account is discussed in more detail in Note 2 to the financial statements. Amortization of rate deferrals In 1999, amortization of rate deferrals decreased due to the November 1998 completion of the Grand Gulf 1 rate phase-in plan. These phase-ins had no material effect on net income. In 1998, the amortization of Grand Gulf 1 rate deferrals decreased due to a decrease in the amortization prescribed in the Grand Gulf I rate phase-in plan, which was completed in Novenber 1998. Other Other income Other income decreased in 1999-due to reduced miscellaneous non-operating income, reduced other interest income, and the completion in 1998 of the amortization of Grand Gulf 1 carrying charges,'which was partially offset by accruals for equity fun s used duriig construction. Other interest income includes income from intercompany loans. The allowance for equity funds used during construction increased due to capital charges on projects in 1999. Other'income decreased in 1998 due to reduced Grand Gulf 1 carrying charges as a result of a decline in the deferral balance, which does not impact net income. Interest charge Interest charges decreased in 1999 due to the retirement of certain long-term debt and decreased borrowings for funds used during construction. These decreases were partially offset by an adjustment for interest expense on an income tax settlement from prior years. Interest charges decreased in 1998 due to the retirement of certain long-term debt. Income taxes
-The effective income tax rates for 1999, 1998, and 1997 were 43.8 %, 39.1% and 31.6%, respectively.
The effective income tax rate increased in 1999 primarily is due to accelerated tax depreciation deductions, for which deferred taxes have not been normalized, reflecting a shorter tax life on certain assets. The effective income tax rate increased in 1998 primarily due to the reversal of previously recorded AFUDC amounts included in depreciation.
- ENTERGY ARKANSAS, INC
- INCOMEgSTATEMENTS For the Years Ended December 31,
.1999 1998 1997 (In Thousands)
OPERArING REVENUES I)omestic electric 51.541,894 Sl,608,698 ' Si.715;714' J : OPERATING EXPENSES Operating and Maintenance-Fue fel-related exp:nses, and gass purchased for resale 257,94,6,,. 204,318 .254.703, Purhased power :455.Z5* 41 ,947 419.128 Nucle'ar refueling outage eYpens'Ws 29.85' '32,046 2t,969 Other operation and maintenance 389.462'; .. 358,006:.; 360.860 Decommissioning 10,670 15,583 17.306 Taxes other thaincome taxes 36.669 37223 , 36,700 Dcpreciation and amortization 161,234 165,853 149,346 Other regulatory charges- net 5,230 45,658 29,686 Amortization of rate deferrals - 75,249 . : 3141 TOTAL 1,346,493 1,353,883 1,448,839 OPERATING INCOME *i <: j 95.401 . 254.815 266.875.:.. OTHER INCOME * , , -., .. . ,.77,- Allowance for equityfuids used'during construction ; Ii§66 " ' *'5S921' '! :3,63" Gain on salc'of assets- .. *t ' . 5 * .~, :' ;,
'1777 113 t @-
Miscellaneous - net 3.622 12.292 18.550 TOTAL 16.488 19.990 22.226 INTEREST AND OTHER CHARGES Interest on long-term debt 80,800 86,772 95,122 !: Other interest - net 11,123 4,813 3.943 Distribtutions on prefemd securities of subsidiary. -5,00',: 5,100 . S10 Allowance, for borrowe4 funds used during construction (8,459)* (4.205) ., 2 26, TOTAL 88,564. , 92,480 101,904' (.459. . (2,261_) INCOME BEFORE INCOME T.XE § .123;32 182.325 ' l8t1'7 Income taxes .r, . 54.012 . . 71.374 ,;, .' 59,220 NET INCOME 69,313 1 .10,951 " 277 - Preferred dividend requirements and other 10,854 10.201 10.988 .. EARNINGS APPLICABLE TO. . .
.84 COMMON STOCK -.
S58,459 *'S'100750, Si'16,989 See Notes to Financial Statements. ENTERGY ARKANSAS, INC STATEMrENTS OFCA.SH FLOWS For the Years Ended December 31, 1999 1993 2997
. .. ~~, ,. .1 (In Thousands)
OrizRATINC XAtrTM1S Net Income £69,313 S110,951 $127,977 Noncash Items Included In net Income: Amortization of rate deferrals *;1 - *- 75.249 153,141 Other regulatory rlarges -net 5,230 45,65 29,6S6 Depreciation. imortization. and deconunissioning 171,904 181,436 166,652 Deferred income taxes and investment tax credits 22,421 .' '.:. (12.293) (77,814) Allowanc for equity fiunds used during construction (I 2(866)'777) (3.563) Gain on saleof asset : . (113) Changes In worldng capital: Receivables"; 40.375 61,143 (14,828) Fuel inventor4y (4,633)... ::*.8,317 29,150 Accounts payabk 56,985 :.;t (7,911) (25,451) Taxes aocrued; (30,054) (8,742). 23.133 Interest accrued (2.908) ,. . (3.541)., 1,201 Deferredfuel c .. ; (429) ,.3(57,435) (9.2S9) Other w~ii capital accon s.>~: 2.444 , (61S4S) (931) Provision for mtd losses and esewv (B.] ,. Z6 2032, ,9,594 Changes inother.regulatory assets. 45,9 9-09 (7,150) Other (42,249) 4i49 , 33,374 Net cash flow provided by operating activites 313,315 408,791 434.769
*:'* - INVESlTING ACTIVITIES Construction expenditures (238.009) (190,459) (140.913)
Allowance for equity funds used during construction /ir e tli86'UAWl - ' _ 3.563 Nuclear fuel purchases t' (325-17) - .'(45.845) (59,104) Proceeds from silelleaseback of nu&ar fuel 32.517 * '42,055
- 1. : 59.065 Decommissioning trust contributions and realized change ist assets :,_:____________) - . , (25.929) . . (24,956)
Net cash flow wed In Investing activIties (242,99) (214.257) (162.345) FINANCING ACrVITIES 1,: .'#.f -7 1,I , : - , breedsrou nccot: ,, Long-tern debt 129.564 Retfrement f: (39,60-7). ". - ."'151.441 (117.587)
- .. .:16.0 V,- -,
Redemption of preferred stock (22,6610 . : 0 (9.000) Dividends pid:._ , e..' .. Connmon'siock ' ' (82.700) -'(2,600) (12S.600) Prefeed 'ock -, , , h,, ' (15,69)" t i(20646) ' (11,194) Net cash flow ,ea in fnancing alciiiiee (I156,669) ) 't> - (2Si.3 ) ! - 136,817) Net Increase (decreasb) In cash and cash equivalents . .';. f *, i . -; i 4 o;
-(86,24~?~3) j , (6&897) 135.607
.~~~~ ~ ... .
Cash and cash equivalents at begInning of period 93,105 ,., . .162,002 ., 26,395 Cash Oicash equivalents at end of period S6,862 . £93,105 S162.002 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during theperiod for-Interest-net of'inount capitalized ..... S94.872 S98,013 Income taxes.->^^. i *> . S61,273 9 i.407 ' £111,394 Noncash investing and financing activities: Change in unrealized appreciation of decommisioning trust assets S22,980 S26,782 S22,343 See Notes to Financial Statements Z -
- 2,; . " .:.; ..
- I :-: ENTERGY ARKANSAS, INC BALANCE SHEETS
. . '. . . . I. . . .. ASSETS
...... . ,. . ?
December 31,
.I.. . - . AS. E. . .(l,/h. sau', .
CURRENT A.'SETS Cash and cash equivalent. Cash S6.862 ' 9,814" Tempoeary cash investmcmts - at cost whic4 appr"Gnimates market. Total cash and cash oquivalents 6.862 93.105 Accounts receivable Custon.er. 73,357 72.234. Allowance for doubtful accounts. (1.768) (1.753).,-- Associated'companies .. 27.073 50.141 Other':' 5.583 4.510 Accrued unbilled revenues : 53.600 73.083 Total rceivabes3 157.845 198,219:- Deferred fuel costs 41.620 - 491.49 Fuel inventory - at average cost 24.48;"' . 19.852 MaterigsaiDd iupplies - at average cost 85,612': -:'89.033; Deferred nuclear refueling outage costs 28,119 . 17.787 Prepayments and other - 64 15, ', TOTAL 351023 .1,., 464,744 OTHER PROPERTY AND INVE9TMENTl5 lnvestment.in subsidiary ciwvnpanias - at equity 11;215 11.213. Decommissioning trust funds *. . 344.011. * . . 303.286*. Non-utility property - at cost (less accumulated depreciation) . 463 :.,--- . ..- *,6- tl Other.. at cost (lestaccumlated depreciation) 3.033 3.602. ' TOTAL.- . 35*722 :. 319,69 . . UTILITY PLANT : .... .. .......... I Electrc 4.854,433 4,731;699 ' Property under capital leasm: 44.471 49.4tS Construction work in progress, 267.091 201,8SJ"" Nuclea fud urter capital Iase 85.725 9449 ns 95.5897 s*... - Nuclear fNel 9.44.9 *- *! ;, TOTAL UTILITY PLANr, 5.261.169 5,078,556. Less - accumulated depreciation and amortization 2,401,021 2.275.170,,'
- UTILITI4P - ET .--.. 2,860.148 , 2,803.4801; .
DEFERRED DEBITS AND OTHER ASSLTS - -I ., f: ", , I ;W. . .. ,- ". I Regulatory assets: SFAS.109 rgptatorysset- et' - 192t344"' : ',F 2485275' Unamortized loss on reacquired debt 48,193 51,747 Othersreiulatory assets ... - ... 106;959 '"" 96,927' ' Other 14.125 22,003 TOTAL I.... 361.6ZI' I ' 418.952 ';".
.., ., .~ . .. ,_ .
TOTAL A.SETS S3.932.5i4' ""$4.006.61 "'- See Notes to Financial Statements. sl, . . . .I~~~
; iNTERGY AANS.,1WC.
LIABILJI BALAN ShEtLERS ' -UIT LIABILITIES AND SHAREHOLDERS EQUITY
.. a ...
... December 31, 1999 1998 (In ThuMands)
? ,. - . .
- 'uRRENT LABIL1IIES Currently maturing long-term debt S220 S1,094 Notes payable 667 667
-Accounts payable:
Associated companies 81.958 47.963 Other 102.959 .79.969 Customer deposits 26.320 i.196 Taxes accrued 38.532-: ; :'s68.585 - Accumulated deferred income taxes. 38.649 : ) .24.162 Interest accrued,. 22.378 : . 25.285 Co-owner advances , !5,338, -073 - Obligations under capital leases 55.150 ?64i ClALf 11.598 '16183 TOTAL 393.769 357.245 bFERAREDC`REDITS AND OTHER LIABILITIES Accumulated deferred income taxes 713.622 756.571 Accumulated deferred investment tax credits , .94.852. .. ' 98,768 Obligations under capital leases
- 75.045 .,, _^*,,,96ot9736' Other regulatory liabilities 88.563 65.583 Transition to competition 109.933 90.623 Accumulated provisions 43.288 51.404 Other 51.080 56.400 TOTAL 1.176.383 1.200.285 Long-term debt 1.130,801 Preferred stock with sinking fund 22,027 Cnmpany-obligated mandatorily redeemable preferred securities of subsidiasy trust holding solely junior subordinated deferrable debentures 60.000 60.000 SHAREHOLDERS' EQUITY Preferred stock without sinking fund 116,350 116.350 Common stock. S0.0I par value, authorized 325.000.000 shares; issued and outstanding 46.980,196 shaes in 1999 and 1998 470 470 Paid-in capital 591.127 590.134 Retained earnings 463,614 487.855 TOTAL 1.171.561 1.194.809 Commitments and Contingencies (Notes 2.9. and 1O)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY S3,932.514 S4,006,651 See Notes to Financial Statements. ENTERGYARRAISAS, STAS OF ;A.N. IC ANIG. STATEMENTS OF RETAINEDj EARNINGS C.-. (4. ,-. 4 . For the Years Ended December31,
. ;. .*;. , *(
1999 1998 1997 (In Thousands) Retained Earnings, January I .S487,85.^ .$479.705 $491,316 Add: Net income 69,313 110,95I 127,977 D~dusct . f pividends declared-, Preferred stock 9,223.
- 10,201 . 10,988 Coimon stock 82,700 92,600 '28,600 L'
Capital stock expeies and other 1,631 - -
,Total ;; 93,554 102,801 139,588 Retained Eainiiigs, Decemnbir 31 (Note 8) S463,614 S487,855 S479,705 Se'ifes to Financial §tlatements.
_ .sf 5%E;-':; ~* iof. .-.. '.
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"N ?EiNGY'ARkANSAS, INC.
SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 1996 1995 (inThousands) '
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~S.
..i .. - 2.. ...
Operating.revenues .. $1;541,894.-: $1,608,698 . i$1,7 1 5 , 7 1 4 *$1,743,433 $1,648,233 Netincone. '. . . 69,313;: ;-;, 1l0,951r :.$' 127,977 I-$ 157,798 $ 136,665 (2) Total assets" .$3,932,'514:-.. $4,006,51: .- $4,106,877 -'$4,153,817 . $4,204,415 Long-terrnobligatios (l) :;',
'S1,.265,846 ,:SI,335,248.*. $1,419,728 . 1$1,439,355 $1,423,804 (1) Includes long:term debt (excluding'currently matifing debi),-prcferred stock with sinking fund, preferred securities of subsidiary triist,, lAnd noncurrent WU=italese obligations. -:
.~ ~~~~~i-.
(2) tRpresets incotne befoft ctiiniaitive effectofaicountingchanges. . t; :o-:,.......J.er:-1..... ...
- ';i.. .X^.8.::6
,t . . *; . . .........
1999 1998 . 1997 1996 1995 (Dollars In Thousands) lq I Electric Operating Revenues: Residential $533,245 $562,325 $551,821 . fiS54i610 $542,862 Commercial 288,677 288,816 332,715 ' '323,328 318,475 Industrial 335,824 330,016 372,083 364,943 362,854 Governmental 14,606 14,640 18,200 16,989 17,084 Total retail 1,172,352 1,195,797 1,274,819 1,251,360 1,241,275 Sales for resale: Associated companies 178,150 149,603 213,845 248,211 178,885 Non-associated companies 193,449 240,090, 215,249 207,887 195,844 Other (2,057) 23,208 11,801 35,975 32,229 Total $1,541,894 $1,608,698 $1,715,714 $1,743,433 $1,648,233 Billed Electric Energy Sales (GW): Residential 6,493 6,613 5,988 6,023 5,868 Commercial 4,880 4,773 4,445 4,390 4,267 Industrial 7,054 6,837 6,647 6,487 6,314 Governmental 237 233 239 234 243 Total retail 18,664 18,456 17,319 17,134 16,692 Sales for resale: Associated companies 7,592 6,500 9,557 10,471 8,386 Non-associated companies 4,868 5,948 6,828 6,720 5,066 Total 31,124 30,904 33,704 34,325 30,144 Report of Independent Accountants To the Board of Directors and Shareholders of Entergy Gulf States, lc.: In our opinion, the accompanying balance sheets and the related statements of income, of retained earnings and of cash flows present fairly, in all material respect, .the fiuaifcial position of Entergy Gulf States, Inc. at December 31, 1999 and 1998, and the results of its operations 'and its cash flows for each of the three years in the period ended December 31, 1999 in conformity-with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Company's management; our responsibility is to express an.opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted, i the United. States, wich require. that.we planand:pe the audit to obtain reasonable assurance about whether the financial. statments. are free. of material misstatemnt. -,An. audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates. made by management and evaluatingt overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP New Orleans, Louisiana February 17, 2000
-, ...~-
ENTERGY GULF STATES, INC
.. MANAGEMENT'S FINANCIL DISCUSSIONAND ANALYSIS RESULTS OF OPERATIONS
---Net Income . . .*- . -. Net income increased in 1999 prrily due to increased unbilled rvenues;'decreased provisions for rate refunds in 1999, decreased depreciation and amortization expenses, and decreased interest expense, partially offset by increased operation and maintenance-expenses. Net income in 1998 would have increased approximately 19% compared to 1997, excluding the following net-of-tax items: rate reserves of $129.0 million recorded in 1998; rate reserves of $227.0 million recorded in 1997;
.tle Write-off'of ra'idadive waste facilities of i.4 Millhion 'recorded i4n 1997;' and' the' 1997 recording of $146.6 million to income relating to the settlement of litigation with Cajun. The incease in 1998; excluding these items, was due to decreased operating expenses, partially offset by increased income taxes.
item , wa due to derese op.an. - - ........................................... ... .... Revenues and Sales .. *, . ; Electric operating revenues The changes in electric operating revenues for the twelve months ended December 31, 1999 and 1998 are as follows: - i.4 J~. Increase/(Decrease) Descriptiox _ 1999 1998 (In Millions) aI .* ' ; s *-. Base reQenues $146.4` ($228.3) Fuel cost recovery * , ' .' '.104.9 1.6 Sales volume/weather 1.0 61.2
. . .;, . ^ Other revenue (including unbilled) 31.3 ,. (171.5)
. Sales:for resale * ., . ' 53.1
'21.2
- Xs Totalrev .304.8 a-0 ($283.9)
~~~~~~~~~~~~~~~~~~~
a,*~~ .. i . . Base revenues In 1999, base revenues increased due to:
, . . . s , '@ !, *- ** a,, *: X~-.
o a $93.6 million reversal in June' 1999 of regulatory reserves associated with the accelerated amortization of accounting order deferrals in conjunction with the settlement agreement in Entergy Gulf States' Texas Novemberl 996-and 1998.rate filings.' The settlement agreement was approved by the PUCT in June 1999..: The 'ietincome. effect of this reversal is largely'offset by: the amotizati6n of rate deferrals discussed below, and . - o a reduction in the amount of reserves recorded in 1999 compared to 1998 for the anticipated effects of rate proceedings in Texas. -
- Partially offsetting-these increases were: ,. . . . .
o annual base'ate r fductions of $87' million and $18 million thit'were implemented for Louisiana retail customers in February and August 1998, respectively; o annual base rate rductions 'of $69 million and $4.2 million that were implemented for Texas retail customers'in l)ecenbcr 1998 and March 1999, iespectively; and o reserves recorded in the Louisiana jurisdiction in 1999 for'the estiiiiated outcomes of annual earnings reviews. I ENTERGY GULF STATES, INC. MANAG]EMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS In 1998, base revenues decreased due to base rate reductions and reserves for refunds to Louisiana and ..Texas retail customers totaling $216.5 million ($129.0 million net oftax). The LPSC and PUCT rate issues are discussed in Note 2 to the financial statements. Fuel cost recovery ... .. ; Fuel cost recovery revenues do not affict net income because they are an increase to revenues that are offset by specific incurred fuei-costs.
- In 1999, fuel cost recovery revenues increased due to a higher f&e fcior in 1999 and a fuel surcharge implemented in February 1999 i the Texas jurisdiction. This increase was partially offset by reduced fuel recovery in the Louisiana jurisdiction primarily due to lower fuel and purchased power costs in 1999.
Sales volume In 1998, sales volume increased due to significantly warmer weather and an increase in customer base. Other revenue In 1999, other revenue increased primarily due to a change in estimated unbilled revenues. The estimate more closely aligns the fuel component of unbilled revenues with regulatory treatments This change is expected to affect comparisons of revenue to applicable prior period amounts through the irst quarter of 2000. Comparative impacts are also affected by seasonal variations in demand. In 199g, other revenue decreased primarily dde to the revenue recognized on the gain on the settlement of litigation with Cajun in December 1997 for the transfer of Cajun's 30% of River Bend, the effect of which was partially offset by regulatory reserves recorded in 1997. Other revenue also decreased due to unfavorable pricing of unbilled revenues due to rate reductibns. Sales for resale In 1999, sales for resale increased primarily due to increased sales to associated companies due to higher market prices and outages at affiliate plants in 1999. .. In 1998, sales for resale increased primarily due to additional revenues related to the sale of energy from the 30% interest in River Bend transferred by the Cajun bankruptcy trustee to Entergy Gulf States in December 1997. Sales for resale also increased due to increased sales to non-associated utilities as a result of increased demand. Gas and steam operating revenues In 1999, gas operating revenues decreased primarily due to lower prices of gas purchased for resale as well as decreased usage as a result of warmer winter weather, particularly in the residential and commercial sectors. Steam operating revenues decreased in 1999 due to a new lease arrangement for the Louisiana Station I generating facility that began in June 1999. Under the terms of this new lease, revenues are now classified as other income rather than steam operating revenues. ENTERGY GULF STATES, INC. MANAGEMENT'S FININCIAL DISCTJSSION AND ANALYSS RESULTS OF OPERATIONS It is expected that less revenue will be realized under the new lease arrangement compared to the previous arrangement with the steam customer. In 1998, gas operating revenues decreased due to a lower unit price for gas purchased for resale. Expenses Fuei and purchas6d power ' ' - -. - In 1999, fuel and purchased power expenses increased due to: o increased gas expenses resulting from -a shift to gas generation during tie hlrst six months of 1999 because ofthe reduced availability of Nelson 6 and an extended refueling o'utageit River Bend; o increased purchased power expenses due to higher market prices; and o a higher fuel factor and fuel surcharge in the Texas jurisdiction in 1999. In 1998, fuel and purchased power expenses decreased primarily due to favorable gas and nuclear fuel'prices and a shift in the generation mix as a result of these prices. Continued under-recovery of deferred expenses also contributed to the decrease in fuelexpenses. , ' ',.; . . Other operation and maintenance xses In 1999, other operation and maintenance expenses increased due to increased employee benefit expense, casualty reserve accruals, and customer service expenses, such as tree trimming. In 1998, other operation and maintenance expenses inciased as a result of the settlement of litigation with Cajun in December 1997, pursuant to which the 30% interest in River Bend owned by Cajun was transferred by the .Cajun bankruptcy trustee to Entergy Gulf States. Entergy Gulf States now includes 100% of River Bend's operation and maintenance expenses in its operating expenses, as compared to 40% of su hexpens fr the year ended Decnber31, 1997. ' " Depreciation and amortization In 1999, depreciation and amortization decreased due to: o lower depreciation as a result of ihe write-down of the River Bend abeyed plant as required by the Texas rate settlement; redu6ed amortization of the Riv'er Bead Unit 2 cancellation loss as a result 'of the'.completion of amortization for the Louisiaia poition 6f the loss and the reduction in amortization of the Texas portion in accordance with a PUCT rate order; and o Iower depreciation due to a review of plant in-service'dates for consistency with regulatory treatment. Other regulatory credits In 1999, other regulatory credits increased due to: o change in the amortization period for deferred River Bend finance charges for the Texas retail jurisdiction in accordance with the Texas settlement agreement; and 7 83 -
ENIER Y GLF STATES, INC. MANAG'EME'S MCCIAL DISCUSSION AND ANALYSIS REStAYS bF OPERATIONS o deferral of Year 2C600 costs in accordance with an LPSC order. These 'osts are to be amortized over a five-year period. Amorion ofrate deferialsl In 1999, the amortization of rate deferrals increased due to the reduction of accounting order defias-in accordance with the June 1999 Texas settlement agreement. This settlement substantially reduced the unamortized balance of rate deferrals, while decreasing the amortization period for the remaining deferrals fi;om a ten-year period to a three-year period. * ' . . ** . . In 1998, the amortization of rate deferrals decreased due to the completion in February of the Louisiana retail rate phase-in plaifOi isrBend. -- :...> . .. Other .- .-.
- Otherincome . . - .. -* .*. .*. .':~.~.* .
A ln 1998, other incmii icreased primrilydue to the 1997 resev for hgulat6r adjustments of $3i 1'nilion ($185.4 million net oftax). This increase was partially offset by interestitncme of Si9.6 Ailion?($ill.6million net of tax) related to the settlement of litigation with Cajun recorded in Decermber 1997. Intees, chams In 1999, interest charges deceased as a resulttof the retirement, redempion, andi refinancing of certain long-term debt in 1998 and 1999, as well as lower accruals of interest on certain Louisiana fuel and earnings reviews in 1998. , '. * .. ^ ,l
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- i * , S.
,1f, 5 1*t ,.
Interest 'cars remaind'relatively unchanged in 1998. Tofal interest expense detreased as a result of the retirement, redemption, and refiai cing of certain ong-term debt in 997 and 1998. This decwase was offset bX an increase in other interest due to the interest component of the provisions recorded for anticipated rate'refund in Louisiana. Income taxes The effective income tax rates for 1999, 1998, and 1997 are 37.6Y; 40.6%, and 27.2%,, respectively. The decrease in the effictive income tax rate in 1999 is due to accelerated tax"depreciation deductions, for which deferred aes have notibcenriiioalized, reflecting-a sl`'otrer tax life on-certaiii asst '; The increase in the effective income tax rate in 998is due to a decrease in tie flo-tirough of tax benefits related to operating resves. ind the 'increased 'reveCrsal of previously 'recorded AFUDC amounts included in depreciation.
*~~~~~~~~~ ~ .'I.!el ,
ENTERGY GULF STATES, INC. INCOME STATEMENTS For the Years Ended December31, 1999 1998 1997 (In Thlousands) OPERATING REVENUES Domestic electric S2.082,358 $1.777.584 S2.061,511 Natural gas 28.998 33,058 42,654 Steam products 15.852 43.167 43.664 TOTAL 2.127.208 1.853.809 2.147.829 OPERATING EXPENSES Operating and Maintenance: FueL fuel-related expenses, and gas purchased for resale 634,726 538.388 560.104 Purchased power 365.245 317.684 327.037 Nuclear refueling outage expenses 16,307 14,293 10,829 Other operation and maintenance 419,713 411,372 316.253 Decommissioning 7,588 3,437 8,855 Taxes other than income taxes 111.872 120,782 109,572 Depreciation and amortization 185.254 195.935 205.789 Other regulatory credits - net (24,092) (5,485) (26.611) Amortization of rate deferrals 89,597 21.749 105.455 TOTAL 1,806210 1.618.155 1.617,283 OPERATING INCOME 320.998 235.654 530.546 OTHER INCOME (DEDUCTIONS) Allowance for equity funds used during construction 6306 2.143 2,211 Gain on sale of assets 2,046 1.816 Miscellaneous-net S ' - I19,073. 14.903 (272.135) TOTAL 26.425 18.862 (269.924)
- INTEREST AND OTHER CHARGES Interest on long-term debt 138,602 149.767 163.146 Other interest - net 6.994 21,016 10.026 Distributions on preferred securities of subsidiary 7,438 7.437 6,901 Allowance for borrowed funds used during construction (5,776) (1.870) (1,829)
TOTAL 147.258 176.350 178.244 INCOME BEFORE INCOME TAXES 200.165 78,166 82,378 Income taxes 75.165 31,773 22.402 NET INCOME 125,000 46,393 59.976 Preferred dividend requirements and other 17,423 19.011 23,865 EARNINGS APPLICABLE TO COMMON STOCK S107.577 S27.382 836.111 See Notes to Financial Statements.
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I t *. ENTERGY GULF STATES, INC
.STATEMENTS OF CASH FLOWS
.For the Years Ended December 31, OPATI; ' :... -
199 m_ 1997 (In Thousands) OiERATINC AcrIVTIS Net income S125.0O,, S46.393 S59,976 Noncash Items Included In net Income: .. .
*'! I..
bisuon Cajun Settlement (246.022) Amortizaiion of rate deferrals S9.597 21,749 105.455 Resrve for regulatory adjustments (97.953) ' ' 130,603 381.285 Odr gulitoiy credits net : ,:- , _. . (24,092)! ", (5.4S5) (26.611) Deprtciation. aoization. and deconissioning 192,842 214,644 Deferred inome taxes and investment tax credits (1.495) (29.174) (52.486) Allowande for equity funds used during construction (6,306) (2.143) (2.211) Gain on sale of assets (2.046) (1,S16) (1.399) Chsafges in worlding capital: Receivables 9.791 65.527 (11.834) Fuel inventoy (S,070) 7.426 7,382 Accountp*0yble . 42.370 - ' (6,135) 16,999 Taxes accrued .- 46.01S 7.462 12.171 Interest accrued (14,06 1) (2,523) (4,497) Deferred fiicl costs (1,561) ' 1t2.16i"' (46,254) Other wokink capital accounts (10954) " '11,006 (11.765) Provision foresiimsed tosss and reserves 8,496 (4.207) (5.52) Changes in kherrcgulatory asset:... (59,242) (3.226) 44,883 Proceeds froti i~ttlement of Cajun'tititon *I 102.299 Other 56,817 458 (52,454) Net cash flow provided by operating activities .- ? ' ' ' 345,151 -..' :,. 448.148 4S3.709 INVkSTING A(XIVITIES l
.I,$f; . . .. . .
Consbuction expenditures , (199.076) (136,960), (132,566) Allowance equity funds used &riiig orudion 6.306 *2,143 2,211 Nudear uel purhases' (53.293) (1.977) (25,522) Proceeds fron sale/caseback of nuclear fuel 53,293 i ! 15,932 25.522 Doumssioning trust contributions and realized change in trust assets (10,853) (S1899) (9,540) a Net cash lruced hn esting s (203,623) (132.761) (139,S95) FINANCINC ACTIVITIES . Proceeds roM IuanCe Of: Longten debt 122.906 - * ' . 21,600 Preferred ectIrities of subsidiary bust 82,323 I '- ,: . .
- Retirement of,'
Long-tein debt (197,960) ! (212,090) (13.105) Redemption of preferd stock (25.931) (g.4S1) (93,367) Dividends paid: *. - . *s J !, . - ;I, Common stock -.'(107000) ' ' (109,400) (77,200) Preferred stock (16.967) I (19,055) (21,S62) Net cah fow jased In financing act$iles (224,952) (327,426) (293,211) Net Incrase (decrease) In cash and cash equivalents (t83.424) * (12,039) 50,603 Cash and cash equivalents at begrinig ofperiod 115.736 ' 1'27.775 7 77.172 Cash and ish equivalents at sdeofpirlod.. S32312 S115.736 $127.775 SUPPLEMENTAL DISCLOSURE OF CAH FLOW INFORMATION: Cash paid during the period for Interest -net of amount capitalized S161.326 ; S173,599 S171.874 Income taxes S28,410 $46,620 $50,477 Noncash investing and financing activities: Change in unrealized appreciation of deconumisioning trust assets S14,054 810,410 $3,939 Net assets acquired from Cajun settlement $319,056 See Notes to Financial Statements. I
' *ENTERGY GULF STATES, INC
'.. .. BALANCESHEETS ASSETS December 31, 1999 1998 (In Thousands)
CURRENTASSETS Cash and cash equivalents: Cash s8.607 . Si i.629 Temporary cash investments - at cost which approxdmates market 23,705 104,107 Total cash and cash equivalents .__32,312_. .115.736 ,. Accounts receivablex S - h & J. .. ~.. . Customer 73.21.5-. ,. . 78.961 Allowance for doubfusl accounti (1.828) 7" (1.735) Associated companies 1.706 -t 23.250 Other 15.030 28,265 Accrued unbilled revenues 90.396 59.569 Total receivables 178.519 1B8.310 Deferred fuel costs 134.458 132.896 Fuel inventory - at average cost 38.271 .201
- Materials and supplies - at average cost 112,585 ,346 Rate deferrals 5606 . . - ,9.077 Prepayments and other 21.750.O. 20.495 TOTAL 3;s01., 605,061 OTHER PROPERTYANDINVESTMENTS . :i.P .: ... ; , * .*--
Decommissioning trust finds 234.677 209.770 Non-utility propety - at cost (less accumulated depreciation) -~+/-~i) 1 S!)7579t- :.i~. 165,272 Other- at cost (less accumulated depreciation) 13.681 - 12,426-* TOTAL . 436. 17- 387.468 _UTILITY PLANT Electric. J.J65.407 7.250.789 Propcrty under capital lease, . .46.10 -4 427.
~Natural gms ' S2473 ' ' 5'.053' Steam products ,A,,
,.;..,, ,, 80.537 Construction work in progess 145,492 *... ,;,.15,2 .
Nuclear fuel under capital lease 70.801 46.572. TOTAL UTILITY PLANT 7.680.383 7.588499. ,. Less - accumulated depreciation and amortization 3.534.473 3. 141.5 IS..; UTILITY PLANT-NET 4.145.910 4,446.981 DEFERRED DEBITS AND OTHER ASSETS Reguatory asets Rate deferrals 5,606 89,333 SFAS 109 regulatory asset- net 83'405 ' 3163406 Unamortized loss on reacquired debt 40.576. 42.879 Other regulatory assets ' 40Jl5f ' ' 89,914' Long-term recivabIes .32,260, , t 67,. Other 23.490 22.l085 TOTAL , . ; ,627.494 .. 854,234 .:,. TOTAL ASSETS ;., , ., .5.733.022 . S6,293.744 See Notes to Financial Statements. ENTERGYPVLF STATES, INC BAL4NCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY .. I December 31, 1999 1998 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt S. $71,515 Accounts payable Associated companies 79,962 60.932 Other 114.444 91.102 Customer deposits 33.360 31.462 Taxes accrued 101.798 55.780 Accumulated deferred income taxes 27.960 21.260 Nuclear refueling outage costs 11.216 16.991 Interest accrued 28.570 42,631 Obligations under capital leases . 1.973 34,343 Other 14.557 0 5.32S TOTAL:.: - 463.840 442.341 DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 1.098,882 . 1,081,598 Accumulated deferred investment tax credits 178.500 193.509 Obligations under capital leases ,.003g ,66,656 Other regulatory liabilities 20.089 30.287 Decommissioning 139.194 136.035 Transition to competition 47,101 Regulatory reserves 110.536 515.023 Accumulated provisions 69,395 60.899 Other 117.804 319,962 TOTAL 1.846.539 2.403.969 Long-term debt 1.631.581 1.631,658 Preferred stock with sinking fund 34.650 60,497 Preference stock 150.000 150.000 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated deferrable debentures 85.000 85,000 SHAREHOLDERS' EQUITY Preferred stock without sinking fund 51.444 51.444 Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 100 shares in 1999 and 1998 114,055 114,055 Paid-in capital 1.153.131 1.152.575 Retained earnings 202.782 202.205 TOTAL 1.521.412 1.520.279 Commitments and Contingencies (Notes 2. 9. and 10) TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $5.733.022 S6.293.744 See Notes to Financial Statements. ENTERGY GULF STATES, INC. STATEMENTS OF RETAINED EARNINGS
~~~~. I I ...
For the Years Ended December 31, 1999 1998 1997 (In Thousands) Retained Earnings. January I $202.205 . $284,165 $325,312 Add: Net income 125,000 46,393 59.976 Deduct: Dividends declared: Preferred and preference stock 16.784 . . 19,011 21,862 Common stock 107.000 109,400 77,200 Preferred and preference stock redemption and other 639 (58) 2,061 Total 124.423 128,353 101.123
.S.02.7I2 $ $
Retained Earnings, December 31 (Note 8) S 202,782 : S202.205 S284.165 See Notes to Financial Sitements. ENTERGY GULF STXESINC; AND SBSEDIALUES SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 - 1997 . . 1996 1995 (In Thousands) - Operating revenues - -i- $ 2;127,208 '$ 1853,809 ':$ 2,147%829.' $2,019,181 $ 1,861,974 Netincom(loss) '.-'* $;125;000 i46393.-i..$:
'$i 59,976. $.'(3,887) $ 122,919 Total assets' t ;>*.$- * - ' -' ; S5,733,022 :S 6,293,744 $6,488,637 $6,421,179 ' $ 6,861,058 Longtm oblijations (1) ' 1i966,269 '$:1,993;811 2,098,752 $2,226,329 'S2,521,203
':(1) Includes long-ten debt; (excluding currently mafuring debt), preferred and preference stock'with sinking find, preferd 'secur ties" subsidiary trust, and noncurrent capital 1eia obligdtions;
' - - ' . 1999 ' 1998 - i997 -'1996 : 1995
* '(DollarsId Thousands)
Electric Operating Revenues: Residential $607,875 $605,759 $624,862...i :612,3 . .$573,566 Commercial 430,291 422,944 452,724 444,133 412,601 Industrial 718,779 704,393 740,418 .685,1D8 . . 604,688 Governmental 28,475 35,930 33,774 31,023 -; t.; 25,042 Total retail 1,785,420 1,769,026 1,851,778 1,772,732 1,615,897 Sales for resale:' Associated companies 38,416 14,172 14,260 20,783 62,431 Non-associated companies 109,132 112,182 59,015 76,173 67,103 Other (1) 149,390 (117,796) 136,458 56,300 43,533 Total $2,082,358 $1,777,584 S2,061,511 $1,925,988 $1,788,964 Billed Electric Energy Sales (GW): Residential 8,929 8,903 8,178 8,035 7,699 Commercial 7,310 6,975 6,575 6,417 6,219 Industrial 17,684 18,158 18,038 16,661 15,393 Governmental 425 . 560 481 438 311 Total retail
- 34,348 34,596 . 33,272 31,551 29,622 Sales for resale:
Associated companies 677 380 414 656 2,935 Non-associated companies 3,408 3,701 1,503 2,148 2,212 Total Electric Department 38,433 38,677 35,189 34,355 34,769 (1) 1998 includes the effects of an Entergy Gulf States reserve for rate refund.
I-Reporf,of Independent Accountants To the Board of Directors and Shareholders of Entergy Louisiana, nc.: In oueopinion, the accompanying-balance.sheets and the related statements of income, of retained earnings and-of cash flows present firly, in all material respects, the financial position of Entergy Louisiana, Inc. at December31, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended. December 31, 1999 in conformity with accounting principles generally accepted in the United States. These financial staements are the responsibility of the Company's management our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these staments in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An' audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and sigificant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouistCoopers LLP 'New Orleans, Louisiana February 17, 2000 4-
.~~~ .
ENTERGY LOUISIANA, INC MANAGEMENTS FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF-OPERATIONS Net Income
- ; . .. ! -tA ;¢a Net income increased in 1999 prknarily due to increases in unbilled revenue and other regulatory credits, and decreases in nuclear refueling outage expenses and interest charges, partially offset by increased provisions for rate Net income increased in 1998 primarily due to a decrease in operating expenses, partially offset by a decrease in electric operating revenues and higher income taxes.
Revenues and Sales h'ie chae n eletri& bperating revenues for the twlve months ended December 31, 1999 and 1998 are as follows: * . Inerease/(Decrease) Description 1999 1998 (In Millions) Base revenues ($48.7) (S35.0)
.. F'. ..
- .Y$~o cost recovery . - 63.6 (95.4)
Sales volume/weather (5.3).., 30.8 Other revenue (including unbilled) 74.5 (3.2) Sales for resale 11.6 10.4 Total $95.7 ($92.4) Base revenues In 1999, base revenues decreased primarily due to accruals for potential rate refunds. .. In 1998, base revenues decreased due to base rate reductions that became effective'in early 1998. Fuel cost recovery revenues Fuel cost recovery revenues do not affect net income because they are an increase to revenues that are offset by specific incurred fuel costs. . * . In 1999, fuel cost recovery revenues increased due to a shift from lower priced nuclear fuel to higher priced gas and purchased power due to nuclear outages atWaterford 3 in 1999. In 1998, fuel cost recovery revenues decreased due to lower pricing resulting from a change in generation mix. ENTERG.Y LOUISIANA;INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Sales volume/weather In 1999, sales volume decreased primarily due to less favorable weather, partially offset by increased usage by residential and industrial custorners. --, ;.* : In 1998, sales volume increased primarily due to significantly warmer weather. The increase in sales volume was partially offset by the loss of a large industrial customer as well as substantially lower sales to two other large industrial customers.. - , Other revenue In j999, other revenue increased primarily due to a change in estimated unbilled-reveiies. The changed
- estimate more closely
- aligns the:fuel component of unbilled revenues with regulatory treatment. The change in estimate is expected to affect comparisons to applicable prior period amounts through the first quarter of 2000.
Comparative impacts are also affected by seasonal variations in demand. Sales for resale - In 1999, sales for resale increased as a result of increased sales to affiliates due to outages at affiliate plants, in addition to favorable unit prices. In 1998, sales for resale increased as a result of an increase in sales to associated companies, primarily due to changes in generation requirements and availability among the domestic utility conipames. Exvenses Fuel and purchased power expenss - In 1999, fuel and purchased power expenses increased due to: o higher gas prices; o higher purchased power market prices; and o a shift in generation from lower priced nuclear fuel to higher priced gas as a result of refueling and other outages atWaterfbrd 3.. In 1998, fuel and purchased power expenses decreased due to: o lowergas prices; .. o a shift in mix to nuclear fuel; and o shifting generation requirements in 1997 as a result ofthe extended refueling outage atWaterfbrd 3.
.. ,,:I,,-,; ,,,,
Other operation and maintenance expenses Other, operation and maintenance expenses decreased in 1998 primarily due to: o non-refueling outage related contract work at Waterfbrd 3 during 1997; o maintenance perfonned at Waterford 3 in 1997; o the write-off of previously deferred radioactive waste facility costs in 1997; and o expenses related to fire damage sustained at the Little Gypsy fossil plant in September 1997. ENTERGY LOUISIANA, INC MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Nuclear refueling outage expenses . In 1999, nuclear refueling outage expenses decreased as a result of the amortization of higher outage expenses in 1998 due to the extended nuclear refueling outage in 1997. Other Mulatoly credits Inl1999, other regulatory credits increased due to the deferral of Year 2000 costs incurred as required by the LPSC. The defened costs vill be recovered over a five-year period. Other Interest charzes - .; In 1999, interest.on long-term debt decreased primarily due to the redemption and efinancing of certain long-term debt in 1999. Income taxes The effective income tax rates for .999, 1998, and 1997 were 38.9%, 37.8%, and 41.1%, respectively. The effective income tax rate decreased in 1998 primialy due to aceleated ax depreciation deductions, for which deferred taxes have not been normalized, reflecting a shorter tax life on certain assets. I.'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Ej4TERGY LOIUL[SIANA IN¢. INCOME STATEMENTS
. . . ; . z For the Years Ended Decenber31, 1999 1998 *199 (In lhousands)
OPERATING REVENUES Domestic electric Sl.06,594 S'.710.908 S1.803.272
".OPERATING EXPENSES _ *; - ,
- s .; ~~.
Operating and Maintenance: FueL fuel-related expenses, and gas purchased for resale 421.763 383.413 429,23 1, Purchased power 418,878 372.763 43-532' Nuclear refueling outagc expenses 15.756 21.740 18,634 7I *- te ojperation and rmaintetianc - 89.34 289S22, 318,856 Decommissioning .. .. : : .878& 8.786 ., 8,786 Taxes other than income taxes 75.447 70.621 71.558 Depreciation and amortization 161.754 162.937 163.249 Other regulatory charges (credits) - net (5.280) (1.755) 5,505 Amortization of rate deferrals - 5.749 TOTAL 1.386.452 1.308.027 1.435,692.:.
* . OPERATINQXNCOME.. - 420142 :.* 402,881 - 367,580 OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 4.925 1.887 1.149 Gain on sale of assets 2,340 -. . Miscellaneous - net 2.206 2.644 (517) z :TOTAL .:.,:,:, ' .; . 7.131 __ .6,871._ 632 INTEREST AND OTHER CHARGES .6 " 109.97 rnterest on long-rni debt ., 109.463 ' ' 116,715 Other interest- net
- 71,27 .- '; 5885.'
Distributions on preferred securities of subsidiary 6,300 6,300 6,300 Allowance for borrowed funds used during construction (4.112) (1.729) (1.410) TOTAL 113,135 121,161 127,490 INCOME BEFORE INCOME TAXES 314.138 288.591 240,722 Income taxes 122.368 109.104 98,965 NET INCOME 191.770 179.487 141.757 Preferred dividend requirlements and other 9.955 13.014 13,355 EARNINGS APPLICABLE TO COMMON STOCK S181.815 S166.473 5128.402 See Notes to Financial Slatements. ENTERGY LOUISIANA, INCL ISTATEMENTS OF CASH FLOWS For the Years Ended December31, 1999 199S 197 (In Thousand.) OPERATINC ACTIVITIES Net Income S191.770 $179.487 S141.757 Noncash Items Included In net Income: Amortization of rate deferrals 5.749 Other regulatory charges (credits) -net (5.2:0) (1,754) 5,505 Depreciation. amortizaton, and deconnissioning 170.540 171,723 172,035 Deferred income taxes and investment tax credits (15.487) *26.910 (15.456) Allowance for equity funds used during construction (4.925) --.. (1.887) (1.149) Gain on sale of assets (2.340) Changes In worldng capital: Receivables (41,565) (7.972) (3.335) Accounts payable 95,120 (5.78) (21,926) Taxes accrued 7.659 (7.040) 17.53 Interest aecrued (33.066) 18,731. (14,678) Deferred fuel costs (9.959) 4,S30 21.615 Other working capital accounts 56,714 16,983 (2,286) Provision for estimated losses and reserves 5.442 3,986 Changes in other regulatory assets 38,577 (11,443) 17,932 Other (45.146) *(44,099) (12,130) Net cash flow provided by operating activities 410,394 - 342,361 315,U2 INVESTING ACTIVITIES Construction expenditures (130,933) (105,306) (t4.767) Allowance for equity funds used during constucion : 4.925 1,149 Nuclear fuel purchases (11,308) (3S.141) (43,332) oceeds from saceleaseback of nuclear fuel 11.308 39.701 43,332 Decornmissioning tust contributions and realized change in trust assets (13.678) (11,648) (11,191) Net cash flow used In Investing activities (139.686) (113,507) = (94,S09) FINANCING ACTIITIES Proceeds from Issuance or: Long4erm debt 29S,092 112.556 Retirement ot: Longtern debt (386.707) * : (150.7t6) (34,238) Redemption of preferred stock - (50,000) ;- * . (7.500) Dividends paid: Common stock (197.000) (138,500) (145,400) Preferred stock (10.389) (13,014) (13,251) Net cah flow used Infinancing activities
- 346,004) . ,(189,744) (200,439)
Net Increase (decrease) In cash and cah equvalents (75.296) 39,110 20,174
. . 1 .
Cash and cash equivalents at beginning of period 83,030 43920 23,746 Cash and cash equivalents at end of period S7,734 $83.030 S43.920 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for. Interest -net of amount capitalized S144.731 S98,801 S138,530 Incone taxes $132.924 S86.830 S68,323 Noncash investing and fmancing activities: Change in unrealized appreciation of decommissioning trust assets S4.5B5 S5,92 S3.432 See Notes to Financial Statements. ENTERGY LOUISIANA,'INC BALANCE SMETS; A&S-ETS Decemrber 31, 1999 1998 (In ThDousands) CURRENT ASSETS Cash and cash equivalents: Cash S7,734 S10.187 . Temporary cash investmens - at cost which approximates market: 72.843 Total cash and cash equivalents 7*734 . 83,030 Accounts receivable: Customer 79.335 65.262 Allowance for doubtful acaunts (1.615) (1.164) Associated companies 14.601 33.775 Other 10,762 19.305 Accrued unbilled revenues 106,200 50.540' Total eccivables 209,283 167.718 Deferred fuel costs 2.161 - Accumulated deferred incomez taxes 12.520 13,332 Materials and supplies - at a,#r;age cost 84.027 82.220 Deferred 'nuclear refueling outage csts 11.336. . 6.498 Prepayments and oilier . 6.014 11,565 TOTAL 333,075 364.363 OTHER PROPERTY'AND INVE.STMENTS Investment in subsidiary companies - at equity 14,230 14,230 Decommissioiing trust funds 100.943 82,681 Non-utility property - at cost 'less accumulated depreciation) *' 21;433 21.459 TOTAL.- 136.606 118.370 UTILITY PLANT Electric 5,178,808 5.095.278 Property under capital lease 236.271 234.339 Construction work in progress 108.106 85.565 Nuclear fuel under capital lease 51,930 75.814. TOTAL UTILITY PLANI' .:. 5,575,115 :5,490.996 Less - accumulated depreciation and amortization 2.294.394 2.158,800 UTILlTY PLANT-NET 3.280.721 3.332.196 DEFERRED DEBll'SAND OTHER A.SSETS Regulatory assets: SFAS 109 regulatory asset- tt: ' 230,899 270,068 Unamortizecd loss on reacquired debt 35.856 30,629 Other regulatory assets 50.*19i 49,599 Other 17.302 15,816 TOTAL . 334.248 366.112 TOTAL ASSETS S4.084.650 S4.181.041 See Notes to Financial Statements. ENTERGY LOUISIANA, INC BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 1999 1998 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt S116.388 S6.772 Accounts payable: Associated companies 137,869 43.051 Other 90.768 90.465 Customer deposits 61.096 55.966 Taxes accrued 25.863 18.203 Interest accrued 20.236 53.302 Deferred fuel cost 7,798 Obligations under capital leases 28.387 32.539 Other 59.737 7.644 TOTAL 540.344 315.740 DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 792,290 840.931 Accumulated deferred ivestment tax credits 123.155 128.689 Obligations under capital eases 23.543 43,275 Other regulatory liabilities 15,421 10.836 Accumulated provisions 58.087 52.645 Other 34.564 39.791 TOTAL 1.047.060 1.116.167 Long-term debt 1.145.463 1.332.31I5 Preferred stock with sinking fund 35.000 85.000 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated deferrable debentures 70.000 70.000 SHAREHOLDERS' EQUITY Preferred stock without sinking fund 100.500 100.500 Common stock, no par value, authorized 250.000,000 shares; issued and outstanding 165.173.180 shares in 1999 and 1998 1,088.900 1.088.900 Capital stock expense and other (2.171) (2.320) Retained earnings 59,554 74.739 TOTAL 1.246.783 1.261.819 Commitments and Contingencies (Notes 2. 9. and 10) . TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY S4.084,650 S4,181,041 See Notes to Financial Statements. ENTERGY LOUISIANA, INC. STATEMENTS OF RETAINED EARNINGS For the Years Ended December 31, 1999 1998 1997 (In Thousands) Retained Eamnings, January I $74,739 . $46,766 $63,764 Add: Net income 191,770 I 179,487 141,757 Deduct:, Dividends declared: Preferred stock 9,805 13,014 13,016 Cofmmon stock 197,000 ' 138,500 145.400 Capital stock expenses -' 150 - 339 Total 206.955 151,514 158.755
. _~~~~~~.
,. 9,55 ,, : 7.. $ ,
Retained Earnings. pecember 31 (Note 8) S59,554 -. ' 74,739, ' 46.766 See Notes to Financial Statements.
, - : j .. e.:
- 100-
ENTERGY LOUISIANA, INC. SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 - 1996 . 1995 (In Thousands)
;Operating revenues. . $1,806,594. .. $1;,710,908 $ ,803,272 .. $1,828,867 $1,674,8 75 Netincome .$.-... .. $ 191,770 . $ 179,487, S. 441,757 $ 190,762. $ 201,5 37
. Total assets .. $4,084,650
$. $4,81,041. $4,175,400 .$4,279,278 $4,331,5' 23 Long-term obligations (1) . $l274,006 $1,530,590 $1,522,043. . $1,545,889. $1,528,5 42 (1) Ihcludes long-tem debt (excluding currently maturing debt), prefrrred stock with sinldng fund, preferred * . securities of subsidiary tnisand noncurrent capital lease obligations. ,
I .,.,,1999, 1998 '1997, .' 1996 1995 t (Dollars In Thousands) Electric Operating Reventu es: Residential $620,146 $598,573 S606,173 $609,308, $583,373 Commercial 386,042 367,151 379,131 374,515 - 353,582 Industrial 646,517 597,536 708,356 ..727,505 641,196 Governmental 33,738 32,795 34,171 33,621. 31,616 Total retail 1,686,443 1,596,055 1,727,831 1,744,949 1,609,767 Sales for resale: Associated companies 27,253 16,002 3,817 5,065 1,178 Non-associated compa nies 53,923 53,538 55,345 58,685 48,987 Other 38,975 45,313 16,279 20,168 14,943 Total $1,806,594 $1,710,908 $1,803,272 $1,828,867 $1,674,875 Billed Electric Energy Sales (GWI: Residential 8,354 8,477 7,826 7,893 7,855 Commercial 5,221 .5,265 4,906 4,846 4,786 Industrial 15,052 14,781 . 16,390 17,647 16,971 Governmental 468 481 460 457 439 Total retail 29,095 29,004 29,582 30,843 30,051 Sales for resale: Associated companies 415 386 104 143 44 Non-associated companies 831 855 805 982 1,293 Total 30,341 30,245 30,491 31,968 31,388 I - 101 -
Report of Independent Accountants To the Board of Directors and Shareholders of Entcrgy Mississippi, Inc.: In our opinion, the accompanying balance sheets and the related statements of income, of retained earnings and of cash flows piesent fairly, in all material respects, the financial position of Entergy Mississippi, Inc at December 31, 1999 and 1998, and the results of its operations and its cash flows fr each of the three years in the period ended. December 31,'1999 in confonnity with accounting principles generallyaccepted in the United States. Thesefinancial statements are the responsibility of the Compannis'anagement; our responsibility is to expresl an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted. in the United States;-which require that weplan and perform: the audit to obtain reasonable assurance about wheither the financial statements are free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits prov'ide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP New Orleans, Louisiana ' . February 17, 200
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ENTERGYJT ~SISSI'Prl INC MANAGEMENTSFINANCIAL ISCUSSION.AND ,ANALYSIS RESULTS OF OPERATIONS Net Income
.Net income decreased in .1999 primarily 4ue to a decrease in unbilled revenues and an increase in other opera ion and maintiimce expenses. . '
Not inconme.decreased in 199~. primazily. due to an increase in operatiz expenses,, partially offset by an increase in elictric operating revenues.*... Revenues and Sales , .1. If i. , - I S- ". ., .j , -, The changes in electric operating revcnues for the twelve months ended December 3 1, .199an 19 ar a follows: .. j .. . Increase/(Decrease). Description 1999 99 Base revenues ($9.7) ($10.2) Grand Gulf rate rider (95.9) (2.6) 4, -~ - Fujel os eovj ~ (l6 20.5
. A Saesvyolumi~/e/'te 4:i 1 .2.
05.6' Sales forresale (18.3) 5.0 Total ($143.5) $38.9 Base revenues . . .~ . .. ;A In 1999 and 1998, base revenues decreased due to the formula rate plan reduction that, became effective in 1998. The formula rate plan reduction is discussed in more detail in Note 2 to the financia staements. Rate riders Rate rider revenues have no material effect on net income because specific incurred expenses offset them. In 1999, Grand Gulf rate rider revenue decreased as a result of a new rider which became effective October 1, 1998. This new rider eliminated revenues attributable to` the Grajid Gulf phase-in plan; which was completed in September 1998. However, this decrease was pirtially offset by the Grand Gulf Accelerated Recovery Tariff (GGART), which also became effective October 1, 1998. This tariff provides for accelerated recovery of a portion of Entergy Mississippi's Grand Gulf purchased power obligation., The GGAAT is discussied in'miiore detail in Note 2 to the financial statements.
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ENTERGY MISSISSIPPI, INC. MANAG1 MENTYS FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Fuel cost recovery Futel cost recovery revenies do not affect net income because they are an increase to revenues that arc offset by specific incurred fuel costs. In 1999, fuel cost recc-vtey revenues decreaied du;to ithe'MPSC's review and subsequent decrease of Entergy Mississippi's energy cost recovery rider. In 1998, fuel cost recovery revenues increased primarily due to an increase in sales volume. Sates volrne/wetheu ' ' ' In 1999, sales volume increased as a result of sales growth in the residential and commercial sectors, partially offset by unfavot~ble eatlii . In 1998, sales volumindrised as a result of significantly warmer weather. Other revenue ... In 1999, other.revenue decreased primarily due to a change in estimated unbilled revenues. The changed estimate more closely, aligns the fuel component of unbilted revenues with regulatory treatment. The change in estimate is expected to' affect comparisons to applicable prior period amounts through the first quarter of 2000. Comparative impacts are also afectejd by seasonal variations in dnd Salesfor resale ,. . :. In 1999, sales for resale decreased as a result of decreased oil generation due to plant outages at Entergy Mississippi. e decrease is also due to higher sales to associated companies in 1998 as a result of an outage at EntcrgyArkcansas,.. f':*-'.: ; Expenses uel and purchased owere ies In 1999, fuel and purchased power expenses decreased primarily due to:
- . . 'o.a dewcreasintotalergy, consumption rquirm ts; and.
planned and unplanned plant'outages during the year..-
.; e decrease in fuel, and purchased power expenses was partially offset by:
o a shift from lower priced oil generation to higher priced gas generation as a result of plant outages in 1999; o an increase in the marcet price of purchased power, and o the GGART implemented by System Energy in October 1998 resulting in an increase in the price of System Energy purchased power.
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ENTERY MISSISSIPPI, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
., ,, RESULTS OF OPERATIONS.
In 1998, fuel and purchased power expenses increased primarily due to: o the increased usage as a result of significantly wanner weather, and a the impact of the under-recovery of deferred fuel costs in excess of the fixed fuel factor applied in 1997. In January 1998, Entergy Mississippi increikd its fixed fuel factor to recover'actual fuel expenses more timely. . Other operton and maintance., . In 1999, other operation and maitenance expenses increased primarily.due to: o planned and unplanned plant outages in 1999; o an increase in ustomer service and reliaility improvement spending; o an increase in employee benefit expense; and o an increase in casualty reserves.'- - Other regulatory credits . . . . In 1999, other regulatory credits increaseddue to greater under-recovery of Grand Gulf 1 related costs as a result of the new rider implinented in October 1998. In 1998, other regulatory credits decreased primarily due to less under-recovexy of Grand Gulf related expenses in 1998 as comparedto 1997. Amortization ,frate deferrils - - In 1999, amortization of rate deferrals decreased due to the completion of the Grand Gulf I rate phase-in plan in September 1998. These phase-ins had no material effect on net income. In 1998, amortizatioii of rate deferrals decreased due to a decrease in the amortization prescribed in the Grand Gulf 1 rate phase-in plan, which was completed in September 1998. These phase-ins had no material effect on net income. Other . , . Interest and other charges Interest on long-term debt decreased in 1999 and 1998 primarily due to the refinancing of certain long-term debt. Income taxes The effective income tax rates for 1999, 1998, and 1997 were 29.7/, 30.9%, and 28.6%, respectively.
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ENTERGY MISSISSIPPI, INC,,. INCOME STATEMENTS
-. . j.i I : " ; .e I For the Years Ended December31, 1999 1998 1997 (In Thousands)
OPERATING REVENOCES Domestic electric I- ., . , S832.819 S976,300 S937.395
- '. ' OPE1RATING EXPENSES .: .?'I $:1. #Ojeritingand Mainten imice:, I '
Fuel. fuelrelated expenses, and gas purchased for reside 185,063 241.415 199,880 Purchased power 332,015 286,769. . 285.447 Other operation and mtintenance 152,817 131,752 i9.810 Taxes other than income taxes 44.013 44,888 43,142 Depreciation and amortizatitii : * ' ' - 4.870 4S.133' *:'. 43.300. Other regulatory credits - net (12,044) (3.186) (20.731) Amortization of rate deflerals ' ;d04.969 II91097 TOTAL - . . 744,734 851.740 : 800.645
.I . ;:" ' Z . .. , -.. 'U ..- ,,
OPERATING INCOM 88.08S. .124.560 136.750 OTHER INCOME (DEDUCTIONS) Allowance for equity funds used during construction 1.569 188 543- :R Gain (loss) on sale of assets 1.025 (2) , ,. . .. ;Misceflaneods- net' . ... - .. ::.. ,,, 6,781 4,891 .9
- g19 TOTAL .. , 8.350. 6.104 ,,, 1.460 INTEREST ANI) OTHER CXIARCES
- !i ' , *;z Interest on Ioig-torm debt ' - -
* : 37,756. *40,791 Other interest - net 3.574 : t.3,l71. -, - , 4483 ,
Allowance for borrowed funds used during construction (1.529) (932) . (469) TOTAL 37.310 39,995 . 44,805 . i,1,- INCOME BEFORE INCOME TAXES 59.125 90,669 93.405
! -- : ...;. ' -.e :: .'s Income taxes.- .17.537.:. .-28.031 . '. 26,744 .:i7 .. . N INCOME . ... 41.588 , 62.638 , 66.661.
4
'~ }' referred divided4qutusments and other ' 3i.7' .* 3,370 . . 4;044 EARNINGS APPLICAILE TO COMMON STOCK S38.218 $59,268 S62;617 See Notes to Financial Statements.
I*.. , *,:. .
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ENTERGY MISSISSIiPI, INC
,STATEMENTS OF CASH FLOWS For the Years Ended December31, 1999 1998 1997 (In Thousands)
OPERXTING ACTIVITIES Net income $41,588 $62,63S S66,661 Noncash Items included n net income: Amortization of rate deferrals 104.969 119,797 Other regulatory credits - net (12,044) (3.186) (20.731) Depreciation and amortization 42,870 45.133 43,300 Defared inco6we taxes and investment tax credits 1,066 (12.494)' (32,204) Allowance for quity funds used during construction (1.569) (I) (543) (Gain) loss on sile ofassets (1,025) 2 Chnges In worldng capital: Receivables : 24,208 6.253 2.97S Fue inventorj- (771) !384 3,275 Accounts paiable 54.317 (31967) (12,338) Taxes accrued 29.955 (26.301) 5.S32 laterest accrued (4.595) . 323. (6.600) Defemd fuel costs (45.S30) 12,85 . (10,967) Other working capital accounts 10.072 8.652 (12,245) Provision for estimated losses and reserves 4.173 (6.915) . 1.173 Changes in other regulatory assets (30.179) (38,295) (29,699) OCher 12.152 . 4,202 3S,304 Net cash flow provided by operating activities 142.413 125.041 ;'- - 155.995 INVESTING ACTIVITIES Construction expenditures * (94,717) .. . ,~ (58.705) (50,334) Allowance for equity funds used during construction 1.569 188 543 Net cash fow used in Investing activities (93.14S) (5S,517) (49.791) FINANCING ACTIVITIES Proceeds from Issuance or: LongIAcn debt 153.629 78.703 64.S27 Retirement of: Long4Aern debt (163.278) (8.020) (96.015) Redemption opeferfred stock - .: (14,500) Changes in short-term borrowing, net (6) (13) Dhiidends paid: Common stock " . .. .(34,i00) I. 1 (66,000) - (59,200) Preferred stock ' (3,363) (3,370) (3,998) Ne cash flow used Infinancing activities (47,11S) (70.700) (10S,8S6) Net ncrease (decrease) In cash and cash equivalents 2,147 (4,176) (2,682) C.h and cs eivalents at beglining o period 2.640 6,816 : - 9,498 Cash and cash equivalents at end of period $4,787 $2,640 S6.S16 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for-. Ilercst - net of amount capitalized S41.567 S39,291 S50.662 lcone taxes ($29,850) $64,204 $51.598 See Notes to Financial Statements.
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ENTERGY MISSISSIPPI, INC BALANCE SHEETS ASSETS December 31, 1999 1998 (In Thousands)
- .. . -t .. . ,
CURRENT ASSETS Cash and cash equivalents: Cash S4.787 S2.640, Accounts reeCivabI. t Customer 35,675 , 39.701 Allowance for doubtful accounts (886) (1.21.7). Associated companies 1.370 .- S.703t. Other 2.391 -. ;t1.267.lf! -...' '.: Accrued unbilled revenues 28.600 45,904 - Total receivables 67.150 91,358-
- Dcerred fuel costs 47.939 2.108 *^':
Accumulated deferred income taxes - 665P'- Fuel inventory - at average cost 3.774 3,0d2
- Materials and supplies - at average cost 17.068 17'149 ,
Prepayments and other 7.114 17.256 TOTAL 147.832 129.178 OTHER PROPERTY AND INVESTMENTS Investment in subsidiary companies - at equity 5.531 5.531 Non-utility property - at cost (less accumulated depreciation) 6,965 7.056 Other - at cost (less accumulab d depreciation) .1496- 13 TOTAL
- I12,496 12,690 UTiLITY PLANT Electric 1.76S3.636 ' 1,718.426 Property under capital lease 384 '477 Construction work in progress 66.789 35.317 TOTAL UTILITY PLANT 1,830.809 1.754.220' "
Less -accumulated depreciation and amortization 709.543 685,214 UTILITY PLANT - NET 1,121,266 1.069,006 . DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: SFAS 109 regulatory asset: riet 24.05 I... .25.515,. Unamortized loss on reacquired debt 16.345 7.981 Other regulatory assets 132.243 . 100.601
- Other 5.784 6,048 TOTAL 178.423 *140.145 1 TOTAL ASSETS S1,460.017 SI,356,929 See Notes to Financial Statements.
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ENTERGY MISSISSIPPI, INC BALANCE SHEETS " LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 1999 1998 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt S- S20 Accounts payable: Associated companies 84.382 - 44,091 Other 32.470 1.444 Customer deposits 23.303 18,265 Taxes accrued 35,968
- 6.013 Accumulated deferred income taxes 526 Interest accrued 10,038 14.632 Obligations under capital eases 95 92 Other 2.137 2,319 TOTAL 188,919 103.876 DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 298,477 281 0j7.:
Accumulated deferred investment tax credits 20.908 22.408 Obligations under capital leases 290 384 Accumulated provisions 7,374 3,200 Other 3.368 4,331 TOTAL 330,417 311,340 Long-term debt 464.466 463.616 SHAREHOLDERS' EQUITY Preferred stock without sinking fund 50.381 50.381 Common stock, no par value, authorized 15.000,000 shares, issued and outstanding 8,666.357 shares in 1999 and 1998 199.326 199.326 Capital stock expense and other (59) (59) Retained earnings 226,567 222.449 TOTAL 476.215 472.097 Commitments and Contingencies (Notes 2, 8. and 9) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY S1.460.017 S1.350.929 See Notes to Financial Statements.
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ENTERGY MISSISSIPPI, INC. STATEMENTS OF RETAINED EARNINGS For the Years Ended December31, 1999 1998 1997 (In Thousands) Retained Eaniings. January I S222,449. $229,181 S225,764 Add: Net income 41,588 62,638 66,661 Deduct Dividends declared: Prefened stock 3.370 3.370 3,656 Common stock 34,100 .-. 66.000 59,200 Prefened stock expenses.; - - 388 Total: . 37.470 69.370 63,244 Retained Earnings, December 31 (Note 8) $226,567 :$222 449 : $229,181 See Notes to Financial Statements.
.- :> ! ;; W -*
I . . . . . . .
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ENTERGY MISSISSIPPI, INC. SELECTED FINANCUAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 1996 1995 (In Thousands) Operating revenues . $ 832,819. $ :976,300 $ 937,395 S 958,430. S 889,843 Net Income $' 41,588 . *S 62,638 $ 66,661. S .79,211 $ 68,667 Total assets $1;460,017 . $1,350,929 $1,439,561 $1S521,466 $1,581,983 Long-term obligations (1) $ 464,756 ;-$ 464,000 :S 464,156 $ .406,054 . .S 511,613 (1) Includes long-term debt (excluding currently maturing debt) and noncurrent capital lease obligations.
... . ., ,,; ,,.-I
- o. 1.
1999i 1998 - -1997 1996 ---1995 I . I (Dollars In Thousandi) Electric Operating Revenues: Residential $311,003 $367,895 $342,818 $358,264 $336,194 Commercial 250,929 284,787 274,195 281,626 262,786 Industrial 151,659 170,910 173,152 18S,351 178,466 Governmental 23,528 26,670 26,882 29,093 27,410 Total retail 737,119 850,262 817,047 854,334 804,856 Sales for resale: Associated companies 63,004 80,357 78,233 58,749 35,928 Non-associated companies 31,546 32,442 21,276 22,814 21,906 Other 1,150 13,239 20,839 22,533 27,153 Total $832,819 $976,300 $937,395 $958,430 $889,843 Billed Electric Energy Sales (GWH): Residential 4,753 4,800 4,323 4,355 4,233 Commercial 4,156 4,015 3,673 3,508 3,368 Industrial 3,246 3,163 3,089 3,063 3,044 Governmental 363 347 333 346 336 Total retail 12,518 12,325 11,418 11,272 10,981 Sales for resale: Associated companies 1,774 2,424 1,918 -1,368 959 Non-associated companies 426 484 412 521 692 Total 14,718 15,233 13,748 13,161 12,632
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Report of Independent Accountants To the Board of Directors and Shareholders of EntergyiNewOrleani,'Ic.: ' In our opinion, the accompanying balance sheets and the related statements of income, of retained earnings and of cash flows present ffirly, in all material respects, the fihcial position of Entergy New Orleans, Inc. at December 31, 1999 and 1998, andthe results ofits operations'and its cash flow;for each of the three years in the-period ended Decenber 31,1999 in cnformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the. Company's management; ourtesponsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally. accepted, in de.United States, whichr require tha we. plan and perfqnn the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimate made by management, and evaluating the overall financial statement preseiiiatidi., 1We beliiev that our audits provi&e a reasoiable basis fbr the opinion expressed above. Pricewaterhouseroopers LLP. . New Orleans, Louisiana February 17, 2000-.
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9 ~~ ~ ~ ~ . .
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ENTERGY NEWE ORLEANS, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net Income
. ;.;, Net income increased slightlyin 1999 primarily due to an increase in unbilled revenues and sales volume, .partially offset by,an increase in other operation and aintenance expenses. .,. ,. .. ; !':f Net income increased i 1998 pinmarily due to an increase in: operating revenues and. other income and a decrease in income taxes, partially offset by increased operating expenses.
Revenues and Sales !aElectric operating revenues . ,. . The changes in electric operating revenues for the twelve months ended December 31, 1999 and 1998 are as follows: . ... :. ..- ..
... . . . Increaset(Decrease)
DescriptionX 1999 1998 (In Millions) Base revenues ($1113) -. ($98).- Fuel cost recovery (4.6) 14.5 Salesvolumelweatheri
- 3.
1.7 '
.Other revenue (including unbilled) 5.5 1.0 S., foSresale -.. .... .. .. . .. 3.7.-___ _.1.7
..Total r ,9 ........ * ' ' .... ..($5.0) . ..$21.3 Base revenues . . . .
In 1999, base revenues decreased primarily due to base rate'reductions effective January 1999. and.rate refund provisions accrued for potential rate matters. In 1998, base revenues decreased primarily due to reductions in residential and commercial rates that went into effect in August 1997. . . .; - - Fuel cost ecove. . . Fuel cost recovery revenues do not affect net income because they are an increase to revenues thathare offset by specific incurred fuel costs. In 1999, fuel cost recovery revenues decreased due to an under-recovery of fuel expenses riesulting from higher market prices in 1999 compared to the prior year. In 1998, fuel cost recovery revenues increased due to higher fuel prices and increased generation. Sales volume/weather In 1998, sales volume increased primarily due to significantly warmer weather.
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ENTERGY NEW ORLEANS, INC. MANAGEJMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS' OF OPERATIONS Other revenue Txi1099, other revenue'ificreasef due to a change in estimated unbilled revenues. The changed estimate more closely aligns the fuel component of unbiled revenues with regulatory treatment The increase was partially offset by less favorable weather in 1999. The change in estimate is expected to affect comparisons of revenue to applicable time period amounts thi'ouh tli fLrst'quater of 2000. Comparative'impacts are also affected by seasonal variations in demand. Sales for resale In 1999, sales fbr resale increased due to favorable unit prices resulting from increased purchased power and gas market prices, coupled with an increase in affiliated sales volume. Gas operating revenues In 1998, gas operating revenues decreased due to lower gas prices. Exnenses Fuel and purchased power expeenese-In 1998, fuel and purchased power expenses increased primarily due to:. o an increase in purchased power primarily 'due to increased generation recuirements as a result of significantly warmer weather and an increase in the price of puichised power, and o an over-rtovery of gag and electric fuel cost in 1998 due to market price fluctuations. This increase was partially offset by a decrease in the price of gas purchased for resale. Other overation. andmaintenance gaenses -, In 1999 and 1998, other operation and maintenance expenses increased primarily due to: o increased environmental provisions; O employee benefit expense; and o increased spending for customer service and reliability improvements. . Amortization of rate deferrals In 1999, amortization of rate deferrals decreased due to a scheduled rate change in the amortization of Grand Gulf I phase-in expenses. Other regulatorv credits In 1999, other regulatory credits increased due to a greater under-recovery of Grand Gulf I costs in 1999.
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ENTERGY NEW ORLEANS, INC. MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Other Other income Other income increased in 1999 primarily due to: o an increase in AFUDC resulting from increased iapital charges on projects in 1999; and o increased interest related to the Grand Gulf 1 rate deferral plan. Miscellaneous income increased in 1998 primarily due to Entergy New Orleans' portion of System Fuel's gain on the sale of oil and gas properties and an increase in interest related to the Grand Gulf I rate deferral plan. The'Grand Gulf 1 rate deferral plan is discussed in more detail in Note 2 to the financial statements. Income taxes The effective income tax rates for 1999, 1998, and 1997 were 40.7%, 38,4%, and 44.0%, respectively. The increase in the effective income tax rate for 1999 was primarily due to the increase'in pre-tax income reducing the impact of permanent differences and flow through items. The decrease in the effective income'tax rate for 1998 was primarily due to a tax benefit recorded in 1998 related to a depreciation adjustment.'
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ENTERGY NEW ORLEANS, INC. INCOME STATEMENTS For the Years Ended December31, 1999 1998 1997 (In Thousands) OPERATING REVENUES Domestic electric S426,431 $431,453 S410.131 . Natural gas 81.357 82.297 94,691 TOTAL 507.788 513.750 504.822 OPERA'JING EXPENSES Operating and Maintenance: II Fucl, fuel-related expens:s, and gas purchased for resale 135,242
- 138.142 *141.902 Purchased power 166,579 164.435 156,542 Other operation and maintenance 83;197 79.023 72,748g Taxes other than income taxes. f 39,621 . 40.417. .
Depreciation and amortizalion 21.219 21.878 38,964 Other regulatory credits - net .(9.036) .. (4.540) (6,394) Amortization of rate defctrils '28,430 35.336 37.662 TOTAL 465.252 474.691 462,531 OPERATING INCOME 42,536 39.059 42,291
*OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 1.084 284 380 Gain on sale of assets ;, . *458 '* - * - Miscellaneous- net . .3. 2:0 .263 - (77)3I TOTAL 3.347 1.693 303 INTERPST AND OTHER CHARGES Interest on long-term debt 13,277 13,717 13,918 Other interest - net 1,403 1.075 1.369 Allowance for borrowed fuinds used during construction (788) (219) (286) TOTAL 13.892 14,573 15.001 INCOME BEFORE INCOME TAXES 31,991 26.179 27,593 Income taxes 13.030 10.042 12,142 NET INCOME 18,961 16,137 15.451 Preferred dividend requirements and other 965 965 965 EARNINGS APPLICABLE TO COMMON STOCK S17,996 S15,172 S14,486 See Notes to Financial Statements.
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ENTERGY NEW ORLEANS, INC STATEMENTS OF CASH FLOWS For the Years Ended December31, 1999 1998 1997 (In Thousands) OPERATING ACTIVITIES Net Income S18,961 S16.137 S15,451 Noncash items Inchded In aet Income: . . . Amortization of rate deferrals 2S.430 35,336 37,662 Other regulatory credits - net (9,036) (4,540) (6.394) Dcpreiation and amortization I21,219~ 21,878 21,107 Deferred incomn taxes and investment tax credits (3.131) (7,498), (1,957) Allowance iobequitj funds used during construction (1.OS4) (284) (3S0) Gain on sale of assets (458) Chattes In working capital: Receivables (7.258) 3,148 4,257 Fuel inventory 179 (861). (145) Accounts payable 23,319 (4,136) 540 Taxes accrued 429 (5.270) 4,065 Interest ac'rue- 37 (130) (276) Defeed fuel csit (13,293) .8.193 (2,094) Other working capital accounts 6,607 (5.122) (15,902) Provision for estimated losses and reserves (531) (6,295) (247) Changes in other regulatory assets (11,482) (6,964). 7,365 Other 6,796 (2,805) (S,941) Net cash now pi'led by operating activities 60,162 40,329 54,105 INVESTING ACTMTIES Consnuction expenditures (462'39j (21,691) (16.137) Allowance for 4z6itj funds used during constrution. 1;0S4 2S4 380 Net cash fow used In Investing activIties (21,407) (15,757)
FINANCING ACTVITIES Proceeds from Issuance of:
Long-term debt 29,438 Retirement or: Long4erm debt (30,000) (12,000) Dividends paid:, Common stock (26,500) (9.700) (26,000) Prefered stock , (1,206) (965). (965) Net cash flow used In financing activities - Z- .. (27.706) (11,227) 39 965) Net Increase (decrease) In csh and cash equIvalents (12.699) 7,695. (617) Cash and cash equivalents at beginnlng 6f perlod 17.153 9,458 _ 10.075 Cash and casb equlvents at end of period $4,454 $17,153 - S9,458 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid di eperi for: Interest - net of amount capitalized S14,281 si4,592 S15,237 Income taxes -net S12,476 S26,197 $10,981 See Notes to Financial Statenents.
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E1NTERGY NEW ORLEANS, INC. BALANCE SHEETS ASSETS December 31, 1999 1992 (In Thousands) CJRRENT ASSETS Cash and cash equivalents: Cash S4.454 S3,769 Temporary cash investments - at cost. which approximates market -__________ 13.384. Total cash and cash equivalents 4,454 17,153 Accounts receivable: Customer 28,658 24,355 Allowance for doubtful accounts (846) (761) Associated companies 404 3.320 Other 6.225 3,835 Accrued unbilled revenues 19.820 16.254 Total receivables 54.261 47.003 Deferred fuel costs 14,483 1.191 Fuel inventory ;at average cost. 3,293 3.472 Materials and supplies - at average cost 10,127 8.845S Rate deferrals 24,788 28,430 Prepayments and other 2,528 6.686 TOTAL 113.934 112,780 OTHER PROPERT'Y AND INVESTMENTS Investment in subsidiary companies - at equity 3,259. 3,259 UTILITY PLANT Electric 541.525 514,685 Natural gas 133.568 132,568 Construction work in progress 29.780 20.184 TOTAL UTILITY PLANT 704.873 667,437 Less - accumulated depreciation and amortization 382,797 371.558 UTILITY PLANT-NET 322,076 295,879 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Rate deferrals 10.974 35.762 Unamortized loss on reacquired debt 1.187 1,399 Other regulatory assets :33.039 21.558 Other 1,277 1.267 TOTAL 46.477 .59.986 TOTAL ASSETS S485,746 S471,904 See Notes to Financial Statements.
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,1.jTEgCY NF ORLE S, jINC ..
,. , , .. B4ANCESIIEETS.. ,,. .
LIA tLmES A OSuiRE1HOLWRI EbilTY
- * , J . . . . . , , X i . December 31, 1999 1998
. Ii (In Thousands)
CURRENT LIABILITIES Accounts payable: Associated companies S24,350 S1S,283 Other 2S.261 11.008 1 Customer dposits 17.830 18.082 Taxes accrued 429 Accumulated deferred income taxes 10,863 6,284 Interest accrued 4,956 4,919 Other 5,524 TOTAL 92,213 60,359 -
- . DEFERRED (REDITS AND OTHER LIABILITIES Accumilated deferred incoes taxes 43.878 57,214 Accumulated deferred investment tax credits ,,,
- , -6.37~8
. 7,'52,S;,
, .. 6.942 *
. w:>..SFAS 109 regulatoiy.iabiity-iiet-.- Other regulatory liabilities 1.753 3,146 Accumulated provisions 8,836 9,367 Other
- 7.733 : .8.116-.
TOTAL 76,106 85.679 Long-term debt 169.083 169.018 SHAREHOLDERS' EQUITY Preferred stock without sinking fund 19.780 19.780 Common stock. S4 par value, authorized 10,000,000 sham; issued and outstanding 8.435,900 shares in 1999 and 1998 33,744 33,744 Paid-in capital 36,294 36.294 Retained earnings 5.526 67,030 TOTAL 148.344 156,848 Commitments and Contingencies (Notes 2and 9) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .S485.746 -S471.904 Sec Notes to Financial Statements.
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ETIUERGY NEW ORLEANS, INC STATEMENSOP REAED EARNINGS For the Years Ended December 31, 1999 1998 1997 (In Thousands) Retained Earnings, Januazy I . *!.i6i,630- t61,558 - S73,072 Add: . Net income 18,961 16,1 37 15,451 Deduct Dividends declared. Preferred stock : 965 965 965 Common stock 26,500 9.700 26.000 Total .*:. : :; 27,465 $ 10,665 t.! 26.965 Retained Earnings, Decembei 31 (Note 8) S58,526' ' 1,030 $61,558 See Notes to Financial Statemrnts.
-. I
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1i - .. ; : i . .f % :, .- , Il t .Xio b e ENrERGY NEW T)LEtAN§, lIC SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 - '1996. .1995 (In Thousands)
- 4- ; - .,* : * ,. ' ' . , .1h ' .' , :;. - -;i
.Operating revenues * $507;788 ' 513,70:: .. .. '$304,822 * $ 504,277 *$ 470,278
'Netincome > T$ 18,961 ': ' :I64137-' -S '15451" $ 2;76' S'34,386 Total asses - ' ;: '$485;746 J $471,904 - ; 5$498,150- ' :$549,996 $ 596,206 Long-term obligations (1) $ 169,083 -' 'i6,i8 S 168,953 ; $':- 168,888 - $ 155,958 (1) Includes long-ter debt (excludi curenty matunng debt) !- : *
,,',. j ,. .- ' 46* ' t,).tl" /1999 '_ "i1997 996-- 1995
* . In Thoustnds)
~~~~~~~~~~~~~~(Dollsrs Electric Operating Revenues:
Residential $158,822 $164,765 $145,688 $151,577 $141,353 Commercial 146,328
- 149,353 143,113 . .49,649 .144,374 Industrial 25,584 26,229 24,616 24,663 22,842 Governmental 63,056 62,332 58,746 ;. . 58,561 . - . 52,880 Total retail 393,790 402,679 372,163 384,450 .:. 361,449 Sales for resale:
Associated companies 14,207 10,451 10,342 2,649 3,217 Non-associated companies 10,545 10,590 8,996 9,882 9,864 Other 7,889 7,733 18,630 6,273 15,472 Total $426,431 $431,453 $410,131 $403,254 $390,002 Billed Electric Energy Sales (GWH): Residential 2,102 2,141 1,971 1,998 2,049 Commercial 2,208 2,149 2,072 2,073 2,079 Industrial 514 514 484 481 537 Governmental 1,071 1,037 994 974 983 Total retail 5,895 5,841 5,521 5,526 5,648 Sales for resale: Associated companies 441 370 316 66 149 Non-associated companies 180 199 160 212 297 Total 6,516 6,410 5,997 5,804 6,094
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Repprt f bidI ependqt Accountants
;S - .
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To the Board of Directors and Shareholder of SystemEnergy,Resources,Inc.: .. . .A In our opinion, the accompanyin3 balance sheets and the related statements of income, of retained earnings and of cash flows present fairly, in all.paterial respects; the financial positions of System Energy,.RRsources, Inc.. at December 31, 199 and 1998, and the..results of itsj operations and its,cash flows for each of the three years in the .. period ended-Decn r 31, 1999 conformity with .ccounting principfes I' generally accepted in the United States. These financial. statements are th: yesponsibility oftheoqmpany's management; our respqnfbility.isto.express. an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standarls generally accepted i, the. United. States, hiq uiie hp we plan, and perform the audit to obtain reasonable assurance about whether the financial staaments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and signifint estimatesmpade by management, and evaluating the overall financial statement presentation.. We believe.that our audits provide a reasonable basis for the opinion expressed above.
*~~~~~~~~~~~~~~~~~~~~~~~
..... a:. .9A.,
PricewaterhouseCoopers LLP New Orleans, Ecuisiana . ... February 17,2000
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'SYSTEM ENERGYRESOURCES, INC.
MANAGEMENT'S FINANCIAL DISCUSSION 'AND ANALYSIS RESULTS OF OPERATIONS Net Income Net income decreased in 1999 due to the additional reserves and interest recorded for the potential refund of System Energy's proposed rate increase, as well as downtime for unplanned outages. Net rcome increased slightly in 1998 primarily due to an increase in other income.. Revenues Operating revenues recover operating expenses, depreciation, and capital costs attributable to Grand Gulf 1. Capital.costs'are computed by.allowing .a return;dn!System Energy's common equity funds allocable to its net investment in Grand Gulf 1 and adding to such amount System Energy's effective interest cost for its debt. i.t:Operating revenues increased in 1999 primarily due to the implementation of the..Grand Gulf Accelerated Recovery Tariff (GGART) at Entergy Arkansas and Entergy Mississippi. This increase in revenues is offset by related regulatory charges and does not affect net income. The tariff was designed to allow Entergy Arkansas and Entergy Mississippi to accelerate the payment of a portion of their Grand Gulf purchased power obligation in advance of the implementation of retail access. It became effective 'on January 1, 1999 and October 1, 1998 for EntergyArkansas and Entergy Mississippi, respectively; -The GGART and System Energy's proposed rate increase, which is subject to refund, are discussed in Note 2 to the financial statements. Expenses' - '} ' ' '" Fuel expenses In 1999, fuel expenses decreased primarily due to an extended nuclear refueling outage at Grand Gulf I in addition to unplanned outages. Grand Gulf 1 was on-line for 17 fewer days in 1999 compared to 1998. In 1998, fuel expenses decreased because of lower generation due to a scheduled nuclear refueling outage in April and May. Grand Gulf I was on-line for 47 fewer days in 1998 compared to 1997. Depreciation and amortization In 1999, depreciation and amortization expenses decreased as a result of the reduction in principal payment associated with the sale and leaseback of a portion of Grand Gulf 1. The depreciation schedule matches the collection of lease principal and revenues with the depreciation of the asset. Other reiulatory charges In both 1999 and 1998, other regulatory charges increased due to the implementation of the GGART at Entergy Arkansas and Entergy Mississippi, as discussed above.
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SYSTEMNENERGY RESOURCES INC. MANAGEMEETSFINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Other Other incoe... .. ..... *...,.. Other income increased in both 1999 and 1998 as a result of the interest earned on System Energy's advances to the money pool; an inter-company. fuding.anangement. The moneypool-is discussed in Note 4 to the financial statements. Interest charge
- Othertifiterest-increased in 1999 due to. interest oh.thepotential rcfimd of.System Energy's propose4. rate increase. -i -. * . , t ;-r ' ' i . l i
- I . .. ^Interest onlong-term debtdecreasedin. 1999 and. 1998 as a result of te retirement andrefuiancing of higher-cost long-term debt.;,: .. . t ,, ... . ,...
- 7 Income'taxes. * . ! t.... . ., ', P ., . . ; .. .. .
*
- t .-^ 7!i"O.t-A A, J l!1 l ; .',
.:_ij.
i4. :.,C;IVi:.: The'effictive income tax rates il999,.;l998, and l997-were 39.50/d%.42.L%, and 42.20/% respectvely.,y 1 The effective income tax rate for 1999 decreased due to decreased pre-tax income partially offset by the amortization of investment tax crdits related to Grand Gulf 2.
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SYSTEM ENERGY RESOURCES, INC INCOME STATEMENTS For the Years Ended December31, 199 1998 1997 (In Thousands) OPERATING REVENUES Domestic electric S620.032 $602.373 $633,698 OPERATING EXPENSES Operating and Maintenance Fuel, fuel-related expenses. and gas purchased for resale 37.336 41,740 48.475 Nuclear refueling outage expenses 14.136 15,737 16,425 Other operation and maintenance 87.450 86.696 101.269 Decommissioning 18,944 18.944 18,944 Taxes other than income taxes 27,212 26.839 26,477 Depreciation and amortization 113.862 125,331 128.915 Other regulatory charges - net 57,656 4.443 TOTAL 356,596 319.730 340.505 OPERATING INCOME 263,436 282.643 293.193 OTHER INCOME Allowance for equity funds used during construction 2.540 2.042 2.209 Miscellaneous - net 16.309 13,309 8,517 TOTAL 18.849 15.351 10.726 INTEREST AND OTHER CHARGES Interest on long-term debt * . ,. 102.7,64 109.735 121.633 Other interest- net fd s; ; ; 45-2l8 6,325 7.020 Allowance for borrowed fnds used during construction (1.920) (1,805) (1.683) TOTAL 146,062 114.255 126,970 INCOME BEFORE INCOME TAXES 136,223 183,739 176.949 Income taxes 53,851 77.263 74.654 NET INCOME S82,372 $106,476 S102.295 See Notes to Financial Statements.
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. . , R (Page lePt blank intentionally)
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SYSTEM ENERCY RESOURCE iN(.' STATEMENT.SOF CASH FLOWS For the Years Ended December 31,
. .... , ,.. .... 1999 1992 1997 (In Thousands)
.. W. , . -
OPERATING ACTIVITIES Net Income .. t2.372* 1. . 5106,476 S102.295 Noncash Items included In net Income: Reserve for regulatory adjustments 108.4S4 68.236 43,123 Other regulatory charges- net 57..656 4443 4. Depreciation, amortization and decommoissioning 132,806 , '. 144.275 147.859 Deferred income taxes and investmeuit tax credits-. (86.860) ' . ' (2S,222) (39.370) Allowance for ecuuity funds used during construction (2.540)' ' "-- (2.042) (2.209) Changes In worldng capital: Receivables (172.354) 9.690 (23.833) Accounts payable (11.688) (2859) 11.172 Taxes accrued' - (21,424) 1.131 7,852 Interest accrued ; (2,022) *-* ' (300) 8,127 Other working capital accounts (4.425) (2.228)- 19.054 Provision for estiated losses and recives 45 . (1,704) * (1.025) Changes in otherre guatoiy isse'ts : (18.492) 25,066 36,654 Other 41,250 (23.159) (23.392) Net cash Dow provided by operating activitIes , ' *. 102,808. .....29803 286.307 INVESTING ACTIVITIES Construction expenditures (28.848) . (30,692) (35.141) Allowance for equity funds used during construction 2i,540
--
- 2.042 2,209 Nuclear fuel purchases' (39,975) (30,523) (16,524)
Proceeds from saleaseback ofnuclear fuel 39,975 30,523' 16.524 Decommissioning trust contributions and realized change in trust assets (22,139) :@';-$'-(24.166)' (22.452) Net rash flow used I investing activities (48,447) '- (52.816)-.' (55.384)
; FINANCING ACTIVITIES Proceeds from Issuance or Long-tern debt 101,35 212,976 Retirement of:
Longtern debt (282.885). (300,341). (17319) Dividends pild: Connon stock (75.000) (72.300) : (113.S00) Net cash flow used In financing activ~tIes (256.050) (159,665) (131.119) Net Increase (decrease) In cash and cash eqivalents (201.689) S6.322 99.S04 Cash and eah equivalent at beginning of period 236.841 150;519 ' 50.715 Cash and cash equivalents at end of period S35.152.. "'- 236,841 ' ' 150.519 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest -nct of amount capitalized S102.S67 S107.923 S112387 Income taxes S154.336 S104,987 S105.621 Noncash investing and financing activities: Change in unrealized appreciation (depreciation) of
&ecommissioning trust assets (S37) S3.205 Sl.237 See Notes to Financial Statements.
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SYSTE?4 ENERGY RESOURCES, INC. BAkCSHETSN , AS.SETS December 31,
,' .,'- . 1999 1998 (In Thousands)
CURRENT ASSETS Cash and cash equivalents Cash S136 S120 Tenporary cash investments - at cost, which approximates market 3S.019' 236.721 Total cash and cash equivaients 35.152 236.841. Accounts receivable: Associated companies 301.287 125.171 Other 670 4.431 Total receivables 301.957 129.602. Materials and supplies - at average cost 61264 62.203: Deferred nuclear refueling outage costs 18.665 12.853 Prepayments and other Z251.;:
- 2.592' TOTAL 419.289 444.091 -
OTHER PROPERTY AND INVESTMENTS Decommissioning trust funds 135.384 113.282 UTILITY PLANT Electric . 3.060.324 3.030.636 Property under capital lease 434.993. . 441.098 Construction work in progress .58.510;. . 57.076 Nuclear fuel under capital lease 78.020 64.621 TOTAL UTILITY PLANT' 3.631.847..
- 3.593.431 Less -,accumulated depreciition andamortization 1.312.559
- 1.198.266 UTILITY PLANT - NET -:2.319.289 .::. 2.395.165 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets:
SFAS 109 regulatryasset-net' 242.834 221.996 Unamortized loss on reacquired debt 56.474 57.150 Otherregulaoey assets 185.910 188.256 Other 9.89 11.265 TOTAL 495.087 . 478.667 TOTAL ASSETS S3.369.048 . S3.431.205 See Notes to Financial Statements.
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- ) SYST`IM ENERGY RESO.V 1RCES, INC.*
LIBItE BA.AN¶.E SHEETS . . . . BILKIES AND HAREHfLDtR'S EQUITY
., B .$, Ie~; .: ..
.. ,I . :'. December31,
.. ;;V 1999 1998 (Inihousands)
CURRENT LIABILITIES Currently maturing long-term debt' S77.947 ' - S175,820 Accounts payable: Associated companies 15.237 25.97Si
'Other 18.470 19.420.
Taxes accrued 55.383 76.806 Accumulated deferred income taxes 7.162 5.022 Interest accrued. 40,000 42.022 Obligations under ciptal leases 38.421 41,35 Other 1.651 1,543 TOTAL 254.271 , 388,443 DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 481.945. 506,727 Accumulated deferred investment tax credits . 93.2 i9 - Obligations under capital leases 39.599 22.786 FERC settlement - refund obligation 37.337 43.159 Other regulatory liabilities 73,313 43.309 Decommissioning 129.503 107.365 Regulatory reserves 267.771 159.287 Accumulated provisions 2.016 1.971 Other 16,014 17,524 TOTAL 1.140.717 998.823 Long-term debt 1.082,579 1.159.830 SHAREHOLDER'S EQUITY Common stock, no par value, authorized 1.000,000 shares; issued and outstanding 789.350 shares in 1999 and 1998 789.350 789.350 Retained earnings 102.131 94,759 TOTAL 891.481 884.109 Commitments and Contingencies (Notes 2.9. and 10) TOTAL LIABILITIES AND SHAREHOLDERS' EQUWTY S3.369.048 S3.43 i.205 See Notes to Fnancial Statements.
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SYSTEM ENERGY RESOUtCE9, INC. STATEMENTA tO6 ,JL RE: , . XlNED
. EARN]NffS I~
, . ; i For the Years Ended December 31, 1999 1998 1997 (In Thousands)
Retained Earnings. January 1. S- 45739' i.583 S72,088 Add-. Net income 82.372 106,476 102,295 Deduct: Dividends declared 75.000 72,3d6- 113,800 R Eb Retained Earniis ecemBee 31 Notb 8) $102,131 $94,759 .S60,583 See Ntes to Financial Stateg-imts. A r I' ..'.J .. S. .
- r. ,; { ,: ,. -
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SYSTEM ENERGY RESOURCES, INC. SELECTED FINANCIAL DATA - FIVEYEAR COMPARISON 1999 1998 1997 1996 1995 (Dollars In'Thousands) . Operating revenues $ 620,032 S 602,373 . S. 633 698 .S 623,620 $ 605,639 Net income $ 82,372, $ 106,476 $ 102,295 $ :98,668 $ 93,039 . Total assets $3,369,048 $3,431,205. S,432,031 $.3,461,293 . $3,431,012 Long-term obligations (1) $1,122,178 . $1,182,616. $1,364,161 $1,474,427 -$1,264,024 Electric energy sales (GW) 7,567 8,259 9,735 8,302 7,212 (1) Includes long-term ~~~debt
.~~~ ~ ~ ~(excluding
~~ current maturities) and. noncurrent capital lease obligations. .
.. . '7 . I:
. I. .
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I ENTERGY COidIRATION AND SUBSIDIARIES TS td'FA ANCIAI STATEMENTS NOTE 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Entergy Corporation, Entergy Arkansas, Entergy Gulf Statfs, Entergy Louisiana, Entergy Missis'sippi, Entergy New Orleans, and System Energy) * - ,
. The acco'an consolidated financial t'teints include the accounts of Entergy Corp'oration bid its direct and indirecf subsidiaries, including the domestic utility companies and System Energy, whose- separate financial staiements are'included in this dnbbment. The fiancial 'emnts presented herein result- from tlese companies having registered securities with the SECT ;: 'S As required by generally accepted accounting principles, all significant intercompany transactions have been eliminated in the consolidated financial statements. The domestic utility companies and System Energy maintain accounts in acowiq c with FERC 'ad'other'ielatoyguidelines. Certii previous~teported amounts have been reclassified to conform to curreat classifications, with no effect on net income or shareholders' equity.
Entergy Corporation scld its investments in Entergy London and CitiPower in December 1998. Accordingly, the consolidated balance sheet does not include amounts for these entities as of December 31, 1998. The consolidated statements of income and cash flows for 1998 include amounts for Entergy London and CitiPower through the dates of their respective sales. Use of Estimates in the Preparation of Fiancial Statenents The preparation of Entergy Corporation's and its subsidiaries' financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Adjustments to the reported amounts of assets and liabilities may be necessary in the future to the extent that future estimates or actual results are different from the estimates used. Revenues and Fuel Costs Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi generate, transmit, and distribute electricity primarily to retail customers in Arkansas, Louisiana, and Mississippi, respectively. Entergy Gulf States generates, transmits, and distributes electricity primarily to retail customers in Texas and Louisiana. Entergy Gulf States also distributes gas to retail customers in and around Baton Rouge, Louisiana. Entergy New Orleans sells both electricity and gas to retail customers in the City of New Orleans, except for Algiers, where Entergy Louisiana is the electricity supplier. System Energy's operating revenues are intended to recover operating expenses and capital costs attributable to Grand Gulf 1 from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. Capital costs are computed by allowing a return on System Energy's common equity funds allocable to its net investment in Grand Gulf 1, plus System Energy's effective interest cost for its debt allocable to its investment in Grand Gulf 1. System Energy's proposed rate increase is discussed in Note 2 to the financial statements. The domestic utility companies accrue estimated revenues for energy delivered since the latest billings. The domestic utility companies' rate schedules include either fuel adjustment clauses or fixed fuel factors, both of which allow either current recovery or deferral of fuel costs until such costs are reflected in the related revenues. Fixed fuel factors remain in effect until changed as part of a general rate case, fuel reconciliation, or fixed fuel factor filing.
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Utility Plant . Utility plant is stated at original cost. Te original cost of utility plant retired or removed, plus the applicable removal costs, less'salvage, is charged to accifiulated depreciation. M9i4tenanc rpairs, and minor replacement costs are charged to operating expeises. Subitaiitialy all of the utilit'plant is subject to liens from mortgage bod indentures'.
- Utility plant includes the portions of Grand Gulf 1 and Waterford 3 that have been sold and leased back. For financial reporting purposes, these sale and leaba&c arrangements are reflected as financing transactions.
- Net utility plant by company and iunctional category, as of December 31, 1999, is shown below (in millions):
Entergy Entergy Entergy Entergy Entergy. System Entergy rKansas Gulf States Iouislana Mississippi NewOrleans- Energy PoUtion Nuclear - S 6,766 S 913 S 1,853 S 1,832'. S S - S 2,157 Other 1,396 338 585 201 199 IS - Transmission 1,597 455 495 311- 300 27. 9 Distribution 3,225 964 889 742 463 167:- - Other 567 99 152 118 92 -. 17 16 Plant acquisition adjustment -
- Entergy Gulf States 407 -
Other 86 20 - - 66 Construction work in progress 1,501 267 145 108 67 30 59 Nuclear fiel 374 95 71 52 - - 78 (leased and owned) Atcumulated provisin for . decommissioning (1) (418) (271) '(64) .* (83) *
- Utilityplant-net S 15,501 S 2,860 S 4,146 S 3,281 S 1,121 S - .322 iS -2,319 (1) The decOmmisinulig liabilities related to' Grind Gulf I,.Pilrim, and the 30% of River Bend previously
- 'owned by Cajun are recorded in the applicable Balance Sheets in Deferred Credits-and Other Liabilities -
* "Decomnmissioning." -. ' 'I :; Depreciation is computed on the straight-line basis at -rates based on the estimated service lives and costs of removal of the various classes of property. Depreciation rates on average depreciable property are shown below:
Entergy. Entergy'- Entergy Entergy i *Entergy ISystem
.: ' ;-:Enterzy Arkansas Gulf States 'Louisiana ' Mississippi -'NeWOrleans Enerv 1999 2.9% 3.2% 2.4% 2.9% 2.4% 3.0% 3.3%
1998; 3.0%- -33% '26%3.0% * - 2.5%-: 3.1% 3.3% 1997 3.2% 3.1% 2.8% 3.0% 2.5% v 3.1% # 3A% AFUDC represents the approximate net composite interest cost of borrowed funds and aiteasonable return on the equity funds used for construction. Although AFUDC increases both utility plant and earnings, it is realized in cash through depreciation provisions included in rates. ' '
.. .. . -,, ..- ...... :v ....... -: * :
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Jointly-Owned Generatine Staitions i.4 . I_;. r s . ; ., - Certain Entergy subidiaries jointly ow electnc generating facilities with thi parties. The investments and expenses associated with these generating; statopsare recorded by the Entergy subsidiaries to the extent of their respective undfvided ownership interests. As of December 31, 1999, the subsidiaries' investment and accunulated depreciation in each of these generating stations were as follows:
., .. ,,. ..-*. i . .-- Total
- gawatt Accumulated Generating Stations Fuel-Tnve Capability Ownership Investment Depreciation O d.*\-.... ! fi Millions)
- .... Cs '. . *.! a Entetgy Akansas', m.
Inde&ndence Unit-'1 . ; Co 836 31.50% S 118 S 55 Comnon Facilities Coal 15.75% 30 13 White Bluff Units I and 2 Coal 1,659. 57.00% 404 205 Entergy Gulf States Roy S. Nelson Unit 6 Coal 550 70.00% 403 199 Big Cajun.2 Unit 3 , Coal 540 42.00% 227 .106 Entergy Mississippi - Independence Units and 2 Coal 1,678 25.00% 227 95 System Energy - Grand Gulf Unit 1 Nuclear 1,200 90.00%/(1) 3,483 1,313
- Entergy Power -
Independence Unit2 Coal 842 14.37% 81 32 (1) Includes an 11.5% leasehold interest held by System Energy. System Energy's Grand Gulf I lease obligations are discussed in Note 10 to the financial. statements. Income.Taxes . : . ;; Entergy. Corporation and its subsidiaries;file a U.S. consolidated federal income tax retum. Income taxes are allocated tQtbe subsidiaries in proportion.to-their ,contributionto consolidated taxable income. SEC. regulations require that no Entergy subsidiary pay more taxes than it would have paid if a separate. income tax return had been filed. In accordance with SFAS 109, "Accounting for Income Taxes," deferred income taxes are recorded for all tedmporary differences betwepn thp:book and tax basis. of assets and liabilities, and for certain credits available for carryforward;,. . .
, eferred tax assets are reduced by a valuation, allowance when, in the opinion of management, it is more likely n not th t sqmeportion of the.deferred tax assets will not be realized.. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Investment tax credits are deferred and amortized based upon the average useful life of the related property, in accordance with ratemaking treatment Reacquired Debt
.. . ; l . . . . ..: . :. .. . .
The premiums and costs associated with reacquired debt of the domestic utility companies and System Energy (except that allocable to the deregulated operations of Entergy Gulf States) are being amortized over the life of the related new issuances, in accordance with ratemaking treatment.
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Cash and Cash Equivalents. . Entergy considers all unrestricted highly qd debt instruments purchased with an original maturity of three months or less to be cash equivalents. . . . .. Investments ' . . ,.., .. , .
* - J- ,*---A ,-
Entergy applies the provisions of SFAS 115, "Accounting for Investments for Certain Debt and Equity Securities," in accounting for investments in decommissioning trust funds. As a re~ult,.Entergy has~recorded on the consolidated balance sheet $136 million of additional value in ts decdmunissioning trust funds,:. This, increase represents the amount by which the fair value of the secuities held in such funds. exceeds the amounts deposited plus the earnings onthe deposits.. In accordance with the:regulatory treatment for decommissioning ust funds,. the domestic utility companies and System Energy have recorded an ofsetting amount in unealized gainsoniment securities as a regulatory liability in other deferred credits..- , .J . Decommissioning trust funds for Pilgrim do.not receive regulatorytreatment. Accordingly, unrealized gains recorded on the assets in Pilgrimp's trust fRuds are recognized as a separate. cornpo -Pnt
- shareho lrs'-, ity because these assets are classified as available for sale. , . .... , . ,t
- - . ;.~~~~~~ .a&. .~ )- .4 Foreign Currency Translation . v ,
-;
- At. f of. . .. . * .dI. * . .: e;.
- All assets and liabilities of Entergy's foreign subsidiaries are translated into .US. dollars at the exchange rate in effect at the end of the period. Revenues and expenses are translated at average exchange rates prevailing during the period. The resulting translation adjustments are reflected in a separate,,coponen,,Rfsharehodeps'.equity.
Current exchange rates are used for U.S. dollar disclosures of future obligatibns deioinated iif6reign currencies.
, .' ,: , * -. * .. " . ' - I ' 6* Z -, .1.
EarninesperShare. *.; . . . .. ., , .
- r ,; . :
,,,, - ~~. . . - . , . .. a; . .l;r l .. t The average number ofcommon shares outstnd for he presenation o~4lut earnings per share were greater by approximately 199,000 shares in 1999, 176,OQO shares in 1998, ad .140,000 shares in 1997, than the number of such shares for the presw ation of basic earnings per share due to1Entergy's tock option aid other stock compensation plans discussed more thoroughly in Note 5 to the financial statements.
Options to purchase approximately 5,205,000,149,000, and 225,000 of ioiiin stock at various prices were outstanding at the end of,.l999,1998, and 1997, respectively, but werenot included in the computation of diluted earnings per share because the exercise prices were-greater.than the average.!narke*price of the common shares at the end of each of the years presented. .. . . . . . . , .,..' Application of SFAS 71 .: ! *
.~ ~.~ ~ ~. ~ ~~~.. . .
*The domestic utility companies and System Energy currently account for the effects of`regu ationpursuant to SFAS 71, "Accounting for the Effects of Certain Types of Regulation." This statement applies to the financial statements of a rate-regulated enterprise that meet three criteria. The enterprise must have rates that (i) are approved by the regulator, (ii) are cost-based; and (iii) can be charged to and collected from customers. These criteria may also be applied to separable portions of a utility's business, such as the generation or transmission functions, or to specific classes of customers. If an enterprise meets these criteria, it may capitalize costs that would otherwise be charged to expense if the rate actions of its regulator make it probable that those costs will be recovered in future revenue. Such capitalized costs are reflected as regulatory assets in the accompanying financial statements. SFAS 71 requires that rate-regulated enterprises assess the probability of recovering their regulatory assets at each balance sheet date. When an enterprise concludes that recovery of a regulatory asset is no longer probable, the regulatory asset must be removed from the entity's balance sheet.
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SFAS 101, "Accounting for the Discontinuation of Application of FASB.Statement No. 71,? specifies how an enterprise that ceases to meet the criteria for application of SFAS 71 for all or part of its operations should report that event in its finaiicial staterraents. In general; SFAS 'Olbrecui es.that the' enterprise report the discbntinuation of the application of SFAS 71 by eliminating from its balance sheet all regulatory assets and liabilities related to: the applicable segment. Additionally, if it is determined that a regulated enterprise is no longer recovering all of its costs and therefore no longer qualifies for SFAS 71 accounting, it is possible that an impairment may exist-that could require further write-offs of plant assets.
% ,,: 1 > s ... *- ; , m , . .5 . . *. , . , -,
-' 'EITF 974 "Derglati&o-f the Pricing of ElectricitL Issues Related t .the-Application of FASB
'Statements No.71 and I01'specifiesthat SPAS 71 should be 'discontinued &tadate no later than-when theeffects of
'a transition t domipetition plan for 'all or a portion of the entity 'subject to sucli plan areasonably;'dterminable.
'Additionally, EITF 974 prdmbIgateW that regulatory assets to be recovered'thoigh cash flows derived:fomanother pedtion of the entity'that continues to apply SFAS 71 should not be written: off' rather, they should'be considered regulatory assets of the segment that will continue to apply SFAS'71.-' - '
* '-.' Ai described in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -SIGNIFICANT
*" FACTORg' AND- KNOWN TRENDS," manageifient -believes' tht: definitive outcomes have 'riot yet 'been determined regarding transition to competition in any of Enteigy's jurisdictions.- Therefore, the-edulated operations of the domestic utility companies and System Energy continue to apply SFAS 71. Arkansas and Texas have enacted retail open access laws, but Entergy believes that significant issues remain to be addressed by Arkan&and -Texas regulators, and the enacted laws do not provide sufficient detail to reasonably determine the impact on Entergy Arkansas' aiid Ente ulf Stabs" regulated opciatios. ' " '
., .,; ~~~~-S.,, , .* ....
Transition to Comietitiitilibili es<'. ' En conjunction with the transition to competition of the electric utility industry in certain jurisdictions in which the domestic utility companies operate, regulatory mechanisms have been establishedtoritigdW'potitial stranded costs. . These mechanisms include the transition cost account at Entergy Arkansas, which is discussed further in Not2 to thi A'Zig 1 s'teizents. Also included is a, provisioh'in- the Texas transition legislation that allows depreciation bn transmisisi6n- Bd distribuitibn s'ets to be dircted bto d gexeration assets.' The liabilities recbrded as'i'resilt of these ineclnisms are classified as 'ansition to competiton" deferred credits;
. ;,[: ;. ' *. -'. ' .'";*' ;;'L';;': ;w . :: . .~.: e Domestic Operating Comanv Deregulated Onerations
~.{A
-~.... ~*I* , *' ; a Entergy Gulf States does nbt apply'iiulatory accounting Orinijl& t its wholesale urisdiction, steam
- J- !"departmneit Louisiani retaildriulted portion of River Bend, and the 30/ interest in River Bend'foimerly owned by Cajun. The Louisiana retail deregulated portion of River Bend'is '6peated under -a dergulated asiet plan representing a portion (approximately 24%) of River Bend plant costs, generation, revenues, and expenses established under a 1992 LPSC order. The plan allows Entergy Gulf States to sll
- the' electricity from the deregulated assets to Louisiana retail customers at 4.6 cents per KWH or off-system at higher prices, with certain provisions for sharigsucli incremental revenue above 4:6 cents per KWH between ratepayers and shareholders.
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The results of these deregulated operations before interest charges for the years ended December 31, 1999, 1998, and 1997 are as follows (in thousands): 1999 1998 1997 Operating revenues $ 166,509 $ 178,303 $ 155,471
*-Operating expenses Fuel, operating, and maintenance 126,917 137,579 89,987 Depreciation 35,141 - 39,497 . 36,351 Total operating expense ' 162,058 - 177,076 126,338 ; Income tax expense . 628 . 1,154. 9,416 Net income from deregulated utility operations $ 3,823 S 73 -S 19,717 - The net, investment associated with these deregulated operations as of December 31, 1999 and 1998 was
-.approximately $835 million and $864 million, respectively.' Imnairnetof Lone-Lived Assets .- . . . . . Entergy periodically reviews long-lived assets whenever events or changes in circumstances indicate that recoverability of-these assets is uncertain. Generally,' the determination:of.recoveiability is based on the net cash flows expected t result from such operations and assets.. Projected net`cash flows depend on the future, operating costs associated with the assets, the efficiency. and availability of the assets and generating units, and the future market and price for energy over the remaining life ofthe assets: i '.
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- Assets regulated under traditional cost-of-service atenaking, and thereby-subject to SFAS 71 accounting, fare generally not subject to impainnent-because this form of regulation assures that.all allowed costs are subject to recovery: .However, :certain deregulated assets.and other operations of the domestic.utility companies totaling approximately $1.2 billion (pre-tax) could be affected in the future. T7hose iassets include Entergy Arkanss -and Entergy Louisiana's retained shares of Grand Gulf 1, Entergy Gulf States' Louisiana deregulated asset' plan, the.
Texas jurisdictional abeyed portion of the River Bend plant and the portion of River Bend transferred from Cajun, and wholesale operations. Additionally, as noted 'above,.the-discoiitinuation of SFAS,71 regulatory acounting principles would require that Entcrgy review the affected assets for impairment. Derivative Financial Instruments and Commodity Derivatives As a part of its overall risk management strategy, Entergy uses a variety of derivative financial instruments and commodity derivatives, including interest rate swaps and natural'gas and electricity futures,.'forwards, and options.
- Entergy accounts for derivative financial instruments used to mitigate interest rate risk in accordance with hedge 'accounting. Gains or losses from rate swaps used for such purposes that 'are sold'or terminated are deferred and amortized over the remaining life of the debt instrument being hedged by the intiest rate swap 'If tlie debt instrument being hedged by the interest rate swaps is extinguished, 'any gain or loss attributable to the swap would be recognized in the period 'of the transaction. . Additional information concerning Entergy's interest rate swaps outstanding as of December 31, 1999 is included in Note 7 to the financial statements.
Entergy's power marketing and trading business engages in price risk management activities for trading purposes. To conduct these activities, the business uses futures, forwards, swaps, and options, and uses the mark-to-market method of accounting. Under the mark-to-market method of accounting, forwards, futures, swaps, options, and other financial instruments with third parties are reflected at market value in the balance sheets. Changes in the assets and liabilities from these instruments (resulting primarily from newly originated transactions and the impact of
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price movements) are recognized currently in the statements of income. The market prices used to value these transactions reflect management's best estimate considering various factors including closing exchange and over-the-counter quotations, time value, and volatility factors underlying the commitments. New Accounting Pronouncements In June 1998, the FASB issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities," which will be effective for.Entergy in ,001. This statement requires that all derivatives be recognized in the balance sheet, either as assets or liabilities, and measured at fair value. The statement also requires.the designation and reassessment of all hedging.relationships: The changes in fair value of derivatives will be recognized in earnings or in comprehensive income, depending.on the type of hedge relationship involved. Entergy has not completed its analysis of the effect that the adoption of SFAS 133 will have on its financial position, results of operations, or cash flows.. .
..In February 2000, the FASB issued an SFAS'exposure draft which would be effective for fiscal years beginning after June 15, 2001. The proposed SFAS would require initial measurement and recognition.of the liability for closure and removal of long-lived assets, including decommissioning, at fair value at the time the SFAS is adopted. Determination of fair value will likely require the estimation and' discounting of future cash flows using an expected present value technique. An asset partially offsetting the liability would be determined by further
. discounting the liability to the.time it was first incurred, which is initial'contamination of a nuclear planL This asset and the related accumulated depreciation would be presented with other plant costs on the balance sheet because the cost of decommissioning/closing the plant would be recognized. as part of the total cost of the plant asset Any difference between the liability. recognized and the related net asset recognized at the time the proposed SFAS is adopted would be treated as a cumulative effective adjustment in the statement of income, unless it i probable that the diffrence will ultimately be recoverable from or refundable to customers. In that case, a regulatory asset or
-liability would be recordeds JDeoommissioning expense following the. effective date ofthe proposed SFAS would be determined independently of the regulatory treatment of such expense and could be higher than the current level of expense being recognized. Amortization of any regulatory asset or liability.recorded at the time.of adoption of the SFAS would-mitigate any impact on net income . .
NOTE 2. RATE AND REGULATORY MATTERS: Electric Industry Restructuring Arkansas (EntergyCorporation and Entergy Arkansas)' In April 1999, the Arkansas legislature enacted a law providing for competition in the electric utility industry through retail open ccessi on January 1, 2002. With retail open access, generation operations will become a
.competitive business, butitransmission and'distribution-operations' will continue to be regulated. The APSC may delay implementation of retail open access, but not beyond June 30, 2003. The provisions of the new law"
. o require utilities to separate (unbundle) their costs into generation, transmission, distribution, and customer service functions; o require operation of transmission facilities by an organization independent from the generation, distribution, and retail operations; o provide for the detemiination' of and mitigation measures for generation market power, which could require generation asset divestitures;-
o allow for recovery of stranded and transition costs if the costs are approved by the APSC; o allow for the securitization of approved stranded costs; and
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frezresidential and sinall business customer rates for three years by utilities that illrecoverstranded
*- csts.... .
' ntergy Arkinsas fied separate generation, transmission, distribution, nd customer service rates with the
-.included PS'e r n rbe i(999. 'lhe rates were based on the cost-of-service stdytb, I-B 4- study'tii forme in' le 1997 setaement agreenent. H arings on the'rate fining are sduled for Seiteihber 2000. If onid thebsis of the rates apprv these hd, rates vi b'ecome effective Jul 1, 200 L` Entergy .aiis' als!Qfied noticevith the APSC in December 1999 of its intent to recover stranded costs. The APSC aid various paiticpants iAt iindusty, including Entergy Arkansas, are currently in the process of implementing the legislation through various rulemaking and other proceedings. Texas ' ..
*(Ent r Corporation and Gulf States) - -. '
' inj e'199'- e'Ylawpd fr in the; ric lty'iusry
. 'i'l'r'ojn access. Tlhe law? provis for reil open acces's by most eletic utitiis, inctudinEn ates, ontjanuay :1,' 2002. .Wth 'retail open access, enaon and a.new.retail rp4'ider operation will be
.;:m: ,:o YaSuar co'mretitve .
buismesses, 4:1," bttmsinadisr .- ~ :02 reel, .. L' ibtion
. a 1,r., operations
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*c prvldr ele~ic~mc~s ftctln w b ftrnsmrsspomt o cotact wshtecustomners'.for
. .i . .!:ction~it *r.i er . .
ce and restoratin ofssemce following an outage. The provisions ofthe new'law continuenssevc'bydimtaonf t The new rtail o require a rate freeze through January 1, 2002 with frozen rates beyond that for residential and small commercial customers of incumbent utilities; 't't . o require utilities to separate (unbundle) their generation, transmision and istribution and retail electric provider functions. Entergy Gulf States filed its plaAii Jf~ary'2000'withIthe PIJCTto s4&rifb its functions. . The plan included separate transmission apd distribution companies;
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'1;' taa k'a* .-:
r4~U*4. .:.'- J<r. , -,iles by an --.- rre tion ,a i anner o transmisslon and istribution fcilities by n mnatoy
.. ,orgamiztin maependnt~fro' theg'enerationand a retail'oprations by'etime compe on
** n;ppleiented;;* ,.
! - ., ,0, . aiogor recovery of stranded costs urred ba power and providirg electicign 6n service ifte are apprvid by the P[CT; o allow securitization of regulatory assets and stranded costs; o provide for the determination of and nitigation measures for generation market power; ,and iOrllie uties to ile separated data and proposotrannissioi, a tstrb anffs by April 1,2000. . . ... .. The market power measures include a limit on the ownership of gbtnasets bya'jpower generation company witin a s 6ecffied region.' TheM6piications of this' limit are uncertain for tfigy 13ulf States and the Entergy system. However, it is possible that Entergy Gulf States could be requiied to divest some of its generation assets if Entergy Gulf States is found to have generation market power. The legislation also irffected utilities to sell at auction, at least 60 days before January 1, 2002, entitlements to at least 15% of their inIed generation cpaity in Texas. e obligation to auction capacity entitlements continues for up to 60 months after,January 1,
* .2002,runtil 0 ecustomers in the jurisdiction have c!in ani aiternative supplier wiciever comes fist.
lhe PUt a-nd various patcpanis mthe mdustry are currently in the procs of implementig the legislation through various rulemaking and other proceedings. Two significant rules have been issued lby'ie PUCT: O A code of conduct was approved by the PUCT in December 1999 to ensure that utilities do not allow affiliates to have a business advantage over competitors. The rules allow the continuation of shared services affiliates, such as Entergy Operations and Entergy Services. Entergy adopted an internal code of conduct to ensure compliance with the new rules.
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o Rules governing the separated costs filing have been issued. Included is a provision establishing, as an alteriative:to a' in M-eetbse iii on' equity,' a presuiptively' reasonable eI on equity for a distribution utility at 200 basis points over its cost of debt The provision allows the utility to provide evidence that the return should be higher. The rules also provide that the utility may propose a
* , fii gilte therfrmance-bas~d authofrized rat of return, based on distril'tion and transmission company inde ezce. Manaez t dos fbi agree wi the arbitrary ievel set th iiuld and :wil seek a'liijr retur in Itsseparmd costs. flhng: Avorlshop has been held by the PUCTr to' discss
.opporuties ti se'a ~~U..
perfbxnan ase4 return.
.-X . . .,,,.i......
Loulslan (Entergy Corporation, Entergy Gulf States, and Entergy Louisiana) In September 1996, Entergy Gulf States and Entergy Louisiana filed proposaks with the LPSC designed.to achieve an orderly transition to retail electric competition in Louisiiana, while pi&6cng ain clasof sate6aye's from bearing the burden of cost shifting. In 1997 and 1998, the LPSC identified areas and sues for consideration in
;the *- - r. -, t z i0 ' ' ',,.'
etIt i. t,. e, c r i' t ilit i d' st.r: i " arch a' 1999,' the LiSC deferred makiing a. dec~ision n wether e ianc r~iestuitunng i iuissana s m' the blic interest, but ap-rovetne ,-developmn£.of a ii ci~ pln fdr po'ssiblefEit inp*tation. Th LPSC sf iide cansuits, anmd counsel wr i towi tg-eoanlcand'%xsovc outg issuesi and ircomn'nend a plan fbi the implemietation cof'ptionci1 r'bnsideraonb th'e SCby Januaiy i, 2001. I LPSC staf outsido consultants, counsel, and industzyhieniers are working toger to de~op a pln to besubmitted to tli LiSC.
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(Eintrd Corporation an4Entergy Missssippi) Since 1996, Entty Mississippi and the SC hav ben adissues grdian orly transition to a more competitive iiaril ke fir'electni'city. s' a result, te MPSC issu'd, for inma iog; purposes and to spur sion, a proposed'transition plan in'Junie1998.' The planjprovided'i l onpcimtion Mississippi to begin January , 2001 and for recovery of allowable standed costs, through a nonlbypassable argc during a 'in'sition peiod be Januiay 2001 and einiid of 200- Ii preparnng fo r competition, the lSC has conducted hearings on:
- o ct power and reliabilitk studies fled by the'two investor-ownd utilities in Missisppi, o '
O rfification requiremaits'and load dispatchnd controlTiles; ; . , O cost of service issues; o holding company issues; o .ules and iatidns tlat possiby couidbe promulgae, aerappropriatestae llaiitoimplement
, i' elIctric cqmpetifion;' a a s e on, t implement
,-g ,~idd cos~ts, and;'; s* ;
r s and erfo b ated rate tes.; In February 2000, legisai on was'in 6d mft: Mississippi to estabiish a 'stul committee to"bonsidir retail competiton and provide'a report to the'igisia i9December l,2000. this [gisfhion passes, t tansition r pan. discussed above would be put on hDld until this report has been reviewed. Management does not expect deregulation in ississippi to occur prior to 2003.' I~~~~~~~~~~~~ .. :.
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New Orleans (Entergy Corporation and Entergy New Orleans) . . - .. : Entergy New Orleans filed an electric transition to competition plan in September 1997. This plan is similar
,to those filed for the other domestic utility companies. No procedural schedule has been established for consideration
- -ofthat plan bythe Council. . .. . * ..
In October 1998, the Council established a procedural schedule to demine if natural gas retail competition
.is in the public interest. gIn April 1999, Entergy New Qrleans filed a plan that would allow for gas retail open access in New Orleans. The plan outlines the conditions under which Entergy New Orleans could support gas retail open access should the Council find it in the public interest Hearings on retail competition for.gas service were held in November 999..No further action has been taken by the Council. '. -:Retail Rate Proceedines . . .
Filings with the APSC (Entergy Corporation and Entergy Arkansas). Entergy Arkansas is operating under thea terms of a. settlement. agreement approved by!the APSC in December 1997 that provides for the following:
.:-. accelerated a:. paymentiof Entergy Arkansas' Grand Gulfpurchased power obligation in an amount totaling
$165.3 million over the period from January 1999 to June 2004; collecting eamings.in excess of an .11% retum on equity in a transition cost account to offset stranded costs when retail access is implemented. .
. o. aatecfreeze until.atlcastJulyl,2001; and .:
- o .v1)rate decreases totaling $200 million over.the two-year period 1998-1999. The net income effect from the
- .. mte reductions was approximately$22 milion.
During 1999, Entergy Arkansas' operating expenses reflected reserves of $15.4 million ($9.5.million net of taxes) to
..record he.1.999..accrual of excess earnings and an adjustment of the 1998 accrual.. As of December 31, 1999, the -transition cost account balance was $109.9 million Additional reserves may.also be required in 2000 based on earnings reviews. V..
In March 1999, Entergy Arkansas filed its annually redetermined energy.cost rate with the APSC in accordance with the Energy Cost Recovery Rider formula and special circumstances agreement The filing reflected that an incieasewas warranted to offset an under-recovery of.the energy costs for 1998. The increased energy cost rate is effective April.1 999 through March 2000.
- Filingsevith the PUCT and Texas Cities Rate andEntergy Gulf States)
.roceeding(Entergy-Corporation In, June 1999, the PUCT approved the settlement agreement that Entergy Gulf States entered into in February 1999. Ihe settlement agreement resolved Entergy Gulf States' 1996 and 1998 rate proceedings and all of the settling parties' pending appeals in other matters, except for the appeal in the River Bend abeyed.ccost recovery proceeding discussed below. The Office of Public Utility Counsel, an intervenor in the proceeding, has appealed certain aspects ofthis settlement to Travis County District Court. Entergy Gulf States cannot predict the impact of the appeal.
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The settlement agreement provides for the fbllowing: o an annual $4.2 million base rate reduction, effective March 1,1999, which is in addition to the annual
$69 million base rate reduction (net of River Bend accounting order deferrals) in the PUCT's second order oh rehearing in October 1998; - '.
a methodology for semi-annual revisions of the fixed fuel factor based on the market price of natural gas; o a base rate freeze tarough June 1, 2000. The Texas restructuring law extends the base rate fieeze through December 2001; o amnortization:of the remaining River Bend accounting order ddfbrrals as of January 1, 1999, over three yearso aJ straight-line basis, and the accounting order deferrals will not be recogized in any subsequent
-base rate case or stranded cost calculation;'.
O theldismissal of all pending appeals of the settling parties relating to Entergy Gulf States' proceedings with the PUCT, except the River Bend abeyed plant costs appeal discussed below; and o the potential recovery in the River Bend appeal is limited to $115 million net plant in service as of January 1, 2002, less depreciation over the remaining life of the plant beginning January. 1, 2002 through the date the plant costs are included in rate base, and any such recovery will not be used to increase rates above the level agreed to in the settlement agreement- . As a result of the settlement agreement, in June 1999i Entergy Gulf States: a removed from its balance sheet a $207.3 million deferred asset and the associated provision recorded for unrecovered purchased power costs and deferred revenue from NISCO, which had no net income impact on Entergy Gulf States; . *. o removed the reserve recorded in December 1997 for River Bend plant costs held in abeyance and reduced the plant asset, resulting in other income of $4.8 million; and' - o removed the $93.9 nillion reserve recorded in 1998 for the amortization of River;Bend accounting order deferrals to reflect the three-year amortization schedule detailed in-the agreement The income impact of this removal was largely offset by an increase in the rate of amortization of the accounting order deferrals. hi . -. :..;c- f;* In Junb199W, the PUCT instituted a proceeding to consider the final adjustment of the rate refunds ordered as a resultof Entergy Gulf States' November; 1996 rate case.. These refunds were. required to occur over the fourteen-month period from August 1998 through September 1999. The PUCT issued an order in July 1999 adopting a calculation methodology which required Entergy Gulf States to refund an additional $25 million. This refund was recorded as'areduction in operating revenues.
',j I ; , '. ' '; ' .'_'*
'd'.
- TIwSeptember and October 1999, seven cities in Entergy Gulf States' Texas service territory enacted ordinances purporting to require Entergy Gulf States to "book and hold in a suspense account all revenues from the sale of River Bend power attributable to the 30% share acquired from Cajun pending regulatory determination of the appropriate regulatory treatment of such power." The ordinances had an effective date of December 1997. Eitergy Gulf States filed for a review of the ordinances at the PUCT in October 1999. In November 1999, Entergy Gulf States and the cities entered into a settlement agreement under which. the parties agreed that the ordinances only required Entergy Gulf States to provide monthly informational reports concerning certain expenses, revenues, and operations associated with the 30% share. Entergy Gulf States treats the 30% share as a non-regulated operation.
.;Recovery'ofRiver'Bend Costs '(Emtergy Corporation and Entergy Gulf States): In March' 1998, the PUCT disallowed recovery of $1.4 billion of company-wide abeyed River Bend plant costs which have been held in abeyance since 1988. Entergy Gulf States appealed the PUCT's decision on this matter to the Travis County District Court in Texas. In June 1999, subsequent to the settlement agreement discussed above, Entergy Gulf States removed the reserve for River Bend plant costs held in abeyance and reduced the value of the plant asset. The settlement agreement limits potential recovery of the remaining plant asset, less depreciation, to
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$115 million,: beginning January. , 2002 through the date the plant costs'are included in rate base, and any such recovery will not be used to increase rates above the. level as agreed to in the settlement agreement. The settlement agreement also-prohibits Entergy Gulf States from acting on its appeal until January 1, 2002. Based on advice of counsel, management believes that it is probable that the matter will be remanded again to the PUCT for a further ruling on the prudence of the abeyed plant costs and it is reasonably possible that some portion ofthese costs will be included in rate base. However, no assurance con be given that additional reserves or write-offs will not be required in the future.
PUCT Fuel Cost Review (Entergy Corporation and Entergy Gulf States) - In September 1998, Entergy Gulf States fied an application with the PUCT for an increase in its fixed fuel factor and for a surcharge to Texas retail customers for the cumulative under-recovery of fuel and purchased power costs. The PUCT issued an order in December 1998 approving the implementation of a revised fuel factor and fuel and purchased power'suicharge that would result. in recovery of $1121 million f under-recovered fuel costs, incluiive of interest,: over a 24-nonth period. These increases were implemented in the firstbilling cycle in February 1999. North Star Steel Texas, Inc. has appealed the PUCT's order to the State District Court in Travis County, Texas. Entergy Gulf States cannotpredictthe outcome ofthis appeal. ; Based. on the settlement agreement discussed above, Entergy Gulf States adopted a methodology for
- calculating its",fixed fuel, factor based on the'narket price of iiatural gas. his .calculation. and anynecessary adjustments began semi-annually as of March 1, 1999 and are scheduled to continue until December 200':*.The calculation for the factor to be implemented March 1, 1999 showed that the fuel factor adopted in the December
- 1998 PUCT order should be reduced. This fuel factortreduction wasapproved by the'PUCTtinFebniary-.l999. The calculation for the factor to be implemented Septernber ,.1999 showed, and the PUCT:approved on an interim.basis, an increase in the fuel factor.
; AS
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. : X
- a .5 - .
The amounts collected under Entergy Glf States' fixed fuel factor are, and will continue to be,; the subject of fuel reconciliation proceedings before the PUCT, including a fuel reconciliation case filed by Entergy Gulf States in July 1999::In February 2000, Entergy Gulf Statesxreached a uxanimous settlement with all parties to the proceeding. Entergy. Gulf States is reconciling approximately $73 1 million (after. excluding approximately. $14 million.related to Cajun issues to be handled in a subsequent proceeding) of fuel and purchased power costs. The settlement reduces Entergy Gulf States' requested surcharge in the reconciliation filing from $14.7 million to $2.2 million. Although the settlement terms are still being finalized, the parties will ask the PUCT to allow the remaining $2.2 million surcharge to be rcovered beginning with the.April 2000 billing cycle and continue until January 2001.. .In addition, Entergy Gulf States agreed-to file a fuel reconciliation case by January 12, 2001 covering'the period from. March 1, 1999 th'rough-August 31, 2000.; . ' . .. In'September" 1999, Entergy Gulf.States filed an application with the PUCT reqdesting.an interim fuel surcharge to collect under-recovered fuel and'purchased power expenses incurred from March:1999 through July 1999.: -In December 1999, the PUCI. approved the 'collection of $33.9 million over a five-month period beginning January 2000. The fuel and purchased power expenses contained in this surcharge will be subject to future fuel reconciliation proceedings. .. . .5-Filings with the LPSC : - ' . . -. Annual Earnings Reviews (Entergy Corporation and Entergy Gulf States) . '
- ~~ - ,... . . ,-.. ,: .'
In'May l995, Entergy Gulf States filed its second required post-Merger earnings-analysis with the LPSC. Hearings on this review were held in December:1995.; In October 1996, thde LPSC orderedda $33.3 million annual base rate -reduction and a $9.6 million- refirid. :'One 'component of the rate reduction removes from base rates approximately $13.4 million annually of costs that will be recovered in the.future through the fuel adjustment clause. Subsequently, Entergy Gulf States appealed the LPSC's order and obtained an injunction to stay the order, except
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. insofar as it requires the $13.4 million reduction, which Entergy Gulf States implemented in November 1996. n addition, puisuant to: an. October 1996 settlement with the LPSC, Entergy Gulf States will be allowed to recover
$8.1Inillion annually related to certain gas tasportation and storage facilities costs. -This amount will be applied as an offset to'anyArefimds required In April 1999, a Louisiana Supreme Court'decision reduced the refimd that Entergy Gulf States is required to make from $9.6 million to $6.0.million.. The case has been remanded to the LPSC and management is'continuing to evaluate the implications of this decision.
In May 1996, Entergy Gulf States filed its third required post-Merger earnings analysis with the LPSC. Based on this filing, Entergy Gulf States implemented a $5.3 million annual rate reduction; in- June 1996. In September 1998, the LPSC issued an order in the third required post-Merger earnings analysis that required a refund of S448 fiiillior for the period June 1996 through May 1997, and a prospective rate reduction of $54.6 million effective September 20, 1998. The decision is on appeal to the Louisiana Supreme Court. In May 1997, Entergy Gulf States filed its fourth post-Merger earnings analysis with the LPSC;. Hearings were concluded in 1998 and a final decision by the LPSC is expected during the second or third quarter of 2000.;
. , 'I' , ,. . ! ' .i.': ' ;
In May 1998, Entergy Gulf States filed its fiftf required post-Merger earnings analysis with the LPSC. This filing will be subject to review by the LPSC and may result in a change in rates. Hearings were held in May 1999 and a decision by the'LPSC is.expected in the fourth quarter. of 2000 or the first quarter of 2001.,. In a bifurcated proceeding, the LPSC investigated transactions between Entergy Gulf States and other Entergy affiliates. Hearings wereheld in December 1999 . ;, C ; '.' a : ,. . ', . , ' ,. !. , ,, , In May 1999, Entergy Gulf States filed its sixth required post-Merger earnings; analysis with the LPSC. Herings were held-in February 2000. The timing of a final decision in the proceeding is not certain. Entergy Gulf States' operating revenues during the fourth quarter of 1998 reflected reserves of
$102.2 million ($60.9 million net of taxes) based on managerent's estimates of the probable outcome of the annual
- earnings reviews, as well. as the effects of the LPSC fuel cost review discussed below. . Additional reserves of
$36.1 million (22.2'~niillibn- net of taxes), including interest: a reflected in operating revenues in 1999.
Proceedingi on issues in the second, third, fourtl fifth, and sixth post-Merger earnings analyses will continue. LPSC Fuel CosRevieW (Entergy Corporation and Entergy Gulf States) ..
'! ' . 1,' ., . 4".-,;' - .; ' . . ' pi: . _- . . !} .. .- ;
In September 1996;,the LPSC completed the second phase ofits-review of Entergy Gulf States'tfuel costs, which covbted the period October 1991 through December- 1994.. I October 1996; the LPSC ordered a
$34.2 million refund. The refund includes a disallowance of $14.3 million of capital costs (including interest) related to certain gas transportation and storage facilities, which were recovered through the fuel clause, and which have been'refimded pursuant to' an October 1996 settlement with the.LPSC. 'Entergy Gulf States will be permitted.to recover these costs in the future through base rates. In January- 1999, the Louisiana Supreme Court affirmed the ;LPSC's October 1996 order. . accordance-with this decision,.Entergy Gulf States refunded $26.2 million, including '-.interest; inAugust 1999. Management reserved for this refund-in 1998-in connection with estimates of the probable outcome of this proceeding and the annual earnings reviews discussed above.
Formula Rate Plan Filings (Entergy Corporation and Entergy Louisiana) In May 1997, Entergy Louisiana made its second annual performance-based formula rate plan filing with the LPSC for the 1996 test year. Thi:s filing resulted in a total rate reduction of approximately $54.5 million, which was implemented in'July 1997. -At the same time, rates were reduced by an additional $0.7 million and by an additional
$2.9 million effective March 1998. Upon completion of the hearing process in December 1998, the LPSC, issued an order requiring an additional rate reduction and refiu, although the resulting amounts were not quantified. Entergy Louisiana has appealed this order and obtained a preliminary injunction pending a final decision on appeal.
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In September 1998, Entergy Louisiana made its third annual performance-based formula rate plain filiig *ith the LPSC for the 1997 test year. Entergy Louisiana settled this filing with the LPSC in the third quarter of 1999. The settlement required no further change in Entergy Louisiana's base rates. Entergy Louisiana will recover a
.$4.3 million excess, credit as an offset to future rate reductions.
In April 1999, Entergy Louiisina submitted its.fourth annual performance-.based formula rate plan filing for the 1998 test year. The filing indicated that a $20.7 million base rate reduction might be appropriate. An interim
--rate ieduction of $15.0 million was implemented efctive August 1, 1999. Entergy Louisiana's filing will be subject to further review by the LPSC, which may.result in an additional change in rates.. Entergy Louisiana has provided reserves for the potential of further rate-reductions. Hearings are scheduled with the LPSC in May 2000.
Fuel Adhusmgnt Clause Litigation (Entergy Corporation and Entergy. Louisiana) - In May 1998, a group of ratepayers filed a.co plaint against Entergy Corporation, Entergy Power, and Entergy Louisiana in state court in Orleans Parish purportedly on behalf of all Entergy Louisiana ratepayers. The plaintiffs seek .treble.damages ,for alleged, injuries arising..from the defendants' allegedviolations of Louisiana's antitrust laws in connection with the costs included in fuel filings with the LPSC and passed through to ratepayers.. Among other things, plaintiffs allege that Entergy Louisiana improperly introduced certain costs into the calculation of the fuel charges, including inprudentlyvpurchased highcost.eleticity.fom.its affiliates and inprudently purchased high-cost gas. Plaintiffs allege that these practices violated Louisiana's antitrust laws. In addition,
.plaintiffs seek to recover interest and attorney fees. Exceptions have been filed by Entergy, asserting that this dispute slfould be litigated before the LPSC.and FERC.: At the appropriate time, if necessay,Entergy will raise its defenses
- o the antittust claims. .At present, the suit in state 'court is stayed-byistipulation bfthe parties. .
Plaintiffs also filed this cohplaint with the LPSC to initiate a review by the LPSC of Entergy Louisiana's monthly fuel adjustment charge filings and to force restitution to ratepayers of all-costs that the plaintiffs allege were improperly included in.thosefuelfadjustment filings. MarathonOil Company and Louisiana Energy Users Group
;.have alsointervened in.the LPSCproceeding; Discovery .at the.LPSC has been conducted and is expected to continue. Direct testimony was filed with the LPSC by plaintiffs and the intervenors in July,1999. In their:testinony for the period 1989 through 1998;',plaintiffs;purport to 'quantify many of their claims in an.amount totaling .$544 uiulion, plus interest',: .The plaintiffs Will ikely asseit additional damages for the period .1974 through 1988.
Ibe ,Entergy, companies filed .responsive and rebuttal testimony in September 1999. .Rebuttal testimony by the plaintiffs and intervenors was filed in November 1999. Direct testimony of the LPSC staff will be.filed in April 2000, to which Entergy will be permitted to respond. Hearings before the LPSC are scheduled to begin in September
; 2000. Entergy intends to defend this matter vigorously, both in court and at the LPSC. The outcome of the lawsuit and the LPSC ;proceeding cannotbe. predicted.at this time. Manageent has -provided reserves for.his, -other
%itigation, and .Entergy Louisiana's formula rate plan proceedings based an its estimate of the outcome.-of these Filings with the MPSC (Entergy Corporation and Entergy Mississippi) In March 1999, Entergy Mississippi subrmttd its annual ierfbmnaA fornula rate plan filing for the 1998 test year.,; In April 1999, the MPSC approved.a prospective rate reduction of $13.3 million. This rate redution went into effect May 1, 1999. June 1999, Enterg Mississippi revised its March 1999 filing to include a portuon of refinianced long-term debt, not included in the original filing. This revision resulted in an additional rate
,'reduction ofapprloximately$1.5 million, effective'July.1999. . .'
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Filings, with the Council 1997 Settlement (Entergy Cdrration and Entegy New'Orleans). 7;. , . * ', .. *. ,. Entergy New Orleans submitted its cost of service and revenuerequirement filingin September 1997 to the Council. In connection with this filing, Entergy New Orleans filed a settlement agreement with the Council, which
*as pproied invNovember 1998. The settlement agreement required the following**-.' -
.. *-base
' rate redutions or. Entrgy New, Orleans'. electric- customers of $7.1 million effective January 1, 1999, $3.millioieffeciive Octoberi41999, and$16'1 millioneffttive October 1,2000; O :abiase iteredctiodfor EntergyNewOrleans' gas customets of $1.9 ntillion effetive January 1999; and o no base rate increases priorto October 1, 2001. ;. ".t. . w. .
-Nairrl'Gas (Entrgy Cftoratiouand Entergy New Odeans) * ,
f*;A- 'Thif Council: held. heannjsin May 1999 dgardig. the phidene of Entergy -New Orleans' natural gas
-purchashgitcs.t4- : i I ' .' .; .t*
- J .5 -- ^4
.Fuel Adiustniient Clai; Litigador (Eitergy Corporatin and Entergy New Orleans)i:;i .
'! ti ;!:; ;.- < *- .t: Ss '1 * *.ti '.0 .*e li + 45 ' '.-
- --, ,-,jj; ,t ,}- - ;
-.-!i;l..;In April:1999;a group" ratepayers filedla complaint againstEntergy NewOrleans, Entergy Corporation,
!Entergy Servicds, and:EntergyiPower'in state- ou i Orleans Parish urportdll on behalf of all Entergy New Orleans ratepayers. Thesplaihiffs, seek: treble damages for alleged injuries' arising' fror the defendants' alleged violations of Louisiana's antitrust laws in connection with certain costs passed on to ratepayers in Entergy New
- Orleans'fuel,adjustmentl filijgs.With ,the; Council.r hi particular,. plain'tiffs allege
- that Entergy NeW Orleans
. imprgoerly'included certainn costft in the. calbulation: of fuel charges. and that Entergy New- Orleans: imprudently
-*uhaedlhjgh-cost fuel ,fro othervEntergy 'ffiliates:;. ;Plaintiffsallege; that Entergy New Orleans and the other
--'defendant Entbrgy companies con;pied tofike:these purchase to the detrimentofEntegy New Orleans' ratepayers
-and to tlie benefit of Entergy's shareholders-ihi viol ioi6fLouisihi's antitrust laws. Plaintiffs also seek to recover interest andiattorney fees,:Exceptions to.thejplantiffst allegationswerc.'ele-by Entergy, asserting, among other
'thihg§.tha jurisdictionovettheso issiues:rests'with the Council'ankd FERC:. If necessary, at the appropriate time,
.iEntrgy will also raise its 'defbxses to the aititrust clans. At presebt,.the suitin.state.court is stayed by stipulation ofthepaitiesi ... i 'i '- *. - - ' - . ;- { -
*-,..;:.r ;g.- : ,- t .; *-f'< t * . '- ' '. ! :.,i., , , .@. ;
a;S')..,: iPlaintiffilalsn'fildthiscomplaintawith the Councilgin.orderto initiate a review by the Council of their allejations'and to force rbstitution to ratepayerslof all costs they allege were improperly and imprudently included in the fuel adjustient filings... Discovery has begun ih the proceedings before!the Council. -Mie plaintiffs have not yet stated the amount of damages they claim. Entergy intends to defend this matter vigorously, both in court and before the Council. The ultimate outcome of the lawsuit and the Council proceeding cannot be predicted at this time. River Bend Cost Deferrals (Entergy Corporation and Entergy Gulf States)
- Entergy Gulf States was' amortizing SZmillion"of ifver Bedd operating and purchased power costs, depreciation, arid accnied carying charges over a 20-year period,; however the-PUCT redediy accelerated the rec'oery of these deferils toha d yearcve' period endii Xy 19*9.' ' 1 settlement agreement 'discussed above dismissed Entergy Gulf States' appeal regarding these deferis and'allowed Entergy Gulf States to amortize the remainder of the accelerated balance as of January 1, 1999, over three years on a straight-line basis ending December31, 2001.
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Grand Gulf 1 Deferrals and Retained Shares (Entergy Corporation and Entergy Arkansas)
--. 'Under the settlement agrenment entered into with the APSC in 1985 and amended in 1988, Entergy Arkansas retains -22% of its 36% share of Grand Gulf 1-related costs and recovers the remaining 78% of its shire in rates. In the event that Entergy Arkansas i not able to sell its retained share to third parties, it may sell such energy to its retail customers at, i price equal to its avoided energy cost, which is currently less than Entergy Arkansas' cost of
- energy from its retained share.
(Entergy Corporation and Entergy Louisiana) In a series of LPSC orders, court decisions, and agreements from late 1985 to mid-1988, Entergy Louisiana was granted rate relief with respect to costs associated with Entergy Louisiana's share of capacity and energy from Grand Gulf l,-subject to certain terms and conditions.' Entergy Louisiana retains and does not recover from retail '.ratepayers; 'i8% of its 14% share 'ofthe costs of Grand Gulf I capabity and energy and recovers the remaining 82% of its shbii'in rates: Entergy Louisiana is allowed to recover through the fuel adjustment clause '4.6 cents per KWH for the energy related to its'tained portion of these costs. Non-fuel operation and maintenance costs for Grand Gulf 1 are recovered through Entergy Louisianaas base rates. Alternatively, Entergy Louisiana may sell such energy to inaffiliated parties' at prices above the fuel adjustment clause recovery amount, subject to the LPSC's approval.
i.:o i . ' ' . * : '
- e. . ' : aA i
(Entergy 'Corporation and Entergy, New Orleans)
- LUnder various rate'settlements with the Council in 1986,.1988, and 1991; Entergy New Orleans agreed to absorb and not recover from ratepayers a total of $96.2 million ofits Grand Gulf I costs. Entergy New Orleans was penitted to implement annual rate increases in decreasing amounts each year through 1995,':and to defer certain costs and related carrying charges for recovery on a schedule extending from 1991 through 2001. As of December 31, 1999, the uncollected balance of Entergy New Orleans' deferred costs was $35;8 million.
- FERC Settlement (Entergy Corporation and System Energy) .
,, ., .. I.
,; ^ . . . . . , ;, Jo; .
* . - In November 1994, FERC approved an agreemcht'settling a long-standing dispute involving income tax allocation procedures of System Energy. In accordance with the agreement, System Energy will reflmd a total of approximately $62 million, plus interest, to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans through June 2004. System Energy also reclassified from utility plant to other deferred debits approximately $81 million of other Grand Gulf I costs. Although such costs are excluded from rate base, System Energy is amortizing and recovering these costs over a 10-year period. Interest on the $62 million refund and the loss of the return on the $81 million of other Grand Gulf I costs will reduce Entergy's and System Energy's net income by approximately $10 million annually until 2004. - -- ,. X tProposed Rate Increase -
(System Energy) i . System Energy applied to FERC in May 1995 for a $65.5 million rate increase. The request seeks changes to System Energy's rate schedule, including increases in the revenue requirement associated with decommissioning costs, the depreciation rate, and the rate of return on common equity. The request also includes a proposed change in the accounting recognition of nuclear refueling outage costs from that of expensing those costs as incurred to the deferral and amortization method described in Note I to the financial statements. In December 1995, System Energy implemented the $65.5 million rate increase, subject to refund, for which a portion has been reserved. After holding hearings in 1996, a FERC ALJ found that portions of System Energy's request should be rejected, including a proposed increase in return on common equity from 11% to 13% and a requested change in decommrissioning cost
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methodology. The ALJ recommended a decrease in the return on common eq utyfromI% to 10;86%.. Other portions of System Energy's request for a rate increase were approved by tihe ALJ. All of the AL's findings are advisory, and may be accepted, modified, or rejected by FERC in afnal order.. . .*. ;*J-If FERC-.Were to approve the ALJ's findings, System Enery would be required to make a refid of money collected under.itsproposed tariff in the amount of $228;2 million as of December 31, 1999, together with.interest in the amount of $39.6 million. As of Decenber 31,1999; System Energy has fully provided reserves for this potential refund.. It.is not certain when FERC- may issue a final order in this; rate proceeding or whether. FERC will accept, modify, or reject the ALJ's findings. Although management believes that the recorded reserves are. adequate. to reflect the probable outcome of this proceeding, additional reserves or write-offs could be required in the future. (Entergy Mississippi) Entergy Mississippi's allocation of the proposed System Energy, wholesale rate increase is-$2 1.6 million annually. lIn Julyr.1995j Eiatergy Mississippi filed a. schedule with. the MPSC that defers the retail .recovery of the System Energy rate increase.. -heidefeiral-planwhich.Was:-approved by the MPSCj began in Deember. 1995, the effective date of the. System EnerEy rate increase, and.will end after. the issuance of a final order by FERC.; Under this plan, the deferral period. was anticipat~d.to hare ended by September. 1998,;.and the deferred amount would, have been.amortized over 48.months beginning in October 1998:.. Although the deferral period under the plan has ended, FERC has not yet issued an order. For that reason, Entergy. Mississippi filed a revised deferral plan, with the MPSC in August 1998 that provides for recovery, effective with October 1998 billings, of $11.8 million of the System Energy rate increase that was approved by the FERC AL's initial decision in July 1996. Thle $t18 millin.is-being amortized over the original 48-ironth period, which began in October 1998. The amount of System Energy's proposed increase in excess of the $11.8 millionmwill cbntinue.to: be deferred until the.issuance of a final order by FERC, or Octob* 2000, ,whichever occurs first.-{ These deferred amounts, plus carryingcharges, will-be amortized over a 45.-montkperiodbeginning in October 2000, . -. .
. , ! , '{ ,,
,1. . .., ,.,, ..,,**
- (Entergy NewOrleans) .,. * * .4 .
Entergy New Orleans' allocation of the proposed System.Energy..wholesale rate increase.is.$11:1 million annually. In February 1996, Entergy New Orleans filed a plan with the Council to defer 50% of the amount of the System Energyrate increase.. The deferral began in-February 1996 and will end after the issuance of a final order by FERC. *.-.;..,- . . .;. .. . ; Grand Gulf Accelerated Recovery Tariff . . . - .. . .
- ... f...... , .. .;i:, .*........ .o.s :...:
(Entergy Arkaisas) . 7 -* , .. - ,:. * . . .. . ' b A. . -' . -. rn
'w'* Itt ~. :'
't}. '- * ' *;
In April 1998, FERC approved the GGART that Entergy Arkansas filed as part of the settlement agreenment that the APSC approved in December 1997. The GGART was designed to allow Entergy Arkansas to pay down a portion of its Grand Gulf purchased power obligation in advance of the implementation ofiretail access.in Arkansas. The GGART provides for the acceleration of $165.3 million of its obligation over the period January 1, 1999 through June 30, 2004. The settlement agreement with the APSC is discussed above in "Filings with the APSC."- (Entergy Mississippi) .
*, , . .. 8 . . 'C.
.n September, 1998, FERC approved the GGART for Entergy Mississippi's allocable portion of Grand Gulf which was. filed with FERC in-August 1999&. The GGART provides for the acceleration of Entergy Mississippi's Grand Gulf purchased power obligation in an. amount, totaling $221.3 million over. the period October 1, 1998
- through Jun30, 2004.. . . . ..
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NOTE 3. INCOME TAXES; - ' .. .. . . . . t . I .
,cm . .x f . , s f ; .: ,.: ;
Lncome tax expenses for 1999, 1998, and 1997 consist of the following (in thousands): Entergy . Enterg Etgy, Entergy - Etfr s)tem Fnt Earpv Arkansas Gulf Staes LJuisiana Mississinti ' New Oelinsa Enermw Qirrent Federal S 452,56S S 25.812 S 64,991 S 115.179 S (660) S 13,23S S 121,733 Foreign 27,730 , , . _ _ state 65,334 5,781 11,669 . 22,673 131 2,923. 18,979 546,132 31,593 76,660 137,854 (529) 16,161 140,712 Total 6efmd - not" (153,304) 26,334 13,513 (9,953) 19,566 (2,615)" (77,173) Ivestment tax aerdit adjustments -net t36.161) (3,915) (15,008) (5,533) (1,500 * (516), ' Q,98)
-11wored icome tax expense S ' 356,667 S 54,012 .S 2 75,165 .'. 122,368 5 17,537 S 13,030 S' 53,351
.. . . ~~~~~~~~~~~I.
1998 Entergy Entrgy
- tegy Entergry *:Ergy
- Entcr Stm Entergy Arkansas GilfStats Louisiana. Mississippi-. New Orlewas . Energy
- 'rent Federal S 235,979 S 6S.14 S 43,729. S 69,55,1 S 34,984. S ,.15,010 S 91,107 Fcreign 28,156 _.
State . 67,163 14,353 ' 17,21S ' 2.643 5,541 2,530 14,373 _Tobal.' : 331,293 ' ^ 8336 . .. 60947 * . -42.194 40,525 17,540 105,4s5 Deftrd-net (109.474) '(7.153) (90,314) 32,506 (10.983) (6,993) (24,745) ivestnmentbx credit adjustaents- net 44,911 (5,140) 61,140 (5,596) (1,511) (505) (3.477)
'Racordd income tax expense S 266,735 S 71,374 S 31,773 S 109.104 S 23,031 5 10,042 S 77,263 "97 Entergy Entergy Entergy Entergy Entergy System Entergy Arkansas Gulf States Lailsiana Mississippi New Orleans Energy Current Federal S 433,444 S 113,278 S 68,8S1 S 94,448 S 49,472 S 12,003 S 98,423 Fcrtign 237,337 _ - - - _
State 76.905 23,756 6,007 19,974 9.476 2,096 15,596 Total 747,686 137,034 74,88S 114,422 59,943 14,099 114,024 Deerrd - net (312,691) (73,406) (104,435) (9,333) (30,697) (1,369) (35.94.) Investment tax credit adjustments - net 36,346 (4,40S) 51,949 (5,624) (1,507) (5S8) (3,476) Rccrded incne tax expense S 471,341 S 59,220 S 22,402 S 93,965 S 26,744 S 12Z142 S 74.654
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Total income taxes differ from the amounts computed by applying the statutory income tax rate to income before taxes. The reasons for the differences fbr the years 1999, 1998, and 1997 are (amounts in thousands): Ente Entegy Fntew EdtV EnterV sysem
- '.1999 - Fntcrgy w
Aann Gulf States - Lotwann Mssmpm New Orleans w Energ CQnpued at stat.+/-oryrate (35%) S 333,093 43,164 S <70,058 S 109,948 S 20,693 S 11,196 S 47,678 Inrae (rexhicons) in tax g~tifmm. State inctaxes net of faral tax effect 49,487 6,949 18,805 '.' 13,741 1,982 1,930 6,080 49,460 18,429 4,718 9,577 (1,093) 2,232, 1 15,597 Rate defarals - net (254) (90) 67. (24) cm I Avtzofhivemt . tax fits .. (29,015) (5,132) (6,642) (5,532) (1,500) (518) .(9,691) Flowr _ wmne
.diff~s (8,042) (525D) (2,795) 532 (284) (272) 27 US taxbenefit x freign c (9584)
Bodit of~EiteraCaspratio (3,341) (4,046) (4,053) (1,936) (754) (4,552) Change ta valubon aIow * (46,315) Ote-net . 17.837 (807) (4.843) (1.912) (301) (577) (1,288) Total ancwe tax S .356,667 S 54,012 S 75,165 122,368 S 17,537 S 13,030 S 53,851. Effective ITcone Tax Rate 37.5% 43.80°4 37.6% 4 3 39.0%o 29.7% 40. 40.70a .:.
. , .5 39.5%S
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- 9. .1. ,
EtwEnt awEntergy
- E ntEtergy Entergy . SW=e Entemg Arkasa Gulf States Louisiana Missippi New Qleans ffi rgy~v Caxited at statntmry rate (35%.) S 368,327 S 63,814 $ 27,35 S 101,007 S 31,734 S 9,162
., 64,309 6naeases (reducti ons) in tax resulting f=
State income taxes net of federal in=6n tax effect 37,494. 9,29 *':7,744 -.'-9,156 3,053 - 831 .1.7,421 40,57 6,497 11,099 8,147 (686) 888 Maedefisals -net (51I' >.-'701 659; 372 (2,535) 292
*Amortizato f inlvsn~t Al;,
tax eredits (21,285' (5,136) (5,061). (5,592) (1,512) 54. .(3,480)
&fferenoes 4 (3.57) . 1,07 (4,404)' (188) 149 (187)'- (18)
US tax on foreign ixne 108,194 " Nan-taxable gain an sale of foreign assets (20,283 Cange in UK atatutory rate ,(31,703) Foreig sutsidiai basis difference (58,235) Rc d rate o ganon sa of foreign asiets (56.712) Non-dctin frlandhise fees 7,315. Interest on. perpetual inruments (5,467) Benefit ofEntavg Ccrpcratiern
* (5,212) (4,948) (3,947) (2,386) (629) (4.999)
(2agein valuation allowane (106,636) Oth~er -.. 9229 . 343 (674) .: 149:.
.. 214 189 (603)
TOta incune taxes S 266,735 S 71,374 S 31,773 S 109,104 28,031 S 10,042 S 77,263 Effective Income Tax Rate 25.3% 39.1% 40.6%h 37.8%/ 30.9% 38.4% 42.1% Entergy Enterg Entergy Entergy Entergy System 1997 Enterev 4. Arkansa Gulf States Louisiana Mississippi New Orleans Energy Computed at statutory rate (35%) S 270,284 S 64,470 S 28,833 S 84,253 S 32,691 S 9,658 S 61,932 Increases (reductions) in tax resulting fi-om-State income taxes net of federal income tax effect 33,272 8,382 1,274 12,106 3,110 1,191 7,209 Depreciation 25,471 (2,784) (3,670) 13,162 964 2,236 15,563 Rate deferrals - net 3,484 1,543 5,575 (526) (3,504) 396 Amortization of investment tax credits (19,592) (4,404) (3,981) (5,627) (1,512) (589) (3,479) Flow-throughlpernanent differences (6,537) (1,558) (14,658) 47 (78) (187) - UK ivindfall. profits tax 234,080 Change in UK statutory rate (64,670) Non-deductible franchise fees 17,234 Interest on perpetual instruments (9,094) Benefit ofEntergy Corporation expenses (4,920) (4,788) . (2,704) (831) (4,037) Other - net (12.5911 (1.509) 9.029 338 (2.223 268 (2.534) Total income taxes 5 71,341' 5 59,220 22,402 S 98,965 26,74 S 12,142 S 74,654 Effective Income Tax Rate 61.0%h 3 1.6% 27.2%/ 41.1% 28.6% 44.0% 42.2%
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I-Significant components of net dCefrred tax liabilities as of December 31, 1999 and 1998 are as follows (in thousands): 1999 Fj* m" Ent& Enm E Dt ' ' 'S E1Dcw Admosas GulfStes T W MUM NewOen Psr: Dcferred Tax Uabiiiea: Net regulatcy ans(ia~itics) S (1,268,257) S (229,555) S (432,256) S (278,289) S (32,048) S 4.4S, S (3005S9) PtanflWxed baasftream * (3,041,135) (533,375) (1,013,110) .(749257) (220. ) (6Z104 (452,0t3) Rate defudl -(77652) (6,168) . (3.12S) - (44.214) (24.142).. Othe. (201,952) . 7,12)- (15,157) (741) (9,214) (7,718) (22412) Tctal _ (4,589,00) S (846,910) S (1,463,651) S (1,05228 S (306,303) S (89.44 S (5,084) DIeferdTax Asszta Acamml2ed defrryed mnWS~~td tax 178153 37,211 46,851- 47,390 7,997 3,04S- ,. 35,656 Net operatig loss = ufads 2,137 2,137 . ' ' *
- 62754 . _ . .
Fnreia tax adedits 116,701 - - Atmaive m,- tax crdt 40.658 40,658 , ,. Sale and kasbac 230,690 - 107,184 -123506 Removal cost 10,572 943 26.84 66,786 1.994 12,001 - Ubilled revmes 40,761 - 21,161 17,618 (1,123) 3,165,,_. Perneled item 32,734 10,810-. 9,509 (1,502) S,064. .. 2.83 Rate rdd 142.984 - 45,7S1 20,270 - 1347 102,422 Resere for relatcy jus 124,07t . 124,07S *- Thmitie cast a l 43,127 43,127 - - . . FERC Settlemet 12,638 ., i!4. i2.638 161,074 13,358 18,485 3,760 - 7,112:- . 8,7 Valuion allowance (91,039) ' ' ' - -. . . . aI S. 1,206,022 S 94,639 S 336,809 S 272517 S 7.30 S 34,743 S 2s5,977 S . 9 S . S ' -. . :M. S.F Net defered tax liability S (332,980) S (752,2S71) S (1,126,842) (779.770) S (29,03) S (54,741) 5 (489,107) I
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.E a- E,,m p Eitsv z Eatary.. arry sv Ent . Mmmapss WOSf luiiana' Misissip New (Cdoaie Energy Deid TaxUbiiis:
Nt rtgutatoy asslabites) S (1,334,014) S (226,983) S (432,070) S . (319,588 S '(34,086) S (2,305) S (258982) ant-lated bauss diffetnc (3,053,837) (505.851) (1,027,463) (739.298) (214,461) (57,778) (489.501)
- Btedefemks.: (97,071).. . (1,50) (26,986). - (36.064) (32,671)
Gain c asle of ets -s (55, (3.66J) (892) (23,912)' (6531)' (5.32) ' (20,517) otii' ' S (4,621,122) S *IS47) S (195,= 2 (1,O2,79 S (291,142) S (n2) S (769,000
- Defied Tax Assets Aca-ted deferedhvestmed tax ed 192696 38,702 55,664 49,520 85 71 , 3,247 36,986 kvestme t 1 U)fcEwVI etd -mi:;' 1Is c)fWllt 2,137 - 2,137 *.
CaPital less CuiYtswnd 65,939 . . . . F1reivntax OiVts 135,727 . . . Aternative niimi tax cedit 40,658 , 40,658 ' Sale azd Ieasebuk 240067 - 108,125 - - 131,942 RCV~moest 108,85S 1,127 27,015 66,012 2,945 11,759 - Uibialid revnues 36,02 - 20,35 12,660 (726) 4,503 Ptmi-re d iteas 30,911 . 11,565 9,664 . . 5,849 3,833 110,312 49,35 . 60,927 Resrv for mon y 4wftts, 158,S39 - 158,839 . . - Tr ixn cost ual 35,374 35,374 . - ' . - FERC Setlmat 15,057 . . .- - . - 15,057 10719 ;1905 33,944 9,218
- 9,270 S,506 Vhain aolwanoc (142,261) . . ' . * . . .
TOW S 1,050,814 S 77,114 S 408,551 S 255.199 S 10,790 S 34,628 S 257,251 N defeed tax tiablity S (3,570,32 S (720,733) S (LO86,991) S (827,99) S 220,352) S (63,498) S (511,749) As
-of December 31,' 1999;-Entergy had net operating loss cairyforv'ards of S2455inillion for state income tax purposes, all related to Entergy Gulf States. If the state net operafin~ loss canyforwards are not utilized against income from its subsidiaries, they will expire between 2000 and 2004. The alternative ninimum tax (AMf) credit carryforwardsas of December 31, 1099 were $40.7 million, all related toEntergy Gulf States. .This AM credit can be carried forward indefinifaly and may be applied solely against the federal' incone tax liability df Euitergy Gulf States.-
Tie'luation allowance is provided priniarily against foreign tax credit carryforwards which can be utilized against futii United States taxes on foreign source income.' If these carz'forwards are not utilized, they will expire between 2000 and 2004.
'At'December31-,1999, uircniitted earning's 'offoreign subsidiaries were approxinately$29.5 million. Since it is Entergy's intention to indefinitely reinvesi these earnings no U.S. taxes have been provided. Upon'distribution of these earnings in the form of dividends or otherwise, Entergy 'could be subject to'U.S.- income faxes '(subject to foreign tax credits) and withholding taxes payable to various foreign countries.
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NOTE 4. LINES -OF CREDIT' AND RELATED 'SHORT-TERM BORROWINGS (Entergy Corporation, Entergy Arkansas, Enteirgy Gulf States, Enfeigy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy): The short-term borrowings of the domestic utility companies and System Energy are limited to amounts authorized by the SEC. The current limits authorized are effective through November 30, 2001.' In' addition to borrowing from commercial banks, Entergy companies are iithrized to borrow from the Entergy Systeni Money Pool (money pool). T 'money pool is 'an inter-company borrowmig7 arrangement designed to reduce the domestic utility companies' dependence on external short-term borrowings. Borrowings from the money pool and external borrowings combined may not exceed the SEC authorized limits. The following are the SEC-authorized limits and borrowings from the money pool for the domestic utility companies and System Energy as of December 31, 1999 (there were no borrowings outstanding from external sources): Outstanding Authorized Borrowings (In Millions) Entergy Arkansas S 235 S 40.6 Entergy Gulf States 340 36.1 Entergy Louisiaina 225 91.5 Entergy Mississippi 103 50.0 Entergy New Orleans 35 9.7 System Energy. 140 , - Total Other Entergy companies have SEC authorization to borrow from Entergy Corporation through the money pool and from external sources in an aggregate principal amount up to $265 million. These Entergy companies had $116.6 million outstanding as of )ecember3 1, 1999 borrowed from the money pool. Some of these borrowings are restricted as to use and are collateralized by certain assets. In September 1999,; Entgy Corporation ame its $250 million, 364,idabank credit fcility. As of December 31, 1999, $120 million was' outstanding under this facility. The weighted-average interest rate. on Entergy's outstanding borrowings as of December 31, 1999 and 1998 was 7.48% and 5.97%, respectively. The commitment fee for this facility is currently .15% of the line amount. Commitment fees and interest rates on loans. under the credit facility can fluctute depending on the senior. debt ratings of the domestic utility companies. There is further discussion of commitments for long-term financing arrangements in Note 7to the financial statements.. On Februaxy 25, 2000, Entergy Corporation obtained a 364-day term loan in the amount of $120 million, accruing interest at a rate of 6.7%. The proceeds are being used to make an open-account advance to Entergy Louisiana in order to repay maturing debt. Entergy Corporation will, use any reniang proceeds for general corporate purposes and working capital needs.
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NbTE 5. PREFERRED, PREFERENCE, AND COMMON STOCK (Entergy Corporation, Entergy Arknsas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans) The number of shares authorized and outstanding, and dollar value of preferred and preference stock for Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy.Louisiana, Entergy Mississippi, and Entergy New Orleans as of December 31, 1999, and 1998 were: Shares .R ,PricePer Autboried Shareas of and Outstanding Decamber 31, 1999 1998 1999 .199 .1999 (Doars in lbowandi)
- Eerv AdMM Pred Stock
. ~~~~~~~~~~~~. *WVthout inkg-Aind:
Cmu~ative~ $100 par value: 432%Saies 70,000 70,000 $7,000 $7,000 $103.65 4.720% s 93,500 93,500 9,350 9,350 107.00 4.56%& Seies 75,000 75,000 7,500 7,50 102.83 4.56% 1965 Series 75,000 75,000 7,500 7,500 102.50 6.08%Saies 100,000 100,000 10,000 ,10,000 - 102.83 7.32%Seies 100,000 100,OOD 10,000 10,000 103.17 7.80°/ Scries 150,000 150,000 15,000 15,000 103.25 7.40% Series 200,000 200,000 20,000 20,000. 102.80 150,000 . .. .15,000 15,000... 103.00 7.88/a Scries 150,000 Cinxiatie $0.01 par valu . . S1.96 Seis (a) 600,000 600,000 15,000 15,000 - 25.00 Totalwi thmtsiddngfund 1,613,500 1,613,500 $116,350 - $116,350 .
*WithsislftfugS.. . I; ...
Qmwlafl $r) vahr-8.52%Sries 200,000 - $20,000 Qnml $25 par valm s . 1 9.92%Series 81,085 _ . . . ;- . 2,027 Total iYth sing fimd 281,085 =
- 22,027 Fair Value of Preferred Stock i sicing md (e) $22,986
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.Sham .CA Pr,~N :,,r Autlfrbxd : .. . S rp as of and O 0Atng Decafrr31, 1999 998 . 1999 1998 _,99 EnterevGlfStates Pzbrd and Prefetm Stock (Dollianfhu -a")
I -_ Prfirence Stodc .. I . . . . : . C eaf,wit par value 7% Sis (a)(b) 6,000,000 6,000,000 $150,000 $150,0o mwmmm Pnferred Stock
'ALhrzc 6,000,000 shares, $100 par vahz xuxilative WU~slddngfimd: -
4.40% Saies 51,173 51,173 S5,117 : - $s5,117.. - lO18.00 4.50%/Seies 5,830 5,830 583 .;583
- 105.00 4.40/- 1949 Scris 1,655 1,655 166 166 . '103.00 42Wo Saics 9.745 9.745 975 975' 10282 4.44/ Series 14,804 14,804 1.480 1,480 103.75 5.00% Saies 10,993 10,993 1,099 1,099 104.25
- 5.08% Sries: 26,845 26,845 2.685 .685' -. 104.63 4.52%e Series. 10,564 10,564 1.056 1,056 103.57 6.08% Sers 32,829 32.829 3,283 3,283 103.34 7.56%Sezies 350,000 350,000 35,000 35,000- 101.80 Total vH§Yt siing fuid 514,438 514,438 $51,444 S51,444:;:
IWh &WkdngflnxL. 8.80/. Series - 139,971 S13,95
)7- '. -
8.64% Sens - 84,000:* 8.4( A4justabeRat-A 7.02(C). 144,000 156,000 $14,400 .. 15,6C )O S~100.00 A4justab Rat -E17.03% (c) 202.50 22i5000 20,250 225(KO... . i'100.00 Total wid siLng fumd 346,500 604,971 $34,650 $60.4S FafrVale ofPferene Stck and . t$183
$ 4 . .
Preferred SDcwith sining ftnd (e) S183,357 $20,456 I I :, ..t . - ..
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Shares Call PriPer
!, .. ,Autorfd. Shre as of and Oitstmurmg December31, 1999 1998 1999 1998 1999 E-- erry dslamnaPfearedStDck . .. ollszinmwanh). ..
WVitout mldg xb:'" ': Cumilative, Sl0Oparval. . 4.96/c Srs* 6000 60,00 $6,000 S6,000 S104.25 4.161 Si 70,000 70,000 7,000 7,000 104.21 4.44/a Sui&5 70,000 i6,oo 7.000 7,000 104.06 S. 16% Serieis . .75,000 . .- 75,000 7,500 7,500 104.18 5.40%e Saig; 80,000 80,000 8,000i ' 8000 103.00 6.44% Series 80,000 . 80,000 8,000 8,000 10292 7.84% Saies 10,000 10,000 103.78 7.36%/Series 100,000 100,000 10,000 10,000 103.36 Cuatim,$25 parv al . . '. .. .,if su/e s - - -1,480,000 1,4800 37,000 37,000 25.00 Total tosinlidngfunl 2,115,000 2,115,000 S100,500 . S100,500 500,000
&O0MSerit() $50.0 ; .
350,00 35QU000 35,000 35,000' Total with sinking fund 350,000 850Q000 S35,000 $85 000 FirValue o(Prfeirud Stock Wih dnkt Amd (C) $35,364
= __
S87,813
=.
= .
. *'. .- M* O*
Ezterry MsgSl Pn-emd Stock WithotUt *aidfg fm& 4.36°/ Saics 59,920 59,920 5 992 5,992 . 103.86 4.5&K'eries 43 888;
- 43888 ' '4.389' 4,38' 107.00 4.92h/ sSies;"
- 100,000 ' iaooo 10,000 ' '10,000' 10288 7.44% Series 100,000 10OU00 10,000 10,000 102.81 w8 0/herics
.&36 200,000 200,000, i:. 20,000. .: 20,000. 100.00 Total witbotit sinking fimd 503,808 . 503,808: - $50,381 . . $50,381.
= =
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Sh - ClPlicere Shamasof
- 1-a998dO ell . Demmber3l, 1999 . 1998 "', 1999 . 1998 1999
.. .:. h . ...
- 4.3e'.o6edes
- Qniiift $100per vah=
4.75/oSdies .77,798 7,780 7,780
- p. 105.00
%000 6,000 . . 104657 5.56/oSairs 60,000 60,000 6,000 6)000. 1059 iot Tasift
.km fund. 197,798 197, $19,780 $19,780 .
*A,-
Ena Orono
'tmCto 6,000,000 6)000,000 $L50,XX) '*$150,OO0
.~ r,
. . A., : '- . .J ., I...
A
&Mdvries' P&todc ; . W . . ,
4,944,544 4,944,544 $33k455 $33845'5 -- . sat6; M500 L736,056 $69,650 $16752 3 Is. , . . ..r, . . I .. ..- '- '. FiirV of rkheSd& c nd Mkard Stodcnivh inking fimd(e) $218,721 . ; . I's (a) The totar dollar value representi the liquidation value of $25 per share. (b) These series are not redeemable as of December 31, 1999, but become mandatorily redeemable on July 15, 2000. . ttZ-4lt is t es. (c) Represents weighted-average annualized rates fbr 1999. (d) This series is not redeemable as of December 31, 1999, but becomes mandatojily redeemable onNovember 1, 2001. .. ' .,, (e) Fair values were determinned using bid prices reported by dealer markets and by nationiallyrecognized investment banking finns. There is additional disclosure o fair value of financial instruments n'Note 15 to the financial statements.- Changes in the preferred stock with and without sinking fund, of Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and Entergy Mississippi during the last three years were: Number of Shares 1999 1998 1997 Preferred stock retirements Entergy Arkansas
$100 par value (200,000) (50,000) (50,000)
$25 par value (81,085) (160,000) (160,000)
Entergy Gulf States
$100 par value (258,471) (84,812) (934,812)
Entergy Louisiana
$100 par value (500,000)
$25 par value (300,000)
Entergy Mississippi
$ 100 par value (145,000)
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- Cash sinking fund requirements and mandatory redemptions for the next five years for preferred and preference stock, outstanding as of December 31, 1999, are as follows:.
- r ."Entergy Entergy Enterev Gulf States Louisiana (In Thousands) 2000 $153,450 $153,450 -
2001 38,450 3,450 $35,000 2002 .3,450 3,450 2003 3,450 3,450 2004 3,450 3,450 Entergy Gulf States has the annual non-cumulative option to redeem, at par, additional punounts of certain series of its outstanding preferred stock. In October 1998, the Board approved a plan for the repurchase of Entergy common stock through December 31, 2001, to fulfill the requirements of various compensation and benefit.plans. The stock repurchase plan provides for purchases in the open market of up to five million shires of Entergy common stock, for an aggregate consideration of up to $250 million. In July 1999, the Board approved the commitment of up to an additional $750 million toward the repurchase of Entergy common stock through December 31, 2001. In 1999, Entergy Corporation repurchasd '8,484,000 shares of its common stock for an aggregate purchase price of approximately $245 million. Sharesaepurchasedon a discretionary basis. Entergy Corporation reissues treasury shares'to meet the requirements of the Stock Plan for Outside Directors (Directors' Plan), the Equity Ownership Plan of Entergy Corporation and Subsidiaries (Equity Ownership Plan), and certain other stock benefit plans. The Directors' Plan awards to nonemployee directors a portion of their compensation in the form of a fixed number of shares of Entergy Corporation previously repurchased common stock. Shares awarded under the Directors' Plan were 11,400 during 1999; 5,100 during 1998; and 9,104 during 1997. During 1999, Entergy Corporation issued 350,568 shares of its previously repurchased common stock to satisfy stock options' exercised and stock purchases'under the Equity Plan In' addition, Entergy Corporation received proceeds of $7.5 million from the issuance of 253,269 shares of common stock under its dividend reinvestment and stock purchase plan during 1999. . . . The Equity Ownership Plan grants stock options, equity awards, and incentive awards to key employees of the domestic utility companies. The costs of equity and incentive awards are charged to income over the period of the grant or restricted period, as appropriate. Amounts charged to compensation expense in 1999 were immaterial. Stock options, which comprise 50% of the shares targeted for distribution under the Equity Ownership Plan, are granted at exercise prices not less than market value on the date of grant. The options granted prior to 1999 were generally exercisable six months from the date of grant, with the exception of 40,000 options granted on December 1, 1998, which became exercisable on January 1, 2000. The majority of options granted in 1999 will become exercisable equally over a three-year period. Options are not exercisable beyond ten years from the date of the grant.
- 159-
Entergy does not recognize compensation expense'fortkock options issued with exercise prices at market value on the date of grant. The impact on Entergy's net income for each of the years 1999, 1998, and 997 would have been $15.5 million, $278,000, and $296,000, respectively, had compensation cost for the stock options been recognized based on the fair value of options at the grant date fbr awards under the option plan.
"2:w ' ' !,' ] , ; . ,
The fair value of each option grant ii eifimAted on the date of grant using the Black-Scholes option-pricing model with the following stock option weighted-average assumptions:-
. .9 1999 1998 1997 Stock price volatility '20.3%5 20.9% 19.3%
Expected term in years 5 5 Risk-free interest rate 4.7% 5.1% 6.3%
- Dividend yield ': '- 4.0% 5.4% 6.8%
Dividend payment $1.20 $1.58 ' $1.80 a.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Nonstatutory stock optiontasactions resunima eds:aas '
., . . _ 1999' 1998 997 ..rag.-,.,.,:
-.'Ave ra' Aveirae Mu67ber Opion " er otion Nuer ion Df Options Pice of Opons Puce of Options Price Begjming-of-year balance: .. 901,639 $ 26.21.
2 1,176,308 $ .$25.12 1,053,308 $- 24.94 J~~~. a~ .* ;, . ia,
. ~ ~ 2.84 (pticusgaited -5,354,189 29.88 125,000 29.46 *255,000 -:25.84-j Onias ercised ' (213,084) 236 : (350,169) i: 23.37 (2,500) 23.38 ' :
Options ftfeWtd (4i1,638) " 30.34 ' (49,500) 28.56 (129,500) 25.10
- . . ,Aikl .i I ... . .
*End-ofyear balane... *5,631,106 $ 29.50 901,639 $ . 26.21 1,176,308 .- $ . 25.12
. . . . . I Options execisable at year-eid 612,531 861,639 . 421",909 '
. Wigtedavagefarvalueof.
*-optio s granted . s' 4.72 ' $ . 4.11 ' . . 3.10 i:1
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The following table sarzes infonnati6n'abouft tcick options outstanding as of Decenber'31, 1999: Options Outsti ng -_":;' _ns _ _'_" _xable_ s! '* -? WeightedAvg . egitc. Nu;
.; i ; i , .,4,g,- . Weinght { Number. Weighted
.Range pf .. As of .Contractual
. Ayg.o' Exercse ;, Exercisable Avg. Exercise Exercise Pices 12/31199 ]Life-Yrs. - '. Pricex .. 0 at12/31/99 :...; Price
*. it$20e~30: .; 5,73,o76.;.r;t 8.................
.-: 8.i -i : i"29.29 '* . 533,312 ; .-24.83
- t; . <; : It ; : '. ;.' At ! .- . . . : -. . - : :
$30 -$40 :.."it 458,030-':- 83 31.8i : 79,219 ' 3;:3'599
- 4 $2o 'si'$ 5,631,106 8.7 $ 29.50 612,531 $ 26.27 iTomeettherequirements ,pfGo Employee; S knckIn ,v tPlan (ESIP),.the SEC authorized Entergy Corpqration to issueqr acquire, through March 31, 2999, up to 2,0QO. QO0q shares of its common stock to be held as treasury shares. ;e;E$Is authoized thiough the i9'9pi,-eaiEnding March 31, 2000. Entergy Corporation may issue either treasury shares or previously authorized but unissued shares to satisfy ESIP requirements. Under the ternsof the ES, ernployees.can choose each year t have up to..10% of their.regular annualtsalary (not to exceed $25,OO0) vithheld to purchase the Company's common stock at a purchase. pric equal to 45% of the lower; of the market value onthe first or last business day of the plan year ending March 31;; Under the plan, the number.of subscribed shares was 285,505 in 1999; 294,108 in 1998; and 319,457 in 1997.
. eThe fair alue pfESIP sharewgrantedwas estimted o the date of the grant using the Black-Scholes. option-pricing model ,,ith Scpected ESIPweighted-averag;,assumpjions . -. . .. ..
*',;, {'S wtFAjar . .< : Gs5-
- a. '*I;
¢1- hiv: Eli Afos A' A . , , .1999 ;) or;.; s 998 .. 1997, . ..
@Atlityo. , :-'-
2 9,-<;- i;%9, . .. -. w.; , 3%.. . .,,@ . a, . * ;,-.. Stok,pricevolatility 4 . ;- .. ~2.9.9,.: ':i v '.4.1%. ;. 19.3%o.. Expected term in years 1 1 1 Risk-free interest rate 4.6% 5.1% 6.1% Dividend yield 4.3% 6.1% 7.4% Dividendpayment $1.20 $1.80 $1.80 The'weighted-average fair value of those purchase rights granted was $5.90, $6.32, and $4.75 in 1999, 1998, and 1997, respectively. The impact on Entergy's net income would have been ($3,086), (256,000), and $98,000 in 1999, 1998, and 1997, respectively, had compensation cost for the ESIP been determined based on the fair value at the grant date for awards under the ESIP. Entergy sponsors the Savings Plan of Entergy Corporation and Subsidiaries (Savings Plan). The Savings Plan is a defined contribution plan covering eligible employees of Entergy and its subsidiaries who have completed certain service requirements. The Savings Plan provides that the employing Entergy subsidiary may make matching contributions to the plan in an amount equal to 50% of the participant's basic contribution, up to 6% of their salary, in shares of Entergy Corporation common stock. Entergy's subsidiaries' contributions to the Savings Plan, and any income thereon, are invested in shares of Entergy Corporation common stock. Entergy's subsidiaries contributed
$14.5 million in 1999, $13.6 million in 1998, and $13.2 million in 1997 to the Savings Plan.
- 161 -
NOTE 6. COMPANY-OBLIGATED REDEEMABLE PREFERRED SECURITIES (Entergy Arkansas, Entergy Louisiana, gntergy Gulf States) Entergy Arkansas Capital I, Entergy Louisiana Capital I, and Entergy Gulf States Capital I (Trusts) were established as financing subsidiaries of EntergyArkansas, Entergy Louisiana, and Entergy Gulf States, respectively, for the purpose of issuing comimon and prefched securities. The Trusts issue 'Cumulative Quarterly Income Preferred Securities (Preferred Securities) to'the public and issue common securities to theirz parent companies. Proceeds fom uch issues are used to purchase junior subordinated deferrable interest debentures (Debentures) from the parent company. The Debentures held by each Trust are its only assets. Each Trust uses interest payments received on the Debentures owned by it to make cash distributions on the Preferred Securities. Fair Market Value of Preferred Common Interest Rate Trust's Preferred Date' SCCaitiCs Securities Securities/ " Investment in Secunties at Trusts' Of Issue Issued :Issued Debentures Debentures 12-31-99
.. .I...
1 - . ~~(In-Millions) ' (In Millions) Arkansas Capital I^- 8-14-96 $ 60.0 1:9 '.88.50% S 619 $ 603 ' Louisina CapitalI' i- 716-96 S 70.0 .i ,$ 2.2 9.00% $ 72.2 .' 70.0 Gulf States Capital ! '1-28-97. $ 85.0- ^$ -'2.6
- 8.75%- S 87;6 S 77A.4~
The Preferred Securities of the Trusts mature in the years 2045 and 2046. The Preferred Securities are iredeemable at 100% of their principal amount'at the option of Entergy Arklansas, Entergy Louisiana, and Entergy Gulf States beginning in 2001 ani 2002, or earlier under certain limited circumstances, including the loss of the tax deduction arising out of the interst paid on the Debentures. Entergy Arkansas, Entergy Louisiana, and Entergy Gulf States have, pursuant to certain agreements, fully and inconditionally guaranteed payment of distributions on the Preferred Securities issued by their respective trusts. Entergy Arkansas, Entergy Louisiana, and Entergy Gulf States are the owners of all of the common securities of their individual Trusts, which constitute 3% of each Trust's total capital.
.I 1.
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NOTE 7. LONG - TERM DEBT (Entergy Corporition, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) Long-term debt as ofDecemnber 31,1999 was: '- - . Mjuitics intrestpafrs Frum To Fkun To ite I Ad=e Gulf es Lawi ' Mipp Nwdca Br v
. S.
FtMtgageBc 2W0 2004 5.W S 8250% 1,33.7,109 S240,000 563,750 5288,359 S205000 2005 2o0 6.S00° 7.500% 428000 215,000 98,000! 115,000 2020 2m6 7.000%/ 8.940Y 819,950 260,000 444,950 115,000 G&RHm 200 2012 6.200%/ - &250% 415,000 S360,000
$ sss$5,00 2013 2026 755G/ &0000/o 175,000 60,000 115,000 Ga l~w Wdai6s (a) .4 .
2.000 2010 5.450% 8.25G°/e 22,315 220 22,095 2011 2020 5.600°/ 9.0000h/ 569,535 214,200 355,335i 20Z1 2030 4.850/ ON 1,051,750 72,000 102,000 415,120 46,030 ;416,600 Dbatures 2000 2000 7.38G°/e 7.8CCP/o 75,000 75,000 I . SaltiPted Serio Qedit Faiity, ag nie 693%&due 2014 578,681 lDhead Cedk t Seior Cedit Faclityavgrte 5.98/odue2016 342,929 EdPEtePsk, J=NbftPh 7.7Yq, due 2000 . 67,000. . I . LwTexmDOE Cbig R(e 9) 136,08S 136,088 Watafxd 3 Lease 7.45%(Re 10)
*igctian ' 330,306 330,306 CiA GLfeI Ciia 7.02h (Nde 10) : 465,480 465,480 0d=hrlgTamDbt 10,391 -620', 9,771 . . . . (97 t=MtkIPeiu MU80IDL%=-Nrt * (17396) -n-107) (.4.320) (1.934) (IS64) .. (917) (1.554)
Teta11.-TqmDcbt . 6,807,1,8 .1,13,021. 1,631,581 1,261,851 464,466 , 169,083 . 1,160,26 1AnitoDuefthin ie Year -' 194,555 *' 220 : - 116,388 - - 77,947 Iag-Tam1et EcluningAmtDue c~hi~~ar S6,612,583 S1,130,801 31,631,581' Si,145,463' "'464466'" S169,083' S,082,579 Fair Value cfLwtg-TrmDebt (b) $5,815,189I $96,559 S1,651,415 s34,404 S446168 5163,131 S664,902 j
,-A*. -
... ,...J.!'..'...' -
-163 -
- ::~Long-term debt as of Dcember 31, 1998was:
* 'I ' :
Nirities rdItlur Eiter
&SERY From To FnXD To Entcrw t A OdfSafrs Laidai- lv i NWveC Frst~3ge~1~ds 1999 2004. 6.000:. .25; S1.640.7Q9 .265,000 $674,750 S335;959 $365,000 2005 2010 42,000 215,000 98,000 115,000 '
2020 2026 7.00C0% 8.940% 833,237 273,287 444,950 115,000 G&RBs 200 2026 6.625% 8.75% 590,00 I ; $420,000 S170,000 Gorwal Oigtcs (a) 1999 2008 5.9000/ 8 500Y 36,537 1,540; 2Z,920 11,212 865 2009 2026' 5 600% 9.500Y 1,618,335 286,2t0 457,335 412,1 46.030 416,600 1999 2000 7.380%e 7 3)* . 75,000 I ... ,I* 75,000 Saltaxtject Semii CreFthality. avgrate7.13/edx20ti 320,485 Dxifrah ca l qcctSwiocQct Fmility, airte 688Aidue2016 166,482 EP Edegd, Iz. Nte Pyal, 7.7Ye, &x2000 67,00 LiTrm DOE Mjon(Ce* 9) 129,891 129,891 Wtrford 3 Lacse Migo 7.45%(0460c 10) 353,600 353,600 Gkan 1 Cffle Obfigion7.0% t E e 10) 481,301 .;., ., . 481,301 Othes Ia*gTe=nE lA 134,313 10,614 . 9,771 t atPrmiumardDistt-Nit l (23.052' (8.,153) , t4-553) (IMI4 (3259) *
. C982) (.L251)
I I .~~~~~~~~~~~~~~~.
? , ..1 . . ... - . . !
ToaIang-Tem Debt 6,851,838 1,173,379 ; 1,703,173 1,339.087 .463,636 -.169.018 . 1,335,650 I=Amxt DuthbQne Ycar 255,221 1,094 71,515 6,772 . 20 : e -- * . 175,820 LaTanmTtEd1uwAmmt fDue MfthineYear . $6,596617 $1,172285-. $1,631,658 ' S332315, S463.616. $169,018 . SI,159,830 Fair Vale f1z6gTonIm (b) .I K4,H4iI11I $1,081,502 S1,871,739 $1,059,893 $481520 $ i0753'8 8.7.,446 , (a) Consists of pqllution contr!o bonds, certain series of which are secured by non-interest bearing firsi mortgage
- bonds.
A.. .r d (b) ' The fair valieexcludesIeIaswe obligaions, lon'g-teiin D 'obligations, and other long-term debt and includes debt due witin one year. It is determined using bid prices reported by dealer markets and by nationally recognized investment banking finns.
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The annual long-term debt -maturities (excluding lease 'obligations). and annual cash sinking fund requirements for debt outstanding as of December,3 1, 1999, for the next five years are as follows: Entcrgy Entergy - Entcrgy,. Entergy Entergy. System EnteMfWa) Arkansas(b). GulffStates(c)... Louisiana(d). Mississippi' New Oreans Enermy
.- .w.rt. . * .- .(In Thousands) 2000 S 181,170 $ 220 - . 15,950 - S .75,000 2001 276,450 $ 122,750 St 18,700 - 135,000 2002 379,745 85 150,000 94,660, $ 65,000 - 70,000 2003 .129,155 155 39,000 - 65,000 $ 25,000 -
2004 442,000 - .'. 292,000
- 150,000 - - -
- f. ' - .:;i.:.t ..
(a) 'Not included are other sinking find requirements of approximately $49.6 million annually, which may, be satisfied by cash or by certification of property additions at the rate of 167% of such requirements. (b). Not included are other sinking fund requirements of-approximately S.8 million annually,'which may be satisfied by cash or by certification of property additions at the'rate of 167% of such requirements.
- - X X -a @ ~~* - 4-I. ,
(c) Not included are other sinkingA fund requirements of.approxiately $45.7 million annually,' which may be satisfied by cash or by certification of property additions at the rate of 167% of such requirents.
* *. . e i! !t ; !A;; u f -l G @~~~~~~~~~~~~~~*
(d) Not included are other sikn fli*1' rrequirements of approximnaey $2.1 million annually,. which may be
*~.-satisfied by cash or by certification of property additions at the rate of 167% .ofsuch requireme nts. .
- - On February 15, 2000, Entergy Mississippi issued S120 million of 7.75% Series First Mortgage Bonds due February 15, 2003. On March 9, 2000, Entergy Arkansas issued $100 million of 7.72% Series First Mortgage Bonds due March 1, 2003. The proceeds of both issuances will be used for general corporate purposes, including the retirement of short-term indebtedness that was incurred for working capital needs and capital expenditures.
~
a~~~ . * . '* 'a;'w' ' . '!.j, '. , '- EPDC maintains a credit facility of BPS 100'million. (S161.5 million) to finance the acquisition of the Damhead Creek Project, assist in the financing of the Saltend project, and for general corporate purposes in connection-with the acquisition' and develdopment of power.generation, distribution or transmission facilities. As of December 31, 1999, there were no cash advances outstanding under this facility; Approiinatey BPS6.8 million
- ($10.5 rmillion) was outsiding as of December 31, 1998.-. The interest rate on he outstanding cash advances was 5.88% and 6.97% as of Decenber 31, 1999 and .1998; re=pectively. The commitment'fee is .17% of the undrawn amount. - In addition, .EPDC has BPS89.7.millio'n ($144.9 million) of letiers of credit under the credit facility to support project commitments on the Saltend andDainhead Creelk~rojects.
Saltend Cogeneration Company Limited (SCCL), an indirect wholly-owned subsidiary of EPDC, maintains a BPS586 million ($946.4 million) non-recourse senior credit facility providing bridge and term loan facilities, cost overrun and working capital facilities, and contingent letter'of &edit and guarantee facilities (the Senior Credit Facility) to finance the construction and operation of a 1,200 MW gas-fired power plant in northeast England. Borrowings inderithe Senior Credit'Facility are repayable over a 15-year period beginning December.31,.2000. In addition, SCCL has also entered into a BPS72 million ($1163 million) subordinated credit facility (the Subordinated Credit Facility) which is to be drawn down by the earlier of completion of construction or August 31, 2000. he proceeds of borrowingsunder the Subordinated&Credit Facility will be used to repay a portion' of the Senior Credit Facility. The Subordinated Credit Facility is repayable over a 10-year period beginning December 31 2000. All of the assets of SCCL are pledged as collateal finder the Senior Credit Facility and the Subordinated Credit Facility.
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In February 1998, SCCL entered into 15-year interest rate swap agreements for 85% of the debt outstanding under the bridge and term loan portion of the Senior Credit Facility on an average fixed-rate basis of 6.44%. SCCL is exposed to market risks from movernents in interest rates in the unlikely event that the counterparties to the interest rate swap'agreements were to default on contractual payments. At December 31, 1999, SCCL had outstanding interest rate swap agreements totalling a notional amount of S603.2 million. Thelestimated fair value of the interest rate swap agrdeurents, which :presentthe esaedamount: SCCL would have received to terminate the swaps at December 31, 1999, was a net asset of $3.4'i1llion. 'Under the Senior Credit Facility and the Subordinated Credit Facility, SCCL's ability to maki- distributions of dividends, loans, or advances to EPDC is restricted by, among other things, the requirement to pay pernitted project costs, make debt repayments, and maintain cash reserves. In December 1998, Damhead Creek Finance Limited (DCFL), an indirect wholly-owned subsidiary of EPDC, entered into a BPS463.4 million ($748.4 million) non-recourse senior credit facility providing (among other things) bridge and term loan facilities, cost overrun and working capital facilities, and contingent letter of 'credit and guarantee facilities (the Senior Credit Facility) to'finance the construction and operation of an 800 MW gas-fired power plant in southeast England. Borrowings under the. Senior Credit Facility are. repayable after completion of construction over a fifteen-year period beginningDecember,31; 2001.'. DCFL also enterd into a BPS36.1 million ($58.3 million) subordinated credit facility (the Subordinated Credit Facility) which is to be drawn down by the earlier of commercial operAtion or July 22, 2001:. Borrowings under the Subordinated Credit Facility will be used to repay a portion of the Senior Credit Facility: E1he, Subordinated Credit Facility is payable over a ten-year period beginning December 31, 2001. Pursuant to a corporate restructuring in April 1999, Darnhead Finance LDC (DFLDC), an indirect wholly-owned subsidiary of;EPDC, replaced DCFL as borrower under the Senior. Credit Facility and the Subordinated Credit Facility. All of die assets of DFLDC are pledged as collateral under the Senior Credit Facility and the Subordinated Credit Facility. Furthermore, the Senior Credit Facility requires DFLDC to enter into interest rate hedge agreements for a majority of the project debt from the earlier of commercial operation or the date the long term interest rat for the agreed interest rate hedging strategy exceeds 8M Under the Senior Credit Facility and the Subordinated Credit Facility, DFLDC's ability to make distributions of dividends, loans, or advances to EPDC is restricted by, among other things, the requirement topay permitted project costs, make debt repayments, and maintain cash reserves.. . NOTE 8. DIVIDEND RESTRICTIONS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy. Mississippi, Entergy New Orleans, System Energy)
- ~~~
Provisions withinthe Aiticles of Incorporation or pertinent indentures and various other agreements relating to the long-term debt and preferred stock of certain of Entergy Corporation's subsidiaries restrict the payment of cash dividends or other distributions on their common and preferred stock.. Additionally,.PUHCA prohibits Enfergy Corporation's subsidiaries. fromt making loans or. advances to Entergy Corporation.. As of December 31, 1999, Entergy Arkansas- and Entergy. Mississippi had restricted retained earnings unavailable for distribution to Entergy Corporation of $199.3 million and $15.8 million, respectively. During 1999, cash dividends paid to Entergy Corporation by its subsidiaries totaled $532.3 million. NOTE 9. COMMITMENTS-AND CONTINGENCIES Capital Requirements and Finuincing (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) For the years 2000 through 2004, Entergy plans to spend $9.8 billion in a capital investment plan focused on improving service at the domestic utility companies and growing its global power development and nuclear operations businesses. The estimated allocation in the plan is $4.2 billion to the domestic utility companies, $3.9 billion to the global power development business, and $1.7 billion to the nuclear operations business. This plan is contingent upon Entergy's ability to access the capital necessary to finance the planned expenditures. Construction expenditures
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(including environmental expenditures and AFUDC, but excluding nuclear fuel) for Entergy are estimated at $1.5 billion in 2000, $1.7 billion in 2001, and $1.8 billion in 2002. Included in these totals are estimated construction expenditures for the domestic utility companies and System Energy as follows: 2000 2001 2002. Total (In Millions) Entergy Arkansas $350 $248 $188 $786 Entergy 'Gulf States 298 269 204 771 Entergy Louisiana 202 188 162 552 Entergy Mississippi 115 122 123 360
- } - . Entergy New Orleans', 50 46 45 141
^System i- ' Energy. - 39 20 12 71 The domestic utility companies' anticipated spending is focused mainly on (i) distribution and transmission projects that will support continued reliability improvements; (ii) return to service of generation'stations that have been held in reserve shutdown status; and (iii) transitioning to a more competitive environment. Projected construction expenditures for the replacement of ANO 2's steam generators, which is scheduled for the third quarter of 2000, are included in Entergy Arkansas' estimated figures above. Entergy will also require S1.0 billion during the
- period 2000-2002.to meet long-term debt and preferred stock maturities and cash sinking fund requirements. Entergy plans.to meet these'requirnents primarily with internally generated.finds and-cash on-hand, supplemented by proceeds from.the issuance of. debi;--outstanding credit facilities, and project financing. -Certain domestic. utility companies and System'Energymay also' continue the reacquisition or refinancing'of all 'or a portion of certain outstanding series of preferred stock and long-term debt. See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES" for additional discussion of Entergy's capital spending plans.
Sales Warranties and Indemnities (Entergy Corporation) In theEntergy London and CitiPower sales'transactions, Entergy or its subsidiaries made certain warranties to the purchasers. These warranties include'representations regarding litigation, accuracy of financial accounts, and the adequac3'of existing tag provisions. Notice of a claim on the CitiPower' warranties must be given by December 2000, and Entergy's potential liability is limited to A$100 million ($66 million);' Notice' of a claim on the Entergy London ivaanties had to be given for certain items by December 1999, and for the tax warranties, must be given by June 30, 2001;: Entergy's liability is limited to BPS1.4 billion (2.3 billion) on certain tax warranties and BPS140 million ($226 million) on the remaining warranties. No such notices have been received. Entergy has also agreed to maintain the net asset value of the subsidiary that sold Entergy London at $700 million through June 30, 2001. Management periodically reviews reserve levels for these warranties and believes it has adequately provided for the ultimate resolution of such matters as of December 31, 1999. Fuel Purchase Atmentents
- I .. , . . :
(Entergy Arkansas and Entergy Mississippi) Entergy Arkanias has long-term contracts for the supply of low-sulfur coal to White Bluff and Independence (which is also 25% owned by Entergy Mississippi). These contracts, which expire in 2002 and 2011, provide for approximately 85% of Entergy Arkansas' expected annual coal requirements. Additional requirements are satisfied by spot market purchases.
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(Entergy Gulf States) Entergy Gulf States has, a contract for a supply of low-sulfur coal for Nelson Unit 6, which should be sufficient to satisfy the fuel requirements at Nelson Unit 6 through 2010. Effective April 1, 2000, Louisiana Generating LLC will assume ovrneuhhp of the Cajun portion of the Big Cajun generating facilities. The management of Louisiana Generating LLC has advised Entergy Gulf States that it has executed coal supply and transportation contracts that should provide an adequate supply of coal for the operation of Big Cajun 2, Unit 3 fr the foreseeable future. (Entergy Louisiana) In June 1992, Entergy Louisiana agreed to a 20-year natural gas supply contract,. Entergy Louisiana agreed to purchase natural gas in annual amounts equal to approximately one-third of its projected annual fuel requirements for certain generating units. Annual demand charges associated with this contract are estimated to be $7.6 million. Such charges aggregate $99 million for the years 2000 through 2012. (Entergy Corporation). .; .. . Entergy-'s global. power. development. business has entered into gas supply contrarts-at the project level to supply up to: 100% oftthe gas. quirmnts for the Saltend and Damheac Creek power plants,.located in the .UK. Both contracts have 15-yedr. terms and include, a take-or-pay obligation for apprqximately 75%. of. the gas requirement.for each plant.. Under.the.terms.of Saltend's contract and based on its. current. construction schedule,
- Entergy's global power development business may. incur certain liabilities with regard to this gag prior to the project reaching commercial operation. The disposition of the gas will be managed under the terms.ofthe contract, and the financial effect on the Saltend project. is expected to beminimal. - .. . , .
Sales Aereements/Power Purchases (Entergy GulfStates) ... ; .. * . . -. . In 1988, Entery Gulf-States entered into ajoint venture with a primary tenn QE20 yearvith Conoco, Inc., Citgo.. Petroleum Corporationati z i;sta Chemical Company (collectively. the ndustiial Participants), whereby Entergy Gulf States'Nelson, Units -, and- 2 were sold to NISCO, a partnership consisting of the Industrial Participants and Entergy Gulf States... :The Industrial Participants supply the fiel for the. units, while Entergy Gulf States operates the units at the discretion of the Industrial Participants and purchases the electricity.produced by the units. Entergy Gulf States. purchased electricity from the joint venturetotaling $5 1,4. million in 1999, $57.5 million in 1998, and $70.7'million in 1997... ..
* ' : ; . , . ... , T., . ;: :' . -
(Entergy Louisiana) . .. . .: Entergy Louisiana has as agreement extending through the year 2031 to purchase energy generated by a hydroelectric facility known as the Vidalia project. Entergy Louisiana made payments. under. the contract of approximately $70.3 million in 1999, $77.8 million in 1998, and S64.6 million in 1997. If the maximum percentage (94%) of the energy is made available to Entergy Louisiana, current production projections would,,require. estixated payments of approximately $85.2 million in 2000, and a total of $3.5 billion for the years 2001 through 2031. Entergy Louisiana currently recovers the costs of the purchased energy throughits fuel adjustment clause.
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System Fuels (Entergy Arkansas, Entergy Louisiana, Entergy' Mississippi, Entergy New Orleans, and System Energy) . '.. The domestic utility companies that are owners of Systemr Fuels'have agreed to make loans to System Fuels to finaiice its fuel procurement, delivery, and storage activities. The following loans outstanding to System Fuels as
- of Decenber3I, l999 maturein2008. . . ..
t ~~ ...... , ., -:J ! . :*: .'
- .' ' Owner . .Ownershiy Percentane Loan'Outstanding at December 31. 1999 ;
. .s .. .: ......... : . - ..;.t--
EntergyArkansas . . 35% - . $11.0 million
*.:EntergyLouisianka .I 33 . -. $14.2 million-- * '. Entergy Mississippi. '19% :. . ,: j$ 5.5.million.
- Entergy.New Orleans
- 13% -: . 3.3 million Nuclear Insurance (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) . . i. ,
-iA,1 a ;*
- ! ;*'v*;. r8 r8 ; A . :. 4 . .* ;-t*.
The Price-Anderson Act limits public liability of a nuclear plant owner -for a 'single nuclear; incident to approximately $9.5 billion. Protection for this liability is provided through a combination of private insurance (currn tly. $200 millioritah for Entergy Arkansas; Entergy Gulf States Entergy Louisiana,. System Energy, and Entergy's non-utility nuclear power-business) and .an industry assessment program:: Under the assessment program, the maxizmmn payment requirement for.each nuclear.incident would be $8841 million.per reactor, payable at a-rate of
- S10 million per licensedjreactor'per incident per'.year. Entergy has six licensed reactors, including Filgrim As a co licensee -of Grand3 Gulf J with System Energy, SMEPA would sare 1% ,of this obligation.: Insaddition, each owner/licensee of ntegys sbp nuclear units.participates'in a private insurance program that provides coverage for
.worker tort claims. filed for' bodily.injury caused .by radiation exposure. The program provides .for a maximum assessment of approximately. $18.6 million for the -six nuclear units in the eent -that losses exceed accumulated reservefunds... ' e
- nucler Entergy Arkasas,,.Entergy ,Gulf States, Entergy Louisiana System Energy,:-and Entergy's non-utility nucear power businqss are also members of certain insurance programs that provide coverage for property damage, including decontamination and premature decommissioning expense, to members' nuclear.generating plants.:!As of December 31, 1999, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy were each insured against'sich losses upto $2.3 billion. Entergy's non-utility nuclear power business is insured for $1.115 billion in property.damages for Pilgrim under these insurance programs. In addition, ntergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy's non-utility nuclear power business are members of an insurance program that covers certain replacement power and business interruption costs incurred due . 'prolonged.Inclear unit outages. Under the property damage and replacement power/business interruption ivrance progiams, these Entergy subsidiaries could be subject to assessments if losses exceed the accumulated funds aiailable to the insurers. As of December 31, 1999, the maximum amounts of such possible assessments were: EntergyArkansas - $16.6 million; Entergy Gulf States - $14.1 million; Entergy Louisiana -
$15.3 million, Entergy Mississippi - 0.5 million, Entergy Nw:Orleans- $0..3riillion; System Energy - $12.7 million, and Entergy's non-utility nuclear'power business $7.3 million. -Under ' its agreement with System Energy, SMEPA would share in System Energy's obligation. - ' ' *'
The amount of property insurance maintained for each Entergy nuclear unit exceeds the NRC's minimum requirement for nuclear power plant licensees of $1.06 billion per site. NRC regulations provide that the proceeds of this insurance' must beused,first; .to render the reactor safe and stable, andlsecond, to' complete decontamination operations. Only after proceeds are dedicated for such use and regulatory approval is secured would any remaining proceeds be made available for the benefit of plant owners or their creditors.
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SDent Nuclear Fuel and Decommissioning Costs (Entergy Corporation, Entergy Arkansas, Entergy- Gulf States, Entergy Louisiana, and System Energy) Entergy Arkansas, Entergy Gulf' States, 'Entergy Louisiana, System Energy,' and Entergy's non-utility nuclear power business provide for estimated future disposal costs for spent nuclear fuel in accordance with the Nuclear Waste Policy Act of 1982. The affected Entergy companies entered into contracts with the DOE, whereby the DOE will furnish disposal service at a cost of one mill per net KWH generated and sold after April 7, 1983, plus a one-time fee for generation prior to that date. Entergy Arkansas is the only Entergy company that generated electricity with'nuclear fuel prior to that date and has recorded a liability as of December 31, 1999 of approximately
$136 million for the one-time fee. The fees payable to the DOE may be adjusted in the future to assure full recovery.
Entergy's non-utility nuclear power business has accepted assignment of the Pilgrim spent fuel disposal contract with the DOE previously held by Boston Edison. Boston Edison has paid to the DOE the fes for all generation prior to the July 1999 purchase date. 'Ent'rgy considers all costs incurred for the disposal of spent nuclear fuel, except accrued interest, to be proper conponents of nuclear fuel expense. Provisions to recover such costs have been or will be made by the domestic utility companies in applications to regulatory authorities. Delays have occurred in the DOE's program for the, acceptance and disposal of spent nuclear fueL at a permanent repository. Considerable uncertainty exists regarding the time frame under which the DOE will begin to accept spent fuel from Entergy facilities for storage or disposal.. : ' - - i Pending DOE acceptmne. and disposal of spent nuclear fuel, the owners of nuclear plants are responsible for their own spent fuel storage. C-urent on-site spent fuel storage capacity at Grand Gulf I and River. Bend is, estimated to be sufficient until approximately:2005 and 2003; respectively. The spent fuel pool. at Waterford 3 was recently expanded. thr'dgh the replacement oftheexisting storage racks with higher density storage racks-;.'This expansion should provide sufficient storage for Waterford 3 until after 2010. nr ANO storae. ficilityusing dry casks began operation in 1996 and is being expanded in 2000.. Current on-site spent fuel storage capacityrat ANO, including the current expansion, is estimated'to be sufficient until'approximately 2002. This facilityrnay be further expanded as .-required. The spent fuel storage facility at Pilgrim is'expected to provide storage capacity until approximately 2003. Entergy plans to modify the facility to provide sufficient spent fuel storage capacity through approximately 2012. The cost of adding additional spent fuel storage capacity as needed at each site will be reassessed in 2000. In
.December 1999; Entergys.Arkansas, SystemtEnergy, and Entergy. Gulf--States issued.requests for. proposals for additional dry storage capacity at ANO, Grand Gulf 1, and River-Bend, respectively.. ;;.i-
.: Total approved decommissioning costs for rate recovery purposes as 'of December 31; 1999, for the domestic utility companies? nuclear powe& plants, excluding the co-owner share of Grand Gulf 1, have been estimated as follows: . - ;
* ..- ;- . .. ' -: . ..- Toal Estimated Approved
.i . >.. . : - <. :: :. .(InM~ioni ) .
- :~i ,.. :- . .. .
M 1 and ANO 2 (based aa 1998 cost study srecting 1997 dilars) $ 813.1 Riv Bein (based na 1996 cost sty releqting 1996 dollars) . . 419.0. Wateford 3 (based n a 1994 updated sx in 1993 dolais) . . 3201 Gand Gulf 1 (based on a 1994 cost study using 1993 dollars) 365.9
**, . . $. . 1,918S.1 Decomnuissioning cost updates were prepared for Waterford 3 and Grand Gulf in 1999 and produced revised decommissioning cost updates of$481.5 million and $540.8 million, respectively; The cost update for Waterford 3 will be included in a filing with the LPSC in the second quarter of 2000. The cost update for Grand Gulf has not yet been filed with FERC.
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Entergy Arkansas and Entergy Louisiana are authorized to recover in rates amounts that, when added to
-estimated investment income, should be sufficient to meet the above approved decommissioning costs for ANO and Waterford 3, respectively.
As part of the Pilgrim purchase, Boston Edison funded a $471.3 million. decommissiqning trust fund, which was transferred to Entergy's non-utility nuclear power business. After a fvor'ble tax determination regarding the trust fund, Entergy returned $43 millionsof the trust fund to Boston Edison. 'Based on cost estimates provided by an
.outside.consultant,.Entergy. believes. that Pilgrim's,.decomnmissioning fimdfwill be adequate to cover future decommissioning costs for the Pilgrim plant without any additional deposits to the trust. .
In the Texas retail jurisdiction, Entergy Gulf States is recovering in rates River Bend decommissioning costs
*hat total S385.2 million, basedon,a.1996 cost,,study. Entergy Gulf States included decommissioning.costs of
$513.3 million based ,on a 199, cost update anroint of,$156Z.7.million in the PUCT rate review filed.in November
,1998. The PUCT ordered that E1ntergy Gulf States continue funding atthe level based on the 1996 study. In the Louisiana retail jurisdiction, Entergy Gulf States included decommissioning cQsts,based,on tbe,1996 study, in the
.LPSC rate reviews filed.in May.1996,.1997, and 1998. Jn June 1996, a rate chapge was implemented that included decommissioning revenuerequirements basedopthe j996 study. In September ;1998, the LPSC issued an order accepting the 1996 cost study, amount of $419 million...;In-the May 1999rate qview,,Entergy.Gulf States included decommissiog costs based on the 1998update of$56Z7million .- a,. .
. 6.. * . . . , .- il..
System Energy was previously recovering in rates amounts sufficient to fund $198 million (in 1989 dollars) of its Grand Gulf 1 decommissioning costs. System Energy included updated decommissioning costs (based on the 1994 study) in its pending rate increase filing with Fag . Rates nquestedin.*,is grocerding were placed into effect in December 1995, subject to refund. ERC has not yet issued an order in the rate case. ,., ,..., Entergyperiodically.reviews and updates, estimated decommissioning costs. Although Entergy is ,presently under-recovering for Grand Giolf, Waterford 3,'and River Bend based on the above estimates, applications,have been and will continue to be made to the appropriate regylatory authorities.to reflect projected decommissioning costs in rates. The amounts recovered in rates arp deposited in trust funds ^nd reported at market value based upon market quotes or as detemined by widely used pricing'serviccs. These trust fund assets largely offset the accumulated decommissioning liability that is recorded.as accumulated depreciation for EntergyArkansas, Entergy Gulf States,
'and Entergy Louisiana, and arerecorded as deferred credits for System Energy, and Entergy's non-utility nuclear power business. The liability associated with the trust funds received from Cajun-with the transfer of Cajun's 30%
share of River Bend is also recorded as a deferred credit by Entergy Gulf States. The cumulative liabilities and actual decommissioning expenses recorded in 1999 by Entergy were as follows: CAltive 1999 -. Cumulative 1iabiliies as of 1999 Trust Decormissioning liabilities as of December1. 1998. Earning . Epenses- ' Other.' December31, 1999 (InMinions)
'ANOIandANO2 $ 253.4 $ 7.6 $ i
'-.7 - '271.7 iver Bend 190.3' 5.6 . 7.6' .. 203.5 Waterford3 71.9 2.3 8.8 .- 83.0 GrandGulf - 107.3 32 18.9,. - , 129.4.
Ngrim (1) - _ 6.8 428.0 434.8
$ 622.9 $ 18.7 $ 52.8 $ 428.0 $ 1,122.4 171-- -
(1) The $428 million reflected above for Pilgrim represents Entergy's estimate of the present value of
; Pilgrim's decommissioning liability at the time of Entergy's purchase of Pilgrim.' Pilgrimi's trust earnings'are not shown as an increase to its decommissioning liability because it is not subject-to regulatory treatment.
In 1998 and 1997, ANO's idecominissioning expense was $15.6'inillion and S17.3 million; respectively; River Bend's decommissionin, expense was $3.4 'million and. $81.9 iillion 'respectively;- Waterford 3's decommissioning expense was $8.8 milliontintboti yeart, t and Grand Gulf 1'*deconimissioning expers6 was $18.9 million in both years. The actual' decommissioning costs ntay varyl fron tl estimates: because of regulatory requirements, changes in technolgy, and increased costs of labor, niaterials, andequipmenft."'1.' : '
'The EPAct conbins a pioision that assesses domestic nuclear utilities with fees for thdeontnnation and decommissioning of the DOE'spd tiiiiint enrichMent operations. 'The;dcontaanination rind decommissikaig assessments are being used to'k up a fund int6 which coniibutions-fi utilities nd the fedral government will be placed. Annual assessments (n 1999 dlarsXs Which wilt be adjusted annuallfior inflationt are for 15 years aind are approximately $3.9 millibnr for, Entergy Arkansas; $1.0 million fbr'Entetgy Gulf States,-' .5 million for Enteity Louisiana, and $1.6 niilliom fof System Einergy. DOE .s are inchided 'in other currbtit 'liabilities and "other noncurrent liabilities and, as of Deceuiber 31, 1999; r orded liabilities 'wer $27.0 million fbrEntergy-Araidas, $4.7; million for Entergy Gulf States, $10:3 million for Entetgd'Louisiana, and' $10.0 million foi SysteuttJEhergy.
These liabilities were offsect in the consolidated fi ancialstateniits by regu1atory assets. FERC requires that utilities treat these assessments as costs of fuel as they are amortized and recover these costs through rates in the same manna asother fiiel ?=-*--:-i ; ANO Matters (Entergy Corporation'aid Entergy Arki"a) a:' " ; : Cracks in steam generator tubes at ANO 2 were discovered and repaired during an outage in March 1992. 'Further'insoectiong and repair'weft conducted during subsequent refueling andmidtcycle outages,lincluding the mot recent mid-cycle outage in overiti1e 999; Turbine mdifications weie iislled i May 1997 to restore most of the output lost due to stearngenerator fbuling and tube plugging. In October 1996, the Board authorized Entetgy Arkansas' and Entergy Opetaticn Uv'tdr fabricat∧ install 'replacement steamgenerators at ANO 2 Entergy Operations thereafter'entered'iritW contracts. for the design; fabrication, and installation 6f replacement'steam gerierators.- Ih December i998, the APSC isstied'an order tnding replacement of the ANO 2-steam genetatos i' in
*the public interest. It i anticipated that'the'steam generator will be installed:duriig a planed refuelinigroutage in September 2000. 'Enterg '6stiriiates the cost of fabrication arid replabeiien' of!the steam gneirtors to be approximately $150 million. ' . i, .. - . . .-
Environmental ssues "' ' ' ' (Entergy Gulf States)
.11A .1 -: t ' J'- .
EntergyGulf Stateshas been designated as a PRP forthe clean-up'of certain hazardous waste disposal sites. Entergy Gulf States is' currently negotiating with th EPA and state authorities regarding the clean-up of dtese sites. Several class action and other suits have been filed in state and federal courts seeking relief from Entergy Gulf States and others for damages caused by the disposal of hazardous waste and for asbestos-related disease allegedly resulting from exposure on Entergy Gulf Slates' premises. While the amounts at issue in the clean-up efforts and suits may be substantial, Entergy Gulf States believes that its results of operations and financial condition will not be materally adversely affected by the outcome of the suits. As of December 31, 1999, a.remaining provision of $19;i million existed relating to the clean-up of the'rei ning sites at which Entergy Gulf States has been designated as a PRP.
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(Entergy ouisiana and Entergy New Orleans) 4f J-..
" ing 1993, the LDEQ issued new rules fr solid waste regulatioi, includingiregulation of wastewater
'imphdieits. 'Entergy Louisiana`and En'tergy New Orleans'have determined that certin of their power plant wastewater impoiundments we'raffcted by these regulations' and have chosen to 'upgrade or close them. As a result, a remaining recorded liability in the amount of $5.9 million for Entergy Louisiana and $0.5 million for Entergy New priean~xisted at December 31, 1999 fbr'wastewater uga closures. 'C pletion of this work is pending a,~,, ap~r'Jai ..d -.. J~ ,, . -..
CirI iuise Ordinances (Entety Newv Orl*eans) '
' i Entegy v Oriens provides electric aid gas' service in the'City of New Orleans pursuant to franchise ordinances. These ordinances contain a continuing option for the city to purchase Energy New Orleans' electric and as utility properties, Waterford 3 Lease Obligations (Entergy Louisiana)
"';Li' lhinSept~drier28 1989, Entergy? Louisiana entered into three i& icaltransactions for'the sale and easeigi&df uAdined M nterets (agge" approxitei 9.3%)IiWaterford'3. In'July 1997, Entergy Louisiiana
'aued the lessors to issue'$307.6 nillion te prmcial amount of Waterford 3 Secured Lease Obligation
. ind;6' 8;76%'Sei6iscdue2017, 'to refinance the outitandlig bonds 'originally issued to finance the prurchase of the
'uniided in'terests bythe lessori The leas p we& iduA to reflect the lower interest costs. 'Uon the occ'urrene' of certain'events Entergy Louisiana m'.be bligatedtopayamounts sufficien topennitthe trmination
't' iarnsactioisaid' mayabe required to issume the ou ding bonds '
is'sued t6 ilian&, in part, the lessors' si
.I...lJ. .P*'J-' ; - ; i. - . vg *l t acquisitioi ofthe undvded mterts mn Wteiord 3. . . :' . .
Empovment Litiaion (Entergy Corporation, Entergy Arkansas, Enterg Gul.States, Entergy Louisiana, and ntergy "ew rl ;. Enteri Corppratiop, Entergy Akansos, Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans
'ar &e dints in ii boeroufala uit sdtiniiitth tfhedyyrormeremployes ywe'rewrongfullyterminatedand/or dsis of age; ace, a /orsx tery rporatone r gGulf
'State infegy Louisiana, and Entergy'New Orteans acr vigorously defendiig th#e 'suits and deny any liability to
.' 'ffie'plaiiniffs"yHwever, no assurance can be given as to the oufcome of these cases.
..at~lt .oc .. t. ht. .
Caiisn"Ci Contracts (Entergy Corporation'and E`iterg' Guif States)
*.***'~~~~61ddc~ricyug:nn actionis in the U. .Bankrpu ~~ti ~hc h au Entergy Gulf States filed declaratoyjudgurt in c the Cajun
;banlptcy case is pending.' Tbhse'ations were filed Jo'seek rutigsdeclarin tat"Enty Gulf States is not li'able
- sfor to eranc
;iges' s and the rail a!d barge co'mpanies tbattransjort ol toig Cajun, Unit 3 if cthe ii'cts' Were' d in th bankruptcy proceediig: Co11'ctively, the'oa1 sup`iliers and tinsporters asserted clis'-inthe Aje iKhat ex&cde d'.16'blliin. iOct'ber 1999, the bifilauptcy court confirmed a pla-"& irganizaioni banlauptcy case ursuant' a 'settlement agreement among theparties. The setilement agreement and plan of reorganization effectively release Entergy dulf States' from an'y'laims asserted by the coal suppliers and transporters for Big Cajun 2. The settlement agreement is subject to regulatory approvals.-
Grand Gulf 1-Related Agreements - Funds Agreed SsnenEnrgy Capital Funds ireent (Entergy Corporationnd System Energy)
- ' Entergy Corporation hasagreed to supply System Energy with sufficient capital to (i) maintain System Energy's equity capital at an amount equal to a minimum of 35% of its total 'capitalization (excluding short-term
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debt), and (ii) permit the continued commercial operation of Grand Gulf I and pay in full all indebiedness for borrowed money of System Energy when due. In addition, under supplements to the Capital Funds Agreement assigning System Energy's rights as security for specific debt of System Energy, Entergy Corporation has agreed to make cash capital contibutions to enable System Energy to make payent onsui debt when due. System Energy has eiiteed into agre nnents with Enter Arkansas, Enter2J Louisiana, Etery Mississippi,
*andEntiergy New Orleans whereby they are obligato` urchie their respective entitlements of capacity 4 energy from System Energy's 90% ownership and leasehold interest in Grand Gulf 1, and to make payments thgi together with other available funds, are adequate to cover System Energy's operating expenses. System Energy youldhave to secure funds from other sources, including Entergy Corporation's obligations under the Capital Funds Ag eeent; to coverjany shortfalls from payments received from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans uder thee agreements. . -- :
Unit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) .. System Energy has agreed to sell all of its 90% owned and leased share of capacity and energy from Grand Gulf 1 to Entergy A +',. Entergy. Louisiana, Entery Mississippi, and Entergy New Orleans in accordance with specified percentages (zsner6y a rntcry.L uisana44% Eitergy Mississippi-33%, and Entergy New Orleans-17%) as ordered by FERC. Chrges unfthis agrcanent are paid in consideration fbr the uhng companies' respective entitlemeint,;to receive capacity daenergy and are payable iepectiv e of e qihntity of energy delivered so long as the unit remains in commerciaf operation. The agieeintwillreiain in effect until terminated by the pa tiesand the terntion is approved b6y FtC, most likely upon Grand Gulf I's reii~eint n service: Monthly obligations for payimnns und ithie ageemint are a'pimdat $21 million for Entbil* icnsas,
$8 million for Entergy Louisiana, $19 million for Entergy Mississippi, and $10 inillion for tntergy New Orileans.
Availalility Agreement (*9inteiy Arkinsas, Entergy Louisiaa, Entergy Mississippi, erewdfrtans, and System Energy)
- Entergy A nsa,<Entergy. Louisiana, Entergy Mississippi, and Entergy New Orleans are individually obligated to nalse payments or subordin advances to SystempEnergy in accoidanvistatedercentages
'-(EntergyArkaisas-17.1 i/ Entergyt uii-26.g°/ tergy sissippi-31.3%, and tergy New 6 in ounts that, when added t6 amounts receivedunder the Unit Power Sales Agreeeunt r otherwise, aedequate m to cover all of System Energy's operating expenses as defied, including an aiount sufficient to amortize the cost of Grand Gulf 2 over 27 years. (See Reallocation Agreement terms below.) System Energy has assigned its rights to payments and advances to certain creditors as securiftyf6rcertain obligations. Since comnercial operaibn of Grind Gulf l, payments under the Unit Ppwer Sales Agreement have exceeded the amounts payable under.the Availability Agreement. Ador in y, no payeti uider the Availability Ag eement have ever been required. If Entergy Ark~ansas or Entegy Missisippi s to Caits Unit eowpr Saayents, and System Energy is unable*unable to to obtain-iind obtainm frMm 6tfxi, nundsithers souces
'urces, tiiiyioiiaO rGy Louisiana andr Entirgy genetretadSytm nryito New Orleans could become subject claims or demands b;r System Zergy r creditors for payments o advances under the Asaiiabffity D ent (or the. assignments thereof) equal ti the difference between their required Unit Power Sales Agreement payments and their required Ailability Agrdeinent paymenis.
Reallocation Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) System Energy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans entered into the Reallocation Agreement relating to tie sale of capacity and energy from Grand Gulf and the related costs, in which Entergy Louisiana Entergy Mississippi, and Entergy New Orleans agreed to assume all of Entergy Arkansas' responsibilities and obligations with respect to Grand Gulf under the Availability Agreement. FERC's decision allocating a portion of Grand Gulf capacity and energy to Entergy Arkansas supersedes the Reallocation
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Agreement as it relates to Grand Gulf 1. Responsibility for any Grand Gulf 2 amortization amounts has been individually allocated (Entergy Louisiana-26.23/'o, Entergy Mississippi-43.97%, and Entergy New Orleans-29.80%) under the terms of the.Reallocation Agreement. However, the Reallocation Agreement does not affect Entergy Arkansas' obligation to System Energy's lenders under the assignments referred to in the preceding paragraph. Entergy'Arkansas'would be'liable for its share of such amounts if Entergy Louisiana,.Entergy Mississippi, and Entergy New Orleans were unable to meet their contractual obligations. No payments of any amortization amounts will be required so long as amounts paid to System Energy under the Unit Power Sales Agreement, including other funds available to System Energy, exceed amounts required under the Availability Agreement, which is expected to be the case for the foreseeable future. Reimbursement Agreement.(System Energy). In December 1988, System Energy entered into two, separate, but identical, arrangements for the sale and leaseback of an approximate aggregate 11.5% ownership interest in Grand Gulf 1. In connection with the equity funding of the sale anid leaseback arrangements, letters of credit are required to be maintained to secure certain amounts payable for the benefit of the equity investors by System Energy under the leases. The current letters of credit are effective until March 20, 2003. . Under the provisions of a baik letter of credit reimbursement agreement, System Energy has agreed to a number of covenants ilitiig 'to the mintenance ofr c n capitalization and fixed charge coverage ratios. System Energy agreed, during the term of the reimbursement agreement, to maintain its equity at not less than 33% of its adjusted capitalization .(defined in the.,reimbursement.agreement to include certain amounts not included in capitalization for financial statefent piirposes). In addition, System Energy must maintain, with respect to each fiscal quarter during the term of the reimbursement agreement, a ratio of adjusted net income to interest expense (calculated, in each case, 'as' specified'in thereimbursemeit'agreement) of at least 1.60 times earnings. As of December 31, 1999, System Energy's equity approximated 40.57% of its adjusted capitalization, and its fixed charge coverage ratio for 1999 was 1.92. Litigation (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and E4ter6y New Orleins) In addition to those sedvbe, Entergy and the domestic utility companies are involved in a number of legal proceedings and claims in the ordinary course of their business. While management is unable to predict the outcome of such litigation, it is not expected that the ultimate resolution of these matters will have a material adverse effect on results of operations, cash flows, or financial condition of these entities. I~~~~ .
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-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NOTE 10. LEASES . General As of December. 3,. 1999, Entergy had. capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities (excluding nuclear fuel leases and the sale and leaseback transactions) with minimum lease-payments as follows: .
*4 Capital Leases . . .
Entergy Entergy Year Entergy .9. Arkmaas . Gulf Statesp; s-(In Thousands) 2000 * $25,379 $9,645 $11,829!' 2001-.- 23j676 9,645 . - 11,853.. 2002 19,414 9,645 . 9,720 2003 19,414 9,645 '- 9,720: - 2004 19,414 9,645 9,720
*. Years thereafter -E t.4- *-39.§88 - I 23.034 : 16,746;:
Minimum-leasi payments 147,179 71,259 *i. 69,588 ; :
.. 1.. 720...67 . ,5 Les Aniount representing interest . 48,570 : 26,067 ..:- 21,852 * *; .
Preninilue ofn -- $8,609
- 451.9.
. . 2 . *. ..
mnmum leasc jayments . .. I S9.8,,609 -'-~512- . )S776-I ..... Operating Leases
.,. . ;,, . at, ' ~~ I .
. ilt
.. Imzi'.
11 Year ru A
. '*1 - hR axh)
.. II(
I . .
., . ;-. . . .-'Y' '.- , - . : . . .,. ; ,,
2000 . . $K8978 $3q227 -. $P,2 - m$,7Z7. 2001 77,761
- 29,2l - 20,453 4,742 2002 6,338 2A545 16,804 4,160 2003 43,422 13,082 14,435 2,570 2004 40,173 1ZOD4 14,031 1,653 Yems t seafc& 127,346 33,618 40,073 1,973 Nmrinlenpqyrs $438,018 $142,690 $129,118 $23,825 Rental expense for Entergy's leases (excluding nuclear fuel leases and the Grand Gulf I and Waterford 3 sale and leaseback transactions) amountedto approximately $65.2 million, $69.4 million, and $70.7 million, in 1999, 1998, and 1997, respectively. 'These amounts include $23.9 million, $19.4 million, and $19.7 million, respectively, for Entergy Arkansas; $19.2 million, $18.1 million, and $17.6 million, respectively, for Entergy Gulf States; and
$13.1 million, $13.3 million, and $12.8 million, respectively, for Entergy Louisiana. In addition to the above rental expense, Entergy Arkansas and Entergy Gulf States railcar operating lease payments, which are recorded in fuel expense, amounted to approximately $13.7 million and $2.7 million, respectively, in 1999, 1998, and 1997. The railcar lease payments are recorded as fuel expense in accordance with regulatory treatment.
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. Nuclear Fuel Leases (Entergy Arkanisas, Entergy Gulf States, Entergy Louisiana, System Energy) As of December 31, 1999, Entergy Arkansas, Entergy. Gulf StatesjEntergy'Louisiana, and System Energy each had arrangements to lease'nuclear fuel in an aggregate amount up to $135.million, $85 million, $90 million, and
$100 million,.rospectively. As of December 3l 1999, the unrecovered cost base of Entergy Arkansas', Entergy Gulf States', Entergy Louisiana's, and System Enegy's nuclear fuel leases amounted to approximately. $85.7 million, S70.8 million, $51.9 million, and $78 million, respectively. The lessors'finance the acquisition and ownership of nuclear fuel through credit agreements and the, issuance of intermediate-term notes. The credit agreements for EntergyAxkansas, Entergy Gulf States, Entergy.Louisiana,,and.System Energy have termination dates of December 2000, December 2000, January 2002, and February 2001, respectively. 'Such termination'dates may be extended from time to time with the consent of the lenders. The intermediate-term notes issued pursuant to these fuel lease arrangements have varying maturities through March 15, 2002. It is expected that additional financing under the leases will be arranged as needed to acquire additional fuel, to pay interest, and to pay maturing debt However, if such additional finan ing cannot be arranged, the lessee in each case must repurchase sufficient nuclear fuel to allow the lessor to meet its obligations.
Lease payments are based on nuclear fuel use. The table below representshe total nuclear fuel lease payments (principal and interest) as well as the separate interest component chred to operations by the domestic utility companies and Ssti Energy in 1999, 1998, and 1997: 1999:. 1998 1997 Lease Lease Lease Payments Interest Payments Interest Payments ]Interest (In Millions) Entergy Arkansas $48.6 $5.6 ,H $5.5 . $4.9 $53.7 $6.4 Entergy Gulf States ; : 31.4 . 18 . 36.1 ' -3.1 25.7 3.2 Entergy Louisiana 29.7 '3.7
- 36.8 '3.9 29.4 3.7 SystemEnergy 28.1 3.4 35.4 4.7 41.1 5.4
*Total ' ' '- ' ,'$137.8 '$14.5 $1 8.8 $16.6 $149.9 $18.7
- ' ~4
- V:. - ,'i..*
Sale and Leaseback Transactions ,
, , . ' :, . . .... 1 1n - .- .-
Waterford 3 Lease Obligations (Entergy Louisiana) - In 1989, Entergy Louisiana sold and leased back 9.3% of its'interest in Waterford 3 for the aggregatesum of
$353.6 million. The lease has an 'approximate term of 28 years. The lessors financed the sale-leaseback through the issuance of Waterford 3 Secured Lease Obligation Bonds. The lease payments made by Entergy Louisiana are sufficient to service the debt.
In 1994, Entergy Louisiana did not exercise its option to repurchase the 9.3% interest in Waterford 3. As a result, Entergy Louisiana issued $208.2 million of non-interest bearing first mortgage bonds as collateral for the equity portion of certain amounts payable under the lease. In 1997, the lessors refinanced the outstanding bonds used to finance the purchase of Waterford 3 at lower interest rates which reduced the annual lease payments. Upon the occurrence of certain events, Entergy Louisiana may be obligated to assume the outstanding bonds used to finance the purchase of the unit and to pay an amount sufficient to withdraw from the lease transaction. Such events include lease events of default, events of loss, deemed loss events, or certain adverse "Financial Events."
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"Financial Events" include, among other things,, failifre by Entergy Louisiana, following the expiration of any applicable grace or cure period, to maintain (i) total equity capital (including preferred stock) at least equal to 30% of adjusted capitalization; or (ii)a fixed charge coverage ratio of at least 1.50 computed on a rolling 12 month basis. As of Decenber 31, 1999, Entergy Louisiana's total equity capital (includingpreLrred stock) was 48;1% of adjusted capitalization and its fixed charge coverage ratio:for 1999 was 3.49. As of December 31, 1999, Entergy Louisiana had future minimum lease paymezits (reflecting an overall implicit rate of 7.45%) in connection with the Waterford 3 sale and leaseback transactions, which are recorded as long-term debt, as follows (in thousands): 2000 - *$ 42,573 2001 40,909 2002 39,246 2003 59,709 2Q04 31,739 Years thereafter 440,690 Total 654,866 Less: Amount representing interest 324,560 Present value of net minimum lease payments S 330,306 Grand Gulf 1 Lease Obligations (System Energy) I, In December 1988, System Energy sold and leased back 11.5% of its undivided ownership interest in Grand Gulf 1 for the aggregate sum of $500 million. Subsequently, System Energy leased back its interest in the unit for a term of 26 %4years. System Energy has the option of terminating the lease and repurchasing the 11.5% interest in the unit at certain intervals during the lease. Furthermore, at the end of the lease term, System Energy has the option of renewing the lease or repurchasing the 11.5% interest in Grand Gulf 1. System Energy. is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion'of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Until 2004, the total of interest and depreciation expense exceeds the corresponding revenues realized. Consistent with a recommendation contained in a FERC audit report, System Energy recorded as a net deferred asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and is recording this difference as a deferred asset on an ongoing basis. The amount of this defrred asset was $104.5 million and $85.9 million as of December 31;, 1999 and 1998, respectively.
.. * * , . , r~~~~~~2
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As of December 31, 1999, System Energy had future minimum lease payments (reflecting an implicit rate of 7.02%), which are recorded as long-term debt as follows (in thousands)-- 2000 $ 42,753 2001 46,803 2002 53,827
.2003 . 48,524 2004 36,133 Years thereafter - 574,782.
802,822 Less: Amount representing interest 337,342 Present value ofnet minimum lease payments $ 465,480 NOTE 11. RETIREMENT AND OTHER POSTRETIREMENT BENEFITS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) Pension Plans Entergy has two postrcfirehi~nt benefit plans, "Entergy Corporation Retirement Plan for Non-Bargaining Employees"' and "Entergy Corporation Retirement Plan for Bargaining Employees," covering substantially all of its domestic employees. The: pensionplans are noncontribiitory and provide pension benefits that are based on employees' credited service and conpensation during the final years before etiement. Entergy Corporation and its subsidiaries fund pension costs in accordance with contribution guidelines established by the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. The assets of the plans include common and preferred stocks, fixed-income securities, interest in a money market fund, and insurance contracts. Total 1999, 1998, and 1997 pension cost of Entergy Corporation and its subsidiaries, including amounts capitalized, included the following components (in thousands): 1999 Ehtergy EnterU Ettergy Ehtergy Otry System
---- IKArnsas GlfStates Louana Mssissi New Oeans Eawg Serviec cost - benefis earned during tbe period $39,327 $8,723 $6,531 $4,948 $2,278 $997 $2,334 Interest cost on projected benefit obligation 104,591 29,457 24,757 17,950 10,810 3,296 3,017 Expected return on assets (130,535) (34,784) (37,170) (25,629) (13,815) (2,601) (3,738)
Amortization oftransition asset (9,740) (2,336) (2,387) (2,808) (1,250) (195) (482) Amortization ofprior service cost 11,362 1,227 1,434 558 480 165 64 Net pension cost (inorne) S15,005 $2,287 ($6,835) ($4,981) ($1,497) $1,662 $1,195.
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I Enter Ehtelg BIEterv Entfergy System Edmw. 1 *Akansas GfSe Louisa Miss~vx 'N-w Odeans Enew S:Mce cost - benefits earned during the period $45,470 $7,428 $S5,448 $4,148 $1,913 $818 $2,494 fitexest cost on projected benefit obligation 192,132 27,919 24,564 16,845 10,362 3,020 3,265 Expected return on assets (233,058) (31,119) (32506) (22,526) (12,335) (2,083) (3,979) Aortiozation ofbtnsiticm hsset (9,740) (2,336) (2,387) (2,808) (1,250) (195) (597) Amortization ofpror service cost 11,459 1,227 1,434 - 558 .. 480 259 80 Netpensin cost (con) $6,263 $3,119 ($3,447 ($3,783) ($830) $1,819 $1,263 e 1 Erte r EItergy Er'tery BMteWqy Ertegy System EntaW Adms CGfStates Loum ppi Nw s E Sevice cost - bentis e d dihig the Paw $47,7G3 $4937 - $5,365 $3,762 $Ik893 $763 V£389 Intaust coa on pnrected beefi oigaion 193,665 2A42 23,684 15,778 lQ011 2783 Z942 Expected rcturonn assts (220,641) (28,050) (29,119) (19,988) (11,258) (1,915) (3,480) Anxxtization offtrion asset: (Z546) (Z336) (2387) (2,8.) (1,50) (15) (597) Amrtnizafion ofprior srvice cost f 4,266. .1,227 1,434 558 ; 480 259 80 Nt pension cost fixmm) $22447 $450 .. ($1,023) ($2,698). ($1) . .$1,695 .$1,334 a . -
. .1..
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-. The funded status of Entergy's various pension plais as of December 31, 1999 and 1998.was (in thousands):
- iw.hiyV ft Ertw .. .9~w scn AEtsA GfSites 1wisiam M9;i wTbwOlcfns -. e
-hng QindBef GUiafin (PBQ)
$1,553,251 $435,638. $377,288 $261,858 $158,778 $47,881 $44,876
- iceost- ... 39,327 873 6,531 4,948 2,277 997 2,334 104,591 29,457 :24,757. 17,950 10,810 3,296 3,017 A&cia1 (gpos (124715) (25,915) (35,000) (11,638) (9,03)! (4,663) (6, (0,580) (23,49) (25,359) (16,169) (9,5365) (1469) . ,(671)
B*a t 123119 $1499 601 $424554 $348217 $25&949 $153;262 $46042 $43262 angeiFlanAssets. Fkranxcfps t IF $L791,192 $473,353 S513,65 $3564663 $192,438 , $28,927. $48,910 24460-- 68,258 _ 74,249 49,260 24,602 2,6< ,- 8,203 P7#cwatn1tcn 13,106 - 1,343 - , ,1244.- AP3U ,:-.233491 (2536)- (16168) (965) (1-4694 (671) Faliu ofs t 12'1/9 $1.965.7 563597 S3895.75 $207.475 $31370 $56i442
- ,, .. . o ! . r
. . *.... .. ~s $465,577 $93,708 $215,380. $132,806 $54, 672) $13,180
-hoizdm sset (17,446) (4,6 ) (5615) 501 (180 (,2 30092 1203, 9,780 4,238 3A55 1,282 . 696 Acmrn (gpn)loss .-(483741 (122.63) (250266) (12286) (53.747) 7.77676 (1649
- 5 18 ~'423 ($7 43' 1t623 $L420 (85.79' ($.448) i: 'm,. . .
- s J~CW Hktmu btu ftm kdelu ISy~n Eitle A aMms (UfSats Wusma Msm ti Nw eans B QimdrojetedBftftL
$2,495,107 $381,581 $327,842 $226,254 $14Q317 $40,568 $35,770 Swicr.cod 45,470 7,428 5,448 4,148 1,913 818 - 2,494
' 192,132 ,59 227,949- 16,845 10,362 3,020 3,265 142,217 4,t742 45,302 29,769 15,544 5,319' 4,005
&aeftpid (16li " (23,02) (25,868) (15,158) (9,35) (1,844) (658) a "4idicsubsi&Ties
- uaat12I3198 ' l.553,21 S435638 $377288 $261.858 $158.778 $47881 $44876
. , -..- ., , K a dliiiin*InmAssds Firaluefa s VIIA $3,133,232 $427,175 $454,912 $317,650 S174,434 $23,145 $40,917 Ahfdmamcpma 472,181 67,058 76,254 54,171 27,318 2,000 8,440 aoyratn1xtim 72,596 2,152 806 -44 5,626 211 ' pftp'id (161 (23,032 (25,868) (15,158) (9,358) (1,844) (658)
(1.724818) ,_ ' ' _ - ;- 31 791.15Q '-$473353 -$513365 $356663 $192438 $28927 S48910
,%.Y
$237,941 $37,715 $13O77 $94,05 $33,660 ($18,954) $4,034
- &Fiticiticni& ' ' (24,79) (7,0) (4,775) (8,423) (3,751) (376) (4,097) 32,748 12,429- 11215 4,796 3,935 1,447 941
" (239781) (63.274)' (178188) (87536) (33921) 12507 ^'(6.141)
" Pt~ai(nY1cQsenem - '$610: ($2'13h ($35671) $3642 ($77) ($5376) ($5263)
,*:t.
,- *t, ,,,* ; a. ' ', .'
- Reflects t1 dixdim ofx n Eleiitymd Gctpoe effctive in [l ber 1998.
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Other Postretirement Benefits Entergy also provides health care and life insurance benefits for retired employees. Substantially all domestic employees may become eligible fr these benefits if they reach retirement age while,still working for Entergy. - Effective January.1, 1993, Entergy adopted SFAS 106, which required a change from a cash method to an accrual method of accounting for postirement benefits other than pensions. AtJanuay 1, 1993, the cuarally determined accumulated postretirement benefit obligation (APBO) earned by retirees and active employees was 'estimated to be approximately $241.4 million and $128 million for Ehtergy (other than Entergy Gulf States) and for Entegy Gulf States, respectively. Such obligations are being' ,mortized over a 20-year peinid which began in 1993. Entergy Arkansas; the portion of Entergy Gulf States regulated by the PUCT,- Entergy Mississippi, and Entergy New Orleans have received regulatory approval to recover SFAS 106 costs through rates. Entergy Arkansas began recovery in 1998, pursuant'to an APSC order. This order'also allowed Entergy. Arkansas to amortize a regulatory asset (representing the difference between SFAS 106 costs and cash expenditures for other postretirement benefits incurred for a live-year period that began January 1, 1993) over a period of 15 years beginning in January 1998. The LPSC ordered the portion of Entergy Gulf States regulated 'by t LPSC and Entergy Louisiana to continue the use of the pay-as-you-go method for ratemaking purposes for pe n benefits other than pensions. However, the LPSC retains the flexibility to examine individual companies' accounting for postretirement benefits to determine ifspeial exceptions to this order are warranted.' Pursuant to regulatory directives, Entergy Arkansas, Entergy Mississippi, Entergy New Orleans, the portion of Entergy Gulf States regulated by the PUCT, and System Energyfund postretirenent benefit obligations collected in rates. System Energy is funding on behalf of Entergy Operations postretirement benefits associated with Grand Gulf 1. Entergy Louisiana and Entergy Gulf States continue to recover a portion of these benefits regulated by the LPSC andFERC on a pay-hs-you-go basis.- The assets of the'various pstretirement benefit plans other than pensions include common stocks, fixed-income securities, and a money market fund. Total 1999, 1998, and 1997 postretirement benefit costs of Entergy Corporation and its subsidiaries, including amounts capitalized and deferred, included the following components (in thousands): 1999 Entergy Entgy ' Entergy Entermv End I System Evter Arlykinsas Gulf States Louisiana Mississippi New Orleas Energy Service cost -benefits earned during the period $16,950 $3,952 $3,227 $2,140 $1,009 $512 '$982 Interestcoston APBO 29,467 6,596 8,206- 4,234 2,167 2,699' 631 Epected retn on assets (8,208) (1,309) (2,980) - (1,634) (1,425) (522) Amoxtization of transition obligation 17,874 3,954 5,803 2,971 1,502 2,678 '222 Amortization of prior service cost 44 - 44 - - .. Recogized net (gain) (1,452) - - ;. (393) (227) (69) '(616) (8) Net postretirement benefit cost $54,675 $13,193 $13,907 $9,118 $2,975 $3,848 $1,305
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1998 Entergy Entergy Entergy Ent, . ry System Entereyw . Arkansas _- Gulf States Lousiana, Mississippi New Orleans __Energy _ Service cst -bcnefits earne - duringthe period $13r,878 '$3,325 $2,553 -- '$1,776 -;$862: 3432* -$871 Interest cost on APBO 28,443 6,519 8,103 4,089 2,085 2,714 - 652 EBqpetcd return on assets (5,260) (215) (2,385) - (1,059) (1,155) (446)
% ds~~~o gani Ai atin of hansici obiii6oh .. 17,874
.: .. 4 3,954' I 5J803' 2,971 1,502 2,678 262 An ation ofior servie cost: . 44 s i,..-
... ;4 .:6 ,:b~4~ ... .i-.. 79..
(3,501 . (lt216 (686)' ,(264.)"' '(l024.Y (79) L$51,478 Net posterement benefit cost . $13,583 12902 . $8 150 $3,126 '$3,645 $1,260
* ~ '1997 t En.
.Ent Entergy.- *Entergy Enter. , . Entergy System Entergy Aansasul.GifStates Lisiana; ississippi .;New Orleans Energ Sevice cost -beefits earned: -
duringtb period $13,991 :'$3,20 $3,22 $2,081 $1,092 '1 $61 $939 kt~etccionAPBQ' 29,317 6,232. : 9,466' 4,49b -. 278 3,10W -648 Eqected return on assets (3,386) - (1,637) - (695) (840) (214) Antization of transistion obligation 15,686 3,954.. 5,803 2,971 1,5021 2,678 262 Aioa of ir service cost Rwqpzcd net (gaiWn ; ; 14 ' (238) ' 672 (348) .,(103) . (742). Net postretiineti benefit cost $55,786 $13,152 $17,575 .$9,194. $4,074 .. $4,820., S... .1,635
- j * ~~. !: * ,.i .,i; *, ; ~.. ,6 ,
.............. ,l 5., - '. ;! ;I - ; :.I..........................
!' {,
The.fimded sttus of Entergy's poseireent plans as.ofDecember.3 1, L999 and1998.was (ii thousands):
. : .' ,-,9 ., ' ..' - .* ., . r
.En . f t4 *'Enta, ..... .,
,.ti_/;.? . ,;,,
. . f. ..,- 199 .~ .tsg ; ;.:Etsgy En .. Entcrgy :..> ;.Etcry.:' St
,Entey., . Arkansas, Gulf States Louisiana Mississippi New Orleans Energy Change In APBO . - . . .... :. ;.; .. . , a :,. ...... *. : .. -N.v:, .
Balance at 1/1/99 $444,509 S101,856 $124,431 $63,449 $32,404 S40,838 $9,087
.- .1 16.950 *92 4J:3?22 i, 424 1009
- 512. 982 Interest cost 2467 6596 826 4,234 2,167~
Actuarial (gain) I .. ? (40,202j (10,375) rd (4.04 (21(8(,0882) Benefits paid (25,881) (6,373) (7,282) (3,743) (2,316) (3,588) (272) Acquisition of subsidiary '4,929 . .A+/-c - - r Balanceat12131l99; $429,772 S95,656 . S118,295.: *S61,156 $31,133 S38,363 S9,546 J4'
' .. ' *xt;&j "."'j~~~~~~~~g Change InPlan Asset .
Fair value of assets at 1/1199,. $89,579 774 S31,510 t S - $18,759 * .$20,380 $7,156 Actual retua'mon plan assets; 7,134 1,278 3,403 - 150 i ,476 <.548 Erbployer cntibuimns; 43,576 15,526 11,414 3,743 3,021 0,448 : 2 ,1 17 Benefts paid (25,88i) (6,373) * (7,282)' i(3,743) - (2,316) - (3,588)' L*W. (272) Acaisition ofsubsidiary 5800 : . ,: . . ... ; .* . ;- Fair value 9 f assets at 12/31/99 S120,208 - $22,205 $39,045 ,$ - $19,614 ... . $23,716 $9,549 Funded status . .($309564) ($73,451) ($79,250) ($61.156) 'S3 Unrecognized transition obligation 149,141 51,390 75,444 38,633 19,525 34,827 2,893 Unrecognized pricr svice cost 335 - 335 - - - - Unrecognized net (gain) (19,374) (6,941) (24,503) (12,048) (5,117) (13,870) (3,653) Prepaidt(accued) postretireint benefit assett(liability) (79,462) ($29,002) (S27,974) (S34,571) S2,889 $6,310 ($757)
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Entcray .,Entargy . Enjry Entergy .Entergy . ystn Entergy Arkansas Gulf States Louisiana Mississippi N1w Orleans Energy aange in APBO Balance at 111/98 S427,962 $91,097 $136,228 $65,385 $33,273 "43,8~6 $8,483 Service cost 13,878 3,325 2,553 1,776 862 432 871
¢- Nret t 6 w.-,:- * 'S 28,443
- 6,519 '8,103 ,089 2,085 -2,714t 652 Actuarial (gain)loss 1,322 8,005 (15,C07) (3,698) (1,545) * ;'(2,589j. (573)
Benefits paid (27,096) (7,090) (7,446) (4,103) (2,271) (3,552) (346) Balance at 12J31/98 S444,509 SO1,856. $124,431 .$63,449 $32,404 S40,838 $9,087 Cange in Plan Assets Fairvalue of assets at 1/1/98 $59,688 S - S25,696 S.. $11,807 $17,350 S4,835 Actual retwn on plan assets 4,616 713 1,165 1,612 405 721 Employer contributions 52,372 18,151 12,095 , 4,103 . 7,611 6,177 1,947 Beieits paid (27.097) (7,090) (7,446) '(4,103) (2,271) (3,552) (347) Fair value of asets at 12/31/98 $89,579 Si1,774 $31,510 S - S18,759 S20,380 S7,156 Funded status (S354,930) ($90.082) ($92,921) ($63,449) * ($13,645) (S20,458) ($1,931) Unrecogaized transiticn obligation 160,613 55,344 81,247 41,604 21,027 37,505 3,670 i379 .7' - ' '379. -'*--.. . . * - - Unrecognized net (gain)Ioss :24,704 .3,403-v.i:'(14,186)- .., (7,351) (4;539);-..- (12,337) e .(3,308) Prpaid/(aocrud postreirement benefit asset/aiabIiW) ($169,234) .($31,335)- ($25,481).. ($29,196)- -$2,843. -, $4,710, ($1,569) Ihe assumed health care cost trend tte;used i measuringthe..APBO of Entergy *was,5.5%:for 2000, gradually decreasing each successive year until it reaches 5.0% in 2005 and beyond. A one percentage-point change in the assumed health care cost trend rate for 1999 would have the following effects (in thousands):. -, ,., --% .1 : :, -..I. - ..1 Percentage Point Increase . .s ..-1 Percentap-elointDecrease
*. ;..l - .. . . .. ;... *::: ,,. - Increase in the'sum -. -, Decease in'the sum Increase in the of service cost and Decrease in the of service cost and
-. '.. .:;- 199.9
., - APBO. .' .interestcost . APBO -, interest cost Entergy~i,,' r .; s $5,284.- ., . ($2923),,
':.$34,514 .. ; (S4,356)
Entergy Arkanias $7,379 $1,156 ($6,261) ($955);, Entergy Gulf States $10,041 $1,281 ($8,520) ($1,064) Entergy Louisiana $4,450 $657 ($3,782) ($544) Entergy Mjisissippi - $2,284 . , $319 ' 1 :..* ($1;940) ($263) V. Entergy New Orleans . $2,329 , ..$249 . . -
-(2,012) J-($211)
Syste Energy $1,021 $233 ($845) ($189)
*1e assumptions used in detemi thniAiazitaciaria1 the pehsi&! PBO'and tlie SFAS 106 AP)3O for 1999, 1998,and 97we. .. .'- . ' .*
;.9*- `g..1998 '1997..:
Weigbted-aver discount a *te * , 7
- 7i.25 Weighted-average discount rate 7.5% . 6.75% .-.
- 7.25% ....
. Weighted-average rate of increase in
- II8 . futu're ompensatin levels -' 4.6% :' 4.6%' 4.6%
Expected lorig'term'tate 'of retum on' .' ' - plan assets 9.0% 9.0% 9.0% Entergy's pension transition assets are being amortized over the greater of the remaining service period of active participants or 15 years and its SFAS 106 transition obligations are being amortized over 20 years.
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NOTE 12. DISPOSITIONS AND ACQUISITIONS (Entergy Corporation) Business Disnositions As part of the new strategic plan adopted by Entergy in August 1998, Entergy sold several businesses during 1998, including the fMllowing:
,, _ Business 'Pretax Gain (Loss) on Sale (In Millions)
London Electricity S327 CitiPower (a) 38 Efficient Soutions, Inc. (69)
- (a) The gain on the CitiPower sale reflects a $7.6 million favorable adjustment to the final sale price in January 1999.
In keeping with this plan, in January 1999, Entergy disposed of its security monitoring~suhsidiary, Entergy Security, Inc. 'a a mininhlgain. Several teleconmuunication businesses were sold in June, also at smallUgains. The results of operaiions of these businesses are included in Entergy's Consolidated Statements of Income through their respective dates of sale. Gains and losses arising from sales of businesses are included in "Other Income (Deductions); Gair on sale of assets - het?' in that statement. Asset Acquisition
- OC July 13, 1999, Entergy's non-utility nuclear poWer busines acquired the 670 MW Pilgrim Nuclear Station locle in Plymouth, Massachusetts from Boston Edison. The acquisition included the plant, real estate, materials~ and supplies, and nuclear fuel, for a total purchase price of $81 million. The purchase price was funded with a portion of the proceeds'from the sales of non-regulated businesses'.As part of the Pilgrim purchase, Boston Edison funded a $471 million decommissioning trust fuid, which was transferred to an Entergy subsidiary. Based on a favorable tax determination'regarding the trust fund, Entergy returned S43 million of the trust fund to Boston Edison.
NOTE 13. TRANSACTIONS WITH AFFILIATES (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi; Entergy New Orleans, and System Energy) The domestic utility companies purchase electricity from and/or sell electricity to the other domestic utility companies, Systemn Energy, and ntergy Power (in the case of Entergy Aiiansas) under rate schedirles filed with FERC. In addition, the domestic utility companies and System Energy purchase fuel from System Fuels; receive management, technical, advisory, operating, andr administrative services from Entergy Services; and receive management, technical, and operating services from Entergy Operations. Pursuant to SEC rules under PUHCA, these transactions normally are on an "at cost" basis . . . . As described in Note 1 to the financial statements, all of System Energy's operating revenues consist of billings to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans.
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The tables below contain the various affiliate transactions among the domestic utility companies and System Entergy (in millions). Intercompany Revenues Entergy Entergy Entergy Entery Entergy System "rArkanes.-*'WGulf Stites
*a2 Louisiana MiSsissiDi .`New Orleans Enerev 1999 . $1 9.2 $3.8.4 ..$27.3 :68.3 :',14.2 $620.0 1998 $162.0 $16.7 $16.7 $88.3 $11.0 $602.4l. l
- 1997 $230.8 $15.9 $ 3.4 '$85.5 $11.1. $633.7 Intercompany Onerating Eruense '
- is , Entergy Entergy Entergy Entergy.,, Entergy System ; , . Arkansas Gulf States Louisiana Mssissimpi e New Orleans Enerev (1) .. !.. - .£; .'
1999 $357.5 $436.7 $294.3 $315.6 $182.5 $36.2
-.1998 - *$353 7... $419.7.- .$269.0 - $338.1 - $194.9 ' $39.6
-.. 99 . 3 3$'5.0X $416.4 -. ..$326.7 $316.1 . $177.1 ' $36.5 (1) Includes $15.8 million in1'1999, $18.8 million in 1998, and S16.5 million in 1997 for power puidhkied from EntcriyPower. ........ -
. - Oeratine Expenses Paid or Reimbursed to Enteiry Operations
. .. .- . 'E. - t- . S- .'
.;,.*s~reaZ -. , :,:Entery :frgy. SEatergy .
Arkansas Gulf States Louisiana Enerev 1999 $179.2 $110.9 $113.8 $64.9 1998 $167.5 $114.2 $125.0 $62.8 1997 $162.1 $ 63.5 $133.3 $64.7 NOTE 14. BUSINESS SEGMENT INFORMATION (Entergy Corporation and Entergy New Orleans) In 1998, ntergy adopted SFAS 131, "Disclosures about Segments of an Enterprise and Related Information." Entergy's reportable segments as of December 31, 1999 are domestic utility and power marketing and trading. Entergy's international electric distribution businesses, Entergy London and CitiPower, were sold in December 1998. These businesses would have been a reportable segment had they been held as of December 31, 1998, and financial information regarding them is also provided below. Domestic utility provides retail electric service in portions of Arkansas, Louisiana, Mississippi, and Texas, and provides iatural gas utility service in portions of Louisiana. Entergy's power marketing and trading segment markets wholesale electricity, gas, other generating fuels, and electric capacity, and markets financial instruments to third parties. Entergy's operating segments are strategic business units managed separately due to their different operating and regulatory environments.
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Entergy's semetfa cial infonation is as folows (in thousands): . Ulritl Po I'.. I... ,; .. md Eily C. I .
-A I
,.. I Ef.!. Trn ..Txl C}.. AlOS I0niSVrz Onofidte CaigRcvnrs 9414623 .249,274 $i - S '- 143,4. 8 A773,M8 Fur&0ihrries - 17075 411,519 - (719) 2,0M85 Pmrrhmdpo 6 3,2 L77128 - - - (246) 44,484 N i* fi!Igc7a. : ' :0 '. - .- ' . t-g. ' - - 740S7 Q1cj~ialii&. t .'" ;4(fi -;: ;;6,383 247,250 (13A) 17054 Lkiiit.: '7,1"";' . 7475* 744,69 Tax cdxstimiixmw 334834 682 - - 3,768 - 339,284
,.13 , .- -8113 Annit' ir.'.m l:2,34>7
> ,*:. - . . - .6 ;,__-;;_.-;_-._,._.,;,_-________
Tdalqiiflqq 5,014,018 , .4 . .. - -, 258,493 ;5 861) 7,521,574
. OTgSmo ) .. 370,.05 (5,65t) - (115,34t) 2,046 1,25L654 . e - -. I 10,911 .:3,97 , .18378. (.,, 586) .5640 536,543 2,006 20592 j ,. .555,601 IncuieBr Imn Tams 904,973 (3,719) - - 50439 951,693 fi1Ta=~ .3S,44: -i . 'i ".'3,2' '. -;1.'.* , 447. . - 356,667 NdTl = (1m) $553,525 ===
($491)
~
====
$ - S
=~
- ULM9 S -5, Tctal ass $1 S5_750 $4600G3 t i L . - 6,7=6115 S (193,841) $285,087
-, '1 ., .S i *v 1 . - : $t',' -;
,; :-g;
'. ,0 :; ' *' I I; - - '. I *.. ., .'1 - .
.I . .. .. I -I ' . I .v. : . ,,j, i -; ,- '-. *,
., . ' . . . .., :, 1. ,- , 4: .:, ., .. -1. . *-- ;-7 ' ' *
- , . ;s -. * , - . I
.1.
I .. 1 I.." -
. 6*a
- 11. .,:
. . * , I * *. . t.* . - a I .
.I) - .:r..
6 .
- 188-
Dmic Pa ' system d E~Ifv E, - - aLno G.b: ' 'Al O HiiB OGxucidad
- cilReeqn $310,543 $,5980 $1,91l,875 $3,2A 5 $150,27 ($66S) $l1;49,m J,54413 160135 - - - (K 10628
*; e
- yd0 614964 2,674,87 1,218 oL407 - ,4
' d &ppn fCrreal 83,885 - - - - - 83,885 1,3364881 45,247 298,748 71,603 .247,720 (12,159) 1, Padspwxx r 763,818 5,058 124586 28,444 t Q61,C3 -
,:,Odrayd;~n~n Tct xftotw 340612 997 - A8,226 *2,318 - ,153 35,136 . 53-
. v xlm tc 237,3a2 -- - - i*--: 23-,3(2 4960,011 2886,244 1,643,868 219,680 . 311,061 37,9 .*9,91,917
' . Sog val -1,35Q532, (160,764) t *.779
......X Lls 35.(Z4-
',11,855 1,350,532 (31,264) 268,007 8356 . *J79 U.
58,196 7,630 34810 124 ;272,865 (2601) .. 373,4 549 122 18479 .80,586 21,851 ;.- . 32,515 ttTu 860,429
.- ' (23,756). 122,338 3,103 ;.900 0236 Ot..b... ..
r
-33L93 1'.(§ ) - 4589 - -. - 266,735
; =B r6. .. * $528,498 . $117,749 .$3,103 $151819 $ - *- $75,6
$19,727,666 -S359,626 S .-- $ *- ,783,732 $ (34,33) $, 22,836694 I..
I . .. . .
. .. ~~
~~
.. . . I..;
. . I - . I .
. . I, -
-J;
,1 . " . . .
a
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Doifnic Poaer U~htyaxi Mublettg Syui ii , ta, Eb Tra* C 0* "ub
- All Ofic Minaticus CansliJ~td 1W7 O hz~ew s $5,I31,872' $493,102 $1,847,042 $342959 $180,6 ($56,409), $.S8926 i &gaspa frreale 1,i34887 4Z154 - - - -
- 1,677,041 Pexd mer (0,634 390,125 1,?,034 129,744 (28,726) 2,318,811 NXIT ats 73,857 - - - - 73,857 CfQi tdin&nit 1,:79,112 35,003 316,33 54,516 207,342 (6,657). 1,886149
-qx, zrnn & ixnn 765,597 4,789 121,365 32,70 55,555 - 98Q008 Taxes offiter hno 326,352 938 - 35,653 2,496 365,439 ilt di4S 421,803 1 - . . - . .r 421803 T&I qti aqxmse ;5,C88697 473,009-- 1,6632 252,615':_ 265,393 (35,383) . 7,7563 O h^:s ) 1,643,175 20,093 . 18810 90,344 (85,3) (21,6) .1,83436 OAff zno= (Daductis) (245,439) 2 476. `21,525 45 - ,517 19,025. (199,851)
- hionsau 583,613 91 178,647 69,011 .32,911 (2,001). 862,Z72
; im Inneexxm:Taxes 814,123 2Z478 29,688 21,378 (15,427) ; 77240
- fiinre Tams : 2,432
~^ 8,318 177t 3 22,9243 471,341 MNleui (Ls)-c- $517,691 $14160 ($147,335). ( S $ $304,899 Tdual s $20,114,594 $ 354694 $ 4,403,625 $1,068,564 $1,093,783 $ (34,96( $ 27,000,700 Businesses marked with
- are referred to as the "competitive businesses," with the exception of the parent company, Entergy Corporation, which is also included in the "All Other" column. The All Other category includes the parent Entergy Corporation, segments below the quantitative threshold fr separate disclosure, and other business activities.
Other segments principally include global power development and non-utility nuclear power operations and management Other business activities principally include the gains on the sales of businesses. Reconciling items are principally intersegment activity. Products and Services In addition to retail electric service, Entergy New Orleans supplies natural gas services in the City of New Orleans. Revenue from these two services is disclosed in Entergy New Orleans' Income Statements. Geographic areas For the years ended December 31, 1999, 1998, and 1997, Entergy did not derive material revenues from outside of the United States, other than from Entergy London and CitiPower, which are noted above. Long-lived assets as of December 31 were as follows (in thousands): 1999 1998 1997 Domestic $ 14,590,346 $ 14,863,488 $15,228,107 Foreign 910.408 465.04 2.904.721 Consolidated S. S 15.32.2 $ j-
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NOTE 15. RISK MANAGEMENT AND FAIR VALUES (Entergy Corporation)
.. H;..., . .A Commodity Derivatives Entergy uses a variety of commodity derivatives, including natural gas and electricity futures, forwards, and options, as a part of its overall risk management strategy.
The power marketing and trading business engages in the trading of commodity instruments and, therefore, experiences net open positions. The business- manages open positions with policies .thatlimit its exposure to market risk and require daily reporting to management of potential financial exposure. These policies include statistical risk t tolerance limits using historical price movements. to calculate a value at risk measurement. The weighted-average life
- of the business' commodity risk portfolio was less than 18 months at.December 31, 1999 and less than 12.months at December31, 1998. .. .. .
At December 31, 1999 and 1998, the power marketing and trading business had outstanding absolute notional; ontiact quantities as.follows (power volumes in thousands of megawatt hours, natural gas volumes in thousands of British thermal units): . .
. l: . i.. . . . 1999 1998.
. Energy Commodities:
Power 9,627 33,682 Natural gas 728,560 1,209,791...
* .- . - Market risk is the potential loss that Entergy may incur as a result of changes in themaret or Air value of a
*rparticular instrument or commodity., All financial and commodity-related instruments; including derivatives, are i.subject.to market risk. Entergy's exposure to market risk is determined by. a number of factors, .including the size, duration, composition, and diversification 6f positions held, as well as market.volatility and liquidity. For instruments
-. such as options;ithe time period.during which the:option may be exercised and.the relationship between-the current market.price ofthe underlying instrumentland the option's contractual strike or.exercise'price also affect the level of market risk. The most significant factor influencing the overall level of market risk to which Entergy is exposed is its use of hedging techniques to mitigate such risk. Entergy manages market risk by actively monitoring compliance with stated risk management policies as well as monitoring the effectiveness of-its hedging policies and strategies. Entergy's risk management policies limit the amount ,of total net exposure and rolling net exposure during the stated periods.
.. ,'These policies, including related risk limits; are.regularly assessed to ensure their appropriateness given Entergy's t:.objectives.i -.. ..
. .he. . . . . ... th e
,. Tir
.he New York Mercantile Exchange (Exchange) guarantees -futures and option. contracts.-traded on the Exchange and there is nominal credit risk. On all other transactions described above, Entergy is exposed to. credit risk in the event of nonperformance by the counterparties. For each counterparty, Entergy analyzes the financial condition prior to entering into an agreement, establishes credit limits, and monitors the appropriateness of these limits on an ongoing basis. In some circumstances, Entergy requires letters of credit or parental guarantees. Entergy. also uses netting arrangements whenever possible to mitigate Entergy's exposure to counterparty risk. Netting arrangements enable Entergy to net certain assets and liabilities by counterparty.
The change in market value of Exchangetraded futures and options contracts requires daily cash settlement in margin accounts with brokers. Swap contracts and most other over-the-counter instruments are generally settled at the expiration of the contract term and may be subject to margin requirements with the counterparty. Entergy's principal markets for power and natural gas marketing services are utilities and industrial end-users located throughout the United States and the UK. The power marketing and trading business has a concentration of receivables due from those customers. These industry concentrations may affect the power marketing and trading business' overall credit risk, either positively or negatively, in that changes in economic, industry, regulatory, or other
- 191 -
conditions may similarly affect certain customers. Trade receivables, are generally not collateralized. However, Entergy analyzes customers' crdit positions prior to extending credit, establishes credit limits, and monitors the appropriateness of these limits on an ongoing basis. Fair Values. Commoditv Istrments
,, i'iI ' * ... . .. '.. , . ~. . . ; . ;.
Fair value estinates oftlie power marketing and trading business' commodity instruments are made at discrete pointsiin timnc..based; od 'relevait market inf tion.. These -estimates may be subjective in nature and involve incetaintieg ande maters. of. sinificant'judgment; therefore, actual results may differ. froni these estimates. At DecembET 31 ,1999 and 1998, te fair values of the power marketing and trading business' energy-related commodity contracts used for trading purposms were as follows:
* . 1999
.. i~t 1998&
',, . .. . ........................ :z
.- . ' * . : . ':. ' .: Assets'f Liabilities Assets .. ; . Liabilities (an Thousands)
Commodity Instruments: Natural Gasi. ,*, 43,542 S 39,361 $ 150,130 S 150,311 Electricity $ 185,575 S 130,209 $ 147,363 S 119,891 Financial Instuments'
'i' 'ile estimated fir value ,ofEntergy's financial intrents' is determined using bid prices reported by dealer markets and by-nationally. recognized investlient banking finns. .lThe estimated fair value of derivative- financial
.t . instrumeints is based' on market quotes ofithe applicable interest rates.; Considerable udgment is- required in
- developing the estiznam s offair value. Therefore,. esimhte are not ncessarily indicative of de amounts tbat Entergy
- could realiie ina;current market exchange. I addition,, gains or losses, realized on financial instruments held-by regulwd- busindssesiray be reflected in 'future rates and therefore do not accrue to the benefit or detriment of
.istockholders. s[1 .
. Entergy considers thecarying amounts of financial instruments classified as current assets and liabilities to
- be r asonabl estimate oftheir fir value because of the short maturity of these instuments In addition, Entergy
, docs not xpect tit.performancc of its obligations will be required in-connection-with certain off-balance sheet commitments and guarantees considered financial instruments. For these reasons, and because of the related-party nature of these commitments and guarantees, determination of fair value is not considered practicable. Additional
.'. iinforihation regarding financial instrments and their fiir values is included inNotes 4, 5, 6, and 7 to the financial I .. . . . .,
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NOTE 16. QUARTERLY FINANCIAL DATA.' (UNAUDITED) (Entergy Corporation,..Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Systen Energy) The business of the domestici~liiy companies and System Energy is subject to seasonal fluctuations with the peak periods occurring during te third quarter. Operating results for the four quarters of 1999 and 1998 were:
* : . . :;§ .ul. .':'.';~
- t. !*.
Overatine Revenue
' Entergy Entergy - Entergy Entergy Entergy' ' keSijn Enteriy ' Aikansas Gulf States iLidsiana MisSissiPi New Orleans ne (In Thousands) 1999:
First Quarter S 1,639,922 S 311,969 S 423,819 S 352,135 S 182,443 S 106,056 S 140,617 Second Quarter 2,316,404 387,191 546,543 505,601 194,637 121,287 159,505 Third Quarter 3,064,535 488,801 676,076 576,956 267,159 163,140 163,801 Fourth Quarter 1,752,367 353,933 480,770 371,902 188,580 117,305 156,109 1998: First Quarter $2,313,092 S 329,789 $ 457,509 $ 356,038 S 205,017 S 113,663 S 148,606 Second Quarter 2,508,814 391,357 423,655 424,115 268,908 125,106 144,336 Third Quarter 4,587,447 527,059 609,362 537,632 324,784 165,808 152,083 Fourth Quarter 2,085,419 360,493 363,283 393,123 177,591 109,173 157,348 Oneratin! Income Entergy Entergy Entergy Entergy Entergy System Entery Arkansas Gulf States Louisiana Mississippi New Orleans Enerey (In Thousands) 1999: First Quarter S 203,435 S 32,160 S 61,032 S 65,989 S 12,220 S 749 S 53,837 Second Quarter 363,951 60,212 61,586 179,278 20,630 22,089 68,695 Third Quarter 597,595 113,570 160,784 172,052 42,519 28,622 71,199 Fourth Quarter 86,673 (10,541) 37,596 2,823 12,716 (8,924) 69,705 1998: First Quarter $ 285,507 $ 27,254 $ 63,661 S 55,222 S 15,382 $ 1,891 S 71,959 Second Quarter 472,710 83,837 31,530 114,540 55,721 15,468 72,177 Third Quarter 590,673 140,837 166,403 164,393 54,028. 20,210 68,772 Fourth Quarter 162,965 2,887 (25,940) 68,726 (571) 1,490 69,735 Net Income (Loss) Entergy Entergy Entergy Entergy Entergy System Entem Arkansas Gulf States Louisiana MississiDi New Orleans lEne (In Thousands) 1999: FirstQuarter S 72,906 S 11,011 S 13,437 S 21,487 S 3,015 S (1,535) S 700 Second Quarter 209,758 28,929 17,022 93,371 8,222 11,695 29,483 Third Quarter 296,158 58,021 80,921 88,680 23,212 15,581 24,042 Fourth Quarter 16,204 (28,648) 13,620 (11,768) 7,139 (6,780) 28,147 1998: First Quarter $ 60,054 $ 5,623 S 14,756 $ 13,917 1 55,194 S (902) $ 24,587 Second Quarter 215,979 39,967 (5,241) 49,546 29,514 6,577 24,779 Third Quarter 262,596 73,731 78,313 81,470 29,319 10,258 25,139 Fourth Quarter 247,000 (8,370) (41,435) 34,554 (1,389) 204 31,971
- 193 -
- Eatniis ner Averas e Common Share (Entergy Corporation) ':
... -,f.; .. I,., . ...,1 . . :.,. .. . ... .- . - , . - .
1999 1998 Basic and Diluted Basic and Diluted
. . - : - , .- -.4* . .7. .
FiritQuarTe' ; ' 0.25 *t :$ 0.20 Second Quarter $ 0.81 S 0.83 Quarter. . .. $ 1.01 Foul-Quarter t '..j $ , ,3 , .. S. .0.96
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- 194 -
Item 9. Changes In and DisaEreements With Accountants On Accounting and Financial Disclosure. No event that would be described in response to this item has occurred with respect to Entergy, System Energy, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, or Entergy New Orleans. PART II Item 10. Directors and Executive Officers of the Repistrants (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) All officers and diretors listed below held the spedified positions with their respective companies as of the date of filing this report..
. name Position Period ENTERGY ARKANSAS, INC
. r. .o Directors :.
Thomas J. Wright 53 : President ind Chief Executive Officer of Entergy Arkansas 1999-Present Dircti ofEntergyAikinss 1999-Present Manai1g Diretor of London ElectrcitiEfiglafid 1998-1999"
'Cha3mn CEO andDiricbr ofCitiPowerPty.'Australia 1996-1998 Vice President Transmission and Distribution System of Entergy 1994-1996 Services X.
Donald C. Hintz See information under the Entergy Corp6ration Officers Section in Part L C. John Wilder See information under the Entergy Corporation Officers Section in Part L Officers Cecil L. Alexander 64 Vice President - State Governmental Affairs of EnterEy Arkansas 1991-Present C. Gary Clary 55 Senior Vice President - Human Resources and Administration of Entergy 1998-Present . Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mssissippi, andEntergyNewOrleans Vice President - Human Resources and Administration of Entcrgy 1997-1998
,Arkansas, Entergy Gulf States, Entergy Lolisiana, Entergy
' Mississippi, and Enterg6New Orleans Director-System Human Resources of Entergy Services 1993-1996 Frank F. Gallaher See information under the Entergy Corporation Officers Section in Part L Joseph T. Henderson See information the lnder Entergy Corporation Officers Section in Part L Nathan E. Imngston See information under the Entergy Corportion Officers Section in Part L Steven C. MeNeal See information under theEntergy Corporation Officers Section in Part L Michael G. Thompson Seeinfortion under the Entergy Coxporaton; Oficers Section in Part L C. John Wilder .See information under the Entergy Corporati.nOfficers Section in Part I.
Thomas J. Wright See information under the Entergy Arkansas Directors above. ENTERGY GULF STATES, INC. Directors Joseph F. Domino 51 Director of Entergy'Gulf States 1999-Present President and Chief Executive Officer -Texas 1998-Present Director - Southwest Franchise of Entergy Gulf States 1997-1998 Director - Eastern Region of Entergy Services 1995-1997 Director - Southern Region of Entergy Services 1994-1995 Donald C. Hintz See information under the Entergy Corporation Officers Section in Part L Jery D. Jackson See information under the Entergy Corporation Officers Section in Par L C. John Wilder See information under the Entergy Corporation Officers Section in Part L
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Name .Ag Position FPeriod OMcers James D. Bmno 60 Vice President - Region of Entergy Louisiana and Entergy Gulf States 1999-Present Vice President of Customer Service ofEntergy Louisiana and Entergy 1998-1999 lmlfStates J
- 'VicePrd!sideit
^ - of Customa Service ofEntergy Luiianand Entrgy. .'.- 1994-1998
, N1fewOrlans'.- . *t . ;
Vice President - Metro Region of Entergy Services 1993-1994 Murphy A. Dreher 47 Vice President - Stqe Governvm Affairs of Entergy Gulf States -LA 1999-Present
*mji Eny Laisana Lqgslative Executive - Governmental Affairs of Entergy Gulf States 1995-1998 Director of Governmental Affairs of Entergy Gulf States 1993-1995 Randall W. Helmick 45 Vice President of Operations - Louisiana 1998-Pesent Director of Special Projects of London Electricity 1997-1998 Director of Reliability of Entergy Services 1997 Director of Operations and Engineering of Entergy Services 1994-1997 J. ParkerMcCollough 48 Vice President - State Governmt Affairs of Entergy Gulf States - TX 1996-Present Vice President - Governmental Affairs, Texas Association of Realtors 1993-1996 (trade association)
C. Gary Clary See infornTticnunder the Entergy A sas Officers Section above. Joseph F. Domino See information under the Entergy Gulf States Directors Section above. Frank F. Gallaher See information under the Entergy Corporation Officers Section in Part L Joseph T. Henderson See information under the Entergy Corporation Officers Section in Part L Jerry D. Jackson See infonnation ,tderthe Entergy Corporation Officers Section in Part L Natha E. Langston See information under the Entcrgy Corporation Officers Section in Part L Steven C. McNeal See information under the Entergy Corporation Officers Section in Part L Michael G. Thompson . See infonation under the Entergy Corporation Officers Section in Part L C. John Wilder See information under the Entergy Corporation Officers Section in Part L ENTERGY LOUISIANA, INC. Directors ': i *. Donald C. Hintz See information under the Entergy Corporation Officers Section in Part L Jerry D. ackson Sec infoiItidiia ufidir the Entergy Corporation Officers Section in Part L C. John Wilder See inforiation iider the Entergy Corporation Offlcers Section in Part L Oficers .,... .*~ .-. . . James D. Bruno See nfrinti'* te Entergy Gulf Sts Officers Sectioa above. C. Gary Clary See inforiifunc& the Entergy Akaisai Officers Section above. Murphy A. Dreher See ionmationr r the Entetry Gulf StitesOfficers Section above. Frank F. Gallaher See informa inir the Entergy Corporation Offlcer Section in Part L Randall W. Helmick See informatoni under the Entergy Gulf States Officers Section above. Joseph T. Henderson See information under the Entergy Corporatioi Officers Section in Part L Jerry D. Jackson See information under the Entergy Corporation Officers Section in PartL Nathan E. Langston See information under the Entergy Corporation Officers Section in Part L Steven C. McNeal See information under the Entergy Corporadon Officers Section in Part L Michael G. Thompson See information under the Entergy Corporation Officers Section in Part L C. John Wilder See information under the Entergy Corporation, Officers Section in Part L I .
- ENTERGY MISSISSIPPI, INC. .
Directors -' Carolyn C. Shanks 38 President and Chief Executive Officer of Entergy Mississippi 1999-Present
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Name Ae~g Position .. Period Director of Entergy Mississippi. -1999-Present .
-Vice President of Finance and Administration of Entergy Mississippi 1997-1999 Director of Business Services of Entergy Operations 1994-1997 Donald C. Hintz See information under the Entergy Corporation Officers Section in Part L C. John Wilder See information under the Entergy Corporation Officers Section in Part L Officers Bill F. Coasar 61 Vice President - State Governmental Affairs of Entergy Mississippi 1987-Present C. Gary Clary S.e information under the Entergy Arkansas Officers Section above. I Frank F. Gallaher See information under the Entergy Cotporation Officra Section in Part L Joseph T. Henderson See information under thEntergy Corporation Officers Section in Part I Nathan E. Langston See information under the Entergy Corporation Officers Section in Part L Steven C. McNeal See information under the Entergy Corporation Officers Section in Part L Carolyn C. Shanks See information under the Entergy Mississippi Directors above- .,*
Michad G. Ihompson See information under the Entergy Corporation Officers Section in Part L C. John Wilder See information under the Entergy Corporation Officers Section in Part L ENTERGY NEW ORLEANS, INC .~V .s Ioe:: I . :' . . .. - Directors Daniel F. Packer 52r of Entergy New Orleans - IA , 1998-Present'
* . i: ,,. .. President and Director ofEntergyNew Orleans,,, . 1997-Preserit State President - City ofNew Orleans . , . 1996-1997,,.
Vice President - Regulatory and Govemrmental Affairs of Entergy New 1994-1996 Orleans General Manager - Plant Operations at Waterford 3 A 1991-1994 S Donald C. Hintz See information under the Entergy Corporation Officers Section in Part L C. John Wilder See information under the Eitergy torporatig Dicers Section in Part L Elaine Coleman 50 Vice President External Affairs fEergy New bireans - LA 1998-Preset Director of Customer Service ofEntergy Services ' 1998 Lead Customer Service Manager of Entergy Services 1995-1998 Manaerofb loyeed rCodatioiiofEntergyS-ice ;. 193-1995 C. Gary Clazy 'See ifforin under the tnt-Aiy U OfflierSection abtre. Frank F. Gallaher See information under the Entrgy Corporation Officers Section in Part . Joseph T. Henderson See infornatich under the EntergyCorporation Officers Section in Part L Nathan E. Langston See information under the Entergy Corporation Officers Section in Part 1. Steven ClN4cNea See informatiorXupder the EntergyCpoporation Offiers Secon in Part L Daniel F. Packe *ee information under the Entergy New OrlcansDirectors Section 'above. Michael q. Thompson See information wider the Entergy CorporationOfficers Section in part I. C. John Wilder
- See information unde the Enrgy Corporation Odicers Section inPart L .. . .
;NERGY RESO SYSTEM CES, I . -O"' ' ' '
SYT NEGM SU CES, INC i
.t . I- . ! I .
Directors Jerry W. Yelverton 55 Director, President and Chief Executive Officer of System Energy 1999-Present Senior Vice President of Nuclear ofEntergy Services 1997-1998 Executive Vice President and Chief Operating Officer of Entergy 1996-1998 Operations Vice President of Operations of ANO 1992-1996 In addition, Mr. Yelverton is an executive officer andlor director of various other wholly owned subsidiaries of Entergy Corporation and its operating companies.
- 197-
Name ostion Period . . Donald C. Hintz See information under the Entergy Corporation Officers Section in Part L C. John Wilder - See information under the Entergy Corporation Officers Section in Part L Officers Joseph L Blount 53 Secretary of System Energy and Entergy Operations 199 1-resezit Vice President Legal and External Affairs of Entergy Operations l99O-1993",.: Joseph T. Henderson See infornation under the Entergy Corporation Officers Section in Part L Nathan E. Langston See information under the Entergy Corporation Officers Section in Part L Steven C. McNeal See information under the Entergy Corporation Officers Section in Part L C. John Wilder See information under the Entergy Corporation Officers Section in Part L Jeriy W. Yelverton . See information under the Systen Energy Directors section above.
* ; , f At..:, . :~s.
Each director and officer of the applicable Entergy company is elected yearly to serve by the unanimous consent of the sole stockholder, Entergy Corporation; at its annual meeting. '
".k -!'I T '. , %; .. .. . . ..
Section 16(a) Beneficial Ownership Reporting Compliance Information called for by this item concerning the directors and officers of Entergy Corporation is st forth in the Proxy Statement of Entergy Corporation to be filed in connection with its Annual Meeting of Stockholders to be held on May 12, 2000, under the heading "Section 16(a) Beneficial'Ownership Reporting Compliance", which infbrnidtiort is incorporated herein by reference. Item 11. Executive Compensation ENTERGY CORPORATION.
- Information called for by this item concerning the directors and officers of Entergy Corporation is set forth in the Proxy Statement under he headings "Executive Compensation Tables", "General Information About No iilnees", and "Director Compensation", which info jn is incorporated herein by reference.
-ENTERGY ARKANSAS, ENTERGY GULF SATES, ENTERGYLOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS,AND SYSTEM ENERGY
- Summary Compensation Table -
The following table includes the Chief Executive Officer and thie four other most highly cliiisat~d executive officers in officd'as of I)ecember 31, 1999 at Etergy 'Ark:Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy (c6llectivey, the "Named Executive Officers"). This determination was based on total annual base salary and'bonuses from all Entergy sources earned by each officer for the year 1999. See Item 10, "Directors and Executive Officers of the Registrants," fbr info nation the principal positions of the Named Executive Officers in the table below. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy ; As shown in Item 10, most Named Executive Officers are employed by several Entergy compaies. Because it would be impracticable to allocate such officers' salaries among the vauious companies, the table below includes the aggregate compensation paid by'all Entergy companuies.
^Lonc-Term Compensation Annual Compensation . Awards Restricted .' Securitfies Other Annual Stock Underlying All Other Name Yesar Salar ; Bonus Cotnpensation . Awards -Options Compensation C. Gary Cly . . 1999 S2S4,080 .3193,423, . .: S 0....- . (b) .28,025 shares S 8,012 1998 226,662 .168,089.. - . 9,959 (b) 1,250 5,017 1997 170,73i . 36,086 . -; 23,072 . - (b) '2,500 5,122 John J. Cordaro (d) 1999 S 53,506 S 11,815 S 2,698 (b) O shares S 1,305,083 1994- 227,556 ; .. !67,211 -45,209. . ,, .0') .- 1,250 5,833 i I.. ;.
1997 206,410 'h.- '0 L'f.' 37,986 .. * (b) , . 2,500 6,192
'osepi'F. 6mim6 1999 S223,569 3200,210 S 7,072 ' (b) *i 13,487 shares S 6,838 CEO-Entm'gy GulffStates-TX 1998 '164,0il : 39,492 4,558 '-(by ; 0 5,409 1997 138,374 0 16,205 : (b)r V0 0 Frank F. Gallaher 1999 S401,161 -. 5303,855.. 5 38,496 '. .:" ' (b) ..,-*.: 39,50 share .3 13,545 1998 ' 382,829'" ' '280,747 11,132' " (b) r'-- .2,500 12,396 1997 327,385 0 11.132- --. '(b)' -~I 5,000 9,822 Joseph T.Hentson *1999 S22,115 .201,100 . $ .36,004 ')'. '7500 shar S 21,983 JenyD.Jlackson 1999 S442809 ;;S403554. S 39,670. 94,000 shares S 15,497 CEO En Lousiana 1998 40,46 348,156' 59,630 ; .: ; :"" 2,500 13,849 CE()Ente Gulf Stats-LA 1997 `342077 ' ,o
- 56,5359' (b) ' 5,00 10,262 R. Drak Keith (d) 1999 S 144,017 S 85,544 S 3,785 (b) 16,750 shares S144,801 1998 - 289,145 .165,582 67,239 0') . - 1,2S0 $10,259 1997 '2'
'276,728' . 0 41.230 ,292
.~ -:' ., i *-:..,I Natfian E. Longstond. .1999 , $193,462 ' S178,400' S '23,613 '(b) '115,400 shares S 4,800 1998 .- 158,563! ,1 11,125t 21,953 . (:b) :0 - 5,243 1997 131,660 - -.10,504. 0
. . I Steven C. McNeal' . 1999' S171,077 S 78;100 - $ 0 ' -(14' 5,925 shares S 4,800 1998 "154,721 O; 94,400 -4,432' -(b) - 0 5,145 1997i ' 122,474 - 9,818 *--14,237-* .-* .. (b) 0*'- 0 pwoald E. Meiners (d) ,1999 .180342 S 84,552 5 .7,82 I..
S 1,198,504
-199- 68,345' ' 148,734 60,3S3 . - 16,250 b) 9,388 "1997 ' '255,410 ..- 0 '33,748-' ') ' '2,500 7,662 DanielF. Packer 1999 S211,055 S 127,920 S 10,517 (b) 16,750 shares S 6,583 CEOEntergy New Odleans 1998 - 170,326 .123,513 .. ;.54,208(e) - (b) 0 4,018
- . 1997 -147,077 96,097(e) , b ' - 3,028 CarolynC.Shanks ' 1999 $208,931 '$133,950
- 2;549
' '(b)' il,050:sris S 4,800 CEO-Enterymssissippi 1998 '144,798 41,394 ' - 3,901 . . ' (b) ' : ' ' :3'; 4,340
.1997 - .,,118,124 *. ..1,110 ' 14841 - ';t0).*-' ; 3,267 MichaeG.Tbompsdn 1999 .-. 336,378 . $254,910 S 53,407 . ') 28,700 sI6s S 11,280
'1998 309,958 '283,935 '25,200 S60,874(bXc) 2,500 10,091 1997 259,315 -0 12,856 (b)" 5,000" 7,729 C. John Wilder 1999 $445,191 $406,693 $119,878 0') 52,500 shares S 20,035 1998 201,413 513,106 7,255 $758,560(bXc) 0 3,300
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; ; : ~~~~~~~- : - . ' * . ' . ha:.-....;.;.. :,*8ysy*.
.,_.- .;,F.,'> .,
Thomas . Wright 1999 $263,120 $225,458 $ 159,653(e) (b) 18,999 shares S.32,356 CEO.Entrgy Arkansas 1998 234,361 757,045(0 519,610(e) b) 0' 20,833
, .,~ -. : , - 1997 . :: 2 10.070 89,232 279,188(e) (b) * .,s -0. . 6,102 - I w * . * * *- *', , .. :I. _ .t ,
JerryW.Yelverton 1999 S363,997 $328,500 S .8,036 ' (b) 49,400 shars. $S11,286 CEO-System Enrgy 1998 282,410 184,959' 22, 8 '. ' bj i,250 8,886 1997,. 227,928 0 19,143 (b) 2,500 6,954 (a) Includes the fbliowmg:
~~~~~~'* >eci'iiul *$I *.:d on..*............ .,..,*-
;' (1) . .' -1999- bencflt-^ccibals under t Defined Contfibution-Rkstoration Plan as follows Mr. Clary
'$-S3,,212; Mr. Cordaro $638; Mr. Domino $2j38; Mr. Gallaher $8,745; Mr. Hender61i$1;866; Mr.. Jackson $10,697; Mr. Keith $273; Mr.Meiners $45; Mr. Pcker $1,783; Mr. 'hompson S6,480; Mr. Wilder $8,832; Mr. Wright $164;-and Mr. Yelverton $6,486.
s N.;
,4. * . . ,v .. *&N:.a. ,.
(2) 1999 employer contributions to the System Savings Plan as follows: Mr. Clary $4,800; Mr. Cordaro $1,471; Mr. Domino $4,800; Mr. Gallaher $4,800; Mk. tenderson $40; Mr. Jackson i . -.
$4,800; Mr. Keith $3,187; Mr. Langston $4,800; Mr. McNeal S4,800; Mr. Meiners. .4,263; Mr.
Packer $4,800,?Ms. Shan $4,800; Mr. hompson $4,800; Mr. Wilder $4,40" ;4 gt
$5,810; and Mr. Yelverton $4,800.
(3)' 1999 reimbursenlets for moving expenses as 'follows: - k. Henderson $20,077,' i. \Vilder
$6,803, and N. Wright $26,382. .. .. .
(4) 1999 payments.to retired Named Executive Officers uider the executive pensioiplas wee as follows: Mr. Cordaro and Mr. Meiners receivedlump. sumi payments under the Post Retirement P6ii and Pjioa Equalizaiion Plan totaling $1,302,974 and $1,169,071 ,spe 9 iy . Meiners also, received 24r713. from the Defined Contribution. Restoratiozi'Pj -: ,i Keith received payments under the Post Retirement Plan and the Pension Equalization Plan of $141,341. lere weMno restricd stoclc awaids in 1999 under the Equityuwership Plan. At December 31, 1999, the numb& and value othe aggregate restricted stck holdings were as follows: Mr. Clary 12,945 shares,
$333,334; Mr. Cordaro 1,626 shares, $41,870; Mr. Domino 3,002 shares,$ $77,302; Mrn.Gallaher-7497 shares, $193,048; Mr. Henderson 3,948 shares, $101,661; Mrft akso&27,000 shares, $695,250; Mr.
Keith 1,992 shares, $51,294; Mr. tingston 3,380 Aihi6s, $87,035; Mr. Meiners 2,243 shares, $57,757; Mr. acker 4,500 shares, $115,875; Ms. Shanks 2,382.shares, S61,337; Mr. Thompson. 14,834 shares,
$381,976; Mr. WildeD 39,111 shares, 1,007,108; Mr. Wright 4,500.shares; S115,875; and Mr.' Yelverton 11,505 shares, $296,254. Accumulated dividends are paid on restiicted stockwhen vested. No restrictions were lifted in 1999, 1993, and 1997 under the Equity Ownership Plan. he value of restricted stock holdliigs as of Decemr 31, 1999 is determined by rifiltiplyidg thertota1.number of sh're held'by the closing market price o gatergy Corporation common stock on the New York Stock Exchange Composite Transactions on December 31, 1999 ($25.75 per share).
(c) In addition to the restricted shares granted under the Long Term Incentivb Planili ir Wilde' and' Mr. Thompson were granted 26,000' ad ZOO additional restricted shares, respectively. Restricted shares awaroed will vest incFemntally over.a three-year period, beginning in 1999, based on continued service with Entergy Corporation. Restrictions will be lifted annually. The value Mr. Wilder, and Mr. Thoimpson may realize is dependent upon both the number of shares that vest and the future market price of Entergy Corporation common stock Accumulated dividends will not be paiq on 21,000 shares of Mr.. Wilder's reiited stock whhi vsted. Accumulated dividends will be-paid on 5,00 shares f Mr. Wilder's
- restricted stock and all of Mr. Thompson's restricted stock when vested. ; -
, ,4
- 200 -
(d) Mr. Cordaro is the former Chief Executive Officer of Entergy Gulf States, LA and Entergy Louisiana Mr. Keith is the former Chief Executive Officer of Entergy Arkasas. Mr. Meihe"`is' the former Chief Executive Officer of Entergy Mississippi. - (e) Includes Mr. Packer's living expenses of approximately $24,000 in 1998 and $68,000 in 1997, including taxes and housing. Includes approximately $30,000 in 1999, $465,000 in 1998, and $236,000 in 1997 related to various overseas living expenses assiatd ih'v Mr. Wright's assignments in London and Australia. '
. -X -~~~~J~ -
() Includes approximately $596,000 of perforiinhce bonix f ervice years 1996-1998. A portion of the bonus was paid during 1999 with the remaining amount tobe paid in 2000. Option Grants in 1989 .a The following table summarizes option grants during 1999 to the Named Executive Officers. The absence, in the table below, of any Named Executive Officer.indicates that no options were granted to suci officer. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy Individual Grants
- Potential Realizable
% Total - Value Number of Options at Assumed Annual
.-.Securities . Granted to Ercise Rates of Stock Underlying - Eniployees
- . Price -PiceApprei_
Optlons in (per - Expiration fr Ontlon Termnc) Name Granted (a) 1999 sbiare) (a) Date 5% 10% C. Gary Clary 28,025 (a) S 29.9375 . 18/09 S 527,642 S1,337,147 Joseph F. DOmino 13,487 (a) 0.3% 29.9375 128/09 253,928 643,503 Frnmk F. Gallaher 39,500 (a) .x 0.7%/ 29.9375 1128109 743,688 1,884,650
- dsepiiT:Hcnderson '7,500(b) I0.1% , .z -'288750 - 3/08/09 - 136,195 ; 345,145 Jery D. Jackson 94,000 (a) 1.8% 29.9375 128109 1,769,788 4,484,991 R. Drake Keilh 16,750 (a) 0.3% 29.9375 128/09 315,361 799,187 NatbanE. Langston 15,400(a) 0.3% -_ I , 29.9375 12L8109 289,944 734,775 Steven C. McNeal 5.925 (a) 29.9375 1/2809 111,562 282,719 Donald E. Meiners 16,750 (a) 0.3% 29.9375 128109 315,361 799,187 Daniel F. acker 16,750 (a) 0.3% 29.9375 128109 '315,361 799,187 Carolyn C. Shanks 1,050 (a) 29.9375 128109 . 208,044 527,225 Michay G. Thompson 28,700 (a) 0.5% 29.9375 -:- S4fl,320 1,369,353 1881w C. John Wildr - . 52,500 (a) 1.0% -- 29.9375- -12&8109 5988,4542,504,936 Thomas J. Wright 18,999 (a) 29.9375 128108/09 357,76 '906,498 JenyW. Yelverton 49,400 (a) .. 0.9%
09% 29.9375 ; 1289 - 930,D89 2,357,027
.: I.' 1, (a) 'granted on January 28, 1999, pursuant to the Equity Ownership Plan., All options granted on Options were this date have an exercise'price equal t the closing price of Entergy Corporation common stock on the New York Stock Exchange Composite Transactions on January 28, 1999. These options will vest incrementally iver a threeyeair period beginhing in 2000.'
(b) Options were ranted bn March 8, 1999 and Will vest incrementally over a three-year period beginning in
- ' 2000. .
(c) .. Calculation based on the market price of the underlying securities assuming the market price increases over a ten-year option period ad assuming annual compounding. The column presents estimates of potential
'values based on simple' mathentical assumptions: The actual value, if any, a Named Executive Officer may realize is dependent upon the market price on the date of option exercise.
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Aggtegated Option Exercises in 1999 and December 31, 1999 Option Values The fllowing table sunmarizes the number and value, of all unexercised options held by the Named Executive Officers. The absence, in the table below, of any Named Executive Officer indicates that no options are held by such officer. No Named Executive Officer exercised optionsduring 1999. Numberof Securities -, Value ofUnexekhed Underlying Unexerdsed Options In-the-Money Options as of December 3i. 1999 as of December 31. 1999(a)
.,,Name - xtercssble. Unexersable Eirercisabe Unexercisable c'~f rW. fnf',..~
vaY Ws7
! 3 i50 * ;i 2R 025 -
Joseph F. Domino 1,500 13,487 3,375 Frank F. Gallaher 15,000 39,500 127,813 Joseph T. Henderso !.,1;' .. . 7,500. I 121,875 Jerry D. Jackson 51,91i 94,006 Natb=E.Langztpn 1,500 15l,400.. ; , I; 3,375. Steven C. McNeal 1,500 5,925 3,375 Donald EL Meiies I 11,250 16,750' Daniel F. Packer - 16,750 Carolyn C. Shanks 11,050 Michad G. Thompsom JI10,000 28,700 5,938 C. John Wilder - 52,500 Thomas J. Wrght. ' *1,999. Jeuzy W. Yelverton 8,250 . 49.400 4,500 (a) Bsed oi the difference between the Cl6ing price of bitergy Corporation's common stock on the New York Stoic Exchinge Composite Transactions on December31, 1999, and the option exercise price. Pension Plan Tables . Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy ;. '*
- Retirement Income Plan Table ' ; ;
Annual Covered : ,..
' Years of Service :
Coii- tion i 15 20 ' 25 30 : 35 '.- -
- 100,000 .'$ 22,500 $' 30,000 S. 37,500 $. 45,000 . $ 52,500 200,000
- 45,000 , 60,000 75,000 I 90,000 . 105,000 . ..
300,000 67,500 90,000 112,500 135,000 157,500
. 400,000 90,000 ' 120,00 . 150,000 .* 180,000 *210,000.
500,000 i 112,500' . 150,000. . 187,500 225,000 .262,50 . . 650,000
- 146,250.. 195,000.. 243,750,. .-,292,500 341,250 .
'950,000 213,750 285,000 356,250 . 427,500 .. - 498,750, All of the Named Executive Officers. participate in a Retirement-Income Plan,,a defined benefit plan, that provides a benefit for employees at retirement from Entergy based upon (1) generally all years of service beginning at age 21 through termination, with a fbrty-year maximum, multiplied by (2) 1.5%, multiplied by (3) the final average compensation.. Final. average compensation is based on the highest consecutive 60 months of covered compensation in the last, 120 months of service. .lhe normal form of benefit. for a single employee is a lifetime
- annuity and fbr a married employee is a 50% joint and survivor annuity. Other actuarially equivalent options are available to each retiree. Retirerment benefits are not subject to any deduction for Social Security or other offset
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amounts. The amount of the Named Executive Officers' annual compensation covered. by the plan as of December 31, 1999, is represented bythe salary column in the Summary Compensation Table above.E The credited years of service under the Retirement Income Plan; as of December.31, 1999, for the following Named Executive Officers is as follows: Mr. Domino 29; Mr. Gallaher 30; Mr. Langston 28; Mr. McNeal 17; Mr. Packer 17; Ms.; Shanks 16; Mr.Wright 30; and Mr. Yelverton'20. T'he credited years of serice under the' Retirement Income Plan, as of December31, 1999-forthefollowingNamed'Executive Officers, as'a result of entering into supplm tal.retrement-agreemnts, is as-follows: Mr. Clary' 26 Mr.; Henderson 16; 'Mr:Jackson 20; Mr. Thompson 23; and Mr. Wilder 16. Mr. Cordaro,.Mr. Keith and Mr. Meiners retired.during 1999 with 40, 33,-and 39 credited years of service; respectively. *. * '. r The maximum benefit under the Retirement Income Plan is limited by Sections 401 and 415 of the Jnternal Revenue Code of 1986, as amended; however, Entergy Arkansas, Entergy Gulf States, Entergy. Louisiana, Entergy Mississippi; Entergy New Orleans, and System Energy have'elected to participate in the Pension EqualizatiqnTPlan sponsored by Entergy Corporation. Under this plan, certain executives, including the Named Executive Officers, would receive an additional amount equal to the benefit that would have been payable under the Rketirement Income Plan, except for the Sections 4Oland 415 limitations'discussed above.- *- In addition to the Retirement Income Plan discussed above, Entergy Arkanas, Entergy Louisiana, Entergy Mississippi,.Entergy NewOrleans,.and.System Energy participate in the Siupplemental JRetirrnlent Plan;of Entergy
- Corporation and Subsidiaries and the Post-Retirement Plan of Entergy Corporation and Subsidiaries. Participation is, limited;to, one of these :tw6 plans :and, is at the. invitation ofEntergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy; The participant may receive from the,appropriate Entergy company a monthly benefit payment not in excess of .025 (under the Supplemental Retirement Plan)'or .0333 (uder tbe Post-RetirementPlan) times the participants average basic annual salary (as defined in the plans) for a maximun of 120 months. Mr. Packer and Mr. Yelveiton have entered into a Supplemental Retirement Plan participation contract, and Mr. Cordaro, Mr. Gallaherj Mr. Jackso, Mr. Keith, Mr. Meiners and Mr. Wright have entered into-Post-Retirement Plan participation contracts. Current estimates indicate tat the annual payments to each Named Executive.Officer under the above plans would be less than the payments to that officer under the System Executive Retirement Plan discussed below. : .. '.. -
System Executive Retirement Plan Table (1)
.Annual -*
Covered - Years of Service Compensation '10. 15 20.- .1 ;i25 30+,f SI 200,000.: $ 60,000 $ 90,000 $ 100,000 $ 110,000 $ 120,000
; - 300,000 . 90,000, -135,000. 150,000.. 165,000 180,000' 400,000 120,000 5,000 200,000. .220,000 300,000
- 500,000 150,000 . 225,000 250,000. ' 275,000 300,000 600,000 180,000 300,000 .30,00 .270,000 .360,000 .,*.
700,000 . . 210,000 315,000 . 350,000 . 385,000 420,000 1,000,000 300,000
- 450,000 ;. 500,000. 550,000 600,000 (1) Covered pay includes the average of the highest three years of annual base pay and incentive awards earned by the executive during the ten years immediately preceding his retirement. Benefits shown are based on a target replacement ratio of 50% based on the years of service and covered compensation shown. The benefits for .10, 15, and 20 or more years of service at the 45% and .55% replacementlevels would decrease (in the case of 45%) or increase (in the case of 55%) by the following percentages; 3.0%, 45%, and 5.0%,
respectively. . - .
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In 1993, Entergy Corporation adopted the System Executive Retircmrn Planl (SERP).. This plan was amended in 1998. Entergy Arkarsas, Entergy Gulf States, Entergy Louisna Entery Mississippi, Entergy Ner Orleans, and System Energy are participating employers in the SERP. The SERP is an unfiuded defined benefit plan offered at iremtet to certain senior executives, which would currently; include all the Named Executive Officers (except for Mr. McNeal). Participating executives choose, at refirernntlbetween the retirement benefits paid under provisions of the SERF or those payable iner the Supplemental Retirement Plan or the Post-Reirhednt Plan discussed above,:.Tbe plan was amended in 1998 to provide that covered pay. is the average of the highest thee.yeazs:.nuan l base pay andiincentive'awards sear by the executive duriig the ten years:.immediately preceding his retiremdnt' Benefis paid undei, the SERP are calculated by multiplying the covered pay. times.tarbt pay replacement ratios (45%, 50%,!, or 55%, dependent on job rating at retirement) that are 'attained, according to plan design, at 20 years of credited service. The target ratios are increased by 1% for each year of service over 20 years, up to a maximm of 3G.years of service. In accordance withte SERP foimula the target ratios are reduced for'ea year of service bdovwj2WP' eari.'. The ciedted years of service under this pla are identical to dte years: of setiekfor Wamed Executiv'e Officers (other- than Mr. Hendersdi, Mr. Jackson, Mr. Keith, Mr. ThQinpson; W. Wilder,;and Mr.' Yelverton) disclosed above in the section entitled "Pension Plan. Tables-Retiement Incomei Plan -Tablet Mt. Henderson, Mr. Jackson; Mr. Thompson, Mr. Wilder and Mr.-Yelverton have 8 months, 26 years,18 years, I year, and 30 years, respectively, of credited service under this plan.. Mr.'Keith had 16 years.of credio service under this plan when he retired. e, c*lo*J-*', X .* : .fik.i and-.a a":.i.
.* Thii
. rendedl Olii provicles. that singl civesa lifie aannt a a married employee e employee receives th' reduced bentfit-witr a50% surviving spouse annuity Oiher atuarially equivalent optiosl are available to, each. retiee.J;: SERF 'benefits ate offset by any'and all defined beziefit plan payments from Ez tergy.
SERP benefits are'no!subject to Social Security offsets. - ' ' ' . .; .
;, ** i:j: ti! . e .., ,
.o:e; -I *;. *. .- l ;--*. a ... s.
hgibility'for and receipt of benefits under any ofthe executive plans deseribed above af6 continiintupon 'several factors. he participant ntisi agree; without thespecific consent of the Entergy company fur which such partiipant'wA last empl o4 not tD take employment after retirement with ndntiy that i in. competito With
- or similar in nature to, Entergy Azkansas Entergy Gulf. Statbsi Entergy Louisiana, Entergy -ississippi; Entergy New' Orleans, and System Energy. or any affliate thereof.Eligjbility for benefits is, forfeitable for vaiious reasons, including violation of an agreement with Entergy Arkansas,' Entergy'Gulf' States, Entergy Louisiana,; Entergy Mississippi Entergy New Orleans, and System Energy, certain resignations of employment, or certain terminations of employment without Company jienmission, .. C In addition to the Retirement Income Plan discussed above, Entergy Gulf States providesp among other benefits.. to. officers, an Executive. Income. Security Plan. for key managerial. personnel. The plan provides participants with certain rctirent disability, termination, and survivors' benefits.' To the exteztdthat such benefits are not funded by the employee benefit plans of Entergy Gulf States or' by esfed benefits' payable by the participhnts former employers,n Etergy Gulf States is obligated to make supplemental payments to'participants or their sivbrs. The plaxi provides that upon the death or disability of a participant during his employment, he or his desiated survivors Will jeecive (i) during the first year following his death'or disability an; amount not to exceed hiis annual base saly, and (ii) thereafter for a number of years until the participant attains or would have attained'age 65, but not less thai nine years, an amount equal to one-half of the participant's anneal base salary.
The plailhlso provides supplemental retirement benefits for life for participants retiring after reaching age 65 equal to one-half of the participants average final compensation rate, with one-half of such benefit upon the death of the participant being payable to a surviving spouse for life.
*d *, -Entergy Gilf States 'amended and restated the plan effective March It 1991,:toprvide such benefits fr life upon, termination. of.employnert of a participating officer or key managerial' employee without, cause (as defined in 'the plan) or if the participant separates from employment for good reason (as defined in the plan), with 1/2 of such benefits to be payable to a surviving spouse for life. Further, the plan was amended to provide medical benefits for a participant and his family when the participant separates from. service. These medical benefits generally continue until the participant is eligible to receive medical benefits from a subsequent employer, but in the case of a participant who is over 50 at the time of separation and was participating in the plan on March 1, 1991,
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medical benefits continue for:life.,, By virtue of the 1991 :amendmentand restatement, benefits:for a participant ,Under such plan cannot be modified once he becomes eligible to participate in the plan. Mr. Domino is a participant inithisplan, !*.s .. ' ' .
,. i . CompensationofDirectors
* ~ ~~~~~~~~~~~ :! ':
.-. . . *, 7 *;i For information regarding compensation of the directors of Entergy Corporation, see the Proxy Statement under the heading "Director Compensation", which information is incorporated herein by reference. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy currently have no non-enplQypevjdirectors- and nne ,ofhfe cutreqt, directors of Entergy Corporation are compensated for their responsibilities as director.
.. i Jl. - { .j. . .- , i. i: :;. ::o t x; . * .,r;l *: .: i IA se RtrEd non-emplQyeQ direvtors of Entergy Arlansas:E tergy Jouisiana, Entergy Mississippi, and Entergy New Orleans m~nth a minimum of ive years .f service-on the respective oards of Directors af paid S20anonth for, a termpf years, correspondpg to the number. of years of active service as ,directors, Retired non-maployce directors with over.ten years of service receive a lifetime benefit of. $200 a month.:;Years, of.service as an.advisory director are included in calculating this benefit System Energy has no retired non-employee directors.
Retired non-employee directors of Entergy Gulf States receive retirement benefits under a plan in which all directors who served continuously for a period of years will receive a percentage of their retainer fee in effect at the time of their retirement for life. The retirement benefit is 30 percent of the retainer fee for service of not less than five nor more than nine years, 40 percent for service of not less than ten nor more than fourteen years, and 50 percent for fifteen or more years of service. For those directors who retired prior to the retirement age, their benefits are reduced. The plan also provides disability retirement and optional hospital and medical coverage if the director has served at least five years prior to the disability. The retired director pays one-third of the premium for such optional hospital and medical coverage and Entergy Gulf States pays the remaining two-thirds. Years of service as an advisory director are included in calculating this benefit. Employment Contracts, Termination of Employment Agreements, Retirement Agreements and Change-in-Control Arrangements Entergy Gulf States As a result of the Merger, Entergy Gulf States is obligated to pay benefits under the Executive Income Security Plan to those persons who were participants at the time of the Merger and who later terminated their employment under circumstances described in the plan. For additional description of the benefits under the Executive Income Security Plan, see the "Pension Plan Tables-System Executive Retirement Plan Table" section noted above. Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy For information regarding employment contracts' of the Named Executive Officers of Entergy Corporation, see the Proxy Statement under the heading "Executive Employment Contracts and Retirement Contracts", which information is incorporated herein by reference. Upon his employment on July 6, 1998, Mr. Wilder entered into an employment agreement with the Corporation pursuant to which he receives an annual salary of $400,000 and the potential maximum annual incentive payout of 90%. Mr. Wilder is eligible for a pro-rata share of the performance award for the period 1998-2000. The Corporation granted Mr. Wilder a signing bonus of $300,000, and 21,000 shares of restricted stock, upon which restrictions have been or will be lifted on 7,000 shares each year beginning on his first employment anniversary. On December 4, 1998 Mr. Wilder was granted 5,000 restricted shares of Entergy stock. Restrictions were lifted on one-third of these 5,000 shares on December 4, 1999 and will be lifted on one-third of these shares on
- 205
the' second and third anniversaxy dates of this grant. Mr. Wilder was offered participation, in the Sosten Executive Retirement Plan and was credited with 15.years of service. If Entergy terminates Mr. Wilder's employment within two years other than forjust cause, he will receive his annual base salary and continuation of his health benefits for two years; all remaining eaned but unvested stock options and performance shares would immediately vest. Upon a change of control, if Mr. Wilder resigns for "good reason" his executive pension benefits will immediately vest and he will receive a lump sum payment of 2.99 times his average three years base pay.
- K
. ,. l,.
- t ^ *.. : * *. . XPersonnel Committee Interlocks and Insider Pirticipation . -
The compensation of Entergy Arkansa , Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy ,New.Orleans, and System :Energy executive officers was set by the- Personnel Committed-6f Entergy Corporation's Board:of Ditect&.ii composed solely ofDirectors of Entergy Corporation. Dr; Mirrill is the'retired Chairn=n of the~ Biard and Chief Executive Officer of Entergy Gulf States,.Tiic; and senred, on the Personnel Committee of EntergyCorporatiohndunag 1999.:; i . : 3 ,,
~,, 9
... *. . . .. --a*'l l ,; . ..
a
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; . ; ,7-. , A . .
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Item 12. Security Ownership of Certain Beneficial Owners and Manaement Entergy Corporation owns 100% of the outstanding common stock of registrants Entergy Arkansas, Entergy Gulf States, Entery Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy. The information with respect' to persons known by.Entergy Corporation to be beneficial owners of more than 5% of Entergy Corporation's oulstnding common stock is included under the heading "Stockholders Who Own at Least Five Percent" in the Proxy Statement, which information is incorporated herein by reference. The registrants know of no contractual aiangements that may, at a ubsequent date, result in a change in control of any of the registrants. - - - As of December 31, 1999, the directors, the Named Execuitive Offcers, and the directors and officers as a group for Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, respectively, beneficially owned directly or indirectly common stock of Entergy Corporation as indicated: Entergy Corporation Common Stock Amount and Nature of Benefici i nershi(a) Sole Voting and Other Investment Beneficial
., Name Power Ownershin(b)
Entergy Corporition W. Frank Blount* 6,234 George W. Davis* 900-Norman C. Frandis* 2,100 Frank F. Gallaher** 5,706
- 45,000 Donald C. Hintz**. *2,095 55,000 Jerry D. Jackson". 20,998 51,911 J. Wayne Leonard*** 5,594 Robert v.d. Luft* 14,522 40,000 Jerry L. Maulden** 16,587 32,500 Thomas F. McLarty, J11* 300 Paul W. Murrill* 2,682 James R. Nichols* 15,614 William A. Percy, m*
Dennis H. Reilley* `300 Wm. Clifford Smith* 8,520: Bismark A. Steihiagen* 9,07 C. John Wilder** 138,666 All directors and executive officers 136,086 247,411
-207 -
.' *? i; . .:
' ': - ' ; tn'trgy Corporation t Common Stock Amount'and Nafure of, I.
~S..Bineficial Voti (vinrshiai
* ~~~~~~~~~~~~~ I
- I U'-I...
.1 2 Sole'Voting 6iier' .,..
- 2
..r -;
- ' ' Investment
- Beneficial , . *, s..
-*
- ame - Power *shin(bY i . . I* , *.
Entergy Arkansas .
- '. .-. I .. t:
C. Gary Clary* * ' " 15,705 3,750 :; tt)Te. . 1",. Fink F. Gallaher* 5,706. 45-000 : 'i: DNagd (11 intz"' , 095 55 00 'i' * : I . -.
.22.; ..
R. Drak Keith**(c) 16,984 Michael G. Thompson** 9,319 20,000 C. JobhnWild *" 8,666
*Thomas J igh't* 12,432
' Aft:iretrs and executive
': officrs' '. 82,553 128,750
-, 2i2 -4 Entergy Gulf States C:Ga Clary*!' 15,'70'5 3,750 John J. Cordaro*(c)
Joseph F. Domino*** 5,616. . 1,500 Frank F. Gallaher** 5,706 . 45,000 Donald C. Hintz* 2,095 . 55,000 Jerry D. Jackson** 20,998 '.51,911 Michael G. Thompson** 9,319.. ... 20,000 C. John WZrilder*** : 8,666 . .*2 - All directors and executive officers 81,871 . 186,411 Entergy Louisiana C. Gary Clary* 15,705 3,750 John J. Coidaro**(c) ;346 . . Frank F. Gallaher** 5,706 ' .45,000 Donald C. Hintz* . 2,O95 . 55,000 Jerny D. Jacksont*** 20,998 ' 51'911 Michael G. Thompson*" 9,319 20,000 C. John Wilder** 8,666 All directors and executive officers 75,779 184,911
- 208 -
' " .', i. ' Entergj Corporation
,,,, ,, , , Z, .! a*' ' - ounnion Stack 'i
- v.'*:
- is -:Amduritand.Natureof
- ; - . e . Beneficaal Oinershpfya)
- .Sole Voting . -'
and Other
-' '* ' <ia: . '->' :-nvestment' '.;; Benefitial X *,.. ':.Nanxe;'.-' . Power :Owdershin(b Entergy Mississippi C. Gary ClIay" 15,705 3,750 Frank F. Gallaher** . 0S?,
.'1,,. : 45,0Q0.! .:.::
.')
Donald C. Hintz* 2,095 55,000 Donald E.-,Meiners**(c) ..21,109' ; 11,250 ., .
- . .K* Carolyn C. Shaiks*** -; . '2;528
?L.'.. -
Michael:G. `hompson** ' :ia 1:9,319 .5'.20,001 -
-I C. John Wilder*** 8,666 All directors and executive
- 74,978 138,000 , i, .
; : .. . . .. *s Ien Entergy(New Orleans '
C:GaryClary**. 15A705-- . 3,75O
,. - . XFrinkrF.:1a1aher*t, : :- 5,706 art tf ; 45t000
- i. ; .- iDadald CHifltz -. i -2,095 ' 5s5;000 5
.2,253 .
Michael G. Thompson*" 9,319 20,000 C. John Wilder*** 8,666 - All directors and executive officers 52,401 126,750 System Energy Joseph T. Henderson** Donald C. Hintz* 2,095 55,000 Nathan E. Langston** 5,134 1,500 Steven C. McNeal** 1,768 1,500 C. John Wilder*** 8,666 Jerry W. Yelverton*** 7,110 8,250 All directors and executive officers 27,713 66,250
- Director of the respective Company
** Named Executive Officer of the respective Company
*** Director and Named Executive Officer of the respective Company (a) Based on information furnished by the respective individuals. Except as noted, each individual has sole voting and investment power. The number of shares of Entergy Corporation common stock owned by each individual and by all directors and executive officers as a group does not exceed one percent of the outstanding Entergy Corporation common stock.
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(b) Includes, for the Named lxecutive Officers, shares of Entergy Corporation common stock in the form of unexercised stock options awarded pursuant to the Equity Ownership Plan as follows: C. Gary Clary, 3,750 shares; Joseph F. Domino, 1,500.shares; Frank F. Gallaher, 45,000 shares; Donald C. Hintz, 55,000 shares; Jerry D. Jackson, 51,911 shares; Nathan E. Langston, 1,500 shares; Robert v.d. Luft, 40,000 shares; Jerry L. Maulden, 32,500 shares; SteveaxC. McNeal, 1,500 shares;-Donald E. Meiners, 11,250 shares; Michael G. Thompson, 20,000 shares; and Jerry W. Yelverton, 8,250 shares. (c) Mr. Cordaro is thQ former Chief Executive Officer and a former director of Entergy Gulf States, LA and Entergy Louisiana4- Mr. Keith is the. former Chief Executive Officer and a former director of Entergy Arkansas. Mr. Meiners is the former Chief Executive Officer and a former director of Entergy Mississippi. Item 13. Certain Relationshius and Related Transactions During 1999, T. Baker Smith & Son, Inc. performed land-surveyingservices for, and received payments of approximately $202,996 from Entergy companies. Mr. Wm. Clifford Smith, a director of Entergy Corporation, is President of T. Baker Smith:& Son, Inc. Mr. Smith's children own 100% of the voting stock of T. Baker Smith & Son, Inc. See Item 10, "Directors and Executive Officers of the Registrants," for information on certain relationships and transactions required to be reported under this item. Other than as provided under applicable corporate laws, Entergy does not have policies whereby transactions involving executive officers- and directors are approved by;4a majority of disinterested directors. However, pursuant to the Entergy Corporation Code of Conduct, transactions involving an Entergy company and its executive officers must have prior approval by the next higher reporting level of that individual, and transactions involving an Entergy company and its directors must be reported to the secretary of the appropriate Entergy company. ;.. ;
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. PART IV ' .
Item 14. Exhibits, Financial Statement Schedules. and Reports on Form 8-K (a)l. Financial Statements and Independent Auditors' Reports for Entergy, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi Entergy New Orleans, and System Energy are listed in the Index to Financial Statements (see pages 38 and 39) (a)2. Financial Statement Schedules Reports of Independent Accountants on Financial Statement Schedules (see page 220) Financial Statement Schedules are listed in the Index to Financial Statement Schedules (see page S-i) (a)3. Exhibits Exhibits for Entergy, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy are listed in the Exhibit Index (see page E-1). Each management contract or compensatory plan or arrangement required to be filed as an exhibit hereto is identified as such by footnote in the Exhibit Index. (b) Reports on Form 8-K None . ..
. : ., -, . .. . 41 1,
, 1.! . , . .. . iI. , .: . .
t -.
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ENTERGY CORPORATION SIGNATURES Pursuant to the requirements of Section 13 or 15(d).of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof*
,, . C RPRATION ENTERGY CORPORATION
~ ~ ~
-~~ . .. *I, :: ;'
By /sI Nathan E. Langston
* ' -I . I . .1 . a Nathan E. Langston, Vice President and.
. : I." , Chief Accounting Officer
- 1 3 Dat:.. c 1. . I .20
;" ; Date: March;,14j 2000 -.. ...
~~~~~~~~~~~~~~~~~.1 . . . ...
Pursuant to the requireammts of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relate only to matters having reference to the above-named company and any subsidiaries thereof Signature Title Date
/l Nathan E. Langstoa Nathan E. Langstom Vice President and Chief March 14,2000 Accounting Officer (Principal Accounting Officer)
J. Wayne Leonard (ChiefExecutive Officer and Director, Principal Executive Officer); Robert v.d. Luft (Chainnan of tie Board and Director); C. John Wilder (Executive Vice President and Chief Financial Officer, Principal Financial Officer); W. Frank Blount, George W. Davis, Norman C. Francis, Kinnaird R. McKee, Thomas F. McLarty, m, Paul W. Murrill, James R. Nichols, Eugene IL Owyn, William A. Percy, II, Dennis H. Reilley, Wm. Clifford Smith, and Bismark A. Steinhagen (Directors). By: /s/ Nathan E. Langston March 14,2000 (Nathan E. Langston, Attorney-in-fact)
-212-
ENTERGY ARKANSAS, INC SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant -has duly caused this reprt to be signed nits behalf by.the tndefsigndthereunto duly authorizcd.:.Thesignature of the undersigned company shall be.deemed to relate oily to matters having refce to such company and any subsidiaries thereof. - :* ENTERGY ARKANSAS, INC. By s/Nathan E. Langston
- - . . . J. Nathan E. Langston, Vice President and Chief Accounting Officer .
Date: March 14, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shalltbe deemed to relate only to matters having reference to the above-named company and anysubsidiaries thereof. . .' Sienature Title Date Is/ Nathan E. LauAsl ton Nathan E. Lang ton Vice President and Chief March 14,2000 Accounting Officer . . .*
--: (PicipalAccountingOfficer):-
; .. @ .. . .J
- b- ,,, .;
*. : . - J -'
- lhomas J. Wright (Chairman of the Board, President, Chief Executive Officer, and Director, Principal Executive Officer); C. John Wilder (Executive Vice President, Chief Financial Officer, and Director, Principal Financial Officer); aid Donald C. Hintz (Director).
By: /s/ Nathan E. Langston March 14, 2000 (Nathan E. Langston, Attorney-in-fact)
-213 -
'ENTERGY GULF STATES, INC SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly cauded this report tobe signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company.shall be deemed to relate only to matters having reference to such-company and any subsidiaries thereof*
ENTERGY GULF STATES, INC.
.. .. I By Nathan E. Langston Nathan E. Langston, Vice President and Chief Accounting Officer
*. V~~~~~.I Date: March 14, 2000 v t i!** r .4- . * .; { . :. .. :. . . t ,..
Pursuant, to the requireawnts of the Securities. Exchange Act .of 1934, this report has been signed below. by the following persons on behalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relate only to matters having reference to the above-named company and any subsidiaries thereof. Sipnature Title Date
! . ; . :1' . -.
Is/ Nathan E. Langston I : .:; Nathan E. Langstonl- ' . Vice President and Chief March 14, 2000 Accounting Officer (Principal Accounting Officer) Jerry D. Jackson (Chairman, of the Board, President, Chief Executive Officer-Louisiana, and Director, Principal Executive Officer); Joseph F. Domino (President, Chief Executive Officer-Texas, and Director, Principal Executive Officer); C. John Wilder (Executive Vice President, Chief Financial Officer, and Director, Principal Financial Officer); and Donald C. Hintz (Director). By: s/ Nathan E. Laiwstcn March 14, 2000 (Nathan E. Langston, Attorney-in- fact)
-214 -
ENTERGYLOUISIANA, INC. SIGNATURES
,, .Pursuant to the rquirinets of Section 13or l5(d) ofthe Securities Exchage Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thuto,duly authoriz4., he signature ofthe, ndersgned company shall be deened to -relate only to matters.having reference to suchcompany and any subsidiaries thereof.
1 - -- . . . .. ENTERGY LOUISIANA, INC.
.... .JAI 6 . By Is/Nathan E. Langston
., ' ; :. :J.- .' ' ...
"if ;. 'e.:,-' 2!
1.. Nathan E. Langston, Vice President and Chief
., .'t ';.
Accounting Officer
-, . , 9 I . .
Date: March 14, 2000
. .,?J. ,Purant to the requirements of the Securities,.Exchange Act pf1934, this report has been signed below by
- the Alowing persons, onbethalfqfUle.registrant and, in the capacities and on the dates indicate4.,. The sire of echftfundrsJgned shall be deemed to reate only, mattersbavg reference,,to the above-napied company and any subsidiaries thereof.
. r . Signature O.t Title . .
Date Isl Nathan E. Laneston
* .Nathan E. Langston :.; . YMcePresident and Chief
- March 14, 2000
..'Accounting Officer (Principal Accounting Officer)
Jerryp. Jackson (Chaimn=.of the Board,,President,- Chief xecutive .Officer,,.and Directr Principal.-Exec utive'Officer) C. JohnjWilder (Executive.Vice President, ,ChiefFinancial Officer, and Director,; Principal Financial Officer), and Donald C. Hintz (Director). .
,By: Isl Nathan E. Langston *, . March 14, 2000
.~~~~~~~. .
(Nathan E. Langston, Attorney-in-fact)
-215 -
ENTERGY MiSSISSIPPI;INC. SIGNATUR& Ptiit'io thereu ii of ction 13-or 15(d) of th6 Se iesEdch;Act a of 1934, the registrant hasidly cied his tpoft to' !'e iignd n it bilf by t uiiEsigned, thrto duly athorized.- Th signaut of the uinddsigned'&mpanyslill lie dedned td kelat oy to matters haing ference to such company and Wny subsidiaries thereof 1; fR.
- , . . t. . ENTERGY MISSISSIPPI, INC.
I . I -I*. . . By /s/ Nathan E. Langston Nathan E. Langston, Vice President and Chief Accounting Officer Date: March 14,2000
-Piz-iiat tothe requirerninis of tbl gecuriti :EkcEa Act of 1934, this:kepbrt has been; signed below by thefo1otirigsor' 'on: behlf ofthc rehista Q in thb cadities and on theda d&iniated;- The signa'bnr of each of din iindefitiged shall be-deefid to relakte y to mattets having r-firence lo th 6abod ompanand any subsidiaries thereof. Ij
'.p ' Sigynature ) . .. Title . .' Date Is/ Nathan E. L-anstor i......'I. . .... .--
'Nathan E. Langston *' " -- Vici PresidentandChief t, ' March'14, 2000
'Accounting Officer (Principal;Accounting Officer)
Carolyn C: Shanks (Chairman, of the Board, Presideit Chief Executive Officer, and Director PrincipaiEkeitive Officer), C. ohn Wilder (ExectiVe Vice Presit, Chief Finintial Officer, and Director, Principai Financial Officer); anid Doiald C. HintS (Director).; - By: l Nathan E. Langst)n March 14, 2000 (Nathan E. Langston, Attorney-in-fact)
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ORLEANS, INC tENTER{NI9W
'SINATURES
- ' Pursuantio the requireimenti of Scctio 3 or 15(d) of the Securities ExchiAigAct 6f 1934,the'registrant is duly taused iis report to besigied n' itsbehIf by thE'undeisigned theret itoduly'utn ed.- he signature bfthtmndersign company siall be deemled tdielate dnly to natters' having ieferejiceid'Sch coimpany and aiy subsidiaries thereof.
- '.:.* ENTERGY ;-!. NEW ORLEANS, INC.
-;j.:
. . ..' I ,. - . . , .., w.
.., v )
... . By /s/ Nathan E. Langsiton
" t . --, - ', . . -. '. "; , . .:- !. :,
Nathan E. Langston, Vice President and Chief
. .a - - --.- :: .
Accounting Officer
; .@ :! Date: March 14, 2000 ' Pl'tnt 'to ihe'*euireinits ofIteSecurities Exd aue Act of-1934, this f5ort ha's bean signed below by the f61&w ng iersois bn behlf-of the rgitrant and in the caacities and on the dates indfiW. he signature bf each ftji'&iide tigned shall be deemed to relate ofily t iattei haitng rfere&c'to'Ulab6-na¶ company and any subsidiaries thereof. , .
j,, VI Sipnature
..: i .
Title <'::.'. ' Date
/s/ Nathan E. Lanson :
- h-,2000 Natha E. Langston ' ' Vi& 'President and Chief `March 14, 2000
-.-Accounting Officer (PrincipalAccountingOfficer)
Daniel F.' aiaker (Chdiman ofthe '4ard, Prsident?'ChiBf Executive Officer,.iiid Director, Principal tcutive Officer); C 4ohft Wilder (ib&6tiVe Vi'e Preside&tChief'Financial Officer, and Director;:Principal Fi"i8Wial Officer); aMDoifld C. Hintz .:-
-irectbr)
By! Is/ Nathan E. Langston -:;::- ~-,; March 14, 2000
. 4 ..
(Nathan E. Langston, Attorney-in-fact)
-217 -
SYSTEM ENERGY RESOURCES, INC SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of thSecuities Ex e Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereuntoduly; authorized.. The signature of the undersigned company shall be deemed to relate only to~ matershavireference to such company and any subsidiaries thereof.
. T - ':
SYSTEM ENERGY RESOURCES, INC.
, , .1,: . By /s/ Nathan E. Langston Nathan E. Langston, Vice President and Chief Accounting Officer
., I,,,::. Date: March 14, 2000 Pursuant to the requireients of the Securities Exchange Act of 1934,.this reprt has been sig d ,below by the fllowing persons onbehalf, o.theregistrant.and4 in the capacities and onothe lates indicated. seignature of each of the undersigned shall be 1eemedto relate only to matters having rerence o the abovq-namd conpany and any subsidiaries thereof .
- Sienature *.i. Title Date
/s/ Nathan E. Langston , .. , ,,,
Nathan E. Langston , Vice President and Chief .. Maqch 14, 2000 Accounting Officer (Pnncipal Accounting Officer) Jerry W. Yelvertoa (Chaiman of the joard President Chief Executive;Officer, and Director', . Principal Executive Officer); C. John ,Wilder (Executive Vice President, Chief Financial Officer, and Director, Principal Financial Officer); and Donald C. Hintz (Director).. . .. By Isl Nathan E- Langston March 14,2000. (Nathan E. Langston, Attorney-in-fact) I ;. . L1
- 218 -
EXHIBIT 23(a)
'i' !C0NSOf1 'P1fDENT'ACCOUNTANTS - i We hereby consent to the incorporation by reference in Post-Effective Amendment Nos. 2, 3, 4A, and 5A on Form S-8 and their related prospectuses to the registration statement on Form S-4 (No. 33-54298) and the registration statements and related prospectuses on Form S-3 (Nos. 333-02503 and 333;2007) of Ef rCorporatidd df bir reports dated February 17, 2000, relating to the financial statements and financial statement'schediles, which appear in this Form 10-K.
We hereby consent tole incorporatinhby' iefetice in'the regitration stAemehts'aiid i :related pmspccfl3ee on Fortn S3 (Nos. 33 '50289, 333;Z00103 and1 33P,5d45) of Eriter Ask6sas:iicblifoitif reports dated Februaiy'17, 2000, relating to ti f&aAci,4stafexents and flihza*!iial seniliedue,-uliihapear i td Fomf 10-K. - We hereby consent to the incorporation by reference in the'istrtioftstdteneits ad'tiierelated prdspctses on Form S-3 (Nos. 33-49739, 33-51181 and 333-60957), on Form S-8 (Nos. 2-76551 and 2-98011) and on Form S-2 (No. 333-17911), of Entergy Gulf States, Inc. of our reports dated February 17, 2000, relating to the financial statements and financial statement schedule, which appear in this Form 10-K. I *
- We hereby consent to the incorporation by reference in the registration statements and the related prospechises on Form S-3 (Nos. 33-46085, 33-39221, 33-50937, 333-00105, 333-01329, 333-03567 and 333-93683) 6f Entetiy Louisiana, Inc. of our reports dated February 17, 2000, relating to the financial statements and financial statement schedule, which appear in this Form 10-K.
We hereby consent to the incorporation by reference in the registration statements and the related prospectuses on Form S-3 (Nos. 33-53004, 33-55826, 33-50507 and 333-64023) of Entergy Mississippi, Inc. of our reports dated February 17, 2000, relating to the financial statements and financial statement schedule, which appear in this Form 10-K. We hereby consent to the incorporation by reference in the registration statements and the related prospectuses on Form S-3 (Nos. 33-57926, 333-00255 and 333-95599) of Entergy New Orleans, Inc. of our reports dated February 17, 2000, relating to the financial statements and financial statement schedule, which appear in this Form 10-K. We hereby consent to the incorporation by reference in the registration statements and the related prospectuses on Form S-3 (Nos. 33-47662, 33-61189 and 333-06717) of System Energy Resources, Inc. of our report dated February 17, 2000, relating to the financial statements, which appears in this Form 10-K. PricewaterhouseCoopers LLP New Orleans, Louisiana March 14,2000
- 219 -
Report of Independent Accountants on Financial Statement Schedules ,To the Board of Dikectors and Shureholders., -. ..... of Entergy Corporation: <.*.1 r';* o* , *Xl ;' ;" >
*~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ , .-.
Our audits of the consolidated financial statements of Entergy Corporation and the financial statements of Entergy Arkansas,. Inc, nter GulfStf;;pc., Entery 1fouisiana, c Enterg. M stissipp, ic. and ,Entergy New Orleans, Inci (which repots a a statenlapts:agm inclued in this Annual Report mn.Forn. 10K also included an audit of the financal statement s ;lqslistd inJen 14(a)(2) ofthis form 1QK In our opinion, these financial statement schedUs present fairly, in all material respects, the infbrmation set forth therein when read in conjunction with t4q lat- fina
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]F~tbpLuy, 17,2000 t pX .,.Ui- , 1 .-- ;, v ;bor 4 3 -'. .
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- 220 -
INDEX TO FINA1 L STATEMENT SCHEDULES
"~1 :, ..
, *t I -
a-L- 2 LIIeUuZe .')* ; Paze Financial Statements of Entergy Corporation:
'-. .: \ ' St.tenientsofliconweFortheYears Ended December31, 1999,
. 998,and 1997 , S-2
- - ,StmiatofCashFows -For the Years Ended December 31, 1999,
"'jis
<98dnd 1997 S-3 Balance Sheets, December 31, 1999 and 1998 S-4 Statements of Retained Earnings and Paid-In Capital - For the Years Ended December31,1999, 1998, and 1997 S-5 Valuation and Qualifring Accounts 199, 1998 and 1997:.
! j, ....... '. Entergy Cor itonand Subsidiaries S-6 Entergy Arkansas, Inc. S-7 Entergy Gulf States, Inc. S-8
- Entergy Louisiana, Inc. S-9 Entergy MissisSippi Inc. S-10 Entergy New Orleans, Inc. .'S-1 I
- oih- t-anchedules h those lWted .boveare omitted because they are not required, not applicable, or the required information is shown in the financial statements or notes thereto.
Colmhave been omitted fibm"sdhedulds filed because the information is not applicable.
* .-. f S-1.
*T.> ! t ¢, ENTERGY.CORPORiOON, SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION STATEMENTS OF INCOME
.:' ;, ,:i. ,.SJ . . -i ;.
.* FortheYearsEndedDecember3l,
-; . .~ .~ 1999 ' 'i998 1997 (ki Thoi sands)
Income: .-. : . . : .,.-w '.*
'Equity in'income of subsidiaries :.t. ' $65i,977 $822,758 $325,419 Interest on temporary investments 5,703: " 2,536 5,086
- Total .. 657,680 . ' '825,294 330,505
*., r I Exj enses and Other Deductions: .'
Administrative and general expenses 85 77,296 62,250 i Income taxes (credit) , ;.(6,847) 3,438 Taxes other than income 739 1,325 1,226 Interest 6,143 14,451 15,908 .;t; - Total , . .. .-.. . lQ5,221,. 86,225 . 2,822 Net Income $552,459 $739,069 $247,683 See Entergy Corporation and Subsidiaries Notes to Financial Statements in Part II, Item 8. S-2
ENTERGY CORPORATION ; SCHULE I- FINANCL4L STATEMENTS OF ENTERGY CORPORATION ..., .
.~~~~~~
STATEMENdS.OF. CASH " . .. . iFIAWS
.. I.
Year to Date December 31, 1999 1998 1997 (In Thousands) OperaingActiyitiis). f Net income S5S2,459 . 739,069 S247,683 Noncash items included in net income Equity in earnings of subsidiaries (651.977) (822,758) (325.419) Deferred income taxes (15,23,7) . .11,997) 898 Depreciation 1,438 2.069 1.442 . .Changes in working cpital: Receivables 198 (21,033) (8,683) Payables 17,256 357 I ' " 3.690)' '- Other working capital accounts (83,711) 26,683,.
- 68,089 Common stock dividends received from subsidiaries 532,300 48S,50)0 *: .550,200 ..
,Other 68,276 36,948 43,479 Net cash flow provided by operating activities 421,002 447,838 573,099 Investing Activities:
Investment in subsidiaries 237.121 (96,383) (633,449) . Capital expenditures (604) (212) (23,079) Otfer 9,327 - cish
; Jfle lowproidelbW(used in) investing activities 245,844 (96,595) (656528)
.J* *,
Financing Activities: Changes in short-term borrowings (165,500) 99,500 166,000 Advances to subsidiaries (32,261) (33.000) ; (13,450) Common stock dividends paid (291,483) (373,441) (438,t83) Repurchase of common stock (245,004) (2,964) Issuance of common stock 15,320 19,340 305,379 Net cash flow provided by (used in) financing activities (718,927) (290,565) 19,746 Net increase (decrease) in cash and cash equivalents (52.181) 60,678 (62,783) Cash and cash equivalents at beginning of period 68,574 7.896 70,679 Cash and cash equivalents at end of period S16,493 S68,574 S7,896
' ' - i ' ' '~~
See Entergy Corporation and Subsidiaries Notes to Financial Statements in Part i, Iten8. S-3
ENTERGY CORPORATION SCHEDULE I- FiNANAl STATEM? 4IN-tERGY CORPORA;TIOkiN BALAI"kF lIEETt December 31,
> .. - , .;J 1999 1998 (In Thousands)
ASSETS. S.,~ ~~~~~~~ It:9:. Current Assets: Cash and cash equivalents: Temporary cash investments - at cost, which approximates market S16,493. .;j574_. Total cash and cash equivalents., 16,493 . . 68,574 Accounts receivable: Associated companies. -177,501. 48,660-Interest receivable ; . 93 !. - 253 Other' . , . - , 1,937 9,380 Total. 196,024 . - . 126,867 Investment in Wholly-owned Subsidiaries 7,114,525 . .. 7,268,768 Deferred Debits and Other Assets 50,357.r :, ..:71,543 _.,r .. ... Tota . ;. .. . -. $7,360,906 .. ,' $7,467,178 LIABELITIES AND SHAREHOLDERS' EQUITY . . Current Liabilities: . . Notespayable $120,000 , S285,500 Accounts pable: Associated companies 2,165 '6 04l Other. *17,786 531 Taxesiccrued. . ._'.
- F
- 9; 142 ! :+1 Other current liabilities 6,399 3,394 Total -155,492 295,466 Deferred Credits and Noncurrent Liabilities 80,989 64,672 Shareholders' quity:
Common stock, S.01 par value, authorized 500,000,000 shares; issued 247,082,345 shares in 1999 and 246,829,076 shares in 1998 2,471 2,468 Paid-in capital * ' 4,636,163 4'630,609 Retained earnings 2,786,467 2,526,888 Cumulative foreign currency translation adjustment (68,782) (46,739) Less cost of treasury stock (8,045,434 shares in 1999 and 208,907 shares in 1998) 231,894 6,186 Total common shareholders' equity 7,124,425 7,107,040 Total $7,360,906 $7,467,178 See Entergy Corporation and Subsidiaries Notes to Financial Statements in Part II, Item 8. S-4
' -'NTE13Y CORORATION
.~ ~ ~ ~ ~~-
.~.4" , }, J . F ,- :> l;;,,
SCHEDULEY- FINANCIAL STATEMENTS OF ENTERGY CORPORATION STATEMENTS OF RETAINED EARNINGS AND PAID-IN CAPITAL
--For the Years Ended December 31, 1999 1998 1997
- ' ' '; (In Thousands)
I . . % I. R.e,: n Ea .nu.y
. _ : . . . - I . .. ..._
Retained Eamnings, Janai I" $2,526,888 '$2il'57,912 $2,341,703 Add: . . Net income 552,459 739,069 247,683 Deduct: Dividends declared on common stock 294,352 '369,498 432,268 (1,472) _ 595 (794) Capital stock and odtheir expehes Total 292,880 '.'; 370,093' 431,474 Retained Eanings, December,31. . $2,786,467 . $2,526,888 $2,157,912 Paid-in Capital, Januy 1 . .."-.:
-.'; ~$4,630,609 $4,613572 $4,320,591
.:. T ,. -
Add: Gain on reacquisition of subsidiaries'-ireferred stock . . . - I.I .. I .. 273 Common stock issuances related to stock plans - 5,554 .17,037 292,870 Total 5,554 : 17,037. 293,143 Deduct: -C stc .d . . x. pe. .. .se Capital stock discounts and other expenses -____________ - 162
; - . . 4 .
.. . . , ... - .' . .. . .. -V .:'
Paid-in Capital, December 31 ; I _ -. *- V4f636l63-- $4,630,609 $4,613,572
.4...
See Entergy Corporation and Subsidiaries Notes to Financial Statemcnts' , . i in Part , Item 8. S-5
ENTERGY CORPORATION AN4 SUBSIDIARIES SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS
.
- YesrsEudedIDecember3I1I999,19"8 1 1997,I .
land ¶ (In ThousaPds) . v.: , Cotuton Column B Column C Colum D Column K
.. . Other Additions Changes Deductions Balance at from Balance Beginning Charged to Provisions at End Descrintlon of Period Income (Note I) of Period Yearended Decerrzbcr31, 1999 !. ;Y-i! : . - ;
Accumlated Provisions Deducted fiom Assetr-Doubtful Accounts $10,300 $19,349 S20,142 S9,507 Acucimlated Provisions Not Deducted fin Asset.: Property insuance S(14,846) S35,208 S53,629 S(33,267) Ingwies and damages (Note 2) 28,162 25,162 19,015 34,309 Environnental 35,857 11.344 *9,408. 37,793 Total 349,173 S71,714 382 '-2 ' . Year ended December 31, 1998 -' Accumulated Provisions Deducted from Assem.- DoubtfAccounts $9,800 S16,451 S15,951 *.. 10.300: Accuulated Piovisi6ns Not Deducted from Assets: Propery insace $23,422 32S,83S S67,106 S(14,S46) Injuries and danages (Note 2) 26,484 17,960 16,282 28,162 Envyroturicntal 36,368 7,596 8,107 35.857 Total . . S86,274 mm-_. S54,394 S91,495 i 73 S49 ; Year ended December31, 1997 Accunulated Provisions .. , . . ....;;1 Deducted from Asseti-Doubtful Accounts S9,189 S17,106 S16,495- - S9.800 * . Accumulated Provisions Not. Deducted frm Asset: - Propesj insurance S35,026 $24,128 $35,732 S23,422 Injunes aind dimages (Note 2) 26,145 20,294 19,955 26,484 Environmental 37,719 5,993 7,344 36,368 Total $98,890 $50,415 S63,031 S86,274 -; Notes: (I) Deductions from prvisions rpresent losses or expenses for which the respective provisions werc cereated. In i case of the provisionfordoubtful accounts, suchdeductions are reducedbyrecoveries.. ' *--;" of amunis previotsly written off. - (2) Injuries and damges provision is prorided to absorb all cwrcnt expenses as appropriate and for thc estimatedcostofsettingclahmsforinjwiesanddniges . , , ,*
. V.. -;.. . . .1~ . %,. ~ ... :. . . ..
S-6
- ENTERGY ARKANSAS, INC.
SCHEDULE 11 - VALUATION AND QUALIFYING ACCOUNTS Years Ended Deceiber 31, 1999,1998,Sand 1997 (In Tousands) Column A Column B ColumnC ColumiD Column E Other Additions Changes Deductions Balance at from Balance Beginning- Charged to Provisions at End Description of Period' Income (Note-1) of Period Year ended December 31, 1999 Accumulated Provisions Deducted from Assets-Doubtful Accounts .1.753 S4,175 S4,160 .S1,768 Accumulated Provisions Not Deducted from Assets: Propaty insuance S;7,600 S18,306 ' 25,048 -3858 14uries and danages (Note 2) 4,618 2,502 .3,867. 3,253 Environmental 4,894 3,132 3,092 .4,934
- Total S17,112 323,940 S32,007 . 39,045 Year ended December31, 1998 Accumulated Provisions Deducted from Assets-Doubtful Accounts S1,799 33,848 S3,894 *S1,753
- Acciniiiated Provisions Not Deducted from Assets:
Property insurance 3858 318,805 512,063 S7,600 Injuries and damages (Note 2) 4,798 3,144 3,324 ;* 4,618 Environmental 4,753 1,470 1,329 - 4,894 Total 10,409 323,419 S16,716 - 17,112 Year ended December31, 1997 Accumulated Provisions Deducted from Assets-Doubtfil Accounts 32,326 S3,140 S3,667 31,799
- Accumulated Provisions Not Deducted from Assets:
Property insurance 314 $11,613 310,769 ' 858 Injuries and danuges (Note 2) -2,810 3,538 1,550 4,798 Environmental 5,163 1,320 1,730
- 4,753 Total 7,987 $16,471 S14,049 - 10,409 Notes:
(I) Deductions from provisions represent losses or expcnses for which the respective provisions were created. In the case of the provisiorl for doubtful accounts; such deductions ar reduced by recoveries of amounts previously wtten off. - (2) Injuries and damages provision is provided to absorb all current expenses as appropriate and for the estimated cost of settling claims for injuries and damages. S-7
ENTERGYGULESTATES, INC. SCHI'DULEI H1-VALUATION AND QUALIFYING ACCOUNTS
. Years Ended December 314 1999,1998, and 1997
.(InThousands)
.;... Colnn A . Column B ' Column C Column D Column E Other
- t :.~. .. . .
Additions Changes
..; Deductions Ba1ance at. from Balance Beglnjng Charged to Provisions at End Descriptem- ' -
of Period . Income (Note 1) ., of Period Yearinded December31, 1999 . .. .. . ;\, ,,, ,, J~~4. Accumulated Provisions Deducted from Asst ts-Doubfful Accounts.. SI,735 S4,271 S4,178-. S1,828 Aciltd Piovi5sio6s Not Deducted fiom Assets-
- Prperty insunwce .; . _- . (S4;184) S4,486 S3,754 . S(3,452)
Iuries and damagEs (Note 2) .4,7S9 9,810 : .5,885 . . 8,684 Envir;onental - 22,309 4,187 2,051 .. 24,445 S22,884 S18.483 S11,690 S29,677 Year ended December 31, 1998 Accumulated Provisions Deducted fim Asits--
,,D Wobtfl Accounts ... . .. S1,791 S3,169 S3,225" S1,735 Accumulated Provisions Not Deducted firm Assets-Prerty insurance S4,317 S5,583 S14,084 S(4,184) lziuries and damages (Note 2) 5,339 4,634 5,214 4,759 ETi al. . . 23,789.. 3,058 4,538 22,309 ITotal- . , :. . S33,445 313,275 S23,836 S22,884 Year ended December 31,1997 Accumulated Provisions Deducted from Asscts--
Doubtful-Accounts - - .:: ; 31,997. S3,695 S3,901 Sli 91 Accumulated Provisions Not Deducted from Assets-Property insurance . $17,003 35,584 S18,270 4,3. 17 Injuzies and damages (Note 2) ;. ,594 5,479 9,734 5., 39 Envi etal . . , , 21,829 3,746 1,786 23,7 89 Tbtal - . - S48426 $14.809 S29,790 S 33,4 44S Notes: or (1) Deductions fron provisions represent losses or expenses for wh the respective provisions were. created. In the ca! e ofthe provision for doubtful accounts, such deductions are reduced by recoveries of amounts previously written off.
* .i* '-p.. . . -i**-
(2) lnjuries and darnages provision is provided to absorb al1 cunnt expenses asappiopriate and for the estimated cost of settling claims for injuries and damages. S-8
ENTERGY LOUISIANA, INC. SCHEDULE JJ,-,VALUATION AND QUALIFYING ACCOUNTS Years Ended Decemner3lI1999, 1998, and 1997 (In Thousands)
.~~~~~~~~~~ .4.... . ..........
Column A' Column B Column C Column D Column E
.' . I Other
. Additions . Changes V -; - Deductions
. .. Balance at from Balance 4 ... eglnilng 'Charged to Provisions '. at End Description of Period Income (Note 1) : -I of Period Year ended December31, 1999 Accumulated Provisions Deducted from Assets-Doubtful Accounts S1,164 S4,797 S4,346. S1,615 Accumulated Provisions Not Deducted from Assets:
Propertyinsurance S(17,825) $6,680 $12,944' S(24,089) Injunies and damages (Note 2) 13,124. 7,038 7,710 *-: 12,452 Environmental 7,236- 1,059 1,273 7,022 Total S2,535 S14,777 S21,927 S(4,615) Year ended December 31, 1998 Accumulated Provisions Deducied from Assets-Doubtful Accounts S1,157 $1.919 Sl,912 * $1,164 Accumulated Provisions Not Deducted from Assets: Property insurance '581 S2,930' $21,336 - S(17,825) Injuries and damages (Note 2) 9,944 9,263 6,083 13,124 Enyinnentnl; 7,599 668 1,031 7,236 Total $18,124 S12,861 S28,450 S2,535 Year ended December 31, 1997 Accumulated Provisions Deducted from Assets-: Doubtful Accounts l ,429 S2,542 S2,814 £1Sl,157. Accumulated Provisions Not Deducted from Assets: Property insurance S261 £5,411 S5,091 £581 Injuries and damages (Note 2) 9,443 5,080 4,579 9,944 Environmental 9,979 495 2,875 7,599 Total S19,683 S10,986 S12,545 S18,124 Notes: . .. . . (I) Deductions fromprovisionsrepresent loses or expenses forwhichthe respectiveprovisionswere created. In the case of the provision for doubtful accounts, such deductions areteduced by recoveries of amounts previously written off.
- . * * .. * - . . 4 * : ..
(2) Injuries and damages provision is provided to absorb al current expenses as appropriate and for the estimated cost of settling claims for injuries and damages. S-9
ENTERGY MISSISSIPPI, INC. SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS Years Ended Deceltiber'31i999, 1998, and 1997 (riThousands) Column A Column B Column C Column D Column E Other Additions Changes
. Ba.,nce at Deductions
' Balance at from Balance tRflUn fl 5 e We Si VV*3SW^ -t fl'n Description *. . .i of Period. . Income (Note l) of Period Year ende4 December31, 1999 Accumulated Provisions Deducted from Assets-Doubtful Accounts S1,217 S2,106 $2,437 S886 Accmuplated Provisions Not DVeductid fmhAssets:'
Property insurance S(11,543) S5.736 $10,549 S(16,356) Injuries and damages (Kote 2) 3,796 2.950 (103) 6.49 Environmental 704 895 1,005 . 594 Total S(7,043) $9,581 S11,451 S(8,913) Yesrrended Decerrber 31, 1998 Accumulated Provisions Deducted from Assets-Doubtful Accounts S931 S2.747 S2,461 $1,217 Accurnpated Provisions Not Dhuciid iifiAiscti ' ' Property insurance S2,179 $1,520 S15,242 S(11,543) Injuies and damages (Note 2) 4,662 (437) 429 3,796. Environmental :227 900 423 704 Total S7.068 $1,983 S16,094 S(7,043) Yeari-ed D i 1997 Iermi; Accumulated Provisions Deducted from Assets-Doubtful Accounts $1,374 $1,950 S2,393 $931 Accumulated Provisions Not Deisctidfromnssets: Property insurance S2,082 S1,520 Sl,423- S2,179 Injuries and damages (Note 2) 2,905 4,055 2,298 4,662 Environmental 693 330 796 227 Total, S5,680 S5,905 $4,517 $7,068 Notes: (1) Deductions fron provisions represent losses or expenses for which the respective provisions were created. In the case of the provision for doubtful accounts, such deductions are reduced by recoveries of amounts previously written off. ' . . (2) Injuries and damages provision is provided to absorb all current expenses as appropriate and for the estimated cost of settling claims for injuries and damages. S-10
ENTERGY NEW ORLEANS, INC SCHEDULE 11- VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 1999,1998, and 1997 (In Thousands) Column A Column B Column C Column D Column E Other Additions Changes Deductions Balance at from Balance Beginning Charged to Provisions at End Description of Period Income (Note I) of Period YearendedDecenber31, 1999 Accumulated Provisions Deducted from Assets-Doubtful Accounts $761 S1,936 S1,85I S846 Accumulated Provisions Not Deducted from Assets: Property insurance SI 1,106 - Sl,334 S9,772 Injuries and damages (Note 2) 1,865 2,862 1,656 3,071 Environmental 714 2,071 1,987 798 Total S13,685 54,933 S4,977 513,641 Year ended December31, 1998 Accumulated Provisions Deducted from Assets-Doubtful Accounts S711 - S(50) S761 Accumulated Provisions Not Deducted from Assets: Property insurance S15,487 - S4,381 S11,106 Injuries and damages (Note 2) 1,741 1,356 1,232 1,865 Environmental - 1,500 786 714 Total S17,228 52,856. 56,399 S13,685 Year ended December 31, 1997 Accunulated Provisions Deducted from Assets-Doubtful Accounts S696 S1,599 S1,584 S711 Accumulated Provisions Not Deducted from Assets: Property insurance S15,666 - S179 S15,487 nuries and damages (Note 2) 1,393 2,142 1,794 1,741 Environmental 55 102 157 0 Total Si7.114 S2,244 S2,130 S17,228 Notes: (I) Deductions from provisions represent iosses or expenses for which the respective provisions were created. In the case of the provision for doubtful accounts, such deductions are reduced by recoveries of amounts previously written off. (2) Injuries and damages provision is provided to absorb all current expenses as appropriate and for the estimated cost of settling claims for injuries and damages. S-lI
EXHIBIT INDEX The following exhibits indicated by an asterisk preceding the exhibit number are filed herewith. The balance of the exhibits have heretofore been filed with the SEC, respectively, as the exhibits and in the file numbers indicated and are incorporated herein by reference. The exhibits marked with a (+) are management contracts or compensatory plans or arrangements required to be filed herewith and required to be identified as such by Item 14 of Form 10-K. Reference is made to a duplicate list of exhibits being filed as a part of this Form 10-K, which list, prepared in accordance with Item 102 of Regulation S-T of the' SEC, immediately precedes the exhibits being physically filed with this Form 10-K. (3) (i) Articles of Incorporation Entergy Corporation (a) I - Ccrtificate of Incorporation of Entergy Corporation dated 'December 31, 1993 (A-1(a) to Rule 24 Certificate in 70-8059). System Energy (b) 1 - Amended and Restated Articles of Incorporation of System Energy and amendments thereto through April 28, 1989 (A-1(a) to Form U-1 in 70-5399). Entergy Arkansas
- (c) 1 - Amended andRestated Articles of Incorporation of Entergy Arkansas effective November 12, 1999.
Entergy Gulf States $(d)l 1 - Restated Articles of Incorporation of Entergy Gulf States effective November 17, 1999. 19 a; ..
, r .
Entergy Louisiana*' k I I (e) 1 - Amended and Restated Articles of Incorporation of Entergy Louisiana effective November 15, 1999 (3(a) to Form S-3i 333-93683). Entergy Mississippi ;
- (f) 1 -. Amended and Restated Articles of Incorporation of Entergy Mississippi effective
- November 12, 1999, Entergy New Orleans (g) 1 -:Amended and Restated Articles -of Incorporation of Entergy New Orleans effective November 15, 1999 (3(a) to Form S-3 in 333-95599).
E-l
(3) (ii) By-Laws (a) - By-Laws of Entrrgy Corporation as amended January 29, 1999, and as presently in effect (4.2 to Form S-8 in File No. 333-75097). (b) - By-Laws of System. Energy effective. July 6, 1998, and as presently in effect (3(f) to: Form 10-Q for the quarter ended June 30, 1998).
. By-Laws of Entergy Arkansas effective November 26,1999, and as presently in effe.
- (c) .- By-Laws of Entergy Gulf States effebtive November 26, 1999, and as presently in effect.
(e) - By-Laws of Entergy Louisiana effbctive November 26, 1999, and as presently in effect (3(b) to Form S-3 in File No. 333-93683).
- (f) - By-Laws of Entergy Mississippi effective November 26, 1999, and as presently in effect.
(g) - By-Laws of Ent.rgy New Orleans effective November 30, 1999, and as presently in effect (3(b) to Form S-3 in File No. 333-95599). (4) Instruments Defining Fights of Security Holders, Including Indentures Entergy Corporation (a) 1 - See (4)(b) through (4)(g) below fbr instruments defining the rights of holders of long-term debt of System Energy, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans. (a) 2 - Credit Agreement, dated as of September 13, 1996, among Entergy Corporation, Enter Technology Holding Company, the Banks (The Bank of New York, Bank of America NT & SA,. The Bank of Nova Scotia, Banque. Nationale de Paris (Houston Agency), The. First National Bank of Chicago, The Fuji Bank Ltd., Societe Generale Southwest Agency, and CIBC Inc.) and The Bank of New York, as Agent (the "Entergy-ETHC Credit Agreement') (filed as Exhibit [(a)12 to Form 10-K for the year ended December 31, 1996 in 1-11299). (a) 3 - Amendment No. 1, dated as of October 22,1996 to Credit Agreement Entergy-ETHC Credit Agreement (filed as Exhibit 4(a)13 to Form 10-K for the year ended December 31, 1996 in 1-11299). (a) 4 - Guaranty and Acknowledgment Agreement, dated as of October 3, 1996, by. Entergy Corporation to The Bank of New York of certain pronssory notes issued by ETHC in connection with acquisition of 280 Equity Holdings, Ltd (filed as Exhibit 4(a)14 to Form 10-K for the year ended December 31, 1996 in 1-11299). (a). 5 - Amendment, dated as of November 21, 1996, toGuaranty and Acknowledgment Agreement by Entergy Corporation to The Bank of New York of certain promissory notes issued by EIHC in connection with acquisition of 280 Equity Holdings, Ltd (filed as Exhibit 4(a)15 to Form 10-K for the year ended December 31, 1996 in 1-11299). E-2
(a) 6 - Guaranty and Acknowledgment Agreement, dated as of November 21, 1996, by Enterpy Corporation to The Bank of New York of certain promissory notes issued by ETiC in copnection with acquisition ofSentry 9fied as Exhibit 4(a)16 to Form 10-K forteyear ended December31,,1996 in 1-11299,). (a) '- Ainded and Restated Credit Agreemen dat'd as of Pecembr 12'196,among Entergy, the
.Banks (Baik ofAiienca Naional Tnist & Savings Association, TheBank ofNew York, The Chase Manhattan Bank, Citibuiik, N.A., Ion ank of Switzera, NAnBankN.V.,
- he ' Bk. Nova Scotia, Cwadian lBank mpertaXl of Co'mmerce, M eUon BnkN.A., First
**', Natioi~a1 3ak of Co'mmnerce and W~hitney tina Bank) and Citibank NdA.ias Agent (filed
.:. ; as~hbi4a17t6Form 1 Kfortheyeareadedb;ceniber31, IT.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. . ?6inl- 1 12?9).
SystemEnergy ,-.',. . . (b) 1- Uorte,,"and d of Trust, datedasoJune.l1, 19t, as amened iy twenty-one Supplementi Indentures, (A-1 in 7.5.9 (Mortgage); B and ,C to '-Rule 24 Certificate in
.70-5890 (FirFt); B to Rule 24 Cerficate n'70-625 20(a-5.t6YFoi 1-Q for the
,J quarter cnag4june 30, 1981, in .-3517.(Third); A-e(e)-f to Rle 24rtificate in 70-6985 (Fouth);.t Rule 24 Certcate in 70-7021 (Fift; to Rule 24 Ceiate in 70-7021 (ix A-3(b) to Rule 24 Certificate in' 70-7026 (Seventh);A-3(b) to Ru le.24 Certificate in
* . (Eihth)
'707158B to u e 24 Cftiflcate in *Q-7123 (Ninth); B-i t'o Rule 24 Certificate in
* : 70-7272 (Tenth); B-2 to iule 24 Certiflcate in' 707i2 (Eleventh), B-3. to Ie 2. Certificate in, 70-721i.¢(welh); B-1 to Rule124' ifi in 70-7t82jbdrt'm: - to Rule 24 Certfitei.7-782 '(l , ;2(c) to Ru Certic , 70-7 46 (Fifteenth);
', A.2(c)yto j~ul24 Cefticate in 40-1946 '(Sixteenth); '-2(dto'Rule 24 Certificate in 70-7946
, (§eventeesit,);, A-;e) to. Rule. M,24
&iiih ).... ikteentW;
, . ..-A-14 i-706 gighteenth); A-
- 2,tqnte 2,4,,C~ertcate cieday'6, 1994,iin 70-7946 '(Niiie~tnih); A-2(a(1) to Rule 24
' '-Certifjcatedaled'4Aigust 8,, 1996 inFile lo. .70-851 t eth)nd Xk-.(a)(2) to Rule 24
. Certificate dated August8,,9i 6,nil .08511(f'wentt,'st)).. {t (b) 2 -iFaciity a ieNo. s 'of, date We i MeIian Trist 'Company and
.,.,,tepheiiM. Carta (Stevn Kab,% succesh4a a`Trus an.Sysfem Energy (B-(c)(1) t9 Rle 24 tertificat . dJanuay9D.1989'" 7075,61, as';upplemented by
*LiseSupple .?*dent dated as.of Apri ' 1989,(?22(b) (j toRuIl,24 Cerificate dated April 21, 1989 in 70-7561) and Lease SuppiementNh. 2 dated as.ofJana,, 9 ,.ii994 (B-3(d) to Rule 24 Certificate dated January 31, 1994 in 70-8215).
- 3. F eQ.2,.'dated as dDcember 1, 988 Ma Stephen'M. ,Carta: (teven Kabasu6cessor as Owner,,Thrs aidSstem Energy
(-2(c)(2) to Rule 24 Certificate dated Januar'y9, 1989 in 70-7561), as supplemented by Lease Supplement No.1. dated as .of April .1, 19.89 (-22(b) .(2).to Rule 24 CctificateAated
.ApnWl
, , 1989 iA70-561) andLease Supplmento. 2datedasofJanuaryl, 1994 (Bidj Rule 24 Ceriicate dated January 31, 1994 in 70-8215). '
(1) .4 - ,Tndenture (for Unsecured Debt Securities), dated. as of .Septemer,, 1995, -be System
* :, En.
iergy Resources, Inc., an Chemical 1ank {B-iO(a)to Rule 24 Ser aten 70,-85 1).
~~~~~.. .. :.'.. ..-.
E-3
I
- 9- - ... . -. . ::5 ...................-. ;t; Entergy n (c)' 1 -WMrtgage and'Deed of Trust'dtedas oO ctober, 1,.1944, as aMl&l19 fif-fourth Supplemental Indentures (7(d) in 2-5463 (Mortgag); (b) in 2-7i21'(Fir);-(cj inl 2-7605 (Second);.7(d) in 2-8100 (Tird); 7(a)-4 in 2-8482 (Fourth); 7(a)-5 in 2-9149 (Fit); 4(a)6 in 2-9789'(Si 4(44in Tth); -10261 (Se nth)'(a)4 m2-11O43 th);(I9: in 2-11468 (Nmth); 2(b)-l i 2-15767 (Tenh'; D i 7O-3'92'(Eleventh); D in 7t4b9 f .(ih); 4(d) in 2-2f185'ir th)2(c) i 2-24'44 (Fuiteen ); 2(c) ii 2-291 ,(Fth); 2(c) in 2-28869 (Siecrth, W (d) i;2-28869 (SevzkeethV2(c) in -si,0t,( tit); 2(d) in 2-36646 C>nh);'`2(6) ai 2':32S3 (Trven eth); 2(c) in 2 18'6' first); C-I to Rule24 Cze*riicate in'70-5151 `TWenty-sebond); C-Ilto ilue2e4 ticfai in 70-5257 (Twenty-third); C to Rule 24 Certificate in 70-5343 Cwenty-fourth); C-1 to Rule 24, Certificate in 70-5404 (Twenty-fifth); C to Rule 24 Certificate in 70-5502 (Tweiii~;xth)c,-P1 to Rule 24 Certificate in 70-5556 (Twenty-seventh); C-1 to Rule 24 Certificate in 70-5693
*(rfit-eighth);C-in'to Rule 24 Certificate' 76078 ( ty-fintCj;-1 ,to Rule 20' Certficate in 70-6174 (Thieth); C-i to Rue 24 Cficite' in 70-624i (;irtl-frst); C-1 to
'Ru!t24 Cetlcate i'i0-6498 iy-secoi4; Ak4b-24 in 70-6326 rty-third) C~* to Ruie24 Cetificate- i' Q-6Q7 (ibfi) C'i"'to Rule 24 Certifidate'in 70-60 (I~irt.flf);C Rule 24 CAifi, Diectmbe 1, 1982, in 70-6774,'(ihiriy-sixth): C-I'to Rule24 Ceitiifdt, d Vcd' ebr l I13;.: in 70-6774 (hirty-evh),' A-2 to' Rule,24 Ce, ficte, dad 'beer5 1984 , in 70-6858 (rhirty-eighth); A-(a) to' Rule24. Ceitiflcat6 i 7d7127 irtiith)' A 7 to Rule 24 CeriS~e in' 17068 (F6Mtieth);,A-8b) io Rule 24'Certflcate d'Ju1'6 1989 in 70-7346 (Forty-firi;.A-&(1.igule 2i Certif'cte, date t~at 1 1990 i,7Q-73 (Frty-second);
4't6Forinr0 tdtj'1r'tereit'ed Septerber 3d1, I99b in~ 1-107~ &toi'ithif i); A-2(a) to RulY iCerdtfcate, dated Novehth& 30 990 g70*0 i(Fr-o iiu),A to Rule 24 Certifica te,' a. .(Fo,4-1flh). ld)(2)' inu 33-54298 (Fdity-si 4(c I to FQIm DecrInb'6r 1992 tiii i764 (Forty-seventh); 4(b)to' 1 r~n 1-Q for the quarter & d'Jue30, 19993' 1-87A4(Foryeighth); 4(c) to Form 10-Q for the quarter ended June 3p, 1993 .in 1-lQ764 (Forty-ninth);.4(b) toForn i0-Q fotr theEjharteY efnded septemnbtr 30; i§3 in 1.f01i64 (tPiftieth); 4tc) t' Fonn'10-Q fl51? tIe quarterendd September 30, 'l999i9iit-76'( ifI-it); '() ff qjiitter' ended Jie;30, 'i94it-se&bna);, C-2' to' U5nt S tJfothietyear ended
* , ~December3 1, 19' (1Fifty rd nd, -2(a),to Frm 1355 fbr LicYa'eitded December 31, i9y6(Fifty-fburt-)). .. .... . . -A t
}*t }B as;;5 , ;,.., *¶pj *i.i -r *tv@,dl (c) 2 - Indenture for Unsecured Subordinated Debt Securities relating to Trust Securities between
; ;-@En~roiArlnsas' and Bank oNenv ork (a Tusie, dated as'oAiigust i, D96(filed'ak
; E.tibi A-(aj~ to Rule 24'Certific.ibdated Auguist26,;I996 in Fil o. 7,0-8}23).
" t ; .. 1- .- 1' .;- *; J .1 ! ,1, If'; ,; a- ' j P .^ .*
fi' UC 'Snenided and Retae Trust Agkemrent o Ad
'Argy Ca~I~ it dateddf Auut 14,
; ';' 196 (filed 1S Erhibit A-3(' to l 24 Certificate date'd August 26, 1996 in File No. 70-8723).. S i 6 -Pfth - ' 34 (c) 4 -' Guartee Agreqznent beween Eitergy; s (as Guarantor)' and The; Bai f Nei'7Yorkc (as Truslee), daied as of 'jffis 1~4' 1996, wihi resect~ to mnte Asas CapitlI's obligations on its 8 1/2% Cumulative Quarterly Income Preferred Securities, Serieis A (fied as Exhibit A4(a) to Rule 24 Certificate dated August 26, 1996 in File No. 70-8723).
E-4
Entergy Gulf States . . (d).l: I Indenture of Mortgage, dated Septenber , 1926, as amended by ceitai' Supplemental
'*JAndeture$ (Su-I-1 in Registration No. 2-2449 (Mortgage); 7-A:-9 m. Registration No. 2-6893
* .(Seventh),W to FVorm 8-K dated September. 1, 1959 (Eighteenth);.B to Form 8-K dated February , 1966 (wenty-second); B to Form 8-K dated M , 167 (wnty-tbird); C to
-F6orm dated$ Marcb'l, 8Kfifh); 1968,(rwenty-fourth); B to Form'8-K & d'Nvrnber 1, 1968 No.
- to,,Form,8-K dated April 1,1969 y in Registration wentyi6-F J 1969) 1(ty"sixt1) -A-n
' 2-66612 ir(hirty-eighth); 4-2 to Form,10-K f rteYearene 1; 1984 in 1-2703 cele31194i
.. e .h, 2 to Form 1I0K for tbewyear ended Decern 1,.988zn 1-2703 (Fifty-
.. '. FormnlK second3,.4'to for thie y ended Decbe 31, 1299in.1r-213 (Fiftylird); 4 to Yo; 8-K
.,m daked July 9,.1992 in 1-2703 (Fifth-fourth); 4 tyrm 10-K dated December 31, 12,in 1-703 (Fifty-fift); 4 to Form lOQ fOr thequr endd Mh 31, 1993 in 1-2703
--(*ysb); 4-2.to Aenrnent No. 9 to Registration No. -765,51 (Fifty-sei~nth); and 4(b)
) 'ortb e lt&oPrm endedMarch3 ,1999in 1-2703 (Ffyigh)); Bk t (d) 2 - .Inddenxre, kd rch 2, wes'gnation of The Che Nationwi Bank of the t1939,acptzng City ofi'ew York as. trustee anAnver Bank-and Trust Company as
.su csocjssr.fnistee t, (B-a-in Resration . - . 4.
o..24076)., 44 . . : * . . (d) 3 - Trust Indenture for 9.72% Debenture's due July 1, 1998 (4 in Registration No. 33-40113).
. ' . ' ' ':* '* ' , ' .* ' ,* .'4;* '!,
(d) 4 -. 7ndenture 'for.Unsecured Subordinated i)ebt Securitiels ieatiig toTpzt Securities, dated as of
' anuay 1', 1997 (fled as Exhibit A-1I(a)to Rule 24 Certificate dated February 6, 1997 in 1.PeNo.0-872). ., .; ...
(d) 5 - mn and Reitated Trust Agren' of Enterjy Gulf States Cajital I dated Januaiy 28,
.. .. 1997 of Seies A Preferred Securities (filed as Exhibit A-13(a) to Rule 24 Certificate dated
-;t;!~~-,- ,Fbray,, n File No. 7821):.' -.,.';..,,;
i9, (d).6- Guarante9 Agreement betweenEntergy Glf States, Inc. (as Guarantor) and The Bank ofNew York (as Trustee) dated as ofJ
> y2, i997 res. to Entrg Ses Capital I's
.ulf obligation on its .75% Cumnulative Quarterly Income Preferred Scurities,Seies A (filed as Exhibit A-14(a) to Rule 24 Certificate dated February 6, 1997 in File No. 70-8721).
Entergy Louisiana' (e) 1 Mortgage and Deed of Trust, dated as of April 1, 1944, as amended by fifty-four Supplemental Indentures (7(d) in 2-5317 (Mortgage); 7(b) in 2.408 (Fs);?(c) in 2-63k (Second); 4(b-3 in 2-10412 (iTd)4(b)4 in,2-12264 (Four#); 2()-S, in ,-1U936 (Fifth); Din ;703862 .($ixth); .2(b)-7 in 2-2234,q (Seventh);,.2(c) in,'2-24429, .,(Eighth); 4(c)-9 in 2-2S801,'(NJinth); 4(c)-lO in 2-2691 ;(Ten th); 2(c) in 2-28123 (E!eventh); 2(c) in 2-34659 (Twelfth); C to'Rule'24 Certificate in 70-4793 (hirteenth);,2(b)-2 in 2-38378 (Fourteenth); 2(b)-2 in 2-39437 (Fifteenth); 2(b)-2 in 2-42523 (Sixteenth); Cto Rule 24 Certificate r 70-5242 (Seventeenth); C to Rule 24 Certificate in 70-5330 (Eighteenth), C-1 to Rule 24 Certificate in 70-5449 (Nineteenth); C-1 to Rule 24 Certificate .in 70-5550 (Twentieth); A-6(a) to Rule 24.Cetificate in 70-5598 (Twenty-first); .C-to Rule24, Cerficate.,in 70-5711 (Twenty-second); C-i to Rule 24 Certificate ,'in,70-5919,.(Twenty-third); ,'C-1 to Rule 24
'Certificate in 70-6102 (Twenty-fourth)j C-i to Rule 24 Certificate in 70-6169.(Twenty-fifth);
C-1 to Rule 24. Certificate
.b * ..
in. 70-6278 (Twenty-sixth); C-1 to Rule 24 Certificate in 70-6355
, !~~~~~~~~r~f E-5
(Twenty-seventh); C-I to Rule 24 Certificate in 70-6508 (wenty-eighth); C-1 to Rule 24 Certificate in 70-6556 (Twenty-ninith); C-1 to Rule 24 Ccrtificate in 70-6635 (Thirtieth); C-1 to Re 24 Certificate i 70-6834 (Thirty-first); C- to Ruler24 Ceritificate in 70-6886
-fbirty-secoAd)` C-i to Rule 24 Certificate i 70-6993 (Thirtd-third); C-2 to Rule 24
*C.r!cate in 70,6993 (hirii-fourth); C-3 to Rule 24 Certi cate in 70-6993 (hirty-fift);
A-2() to Rule 24 Certifcate in'70- li (hixsixth); A-2(a) in 70-7226 ( venth);
C-i to Ruile 24 Ceitifkate in 70-770 (Iluityeightj; 4(a) to Quater1r Rrt bn' Form i09-
- th quarter ehdJunkifor 30, 1988, in 1-8474 (Thirity-ninth);'A;-(b) to Rule'24 Certificate in
' 70-7553 (Fortet) A-2(d) tb Ruie 24 Certificate-in70-7553 '(F rt-flrt); A-3'(a) to Rule 24 Certficate in 70-71.Z (Forty-second), .'-3(b)to Rule 24 Certificate-in 70-7822 (Forty-third);
A-2(b) to lue 4 tifcate i File Nb. 70-7822 (F6rty-f6"zrth); A-3(cj io Rule 24 Certificate
in 707822"(Fortfi h) A-2(c) to Sl4Cericate datd April 7, 1993 in 0-70822 (Forty-sixth) 'A-3(d)to Rla 24 Certificate dlated June 4, 1993 hi7047822 (Forth-getl); A-3(e) to ine 24 Certifii dated De Ini' 21 1993 in io-7822 (Fojqtyeighth);'A-3(to Rule 24 W
Certificate dited August 1, 1994 in 7d-7822 (Fdtty-ninth), A-4(c) tk 1ule .24'Cerificate dated September 28, 1994 in 70-7653 (Fifieth); A-2(a).to Rule 24 Certificate dated April 4, 1996 in FI&14d.'7O-84 7 Fifty-first); A-2(a)'to RuW24 Certificate dated' April 3, i9.8 in File No. 10-9141 Fiecond);%A-2(b) to Rule 24' (rtiflcate dted April 9,' 1999 ii'ild2 o. 70-9141 (Fifty-third); and A-3(a) to Rule 24 Ceri ficate dated July 6, 1999 imFile'No: 70-'9141 (Fifty-
'fourt)). '
(e) 2 - Facility Lease No. 1, dated as of September 1, 1989, between First National Bank of C ierce, asaeF Trustee, and Eniergy Louisiana (4(c)- in RegsiationNo. 33-30660). (e) 3 Facility Lease No. 2, dated as of September 1, 1989, between First National Bank of Commerce, as Owner Trustee, and Entergy Louisiana (4(c)-2 in Registration No. 33-30660). (e): 4 Facility Lease'No. 3, dated'as of Sepimbr 1, 1989, ben Firti National Bank of Commerce, as Owner Trustee, and Entergy Louisiana (4(c)-3 ineistration No. 33-30660). (e) f5 1ndenture'.for tJsfiired Subrdihated Dlebt Securitie reLg to'Tmust Securitie, dated'as of
" July 1, 9 6(fileclas; hibit A-14(atokile 24 Cerificate dated July 25, 1996 in File No.
*~~~
70:-8)i: 78;8);: b*
.,I.,
(e) 6 - Amended and Restated Trust Agreement of Entergy Louisiana Capital I dated July 16, 1996 of Series A Preferred Securities (filed as Exhibit A-16(a) to Rule 24 Certificate dated July 25, 1996 in File No. 70-8487). (e) '7 ' Guarante'Agripent between Entergy Louisiana, Inc. (as Guarantor) and Ihe Bank of New
'Y'rk (as TjisteC) dated as of Juily' 16, 1996: Wiih rspe toEtergy Louisiana Capital I's obligation & its- ga Cmulative QiarterlyIncome Preferred Securites, Series A (filed as ExhibitA-19('to Rue 24 Certificat6-dated July 25, 1996'in File No. 70-8487):
Entern Mississippi - (f) 1 - Mortgage and Deed'of TruSt, dated as of February 1, 1988, as. amended by fourteen Supplemen'tal Indintures (A-2(a)-2 to Rule 24 Certificate in 70-7461 (Mortgage); A-2(b)-2 in 70-7461 (First);- A-5(b) to Rule 24' Certificate in- 70-7419. (Second); A4() to Rule 24 Certificate in 70-7554 (hird); A-l(b)-l io Rule 24 Certificate in 70-7737 (Fourth); A-2(b) to Rule 24 Certificate dated November 24, 1992 in 70-7914 (Fifth); A-2(e) to Rule 24 Certificate E-6
daled January 22, 1993 in 70-7914 (Sixth); A-2(g) to Form'U-I in 70-7914 (Seventh); A-2(i) to Rule 24 Certificate dated November 10, 1993 in 70-7914 (Eighth); A-26) to Rule 24 Certificate dated July 22, 1994 in 70-7914 (Ninth); (A-2(1) to Rule 24 Certificate dated April 21, 1995 in File 70-7914 (Tenth), A-2(a) to Rule 24 Certificate'dated June 27, 1997 in'File 70-8719 (Eleventh); A-2(b) to Rule'24 Certificate 6iated.April 16, 1998 iFile 70-8719 (Twelfh); A-2(c) to Rule 24 Certificate dated May 12, 1999 in File No. 70-8719 (Thirteenth); A-3(a) o Rule 24 Certificate dted June 8,; 1999 in File No. 70-8719 (Fourteenth); and A-2(d) to Rule 24 Certificate dated February 24, 2000 inFileNo. 70-8719 (Fifteejth)). EntergyNe~wOrleans (-) 1 - Mortgage and Deed of Trust, dated as of May 1, 1987, as amended by seven Supplemental Indentures (A-2(c) to Rute 24 Ceiiflatein 70-7350 (Mortgage); A-5(b) topRle 24 Certificate in 70-7350 (First); A-4(b) to Rule 24'Certificate i 7'-7448 (Second); 4(f)4 to Forn 10-K for the year ended December 31, 1992 in 0-5807 (Third); 4(a) to Form 10-Q for the quarter ended
*dptimbr 30, 1993 'i -58071I ouu), 4(a) to Form 8-K dat4 Apil26, 1995 in File Now 0-5807 (Fifth); 4(a) to Form 8-K dated March 22,' 196 in File'No: 0-5807 (Sixth); and 4(b) to Form I0-Q for the quarter ended June 30, 1998 in 0-5807 (Sevnth)).
(10) Material Contracts - ' 'Eiter'gy C(prpoation ' ' (a) 1 - Ageement, dated Apil23, 1982, among certain System companies, relating to System Planning and Development and Intra-System Transactions (10(a)l to Form 10-K for the year
. Tnded December 31, 1982, in 13517). ' '
(a) 2 - Middle Souith Utilities (now' Entergy' 'Corporatibn) System Agency Agreement, dated
; December r 11, 1970 (5(a)-2 in 241080). . . .. . .
(a) '3 - -'Am~benment, dated Februaiy 10,1971, to Middle'South Utilities System Agency Agreement, da'tDeceber 11, 1970 (5(a)4 in 241080). ' ' . ' .; (a) ' -. neidment, dated May 12,"1988, to Middle South Utilities System Agenicy Agrefment, dated
'1e~&nber 11,'1970 (5(a)-4 i 21080). . . '
(a) 5 - Middle South Utilities System Agency Coordination Agreement, dated December 11, 1970 ()5- Middler Sot Ut*te Syte . , ..,a.;.* <. e*~ (a) 6 - ServiceAgreementwith Entei Services, 'dated as of Apnl 1' 1963 (5(a)5'in'i-41080). (ad 7 -, Amenu"ent,: dated January , ;1972, to Sevice A t with Enter Services (5(a)-6 in a .. 2-43175). (a) 8 -> Amendment, dated April 27, 1984,'to'Service Agrimnit with Entergy Services (0(a)-7 to Form 10-Kfor theyearendedDecember31, 1984, in 1-3517).. (a) 9 - Amendment, datedAugust 1,' 1988, to Service Agreement with Entergy Services (10(a)-S to Form 10-KfortheyearcndedDecember31, 1988, in 1-3517). E-7
(a) 10 - Andmet, dated January 1, 1991, to Service Agreement with Entagy Sces (lO(a)-9 to
.-Fori
- , 10-KlrtheyearenDcember3 1990, in 1-3517.
b(a) ;* ,-~ Amendment, dated Januay 1, 1992, to Service Agreementwit 4 ter (0(a)-il1 for
;;t :.. ,-the rend Dlember,1k994 in 1-3517. .
,1(a).e 1- AvailabilityAgremezt deqdiJ 2i 1974, among Sysem Eneijy an4 cer in other System companzief (B to Rule 24 Certcate, datd June 24, 1974 0-5 (a) 13- First Amendment to Availability Agreement, dated as of June30, 1977.(B to Rule24 Certificate, dated lune 24, 1977, in 70-5399).
'7 f^jlt' j1,,9;..t . , A t., ' .f fe of 15, (a].14, . S Amendmd tAailabilireen, idate as of June 1, 1981 (E to Rule24
,; Certficae dated July 1, 18 in 70-6 9 .
- ' -a*ka24.*. a
'(a)' .J;'!Di,.'.:-s ,:^f,.'S; f :,c4,*;te a's iof.. ;u.
, (ag 15< ;-Third A mto AvaiabiiW eement, dated as of June 28, 1984 (4 (a) to Rule 24
;,- ,>;.;~ere, t.;. i~l uly.6,,9,4in769S.,; .. . .
(a) 16- Fourth Amendmnt to Aaiability Agreement, dae as of June 1, 1989 (A to Rule 24 Certificate, dated June 8, 1989, in 70-5399). . (a) 17- Eighteenth Assigiment of Availability Agreement, Consent and Agrement, dated as -of September 1, 1986, with United States Trust Company of New York an ;d F. aney, as 'f~*~, >* Ttees (C-2 tp Rule 24 Certificate, datedOctober 1, 1986, in 70-7272). . (a) 18- ineteenth Assignient of Availabiliy A em Consent and Agreemejt, dated as of September 1, 1986, with United States Trust Company of New York and Gerl1 F. Ganey, as
'Trustees,(C-3 to Rule,24 Certificate, dated October 1, 1986, in 70-7272)..
(a) 19- Twenty-sixth Assignment of Availability Agrment Consent and dated as of
- 1
-. ~. *. .. October, 1, 1992, with United States Trust Company of New York and Gerard F. Ganey, as Tristees (B-2(c) to Rule 24 Certifica, dated November 2, 1992, in 7,746).
(a) ,*, Alwenty-seventh Assignnt of Availability Aqeet, Consent, and Agreenent, dated as. of April 1, 1993, with United States Trust, (opany of, New. Yorik and rd F. Ganey as Trustees (B-2(d) to Rule 24 Certificate dated May 4, 1993 in 70-7946). (a) 21- T ty-ninth Assigniient of Availability Agreenent Consent and Agreenent, dated as of April 1, 1994, with United States Trust Company of New York and deiard F. Ganey as
;.,Tstees (B-2(f) toRule^24 Certificate dated May 6, 1994, in 70-7946),
(a) 22- ,Thirtieth Assignment,of Avaiability Agreent, Consent and Agreement, dated as, of August 1, 1996, among Sstem Energy, Entergy Arlkasas, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans, and United States Trust Company of New York and Gerard F. Ganey, as TIees (filed as Exhibit B-2(a) to Rule 24 Certificate dated August 8, 1996 inFile No. "51 1)., (a) 23-. Thirty-first: Assignmen;t of Availability Agreement, Consent and Agreement, dated as of August 1, 1996, among System Energy ,Entergy Arkansas, Entergy' Louisiana; Entergy Mississippi, andi Entergy New Orleans, and United States Trust Company of New York and E-8
. *. . Gerard F. Ganey, as-Trustees (filed as Exhibit B-2(b) to Rule 24 Certificate dated August 8,
... 1996 File NQ-70451 ). ...... ..-.
(a) 24- Thirty-second Assignment of Availability Agreement, Consent and.Agreement, dated as of December 27, 1996, among System Energy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and tergy NewQrleans, and The Chase Manhatt Bank (fied as Exhibit
-B*.2(a) to Rule 24 Certificate dated;January 13, 1997 in FileNo.10-7561).
(a) 25- Thirtythird Assignment of Availability Agreement, Consent and Agreement, dated as of i . ..Deemberr2041999h among SystrEnergyj Entergyckansasi;Enterg Louisiana,; Entergy Mississippi;-and Entergy New Orleans, and The Chase Manhattan Bank, (filed as Exhibit B-2(b) to.Rule 24.Certificate dated March 3, 2000 in ile No. 70-7561). i . . (a) 26- Capital Funds Agreement, dated June 21, 1974, between Entergy Corporation and System Energy,(Cto Rule 24 Certificate, dated June 24, 1974, in 70-5399).- . .
.(a) ;.27 -. First Amendment to LCapital -Funds Agreement, dated as of June 1, .1989 (B to Rule 24 Certificate, dated June 8, 1989, in 70-5399).
(a), ,28 - ^.Eigteenth ¢,S.npplenientary ,C~pitat .Funds Agreeent and Assignment,. dated a,.of
- e, .:.SeptenbeT,- i19,86, wit United 1States Trust Cqiipany ofNew York and Gerard F. any, as Trustees (D-2 to Rule 24 Certificate dated Octoberj, 1986, in 70-.7272).
..(a) 2, eNfiietezrth Supplementary Capital.Funds Agreemesiand Assignment, dated as of September 1, 1986, with United States Trust Company.of New YozkVcidierazd F. Ganey, as Trustees (D-3 to Rule 24 Certificate, dated October 1, 1986, in 70-7272).
.,.(a) ,s 30,- Twenty.-$ixth Supplementary, Capital Funds Agreement and Assignment, ,dated as of October
; <,.f , *1, " ,1992, with ,United States Trust Company of-New YXork and Gerard F.,Canqy, as Trustees (B-3(c) to Rule 24 Certificate dated Novenber 2, 1992 in 70-7946).
- ;(a) Tl-.-Twenty-seventh SupplementaryCapital Funds Agreement and Assi et,daed as of April 1, 1993, with United States Trust Company of New York and Gerard F.:Ganey,.as Trustees (B-3(d) to Rule 24 Certificate dated May 4, 1993 in 70-7946).
*-si4 . . *;e (a), 32- ,Twenty-nipth Supplementary Capital Funds.Agreement and Assignment, dated as of April 1, 1994, with United States Trust-Company of New York and Gerard F. Ganey, as Trustees (B-3(f) to Rule 24 Certificate dated May 6, 1994, in 70-7946).
i :.. j tl '. ^ ..
. - - ) i; '4 4 /..~t.! .% : . . , '. , :
- t (a). 33- (Thlirtieth'Supplemlentary.-Capitl. Funds.-Agreement and Assignment, dated .as of August 1, 1996, among Entergy.Corporation, System Energy and.UnitedStates Trust Company of New York and Gerard F. Ganey, as Trustees (filed as Exhibit B-3(a) to Rule 24 Certificate dated
,,*. ; 1996 iAFileNo.-70-8511).. .
,vA~st8, . . , .. . .
(a) 34 - Thirty-first Supplementary Capital Funds Agreement and Assignment, dated as of August 1, 1996,. among EntergysCorporation, System Energy and United States Trust Company of.New York and Gerard F. Ganey, as Trustees .(filed as Exhibit B-3(b) to Rule 24 Certificate dated August 8, 1996 in File No. 70-851 1).
., r * .; - . *. ., . * ,, *, .
-9
(a) 35- Thirty-second Supplementary Capital Funds-Agreemet and Assignment; dated as of December. 27, 1996, among Entergy Corporation, Systeni Energy and Ile Chase Manhattan Bank (filed as Exhibit B-l(a) to Rule 24 Certificate dated January 13, 1997 in File No. 70-7561)*.! . ' : *,f .i' ; (a) .36- Thirty-thirdSupplehintary'Capital Funds Agreement andjAignmentdated as of December 20, 1999, aindig Entergy Corporation, Systm'Eziergy ind The'Chafe Manhattan Bank (filed as Exhibit B-3(b) to Rule 24 Certificate dated March 3, 2000 in File No. 70-7561). (a). 37.-s First Anendibet to Supplementixy Capital Funds Agreemnts and!Assgnments, dated as of at . .June:,};: ;1989, by. and betwedi Entergy Corporation-. Systeini"Energy, Deposit Guaranty National Bankl United States Thist Company of New York and Ger~rd F: Ganey (C to Rule 24 Certificate, dated June 8, 1989, in 70-7026). (a) 38- First Amendmeii o Suppldnntiuy Capital Funds- Agreements and Aisigrments, dated as of June 1, 1989, by and between Entergy Corporation, System Energy, United States Trust
."CofiianylofNew York hnd Gerard F: -ner (C to Rule 24 Certificate, dated June 8,"1989, in 70-7123). . * - :
X.(a). 39-: First Amendfnent to Supplementary Capital Funds Agreement and Assignment, dated as of W';! June' 1,( 1989, by and betwcen:Entergy Corpotatiod, Systen Energy and'Che nua1 Bank (C to Rule 24'Ceificae, dated June 8, 1989, in70.7S61),; * (a).40-' Reallocbation Agncment, dated as of July!28 I9&1, among Syternm Energy afd certain other
' Sysim-`cotnpanie(B-la)in70-6624). , .**; .i ' I (a) 41- Joint Construction, Acquisition and Ownership Agreement, dated as of May 1, 1980, between
- *,; S'Systm Ener'aid SMEPA(B (a) iifr70-6337).,a5 amended by Amendment No: 1; dated as
' ofMay l 198013-1(cyizin70-6337)andAmendknentN.-2,dited asofOctober31, 1980 (1 to Rule. 24 Certificate, dated October 30, 1981, in 70-6337).
(a) '42'-; Operating Agrbehiint dated as of May 1,' 1980,1 between Systeii Energy and' SMEPA (B(2)(a) -1 *. - 'ih706337). : 9, . * . ,; (a) 43- Assignment, Asswumption and Further Agreement No. 1, dated as of December 1, 1988, among
*.'e- System Energy;,?rvIidiaxi Trust.Conpany!and. Stephea M.Cartagand SMEPA (B-7(c)(1) to
... r ., Rule2i'CirificaecdatedJnuarsf9, 1989>in70-:7561) - ; --
(a) 44- Assignment, Asstumption and Further Agreement No. 2, dated as of December 1, 1988, among
'. Syktem Energy; Meridian Trust Company and Stephen.Mi Caa. aid SMEPA (B-7(c)(2) to i:.Rxile 24 Certificao,-dated Januay 9, 1989, in'707561).
(a) 45- Substitute Power Agreement, dated as of May 1, 1980, among Entergy Migsissippi System Energy and SMEPA (B(3)(a) in 70-6337).
.(a) 46-. Grand Gulf Unit:No. 2Supplementary Agreement,. dated as of February 7, 1986, between
SystemEergy'and SMEPA (10(aaa) in 334033)s . .
(a) 47- Compromise and Settlement Agreement, dated June 4, 1982, between Texaco, Inc. and Entergy Louisiana (28(a) to Form 8-K, dated June 4, 1982, in 1-3517). E-10
'+(a) 4$- P i-Retreiient Plan"(10(a)3V7t"d'Fonn 10-XK forh&fe':ear 'endDecember 31; i983, in 1-3517). ,
(a) 49- SlMn6'iopr` 2es d M i-dofJune 10b1982, ,tie-yin Ergyan aEntrad , Arkansas, Entrgy fiiria, E er Misissip ad th New Orlea (1O(a)-39 to Form 10-K fr the arnded Dcember 31, 1982, in 1-3517).
-- - . ' @ '- '. x.r:Jtj ,.U< - ,j: ; :
(a) 50- First Amendment to Unit Power Sales Agreement, datdd as of JYe 28, 1984, between System Energy and Entergy Adransas, Enter" L -isiaia, Entergy Mississippi 'and Etergy New
- (rib (19tI(rt 6 i OnIf1thi4 erded Sd '10,'494,'inl-3517).
(a) 51- Revised Unit Power Sales Agreement (lO(ss) in 33-4033). (a) 52- Middle Sdah Utilitieic ahid Sfbsidia iiiesp hies} oneTax Allocation Agreement, dated April 28, 1988 (Ehbit D-1 to Form U5S for the year ended Decerber 31,
- - - . . :: ' ~~~~~~~~.' ^ :
(a) .53 - First Amendnent, dated January 1, 1990, to the Middle South Utilities Inc. and Subsidiary
' '**ie "~Cd ~ TilcTh Jioatb lnd2 A to Fbri'iJS forie year ended December 31, 1989).. '(a) '5i4 ! ' An&iidmwf dte. I Io99'tb. he'ite3 d -onS iliaiy Companies Itercorpany Income Tax A aii -Pdi p)-3:o U5S for the year ended December 31, 1992).
(a) 55- Third Amendment dated January 1,;1994 to Entergy Corporation and Siisidiiy Cbsnpames Intercompany Income Tax Allocation Agrecent (D-3(a) to. Form US fr he year nded { - . **.;r *.t '.. :**..' . .* :.1 - (a) 56 - Fourth Amendment dated April , 1997 to Entergy Corporation and Subsidiary Companies
%bmi rn 4 i-ncw T (D-5 to FAibtU5St o'e year ided December31, 1996). ; '
(a) 57- A e t'eabet 'rter iCoitioiand En rgyAAcxisAk"i dated as of September 20'1990 (' 1(a) to-Rfie i4'rtificate, d l Soter'2,;1.60,'n 70-7757). ' (A)*c .P*iUCt 8-' , Ente Cion
- and Edeig' 156disi date a of Sp)ber 20, 190 (B-2(#io le 24Ceitifiite, dated Sepferei27'n19,90 1 07757).
7'i (a) 59- Guarantee Agreement between Entergy Coxporaon and System Energy, dated, as of
; Spte .),'1990 (B4-(a) to Ri1d'Y4 Certifidaie, dated Saftenber 27 b,'in 70. 7757.
a: ;-.. ,@* . *l@^4 ;. *.t .3:- . - 1i 3 (a) 60- Loan Agreement between Entergy Operations and' Entergy' Corporation, dated as of
- Septibne20,19YOO (B-42(b) to Rule 24 Certicgtc;dated-Jiuie 15; 1990,:iA7O'7679I (a) 61- Loan Agreement between Entergy Power and Entergy Corporation, dated as of August 28,
!'*190 (A-4i) toRle 24 Citfiei&, datid Septembei,6, 1990t mn70-7684).
1990 (k-4(b) iii~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~io-46").~~ E-11
(a) 62- Lamn Agmn t between EtW Cwand Euterj Systrq d S e. Ip,, dated as of December 29, 1992 (A-4(b) to Rule 24 Ceutificate in 70-7947).
-f(a), 63- Executiye F~iansial (a) 2 to
- Fqnm1QO-T fiwoeI~rend et1i,lw1 9 in 1-J~3M17).,-t i, V!.;t.
yar dD~b '19A .Qt* . I
+(a) 64- EnteWr Corporation Annual Incentive Plan (10(a) 54 to Fon 10-K for the year ended December31; 1989, inl-357 . ,! . -. +(a) 65- Eqr (Sp ,aa 1 of Epterv Cpoxatio and SibsidiaC;.(44(a to Rule 24 ertifcate, dated May 24, 1991, in 70-7831). +(a) 66- Amendment No. I to the Eqity Own ripPla of Entergy Co t d Su i
- i .;.(1(a) t*on 10-K forthe year endcdcn 31,1992p l-}$ .7).-
+{aj 67- 1998 Eqity Own:rship Plan of Entergy Corporation and Subsidiaries (Filedmith the Proxy Statement dated March 30, 1998).
Ca)8 § .- R+}, Outside&,tor enefit Plan (}Q(a)63 to F 10-K foi the yeded D 19 31, 1991, in 1-35d17). * : . r (a6,, ~,Ap en Jowe Ery C orplipn and JM D. c Qo I(a67torm 1Q-Kforthe year dPpber31,1992 l30.1).; :If;. ,*
+(a) 70- Supplemental Retirement Plan (10(a) 69 to Form 10-K fbr the year ended December 31, 1992
* , r i * -)T '1 {C *: ' 1
+(a) 71- Defined Cotribulion Restoration Plan of Enter Corporatioqn'and Subsiliaries (lO(a)53 to Form 10-K fbr the year ended December 31, 1989 in 1-3517).
72- Exectivo DieabtyPlan of i d Subsianes ioro, (iQ(a)7;tp Form 10-K for the year ded Domber 31, 1992 in 1-3517). . .
*-(a) 3 7 . Sto* PLpn fOuitsideDirectors of Enterr C oroion and Subsiarids ,s anded (10(a) 4.? ! pKro lc l t 9 in 3 7)
(a), 74,-7 . Agzpe azzd.Pla of Reorganiza B Ent Coration a),CiuIf States tilips
;. 5Qompanyi dated .Thnm 5, .i992 (1.to CuenBep rt on Fom -K datcl jne 5, 1992 in 1-3517).
8 '.~ i~ 4X' !.F '1:'p^;t;.!.-.s * . . ., ;- *;, ,. . t - ;
+(a) 75 Amenidne to Cantribution ofi R Planqf EntewAoxa.4on and Subsidiaries (10(a) 8ltooonr -Kfbrthe year cdedDeembr3l, 1993 in 1-11299). +(a) 76 S itemcecutive cut Plan (10(a) 81 to Form 10-K f the y'eauded December 31, 1993 in 1-11299). +(a) 77- Jenuy L.. Mau 's Retirement Letter tO(a)77 to For! ,,O-K for die year ended Deceiber 31, 1998 in -1 1299).
E-12
+(a) 78- Letter of regarding the Emploent of Wayne Lenard (10-(a)78 to Fom 10-K for the yearended Decebe 3 1998in 1-11299)i.
,,:(a) 79 ' Letter :to John Willder offering Employment.(10(b)62to Form 10-K for the year eided, Dbiifiber 31, 1998 in 1-9067).
*+(a)80 - Agrement between Eitergy Corporation and Donald C. Hintz effective July 29, 1999
*~~~ - - . 3' ' . t t*. . 'i%.a ...............................
Systen E r r.' .- * . (b) I through ~~ ~ ti~ .; .. . : . (b) 1 - .- (b) 28 - See'10(a)-26 thougb 10(a)-39 above. ..
*(b) .29- RtI~ocation Agreement, dated as of July 28, 1981, among System Encrgy and certain other System companies (B-l(a) in 70-6624), -R - 'S .
(b) .:30-, Jinti ostruction, Acquisitionand Ownership Agreanent, dateda of~ay I;51980,'bedwen System Energy and SMEPA (B-1(a) in 70-6337), as aided by.Anndment No. 1, datcd as of May 1, 1980 (B-l(c)in70-6337)and AnendnentNo. 2, dated as of October31, 1980 (1 to Puli24 CerficateditedOctober30,'1981,in70-6337). . .
. ' .' . ..,* , .b* a- .: . i 3. *.3>
(b) 31- Operating Agremenit, dated s of-May 1,1980,between. System Er"gy and SMEPA (B(2Xa) in 70-6337). n~~~~~~~~ i:. ~ ~ .: ~ ... .. . , . A , (b) 32- Amended andReiitatedInstallment Sale Agreeient, dated as of Fcbruary 15, 1996, between Systeii -P Uyand Claiboine Cot, Msi'pi (fied as Eib'Bq6a) to Rule 24 Certificate dated March 4, 1996 in 70-8511). (b) 33- Loan Agreement, dated as of October 15, 1998, between System Energy and Mississippi
.-,usinss Finance:Corpoiation (B;6(b) to Rule24 Cificate dated November 12, 1998 in
*70451). : ' - ' ;
(b) ...34- lan Agrenrt, dated as of May.15, 1999, betwee System Energy nd MississippiBusiness Finance .Corporation (B-6(c) to Rule24 Certificatedated Junc g,1999in 70i8511). (b) 35- Facity Lease No.1, dated as of December 1, 1988, betweenMridian Tst Company and
*. Stephen M. Caita' (Stephen J. Kaba, successor), as Owner Trstees, and System Energy (B-2(c)(1) to Rule 24 Certificate dated January%, 1989 in 70-7561), as spplemented by Lease Supplement No. 1 dated as of April 1, 1989 (B-22(b) (1) to Rule 24 Certificate dated April'21, 1989 in 70-7561) and Leise Supplement No. 2 datedas of Januazy'l, 1994 (B.-3(d) toRle24 Certificate dated Janary 31, 1994 in7O-8215)...
(b) . 36- Facility Lease No. 2, dated as of December 1, 1988 between Meridian Trust Company and Stephen M. Cirta (Stephen J. Kabi, successor), as; Owner Trustees,: andSystem Engy (B-2(c)(2) to Rule 24 Certificate dated Januay 9, 1989 in 70-7561), as supplemented by Lease Supplement No. 1 dated as of April 1,;1989 (B-22(b) (2) to Rule.24 Certifiate thated s . , . .......................................... ;
*E-13
April 21, 1989 in 70-7561) and Lease Supplement No. 2 dated as of January 1, 1994. (B-4(d) Rule 24 Certificate dated January 31, 1994 in 7-8215). (b> 37- Assignment, Assumption and Further-AgreementNo. 1, dated as of December 1, 1988, among System Energy, Meridian Trust Company and Stephen M. Carta, and SMPA (B-7(c)(1) to Rule 24 Certificate, dated January 9, 1989, in 70-7561). (b) 38- Assignment, Assumption and Further Agreement No. 2, dated as of December 1, 1988, among System Energy, Meridian Trust Company and Stephen MC Carta, and SMEIPA.(B-7(c)(2) to Rule 24 Certificate, dated January 9, 1989, in 70-7561). (b) 39- Collateral Tmst Indenture, dated as of January , 1994, among System Energy, GGIB Funding Corporation and Bankers Trust Company, as Trustee (A-3(e) to Rule 24 Certificat dated January 31, 1994, in 70-8215), as supplemented by Supplemental Indeaturm No. 1 dated January 1, 1994, (A-3(f) to Rule 24 Certificat dated January 31, 1994, in 70-8215).: (b) 40- Substitute Power Agreement, dated as.of May 1, 1980, among Entergy Mississippi; System Energy and SMEPA (B(3)(a) in 70-6337).. - . .
- (b) 41- Grand Gulf Unit No. 2 Supplementary Agreement, dated as of February7, 1986, between System Energy and SMEPA (10(aaa) in 334033)..
(b) 42- Unit Power Sales Agroement, dated as of Juno 10, 1982, between System Energy and Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans (10(a)-39 to Form 10-K forihe year ended December 31j 1982, in 1-3517). (b) 43- First Amendment to the Unit Power Sales Agreement, dated as of June 28, 1984, between System Energy and Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy
*' *.. New Orleans (19 to Forml.10-Q forthe quarter ended September30, 1984 in 1-3517).
(b) 44- Revised Unit Pawer Sales Agreement (10(ss) in 334033). (b) 45- Fuel Lease, dated as of February 24, 1989, between River Fuel Funding Company #3, Inc. and System Energy 0IlB(b) to Rule 24 Certificate, dated March 3, 1989, in 70-7604). (b) 46-. System Energy's Consent, dated January .31, 1995, pursuant to Fuel Lease, dated as of February 24, 1989, between River Fuel Funding Company #3, m. and System Energy (B-l(c) to Rule 24 Certificate, dated February 13, 1995 in 70-7604). (b) 47- Sales Agreement, dated as of June 21, 1974, between System Energy and Entergy Mississippi
.( to Rulc 24 Certificate dated June 26, 1974, in 70-5399).-..
(b). 48- Service Agreerrnt, dated as of June. 21, 1974, between. System Energy and Entergy Mississippi (E to Rule 24 Certificate, dated June 26, 1974, in 70-5399).. (b) 49..- Partial Termination Agreement, dated as of December 1, 1986, between System Energy and Entergy Mississippi (A-2 to Rule 24 Certificate, dated January 8, 1987, in 70-53 99). (b). 50- Middle South Utilities, Inc. and Subsidiary Companies Intercompany Income Tax Allocation Agreement, dated April 28, 1988 (D-1 to Form US forthe year ended December 31, 1987). E-14
* * . *6 6 t . -
(b) 51- First Amendment, dated January 1, 1990 to the Middle South Utilitieg Inc. and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-2 to Form USS for the year endedDecember31, 1989). (b) 52- Second Amendent dated January 1, 1992, to the Etergy Corporation and Subsidiauy
* . -. Companies-nterompany income Tax Allocation Agreement (D-3 to Form U5S for the year ended Decenber 31, 1992).
(b) 53- Third Amendmntt dated January 1, 1994 to Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-3(a) to Form USS for the year ended December31, 1993). *.: (b) 54- Service Agreement with Entergy Services, dated as of July 16, 1974, as amended (10(b)-43 to Foun10KfbrtheyeandedDecember31, 1988, in l-9067). ..-.. ; * - (b) 55- Amendment, dated January 1, 1991, to Service Agreement with Entergy Services (10(b)45 to
.: . FomrnlO.KfortheyearendedDecanber3l, 1990,inl-9067). . x. v.
(b) 56- Amendment, dated January 1, 1992, to Service Agreement with Entergy Services (10(a) -1 to Form -KfbrtheyearendedDecernber31, 1994im1-3517);. * .i., si: .' (b) 57- Operating Agreement between Entergy Operations and System Energy, dated as of June 6, 1990 (B-3(b) to Rule 24.Certificate, dated June 15, 1990, in 70-7679).!
, 5. , . . ., , ~* ; _
* i (b) 58- Guarantee Agreement between. Entergy Corporation and Systen Energy, dated as of September 20, 1990 (3-3(a) to Rule 24 Certificate, dated September 27, 199D, in 70-7757).
(b) 59- Amended and Restated Reimbursement Agreement, dated as of December 1, 1988 as amended and restated as 'of December 20, 1999, among System Ener& Resources, Inc., The -Bankof Tokyo-Mitsubishi, Ltd., as Funding Bank and The Chase Manhattn Bank, as administrating bank, Union Bank of California, NA., as documentation agent, and the Banks named therein, as PAiticipating Banks (B-l(b) to Rule 24 Crtificate dated March 3,2000 70-7561). +(b) 60- Letter to John Wilder offering Employmt (10(b)62 to Form 10-K for the year ended December 31,1998 in 1-.9067).. +(b) 61- 1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries (Filed with the Proxy Stateient dated March 30, 1998). Entergy Arkansas (c) I - Agreeent, dated April 23, 1982, amonrg Entgy Arkansas -and certain other System companies, relating to System Planning and Development and Intra-Systen Transacions (10(a) 1 to Form 10-K.fortheyear ended Decembet31, 1982, i 1-3517). (c) 2 - Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)2 in
.241080). ...
E-15
(c) 3 - Amendment, dated Febxay 10, 1971, to Middle South Utilities System Agency Agreement,
.. datdD c ier;eln970 (5(a)4in 241080). *
- - * .*3 . t.., ' .,, .... ..... -, ; -j (c) 4 - Amendmet, dated May 12, 1988, to Middl South Utilities System Agehcy Agreement, dated December 11, 19O (5(a) 4 in 2-41080).
(c) :5 - Middle South Utilities System Agency Coordination Agreent, dated;ecerber II, 1970 (5(a)-3 in2-41030). .
- -.(c)- 6..- ServieAgr entwith Entergy Svices, dated as of April 1,1963 (5(a)-5 in2-41080).
* :: .. *; -; * *I . * . S.
(c) 7 - Amendmt datd January 1, 1972, to Service Agreemet with Enter Services (5(a)- 6 in
- 2-43175).
* , . 8; *.£9.~t. S . , .*. * * .- ... .
(c) 8 - Amendment, dat:d Aprib 27, 1984, to Service Agreement, with Enterg Services (10(a)- 7 to Fonn 10-KfortleyearenldedDecember3l, 1984,in 1-3517).
; , .' S -. ,_ . * . * *. - - S.-.S..
(c) 9 - Amedment dat:d-August1, 1988, to SrviceAgrement withEntei& Serices (10(c)- to Form 10-K for the yearended December 31, 1988, in 1-10764).
; * *'* c , @ r@ .........
- i .,.r . ..* ,, ,- .s , ,;*
(c) 10- Aedmet, datid Jaluary: 1- 1991, to Service Agreement withrEter Services (10(c)-9 to Form 10-Kfort yearendedDecenber31, 1990,in 1-10764). (c) 11- Amendmnt, dated Januaxy 1, 1992, to Service Aj mne with Enrgy Srvices (10(a)-Il to Form 10-KfortieyearendedDecember31, 1994in 1-3517). (c) 25- See 10(a)-12 thrwugh 1O(a)-25 above.
.~~~~~~~~~~~'
() 26 t dtl3Aukust 20; 1954, between Entergy. Arkansas and the United States of
- ::. Amrici(SPA)(1.3(h) in2-11467). ..*
(c) 2-* Amendident, 'dated April .19,:1955, to the United Sttes of AMerica. (SPA) Contract, dated August 20, 1954 ((d)-2 in 2-41080). (c) 28- Amendment, dattd January 3, 1964, to the Unitd States of America(SPA) Contract, dated August20, 1954 (5(d)-3 in 2-41080).
* ; . I . . ^i .. v ._
(c) 29- Amendment, dated September 5, 1968, to the United States of Amerita (SPA) Contract, dated August 20, 1954 (5(d)-4 in 241080). (c) 30- Amendment, dated November 19, 1970, to the United States of America (SPA) Contxact, dated
- August20,-1954(5(d)-Sin2-41080).: y . ;
Z . i . ; ..... ~~~~~~-
*: -*. :. *....W ; ; ...... ,.....,
(c) 31- Amen dated July I8, 1961, to the United States of America (SPA) Contract, dated August 20, 1954 (5(d)-6 in 241080). (c) 32- Amendment, dated December 27, 1961, to the United States of Amemica (SPA) Contract, dated August 20, 1954 ((d)-7 in 2-41080). E-16
.(c) 33 - iAbendment, dated January 25, 4968, to the United States of America (SPA) Contract, dated
* ' 20, 19A4.(5..i. 2-41N). . ' .A. ... *'
*(e). 34 PA d datedOctober. 144971, to the Unitod:States of America (SPA) CO , dated
#,% - , l ;,J~ - ;.*r-..v *? ' '* 3 *. _
(c) 35- Amendment, dated Jainuy 10, 1977, to th United States of America (SPA) Contract, dated 13ii. . August,20 1954.0(*10 in2-60233).. . , - (c) 36- Agreement, dated May 14, 1971, between Entery Arkansas and the United States of America
*--,(SPA) (5( i1080). .. .
(c) 37- Ainednient, dated January 10, 1977, to the United States of America (SPA) Contract, dated
@ Yat. May.14;19717(5(e)-.1 t in24233):. . . . .
.* f.7. .,8'*- .- ' .;;: - . - 3; - @'~w ,' . ' '^ ' '. '- ." "' (c) 38- Cot dated May 28, 1943, Amendnza t.Cntract,'datcd July 21;'1949, and Supplenent to Amendment to Contract, dated December 30, 1949, betwem Etergy Arkansas and
,'_. \rem
*'2vi c aini Gas aCeaningC-ompoAn ets dated as .of Sepptnbr.*30, 1965 ,etween
, IT . Entery Arkansas animr stockholders of McKanie Gas Cleanibg Coimpany; and Letter S J.i~.. Agre"rent dated June. 2, 1966, y Humble Oil& Refining.Company acced by Entergy Arkansas on June 24, 1966 (5(k)-7 in 2-41080).
'(c),@§39 -.. Agrement, dated piil .1972, betw Entr Serices and Gulf United Nuclear Fuels
.*.:;~~ q:...:
opwfloa(51)-3 246152). ^1 ; X; (c) 40- Fuel Lease, dated as of December 22, 1988, between River Fuel Trust #1 and Entergy 1- ':. --Akausds(B-1(b) to Rule 24 Certicatdin 70-7571) . - . ' .5. ; (c) 41- White Bluff Operating Agrcemt, dated June 27, 1977, among Entergy Arkansas and r .Arkauias EleicCioop ve Corioaiorind City Wate and Light-Plant of-the City of Jonesboro, Arka& (B-2(a)'to'Rilcle24 Certif atr,'datcd June 30, 1977; in 70-6009). _;ijc);i42-. ,lswhitc.Bluff.Omnersip;gr d t,,d June.'27, 19.77, among Entegy Arkansas and Arkansas Electric Cooperative Corporation and City Water id Light Plant of the City of Jonesboro, Arkansas (B-1(a) to Rule 24 Certificatedated June 30, 1977, in 70-6009). (c) 43 Agreement, dated June 29, 1979, between Eniergy Axkan and City of Conway, Arkansas (5(r)-3 in 2-66235). 2.0I44 ,;- . 7 3 . )...o. .. .. ... ,; .7
- c. (o) 4;4 - . ,rannisso.grmnent, daed August 2, 1977, betwe Eute iAsas and City Wa and Light Plant ofthe Cityoftlonsboio, Arkansas (5(r)-3 in2.60233). -
Ai. , -Power Cbordinion, Interchange and Transmission Service Agnenaet4 dated as of June 27, 1977) betwe Arkansas lectric Cooperative Corporation and Enteg Arkansas (5(r)4 in 2-60233).. .. *.* (c) 46- Independence Steam Electric Station Operating Agreement, dated July 31, 1979, among Entergy Arkansas and Aras Electric Cooperative Corporation and City Water and Light Plant of the City of Jonesboro, Arkansas and City of Conway, Arkansas (5(r)-6 in 2-66235).
-, - E-17
(c) 47- A~iei datd December 4, 1984, to th depende Steam E ic Sation Operating Agrement (10(c) 51 to Form 10-K fbr the yv:i'ded Decenber 31, 1984, in 1-10764). 48)- Independence Steam Electric Station e Agreemat.dated. July 31', 1979, among Entergy Arkansas and Arkansas Electric Cooperative Corporatich and City Water and Light Plant of the City of Jonesboro, Arkansas and City of Conway, Arkansas (5(r)-7 i 2-66235). _. F*.' -; ,,' I
- i* '; - . ' 2 1 t u ; ' 1 ~ .' v ..................................
' -- -f - t.
(c) 49- Amendment, dated December 28, 1979, to the Tndependeno Steam Electric Station Ownership Agreent (5(r)-7(a) in 2-66235).
.& Xe.4 . Ia -j , * . ,, ........
,;I - a ' . it -1 ', *t* *w (c) 50- Amendment, dated December 4, 1984, to the dependei&e Steam E1ectric Station Ownership Agreement (10(c) 54 to Form 10-K for the year ended December 31, 1984, in 1-10764).
(c) 51- Ownees Agreement, dated November 28, 1984, among Entr, Arkansas, Entergy Mississippi, other co-owners of the Independence Station (10(c) 55 to Form 10-K for the year
- :.,;'.F bended-Debe 1., 1984, in -10764? .
~
1" & - ;.**s ~ 6 ;- .Sw .* .* ;s 's.
^ *6 ! *; -~ '
- (c) Cakwnt Agrecnt-,aid Assumpfion; dated!Decemiber 4, 1984, amiongEntergy Arkansas, s~w'.. FEntergy Missisippi, other coqwners'of the Idependce Station aid- United States Trust
' ...* ;Company ofNew. Yor.as Tntee(10(c) 56 to Forrn10-K fbr the year aded Deceiber 31, 1984, in 1-10764). .. : .. ' ; .--(C i33-Power Cooiination, tebangeand Tranlion Sevic Agrent, dadas of July31, 1979, between Entergy Arkansas and City Watei and Light Plant of the..City of Jonesboro, Arkansas (5(r)-S in 2-66235).
s7:;.................................. (c) 54- Power Coordination, Interchangc and Transnisslon Agreement, dated as.of!June 29, 1979, between City of Conway, Arkansas and Entergy Arkansas (5(r)-9 in 2-66235)..
.t (c) . 55:i.- AVrmnqt, dated Juno 21, 1979;bet=wantfgy Arkansaid Recvez E. Ritchie ((IO)(b)-90 tdForm 1-Kfortheyear endedDecembr31,.1980, in 1-10764).:
' -(c). 56-- Reallocation ,Ageement, dada, of Jiily.284981;.9a Syste Energy and certain other
. .r t .. ,ompan(B-(a)ii06624.
+(c) 57- Post-Retirement Plan (10(b) 55 to Form 10-K for the year ended December 31, 1983, in
; ¢ 1.10764):
(c) 58- Unit Power Sales Agreement, dated as of June 10,. 1982, between System Energy and Entergy
;. .z msArans^s,^.Entergy Louismia Entergy Mississipp a itergy. New Orleans (0(a) 39 to Form 10-Kbfrthe yearended December31,:1982; in 1-3517.
-(c) .59- First Amendment to Unit Power SalesAgrenentdated as of June 28, 1984, betwetn System.
.:*Energy Ent&A ansas; Entergy Louisiana, ntergyMississipp and Entergy New Orleans (19 to Form 10-Q for the quarter ended September30, 1984, in 1-3517).
,,.,(c) 60.-. Rcvised UnitPower Sales Agreement (l0(ss) in 334033). * -: ..
'!I *1.'.. .. . ,'.,
E-18
(c) 61- Contact For Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste, dated Jiine30, 1983, amongih6DOB, System Fuels and Entergy Arkansas (10(b)-57 to Form 10-K for the year ended December 31, 1983, in 1-10764). (c) 62'- Middle South Utilities, Inc. and Subsidiaiy Companies liercompany Inxie Tax Allocation Agremment dated April 28, 188 (-1 to Form 1J5S for the year ended December31, 1987). (c) 63- Firt Armndmeai dated January 1, 1990, to the Middle South Utilities, lie. and Subsidiary Companies Intercompany lIcome Tax Allocation Agreement (D-2 to Form U5S for the year ended December 31, 1989). (c) 64 - Second Amendment dated Januay 1, 1992, to te Entergy Corporation and Subsidiary Compan Intercmnpany Income Tax Allocation Agreenent (D-3 to Form U5S for the year nded December 31, 1992). (c) 65- Third Amendment dated January 1, 1994, to Entergy Corporation and Subsidiary Conpanies wIncompanconfb Tax'Allocation Agreement (D-3(a) to Form USS for the year ended December 31, 1993). : -:
- (c) 66- Assigtmlet of Coal Supply Agement dated December 1, 1987, betweei System Fuels and Entergy Arkansas (B to Rule-24 letter filing, dated November 10, 1987, in 70-964).
- (c) 67-- Coal Supply Agrint ltd Decembe22, 1976, btween s Fuels and Antlbpe Coal Company (B-1 in 70-5964), as amended by First Amendment (A to Rule 24 Certificate in 70-5964); Second Amendment (A to Rule 24 letter filing, dated December 16, 1983, in 70-5964); and Third Amendment (A to Rule 24 lette filing, dated No&ibcr I0, 1987 in 70-5964).
(c) 68- Operating Agreeient between Entergy Operations and Entr Arkansas. dated as of Jiizie 6, 1990 (B-1(b) to Rule 24 Certificate, dated June 15, 1990; in 704679). (c) 69 - Guaranty Agreemenbetween lntergy Corporation' and Entergy Axkansas, dated as of September'20, 1990 (B-i(a) to Rule 24 Certificae, dated Septcib~r 27, l900, in 70-7757). (c) 70-- Agreemenfr Purchase and Sale of lndependince Unit 2 betweeni Entergy Arkansas and Entergy Power, dated as of August 28; 1990 (B-3(c) to Rule 24 Certificate, dated September 6, 1990, in 70-7684). (c) 71- Agreement for Purchase and Sale of Ritchie Unit 2 betwee Entefgy Arkansas and Entergy Power, dated as of August 28, 1990 (B-4(d) to Rule 24 Certificate, dated September 6, 1990, in 70-7684). ' (c) 72 - Ritchie Steam Electric Station Unit No. 2 Operating Agreement between Entergy Arkansas and Entergy Power, dated as of Aiugust28, 1990 (B-5(a) to Rule 24 Certificate, dated September 6, 1990, in 70-7684). (c) 73- Ritchie Steam Electric Station Unit No. 2 Ownership Agreement between Entergy Arkansas and Entery Power, dated as of August28, 1990 (B-6(a) to Rule24 Crtificate, dated September 6, 1990, in 70-7684). E-19
(c) 74- Powcr Coordinaion,. Intchange and Transmnissi Serice Agrent .between Entrg Power and.Entergy Akansasdatd asof August28, 1990 (1O(c)-71 to Form 10-K for fte year ended Decenber 31, 1990, in 1-10764).
+(c) 75- Expcutive Financial Counseling Program of Enter Corporation and Subsidiaries (10(a)52 to Form 10-KfdrtieyearcndedDecemnber31,1989, in. 1-3517).
+(c).76 - Enter Corporaion nnual Incentive Plan (10(a)54 to Form 10-K for the year anded
.December31,1989,in 13517)..
Nc) 77- Equity Ownerstip Plan of EntW Corporatio and, Subsidiarie (A-4(a) to Rule 24 Certificate,dateclMay24,199.1,in70-7831)..., -. , -+(c) 78- Andment No. 1 to te Equity Ownership Plan of Entergy Corporaton and Subsidiaries (10(a)71 to Form 10-K for the year ended Decmber 31, 1992 in 1-3517). N4C) 79- 1998 Equity, Ovnership Plan of Entery Corporation and Subsidiaries (Filed with the Proxy Statement dated March 30, 1998). +(c) 80 - Agreement between Arkansas Power & Light Company and R. Drake Keith (10(c) 78 to Fomn 1O-K for the year endd Dcember 31, 1992 in 1-10764).
+(c) 81- Supplental..etirmnent Plan (10(a)69 to Form 10-K for. theyear ended December 31, 1992
,. in 1!.35l7)~~~~.: :liS: ' * -
+(c) 82- Pefipqd Contribution Restoration Plan of Entegy Corporation and Subsidiaries (0(a)53 to Form 10-K for the year endedDecember 31, 1989 in 1-3517).
+(c) 83- Fxecutive Disa4ility Plqa. fEntergy Corporation and Subsidiazi (1O(a)72.to Form 10-K for t- ,year en4ed I) 31,'1992.in1-3517). .
+(c). .4-. Sto Planf.qr OuVide Directors of Entegy Corporation pn4 Subses, as. amended (10(a)74 to Fon 10-K £brte year ended December 31, 1992 in 1-3517).
.+ . ge .7 .K f
. .(c)$_- Agrvni~zt betwen tergy Corporation and JerryP. Jackson (10(a) 67.tq Form 10K for the
. . yearendedDeconiber 31 1992 in 1-3517). .
N(c) 86- Summary Description of Retired Outside Director Benefit Plan. (10(c) 90 to Form 10-K for the yearuended December 31, 1992 in.l 1l0764). .. .
+c) 87- Andment to Defnd Contribution Restoration Plan of Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K fortheyear ended Decmber 31, 1993 in 1-11299).
* .; . .-, ,. ,. J
+(c) 88- System Executive Retirement Plan (10(a) 82 to Form 10-K for the year ended December 3 1,
- 1993 in 1-112919). .
.(c) 89- Loan Agreemeat dated June 15, 1993, betweeji EntergY Arkansas and Independence Country, Arkansas (B-I (a) to Rule 24 Certificate dated July 9, 1993 in 70-8171). E-20
(c) 90- Installment Sale Agremcut dated Janazy 1, 1991, between Entergy Arkansas and Pope
, .; Coimty, Axkansas (B-1 (b) to Rule 24 Certificate dated January 24, 1991 in 70-7802).
, ;*
- I *
(c) 91- Installment Sale Agreement dated November 1, 1990, between Enter Arkansas and Pope Country, Arkansas (B-1 (a),to Rule 24 Certificate dated November 30, 1990 in 70-7802).
.(c) .92-. Uldan Agreement dated June 15, 1994, between Entergy Arkansas and Jefferson County,
- . . -Arkansas (Bil(a) to Rule 24 Certificate dated une 30, 1994in 70-8405).
'~
,,c). 93- Loin Agreement dated J1m 15, 1994, between Entergy Axkansas and Pope County, Arkansas (B-.(b) to Rule 24 Certificate in 708405). (c) 94- Loan Agreement dated Novenber S,1995, between Enter Arkansas and Pope County,
,*- - iArkansas (10(c) 96 to Forn 10-K fbrthe year ended December 31, 1995 in 1-10764).
- ' * *~ , '. a ,;
(c) 95- Agrement as to Expenses and Liabilities between Entergy Arkansas and Entergy Arkansas Capital 1, dated as of August 14,1996(40) to Form 10-Q for the quarter ended September 30,
- e -f1996iml-10764) . ..
i,~~'. ~ ~ * (c) 96- Loan Agrencnt dated December 1, 1997, between Entergy Arkansas and Jeffirson County, Arkansas (10(c)100 to Form 10-K forthe year ended December31, 1997 in 1-10764).
+(c) 97 - Leter to John Wilde. offring Employment (10(b)62 to Form 10-K fr the year ended December 31, 1998 in 1-9067).
rftgyGulfftates , .. . (d) 1--.Guary Agreementidated July 1, 1976, between Eatergy Gulf States and American Bank and Trust Company (C and D to Fon 8-K, dated August 6,1976 in 1.2703). (d) 2 .- L ofRailroad Equipment, dated as of December 1, 1981, between The Connecticut Bank
-rand TustCompanyas LessorandEntcgyGulfStates as LIsseCand FirstSupplement dated as'ofDccxnber 31,1981,retngto 605 One.Hundred-Ton UnitTrain Ste CoalPorterCars (4-12to Form 10-K fortheyearendedDecember3l,1981in l-2703).
(d) 3. -. .Gi~urnty; Agreemnt, datd..August 1, 1992, between Entergy Gulf States and Hibernia Nationakliank, relating to Pollution, Control Revenue Refunding Bonds of the Industrial
. ,! Deye1opnevt.Board of the Parish of Calcasieu, nc. (Louisiana) (10-1 to Form 10-K fbr the year 6ided Deember 31, 1992 in 1-2703).
(d) 4 - Guaranty.Agreement, dated January 1, 1993, between Entergy Gulf States and Hancock Bank of Louisianarelating to Pollution Control Remie RefdiWng Bonds of the Parish of Pointe Coupee (Louisiana) (10-2 to Form 10-K for the year ended December 31, 1992 in 1-2703). .(d) 5 - Deposit Agremt, dated as of December 1, 1983 between Entergy Gulf States, Morgan
- Guaranty Trust Co. as Depositary and the Holders of Depository Receipts, relatinb to the Issue of 900,000 Depositary Peferred Shares, each representing 12 share of Adjustable Rate Cumulative Prefered Stock, Series E-100 Par Value (4-17 to Form 10-K for the year ended December31, 1983 in 1-2703).
E-21
(d) 6 -Agreement effective February 1, 1964, between Sabine River Authority, State of Louisiana, and Sabine Rivr Authority of Texas, and Entergy Gulf States, Central Louisiana Electric Company, Inc., and Louisiana Power & Light Company, as supplepented (B to Form 8-K, dated May 6, 1964,. A.to Form 8-K, dated October 5, 1967; A to Form' -K dated May 5, 1969, andAtoorm 8-K, dated December 1, 1969,'in 1-2708). (d) 7 - Joint Ownership Participation and Operating Agreemc regarding River Bend Unit 1 Nuclear Plant, dated August 20; 1979, between Enterm, Gulf States, Cajun, and SRG&T; Power Intrconnection Agreement with Cajun, dated June 26, 1978, and approved by the REA on August. 16, 19'79, bet* Entergy Gulf States and Cajun; nd -eer Agreezent regarding CEPCO buybadcs, dated August 28, 1979, bitween Ertergy Gulf States and Cajun (2, 3, and 4, respectively, to Form 8-K, dated September 7, 1979, in 1-2703). (d) 8 - Ground Lease, ated August 15, 1980, between Statmont Associates limited Partnership (Statnont) and Entergy Gulf States, as amended (3 to Form 8-K, dated August 19, 1980, and A-3-b to Fom. 10-Q fiorthe quartnded September30, 1983 in l-2703).-; (d) 9 - Lease and Sublease Agreen mt, dated August 15, 1980, between Statmont and. Entergy Gulf States, as amended (4 to Form 8-K, dated August 19, 1980, and A-3-c to Form 10-Q for the quarter ended September 30; 1983 in 1-2703). - (d) 10- Leasc Agreemen, dated September 18, 1980, between BLC Corporation and Entergy Gulf States (1 to Form 8-K, dated October 6, 1980 in 1-2703). (d) l1- Joint Ownership Participation and Operating Agreement for Big Cajun, between Entey Gulf States, Cajur Electric Power Cooperative, Inc., and Sam Rayburn G&T, Lic, dated Novenber 14, 1980 (6 to Form 8-K, dated January 29, 1981 in 1-2703); Amendment No. 1 dated
- D&ember 12, 180. (7 to Form 8-K, dated January 29, 19811 in 1-2703); Amendment No. 2, dated Decmbei 29, 1980 (8 to Fonn 8-K, dated January 29, 1981 in 1-2703)..
(d) 12- Agreement of Joii Ownership-Participation between!SRMPA, SRG&T1. and Entergy Gulf States, dated Jumc 6, 1980, for Nelson Station, Coal Unit #6, as .amendd (8 to Form 8-K, dated June 11, 1980, A-24 to Fornn m O-Q For the quarter June 30,;1982; and 10-1 to Form 8-K, dated February 19, 1988 in 1-2703). (d) 13- Agreements between Southern Company and Entergy Gulf States' dated;Febirbary 25, 1982, which 6ver the donstruction of a 140-mild transmission line to connect the two systens, purchase of powtrand-use of transmissionfacilities (10-31to Form 10CK, for the year ended December31, 19:31 in 1-2703). . +(d) 14- Executive Income Security Plan, effective October 1, 1980, as amended, continued and conpletely restaftd effective as of March 1, 1991 (10-2 to Form' 10-K for the year ended Decmber31, 1991 in 1-2703). (d). '15- Transmission Facilities Agreement between Entergy Gulf States and Mississippi Power Company, dated February 28, 1982, and Amendment, dated May 12, 1982 (A-2-c to Form 10-Q for the quarter ended March 31, 1982 in 1-2703) and Amernit, dated December 6, 1983 (1043 to Form 10-K, fbrthe year ended December 31, 1983 in 1-2703). E-22
() 16- L A genient dated as of June 29, 1983, bewee EnteW GulfSttes ind Cty National
*: . Bank of B~tbn Roi as Oi~ner Trusteei in conectdon wi the 1 hsiiig of a Simulator and Training Center for River Bend Unit 1 (A-2-a to PormiO-Q'fli the qiarter ended June 30, 1983 in 1-2703) and Amendment, dated December 14, 1984 (10-55 to Form 10-K, for the year eiddDecember3l;'1N4i 1n-2703). '
- r.. . . ..
(d) 17- Participation Agreeent, dated as of lune 29, 1983; iabng Eti' GlfStates; City National Bank of Baton Rouge, PruFundng, Inc. Bank of the Southwest National Association, Houston afiiba*itics Life Coi*ny in 6 oJealir~i4ofa Simulr at d Training Center of River Bend2Unit -2Lb to F6rni0 for the iteded Juri 30,-1983 in 1-2703). (d) 18 Tax"ikdemnity AgXeenzit,;iited as of,Kime 29 i983, lbetwe Ee Gulf States and PrFundin, Inc, in connection with the leasing of a Simulator and Training Center for River
.t *;' xs'Bei~tl:X-2ctoFohn-02'1;& qdart e'rJd30; 1993ii 1-z2703).I t 1 * :' ;' A ,. I 't . . 'S ,_0., _ . .a - . . A . '. .*
(d) 19- Agement to Lease, dated as of August 28, 1985, amcng Entery Gulf Stkis, City National Bank of Baton Roue, as Owner Trustee, and Prudental Interfimding Corp., as Trustor, in me - * ,: ctbo~i'ith th leg of'oiprovIt to a`Sifililator dd Taining'Fiiity for River JUn; -;;d lttI(10-69
*- '~ 1 to Forin i-Kf&the )-r ended b3 1,1985 'in 1-2703).
*6* * %t'
- EFo. t ;t *t'- 3 i :d fe * !;
(d) 20- First Amended Power Sales Agreement, dated December 1, 1985 betw~en Sabine River
-Authorit, State dfluisiAna, 4M Sabine River Aftritjr4 Stat of Texs; and En&fgy Gulf tate, Central Lbdisiani Electric CG ilt., ind Losa P d npaW (1072 ,ZJ( 1"X 4Form10K fr tfiear brX. eniber3 , I9S5idl-2703).' *1 .
+(d) 21- Deferred Compensation Plan for Directors of Enter Gulf States and Vaibus Corporation, as
- -J" **amkzided Januaxy 8, 1987;4and fetivcJ ay , 1987 (1077 ) Fii 10IK for' the .ear
'ndd e dD6eber 31.I 98A d'1 -+/-703)^'Aniikbut dated Dec&nber'4,"i991 (10-3 to AmendntNo. 8 inReetatich-&:.2-76551)':
+(d)' 22- Tnsrg n forf Pamts tbe miade biEnty' blf State pw urguait the Executive Income 'Security Pla, bi and betn Etery GfStht ad 'Bankers Trust Company, eflfctive November l, 1986 (10-78 to Form 1O-K for the year'ended Decmber 31,
*'<**ws"I-986 in -2703).-- ::,.;..;; . . *.., ** .,.
+(d) 23- TrustAgimet for Defi ted hftallndintsIini EntexW'Gulf Stats" M 4inenent Incentive Compensation Plan and'Administrative 'Guidelines by and'between Entergy Gulf States and e ';I st Compgany. efectiv64e- 1,;986. (10-79 to Po'rm:10-K fhithe yirended December31, 1986in 1-2703)' .. t(d);24- Nookufied Drrd Comensation Plin for Officers,' iNonnipl e 'Direct6'`and
.esgnated Key Enipldytes,. fecie December 1, 985,'s amended, continued and
;. : -coudpletely iestated ffectivee's of Marcli ,199i (10-3 'to Am e drn No. 8 in Registration No. 2-76551).
(d) Trust: Aireement for Entergy. G*If States' Niqualified-'litectdrs ind - besignated Key Enployees by and between Enter~jr'Glf States and First City Bank, Tex&Beaumont, N.A. (now Texas Commerce Bank), effective July 1, 1991 (104 to Form K for the year ended December 31, 1992 in 1-2703). E&23
.(d). ,26.- LesAgreent 1 dated-at of June 29, 1987, amog GSG&tT, nc., a4 ergy Gulf States
-~ ~.r,lat tp.he l ease ask o£ b Lewis Cre e ng staioa,(10-&3 to Form 10K for te
-* year endDeeunber31, 1988 in 2703).,. , iu * ..
(d) 27- Nuclear Fuel ease Agremnt between Ebtegy p ' taltsan4 River Ben4 Fuel Seices, Inc. to lease the fuel for River Bend Unit 1, dated February 7, 1989 (10-64 to Form 10-K fbr
., qeyparjndcD t: - 3,1 18198 i*in!-2703). ; ,, r *: - ft.
. (d) 248- -:W d besntM .4 er t be E Ste and Morgan
; , arqnt ind TT opny of Ne..York (the oinnssxg TrustAgnent) wiih respect to decommissioning f autborized to be collected by Entrgy Gulf States, dated i..§ 5.. ' ' r; 15, 1989 (l0-66to~Fonn10-K for the year endedD eber.31, 19,8 intl-2703). ,
*~~~~~~
. * .Itv : ix:. * ' - .
(d) 29- Aruq mt Nq. 2 datdo er .1995 bqete Eatergy Gulf $ates #,a eflon Bak to
)ecommissioning Trust Agreemt (10(d) 31 to Form 10-K for the year ended Decmber 3 1, 19M - *,
- i t* .
;- i R**it o V.
-- I ,--! .
- Y i v Pi. . %j.z - sri e s*
,(d). 3p-. ; nA t, d . ofDgerr2enu,1 P, ar, B.Tu rqvices, nc. ad
;Certim :_ttions du anAC1A he, as Agent ft Lenders (l(d)34 to Form 10-K for year ended December 31, 1994).
.* ; ,
- I- !. *;**
- a - :t * ;
.. (4 . pien~nt NC) L1.N dated as offJte4 Janwary.3, rtlgre! as of December 3 1,
. *, .!',i99m pg Bd Fteu Sqrvica, Ipct cummral diinsttions
*iyer and CIBC Inc. as agent.for L=ners (10(d) 3 to Fot 10-K ?the year ended.Decmnber 31, 1995).
*-- - efAl':
. tUl W , . ; 4 '@w F-rt1 ; tS 6?{8V [ .5' 8
-32.- Parto Rs AEcnt by =md among go
. Inc., and Entera;,G States, CTGO qletrolecnororaidon anVfthIca1 Coioytdated ApriA24, 1988 (10-67 to Fon 10-KfbrtheyearendedDecember31,1988n -27q3). i ;.l t .
.+(d)C33 lfSat;Ulities ay E Coptmur;Pan, 4atodJauzy. 1991 (1 to
!S . Fp~n~ lr~he year, cndet D~ccember 3 i2 I3..
1,19lY9n,
?03)~..^;..
n.
+(d) 34- Trust Agreeenr for Entergy Gulf States' Executive Continuity Plan, by aild between Entengy Gulf Stats anl First City Bank, Texas-Beauont, N.A. (now Texas Commerce Bank),
\. , ,t;y. I i 20I);;' 1991 (r0i to kFom101TKfbv1 tlyear~end Dcer 31, 1992 m 1-2703).
.*(d>35 . ,Gplf StasUtiliies Board o$Dietor premt Pla, dated Februa s5, 1991 (10-8 to Form 10-K for he year ended December 31, 1990 in 1-2703).. .* t
+(da6. tGu$ S IJtiitie Company Emplye',7frustee Re t Pla.,fctiv July 1,.195 as
.. ;.; amnde,,conjn~ucd and completely rsd 1, 1989,an A nt No.l
.e.ective.Janury 1,-1993 .(106to Fonm 10-K b the year ended December 31, 1992 in I-2703).' . .
(d),3?-;Agreemeand ~Ia, o~Rorganization, da.e4 June 5 1992, be rGulf States and
!*... ' E ntrgy Cgrporation (2 to Form 1rI.4 ted ,une 8; 1992 in 1-2703).,.-
.e . - .1 . . ' ^ . ' ,I . " ' . . .
E-24
-4(d) 38 "- Gulf States Utilities Company Emp Stock Ownership Plan, as amended, continued, and
-completely restated'efiective January 1, 1984, and January 1, 1985 (A to Form 1-K, dated December31, 1985 in 1-2703).
+(d) 39- Trust Agicnt wxkerthe Gulf States Utilities Company Employee Stock Ownersip Plan, dated December 30,1976, betwcen Enterg Gulf Stdteg and the Louisiana National Bank, as Trustee (2-A to RegistrationNo. 2-62395). -
4;;(d)40-
; )4 -
Letter Agieement .dated Setember 7, 1977 between BEnty Gulf States and the Trustee, delegati* c*rtai of the Tnistee's fimctio :to the ESOP Committee (2-B to Regitai Statement No. 2-62395).
+(d)41 -' Gulf States Utilities Company Employees 'Ihrift Plan as amended, contimid and completely restated effective as of January 1, 1992 (28-1 to'Arifdndment No. 8 to Registation No. 2-76551). +(d) 42 - Restatement of Trust Agreement under the Gulf States Utilities Company Employees Thrif Plan, reflecting changes made through January 1, 1989, between Entrgy Gulf States and First City Bank, Texas-Beaumont N.A., (now Texas Commerce Bank), as Trustee (2-A to.Form 8-K dated October20, 1989 in 1-2703).
1
. . L8t
.*, . ),.***
(dy'.43 ' Operitit Agement ;bAwect Energy Operations and ntery Gulf States, dated as of December31, 1993 (B-2(Q) to Rule 24 Certificate in 70-8059). (d) 44- Guamntee Agement beteen Eufcrfy Coiporation and Entery Gulf States, dated as of December31, 1993 (B-5(a) to Rule 24 Certificate in 70-8059). .. (d) Sem'be Agr~cr~nt with Entergy Services, dated as of December 31, 1993 (B-6(c) to Rule 24 Certificate in70-8059). ::
.+(d) 46-' Amndnent to Employ entAgrentbetweei J. L. Donnellyad E y Onf States, dated December22, 1993 (10(d)S7toForm 10-KfbrtheyearendedDecenibr3lj1993 in 1-2703).
(d) 47- Assignment, Assumption and Am~ndment Agreemet to Lettef of Creditind Reimbursement Agrement between Entergy Gulf States, Canadian Imperial Baik of Comwerce and Westpac Banking Corporation (10(d) 58 to Form 10-K for the year ended December 31, 1993 in 1-
- '2703)..
K~ ) ~~ - : I .. .2 . .. (d) 48" '- Third Amendmnt,'dated January 15 1994, to tegy Corpatiom and Subsidiary Companies Intercompany Income Tax Allocation Agreemnt (D-3(a) to Form U5S for the year ended December31, 1993).
* * ~ . * '_,,,;wl *. .,*'8;**
- (d) 49- Agreement as to Expenses ^iid Liabilities between EntergyGulf States and Entergy Gulf States Capital I, dated as of January 28, 1997 (10(d)52 to Form 10-K fr the year ended December31, 1996 in l12703)2' .:
(d) 50- Refunding Agreement dated as of May 1, 1998 betwen Entergy Gulf States and Parish of Iberville, State of Louisiana (B-3(a) to Rule 24 Certificate dated May 29, 1998 in 708721). E-25
(d) 51-. Rending Agreement dated as of May 1, 1998 between Entey Gulf States and idustrial
- Developni Board of the Parish of Calcasieu, Inc. (B-3(b) to Rule 24 Certificate dated January 29, 1999 in 70-8721).
(d) 52- Refunding Agreient (Sexies 1999-A) dated as of September. 1, 999 between Entergy Gulf States and Pazish of West Feliciana, State of Louisiana (B-3(c).to Rule 24 Certificate dated October 8, 1999 in 70-8721). .. (d) 53-. Refunding Agr=ment (Series 1999-B) dated as of Septerber 1, 1999 betwee Entergyuif States and Parish of West Feliciana, State of Louisiana (B-3(d) to Rule 24 Certificate dated October 8, 1999 in 70-8721).
+(d) 56- 1998 Equity wneship Plan of Entergy Corporation-and Subsidiaries (Filed with the-Proxy Statement dated March 3 0- 1998). +(d) 57- Letter to John Wilder offering Employment (10(b)62 to Form 10-K for the year ended December31, 1998 in 1-9067). ... , .. *.
Entergy Louisiana .* . . . ... (e) I - Agreement, dated April 23, 1982, among Entergy Louisiana and certain other System companies, relating to Syster.Planning and Deveopament and Intra-Systen Transactions (10(a) 1 to Form 1.0-K for the yar.ended Decenber 31, 1982, in 1-3517). ; (e) 2 - Middle. South Utilities System Agency Agreement, dated. December 11, .1970 (5(a)-2 in 2-41080). (e). 3 - Amendfmnnt dated as .of Febnzuiy 10, 1911, to Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)4 in 2-41080). . (e) A ie dated May. 12, 1988, to Middle South Utilities System Agency Agreement, dated
-. . Deccmber 11, 1970 (5(a)4in2-41080). .*
(e) 5 -: Middld South Utilities System Agency Coordination Agrennt, dated December 11,. .1970 (5(a)-3 n 2-41080). ..- (e) 6 - Service Agreemnt with Entergy Services, dated as ofApril 1, 1963 (5(a)-5 in 2-42523). (e) 7 - Amendment, dated as of January 1, 1972, to ServiceAgreement with Entergy Services (4(a)-6 in 2-45916). n (e) 8 - Amendment, dated as of April 27, 1984, to Sevice Agreement with Entergy Services (10(a) 7 to Form 10-K Ar the year ended December 31, 1984, in 1-3517). (e) 9 - Amendment, dated as of August 1, 1988, to Serice Agreement with Entergy Services (10(d)-8 to Form 10-K f*r the year ended December 31, 1988, in 1-8474). (e) 10-1 Amiendnent, dated January 1, 1991, to Service Agreement with Entergy Services (10(d)-9 to Form I0-K forthe year ended December 31, 1990, in 1-8474). E-26
(e) 11- Aidmnt, datedJanalr i,1992, io Service AgrementSwithEtrgyServices (1O(a)-l to
'Form lO-KfortheyendedDecanemr31, 1994'ia 1-3517).'
(e} -12through . (e) 25- See10(a)-12throu&J10(a)-25 abve.' (e) 26-; Fuel Leasr, dated as oflfamzary 31, 1989, betw Rive Fuel Company #2,. Inc., and Entergy Louisiana (B-l(b) to Rule 24 Certificate in 70-7580)
- (e) 27 - Reallocafion Ag wnt, ded as of July 2&,l981, an S Energy and certain other Systemcompmaies(B-l(a)in 7O-6624): '
(e :28 - Coniprrniseand Setderieat AOfeent, dated June 4, 1982, betw Texaco, Inc. and Entergy Louisiana.(28(a) to Fonu8:K ated-Juia 4,1982, i-14474).
- +() 29 r- "Post-Redrejment Plan (lD(c)23.to'-Forznn 10-K for-1e year eided Decaiber 31,:1983, in 1-8474).
(e) 30- Unit Power Sales Aement dated ad of June 10; 1982, betven Systn Enerky and Faeigy Arkansas, Entergy Louisiana, Entergy Mississippi and Etergy New Orleans (10(a) 39 to Form 10-K for the year ended December 31, 1982, in 1-3517). (e) 31- First Amendment t the Unit PowerrSalds Agre , dated. as ofirine 28,1984, betwe System Energy and Entergy Aflinsas, Entergy Iuisiana, Entergy Mississippi and Entergy
'-"i i-eNewV.Orleiz (l9tdFonn .10-Qfthequr ede Sepmb&i30, l984;in 1;3517).
(e) 32- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
- X l * . R ; U ~~~~~~~~~~~~~~~~~~~~~~~. - I ? wW.
(e) 33- Middle South Utilities, Inc. and SUib~idiazy Cmpani-s Intrcomiay Tax Allocation Agreement, dated April 28, 1988 (D-1 to Form USS for the year ended December 31, 1987).
*-S -. .... I~*.S
;t 9 '3 -. ; . '.; 9 i%-: * .. !:. * . . . -. '
(e) 34- First Amendment, dated January 1, 1990;t6 the Middle South Uili ies, Inc. and Subsidiary Companies Intercompany Icome Tax Allocation Agrement, dated January 1, 1990 (-2 to'
-s *! Fonfuzt5Sfotheyeai nded eIbher31; 189). i . .- ;r . ;.,
(e) 35- Second Amendment dated January 1, 1992, to the Eatergy 'Corporation and Subsidiary Companies Intercompany hib6me Tax Alloj Agrft.D-3 to Form'U5S forte year ended December 3 I, 199). (e)i 36- Third Amendment datW;Janary 1; 1904 toEntergyrCorjoration and Subsidiary Companies Intercompany Income Tax Allocation Ageement (-3(a) to 'Form USS for the year ended December31, 1993).
*9- ; . . , e.
(e) 37- Contact for Disposal of Spent Nuclear Fuel aid/or .H-Level Radioactive Waste, dated February 2, 1984, among DOE, System Fuels and Entergy Louisiana (10(d)33 to Form 10-K
*.*;-forthey earendedDecenber3l, 1984,in'l-8474). - '
(e) 38- Operating Agreement between Entergy Operations and Entergy Louisiana, dated as of June 6, 1990 (B-2(c) to Rule 24 Certificate, dated June 15, 1990, in 70-7679). E-27
(e) 39-. uarantee Agreement bowrecn Entry CroratoaoA dEntergy L=nisia dated as of Septembe 2D, 1990 (B-2(a)to.Rule 24,Certifiqata, datedSeptem1her 27, 1990, in 70-7757).
+(e) 40- Executive Financial Counseling Program of Entergy Corporation and Subsidiaries. (0(a) 52 to Form IO-KfortheyearendedDecnber3l, 198,in.i-351J ; +(ej 41 - Entergy. Coprt A tiye Plan (1(a . Wto Form. lp- for the year' ended December 31, 1989, in 1-3517):-.,:; . ... . . J.. ; +(e) 42- Equity. Ownership lan, opfEptergy,Corporation and Subsidiaries.. (A-4(a) to. Rule 24 Certificate, dated May24, 1991,in707831): .. ', ,. ,..... .. ; j +(e) 43- Amendmnt NW i tothe E ity;OQb.ipj4u pEntergyCorporation, and Subsidiaries (10(a) 71 tor-orm 10;-Kfbrthe-yearqnxdedec:pibqr31j 1992 in 1,-31.7). ... +(4c).44- 199 ity p lan of E orporatinq-nd Subsidias Fd with th ry Statement dated March 30, 1998).
.+(eX 45- ,-SuppIemnta1.lletirementPan (10(ay 69 to VoM l,0-K for the year ended Depember 31, 1992
*-, ,;;in inI^S1 1)* 9' *- , .
- ~ v
- i
-.. : ;' ' .*~' -
- s . . . t~ ;*T~ >. * * * ;i
+te) 46- Defined Contribution Restoration.Plan of Enty Corporation and Subsidiaries (10(a) 53 to
- Form m lmKfbt h wee n 31989jiu1-3117)... *.
A i*j.
+te) 47- Executive DisabiliW Pla-pEqtergy Corporion an Sbsidiarirs (lO(a) 72 to Form 10-K for thc year ended December 31, 1992 in 1-3517).
*
- r (-
. I.ft.
Ne) 48-. Stock Plan fir Outside Directors of Entergy Corporation and Subsidiaries (10(a) 74 to Form 10-K A tWieyear s edDecccbr31;'19,92iw1-3517). .,:: .. tr 1
- . ~ . .. . ,r. ¢.# ^ ; w 3 0i . -:'. * .; .
+(e) 49- Agrement bdwe Entergy, Corporation and Jery D. Jackson (10(a) 67 to Form 10-K for the
. . dedfWle i!319~22 J, 173 .'.. ' . .
~~~~~~- .i 'i -. *v~.~st; 1--L '} d f. .
'J **:'t
+(e) 50- Summary Desziption of etirc4 OutsidePjrtcoBenefitPlan (IO(c)90 tq Form 0-K for the year ended December 31, 1992 in 1-10764).
,Ne) 51.- .Anditoefd oibution RestorationA a-n of Entergy Corppotion and Subsidiaries (10(a) 81 toForm 10-Kfor theyearendedDecember.31, 1993 in 1-11299)..
+(e) 52-. System ExqcuieReme;,t Plan (10(a) 84 to. Fo;n tQ-,K for the year ended Decembex 31, 1993in,1- 1299). . *:.* . : ..- .-
(e) 53- Installment Sale Agreement, dated July 20, 1994, between Entergy Louisiana and St. Charles '., , ., Parish, Luisi~nx QB-6(e) toRule,4 Certilcate dated August. 11994 in 7,-7822)..
, . , .,,~~~~~~X ,199... 7,Q;,
;.,i~
.T ''*
(e) 54- Installmnat Sate Agreement, dated November. 1, I995, between Entergy Louisiana and St Chales Parish, Louisiana (B-6(a) to Rule 24 Certificate dated December 19, 1995 in 70-8487). - : b !S.- , .I . E-28
(e) 55- Refunding Agreement (Series 1999-A), dated as of June 1, 1999, between Entergy Louisiana and Parish of St. Charles, State of Louisiana (B-6(a) toule 24 Certificote dated July 6, 1999 in 70-9141). ... -. : (c) 56- Refunding Agreement (Series 1999-B), dated as of June 1, 1999, betwe Entergy-Louisiana and Parish of St. Charles, State ofLouisiana (B-6b) to Rule 24 Certificate dated July 6, 1999 in 70-9141). (c) 57-' Refn Agreement -(Series 1999-); dated. as, of sQober 1, 1999, between Entergy Louisiana and Parish of St. Charles, State of Louisiana (B-iI (a) to Rule 24 Certificate dated October 15, 1999 in 70-9141).
.- s _ , '*l ,' '
(e) 58- Agreement as to.oExp~s-and Liabifities between BEtergy Loussia Ji and Enrgy Louisiana Capital I dated July 16, 1996 (4(d) to Form 10,Q for .the.quarter ended June 30, 1996 in 1-8474). -. (e) 59- Letter to John Wilder offing Employment (10(b)62 .to Formi,10-K for the year ended December31, 1998in1-9067). S 1r~ Missisippi. . ..... ( Agreement dated April 23, 1982, among Entergy Mississippi and certain other System companies, relating to System Plannmig and Development and Intra-Systern Transactions (1O(a) ltoFonnlO-Kfor.theyearededDecembe{31;.1982in.1-3517). .. (f 2 - Middle South Utilities System Agr t daed Do Ii, 1970 (5(a)-2 in 2-41080). A Age ; , d December 11, 1970 (5(.;.2 in
, * .. :. t z j sst., - ; @* :1 (f 3 - Amendment, dated February 10, 1971, to Middle South Utities System Agency Agreement,
. :.dated-Decetnber
! 11 1970.(5(a)4'ill241080). !.
@ <~~~~~~~~~~~~~~~~, *.1 s .t -,
r;F ;--i () 4 -- Amndment, dated May 12 1988, to Middle South Utilities System Agency Agreement, dated
- ecem.D iber-11; 1970.(5(a) 4 n241080). ... ,. ..
() 5 - Middle South Utilities System Agency Coordinatioh Agreemeent, datod December 11, 1970 (5(a)-3 in 2-41080). (f .6 -,Serice Agreementwith EntergyServices, dated as ofApril 1,1963 (Din37-63). () 7 - Amend nt, dated January 1,1972, to Service Agreement with Entergy Services (A to Notice, dated October 14, 1971, in 37-63). (f) 8 - Aiedment, dated Apri1 27, 1984, to Service Agrent 'wi Ente Services (10(a) 7 to Form 10-KfortheyearendedDecember3l, 1984, in 1-3517). 44 . ' ;' I . -- ' . . . ' -,it;l ,.- . - H 8 t!-' -. ( 9 - Aendment, dated as of August 1, 1988, to Service Agreement with Eitergy Services (10(e) 8 to Form 10-Kforthe year ended December 31, 1988, in 320).
. I s.- , .' , i\;
() 10 -- Amed ent, dated January 1*l991, to Service Agreement with Entergy Services (10(e) 9 to Form IO-K for the year ended December 31,1990, in 0-320). E-29
(f) 11- Amendment, dated January 1, 1992, to>Service Agrnenrwith Entewgy Services (10(a)-Il to Form 10-K fbrtheyearended Decenber 31, 1994 in 1-3517). (f) 12:though (f) 25- SeelO(a) 1O(a)-25above. (f) 26- Installment Fale Agreement, dated as of June, 1, 1974, between Entergy Mississippi and
- Washington County:Mississippi Q3 2(a) to Rule 24 Certificate, dated August 1, 1974; in 70-5504). -
(f) 27- Amended and Restated Installment Sale Agreem=t dated as of April 1, 1994, between Entergy Mississippiand.Warren CountyMississippi (-6(a) to Rule 24 Certificate dated May 4, 1994, in 70-7914). . (f) 28- Amended and Restated Intllent Sale Agrcment, dated as of April 1, 1994, between Entergy Miisissippi aWd Washington Couity. Mississippi, (B-6(b) to Rule 24 Certificate dated May 4, 1994, in 70-7914). (f) 29- Refinding Agreement, dated as of May 1, 1999, between Entergy Mississippi abd Independce County, Arkansas (B-6(a) to Rule 24 Certificate dated June 8, 1999 in 708719);'
.. ~ ~ ~
(f) 30- Substitt PverA ent, dated as of May 1, 1980, among Eniergy Mississippi System Energy and SMEPA (B-3(a) in 70-6337). (f) 31- Amendment, dated December 4, 1984, to the Independence Steam Electric Station Operating Agreement (10(c) 51 to Form 10-K for the year ended December 31, 1984, in 0-375). (f) 32- Amendment, ated December 4, 1984, to the Independence Steam Electic Station Ownership Agreement (10(c) 54 to Form 10-K for the year ended December 31, 1984, in 0-375).
~~ ~ ~
* *- t> '* ; § . :. I'
.?j*
(f) 33- Owners Agreement, dated November 28, 1984,-among Entergy Arkmnsas, Entergy Mississippi and other co-cwners of the Independence Station (10(c) 55 to Form 10-K for the year ended December31,1984in0-375). .r. (f) 34- Consent, Agreement and Assumption, dated December 4, 1984, among Entergy Arkansas, Entrgy.Missippi, other co-owners of the Independeice Station and United States Trust Company of New York, as Tmstee (1O(c) 56 to Fonn 10-K for the year ended December 31, 1984, in 0375). ' - -' () 35- Reallocation Agreement, dated as of July 28, 1981, among System Energy and certain other System compa ies (B-1(a) in 70-6624). +(f) 36- Post-Retiremmit Plan (10(d) 24 to Form 10-K for the year ended December 31, 1983, in 0-320). - -' * (f) 37- Unit Power Sales Agreement, dated as of June 10, 1982, between System Energy and Entergy Arkansas, Eergy Louisiana, Entergy Mississippi, and Entergy New Orleans (10(a) 39 to Form 10-KfortheyearetidedDecember31, 1982;in 1-3517). E-30
() 38- First Amendment to the Unit Power Sales Agreement, dated as of June 28, 1984, between System Ene and Entergy Armnsas, Entry Louisiana, EUteg Mississippi and Entergy New Oreans (19 to Form 0l0Q for the quarterended September 30, 1984, in 1-3517). (f) 39- Revised Unit Power Sales Agmnt (IO(ss) in 33-4033). (f) 40 - Sales Agreement, dated as of June 21; 1974, between System Energy and Entergy Mississippi (D to Rule 24 Certificate, dated June 26; 1974, in 70-5399). (f 41- Service Agreement, dated as of June 21, 1974, *betwen-System Energy and Entegy Mississippi (E to Rule 24 Certificate, dated June 26, 1974, in 70-5399). (f) 42- Partial Tennination Agreenient dated as of Decenber 1, 1986, ween System Energy and Entergy Mississippi (A-2 to Rule 24 Certificate dated January 8, 1987, in 70-5399). (f) 43- Middle South Utilities, Inc. and Subsidiary Companies Intercompany.Income Tax Allocation Agreement, dated April 28, 1988 (D-1 to Form USS for the year ended December 31, 1987). (f) 44- First Amendment dated January 1, 1990 to the Middle South Utilities Lac. and Subsidiary Companies Intercompany Tax Allocation Agreement (D-2 to Form U5S for the year ended December 31,1989). . (f) 45- Second Amendment dated January 1, 1992, to the Entergy Corporaiion and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-3 to Form US for the.year ended December 31, 1992). . (f) 46- hird Amendment dated January 1, 1994 to Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-3(a) to Form U5S for the year ended Decnber31, 1993).
+(D) 47- Executivc Financial Counseling Program of Entergy Corporation and Subsidiaries (10(a) 52 to Form IO-Kfor the year ended December 31, 1989, in 1-3517). +(I) 48- Entergy Corporation Annual Incentive Plan (10(a) 54 to Fonm 10-K for the year ended December 31, 1989, in 1-3517). +(f) 49- Equity Ownership Plan of Entergy Corporation.and..Subsidiaries (A,-4(a) to Rule 24 Certificate, dated May 24, 1991, in 70-7831). +(f) 50- Amendment No. 1 to the Equity Ownership Plan of Entergy Corporaton and Subsidiaries (10(a)71 to Form 10-K for the year ended December 31, 1992 in 1-3517). +() 51- 1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries (Filed with the Prxy Statement dated March 30, 1998). . . +() 52- Supplemental Retirement Plan (l0(a)69 to Form 1-K for the year ended December31, 1992 in 1-3517).
E-31
+(f) 53- Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries (10(a)53 to Form 10-K flor theyear eided December 31, 1989 in 1-3517). +(I) 54- Executive Diability Plan of Enter Corpoiation and Subsidiaries (10(a)72 to Form 10-K for the year ended December31, 1992 in 1-3517). +(f) 55- Stock Plan for Outside Directors of Entergy Corporation and Subsidiaries, as amended (10(a)74to FormI10-K fithedydearzdh December31, 1992in 1-3517). +(f) 56- Agreemet betwe Entergy Corporation and Jerry D. Jackson (10(a)-67 to Form 10-K for thc
*.year ended Drnbwr3l; 1992 in 1-3517):.
; t .* . . ' . . - '. .. -- " '-
+() 57- Summary Description of Refired Outside Director Benefit Plan (10(c)-90 to Form 10-K for the yearended Decnber31, 192in 1-10764). *- - ; .
... .. . . s..;, t. . .. .4:. - :
+(f) 58- Amendment to Definid Contribution Restoration Plan of Entergy Corporation and Subsidiaries (1(a) 81 tonn I-Kfortho erddDe ber 31, 1993 n -11299). +(f) 59- System Executive Retirement Plan (10(a) 82 to Form 10-K for the year ended December 31, 1993 in 11299)J '. - .. +(I) 60- Letter to John Wilder ofbing Employment (10(b)62 to: Form 10-K for the year ended December31, 1998 in 1-9067). Ent NewOrleans *. ,. . , (g) I - Agreement, dated April 23, 1982, among Entergy New Orleans and certain other System comp mes, relating to System Planing and Devel6pnent and ntra;S'stemn Transacticns (10(a)-1 to Form 10-K frorhe yeatended Deccinbei 31, 1982, i1-3517). (g) 2 - Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)-2 in 2-41080). . - -.
- iJi .. , .
(g) 3 - Amendment dated as of February 10, 1971, to Middle South Utilities System Agency Agreement, dated December 1, .1970 (5(a)-4 in 241080). (g) 4 - Amendment, dftd May 12, 1988, to Middle South Utilities System Agency Agreement, dated
- lDcenber l, i970(5(a)4In2-41080).
(g) 5 - Middle South Utilities System Agency Coordination Agrment, dated December 11, 1970 (5(a)-3i 24 1080). '* : - : (g) 6 - Service Agreement with Entergy Services dated as of April 1, 1963 (5(a)-5 in 2-42523). (g) 7 - Amendment, dated as of January 1, 1972, to Service Agreemeit with Entergy Services (4(a)-6 in 2-45916). (B) 8 - Amendment, dated as of April 27, 1984, to Service Agreement with Entergy Services (10(a)7 to Form 10-K forthe year ended December 31, 1984, in 1-3517). E-32
1 9 -- Amtdment, datedcas of Aughst 1, 1988, to Service Agnro ent with EnterkyServices (10(f)-S to Form 10-K forthe year ended December 31, 1998;in 05807). : ' (g)' '104 W meznt, dated Jamiary'1,1991,'td Servioe e t with EBtergy Services (10-9 to. Form 10-K forthe year ended December31, 1990, it 0807): - t :i (g); ;i AAnem td ted 'Jamrar-lf'1992, to Service Agr it with Entergy&rvices (10(a)-l to Form l:1Kforyearcidedboceinber31,;1994in P). i * ' (g) 25- See 10(a) 10(a)-25 above.
.26 w-lRallocation Agreeient, dt astof July 28,41981;rnozig System Enegy and certain other System cmpanies (B-1(a) in 70-6624).
- W)27o -Post-R'i et~iPln(10()22 to Fomi 10-K for the year ended Deccbei 31, 1983, in 1-1319). ;,.; .
- st) ;tnWtPot.rSales e Agramzient, dated as otiue 1 0 ,i 1 9 8 2 , belen 'Sjste~ Ehery and Entery Afkasas, Eitergy Louisiana, EntyjMissislppi and* Enter Ntw Oileans (10(a) 39 to Form 10-K for the year ended December3l, 1982, in 1-3517).
(g) 29- First Ainaidment to the Unit Power Sales Agreaiknt, dathd ;as vf Jue 28, 1984, between System Energy and Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy
- * -0; New Odeans (19 to Form 10-Q forthe qtr ede Stember 30, 1984, init-3517).:
(g) 30- Rvised Unit Power Sales Agreement (O(ss) in 33-4033). (g) 31-. Transfer Agreement, dated as of June 28, 1983, among the City of New Odeans, Entergy New Orleans and Regional TransitAuthority (2(a)toForm 8-R, dated June 24, 1983, in 1-1319). (g) 32- Middle South Utilities, icahd Subsidiary Companies It6ioompany liicome Tax Allocation Agment, dated April 28, 1988 (D-1 to Form U5S forthe year ended December 31, 1987). (g) 33- First Amendment, dated January 1, 1990, to the Middle South Utilities,'Inc and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-2 to Form U5S for the year
': .ndedDeciznber31,1989);. .: . .. * . . -.
(g) 34- Second Amendment dated January 1, 1992, to the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agicement (D- 3 to Fotm U5S for-the year ended December 31, 1992). (g) 35- Third Amendment dated January 1, 1994 to Entergy Corporation and Subsidiaiy Companies Intercompany Income Tax Allocation Agreement (D-3(a) to Form USS for the year ended
.1i s ..jDeceber31, 993), - . . . . ;-; . +(g) 36- Executive Financial Counseling Program of Entergy Corporation and Subsidiaries (10(a)52 to Form10-KfortheyearendedDecember31, 1989,in-1-3517). ;;
E-33
+(g) 37- Fztr Corporation Annual hcentive Plan (10(a)54- to -Form 10-Y. for the year qe9d Decembe 31, 1989, in 1-3517). . .. .- +(g) 38- Equity. 9nrsip Plan, of Entergy Corporation.and Subsidiaries (A-4(a) to Rule 24 Certificate dlted ay 24,. 1991, in 70-7831). , +(g) 39- Ama*=t. l o. 1,to the Equity Ownership Plan of Entergy Corporation and Subsidiai (l0(a)71 toForm 10-KfbrteyearendedDecember31, 1992in 1-3517). +(g) 40- 1998 Equity Ownership Plan of Entcergy Corporation and Subsidiaries (Filed. with the Prow Statement dated March 30, 1998). .. . . .: * +(g) 41 Supplemental Retirement Plan (l0(a)69 to Form 10-K for t year ended ecember 31, 1992 in 1-3517). . '; - ., +(g) 42- Defined Contribution Regoration PaI of- EnteyCorporation, and Subsidiaries (IQ(a)3 to Form 10-KfortheyearendedDecember31, 1989in 1-3517).
- +(g) 43- ExeutieDisabit Plan of Ectey Corporationand Subsidiaries (10(a)72 to Fonn0-K for the year cndcDecnber.31j992 in 1-3517); -,
+(g) 44- Stock. Plan fr Outside Directors of Entergy Corporation and Subsidiaries, as amended (lO(a)74-to F(rm 10-K forthe yar ended Decanber 31, 1992 i1-3517). . ,* ,, ,.-. :..,- ,t-- , ,. ;.. . +(g) 45-. Agrment beeen Ente Corporation and Jery D. Jacks (IO(a)-67 to FoM 10-K for the year ended December 31, 1992 in 1-3511). +(g) 46- Summary Description of Retired Outside Director Benefit Plan (10(c)-90 to Form 10-K for the ye endedDeer3IJ992in 1-10764). . * ..
- r *uW De@em~ 31, *. . *
+(g) 47- Amendment to Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries (10(a)IW FDr'i.KforhpycarendedDcmber3l, 1993 in 1-11299)..
* , t ;, ** .- a . 2* -
+(g) 48- System Executive Retirement Plan (0(a) 82 to Form 10-K for the year ended December31,
. - 1993in1-11299) .. . . . ... .
+(g) 49- Letter to Johir Wilder offering Employment (10(b)62 to Form 10-K for the year ended December 31, 1998 in 1-9067).
(12) StatementRe Computation of Ratios .r.
*(a) Entergy Arkansas's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed
- Charges and Prefrr Dividends, as defined. . . .
*(b) Entergy Gulf Se' Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferm Dividends, as defined. *(c) Entergy Louisiana's Computation of Ratios of Earnings to Fixed Chargei and of Earnings to Fixed Charges and Prefemed Dividends, as defined.
E-34
- (d) Entergy Mississippi's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined.
- (e) Entergy New Orleans' Computation of Ratios of Earnings to Fixed Cha and of Earnings to Fixed Charges and Pefrrcd Dividends, as defined.
- (f) System Energy's Computation of Ratios of Earnings to Fixed Charges, as defined.
- (ii) Subsidiaries of the Registrants (Z3) Consents of Experts and Counsel
- (a) The consent of PricewaterhouseCoopers LLP is contained herein at page 219.
- (24) Powers of Attorney (27) Financial Data Schedule
- (a) Financial Data Schedule for Entergy Corporation and Subsidiaries as of December 31, 1999.
- (b) Financial Data Schedule for Entergy Arkansas as of December 31, 1999.
- (c) Financial Data Schedule for Entergy Gulf States as of December 31, 1999.
- (d) Financial Data Schedule for Entergy Louisiana as of December 31, 1999.
- (e) Financial Data Schedule for Entergy Mississippi as of Dcember 31, 1999.
- (f) Financial Data Schedule for Entergy New Orlean as of Deccmber 31, 1999.
- (g) Finncial Data Schedule for System Energy as ofDecember 31, 1999.
- Filed herewith.
+ Management contracts or compensatory plans or arrangements. E-35}}