ML20072P600

Annual Financial Rept 1982

ML20072P600
Person / Time
Site:	Arkansas Nuclear
Issue date:	02/11/1983
From:	ARKANSAS POWER & LIGHT CO.
To:
Shared Package
ML20072P591	List: 0CAN038334, Forwards Annual Financial Rept 1982 ML20072P600
References
NUDOCS 8304040320
Download: ML20072P600 (40)

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Al%I is successfully breaking the stranglehold of oil on Arkansas' energy future.

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PERFORMANCE HIGHLIGHTS 1982 1981 Increase Revenues from operations (000)

$1,046,143 $1,015,561 3

Operation and maintenance expenses (000)

$ 669,497 $ 679,925 (2)

Allowance for funds used during construction (000) $

23,208 $

23,253 Net income (000)

$ 107,372 $

96,140 12 Capitalization-end of year (000)

(investment required to provide service)

$2,058,542 $1,854,492 11 Construction expenditures (000)

$ 208,248 $ 372,694 (44)

Total utility plant investment-end of year (000)

$3,004,440 $2,811,728 7

Customers Electric (end of year) 535,381 531,959 1

Gas (end of year) 65,824 65,464 1

Energy sales to retail customers Electric (millions of kilowatt hours) 14,121 14,924 (5)

Natural Gas (millions of cubic feet) 11,505 11,176 3

Employees (end of year) 5,165 4,981 4

Peak demand (megawatts) 3,541 3,831 (8)

Average use per customer (kilowatt hours)

Residential 9,814 9,647 2

Commercial 50,442 49,274 2

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t Prssidsnt's Persp:ctiv2 As a result of our efforts to restore We.have been forced by economic end maintain the Company's financial necessity to seek even further adjust-s' ability, Arkansas Power & Light ments in our rate structure. This action experienced improvement in its fiscal became particularly important since health in 1982.

the Arkansas Public Service Commis-Company management is continu-sion granted only a $29 mi!! ion annual l

ing to take steps to assure that our increase in retail rates following financial integrity will allow us to meet hearings on an application filed in our important responsibilities to our May,1981, seeking an increase of j

customers, investors and employees.

approximately $101.4 million. AP&L Those initiatives include rate filings has appealed many of the issues denied keyed to prompt recovery of opera-by the APSC in this case.

tional costs while earning a fair return in mid-November,1982, an applica-on investment, completion of our tion requesting a $93.2 million annual current fuel diversification program to increase in Arkansas retail rates over aid system reliability and economy, the amount on appeal was filed with and the continuing application of cost the APSC. Final decision on this control measures to make AP&L even Company request is anticipated by the more efficient.

third quarter of 1983.

Four benchmarks of AP&L '

Other major rate activity in 1982 performance in 1982 illustrate our included the granting of approximately progress in striving to attain corporate

$5.6 million in annual retail revenue financial objectives:

increases for Missouri customers and e Revenues from operationsincreased approximately $9.5 million in whole-3% from $1,015,561,000 in 1981 sale rate increases for Arkansas and.

to $1,046,143,000 in 1982.

Missouri wholesale customers. An e Operation and maintenance application filed in 1982 totaling $9.9 expenses were reduced 2% from million in annualincreases for Missouri

$679,925,000 in 1981 to retail customers is currently pending.

$669,497,000 in 1982.

Our goal remains to keep electric e Net income improved 12% from costs at their lowest practical level.

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$96,140,000 in 1981 to $107,372,000 A major contributing factor to attain-in 1982.

ment of that objective will be the t

e Annual return on average common completion of our fuel diversification l

equity for 1982 was 13.1% compared program in shifting our reliance away with the 1981 return of 12.4%.

from higher-cost natural gas and oil j

While net income did show a 12%

to coal and nuclear fuels. While this i

improvement, this was in part due to effort is discussed in-depth in the next increased capitalization (investment section of this Report, it is noteworthy required to provide service) which was that in January,1983, Unit 1 of the coal-up 11% over the 1981 level, fueled Independence Steam Electric,

Electric energy sales and peak Station near Newark began commer-demand were atlowerlevelsin 1982 as cial operation. Unit 2 at Independence compared with 1981. For the most part, is scheduled for completion in early this reduction can be attributed to an 1985. Without question, our program abnormally mild summer period and of incorporating two nuclear-fueled to recessionary effects on industrial units and four coal-fueled units into our generating system means long-customers.

term reliability and cost-saving advantages for our more than 535,000 electric customers.

This fact was confirmed by a comprehensive Management Review of the Company completed last October by the nationally-recognized independent consulting firm, Theodore Barry & Associates.

Commissioned by the AP&L Board of Directors in early 1982, the study was conducted overa six-month period and was a follow-up to the Management Review of AP&L conducted by TB&A in 1977.

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corporate strategic plan Q. h.J;( @y 4Oi We are grateful for the conhdence

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p Middle South Utilities System, we are optimistic that the decade of the Highlights from the Review report "AP&l has made sigmficant strides in Eighties will be an era remembered include:

rmproving its operations. and the average w th pride in energy reliability and (1) "A key charactenstic of AP&L cost per kilowatt-hour pard by its customers area progress.

has been its continuing commitment to is wcil below those pard to most other l

improving its operational effectiveness U S. clectnc utrhtws AP&L rs dehrering and efficiency," the report stated.

cost-effectrvc scrrice, to its cu stomers. Most

[ /g, (2) AP&L has adopted the best of of its maior operatwnal problems harc the industry innovations and been solved durrng the last frve years.

Jerry L Maulden President & Chief Executive Officer approaches and has applied them in a AP&LN opportumtres for improvement arc way that will yield sohd. long-term down to a 'short hst' and thosc orportu nitws benefits In TB& A's expenence, arc of the kind that can be attacked only tew other utdities marry the organiza.

by a sophisticated utihty. such as AP&LJ i

l tional structure with individual talents In the area of customer and l

as well as AP&L '

community relations, w e implemented l

(3) In commentmg on AP&L's a pioneenng effort in N82 through I

planning processes, TB& A said:

new " Helping Hand Programs" l

"Through a senes of strong manage-designed to assist the dderly, handi-ment initiatives. the Company leads capped and needy in making their the industry '

electnc service more economical and (4) After reviewing AP&L's convenient. These innovative projects management of the engineenng and are being adopted by numerous l

construction of Independence Staton, utilities across the nation as a model l

the consultant concluded. "The results assistance program I

are the industrv's state-of-the-art Each of these aid projects was TB& A has seen no better-managed designed to meet a particular customer power plant project anywhere in need For example, Project Deserve is the mdustry "

a jomt effort by the American Red (5) "We can say that based en our past Cross and AP& L to assist persons with circrrenic in the mdustry. AP&l today is short-term, energy-related emerg(n-one of the better-managed clectuc utrhty cies. Funding is bemg provided by wmpamc3 rn the countrv."the report stated voluntary contnbutions from Company a

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for Arkansas' Energy i

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. A Approximately 1,100 cars of louusulfur Wyoming coal arrive by unit train weekly at the White' Bluff Steam Electric Station (as shown on facing page). Coal not used immediately for electric generation is stored in the coal yard adiacent to the two umt facihty (shown above).

The stranglehold of oil-particularly AP&L management began laying a foreign oil-on America's economy solid foundation for fuel diversification has been a major contributor to our when our existing natural gas contracts nation's inflationary environment since were cancelled by our primary the 1973-74 Arab Oil Embargo.

supplier. This planning process Pre-Embargo prices were in the $3-per-involved sophisticated forecasting barrel range. Today oil prices have of AP&L customer demands; coordi-risen to the $25-to-530-per-barrel nation with sister companies on the range and over the long-term into the Middle South Utilities System in Nineties, both oil and natural gas Louisiana and Mississippi; compre-represent unaffordable options for hensive study of the fuel options AP&L customers.

available; and formation of a jointly-Faced with those prospects, owned fuels subsidiary, System Arkansans can be justifiably proud of Fuels, Inc.

the progress being made by Arkansas Those initiatives assumed major Power & Light in developing an electric importance in the early Seventies generating system that no longer must when natural gas supplier and govern-rely on oil and natural gas for its avail-mental limitations were placed on the l

ability and reliability. Now and into the use of gas as a boiler fuel for generating l

foreseeable future, the American electricity. Those contract cancellations resources of coal and nuclear f A= are and curtailments had their most and will be used on the AP&L system devastating effect on states like to meet growing electric energy Arkansas because of the limited avail-demands. This shift away from higher-ability of natural gas being produced cost oil and natural gas demonstrates within our own borders. The AP&L the wisdom of decisions made since system with its almost total reliance I

the mid-Sixties in planning for our on natural gas had to be converted state's energy future.

within a short time to another fuel-oil.

Foreseeing that long-term solutions That costly conversion was being to a changing fuel picture were needed, completed at AP&L units when the i

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.a Operations at the White Bluff Steam Dectric Station are ma ed through the control room. Fxperienced technicians are supported by highly ~sophisti ted monitoring systems Sources of Energy in assunng etficient operation of the L631-megawatt facility.

for AP&L Electricity Arab Oil Embargo hit. As a result of These units have helped to free our 1973 the skyrocketing prices created by this customers from the uncertainties of event, oil quickly became economically using oil and natural gas.

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obsolete for power production.

When in full operation, both units J

Nuclear power and coal were can save the equivalent of more than selected to iead Arkansas away from 63,000 barrels of oil per day, saving natural gas and oil and toward energy millions of dollars in differential fuel independence. Why? Because both of costs. For example, an independent these fuels represent commodities that study showed that in the 1975-79 are abundant, domestically available, period Unit I at Arkansas Nuclear One environmentally compatible and saved AP&L customers over $400 economically sound.

million as compared to the energy costs The first major achievement in the. of an oil-fired unit which could have L-- Hydro 2%

AP&L fuel diversification effort came been built in the same time frame. Over about when Unit 1 of Arkansas Nuclear the operating life of this nuclear-fueled 1982 One-the Southwest's first nuclear-facility, billions of dollars will be fueled generation station-went into saved over the oil option.

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in 1970 and began commercial service in late 1974 following a seven-Coal, too, is an energy answer to year planning, permitting and con-the oil and natural gas displacement struction perio d. Unit 2 was announced challenge. America has been called "the Saudi Arabia of coal" and for good operation in 1980.

reason. Coal is our nation's most l

abundant fossil fuel. The United States has over 30 percent of the e

world's estimated coal reserves-enough to last America around 300 years at the current rate of production.

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competitive advantage in attracting g-2 4

new and expanded business and industry along with more job oppor-

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tunities. Indicative of this reality was Qfgybp the announcement in 1982 of the R ' c' w

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at an estimated cost of $500 million, this facility represents one of the state's

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u Wh, istration Department of Economics and Finance, released the report in October, y-e y.

1982. The UALR study concluded that Die first unit of the Independence Steam Electric Station near Newark began commercial electric rates in Arkansas are among operatism in January 1983. Die second unit of this coal-fueled plant is scheduled to the lowest in the nation, and neither hgin service in 1985, completing AP&L's current generation construction program.

availability not cost of power should hinder the state's economic develop-ment in the next decade.

In 1973 AP&L announced plans to current generation construction build its first modern-day coal-fueled program. AP&L anticipates that future Third, the serious problems created l

station. Today both units at the White construction will not be needed until by reliance on foreign oil supphers will Bluff Steam Electric Station near the mid-Nineties at which time be alleviated, to a greater extent, by Redfield are in service. Unit I came Arkansas lignite will be used as using American coal and uranium.

"on line"in 1980 followed by Unit 2 the primary fuel.

Because approximately 40 percent of in 1981. The Station is jointly-owned Both White Bluff and Independence ur nation's oil supply is provided by by AP&L. The Arkansas Electric use low-sulfur Wyoming coal as boiler f reign sources, this situation creates an awesome economic drain, has Cooperative Corporation and several fuel with contracts calling for 150 municipalities. AP&L's 57% ownership million tons of coal at each facility developed a critical trade imbalance of the total 1,631-megawatt station during their projected 35-year lifi arid threatens national security.

Our commitment to utilize eco-adds 930 megawatts to the Company's For example, at White Bluff, coal is n mic and reliable American fuels system. In 1982 this facility completed delivered to the site by unit train, with its fir <t full year of total operation an average of ten 110-car unit trains should significantly influence fulfill-during which time it provided almost each week. Coal not diverted to storage ment of Arkansas' potential-today 25 percent of AP&Us total energy is crushed, pulverized and blown into and tomorrow. Goals m j,ob growth, sources.

the boilers for combustion.

c mmunity development, expanded A second two-unit, jointly-owned With the total completion of the industrialization, agnbusiness expan-sion and cultural enhancement are generating plant-Independence Independence Station in the mid-Steam Electric Station near Newark-Eighties, coal's contribution to reliabil.

withm Arkansas' grasp.

was announced in 1977. AP&L holds ity and savings will become even more By usm, g American resources, we're a 31%% ownership in both Indepen-significant in Arkansas' energy picture.

Prepared to aid m ushering in that new dence units. Its 836-megawatt first All of these fuel diversification era of prosperity because we believe unit began commercial operation in efforts have provided and will continue that those are goals worth striving for.

January,1983, with the second unit to supply Arkansas with one of the scheduled for completion in early 1985.

brightest energy outlooks in the This will complete the Company's Sunbelt.

1 7

BOARD OF DIRECTORS John A. Cooper, Jr.

Richard P. lierget. Jr.

Kaneaster Hodges, Jr.

Hal E. Hunter. Jr.

Floyd W. Lewis President becutnv Vuce Presndent Attorney Attornet Cha'rman of the Board Cooper Communities. Inc.

& Ses retary-Treasurer

& Fornier US. Senator New Aladrid. Atissouri

& President Bentonedle. Arkan as AtLuns insurance Corporatwn Newport. Arkansas Aiuddle South Utahties. Inc.

httle Ronk. Arkansas New Orleans. Louisiana fh^

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t lerry L. hiaulden Roy L hturphy William C. Notar Jr.

J. D. Phillips Robert D. Pugh Presadent & Chuef Executive Prcrsdent Attorney Senior Vice President Chairman of the Board Ofsar of the Companu Afid-South Engsneersng U Dor.ido. Arkansas of the Company of Directors bttle Ral. Arlansas '

Company Lattic Rocl. Arlansas Portland Gin Company Hot Springs. Arkansas Portland. Arlansas Raymond P. %Iler, Sr., N1 D.

George K. Reeves Reeves E. Ritchie Cus B. Walton, Jr.

Niichael E. Wilson i

Little Ra L internal Attorney Retured Chaurman of the Board Attormy President Afeducune Clunse Caruthersvulle. Atiswurt et the Companu Little RhL. Arlanw Uc nilson and Company Lstile R.nl. Atlan~as Lattic Rock. Arkanas Wulunt. Arlansas ADVISORY DIRECTORS All Past Directors of the Company I

lawrence Blackwell Richard C. Butler L C. Carter Attorneu Chatrman of the Board Past Pres >Jent Ptne Blu4. Arkansas Peoples Sainny & Loan Association Rualand Foods. Rettred Luttle kn L. Ark.nsas Stuttgart. Arkansas Dr. Marshall T. Steel R. E. L Wilson Past President of Chairman of the Board &

Hendra College. Retired Chief becutiiv OWicer Luttle Ral. Arkansas Lee Wulum and Company Wilmm, Arkansas 8

ennemanummesmune 1982 MANAGEMENT DISCUSSION AND FINANCIAL REPORT WWWWWWWWWWWWWWWW l

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition 2.0 times the annual mortgage interest Arkansas Power & Light Company's requirements for the issuance of additional financial condition improved during 1982.

bonds, was 2.65 at December 31,1982, Indicators of this improvement are increased compared to 2.90 at December 31,1981 and net income and rate of return on common 1.75 at December 31,1980. The level of the equity. Also improved are the Company's Mortgage coverage ratio at December 31, liquidity and quality of earnings. The princi-1982 and its increase over the December 31, pal factors responsible for this improvement 1980 level are significant since interest are retail and wholesale rate increases.

requirements increased with the issuance of During 1982, the payment of second

$172 million of additional first mortgage quarter common dividends was limited due bonds (net of retirements) during 1982 and to restrictions placed on retained earnings 1981. Earnings coverage (excluding by the Company's mortgage. However, revenues subject to refund) for preferred earnings following the second quarter were stock, which must be a minimum of 1.5 times sufficient to pay the balance of the second the Company's annual interest charges and quarter dividends and dividends as declared preferred stock dividend requirements to during the remainder of the year. Due allow the issuance of additional preferred principally to the summer / winter differen-stock, has increased to 1.54 at December 31, tial in energy prices and seasonal sales, 1982 from 1.51 and 1.25 at December 31, the timing of future quarterly common 1981 and December 31,1980, respectively.

dividends may be affected by this mortgage The Company's 1982 construction restriction. As of December 31,1982, expenditures, excluding AFDC, totaled $185

$12,024,000 of retained earnings arc free million as compared to the 1981 and 1980 from such restrictions.

levels of $349 million and $193 million, g

g respectively. Financing of the 1982 construc-Liqtudity and Capital Resources tion expenditures was accomplished The increase in cash earnings which has through first mortgage bond sales of $138 been experienced during the last two years, million (net of retirements), common stock coupled with a reduction in construction sales of $80 million, pollution control bond expenditures in 1982, has improved the proceeds of $8 million and funds from Company's liquidity and access to outside operations. The Company redeemed $3 capital resources. Net income, excluding million of preferred stock associated with Allowance for Funds Used During Con-cash sinking funds, repaid $79 million in struction (AFDC), a non-cash addition to bank loans, and had short-term investments income, grew to $84 million in 1982 from at year end of $23 million.

$73 million in 1981 and $28 million in 1980.

Construction expenditures for future Internally generated funds from operations, years are projected to be $304 million in after dividends, amounted to L108 million 1983,$283 million in 1984, and $273 in 1982 as compared to the 1>81 and 1980 million in 1985. These amounts include levels of $100 million and $8 million, AFDC of $23 million, $25 million and respectively.

$14 million, respectively. In addition, the The increase in earnings over the past Company has debt maturing and cash two years has had a positive effect on the sinking fund requirements of $90 million Company's Mortgage and Charter coverage during the next three years. To fund these ratios. Earnings coverage (excluding requirements, the Company expects to rely revenues subject to refund) for first mort-on internally generated funds and gage bonds, which must be a minimum of conventional financing.

10

Based on the Company's Mortgage and pany's financial position as noted above Charter coverage ratios at December 31, resulted primarily from retail rate increases 1982, the Company could sell an additional authorized by its principal regulator in May

$285 million of first mortgage bonds or 1981 and March 1982. The May 1981 increase

$33 million of preferred stock assuming an amounted to $102 million, of which $87 annual interest or dividend rate of 12%

million had been placed in effect in October In addition, at December 31,1982, the 1980 with the balance becoming effective Company had available $200 million in in June 1981. The March 1982 increase short-term borrowing authority, $2.5 million ultimately totaled $29 million, of which in pollution control bond proceeds and

$26 million was placed into effect that month

$23 million in short-term investments.

and the balance in November 1982. The Company also filed comparable rate appli-Results of Operations cations and received increases in rates for As stated above, net income, as well as wholesale and other retail customers. These the quality of net income, has improved in rate cases included the addition to rate base 1982 compared to 1981 and 1980. The of two coal-fueled electric generating units current year's net income of $107 million which were placed in commercial operation represents an annual return on average in August 1980 and July 1981. (See Note 2 common equity of 13.12%. In comparison, to Financial Statements " Rate Matters.")

the respective net income and rate of return Effects of Inflation for 1981 and 1980 were $96 million repre-M senting a 12.41% return, and $65 million Despite the reduced level of inflation in representing a 7.75% return.

1982, its impact on the Company's opera-Revenue for 1982,1981 and 1980 totaled tions in recent years has been significant.

gogggggg,

$1,046 million, $1,016 million and $750 (See Note 14 to Financial Statements-million, respectively. Operating revenue

" Effects of Inflation on Operations.")

during 1982 increased $31 million or 3%

6" * * *'Y over 1981 due to rate increases while KWH sales to retail and wholesale customers The Company's overall financial condi-respectively decreased 5% and 12% Opera-tion and its results of operations improved tion and maintenance expenses for 1982 during 1982 and 1981. This improvement totaled $669 million, a decrease of $10 is substantial when comparing the results million or 2% from 1981 primarily due to of 1982 and 1981 to the year 1980. The a decrease in fuel-related costs. The decrease recent increases in approved rates and the in operation and maintenance expenses cost controls which have been continued was offset by an increase of $17 million in by management have been the primary depreciation expense and taxes associated factors in reaching this financial stability.

with operating income. The Company's Continued financial stability, however, is interest expense, excluding AFDC, increased still largely contingent on the Company's

$8 million in 1982 over its 1981 level of ability to obtain rates which allow the

$112 million. This was p imarily due to the Company to recover costs and earn a fair Company's issuance of new debt in 1982 and rate of return on its investment.

to its 1981 debt issues being outstanding a full year. This new debt was issued to par-tially fund the Company's construction program.

l The general improvement of the Com-i l

11

REPORT OF MANAGEMENT The management of Arkansas Power & Light Company has prepared and is responsible for the financial statements and related financial information included in this annual report.

The financial statements are based on generally accepted accounting principles, consistently applied. Financial information included elsewhere in this report is consistent with the financial statements.

To meet its responsibilities with respect to financial information, management maintains and enforces a system of internal accounting controls which provides reasonable assurance, on a cost effective basis, as to the integrity, objectivity and reliability of the financial records and as to the protection of assets. This system includes communication through written policies and procedures and an organizational structure that provides for appropriate division of responsibility and the training of personnel. This system is also tested by a comprehensive internal audit program.

The board of directors pursues its responsibility for reported financial information through its audit committee, composed of outside directors. The audit committee meets periodically with management, the internal auditors and the independent certified public accountants to discuss auditing, internal control and financial reporting matters and reports thereon to the board of directors. The independent certified public accountants have full and free access to meet with the audit committee at any time without members of Company management being present.

The independent certified public accountants provide an objective assessment of the degree to which management meets its responsibility for fairness of financial reporting.

They regularly evaluate the system of internal accounting control and perform such tests and other procedures they deem necessary to reach and express an opinion of the fairness of the financial statements.

We believe that these policies and procedures provide reasonable assurance that our operations are carried out with a high standard of business conduct.

l Nl Jerry L. Maulden President & Chief Executive Officer 12

Deloitte Haskins1 Sells 39th Floor One Shell Square New Orleans, Louisiana 70139 (504) 581-2727 Cable DEHANDS AUDITORS' OPINION Arkansas Power & Light Company:

We have examined the consolidated balance sheets of Arkansas Power & Light Company and its subsidiary as of December 31, 1982 and 1981 and the related consolidated statements of income and retained earnings and of changes in financial position for each of the three years in the period ended December 31, 1982.

Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our report dated February 12, 1982 (March 1, 1982 as to the second and third paragraphs of Note 2 to the 1981 finaccial statements) our opinion on the 1980 and 1981 financial statements was qualified as being subject to the combined effects on those statements of such adjustments, if any, as might have been required had the outcomes of two uncertainties been known.

The nature and current status of these two matters are described in the first and fourth paragraphs of Note 2 to the accompanying 1982 financial statements.

As a result of the resolution of one of the uncertainties and the determination that the resolution of the remaining uncertainty would not materially affect the Company's financial position or results of operations, our present opinion on the 1980 and 1981 financial statements, as expressed herein, is different from that expressed in our previous report.

In our opinion, the above-mentioned consolidated financial statements present fairly the financial position of the Company and its subsidiary at December 31, 1982 and 1981 and the results of their operations and the changes in their financial position for each of the three years in the period ended December 31, 1982, in conformity with generally accepted accounting principles applied on a consistent basis.

&W4 February 11, 1983

Arkansas Power & Light Company and Subsidiary CONSOLIDATED BALANCE SHEETS December 31, ASSETS 1982 1981 (in thousands)

Utility Plant (Notes 5 and 6):

$2,585,957

$2,509,683 Electric plant.

37,362 36,363 Gas plant.

Construction work in progress...

364,252 255,468 16,869 10,214 Nuclear fuel.

3,004,440 2,811,728 Total..

Less-accumulated depreciation and 605,404 532,261 amortization.

2,399,036 2,279,467 Utility plant-net..

Other Property and Investments:

Investments in associated companies, at equity 40,064 35,859 (Note 5)...

Other, at cost (less accumulated depreciation)....

512 913 40,576 36,772 Totti...

Current Assets:

Cash and special deposits (Note 8).

8,302 13,723 Temporary investments, at cost which gg approximates market:

21,600 Associated companies.

945 2,124 Other.

Notes receivable-net 1,195 1,216 Accotints receivable:

Customer and other (less allowance for doubtful accounts

-$1,538,000 in 1982 and $1,396,000 in 1981) 47,303 41,105 14,737 19,106 Associated companies..

21,951 179 Deferred fuel cost.

57,821 34,338 Fuel inventory, at average cost.

32,950 20,753 Materials and supplies, at average cost.

9,030 9,194 Prepayments and other.

Total.

215,834 141,738 13,971 16,272 Deferred Debits.

. $2,669,417

$2,474,249 Total.

See Notes to Consolidated Financial Statements.

14

December 31, LIABILITIES 1982 1981 (in thousands)

Capitalization:

Common stock, $12.50 par value: authorized 325,000,000 shares; issued and outstanding, 49,780,196 shares in 1982 and 43,380,196 shares in 1981 (Note 10)..

. S 622,252 S 542,252 Paid-in capital 5,457 4,933 Retained earnings (Notes 2 and 9).

33,365 43,134 Total common shareholder's equity.

661,074 590,319 Preferred stock and premium, without sinking fund (Note 10).

126,890 126,890 Preferred stock and premium, with sinking fund (Note 10).

141,138 144,120 Long-term debt (Note 11).

1,129,440 993,163 Total.

2,058,542 1,854,492 Current Liabilities:

Currently maturing long-term debt (Note 11).

2,297 16,719 Notes payable (Note 8)..

750 56,200 Accounts payable:

M Associated companies.

4,286 10,672 W

Other.

87,236 118,696 ccccccccc Customer deposits.

5,977 5,771 Taxes accrued.

33,696 32,37p Accumulated deferred income taxes (Note 4) 10,792 44 Interest accrued...

37,919 32,840 Dividends declared.

24,630 23,448 Nuclear refueling reserve..

12,304 8,004 Other.

43,548 31,506 Total....

263,435 336,273 Deferred Credits and Other Liabilities:

Accumulated deferred income taxes (Note 4) 208,960 188,641 Accumulated deferred investment tax credits (Note 4) 80,348 54,494 Reserve for spent nuclear fuel disposal (Note 5).

36,019 23,678 Other.

14,962 10,833 Total.

340,289 277,646 7,151 5,838 Reserves.

Commitments and Contingencies (Notes 2,5 and 6).

Total.

$2,669,417 52,474,249 See Notes to Consolidated Financial Statements.

15

Arkansas Power & Light Company and Subsidiary CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS Years ended December 31, 1982 1981 1980 (in tlwusands)

Statements of Income Operating Revenues (Notes 2,3 and 12):

$ 994,124 $ 974,734 $750,497 Electric.

52,019 40,827 Natural gas.

1,046,143 1,015,561 750,497 Total.

Operating Expenses:

Operation:

262,604 307,213 237,346 Fuel..

178,841 141,316 154,126 Purchased power.

Gas purchased for resale (Note 3).

40,986 30,637 141,824 157,084 121,332 Other.

Maintenance.

45,242 43,675 29,142 84,194 77,923 59,574 Depreciation..

Taxes other than income taxes...

31,861 28,129 25,401 Income taxes (Note 4) 69,285 62,401 28,632 Total.

854,837 848,378 655,553 191,306 167,183 94,944 Operating Income.

Other Income and Deductions:

Allowance for equity funds used during construction.

12,722 11,541 22,482 M

Miscellaneous-net.

7,062 20,292 5,277 Income taxes (Note 4) 5,625 (2,795) 12,191 ccccocccc Total.

25,409 29,038 39,950 Interest Charges:

108,557 90,755 67,036 Interest on long-term debt.

Other interest-net of debt premium.

11,272 21,038 17,649 Allowance for borrowed funds used (10,486)

(11,712)

(15,021) during construction.

109,343 100,081 69,664 Total.

Net Income (Notes 2 and 3)

$ 107,372 5 96,140 $ 65,23_0 Statements of Retained Earnings Retained Earnings-January 1.

S 43,134 5 54,699 5 86,332 Add-Net income.

107,372 96,140 65,230 Total..

150,506 150,839 151,562 Deduct-Cash dividends:

Preferred stock.

25,274 25,586 25,400 Common stock.

91,867 82,119 71,463 Total..

117,141 107,705 96,863 Retained Earnings-December 31 (Notes 2 and 9) 33,365 !

43,134 5 54,699 See Notes to Consolidated Financial Statements.

16

Arkansas Power & Light Company and Subsidiary CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION Years ended December 31, 1982 1981 1980 (in thousands)

Funds Provided By:

Operations:

Net income.

. $107,372

$ 96,140

$ 65,230 Depreciation.

84,194 77,923 59,574 Deferred income taxes and investment tax credit adjustments-net......

56,696 56,473 17,885 Allowance for funds used during construction.

(23,208)

(23,253)

(37,503)

Total funds provided by operations.

225,054 207,283 105,186 Other:

Allowance for funds used during construction.

23,208 23,253 37,503 Decrease in working capitali 17,080 38,362 Miscellaneous-net.

15,328 17,851 9,943 Total funds provided by operations and other.

263,590 265,467 190,994 Financing transactions:

Common stock.

80,000 84,292 30,000 2

Preferred stock.....

50,000 First mortgage bonds 3 155,000 103,382 70,000 Installment purchase transactions.

8,325 37,735 27,466 long-term bank loans.

6,000 23,052 Sale and leaseback transactions-net..

22,136 18,709 Book value of utility plant sold.

10,302 85,632 934 Short. term securities-net.

17,676 Total funds provided by financing.

259,627 373,905 197,109 Total funds provided.

$523,217 5639,372 S388,103 Funds Applied To:

M Utility plant additions:

ccccccccc Construction expenditures for utility lant.

$208,248 5372,694 5230,474 Plant additions 4 N

80,559 Expenditures for nuclear fuel.

6,655 3,063 7,151 Other-net.

(837) 3.045 98 Total gross additions (includes allowance for funds used during construction).

214,066 459,361 237,723 Other:

Dividends declared on preferred stock.

25,274 25,586 25,400 Dividends declared on common stock.

91,867 82,119 71,463 Increase in working capital..

67,389 i

184,530 107,705 96,863 Total funds applied to other.

Financing transactions:

Redemption of preferred stock....

2,979 2,943 3,787 Retirement of first mortgage bonds..

16,719 69,363 6,000 Repayment of long-term bank loans.

29,052 Repayment of short-term securities-net.

75,871 43,730 Total funds applied to financing.

124,621 72,306 53,517 l

Total funds applied.

5523,217

$639,372

$388,103

1. Workmg capetal excludes short-term secuntnes. current maturnhrs and deferred taxes uncluded un current habshtnes. De 1982 uncrease un workmg capntal us due pnmanly to mcreases m deferred fuel costs, fuel mventory. matenals and supphes and a decreaw m occounts payaNe whale of<ct by a decrease in spenn.' depossts and incerases in interest accrued and miscellaneous other habihtnes. De 1981 decreau in uvraung capital ss due pnmanly so sncreases in accounts payable. mterest accrued, and contract advances. partne!!y offset by mcreases in accounts recesveNe from associated compame<

nnd matenals and supphes. De 1980 decrease m uvrkung capstal as due pnmanly to mcreases m accounts paynNr. nacunts pavane to eneaated compemes drundends declared, nucteer reserve and Whnte Bluff coal advances. Dese serve partnally offset by sncreases m s;waal depossts. acceunts rrcervaNe and fuel stock.

2. The year 1981 encludes $29.292.C00 of common stock sssued in connection serth the Art-Ms consohdarnon. Das amount does not mclude a prcmuum of $3.820.000 assonated neuth the assur.

3. Dr year 1981 mcludes $21.160.000 of fnrst mortgage bonds exchanged for Ark-Mo frrst mortgage bonds. Also mcludes $7.222.000 of frrst mortgage bonds of Assonated Natural Gas Company 4 Plant acqurred resth the conschdatson of Ark-Mo.

See Notes to Consolidated Financial Statements.

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.

SUMMARY

OF SIGNIFICANT E. Jointly Owned Generating Stations ACCOUNTING POLICIES The Company jointly owns two generating stations, one of which is currently under.

A. Principles of Consolidation c nstruction. The Company records the invest-The accompanying consolidated financial ment and expenses associated with these stations statements include the accounts of Arkansas to the extent to which the Company owns Power & Light Company and its wholly-owned and participates m the generating units.

subsidiary, Associated Natural Gas Company.

F. Pension Plan B. System of Accounts The Company has a pension plan covering The accounts of the Company are maintained substantially all of its employees. The policy of in accordance with the system of accounts the Company is to fund pension costs accrued.

prescribed by the Federal Energy Regulatory Commission (FERC).

G. Income Taxes The Company joins its parent in filing a C. Revenues and Fuel Costs c ns lidated Federalincome tax return. Income The Company records revenues as billed taxes are allocated to the Company in proportion to its customers on a cycle billing basis. Revenue to its contribution to the consolidated tax liability.

is not accrued for energy delivered but not Deferred income taxes are provided for differ-billed at the end of the fiscal period.

ences between book and taxable income to the Substantially all of the rate schedules of extent permitted by the regulatory bodies for the Company include adjustment clauses under ratemaking purposes. Investment tax credits which fuel costs above or below the levels allocated to the Company are deferred and allowed in the various rate schedules are amortized over the average useful life of the permitted to be billed or required to be credited related property beginning with the year allowed to customers. The Company has adopted a in the consolidated tax return.

deferral method of accounting for those fuel costs recoverable under fuel adjustment clauses.

H. Allowance for Funds Used Under this method, such costs are deferred to During Construction the month in which the related revenues are To the extent that the Company is not billed.

permitted by its regulatory bodies to recover The fuel adjustment factor contains an in current rates the carrying cost of funds used amount for a nuclear reserve fund, estimated for construction, the Company capitalizes, as to cover the cost of replacement energy when an appropriate cost of utility plant, an allowance the nuclear plant is down for scheduled main-for funds used during construction (AFDC) tenance and refueling. The fund bears interest which is calculated and recorded as provided and is used to reduce fuel expense for fuel by the regulatory system of accounts. Under this adjustment purposes during the shutdown utility industry practice, construction work in period.

progress on the balance sheet is charged and the income statement is credited for the approxi-D. Utility Plant and Depreciation mate net composite interest cost of borrowed Utility plant is stated at original cost.

funds and for a reasonable return on the equity The cost of additions to utility plant includes funds used for construction. This procedure contracted work, direct labor and materials, s intended to remove from the income statement allocable overheads and an allowance for the the effect of the cost of financing the construction composite cost of funds used during construction. program and results in treating the AFDC The costs of units of property retired are charges in ihe same manner as construction labor i

removed from utility plant and such costs, plus and material costs. As non-cash items, these removal costs, less salvage, are charged t credits to the income statement have no effect l

accumulated depreciation. Maintenance and on current cash earnings. After the property l

repair of property and replacement of items is placed in service the AFDC charged to determined to be less than units of property construction costs is recoverable from customers are charged to operating expenses-through depreciation provisions included in Depreciation is computed on the straight' rates charged for utility service. The effective line basis at rates based on the estimated service composite AFDC rate for the Company was lives of the various classes of property. Deprecia-9.1%,9.4% and 8.1% for 1982,1981 and l

tion on average depreciable property in 1982, 1980, respectively.

l 1981 and 1980 amounted to approximately The Company's policy is to capitalize 3.3% each year. Principally all the Company's allowance for funds used during construction r

l utility plant is subject to the lien of its first on projects during periods of interrupted j

mortgage bond indenture.

construction when such interruption is i

temporary and the continuation can be justified as being reasonable under the circumstances.

18

I. Reser'ves the commercial operation of Unit One of It is the policy of the Co npany to provide Independence Steam Electric Generating reserves for uninsured property risks, for certain Station, which began commercial operation employee benefits, and for claims for injuries on January 18,1983. On January 14,1983, and damages through charges to operating the APSC issued an orderallowing the Company expense on an accrual basis. Accruals for these to capitalize depreciation and carrying cost of reserves have been allowed for ratemaking the unit from the date of commercial operation purposes.

until such time that the unit is recognized in the Company's rates. The order also directed that related fuel savings during this interim period,

2. RATE MATTERS less current operation and maintenance expense, be flowed through to customers under the fuel On May 1,1981, the Company filed an adjustment clause.

application with the Arkanses Public Service During 1982, the Company received orders Commission (APSC) to increase its Arkansas allowing approximately $5.6 million in annual retail rates by approximately $101.4 million.

revenue increases for its Missouri retail cus-On March 1,1982, the APSC entered an order tomers and approximately $9.5 million for its authorizing an annual increase in retail rates wholesale customers. Also during 1982, the of $26.2 million. This increase was placed in Company filed new applications requesting effect on March 8,1982. The order also directed additional annualincreases of approximately the Company to refund approximately $19.3

$9.9 million for these retail customers.

million (over a two-year period) related to As a result of a complaint filed by the Attorney collections that the APSC states resulted from General of Arkansas during 1979, the APSC the Company's past practice of tax normalization. issued an order on October 27,1980 stating that The Company requested and was granted a the Company had over-collected from its rehearing by the APSC to reconsider certain customers approximately $6.2 million through pans of the rate request and refund order. On an erroneous application of the fuel adjustment September 8,1982, the APSC granted an clause during 1977,1978 and 1979. After additional annualincrease of S2.8 million, raising appeals, the Company made refunds in 1982 the approved amount to $29 million. This to its customers of approximately $8.6 million, M

increase was placed into effect on October 6, which includes interest, and restated its financial 1982. The Company filed an appeal with the statements for 1977,1978 and 1979 to reflect Circuit Court of Pulaski County, Arkansas, decreases in income (after income taxes) of placing before it the issues related to the differ- $1.4 million, $1.6 million and $1.3 million, ence between the $101.4 million sought and the respectively.

$29.0 million granted, subject to certain adjust-ments, and that part of the order that directed

3. BUSINESS CONSOLIDATION the Company to refund approximately $19.3 million. In lieu of collection of the full disputed The Company acquired, effective January 1, portion of rates subject to refund during appeal 1981, all the outstanding shares of common stock by the Company, and pursuant to a procedure of Arkansa,-Missouri Power Company approved by the APSC, the APSC has approved (Ark-Mo) from Middle South Utilities, Inc.

rate schedules which would allow collection (MSU), the Company's parent, and effected the of a portion of the denied rate relief, $33 million, liquidation of Ark-Mo and the distribution of during appeal. Collection of this amount has its assets to the Company, including the out-been deferred by the Company pending final standing shares of comm'on stock of Associated court review. Any portion of the deferred Natural Gas Company. Ark-Mo became a amount which is finally granted by the Court division of the Companyand Associated Natural may be collected by a surcharge over a period Gas Company a subsidiary of the Company.

equal to the length of deferral. Further, all relief If Ark-Mo had been combined with the granted by the Court will be collected prospec-Company for the year ended December 31,1980, tively from the date of the Court's decision.

operating revenues and net income would have This appeal is pending.

be en approximately $855,078,000 and On November 19,1982, the Company filed

$68,491,000, respectively. Financial data shown an application with the APSC requesting an for 1982 and 1981 are on a consolidated basis.

annual increase in Arkansas retail rates of Financial data prior to 1981 have not been l

approximately $93.2 million over that level of restated for the consolidation since the effect rates that would be reflected had the Company s immaterial.

been collecting the $33 million of additional j

annual revenue that it has determined to defer.

Hearings associated with this filing are scheduled to begin May 31,1983. In the filing, the Company j

also requested immediate action by the Commis-sion to approve an increase in rates recognizing 19 r

4. INCOME TAXES Income tax expense (credit) consists of the following:

1982 1981 1980 (in thousands)

Current:

Federal..

S 3,713

$ 7,036

$ (1,084)

State.

3,251 1,687 (360)

Total.

6,964 8,723 (1,444)

Deferred-net:

Liberalized depreciation.

30,744 19,118 18,570 Taxes capitalized on books.

1,804 1,715 2,181 Interest capitalized on nuclear fuel.

(2,784) 466 1,520 Revenues collected in advance-nuclear refueling reserve.

(2,117) 3,360 (5,648)

Deferred fuel cost.

10,748 (6,065)

(2,629)

Restoration due to tax loss carryforward 15,188 10,636 (6,074)

(7,491)

(4,164)

Nuclear fuel disposal costs.

Expenses associated w3h co-owner advances to construct coal plants.

(44) 4,924 Differences between book and tax gains and losses on sales of property.

(997) 7,000 (750)

Other.

(213)

(3,148)

(427)

Total.

. _ 31,067 35,067 19,289 Investment tax credit adjustments-net.

25,629 21,406 (1,404)

Recorded income tax expense.

$63,660 565,196 5 16,441 Charged to operations.

569,285

$62,401 S 28,632 Charged (credited) to other income.

(5,625) 2,795 (12,191)

Recorded income tax expense.

63,660 65,196 16,441 Income taxes applied against the debt component of AFDC.

7,669 9,848 14,571 Total income taxes.

571,329 575,044 5 31,012 Total income taxes differ from the amounts computed by applying the statutory Federal income tax rate to income before taxes. The reasons for the differences are as follows:

1982 1981 1980

% of

% of

% of Pre-Tax Pre-lax Pre-Tax Amount income Amount Income Amount Income Computed at statutory rate.

578,675 46.0%

$74,214 46.0 %

$37,568 46.0%

Increases (reductions) in tax resulting from:

Allowance for funds used during construction.

(9,492) (5.6%)

(9,986) (6.2%)

(17,251) (21.1%)

Difference between book depreciation and tax straight-line depreciation.

(799)

(.5%)

2,050 1.3%

(710)

(.9%)

Difference between interest capitalized on nuclear fuel combined with tax deprecia-tion of nuclear fuel and nuclear fuel expense..

(2,821) (1.6%)

(1,224)

(.8%)

(2,141) (2.6%)

State income taxes net of Federalincome tax effect 4,406 2.6%

4,546 2.8%

1,168 1.4%

Other-net.

(6,309)

(3.7%)

(4,405) (2.7%)

(2,193) (2.7%)

Recorded income tax expense.

63,660 37.2 %

65,196 40.4 %

16,441 20.1 %

income taxes apphed against i

debt compeaent of AFDC.

7,669 2.7%

9,848 3.4%

14,571 12.1 %

Total income taxes.

$71,329 39.9 %

$75,044 43.8 %

S31,012 32.2 %

20 1

In 1979, the Company incurred a Federal through 1996, and $23.8 million through 1997.

tax loss. The tax effect of the portion of the loss Pursuant to an order of the APSC dated which was not realized during 1979 was hiarch 1,1982, the Company ceased providing recorded as a reduction of deferred income taxes. deferred taxes on certain timing differences The tax effect of the loss carryforward used which were previously normalized. However, in 1980 and 1981 has been recorded as a the order requires the Company to continue restoration of deferred income taxes. The 1979 providing deferred taxes on decommissioning Federal tax loss carryforward was fully utilized costs of nuclear plant and disposal costs of at December 31,1981.

nuclear fuei, and provides for continued Unused investment tax credits at December normalization of timing differences for which 31, 1982 amounted to $86.9 million, of which normalization is required by the Internal

$6.6 million may be carried forward through Revenue Code or State law.

1992, $33.7 mill;on through 1993, $22.8 million

5. COMMITMENTS AND CONTINGENCIES arrangements, SFI's parent companies, includ-The construction program contemplates ing the Company, have covenanted and agreed Company construction expenditures of approxi. severally in accordance with their respective mately $304 million in 1983, $283 million in shares of ownership of SFI's common stock, 1984 and $273 million in 1985.

that they wil take any and all action necessary The Federal income tax returns for the to keep SFI in a sound financial condition years 1971 through 1976 have been examined and to place SFI in a position to discharge, and by the Internal Revenue Service (IRS) and to cause SFl to discharge its obligations under adjustments have been proposed. The principal these arrangements. At December 31,1982, the issue is whether customer deposits are total loan commitment under these arrange-includable in taxable income. A formal written ments amounted to $295,000,000 of which protest has been filed and conferences are being $198,210,000 was outstanding at that date. Also.

held with an Appeals Officer of the IRS. Any SFI's parent companies, including the Company, final liability for taxes resulting from settlement have made similar covenants and agreements with the IRS would not have a material effect in connection with long-term leases by SFI of on net income. Most of the other issues have oil storage and handling facilities and coal been settled and adequate provisions have hopper cars. At December 31,1982, the been recorded.

aggregate discounted value of these lease The Company has a 35% interest in System arrangements was $77,700,000.

Fuels, Inc. (SFI), a jointly owned subsidiary The Company has agreed to purchase over of the four principal operating subsidiaries of a 20-year period,100 million tons of cc al, with Middle South Utilities, Inc., (MSU). SFI operates an option to purchase over a further 10-year on a non-profit basis for the purpose of planning period an additional 50 million tons, for use and implementing programs for the procure-at the White Bluff Steam Electric Station, ment of fuel supplies for all of the operating presently in commercial operation. SFl has companies; its costs are primarily recovered entered into a contract with a joint venture for through charges for fuel delivered and a supply of coal from a mine in Wyoming, which services rendered.

is expected to provide 150 to 210 million tens The parent companies of SFl have made over a period of 26 to 42 years; the coal supplied loans to SFl to finance its fuel supply business is expected to be used at the Independence under a loan agreement dated January 4,1978, Steam Electric Station. SFI's parent companies, as amended January 1,1983, which provides including the Company, each acting in accor-for SFI to borrow up to $220,300,000 from its dance with their respective shares of ownership parent companies through December 31,1983.

of SFI's common stock, joined in, ratified, As of December 31,1982, the Company had confirmed and adopted the contract and loaned $29,271,000 to SFl pursuant to this loan obligations of SFl thereunder. The contract agreement and the Company's share of the provides for SFI to make direct investments in unused loan commitment was $40,331,000.

the mine for plant and equipment in order to Notes under this agreement mature December limit the amount to be paid by SFl to the joint 31,2008. In addition, the Company had loaned venture as a component of the price of coal.

SFI $10,607,500 under previous loan agree-Through 1982, SFI has invested approximately ments. Notes mature in 10 and 25 years from

$4.8 million and at December 31,1982, SFI date of borrowing under the provisions of the anticipated that its total additional investment previous loan agreemen's. Maturities in 1983 over the life of the contract would be approxi-of $6,317,500 are expected to be refinanced as mately $100 million, including $44.8 million part of the amended January 4,1978 agreement. estimated for 1983. Any funds invested under In connection with certain of SFI's borrowing the contract would be obtained by SFI either 21

through borrowings or other arrangements with by December 31,1983.

its parent companies, including the Company, Effective November 1981, the Company, or through other methods of financing.

together with the other hfiddle South System The Company has agreements for the operating companies, entered into a reallocation purchase and fabrication of fuel assemblies for agreement related to the Grand Gulf Plant its nuclear plant, Arkansas Nuclear One. The which provides that the other System operating Company has agreed to purchase from Kerr-companies have agreed to assume and hold hicGee Nuclear Corporation 1,696,000 kg of the Company harmless from all of the responsi-uranium over the next seven years. The bilities and obligations of the Company with Company also has agreements with the Babcock respect to the MSE Agreements, and in con-

& Wilcox Company and the General Atomic sideration thereof, the Company has relinquished Company for the fabrication of fuel assemblies its rights in the Grand Guif Plant. The Company used at the plant.

remains primarily liable to MSE and its assignees The Company, under the terms of its nuclear for payments under the MSE Agreements in fuel leases, is responsible for the storage and accordance with its original stated percentage, disposal of spent nuclear fuel. The Company but would be required to make its share of the considers all costs incurred or to be incurred payments or advances thereunder only if the in the use and disposal of nuclear fuel to be other System operating companies were unable proper components of nuclear fuel expense and to meet their contractual obligations.

provisions to recover such costs have been The Company is a member of Nuclear made in applications to regulatory commissions. Electric Insurance Limited (NEIL), a mutual As of December 31,1982, the Company has insurer which provides its members with collected approximately $31.3 million for the insurance coverage for the cost of replacement storage and disposal of spent fuel.The Company power incurred due to prolonged outages of is also recovering approximately $160 million nuclear units and for property damage in excess for decommissioning costs for its two nuclear of $500 million caused by radioactive contamin-units through increased depreciation charges ation or other specified damage. Members pay over the life of the station. Based upon a study annual premiums and are subject to assessments performed by the Company, nuclear plant if losses exceed the accumulated funds available decommissioning costs are projected to be in to the insurer. The Company's present maxi-excess of this amount. The Company is mum assessment for incidents occurring during requesting and will request recovery of a policy year would be approximately M

estimated increased costs in applications to 525 million.

its regulatory commissions.

The Price-Anderson Act limits the public The Company, together with the other liability of a licensee of a nuclear power plant Middle South System operating companies, is to $560 million for a single nuclear incident.

obligated under agreements (MSE Agreements) Insurance for this exposure is provided by with Middle South Energy, Inc. (MSE) in private insurance and an indemnity agreement accordance with stated percentages specified with the Nuclear Regulatory Commission. Every therein to make payments or subordinated licensee of a nuclear power plant is obligated, advances adequate to' cover all of the operating in the event of a nuclear incident involving expenses and certain of the capital costs of MSE any commercial nuclear facility in the United The Company's stated percentage responsibil-States that results in damages in excess of the ity under the MSE Agreements is 17.1%

private insurance, to pay retrospective assess-Through 1982, $2.7 billion had been expended ments of up to 55 million per incident for each by MSE on the Grand Gulf Plant's two units, licensed reactor operated by it or up to a the first unit of which is scheduled for commer-maximum per reactor owned of $10 million cial operation in the fourth quarter of 1983.

in any calendar year. At the end of 1982, the Under certain circumstances, the Company may Company had two licensed reactors.

be required under the MSE Agreements to make its share of the $12.5 million per month advance power purchase payments commencing January 2,1984 if the first unit of the Grand Gulf Plant has not been placed in commercial operation

6. LEASES the revenues utilized to recover the lease costs.

The Company accounts for leases on the Application of criteria used to define a capital same basis as that used by its regulatory authority lease would permit recording the following in the ratemaking process which determines assets and liabilities on the balance sheet:

22

s l

_ 1982 1981 1980 (in thousands)

Assets:

Utility plant.

. $113,632

$110,473

$83,983 Accumulated amortization.

14,505 14,287 12,348

$ 99,127

$ 96,186

$71,635 Net leased property.

Liabilities:

Noncurrent obligations under capital leases.

. $ 95,605

$ 93,342

$68.99J Current obligations under capital leases:

Principal.

3,522

$ 2,844

$ 2,639 Interest accrued 3,566 2,177 958 Total.

$ 7,088 5 5,021

$ 3,597 Recording of such leases would not materially together allow it to lease nuclear fuel up to a affect the amounts reported as either expense maximum of $150 million. Lease payments, or net income.

which are not included in the tabulations above, At December 31,1982, there were noncan-are based on nuclear fuel use. Both leases, unless cellable leases with minimum rental commit-sooner terminated by one of the parties, will ments as follows:

continue until 2018. The unrecovered cost (in thousands) base of the leases at December 31,1982,1981 and 1983.

$ 17,437

'1980 was $145,531,000, $122,976,000 und 1984.

18,007

$123,740,000, respectively. Nuclear fuel expense 1985.

17,757 cf $40,091,000 in 1982, $51,455,000 in 1981 1986.

17,545 and $37,300,000 in 1980 was charged to 1987.

17,452 op trations.

For years thereafter.

196,250 Rental expense (excluding nuclear fuel)

Total

$284,448 amounted to approximately $19,039,000,

$17,643,000 and $10,833,000 in 1982,1981 The Company has two lease agreements, and 1980, respectively.

W not reflected in the schedule above, which ccccccccc

7. PENSION PLANS The companies of the Middle South System of this change on 1982 pension expense was have various pension plans covering substan-not significant. Total pension expense of the tially all of their employees. These plans are Company for 1982,1981 and 1980 was administered by a trustee who is responsible

$8,266,000,59,011,000 and $6,305,000, for pension payments to retirees. Various respectively.

investment managers have responsibility for The comparison of the actuarial present management of the plans' assets. In addition, values of accumulated plan benefits and plan an independent actuary performs the necessary net assets for the Company's defined benefit actuarial valuations for the individual company plans is presented below. This comparison was plans.

determined in accordance with the provisions Effective January 1,1982, the Company of Statement of Financial Accounting Standards modified the method of amortizing prior service No. 36 which requires the use of certain costs by changing from a fixed amortization assumptions which are different from those used period of twenty years to varying amortization by our actuary in determining an appropriate periods not to exceed thirty years. The effect level of funding for the Company.

January 1, 1982 1981 (in thousands)

Actuarial present value of accurnulated plan benefits:

Vested.

$ 68,691

$56,999 Nonvested 4,921 3,340

$ 73,612

$60,339 Total.

Net assets available for benefits.

$108,593

$96,160 The assumed rate of return used in determining the actuarial present value of accumulated plan benefits was 9%

23

8. LINES OF CREDIT AND SHORT-TERM BORROWINGS ments. The Company may borrow any portion of these lines subject only to its maximum At December 31,1982, the Company had authorized level of short-term borrowings.

$64.0 million in lines of credit with Arkansas The Company has received authorization from banks and participated with the three other the Securities and Exchange Commission under Middle South System operating companies the Public Utility Holding Company Act of1935 in $100 million of consolidated lines of credit to have outstanding at any one time short-term with banks outside the Middle South System borrowings aggregating not more than the lesser service area. In February 1983, the consolidated of $200 million or 10% of the Company's lines of credit were increased to $200 million.

capitalization. The aggregate amounts of the Compensatin;; balances (approximately 5% of unused lines of credit with Ar)ansas banks at the the commitment amount) or equivalent fees end of 1982 and 1981 were $$3.3 million and are reqmred by certain of the banks located

$18.7 million, respectively. The operating outside the Middle South service area. Addition-companies had available at the end of 1982 and ally, the Company now participates with certain 1981,$56 million and $190.8 million, respec-other companies c,f the Middle South System in tively, under the consolidated lines of credit.

a System money pool arrangement whereby The short-term borrowings and the applicable those companies with available funds make interest rates (determined by dividing applicable short-term loans to other companies in the interest expense by the average amount bor-System having short-term borrowing require-rowed) for the Company were as follows:

1982 1981 1980 (in thousands)

Maximum bouowing.

$90,700

$122,400

$135,250 Year-end borrowing.

$ 750 5 56,200

$ 36,400 Average borrowing:

Bank loans.

523,030 5 73,065 5 93,683 Commercial pape r.

5 990 Asse.ciated co npanies.

513,122 Average interest rate during the period:

Bank loans.

13.66 %

18.13 %

14.6 %

Commercial paper.

15.3 %

gggggggg, Asscciated companies.

10.50 %

Average interest rate at end of period:

Bank loans.

11.50 %

14.84 %

21.0 %

Compensating and working balances 5 6,600

$ 5,800 at end of periad.

9. RESTRICTED RETAINED EARNINGS rovide for restrictions on the preferred kock p' dividends on common stock.

payment of cash The indenture relating to the Company's lon;;-term debt and provisions of the articles As of December 31,1982,512,024,000 of retained of incorporation relating to the Company's earnings are free from such restrictions.

24

b

/

10. PRET ERIT &AND, COMMON S,T OCK 1

Pteferred ead outstanriing at ik:nmber 31,1982 and 1981 consisted of the following:

Current

• ~

Shares

. Shares Outstanding Call Price

~ Cumulatke,3100 Par V. Cue

. Authorized 1982 1981 Per Share Without sini.ing tunT

- 4 32% series... Jr.)

70,000 70,000 70,000

$103.647 93,500 93,500 93,500 107.00 4.72% series.

4.56% series.

75,000 75,000 75,000 102.83 75,000 75,000 75,000 102.50 4.56 % 1965 series.

100,000 100,000 100,000 ' '

102.83 6 08% saies.

7.32% series.

5..

100,000 100,000 100,000 103.17 150,000-150,000 150,000 105.20 7.80% wries.

..c...

7.40S', series.

~

200,000 200,000 ' 200,000 104.65 150,000 150,000 150,000 106.94 7.8F.% series.

Total..

, 1.013,500 1,013,500 1,013,500 With sinking fund *:

,10.60% series...

165A12 163,412 174,962 109.39 11.04% series..

7.

337,597 337,597 357,747 109.78 Total.

503,009 503,009 532,709 Unissued.

2,386,500 Total, $100 Par Value 3,903,009 Cumulative, $25 Per Value Wilbout sinking fund:

3.M% series..

400,000 400,000 400,000 27.66

'10.40,% series.

600,000 600,000 600,000 28.60 Total.

1,000,000 1,000,000 1,000,000 With sinking fund *-

M 9.92% series.

1,599,640 1,599,640 1,600,000 28.18 13.28% series.

2,000,000 2,000,000 2,000.000 29.88 ccccccccc Total.

3,599,640 3,599,640 3,600,000 Unissued....

5,400.000

. 9,999,610 Total, $25 Par Value.

(itt t wusattds) l Without sinking fund:

Stated at $100 a share.

. $101,350

$101,350 Stated at $25 a share.....

25,000 25,000 Premium...

540 540 Total referred stock and premium, without sin ing fand.

. $126,890

$126,890 With sinking fund:

Stated at $100 a share.

. $ 50,301 5 53,271 Stated at $25 a share.

89,991 90,000 Premium...

846 849 Total preferred stock and premium, with sinking fund.

... $141,138

$144,120 The changes in the number of shares of common and preferred stock outstanding in 1980, 1981 and 1982 were:

Common Stock **

Preferred Stock Shares Sold Shares Sold (RedeemedJ

$100 Par

$25 Par 1980....

2,400,000 (37,866) 2,000,000 1981.

6,743,423 (29,425) 1982.

6,400,000 (29,700)

(360)

• Thew scrues avr In be retterd un full the nagh the operatum of sanarng fran.l> The 10 60% scrus ss brung trJermed a* the rat. << l0 000 shara n

resk year. The II 04% serres is besng ordermed at the este of 20,000 shares ra< k year Betsnmng lune 1.1984. the 9 9:% wrrr< re to be vrJeemr1 at the rate of $0.000 shares rack year Begmnung lanuary 1.1985. the 13 28% sents es to be vrJermed at the rate of 100 000.havo ca.k ver in aJJrta.,s. the Comyweny has the non-runrularity eption to rederne an a.fdstumalleAr anmust et naul sharrs ras 4 year ememen. ng ts: the far t yrar of rrdrmprum an ras 4 rrspr(tery sents.

• • In 3081 a permsum of $3 820,000uws recented en2.343.423 shares of comnum stst rukanged for the awt< and laahl:tsa n4 ArL4fs.

s All other csmenum stah sales uvre at par twiur.

25

11. LONG-TERSI DEBT long term debt outstanding consisted of the following:

1982 1981 (in thousands)

FIRST h10RTGAGE BONDS:

3-1/2% series due 1982.

.5

$ 15,000 5-3/8% series due 1982.

464 4-1/2% series due 1983.

1,002 1,102 3-1/4% series due 1984.

7,500 7,500 3-3/8% series due 1985.

18,000 18,000 16-1/8% series due 1986.

70,000 70,000 5-1/2% series due 1988.

508 553 17-3/8% series due 1988.

75,000 75,000 5-5/8% series due 1990.

1,200 1,300 4-7/8% series due 1991..

12,000 12,000 16-1/2% series duc 1991.

80,000 4-3/8% series due 1993.

15,000 15,000 9-3/8% series due 1993..

6,230 6,440 4-5/8% series due 1995.

25,000 25,000 5-3/4% series due 1996.

25,000 25,000 6-1/4% series due 1996..

3,160 3,360 5-7/8% series due 1997.

30,000 30,000 8-3/4% series due 1998.

9,000 9,400 7-3/8% series due 1998.

15,000 15,000 9-1/4% series due 1999.

25,000 25,000 9-5/8% series duc 2000.

25,000 25,000 9-3/4% series due 2000...

4,200 4,400 7-5/8% series due 2001..

30,000 30,000 8

% series due 2001.

30,000 30,000 7-3/4% series due 2002.

35,000 35,000 6

7-1/2% series due 2002.

15,000 15,000 AcWccWAct 8

% series due 2003.

40,000 40,000 8-1/8% series due 2003..

40,000 40,000 10-1/2% series due 2004.

40,000 40,000 10-1/8% series due 2005.

40,000 40,000 9-1/8% series due 2007.

75,000 75,000 9-7/8% series due 2008.

75,000 75,000 10-1/4% series due 2009.

60,000 60,000 13-3/8% series due 2012.....

75,000 TOTAL FIRST h10RTGAGE BONDS

• 1,002,800 864,519 INSTALLh1ENT PURCHASE CONTRACTS:

Pope County, Arkansas; due 1986 to 2008 at rates ranging from 7-1/4% to 10%.

20,800 20,800 Jefferson County, Arkansas; due 1986 to 2008 at rates ranging from 6-1/8% to 10%.

71,700 71,700 Independence County, Arkansas; due 1984 at rate of 9-1/4%.

41,000 41,000 Less: Amount held in construction funds.

2,519 10,845 TOTAL INSTALLMENT PURCHASE CONTRACTS.

130,981 122,655 LONG-TERA 1 LOANS (at prime rate) 23,052 UNAh10RTIZED PREh11Uh1 AND DISCOUNT ON DEBT-NET.

(2,044)

(344)

TOTAL.

1,131,737 1,009,882 LESS: CURRENT OBLIGATIONS INCLUDED *,N CURRENT LIABILITIES.

2,297 16,719 LONG-TERh1 DEBT EXCLUDING AMOUNT DUE WITHIN ONE YEAR.

51,129,440 5 993,163 26

At December 31,1982, the sinking fund requirements and maturities for long-term debt for the years 1983 through 1987 are as follows:

Cash Sinking Fund Sinking Fund" Maturities (in thousands) 1983

$1,295

$6,143

$ 1,002 1984 1,365 6,818 48,500 1985......

1,365 6,638 18,000 1986.

1,365 7,088 70,725 1987 1,365 7,438 810

• The Gnnpany sold an addulumal $25 mullwn prsncupel amount of fura mortgage bonds Jared Tehruary 1. I98 S Jur Trbruary 1. 2013 anth an unternt rate of 13%%

• • Thew annual sonhng fund requurrments may be met by cerrufwatum of preperty nJJatwns et a rate of 167% of swk requurements

12. TRANSACTIONS WITH ASSOCIATED COMPANIES The Company buys from and sells electricity Operating revenues include revenues from to the operating subsidiaries of Middle South sales to associated companies amounting to Utilities, Inc., its parent, under rate schedules

$223,748,000 in 1982, $223,235,000 in 1981 and filed with the Federal Energy Regulatory

$84,415,000 in 1980. Operating expenses include Commission. In addition, the Company pur-charges from affiliates for fuel cost, purchased chases fuel from SFI and receives technical power, and technical and advisory services and advisory services from Middle South totaling $67,960,000 in 1982, $65,305,000 Services, Inc.

in 1981 and $148,756,000 in 1980.

13. CONSOLIDATED QUARTERLY RESULTS (Unaudited)

Operating results for the four quarters of 1982 and 1981 were as follows:

1982 March June September December (in thousands)

Operating Revenue.

. $253,110

$234,343

$315,953

$242,737 Operating Income.

45,762 39,587 75,129 30,829 Net income..

24,721 18,749 53,777 10,125 1981 March June September December (in thousands)

Operating Revenue.

$224,394

$223,327

$319,480

$248,360 Operating Income.

30,935 25,480 76,941 33,827 Net Income.

15,560 9,476 54,241 16,863 The business of the Company is subject ingly, earnings information for any three-month to seasonal fluctuations with the peak period period should not be considered as a basis occurring during the summer months. Accord-for estimating the results for a full year.

27

14. EFFECTS OF INFLATION ON OPERATIONS (UNAUDITED)

The following supplementary information ing Standards (SFAS) No. 33, " Financial about the effects of changing prices on the Reporting and Changing Prices." It should be Company is provided in accordance with the viewed as an estimate of the effect of changing requirements of Statement of Financial Account-prices, rather than a precise measure.

STATEMENT OF INCOME FROM OPERATIONS AND OTHER FINANCIAL DATA ADJUSTED FOR EFFECTS OF CHANGING PRICES FOR THE YEAR ENDED DECEMBER 31,1982 (in thousands)

Adjusted For Adjusted For As Reported In General Changes In The Financial Inflation Specific Prices Statements (Constant Dollars) (Current Costs)

Operating revenues *.....

$1,046,143

$1,046,143

$1,046,143 Operating expenses (excluding depreciation)*

770,643 770,643 770,643 Depreciation..

84,194 170,953 178,827 Total operating expense...

854,837 941,596 949,470 Operating income......

191,306 104,547 96,673 Other income' 25,409 25,409 25,409 Interest and other charges

• 109,343 109,343 109,343 Income from operations (excluding adjustment to net recoverable cost)**.. $ 107,372

$ 20,613

$ 12,739 Increase in specific prices (current costs) of property, plant and equipment held during the year *"

$ 164,468 M

Adjustment to net recoverable cost.

9,193 29,660 Effect of increase in general ccccqqcuc price level...

(177,061)

Excess of increase in general price level over increase in specific prices after adjustment to net recoverable cost.

17,067 Gains from decline in purchasing power of net amounts owed...

54,760 54,760 Ne t......

$ 63,953

$ 71,827

• Assumed so be in " average for the year'* Adlers and thus are not restated.

• • Includung the ad ustment to net recoveraNr cost. the unceme from operstwns on a constant Adler basss would h. rte been $29.800 m 1982.

i

• • • At December 31.1982 current cost of property. plant and equarment net of accumulated deprecsatum was $U50.695 whsle hsstorncal cost or net cost recoveraNe through deperciatwn seas $2.399.036.

28

FIVE-YEAR COMPARISONS OF SELECTED SUPPLEMENTARY FINANCIAL DATA ADJUSTED FOR EFFECTS OF CHANGING PRICES (in thousands of average 1982 dollars)

Years Ended December 31, 1982 1981 1980 1979 1978 Operating revenues..

$1,046,143 $1,077,822 $879,128 $774,759 $819,075 llistorical cost information adjusted for general inflation:

Income from operations (excluding adjustment to net recoverable cost) 20,613 26,810 17,685 63,618 Net assets at year-end at net recoverable cost.

653,613 606,257 574,249 646,725 Current cost information:

Income from operations (excludirig adjustment to net recoverable cost) 12,739 13,353 (1,327) 46,092 Excess of increase in general price level over increase in specific prices after adjustment to net recoverable cost.

(17,067) 102,556 178,754 218,465 Net assets at year-end at net recoverable cost.

653,613 606,257 574,249 646,725 General information:

coccccccc Gain from decline in purchasing power of net amounts.

54,760 136,384 192,329 202,097 Average consumer price index.

289.1 272.4 246.8 217.4 195.4 NoTr: STAS W 33 reqwes that hnt wusi mt mkwmatum adrusted f.w general mRatum and current mt mt.wmaru.n l'c pr.mded 1.w 1979 and subvquent years. ComparaN< mt.wmatum os out readu'y availaHe f.w 1978 and thus es n.t pr.mdeJ Constant dollar amounts represent historical Current cost amounts reflect the changes costs adjusted for the effects of generalinflation. in specific prices of property, plant and The effects are determined by converting equipment from the year of acquisition to the these costs into dollars of equal purchasing present. The current costs of property, plant power using the Consumer Price Index and equipment, which represent the estimated for all Urban Consumers (CPI-U).

costs of replacing existing plant assets, are 29

determined by applying the Handy-Whitman ciation. Therefore the excess cost of plant stated Index of Public Utility Construction Costs (HWI) in terms of constant dollars or current cost over to the cost of the surviving plant by year of the historical cost of plant is not presently acquisition.1.and and certain other plant assets recoverable in rates. This excess is reflected as which are not included in the HWI were a reduction to net recoverable cost. While the converted using the CPI-U.

rate-making process gives no recognition to the The difference between current cost current cost of replacing property, plant and amounts and constant dollar amounts results equipment, the Company believes, based on from specific prices of property, plant and past experiences, that it will be allowed to earn equipment (as measured by the HWI) changing on the increased cost of its net investment when at a rate different than the rate of general replacement of facilities actually occurs.

inflation (as measured by the CPI-U).

To properly reflect the economics of rate The current year's depreciation expense regulation in the Statement of Income from on the constant dollar and current cost amounts Operations presented above, the reduction of of property, plant and equipment was deter-net property, plant and equipment to net mined by applying the Company's depreciation recoverable cost is offset by the gain from the rates to the indexed amounts.

decline in purchasing power of net amounts The cost of fuel used in generation has owed. During a period of inflation, holders of not been restated from historical cost. Regulation monetary assets suffer a loss of general purchas-limits the recovery of fuel costs to actual costs ing power while bolders of monetary liabilities through the operation of adjustment clauses experience a gain. The gain from the decline or adjustments in basic rate schedules.

in purchasing power of net amounts owed is As prescribed in Statement of Financial primarily attributable to the substantial amount W

Accounting Standards No. 33, income taxes of debt which has been used to finance property, tscccccccc were not adjusted.

plant and equipment. Since the depreciation The regulatory commissions to which the on this plant is limited to the recovery of Company is subject allow only the historical cost historical costs, the Company does not have of plant to be recovered in revenues as depre-the opportunity to realize a holding gain on debt.

30

i

{

l l

1 COMPANY DIRECTORY Transfer Agents for Preferred Stock-Union National Bank of Uttle Rock,1 Union National Plaza, Uttle Rock, Arkansas 72203, and The Commercial National Bank of Uttle Rock, Second and Main Streets, Uttle Rock, Arkansas 72203 Registrar of Preferred Stock-The First National Bank in Uttle Rock, Capitol and Broadway Streets, Uttle Rock, Arkansas 72203 Certified Public Accountants-Deloitte Haskins &

Sells, One Shell Square, New Orleans, louisiana 70139 Executive Office-The First National Building, Capitol and Broadway Streets, Uttle Rock, Arkansas 72203, Phone (501) 371-4000 Annual Meeting-Fourth Wednesday of May The Company's 1982 Annual Report to the Securities and Enchange Commission on Form 10-K (including Financial Statements and Financial Statement schedules) is available to any stockholder upon request, without charge. Persons interested in obtaining a copy should contact Mr. Steve L. Riggs, gggg Vice President, General Counsel and Secretary, at the address below:

ARKANSAS POWER & LIGHT COMPANY P.O. Box 551 Little Rock, Arkansas 72203 (501) 371 4000 31

Arkansas Power & Light Company TEN YEARS OF PROGRESS / FINANCIAL (Consolidaled) 3 1982 Capitalization and Capitalization Ratios MWONS OF DOLLARS (In Thousands of Dollars) 2200 Selected Financial Data:

Net operating revenues.

51,046,143 2000 we

,.,,,,,o Net income...

107,372 1800 eaa Total assets....

2,669,417 3gog long-term debt............

1,129,440 Preferred stock, with sinking fund.

141,136 1400 Capitalization-End of period:

1200 Preferred stock and premium.

$ 268,025 iom ---

Common stock and paid-in capital.

627,709 Retained earnings.

33,365 am Total.

929,102 000 Long-term debt:

43 First mortgage bonds 2 -

998,459 2m Installment purchase contracts 2 130,981 Sinking fund debentures.

1974 1976 1978 1980 1981 1982 Total capitalization.

52,058,542 ]

Annual Payment Requirements:

Interest on:

u$'NrNS First mortgage bonds.

5 105,568 32w Installment purchase contracts.

10,386 i

Dividends on preferred stock.

25,131 l 3*

2750

- E *' *****~

=E Utility Plant-End of period:

E Plant completed...

52,623,319 Construction work in progress.

364,252 2500 1250

- llJ Nuclear fuel.

16,869 Total utility plant.

3,004,440 i

_EE

,7g 1 ess-accumulated depreciation.

(605,404 l ccccccccc 33,

Net utility plant.

52,399,036 l E

Income Statement:

1000 Operating revenues.

$1,046,143 750 Operating expenses:

soo Fu el........

262,604 250 Purchased power.

178,841 g

Gas purchased for resale.

40,986 1973 74 75 76 77 78 79 Bo B11982 Payroll-Operation and maintenance.

Other operation and....

77,566 maintenance..

109,500 Not incom, Depreciation.

84,194 MwONS OF DOLLARS Taxes.

101,146 "o

Total.

854,837 I

E 1m

{@gg Operating income 191,306 90 g,yyya~

Other income and deductions-net (excluding AFDC*)

12,687 m

Interest and other charges:

7 "g-Interest on long-term debt.

108,557 eo Other interest-net of g

debt premium.

11,272 l

io 11

~

Total (excluding AFDC*).

119,829 Income from revenues......

84,164 30 Non-cash income from AFDC' 23,20S 20 Income from accounting change 3 Net income.

$ 107,372 1973 74 75 76 77 78 79 Bo 311982

" I"""*'Y

• A ansas ouvr g

innpany aqun A ansas-Msmun Power Compa'ny (See Note 3 to Fenancsal Statements "Busmess Conschdatum The fsnancnal dets un Ihns report for the years pnor to 1981 have not been restated v

for the consohdatton since the effert us smmatenal.

2 cncludes currently matunng portwr 3 Cunsulatuts effect to lanuary 1.1976, of change in accounting for fuel co<ts.

• ATDC-Allowance for funds used dunng constructron 32

1981 1980 1979 1978 1977 1976 1975 1974 1973

$1,015,561

$ 750,497

$ 582,610

$ 553,605

$ 535,298 5 396,597 5 316,831

$ 296,811

$ 209,327 96,140 65,230 82,404 86,014 69,305 46,963 40,713 55,562 41,946 2,474,249 2,147,983 1,940,643 1,693,906 1,562,999 1,421,940 1,311,433 1,124,177 1,002,893 992,163 848,667 819,716 749,262 667,484 591,382 586,318 546,284 480,829 144,120 147,065 100,518 60,063 60,063 60,063 60,063

$ 271,010

$ 273,955

$ 227,408

$ 171,772

$ 171,772

$ 171,772

$ 161,720

$ 101,657

$ 101,657 547,185 458,569 427,960 397,960 382,960 367,960 337,375 292,375 257,375 43,134 54,700 86,333 78,462 54,261 39,040 41,297 41,869 36,827 861,329 787,224 741,701 648,194 608,993 578,772 540,392 435,901 395,859 849,585 765,430 763,549 709,549 642,979 575,184 586,318 546,284 476,354 143,578 83,237 56,167 39,713 24,505 16,198 4,475 993,163 848,667 819,716 749,262 667,484 591,382 586,318 546,284 480,829

$1,854,492

$1,635,891

$1,561,417

$1,397,456

$1,276,477

$1,170,154

$1,126,710

$ 982,185

$ 876,688

$ 82,986 5 73,551

$ 62,436

$ 56,536

$ 49,364

$ 42,837

$ 42,837

$ 38,787

$ 29,974 14,016 6,593 4,980 4,980 4,103 1,224 25,456 25,778 19,548 14,020 14,020 14,020 13,136 6,600 6,600

$2,546,046

$2,133,704

$1,231,832

$1,178,601

$1,139,511

$1,111,119

$1,097,913

$1,051,248

$ 762,319 255,468 282,376 980,054 785,684 610,557 505,659 350,941 215,794 330,585 10,214 7,151 12,747 4,56.2 8,179 5,229 29,953 2,811,728 2,423,231 2,211,886 1,964,285 1,762,815 1,621,350 1,457,033 1,272,271 1,122,857 532,261 417,435 364,447 331,231 297,464 265,099 240,014 211,456 193,400

$2,279,467

$2,005,796

$1,847,439

$1,633,054

$1,465,351

$1,356,251

$1,217,019

$1,060,815

$ 929,457

$1,015,561 5 750,497

$ 582,610

$ 553,605 5 535,298

$ 396,597

$ 316,831 5 296,811

$ 209,327 307,213 237,346 174,667 167,681 169,890 107,213 76,322 83,840 46,605 141,316 154,126 171,425 120,804 114,225 107,983 56,022 55,936 28,737 30,637 67,897 49,774 40,607 35,400 29,448 26,626 24,286 19,486 17,647 132,862 100,700 50,994 55,478 53,014 31,224 30,637 24,114 19,416 77,923 59,574 39,708 38,365 36,768 35,025 33,790 23,885 21,373 90,530 54,033 34,948 55,693 62,753 36,022 38,352 24,949 25,766 848,378 655,553 512,349 473,421 466,098 344,093 259,409 232,210 159,544 167,183 94,944 70,261 80,184 69,200 52,504 57,422 64,601 49,783 17,497 17,468 23,627 16,986 12,466 10,328 8,131 1,352 572 90,755 67,036 67,091 56,949 45,047 43,152 40,553 32,554 25,528 21,038 17,649 10,296 4,469 3,980 2,703 3,265 3,323 1,557 111,793 84,685 77,387 61,418 49,027 45,855 43,818 35,877 27,085 72,887 27,727 16,501 35,752 32,639 16,977 21,735 30,076 23,270 23,253 37,503 65,903 50,262 36,666 26,445 18,978 25,486 18,676 3,541

$ 96,140

$ 65,230

$ 82,404 5 86,014

$ 69,305

$ 46,963

$ 40,713

$ 55,562

$ 41,946 33

Arkansas Potm & Light Compa ty TEN YEARS OF PROGRESS / OPERATING (Electric) 3 -

1982 Average Annual Kilowatt Hour Use Residential Customers Electric Operating Revenues:

mousAnos or xw (In Thousands of Dollars)

Residential.

$282,204 NO.

Commercial.

153,392 100 Industrial-Aluminum processing.

50,175 Industrial-Other.

183,975 so Government and municipal.

1o ^31 Total from retail customers.

686,826 60 Public utilities.

299,724 Miscellaneous revenues.

5,5 72 4o Total electric operating revenues.

$994,124 Electric Sales (Millions of Kilowatt Hours):

20 Residential,

4,514 Commercial.

2,87C Industrial-Aluminum processing.

2,0S1 o 1973 74 75 76 77 78 79 '80 B1 1982 Industrial-Other.

4,24(

Governmental and municipal.

41t Total sales to retail customers.

14,121 Kilowatt Hour Sales Public utilities.

7,38i

"s'$nN','w"n**

Total electric energy sold.

21,50[

16o Number of customers-end of year:

14 o Residential.

462.753 Commercial.

56,7 7 2o Industrial-Aluminum processing.

1 M

~

Government and municipal.

2.372 i Industrial-Other.

13,526 l ccccccccc eo Total retail customers.

535,363 Public utilities.

15 8

Total customers..

535,381 d

~

Electric Energy:

20 S urce and disposition (Millions of Kilowatt Hours) o Generated-net station output:

1973 74 75 76 77 78 79 Bo B11982 Coal.

5,224 Gas.

2,66C Oil..

72 Generation By Fuel Nuclear..

7,463 (Encluding Hydro)

Hydro.

176 BILDONs OF KWH 15,595 20 Total generated..

Purchased.

7,241 1s

,g Net interchange.

82 16 oa Total.

22,91E 14 Less: Company use, losses and M

unaccounted for.

1,405 E

to

~

Total energy sold.

21,505 E

Peak demand (Megawatts) 3,541 8

l 3 5,,,4, y,, yv,,,,,4 p,,,,g,,,,_,,,_

6 4

2 Includes $38 megawatts to surplu Arannus Licarw Cooperatnv Convran.

l (AECC) load whwh as me bemg surplotJ by thne vn narahlsta, ha.. r-s 2

to I981 elw unslude turymg amount.< s1 load surptwJ to AECC 1973 74 75 76 77 78 79 BD B1 1982'

~

l 34

~

. ~..

O 1981 1980 1979 1978 1977 1976 1975 1974 1973

$357,801

$212,833

$160,992

$164,224

$154,403

$121,267

$104,440

$ 86,337

$ 68,098 148,938 128,477 100,741 98,293 92,999 75,641 62,325 53,438 43,448 69,527 69,171 65,861 43,972 40,482 33,100 12,652 28,061 17,358 179,331 140,422 112,515 104,930 102,264 83,844 61,619 58,566 42,865 14,787 12,824 11,447 11,234 10,468 8,536 7,144 6,003 4,737 670,384 563,727 451,556 422,653 400,616 322,388 248,180 232,405 177,506 298,781 181,650 125,980 124,653 128,174 70,362 65,346 61,168 28,942 5,569 5,120 5,074 6,299 6,508 3,847 3,305 3,238 2,879

_5974,734

$750,497

$582,610

$553,605

$535,298

$396,597

$316,831 5296,811

$209,327 4,418 4,480 3,884 4,062 3,838 3,369 3,386 3,077 3,103 2,819 2,682 2,444 2,472 2,353 2,162 2,072 1,893 1,903 3,064 3,411 3,349 2,686 2,597 2,145 1,011 2,569 2,594 4,311 3,675 3,681 3,545 3,443 3,160 2,840 3,042 2,920 312 292 326 334 325 307 297 284 290 14,924 14,540 13,684 13,099 12,556 11,143 9,606 10,865 10,810 8,358 5,445 4,204 4,475 5,170 3,247 3,548 3,640 2,899 23,282 19,985 17,888 17,574 17,726 14,390 13,154 14,505 13,709 458,941 405,717 400,290 394,766 387,495 379,556 371,491 364,954 355,673 57,133 49,444 49,009 48,424 47,580 46,844 45,657 44,957 44,073 1

1 1

1 1

1 1

1 1

13,529 12,284 12,151 11,724 11,182 10,913 10,431 9,926 9,508 2,332 1,548 1,617 1,573 1,519 1,500 1,446 1,396 1,317 531,936 468,994 463,068 456,488 447,777 438,814 429,026 421,234 410,572 23 19 19 19 25 25 25 25 25 531,959 469,013 463,087 456,507 447,802 438,839 425,051 421,259 410,597 4,293 601 4,727 4,741 2,468 470 487 1,168 2,645 3,209 3,919 389 1,653 4,050 6,741 6,973 4,010 2,242 3,920 4,089 9,173 7,831 4,101 5,220 5,085 3,858 4,874 171 140 103 251 131 98 94 172 230 321 18,722 14,929 10,870 12,562 12,643 9,130 9,933 7,530 8,329 5,980 6,459 7,740 6,162 6,133 6,172 4,070 7,670 5,890 12 (209) 296 8

(65) 43 101 181 361 24,714 21,179 18,906 18,732 18,711 15,345 14,104 15,381 14,580 1,432 1,194 1,018 1,158 985 955 950 876 871 23,282 19,985 17,888 17,574 17,726 14,390 13,154 14,505 13,709 4,3692 4,179 3,521 3,654 3,336 3,242 2,868 3,049 2,744 35

OFFICERS i

1 jerry L Aiulden Michael B. Bemis William Cavanaugh, Ill Jack L King Pressdent &

Senior Vice President. Einance.

Senior Vuce President.

Senior Vsw Pressdent.

Chwf E.necu tv Ollscer Regulation & Ugal Sernces; Energy Supply Energy Delwery & Sernces Assistant Treasurer

& Assistant Secretary

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J D. Phillips Charles L Steel Cecil L Alesander R. A. A!!en Senior Vsw President Senior Vsce President Voce President.

Vuce President.

l 6 Sentor Consultarit

& Assistant to the President Public Affaurs Customer Serrace s

• J John M. Gnffin John J. Harton Charles Kelly Ralph C. Mitchell, Ill Vu e President.

Vsce President. Chief Vsce Presideni.

Vua PressJent. Cantservation Nuslear Operatsons Tunancial Olfteer. Treasurer Corporate Comnrunications

& Rene cable Rewurces

& Assistant Secretary t

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vR Steve L Riggs W. R. Southern Vu'e Pressdent.

Vice President.

Cencral Counvl & Secretary AJmunistratutv Serruces 36

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Arkansas Power & Light Company Electric System and Service Area Arkansas Power & light owns electric facilities in 66 of Arkansas' 75 counties and in 13 of Missouri's 114 counties. At December 31,1982, the Company furnished retail electric service in 319 Arkansas and Missouri incorporated municipalities.

AP&L also provided power at whole21e to nine Arkansas and two Missouri municipalities and in Arkansas to two rural electric cooperatives and one association of rural electric coopera'ives.

AP&L's sy_ em is interconnected with and operated as a part of the Middle South Utilities System, which supplies the power requirements of more than 1.5 million customers in a 92,000-square-mile area of Arkansas, Louisiana, Mississippi and southeast Missouri.

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